EXHIBIT 10.1

                                                                  EXECUTION COPY



                                    FIVE-YEAR


                                CREDIT AGREEMENT


                                   dated as of


                                October 25, 2005

                                      among



                             THE VALSPAR CORPORATION

                           The Borrowing Subsidiaries
                                  Party Hereto


                            The Lenders Party Hereto


                                       and


                           JPMORGAN CHASE BANK, N.A.,
                             as Administrative Agent

                           J.P. MORGAN EUROPE LIMITED,
                                 as London Agent

                         J.P. MORGAN AUSTRALIA LIMITED,
                               as Australian Agent


                               BARCLAYS BANK PLC,
                              as Syndication Agent

                           ___________________________

                J.P. MORGAN SECURITIES INC. and BARCLAYS CAPITAL,
                   as Co-Lead Arrangers and Joint Bookrunners




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                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----
                                    ARTICLE I

                                   Definitions

SECTION 1.01.  Defined Terms..................................................1
SECTION 1.02.  Classification of Loans and Borrowings........................23
SECTION 1.03.  Terms Generally...............................................23
SECTION 1.04.  Accounting Terms; GAAP........................................23
SECTION 1.05.  Exchange Rates................................................24
SECTION 1.06.  Redenomination of Certain Designated Foreign Currencies.......24

                                   ARTICLE II

                                   The Credits

SECTION 2.01.  Commitments...................................................25
SECTION 2.02.  Loans and Borrowings..........................................25
SECTION 2.03.  Requests for Revolving Borrowings.............................26
SECTION 2.04.  Competitive Bid Procedure.....................................27
SECTION 2.05.  Letters of Credit.............................................29
SECTION 2.06.  Funding of Borrowings.........................................34
SECTION 2.07.  Interest Elections............................................34
SECTION 2.08.  Termination and Reduction of Commitments......................36
SECTION 2.09.  Repayment of Loans; Evidence of Debt..........................37
SECTION 2.10.  Prepayment of Loans...........................................38
SECTION 2.11.  Fees..........................................................38
SECTION 2.12.  Interest......................................................40
SECTION 2.13.  Alternate Rate of Interest....................................41
SECTION 2.14.  Increased Costs...............................................42
SECTION 2.15.  Break Funding Payments........................................43
SECTION 2.16.  Taxes.........................................................44
SECTION 2.17.  Payments Generally; Pro Rata Treatment; Sharing of Set-offs...45
SECTION 2.18.  Mitigation Obligations; Replacement of Lenders................47
SECTION 2.19.  Borrowing Subsidiaries........................................47
SECTION 2.20.  Additional Reserve Costs......................................48
SECTION 2.21.  Foreign Subsidiary Costs......................................48
SECTION 2.22.  Reliquification Bills.........................................49

                                   ARTICLE III

                         Representations and Warranties

SECTION 3.01.  Corporate Existence and Power.................................50


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                                                                           Page
                                                                           ----

SECTION 3.02.  Corporate and Governmental Authorization; No Contravention....50
SECTION 3.03.  Binding Effect................................................50
SECTION 3.04.  Financial Information.........................................50
SECTION 3.05.  No Litigation.................................................50
SECTION 3.06.  Compliance with ERISA.........................................51
SECTION 3.07.  Compliance with Laws; Payment of Taxes........................51
SECTION 3.08.  Subsidiaries..................................................51
SECTION 3.09.  Investment Company Act........................................52
SECTION 3.10.  Public Utility Holding Company Act............................52
SECTION 3.11.  Ownership of Property; Liens..................................52
SECTION 3.12.  No Default....................................................52
SECTION 3.13.  Full Disclosure...............................................52
SECTION 3.14.  Environmental Matters.........................................52
SECTION 3.15.  Capital Stock.................................................53
SECTION 3.16.  Margin Stock..................................................53
SECTION 3.17.  Insolvency....................................................53

                                   ARTICLE IV

                                   Conditions

SECTION 4.01.  Effective Date................................................53
SECTION 4.02.  Each Credit Event.............................................55
SECTION 4.03.  Initial Borrowing by each Borrowing Subsidiary................55

                                    ARTICLE V

                                    Covenants

SECTION 5.01.  Information...................................................56
SECTION 5.02.  Inspection of Property, Books and Records.....................57
SECTION 5.03.  Ratio of Consolidated Debt to Consolidated EBITDA.............58
SECTION 5.04.  Minimum Shareholders' Equity..................................58
SECTION 5.05.  Restricted Payments...........................................58
SECTION 5.06.  Loans or Advances.............................................58
SECTION 5.07.  Acquisitions..................................................58
SECTION 5.08.  Negative Pledge...............................................59
SECTION 5.09.  Maintenance of Existence......................................60
SECTION 5.10.  Dissolution...................................................60
SECTION 5.11.  Consolidations, Mergers and Sales of Assets...................60
SECTION 5.12.  Use of Proceeds...............................................60
SECTION 5.13.  Compliance with Laws; Payment of Taxes........................60
SECTION 5.14.  Insurance.....................................................61
SECTION 5.15.  Change in Fiscal Year.........................................61
SECTION 5.16.  Maintenance of Property.......................................61
SECTION 5.17.  Environmental Notices.........................................61


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                                                                           Page
                                                                           ----

SECTION 5.18.  Environmental Matters.........................................61
SECTION 5.19.  Environmental Release.........................................62
SECTION 5.20.  Transactions with Affiliates..................................62
SECTION 5.21.  Limitation on Subsidiary Debt.................................62
SECTION 5.22.  Subsidiary Guarantors.........................................62

                                   ARTICLE VI

                                Events of Default

SECTION 6.01.  Events of Default.............................................63
SECTION 6.02.  Notice of Default.............................................65

                                   ARTICLE VII

                                   The Agents


                                  ARTICLE VIII

                                    Guarantee


                                   ARTICLE IX

                                  Miscellaneous

SECTION 9.01.  Notices.......................................................70
SECTION 9.02.  Waivers; Amendments...........................................70
SECTION 9.03.  Expenses; Indemnity; Damage Waiver............................73
SECTION 9.04.  Successors and Assigns........................................74
SECTION 9.05.  Survival......................................................77
SECTION 9.06.  Counterparts; Integration; Effectiveness......................78
SECTION 9.07.  Severability..................................................78
SECTION 9.08.  Right of Setoff...............................................78
SECTION 9.09.  Governing Law; Jurisdiction; Consent to Service of Process....78
SECTION 9.10.  WAIVER OF JURY TRIAL..........................................79
SECTION 9.11.  Headings......................................................79
SECTION 9.12.  Confidentiality...............................................80
SECTION 9.13.  Conversion of Currencies......................................80
SECTION 9.14.  Interest Rate Limitation......................................81
SECTION 9.15.  Release of Subsidiary Guarantors..............................81
SECTION 9.16.  USA Patriot Act...............................................81


                                      iii

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SCHEDULES:
----------

Schedule 1.01  --     Domestic Material Subsidiaries

Schedule 2.01  --     Commitments

Schedule 3.08  --     Subsidiaries

Schedule 3.14  --     Environmental Matters


EXHIBITS:
---------

Exhibit A-1    --     Form of Borrowing Subsidiary Agreement

Exhibit A-2    --     Form of Borrowing Subsidiary Termination

Exhibit B      --     Form of Assignment and Assumption

Exhibit C      --     Form of Opinion of Lindquist & Vennum, PLLP

Exhibit D      --     Mandatory Costs Rate

Exhibit E      --     Form of Compliance Certificate

Exhibit F      --     Form of Guarantee Agreement

Exhibit G      --     Form of Indemnity, Subrogation and Contribution Agreement













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                                    FIVE-YEAR CREDIT AGREEMENT dated as of
                           October 25, 2005, among THE VALSPAR CORPORATION, a
                           Delaware corporation (the "Company"); the BORROWING
                           SUBSIDIARIES from time to time party hereto; the
                           LENDERS from time to time party hereto; JPMORGAN
                           CHASE BANK, N.A., as Administrative Agent; J.P.
                           MORGAN EUROPE LIMITED, as London Agent; J.P. MORGAN
                           AUSTRALIA LIMITED (ABN 52 002 888011), as Australian
                           Agent; and BARCLAYS BANK PLC, as Syndication Agent.

         The Company has requested the Lenders to extend Commitments under which
the Borrowers may obtain revolving loans in an aggregate principal amount at any
time outstanding not greater than US$500,000,000 or the equivalent thereof in
certain other currencies. The proceeds of the Borrowings hereunder will be used
to refinance existing Debt of the Company and the Subsidiaries and to pay
related fees and expenses, as well as for working capital and general corporate
purposes, including the financing of future acquisitions.

         The Lenders are willing to establish the credit facilities referred to
in the preceding paragraph upon the terms and subject to the conditions set
forth herein. Accordingly, the parties hereto agree as follows:

                                    ARTICLE I

                                   Definitions
                                   -----------

         SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:

         "ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.

         "ACQUISITION" means any transaction pursuant to which the Company or
any of the Subsidiaries directly or indirectly, in its own name or by or through
a nominee or an agent (a) acquires equity Securities (or warrants, options or
other rights to acquire such Securities) of any Person other than the Company or
a Person which is, prior to such acquisition, a Subsidiary of the Company,
pursuant to a solicitation of tenders therefor, or in one or more negotiated
block, market or other transactions not involving a tender offer, or a
combination of any of the foregoing, or (b) makes any Person a Subsidiary of the
Company, or causes any Person other than a Subsidiary to be merged into the
Company or any of its Subsidiaries, in any case pursuant to a merger, purchase
of assets or any reorganization providing for the delivery or issuance to the
holders of such Person's then outstanding Securities, in exchange for such
Securities, of cash or Securities of the Company or any of its Subsidiaries, or
a combination thereof, or (c) purchases all or substantially all of the business
or assets of any Person or line of business or business unit


<PAGE>


(or substantially all of the assets comprising a line of business or business
unit) of any Person.

         "ADJUSTED LIBO RATE" means, with respect to any Eurocurrency Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate; PROVIDED that, with respect
to any Eurocurrency Borrowing denominated in a Designated Foreign Currency for
any Interest Period, Adjusted LIBO Rate means an interest rate per annum
(rounded upwards, if necessary, to the next 1/100 of 1%) equal to the LIBO Rate
for such Interest Period.

         "ADMINISTRATIVE AGENT" means JPMCB, in its capacity as administrative
agent for the Lenders hereunder.

         "ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.

         "AFFILIATE" of any Person means (i) any other Person which directly, or
indirectly through one or more intermediaries, controls such Person, (ii) any
other Person which directly, or indirectly through one or more intermediaries,
is controlled by or is under common control with such Person, or (iii) any other
Person of which such Person owns, directly or indirectly, 20% or more of the
common stock or equivalent equity interests. As used herein, the term "control"
means possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

         "AGENTS" means, collectively, the Administrative Agent, the London
Agent and the Australian Agent.

         "AGREEMENT CURRENCY" has the meaning assigned to such term in Section
9.13(b).

         "ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.

         "APPLICABLE AGENT" means (a) with respect to a Loan or Borrowing
denominated in US Dollars, the Administrative Agent, (b) with respect to a Loan
or Borrowing denominated in any Designated Foreign Currency, the London Agent
and (c) with respect to a Loan or Borrowing denominated in Australian Dollars,
the Australian Agent.

         "APPLICABLE CREDITOR" has the meaning assigned to such term in Section
9.13(b).


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<PAGE>


         "APPLICABLE PERCENTAGE" means at any time, with respect to any Lender,
the percentage of the total Commitments represented by such Lender's Commitment
at such time, or if the Commitments have terminated or expired, the percentage
of the total Revolving Exposures and Competitive Loan Exposures represented by
such Lender's Revolving Exposures and Competitive Loan Exposures at such time;
PROVIDED that if at the time of determination there are no Revolving Exposures
or Competitive Loan Exposures, the "Applicable Percentage" shall be the
percentage of the total Commitments most recently in effect represented by such
Lender's Commitment most recently in effect.

         "APPLICABLE RATE" means, for any day, with respect to any Eurocurrency
Revolving Loan or Bill Rate Loan, or with respect to the facility fees payable
hereunder, as the case may be, the applicable rate per annum set forth below
under the caption "Eurocurrency and Bill Rate Spread" or "Facility Fee Rate", as
the case may be, based upon the ratings by Moody's and S&P, respectively,
applicable on such date to the Index Debt (or, if the Company does not have
Index Debt, then based upon the Company's corporate credit ratings by Moody's
and S&P):

                                   Eurocurrency and                  Facility
Index Debt Ratings:                Bill Rate Spread                  Fee Rate
-------------------                ----------------                  --------

Category 1                             .220%                          .080%
----------
A-/A3 or higher

Category 2                             .300%                          .100%
----------
BBB+/Baa1

Category 3                             .375%                          .125%
----------
BBB/Baa2

Category 4                             .600%                          .150%
----------
BBB-/Baa3

Category 5                             .800%                          .200%
----------
lower than BBB-/Baa3

         For purposes of the foregoing, (i) if either Moody's or S&P shall not
have in effect a rating for the Index Debt or a corporate credit rating for the
Company (other than by reason of the circumstances referred to in the third
sentence of this paragraph), then such rating agency shall be deemed to have
established a rating in Category 5; (ii) if the ratings established or deemed to
have been established by Moody's and S&P for the Index Debt or the Company's
corporate credit ratings shall fall within different Categories, the Applicable
Rate shall be based on the higher of the two ratings unless (A) the ratings are
not in two adjacent Categories, in which case the Applicable Rate shall be
determined by reference to the Category one level above the Category
corresponding to the lower of the two ratings, or (B) one of the ratings is in
Category 5, in which case the Applicable Rate shall be determined by reference
to Category 5; and (iii) if the ratings


                                       3
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established or deemed to have been established by Moody's and S&P for the Index
Debt or the Company's corporate credit ratings shall be changed (other than as a
result of a change in the rating system of Moody's or S&P), such change shall be
effective as of the date on which it is first announced by the applicable rating
agency. Each change in the Applicable Rate shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of Moody's or S&P shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt obligations, the Borrower
and the Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the
Applicable Rate shall be determined using the rating of such rating agency most
recently in effect prior to such change or cessation.

         "ASSIGNMENT AND ASSUMPTION" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit B or any other form approved by the Administrative Agent and
reasonably acceptable to the Company.

         "AUSTRALIAN AGENT" means JPMAL, in its capacity as Australian agent for
the Lenders hereunder, or any successor thereto appointed in accordance with
Article VII.

         "AUSTRALIAN BANK BILL RATE" means, for any Interest Period, the rate
per annum which is:

         (a) the average determined bid rate (rounded upwards if necessary to
the nearest four decimal places) for Bills accepted by a bank having a tenor
which is closest to that Interest Period and published on the "BBSY" reference
page of the Reuters Monitor System at or about 10:10 am (Local Time) on the
first day of that Interest Period;

         (b) if on that day that rate is not published by 10:30 am, the rate
determined by the Australian Agent in good faith to be the average determined
bid rate for Bills accepted by a bank on that day having a tenor which is
closest to that Interest Period.

         "AUSTRALIAN BORROWING SUBSIDIARY" means any Subsidiary that is
incorporated or otherwise organized under the laws of Australia or any political
subdivision thereof that has been designated as a Borrowing Subsidiary pursuant
to Section 2.19 and that has not ceased to be a Borrowing Subsidiary as provided
in such Section.

         "AUSTRALIAN DOLLARS" or "A$" means the lawful currency of Australia.

         "AUSTRALIAN LENDING OFFICE" means, as to any Australian Tranche Lender,
the applicable office designated to make Loans in Australian Dollars.


                                       4
<PAGE>

         "AUSTRALIAN TRANCHE COMMITMENT" means, with respect to each Australian
Tranche Lender, the commitment of such Australian Tranche Lender set forth on
Schedule 2.01 (or in the Assignment and Assumption pursuant to which such
Australian Tranche Lender shall have assumed its Australian Tranche Commitment)
to make Australian Tranche Revolving Loans pursuant to Section 2.01(b), as such
commitment may be (a) reduced from time to time pursuant to Section 2.08, (b)
increased from time to time pursuant to Section 9.02(c) and (c) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The aggregate amount of the Australian Tranche
Commitments on the date hereof is US$50,000,000.

         "AUSTRALIAN TRANCHE LENDER" means a Lender with an Australian Tranche
Commitment.

         "AUSTRALIAN TRANCHE PERCENTAGE" means, with respect to any Australian
Tranche Lender, the percentage of the total Australian Tranche Commitments
represented by such Lender's Australian Tranche Commitment. If the Australian
Tranche Commitments have terminated or expired, the Australian Tranche
Percentages shall be determined based upon the Australian Tranche Commitments
most recently in effect, giving effect to any assignments.

         "AUSTRALIAN TRANCHE REVOLVING BORROWING" means a Borrowing comprised of
Australian Tranche Revolving Loans.

         "AUSTRALIAN TRANCHE REVOLVING EXPOSURE" means, with respect to any
Australian Tranche Lender at any time, the sum of the US Dollar Equivalents of
the principal amounts of such Lender's Australian Tranche Revolving Loans.

         "AUSTRALIAN TRANCHE REVOLVING LOAN" means a Loan made by an Australian
Tranche Lender pursuant to Section 2.01(b). Each Australian Tranche Revolving
Loan shall be (i) if denominated in Australian Dollars, a Bill Rate Loan, (ii)
if denominated in a Designated Foreign Currency, a Eurocurrency Loan and (iii)
if denominated in US Dollars, a Eurocurrency Loan or an ABR Loan.

         "AVAILABILITY PERIOD" means the period from and including the Effective
Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.

         "BILL" has the meaning it has in the Bills of Exchange Act 1909 (Cwlth)
and a reference to the drawing or acceptance or endorsement of, or other dealing
with, a Bill is to be interpreted in accordance with that Act.

         "BILL RATE", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Australian Bank Bill Rate.

         "BOARD" means the Board of Governors of the Federal Reserve System of
the United States of America.


                                       5
<PAGE>


         "BORROWER" means the Company or any Borrowing Subsidiary.

         "BORROWING" means (a) Revolving Loans of the same Class, Type and
currency, made, converted or continued on the same date and, in the case of
Eurocurrency Loans, as to which a single Interest Period is in effect or (b) a
Competitive Loan or group of Competitive Loans of the same Type made on the same
date and as to which a single Interest Period is in effect.

         "BORROWING MINIMUM" means (a) in the case of a Borrowing denominated in
US Dollars, US$5,000,000 and (b) in the case of a Borrowing denominated in any
Committed Foreign Currency, the smallest amount of such Committed Foreign
Currency that has a US Dollar Equivalent in excess of US$5,000,000.

         "BORROWING MULTIPLE" means (a) in the case of a Borrowing denominated
in US Dollars, US$1,000,000 and (b) in the case of a Borrowing denominated in
any Committed Foreign Currency, 250,000 units of such currency.

         "BORROWING REQUEST" means a request by the Borrower for a Revolving
Borrowing in accordance with Section 2.03.

         "BORROWING SUBSIDIARY" means, at any time, each of the Subsidiaries
that (a) is named on the signature pages to this Agreement or (b) has been
designated as a Borrowing Subsidiary by the Company pursuant to Section 2.19,
other than any such Subsidiary that has ceased to be a Borrowing Subsidiary as
provided in Section 2.19.

         "BORROWING SUBSIDIARY AGREEMENT" means a Borrowing Subsidiary Agreement
substantially in the form of Exhibit A-1.

         "BORROWING SUBSIDIARY TERMINATION" means a Borrowing Subsidiary
Termination substantially in the form of Exhibit A-2.

         "BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; PROVIDED, that (a) when used in connection with a Eurocurrency
Loan, the term "BUSINESS DAY" shall also exclude any day on which banks are not
open for dealings in deposits in the applicable currency in the London interbank
market, (b) when used in connection with a Loan denominated in Euro, the term
"BUSINESS DAY" shall also exclude any day on which the TARGET payment system is
not open for the settlement of payments in Euro and (c) when used in connection
with a Bill Rate Loan, the term "BUSINESS DAY" shall also exclude any day on
which banks are not open for dealings in deposits in Australian Dollars in the
Sydney or Melbourne markets.

         "CALCULATION DATE" means the last Business Day of each calendar month.

         "CAPITAL STOCK" means any capital stock (other than Redeemable
Preferred Stock) of the Company or any Consolidated Subsidiary (to the extent
issued to a Person other than the Company), whether common or preferred.


                                       6
<PAGE>


         "CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. ss.ss. 9601 ET SEQ. and its implementing
regulations and amendments.

         "CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System established pursuant to CERCLA.

         "CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

         "CLASS", when used in reference to (a) any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Competitive
Loans, Multicurrency Tranche Revolving Loans, Australian Tranche Revolving Loans
or Loans under any term or revolving loan commitments established under Section
9.02(c) and (b) any Commitment, refers to whether such Commitment is a
Multicurrency Tranche Commitment, an Australian Tranche Commitment or a term or
revolving loan commitment established under Section 9.02(c).

         "CODE" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code. Any reference to any provision of the Code shall
also be deemed to be a reference to any successor provision or provisions
thereof.

         "COMMITMENT" means a Multicurrency Tranche Commitment, an Australian
Tranche Commitment or a term or revolving loan commitment established under
Section 9.02(c).

         "COMMITTED FOREIGN CURRENCY" means Australian Dollars or any Designated
Foreign Currency.

         "COMPANY" means The Valspar Corporation, a Delaware corporation.

         "COMPETITIVE BID" means an offer by a Lender to make a Competitive Loan
in accordance with Section 2.04.

         "COMPETITIVE BID RATE" means, with respect to any Competitive Bid, the
Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.

         "COMPETITIVE BID REQUEST" means a request by any Borrower for
Competitive Bids in accordance with Section 2.04.

         "COMPETITIVE LOAN" means a Loan made pursuant to Section 2.04.


                                       7
<PAGE>


         "COMPETITIVE LOAN EXPOSURE" means, with respect to any Lender at any
time, the sum of (a) the aggregate principal amount of the outstanding
Competitive Loans of such Lender denominated in US Dollars and (b) the sum of
the US Dollar Equivalents of the aggregate principal amounts of the outstanding
Competitive Loans of such Lender denominated in Designated Foreign Currencies.

         "CONSOLIDATED DEBT" means at any date the Debt of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.

         "CONSOLIDATED EBITDA" for any period means the sum of (i) Consolidated
Net Income for such period; (ii) Consolidated Interest Expense for such period,
(iii) taxes on income of the Company and its Consolidated Subsidiaries for such
period to the extent deducted in determining Consolidated Net Income for such
period, (iv) Depreciation for such period and (v) amortization of intangible
assets of the Company and its Consolidated Subsidiaries for such period. In
determining Consolidated EBITDA for any period, any Consolidated Subsidiary
acquired during such period by the Company or any other Consolidated Subsidiary
shall be included on a pro forma, historical basis as if it had been a
Consolidated Subsidiary during such entire period.

         "CONSOLIDATED INTEREST EXPENSE" for any period means interest, whether
expensed or capitalized, in respect of Debt of the Company or any of its
Consolidated Subsidiaries outstanding during such period.

         "CONSOLIDATED NET INCOME" means, for any period, Reported Net Income,
excluding (i) extraordinary items and (ii) any equity interests of the Company
or any Subsidiary in the unremitted earnings of any Person that is not a
Subsidiary.

         "CONSOLIDATED OPERATING PROFITS" means, for any period, the Operating
Profits of the Company and its Consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

         "CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be consolidated
with those of the Company in its consolidated financial statements as of such
date.

         "CONSOLIDATED TOTAL ASSETS" means, at any time, the Total Assets of the
Company and its Consolidated Subsidiaries, determined on a consolidated basis in
accordance with GAAP.

         "CONTROLLED GROUP" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414 of the Code.

         "DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade


                                       8
<PAGE>


accounts payable arising in the ordinary course of business, but only if such
obligations are, in accordance with GAAP, recorded on such Person's financial
books as long-term debt, (iv) all obligations of such Person as lessee under
capital leases, (v) all obligations of such Person to reimburse any bank or
other Person in respect of amounts payable under a banker's acceptance, (vi) all
Redeemable Preferred Stock of such Person (in the event such Person is a
corporation), (vii) all obligations (absolute or contingent) of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of
credit or similar instrument, (viii) all Debt of others secured by a Lien on any
asset of such Person, whether or not such Debt is assumed by such Person, (ix)
all Debt of others Guaranteed by such Person, and (x) the net obligation of such
Person with respect to interest rate protection agreements, foreign currency
exchange agreements or other hedging agreements (and for purposes of this
Agreement, the net amount which such Person is obligated to pay under any such
agreement upon termination of such agreement shall be deemed to constitute the
principal amount of such net obligation).

         "DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived in writing, become an Event of Default.

         "DEPRECIATION" means for any period the sum of all depreciation
expenses of the Company and its Consolidated Subsidiaries for such period, as
determined in accordance with GAAP.

         "DESIGNATED FOREIGN CURRENCY" means Sterling, Yen, Euro and Swiss
Francs.

         "DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York are authorized or required by
law to close.

         "DOMESTIC MATERIAL SUBSIDIARY" means any Material Subsidiary that is a
Domestic Subsidiary.

         "DOMESTIC SUBSIDIARY" means a Subsidiary incorporated or organized
under the laws of the United States of America, any State or territory thereof
or the District of Columbia.

         "EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

         "EMU LEGISLATION" means the legislative measures of the European Union
for the introduction of, changeover to or operation of the Euro that apply
generally in the European Union.

         "ENVIRONMENTAL AUTHORITY" means any Governmental Authority that
exercises any form of jurisdiction or authority under any Environmental
Requirement.


                                       9
<PAGE>


         "ENVIRONMENTAL AUTHORIZATIONS" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of the Company or any Subsidiary required by any Environmental
Requirement.

         "ENVIRONMENTAL JUDGMENTS AND ORDERS" means all judgments, decrees or
orders arising from or in any way associated with any Environmental Requirement,
whether or not entered upon consent or written agreements with an Environmental
Authority or other entity arising from or in any way associated with any
Environmental Requirement, whether or not incorporated in a judgment, decree or
order.

         "ENVIRONMENTAL LIABILITIES" means any liabilities, whether accrued,
contingent or otherwise, arising from or in any way associated with any
Environmental Requirement, Environmental Judgments and Orders, Environmental
Notices, Environmental Proceedings, or Environmental Releases.

         "ENVIRONMENTAL NOTICES" means notice from any Environmental Authority
or by any other person or entity, of alleged material noncompliance with or
material liability under any Environmental Requirement, including without
limitation any complaints, citations, demands or requests from any Environmental
Authority or from any other person or entity for correction of any violation of
any Environmental Requirement or any investigations concerning any violation of
any Environmental Requirement.

         "ENVIRONMENTAL PROCEEDINGS" means any judicial or administrative
proceedings to which the Company or any Subsidiary is a party or to which their
respective properties are subject, arising from or in any way associated with
any Environmental Requirement.

         "ENVIRONMENTAL RELEASES" means releases as defined in CERCLA or under
any Environmental Requirement.

         "ENVIRONMENTAL REQUIREMENT" means any legal requirement relating to
health, safety or the environment, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state and
local laws, ordinances, regulations, orders, writs, decrees, judgments,
injunctions and common law.

         "EQUITY INTERESTS" means shares of Capital Stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a person.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.

         "EURO" or "E" means the single currency of the European Union as
constituted by the Treaty on European Union and as referred to in the EMU
Legislation.


                                       10
<PAGE>


         "EUROCURRENCY", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate (or, in the
case of a Competitive Loan, the LIBO Rate).

         "EVENT OF DEFAULT" has the meaning assigned to such term in Section
6.01.

         "EXCESS MARGIN STOCK" means that portion, if any, of the Margin Stock
owned by the Company and the Subsidiaries that must be excluded from the
restrictions imposed by Section 5.08 and Section 5.11 in order for the value
(determined in accordance with Regulation U) of Margin Stock subject to such
Section to account for less than 25% of the aggregate value (as so determined)
of all assets subject to such Section.

         "EXCHANGE RATE" means on any day, with respect to any Committed Foreign
Currency, the rate at which such Committed Foreign Currency may be exchanged
into US Dollars, as set forth at approximately 11:00 a.m., London time, on such
day on the Reuters World Currency Page for such Committed Foreign Currency. In
the event that such rate does not appear on any Reuters World Currency Page, the
Exchange Rate shall be determined by reference to such other publicly available
service for displaying exchange rates as may be agreed upon by the
Administrative Agent and the Company, or, in the absence of such an agreement,
such Exchange Rate shall instead be the arithmetic average of the spot rates of
exchange of the Administrative Agent in the market where its exchange operations
in respect of such Committed Foreign Currency are then being conducted, at or
about 10:00 a.m., Local Time, on such date for the purchase of US Dollars for
delivery two Business Days later; provided that if at the time of any such
determination, for any reason, no such spot rate is being quoted, the
Administrative Agent may use any reasonable method it deems appropriate to
determine such rate, and such determination shall be conclusive absent manifest
error.

         "EXCLUDED TAXES" means, with respect to the Agents, the Issuing Bank,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of any Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by the
jurisdiction under which such recipient is organized or in which its principal
office is located or in which its applicable lending office is located, (b) any
branch profit taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above, (c) in the case
of a Multicurrency Tranche Lender (other than a purchaser of a participation
pursuant to Section 2.17(c) or an assignee pursuant to a request by the Company
under Section 2.18(b)), any withholding tax imposed by the United States of
America that is in effect and would apply to amounts payable to such
Multicurrency Tranche Lender by the Company or a Borrower which is a Domestic
Subsidiary from an office within such jurisdiction at the time such
Multicurrency Tranche Lender becomes a party to this Agreement (or designates a
new lending office), (d) in the case of an Australian Tranche Lender (other than
a purchaser of a participation pursuant to Section 2.17(c) or an assignee
pursuant to a request by the Company under Section 2.18(b)), any withholding tax
that is imposed (i) by Australia (or any state or other political subdivision


                                       11
<PAGE>


therein) on payments by an Australian Borrowing Subsidiary from an office within
such jurisdiction or (ii) by the United States of America (or any political
subdivision thereof) on payments by the Company or any Borrower which is a
Domestic Subsidiary from an office within such jurisdiction, in either case to
the extent such tax is in effect and would apply as of the date such Australian
Tranche Lender becomes a party to this Agreement or relates to payments received
by a new lending office designated by such Australian Tranche Lender and is in
effect and would apply at the time such lending office is designated and (e) any
withholding tax that is attributable to such Lender's failure to comply with
Section 2.16(e), except, in the case of clause (c) or (d) above, to the extent
that (i) such Lender (or its assignor, if any) shall have been entitled, at the
time it became party to this Agreement or designated such new lending office, to
receive additional amounts with respect to any withholding tax or (ii) such
withholding tax shall have resulted from the making of any payment to a location
other than the office designated by the Applicable Agent or such Lender for the
receipt of payments of the applicable type.

         "EXISTING CREDIT AGREEMENT" means the Five-Year Credit Agreement dated
as of November 17, 2000 among the Company, the Borrowing Subsidiaries party
thereto, the Lenders party thereto, JPMCB (as successor to The Chase Manhattan
Bank), as Administrative Agent, JPMEL (as successor to Chase Manhattan
International Limited), as London Agent, JPMAL (as successor to Chase Securities
Australia Limited), as Australian Agent, and Bank of America, N.A., Citicorp
USA, Inc. and Wachovia Bank, N.A. as Co-Syndication Agents and Co-Documentation
Agents.

         "FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

         "FISCAL QUARTER" means any fiscal quarter of the Company.

         "FISCAL YEAR" means any fiscal year of the Company.

         "FIXED RATE" means, with respect to any Competitive Loan (other than a
Eurocurrency Competitive Loan), the fixed rate of interest per annum specified
by the Lender making such Competitive Loan in its related Competitive Bid.

         "FIXED RATE LOAN" means a Competitive Loan bearing interest at a Fixed
Rate.

         "FOREIGN LENDER" means, as to any Borrower, any Lender that is
organized under the laws of a jurisdiction other than that in which such
Borrower is located. For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.


                                       12
<PAGE>


         "GAAP" means generally accepted accounting principles in the United
States of America.

         "GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

         "GRANTING LENDER" shall have the meaning assigned to such term in
Section 9.04(h).

         "GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.

         "GUARANTEE AGREEMENT" means the Guarantee Agreement, substantially in
the form of Exhibit F, between the Subsidiary Guarantors and the Administrative
Agent for the benefit of the Lenders.

         "HAZARDOUS MATERIALS" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. ss. 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b) any
"hazardous substance", "pollutant" or "contaminant", as defined in CERCLA, or in
any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including crude oil or any fraction thereof,
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation and (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.

         "INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.

         "INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit G, among the Company, the Subsidiary Guarantors and the Administrative
Agent.


                                       13
<PAGE>


         "INDEX DEBT" means senior, unsecured, long-term indebtedness for
borrowed money of the Company that is not guaranteed by any other Person (other
than a Subsidiary) or subject to any other credit enhancement.

         "INFORMATION MEMORANDUM" means the Confidential Information Memorandum
dated September 2005 distributed to the Lenders, together with the appendices
thereto, as amended through the date hereof.

         "INTEREST ELECTION REQUEST" means a request by the relevant Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.07.

         "INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December, (b) with respect to any
Eurocurrency Loan or Bill Rate Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurocurrency Borrowing or Bill Rate Borrowing with an Interest Period of more
than three months' duration, each day prior to the last day of such Interest
Period that occurs at intervals of three months' duration after the first day of
such Interest Period and (c) with respect to any Fixed Rate Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Fixed Rate Borrowing with an Interest Period of more than
90 days' duration (unless otherwise specified in the applicable Competitive Bid
Request), each day prior to the last day of such Interest Period that occurs at
intervals of 90 days' duration after the first day of such Interest Period, and
any other dates that are specified in the applicable Competitive Bid Request as
Interest Payment Dates with respect to such Borrowing.

         "INTEREST PERIOD" means (a) with respect to any Eurocurrency Borrowing
or Bill Rate Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day in the calendar month that is one,
two, three or six months (or, with the consent of each Lender, nine or twelve
months) thereafter, as the applicable Borrower may elect and (b) with respect to
any Fixed Rate Borrowing, the period (which shall not be less than 7 days or
more than 360 days) commencing on the date of such Borrowing and ending on the
date specified in the applicable Competitive Bid Request; PROVIDED, that (i) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurocurrency Borrowing or Bill Rate Borrowing only, such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
pertaining to a Eurocurrency Borrowing or Bill Rate Borrowing that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, in the case of a Revolving
Borrowing, thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.


                                       14
<PAGE>

         "ISSUING BANK" means JPMCB, in its capacity as the issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in Section
2.05(i). The Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case
the term "Issuing Bank" shall include any such Affiliates with respect to
Letters of Credit issued by such Affiliates.

         "JPMAL" means J.P. Morgan Australia Limited and its successors.

         "JPMCB" means JPMorgan Chase Bank, N.A. and its successors.

         "JPMEL" means J.P. Morgan Europe Limited and its successors.

         "JUDGMENT CURRENCY" has the meaning assigned to such term in Section
9.13(b).

         "LC DISBURSEMENT" means a payment made by the Issuing Bank in respect
of a Letter of Credit.

         "LC EXPOSURE" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the applicable Borrower at such time. The LC Exposure of any Multicurrency
Tranche Lender at any time shall be such Lender's Multicurrency Tranche
Percentage of the aggregate LC Exposure at such time.

         "LENDERS" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that shall have ceased to be a party
hereto pursuant to an Assignment and Assumption.

         "LETTER OF CREDIT" means any letter of credit issued pursuant to this
Agreement on behalf of Lenders holding Multicurrency Tranche Commitments.

         "LEVERAGE RATIO" means, at any date of determination, the ratio of
Consolidated Debt at the end of the most recent fiscal quarter for which
financial statements have been delivered to Consolidated EBITDA for the period
of four consecutive fiscal quarters then ended.

         "LIBO RATE" means, with respect to any Eurocurrency Borrowing for any
Interest Period, the rate per annum determined by the Applicable Agent at
approximately 11:00 a.m., London time, on the Quotation Day for such Interest
Period by reference to the British Bankers' Association Interest Settlement
Rates for deposits in the currency of such Borrowing (as reflected on the
applicable Telerate screen), for a period equal to such Interest Period;
PROVIDED that, to the extent that an interest rate is not ascertainable pursuant
to the foregoing provisions of this definition, the "LIBO Rate" shall be the
average (rounded upward, if necessary, to the next 1/100 of 1%) of the
respective interest rates per annum at which deposits in the currency of such
Borrowing are offered for such Interest Period to major banks in the London
interbank market by JPMCB at


                                       15
<PAGE>


approximately 11:00 a.m., London time, on the date two Business Days prior to
the beginning of such Interest Period.

         "LIEN" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge, security interest, security title,
preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, servitude or encumbrance of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, the Company or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease (but not an operating lease) or other title retention agreement relating
to such asset.

         "LILLY SECURITIES" means the 7 3/4% Senior Notes due 2007 issued under
the Indenture dated as of November 10, 1997, between Lilly Industries, Inc. and
BNY Midwest Trust Company (as successor to Harris Trust and Savings Bank), as
trustee.

         "LOAN DOCUMENTS" means this Agreement, each Borrowing Subsidiary
Agreement, each Borrowing Subsidiary Termination, the Guarantee Agreement, the
Indemnity, Subrogation and Contribution Agreement and each promissory note
delivered pursuant to this Agreement, as such documents may be amended,
modified, supplemented, or restated from time to time.

         "LOANS" means the loans made by the Lenders to the Borrowers pursuant
to this Agreement.

         "LOCAL TIME" means (a) with respect to a Loan or Borrowing denominated
in US Dollars, New York City time, (b) with respect to a Loan or Borrowing
denominated in any Designated Foreign Currency, London time and (c) with respect
to a Loan or Borrowing denominated in Australian Dollars, Sydney time.

         "LONDON AGENT" means JPMEL, in its capacity as London agent for the
Lenders hereunder, or any successor thereto appointed in accordance with Article
VII.

         "MARGIN" means, with respect to any Competitive Loan bearing interest
at a rate based on the LIBO Rate, the marginal rate of interest, if any, to be
added to or subtracted from the LIBO Rate to determine the rate of interest
applicable to such Loan, as specified by the Lender making such Loan in its
related Competitive Bid.

         "MARGIN STOCK" means "margin stock" as defined in Regulation T, U or X
of the Board, as in effect from time to time, together with all official rulings
and interpretations issued thereunder.

         "MATERIAL ADVERSE EFFECT" means any event, act, condition or occurrence
that, alone or in conjunction with one or more other events, acts, conditions or
occurrences, has resulted or is reasonably likely to result in a material
adverse effect on


                                       16
<PAGE>


(a) the financial condition, operations, business or properties of the Company
and the Consolidated Subsidiaries, taken as a whole, (b) the rights and remedies
of the Agents and the Lenders under the Loan Documents or the ability of the
Company to perform its obligations under the Loan Documents to which it is a
party or (c) the legality, validity or enforceability of any Loan Document.

         "MATERIAL SUBSIDIARY" means, on any date, any Subsidiary that either
(a) had, at the end of the most recently ended Fiscal Year, assets with a book
value greater than 10% of Consolidated Total Assets at the end of such Fiscal
Year (or, with respect to any Subsidiary that shall have been acquired by the
Company since the end of such Fiscal Year, that had, at the time of such
acquisition, assets with a book value greater than 10% of Consolidated Total
Assets at the end of such Fiscal Year), or (b) contributed more than 5% of
Consolidated Operating Profits for the most recently ended Fiscal Year (or, with
respect to any Subsidiary that shall have been acquired by the Company since the
end of such Fiscal Year, that would have contributed more than 5% of
Consolidated Operating Profits for the entire such Fiscal Year had it been a
Subsidiary for the entire such Fiscal Year, as determined on a pro forma basis
in accordance with GAAP); PROVIDED, that if at any time the aggregate Total
Assets of all Domestic Subsidiaries that are not Material Subsidiaries as of the
end of the most recently ended Fiscal Year exceeds 20% of Consolidated Total
Assets as of the end of such Fiscal Year, the Company (or, in the event the
Company has failed to do so within 30 days, the Administrative Agent) shall
designate sufficient Domestic Subsidiaries as "Material Subsidiaries" to
eliminate such excess, and such designated Subsidiaries shall for all purposes
of this Agreement constitute Material Subsidiaries.

         "MATURITY DATE" means October 25, 2010.

         "MOODY'S" means Moody's Investors Service, Inc.

         "MULTICURRENCY TRANCHE COMMITMENT" means, with respect to each
Multicurrency Tranche Lender, the commitment of such Multicurrency Tranche
Lender set forth on Schedule 2.01 (or in the Assignment and Assumption pursuant
to which such Multicurrency Tranche Lender shall have assumed its Multicurrency
Tranche Commitment) to make Multicurrency Tranche Revolving Loans pursuant to
Section 2.01(a), as such commitment may be (a) reduced from time to time
pursuant to Section 2.08, (b) increased from time to time pursuant to Section
9.02(c) and (c) reduced or increased from time to time pursuant to assignments
by or to such Lender pursuant to Section 9.04. The aggregate amount of the
Multicurrency Tranche Commitments on the date hereof is US$450,000,000.

         "MULTICURRENCY TRANCHE LENDER" mean a Lender with a Multicurrency
Tranche Commitment.

         "MULTICURRENCY TRANCHE PERCENTAGE" means, with respect to any
Multicurrency Tranche Lender, the percentage of the total Multicurrency Tranche
Commitments represented by such Lender's Multicurrency Tranche Commitment. If
the Multicurrency Tranche Commitments have terminated or expired, the
Multicurrency


                                       17
<PAGE>


Tranche Percentages shall be determined based upon the Multicurrency Tranche
Commitments most recently in effect, giving effect to any assignments.

         "MULTICURRENCY TRANCHE REVOLVING BORROWING" means a Borrowing comprised
of Multicurrency Tranche Revolving Loans.

         "MULTICURRENCY TRANCHE REVOLVING EXPOSURE" means, with respect to any
Multicurrency Tranche Lender at any time, the sum of (i) the US Dollar
Equivalent of the principal amounts of such Lender's Multicurrency Tranche
Revolving Loans and (ii) the LC Exposure of such Lender at such time.

         "MULTICURRENCY TRANCHE REVOLVING LOAN" means a Loan made by a
Multicurrency Tranche Lender pursuant to Section 2.01(a). Each Multicurrency
Tranche Revolving Loan shall be (i) if denominated in a Designated Foreign
Currency, a Eurocurrency Loan or (ii) if denominated in US Dollars, a
Eurocurrency Loan or an ABR Loan.

         "MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

         "NET INCOME" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, for such period, as determined in
accordance with GAAP.

         "NET PROCEEDS OF CAPITAL STOCK/CONVERSION OF DEBT" means any and all
proceeds (whether cash or non-cash) or other consideration received by the
Company or a Consolidated Subsidiary in respect of the issuance of Capital Stock
(including, without limitation, the aggregate amount of any and all Debt
converted into Capital Stock), after deducting therefrom all reasonable and
customary costs and expenses incurred by the Company or such Consolidated
Subsidiary directly in connection with the issuance of such Capital Stock.

         "OBLIGATIONS" means the due and punctual payment of (a) the principal
of and premium, if any, and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans made to each Borrower, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (b) all
payments required to be made by any Borrower under this Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of
reimbursement of LC Disbursements, interest thereon and obligations to provide
cash collateral and (c) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Company or any other
Borrower or Subsidiary Guarantor under this Agreement or any other Loan
Document.


                                       18
<PAGE>

         "OPERATING PROFITS" means, as applied to any Person for any period, the
operating income of such Person for such period, as determined in accordance
with GAAP.

         "OTHER TAXES" means 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.

         "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.

         "PERMITTED ACQUISITION" means any Acquisition (a) which is of a Person
engaged in or assets used in the same or similar line or lines of business as
the Company or any Consolidated Subsidiaries, and (b) if the aggregate
consideration to be paid by the Company or any Subsidiary in connection with
such Acquisition exceeds US$100,000,000, as to which the Company has delivered
to the Lenders a certificate of the chief financial officer, treasurer or chief
accounting officer of the Company certifying (and, in the case of Sections 5.03,
5.04, 5.08 and 5.11(d), including calculations evidencing) pro-forma compliance
with the terms of this Agreement after giving effect to such Acquisition.

         "PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.

         "PLAN" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.

         "PREPAID REBATES" means any payment made to or credit allowed to a
customer or prospective customer of the Company or any Subsidiary, or to any
affiliate of the customer or prospective customer, in each case in the ordinary
course of the Company's or such Subsidiary's business and pursuant to a written
agreement or purchase order, which represents the prepayment of a rebate, price
discount or price reduction on products sold or to be sold by the Company or
such Subsidiary to one or more customers or prospective customers.

         "PRIME RATE" means the rate of interest per annum publicly announced
from time to time by JPMCB as its prime rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.


                                       19
<PAGE>

         "PROPERTIES" means all real property owned, leased or otherwise used or
occupied by the Company or any Subsidiary, wherever located.

         "QUOTATION DAY" means, with respect to any Eurocurrency Borrowing and
any Interest Period, the day on which it is market practice in the relevant
interbank market for prime banks to give quotations for deposits in the currency
of such Borrowing for delivery on the first day of such Interest Period. If such
quotations would normally be given by prime banks on more than one day, the
Quotation Day will be the last of such days.

         "REDEEMABLE PREFERRED STOCK" of any Person means any preferred stock
issued by such Person which is at any time prior to the Maturity Date either (i)
mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.

         "REGISTER" has the meaning set forth in Section 9.04(c).

         "RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.

         "REPORTED NET INCOME" means, for any period, the Net Income of the
Company and its Consolidated Subsidiaries determined on a consolidated basis.

         "REQUIRED LENDERS" means, at any time, Lenders having Revolving
Exposures and unused Commitments representing more than 50% of the sum of the
total Revolving Exposures and unused Commitments at such time; PROVIDED that (i)
for purposes of terminating the Commitments pursuant to Article VI, Required
Lenders shall mean Lenders representing more than 50% of the Commitments at such
time, (ii) for purposes of declaring the Loans to be due and payable pursuant to
Article VI, Required Lenders shall mean Lenders having Revolving Exposures and
Competitive Loan Exposures representing more than 50% of the total Revolving
Exposures and Competitive Loan Exposures at such time and (iii) for all purposes
after the Loans become due and payable pursuant to Article VI and the
Commitments expire or terminate, Required Lenders shall mean Lenders having
Revolving Exposures and Competitive Loan Exposures representing more than 50% of
the total Revolving Exposures and Competitive Loan Exposures at such time.

         "RESET DATE" has the meaning assigned to such term in Section 1.05.

         "RESTRICTED PAYMENT" means (i) any dividend or other distribution on
any shares of the Company's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of any shares of the Company's capital
stock (except shares acquired upon the conversion thereof into other shares of
its capital stock).

         "REVOLVING EXPOSURE" means a Multicurrency Tranche Revolving Exposure
or an Australian Tranche Revolving Exposure.


                                       20
<PAGE>

         "REVOLVING LOAN" means a Multicurrency Tranche Revolving Loan or an
Australian Tranche Revolving Loan.

         "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.

         "SECURITY" has the meaning assigned to such term in Section 2(l) of the
Securities Act of 1933, as amended.

         "SHAREHOLDERS' EQUITY" means, at any time, the shareholders' equity of
the Company and its Consolidated Subsidiaries, as set forth or reflected on the
most recent consolidated balance sheet of the Company and its Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable
Preferred Stock of the Company or any of its Consolidated Subsidiaries.
Shareholders' equity generally would include, but not be limited to (i) the par
or stated value of all outstanding Capital Stock, (ii) capital surplus, (iii)
retained earnings, and (iv) various deductions such as (A) purchases of treasury
stock, (B) valuation allowances, (C) receivables due from an employee stock
ownership plan, (D) employee stock ownership plan debt guarantees, and (E)
translation adjustments for foreign currency transactions.

         "SPC" shall have the meaning assigned to such term in Section 9.04(h).

         "STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject, for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.

         "STERLING" or "(pound)" means the lawful money of the United Kingdom.

         "SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation or other entity of which equity securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the time
directly or indirectly owned by the parent.

         "SUBSIDIARY" means any subsidiary of the Company.

         "SUBSIDIARY GUARANTOR" means (i) each Subsidiary listed on Schedule
1.01 and (ii) each Subsidiary that becomes a Guarantor pursuant to Section 5.22.


                                       21
<PAGE>


         "SWISS FRANCS" means the lawful currency of Switzerland.

         "TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.

         "THIRD PARTIES" means all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Company's or any Subsidiary's business and on a temporary basis.

         "TOTAL ASSETS" of any Person means, at any time, the total assets of
such Person, as set forth or reflected or as should be set forth or reflected on
the most recent balance sheet of such Person, prepared in accordance with GAAP.

         "TRANSACTIONS" means the execution, delivery and performance by the
Borrowers of the Loan Documents, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder.

         "TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate
Base Rate, the Australian Bank Bill Rate or, in the case of a Competitive Loan
or Borrowing, the LIBO Rate or a Fixed Rate.

         "US BORROWING SUBSIDIARY" means any Subsidiary that is incorporated or
otherwise organized under the laws of the United States or any political
subdivision thereof that has been designated as a Borrowing Subsidiary pursuant
to Section 2.19 and that has not ceased to be a Borrowing Subsidiary as provided
in such Section.

         "US DOLLARS" or "US$" refers to lawful money of the United States of
America.

         "US DOLLAR EQUIVALENT" means, on any date of determination, (a) with
respect to any amount in US Dollars, such amount, and (b) with respect to any
amount in any Committed Foreign Currency, the equivalent in US Dollars of such
amount, determined by the Administrative Agent pursuant to Section 1.05 using
the Exchange Rate with respect to such Committed Foreign Currency at the time in
effect under the provisions of such Section.

         "US LENDING OFFICE" means, as to any Australian Tranche Lender, the
applicable office designated to make Loans in US Dollars.

         "USA PATRIOT ACT" means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001.

         "WHOLLY OWNED SUBSIDIARY" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Company.


                                       22
<PAGE>


         "WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

         "YEN" or "(Y)"means the lawful money of Japan.

         SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of
this Agreement, Loans may be classified and referred to by Class (E.G., a
"Multicurrency Tranche Revolving Loan") or by Type (E.G., a "Eurocurrency Loan")
or by Class and Type (E.G., a "Multicurrency Tranche Eurocurrency Revolving
Loan"). Borrowings also may be classified and referred to by Class (E.G., a
"Multicurrency Tranche Revolving Borrowing") or by Type (E.G., a "Eurocurrency
Borrowing") or by Class and Type (E.G., a "Multicurrency Tranche Eurocurrency
Revolving Borrowing").

         SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

         SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.


                                       23
<PAGE>

         SECTION 1.05. EXCHANGE RATES. (a) Not later than 1:00 p.m., New York
City time, on each Calculation Date, the Administrative Agent shall (i)
determine the Exchange Rate as of such Calculation Date with respect to each
Committed Foreign Currency and (ii) give notice thereof to the Lenders and the
Company. The Exchange Rates so determined shall become effective on the first
Business Day immediately following the relevant Calculation Date (a "RESET
DATE"), shall remain effective until the next succeeding Reset Date, and shall
for all purposes of this Agreement (other than Section 9.13 or any other
provision expressly requiring the use of a current Exchange Rate) be the
Exchange Rates employed in converting any amounts between US Dollars and
Committed Foreign Currencies.

         (b) Not later than 5:00 p.m., New York City time, on each Reset Date
and each date on which Revolving Loans denominated in any Committed Foreign
Currency are made or are continued for a new Interest Period, the Administrative
Agent shall (i) determine the aggregate amount of the US Dollar Equivalent of
the principal amounts of the Loans denominated in Committed Foreign Currencies
then outstanding (after giving effect to any Loans denominated in Committed
Foreign Currencies made or repaid on such date) and (ii) notify the Lenders and
the Company of the results of such determination.

         SECTION 1.06. REDENOMINATION OF CERTAIN DESIGNATED FOREIGN CURRENCIES.
(a) Each obligation of any party to this Agreement to make a payment denominated
in the national currency unit of any member state of the European Union that
adopts the Euro as its lawful currency after the date hereof shall be
redenominated into Euro at the time of such adoption (in accordance with the EMU
Legislation). If, in relation to the currency of any such member state, the
basis of accrual of interest expressed in this Agreement in respect of that
currency shall be inconsistent with any convention or practice in the London
interbank market for the basis of accrual of interest in respect of the Euro,
such expressed basis shall be replaced by such convention or practice with
effect from the date on which such member state adopts the Euro as its lawful
currency; PROVIDED that if any Borrowing in the currency of such member state is
outstanding immediately prior to such date, such replacement shall take effect,
with respect to such Borrowing, at the end of the then current Interest Period.

         (b) Without prejudice and in addition to any method of conversion or
rounding prescribed by any EMU Legislation and (i) without limiting the
liability of any Borrower for any amount due under this Agreement and (ii)
without increasing any Commitment of any Lender, all references in this
Agreement to minimum amounts (or integral multiples thereof) denominated in the
national currency unit of any member state of the European Union that adopts the
Euro as its lawful currency after the date hereof shall, immediately upon such
adoption, be replaced by references to such minimum amounts (or integral
multiples thereof) as shall be specified herein with respect to Borrowings
denominated in Euro.

         (c) Each provision of this Agreement shall be subject to such
reasonable changes of construction as the Administrative Agent may from time to
time specify to be


                                       24
<PAGE>


appropriate to reflect the adoption of the Euro by any member state of the
European Union and any relevant market conventions or practices relating to the
Euro.

                                   ARTICLE II

                                   The Credits
                                   -----------

         SECTION 2.01. COMMITMENTS. (a) Subject to the terms and conditions set
forth herein, each Multicurrency Tranche Lender agrees to make Multicurrency
Tranche Revolving Loans to the Borrowers from time to time during the
Availability Period in US Dollars or one or more Designated Foreign Currencies
in amounts that will not result in (i) such Lender's Multicurrency Tranche
Revolving Exposure exceeding its Multicurrency Tranche Commitment, (ii) the
aggregate Multicurrency Tranche Revolving Exposures exceeding the aggregate
Multicurrency Tranche Commitments, and (iii) the sum of the aggregate Revolving
Exposures plus the aggregate Competitive Loan Exposures exceeding the aggregate
Commitments.

         (b) Subject to the terms and conditions set forth herein, each
Australian Tranche Lender agrees (i) to make Australian Tranche Revolving Loans
to the Australian Borrowing Subsidiaries in Australian Dollars from its
Australian Lending Office, and (ii) to make Australian Tranche Revolving Loans
to the Company and the US Borrowing Subsidiaries in US Dollars or one or more
Designated Foreign Currencies (PROVIDED that no Australian Tranche Lender shall
be required to make Australian Tranche Revolving Loans denominated in US Dollars
or any Designated Foreign Currency from its Australian Lending Office), in
amounts that will not result in (A) such Lender's Australian Tranche Revolving
Exposure exceeding its Australian Tranche Commitment, (B) the aggregate
Australian Tranche Revolving Exposures exceeding the aggregate Australian
Tranche Commitments or (C) the sum of the aggregate Revolving Exposures plus the
aggregate Competitive Loan Exposures exceeding the aggregate Commitments.

         (c) Within the foregoing limits, and subject to the terms and
conditions set forth herein, any Borrower may borrow, prepay and reborrow
Revolving Loans.

         SECTION 2.02. LOANS AND BORROWINGS. (a) Each Multicurrency Tranche
Revolving Loan shall be made as part of a Borrowing consisting of Multicurrency
Tranche Revolving Loans made by the Multicurrency Tranche Lenders ratably in
accordance with their respective Multicurrency Tranche Commitments. Each
Australian Tranche Revolving Loan shall be made as part of a Borrowing
consisting of Australian Tranche Revolving Loans made by the Australian Tranche
Lenders ratably in accordance with their respective Australian Tranche
Commitments. Each Competitive Loan shall be made in accordance with the
procedures set forth in Section 2.04. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; PROVIDED that the Commitments and Competitive Bids of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required hereunder.


                                       25
<PAGE>


         (b) Subject to Section 2.13, (i) each Revolving Borrowing denominated
in a Designated Foreign Currency shall be comprised entirely of Eurocurrency
Loans, (ii) each Revolving Borrowing denominated in Australian Dollars shall be
comprised entirely of Bill Rate Loans, (iii) each Revolving Borrowing
denominated in US Dollars shall be comprised entirely of ABR Loans or
Eurocurrency Loans as the applicable Borrower may request in accordance
herewith, and (iv) each Competitive Borrowing shall be comprised entirely of
Eurocurrency Loans or Fixed Rate Loans as the applicable Borrower may request in
accordance herewith. Each Lender at its option may make any Eurocurrency Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; PROVIDED that any exercise of such option shall not affect the obligation
of any Borrower to repay such Loan in accordance with the terms of this
Agreement.

         (c) At the commencement of each Interest Period for any Borrowing, such
Borrowing shall be in an aggregate amount that is at least equal to the
Borrowing Minimum and an integral multiple of the Borrowing Multiple; PROVIDED
that an ABR Revolving Borrowing may be in an aggregate amount that is equal to
the entire unused balance of the Commitments of the applicable Class, or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e). Borrowings of more than one Type and Class may be outstanding
at the same time; PROVIDED that there shall not at any time be more than a total
of ten Eurocurrency Revolving Borrowings outstanding with different Interest
Period termination dates.

         (d) Notwithstanding any other provision of this Agreement, no Borrower
shall be entitled to request, or to elect to convert or continue, any Borrowing
if the Interest Period requested with respect thereto would end after the
Maturity Date.

         SECTION 2.03. REQUESTS FOR REVOLVING BORROWINGS. To request a Revolving
Borrowing, the applicable Borrower, or the Company on behalf of the applicable
Borrower, shall notify the Applicable Agent of such request by telephone (a) in
the case of a Eurocurrency Borrowing denominated in US Dollars or a Bill Rate
Borrowing, not later than 11:00 a.m., Local Time, three Business Days before the
date of the proposed Borrowing, (b) in the case of a Eurocurrency Borrowing
denominated in a Designated Foreign Currency, not later than 11:00 a.m., Local
Time, four Business Days before the date of the proposed Borrowing, or (c) in
the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, the
Business Day of the proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Applicable Agent of a written Borrowing Request in a form
approved by the Applicable Agent and signed by the applicable Borrower, or by
the Company on behalf of the applicable Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:

                  (i) the Borrower requesting such Borrowing (or on whose behalf
         the Company is requesting such Borrowing);

                                       26
<PAGE>

                  (ii) the Class, currency and aggregate principal amount of the
         requested Borrowing;

                  (iii) the date of the requested Borrowing, which shall be a
         Business Day;

                  (iv) whether the requested Borrowing is to be an ABR
         Borrowing, a Eurocurrency Borrowing or a Bill Rate Borrowing;

                  (v) in the case of a Eurocurrency Borrowing or a Bill Rate
         Borrowing, the initial Interest Period to be applicable thereto, which
         shall be a period contemplated by the definition of the term "Interest
         Period"; and

                  (vi) the location and number of the Borrower's account to
         which funds are to be disbursed, which shall comply with the
         requirements of Section 2.06.

If no currency is specified with respect to any requested Eurocurrency Revolving
Borrowing, then the relevant Borrower shall be deemed to have selected US
Dollars. If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be (i) in the case of a Borrowing denominated in US
Dollars, an ABR Borrowing, (ii) in the case of a Borrowing denominated in a
Designated Foreign Currency, a Eurocurrency Borrowing and (iii) in the case of a
Borrowing denominated in Australian Dollars, a Bill Rate Borrowing. If no
Interest Period is specified with respect to any requested Eurocurrency
Revolving Borrowing, then the relevant Borrower shall be deemed to have selected
an Interest Period of one month's duration. Promptly following receipt of a
Borrowing Request in accordance with this Section, the Applicable Agent shall
advise each Lender that will make a Loan as part of the requested Borrowing of
the details thereof and of the amount of such Lender's Loan to be made as part
of the requested Borrowing.

         SECTION 2.04. COMPETITIVE BID PROCEDURE. (a) Subject to the terms and
conditions set forth herein, from time to time during the Availability Period
any Borrower may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids and borrow Competitive Loans, in each
case denominated in US Dollars or any Designated Foreign Currency; PROVIDED that
after giving effect to any Borrowing of Competitive Loans the sum of the total
Revolving Exposures and the total Competitive Loan Exposures shall not exceed
the total Commitments. To request Competitive Bids, the Company or the
applicable Borrowing Subsidiary shall notify the Applicable Agent of such
request by telephone, in the case of a Eurocurrency Borrowing, not later than
11:00 a.m., Local Time, four Business Days before the date of the proposed
Borrowing and, in the case of a Fixed Rate Borrowing, not later than 10:00 a.m.,
Local Time, one Business Day before the date of the proposed Borrowing; PROVIDED
that the Borrowers may submit up to (but not more than) three Competitive Bid
Requests on the same day, but a Competitive Bid Request shall not be made within
five Business Days after the date of any previous Competitive Bid Request,
unless any and all such previous Competitive Bid Requests shall have been
withdrawn or all Competitive Bids received in response thereto rejected. Each
such telephonic Competitive Bid Request shall be confirmed promptly by hand
delivery or telecopy to the Applicable Agent of a written


                                       27
<PAGE>


Competitive Bid Request in a form approved by the Applicable Agent and signed by
the relevant Borrower. Each such telephonic and written Competitive Bid Request
shall specify the following information in compliance with Section 2.02:

                  (i) the Borrower requesting such Borrowing (or on whose behalf
         the Company is requesting such Borrowing);

                  (ii) the aggregate principal amount and currency of the
         requested Borrowing;

                  (iii) the date of the requested Borrowing, which shall be a
         Business Day;

                  (iv) whether such Borrowing is to be a Eurocurrency Borrowing
         or a Fixed Rate Borrowing;

                  (v) the Interest Period to be applicable to such Borrowing,
         which shall be a period contemplated by the definition of the term
         "Interest Period"; and

                  (vi) the location and number of the Borrower's account to
         which funds are to be disbursed, which shall comply with the
         requirements of Section 2.06.

Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Applicable Agent shall notify the Lenders of the details thereof by
telecopy, inviting the Lenders to submit Competitive Bids.

         (b) Each Lender may (but shall not have any obligation to) make one or
more Competitive Bids to any Borrower in response to a Competitive Bid Request.
Each Competitive Bid by a Lender must be in a form approved by the Applicable
Agent and must be received by the Applicable Agent by telecopy, in the case of a
Eurocurrency Competitive Borrowing, not later than 9:30 a.m., Local Time, three
Business Days before the proposed date of such Competitive Borrowing, and in the
case of a Fixed Rate Borrowing, not later than 9:30 a.m., Local Time, on the
proposed date of such Competitive Borrowing. Competitive Bids that do not
conform substantially to the form approved by the Applicable Agent may be
rejected by the Applicable Agent, and the Applicable Agent shall notify the
applicable Lender as promptly as practicable. Each Competitive Bid shall specify
(i) the principal amount (which shall be in an amount that is at least equal to
the Borrowing Minimum and an integral multiple equal to the Borrowing Multiple,
and which may equal the entire principal amount of the Competitive Borrowing
requested by the relevant Borrower) of the Competitive Loan or Loans that the
Lender is willing to make, (ii) the Competitive Bid Rate or Rates at which the
Lender is prepared to make such Loan or Loans (expressed as a percentage rate
per annum in the form of a decimal to no more than four decimal places) and
(iii) the Interest Period applicable to each such Loan and the last day thereof.

         (c) The Applicable Agent shall promptly notify the applicable Borrower
by telecopy of the Competitive Bid Rate and the principal amount specified in
each Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.


                                       28
<PAGE>


         (d) Subject only to the provisions of this paragraph, the Borrower may
accept or reject any Competitive Bid. The Borrower shall notify the Applicable
Agent by telephone, confirmed by telecopy in a form approved by the Applicable
Agent, whether and to what extent it has decided to accept or reject each
Competitive Bid, in the case of a Eurocurrency Competitive Borrowing, not later
than 10:30 a.m., Local Time, three Business Days before the date of the proposed
Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than
10:30 a.m., Local Time, on the date of the proposed Competitive Borrowing;
PROVIDED that (i) the failure of the Borrower to give such notice shall be
deemed to be a rejection of each Competitive Bid, (ii) the Borrower shall not
accept a Competitive Bid made at a particular Competitive Bid Rate if the
relevant Borrower rejects a Competitive Bid made at a lower Competitive Bid
Rate, (iii) the aggregate amount of the Competitive Bids accepted by the
Borrower shall not exceed the aggregate amount of the requested Competitive
Borrowing specified in the related Competitive Bid Request, (iv) to the extent
necessary to comply with clause (iii) above, the Borrower may accept Competitive
Bids at the same Competitive Bid Rate in part, which acceptance, in the case of
multiple Competitive Bids at such Competitive Bid Rate, shall be made pro rata
in accordance with the amount of each such Competitive Bid, and (v) except
pursuant to clause (iv) above, no Competitive Bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount
of at least the Borrowing Minimum and an integral multiple equal to the
Borrowing Multiple; PROVIDED FURTHER that if a Competitive Loan must be in an
amount less than the Borrowing Minimum because of the provisions of clause (iv)
above, such Competitive Loan may have a minimum amount of US$1,000,000 (or, in
the case of a Designated Foreign Currency Competitive Loan, the smallest amount
of such Designated Foreign Currency that (i) is an integral multiple of
1,000,000 units (or, in the case of Sterling, 500,000 units) of such currency
and (ii) has a US Dollar Equivalent in excess of US$1,000,000) and in
calculating the pro rata allocation of acceptances of portions of multiple
Competitive Bids at a particular Competitive Bid Rate pursuant to clause (iv)
the amounts shall be rounded to integral multiples of the Borrowing Multiple in
a manner determined by the Borrower. A notice given by a Borrower pursuant to
this paragraph shall be irrevocable.

         (e) The Applicable Agent shall promptly notify each bidding Lender by
telecopy whether or not its Competitive Bid has been accepted (and, if so, the
amount and Competitive Bid Rate so accepted), and each successful bidder will
thereupon become bound, subject to the terms and conditions hereof, to make the
Competitive Loan in respect of which its Competitive Bid has been accepted.

         (f) If the Applicable Agent shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such Competitive Bid directly to the
Borrower at least one quarter of an hour earlier than the time by which the
other Lenders are required to submit their Competitive Bids to the Applicable
Agent pursuant to paragraph (b) of this Section.

         SECTION 2.05. LETTERS OF CREDIT. (a) GENERAL. Subject to the terms and
conditions set forth herein, any Borrower may request the issuance (or the
amendment, renewal or extension) of Letters of Credit denominated in US Dollars
for its own account,


                                       29
<PAGE>


in a form reasonably acceptable to the Administrative Agent and the Issuing
Bank, at any time and from time to time during the Availability Period. In the
event of any inconsistency between the terms and conditions of this Agreement
and the terms and conditions of any form of letter of credit application or
other agreement submitted by a Borrower to, or entered into by a Borrower with,
the Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.

         (b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the relevant Borrower
shall hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to enable the Issuing Bank to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, such Borrower also shall submit a letter of credit application on
the Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrowers shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $100,000,000, (ii) the aggregate Multicurrency Tranche Revolving
Exposures shall not exceed the Multicurrency Tranche Commitments and (iii) the
aggregate Revolving Exposures plus the aggregate Competitive Loan Exposures
shall not exceed the aggregate Commitments.

         (c) EXPIRATION DATE. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.

         (d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Multicurrency Tranche
Lenders, the Issuing Bank hereby grants to each Multicurrency Tranche Lender,
and each Multicurrency Tranche Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Multicurrency Tranche
Lender's Multicurrency Tranche Percentage of the aggregate amount available to
be drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Multicurrency Tranche Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Lender's Multicurrency Tranche Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the relevant
Borrower on the date due as


                                       30
<PAGE>


provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the relevant Borrower for any reason. Each
Multicurrency Tranche Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Multicurrency Tranche Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.

         (e) REIMBURSEMENT. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the relevant Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 2:00 p.m., New York City time, on the date that such
LC Disbursement is made, if such Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by such Borrower prior to such time on such date,
then not later than 2:00 p.m., New York City time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to 10:00
a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; PROVIDED that
the relevant Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 that such payment be financed
with a Multicurrency Tranche ABR Revolving Borrowing in an equivalent amount
and, to the extent so financed, the relevant Borrower's obligation to make such
payment shall be discharged and replaced by the resulting Multicurrency Tranche
ABR Revolving Borrowing. If the relevant Borrower fails to make such payment
when due, the Administrative Agent shall notify each Multicurrency Tranche
Lender of the applicable LC Disbursement, the payment then due from such
Borrower in respect thereof and such Multicurrency Tranche Lender's
Multicurrency Tranche Percentage thereof. Promptly following receipt of such
notice, each Multicurrency Tranche Lender shall pay to the Administrative Agent
its Multicurrency Tranche Percentage of the payment then due from such Borrower,
in the same manner as provided in Section 2.06 with respect to Loans made by
such Multicurrency Tranche Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Multicurrency Tranche Lenders), and
the Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Multicurrency Tranche Lenders. Promptly following
receipt by the Administrative Agent of any payment from the relevant Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Multicurrency Tranche Lenders
have made payments pursuant to this paragraph to reimburse the Issuing Bank,
then to such Multicurrency Tranche Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Multicurrency Tranche Lender
pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement
(other than the funding of ABR Revolving Loans as contemplated above) shall not
constitute a Loan and shall not relieve the relevant Borrower of its obligation
to reimburse such LC Disbursement.


                                       31
<PAGE>


         (f) OBLIGATIONS ABSOLUTE. A Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any other Loan Document, or any term or provision
herein or therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by
the Issuing Bank under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit or
(iv) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section, constitute
a legal or equitable discharge of, or provide a right of set-off against, such
Borrower's obligations hereunder. None of the Administrative Agent, the
Multicurrency Tranche Lenders or the Issuing Bank, or any of their Related
Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; PROVIDED that the foregoing shall not be construed to excuse the
Issuing Bank from liability to a Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrowers to the extent permitted by applicable law) suffered by
such Borrower that are caused by the Issuing Bank's failure to exercise care
when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or wilful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.

         (g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the relevant Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; PROVIDED that any failure to give or
delay in giving such notice shall not relieve such Borrower of its obligation to
reimburse the Issuing Bank and the Multicurrency Tranche Lenders with respect to
any such LC Disbursement.


                                       32
<PAGE>


         (h) INTERIM INTEREST. If the Issuing Bank shall make any LC
Disbursement, then, unless the relevant Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that such Borrower reimburses
such LC Disbursement, at the rate per annum then applicable to ABR Revolving
Loans; PROVIDED that, if such Borrower fails to reimburse such LC Disbursement
when due pursuant to paragraph (e) of this Section, then Section 2.12(d) shall
apply. Interest accrued pursuant to this paragraph shall be for the account of
the Issuing Bank, except that interest accrued on and after the date of payment
by any Multicurrency Tranche Lender pursuant to paragraph (e) of this Section to
reimburse the Issuing Bank shall be for the account of such Multicurrency
Tranche Lender to the extent of such payment.

         (i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be replaced
at any time by written agreement among the Borrowers, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Multicurrency Tranche Lenders of any such replacement of
the Issuing Bank. At the time any such replacement shall become effective, the
Borrowers shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.11(d). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of the Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

         (j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, on the Business Day that the Company receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Multicurrency Tranche Lenders with LC Exposures
representing greater than 50% of the total LC Exposure) demanding the deposit of
cash collateral pursuant to this paragraph, the Company shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Multicurrency Tranche Lenders, an amount in cash
equal to the LC Exposure as of such date plus any accrued and unpaid interest
thereon; PROVIDED that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand presentment, protest or other notice of any kind, all of
which are expressly waived by the Borrowers, upon the occurrence of any Event of
Default with respect to the Company or any Subsidiary described in clause (g) or
(h) of Article VI. Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrowers
under this Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the


                                       33
<PAGE>


Administrative Agent and at the Company's risk and expense, such deposits shall
not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrowers, as
applicable, for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Multicurrency Tranche
Lenders with LC Exposures representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the Borrowers under this
Agreement. If the Company is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Company within
three Business Days after all Events of Default have been cured or waived.

         SECTION 2.06. FUNDING OF BORROWINGS. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, Local Time, to the account of the
Applicable Agent most recently designated by it for such purpose by notice to
the Lenders. The Applicable Agent will make such Loans available to the relevant
Borrower by promptly crediting the amounts so received, in like funds, to an
account of such Borrower maintained by the Applicable Agent (i) in New York
City, in the case of Loans denominated in US Dollars, (ii) in London, in the
case of Loans denominated in Designated Foreign Currencies, or (iii) in Sydney,
in the case of Loans denominated in Australian Dollars, and designated by such
Borrower in the applicable Borrowing Request or Competitive Bid Request.

         (b) Unless the Applicable Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Applicable Agent such Lender's share of such Borrowing,
the Applicable Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the relevant Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Applicable Agent, then the
applicable Lender and such Borrower severally agree to pay to the Applicable
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to such
Borrower to but excluding the date of payment to the Applicable Agent, at (x)
the Federal Funds Effective Rate (in the case of a Borrowing in US Dollars), or
(y) the rate reasonably determined by the London Agent or the Australian Agent,
as applicable, to be the cost to it of funding such amount (in the case of a
Borrowing in a Committed Foreign Currency), but not in excess of the interest
rate that would have applied to that Borrowing under the terms of this
Agreement. If such Lender pays such amount to the Applicable Agent, then such
amount shall constitute such Lender's Loan included in such Borrowing.

         SECTION 2.07. INTEREST ELECTIONS. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurocurrency Revolving Borrowing or a Bill Rate Borrowing,
shall have an


                                       34
<PAGE>


initial Interest Period as specified in such Borrowing Request. Thereafter, the
relevant Borrower may elect to convert any Multicurrency Tranche Revolving
Borrowing or Australian Tranche Revolving Borrowing to a Borrowing of a
different Type and, in the case of a Eurocurrency Revolving Borrowing or a Bill
Rate Borrowing, may elect Interest Periods therefor, all as provided in this
Section. A Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing. Notwithstanding the foregoing, no Borrowing may be converted to a
Borrowing of a different Class or denominated in a different currency. This
Section shall not apply to Competitive Borrowings, which may not be converted or
continued.

         (b) To make an election pursuant to this Section, a Borrower (or, in
the case of a Borrowing Subsidiary, the Company on its behalf) shall notify the
Applicable Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if such Borrower were requesting a
Revolving Borrowing of the Type and currency resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Applicable Agent of a written Interest Election
Request in a form approved by the Applicable Agent and signed by the relevant
Borrower, or by the Company on its behalf.

         (c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02:

                  (i) the Borrowing to which such Interest Election Request
         applies and, if different options are being elected with respect to
         different portions thereof, the portions thereof to be allocated to
         each resulting Borrowing (in which case the information to be specified
         pursuant to clauses (iii) and (iv) below shall be specified for each
         resulting Borrowing);

                  (ii) the effective date of the election made pursuant to such
         Interest Election Request, which shall be a Business Day;

                  (iii) whether the resulting Borrowing is to be an ABR
         Borrowing, a Eurocurrency Borrowing or a Bill Rate Borrowing; and

                  (iv) if the resulting Borrowing is a Eurocurrency Borrowing or
         a Bill Rate Borrowing, the Interest Period to be applicable thereto
         after giving effect to such election, which shall be a period
         contemplated by the definition of the term "Interest Period".

If any such Interest Election Request requests a Eurocurrency Borrowing or a
Bill Rate Borrowing but does not specify an Interest Period, then the relevant
Borrower shall be deemed to have selected an Interest Period of one month's
duration.


                                       35
<PAGE>


         (d) Promptly following receipt of an Interest Election Request, the
Applicable Agent shall advise each applicable Lender of the details thereof and
of such Lender's portion of each resulting Borrowing.

         (e) If the relevant Borrower fails to deliver a timely Interest
Election Request with respect to a Eurocurrency Revolving Borrowing or Bill Rate
Borrowing or irrevocable notice of its intent to prepay such Borrowing as of the
end of the applicable Interest Period thereto, prior to 11:00 a.m., Local Time,
three Business Days prior to the end of the Interest Period applicable thereto,
then, unless such Borrowing is repaid as provided herein, at the end of such
Interest Period such Borrowing shall be deemed to be and shall be continued as a
Eurocurrency Revolving Borrowing or Bill Rate Borrowing, with an Interest Period
of one month's duration (unless such Borrowing is denominated in any Designated
Foreign Currency, in which case such Borrowing shall become due and payable on
the last day of such Interest Period). Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the Applicable
Agent, at the request of the Required Lenders, so notifies the Company, then, so
long as an Event of Default is continuing (i) no outstanding Revolving Borrowing
denominated in US Dollars may be converted to or continued as a Eurocurrency
Borrowing and (ii) unless repaid, each Eurocurrency Revolving Borrowing
denominated in US Dollars shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.

         SECTION 2.08. TERMINATION AND REDUCTION OF COMMITMENTS. (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.

         (b) Upon at least three Business Days' prior irrevocable written notice
to the Administrative Agent, the Company may at any time terminate, or from time
to time reduce, the Multicurrency Tranche Commitments or the Australian Tranche
Commitments; PROVIDED that (i) each reduction of the Commitments of any such
Class shall be in an amount that is an integral multiple of US$1,000,000 and in
a minimum amount of US$5,000,000, (ii) the Company shall not terminate or reduce
the Multicurrency Tranche Commitments if, after giving effect to any concurrent
prepayment of Loans in accordance with this Agreement, (A) the aggregate
Multicurrency Tranche Revolving Exposures would exceed the aggregate
Multicurrency Tranche Commitments or (B) the aggregate Revolving Exposures and
Competitive Loan Exposures would exceed the aggregate Commitments and (iii) the
Company shall not terminate or reduce the Australian Tranche Commitments if,
after giving effect to any concurrent prepayment of Loans in accordance with
this Agreement, (A) the aggregate Australian Tranche Revolving Exposures would
exceed the aggregate Australian Tranche Commitments or (B) the aggregate
Revolving Exposures and Competitive Loan Exposures would exceed the aggregate
Commitments.

         (c) The Company shall notify the Administrative Agent in writing of any
election to terminate or reduce the Commitments of any Class under paragraph (b)
of this Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following


                                       36
<PAGE>


receipt of any notice pursuant to this Section 2.08, the Administrative Agent
shall advise the London Agent, the Australian Agent and the Lenders of the
contents thereof. Each notice delivered by the Company pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments
of any Class delivered by the Company may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Company (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments of any Class shall be permanent.
Each reduction of the Commitments of any Class shall be made ratably among the
applicable Lenders in accordance with their respective Commitments of such
Class.

         SECTION 2.09. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) Each Borrower
hereby unconditionally promises to pay (i) to the Applicable Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
on the Maturity Date and (ii) to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Competitive Loan made by
such Lender on the last day of the Interest Period applicable to such Loan.

         (b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

         (c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Agents
hereunder for the account of the Lenders and each Lender's share thereof.

         (d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of any Borrower to repay
the Loans in accordance with the terms of this Agreement.

         (e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, each Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).


                                       37
<PAGE>


         SECTION 2.10. PREPAYMENT OF LOANS. (a) Any Borrower shall have the
right at any time and from time to time to prepay any Borrowing of such Borrower
in whole or in part, subject to (i) prior notice in accordance with paragraph
(c) of this Section and (ii) in the case of a Eurocurrency Loan or Bill Rate
Loan, reimbursement of any breakage costs if prepayment occurs other than at the
end of an Interest Period; PROVIDED that a Borrower shall not have the right to
prepay any Competitive Loan without the prior consent of the Lender thereof.

         (b) In the event and on each occasion that (i) the aggregate
Multicurrency Tranche Revolving Exposures exceed 105% of the total Multicurrency
Tranche Commitments, (ii) the aggregate Australian Tranche Revolving Exposures
exceed 105% of the total Australian Tranche Commitments or (iii) the aggregate
Revolving Exposures and Competitive Loan Exposures exceed the aggregate
Revolving Commitments, the Borrowers shall promptly prepay Revolving Borrowings
in an aggregate amount sufficient to eliminate such excess.

         (c) The Company shall notify the Applicable Agent by telephone
(confirmed by telecopy) of any prepayment hereunder not later than 11:00 a.m.,
Local Time, (i) in the case of the prepayment of any Borrowing denominated in US
Dollars, one Business Day, or (ii) in the case of the prepayment of any
Borrowing denominated in Australian Dollars or any Designated Foreign Currency,
three Business Days before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; PROVIDED that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.08, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.08. Promptly following receipt of any such notice, the Applicable
Agent shall advise the applicable Lenders of the contents thereof. Each partial
prepayment of any Revolving Borrowing shall be in an amount that would be
permitted in the case of an advance of a Revolving Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.12.

         SECTION 2.11. FEES. (a) The Company agrees to pay to the Administrative
Agent, in US Dollars, for the account of the office (or Affiliate) of each
Lender from which such Lender would make Loans to the Company in US Dollars
hereunder (which office or Affiliate shall be specified by each Multicurrency
Tranche Lender and Australian Tranche Lender in a notice delivered to the
Administrative Agent prior to the initial payment to such Lender under this
paragraph), a facility fee, which shall accrue at the Applicable Rate on the
daily aggregate amount of the Commitments of such Lender (whether used or
unused) during the period from and including the Effective Date to but excluding
the date on which the last of such Commitments terminates; PROVIDED that, if
such Lender continues to have any Revolving Exposure or Competitive Loan
Exposure after its Commitments terminate, then such facility fee shall continue
to accrue on the daily amount of such Lender's Revolving Exposures and
Competitive Loan Exposure from and including the date on which the last of its
Commitments terminates to


                                       38
<PAGE>


but excluding the date on which such Lender ceases to have any Revolving
Exposure or Competitive Loan Exposure. Accrued facility fees shall be payable in
arrears on the last day of March, June, September and December of each year
(commencing on the first such date to occur after the date hereof), on each date
on which the Commitments of a Class terminate and on the Maturity Date; PROVIDED
that any facility fees accruing after the Maturity Date shall be payable on
demand. All facility fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).

         (b) For each day on which the sum of (i) the aggregate Revolving
Exposures and (ii) the aggregate Competitive Loan Exposures shall be greater
than 50% of the aggregate Commitments, and for each day after the Maturity Date,
a utilization fee, which shall accrue at a rate of 0.125% per annum, shall be
paid to each Lender, through the Applicable Agents, (A) by the Company and/or
the Borrowing Subsidiaries (other than Australian Borrowing Subsidiaries) in US
Dollars on such Lender's Australian Tranche Percentage of the portion of the US
Dollar Equivalent of the Australian Tranche Revolving Exposure attributable to
Australian Tranche Revolving Loans made to the Company or such Borrowing
Subsidiaries, (B) by the Australian Borrowing Subsidiaries in US Dollars on such
Lender's Australian Tranche Percentage of the portion of the US Dollar
Equivalent of the Australian Tranche Revolving Exposure attributable to
Australian Tranche Revolving Loans made to the Australian Borrowing Subsidiaries
and (C) by the Company or the Borrowing Subsidiaries in US Dollars on such
Lender's Multicurrency Tranche Percentage of the US Dollar Equivalent of the
aggregate Multicurrency Tranche Revolving Exposures. The accrued utilization
fees, if any, shall be payable in arrears on the last day of each March, June,
September and December and on the Maturity Date. All utilization fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

         (c) The Company agrees to pay (i) to the Administrative Agent for the
account of each Multicurrency Tranche Lender a participation fee with respect to
its participations in Letters of Credit, which shall accrue at the same
Applicable Rate used from time to time to determine the interest rate applicable
to Eurocurrency Revolving Loans on the average daily amount of such
Multicurrency Tranche Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the date hereof to but excluding the later of the date on which such
Multicurrency Tranche Lender's Multicurrency Tranche Commitment terminates and
the date on which such Multicurrency Tranche Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the
rate or rates per annum separately agreed upon between the Company and the
Issuing Bank on the average daily amount of the LC Exposure attributable to
Letters of Credit issued by the Issuing Bank (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure attributable to Letters of Credit issued by the Issuing Bank, as well
as the Issuing Bank's standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder.


                                       39
<PAGE>


Participation fees and fronting fees accrued through and including the last day
of March, June, September and December of each year shall be payable on the
third Business Day following such last day, commencing on the first such date to
occur after the date hereof; PROVIDED that all such fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).

         (d) The Company agrees to pay to the Administrative Agent for the
accounts of the Administrative Agent and the institution named in the heading of
this Agreement as Syndication Agent, the fees separately agreed upon between the
Company, the Administrative Agent and such institution.

         (e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees, utilization fees, and participation fees, to the Lenders. Fees
paid shall not be refundable under any circumstances.

         SECTION 2.12. INTEREST. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate.

         (b) The Loans comprising each Eurocurrency Borrowing shall bear
interest (i) in the case of a Eurocurrency Revolving Loan, at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Rate and (ii) in the case of a Eurocurrency Competitive Loan, at the LIBO Rate
for the Interest Period in effect for such Borrowing plus (or minus, as
applicable) the Margin applicable to such Loan. The Loans comprising each Bill
Rate Borrowing shall bear interest at the Australian Bank Bill Rate for the
Interest Period in effect for such Borrowing plus the Applicable Rate.

         (c) Each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan.

         (d) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by any Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% per
annum plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Loans as provided in paragraph (a) of this
Section.

         (e) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Commitments; PROVIDED that (i) interest accrued pursuant to
paragraph (d) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to


                                       40
<PAGE>


the end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any Eurocurrency Revolving Loan
prior to the end of the current Interest Period therefor, accrued interest on
such Loan shall be payable on the effective date of such conversion.

         (f) All interest hereunder shall be computed on the basis of a year of
360 days, except that (i) interest on Borrowings denominated in Sterling or
Australian Dollars and (ii) interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate, LIBO Rate or Australian Bank Bill Rate shall be determined
by the Applicable Agent, and such determination shall be conclusive absent
manifest error.

         SECTION 2.13. ALTERNATE RATE OF INTEREST. If prior to the commencement
of any Interest Period for a Eurocurrency Borrowing denominated in any currency:

                  (a) the Applicable Agent determines (which determination shall
         be conclusive absent manifest error) that adequate and reasonable means
         do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate,
         as applicable, for such Interest Period; or

                  (b) the Applicable Agent is advised by the Required Lenders
         (or, in the case of a Eurocurrency Competitive Loan, the Lender that is
         required to make such Loan) that the Adjusted LIBO Rate or the LIBO
         Rate, as applicable, for such Interest Period will not adequately and
         fairly reflect the cost to such Lenders (or Lender) of making or
         maintaining their Loans (or its Loan) included in such Borrowing for
         such Interest Period;

then the Applicable Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Applicable Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing
denominated in such currency to, or continuation of any Revolving Borrowing
denominated in such currency as, a Eurocurrency Borrowing shall be ineffective
and any Eurocurrency Borrowing denominated in such currency that is requested to
be continued (A) if such currency is the US Dollar, shall be converted to an ABR
Borrowing on the last day of the Interest Period applicable thereto and (B) if
such currency is a Designated Foreign Currency, shall be repaid on the last day
of the Interest Period applicable thereto, (ii) any Borrowing Request for a
Eurocurrency Revolving Borrowing denominated in such currency (A) if such
currency is the US Dollar, shall be deemed a request for an ABR Borrowing and
(B) if such currency is a Designated Foreign Currency, shall be ineffective, and
(iii) any request by a Borrower for a Eurocurrency Competitive Borrowing shall
be ineffective; PROVIDED that if the circumstances giving rise to such notice do
not affect all the Lenders, then requests by a


                                       41
<PAGE>


Borrower for Eurocurrency Competitive Borrowings may be made to Lenders that are
not affected thereby.

         SECTION 2.14. INCREASED COSTS. (a) If any Change in Law shall:

                  (i) impose, modify or deem applicable any reserve, special
         deposit or similar requirement against assets of, deposits with or for
         the account of, or credit extended by, any Lender (except any such
         reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
         Bank; or

                  (ii) impose on any Lender or the Issuing Bank or the London or
         Australian interbank markets any other condition affecting this
         Agreement or Eurocurrency Loans, Fixed Rate Loans or Bill Rate Loans
         made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan, Fixed Rate Loan or Bill
Rate Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to such Lender or the Issuing Bank of participating in,
issuing or maintaining any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender or the Issuing Bank hereunder (whether of
principal, interest or otherwise), then the Company will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.

         (b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Company will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.

         (c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Company and shall be conclusive absent
manifest error. The Company shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.


                                       42
<PAGE>


         (d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Company shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Company of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.

         (e) Notwithstanding the foregoing provisions of this Section, a Lender
shall not be entitled to compensation pursuant to this Section in respect of any
Competitive Loan if the Change in Law that would otherwise entitle it to such
compensation shall have been publicly announced prior to submission of the
Competitive Bid pursuant to which such Loan was made.

         SECTION 2.15. BREAK FUNDING PAYMENTS. In the event of (a) the payment
of any principal of any Eurocurrency Loan, Fixed Rate Loan or Bill Rate Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan
or Bill Rate Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Revolving
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.08(c) and is revoked in
accordance therewith), (d) the failure to borrow any Competitive Loan after
accepting the Competitive Bid to make such Loan, or (e) the assignment of any
Eurocurrency Loan, Fixed Rate Loan or Bill Rate Loan other than on the last day
of the Interest Period applicable thereto as a result of a request by the
Company pursuant to Section 2.18, then, in any such event, the Company shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurocurrency Loan or Bill Rate Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate or Australian Bank Bill Rate, as applicable, that would have
been applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for
deposits in the applicable currency of a comparable amount and period from other
banks in the eurocurrency market or bill rate market, as applicable. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Company and shall be conclusive absent manifest error. The Company shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.


                                       43
<PAGE>


         SECTION 2.16. TAXES. (a) Any and all payments by or on account of any
obligation of any Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if any Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Applicable Agent, the Issuing Bank or the applicable Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Borrower shall make such deductions and (iii)
such Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

         (b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

         (c) Each Borrower shall indemnify each Agent, each Lender and the
Issuing Bank, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by such Agent, such Lender or the
Issuing Bank, as the case may be, on or with respect to any payment by or on
account of any obligation of such Borrower hereunder or under any other Loan
Document (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Company by a Lender or by the Issuing
Bank, or by an Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.

         (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by any Borrower to a Governmental Authority, such Borrower shall
deliver to the Applicable Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Applicable Agent.

         (e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Company (with a
copy to the Applicable Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Company as will permit such payments to be
made without withholding or at a reduced rate; provided, that no Lender shall be
required to deliver any such documentation with respect to an exemption from or
reduction of withholding taxes imposed under the law of a jurisdiction other
than the United States of America unless the Company shall notify it of the
availability of such exemption or reduction and shall request the delivery of
such documentation.


                                       44
<PAGE>


         SECTION 2.17. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS. (a) Each Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.14,
2.15, 2.16, 2.20 or 2.21 or otherwise) prior to 2:00 p.m., Local Time, on the
date when due, in immediately available funds, without set-off or counterclaim.
All such payments shall be made to the Applicable Agent to such account as it
shall from time to time specify at its offices (i) in the case of any amount
denominated in US Dollars, at 270 Park Avenue, New York, New York 10017, (ii) in
the case of any amount denominated in a Designated Foreign Currency, at J.P.
Morgan Europe Limited, 125 London Wall, Floor 9, London EC2Y 5AJ, (iii) in the
case of any amount denominated in Australian Dollars, at J.P. Morgan Australia
Limited, Level 32, Grosvenor Place Building, 225 George Street, Sydney, New
South Wales, 2000, or, in any such case, at such other address as the Applicable
Agent shall from time to time specify in a notice delivered to the Company;
PROVIDED that payments to be made directly to the Issuing Bank, any Agent or any
Lender as expressly provided herein and payments pursuant to Section 2.14,
Section 2.15, Section 2.16 and Section 9.03 shall be made directly to the
Persons entitled thereto. The Applicable Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder of principal or interest in respect of any Loan (or of
any breakage indemnity in respect of any Loan) shall be made in the currency of
such Loan; all other payments hereunder and under each other Loan Document shall
be made in US Dollars. Any payment required to be made by an Agent hereunder
shall be deemed to have been made by the time required if such Agent shall, at
or before such time, have taken the necessary steps to make such payment in
accordance with the regulations or operating procedures of the clearing or
settlement system used by such Agent to make such payment. Any amount payable by
any Agent to one or more Lenders in the national currency of a member state of
the European Union that has adopted the Euro as its lawful currency shall be
paid in Euro.

         (b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
of the Loans and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.

         (c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans of any Class or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its


                                       45
<PAGE>


Revolving Loans of such Class and participations in LC Disbursements and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans of such Class and participations in LC
Disbursements, as applicable, of other Lenders to the extent necessary so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans of such Class and participations in LC
Disbursements; PROVIDED that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by any Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to the Company or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
Each Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.

         (d) Unless the Applicable Agent shall have received notice from the
Company prior to the date on which any payment is due to the Applicable Agent
for the account of the Lenders or the Issuing Bank hereunder that the relevant
Borrower will not make such payment, the Applicable Agent may assume that such
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as
the case may be, the amount due. In such event, if such Borrower has not in fact
made such payment, then each of the Lenders or the Issuing Bank, as the case may
be, severally agrees to repay to the Applicable Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Applicable Agent, at (i) the greater of the
Federal Funds Effective Rate and a rate determined by the Applicable Agent in
accordance with banking industry rules on interbank compensation (in the case of
a Borrowing in US Dollars) and (ii) the rate reasonably determined by the
Applicable Agent to be the cost to it of funding such amount (in the case of a
Borrowing in a Committed Foreign Currency).

         (e) If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.06(b) or 2.17(d), then the Administrative Agent, the
London Agent or the Australian Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent, the London Agent or the Australian Agent for the account
of such Lender to satisfy such Lender's obligations under such Sections until
all such unsatisfied obligations are fully paid.


                                       46
<PAGE>


         SECTION 2.18. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a) If
any Lender requests compensation under Section 2.14, or if any Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Company
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

         (b) If any Lender requests compensation under Section 2.14, or if any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Company may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under the Loan
Documents (other than any outstanding Competitive Loans held by it) to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the Company
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans (other than
Competitive Loans) and participations in LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 2.14
or payments required to be made pursuant to Section 2.16, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.

         SECTION 2.19. BORROWING SUBSIDIARIES. On or after the Effective Date,
the Company may designate any Subsidiary of the Company as a Borrowing
Subsidiary by delivery to the Administrative Agent of a Borrowing Subsidiary
Agreement executed by such Subsidiary and the Company, and upon such delivery
such Subsidiary shall for all purposes of this Agreement be a Borrowing
Subsidiary and a party to this Agreement. Upon the execution by the Company and
delivery to the Administrative Agent of a Borrowing Subsidiary Termination with
respect to any Borrowing Subsidiary, such Subsidiary shall cease to be a
Borrowing Subsidiary and a party to this Agreement; PROVIDED that no Borrowing
Subsidiary Termination will become effective as to any Borrowing Subsidiary
(other than to terminate such Borrowing Subsidiary's right to make further
Borrowings under this Agreement) at a time when any principal of or



                                       47
<PAGE>


interest on any Loan to such Borrowing Subsidiary shall be outstanding
hereunder. Promptly following receipt of any Borrowing Subsidiary Agreement or
Borrowing Subsidiary Termination, the Administrative Agent shall send a copy
thereof to each Lender.

         SECTION 2.20. ADDITIONAL RESERVE COSTS. (a) If and so long as any
Lender is required to make special deposits with the Bank of England, to
maintain reserve asset ratios or to pay fees, in each case in respect of such
Lender's Eurocurrency Loans in any Designated Foreign Currency, such Lender may
require the relevant Borrower to pay, contemporaneously with each payment of
interest on each of such Loans, additional interest on such Loan at a rate per
annum equal to the Mandatory Costs Rate calculated in accordance with the
formula and in the manner set forth in Exhibit D hereto.

         (b) If and so long as any Lender is required to comply with reserve
assets, liquidity, cash margin or other requirements of any monetary or other
authority (including any such requirement imposed by the European Central Bank
or the European System of Central Banks, but excluding requirements reflected in
the Statutory Reserve Rate or the Mandatory Costs Rate) in respect of any of
such Lender's Eurocurrency Loans in any Designated Foreign Currency, such Lender
may require the relevant Borrower to pay, contemporaneously with each payment of
interest on each of such Lender's Eurocurrency Loans subject to such
requirements, additional interest on such Loan at a rate per annum specified by
such Lender to be the cost to such Lender of complying with such requirements in
relation to such Loan.

         (c) Any additional interest owed pursuant to paragraph (a) or (b) above
shall be determined by the relevant Lender, which determination shall be
conclusive absent manifest error, and notified to the relevant Borrower (with a
copy to the Administrative Agent) at least five Business Days before each date
on which interest is payable for the relevant Loan, and such additional interest
so notified to the relevant Borrower by such Lender shall be payable to the
Administrative Agent for the account of such Lender on each date on which
interest is payable for such Loan.

         SECTION 2.21. FOREIGN SUBSIDIARY COSTS. (a) If the cost to any Lender
of making or maintaining any Loan to any Borrowing Subsidiary that is not named
on the signature pages to this Agreement is increased (or the amount of any sum
received or receivable by any Lender (or its applicable lending office) is
reduced) by an amount deemed in good faith by such Lender to be material, by
reason of the fact that such Borrowing Subsidiary is incorporated in, or
conducts business in, a jurisdiction outside the United States of America, such
Borrowing Subsidiary shall indemnify such Lender for such increased cost or
reduction within 15 days after demand by such Lender (with a copy to the
Administrative Agent). A certificate of such Lender claiming compensation under
this paragraph and setting forth the additional amount or amounts to be paid to
it hereunder (and the basis for the calculation of such amount or amounts) shall
be conclusive in the absence of manifest error.


                                       48
<PAGE>


         (b) Each Lender will promptly notify the Company and the Administrative
Agent of any event of which it has knowledge that will entitle such Lender to
additional interest or payments pursuant to paragraph (a) above, but in any
event within 45 days after such Lender obtains actual knowledge thereof;
PROVIDED that (i) if any Lender fails to give such notice within 45 days after
it obtains actual knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 2.21 in respect of any costs
resulting from such event, only be entitled to payment under this Section 2.21
for costs incurred from and after the date 45 days prior to the date that such
Lender does give such notice and (ii) each Lender will designate a different
applicable lending office, if, in the judgment of such Lender, such designation
will avoid the need for, or reduce the amount of, such compensation and will not
be otherwise disadvantageous to such Lender.

         SECTION 2.22. RELIQUIFICATION BILLS. Each Australian Borrowing
Subsidiary (the "APPLICABLE SUBSIDIARY") agrees, with respect to Loans
denominated in Australian Dollars made to it:

                  (a) To draw Bills when and in the form required by the
         Australian Agent on behalf of an Australian Tranche Lender. However,
         (i) the discounted value of those Bills, when added to the total of the
         discounted value of all other Bills drawn as required by the Australian
         Agent on behalf of the Australian Tranche Lender under this clause and
         which are outstanding, may not exceed the Australian Tranche Lender's
         Loan to which the Bills relate and (ii) no Bill is to be drawn which
         would mature after the Maturity Date.

                  (b) The Applicable Subsidiary irrevocably appoints each
         Australian Tranche Lender and each authorized officer of each
         Australian Tranche Lender individually as its attorney to draw, accept
         or endorse the Bills and agrees to ratify all action taken by an
         attorney under this Section 2.22.

                  (c) The Applicable Subsidiary's obligation to draw Bills
         ceases, and the appointment of an Australian Tranche Lender and its
         authorized officers as attorney for this purpose is revoked, on payment
         by the Applicable Subsidiary to the Australian Agent of all amounts
         owing to that Australian Tranche Lender under this Agreement.

                  (d) Each Australian Tranche Lender unconditionally and
         irrevocably indemnifies the Applicable Subsidiary against liability or
         loss arising from, and any costs, charges and expenses (including stamp
         duty) incurred in connection with, any Bill drawn at such Australian
         Tranche Lender's request under this Section 2.22.

                                   ARTICLE III

                         Representations and Warranties
                         ------------------------------

         The Company represents and warrants to the Lenders that:


                                       49
<PAGE>


         SECTION 3.01. CORPORATE EXISTENCE AND POWER. The Company, the Borrowing
Subsidiaries and the Subsidiary Guarantors are each corporations duly organized,
validly existing and in good standing under the laws of the jurisdiction of
their incorporation, are duly qualified to transact business in every
jurisdiction where, by the nature of its business, the failure to be so
qualified could have or cause a Material Adverse Effect, and have all corporate
powers and all governmental licenses, authorizations, consents and approvals
required to carry on their business as now conducted.

         SECTION 3.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by the Borrowers of this
Agreement and the other Loan Documents, and the execution by the Subsidiary
Guarantors of the Guarantee Agreement and the Indemnity, Subrogation and
Contribution Agreement (i) are within the Borrowers' and the Subsidiary
Guarantors' respective corporate powers, (ii) have been duly authorized by all
necessary corporate action, (iii) require no action by or in respect of or
filing with any governmental body, agency or official, (iv) do not contravene,
or constitute a default under, any provision of applicable law or regulation or
of the certificate of incorporation or by-laws of the Company or any Subsidiary
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Company or any of its Subsidiaries, and (v) do not result in
the creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries.

         SECTION 3.03. BINDING EFFECT. This Agreement has been duly executed and
delivered and constitutes a valid and binding agreement of the Borrowers
enforceable in accordance with its terms, and the other Loan Documents, when
executed and delivered in accordance with this Agreement, will constitute valid
and binding obligations of the Borrowers and the Subsidiary Guarantors party
thereto, enforceable in accordance with their respective terms, provided that
the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors' rights generally.

         SECTION 3.04. FINANCIAL INFORMATION. (a) The audited balance sheet of
the Company and the Consolidated Subsidiaries as of October 29, 2004, and the
related statements of income, shareholders' equity and cash flows for the Fiscal
Year then ended, reported on by Ernst & Young LLP, and the unaudited balance
sheets of the Company and the Consolidated Subsidiaries as of January 28, 2005,
April 29, 2005 and July 29, 2005 and the related statements of income,
shareholders' equity and cash flows for the Fiscal Quarters and portions of the
Fiscal Year then ended, copies of all of which have been delivered to each of
the Lenders, fairly present, in conformity with GAAP, the consolidated financial
position of the Company and the Consolidated Subsidiaries as of such dates and
their results of operations and cash flows for such periods.

         (b) Since October 29, 2004, there has been no Material Adverse Effect.

         SECTION 3.05. NO LITIGATION. There is no action, suit or proceeding
pending, or to the knowledge of the Company threatened, against or affecting the


                                       50
<PAGE>


Company or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could have a Material Adverse Effect
or which in any manner draws into question the validity of or could impair the
ability of any Borrower or Subsidiary Guarantor to perform its obligations under
this Agreement or any of the other Loan Documents.

         SECTION 3.06. COMPLIANCE WITH ERISA. (a) The Company and each member of
the Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the presently applicable provisions of ERISA and
the Code, and have not incurred any liability to the PBGC or a Plan under Title
IV of ERISA.

         (b) Neither the Company nor any member of the Controlled Group has
incurred any withdrawal liability with respect to any Multiemployer Plan under
Title IV of ERISA, and no such liability is expected to be incurred.

         SECTION 3.07. COMPLIANCE WITH LAWS; PAYMENT OF TAXES. The Company and
the Subsidiaries are in compliance in all material respects with all applicable
laws, regulations and similar requirements of Governmental Authorities, except
for the matters disclosed in Schedule 3.14 or where such compliance is being
contested in good faith through appropriate proceedings, except where the
failure to comply would not have or cause a Material Adverse Effect. There have
been filed on behalf of the Company and its Subsidiaries all Federal, state and
local income, excise, property and other tax returns which are required to be
filed by them and all taxes due pursuant to such returns or pursuant to any
assessment received by or on behalf of the Company or any Subsidiary have been
paid or are being contested in good faith by appropriate proceedings. The
charges, accruals and reserves on the books of the Company and the Subsidiaries
in respect of taxes or other governmental charges are, in the opinion of the
Company, adequate. United States income tax returns of the Company and the
Subsidiaries have been examined and closed through the Fiscal Year ended October
31, 2003.

         SECTION 3.08. SUBSIDIARIES. Each of the Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to transact business in every
jurisdiction where, by the nature of its business, such qualification is
necessary, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, except where the failure to qualify or have any such license,
authorization, consent or approval would not have or cause a Material Adverse
Effect. The Company has no Subsidiaries except for those Subsidiaries listed on
Schedule 3.08, or as described in a Compliance Certificate furnished pursuant to
Section 5.01(c), in each case which accurately sets forth each such Subsidiary's
complete name and jurisdiction of incorporation. Each Domestic Material
Subsidiary on the date hereof is separately identified as such in Schedule 3.08
hereto.


                                       51
<PAGE>


         SECTION 3.09. INVESTMENT COMPANY ACT. Neither the Company nor any of
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.

         SECTION 3.10. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Company
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.

         SECTION 3.11. OWNERSHIP OF PROPERTY; LIENS. Each of the Company and its
Consolidated Subsidiaries has title to its properties sufficient for the conduct
of its business, and none of such property is subject to any Lien except as
permitted in Section 5.08.

         SECTION 3.12. NO DEFAULT. Neither the Company nor any of the
Consolidated Subsidiaries is in default under or with respect to any agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound which could have or cause a Material Adverse Effect. No
Default has occurred and is continuing.

         SECTION 3.13. FULL DISCLOSURE. All information heretofore furnished by
the Company or any Subsidiary to the Agents or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby (including
the information set forth in the Information Memorandum) is, and all such
information hereafter furnished by the Company or any Subsidiary to the Agents
or any Lender will be, true, accurate and complete in every material respect or
based on reasonable estimates on the date as of which such information is stated
or certified.

         SECTION 3.14. ENVIRONMENTAL MATTERS. (a) Except for the matters
disclosed in Schedule 3.14, neither the Company nor any Subsidiary is subject
to, or knows any basis for, any Environmental Liability which could have or
cause a Material Adverse Effect and neither the Company nor any Subsidiary has
been designated as a potentially responsible party under CERCLA or under any
state statute similar to CERCLA. To the best knowledge of the Company, except
for the matters disclosed in Schedule 3.14, none of the Properties has been
identified on any current or proposed (i) National Priorities List under 40
C.F.R. ss. 300, (ii) CERCLIS list or (iii) any list arising from a state statute
similar to CERCLA.

         (b) Except for the matters disclosed in Schedule 3.14, no Hazardous
Materials have been or are being used, produced, manufactured, processed,
treated, recycled, generated, stored, disposed of, managed or otherwise handled
at, or shipped or transported to or from the Properties or are otherwise present
at, on, in or under the Properties, or, to the best of the knowledge of the
Company, at or from any adjacent site or facility, except for Hazardous
Materials used or otherwise handled, to the best knowledge of the Company, in
the ordinary course of business in compliance with all


                                       52
<PAGE>


applicable Environmental Requirements, except where the failure to comply would
not have or cause a Material Adverse Effect.

         (c) Except for the matters disclosed in Schedule 3.14, the Company, and
each of its Affiliates, has procured all Environmental Authorizations necessary
for the conduct of its business, and, to the best knowledge of the Company, is
in compliance with all Environmental Requirements, Environmental Authorizations
and Environmental Judgments and Orders in connection with the operation of the
Properties and the Company's, and its Affiliate's, businesses, except where the
failure to comply could not have or cause a Material Adverse Effect.

         SECTION 3.15. CAPITAL STOCK. All Capital Stock, debentures, bonds,
notes and all other securities of the Company and its Subsidiaries presently
issued and outstanding are validly and properly issued. All outstanding
securities (whether debt or equity) of the Company and its Subsidiaries were
registered under the federal and any applicable state securities laws or were
issued in transactions which were exempt from registration under such laws;
PROVIDED, that as to any Subsidiary acquired but not created by the Company, the
foregoing representation is made to the best of the Company's knowledge. The
issued shares of Capital Stock of the Company's Wholly Owned Subsidiaries are
owned by the Company free and clear of any Lien or adverse claim. At least a
majority of the issued shares of capital stock of each of the other Subsidiaries
(other than Wholly Owned Subsidiaries) is owned by the Company, and all such
shares owned by the Company are free and clear of any Lien or adverse claim.

         SECTION 3.16. MARGIN STOCK. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Loan will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock, or be used for any purpose which violates, or which is inconsistent with,
the provisions of Regulations U or X.

         SECTION 3.17. INSOLVENCY. After giving effect to the execution and
delivery of the Loan Documents and the making of the Loans under this Agreement,
no Borrower or Subsidiary Guarantor will be "insolvent," within the meaning of
such term as defined in Section 101 of Title 11 of the United States Code or
Section 2 of the Uniform Fraudulent Transfer Act, or any other applicable state
law pertaining to fraudulent transfers, as each may be amended from time to
time, or be unable to pay its debts generally as such debts become due, or have
an unreasonably small capital to engage in any business or transaction, whether
current or contemplated.

                                   ARTICLE IV

                                   Conditions
                                   ----------

         SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become



                                       53
<PAGE>


effective until the date (the "EFFECTIVE DATE") on which each of the following
conditions is satisfied (or waived in accordance with Section 9.02):

                  (a) The Administrative Agent (or its counsel) shall have
         received from each party hereto either (i) a counterpart of this
         Agreement signed on behalf of such party or (ii) written evidence
         satisfactory to the Administrative Agent (which may include telecopy
         transmission of a signed signature page of this Agreement) that such
         party has signed a counterpart of this Agreement.

                  (b) The Administrative Agent shall have received the favorable
         written opinion (addressed to the Agents and the Lenders and dated the
         Effective Date) of Lindquist & Vennum, PLLP, special counsel for the
         Borrowers and the Subsidiary Guarantors, substantially in the form of
         Exhibit C and covering such other matters relating to the Borrowers,
         the Subsidiary Guarantors, this Agreement, the other Loan Documents or
         the Transactions as the Agents or the Required Lenders shall reasonably
         request. The Borrowers hereby request such counsel to deliver such
         opinion.

                  (c) The Administrative Agent shall have received such
         documents and certificates as the Administrative Agent or its counsel
         may reasonably request relating to the organization, existence and good
         standing of each of the Borrowers and the Subsidiary Guarantors, the
         authorization of the Transactions and any other legal matters relating
         to the Borrowers, the Subsidiary Guarantors, this Agreement, the other
         Loan Documents or the Transactions, all in form and substance
         satisfactory to the Administrative Agent and its counsel.

                  (d) The Administrative Agent shall have received a certificate
         dated as of the Effective Date and signed by a principal financial
         officer of the Company, as to the satisfaction on the Effective Date of
         the conditions set forth in clauses (a) and (b) of Section 4.02,
         PROVIDED that for purposes of this Section 4.01(d) and the certificate
         to be delivered hereunder the exclusion of the representations and
         warranties set forth in Sections 3.04(b), 3.05 and 3.14 contained in
         Section 4.02(a) shall not apply.

                  (e) The Guarantee Agreement shall have been duly executed by
         the parties thereto, shall have been delivered to the Administrative
         Agent and shall be in full force and effect.

                  (f) The Indemnity, Subrogation and Contribution Agreement
         shall have been duly executed by the parties thereto, shall have been
         delivered to the Administrative Agent and shall be in full force and
         effect.

                  (g) All loans outstanding under the Existing Credit Agreement
         shall have been repaid, together with all interest, fees and other
         amounts accrued thereunder, and the commitments under the Existing
         Credit Agreement shall have been terminated.


                                       54
<PAGE>


                  (h) The Administrative Agent shall have received all fees and
         other amounts due and payable on or prior to the Effective Date,
         including, to the extent invoiced, reimbursement or payment of all
         out-of-pocket expenses (including fees, charges and disbursements of
         counsel) required to be reimbursed or paid by the Company or any
         Subsidiary hereunder or under any other Loan Document.

                  (i) The Lenders shall have received the balance of all upfront
         fees agreed to upon by the Company and the Administrative Agent and
         required to be paid by the Company.

The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) on
or prior to October 30, 2005 (and, in the event such conditions are not so
satisfied or waived, the Commitments shall terminate at such time).

         SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender to make
a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:

                  (a) The representations and warranties of the Borrowers set
         forth in this Agreement (other than those set forth in Sections
         3.04(b), 3.05 and 3.14) shall be true and correct on and as of the date
         of such Borrowing or the date of such issuance, amendment, renewal or
         extension of a Letter of Credit, as applicable.

                  (b) At the time of and immediately after giving effect to such
         Borrowing or such issuance, amendment, renewal or extension of a Letter
         of Credit, no Default shall have occurred and be continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrowers on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.

         SECTION 4.03. INITIAL BORROWING BY EACH BORROWING SUBSIDIARY. The
obligation of each Lender to make Loans and of the Issuing Bank to issue Letters
of Credit to any Borrowing Subsidiary (other than the Borrowing Subsidiaries
party hereto on the date hereof) is subject to the satisfaction of the following
conditions:

                  (a) The Administrative Agent (or its counsel) shall have
         received such Borrowing Subsidiary's Borrowing Subsidiary Agreement,
         duly executed by all parties thereto.

                  (b) The Administrative Agent shall have received such
         documents and certificates as the Administrative Agent or its counsel
         may reasonably request relating to the organization, existence and good
         standing of such Borrowing


                                       55
<PAGE>


         Subsidiary, the authorization of the Transactions insofar as they
         relate to such Borrowing Subsidiary and any other legal matters
         relating to such Borrowing Subsidiary, its Borrowing Subsidiary
         Agreement or such Transactions, all in form and substance satisfactory
         to the Administrative Agent and its counsel.

                                    ARTICLE V

                                    Covenants
                                    ---------

         Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees and other amounts payable hereunder
shall have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Company
covenants and agrees with the Lenders that:

         SECTION 5.01. INFORMATION. The Company will deliver to each of the
Lenders:

                  (a) as soon as available and in any event within 90 days after
         the end of each Fiscal Year, a consolidated balance sheet of the
         Company and its Consolidated Subsidiaries as of the end of such Fiscal
         Year and the related consolidated statements of income, shareholders'
         equity and cash flows for such Fiscal Year, setting forth in each case
         in comparative form the figures for the previous fiscal year, all
         certified by Ernst & Young LLP or other independent public accountants
         of nationally recognized standing, with such certification to be free
         of exceptions and qualifications not acceptable to the Required
         Lenders;

                  (b) as soon as available and in any event within 45 days after
         the end of each of the first three Fiscal Quarters of each Fiscal Year,
         a consolidated balance sheet of the Company and its Consolidated
         Subsidiaries as of the end of such Fiscal Quarter and the related
         statements of income and cash flows for such Fiscal Quarter and for the
         portion of the Fiscal Year ended at the end of such Fiscal Quarter,
         setting forth in each case in comparative form the figures for the
         corresponding Fiscal Quarter and the corresponding portion of the
         previous Fiscal Year, all certified (subject to normal year-end
         adjustments) as to fairness of presentation, GAAP and consistency by
         the chief financial officer, the treasurer or the chief accounting
         officer of the Company;

                  (c) simultaneously with the delivery of each set of financial
         statements referred to in clauses (a) and (b) above, a certificate of
         the chief financial officer, the treasurer or the chief accounting
         officer of the Company substantially in the form of Exhibit E (a
         "COMPLIANCE CERTIFICATE") (i) setting forth in reasonable detail the
         calculations required to establish whether the Company was in
         compliance with the requirements of Sections 5.03, 5.04, 5.06, 5.08,
         5.11(d) and 5.21 on the date of such financial statements, (ii) stating
         whether any Default exists on the date of such certificate and, if any
         Default then exists, setting forth the details thereof and the action
         which the Company is taking or proposes to take


                                       56
<PAGE>


         with respect thereto, (iii) containing the certification required by
         Section 5.01(b), and (iv) listing any new Subsidiaries not listed on
         Schedule 3.08 or in any prior Compliance Certificate;

                  (d) simultaneously with the delivery of each set of annual
         financial statements referred to in clause (a) above, a statement of
         the firm of independent public accountants which reported on such
         statements to the effect that nothing has come to their attention to
         cause them to believe that any Default under any of Sections 5.03, 5.04
         and 5.11(d) existed on the date of such financial statements;

                  (e) within five Domestic Business Days after the chief
         executive officer, chief operating officer, chief financial officer,
         chief accounting officer or treasurer of the Company becomes aware of
         the occurrence of any Default, a certificate of the chief financial
         officer, treasurer or the chief accounting officer of the Company
         setting forth the details thereof and the action which the Company is
         taking or proposes to take with respect thereto;

                  (f) promptly upon the mailing thereof to the shareholders of
         the Company generally, copies of all financial statements, reports and
         proxy statements so mailed;

                  (g) promptly upon the filing thereof, copies of all
         registration statements (other than the exhibits thereto and any
         registration statements on Form S-8 or its equivalent) and annual,
         quarterly or monthly reports which the Company shall have filed with
         the Securities and Exchange Commission;

                  (h) if and when the Company or any member of the Controlled
         Group (i) gives or is required to give notice to the PBGC of any
         "reportable event" (as defined in Section 4043 of ERISA) with respect
         to any Plan which might constitute grounds for a termination of such
         Plan under Title IV of ERISA, or knows that the plan administrator of
         any Plan has given or is required to give notice of any such reportable
         event, a copy of the notice of such reportable event given or required
         to be given to the PBGC; (ii) receives notice of complete or partial
         withdrawal liability under Title IV of ERISA, a copy of such notice; or
         (iii) receives notice from the PBGC under Title IV of ERISA of an
         intent to terminate or appoint a trustee to administer any Plan, a copy
         of such notice;

                  (i) promptly after the Company knows of the commencement
         thereof, notice of any litigation or other legal proceeding involving a
         claim against the Company and/or any Subsidiary for US$10,000,000 or
         more in excess of amounts covered in full by applicable insurance; and

                  (j) from time to time such additional information regarding
         the financial position or business of the Company and its Subsidiaries
         as the Administrative Agent, at the request of any Lender, may
         reasonably request.

         SECTION 5.02. INSPECTION OF PROPERTY, BOOKS AND RECORDS. The Company
will (i) keep, and will cause each Subsidiary to keep, proper books of record


                                       57
<PAGE>


and account in which full, true and correct entries in conformity with GAAP
shall be made of all dealings and transactions in relation to its business and
activities; and (ii) permit, and will cause each Subsidiary to permit,
representatives of any Lender at such Lender's expense prior to the occurrence
of an Event of Default and at the Company's expense after the occurrence of an
Event of Default to visit and inspect any of their respective properties, to
examine and make abstracts from any of their respective books and records and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants. The Company agrees to
cooperate and assist in such visits and inspections, in each case at such
reasonable times and as often as may reasonably be desired.

         SECTION 5.03. RATIO OF CONSOLIDATED DEBT TO CONSOLIDATED EBITDA. The
ratio of Consolidated Debt at any date to Consolidated EBITDA for the period of
four consecutive Fiscal Quarters ended on or most recently prior to such date
will not exceed the ratio of 3.50 to 1.00.

         SECTION 5.04. MINIMUM SHAREHOLDERS' EQUITY. Shareholders' Equity will
at no time be less than US$850,000,000 plus the sum of (i) 50% of the cumulative
Reported Net Income of the Company and its Consolidated Subsidiaries during any
period after October 29, 2004 (taken as one accounting period), calculated
quarterly but excluding from such calculations of Reported Net Income for
purposes of this clause (i) any quarter in which the Consolidated Net Income of
the Company and its Consolidated Subsidiaries is negative, and (ii) 100% of the
cumulative Net Proceeds of Capital Stock/Conversion of Debt received during any
period after the date hereof, calculated quarterly.

         SECTION 5.05. RESTRICTED PAYMENTS. The Company will not declare or make
any Restricted Payment during any Fiscal Year, except for stock repurchases and
dividends approved by the Board of Directors of the Company.

         SECTION 5.06. LOANS OR ADVANCES. Neither the Company nor any of its
Subsidiaries shall make loans or advances to any Person except: (i) loans or
advances to employees not exceeding US$10,000,000 in the aggregate at any time
outstanding made in the ordinary course of business; (ii) deposits required by
government agencies or public utilities; (iii) loans or advances to any Borrower
or Subsidiary Guarantor; (iv) Prepaid Rebates; and (v) loans, advances or
deposits other than those permitted by clauses (i) through (iv) of this Section
not exceeding 10% of Consolidated Total Assets in the aggregate at any time
outstanding, PROVIDED that after giving effect to the making of any loans,
advances or deposits permitted by clause (i), (ii), (iii), (iv) or (v) of this
Section, no Default shall have occurred and be continuing.

         SECTION 5.07. ACQUISITIONS. Neither the Company nor any of its
Subsidiaries shall make any Acquisitions, PROVIDED, that Permitted Acquisitions
may be made if, after giving effect thereto, no Default or Event of Default
would be caused thereby (giving effect to such Permitted Acquisitions on a pro
forma basis as to financial covenants as if they had occurred on each relevant
date or at the beginning of each relevant period).


                                       58
<PAGE>


         SECTION 5.08. NEGATIVE PLEDGE. Neither the Company nor any Consolidated
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:

                  (a) Liens existing on the date of this Agreement securing Debt
         outstanding on the date of this Agreement in an aggregate principal
         amount not exceeding US$10,000,000;

                  (b) any Lien existing on any asset of any corporation at the
         time such corporation becomes a Consolidated Subsidiary and not created
         in contemplation of such event;

                  (c) any Lien on any asset (other than Equity Interests,
         Indebtedness or inventory) securing Debt incurred or assumed for the
         purpose of financing all or any part of the cost of acquiring or
         constructing such asset, PROVIDED that such Lien attaches to such asset
         concurrently with or within 18 months after the acquisition or
         completion of construction thereof;

                  (d) any Lien on any asset of any corporation existing at the
         time such corporation is merged or consolidated with or into the
         Company or a Consolidated Subsidiary and not created in contemplation
         of such event;

                  (e) any Lien existing on any asset prior to the acquisition
         thereof by the Company or a Consolidated Subsidiary and not created in
         contemplation of such acquisition;

                  (f) Liens securing Debt owing by any Subsidiary to any
         Borrower or Subsidiary Guarantor;

                  (g) any Lien arising out of the refinancing, extension,
         renewal or refunding of any Debt secured by any Lien permitted by any
         of the foregoing clauses of this Section, provided that (i) such Debt
         is not secured by any additional assets, and (ii) the amount of such
         Debt secured by any such Lien is not increased;

                  (h) Liens incidental to the conduct of its business or the
         ownership of its assets which (i) do not secure Debt and (ii) do not in
         the aggregate materially detract from the value of its assets or
         materially impair the use thereof in the operation of its business;

                  (i) any Lien on Excess Margin Stock; and

                  (j) Liens not otherwise permitted by the foregoing clauses of
         this Section securing Debt (other than Loans) in an aggregate principal
         amount at any time outstanding which, together with the amount of Debt
         secured by Liens permitted by the foregoing paragraphs (a) through (i),
         does not exceed 10% of Consolidated Total Assets.


                                       59
<PAGE>


         SECTION 5.09. MAINTENANCE OF EXISTENCE. The Company shall, and shall
cause each Subsidiary Guarantor and each other Borrower to, maintain its
corporate existence and carry on its business in substantially the same manner
and in substantially the same fields in which such business is now carried on,
except as permitted by Section 5.11.

         SECTION 5.10. DISSOLUTION. None of the Company, any Subsidiary
Guarantor or any other Borrower shall suffer or permit dissolution or
liquidation either in whole or in part or redeem or retire any shares of its own
stock or that of any Subsidiary, except (i) through a corporate reorganization
permitted by Section 5.11 or (ii) Restricted Payments permitted by Section 5.05.

         SECTION 5.11. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. The Company
will not, nor will it permit any Subsidiary to, consolidate or merge with or
into, or sell, lease or otherwise transfer all or any substantial part of its
assets (other than Excess Margin Stock) to, any other Person, or discontinue or
eliminate any business line or segment, provided that (a) the Company may merge
with another Person if (i) such Person was organized under the laws of the
United States of America or one of its states, (ii) the Company is the
corporation surviving such merger and (iii) immediately after giving effect to
such merger, no Default shall have occurred and be continuing, (b) Subsidiaries
of the Company may merge with one another, or with and into the Company where
the Company is the corporation surviving such merger, (c) Borrowers which are
both Domestic Subsidiaries and Subsidiary Guarantors may transfer assets among
themselves, (d) the foregoing limitation on the sale, lease or other transfer of
assets and on the discontinuation or elimination of a business line or segment
shall not apply to loans or advances permitted by Section 5.06 or prohibit,
during any Fiscal Quarter, a transfer of assets or the discontinuance or
elimination of a business line or segment (in a single transaction or in a
series of related transactions) unless the aggregate assets to be so transferred
or utilized in a business line or segment to be so discontinued, when combined
with all other assets transferred (other than inventory sold in the ordinary
course of business), and all other assets utilized in all other business lines
or segments discontinued, during such Fiscal Quarter and the immediately
preceding three Fiscal Quarters contributed more than 20% of Consolidated
Operating Profits during the four consecutive Fiscal Quarters immediately
preceding such Fiscal Quarter and (e) the Company and any Subsidiary Guarantor
may sell inventory in the ordinary course of business.

         SECTION 5.12. USE OF PROCEEDS. The proceeds of the Loans will be used
only for the purposes referred to in the preamble to this Agreement. No portion
of the proceeds of the Loans will be used by the Company or any Subsidiary (i)
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any Margin Stock, or (ii) for any purpose in
violation of any applicable law or regulation.

         SECTION 5.13. COMPLIANCE WITH LAWS; PAYMENT OF TAXES. (a) The Company
will, and will cause each of its Subsidiaries and each member of the Controlled
Group to, comply with applicable laws (including but not limited to ERISA and



                                       60
<PAGE>


Environmental Requirements), regulations and similar requirements of
Governmental Authorities (including but not limited to PBGC), except where the
necessity of such compliance is being contested in good faith through
appropriate proceedings diligently pursued. The Company will, and will cause
each of its Subsidiaries to, pay promptly when due all taxes, assessments,
governmental charges, claims for labor, supplies, rent and other obligations
which, if unpaid, might become a lien against the property of the Company or any
Subsidiary, except liabilities being contested in good faith by appropriate
proceedings diligently pursued and against which the Company shall have set up
reserves in accordance with GAAP.

         (b) The Company shall not permit the aggregate complete or partial
withdrawal liability under Title IV of ERISA with respect to Multiemployer Plans
incurred by the Company and members of the Controlled Group to exceed
US$10,000,000 at any time. For purposes of this Section 5.13(b), the amount of
withdrawal liability of the Company and members of the Controlled Group at any
date shall be the aggregate present value of the amount claimed to have been
incurred less any portion thereof which the Company and members of the
Controlled Group have paid or as to which the Company reasonably believes, after
appropriate consideration of possible adjustments arising under Sections 4219
and 4221 of ERISA, it and members of the Controlled Group will have no
liability.

         SECTION 5.14. INSURANCE. The Company will maintain, and will cause each
of its Subsidiaries to maintain (either in the name of the Company or in such
Subsidiary's own name), with financially sound and reputable insurance
companies, insurance on all its Property in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies of established repute engaged in the same or similar business.

         SECTION 5.15. CHANGE IN FISCAL YEAR. The Company will not change its
Fiscal Year without the consent of the Required Lenders.

         SECTION 5.16. MAINTENANCE OF PROPERTY. The Company shall, and shall
cause each Subsidiary to, maintain all of its material properties and assets in
good condition, repair and working order, ordinary wear and tear excepted.

         SECTION 5.17. ENVIRONMENTAL NOTICES. The Company shall furnish to the
Lenders and the Administrative Agent prompt written notice of all material
Environmental Liabilities, Environmental Notices and Environmental Judgments and
Orders and pending, threatened or anticipated Environmental Proceedings relating
to the Company, any of its Subsidiaries or the Properties.

         SECTION 5.18. ENVIRONMENTAL MATTERS. The Company and its Subsidiaries
will not, and will not permit any Third Party to, use, produce, manufacture,
process, treat, recycle, generate, store, dispose of, manage at, or otherwise
handle or ship or transport to or from the Properties any Hazardous Materials
except for Hazardous Materials used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed, managed or otherwise handled, to the best
knowledge of the Company, in


                                       61
<PAGE>


compliance with all applicable Environmental Requirements, except where the
failure to comply could not (individually or in the aggregate) reasonably be
expected to have or cause a Material Adverse Effect.

         SECTION 5.19. ENVIRONMENTAL RELEASE. The Company agrees that upon the
occurrence of an Environmental Release at or on any of the Properties it will
act immediately to investigate the extent of, and to take appropriate remedial
action with respect to, such Environmental Release, whether or not ordered or
otherwise directed to do so by any Environmental Authority.

         SECTION 5.20. TRANSACTIONS WITH AFFILIATES. Neither the Company nor any
of its Subsidiaries shall enter into, or be a party to, any material transaction
with any Affiliate of the Company or such Subsidiary (which Affiliate is not a
Borrower or a Subsidiary Guarantor), except as permitted by law and in the
ordinary course of business and pursuant to reasonable terms no less favorable
to the Company or such Subsidiary than would be obtained in a comparable arm's
length transaction with a Person which is not an Affiliate.

         SECTION 5.21. LIMITATION ON SUBSIDIARY DEBT. The Company shall not
permit the outstanding principal amount of Debt of the Subsidiaries (other than
(i) Debt owed to any Borrower or Subsidiary Guarantor and (ii) Debt owed under
this Agreement or any other Loan Document) at any time to exceed, in the
aggregate, 10% of Consolidated Total Assets, PROVIDED that Debt outstanding
under the Lilly Securities shall not be included in the determination of the
Subsidiaries' "Debt" under this Section.

         SECTION 5.22. SUBSIDIARY GUARANTORS. (a) The Company shall cause each
Domestic Material Subsidiary that is not already a Subsidiary Guarantor to
become a party to, and agree to be bound by the terms of, the Guarantee
Agreement and the Indemnity, Subrogation and Contribution Agreement pursuant to
an instrument in form and substance satisfactory to the Administrative Agent
executed and delivered to the Administrative Agent by such Domestic Material
Subsidiary as promptly as practicable and in any event within 20 Domestic
Business Days after the day on which it becomes a Domestic Material Subsidiary.
The Company shall also cause the items specified in Sections 4.01(b) and (c) to
be delivered to the Administrative Agent concurrently with the instrument
referred to above, modified appropriately to refer to such instrument and such
Domestic Material Subsidiary.

         (b) Once any Subsidiary becomes a Domestic Material Subsidiary and a
party to the Guarantee Agreement and the Indemnity, Subrogation and Contribution
Agreement, such Subsidiary thereafter shall remain a party to and a guarantor
under the Guarantee Agreement and the Indemnity, Subrogation and Contribution
Agreement without regard to the amount of its Total Assets on any day or
Operating Profits for any period.


                                       62
<PAGE>


                                   ARTICLE VI

                                Events of Default
                                -----------------

         SECTION 6.01. EVENTS OF DEFAULT. If one or more of the following events
("EVENTS OF DEFAULT") shall have occurred and be continuing:

                  (a) any Borrower shall fail to pay when due any principal of
         any Loan or any reimbursement obligation in respect of any LC
         Disbursement or shall fail to pay any interest on any Loan within five
         Domestic Business Days after such interest shall become due, or shall
         fail to pay any fee or other amount payable hereunder within five
         Domestic Business Days after such fee or other amount becomes due; or

                  (b) the Company shall fail to observe or perform any covenant
         contained in Section 5.01(e), 5.02(ii), 5.03, 5.04, 5.08, 5.09, 5.10 or
         5.11; or

                  (c) any Borrower shall fail to observe or perform any covenant
         or agreement contained or incorporated by reference in this Agreement
         (other than those covered by clause (a) or (b) above) or any other Loan
         Document for thirty days after the earlier of (i) the first day on
         which the Company has knowledge of such failure or (ii) written notice
         thereof has been given to the Company by the Administrative Agent at
         the request of any Lender; or

                  (d) any representation, warranty, certification or statement
         made or deemed made by the Company in Article III of this Agreement, or
         by any Subsidiary Guarantor in Section 8 of the Guarantee Agreement, or
         by the Company or any other Borrower in any certificate, financial
         statement or other document delivered pursuant to this Agreement or any
         Loan Document shall prove to have been incorrect or misleading in any
         material respect when made (or deemed made); or

                  (e) the Company or any Subsidiary shall fail to make any
         payment in respect of Debt outstanding in an aggregate principal amount
         in excess of US$10,000,000 (other than the Loans) when due or within
         any applicable grace period; or

                  (f) any event or condition shall occur which results in the
         acceleration of the maturity of Debt of the Company or any Subsidiary
         in an aggregate principal amount in excess of US$10,000,000 or the
         mandatory prepayment or purchase of such Debt by the Company (or its
         designee) or such Subsidiary (or its designee) prior to the scheduled
         maturity thereof, or enables (or, with the giving of notice or lapse of
         time or both, would enable) the holders of such Debt or any Person
         acting on such holders' behalf to accelerate the maturity thereof or
         require the mandatory prepayment or purchase thereof prior to the
         scheduled maturity thereof, without regard to whether such holders or
         other Person shall have exercised or waived their right to do so; or


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<PAGE>


                  (g) the Company or any Subsidiary shall commence a voluntary
         case or other proceeding seeking liquidation, reorganization or other
         relief with respect to itself or its debts under any bankruptcy,
         insolvency or other similar law now or hereafter in effect or seeking
         the appointment of a trustee, receiver, liquidator, custodian or other
         similar official of it or any substantial part of its property, or
         shall consent to any such relief or to the appointment of or taking
         possession by any such official in an involuntary case or other
         proceeding commenced against it, or shall make a general assignment for
         the benefit of creditors, or shall fail generally, or shall admit in
         writing its inability, to pay its debts as they become due, or shall
         take any corporate action to authorize any of the foregoing; or

                  (h) an involuntary case or other proceeding shall be commenced
         against the Company or any Subsidiary seeking liquidation,
         reorganization or other relief with respect to it or its debts under
         any bankruptcy, insolvency or other similar law now or hereafter in
         effect or seeking the appointment of a trustee, receiver, liquidator,
         custodian or other similar official of it or any substantial part of
         its property, and such involuntary case or other proceeding shall
         remain undismissed and unstayed for a period of 60 days; or an order
         for relief shall be entered against the Company or any Subsidiary under
         the federal bankruptcy laws as now or hereafter in effect; or

                  (i) the Company or any member of the Controlled Group shall
         fail to pay when due any material amount which it shall have become
         liable to pay to the PBGC or to a Plan under Title IV of ERISA; or
         notice of intent to terminate a Plan or Plans shall be filed under
         Title IV of ERISA by the Company, any member of the Controlled Group,
         any plan administrator or any combination of the foregoing; or the PBGC
         shall institute proceedings under Title IV of ERISA to terminate or to
         cause a trustee to be appointed to administer any such Plan or Plans or
         a proceeding shall be instituted by a fiduciary of any such Plan or
         Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding
         shall not have been dismissed within 30 days thereafter; or a condition
         shall exist by reason of which the PBGC would be entitled to obtain a
         decree adjudicating that any such Plan or Plans must be terminated; or

                  (j) one or more judgments or orders for the payment of money
         in an aggregate amount in excess of US$10,000,000 shall be rendered
         against the Company or any Subsidiary and the Company or such
         Subsidiary shall not discharge the same in accordance with its terms or
         procure a stay of execution thereof within 30 days from the date of
         entry thereof, and within such period of 30 days, or such longer period
         during which execution of such judgment shall have been stayed, appeal
         therefrom and cause the execution thereof to be stayed during such
         appeal; or

                  (k) a federal tax lien shall be filed against the Company or
         any Subsidiary under Section 6323 of the Code or a lien of the PBGC
         shall be filed against the Company or any Subsidiary under Section 4068
         of ERISA and in either case such lien shall remain undischarged for a
         period of 25 days after the date of filing; or


                                       64
<PAGE>


                  (l) (i) any Person or two or more Persons acting in concert
         shall have acquired beneficial ownership (within the meaning of Rule
         13d-3 of the Securities and Exchange Commission under the Securities
         Exchange Act of 1934) of 30% or more of the outstanding shares of the
         voting stock of the Company; or (ii) as of any date a majority of the
         Board of Directors of the Company shall consist of individuals who were
         not either (A) directors of the Company as of the corresponding date of
         the previous year, (B) selected or nominated to become directors by the
         Board of Directors of the Company of which a majority consisted of
         individuals described in clause (A), or (C) selected or nominated to
         become directors by the Board of Directors of the Company of which a
         majority consisted of individuals described in clause (A) or
         individuals described in clause (B); or

                  (m) any provision of the Guarantee Agreement shall for any
         reason cease to be valid and binding on any Subsidiary Guarantor, or
         any Subsidiary Guarantor (or any Person acting on behalf of any
         Subsidiary Guarantor) shall deny or disaffirm its obligations under the
         Guarantee Agreement; or

                  (n) the Guarantee of the Company set forth in Article VIII
         shall cease at any time to be in full force and effect, or the Company
         shall so assert in writing, or the Company shall disaffirm or deny any
         of its Obligations hereunder in writing.

then, and in every such event, the Administrative Agent shall (i) if requested
by the Required Lenders, by notice to the Company terminate the Commitments and
they shall thereupon terminate, and (ii) if requested by the Required Lenders,
by notice to the Company declare the Loans (together with accrued interest
thereon) and all other amounts payable hereunder and under the other Loan
Documents to be, and the Loans (together with all accrued interest thereon) and
all other amounts payable hereunder and under the other Loan Documents shall
thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrowers; PROVIDED that if any Event of Default specified in clause (g) or (h)
above occurs with respect to any Borrower, without any notice to any Borrower or
any other act by the Administrative Agent or the Lenders, the Commitments shall
thereupon automatically terminate and the Loans (together with accrued interest
thereon) and all other amounts payable hereunder and under the other Loan
Documents shall automatically become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers. Notwithstanding the foregoing, the
Administrative Agent shall have available to it all other remedies at law or
equity, and shall exercise any one or all of them at the request of the Required
Lenders.

         SECTION 6.02. NOTICE OF DEFAULT. The Administrative Agent shall give
notice to the Company of any Default under Section 6.01(c) promptly upon being
requested to do so by any Lender and shall thereupon notify all the Lenders
thereof.


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<PAGE>


                                   ARTICLE VII

                                   The Agents
                                   ----------

         In order to expedite the transactions contemplated by this Agreement,
JPMCB is hereby appointed to act as Administrative Agent on behalf of the
Lenders and the Issuing Bank, JPMEL is hereby appointed to act as London Agent
on behalf of the Lenders, and JPMAL is hereby appointed to act as Australian
Agent on behalf of the Lenders. Each of the Lenders, each assignee of any such
Lender and the Issuing Bank hereby irrevocably authorizes the Agents to take
such actions on its behalf and to exercise such powers as are delegated to the
Agents by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.

         With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates in their respective individual capacities may
accept deposits from, lend money to and generally engage in any kind of business
with the Company or any Subsidiary or other Affiliate thereof as if it were not
an Agent.

         The Agents shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) no Agent shall be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) no
Agent shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that such Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02), and (c) except as expressly set forth in the Loan Documents, no Agent
shall have any duty to disclose, and no Agent shall be liable for the failure to
disclose, any information relating to the Company or any of its Subsidiaries
that is communicated to or obtained by the institution serving as Agent or any
of its Affiliates in any capacity. No Agent shall be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.02) or in the absence of its own
gross negligence or wilful misconduct. No Agent shall be deemed to have
knowledge of any Default unless and until written notice thereof is given to
such Agent by a Borrower or a Lender, and no Agent shall be responsible for or
have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with the Loan Documents, (ii) the
contents of any certificate, report or other document delivered hereunder or in
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein,
(iv) the validity, enforceability, effectiveness or genuineness of the Loan
Documents or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein or in any other
Loan Document, other than to confirm receipt of items expressly required to be
delivered to such Agent.


                                       66
<PAGE>


         Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it in good faith to
be genuine and to have been signed or sent by the proper Person. Each Agent also
may rely upon any statement made to it orally or by telephone and believed by it
in good faith to be made by the proper Person, and shall not incur any liability
for relying thereon. Each Agent may consult with legal counsel (who may be
counsel for any Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

         Each Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by such Agent.
Each Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs and the provisions of Section
9.03 shall apply to any such sub-agent and to the Related Parties of each Agent
and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Agent.

         Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, any Agent may resign at any time by notifying the
Lenders, the Issuing Bank and the Company. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Company, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders and the Issuing Bank, appoint a successor Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Company to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Company and such
successor. After the Agent's resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent.

         Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.


                                       67
<PAGE>


         The institution named as Syndication Agent in the heading of this
Agreement shall not, in its capacity as such, have any duties or
responsibilities of any kind under this Agreement.

                                   ARTICLE VIII

                                    Guarantee
                                    ---------

         In order to induce the Lenders to extend credit to the Borrowing
Subsidiaries hereunder and to induce the Issuing Bank to issue Letters of Credit
hereunder, the Company hereby irrevocably and unconditionally guarantees, as a
primary obligor and not merely as a surety, the Obligations of the Borrowing
Subsidiaries. The Company further agrees that the due and punctual payment of
the Obligations of the Borrowing Subsidiaries may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee hereunder notwithstanding any such extension or
renewal of any Obligation.

         The Company waives presentment to, demand of payment from and protest
to any Borrowing Subsidiary of any of the Obligations, and also waives notice of
acceptance of its obligations and notice of protest for nonpayment. The
obligations of the Company hereunder shall not be affected by and the Company
hereby waives any defense that it may now or hereafter have arising out of the
following: (a) the failure of any Lender or the Issuing Bank, as the case may
be, to assert any claim or demand or to enforce any right or remedy against any
Borrowing Subsidiary under the provisions of this Agreement, any other Loan
Document or otherwise; (b) any extension or renewal of any of the Obligations;
(c) any rescission, waiver, amendment or modification of, or release from, any
of the terms or provisions of this Agreement, any Borrowing Subsidiary Agreement
or any other Loan Document or agreement; (d) the failure or delay of any Lender
or the Issuing Bank, as the case may be, to exercise any right or remedy against
any other guarantor of the Obligations; (e) the failure of any Lender or the
Issuing Bank, as the case may be, to assert any claim or demand or to enforce
any remedy under any Loan Document or any other agreement or instrument; (f) any
default, failure or delay, wilful or otherwise, in the performance of the
Obligations; or (g) any other act, omission or delay to do any other act which
may or might in any manner or to any extent vary the risk of the Company or
otherwise operate as a discharge of the Company as a matter of law or equity or
which would impair or eliminate any right of the Company to subrogation.

         The Company further agrees that its guarantee hereunder constitutes a
promise of payment when due (whether or not any bankruptcy or similar proceeding
shall have stayed the accrual or collection of any of the Obligations or
operated as a discharge thereof) and not merely of collection, and waives any
right to require that any resort be had by any Lender or Issuing Bank, as the
case may be, to any balance of any deposit account or credit on the books of any
Lender or Issuing Bank, as the case may be, in favor of any Borrower or
Subsidiary Guarantor or any other Person.


                                       68
<PAGE>


         The obligations of the Company hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, and shall not
be subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever, by reason of the invalidity, illegality or unenforceability of the
Obligations, any impossibility in the performance of the Obligations or
otherwise.

         The Company further agrees that its obligations hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by any Lender or Issuing Bank, as the case may be, upon the
bankruptcy or reorganization of any Borrower or otherwise.

         In furtherance of the foregoing and not in limitation of any other
right which any Lender or the Issuing Bank may have at law or in equity against
the Company by virtue hereof, upon the failure of any Borrowing Subsidiary to
pay any Obligation when and as the same shall become due, whether at maturity,
by acceleration, after notice of prepayment or otherwise, the Company hereby
promises to and will, upon receipt of written demand by the Administrative
Agent, forthwith pay, or cause to be paid, to the Administrative Agent for
distribution to the Lenders or the Issuing Bank in cash an amount equal the
unpaid principal amount of such Obligation. The Company further agrees that if
payment in respect of any Obligation shall be due in a currency other than US
Dollars and/or at a place of payment other than New York and if, by reason of
any legal prohibition, disruption of currency or foreign exchange markets, war
or civil disturbance or other event, payment of such Obligation in such currency
or at such place of payment shall be impossible or, in the judgment of any
Lender, not consistent with the protection of its rights or interests, then, at
the election of such Lender, the Company shall make payment of such Obligation
in US Dollars (based upon the applicable Exchange Rate in effect on the date of
payment) and/or in New York, and shall indemnify such Lender or the Issuing Bank
against any losses or expenses (including losses or expenses resulting from
fluctuations in exchange rates) that it shall sustain as a result of such
alternative payment.

         Upon payment in full by the Company of any Obligation of any Borrowing
Subsidiary, each Lender or the Issuing Bank shall, in a reasonable manner,
assign to the Company the amount of such Obligation owed to such Lender or the
Issuing Bank and so paid, such assignment to be PRO TANTO to the extent to which
the Obligation in question was discharged by the Company, or make such
disposition thereof as the Company shall direct (all without recourse to any
Lender or the Issuing Bank and without any representation or warranty by any
Lender or the Issuing Bank). Upon payment by the Company of any sums as provided
above, all rights of the Company against any Borrowing Subsidiary arising as a
result thereof by way of right of subrogation or otherwise shall in all respects
be subordinated and junior in right of payment to the prior indefeasible payment
in full of all the Obligations owed by such Borrowing Subsidiary to the Lenders
and the Issuing Bank.


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<PAGE>


                                   ARTICLE IX

                                  Miscellaneous
                                  -------------

         SECTION 9.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

                  (a) if to the Company, to it at 1101 South Third Street,
         Minneapolis, MN 55415, Attention of Lori Walker, Treasurer and
         Controller, (Telecopy No. (612) 375-7748;

                  (b) if to any Borrowing Subsidiary or Subsidiary Guarantor, to
         it in care of the Company as provided in paragraph (a) above;

                  (c) if to the Administrative Agent, to it at JPMorgan Chase
         Bank, N.A., Loan and Agency Services Group, 10 South Dearborn, 19th
         Floor, Chicago, IL 60670, Attention of Nanette Wilson (Telecopy No.
         (312) 385-7101) and Ted Heldring (Telecopy No. (312) 732-7455); with a
         copy to the London Agent and the Australian Agent;

                  (d) if to the London Agent, to it at J.P. Morgan Europe
         Limited, 125 London Wall, Floor 9, London EC2Y 5AJ, United Kingdom,
         Attention of Loans Agency Division (Telecopy No. 011-44-207-7772360);
         with a copy to the Administrative Agent as provided in paragraph (c)
         above;

                  (e) if to the Australian Agent, to it at J.P. Morgan Australia
         Limited, 225 George Street, Floor 28, Sydney, New South Wales,
         Australia, Attention of Jason Lock (Telecopy No. 011-61-612-9247-7698);
         with a copy to the Administrative Agent as provided in paragraph (c)
         above;

                  (f) if to the Issuing Bank, to it at JPMorgan Chase Bank,
         N.A., Loan and Agency Services Group, 10 South Dearborn, 19th Floor,
         Chicago, IL 60670, Attention of Nanette Wilson (Telecopy No. (312)
         385-7101) and Ted Heldring (Telecopy No. (312) 732-7455); and

                  (g) if to any other Lender, to it at its address (or telecopy
         number) set forth in its Administrative Questionnaire.

         Any party hereto may change its address or telecopy number for notices
and other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

         SECTION 9.02. WAIVERS; AMENDMENTS. (a) No failure or delay by any
Agent, any Lender or the Issuing Bank in exercising any right or power hereunder
or


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<PAGE>


under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agents, the Lenders and the Issuing Bank hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Borrower or Subsidiary Guarantor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time.

         (b) Neither this Agreement nor any of the Loan Documents nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Company and the
Required Lenders or by the Company and the Administrative Agent with the consent
of the Required Lenders (and, in the case of a Borrowing Subsidiary Agreement,
the applicable Borrowing Subsidiary); PROVIDED that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby without the written
consent of each Lender, (v) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release the
Company from its obligations under Article VIII or release any of the Subsidiary
Guarantors from their obligations under the Guarantee Agreement without the
consent of each Lender, or (vii) change any provisions of any Loan Document in a
manner that by its terms adversely affects the rights in respect of payments due
to Lenders holding Loans of any Class differently than those of Lenders holding
Loans of any other Class without the written consent of Lenders holding a
majority in interest of the outstanding Loans and unused Commitments of each
adversely affected Class; PROVIDED FURTHER that (A) no such agreement shall
amend, modify or otherwise affect the rights or duties of any Agent or the
Issuing Bank hereunder without the prior written consent of such Agent or the
Issuing Bank, as the case may be, and (B) any waiver, amendment or modification
of this Agreement that by its terms affects the rights or duties under this
Agreement of the Multicurrency Tranche Lenders (but not the Australian Tranche
Lenders) or the


                                       71
<PAGE>


Australian Tranche Lenders (but not the Multicurrency Tranche Lenders) may be
effected by an agreement or agreements in writing entered into by the Company
and the requisite percentage in interest of the affected class of Lenders.

         (c) Notwithstanding anything in paragraph (b) of this Section to the
contrary, this Agreement and the other Loan Documents may be amended at any time
and from time to time to increase the aggregate amount of any Class of
Commitments, or to establish one or more new Classes of term loans to be made to
the Borrowers and/or revolving credit commitments to be made available to the
Borrowers, by an agreement in writing entered into by the Company, the
Administrative Agent and each Person (including any Lender) that shall agree to
provide any portion of such increase in Commitments or such new Classes of term
loans or revolving credit commitments so established (but without the consent of
any other Lender), and each such Person that shall not already be a Lender
shall, at the time such agreement becomes effective, become a Lender with the
same effect as if it had originally been a Lender under this Agreement with the
Commitments and/or term loans set forth in such agreement; PROVIDED, HOWEVER,
that (i) the sum of (x) the aggregate amount of all Commitment increases
effected hereunder and (y) the aggregate amount of all revolving credit
commitments of any new Class and all outstanding term loans of any new Class
established hereunder, shall not exceed $200,000,000; and (ii) in the case of
any increase in the Multicurrency Tranche Commitments, the Issuing Bank shall
have approved each Lender that proposes to extend any such increased
Multicurrency Tranche Commitment. Any such agreement shall amend the provisions
of this Agreement and the other Loan Documents to set forth the terms of each
new Class of term loans or revolving credit commitments established thereby
(including the amount and final maturity thereof (which shall not be earlier
than the Maturity Date), any provisions relating to the amortization or
mandatory prepayment thereof, if any (it being agreed that not more than 1% of
the aggregate principal amount of the term loans of any Class shall amortize
during any calendar year prior to the Maturity Date), the interest to accrue and
be payable thereon and any fees to be payable in respect thereof) and to effect
such other changes (including changes to the provisions of this Section, Section
2.17 and the definition of "Required Lenders") as the Company and the
Administrative Agent shall deem necessary or advisable in connection with the
establishment of any such new Class of term loans or revolving credit
commitments; PROVIDED, HOWEVER, that no such agreement shall (i) effect any
change described in any of clauses (i), (ii), (iii), (vi) or (vii) of paragraph
(b) of this Section without the consent of each Person required to consent to
such change under such clause (it being agreed, however, that any increase in
the Commitments of any Class or the establishment of any new Class of term loans
or revolving credit commitments will not, of itself, be deemed to effect any of
the changes described in clause (vi) of such paragraph (b), and that
modifications to Section 2.17 or the definition of "Required Lenders" or other
provisions relating to voting provisions to provide the Lenders under such new
Class of term loans or revolving credit commitments with the benefit of such
provisions will not, by themselves, be deemed to effect any of the changes
described in clauses (iv) or (v) of such paragraph (b)), or (ii) amend Article V
or VI to establish any covenant, Event of Default or remedy that by its terms
benefits one or more Classes, but not all Classes, of Loans or Borrowings
without the prior written consent of Lenders holding a majority in interest of
the Loans and Commitments of each Class not so benefited. The loans,


                                       72
<PAGE>


commitments and borrowings of any new Class established pursuant to this
paragraph shall constitute Loans, Commitments and Borrowings under, and shall be
entitled to all the benefits afforded by, this Agreement and the other Loan
Documents, and shall, without limiting the foregoing, benefit equally and
ratably from the Guarantee by the Company under Article VIII and the Guarantees
by the Subsidiary Guarantors under the Guarantee Agreement. The Company shall
take any actions reasonably required by the Administrative Agent to ensure
and/or demonstrate that the Guarantee by the Company under Article VIII and the
Guarantees by the Subsidiary Guarantors under the Guarantee Agreement continue
to be in full force and effect after any increase in Commitments or the
establishment of any new Class of term loans or revolving credit commitments.

         SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Company shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent, the London Agent and the Australian Agent and each of their Affiliates,
including the reasonable fees, charges and disbursements of Cravath, Swaine &
Moore LLP, counsel for the Administrative Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of this Agreement or the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
out-of-pocket expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the London Agent, the Australian Agent, the Issuing Bank
or any Lender, including the reasonable fees, charges and disbursements of any
counsel for the Administrative Agent, the London Agent, the Australian Agent,
the Issuing Bank or any Lender, in connection with the enforcement or protection
of its rights in connection with any Loan Document, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.

         (b) The Company agrees to indemnify the Agents, each Lender and the
Issuing Bank, and each Related Party of any of the foregoing Persons (each such
Person being called an "INDEMNITEE") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the reasonable fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document, or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the
use of the proceeds therefrom (including any refusal by the Issuing Bank to
honor a demand for payment under a Letter of Credit if the documents presented
in connection with such demand do not strictly comply with the terms of such
Letter of Credit) or any transaction in which such proceeds are used, (iii) any
actual or alleged presence or Environmental Release of Hazardous Materials on or
from any property currently or formerly owned or operated by the Company or any
of its Subsidiaries or Affiliates, or any Environmental


                                       73
<PAGE>


Liability related in any way to the Company or any of its Subsidiaries or
Affiliates or their respective predecessors, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; PROVIDED that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are finally determined by a court of competent
jurisdiction to have resulted from the gross negligence or wilful misconduct of
such Indemnitee.

         (c) To the extent that the Company fails to pay any amount required to
be paid by it to the Administrative Agent, the London Agent, the Australian
Agent or the Issuing Bank under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to the Administrative Agent, the London Agent,
the Australian Agent or the Issuing Bank, as the case may be, such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
PROVIDED that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the London Agent, the Australian Agent or the
Issuing Bank in its capacity as such.

         (d) To the extent permitted by applicable law, no Borrower shall
assert, and each Borrower hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.

         (e) All amounts due under this Section shall be payable promptly after
written demand therefor.

         SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns (including any Affiliate
of the Issuing Bank that issues any Letter of Credit), except that no Borrower
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by any Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Agents, the Lenders and the Issuing Bank) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

         (b) Any Lender may assign by novation to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); PROVIDED that
(i) the Administrative Agent, the Issuing Bank and, except in the case of an
assignment to a Lender or an Affiliate of a Lender, the Company, must give their
prior written consent to such assignment, which consent shall not be
unreasonably withheld, (ii) except in the case of an assignment to a Lender or
an


                                       74
<PAGE>


Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment, the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than US$5,000,000 unless each of the
Company and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that this
clause (iii) shall not apply to rights in respect of outstanding Competitive
Loans, (iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of US$3,500, and (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and PROVIDED FURTHER that any consent of the Company otherwise
required under this paragraph shall not be required if a Default or an Event of
Default has occurred and is continuing. Subject to acceptance and recording
thereof pursuant to paragraph (d) of this Section, from and after the effective
date specified in each Assignment and Assumption the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.14, 2.15, 2.16, 2.20, 2.21 and
9.03). Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (e) of this Section.

         (c) The Administrative Agent, acting for this purpose as an agent of
each Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive absent manifest error, and the Borrowers, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Company, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

         (d) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any


                                       75
<PAGE>


written consent to such assignment required by paragraph (b) of this Section,
the Administrative Agent shall accept such Assignment and Assumption and
promptly record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

         (e) Any Lender may, without the consent of any Borrower, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "PARTICIPANT") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); PROVIDED that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Administrative Agent, the other
Lenders and the Issuing Bank shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; PROVIDED that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (f) of this
Section, each Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15, 2.16, 2.20 and 2.21 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to paragraph
(b) of this Section. To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 9.08 as though it were a Lender, PROVIDED
such Participant agrees to be subject to Section 2.17(c) as though it were a
Lender.

         (f) A Participant shall not be entitled to receive any greater payment
under Section 2.14, 2.15, 2.16, 2.20 or 2.21 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Company's prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.16
unless the Company is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Borrowers, to comply with
Section 2.16(e) as though it were a Lender.

         (g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; PROVIDED that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.


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<PAGE>


         (h) 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 Administrative Agent and the Company, the option to provide to the
Borrowers all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrowers pursuant to this Agreement or the option
to participate in any Letter of Credit, as the case may be; PROVIDED THAT (i)
nothing herein shall constitute a commitment by any SPC to make any Loan or to
participate in any Letter of Credit, (ii) nothing herein shall relieve the
Granting Lender of liability for the performance or nonperformance by the SPC of
the obligations of the Granting Lender under this Agreement. The making of a
Loan by an SPC or the participation by such SPC in any Letter of Credit
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by such Granting Lender or such
participation in a Letter of Credit were paid or taken, as the case may be, 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
senior 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 of America or any State thereof. In addition, notwithstanding anything to
the contrary contained in this Section 9.04, any SPC may (i) with notice to, but
without the prior written consent of, the Company and the Administrative Agent
and without paying any processing fee therefor, assign all or a portion of its
interests in any Loans or participations in Letters of Credit to the Granting
Lender or to any financial institution (consented to by the Company and
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans or participations in any Letters of Credit to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC.

         SECTION 9.05. SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrowers herein or in any other Loan Document and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and thereto and shall survive the
execution and delivery of this Agreement and any other Loan Document and the
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, any Lender or the Issuing Bank may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement or any other Loan Document
is outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not expired or terminated. The provisions of Sections 2.14,
2.15, 2.16, 2.20, 2.21 and


                                       77
<PAGE>


9.03 and Article VII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Commitments or the
Letters of Credit or the termination of this Agreement or any other Loan
Document or any provision hereof or thereof.

         SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

         SECTION 9.07. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

         SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of any
Borrower against any of and all the obligations of such Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.

         SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.

         (b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the


                                       78
<PAGE>


Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to any Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent, any Lender or the Issuing Bank may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against any Borrower or its properties in the courts of
any jurisdiction.

         (c) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

         (d) Each party to this Agreement (including any Borrowing Subsidiaries)
irrevocably consents to service of process in the manner provided for notices in
Section 9.01. Nothing in this Agreement or any other Loan Document will affect
the right of any party to this Agreement to serve process in any other manner
permitted by law.

         SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

         SECTION 9.11. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.


                                       79
<PAGE>


         SECTION 9.12. CONFIDENTIALITY. Each of the Administrative Agent, the
London Agent, the Australian Agent, the Issuing Bank and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or participant in, or any prospective assignee of or participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty to any swap or derivative transaction relating to the
Company and its obligations, or any advisor of any such counterparty, (g) with
the consent of the Company or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent, the London Agent, the Australian
Agent, any Lender or the Issuing Bank on a nonconfidential basis from a source
other than the Company. For the purposes of this Section, "INFORMATION" means
all information received from the Company relating to the Company or its
business, other than any such information that is available to the
Administrative Agent, the London Agent, the Australian Agent, the Issuing Bank
or any Lender on a nonconfidential basis prior to disclosure by the Company;
PROVIDED that, in the case of information received from the Company after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

         SECTION 9.13. CONVERSION OF CURRENCIES. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto (including
any Borrowing Subsidiary) agrees, to the fullest extent that it may effectively
do so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures in the relevant jurisdiction the first currency could
be purchased with such other currency on the Business Day immediately preceding
the day on which final judgment is given.

         (b) The obligations of each Borrower in respect of any sum due to any
party hereto or any holder of the obligations owing hereunder (the "APPLICABLE
CREDITOR") shall, notwithstanding any judgment in a currency (the "JUDGMENT
CURRENCY") other than the currency in which such sum is stated to be due
hereunder (the "AGREEMENT CURRENCY"), be discharged only to the extent that, on
the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the


                                       80
<PAGE>


relevant jurisdiction purchase the Agreement Currency with the Judgment
Currency; if the amount of the Agreement Currency so purchased is less than the
sum originally due to the Applicable Creditor in the Agreement Currency, such
Borrower agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify the Applicable Creditor against such loss. The obligations of the
Borrowers contained in this Section 9.13 shall survive the termination of this
Agreement and the payment of all other amounts owing hereunder.

         SECTION 9.14. INTEREST RATE LIMITATION. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "CHARGES"), shall exceed the
maximum lawful rate (the "MAXIMUM RATE") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

         SECTION 9.15. RELEASE OF SUBSIDIARY GUARANTORS. Notwithstanding any
contrary provision herein or in any other Loan Document, if all the Capital
Stock of any Subsidiary Guarantor owned by the Company and the Subsidiaries
shall be sold to one or more Persons (other than the Company or an Affiliate of
the Company) in a transaction permitted under this Agreement, and if the Company
shall request the release of such Subsidiary Guarantor from its obligations
under the Guarantee Agreement and the Indemnity, Subrogation and Contribution
Agreement and shall deliver to the Administrative Agent a certificate to the
effect that such release will comply with the terms of this Agreement, the
Administrative Agent, if satisfied that the applicable certificate is correct,
shall, without the consent of any Lender, execute and deliver all such
instruments, releases, or other agreements, and take all such further actions,
as shall be necessary to effectuate the release of such Subsidiary Guarantor and
shall promptly notify each Lender of such release.

         SECTION 9.16. USA PATRIOT ACT. Each Lender and the Issuing Bank hereby
notifies the Borrowers that pursuant to the requirements of the USA Patriot Act,
it is required to obtain, verify and record information that identifies the
Borrowers, which information includes the names and addresses of the Borrowers
and other information that will allow such Lender to identify the Borrowers in
accordance with its requirements. The Borrowers shall promptly following a
request by the Administrative Agent or any Lender, provide all documentation and
other information that the Administrative Agent or 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 USA
Patriot Act.


                                       81
<PAGE>


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

                                        THE VALSPAR CORPORATION,

                                           by

                                              ---------------------------------
                                              Name:
                                              Title:


                                        THE VALSPAR (SWITZERLAND)
                                        HOLDING CORPORATION A.G.,

                                           by

                                              ---------------------------------
                                              Name:
                                              Title:





















                                       82
<PAGE>


EXECUTED by VALSPAR                        ) Signature of director
(AUSTRALIA) HOLDINGS PTY                   )
LIMITED in  accordance with section        )
127(1) of the Corporations Law by          ) Name of director  block letters
authority of its directors in the presence )
of:                                        )
                                           ) Signature of director
                                           )
                                           )
Signature of witness                       )
                                           ) Name of director (block letters)
                                           )
                                           )
Name of witness (block letters)            )
                                           )
                                           )
                                           )




















                                       83
<PAGE>

                                       JPMORGAN CHASE BANK, N.A.,
                                       individually and as Administrative Agent,

                                           by

                                              ---------------------------------
                                              Name:
                                              Title:


                                       J.P. MORGAN EUROPE LIMITED, as
                                       London Agent,

                                           by

                                              ---------------------------------
                                              Name:
                                              Title:


                                       J.P.  MORGAN AUSTRALIA LIMITED, as
                                       Australian Agent,

                                           by

                                              ---------------------------------
                                              Name:
                                              Title:


                                       BARCLAYS BANK PLC, individually and
                                       as Syndication Agent,

                                           by

                                              ---------------------------------
                                              Name:
                                              Title:

















                                       84


<PAGE>

                                                                     EXHIBIT A-1


                                    [FORM OF]

                                    BORROWING SUBSIDIARY AGREEMENT dated as of
                           [ ], 20[ ], among THE VALSPAR CORPORATION, a Delaware
                           corporation (the "Company"), [Name of Borrowing
                           Subsidiary], a [ ] corporation (the "New Borrowing
                           Subsidiary"), and JPMorgan Chase Bank, N.A., as
                           Administrative Agent (the "Administrative Agent").

         Reference is hereby made to the Five-Year Credit Agreement dated as of
October 25, 2005 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Company, the Borrowing Subsidiaries
from time to time party thereto, the Lenders party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, J.P. Morgan Europe Limited, as London Agent, J.P.
Morgan Australia Limited, as Australian Agent, and Barclays Bank PLC, as
Syndication Agent. Capitalized terms used herein but not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
Under the Credit Agreement, the Lenders have agreed, upon the terms and subject
to the conditions therein set forth, to make Loans to, and issue Letters of
Credit for the account of, the Borrowing Subsidiaries, and the Company and the
New Borrowing Subsidiary desire that the New Borrowing Subsidiary become a
Borrowing Subsidiary. Each of the Company and the New Borrowing Subsidiary
represent and warrant that the representations and warranties of the Company in
the Credit Agreement relating to the New Borrowing Subsidiary and this Agreement
are true and correct on and as of the date hereof. The Company and the New
Borrowing Subsidiary represent and warrant that there is no income, stamp, or
other tax of any country, or any taxing authority thereof or therein, in the
nature of a withholding tax or otherwise, which is imposed on any payment to be
made by the New Borrowing Subsidiary pursuant to this Agreement or the Credit
Agreement, or is imposed in respect of the execution, delivery or enforcement of
this Agreement or the Credit Agreement. The Company agrees that the Guarantee of
the Company contained in the Credit Agreement will apply to the Obligations of
the New Borrowing Subsidiary. Upon execution of this Agreement by each of the
Company (and the execution and delivery of any other documents reasonably
requested by the Administrative Agent), the New Borrowing Subsidiary and the
Administrative Agent, the New Borrowing Subsidiary shall be a party to the
Credit Agreement and a "Borrowing Subsidiary" and a "Borrower" for all purposes
thereof, and the New Borrowing Subsidiary hereby agrees to be bound by all
provisions of the Credit Agreement. Upon execution of this Agreement by each of
the Company, the New Borrowing Subsidiary and the Administrative Agent, the New
Borrowing Subsidiary (if a Domestic Material Subsidiary) agrees to become party
to the Guarantee Agreement and the Indemnity, Subrogation and Contribution
Agreement.

         THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized officers as of the date first appearing above.

                                        THE VALSPAR CORPORATION,

                                           by

                                           ------------------------------------
                                           Name:
                                           Title:

<PAGE>
                                                                               2

                                        [NAME OF NEW BORROWING SUBSIDIARY],

                                           by

                                           ------------------------------------
                                           Name:
                                           Title:



                                        JPMORGAN CHASE BANK, N.A., as
                                        Administrative Agent,

                                           by

                                           ------------------------------------
                                           Name:
                                           Title:




<PAGE>


                                                                     EXHIBIT A-2

                                    [FORM OF]

                        BORROWING SUBSIDIARY TERMINATION

JPMorgan Chase Bank, N.A.,
as Administrative Agent
for the Lenders referred to below
c/o JPMorgan Chase Bank, N.A.,
as Administrative Agent
270 Park Avenue
New York, NY 10017

                                                                          [Date]

Ladies and Gentlemen:

         The undersigned, The Valspar Corporation (the "Company"), refers to the
Five-Year Credit Agreement dated as of October 25, 2005 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Company, the Borrowing Subsidiaries from time to time party thereto,
the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent,
J.P. Morgan Europe Limited, as London Agent, J.P. Morgan Australia Limited, as
Australian Agent, and Barclays Bank PLC, as Syndication Agent. Capitalized terms
used and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement.

         The Company hereby terminates the status of [                  ] (the
"Terminated Borrowing Subsidiary") as a Borrowing Subsidiary under the Credit
Agreement. [The Company represents and warrants that no Loans made to, or
Letters of Credit issued for the account of, the Terminated Borrowing Subsidiary
are outstanding as of the date hereof and that all amounts payable by the
Terminated Borrowing Subsidiary in respect of interest and/or fees or in respect
of Letters of Credit (and, to the extent notified by the Administrative Agent or
any Lender, any other amounts payable under the Credit Agreement) pursuant to
the Credit Agreement have been paid in full on or prior to the date hereof.]
[The Company acknowledges that the Terminated Borrowing Subsidiary shall
continue to be a Borrowing Subsidiary until such time as all Loans made to the
Terminated Borrowing Subsidiary shall have been repaid, no Letters of Credit
issued for the account of the Terminated Borrowing Subsidiary shall be
outstanding, and all amounts payable by the Terminated Borrowing Subsidiary in
respect of interest and/or fees or in respect of Letters of Credit (and, to the
extent notified by the Administrative Agent or any Lender, any other amounts
payable under the Credit Agreement) pursuant to the Credit Agreement shall have
been paid in full, PROVIDED that the Terminated Borrowing Subsidiary shall not
have the right to make further Borrowings under the Credit Agreement.]

         THIS INSTRUMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.

                                        Very truly yours,

                                        THE VALSPAR CORPORATION,

                                           by

                                           ------------------------------------
                                           Name:
                                           Title:



<PAGE>

                                                                       EXHIBIT B

                                    [FORM OF]

                            ASSIGNMENT AND ASSUMPTION

         Reference is made to the Five-Year Credit Agreement dated as of October
25, 2005 (as amended, modified, supplemented or waived, the "Credit Agreement"),
among The Valspar Corporation, the Borrowing Subsidiaries from time to time
party thereto, the Lenders party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, J.P. Morgan Europe Limited, as London Agent, J.P. Morgan
Australia Limited, as Australian Agent, and Barclays Bank PLC, as Syndication
Agent. Capitalized terms used but not defined herein shall have the meanings
specified in the Credit Agreement.

         1. The Assignor named below hereby sells and assigns, without recourse
to the Assignor, to the Assignee named below, and the Assignee hereby purchases
and assumes, without recourse to the Assignor, from the Assignor, effective as
of the Assignment Date set forth below, the interests set forth below in the
Assignor's rights and obligations under the Credit Agreement, including, without
limitation, the interests set forth below in the Commitments of the Assignor on
the Assignment Date, and the Loans owing to the Assignor which are outstanding
on the Assignment Date. The Assignor represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any Lien. The Assignee hereby
acknowledges receipt of a copy of the Credit Agreement. From and after the
Assignment 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 Assumption, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent of the interests assigned
by this Assignment and Assumption, relinquish its rights and be released from
its obligations under the Credit Agreement.

         2. By executing and delivering this Assignment and Assumption, the
Assignor and the Assignee shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) the Assignor warrants that it
is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim created by the Assignor and that its Revolving
Loan Commitment, and the outstanding balances of its Revolving Loans, in each
case without giving effect to assignments thereof which have not become
effective, are as set forth herein, (ii) except as set forth in (i) above, the
Assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Loan Document or any other instrument or document furnished pursuant
thereto, or the financial condition of the Borrowers or any Subsidiary or the
performance or observance by the Borrowers or any Subsidiary of any of its
obligations under the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto; (iii) the Assignee represents
and warrants that it is legally authorized to enter into this Assignment and
Assumption; (iv) the Assignee confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements referred
to in Section 3.04(a) thereof or delivered pursuant to Section 5.01 thereof 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 Assumption;
(v) the Assignee will independently and without reliance upon 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 Credit Agreement; (vi)
the Assignee appoints and authorizes the Administrative Agent to take such
action as agent 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 (vii) the
Assignee agrees that it will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender.

         3. This Assignment and Assumption is being delivered to the
Administrative Agent together with (i) if the Assignee is a Foreign Lender, any
documentation required to be

<PAGE>
                                                                               2


delivered by the Assignee pursuant to Section 2.16(e) of the Credit Agreement,
(ii) if the Assignee is not already a Lender under the Agreement, an
Administrative Questionnaire in the form provided by the Administrative Agent
and (iii) a processing and recordation fee in the amount of $3,500.

         4. THIS ASSIGNMENT AND ASSUMPTION SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Date of Assignment:
                     -----------------------------------------------------------

Legal Name of Assignor:
                         -------------------------------------------------------

Legal Name of Assignee:
                         -------------------------------------------------------

Assignee's Address for Notices:
                                 -----------------------------------------------

Effective Date of Assignment ("Assignment Date"):
                                                   -----------------------------

<PAGE>
                                                                               3


                                                       Percentage Assigned of
                                                      Commitment (set forth, to
                                                     at least 8 decimals), as a
                                                     percentage of the facility
                                                          and the aggregate
                                                     Commitments of all Lenders
Loan/Commitment         Principal Amount Assigned            thereunder
---------------         -------------------------            ----------

                        $                                         %

                        $                                         %



The terms set forth herein are
hereby agreed to:                          Consent (if required):

_____________________, as Assignor         THE VALSPAR CORPORATION


by                                         by
    ---------------------------------          -------------------------------
    Name:                                      Name
    Title                                      Title


                                           JPMORGAN CHASE BANK, N.A., as
_____________________, as Assignee         Administrative Agent


by                                         by
    ---------------------------------          -------------------------------
    Name:                                      Name
    Title                                      Title



<PAGE>

                                                                       EXHIBIT C

                                     FORM OF

                       OPINION OF LINDQUIST & VENNUM, PLLP

                                                                October 25, 2005

JPMorgan Chase Bank, N.A., as
Administrative Agent
270 Park Avenue
New York, New York 10017

The Lenders party to the Credit
Agreement referred to below

Ladies and Gentlemen:

         We have acted as special counsel for The Valspar Corporation, a
corporation organized under the laws of the State of Delaware (the "Company"),
and each of the domestic subsidiaries of the Company listed on Schedule A hereto
(together with the Company, the "Loan Parties") in connection with (a)
extensions of credit to the Company pursuant to a Five-Year Credit Agreement of
even date herewith (the "Credit Agreement") between the Company, the lenders
party thereto (the "Lenders"), the Borrowing Subsidiaries party thereto (the
"Borrowing Subsidiaries"), JPMorgan Chase Bank, N.A., as Administrative Agent
for the Lenders (in such capacity, the "Administrative Agent"), J.P. Morgan
Europe Limited, as London Agent, J.P. Morgan Australia Limited, as Australian
Agent, and Barclays Bank PLC, as Syndication Agent. The execution, delivery and
performance by the Company of the Loan Documents are sometimes hereinafter
referred to as the "Transactions".

         This opinion is given to you pursuant to Section 4.01 of the Credit
Agreement. Capitalized terms defined in the Credit Agreement and not otherwise
defined herein shall have the meanings given those terms in the Credit
Agreement.

         We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion. Without limiting the foregoing, we have examined
originals or copies, certified or otherwise identified to our satisfaction, of
the following documents (collectively, the "Loan Documents"):

         (a)      the Credit Agreement;

         (b)      the Guarantee Agreement; and

         (c)      the Indemnity, Subrogation and Contribution Agreement.

We have assumed the authenticity of any document submitted to us an original,
the conformity to the original of any document submitted to us as a copy and the
authenticity of the originals of such documents, the genuineness of all
signatures, the legal capacity of natural persons, and the due authorization,
execution and delivery of the Credit Agreement by the Lenders. As to questions
of fact, we have relied upon the representations and warranties of the Loan
Parties in the Loan Documents or in certificates of the Company, its officers or
of public officials. Certain opinions expressed below as to factual matters are
qualified as being limited "to our knowledge" or by other words to the same or
similar effect. Such words, as used herein, mean that prior to or during the
course of this representation of the Loan Parties in connection with the
specific transactions contemplated by the Loan Documents, no contrary
information came to the attention of Richard D. McNeil, the attorney in our firm
who has represented the Loan Parties in connection with the transactions
contemplated by the Loan Documents and the preparation of this

<PAGE>
                                                                               2


opinion. In rendering such opinions, we have not conducted any independent
investigation or consulted with other attorneys in our firm with respect to the
matters covered thereby.

         Upon the basis of the foregoing, we are of the opinion that:

         1. Each of the Loan Parties (a) is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation as indicated on the attached Schedule A and (b) has all requisite
power and authority to carry on its business as now conducted.

         2. The Transactions are within the Loan Parties' corporate powers and
have been duly authorized by all necessary corporate and, if required,
stockholder action.

         3. Each of the Loan Documents has been duly executed and delivered by
each of the Loan Parties that is a party thereto and constitutes the legal,
valid and binding obligation enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

         4. The Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of any of the Loan Parties or any order of any
Governmental Authority, (c) to our knowledge, will not violate or result in a
default under any indenture, agreement or other instrument binding upon any of
the Loan Parties or any of their assets, or give rise to a right thereunder to
require any payment to be made by any of the Loan Parties, and (d) to our
knowledge, will not result in the creation or imposition of any Lien (other than
any Liens created or arising under any Loan Documents) on any asset of any Loan
Party.

         5. To our knowledge, there are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or threatened
against or affecting the Company or any of the Subsidiaries (a) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect or (b) that involve the
Transactions.

         6. No Loan Party is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.

         7. The making of the Loans to the Company and the application of the
proceeds thereof by the Company pursuant to the terms of the Credit Agreement
will not violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System.

         8. A Minnesota State court or a federal court applying the choice of
laws principles prevailing under the laws of the State of Minnesota to which the
question is presented will give effect to the provisions in the Loan Documents
selecting the laws of the State of New York as the governing law thereof (except
as therein provided) and will apply such laws, rather than the laws of Minnesota
or any other state, to the construction and application thereof.

         9. (a) None of the provisions of the Loan Documents will violate any
law, statute or regulation relating to usury and (b) the use of counterpart
copies of any of the Loan Documents does not affect the enforceability of any of
the Loan Documents.

         We are admitted to practice in the State of Minnesota and the foregoing
opinion is limited to the laws of the State of Minnesota and the Federal laws of
the United States of America.

<PAGE>
                                                                               3


         This opinion is given solely for the use and benefit of the Lenders,
the Administrative Agent, the London Agent and the Australian Agent and each of
their successors and assigns under the Loan Documents in connection with the
loans contemplated by the Credit Agreement and may not be relied upon for any
other purpose or by any other party or entity.

                                        Very truly yours,




<PAGE>
                                                                               4


              Schedule A to Opinion of Lindquist & Vennum, P.L.L.P.
                             dated October 25, 2005

Engineered Polymer Solutions, Inc., a Delaware corporation
Valspar Finance Corporation, a Minnesota corporation
Valspar Coatings Finance Corporation, a Minnesota corporation
Valspar Sourcing, Inc., a Minnesota corporation





<PAGE>

                                                                       EXHIBIT D

                              MANDATORY COSTS RATE

1.       DEFINITIONS

         In this Exhibit:

         "ACT" means the Bank of England Act of 1998.

         The terms "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the
         meanings ascribed to them under or pursuant to the Act or by the Bank
         of England (as may be appropriate), on the day of the application of
         the formula.

         "FEE BASE" has the meaning ascribed to it for the purposes of, and
         shall be calculated in accordance with, the Fees Regulations.

         "FEES REGULATIONS" means, as appropriate, either:

                  (a)      the Banking Supervision (Fees) Regulations 1998; or

                  (b)      such regulations as from time to time may be in
                           force, relating to the payment of fees for banking
                           supervision in respect of periods subsequent to
                           January 1, 2000.

         "FSA" means the Financial Services Authority.

         Any reference to a provision of any statute, directive, order or
         regulation herein is a reference to that provision as amended or
         re-enacted from time to time.

2.       CALCULATION OF THE MANDATORY COSTS RATE

         The Mandatory Costs Rate is an addition to the interest rate on each
         Eurocurrency Loan or any other sum on which interest is to be
         calculated to compensate the Lenders for the cost attributable to such
         Eurocurrency Loan or such sum resulting from the imposition from time
         to time under or pursuant to the Act and/or by the Bank of England
         and/or the FSA (or other United Kingdom governmental authorities or
         agencies) of a requirement to place non-interest bearing or Special
         Deposits (whether interest bearing or not) with the Bank of England
         and/or pay fees to the FSA calculated by reference to the liabilities
         used to fund the relevant Eurocurrency Loan or such sum.

         The "MANDATORY COSTS RATE" will be the rate determined by the
         Administrative Agent to be equal to the rate (rounded upward, if
         necessary, to the next higher 1/100 of 1%) resulting from the
         application of the following formula:

         For Sterling:

                  XL + S(L-D) + F x 0.01
                  ----------------------
                        100-(X+S)

         For other Designated Foreign Currencies:

                  F x 0.01
                  --------
                    300

         where on the day of application of the formula

         X        is the percentage of Eligible Liabilities (in excess of any
                  stated minimum) by reference to which JPMorgan Chase Bank,
                  N.A. ("JPMCB") is required under or pursuant to the Act to
                  maintain cash ratio deposits with the Bank of England;
<PAGE>
                                                                               2


         L        is the rate of interest (exclusive of Euro-Currency Margin and
                  Mandatory Costs Rate) payable on that day on the related
                  Eurocurrency Loan or unpaid sum pursuant to this Agreement;

         F        is the rate of charge payable by JPMCB to the FSA pursuant to
                  the Fees Regulations and expressed in pounds per (pound)1
                  million of the Fee Base of JPMCB;

         S        is the level of interest-bearing Special Deposits, expressed
                  as a percentage of Eligible Liabilities, which JPMCB is
                  required to maintain by the Bank of England (or other United
                  Kingdom governmental authorities or agencies); and

         D        is the percentage rate per annum payable by the Bank of
                  England to JPMCB on Special Deposits.

         (X, L, S and D are to be expressed in the formula as numbers and not as
         percentages. A negative result obtained from subtracting D from L shall
         be counted as zero.)

         The Mandatory Costs Rate attributable to a Eurocurrency Loan or other
         sum for any period shall be calculated at or about 11:00 A.M. (London
         time) on the first day of such period for the duration of such period.

         The determination of Mandatory Costs Rate by the Administrative Agent
         in relation to any period shall, in the absence of manifest error, be
         conclusive and binding on all parties hereto.

3.       CHANGE OF REQUIREMENTS

         If there is any change in circumstance (including the imposition of
         alternative or additional requirements) which in the reasonable opinion
         of the Administrative Agent renders or will render the above formula
         (or any element thereof, or any defined term used therein)
         inappropriate or inapplicable, the Administrative Agent shall (with the
         written consent of the Company, which shall not be unreasonably
         withheld) be entitled to vary the same. Any such variation shall, in
         the absence of manifest error, be conclusive and binding on all parties
         and shall apply from the date specified in such notice.

<PAGE>
                                                                       EXHIBIT E

                             THE VALSPAR CORPORATION
                             COMPLIANCE CERTIFICATE
                             ----------------------

         Reference is made to the Credit Agreement dated as of October 25, 2005
(as modified and supplemented and in effect from time to time, the "Credit
Agreement") among The Valspar Corporation, the Borrowing Subsidiaries from time
to time party thereto, the Lenders party thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, J.P. Morgan Europe Limited, as London Agent, J.P. Morgan
Australia Limited, as Australian Agent, and Barclays Bank PLC, as Syndication
Agent. Capitalized terms used herein shall have the meanings ascribed thereto in
the Credit Agreement.

         Pursuant to Section 5.01[(a)/(b)] of the Credit Agreement, [ ], the
duly authorized [Chief Financial Officer/Treasurer/Chief Accounting Officer] of
The Valspar Corporation, hereby certifies that the consolidated balance sheet of
the Company and its Consolidated Subsidiaries as of the end of the Fiscal
[Quarter/Year] ended [ ] and the related statement of income and statement of
cash flows furnished to each of the Lenders simultaneously herewith are fairly
presented, prepared in accordance with GAAP, applied on a basis consistent with
the most recent audited consolidated financial statements of the Company and its
Consolidated Subsidiaries (subject to normal year-end adjustments).

         Pursuant to Section 5.01(c) of the Credit Agreement, [ ], the duly
authorized [Chief Financial Officer/Treasurer/Chief Accounting Officer] of The
Valspar Corporation, hereby (i) certifies to the Administrative Agent and the
Lenders that the information contained in the Compliance Check List attached
hereto is true, accurate and complete as of [ ], and that no Default or Event of
Default is in existence on and as of the date hereof and (ii) restates and
reaffirms that the representations and warranties contained in Article III of
the Credit Agreement are true on and as of the date hereof as though restated on
and as of this date.

                                        THE VALSPAR CORPORATION,

                                           by

                                               --------------------------------
                                               Name:    [          ]
                                               Title:   [Chief Financial
                                                        Officer/Treasurer/Chief
                                                        Accounting Officer]


                                        Date:
                                               --------------------------------



<PAGE>
                                                                               2


                              COMPLIANCE CHECK LIST
                             The Valspar Corporation

                           __________________________


                                [______________]


1.       Subsidiaries (Section 3.08)

         The Company has no Subsidiaries except for those Subsidiaries listed on
         Schedule 3.08, or as described in the Compliance Certificate furnished
         pursuant to Section 5.01(c), in each case which accurately sets forth
         each such Subsidiary's complete name and jurisdiction of incorporation.

         New Subsidiaries not listed on Schedule 3.08 or in a prior Compliance
         Certificate:

         Domestic Subsidiaries        Name         Jurisdiction of Incorporation
         ---------------------        ----         -----------------------------

         Foreign Subsidiaries         Name         Jurisdiction of Incorporation
         --------------------         ----         -----------------------------

2.       Ratio of Consolidated Debt to Consolidated EBITDA (Section 5.03)

         The ratio of Consolidated Debt at any date to Consolidated EBITDA for
         the period of four consecutive Fiscal Quarters ended on or most
         recently prior to such date will not exceed 3.50 to 1.00.

         (a)  Consolidated Debt                       Schedule - 2  $___________

         (b)  EBITDA                                  Schedule - 1  $___________

         Actual Ratio of (a) to (b)                                  ___________

         Maximum Ratio for Applicable Period                        3.50 to 1.00

3.       Minimum Shareholders' Equity (Section 5.04)

         Shareholders' Equity will at no time be less than US$850,000,000 plus
         the sum of (i) 50% of the cumulative Reported Net Income of the Company
         and its Consolidated Subsidiaries during any period after October 29,
         2004 (taken as one accounting period), calculated quarterly but
         excluding from such calculations of Reported Net Income for purposes of
         this clause (i) any quarter in which the Consolidated Net Income of the
         Company and its Consolidated Subsidiaries is negative, and (ii) 100% of
         the cumulative Net Proceeds of Capital Stock/Conversion of Debt
         received during any period after the date hereof, calculated quarterly.

         (a)  Actual Shareholders' Equity at [  ]                   $___________

         (b)  50% of cumulative Reported Net Income                 $___________

         (c)  100% of cumulative Net Proceeds of Capital
              Stock/Conversion of Debt                              $___________

         (d)  US$850,000,000                                        $___________

<PAGE>
                                                                               3


         = Required Shareholders Equity
              (sum of (b) + (c) + (d))                              $___________

4.       Loans or Advances (Section 5.06)

         Neither the Company nor any of its Subsidiaries shall make loans or
         advances to any Person except: (i) loans or advances to employees not
         exceeding US$10,000,000 in the aggregate at any time outstanding made
         in the ordinary course of business; (ii) deposits required by
         government agencies or public utilities; (iii) loans or advances to any
         Borrower or Subsidiary Guarantor; (iv) Prepaid Rebates; and (v) loans,
         advances or deposits other than those permitted by clauses (i) through
         (iv) of this Section not exceeding 10% of Consolidated Total Assets in
         the aggregate at any time outstanding, PROVIDED that after giving
         effect to the making of any loans, advances or deposits permitted by
         clause (i), (ii), (iii), (iv) or (v) of this Section, no Default shall
         have occurred and be continuing.

         (a)  loans and advances to employees                       $___________

              Limitation                                           US$10,000,000

         (b)  other loans and advances not permitted by
              clauses (i) through (iv), inclusive                   $___________

              10% of Consolidated Total Assets                      $___________

5.       Negative Pledge (Section 5.08)

         Neither the Company nor any Consolidated Subsidiary will create, assume
         or suffer to exist any Lien on any asset now owned or hereafter
         acquired by it, except:

                  (a) Liens existing on the date of this Agreement securing Debt
         outstanding on the date of this Agreement in an aggregate principal
         amount not exceeding US$10,000,000;

                  (b) any Lien existing on any asset of any corporation at the
         time such corporation becomes a Consolidated Subsidiary and not created
         in contemplation of such event;

                  (c) any Lien on any asset (other than Equity Interests,
         Indebtedness or inventory) securing Debt incurred or assumed for the
         purpose of financing all or any part of the cost of acquiring or
         constructing such asset, PROVIDED that such Lien attaches to such asset
         concurrently with or within 18 months after the acquisition or
         completion of construction thereof;

                  (d) any Lien on any asset of any corporation existing at the
         time such corporation is merged or consolidated with or into the
         Company or a Consolidated Subsidiary and not created in contemplation
         of such event;

                  (e) any Lien existing on any asset prior to the acquisition
         thereof by the Company or a Consolidated Subsidiary and not created in
         contemplation of such acquisition;

                  (f) Liens securing Debt owing by any Subsidiary to any
         Borrower or Subsidiary Guarantor;

                  (g) any Lien arising out of the refinancing, extension,
         renewal or refunding of any Debt secured by any Lien permitted by any
         of the foregoing clauses of this Section, provided that (i) such Debt
         is not secured by any additional assets, and (ii) the amount of such
         Debt secured by any such Lien is not increased;
<PAGE>
                                                                               4


                  (h) Liens incidental to the conduct of its business or the
         ownership of its assets which (i) do not secure Debt and (ii) do not in
         the aggregate materially detract from the value of its assets or
         materially impair the use thereof in the operation of its business;

                  (i) any Lien on Excess Margin Stock; and

                  (j) Liens not otherwise permitted by the foregoing clauses of
         this Section securing Debt (other than Loans) in an aggregate principal
         amount at any time outstanding which, together with the amount of Debt
         secured by Liens permitted by the foregoing paragraphs (a) through (i),
         does not exceed 10% of Consolidated Total Assets.

         Total Secured Debt                                         $___________
         Consolidated Total Assets                                  $___________
         10% of Consolidated Total Assets                           $___________

6.       Consolidations, Mergers and Sales of Assets (Section 5.11(d))

         The Company will not, nor will it permit any Subsidiary to, consolidate
         or merge with or into, or sell, lease or otherwise transfer all or any
         substantial part of its assets (other than Excess Margin Stock) to, any
         other Person, or discontinue or eliminate any business line or segment,
         PROVIDED that the foregoing limitation on the sale, lease or other
         transfer of assets and on the discontinuation or elimination of a
         business line or segment shall not apply to loans or advances permitted
         by Section 5.06 or prohibit, during any Fiscal Quarter, a transfer of
         assets or the discontinuance or elimination of a business line or
         segment (in a single transaction or in a series of related
         transactions) unless the aggregate assets to be so transferred or
         utilized in a business line or segment to be so discontinued, when
         combined with all other assets transferred (other than inventory sold
         in the ordinary course of business), and all other assets utilized in
         all other business lines or segments discontinued, during such Fiscal
         Quarter and the immediately preceding three Fiscal Quarters contributed
         more than 20% of Consolidated Operating Profits during the four
         consecutive Fiscal Quarters immediately preceding such Fiscal Quarter.

         (a)  Consolidated Operating Profits                        $___________

         (b)  20% of Consolidated Operating Profits                 $___________

         (c)  aggregate of assets transferred or utilized in        $___________
              discontinued business lines or segments

7.       Limitation on Subsidiary Debt (Section 5.21)

         The Company shall not permit the outstanding principal amount of Debt
         of the Subsidiaries (other than (i) Debt owed to any Borrower or
         Subsidiary Guarantor and (ii) Debt owed under this Agreement or any
         other Loan Document) at any time to exceed, in the aggregate, 10% of
         Consolidated Total Assets, PROVIDED that Debt outstanding under the
         Lilly Securities shall not be included in the determination of the
         Subsidiaries' "Debt" under this Section.

         (a)  outstanding principal amount of Debt of Subsidiaries  $___________

         (b)  10% of Consolidated Total Assets                      $___________

<PAGE>

                                                                    Schedule - 1

                                     EBITDA
                                     ------

Consolidated Net Income for:

         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________

         Total                                                       $__________

Consolidated Interest Expense for:

         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________

         Total                                                       $__________

Depreciation for:

         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________

         Total                                                       $__________

Amortization for:

         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________

         Total                                                       $__________

Tax Expense for:

         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________
         ____ quarter ____-____                                      $__________

         Total                                                       $__________

         Total Consolidated EBITDA                   $__________



<PAGE>

                                                                    Schedule - 2

                                Consolidated Debt
                                -----------------

                                                                           TOTAL
                                                                           -----
Borrowed Money or Bonds, Debentures,
Notes or Similar Instruments
----------------------------

                                                                     $
                                                                     $
                                                                     $
                                                                     $

         Total Borrowed Money                                        $__________

Capital Leases
--------------

                                                                     $
                                                                     $
                                                                     $
                                                                     $

         Total Capital Leases                                        $__________

         Total Reimbursement Obligations                             $__________

Guaranteed Obligations
----------------------

                                                                     $
                                                                     $
                                                                     $
                                                                     $

         Total Guaranteed Obligations                                $__________

         Total Guaranteed Obligations                                $__________

Other Debt
----------

                                                                     $
                                                                     $
                                                                     $
                                                                     $

         Total Other Debt                                            $__________

         Consolidated Debt                         $__________




<PAGE>

                                                                       EXHIBIT F


                          [FORM OF GUARANTEE AGREEMENT]

                                    GUARANTEE AGREEMENT dated as of October 25,
                           2005, among each of the subsidiaries listed on
                           Schedule I hereto (each such subsidiary individually
                           a "GUARANTOR", and collectively the "GUARANTORS") of
                           THE VALSPAR CORPORATION, a Delaware corporation (the
                           "COMPANY"), and JPMORGAN CHASE BANK, N.A., as
                           administrative agent (the "ADMINISTRATIVE AGENT") for
                           the Lenders (each as defined in the Credit Agreement
                           referred to below).

         Reference is made to the Five-Year Credit Agreement dated as of October
25, 2005 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among the Company, the Borrowing Subsidiaries from time to
time party thereto, the lenders from time to time party thereto (the "LENDERS"),
JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Europe Limited,
as London Agent, J.P. Morgan Australia Limited, as Australian Agent, and
Barclays Bank PLC, as Syndication Agent. Capitalized terms used herein and not
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.

         The Lenders and the Issuing Bank, respectively, have agreed to make
Revolving Loans to and issue Letters of Credit for the account of the Borrowers,
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. Each of the Guarantors is a subsidiary of the Company and
acknowledges that it will derive substantial benefit from the making of the
Loans by the Lenders and the issuance of Letters of Credit by the Issuing Bank.
The obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit are conditioned on, among other things, the execution and
delivery by the Guarantors of a Guarantee Agreement in the form hereof. As
consideration therefor and in order to induce the Lenders to make Loans and the
Issuing Bank to issue Letters of Credit, the Guarantors are willing to execute
this Agreement.

         Accordingly, the parties hereto agree as follows:

         SECTION 1. GUARANTEE. Each Guarantor unconditionally guarantees,
jointly with the other Guarantors and severally, as a primary obligor and not
merely as a surety, the due and punctual payment of (i) the principal of and
premium, if any, and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans made
to each Borrower, when and as due, whether at maturity, by acceleration, upon
one or more dates set for prepayment or otherwise, (ii) all payments required to
be made by any Borrower under the Credit Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of LC
Disbursements, interest thereon and obligations to provide cash collateral and
(iii) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of any Borrower or any other Guarantor
to the Lenders under the Credit Agreement or any other Loan Document when and as
due (all the obligations referred to in the preceding clause being collectively
called the "OBLIGATIONS"). Each Guarantor further agrees that the Obligations
may be extended or renewed, in whole or in part, without notice to or further
assent from it, and that it will remain bound upon its guarantee notwithstanding
any extension or renewal of any Obligation.

         SECTION 2. OBLIGATIONS NOT WAIVED. To the fullest extent permitted by
applicable law, each Guarantor waives presentment to, demand of payment from and
protest to any Borrower or to any Guarantor of any of the Obligations, and also
waives notice of acceptance of its guarantee and notice of protest for
nonpayment (except notice to any Borrower to the extent required under Section
6.01 of the Credit Agreement). To the fullest extent permitted by applicable
law, the obligations of each Guarantor hereunder shall not be affected by (a)
the failure

<PAGE>
                                                                               2


of the Administrative Agent or any Lender to assert any claim or demand or to
enforce or exercise any right or remedy against any Borrower or any other
Guarantor under the provisions of the Credit Agreement, any other Loan Document
or otherwise, (b) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of this Agreement, any other Loan
Document, any Guarantee or any other agreement, including with respect to any
other Guarantor under this Agreement, (c) the failure of the Company or any
Subsidiary to comply with Section 5.22 of the Credit Agreement and Section 19
hereof or (d) the release of any of the security held by or on behalf of the
Administrative Agent or any Lender.

         SECTION 3. GUARANTEE OF PAYMENT. Each Guarantor further agrees that its
guarantee constitutes a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the Administrative Agent
or any Lender to any of the security held for payment of the Obligations or to
any balance of any deposit account or credit on the books of the Administrative
Agent or any Lender in favor of any Borrower, any Guarantor or any other person.

         SECTION 4. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. The obligations
of each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Administrative Agent or any Lender to
assert any claim or demand or to enforce any remedy under the Credit Agreement,
any other Loan Document or any other instrument or agreement, by any waiver or
modification of any provision of any thereof, by any default, failure or delay,
wilful or otherwise, in the performance of the Obligations, or by any other act
or omission that may or might in any manner or to any extent vary the risk of
any Guarantor or that would otherwise operate as a discharge of any Guarantor as
a matter of law or equity (other than the indefeasible payment in full in cash
of all the Obligations).

         SECTION 5. DEFENSES OF BORROWER WAIVED. To the fullest extent permitted
by applicable law, each of the Guarantors waives any defense based on or arising
out of any defense of any Borrower or any Guarantor, the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of any Borrower, other than the final and indefeasible payment
in full in cash of the Obligations. The Administrative Agent may, at its
election, foreclose on any security by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other accommodation
with any Borrower or any other Guarantor or exercise any other right or remedy
available to them against any Borrower or any Guarantor, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Obligations have been fully, finally and indefeasibly paid in cash.
Pursuant to applicable law, each of the Guarantors waives any defense arising
out of any such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against any Borrower or
any other Guarantor or guarantor, as the case may be, or any security.

         SECTION 6. AGREEMENT TO PAY; SUBORDINATION. (a) In furtherance of the
foregoing and not in limitation of any other right that the Administrative Agent
or any Lender has at law or in equity against any Guarantor by virtue hereof,
upon the failure of any Borrower or any other Guarantor to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Guarantor hereby promises to and
will forthwith pay, or cause to be paid, to the Administrative Agent in cash the
amount of such unpaid Obligations. Upon payment by any Guarantor of any sums to
the Administrative Agent as provided above, all rights of such Guarantor against
the applicable Borrower or any Guarantor arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subordinate and

<PAGE>
                                                                               3


junior in right of payment to the prior indefeasible payment in full in cash of
all the Obligations. In addition, if there shall occur any Default or Event of
Default under paragraph (g) or (h) of Section 6.01 of the Credit Agreement, any
indebtedness of any Borrower or any Guarantor now or hereafter held by any
Guarantor is hereby subordinated in right of payment to the prior payment in
full of the Obligations. If any amount shall erroneously be paid to any
Guarantor on account of (i) such subrogation, contribution, reimbursement,
indemnity or similar right or (ii) any such indebtedness of any Borrower, such
amount shall be held solely for the benefit of the Lenders (and the Guarantors
shall have no legal, equitable or beneficial interest therein) and shall
forthwith be paid to the Administrative Agent to be credited against the payment
of the Obligations, whether matured or unmatured, in accordance with the terms
of the Loan Documents.

         (b) Each Guarantor further agrees that if payment in respect of any
Obligation shall be due in a currency other than Dollars and/or at a place of
payment other than New York and if, by reason of any legal prohibition,
disruption of currency or foreign exchange markets, war or civil disturbance or
other event, payment of such Obligation in such currency or at such place of
payment shall be impossible or, in the judgment of any Lender, not consistent
with the protection of its rights or interests, then, at the election of such
Lender, such Guarantor shall make payment of such Obligation in Dollars (based
upon the applicable Exchange Rate in effect on the date of payment) and/or in
New York, and shall indemnify such Lender against any losses or expenses
(including losses or expenses resulting from fluctuations in exchange rates)
that it shall sustain as a result of such alternative payment.

         SECTION 7. INFORMATION. Each of the Guarantors assumes all
responsibility for being, and keeping, itself informed of the Borrowers' and the
other Guarantors' financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope and
extent of the risks that such Guarantor assumes and incurs hereunder, and agrees
that neither the Agents nor any Lender will have any duty to advise any of the
Guarantors of information known to it or any of them regarding such
circumstances or risks.

         SECTION 8. REPRESENTATIONS AND WARRANTIES, AGREEMENTS. Each of the
Guarantors represents and warrants as to itself that all representations and
warranties relating to it contained in any Loan Document to which it is a party
are true and correct in all material respects. Each of the Guarantors agrees
that the provisions of Section 2.17 of the Credit Agreement shall apply equally
to each Guarantor with respect to payments made by it hereunder.

         SECTION 9. TERMINATION. The Guarantees made hereunder (a) shall
terminate when all the Obligations have been indefeasibly paid in full, no
Letters of Credit are outstanding and the Lenders have no further commitment to
lend under the Credit Agreement and (b) shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any Obligation is rescinded or must otherwise be restored by the Administrative
Agent or any Lender upon the bankruptcy or reorganization of any Borrower or any
Guarantor or otherwise. The Guarantees hereunder will also be released as
provided in Section 9.15 of the Credit Agreement.

         SECTION 10. BINDING EFFECT; SEVERAL AGREEMENT; ASSIGNMENTS. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and permitted assigns of such party; and all
covenants, promises and agreements by or on behalf of the Guarantors that are
contained in this Agreement shall bind and inure to the benefit of each party
hereto and their respective successors and permitted assigns. This Agreement
shall become effective as to any Guarantor when a counterpart hereof executed on
behalf of such Guarantor shall have been delivered to the Administrative Agent,
and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon such Guarantor and
the Administrative Agent and their respective successors and permitted assigns,
and shall inure to the benefit of such Guarantor, the Administrative Agent and
the Lenders, and their respective successors and permitted assigns, except that
no Guarantor shall have the right to assign its rights or obligations hereunder
or any interest herein (and any such attempted assignment shall be void). This
Agreement shall be construed as a separate agreement


<PAGE>
                                                                               4


with respect to each Guarantor and may be amended, modified, supplemented,
waived or released with respect to any Guarantor without the approval of any
other Guarantor and without affecting the obligations of any other Guarantor
hereunder.

         SECTION 11. WAIVERS; AMENDMENT. (a) No failure or delay of the
Administrative Agent or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Agents
and of the Lenders hereunder and under the Credit Agreement are cumulative and
are not exclusive of any rights or remedies that such parties would otherwise
have. No waiver of any provision of this Agreement or any other Loan Document or
consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on any Guarantor in any case
shall entitle such Guarantor to any other or further notice or demand in similar
or other circumstances.

         (b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Guarantors with respect to which such waiver, amendment or modification
relates and the Administrative Agent, with the prior written consent of the
Lenders or the Required Lenders, as the case may be, if required under the
Credit Agreement.

         SECTION 12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         SECTION 13. NOTICES. All communications and notices hereunder shall be
in writing and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to each Guarantor shall be given in care of
the Company.

         SECTION 14. SURVIVAL OF AGREEMENT; SEVERABILITY. (a) All covenants,
agreements, representations and warranties made by the Guarantors herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Agents, the Issuing Bank and the Lenders and shall
survive the making by the Lenders of the Loans and the issuance by the Issuing
Bank of Letters of Credit regardless of any investigation made by the
Administrative Agent, the Issuing Bank or any Lender or on their behalf, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any other fee or amount payable under this
Agreement or any other Loan Document or in respect of any Letter of Credit is
outstanding and unpaid, the Commitments have not been terminated or any Letter
of Credit is outstanding.

         (b) In the event any one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

         SECTION 15. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract, and shall become effective as
provided in Section 10. Delivery of an executed signature page to this Agreement
by facsimile transmission shall be as effective as delivery of a manually
executed counterpart of this Agreement.

<PAGE>
                                                                               5


         SECTION 16. RULES OF INTERPRETATION. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.

         SECTION 17. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) Each
Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District Court of
the Southern District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or the
other Loan Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final, nonappealable
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Guarantor or its properties in the courts of any jurisdiction.

         (b) Each Guarantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any such New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

         (c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 13. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

         SECTION 18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 18.

         SECTION 19. ADDITIONAL GUARANTORS. Pursuant to Section 5.22 of the
Credit Agreement, each Domestic Material Subsidiary of the Company that was not
in existence or was not such a Domestic Material Subsidiary on the date of the
Credit Agreement is required to enter into this Agreement as a Guarantor upon
becoming a Domestic Material Subsidiary. Upon execution and delivery after the
date hereof by the Administrative Agent and a Subsidiary of an instrument in the
form of Annex 1, such Subsidiary shall become a Guarantor hereunder with the
same force and effect as if originally named as a Guarantor herein. The
execution and delivery of any instrument adding an additional Guarantor as a
party to this Agreement shall not require the consent of any other Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as a
party to this Agreement.

<PAGE>
                                                                               6


         SECTION 20. RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, each Agent and each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other Debt at any time owing by such Agent or such
Lender to or for the credit or the account of any Guarantor against any or all
the obligations of such Guarantor now or hereafter existing under this Agreement
and the other Loan Documents held by such Agent or such Lender, irrespective of
whether or not such Agent or such Lender shall have made any demand under this
Agreement (except to the extent required under Section 6.01 of the Credit
Agreement) or any other Loan Document and although such obligations may be
unmatured, and in the event of any such set-off, the Administrative Agent or
such Lender shall promptly give such Guarantor notice thereof. The rights of
each Agent and each Lender under this Section 20 are in addition to other rights
and remedies (including other rights of setoff) which such Agent or such Lender
may have.



<PAGE>
                                                                               7


         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.


                                        ENGINEERED POLYMER SOLUTIONS,
                                        INC., as a Guarantor,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


                                        VALSPAR FINANCE CORPORATION, as a
                                        Guarantor,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


                                        VALSPAR COATINGS FINANCE
                                        CORPORATION, as a Guarantor,

                                           by
                                               --------------------------------
                                               Name:
                                               Title:


                                        VALSPAR SOURCING, INC., as a Guarantor,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


                                        JPMORGAN CHASE BANK, N.A., as
                                        Administrative Agent,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


<PAGE>


                                                               SCHEDULE I to the
                                                             Guarantee Agreement

                               INITIAL GUARANTORS



Name of Guarantor                                  Jurisdiction of Organization
-----------------                                  ----------------------------
Engineered Polymer Solutions, Inc.                 Delaware
Valspar Finance Corporation                        Minnesota
Valspar Coatings Finance Corporation               Minnesota
Valspar Sourcing, Inc.                             Minnesota





<PAGE>

                                                                  ANNEX 1 to the
                                                             Guarantee Agreement


                                    SUPPLEMENT NO. [ ] dated as of [ ], to the
                           Guarantee Agreement dated as of October 25, 2005,
                           among each of the subsidiaries of THE VALSPAR
                           CORPORATION, a Delaware corporation (the "COMPANY"),
                           party thereto (each such subsidiary individually a
                           "GUARANTOR", and collectively the "GUARANTORS"), and
                           JPMORGAN CHASE BANK, N.A., as administrative agent
                           (the "ADMINISTRATIVE AGENT") for the Lenders (each as
                           defined in the Credit Agreement referred to below).

         A. Reference is made to the Five-Year Credit Agreement dated as of
October 25, 2005 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Company, the Borrowing Subsidiaries
from time to time party thereto, the lenders from time to time party thereto
(the "LENDERS"), JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan
Europe Limited, as London Agent, J.P. Morgan Australia Limited, as Australian
Agent, and Barclays Bank PLC, as Syndication Agent. Capitalized terms used
herein and not defined herein shall have the meanings assigned to such terms in
the Credit Agreement.

         B. The Guarantors have entered into the Guarantee Agreement in order to
induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Pursuant to Section 5.22 of the Credit Agreement, each Domestic Material
Subsidiary of the Company that was not in existence or not a Domestic Material
Subsidiary on the date of the Credit Agreement is required to enter into the
Guarantee Agreement as a Guarantor upon becoming a Domestic Material Subsidiary.
Section 19 of the Guarantee Agreement provides that additional Subsidiaries of
the Company may become Guarantors under the Guarantee Agreement by execution and
delivery of an instrument in the form of this Supplement. The undersigned
Subsidiary of the Company (the "NEW GUARANTOR") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Guarantor
under the Guarantee Agreement in order to induce the Lenders to make additional
Loans and the Issuing Bank to issue additional Letters of Credit and as
consideration for Loans previously made and Letters of Credit previously issued.

         Accordingly, the Administrative Agent and the New Guarantor agree as
follows:

         SECTION 1. In accordance with Section 19 of the Guarantee Agreement,
the New Guarantor by its signature below becomes a Guarantor under the Guarantee
Agreement with the same force and effect as if originally named therein as a
Guarantor and the New Guarantor hereby (a) agrees to all the terms and
provisions of the Guarantee Agreement applicable to it as a Guarantor thereunder
and (b) represents and warrants that the representations and warranties made by
it as a Guarantor thereunder are true and correct on and as of the date hereof.
Each reference to a "Guarantor" in the Guarantee Agreement shall be deemed to
include the New Guarantor. The Guarantee Agreement is hereby incorporated herein
by reference.

         SECTION 2. The New Guarantor represents and warrants to the
Administrative Agent and the Lenders that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

         SECTION 3. This Supplement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Administrative Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Guarantor and the
Administrative Agent. Delivery of an executed signature page to this Supplement
by facsimile transmission shall be as effective as delivery of a manually
executed counterpart of this Supplement.

         SECTION 4. Except as expressly supplemented hereby, the Guarantee
Agreement shall remain in full force and effect.
<PAGE>
                                                                               2


         SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision hereof in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

         SECTION 7. All communications and notices hereunder shall be in writing
and given as provided in Section 13 of the Guarantee Agreement. All
communications and notices hereunder to the New Guarantor shall be given to it
in care of the Company.

         SECTION 8. The New Guarantor agrees to reimburse the Administrative
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, disbursements and other charges of
counsel for the Administrative Agent.


<PAGE>
                                                                               3


         IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have
duly executed this Supplement to the Guarantee Agreement as of the day and year
first above written.

                                        [NAME OF NEW GUARANTOR], as a Guarantor,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


                                        JPMORGAN CHASE BANK, N.A., as
                                        Administrative Agent,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:

<PAGE>

                                                                       EXHIBIT G

           [FORM OF INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT]

                                    INDEMNITY, SUBROGATION AND CONTRIBUTION
                           AGREEMENT, dated as of October 25, 2005, among THE
                           VALSPAR CORPORATION, a Delaware corporation (the
                           "COMPANY"), each of the subsidiaries of the Company
                           listed on Schedule I hereto (each such subsidiary
                           individually a "GUARANTOR", and collectively the
                           "GUARANTORS"), and JPMORGAN CHASE BANK, N.A., as
                           administrative agent (the "ADMINISTRATIVE AGENT") for
                           the Lenders (each as defined in the Credit Agreement
                           referred to below).

         Reference is made to the Five-Year Credit Agreement dated as of October
25, 2005 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among the Company, the Borrowing Subsidiaries from time to
time party thereto, the lenders from time to time party thereto (the "LENDERS"),
JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Europe Limited,
as London Agent, J.P. Morgan Australia Limited, as Australian Agent, and
Barclays Bank PLC, as Syndication Agent. Capitalized terms used herein and not
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.

         The Lenders and the Issuing Bank, respectively, have agreed to make
Revolving Loans to and issue Letters of Credit for the account of the Borrowers
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. The Guarantors have guaranteed such Loans and the other
Obligations (as defined in the Guarantee Agreement) of the Borrowers under the
Credit Agreement or any other Loan Document pursuant to the Guarantee Agreement.
The obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit are conditioned on, among other things, the execution and
delivery by the Company and the Guarantors of an agreement in the form hereof.

         Accordingly, the Company, each Guarantor and the Administrative Agent
agree as follows:

         SECTION 1. INDEMNITY AND SUBROGATION. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), the Company agrees that in the event a payment shall be
made on behalf of the Company (or on behalf of any other Borrower) by any
Guarantor under the Guarantee Agreement, the Company shall indemnify such
Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the person to whom such payment shall have been made
to the extent of such payment.

         SECTION 2. CONTRIBUTION AND SUBROGATION. Each Guarantor (a
"CONTRIBUTING GUARANTOR") agrees (subject to Section 3) that, in the event a
payment shall be made by any other Guarantor under the Guarantee Agreement to
satisfy a claim of any Agent or any Lender and such other Guarantor (the
"CLAIMING GUARANTOR") shall not have been fully indemnified by the Company as
provided in Section 1, the Contributing Guarantor shall indemnify the Claiming
Guarantor in an amount equal to the amount of such payment multiplied by a
fraction of which the numerator shall be the net worth of the Contributing
Guarantor on the date hereof (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 12, the date of the Supplement hereto executed and
delivered by such Guarantor) and the denominator shall be the aggregate net
worth of all the Guarantors on the date hereof (or, in the case of any Guarantor
becoming a party hereto pursuant to Section 12, the date of the Supplement
hereto executed and delivered by such Guarantor). Any Contributing Guarantor
making any payment to a Claiming Guarantor pursuant to this Section 2 shall be
subrogated to the rights of such Claiming Guarantor under Section 1 to the
extent of such payment.

         SECTION 3. SUBORDINATION. Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 1 and 2
and all other rights of indemnity, contribution or subrogation under applicable
law or otherwise shall be fully subordinated to the indefeasible payment in full
in cash of the Obligations. No failure on the part of the Company or

<PAGE>
                                                                               2


any other Guarantor to make the payments required by Sections 1 and 2 (or any
other payments required under applicable law or otherwise) shall in any respect
limit the obligations and liabilities of any Guarantor with respect to its
obligations hereunder, and each Guarantor shall remain liable for the full
amount of the obligations of such Guarantor hereunder.

         SECTION 4. TERMINATION. This Agreement shall survive and be in full
force and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, any Lender has a further commitment to lend
under the Credit Agreement or any Letter of Credit is outstanding, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by any Agent, any Lender or any Guarantor upon the bankruptcy or
reorganization of any Borrower, any other Guarantor or otherwise. Any Guarantor
shall cease to be a party to this Agreement and to be bound hereby at such time
as it shall be released from its Guarantee in accordance with the provisions of
the Guarantee Agreement.

         SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         SECTION 6. NO WAIVER; AMENDMENT. (a) No failure on the part of any
Agent, any Lender or any Guarantor to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy by any Agent,
any Lender or any Guarantor preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law. None of
the Administrative Agent, any Lender and the Guarantors shall be deemed to have
waived any rights hereunder unless such waiver shall be in writing and signed by
such parties.

         (b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Company, the Guarantors and the Administrative Agent, with the prior written
consent of the Lenders or the Required Lenders if required under the Credit
Agreement.

         SECTION 7. NOTICES. All communications and notices hereunder shall be
in writing and given as provided in the Guarantee Agreement and addressed as
specified therein.

         SECTION 8. BINDING AGREEMENT; ASSIGNMENTS. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and permitted assigns of such party; and all covenants,
promises and agreements by or on behalf of the parties that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and permitted assigns. No Guarantor may assign or transfer any of its
rights or obligations hereunder (and any such attempted assignment or transfer
shall be void) without the prior written consent of the Required Lenders.
Notwithstanding the foregoing, at the time any Guarantor is released from its
obligations under the Guarantee Agreement in accordance with such Guarantee
Agreement and the Credit Agreement, such Guarantor will cease to have any rights
or obligations under this Agreement.

         SECTION 9. SURVIVAL OF AGREEMENT; SEVERABILITY. (a) All covenants and
agreements made by the Company and each Guarantor herein and in the certificates
or other instruments prepared or delivered in connection with this Agreement or
the other Loan Documents shall be considered to have been relied upon by the
Administrative Agent, the Issuing Bank, the Lenders and each Guarantor and shall
survive the making by the Lenders of the Loans and the issuance by the Issuing
Bank of Letters of Credit and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loans or any other fee or amount
payable under the Credit Agreement or this Agreement or under any of the other
Loan Documents or in respect of any Letter of Credit is outstanding and unpaid,
the Commitments have not been terminated or any Letter of Credit is outstanding.


<PAGE>
                                                                               3


         (b) In case any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, no
party hereto shall be required to comply with such provision for so long as such
provision is held to be invalid, illegal or unenforceable, but the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

         SECTION 10. COUNTERPARTS. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall be effective with
respect to any Guarantor or the Company when a counterpart bearing the signature
of such Guarantor or the Company, as the case may be, shall have been delivered
to the Administrative Agent. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.

         SECTION 11. RULES OF INTERPRETATION. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.

         SECTION 12. ADDITIONAL GUARANTORS. Pursuant to Section 5.22 of the
Credit Agreement, each Domestic Material Subsidiary of the Company that was not
in existence or was not such a Domestic Material Subsidiary on the date of the
Credit Agreement is required to enter into this Agreement as a Guarantor upon
becoming a Domestic Material Subsidiary. Upon execution and delivery, after the
date hereof, by the Administrative Agent and such a Subsidiary of an instrument
in the form of Annex 1 hereto, such Subsidiary shall become a party hereto with
the same force and effect as if originally named as a party hereto. The
execution and delivery of any instrument adding an additional Domestic Material
Subsidiary as a party to this Agreement shall not require the consent of any
other party hereto. The rights and obligations of each party hereto shall remain
in full force and effect notwithstanding the addition of any new Domestic
Material Subsidiary as a party to this Agreement.

         SECTION 13. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) The
Company and each Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final,
nonappealable judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement or any other Loan Document
shall affect any right that the Administrative Agent, the Syndication Agent or
any other Lender may otherwise have to bring any action or proceeding relating
to this Agreement or any other Loan Document against any Guarantor or its
properties in the courts of any jurisdiction.

         (b) The Company and each Guarantor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any such New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

         (c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7. Nothing in this
Agreement or any other Loan

<PAGE>
                                                                               4


Document will affect the right of any party to this Agreement or any other Loan
Document to serve process in any other manner permitted by law.

         SECTION 14. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.


<PAGE>
                                                                               5


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first appearing above.



                                        THE VALSPAR CORPORATION,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


                                        ENGINEERED POLYMER SOLUTIONS,
                                        INC., as a Guarantor,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


                                        VALSPAR FINANCE CORPORATION, as a
                                        Guarantor,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


                                        VALSPAR COATINGS FINANCE
                                        CORPORATION, as a Guarantor,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


                                        VALSPAR SOURCING, INC., as a Guarantor,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


                                        JPMORGAN CHASE BANK, N.A., as
                                        Administrative Agent,

                                           by

                                               --------------------------------
                                               Name:
                                               Title:




<PAGE>


                                                                      SCHEDULE I
                                                    to the Idemnity, Subrogation
                                                      and Contribution Agreement


                               INITIAL GUARANTORS



Name of Guarantor                                  Jurisdiction of Organization
-----------------                                  ----------------------------
Engineered Polymer Solutions, Inc.                 Delaware
Valspar Finance Corporation                        Minnesota
Valspar Coatings Finance Corporation               Minnesota
Valspar Sourcing, Inc.                             Minnesota




<PAGE>

                                                                      ANNEX 1 to
                                                  the Indemnity, Subrogation and
                                                          Contribution Agreement


                                    SUPPLEMENT NO. [ ] dated as of [ ], to the
                           Indemnity, Subrogation and Contribution Agreement
                           dated as of October 25, 2005 (as the same may be
                           amended, supplemented or otherwise modified from time
                           to time, the "INDEMNITY, SUBROGATION AND CONTRIBUTION
                           AGREEMENT"), among THE VALSPAR CORPORATION, a
                           Delaware corporation (the "COMPANY"), each of the
                           subsidiaries of the Company party thereto (each such
                           subsidiary individually a "GUARANTOR", and
                           collectively the "GUARANTORS"), and JPMORGAN CHASE
                           BANK, N.A., as administrative agent (the
                           "ADMINISTRATIVE AGENT") for the Lenders (each as
                           defined in the Credit Agreement referred to below).

         A. Reference is made to the Five-Year Credit Agreement dated as of
October 25, 2005 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Company, the Borrowing Subsidiaries
from time to time party thereto, the lenders from time to time party thereto
(the "Lenders"), JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan
Europe Limited, as London Agent, J.P. Morgan Australia Limited, as Australian
Agent, and Barclays Bank PLC, as Syndication Agent.

         B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indemnity, Subrogation and
Contribution Agreement and the Credit Agreement.

         C. The Company and the Guarantors have entered into the Indemnity,
Subrogation and Contribution Agreement in order to induce the Lenders to make
Loans and the Issuing Bank to issue Letters of Credit. Pursuant to Section 5.22
of the Credit Agreement, each Domestic Material Subsidiary of the Company that
was not in existence or was not a Domestic Material Subsidiary on the date of
the Credit Agreement is required to enter into this Agreement as a Guarantor
upon becoming a Domestic Material Subsidiary. Notwithstanding the foregoing, a
Domestic Material Subsidiary shall not be required to become a Guarantor under
this Indemnity, Subrogation and Contribution Agreement if it would be a
violation of applicable law for such Domestic Material Subsidiary to take such
action or if, in the judgment of the Administrative Agent, in consultation with
the Company, the expense, tax or regulatory consequences or difficulty of taking
such action would not, in light of the benefits to accrue to the Lenders,
justify taking such action. Section 12 of the Indemnity, Subrogation and
Contribution Agreement provides that additional Subsidiaries of the Company may
become Guarantors under the Indemnity, Subrogation and Contribution Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary of the Company (the "NEW GUARANTOR") is executing this
Supplement in accordance with the requirements of the Credit Agreement to become
a Guarantor under the Indemnity, Subrogation and Contribution Agreement in order
to induce the Lenders to make additional Loans and the Issuing Bank to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.

         Accordingly, the Administrative Agent and the New Guarantor agree as
follows:

         SECTION 1. In accordance with Section 12 of the Indemnity, Subrogation
and Contribution Agreement, the New Guarantor by its signature below becomes a
Guarantor under the Indemnity, Subrogation and Contribution Agreement with the
same force and effect as if originally named therein as a Guarantor and the New
Guarantor hereby agrees to all the terms and provisions of the Indemnity,
Subrogation and Contribution Agreement applicable to it as a Guarantor
thereunder. Each reference to a "Guarantor" in the Indemnity, Subrogation and
Contribution Agreement shall be deemed to include the New Guarantor. The
Indemnity, Subrogation and Contribution Agreement is hereby incorporated herein
by reference.

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                                                                               2


         SECTION 2. The New Guarantor represents and warrants to the
Administrative Agent and the Lenders that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

         SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Administrative
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Administrative Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

         SECTION 4. Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.

         SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         SECTION 6. In the event that any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable in
any respect, neither party hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal or
unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Indemnity, Subrogation and Contribution
Agreement shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision in
any other jurisdiction). The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

         SECTION 7. All communications and notices hereunder shall be in writing
and given as provided in Section 7 of the Indemnity, Subrogation and
Contribution Agreement. All communications and notices hereunder to the New
Guarantor shall be given to it at the address set forth under its signature.

         SECTION 8. The New Guarantor agrees to reimburse the Administrative
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Administrative Agent.


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                                                                               3


         IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have
duly executed this Supplement to the Indemnity, Subrogation and Contribution
Agreement as of the day and year first above written.


                                        [NAME OF NEW GUARANTOR],

                                           by

                                               --------------------------------
                                               Name:
                                               Title:


                                        JPMORGAN CHASE BANK, N.A., as
                                        Administrative Agent,

                                           by

                                               --------------------------------
                                               Name:
                                               Title: