Exhibit 10.7

# AMENDED AND RESTATED
CREDIT AGREEMENT

# Dated as of May 20,
2003

# Among

# THE FINANCIAL
INSTITUTIONS NAMED HEREIN

# as the Lenders

# and

# BANK OF AMERICA, N.A.

# as the Agent

# and

# PSS WORLD MEDICAL,
INC. AND CERTAIN OF ITS SUBSIDIARIES

# as the Borrowers

# and

# CERTAIN OTHER
SUBSIDIARIES OF PSS WORLD MEDICAL, INC.

# as the Guarantors

---

# TABLE OF CONTENTS

|Section                                                                 |                                                                                      | Page
|----------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | ----
|                                                                        |                                                                                      |     
|                                                                        |                                                                                      |     
|ARTICLE 1 LOANS AND LETTERS OF CREDIT                                   | 2                                                                                   
|                                                                        |                                                                                      |     
|1.1                                                                     | Credit Facility                                                                      | 2   
|1.2                                                                     | Revolving Loans                                                                      | 2   
|1.3                                                                     | Letters of Credit                                                                    | 5   
|1.4                                                                     | Bank Products                                                                        | 9   
|                                                                        |                                                                                      |     
|ARTICLE 2 INTEREST AND FEES                                             | 9                                                                                   
|                                                                        |                                                                                      |     
|2.1                                                                     | Interest                                                                             | 9   
|2.2                                                                     | Continuation and Conversion Elections                                                | 10  
|2.3                                                                     | Maximum Interest Rate                                                                | 11  
|2.4                                                                     | Arrangement, Closing and Administrative Fees                                         | 11  
|2.5                                                                     | Unused Line Fee                                                                      | 11  
|2.6                                                                     | Letter of Credit Fees                                                                | 12  
|                                                                        |                                                                                      |     
|ARTICLE 3 PAYMENTS AND PREPAYMENTS                                      | 12                                                                                  
|                                                                        |                                                                                      |     
|3.1                                                                     | Revolving Loans                                                                      | 12  
|3.2                                                                     | Termination of Facility                                                              | 12  
|3.3                                                                     | LIBOR Loan Prepayments                                                               | 13  
|3.4                                                                     | Payments by the Borrowers                                                            | 13  
|3.5                                                                     | Payments as Revolving Loans                                                          | 13  
|3.6                                                                     | Apportionment, Application and Reversal of Payments                                  | 13  
|3.7                                                                     | Indemnity for Returned Payments                                                      | 14  
|3.8                                                                     | Agents and Lenders Books and Records; Monthly Statements                           | 14  
|3.9                                                                     | Borrowers Agent                                                                     | 15  
|3.10                                                                    | Joint and Several Liability                                                          | 15  
|3.11                                                                    | Obligations Absolute                                                                 | 16  
|3.12                                                                    | Waiver of Suretyship Defenses                                                        | 16  
|3.13                                                                    | Contribution and Indemnification among the Borrowers                                 | 16  
|                                                                        |                                                                                      |     
|ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY                        | 17                                                                                  
|                                                                        |                                                                                      |     
|4.1                                                                     | Taxes                                                                                | 17  
|4.2                                                                     | Illegality                                                                           | 18  
|4.3                                                                     | Increased Costs and Reduction of Return                                              | 19  
|4.4                                                                     | Funding Losses                                                                       | 20  
|4.5                                                                     | Inability to Determine Rates                                                         | 20  
|4.6                                                                     | Certificates of Lender                                                               | 20  
|4.7                                                                     | Survival                                                                             | 20  
|4.8                                                                     | Assignment of Commitments Under Certain Circumstances                                | 20  
|                                                                        |                                                                                      |     
|ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES             | 21                                                                                  
|                                                                        |                                                                                      |     
|5.1                                                                     | Books and Records                                                                    | 21  
|5.2                                                                     | Financial Information                                                                | 21  
|5.3                                                                     | Notices to the Lenders                                                               | 24  
|                                                                        |                                                                                      |     
|ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS                        | 27                                                                                  
|                                                                        |                                                                                      |     
|6.1                                                                     | Authorization, Validity, and Enforceability of this Agreement and the Loan Documents | 27  
|6.2                                                                     | Validity and Priority of Security Interest                                           | 27  
|6.3                                                                     | Organization and Qualification                                                       | 27  
|6.4                                                                     | Corporate Name; Prior Transactions                                                   | 27  
|6.5                                                                     | Subsidiaries and Affiliates                                                          | 28  
|6.6                                                                     | Financial Statements and Projections                                                 | 28  
|6.7                                                                     | Capitalization                                                                       | 28  
|6.8                                                                     | Solvency                                                                             | 28  
|6.9                                                                     | Debt                                                                                 | 28  
|6.10                                                                    | Distributions                                                                        | 29  
|6.11                                                                    | Real Estate; Leases                                                                  | 29  
|6.12                                                                    | Proprietary Rights                                                                   | 29  
|6.13                                                                    | Trade Names                                                                          | 29  
|6.14                                                                    | Litigation                                                                           | 29  
|6.15                                                                    | Labor Disputes                                                                       | 29  
|6.16                                                                    | Environmental Laws                                                                   | 30  
|6.17                                                                    | No Violation of Law                                                                  | 31  
|6.18                                                                    | No Default                                                                           | 31  
|6.19                                                                    | ERISA Compliance                                                                     | 31  
|6.20                                                                    | Taxes                                                                                | 32  
|6.21                                                                    | Regulated Entities                                                                   | 32  
|6.22                                                                    | Use of Proceeds; Margin Regulations                                                  | 32  
|6.23                                                                    | Senior Subordinated Notes                                                            | 32  
|6.24                                                                    | No Material Adverse Change                                                           | 32  
|6.25                                                                    | Full Disclosure                                                                      | 32  
|6.26                                                                    | Material Agreements                                                                  | 33  
|6.27                                                                    | Bank Accounts                                                                        | 33  
|6.28                                                                    | Governmental Authorization                                                           | 33  
|6.29                                                                    | Tax Shelter Regulations                                                              | 33  
|                                                                        |                                                                                      |     
|ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS                            | 33                                                                                  
|                                                                        |                                                                                      |     
|7.1                                                                     | Taxes and Other Obligations                                                          | 33  
|7.2                                                                     | Legal Existence and Good Standing                                                    | 34  
|7.3                                                                     | Compliance with Law and Agreements; Maintenance of Licenses                          | 34  
|7.4                                                                     | Maintenance of Property; Inspection of Property                                      | 34  
|7.5                                                                     | Insurance                                                                            | 35  
|7.6                                                                     | Insurance and Condemnation Proceeds                                                  | 35  
|7.7                                                                     | Environmental Laws                                                                   | 36  
|7.8                                                                     | Compliance with ERISA                                                                | 37  
|7.9                                                                     | Mergers, Consolidations or Sales                                                     | 37  
|7.10                                                                    | Distributions; Capital Change; Restricted Investments                                | 39  
|7.11                                                                    | Transactions Affecting Collateral or Obligations                                     | 39  
|7.12                                                                    | Guaranties                                                                           | 39  
|7.13                                                                    | Debt                                                                                 | 39  
|7.14                                                                    | Prepayment                                                                           | 40  
|7.15                                                                    | Transactions with Affiliates                                                         | 40  
|7.16                                                                    | Investment Banking and Finders Fees                                                 | 40  
|7.17                                                                    | Business Conducted                                                                   | 41  
|7.18                                                                    | Liens                                                                                | 41  
|7.19                                                                    | Sale and Leaseback Transactions                                                      | 41  
|7.20                                                                    | New Subsidiaries                                                                     | 41  
|7.21                                                                    | Fiscal Year                                                                          | 41  
|7.22                                                                    | Capital Expenditures                                                                 | 41  
|7.23                                                                    | Financial Covenants                                                                  | 41  
|7.24                                                                    | Minimum Excess Availability                                                          | 42  
|7.25                                                                    | Use of Proceeds                                                                      | 42  
|7.26                                                                    | Further Assurances                                                                   | 43  
|                                                                        |                                                                                      |     
|ARTICLE 8 CONDITIONS OF LENDING                                         | 43                                                                                  
|                                                                        |                                                                                      |     
|8.1                                                                     | Conditions Precedent to Making of Loans on the Closing Date                          | 43  
|8.2                                                                     | Conditions Precedent to Each Loan                                                    | 45  
|                                                                        |                                                                                      |     
|ARTICLE 9 DEFAULT; REMEDIES                                             | 45                                                                                  
|                                                                        |                                                                                      |     
|9.1                                                                     | Events of Default                                                                    | 45  
|9.2                                                                     | Remedies                                                                             | 48  
|                                                                        |                                                                                      |     
|ARTICLE 10 TERM AND TERMINATION                                         | 50                                                                                  
|                                                                        |                                                                                      |     
|10.1                                                                    | Term and Termination                                                                 | 50  
|                                                                        |                                                                                      |     
|ARTICLE 11 AMENDMENTS; WAIVERs; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS | 50                                                                                  
|                                                                        |                                                                                      |     
|11.1                                                                    | Amendments and Waivers                                                               | 50  
|11.2                                                                    | Assignments; Participations                                                          | 51  
|                                                                        |                                                                                      |     
|ARTICLE 12 THE AGENT                                                    | 53                                                                                  
|                                                                        |                                                                                      |     
|12.1                                                                    | Appointment and Authorization                                                        | 53  
|12.2                                                                    | Delegation of Duties                                                                 | 54  
|12.3                                                                    | Liability of the Agent                                                               | 54  
|12.4                                                                    | Reliance by the Agent                                                                | 55  
|12.5                                                                    | Notice of Default                                                                    | 55  
|12.6                                                                    | Credit Decision                                                                      | 55  
|12.7                                                                    | Indemnification                                                                      | 56  
|12.8                                                                    | Agent in Individual Capacity                                                         | 56  
|12.9                                                                    | Successor Agent                                                                      | 56  
|12.10                                                                   | Withholding Tax                                                                      | 57  
|12.11                                                                   | Collateral Matters                                                                   | 58  
|12.12                                                                   | Restrictions on Actions by Lenders; Sharing of Payments                              | 59  
|12.13                                                                   | Agency for Perfection                                                                | 60  
|12.14                                                                   | Payments by the Agent to the Lenders                                                 | 60  
|12.15                                                                   | Settlement                                                                           | 60  
|12.16                                                                   | Letters of Credit; Intra-Lender Issues                                               | 64  
|12.17                                                                   | Concerning the Collateral and the Related Loan Documents                             | 66  
|12.18                                                                   | Field Audit and Examination Reports; Disclaimer by Lenders                           | 66  
|12.19                                                                   | Relation Among Lenders                                                               | 67  
|                                                                        |                                                                                      |     
|ARTICLE 13 Subsidiary guaranties                                        | 67                                                                                  
|                                                                        |                                                                                      |     
|13.1                                                                    | Subsidiary Guaranties                                                                | 67  
|13.2                                                                    | Obligations Absolute                                                                 | 67  
|13.3                                                                    | Waiver of Suretyship Defenses                                                        | 67  
|13.4                                                                    | Contribution and Indemnification                                                     | 68  
|13.5                                                                    | Subordination of Intercompany Debt                                                   | 68  
|                                                                        |                                                                                      |     
|ARTICLE 14 MISCELLANEOUS                                                | 69                                                                                  
|                                                                        |                                                                                      |     
|14.1                                                                    | No Waivers; Cumulative Remedies                                                      | 69  
|14.2                                                                    | Severability                                                                         | 69  
|14.3                                                                    | Governing Law; Choice of Forum; Service of Process                                   | 69  
|14.4                                                                    | WAIVER OF JURY TRIAL                                                                 | 70  
|14.5                                                                    | Survival of Representations and Warranties                                           | 70  
|14.6                                                                    | Other Security and Guaranties                                                        | 70  
|14.7                                                                    | Fees and Expenses                                                                    | 71  
|14.8                                                                    | Notices                                                                              | 71  
|14.9                                                                    | Waiver of Notices                                                                    | 73  
|14.10                                                                   | Binding Effect                                                                       | 73  
|14.11                                                                   | Indemnity of the Agent and the Lenders by the Borrowers                              | 73  
|14.12                                                                   | Limitation of Liability                                                              | 74  
|14.13                                                                   | Final Agreement                                                                      | 74  
|14.14                                                                   | Counterparts                                                                         | 74  
|14.15                                                                   | Captions                                                                             | 75  
|14.16                                                                   | Right of Setoff                                                                      | 75  
|14.17                                                                   | Confidentiality                                                                      | 75  
|14.18                                                                   | Conflicts with Other Loan Documents                                                  | 76  
|14.19                                                                   | No Novation                                                                          | 76  
|                                                                        |                                                                                      |     

---

# ANNEXES, EXHIBITS AND
SCHEDULES

|           |   |                                            
|---------- | - | -------------------------------------------
|ANNEX A    | - | DEFINED TERMS                              
|          
|EXHIBIT A  | - | FORM OF BORROWING BASE CERTIFICATE         
|          
|EXHIBIT B  | - | FORM OF NOTICE OF BORROWING                
|          
|EXHIBIT C  | - | FORM OF NOTICE OF CONTINUATION/CONVERSION  
|          
|EXHIBIT D  | - | FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
|          
|SCHEDULE 1 | - | LENDERS COMMITMENTS                       
|          
|SCHEDULE 1 | - | EXISTING INVESTMENTS                       
|          
|SCHEDULE 6 | - | ORGANIZATION AND QUALIFICATIONS            
|          
|SCHEDULE 6 | - | CORPORATE NAME; PRIOR TRANSACTIONS         
|          
|SCHEDULE 6 | - | SUBSIDIARIES AND AFFILIATES                
|          
|SCHEDULE 6 | - | CAPITALIZATION                             
|          
|SCHEDULE 6 | - | DEBT                                       
|          
|SCHEDULE 6 | - | REAL ESTATE; LEASES                        
|          
|SCHEDULE 6 | - | PROPRIETARY RIGHTS                         
|          
|SCHEDULE 6 | - | TRADE NAMES                                
|          
|SCHEDULE 6 | - | LITIGATION                                 
|          
|SCHEDULE 6 | - | LABOR DISPUTES                             
|          
|SCHEDULE 6 | - | ENVIRONMENTAL LAWS                         
|          
|SCHEDULE 6 | - | MATERIAL AGREEMENTS                        
|          
|SCHEDULE 6 | - | BANK ACCOUNTS                              
|          
|SCHEDULE 7 | - | PERMITTED AFFILIATE TRANSACTIONS           
|          

---

# AMENDED AND RESTATED
CREDIT AGREEMENT

This Amended and Restated Credit
Agreement, dated as of May 20, 2003 (this Agreement), among the
financial institutions from time to time parties hereto (such financial institutions,
together with their respective successors and assigns, are referred to hereinafter each
individually as a Lender and collectively as the
Lenders), Bank of America, N.A., as agent for the Lenders (in
its capacity as agent, the Agent), PSS World Medical, Inc., a
Florida corporation (PSS), Gulf South Medical Supply, Inc., a
Delaware corporation (GulfSouth), and Physician Sales &
Services Limited Partnership, a Florida limited partnership (PSS
LP); PSS, Gulf South and PSS LP are referred to hereinafter each individually as
a Borrower and collectively as the Borrowers), and PSS
Holding, Inc., a Florida corporation (PSS Holding), PSS Service,
Inc., a Florida corporation (PSS Service), Physician Sales &
Service, Inc., a Florida corporation (Physician Sales &Service), and ThriftyMed, Inc., a Florida corporation
(ThriftyMed; PSS Holding, PSS Service, Physician Sales & Service,
and ThriftyMed are referred to hereinafter each individually as a
Guarantor and collectively as the Guarantors).

W
I T N E S S E T H:

WHEREAS, the Borrowers, the
Guarantors, Bank of America, N.A., as agent, the lenders party thereto, General Electric
Capital Corporation, as syndication agent, Fleet Capital Corporation, as documentation
agent, and Banc of America Securities LLC, as arranger, are parties to that certain Credit
Agreement dated as of May 24, 2001 (as amended, the Existing
Agreement); and

WHEREAS, the Borrowers, the
Guarantors, the Agent and the Lenders desire to amend and restate the Existing Agreement
in order to provide the Borrowers a credit facility on the terms set forth herein, which
credit facility the Borrowers will use for the purposes permitted hereunder; and

WHEREAS, in order to utilize the
financial powers of the Borrowers in the most efficient and economical manner, and in
order to facilitate the financing of the Borrowers working capital needs, the
Lenders will, at the request of the Borrowers, extend financial accommodations to the
Borrowers based on the combined borrowing base of the Borrowers in accordance with the
provisions set forth in this Agreement; and

WHEREAS, the Borrowers and
Guarantors business is a mutual and collective enterprise and the Borrowers and
Guarantors believe that the consolidation of all loans and other financial accommodations
under this Agreement will enhance the aggregate borrowing powers of the Borrowers and
Guarantors and facilitate the administration of their loan relationship with the Agent and
the Lenders, all to the mutual advantage of the Borrowers and Guarantors; and

WHEREAS, each Borrower and Guarantor
acknowledges that it will receive substantial direct and indirect benefits by reason of
the making of loans and other financial accommodations to the Borrowers as provided in
this Agreement, by virtue of the Borrowers and Guarantors various
inter-relationships as joint guarantors or joint obligors and the beneficiaries thereof,
as lessors and lessees, as suppliers and customers, and as joint venturers; and

WHEREAS, the Agents and the
Lenders willingness to extend financial accommodations to the Borrowers, and to
administer the Borrowers and Guarantors collateral security therefor, on a
combined basis as more fully set forth in this Agreement, is done solely as an
accommodation to the Borrowers and Guarantors and at the Borrowers and
Guarantors request and in furtherance of the Borrowers and Guarantors
mutual and collective enterprise; and

WHEREAS, capitalized terms used in
this Agreement and not otherwise defined herein shall have the meanings ascribed thereto
in Annex A which is attached hereto and incorporated herein; the rules of construction
contained therein shall govern the interpretation of this Agreement; and all Annexes,
Exhibits and Schedules attached hereto are incorporated herein by reference.

NOW, THEREFORE, in consideration of
the mutual conditions and agreements set forth in this Agreement, and for good and
valuable consideration, the receipt of which is hereby acknowledged, the Lenders, the
Agent, the Borrowers and the Guarantors hereby agree as follows.

ARTICLE 1

LOANS AND LETTERS OF CREDIT

1.1              Credit Facility.
Subject to all of the terms and conditions of this Agreement, the Lenders agree to make
available a revolving credit facility to the Borrowers from time to time during the term
of this Agreement of up to the Maximum Revolver Amount. The credit facility shall be
composed of a revolving line of credit consisting of Revolving Loans and Letters of
Credit.

1.2             Revolving Loans.

(a)       
          Amounts. Subject to the terms and conditions hereof, each Lender
          severally, but not jointly, agrees, upon a Borrowers request from time to
          time on any Business Day, during the period from the Closing Date to the
          Termination Date, to make revolving loans (the
          Revolving Loans) to the Borrowers in amounts not to
          exceed such Lenders Pro Rata Share of Availability, except for Non-Ratable
          Loans and Agent Advances. The Lenders, however, in their unanimous discretion,
          may elect to make Revolving Loans or issue or arrange to have issued Letters of
          Credit in excess of the Borrowing Base on one or more occasions, but if they do
          so, neither the Agent nor the Lenders shall be deemed thereby to have changed
          the limits of the Borrowing Base or to be obligated to exceed such limits on any
          other occasion. If any Borrowing would exceed Availability after giving effect
          to any Borrowing, the Lenders may refuse to make or may otherwise restrict the
          making of Revolving Loans as the Lenders determine until such excess has been
          eliminated, subject to the Agents authority, in its sole discretion, to
          make Agent Advances pursuant to the terms of Section 1.2(i).

(b)       
          Procedure for Borrowing.

| | (i)                        Each
Borrowing of Revolving Loans shall be made upon a Borrowers           irrevocable
written notice delivered to the Agent in the form of a notice of           borrowing
substantially in the form of Exhibit B (Notice of           Borrowing),
which must be received by the Agent prior to (i) 12:00           noon (Atlanta, Georgia
time) three Business Days prior to the requested Funding           Date in the case of
LIBOR Loans, and (ii) 11:00 a.m. (Atlanta, Georgia time) on           the requested
Funding Date in the case of Base Rate Loans, specifying:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (A)                               the
amount of the Borrowing, which in the case of a LIBOR Loan must equal or           exceed
$1,000,000 (and increments of $500,000 in excess of such amount);
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (B)                               the
requested Funding Date, which must be a Business Day;
| | -------------------------------------------------------------------------------------------

| | (C)                               whether
the Loans requested are to be Base Rate Revolving Loans or LIBOR           Revolving
Loans (and if not specified, it shall be deemed a request for a Base           Rate
Revolving Loan); and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (D)                             the
duration of the Interest Period for LIBOR Revolving Loans (and if not
               specified, it shall be deemed a request for an Interest Period of one
month); provided, however, that with respect to the Revolving Loans to be made on
               the Closing Date, such Borrowings will consist of Base Rate Revolving
Loans                only.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        In
lieu of delivering a Notice of Borrowing, a Borrower may give the Agent
          telephonic notice of such request for advances to the Designated Account on or
          before the deadline set forth above. The Agent at all times shall be entitled
to           rely on such telephonic notice in making such Loans, regardless of whether
any           written confirmation is received.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)       
               Whenever checks are presented to the Bank for payment against the Designated
               Account or any other account of a Borrower maintained with the Bank in an amount
               greater than the then available balance in such accounts, such presentation
               shall be deemed to be a request for a Base Rate Revolving Loan on the date of
               such presentation in an amount equal to the excess of such checks over such
               available balances (less the amount of collections credited to the Loan Account
               on such date), and such request shall be irrevocable.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)       
               At the election of the Required Lenders, the Borrowers shall have no right to
               request a LIBOR Loan while a Default or Event of Default has occurred and is
               continuing.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(c)       
          Reliance upon Authority. Prior to the Closing Date, the Borrowers
          Agent shall deliver to the Agent a notice setting forth the account of the
          Borrowers Agent (the Designated Account) to which the
          Agent is authorized to transfer the proceeds of the Loans requested hereunder.
          The Borrowers Agent may designate a replacement account from time to time
          by written notice to the Agent. All such Designated Accounts must be reasonably
          satisfactory to the Agent. The Agent is entitled to rely conclusively on any
          persons request for Loans on behalf of a Borrower, so long as the proceeds
          thereof are to be transferred to the Designated Account. The Agent has no duty
          to verify the identity of any individual representing himself or herself as a
          person authorized by a Borrower to make such requests on its behalf.

(d)       
          No Liability. The Agent shall not incur any liability to any Borrower as
          a result of acting upon any notice referred to in Section 1.2 which the
          Agent believes in good faith to have been given by an officer or other person
          duly authorized by a Borrower to request Loans on its behalf. The crediting of
          Loans to the Designated Account conclusively establishes the obligation of the
          Borrowers to repay such Loans as provided herein.

(e)       
          Notice Irrevocable. Any Notice of Borrowing (or telephonic notice in lieu
          thereof) made pursuant to Section 1.2 shall be irrevocable. The
          Borrowers shall be bound to borrow the funds requested therein in accordance
          therewith.

(f)       
          Agents Election. Promptly after receipt of a Notice of Borrowing
          (or telephonic notice in lieu thereof), the Agent shall elect to have the terms
          of Section 1.2(g) or the terms of Section 1.2(h) apply to such
          requested Borrowing. If the Bank declines in its sole discretion to make a
          Non-Ratable Loan pursuant to Section 1.2(h), the terms of
          Section 1.2(g) shall apply to the requested Borrowing.

(g)       
          Making of Loans. If the Agent elects to have the terms of this Section
          1.2(g) apply to a requested Borrowing, then promptly after receipt of a
          Notice of Borrowing or telephonic notice in lieu thereof, the Agent shall notify
          the Lenders by telecopy, telephone or e-mail of the requested Borrowing. Each
          Lender shall transfer its Pro Rata Share of the requested Borrowing available to
          the Agent in immediately available funds, to the account from time to time
          designated by the Agent, not later than 12:00 noon (Atlanta, Georgia time) on
          the applicable Funding Date. After the Agents receipt of all proceeds of
          such Revolving Loans, the Agent shall make the proceeds of such Revolving Loans
          available to the Borrowers on the applicable Funding Date on or before 3:00 p.m.
          (Atlanta, Georgia time) by transferring same day funds to the Designated
          Account; provided, however, that the amount of Revolving Loans so made on
          any date shall not exceed Availability on such date.

(h)       
          Making of Non-Ratable Loans. If the Agent elects, with the consent of the
          Bank, to have the terms of this Section 1.2(h) apply to a requested
          Borrowing, the Bank shall make a Revolving Loan in the amount of that Borrowing
          available to the Borrowers on the applicable Funding Date by transferring same
          day funds on or before 3:00 p.m. (Atlanta, Georgia time) to the Designated
          Account. Each Revolving Loan made solely by the Bank pursuant to this Section
          1.2(h) is herein referred to as a Non-Ratable Loan, and
          such Loans are collectively referred to as the Non-Ratable
          Loans. Each Non-Ratable Loan shall be subject to all the terms and
          conditions applicable to other Revolving Loans except that all payments thereon
          shall be payable to the Bank solely for its own account. The Agent shall not
          request the Bank to make any Non-Ratable Loan if (i) the Agent has received
          written notice from the Required Lenders that one or more of the applicable
          conditions precedent set forth in Article 8 will not be satisfied on
          the requested Funding Date for the applicable Borrowing, or (ii) the
          requested Borrowing would exceed Availability on that Funding Date. The
          Non-Ratable Loans shall be secured by the Agents Liens in and to the
          Collateral and shall constitute Base Rate Revolving Loans and Obligations
          hereunder.

(i)       
          Agent Advances. Subject to the limitations set forth below, the Agent is
          authorized by the Borrowers and the Lenders, from time to time in the
          Agents sole discretion, (i) after the occurrence of a Default or an Event
          of Default, or (ii) at any time that any of the other conditions precedent set
          forth in Article 8 have not been satisfied, to make Base Rate
          Revolving Loans to the Borrowers on behalf of the Lenders, in an aggregate
          amount outstanding at any time not to exceed the lesser of $15,000,000 and 10%
          of the Borrowing Base (provided that the Aggregate Revolver Outstandings
          (including such Agent Advances) shall not exceed the Maximum Revolver Amount),
          which the Agent, in its reasonable business judgment, deems necessary or
          desirable (A) to preserve or protect the Collateral, or any portion thereof, (B)
          to enhance the likelihood of, or maximize the amount of, repayment of the Loans
          and other Obligations (including through Base Rate Revolving Loans for the
          purpose of enabling the Borrowers to meet payroll and associated tax
          obligations), or (C) to pay any other amount chargeable to the Borrowers
          pursuant to the terms of this Agreement, including costs, fees and expenses as
          described in Section 14.7 (any of such advances are herein referred
          to as Agent Advances); provided, that the Required
          Lenders may at any time revoke the Agents authorization to make Agent
          Advances. Any such revocation must be in writing and shall become effective
          prospectively upon the Agents receipt thereof. The Agent Advances shall be
          secured by the Agents Liens in and to the Collateral and shall constitute
          Base Rate Revolving Loans and Obligations hereunder.

1.3             Letters of Credit.

(a)       
          Agreement to Issue or Cause To Issue. Subject to the terms and conditions
          of this Agreement, the Agent agrees (i) to cause the Letter of Credit Issuer to
          issue for the account of the Borrowers one or more commercial/documentary and
          standby letters of credit (each, a Letter of Credit) and/or
          (ii) to provide credit support or other enhancement to a Letter of Credit Issuer
          acceptable to the Agent, which issues a Letter of Credit for the account of the
          Borrowers (any such credit support or enhancement being herein referred to as a
          Credit Support) from time to time during the term of this
          Agreement.

(b)       
          Amounts; Outside Expiration Date. The Agent shall not have any obligation
          to issue or cause to be issued any Letter of Credit or to provide Credit Support
          for any Letter of Credit at any time if: (i) the maximum face amount of the
          requested Letter of Credit is greater than the Unused Letter of Credit
          Subfacility at such time; (ii) the maximum undrawn amount of the requested
          Letter of Credit and all commissions, fees, and charges due from the Borrowers
          in connection with the opening thereof would exceed Availability at such time;
          or (iii) such Letter of Credit has an expiration date less than 30 days prior to
          the Stated Termination Date or more than 12 months from the date of issuance for
          standby letters of credit and 180 days for documentary letters of credit. With
          respect to any Letter of Credit which contains any evergreen or
          automatic renewal provision, each Lender shall be deemed to have consented to
          any such extension or renewal unless any such Lender shall have provided to the
          Agent written notice that it declines to consent to any such extension or
          renewal at least thirty (30) days prior to the date on which the Letter of
          Credit Issuer is entitled to decline to extend or renew the Letter of Credit,
          provided, that, no such extension or renewal shall cause the expiration date of
          such Letter of Credit to extend beyond the 30th day prior to the
          Stated Termination Date. If all of the requirements of this Section 1.3
          are met and no Default or Event of Default has occurred and is continuing, no
          Lender shall decline to consent to any such extension or renewal.

(c)       
          Other Conditions. In addition to the conditions precedent contained in
          Article 8, the obligation of the Agent to issue or to cause to be
          issued any Letter of Credit or to provide Credit Support for any Letter of
          Credit is subject to the following conditions precedent having been satisfied in
          a manner reasonably satisfactory to the Agent:

| | (i)                        The
Borrowers shall have delivered to the Letter of Credit Issuer, at such times
          and in such manner as such Letter of Credit Issuer may prescribe, an
application           in form and substance satisfactory to such Letter of Credit Issuer
and           reasonably satisfactory to the Agent for the issuance of the Letter of
Credit           and such other documents as may be required pursuant to the terms
thereof, and           the form, terms and purpose of the proposed Letter of Credit shall
be reasonably           satisfactory to the Agent and the Letter of Credit Issuer,
provided that such           application and other documents shall not contain any
operating or financial           covenants inconsistent with the terms of the other Loan
Documents (including any           requirement for collateral other than the Agents
Liens) or any requirement           for fronting fees other than fronting fees payable
under Section 2.6; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        As
of the date of issuance, no order of any court, arbitrator or Governmental
          Authority shall purport by its terms to enjoin or restrain money center banks
          generally from issuing letters of credit of the type and in the amount of the
          proposed Letter of Credit, and no law, rule or regulation applicable to money
          center banks generally and no request or directive (whether or not having the
          force of law) from any Governmental Authority with jurisdiction over money
          center banks generally shall prohibit, or request that the proposed Letter of
          Credit Issuer refrain from, the issuance of letters of credit generally or the
          issuance of such Letters of Credit.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(d)       
          Issuance of Letters of Credit.

| | (i)              Request
for Issuance. The Borrowers must notify the Agent of a requested           Letter of
Credit at least three (3) Business Days prior to the proposed issuance           date.
Such notice shall be irrevocable and must specify the original face amount           of
the Letter of Credit requested, the Business Day of issuance of such           requested
Letter of Credit, whether such Letter of Credit may be drawn in a           single or in
partial draws, the Business Day on which the requested Letter of           Credit is to
expire, the purpose for which such Letter of Credit is to be           issued, and the
beneficiary of the requested Letter of Credit. The Borrowers           shall attach to
such notice the proposed form of the conditions for drawing           under the Letter of
Credit.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)              Responsibilities
of the Agent; Issuance. As of the Business Day           immediately preceding the
requested issuance date of the Letter of Credit, the           Agent shall determine the
amount of the applicable Unused Letter of Credit           Subfacility, Aggregate
Revolver Outstandings and Availability. If (A) the face           amount of the requested
Letter of Credit is less than the Unused Letter of           Credit Subfacility and (B)
the amount of such requested Letter of Credit and all           commissions, fees, and
charges due from the Borrowers in connection with the           opening thereof would not
exceed Availability, the Agent shall cause the Letter           of Credit Issuer to issue
the requested Letter of Credit on the requested           issuance date so long as the
other conditions hereof are met.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)              No
Extensions or Amendment. The Agent shall not be obligated to cause the
          Letter of Credit Issuer to extend or amend any Letter of Credit issued pursuant
          hereto unless the requirements of this Section 1.3 are met as though a
          new Letter of Credit were being requested and issued.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(e)       
          Payments Pursuant to Letters of Credit. The Borrowers agree to reimburse
          immediately the Letter of Credit Issuer for any draw under any Letter of Credit
          and the Agent for the account of the Lenders upon any payment pursuant to any
          Credit Support, and to pay the Letter of Credit Issuer the amount of all other
          charges and fees payable to the Letter of Credit Issuer in connection with any
          Letter of Credit immediately when due, irrespective of any claim, setoff,
          defense or other right which any Borrower may have at any time against the
          Letter of Credit Issuer, the beneficiary of any Letter of Credit or any other
          Person. Each drawing under any Letter of Credit shall constitute a request by
          the Borrowers to the Agent for a Borrowing of a Base Rate Revolving Loan in the
          amount of such drawing. The Funding Date with respect to such borrowing shall be
          the date of such drawing.

(f)       
          Indemnification; Exoneration; Power of Attorney.

| | (i)              Indemnification.
In addition to amounts payable as elsewhere provided in           this Section 1.3,
the Borrowers agree to protect, indemnify, pay and save           the Lenders and the
Agent harmless from and against any and all claims, demands,           liabilities,
damages, losses, costs, charges and expenses (including reasonable           attorneys fees)
which any Lender or the Agent (other than the Bank or any           of its affiliates in
its capacity as Letter of Credit Issuer) may incur or be           subject to as a
consequence, direct or indirect, of the issuance of any Letter           of Credit or the
provision of any Credit Support or enhancement in connection           therewith. The
Borrowers obligations under this Section 1.3 shall           survive payment
of all other Obligations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)              Assumption
of Risk by the Borrowers. As among the Borrowers, the Lenders           and the
Agent, the Borrowers assume all risks of the acts and omissions of, or           misuse
of any of the Letters of Credit by, the respective beneficiaries of such
          Letters of Credit. In furtherance and not in limitation of the foregoing, the
          Lenders and the Agent shall not be responsible for: (A) the form, validity,
          sufficiency, accuracy, genuineness or legal effect of any document submitted by
          any Person in connection with the application for and issuance of and
          presentation of drafts with respect to any of the Letters of Credit, even if it
          should prove to be in any or all respects invalid, insufficient, inaccurate,
          fraudulent or forged; (B) the validity or sufficiency of any instrument
          transferring or assigning or purporting to transfer or assign any Letter of
          Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
          part, which may prove to be invalid or ineffective for any reason; (C) the
          failure of the beneficiary of any Letter of Credit to duly comply with
          conditions required in order to draw upon such Letter of Credit; (D) errors,
          omissions, interruptions, or delays in transmission or delivery of any
messages,           by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher;           (E) errors in interpretation of technical terms; (F) any loss or
delay in the           transmission or otherwise of any document required in order to
make a drawing           under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by           the beneficiary of any Letter of Credit of the proceeds of
any drawing under           such Letter of Credit; (H) any consequences arising from
causes beyond the           control of the Lenders or the Agent, including any act or
omission, whether           rightful or wrongful, of any present or future dejure or
defactoGovernmental Authority; or (I) the Letter of Credit           Issuers
honor of a draw for which the draw or any certificate fails to           comply in any
respect with the terms of the Letter of Credit. None of the           foregoing shall
affect, impair or prevent the vesting of any rights or powers of           the Agent or
any Lender under this Section1.3(f).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)              Exoneration.
Without limiting the foregoing, no action or omission           whatsoever by the Agent
or any Lender (excluding the Bank or any of its           affiliates in its capacity as a
Letter of Credit Issuer) shall result in any           liability of the Agent or any
Lender to any Borrower, or relieve the Borrowers           of any of their obligations
hereunder to any such Person.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)              Rights
Against Letter of Credit Issuer. Nothing contained in this           Agreement,
including clauses (i) and (ii) of this Section           1.3(f), is
intended to limit the Borrowers rights, if any, with           respect to the
Letter of Credit Issuer which arise as a result of the letter of           credit
application and related documents executed by and between the Borrowers           and the
Letter of Credit Issuer.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v)              Account
Party. The Borrowers hereby authorize and direct any Letter of           Credit
Issuer with respect to any Letter of Credit to name the applicable           Borrower as
the Account Party therein and to deliver to the Agent           all
instruments, documents and other writings and property received by the           Letter
of Credit Issuer pursuant to such Letter of Credit, and to accept and           rely upon
the Agents instructions and agreements with respect to all           matters
arising in connection with such Letter of Credit or the application           therefor.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(g)       
          Supporting Letter of Credit. If, notwithstanding the provisions of
          Section 1.3(b) and Section 10.1, any Letter of Credit or Credit
          Support is outstanding upon the termination of this Agreement, then upon such
          termination the Borrowers shall deposit with the Agent, for the ratable benefit
          of the Agent and the Lenders, with respect to each Letter of Credit or Credit
          Support then outstanding, a standby letter of credit (a Supporting
          Letter of Credit) in form and substance satisfactory to the Agent,
          issued by an issuer satisfactory to the Agent in an amount equal to the greatest
          amount for which such Letter of Credit or such Credit Support may be drawn plus
          any fees and expenses associated with such Letter of Credit or such Credit
          Support, under which Supporting Letter of Credit the Agent is entitled to draw
          amounts necessary to reimburse the Agent and the Lenders for payments to be made
          by the Agent and the Lenders under such Letter of Credit or Credit Support and
          any fees and expenses associated with such Letter of Credit or Credit Support.
          Such Supporting Letter of Credit shall be held by the Agent, for the ratable
          benefit of the Agent and the Lenders, as security for, and to provide for the
          payment of, the aggregate undrawn amount of such Letters of Credit or such
          Credit Support remaining outstanding.

1.4             Bank Products. The
Obligors may request, and the Bank may, in its sole and absolute discretion, arrange for
the Obligors to obtain from the Bank, or the Banks Affiliates, Bank Products,
although the Obligors are not required to do so. If Bank Products are provided by an
Affiliate of the Bank, the Obligors agree to indemnify and hold the Bank harmless from any
and all costs and obligations now or hereafter incurred by the Bank which arise from any
indemnity given by the Bank to its Affiliates related to such Bank Products;
provided, however, nothing contained herein is intended to limit the
Obligors rights, if any, with respect to any such Affiliate that provides Bank
Products, to the extent such rights arise as a result of the execution of documents by and
between the Obligors and such Affiliate which relate to Bank Products. The agreement
contained in this Section shall survive termination of this Agreement. The Obligors
acknowledge and agree that the obtaining of Bank Products from the Bank or its Affiliates
(a) is in the sole and absolute discretion of the Bank or its Affiliates, and (b) is
subject to all rules and regulations of the Bank or its Affiliates.

ARTICLE 2

INTEREST AND FEES

2.1             Interest.

(a)       
          Interest Rates. All outstanding Obligations shall bear interest on the
          unpaid principal amount thereof (including, to the extent permitted by law, on
          interest thereon not paid when due) from the date made until paid in full in
          cash at a rate determined by reference to the Base Rate or LIBOR plus the
          Applicable Margins as set forth below, but not to exceed the Maximum Rate. If at
          any time Loans are outstanding with respect to which the Borrowers have not
          delivered to the Agent a notice specifying the basis for determining the
          interest rate applicable thereto in accordance herewith, those Loans shall bear
          interest at a rate determined by reference to the Base Rate until notice to the
          contrary has been given to the Agent in accordance with this Agreement and such
          notice has become effective. Except as otherwise provided herein, the
          outstanding Obligations shall bear interest as follows:

| | (i)                        For
all Base Rate Loans and other Obligations (other than LIBOR Loans), at a
          fluctuating per annum rate equal to the Base Rate plus the Applicable Margin;
          and
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        For
all LIBOR Loans, at a per annum rate equal to LIBOR plus the           Applicable
Margin.
| | -------------------------------------------------------------------------------------------------------------------------

Each change in the Base Rate shall be
reflected in the interest rate applicable to Base Rate Loans as of the effective date of
such change. All interest charges shall be computed on the basis of a year of 360 days and
actual days elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year). The Borrowers shall pay to the Agent, for the ratable benefit of
the Lenders, interest accrued on all Base Rate Loans in arrears on the first day of each
month hereafter and on the Termination Date. The Borrowers shall pay to the Agent, for the
ratable benefit of Lenders, interest on all LIBOR Loans in arrears on each LIBOR Interest
Payment Date.

(b)       
          Default Rate. If any Default or Event of Default occurs and is continuing
          and the Agent or the Required Lenders in their discretion so elect, then, while
          any such Default or Event of Default is continuing, all of the Obligations shall
          bear interest at the Default Rate applicable thereto.

2.2             Continuation and
Conversion Elections.

(a)       
          If no Default or Event of Default exists, the Borrowers may:

| | (i)                        elect,
as of any Business Day, in the case of Base Rate Loans, to convert any           Base
Rate Loan (or any part thereof in an amount not less than $1,000,000, or           that
is in an integral multiple of $500,000 in excess thereof) into LIBOR Loans;           or
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        elect,
as of the last day of the applicable Interest Period, to continue any           LIBOR
Loans having Interest Periods expiring on such day (or any part thereof in           an
amount not less than $1,000,000, or that is in an integral multiple of           $500,000
in excess thereof);
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

provided, that if at any time
the aggregate amount of LIBOR Loans in respect of any Borrowing is reduced, by payment,
prepayment, or conversion of part thereof to be less than $1,000,000, such LIBOR Loans
shall automatically convert into Base Rate Loans; provided further that if
the Notice of Continuation/Conversion shall fail to specify the duration of the Interest
Period, such Interest Period shall be one month.

(b)       
          The Borrowers shall deliver a notice of continuation/conversion (Notice
          of Continuation/Conversion) to the Agent not later than 12:00 noon
          (Atlanta, Georgia time) at least three (3) Business Days in advance of the
          Continuation/Conversion Date, if the Loans are to be converted into or continued
          as LIBOR Loans and specifying:

| | (i)                        the
proposed Continuation/Conversion Date;
| | ---------------------------------------------------------------------

| | (ii)                                   the
aggregate amount of Loans to be converted or renewed;
| | ------------------------------------------------------------------------------------------------

| | (iii)               the
type of Loans resulting from the proposed conversion or continuation; and
| | -------------------------------------------------------------------------------------------------

| | (iv)               
      the duration of the requested Interest Period, provided, however, the Borrowers may
not select an Interest Period that ends after the Stated  Termination Date.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In lieu of delivering a Notice of Continuation/Conversion, a Borrower may give the Agent
telephonic notice of such request on or before the deadline set forth above. The Agent at
all times shall be entitled to rely on such telephonic notice with respect to such
continuation or conversion, regardless of whether any written confirmation is received.

(c)       
          If upon the expiration of the Interest Period applicable to any LIBOR Loan, the
          Borrowers shall have failed to timely select a new Interest Period to be
          applicable to such LIBOR Loan, or at the election of the Required Lenders if any
          Default or Event of Default then exists, the Borrowers shall be deemed to have
          elected to convert such LIBOR Loan into a Base Rate Loan effective as of the
          expiration date of such Interest Period.

(d)       
          The Agent will promptly notify each Lender of its receipt of a Notice of
          Continuation/Conversion. All conversions and continuations shall be made ratably
          according to the respective outstanding principal amounts of the Loans with
          respect to which the notice was given held by each Lender.

(e)       
          There may not be more than eight (8) different LIBOR Loans in effect hereunder
          at any time.

2.3             
Maximum Interest Rate. In no event shall any interest rate provided for
hereunder exceed the maximum rate legally chargeable by any Lender under applicable law
for such Lender with respect to loans of the type provided for hereunder (the
Maximum Rate). If, in any month, any interest rate, absent such limitation,
would have exceeded the Maximum Rate, then the interest rate for that month shall be the
Maximum Rate, and, if in future months, that interest rate would otherwise be less than
the Maximum Rate, then that interest rate shall remain at the Maximum Rate until such time
as the amount of interest paid hereunder equals the amount of interest which would have
been paid if the same had not been limited by the Maximum Rate. In the event that, upon
payment in full of the Obligations, the total amount of interest paid or accrued under the
terms of this Agreement is less than the total amount of interest which would, but for
this Section 2.3, have been paid or accrued if the interest rate otherwise set
forth in this Agreement had at all times been in effect, then the Borrowers shall, to the
extent permitted by applicable law, pay the Agent, for the account of the Lenders, an
amount equal to the excess of (a) the lesser of (i) the amount of interest which
would have been charged if the Maximum Rate had, at all times, been in effect, or
(ii) the amount of interest which would have accrued had the interest rate otherwise
set forth in this Agreement, at all times, been in effect, over (b) the amount of interest
actually paid or accrued under this Agreement. If a court of competent jurisdiction
determines that the Agent and/or any Lender has received interest and other charges
hereunder in excess of the Maximum Rate, such excess shall be deemed received on account
of, and shall automatically be applied to reduce, the Obligations other than interest, in
the inverse order of maturity, and if there are no Obligations outstanding, the Agent
and/or such Lender shall refund to the Borrowers Agent such excess.

2.4             Arrangement, Closing and
Administrative Fees. The Borrowers agree to pay the Agent on the Closing Date the
arrangement and closing fee set forth in the Fee Letter. The Borrowers also agree to pay
to the Agent on the Closing Date and each Anniversary Date the administrative fee set
forth in the Fee Letter. All fees described in this Section 2.4 shall be fully
earned as of the due date thereof, are not subject to refund or rebate and are for the
Agents own account and not for the benefit of any Lender.

2.5             Unused Line Fee. On
the first day of each month, and on the Termination Date, the Borrowers agree to pay to
the Agent, for the account of the Lenders, in accordance with their respective Pro Rata
Shares, an unused line fee (the Unused Line Fee) equal to three-eighths of one
percent (0.375%) per annum times the amount by which the Maximum Revolver Amount exceeded
the sum of the average daily amount of the Aggregate Revolver Outstandings during the
immediately preceding month or shorter period if calculated for the first month hereafter
or on the Termination Date. The Unused Line Fee shall be computed on the basis of a
360-day year for the actual number of days elapsed. All principal payments received by the
Agent that constitute collected funds shall be deemed to reduce the Aggregate Revolver
Outstandings immediately upon receipt for purposes of calculating the Unused Line Fee
pursuant to this Section 2.5; provided, however, that in the event a principal
payment received by the Agent will not be credited until the following Business Day in
accordance with Section 3.4(a), the Aggregate Revolver Outstandings shall be deemed
to have been reduced on the day such payment is actually credited.

2.6            
Letter of Credit Fees. On the first day of each month and on the
Termination Date, the Borrowers agree to pay to the Agent, for the account of the Lenders,
in accordance with their respective Pro Rata Shares, a fee (the Letter of Credit
Fee) equal to the Applicable Margin in effect with respect to LIBOR Loans, on a
per annum basis, multiplied by the average daily undrawn amount of Letters of Credit
outstanding during the immediately preceding month. The Letter of Credit Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed. The
Borrowers also agree to pay to the Agent, for the benefit of the Letter of Credit Issuer,
a fronting fee of one-quarter of one percent (0.25%) of the face amount of each Letter of
Credit upon the issuance thereof, and to pay to the Letter of Credit Issuer all
out-of-pocket costs, fees and expenses incurred by the Letter of Credit Issuer in
connection with the application for, processing of, issuance of, or amendment to any
Letter of Credit.

ARTICLE 3

PAYMENTS AND PREPAYMENTS

3.1             Revolving Loans. The
Borrowers shall repay the outstanding principal balance of the Revolving Loans, plus all
accrued but unpaid interest thereon, on the Termination Date. The Borrowers may prepay the
Revolving Loans at any time and reborrow the Revolving Loans subject to the terms of this
Agreement. In addition, and without limiting the generality of the foregoing, the
Borrowers shall immediately pay to the Agent, for the account of the Lenders, the amount,
without duplication, by which (a) the Aggregate Revolver Outstandings exceeds (b) the
lesser of (i) the Maximum Revolver Amount or the Borrowing Base minus (ii) without
duplication, Reserves, at any time.

3.2            
Termination of Facility. The Borrowers may terminate this Agreement upon
at least ten (10) Business Days notice to the Agent and the Lenders of their intent
to terminate, and at least three (3) Business Days notice to the Agent and the
Lenders of the actual termination date, upon (a) the payment in full of all
outstanding Revolving Loans, together with accrued interest thereon, and the cancellation
and return of all outstanding Letters of Credit (or the delivery to the Agent of
Supporting Letters of Credit with respect thereto), (b) if such termination occurs on
or prior to March 31, 2005, the payment of the applicable Early Termination Fee to the
Agent, for the account of the Lenders in accordance with their Pro Rata Shares,
(c) the payment in full in cash of all reimbursable expenses and other Obligations,
and (d) with respect to any LIBOR Loans prepaid, payment of the amounts due under
Section 4.4, if any.

3.3             LIBOR Loan Prepayments. In
connection with any prepayment, if any LIBOR Loan is prepaid or converted to a Base Rate
Loan prior to the expiration date of the Interest Period applicable thereto, the Borrowers
shall pay to the Agent, for the account of the Lenders, the amounts described in
Section 4.4.

3.4             Payments by the
Borrowers.

(a)       
          All payments to be made by the Borrowers shall be made without set-off,
          recoupment or counterclaim. Except as otherwise expressly provided herein, all
          payments by the Borrowers shall be made to the Agent for the account of the
          Lenders, at the account designated by the Agent, and shall be made in Dollars
          and in immediately available funds, no later than 12:00 noon (Atlanta, Georgia
          time) on the date specified herein. Any payment received by the Agent after such
          time shall be deemed (for purposes of calculating interest only) to have been
          received on the following Business Day and any applicable interest shall
          continue to accrue.

(b)       
          Subject to the provisions set forth in the definition of Interest
          Period, whenever any payment is due on a day other than a Business
          Day, such payment shall be due on the following Business Day, and such extension
          of time shall in such case be included in the computation of interest or fees,
          as the case may be.

3.5             Payments as Revolving
Loans. At the election of the Agent, all payments of principal, interest,
reimbursement obligations in connection with Letters of Credit and Credit Support for
Letters of Credit, fees, premiums, reimbursable expenses and other sums payable hereunder
may be paid from the proceeds of Revolving Loans made hereunder. The Borrowers hereby
irrevocably authorize the Agent to charge the Loan Account for the purpose of paying all
amounts from time to time due hereunder and agree that all such amounts charged shall
constitute Base Rate Revolving Loans (including Non-Ratable Loans and Agent Advances).

3.6             Apportionment, Application and
Reversal of Payments. Principal and interest payments shall be apportioned ratably
among the Lenders (according to the unpaid principal balance of the Loans to which such
payments relate held by each Lender) and payments of the fees shall, as applicable, be
apportioned ratably among the Lenders, except for fees payable solely to Agent and the
Letter of Credit Issuer and except as provided in Section 11.1(b). All
payments shall be remitted to the Agent and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees, and all proceeds
of Accounts or other Collateral received by the Agent, shall be applied, ratably, subject
to the provisions of this Agreement, first, to pay any fees, indemnities or expense
reimbursements then due to the Agent from any Obligor; second, to pay any fees or
expense reimbursements then due to the Lenders from any Obligor and to pay any amounts
under ACH Transactions then owing to the Bank or any Affiliate of the Bank; third,
to pay interest due in respect of all Loans, including Non-Ratable Loans and Agent
Advances; fourth, to pay or prepay principal of the Non-Ratable Loans and Agent
Advances; fifth, to pay or prepay principal of the Revolving Loans (other than
Non-Ratable Loans and Agent Advances) and unpaid reimbursement obligations in respect of
Letters of Credit; sixth, to pay an amount to the Agent equal to all outstanding
Letter of Credit Obligations to be held as cash collateral for such Obligations; and
seventh, to the payment of any other Obligation due to the Agent or any Lender by
any Obligor (including any amounts relating to Hedge Agreements or other Bank Products).
Notwithstanding anything to the contrary contained in this Agreement, unless so directed
by the Borrowers, or unless an Event of Default has occurred and is continuing, neither
the Agent nor any Lender shall apply any payments which it receives to any LIBOR Loan,
except (a) on the expiration date of the Interest Period applicable to any such LIBOR
Loan, or (b) in the event, and only to the extent, that there are no outstanding Base Rate
Loans and, in any event, the Borrowers shall pay LIBOR breakage losses in accordance with
Section 4.4. The Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments to any
portion of the Obligations.

3.7             Indemnity for Returned
Payments. If, after receipt of any payment which is applied to the payment of all or
any part of the Obligations, the Agent, any Lender, the Bank or any Affiliate of the Bank
is for any reason compelled to surrender such payment or proceeds to any Person because
such payment or application of proceeds is invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, impermissible setoff, or a diversion of
trust funds, or for any other reason, then the Obligations or part thereof intended to be
satisfied shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by the Agent or such Lender and the
Borrowers shall be liable to pay to the Agent and the Lenders, and hereby does indemnify
the Agent and the Lenders and hold the Agent and the Lenders harmless for, the amount of
such payment or proceeds surrendered. The provisions of this Section 3.7 shall
be and remain effective notwithstanding any contrary action which may have been taken by
the Agent or any Lender in reliance upon such payment or application of proceeds, and any
such contrary action so taken shall be without prejudice to the Agents and the
Lenders rights under this Agreement and shall be deemed to have been conditioned
upon such payment or application of proceeds having become final and irrevocable. The
provisions of this Section 3.7 shall survive the termination of this Agreement.

3.8             Agents and Lenders
Books and Records; Monthly Statements. The Agent shall record the principal amount of
the Loans owing to each Lender, the undrawn face amount of all outstanding Letters of
Credit and the aggregate amount of unpaid reimbursement obligations outstanding with
respect to the Letters of Credit from time to time on its books. In addition, each Lender
may note the date and amount of each payment or prepayment of principal of such
Lenders Loans in its books and records. Failure by the Agent or any Lender to make
such notation shall not affect the obligations of the Borrowers with respect to the Loans
or the Letters of Credit. The Borrowers agree that the Agents and each Lenders
books and records showing the Obligations and the transactions pursuant to this Agreement
and the other Loan Documents shall be admissible in any action or proceeding arising
therefrom, and shall constitute rebuttably presumptive proof thereof, irrespective of
whether any Obligation is also evidenced by a promissory note or other instrument. The
Agent will provide to the Borrowers Agent a monthly statement of Loans, payments,
and other transactions pursuant to this Agreement. Such statement shall be deemed correct,
accurate, and binding on the Borrowers and an account stated (except for reversals and
reapplications of payments made as provided in Section 3.6 and corrections of
errors discovered by the Agent), unless the Borrowers notify the Agent in writing to the
contrary within sixty (60) days after such statement is rendered. In the event a timely
written notice of objections is given by the Borrowers, only the items to which exception
is expressly made will be considered to be disputed by the Borrowers.

3.9             Borrowers Agent.
Each of the Borrowers other than PSS hereby appoints PSS, and PSS shall act under this
Agreement, as the agent, attorney-in-fact and legal representative of such other Borrowers
for all purposes, including requesting Loans and receiving account statements and other
notices and communications to the Borrowers (or any of them) from the Agent or any Lender.
The Agent, the Letter of Credit Issuer and the Lenders may rely, and shall be fully
protected in relying, on any Notice of Borrowing, Notice of Conversion or Continuation,
request for a Letter of Credit, disbursement instruction, report, information or any other
notice or communication made or given by PSS, whether in its own name, as Borrowers
Agent, on behalf of any other Borrower or on behalf of the Borrowers, and
neither the Agent nor the Letter of Credit Issuer or any Lender shall have any obligation
to make any inquiry or request any confirmation from or on behalf of any other Borrower as
to the binding effect on it of any such Notice, request, instruction, report, information,
other notice or communications, nor shall the joint and several character of the
Borrowers obligations hereunder be affected, provided, that the provisions of this
Section 3.9 shall not be construed so as to preclude any Borrower from taking
actions permitted to be taken by a Borrower hereunder.

3.10             Joint and Several
Liability.

(a)       
          Joint and Several Liability. All Loans made to the Borrowers and all of
          the other Obligations of the Borrowers, including all interest, fees and
          expenses with respect thereto and all indemnity and reimbursement obligations
          hereunder, shall constitute one joint and several direct and general obligation
          of all of the Borrowers. Notwithstanding anything to the contrary contained
          herein, each of the Borrowers shall be jointly and severally, with each other
          Borrower, directly and unconditionally, liable for all Obligations, it being
          understood that the advances to each Borrower inure to the benefit of all
          Borrowers, and that the Agent, the Letter of Credit Issuer and the Lenders are
          relying on the joint and several liability of the Borrowers as co-makers in
          extending the Loans hereunder and issuing Letters of Credit. Each Borrower
          hereby unconditionally and irrevocably agrees that upon default in the payment
          when due (whether at stated maturity, by acceleration or otherwise) of any
          principal of, or interest on, any Obligation, it will forthwith pay the same,
          without notice or demand.

(b)       
          No Reduction in Obligations. No payment or payments made by any of the
          Borrowers or any other Person or received or collected by the Agent, the Letter
          of Credit Issuer or any Lender from any of the Borrowers or any Person by virtue
          of any action or proceeding or any setoff or appropriation or application at any
          time or from time to time in reduction of or in payment of the Obligations shall
          be deemed to modify, reduce, release or otherwise affect the liability of each
          Borrower under this Agreement, which shall remain liable for all remaining and
          thereafter arising Obligations until the Obligations are paid in full and the
          Commitments are terminated.

3.11             Obligations Absolute.
Each Borrower agrees that the Obligations will be paid strictly in accordance with the
terms of the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the Agent, the
Letter of Credit Issuer or any Lender with respect thereto. All Obligations shall be
conclusively presumed to have been created in reliance hereon. The liabilities of each
Borrower under this Agreement shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any Loan Document or any other
agreement or instrument relating thereto; (b) any change in the time, manner or place
of payments of, or in any other term of, all or any part of the Obligations, or any other
amendment or waiver thereof or any consent to departure therefrom, including any increase
in the Obligations resulting from the extension of additional credit to any Borrower or
otherwise; (c) any taking, exchange, release or non-perfection of any Collateral, or
any release or amendment or waiver of or consent to departure from any guaranty for all or
any of the Obligations; (d) any change, restructuring or termination of the structure
or existence of any Borrower or other Obligor; or (e) any other circumstance which
otherwise constitute a defense available to, or a discharge of, any Borrower or other
Obligor, other than the indefeasible payment in full of the Obligations. This Agreement
shall continue to be effective or be reinstated, as the case may be, if at any time any
payment of any of the Obligations is rescinded or must otherwise be returned by the Agent,
the Letter of Credit Issuer or any Lender upon the insolvency, bankruptcy or
reorganization of any Borrower or other Obligor or otherwise, all as though such payment
had not been made.

3.12             Waiver of Suretyship
Defenses. Each Borrower agrees that the joint and several liability of the Borrowers
provided for in Section 3.10 shall not be impaired or affected by any modification,
supplement, extension or amendment of any contract of agreement to which the other
Borrowers or Obligors may hereafter agree (other than an agreement signed by the Agent and
the Lenders specifically releasing such liability), nor by any delay, extension of time,
renewal, compromise or other indulgence granted by the Agent or any Lender with respect to
any of the Obligations, nor by any other agreements or arrangements whatever with the
other Borrowers, the Obligors or with anyone else, each Borrower hereby waiving all notice
of such delay, extension, release, substitution, renewal, compromise or other indulgence,
and hereby consenting to be bound thereby as fully and effectually as if it had expressly
agreed thereto in advance. The liability of each Borrower is direct and unconditional as
to all of the Obligations, and may be enforced without requiring the Agent or any Lender
first to resort to any other right, remedy or security. Each Borrower hereby expressly
waives promptness, diligence, notice of acceptance and any other notice (except to the
extent expressly provided for herein or in another Loan Document) with respect to any of
the Obligations, this Agreement or any other Loan Documents and any requirement that the
Agent or any Lender protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against any Borrower, any Obligor or any
other Person or any collateral, including any rights any Borrower may otherwise have under
O.C.G.A. § 10-7-24 or any successor statute or any analogous statute in any
jurisdiction under the laws of which any Borrower is organized or in which any Borrower
conducts business.

3.13             Contribution and
Indemnification among the Borrowers. Each Borrower is obligated to repay the
Obligations as joint and several obligors under this Agreement. To the extent that any
Borrower shall, under this Agreement as a joint and several obligor, repay any of the
Obligations constituting Loans made to another Borrower hereunder or other Obligations
incurred directly and primarily by any other Borrower (an Accommodation
Payment), then, to the extent that such Borrower has not received the benefit of
such repaid Obligations (whether through an inter-company loan or otherwise), the Borrower
making such Accommodation Payment shall be entitled to contribution and indemnification
from, and be reimbursed by, each of the other Borrowers in an amount, for each of such
other Borrowers, equal to a fraction of such Accommodation Payment, the numerator of which
fraction is such other Borrowers Allocable Amount (as defined below) and
the denominator of which fraction is the sum of the Allocable Amounts of all of the
Borrowers. As of any date of determination, the Allocable Amount of each
Borrower shall be equal to the maximum amount of liability for Accommodation Payments
which could be asserted against such Borrower hereunder without (a) rendering such
Borrower insolvent within the meaning of Section 101(31) of Title 11 of the
United States Code entitled Bankruptcy (the Bankruptcy Code),
Section 2 of the Uniform Fraudulent Transfer Act (the UFTA), or
Section 2 of the Uniform Fraudulent Conveyance Act (UFCA),
(b) leaving such Borrower with unreasonably small capital or assets, within the
meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or
Section 4 of the UFCA, or (c) leaving such Borrower unable to pay its debts as
they become due within the meaning of Section 548 of the Bankruptcy Code, Section 4
of the UFTA, or Section 5 of the UFCA. All rights and claims of contribution,
indemnification and reimbursement under this Section 3.13 shall be subordinate in
right of payment to the prior payment in full of the Obligations.

ARTICLE 4

TAXES, YIELD
PROTECTION AND ILLEGALITY

4.1             Taxes.

(a)       
          Except as provided in Section 4.1(f), any and all payments by the
          Borrowers to each Lender or the Agent under this Agreement and any other Loan
          Document shall be made free and clear of, and without deduction or withholding
          for, any Taxes. In addition, the Borrowers shall pay all Other Taxes.

(b)       
          If the Borrowers fail to pay any Taxes or Other Taxes described in Section
          4.1(a) when due, the Borrowers shall indemnify and hold harmless each Lender
          and the Agent for the full amount of such Taxes or Other Taxes (including any
          Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
          Section 4.1) paid by any Lender or the Agent and any liability (including
          penalties, interest, additions to tax and expenses) arising therefrom or with
          respect thereto. Payment under this indemnification shall be made within 30 days
          after the date such Lender or the Agent makes written demand therefor and
          provides documentation reasonably satisfactory to the Borrowers Agent of
          the payment of such Taxes or Other Taxes.

(c)       
          If the Borrowers shall be required by law to deduct or withhold any Taxes or
          Other Taxes from or in respect of any sum payable hereunder to any Lender or the
          Agent, then, subject to Section 12.10:

| | (i)                        the
sum payable shall be increased as necessary so that after making all           required
deductions and withholdings (including deductions and withholdings           applicable
to additional sums payable under this Section 4.1) such Lender           or the
Agent, as the case may be, receives an amount equal on an after-tax basis           to
the sum it would have received had no such deductions or withholdings been
          made;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        the
Borrowers shall make such deductions and withholdings; and
| | ------------------------------------------------------------------------------------------

| | (iii)                        the
Borrowers shall pay the full amount deducted or withheld to the relevant           taxing
authority or other authority in accordance with applicable law.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(d)       
          At the Agents request, within 30 days after the date of any payment by the
          Borrowers of Taxes or Other Taxes, the Borrowers shall furnish to the Agent the
          original or a certified copy of a receipt evidencing payment thereof, or other
          evidence of payment satisfactory to the Agent.

(e)       
          If the Borrowers are required to pay additional amounts to any Lender or the
          Agent pursuant to subsection (c) of this Section 4.1, then such
          Lender shall use reasonable efforts (consistent with legal and regulatory
          restrictions) to change the jurisdiction of its lending office so as to
          eliminate any such additional payment by the Borrowers which may thereafter
          accrue, if such change in the judgment of such Lender is not otherwise
          disadvantageous to such Lender.

(f)       
          Notwithstanding anything else in this Agreement, the Borrowers shall not be
          required to indemnify any Lender or to pay any increased amounts to any Lender,
          in respect of any Taxes pursuant to this Section 4.1 or otherwise to the
          extent that any obligation to withhold or deduct amounts with respect to such
          Taxes existed (i) on the date such Lender (or its successor or assign) became a
          party to this Agreement or (ii) if a Lender after becoming a party to this
          Agreement changes the office to which payments are made, on the date of such
          change. The foregoing sentence shall not in any manner limit the Borrowers
          obligations with respect to Other Taxes.

4.2             Illegality.

(a)       
          If any Lender determines that the introduction of any Requirement of Law, or any
          change in any Requirement of Law, or in the interpretation or administration of
          any Requirement of Law, has made it unlawful, or that any central bank or other
          Governmental Authority has asserted that it is unlawful, for any Lender or its
          applicable lending office to make LIBOR Loans, then, on notice thereof by that
          Lender to the Borrowers Agent through the Agent, any obligation of that
          Lender to make LIBOR Loans shall be suspended until that Lender notifies the
          Agent and the Borrowers Agent that the circumstances giving rise to such
          determination no longer exist. The affected Lender shall provide prompt notice
          to the Agent and the Borrowers Agent of the cessation of such
          circumstances.

(b)       
          If any Lender determines that it is unlawful to maintain any LIBOR Loan, the
          Borrowers shall, upon the Borrowers Agents receipt of notice of such
          fact and demand from such Lender (with a copy to the Agent), prepay in full such
          LIBOR Loans of that Lender then outstanding, together with interest accrued
          thereon and amounts required under Section 4.4, either on the last day of
          the Interest Period thereof, if that Lender may lawfully continue to maintain
          such LIBOR Loans to such day, or immediately, if that Lender may not lawfully
          continue to maintain such LIBOR Loans. If the Borrowers are required to so
          prepay any LIBOR Loans, then, concurrently with such prepayment, the Borrowers
          shall borrow from the affected Lender, in the amount of such repayment, a Base
          Rate Loan.

4.3             Increased Costs and
Reduction of Return.

(a)       
          If any Lender determines that due to either (i) the introduction of or any
          change in the interpretation of any law or regulation, or (ii) the
          compliance by that Lender with any guideline or request from any central bank or
          other Governmental Authority (whether or not having the force of law) (excluding
          any costs resulting from reserve requirements taken into account in the
          definition of LIBOR), there shall be any increase in the cost to such Lender of
          agreeing to make or making, funding or maintaining any LIBOR Loans, then the
          Borrowers shall be liable for, and shall from time to time, upon demand (with a
          copy of such demand to be sent to the Agent), pay to the Agent for the account
          of such Lender, additional amounts as are sufficient to compensate such Lender
          for such increased costs.

(b)       
          If any Lender shall have determined that (i) the introduction of any Capital
          Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii)
          any change in the interpretation or administration of any Capital Adequacy
          Regulation by any central bank or other Governmental Authority charged with the
          interpretation or administration thereof, or (iv) compliance by such Lender or
          any corporation or other entity controlling such Lender with any Capital
          Adequacy Regulation, affects or would affect the amount of capital required or
          expected to be maintained by such Lender or any corporation or other entity
          controlling such Lender and (taking into consideration such Lenders or
          such corporations or other entitys policies with respect to capital
          adequacy and such Lenders desired return on capital) determines that the
          amount of such capital is increased as a consequence of its Commitment, loans,
          credits or obligations under this Agreement, then, upon demand of such Lender to
          the Borrowers through the Agent, the Borrowers shall pay to such Lender, from
          time to time as specified by such Lender, additional amounts sufficient to
          compensate such Lender for such increase.

(c)       
          Failure or delay on the part of any Lender to demand compensation pursuant to
          this Section shall not constitute a waiver of such Lenders right to demand
          such compensation; provided that the Borrowers shall not be required to
          compensate a Lender pursuant to this Section for any increased costs or reduced
          returns incurred more than 180 days prior to the date that such Lender notifies
          the Borrowers Agent of the event giving rise to such increased costs or
          reduced returns and of such Lenders intention to claim compensation
          therefor; provided further that, if the event giving rise to such
          increased costs or reduced returns is retroactive, then the 180-day period
          referred to above shall be extended to include the period of retroactive effect
          thereof.

4.4             Funding Losses.
 The Borrowers  shall  reimburse each Lender and hold each Lender harmless from any loss
or expense which such Lender may sustain or incur as a consequence of:

(a)       
          the failure of the Borrowers to make on a timely basis any payment of principal
          of any LIBOR Loan;

(b)       
          the failure of the Borrowers to borrow, continue or convert a Loan after any
          Borrower has given (or is deemed to have given) a Notice of Borrowing or a
          Notice of Continuation/Conversion; or

(c)       
          the prepayment or other payment (including after acceleration thereof) of any
          LIBOR Loans on a day that is not the last day of the relevant Interest Period;

including any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain its LIBOR Loans
or from fees payable to terminate the deposits from which such funds were obtained, but
excluding any loss of profit or Applicable Margin. The Borrowers shall also pay any
customary administrative fees charged by any Lender in connection with the foregoing.

4.5             Inability to Determine
Rates. If the Agent determines that for any reason adequate and reasonable means do
not exist for determining LIBOR for any requested Interest Period with respect to a
proposed LIBOR Loan, or that LIBOR for any requested Interest Period with respect to a
proposed LIBOR Loan does not adequately and fairly reflect the cost to the Lenders of
funding such Loan, the Agent will promptly so notify the Borrowers Agent and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Loans
hereunder shall be suspended until the Agent revokes such notice in writing. Upon receipt
of such notice, the Borrowers may revoke any Notice of Borrowing or Notice of
Continuation/Conversion then submitted by any Borrower. If the Borrowers do not revoke
such Notice, the Lenders shall make, convert or continue the Loans, as proposed by the
Borrowers, in the amount specified in the applicable notice submitted by the Borrowers,
but such Loans shall be made, converted or continued as Base Rate Loans instead of LIBOR
Loans.

4.6             Certificates of Lender. If
any Lender claims reimbursement or compensation under this Article 4, the affected
Lender shall determine the amount thereof and shall deliver to the Borrowers Agent
(with a copy to the Agent) a certificate setting forth in reasonable detail the amount
payable to the affected Lender, and such certificate shall be conclusive and binding on
the Borrowers in the absence of manifest error.

4.7             Survival. The agreements
and obligations of the Borrowers in this Article 4 shall survive the payment of all
other Obligations and the termination of this Agreement.

4.8             Assignment of Commitments
Under Certain Circumstances. In the event (a) any Lender requests compensation
pursuant to Section 4.3 in an aggregate amount in excess of $100,000, (b) any
Lender delivers a notice described in Section 4.2, or (c) the Borrowers are
required to pay additional amounts to any Lender or any Governmental Authority on account
of any Lender pursuant to Section 4.1 in an aggregate amount in excess of $100,000,
the Borrowers may, at their sole expense and effort (including with respect to the
processing fee referred to in Section 11.2(a)), upon notice to such Lender and the
Agent, require such Lender to transfer and assign, without recourse (in accordance with
and subject to the restrictions contained in Section 11.2), all of its interests,
rights and obligations under this Agreement to an Eligible Assignee that shall assume such
assigned obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that (i) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority having jurisdiction, (ii)
no Event of Default shall have occurred and be continuing, (iii) the Borrowers or such
assignee shall have paid to such Lender in immediately available funds an amount equal to
the sum of 100% of the principal of and interest accrued to the date of such payment on
the outstanding Loans of such Lender, plus all fees and other amounts accrued for the
account of such Lender hereunder (including any amounts under Sections 4.1,
4.2 and 4.3), (iv) such assignment is consummated within ninety (90) days
after the date on which the Borrowers right under this Section arises, and (v) such
assignee is reasonably acceptable to the Agent; provided further that if prior to any such
assignment the circumstances or event that resulted in such Lenders request or
notice under Section 4.2 or 4.3 or demand for additional amounts under
Section 4.1, as the case may be, shall cease to exist or become inapplicable for
any reason, or if such Lender shall waive its rights in respect of such circumstances or
event under Section 4.1, 4.2 or 4.3, as the case may be, then such
Lender shall not thereafter be required to make such assignment hereunder.

ARTICLE 5

BOOKS AND RECORDS;
FINANCIAL INFORMATION; NOTICES

5.1            
Books and Records. The Obligors shall maintain, at all times, correct and
complete books, records and accounts in which complete, correct and timely entries are
made of their transactions in accordance with GAAP applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 5.2(a). The
Obligors shall, by means of appropriate entries, reflect in such accounts and in all
Financial Statements proper liabilities and reserves for all taxes and proper provision
for depreciation and amortization of property and bad debts, all in accordance with GAAP.
The Obligors shall maintain at all times books and records pertaining to the Collateral in
such detail, form and scope as the Agent shall reasonably require, including, but not
limited to, records of (a) all payments received and all credits and extensions granted
with respect to the Accounts, and (b) the return, rejection, repossession, stoppage in
transit, loss, damage, or destruction of any Inventory.

5.2            
Financial Information. The Obligors shall promptly furnish to the Agent and
each Lender all such financial information as the Agent shall reasonably request. Without
limiting the foregoing, the Obligors will furnish to the Agent and each Lender, in such
detail as the Agent or the Lenders shall request, the following:

(a)       
          As soon as available, but in any event not later than ninety (90) days after the
          close of each Fiscal Year, consolidated audited and consolidating unaudited
          balance sheets, statements of operations, statements of cash flow and changes in
          shareholders equity for the Obligors and their consolidated Subsidiaries
          for such Fiscal Year, and the accompanying notes thereto, setting forth in each
          case in comparative form figures for the previous Fiscal Year, all in reasonable
          detail, fairly presenting the financial position and the results of operations
          of the Obligors and their consolidated Subsidiaries as at the date thereof and
          for the Fiscal Year then ended, and prepared in accordance with GAAP. Such
          statements shall be examined in accordance with generally accepted auditing
          standards by and, in the case of such statements performed on a consolidated
          basis, accompanied by a report thereon unqualified in any respect of independent
          certified public accountants selected by the Obligors and reasonably
          satisfactory to the Agent. The Obligors hereby authorize the Agent to
          communicate directly with their certified public accountants and, by this
          provision, authorize those accountants to disclose to the Agent any and all
          financial statements and other supporting financial documents and schedules
          relating to any Obligor and to discuss directly with the Agent the finances and
          affairs of any Obligor. The Obligors shall be entitled to have a representative
          present during all such communications.

(b)       
          As soon as available, but in any event not later than thirty (30) days after the
          end of each month (other than any month ending as of the end of a fiscal quarter
          or year), consolidated unaudited balance sheets of the Obligors and their
          consolidated Subsidiaries as at the end of such month, and consolidated
          unaudited statements of operations and statements of cash flow for the Obligors
          and their consolidated Subsidiaries for such month and for the period from the
          beginning of the Fiscal Year to the end of such month, all in reasonable detail,
          fairly presenting the financial position and results of operations of the
          Obligors and their consolidated Subsidiaries as at the date thereof and for such
          periods, and, in each case, in comparable form, figures for the corresponding
          period in the prior Fiscal Year and in the Obligors budget, and prepared
          in accordance with GAAP applied consistently with the audited Financial
          Statements required to be delivered pursuant to Section 5.2(a). The
          Borrowers shall certify by a certificate signed by a Designated Financial
          Officer that all such statements have been prepared in accordance with GAAP and
          present fairly the Obligors financial position as at the dates thereof and
          its results of operations for the periods then ended, subject to normal year-end
          adjustments.

(c)       
          As soon as available, but in any event not later than forty-five (45) days after
          the end of each fiscal quarter, consolidated and consolidating unaudited balance
          sheets of the Borrowers and their consolidated Subsidiaries as at the end of
          such fiscal quarter, and consolidated and consolidating unaudited statements of
          operations and statements of cash flow for the Borrowers and their consolidated
          Subsidiaries for such fiscal quarter and for the period from the beginning of
          the Fiscal Year to the end of such fiscal quarter, all in reasonable detail,
          fairly presenting the financial position and results of operations of the
          Borrowers and their consolidated Subsidiaries as at the date thereof and for
          such periods, and, in each case, in comparable form, figures for the
          corresponding period in the prior Fiscal Year and in the Borrowers budget,
          and prepared in accordance with GAAP applied consistently with the audited
          Financial Statements required to be delivered pursuant to
          Section 5.2(a). The Borrowers shall certify by a certificate signed
          by a Designated Financial Officer that all such statements have been prepared in
          accordance with GAAP and present fairly the Borrowers financial position
          as at the dates thereof and its results of operations for the periods then
          ended, subject to normal year-end adjustments.

(d)       
          With each of the audited Financial Statements delivered pursuant to
          Section 5.2(a), a certificate (which certificate may be eliminated,
          narrowed in scope or qualified to the extent required by generally applicable
          accounting rules and guidelines) of the independent certified public accountants
          that examined such statements to the effect that they have reviewed and are
          familiar with this Agreement and that, in examining such Financial Statements,
          they did not become aware of any fact or condition which then constituted a
          Default or Event of Default with respect to a financial covenant, except for
          those, if any, described in reasonable detail in such certificate.

(e)       
          With each of the Financial Statements delivered pursuant to
          Sections 5.2(a) and (c), a certificate of a Designated
          Financial Officer of the Borrowers setting forth in reasonable detail the
          calculations required to establish that the Obligors were in compliance with the
          covenants set forth in Sections 7.22 and 7.23 during the
          period covered in such Financial Statements and as at the end thereof. With each
          of the Financial Statements delivered pursuant to Sections 5.2(b) and
          (c), a certificate of a Designated Financial Officer of the Borrowers
          containing an update of any changes in the landlord with respect to leased Real
          Estate (or the amount of rent payable with respect to leased Real Estate or
          delinquencies in the payment of rent with respect to leased Real Estate) or the
          bank accounts listed on Schedule 6.27, and stating that, except as
          explained in reasonable detail in such certificate, (i) all of the
          representations and warranties of the Obligors contained in this Agreement and
          the other Loan Documents are correct and complete in all material respects as at
          the date of such certificate as if made at such time, except for those that
          speak as of a particular date, (ii) each Obligor is, at the date of such
          certificate, in compliance in all material respects with all of its respective
          covenants and agreements in this Agreement and the other Loan Documents
          (including, without limitation, a certification that no Obligor: has changed its
          legal name or jurisdiction of organization; changed the names under which it
          sells Inventory or creates Accounts; entered into any merger or acquisition;
          caused any Collateral to be located in a location not previously disclosed to
          the Agent in writing; formed any Subsidiary; or acquired any new material
          Proprietary Rights or made a filing of an application for the registration of
          any patent, trademark or copyright with the United States Patent and Trademark
          Office, the United States Copyright Office or any similar office or agency),
          (iii) no Default or Event of Default then exists or existed during the period
          covered by the Financial Statements for such month, and (iv) explaining, in form
          consistent with the Borrowers past practices or otherwise acceptable to
          the Agent, the material variances of the figures in the corresponding budgets
          and prior Fiscal Year financial statements (unless such variances are explained
          in filings with the Securities and Exchange Commission under the Exchange Act).
          If such certificate discloses that a representation or warranty is not correct
          or complete, or that a covenant has not been complied with, or that a Default or
          Event of Default existed or exists, such certificate shall set forth what action
          the Obligors have taken or propose to take with respect thereto.

(f)       
          No sooner than sixty (60) days and not less than five (5) days prior to the
          beginning of each Fiscal Year, commencing with the fiscal year ending April 2,
          2004, annual forecasts (to include forecasted consolidated and consolidating
          balance sheets, statements of operations and statements of cash flow) for the
          Obligors and their Subsidiaries as at the end of and for each month of such
          Fiscal Year.

(g)       
          If requested by the Agent, promptly after filing with the PBGC and the IRS, a
          copy of each annual report or other filing filed with respect to each Plan of
          any Obligor (other than any annual report or other filing that is the subject of
          Section 5.3(l)).

(h)       
          Promptly upon the filing thereof, copies of all reports, if any, to or other
          documents filed by any Obligor or any Subsidiary with the Securities and
          Exchange Commission under the Exchange Act, and all reports, notices, or
          statements sent or received by any Obligor or any Subsidiary to or from the
          holders of any equity interests of any Obligor (other than routine non-material
          correspondence sent by shareholders of any Obligor to such Obligor) or any such
          Subsidiary or of any Debt of any Obligor or any Subsidiary registered under the
          Securities Act of 1933 or to or from the trustee under any indenture under which
          the same is issued.

(i)       
          As soon as available, but in any event not later than 15 days after any
          Obligors receipt thereof, a copy of all management reports and management
          letters prepared for such Obligor by any independent certified public
          accountants of such Obligor.

(j)       
          Promptly after their preparation, copies of any and all proxy statements,
          financial statements, and reports which any Obligor makes available to its
          shareholders.

(k)       
          If requested by the Agent, promptly after filing with the IRS, a copy of each
          tax return filed by any Obligor or by any Subsidiary.

(l)       
          No later than five Business Days after the date of the most recent Borrowing
          Base Certificate, an updated Borrowing Base Certificate as of a date subsequent
          to the date of such prior Borrowing Base Certificate, together with all
          supporting information with respect thereto in accordance with
          Section 9 of the Security Agreement.

(m)       
          Such additional information as the Agent and/or any Lender may from time to time
          reasonably request regarding the financial and business affairs of any Obligor
          or any Subsidiary; provided, however, that the Obligors shall not be obligated
          to provide any information under this clause (m) that would vitiate the
          attorney-client privilege, but in such event the Obligors will make available to
          the Agent, promptly following the Agents request, copies of all pleadings
          relating to the subject litigation.

5.3             Notices to the Lenders.
The Obligors shall notify the Agent and the Lenders in writing of the  following
matters at the following times:

(a)       
          Immediately after becoming aware of any Default or Event of Default;

(b)       
          Immediately after becoming aware of the assertion by the holder of any Debt of
          any Obligor in a face amount in excess of $1,000,000 that a default exists with
          respect thereto or that such Obligor is not in compliance with the terms
          thereof, or the threat or commencement by such holder of any enforcement action
          because of such asserted default or non-compliance;

(c)       
          Promptly after becoming aware of any event or circumstance generally affecting
          the Obligors industry which could reasonably be expected to have a
          Materially Adverse Effect, and immediately after becoming aware of any other
          event or circumstance which could reasonably be expected to have a Material
          Adverse Effect (other than changes in general economic circumstances);

(d)       
          Immediately after becoming aware of any pending or threatened action, suit, or
          proceeding, by any Person against any Obligor, or any pending or threatened
          investigation by a Governmental Authority involving any Obligor, which could
          reasonably be expected to have a Material Adverse Effect;

(e)       
          Immediately after becoming aware of any pending or threatened strike, work
          stoppage, unfair labor practice claim, or other labor dispute affecting any
          Obligor in a manner which could reasonably be expected to have a Material
          Adverse Effect;

(f)       
          Immediately after becoming aware of any violation of any law, statute,
          regulation, or ordinance of a Governmental Authority affecting any Obligor which
          could reasonably be expected to have a Material Adverse Effect;

(g)       
          Immediately after receipt of any written notice of any violation by any Obligor
          or any Subsidiary of any Environmental Law which could reasonably be expected to
          have a Material Adverse Effect or that any Governmental Authority has asserted
          in writing that any Obligor or any Subsidiary is not in compliance with any
          Environmental Law or is investigating any Obligors or any
          Subsidiarys compliance therewith and such noncompliance could reasonably
          be expected to have a Material Adverse Effect;

(h)       
          Immediately after receipt of any written notice that any Obligor or any
          Subsidiary is or may be liable to any Person as a result of the Release or
          threatened Release of any Contaminant or that any Obligor or any Subsidiary is
          subject to investigation by any Governmental Authority evaluating whether any
          remedial action is needed to respond to the Release or threatened Release of any
          Contaminant which, in either case, is reasonably likely to give rise to
          liability in excess of $1,000,000;

(i)       
          Immediately after receipt of any written notice of the imposition of any
          Environmental Lien against any property of any Obligor or any Subsidiary;

(j)       
          Any change in any Obligors name, state of organization, locations of
          Collateral, or form of organization, or to which instruments in payment of
          Accounts may be made payable, in each case at least thirty (30) days prior
          thereto;

(k)       
          Within ten (10) Business Days after any Obligor or any ERISA Affiliate knows or
          has reason to know, that an ERISA Event or a prohibited transaction (as defined
          in Sections 406 of ERISA and 4975 of the Code) has occurred, and, when known,
          any action taken or threatened by the IRS, the DOL or the PBGC with respect
          thereto;

(l)       
          Upon request, or, in the event that such filing reflects a significant change
          with respect to the matters covered thereby, within ten (10) Business Days after
          the filing thereof with the PBGC, the DOL or the IRS, as applicable, copies of
          the following: (i) each annual report (form 5500 series), including Schedule B
          thereto, filed with the PBGC, the DOL or the IRS with respect to each Plan, (ii)
          a copy of each funding waiver request filed with the PBGC, the DOL or the IRS
          with respect to any Plan and all communications received by any Obligor or any
          ERISA Affiliate from the PBGC, the DOL or the IRS with respect to such request,
          (iii) a copy of each other filing or notice filed with the PBGC, the DOL or the
          IRS, with respect to each Plan by any Obligor or any ERISA Affiliate, and (iv) a
          copy of each favorable determination letter from the IRS regarding the
          qualification of a Plan under Section 401(a) of the Code;

(m)       
          Upon request, copies of each actuarial report for any Plan or Multi-employer
          Plan and annual report for any Multi-employer Plan; and within three (3)
          Business Days after receipt thereof by any Obligor or any ERISA Affiliate,
          copies of the following: (i) any notices of the PBGCs intention to
          terminate a Plan or to have a trustee appointed to administer such Plan;
          (ii) any unfavorable determination letter from the IRS regarding the
          qualification of a Plan under Section 401(a) of the Code; or (iii) any
          notice from a Multi-employer Plan regarding the imposition of withdrawal
          liability;

(n)       
          Within ten (10) Business Days after the occurrence thereof: (i) any changes in
          the benefits of any existing Plan which increase one or more Obligors
          annual costs with respect thereto by an amount in excess of $1,000,000, or the
          establishment of any new Plan or the commencement of contributions to any Plan
          to which any Obligor or any ERISA Affiliate was not previously contributing; or
          (ii) any failure by any Obligor or any ERISA Affiliate to make a required
          installment or any other required payment under Section 412 of the Code on or
          before the due date for such installment or payment;

(o)       
          Within three (3) Business Days after any Obligor or any ERISA Affiliate knows or
          has reason to know that any of the following events has or will occur: (i) a
          Multi-employer Plan has been or will be terminated; (ii) the administrator or
          plan sponsor of a Multi-employer Plan intends to terminate a Multi-employer
          Plan; or (iii) the PBGC has instituted or will institute proceedings under
          Section 4042 of ERISA to terminate a Multi-employer Plan; and

(p)       
          Promptly after any Borrower has notified the Agent of any intention by such
          Borrower to treat the Loans and/or Letters of Credit and related transactions as
          being a reportable transaction (within the meaning of Treasury
          Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or any
          successor form.

Each notice given under this
Section 5.3 shall describe the subject matter thereof in reasonable detail and
shall set forth the action that the applicable Obligor, its Subsidiary, or any ERISA
Affiliate, as applicable, has taken or proposes to take with respect thereto.

ARTICLE 6

GENERAL WARRANTIES AND REPRESENTATIONS

Each Obligor warrants and represents
to the Agent and the Lenders that except as hereafter disclosed to and accepted by the
Agent and the Required Lenders in writing:

6.1             Authorization, Validity, and Enforceability of this Agreement and the Loan Documents.

Each Obligor has the power and
authority to execute, deliver and perform this Agreement and the other Loan Documents to
which it is a party, to incur the Obligations, and to grant to the Agent Liens upon and
security interests in the Collateral. Each Obligor has taken all necessary action
(including obtaining approval of its stockholders if necessary) to authorize its
execution, delivery, and performance of this Agreement and the other Loan Documents to
which it is a party. This Agreement and the other Loan Documents to which it is a party
have been duly executed and delivered by such Obligor and constitute the legal, valid and
binding obligations of such Obligor, enforceable against it in accordance with their
respective terms. Each Obligors execution, delivery, and performance of this
Agreement and the other Loan Documents to which it is a party do not and will not conflict
with, or constitute a violation or breach of, or result in the imposition of any Lien upon
the property of such Obligor or any of its Subsidiaries, by reason of the terms of
(a) any contract, mortgage, lease, agreement, indenture, or instrument to which such
Obligor is a party or which is binding upon it, (b) any Requirement of Law applicable to
such Obligor or any of its Subsidiaries, or (c) the certificate or articles of
incorporation or by-laws or the limited liability company or limited partnership agreement
of such Obligor or any of its Subsidiaries.

6.2             Validity and Priority of
Security Interest. The provisions of this Agreement and the other Loan Documents
create legal and valid Liens on all the Collateral in favor of the Agent, for the ratable
benefit of the Agent and the Lenders, and such Liens constitute perfected and continuing
Liens on all the Collateral, having priority over all other Liens on the Collateral,
except for those Liens identified in clauses (c), (d) and (e) of the
definition of Permitted Liens and as otherwise provided in the Security Agreement,
securing all of the Obligations, and enforceable against each Obligor and all third
parties.

6.3             Organization and
Qualification. Each Obligor (a) is duly organized or incorporated and validly
existing and in good standing under the laws of the state of its organization or
incorporation, (b) is qualified to do business and is in good standing in the
jurisdictions set forth on Schedule 6.3 (which are the only jurisdictions on the
Closing Date in which such qualification is necessary in order for it to own or lease its
property and conduct its business, other than those jurisdictions in which the failure to
qualify could not reasonably be expected to have a Material Adverse Effect), and
(c) has all requisite power and authority to conduct its business and to own its
property.

6.4             Corporate Name; Prior
Transactions. Except as set forth on Schedule 6.4, no Obligor has, during the
five (5) years prior to the Closing Date, been known by or used any other corporate or
fictitious name, or been a party to any merger or consolidation, or acquired all or
substantially all of the assets of any Person, or acquired any of its property outside of
the ordinary course of business.

6.5             Subsidiaries and
Affiliates. Schedule 6.5 sets forth a correct and complete list as of the
Closing Date of the name and relationship to PSS of each and all of PSSs
Subsidiaries and other Affiliates. Each Subsidiary (a) is duly incorporated or organized
and validly existing in good standing under the laws of its state of incorporation or
organization set forth on Schedule 6.5, (b) is qualified to do business and in good
standing in each jurisdiction in which the failure to so qualify or be in good standing
could reasonably be expected to have a Material Adverse Effect, and (c) has all requisite
power and authority to conduct its business and own its property.

6.6             
Financial Statements and Projections.

(a)       
          The Obligors have delivered to the Agent and the Lenders the audited balance
          sheet and related statements of income, retained earnings, cash flows, and
          changes in stockholders equity for the Obligors and their consolidated
          Subsidiaries as of March 29, 2002, and for the Fiscal Year then ended,
          accompanied by the report thereon of the Borrowers independent certified
          public accountants, KPMG LLP. The Obligors have also delivered to the Agent and
          the Lenders the unaudited balance sheet and related statements of operations and
          cash flows for the Obligors and their consolidated Subsidiaries as of March 28,
          2003. All such financial statements have been prepared in accordance with GAAP
          and present accurately and fairly in all material respects the financial
          position of the Obligors and their consolidated Subsidiaries as at the dates
          thereof and their results of operations for the periods then ended.

(b)       
          The Latest Projections when submitted to the Lenders as required herein
          represent the Obligors best estimate of the future financial performance
          of the Obligors and their consolidated Subsidiaries for the periods set forth
          therein. The Latest Projections have been prepared on the basis of the
          assumptions set forth therein, which the Obligors believe are fair and
          reasonable in light of current and reasonably foreseeable business conditions at
          the time submitted to the Lenders, it being understood that actual results may
          differ from projections.

6.7             Capitalization.
Schedule 6.7 sets forth, as of the Closing Date, the number of authorized shares of
capital stock or similar equity interests of each Obligor, the number of such shares or
other interests that are outstanding, and the names of (a) the record and beneficial
owners, of public record as of the Closing Date, of each owner of more than 5% of the
capital stock of PSS, and (b) the record and beneficial owners of all such shares of the
other Obligors. All such issued and outstanding shares or other interests are validly
issued, fully paid and non-assessable.

6.8             Solvency. Each Obligor is
Solvent prior to and after giving effect to the Borrowings to be made on the Closing Date,
the issuance of any Letters of Credit to be issued on the Closing Date, and the guaranty
obligations to be incurred on the Closing Date.

6.9             Debt. After giving effect
to the making of the Loans to be made on the Closing Date, the Obligors and their
Subsidiaries have no Debt, except (a) the Obligations, (b) Debt described on Schedule
6.9, and (c) other Permitted Debt.

6.10             Distributions. Since
March 29, 2002, no Distribution has been declared, paid, or made upon or in respect of any
capital stock or other securities of (a) PSS, except of the type permitted under
Section 7.10(a)(ii), and (b) any other Obligor, except of the type permitted under
Section 7.10(a)(i).

6.11             Real Estate; Leases.
Schedule 6.11 sets forth, as of the Closing Date, a correct and complete list of
all Real Estate owned by any Obligor or any Subsidiary, all leases and subleases of real
or personal property held by any Obligor as lessee or sublessee (other than leases of
personal property as to which an Obligor is lessee or sublessee for which the value of
such personal property in the aggregate is less than $1,000,000), and all leases and
subleases of real or personal property held by any Obligor as lessor, or sublessor. Each
of such leases and subleases is valid and enforceable in accordance with its terms and is
in full force and effect, and, to the Obligors knowledge, no default by any party to
any such lease or sublease exists, except in each case where the failure could not
reasonably be expected to have a Material Adverse Effect. The applicable Obligor has good
and marketable title in fee simple to the Real Estate identified on Schedule 6.11
as owned by such Obligor, or valid leasehold interests in all material Real Estate
designated therein as leased by such Obligor, and each Obligor has good,
indefeasible, and merchantable title to all of its other property reflected on the March
29, 2002 Financial Statements delivered to the Agent and the Lenders, except as disposed
of in the ordinary course of business since the date thereof, free of all Liens except
Permitted Liens.

6.12             Proprietary Rights.
Schedule 6.12 sets forth, as of the Closing Date, a correct and complete list of
all of each Obligors Proprietary Rights. None of the Proprietary Rights is subject
to any licensing agreement or similar arrangement except as set forth on Schedule
6.12 or as could not reasonably be expected to have a Material Adverse Effect. To the
best of the Obligors knowledge, none of the Proprietary Rights infringes on or
conflicts with any other Persons property, and no other Persons property
infringes on or conflicts with the Proprietary Rights, except, in each case, where such
infringement or conflict could not reasonably be expected to have a Material Adverse
Effect. The Proprietary Rights described on Schedule 6.12 constitute all of the
property of such type necessary to the current and anticipated (as of the Closing Date)
future conduct of the Obligors business.

6.13             Trade Names. All
trade names or styles under which any Obligor or any Subsidiary sells Inventory or creates
Accounts, as of the Closing Date, or to which instruments in payment of Accounts may be
made payable, as of the Closing Date, are listed on Schedule 6.13.

6.14             Litigation. Except as set
forth on Schedule 6.14, there is no pending, or, to the best of any Obligors
knowledge, threatened, action, suit, proceeding, or counterclaim by any Person, or, to the
best of any Obligors knowledge, investigation by any Governmental Authority, or any
basis for any of the foregoing, which could reasonably be expected to have a Material
Adverse Effect.

6.15             Labor Disputes. Except as
set forth on Schedule 6.15, as of the Closing Date (a) there is no collective
bargaining agreement or other labor contract covering employees of any Obligor or any
Subsidiary, (b) no such collective bargaining agreement or other labor contract is
scheduled to expire during the term of this Agreement, (c) no union or other labor
organization is seeking to organize, or to be recognized as, a collective bargaining unit
of employees of any Obligor or any Subsidiary or for any similar purpose, and
(d) there is no pending or (to the best of any Obligors knowledge) threatened,
strike, work stoppage, material unfair labor practice claim, or other material labor
dispute against or affecting adversely any Obligor or any Subsidiary or their employees.

6.16             Environmentsl Laws.. Except as set forth on Schedule 6.16 or as could not  reasonably be expected to have
a Material Adverse Effect:

(a)       
          The Obligors and their Subsidiaries have complied in all material respects with
          all Environmental Laws and neither any Obligor nor any Subsidiary nor any of
          their presently owned real property or presently conducted operations, nor their
          previously owned real property or prior operations, is subject to any
          enforcement order from or liability agreement with any Governmental Authority or
          any settlement agreement with any private Person respecting (i) compliance with
          any Environmental Law, or (ii) any potential liabilities and costs or remedial
          action arising from the Release or threatened Release of a Contaminant.

(b)       
          The Obligors and their Subsidiaries have obtained all permits necessary for
          their current operations under Environmental Laws, and all such permits are in
          good standing and the Obligors and their Subsidiaries are in compliance with all
          material terms and conditions of such permits.

(c)       
          Neither any Obligor nor any Subsidiary, nor, to the best of any Obligors
          knowledge, any of the predecessors in interest of any Obligor or any Subsidiary,
          has in violation of applicable law stored, treated or disposed of any hazardous
          waste.

(d)       
          Neither any Obligor nor any Subsidiary has received any summons, complaint,
          order or similar written notice indicating that it is not currently in
          compliance with, or that any Governmental Authority is investigating its
          compliance with, any Environmental Laws or that it is or may be liable to any
          other Person as a result of a Release or threatened Release of a Contaminant.

(e)       
          To the best of any Obligors knowledge, none of the present or past
          operations of any Obligor or any Subsidiary is the subject of any investigation
          by any Governmental Authority evaluating whether any remedial action is needed
          to respond to a Release or threatened Release of a Contaminant.

(f)       
          There is not now, nor, to the best of any Obligors knowledge, has there
          ever been, on or in the Real Estate:

| | (i)                        any
underground storage tanks or surface impoundments,
| | ---------------------------------------------------------------------------------

| | (ii)                        any
asbestos-containing material, or
| | ----------------------------------------------------------------

| | (iii)                        any
polychlorinated biphenyls (PCBs) used in hydraulic oils, electrical
          transformers or other equipment.
| | -----------------------------------------------------------------------------------------------------------------------------------------------

(g)       
          Neither any Obligor nor any Subsidiary has filed any notice under any
          requirement of Environmental Law reporting a spill or accidental and unpermitted
          Release or discharge of a Contaminant into the environment.

(h)       
          Neither any Obligor nor any Subsidiary has entered into any negotiations or
          settlement agreements with any Person (including the prior owner of its
          property) imposing material obligations or liabilities on any Obligor or any
          Subsidiary with respect to any remedial action in response to the Release of a
          Contaminant or environmentally related claim.

(i)       
          None of the products manufactured, distributed or sold by any Obligor or any
          Subsidiary contain asbestos containing material.

(j)       
          No Environmental Lien has attached to any Real Estate.

6.17             No Violation of Law.
Neither any Obligor nor any Subsidiary is in violation of any law, statute, regulation,
ordinance, judgment, order, or decree applicable to it which violation could reasonably be
expected to have a Material Adverse Effect.

6.18             No Default. Neither any
Obligor nor any Subsidiary is in default with respect to any note, indenture, loan
agreement, mortgage, lease, deed, or other agreement to which such Obligor or such
Subsidiary is a party or by which it is bound, which default could reasonably be expected
to have a Material Adverse Effect.

6.19             ERISA Compliance.

(a)       
          Each Plan is in compliance in all material respects with the applicable
          provisions of ERISA, the Code and other federal or state law. Each actively
          maintained Plan which is intended to qualify under Section 401(a) of the Code
          has received a favorable determination letter from the IRS. Each terminating
          Plan, which is intended to qualify under Section 401(a) of the Code and which is
          currently maintained by the Obligors as a result of the stock purchase of its
          sponsoring corporation by the Obligors, has received or is scheduled to receive
          a favorable determination letter from the IRS. To the best knowledge of the
          Obligors, nothing has occurred which would cause the loss of qualification under
          Section 401(a) of the Code with respect to any such actively maintained or
          terminating Plan. Each Obligor and each ERISA Affiliate has made all required
          contributions to any Plan subject to Section 412 of the Code, and no application
          for a funding waiver or an extension of any amortization period pursuant to
          Section 412 of the Code has been made with respect to any Plan.

(b)       
          There are no pending or, to the best knowledge of any Obligor, threatened
          claims, actions or lawsuits, or action by any Governmental Authority with
          respect to any Plan which has resulted or could reasonably be expected to result
          in a Material Adverse Effect. There has been no prohibited transaction or
          violation of the fiduciary responsibility rules with respect to any Plan which
          has resulted or, to the best knowledge of any Obligor, could reasonably be
          expected to result in a Material Adverse Effect.

(c)       
          (i)  No ERISA Event has occurred or is reasonably expected to occur;
          (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither any
          Obligor nor any ERISA Affiliate has incurred, or reasonably expects to incur,
          any liability under Title IV of ERISA with respect to any Pension Plan (other
          than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
          any Obligor nor any ERISA Affiliate has incurred, or reasonably expects to
          incur, any liability (and no event has occurred which, with the giving of notice
          under Section 4219 of ERISA, would result in such liability) under Section 4201
          or 4243 of ERISA with respect to a Multi-employer Plan; and (v) neither any
          Obligor nor any ERISA Affiliate has engaged in a transaction that could be
          subject to Section 4069 or 4212(c) of ERISA.

6.20             Taxes. Each Obligor and
each Subsidiary has filed all federal and other tax returns and reports required to be
filed and has paid all federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon such Obligor or Subsidiary or its properties,
income or assets otherwise due and payable, unless such unpaid taxes and assessments would
constitute a Permitted Lien.

6.21             Regulated Entities.
Neither any Obligor, any Person controlling any Obligor, nor any Subsidiary is an
Investment Company within the meaning of the Investment Company Act of 1940.
No Obligor is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Interstate Commerce Act, any state public utilities code or
law, or any other federal or state statute or regulation limiting its ability to incur
indebtedness or enter into any Guaranty.

6.22             Use of Proceeds; Margin
Regulations. The proceeds of the Loans are to be used solely for working capital
purposes and general corporate purposes, and to finance Permitted Acquisitions and
Permitted Stock Redemptions. Neither any Obligor nor any Subsidiary is engaged in the
business of purchasing or selling Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock.

6.23             Senior Subordinated
Notes. All Debt and other obligations outstanding under the Senior Subordinated Notes
Indenture and the Senior Subordinated Notes have been paid in full and the Senior
Subordinated Notes Indenture (as it relates to the Senior Subordinated Notes) and each
Senior Subordinated Note has terminated and is no longer effective.

6.24            
No Material Adverse Change. No Material Adverse Effect has occurred
since March 29, 2002. If a fact or circumstance disclosed in the Financial Statements
referred to in Section 6.6(a) or one of the Schedules hereto, or an action, suit,
proceeding or other matter disclosed in Schedule 6.14 or 6.16, should in the
future have a Material Adverse Effect, such Material Adverse Effect shall constitute a
change or event subject to this Section 6.24, notwithstanding any such disclosure.

6.25             Full Disclosure. None of
the representations or warranties made by any Obligor or any Subsidiary in the Loan
Documents as of the date such representations and warranties are made or deemed made, and
none of the statements contained in any exhibit, report, statement or certificate
furnished by or on behalf of any Obligor or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on behalf of
any Obligor to the Lenders prior to the Closing Date), when taken as a whole with all
statements contained in all such materials delivered by the Obligors, contains any untrue
statement of a material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances under which
they are made, not misleading as of the time when made or delivered.

6.26             Material Agreements.
Schedule 6.26 hereto sets forth as of the Closing Date all material agreements and
contracts to which any Obligor or any Subsidiaries is a party or is bound as of the date
hereof.

6.27             Bank Accounts.
Schedule 6.27 contains as of the Closing Date a complete and accurate list of all
bank accounts maintained by any Obligor with any bank or other financial institution and a
brief description of the purpose of each such bank account.

6.28             Governmental
Authorization. No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or other Person is necessary or
required in connection with the execution, delivery or performance by, or enforcement
against, any Obligor of this Agreement or any other Loan Document, except for filings
necessary to perfect the Agents Liens and routine filings by PSS under the Exchange
Act to comply with reporting obligations thereunder.

6.29             Tax Shelter Regulations.
The Borrowers do not intend to treat the Loans and/or Letters of Credit and related
transactions as being a reportable transaction (within the meaning of Treasury
Regulation Section 1.6011-4). In the event any Borrower determines to take any action
inconsistent with such intention, it will promptly notify the Agent thereof. If any
Borrower so notifies the Agent, the Borrowers acknowledge that one or more of the Lenders
may treat its Loans and/or its interest in Non-Ratable Loans and/or Agent Advances and/or
Letters of Credit as part of a transaction that is subject to Treasury Regulation Section
301.6112-1, and such Lender or Lenders, as applicable, will maintain the lists and other
records required by such Treasury Regulation.

ARTICLE 7

AFFIRMATIVE AND
NEGATIVE COVENANTS

Each Obligor covenants to the Agent
and each Lender that so long as any of the Obligations remain outstanding or this
Agreement is in effect:

7.1             Taxes and Other
Obligations. Each Obligor shall, and shall cause each of its Subsidiaries to,
(a) file when due all tax returns and other reports which it is required to file; (b)
pay, or provide for the payment, when due, of all material taxes, fees, assessments and
other governmental charges against it or upon its property, income and franchises, make
all required withholding and other tax deposits, and establish adequate reserves for the
payment of all such items, and provide to the Agent and the Lenders, upon request,
satisfactory evidence of its timely compliance with the foregoing; and (c) pay when
due all claims of materialmen, mechanics, carriers, warehousemen, landlords, processors
and other like Persons; provided, however, so long as such Obligor has
notified the Agent in writing, neither such Obligor nor any of its Subsidiaries need pay
any tax, fee, assessment, or governmental charge (i) it is contesting in good faith
by appropriate proceedings diligently pursued, (ii) as to which such Obligor or its
Subsidiary, as the case may be, has established proper reserves as required under GAAP,
and (iii) the nonpayment of which does not result in the imposition of a Lien (other
than a Permitted Lien).

7.2             Legal Existence and Good
Standing. Each Obligor shall, and shall cause each of its Subsidiaries to, maintain
its legal existence and its qualification and good standing in all jurisdictions in which
the failure to maintain such existence and qualification or good standing could reasonably
be expected to have a Material Adverse Effect.

7.3             Compliance with Law and
Agreements; Maintenance of Licenses. Each Obligor shall comply, and shall cause each
Subsidiary to comply, with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business (including the Federal Fair Labor Standards Act and
all Environmental Laws), except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect. Each Obligor shall, and shall cause each of
its Subsidiaries to, obtain and maintain all licenses, permits, franchises, and
governmental authorizations necessary to own its property and to conduct its business as
conducted on the Closing Date, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect. No Obligor shall modify, amend or alter its
certificate or articles of incorporation, or its limited liability company operating
agreement or limited partnership agreement, as applicable, other than in a manner which
does not adversely affect the rights of the Lenders or the Agent.

7.4             Maintenance of
Property; Inspection of Property.

(a)       
          Each Obligor shall, and shall cause each of its Subsidiaries to, maintain all of
          its property necessary and useful in the conduct of its business, in good
          operating condition and repair, ordinary wear and tear excepted.

(b)       
          Each Obligor shall permit representatives and independent contractors of the
          Agent (at the expense of the Obligors) to visit and inspect any of its
          properties, to examine its corporate, financial and operating records, and make
          copies thereof or abstracts therefrom and to discuss its affairs, finances and
          accounts with its directors, officers and independent public accountants, at
          such reasonable times during normal business hours and as soon as may be
          reasonably desired, upon reasonable advance notice to the Borrowers Agent;
          provided, however, (i) if no Event of Default exists, the Obligors
          shall not be responsible for the expense of more than four (4) such inspections
          and audits per year, (ii) when an Event of Default exists, the Agent or any
          Lender may do any of the foregoing at the expense of the Obligors at any time
          during normal business hours and without advance notice, and (iii) the Obligors
          shall be entitled to have a representative present at all such inspections,
          visits and discussions.

(c)       
          The Borrowers shall cooperate with the Agent and its representatives and
          independent contractors (such cooperation to include the Borrowers making their
          books and records, Collateral and personnel available to the Agent and its
          representatives and independent contractors) in order to enable the Agent to
          obtain an Appraisal of the Borrowers Inventory (a) on or about the Closing
          Date, and (b) at such times thereafter as the Agent, in its sole discretion, may
          request. The Agent shall select any and all appraisers in its sole discretion.
          The Borrowers will reimburse the Agent for all of its reasonable out-of-pocket
          costs and expenses actually incurred in connection with (i) up to two Appraisals
          conducted during each calendaryear, and (ii) each such Appraisal
          conducted during the existence of an Event of Default.

7.5             Insurance.

(a)       
          Each Obligor shall maintain, and shall cause each of its Subsidiaries to
          maintain, with financially sound and reputable insurers having a rating of at
          least A or better by Best Rating Guide, insurance against loss or damage by
          fire with extended coverage; theft, burglary, pilferage and loss in transit;
          public liability and third party property damage; larceny, embezzlement or other
          criminal liability; business interruption; public liability and third party
          property damage; and such other hazards or of such other types and in such
          amounts (with the amount of any such insurance on Inventory to be reasonably
          satisfactory to the Agent) as is customary for Persons engaged in the same or
          similar business, under policies reasonably acceptable to the Agent. Each
          Obligor shall also maintain flood insurance (through its umbrella policy or
          otherwise) for its Inventory and Equipment which is, at any time, located in an
          area that has been identified by the Director of the Federal Emergency
          Management Agency as a Special Flood Hazard Area, provided that no such flood
          insurance shall be required for locations designated as Flood Zone A5 by the
          Federal Emergency Management Agency.

(b)       
          Each Obligor shall cause the Agent, for the ratable benefit of the Agent and the
          Lenders, to be named as secured party or mortgagee and sole loss payee or
          additional insured, in a manner acceptable to the Agent. Each policy of
          insurance shall contain a clause or endorsement requiring the insurer to give
          not less than thirty (30) days prior written notice to the Agent in the
          event of cancellation of the policy for any reason whatsoever and a clause or
          endorsement stating that the interest of the Agent shall not be impaired or
          invalidated by any act or neglect of any Obligor or any of its Subsidiaries or
          the owner of any Real Estate for purposes more hazardous than are permitted by
          such policy. All premiums for such insurance shall be paid by the applicable
          Obligor when due, and certificates of insurance and photocopies of the policies
          shall be delivered to the Agent. If any Obligor fails to procure such insurance
          or to pay the premiums therefor when due, the Agent may, and at the direction of
          the Required Lenders shall, do so from the proceeds of Revolving Loans upon
          three Business Days notice to the Borrowers Agent (no such notice to
          be necessary in the case of the Obligors failure to pay premiums when
          due).

7.6             Insurance and Condemnation
Proceeds. The Obligors shall promptly notify the Agent and the Lenders of any loss,
damage, or destruction to the Collateral, whether or not covered by insurance, with a
value in excess of $100,000. So long as no Event of Default shall have occurred and be
continuing, the Obligors may collect all insurance and condemnation proceeds and deal with
the applicable insurers in good faith, provided that all proceeds thereof shall be applied
to the Obligations in accordance with Section 3.6. During the occurrence and
continuance of an Event of Default, the Agent is hereby authorized to collect all
insurance and condemnation proceeds in respect of Collateral directly and to apply or
remit them, after deducting from such proceeds the reasonable expenses, if any, incurred
by the Agent in the collection or handling thereof, to the Obligations in accordance with
Section 3.6.

7.7             Environmental Laws.

(a)       
          Each Obligor shall, and shall cause each of its Subsidiaries to, conduct its
          business in compliance with all Environmental Laws applicable to it, including
          those relating to the generation, handling, use, storage, and disposal of any
          Contaminant, except to the extent the failure to do so could not reasonably be
          expected to have a Material Adverse Effect. Each Obligor shall, and shall cause
          each of its Subsidiaries to, take prompt and appropriate action to respond to
          any non-compliance with Environmental Laws, except to the extent the failure to
          do so could not reasonably be expected to have a Material Adverse Effect, and
          shall regularly report to the Agent on such response.

(b)       
          Without limiting the generality of the foregoing, each Obligor shall submit to
          the Agent and the Lenders annually, commencing on the first Anniversary Date,
          and on each Anniversary Date thereafter, an update of the status of each
          environmental compliance or liability issue as to which notification was given
          (or required to be given) pursuant to Section 5.3. In connection with the
          foregoing, the Agent or any Lender may request copies of technical reports
          prepared by any Obligor and its communications with any Governmental Authority
          to determine whether such Obligor or any of its Subsidiaries is proceeding
          reasonably to correct, cure or contest in good faith any alleged non-compliance
          or environmental liability. In connection with any alleged noncompliance or
          environmental liability which may result in liability in excess of $250,000,
          each Obligor shall, at the Agents or the Required Lenders request
          and at no cost or expense to the Agent or any Lender, (i) retain an
          independent environmental engineer reasonably acceptable to the Agent to
          evaluate the site, including tests if appropriate, where the non-compliance or
          alleged non-compliance with Environmental Laws has occurred and prepare and
          deliver to the Agent, in sufficient quantity for distribution by the Agent to
          the Lenders, a report setting forth the results of such evaluation, a proposed
          plan for responding to any environmental problems described therein, and an
          estimate of the costs thereof, and (ii) provide to the Agent and the Lenders a
          supplemental report of such engineer whenever the scope of the environmental
          problems, or the response thereto or the estimated costs thereof, shall increase
          in any material respect.

(c)       
          If the Agent has reasonable cause to believe that, as a result of non-compliance
          with Environmental Laws, the Obligors may have liability in excess of $250,000,
          the Agent may exercise its rights under this Section 7.7(c). The Agent
          and its representatives will have the right at any reasonable time to enter and
          visit the Real Estate and any other place where any property of any Obligor is
          located for the purposes of observing the Real Estate, taking and removing soil
          or groundwater samples, and conducting tests on any part of the Real Estate. The
          Agent is under no duty, however, to visit or observe the Real Estate or to
          conduct tests, and any such acts by the Agent will be solely for the purposes of
          protecting the Agents Liens and preserving the Agents and the
          Lenders rights under the Loan Documents. No site visit, observation or
          testing by the Agent or any Lender will result in a waiver of any default of any
          Obligor or impose any liability on the Agent or any Lender. In no event will any
          site visit, observation or testing by the Agent be a representation that
          hazardous substances are or are not present in, on or under the Real Estate, or
          that there has been or will be compliance with any Environmental Law. No Obligor
          nor any other party is entitled to rely on any site visit, observation or
          testing by the Agent. The Agent and the Lenders owe no duty of care to protect
          any Obligor or any other party against, or to inform any Obligor or any other
          party of, any hazardous substances or any other adverse condition affecting the
          Real Estate. The Agent may in its discretion disclose to the Obligors or to any
          other party if so required by law any report or findings made as a result of, or
          in connection with, any site visit, observation or testing by the Agent,
          provided, however, that the Agent shall give the Borrowers
          Agent reasonable advance written notice to the extent practicable of any
          disclosure to be made by the Agent to any third party, which notice shall
          include the basis for the conclusion that such disclosure is legally required.
          The Obligors understand and agree that the Agent makes no warranty or
          representation to any Obligor or any other party regarding the truth, accuracy
          or completeness of any such report or findings that may be disclosed. The
          Obligors also understand that depending on the results of any site visit,
          observation or testing by the Agent and disclosed to any Obligor, the Obligors
          may have a legal obligation to notify one or more environmental agencies of the
          results, that such reporting requirements are site-specific, and are to be
          evaluated by the Obligors without advice or assistance from the Agent. In each
          instance, the Agent will give the Obligors reasonable notice before entering the
          Real Estate or any other place the Agent is permitted to enter under this
          Section 7.7(c). The Agent will make reasonable efforts to avoid
          interfering with the Obligors use of the Real Estate or any other property
          in exercising any rights provided hereunder. Notwithstanding anything to the
          contrary set forth herein, the Agent shall secure from its representatives
          customary indemnification, liability insurance and confidentiality protections.

7.8             Compliance with ERISA.
Each Obligor shall, and shall cause each of its ERISA Affiliates, except where the failure
to do so could not reasonably by expected to have a Material Adverse Effect, to: (a)
maintain each Plan in compliance in all material respects with the applicable provisions
of ERISA, the Code and other federal or state law; (b) cause each Plan which is qualified
under Section 401(a) of the Code to maintain such qualification; (c) make all required
contributions to any Plan subject to Section 412 of the Code; (d) not engage in a
prohibited transaction or violation of the fiduciary responsibility rules with respect to
any Plan; and (e) not engage in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.

7.9             Mergers, Consolidations or
Sales. Neither any Obligor nor any Subsidiary shall enter into any transaction of
merger, reorganization, or consolidation, or transfer, sell, assign, lease, or otherwise
dispose of all or any part of its property, or wind up, liquidate or dissolve, or agree to
do any of the foregoing (collectively, Asset Dispositions), except:

(a)       
          for sales of Inventory in the ordinary course of its business,

(b)       
          for sales or other dispositions of items of Equipment or other Fixed Assets in
          the ordinary course of business that are obsolete or no longer useable by the
          Obligors in their business with an orderly liquidation value not to exceed
          $2,500,000 in the aggregate in any Fiscal Year,

(c)       
          the issuance of equity securities (excluding equity securities which require
          mandatory redemption or repurchase by PSS except at a time when all Obligations
          have been repaid in full) by PSS,

(d)       
          sales of Cash Equivalents and investments described under clauses (d)
          through (j), (l), (n) and (q) of the definition of
          Restricted Investments, in each case for fair value,

(e)       
          Asset Dispositions resulting from casualties and condemnations,

(f)       
          Asset Dispositions among Obligors,

(g)       
          Asset Dispositions of Equipment or other Fixed Assets of an Obligor or
          Subsidiary which will be replaced or upgraded with Equipment or other Fixed
          Assets, provided that (i) such replaced or upgraded Equipment and Fixed Assets
          are acquired (or a firm order therefore is placed) within 180 days after such
          disposition, and (ii) the book value of all property disposed of pursuant to
          this clause (g) does not exceed $2,500,000 in the aggregate in any Fiscal
          Year,

(h)       
          if no Event of Default exists, mergers or consolidations of any Subsidiary into
          an Obligor where such Obligor is the surviving entity,

(i)       
          mergers or consolidations of any Subsidiary of an Obligor with any Person (other
          than an Obligor) in order to effectuate a Permitted Acquisition if (i) such
          Subsidiary shall be the surviving entity, and (ii) the Obligors comply with the
          requirements set forth in the definition of Permitted Acquisition,

(j)       
          if no Event of Default exists, dissolutions, liquidations and winding-ups of any
          Subsidiary of a Borrower that is not an Obligor,

(k)       
          any asset or stock sale or other disposition not related to the core business of
          the Borrowers conducted on the Closing Date so long as such assets were acquired
          by the Borrowers or a Subsidiary pursuant to a Permitted Acquisition and the
          aggregate proceeds of all such sales and dispositions do not exceed $5,000,000
          in any Fiscal Year,

(l)       
          sales of assets in connection with any sale and leaseback transaction permitted
          under Section 7.19,

(m)       
          the sale, lease, transfer, assignment or other disposition of assets (other than
          in connection with a casualty or condemnation or a securitization transaction)
          of the Borrowers or any of their Subsidiaries to any other Person so long as the
          consideration received consists of cash and the fair market value of all
          property disposed of pursuant to this clause (m) does not exceed
          $5,000,000 in the aggregate in any Fiscal Year, and

(n)       
          any other sale, lease, transfer, assignment or other disposition of assets,
          provided that (i) the consideration therefore is at least 75% cash or Cash
          Equivalents, (ii) such transaction does not involve the sale or other
          disposition of a minority equity interest in any Obligor or a securitization
          transaction, (iii) the aggregate net book value of all the assets sold or
          otherwise disposed of by the Obligors in all such transactions in reliance on
          this clause (n) shall not exceed $10,000,000 in any Fiscal Year, and (iv)
          no Default or Event of Default shall have occurred and be continuing immediately
          before or after giving effect to such transaction and, whether or not the
          Borrowers are at the time of such transaction required to comply with the
          financial covenants in Section 7.23, the Borrowers shall have delivered
          to the Agent a certificate demonstrating that, upon giving effect on a pro forma
          basis to such transaction (such financial covenants shall be measured as of the
          most recently ended fiscal month for the twelve fiscal month period then ended
          and shall be calculated as if such Asset Disposition had been consummated on the
          first day of such twelve fiscal month period), the Borrowers will be in
          compliance with such covenants.

All proceeds of Asset Dispositions
shall be applied to the Obligations in accordance with Section 3.6.

7.10             Distributions; Capital
Change; Restricted Investments. Neither any Obligor nor any Subsidiary shall
(a) directly or indirectly declare or make, or incur any liability to make, any
Distribution, except (i) Distributions to any Obligor by its Subsidiaries, (ii)
repurchases of equity securities and equity rights, from former or departing officers,
directors and employees not to exceed $1,000,000 in the aggregate in any Fiscal Year, and
(iii) Permitted Stock Redemptions, (b) make any change in its capital structure which
could reasonably be expected to have a Material Adverse Effect, or (c) make any Restricted
Investment.

7.11             Transactions Affecting
Collateral or Obligations. Neither any Obligor nor any Subsidiary shall enter into any
transaction which would have a Material Adverse Effect.

7.12             Guaranties. Neither any
Obligor nor any Subsidiary shall make, issue, or become liable on any Guaranty, except
Guaranties of the Obligations in favor of the Agent and any Guaranty in respect of Debt
otherwise permitted under Section 7.13 (except clauses (b) and (d)
thereof).

7.13             Debt. Neither any Obligor
nor any Subsidiary shall incur or maintain any Debt, other than, without duplication, the
following (Debt permitted under this Section 7.13 is hereafter referred to as
Permitted Debt):

(a)       
          the Obligations;

(b)       
          Debt described on Schedule 6.9;

(c)       
          Capital Leases of Equipment and purchase money secured Debt incurred to purchase
          or refinance the purchase of Equipment, provided that (i) Liens
          securing the same attach only to the Equipment acquired by the incurrence of
          such Debt and other Equipment the financing of which was provided by the same
          vendor, and (ii) the aggregate amount of such Debt (including Capital
          Leases) outstanding does not exceed $10,000,000 at any time;

(d)       
          any Refinancing by an Obligor or any Subsidiary of Debt incurred in accordance
          with clause (b)above; provided that (i) the principal amount of
          such Refinanced Debt is not increased, (ii) the Liens, if any, securing
          such Refinanced Debt do not attach to any assets in addition to those assets, if
          any, securing the Debt to be refinanced, (iii) no Person that is not an obligor
          or guarantor of such Debt shall become an obligor or guarantor of such
          Refinanced Debt; and (iv) the terms of such refunding, renewal or extension
          are no less favorable to the Obligors, the Agent or the Lenders than the
          original Debt;

(e)       
          intercompany Debt among the Borrowers and their Subsidiaries to the extent the
          Investment represented thereby is permitted under Section 7.10 and such
          Debt is subordinated to the repayment of the Obligations at least to the extent
          set forth in Section 13.5;

(f)       
          Debt incurred in connection with a Permitted Acquisition, to the extent
          permitted under the definition of Permitted Acquisition that consists of (i)
          Debt existing prior to the consummation of the Permitted Acquisition (and not
          incurred in contemplation thereof) that is permitted to be assumed by the
          Obligors pursuant to clause (c) above, and (ii) Debt acceptable to the
          Agent that is incurred in favor of the seller in such Permitted Acquisition as a
          portion of the purchase price for such Permitted Acquisition, including all Debt
          under non-compete arrangements entered into in connection with such Permitted
          Acquisition that is acceptable to the Agent; and

(g)       
          other Debt, that is not secured by any Lien, in an aggregate amount outstanding
          at any time not to exceed $5,000,000.

7.14             Prepayment. Neither any
Obligor nor any Subsidiary shall voluntarily prepay any Debt, except (a) the Obligations
in accordance with the terms of this Agreement, (b) in connection with Refinancings
permitted under Section 7.13(d), and (c) intercompany Debt, provided no such
intercompany Debt will be prepaid to any non-Obligor if an Event of Default exists.

7.15             Transactions with
Affiliates. Except as set forth below, neither any Obligor nor any Subsidiary shall,
sell, transfer, distribute, or pay any money or property, including, but not limited to,
any fees or expenses of any nature (including, but not limited to, any fees or expenses
for management services), to any Affiliate, or lend or advance money or property to any
Affiliate, or invest in (by capital contribution or otherwise) or purchase or repurchase
any stock or indebtedness, or any property, of any Affiliate, or become liable on any
Guaranty of the indebtedness, dividends, or other obligations of any Affiliate.
Notwithstanding the foregoing, the following shall be permitted: (a) transactions with
Affiliates expressly permitted hereunder with respect to Affiliates, (b) transactions set
forth on Schedule 7.15, (c) compensation and indemnity arrangements with officers,
directors and employees in the ordinary course of business, and (d) while no Event of
Default has occurred and is continuing, the Obligors and their Subsidiaries may engage in
transactions with Affiliates in the ordinary course of business on terms no less favorable
to the Obligors and their Subsidiaries than would be obtained in a comparable
arms-length transaction with a third party who is not an Affiliate. The terms of all
such transactions shall be made available to the Agent upon request.

7.16             Investment Banking and
Finders Fees. Neither any Obligor nor any Subsidiary shall pay or agree to pay,
or reimburse any other party with respect to, any investment banking or similar or related
fee, underwriters fee, finders fee, or brokers fee to any Person in
connection with this Agreement, other than under the Fee Letter. The Obligors shall defend
and indemnify the Agent and the Lenders against and hold them harmless from all claims of
any Person that any Obligor is obligated to pay for any such fees, and all costs and
expenses (including attorneys fees) incurred by the Agent and/or any Lender in
connection therewith.

7.17             Business Conducted. The
Obligors shall not, and shall not permit any Subsidiary to, engage, directly or
indirectly, in any line of business other than the businesses in which the Obligors and
their Subsidiaries are engaged on the Closing Date and businesses reasonably incidental or
reasonably relating thereto.

7.18             Liens. Neither any
Obligor nor any Subsidiary shall create, incur, assume, or permit to exist any Lien on any
property now owned or hereafter acquired by any of them, except (a) Permitted Liens, (b)
Liens, if any, in effect as of the Closing Date described in Schedule 6.9 securing
Debt described in Schedule 6.9, (c) Liens securing Capital Leases and purchase
money Debt permitted under Section 7.13, and (d) Liens securing Debt permitted
under Section 7.13(f)(i), provided that such Liens do not cover or relate to any
Inventory or Accounts or any assets other than the assets acquired pursuant to such
Permitted Acquisition.

7.19             Sale and Leaseback
Transactions. Neither any Obligor nor any Subsidiary shall, directly or indirectly,
enter into any arrangement with any Person providing for such Obligor or such Subsidiary
to lease or rent property that such Obligor or such Subsidiary has sold or will sell or
otherwise transfer to such Person, other than sale and leaseback transactions resulting in
proceeds to the Obligors in the aggregate not to exceed $1,000,000 during each Fiscal
Year.

7.20             New Subsidiaries. Neither
any Obligor nor any Subsidiary shall, directly or indirectly, organize, create, acquire or
permit to exist any Subsidiary other than those listed on Schedule 6.5, new United
States Subsidiaries that become Guarantors upon their creation pursuant to legal
documentation acceptable to the Agent, and Subsidiaries formed or acquired in connection
with Permitted Acquisitions.

7.21             Fiscal Year.
The Obligors shall not change their Fiscal Year.

7.22             Capital Expenditures.
Neither any Obligor nor any Subsidiary shall make or incur any Capital Expenditure if,
after giving effect thereto, the aggregate amount of all Capital Expenditures by the
Obligors and their Subsidiaries on a consolidated basis would exceed $25,000,000 during
any Fiscal Year.

7.23             Financial Covenants.

The Borrowers and their consolidated
Subsidiaries shall:

(a)       
          have EBITDA for each period of four consecutive fiscal quarters ending on the
          last day of each fiscal quarter set forth below of not less than the applicable
          amount set forth below:

|Period Ending                                                                                                                                 | Minimum EBITDA
|--------------------------------------------------------------------------------------------------------------------------------------------- | --------------
|Each  four  fiscal  quarter  period  ending on or
after  March  28,  2003 but  prior to the  fiscal
quarter ending on or about April 2, 2004  | $38,000,000   
|Each  four  fiscal  quarter  period  ending on or 
after  April 2,  2004  but  prior  to the  fiscal
quarter ending on or about April 1, 2005 | $41,000,000   
|Each four fiscal quarter period ending thereafter                                                                                             | $44,000,000   

|(b) | maintain
a Leverage Ratio as of each fiscal quarter ending as of the applicable date set forth below of not more than the applicable ratio set forth
below:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|Fiscal Quarter Ending                                                                                                                         | Maximum Leverage Ratio
|--------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------
|Each  four  fiscal  quarter  period  ending on or 
after  March  28,  2003 but  prior to the  fiscal
quarter ending on or about April 2, 2004 | 3.0 to 1              
|Each four fiscal quarter period ending thereafter                                                                                             | 2.5 to 1              

provided, however, the Borrowers
shall only be required to comply with this Section 7.23 with respect to any fiscal
quarter end if, at any time during such fiscal quarter then ended, Excess Availability was
less than $25,000,000.

7.24             Minimum  Excess  Availability.. The
The  Borrowers  shall  maintain  Excess  Availability  of  not  less  than $15,000,000 at all times.

7.25             Use of Proceeds. The
proceeds of the Loans shall be used to finance ongoing working capital needs and for
general corporate purposes, and to finance Permitted Acquisitions and Permitted Stock
Redemptions. The Obligors shall not, and shall not suffer or permit any Subsidiary to, use
any portion of the Loan proceeds, directly or indirectly, (a) to purchase or carry Margin
Stock, (b) to repay or otherwise refinance Debt of any Obligor or any other Person
incurred to purchase or carry Margin Stock, (c) to extend credit for the purpose of
purchasing or carrying any Margin Stock, or (d) to acquire any security in any transaction
that is subject to Section 13 or 14 of the Exchange Act.

7.26             Further Assurances. The
Obligors shall execute and deliver, or cause to be executed and delivered, to the Agent
and/or the Lenders such documents and agreements, and shall take or cause to be taken such
actions, as the Agent or any Lender may, from time to time, request in good faith to carry
out the terms and conditions of this Agreement and the other Loan Documents.

ARTICLE 8

CONDITIONS OF LENDING

8.1             Conditions Precedent to Making
of Loans on the Closing Date. The obligation of the Lenders to make the initial
Revolving Loans on the Closing Date, and the obligation of the Agent to cause the Letter
of Credit Issuer to issue any Letter of Credit on the Closing Date, are subject to the
following conditions precedent having been satisfied in a manner satisfactory to the Agent
and each Lender:

(a)       
          This Agreement and the other Loan Documents shall have been executed by each
          party thereto and the Obligors shall have performed and complied with all
          covenants, agreements and conditions contained herein and the other Loan
          Documents which are required to be performed or complied with by the Obligors
          before or on such Closing Date.

(b)       
          Upon making the Revolving Loans (including such Revolving Loans made to finance
          any amounts due under the Fee Letter or otherwise as reimbursement for fees,
          costs and expenses then payable under this Agreement or any other Loan Document)
          and with all obligations of the Obligors current, Availability shall be at least
          $30,000,000.

(c)       
          All representations and warranties made hereunder and in the other Loan
          Documents shall be true and correct as if made on such date.

(d)       
          No Default or Event of Default shall have occurred and be continuing after
          giving effect to the Loans to be made and the Letters of Credit to be issued on
          the Closing Date.

(e)       
          The Agent and the Lenders shall have received such opinions of counsel for the
          Obligors as the Agent or any Lender shall request, each such opinion to be in a
          form, scope, and substance satisfactory to the Agent, the Lenders, and their
          respective counsel.

(f)       
          The Agent shall be satisfied that all Debt and other obligations under the
          Senior Subordinated Notes Indenture and the Senior Subordinated Notes have been
          paid in full and that the Senior Subordinated Notes Indenture (as it relates to
          the Senior Subordinated Notes) and each Senior Subordinated Note has terminated
          and is no longer effective.

(g)       
          The Agent shall have received:

| | (i)                        proper
financing statements in appropriate form for filing under the UCC of all
          jurisdictions that the Agent may deem necessary or desirable in order to
perfect           the Agents Liens; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        duly
executed UCC-3 Termination Statements and such other instruments, or duly
          executed payoff letters obligating the secured parties thereunder to provide
          such UCC-3 Termination Statements and instruments, in form and substance
          satisfactory to the Agent, as shall be necessary to terminate and satisfy all
          Liens on the Property of the Obligors except Permitted Liens.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(h)       
          The Obligors shall have paid all fees and expenses of the Agent and the Attorney
          Costs incurred in connection with any of the Loan Documents and the transactions
          contemplated thereby to the extent invoiced with reasonably requested supporting
          information.

(i)       
          The Agent shall have received evidence, in form, scope, and substance reasonably
          satisfactory to the Agent, of all insurance coverage as required by this
          Agreement.

(j)       
          The Agent and the Lenders shall have had an opportunity, if they so choose, to
          examine the books of account and other records and files of the Obligors and to
          make copies thereof, and to conduct a pre-closing audit which shall include,
          without limitation, verification of Accounts and the Borrowing Base, and the
          results of such examination and audit shall have been satisfactory to the Agent
          and the Lenders in all respects.

(k)       
          All proceedings taken in connection with the execution of this Agreement, all
          other Loan Documents and all documents and papers relating thereto shall be
          satisfactory in form, scope, and substance to the Agent and the Lenders.

(l)       
          Without limiting the generality of the items described above, the Obligors and
          each other Person guarantying or securing payment of the Obligations shall have
          delivered or caused to be delivered to the Agent (in form and substance
          reasonably satisfactory to the Agent) the financial statements, instruments,
          resolutions, documents, agreements, certificates, opinions and other items set
          forth on the Closing Checklist delivered by the Agent (or its
          counsel) to PSS (or its counsel) prior to the Closing Date.

The acceptance by any Borrower of any
Loans made or Letters of Credit issued on the Closing Date shall be deemed to be a
representation and warranty made by the Obligors to the effect that all of the conditions
precedent to the making of such Loans or the issuance of such Letters of Credit have been
satisfied, with the same effect as delivery to the Agent and the Lenders of a certificate
signed by a Responsible Officer, dated the Closing Date, to such effect.

Execution and delivery to the Agent
by a Lender of a counterpart of this Agreement shall be deemed confirmation by such Lender
that (x) all conditions precedent in this Section 8.1 have been fulfilled to the
satisfaction of such Lender, (y) the decision of such Lender to execute and deliver to the
Agent an executed counterpart of this Agreement was made by such Lender independently and
without reliance on the Agent or any other Lender as to the satisfaction of any condition
precedent set forth in this Section 8.1, and (z) all documents sent to such
Lender for approval consent, or satisfaction were acceptable to such Lender.

8.2            
Conditions Precedent to Each Loan. The obligation of the
Lenders to make each Loan, including the initial and all subsequent Revolving Loans, and
the obligation of the Agent to cause the Letter of Credit Issuer to issue any Letter of
Credit, shall be subject to the further conditions precedent that on and as of the date of
any such extension of credit:

(a)       
          The following statements shall be true, and the acceptance by any Obligor of any
          extension of credit shall be deemed to be a statement to the effect set forth in
          clauses (i), (ii), (iii) and (iv) with the same
          effect as the delivery to the Agent and the Lenders of a certificate signed by a
          Responsible Officer, dated the date of such extension of credit, stating that:

| | (i)                        The
representations and warranties contained in this Agreement and the other           Loan
Documents are correct in all material respects on and as of the date of           such
extension of credit as though made on and as of such date, other than any           such
representation or warranty which relates to a specified prior date and           except
to the extent the Agent and the Lenders have been notified in writing by           the
Obligors that any representation or warranty is not correct and the Required
          Lenders have explicitly waived in writing compliance with such representation
or           warranty;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        No
Default or Event of Default has occurred and is continuing;
| | ------------------------------------------------------------------------------------------

| | (iii)                        No
event has occurred and is continuing, or would result from such extension of
          credit, which has had or would have a Material Adverse Effect; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)                        Each
of the Obligors is Solvent (taking into account contribution rights).
| | ------------------------------------------------------------------------------------------------------

(b)       
          No such Borrowing shall exceed Availability; provided, however,
          that the foregoing conditions precedent are not conditions to each Lender
          participating in or reimbursing the Bank or the Agent for such Lenders Pro
          Rata Share of any Non-Ratable Loan or Agent Advance made in accordance with the
          provisions of Sections 1.2(h) and (i).

ARTICLE 9

DEFAULT; REMEDIES

9.1             Events of Default.
It shall  constitute  an event of default  ("Event of Default")  if any one or more of
the following shall occur for any reason:

(a)       
          any failure by any Obligor to pay the principal of or interest or premium on any
          of the Obligations or any fee or other amount owing hereunder or under any of
          the Obligations when due, whether upon demand or otherwise; provided, that, if
          the Agent fails to charge the Borrowers Loan Account for any interest
          payment or other Obligation (other than principal) for which the Borrowers
          Agent does not receive prior demand or notice of the amount and due date thereof
          at a time when the Borrowers have sufficient Availability to pay such amount in
          full (taking into account the provisions of Section 7.24 and all other
          amounts charged to the Loan Account on such date), then the non-payment of such
          interest or other Obligation shall not constitute an Event of Default under this
          clause (a) unless and until the Borrowers Agent has received notice
          of the amount due and the Borrowers fail to pay such amount within two Business
          Days thereafter;

(b)       
          any representation or warranty made or deemed made by any Obligor or any
          Subsidiary in this Agreement or in any of the other Loan Documents, any
          Financial Statement, or any certificate furnished by any Obligor or any
          Subsidiary at any time to the Agent or any Lender shall prove to be untrue in
          any material respect as of the date on which made, deemed made, or furnished;

(c)       
          (i)  any default shall occur in the observance or performance of any
          of the covenants and agreements contained in Sections 5.2(l),
          7.2, 7.5, 7.9 through 7.26 of this Agreement, or
          Section 9 or 11 of the Security Agreement; (ii) any default shall occur in
          the observance or performance of any of the covenants and agreements contained
          in Sections 5.2 (other than Section 5.2(l)) or 5.3 and such
          default shall continue for five (5) Business Days or more; or (iii) any
          default shall occur in the observance or performance of any of the other
          covenants or agreements contained in any other Section of this Agreement or any
          other Loan Document, and such default shall continue for thirty (30) days or
          more;

(d)       
          any default shall occur with respect to any Debt (other than the Obligations) of
          any Obligor or any Subsidiary in an outstanding principal amount which exceeds
          $5,000,000, or under any agreement or instrument under or pursuant to which any
          such Debt may have been issued, created, assumed, or guaranteed by any Obligor
          or any Subsidiary, and such default shall continue for more than the period of
          grace, if any, therein specified, if the effect thereof (with or without the
          giving of notice or further lapse of time or both) is to accelerate, or to
          permit the holders of any such Debt to accelerate, the maturity of any such
          Debt; or any such Debt shall be declared due and payable or be required to be
          prepaid (other than by a regularly scheduled required prepayment) prior to the
          stated maturity thereof; provided, however, in the case of Debt consisting
          solely of obligations of an Obligor under a non-compete agreement, if such
          Obligor defaults in the payment of such obligations in response to the
          counter-partys violation of its non-compete agreement, such default shall
          not constitute an Event of Default under this clause (d) so long as such
          Obligor is contesting in good faith any action or claim brought by such
          counter-party as a result of such default;

(e)       
          any Obligor or any of its Subsidiaries shall (i) file a voluntary petition in
          bankruptcy or file a voluntary petition or an answer or otherwise commence any
          action or proceeding seeking reorganization, arrangement or readjustment of its
          debts or for any other relief under the federal Bankruptcy Code, as amended, or
          under any other bankruptcy or insolvency act or law, state or federal, now or
          hereafter existing, or consent to, approve of, or acquiesce in, any such
          petition, action or proceeding; (ii) apply for or acquiesce in the
          appointment of a receiver, assignee, liquidator, sequestrator, custodian,
          monitor, trustee or similar officer for it or for all or any part of its
          property; (iii) make an assignment for the benefit of creditors; or (iv) be
          unable generally to pay its debts as they become due;

(f)       
          an involuntary petition shall be filed or an action or proceeding otherwise
          commenced seeking reorganization, arrangement, consolidation or readjustment of
          the debts of any Obligor or any Subsidiary or for any other relief under the
          federal Bankruptcy Code, as amended, or under any other bankruptcy or insolvency
          act or law, state or federal, now or hereafter existing, and such petition or
          proceeding shall not be dismissed within sixty (60) days after the filing or
          commencement thereof or an order of relief shall be entered with respect
          thereto;

(g)       
          a receiver, assignee, liquidator, sequestrator, custodian, monitor, trustee or
          similar officer for any Obligor or any Subsidiary or for all or any part of its
          property shall be appointed or a warrant of attachment, execution or similar
          process shall be issued against any part of the property of any Obligor or any
          of its Subsidiary;

(h)       
          any Obligor or any Subsidiary shall file a certificate of dissolution under
          applicable state law or shall be liquidated, dissolved or wound-up or shall
          commence or have commenced against it any action or proceeding for dissolution,
          winding-up or liquidation, or shall take any corporate action in furtherance
          thereof, except as permitted under Section 7.9(j);

(i)       
          all or any material part of the property of the Obligors, taken as a whole,
          shall be nationalized, expropriated or condemned, seized or otherwise
          appropriated, or custody or control of such property or of any such Obligor
          shall be assumed by any Governmental Authority or any court of competent
          jurisdiction at the instance of any Governmental Authority, except where
          contested in good faith by proper proceedings diligently pursued where a stay of
          enforcement is in effect;

(j)       
          any Loan Document shall be terminated, revoked or declared void or invalid or
          unenforceable or challenged by any Obligor;

(k)       
          one or more judgments, orders, decrees or arbitration awards is entered against
          any Obligor or any Subsidiary involving in the aggregate liability as to any
          single or related or unrelated series of transactions, incidents or conditions,
          of $5,000,000 or more (to the extent not paid or fully covered by insurance
          provided by a carrier that has acknowledged coverage and has the ability to
          perform), and the same shall remain unsatisfied, unvacated and unstayed pending
          appeal for a period of thirty (30) days (or such longer period expressly
          contemplated by the terms thereof during which a stay against enforcement is in
          effect) after the entry thereof;

(l)       
          any loss, theft, damage or destruction of any item or items of Collateral or
          other property of any Obligor or any Subsidiary occurs which could reasonably be
          expected to cause a Material Adverse Effect and is not adequately covered by
          insurance;

(m)       
          there is filed against any Obligor or any Subsidiary any action, suit or
          proceeding under any federal or state racketeering statute (including the
          Racketeer Influenced and Corrupt Organization Act of 1970), which action, suit
          or proceeding (i) is not dismissed within one hundred twenty (120) days, and
          (ii) could reasonably be expected to result in the confiscation or forfeiture of
          any material portion of the Collateral;

(n)       
          for any reason other than the failure of the Agent to take any action available
          to it to maintain perfection of the Agents Liens pursuant to the Loan
          Documents, any Loan Document ceases to be in full force and effect or any Lien
          of the Agent with respect to any material portion of the Collateral intended to
          be secured thereby ceases to be, or is not, valid, perfected and prior to all
          other Liens (other than Permitted Liens) or is terminated, revoked or declared
          void;

(o)       
          an ERISA Event shall occur with respect to a Pension Plan or Multi-employer Plan
          which has resulted or could reasonably be expected to result in liability of any
          Obligor or any Subsidiary under Title IV of ERISA to the Pension Plan,
          Multi-employer Plan or the PBGC in an aggregate amount in excess of $5,000,000;
          (ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
          at any time exceeds $5,000,000; or (iii) any Obligor or any Subsidiary or any
          ERISA Affiliate shall fail to pay when due, after the expiration of any
          applicable grace period, any installment payment with respect to its withdrawal
          liability under Section 4201 of ERISA under a Multi-employer Plan in an
          aggregate amount in excess of $5,000,000;

(p)       
          there occurs a Change of Control; or

(q)       
          there occurs an event that will have a material adverse effect on the ability of
          the Obligors, taken as a whole, to pay the Obligations in full in a timely
          manner.

9.2             Remedies.

(a)       
          If a Default or an Event of Default exists, the Agent may, in its discretion,
          and shall, at the direction of the Required Lenders, do one or more of the
          following at any time or times and in any order, without notice to or demand on
          any Borrower or other Obligor: (i) reduce the Maximum Revolver Amount, or
          the advance rates against Eligible Accounts and/or Eligible Inventory used in
          computing the Borrowing Base, or reduce one or more of the other elements used
          in computing the Borrowing Base; (ii) restrict the amount of or refuse to
          make Loans; and (iii) restrict or refuse to provide Letters of Credit or Credit
          Support. If an Event of Default exists, the Agent shall, at the direction of the
          Required Lenders, do one or more of the following, in addition to the actions
          described in the preceding sentence, at any time or times and in any order,
          without notice to or demand on any Borrower or other Obligor: (A) terminate the
          Commitments and this Agreement; (B) declare any or all Obligations to be
          immediately due and payable; provided, however, that upon the
          occurrence of any Event of Default described in Sections 9.1(e),
          9.1(f), 9.1(g), or 9.1(h), the Commitments shall automatically
          and immediately expire and all Obligations shall automatically become
          immediately due and payable without notice or demand of any kind; (C) require
          the Borrowers to cash collateralize, or provide Supporting Letters of Credit
          for, all outstanding Letter of Credit Obligations; and (D) pursue its other
          rights and remedies under the Loan Documents and applicable law.

(b)       
          If an Event of Default has occurred and is continuing: (i) the Agent shall
          have, for the benefit of the Lenders, in addition to all other rights of the
          Agent and the Lenders, the rights and remedies of a secured party under the Loan
          Documents and the UCC (except any consent of an Obligor under Section 9-620 of
          the UCC must be in writing and may not be deemed given by failure to respond to
          any notice given by any secured party thereunder); (ii) the Agent may, at
          any time, take possession of the Collateral and keep it on any Obligors
          premises, at no cost to the Agent or any Lender, or remove any part of it to
          such other place or places as the Agent may desire, or the Obligors shall, upon
          the Agents demand, at the Obligors cost, assemble the Collateral and
          make it available to the Agent at a place reasonably convenient to the Agent;
          and (iii) the Agent may sell and deliver any Collateral at public or
          private sales, for cash, upon credit or otherwise, at such prices and upon such
          terms as the Agent deems advisable, in its sole discretion, and may, if the
          Agent deems it reasonable, postpone or adjourn any sale of the Collateral by an
          announcement at the time and place of sale or of such postponed or adjourned
          sale without giving a new notice of sale. Without in any way requiring notice
          (unless the UCC expressly requires a longer notice period) to be given in the
          following manner, each Obligor agrees that any notice by the Agent of sale,
          disposition or other intended action hereunder or in connection herewith,
          whether required by the UCC or otherwise, shall constitute reasonable notice to
          such Obligor if such notice is mailed by registered or certified mail, return
          receipt requested, postage prepaid, or is delivered personally against receipt,
          at least five (5) Business Days prior to such action to the address for notices
          to the Obligors specified in or pursuant to Section 14.8. If any
          Collateral is sold on terms other than payment in full at the time of sale, no
          credit shall be given against the Obligations until the Agent or the Lenders
          receive payment, and if the buyer defaults in payment, the Agent may resell the
          Collateral without further notice to any Obligor. In the event the Agent seeks
          to take possession of all or any portion of the Collateral by judicial process,
          each Obligor irrevocably waives: (A) the posting of any bond, surety or security
          with respect thereto which might otherwise be required; (B) any demand for
          possession prior to the commencement of any suit or action to recover the
          Collateral; and (C) any requirement that the Agent retain possession and not
          dispose of any Collateral until after trial or final judgment. Each Obligor
          agrees that the Agent has no obligation to preserve rights to the Collateral or
          marshal any Collateral for the benefit of any Person. The Agent is hereby
          granted a license or other right to use, without charge, each Obligors
          labels, patents, copyrights, name, trade secrets, trade names, trademarks, and
          advertising matter, or any similar property, in completing production of,
          advertising or selling any Collateral, and each Obligors rights under all
          licenses and all franchise agreements shall inure to the Agents benefit
          for such purpose. The proceeds of sale shall be applied first to all expenses of
          sale, including attorneys fees, and then to the Obligations. The Agent
          will return any excess to the Borrowers Agent and the Obligors shall
          remain liable for any deficiency. Nothing herein waives any rights of the
          Borrowers or any Obligor which cannot be waived under the UCC.

(c)       
          If an Event of Default occurs, each Obligor hereby waives, to the extent
          permitted by applicable law, all rights to notice and hearing prior to the
          exercise by the Agent of the Agents rights to repossess the Collateral
          without judicial process or to reply, attach or levy upon the Collateral without
          notice or hearing.

ARTICLE 10

TERM AND TERMINATION

10.1            Term and Termination. The
term of this Agreement shall end on the Stated Termination Date unless sooner terminated
in accordance with the terms hereof. The Agent, upon direction from the Required Lenders,
may terminate this Agreement without notice upon the occurrence of an Event of Default.
Upon the effective date of termination of this Agreement for any reason whatsoever, all
Obligations (including all unpaid principal, accrued and unpaid interest and any early
termination or prepayment fees or penalties) shall become immediately due and payable and
the Borrowers shall immediately arrange for the cancellation and return of Letters of
Credit then outstanding. Notwithstanding the termination of this Agreement, until all
Obligations are indefeasibly paid and performed in full in cash, the Obligors shall remain
bound by the terms of this Agreement and shall not be relieved of any of their Obligations
hereunder or under any other Loan Document, and the Agent and the Lenders shall retain all
their rights and remedies hereunder (including the Agents Liens in and all rights
and remedies with respect to all then existing and after-arising Collateral).

ARTICLE 11

AMENDMENTS; WAIVERS;
PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS

11.1             Amendments and
Waivers.

(a)       
          No amendment or waiver of any provision of this Agreement or any other Loan
          Document, and no consent with respect to any departure by any Obligor therefrom,
          shall be effective unless the same shall be in writing and signed by the
          Required Lenders (or by the Agent at the written request of the Required
          Lenders) and the Obligors and then any such waiver or consent shall be effective
          only in the specific instance and for the specific purpose for which given;
          provided, however, that no such waiver, amendment, or consent
          shall, unless in writing and signed by all the Lenders affected thereby and the
          Obligors and acknowledged by the Agent, do any of the following:

| | (i)                        increase
or extend the Commitment of any Lender;
| | ---------------------------------------------------------------------------

| | (ii)                        postpone
or delay any date fixed by this Agreement or any other Loan Document           for any
payment of principal, interest, fees or other amounts due to the Lenders           (or
any of them) hereunder or under any other Loan Document;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)                        reduce
the principal of, or the rate or amount of interest specified herein on           any
Loan, or any fees or other amounts payable hereunder or under any other Loan
          Document;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)                        change
the percentage of the Commitments or of the aggregate unpaid principal           amount
of the Loans which is required for the Lenders or any of them to take any
          action hereunder;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v)                        increase
any of the percentages set forth in the definition of the Borrowing           Base;
| | -----------------------------------------------------------------------------------------------------------------------

| | (vi)                        amend
this Section or any provision of this Agreement providing for consent or           other
action by all Lenders;
| | -------------------------------------------------------------------------------------------------------------------------------------------------

| | (vii)                        release
any Guaranties of the Obligations or release Collateral other than as           permitted
by Section 12.11;
| | ------------------------------------------------------------------------------------------------------------------------------------------------

| | (viii)                        change
the definition of Required Lenders; or
| | -----------------------------------------------------------------------------

| | (ix)                        increase
the Maximum Revolver Amount, the Maximum Inventory Loan Amount or the           Letter of
Credit Subfacility; provided, however, the Agent may, in           its sole
discretion and notwithstanding the limitations contained in clauses           (v) and
(ix) above and any other terms of this Agreement, make Agent           Advances in
accordance with Section 1.2(i); providedfurther, that no
amendment, waiver or consent shall, unless in writing           and signed by the Agent,
affect the rights or duties of the Agent under this           Agreement or any other Loan
Document; providedfurther, that Schedule 1.1 hereto
(Commitments) may be amended from time to time           by the Agent alone to reflect
assignments of Commitments in accordance herewith;           and providedfurther,
that any Loan Document relating to Bank           Products may be amended by the
applicable Obligor and the Bank (or any Affiliate           of the Bank) without the
consent or approval of any other Lender.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b)       
          If any fees are paid to the Lenders as consideration for amendments, waivers or
          consents with respect to this Agreement, at Agents election, such fees may
          be paid only to those Lenders that agree to such amendments, waivers or consents
          within the time specified for submission thereof.

(c)       
          If, in connection with any proposed amendment, waiver or consent (a
          Proposed Change) requiring the consent of all Lenders, the
          consent of Required Lenders is obtained, but the consent of other Lenders is not
          obtained (any such Lender whose consent is not obtained as described in this
          clause (c) being referred to as a Non-Consenting Lender),
          then, so long as the Agent is not a Non-Consenting Lender, at the
          Borrowers request, the Agent or an Eligible Assignee shall have the right
          (but not the obligation) with the Agents approval, to purchase from the
          Non-Consenting Lenders, and the Non-Consenting Lenders agree that they shall
          sell, all the Non-Consenting Lenders Commitments for an amount equal to
          the principal balances thereof and all accrued interest and fees with respect
          thereto through the date of sale pursuant to Assignment and Acceptance
          Agreement(s), without premium or discount.

11.2             Assignments;
Participations.

(a)       
          Any Lender may, with the written consent of the Agent (which consent shall not
          be unreasonably withheld), and, if no Default or Event of Default exists, with
          the written consent of the Borrowers Agent (which consent shall not be
          unreasonably withheld), assign and delegate to one or more Eligible Assignees
          (provided that no consent of the Agent or the Borrowers Agent shall be
          required in connection with any assignment and delegation by a Lender to an
          Affiliate of such Lender capable, in the good faith judgment of such Lender, of
          performing its obligations hereunder) (each an Assignee) all,
          or any ratable part of all, of the Loans, the Commitments and the other rights
          and obligations of such Lender hereunder, in a minimum amount of $5,000,000
          (provided that, unless an assignor Lender has assigned and delegated all of its
          Loans and Commitments, no such assignment and/or delegation shall be permitted
          unless, after giving effect thereto, such assignor Lender retains a Commitment
          in a minimum amount of $5,000,000); provided, however, that the
          Obligors and the Agent may continue to deal solely and directly with such Lender
          in connection with the interest so assigned to an Assignee until (i) written
          notice of such assignment, together with payment instructions, addresses and
          related information with respect to the Assignee, shall have been given to the
          Borrowers Agent and the Agent by such Lender and the Assignee;
          (ii) such Lender and its Assignee shall have delivered to the
          Borrowers Agent and the Agent an Assignment and Acceptance in the form of
          Exhibit D (Assignment and Acceptance), and (iii)
          the assignor Lender or Assignee has paid to the Agent a processing fee in the
          amount of $3,500. Any assignment in violation of this Section 11.2 shall
          be null and void.

(b)       
          From and after the date that the Agent notifies the assignor Lender that it has
          received an executed Assignment and Acceptance (including the consent of the
          Borrowers Agent, if required) and payment of the above-referenced
          processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
          extent that rights and obligations, including, but not limited to, the
          obligation to participate in Letters of Credit and Credit Support have been
          assigned to it pursuant to such Assignment and Acceptance, shall have the rights
          and obligations of a Lender under the Loan Documents, and (ii) the assignor
          Lender shall, to the extent that rights and obligations hereunder and under the
          other Loan Documents have been assigned by it pursuant to such Assignment and
          Acceptance, relinquish its rights and be released from its obligations under
          this Agreement (and in the case of an Assignment and Acceptance covering all or
          the remaining portion of an assigning Lenders rights and obligations under
          this Agreement, such Lender shall cease to be a party hereto).

(c)       
          By executing and delivering an Assignment and Acceptance, the assigning Lender
          thereunder and the Assignee thereunder confirm to and agree with each other and
          the other parties hereto as follows: (i) other than as provided in such
          Assignment and Acceptance, such assigning Lender makes no representation or
          warranty and assumes no responsibility with respect to any statements,
          warranties or representations made in or in connection with this Agreement or
          the execution, legality, validity, enforceability, genuineness, sufficiency or
          value of this Agreement or any other Loan Document furnished pursuant hereto or
          the attachment, perfection, or priority of any Lien granted by any Obligor to
          the Agent or any Lender in the Collateral; (ii) such assigning Lender makes no
          representation or warranty and assumes no responsibility with respect to the
          financial condition of any Obligor or the performance or observance by any
          Obligor of any of its obligations under this Agreement or any other Loan
          Document furnished pursuant hereto; (iii) such Assignee confirms that it has
          received a copy of this Agreement, together with such other documents and
          information as it has deemed appropriate to make its own credit analysis and
          decision to enter into such Assignment and Acceptance; (iv) such Assignee will,
          independently and without reliance upon the Agent, such assigning Lender or any
          other Lender, and based on such documents and information as it shall deem
          appropriate at the time, continue to make its own credit decisions in taking or
          not taking action under this Agreement; (v) such Assignee appoints and
          authorizes the Agent to take such action as agent on its behalf and to exercise
          such powers under this Agreement as are delegated to the Agent by the terms
          hereof, together with such powers, including the discretionary rights and
          incidental power, as are reasonably incidental thereto; and (vi) such Assignee
          agrees that it will perform in accordance with their terms all of the
          obligations which by the terms of this Agreement are required to be performed by
          it as a Lender.

(d)       
          Immediately upon satisfaction of the requirements of Section 11.2(a),
          this Agreement shall be deemed to be amended to the extent, but only to the
          extent, necessary to reflect the addition of the Assignee and the resulting
          adjustment of the Commitments arising therefrom. The Commitment allocated to
          each Assignee shall reduce such Commitments of the assigning Lender pro
          tanto.

(e)       
          Any Lender may at any time sell to one or more commercial banks, financial
          institutions, or other Persons not Affiliates of the Borrowers (a
          Participant) participating interests in any Loans, the
          Commitment of that Lender and the other interests of that Lender (the
          originating Lender) hereunder and under the other Loan
          Documents; provided, however, that (i) the originating
          Lenders obligations under this Agreement shall remain unchanged,
          (ii) the originating Lender shall remain solely responsible for the
          performance of such obligations, (iii) the Obligors and the Agent shall
          continue to deal solely and directly with the originating Lender in connection
          with the originating Lenders rights and obligations under this Agreement
          and the other Loan Documents, and (iv) no Lender shall transfer or grant
          any participating interest under which the Participant has rights to approve any
          amendment to, or any consent or waiver with respect to, this Agreement or any
          other Loan Document except the matters set forth in Section 11.1(a)(i),
          (ii) and (iii), and all amounts payable by the Obligors hereunder
          shall be determined as if such Lender had not sold such participation; except
          that, if amounts outstanding under this Agreement are due and unpaid, or shall
          have become due and payable upon the occurrence of an Event of Default, each
          Participant shall be deemed to have the right of set-off in respect of its
          participating interest in amounts owing under this Agreement to the same extent
          and subject to the same limitation as if the amount of its participating
          interest were owing directly to it as a Lender under this Agreement. Any
          Participant exercising such right of set-off shall give prompt written notice
          thereof to the Borrowers Agent after such set-off.

(f)       
          Notwithstanding any other provision in this Agreement, any Lender may at any
          time create a security interest in, or pledge, all or any portion of its rights
          under and interest in this Agreement in favor of any Federal Reserve Bank in
          accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR
          §203.14, and such Federal Reserve Bank may enforce such pledge or security
          interest in any manner permitted under applicable law.

ARTICLE 12

THE AGENT

12.1             Appointment and
Authorization. Each Lender hereby designates and appoints Bank as its Agent under this
Agreement and the other Loan Documents, and each Lender hereby irrevocably authorizes the
Agent to take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. The Agent agrees to act as such on the
express conditions contained in this Article 12. The provisions of this
Article 12 are solely for the benefit of the Agent and the Lenders and no
Obligor shall have any rights as a third party beneficiary of any of the provisions
contained herein, except with respect to the provisions of Sections 12.9,
12.10 and 12.11 to the extent such Sections provide rights or benefits to
the Obligors. Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent have or be
deemed to have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent. Without
limiting the generality of the foregoing sentence, the use of the term agent
in this Agreement with reference to the Agent is not intended to connote any fiduciary or
other implied (or express) obligations arising under agency doctrine of any applicable
law. Instead, such term is used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent contracting
parties. Except as expressly otherwise provided in this Agreement, the Agent shall have
and may use its sole discretion with respect to exercising or refraining from exercising
any discretionary rights or taking or refraining from taking any actions which the Agent
is expressly entitled to take or assert under this Agreement and the other Loan Documents,
including (a) the determination of the applicability of ineligibility criteria with
respect to the calculation of the Borrowing Base, (b) the making of Agent Advances
pursuant to Section 1.2(i), and (c) the exercise of remedies pursuant to Section
9.2, and any action so taken or not taken shall be deemed consented to by the Lenders.

12.2             Delegation of Duties. The
Agent may execute any of its duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be responsible for
the negligence or misconduct of any agent or attorney-in-fact that it selects as long as
such selection was made without gross negligence or willful misconduct.

12.3             Liability of the Agent.
None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to
be taken by any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (b) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by any Obligor or any Subsidiary or
Affiliate of any Obligor, or any officer thereof, contained in this Agreement or in any
other Loan Document, or in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or for any
failure of any Obligor or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of any Obligor or any Subsidiary or Affiliate
of any Obligor.

12.4             Reliance by the Agent.
The Agent shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile,
telex or telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel to the
Obligors), independent accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this Agreement or
any other Loan Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or consent of the
Required Lenders (or all Lenders if so required by Section 11.1) and such request
and any action taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.

12.5             Notice of Default. The
Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default (other than an Event of Default arising out of the Borrowers
failure to pay principal, interest or fees hereunder in a timely manner), unless the Agent
shall have received written notice from a Lender or an Obligor referring to this
Agreement, describing such Default or Event of Default and stating that such notice is a
notice of default. The Agent will notify the Lenders of its receipt of any
such notice. The Agent shall take such action with respect to such Default or Event of
Default as may be requested by the Required Lenders in accordance with Section 9;
provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall deem
advisable.

12.6             Credit Decision. Each
Lender acknowledges that none of the Agent-Related Persons has made any representation or
warranty to it, and that no act by the Agent hereinafter taken, including any review of
the affairs of the Obligors and their Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each Lender
represents to the Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the Obligors
and their Affiliates, and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and to extend
credit to the Obligors. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform itself as
to the business, prospects, operations, property, financial and other condition and
creditworthiness of the Obligors. Except for notices, reports and other documents
expressly herein required to be furnished to the Lenders by the Agent, the Agent shall not
have any duty or responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other condition or
creditworthiness of the Obligors which may come into the possession of any of the
Agent-Related Persons.

12.7             Indemnification. Whether
or not the transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so), in accordance
with their Pro Rata Shares, from and against any and all Indemnified Liabilities as such
term is defined in Section 14.11; provided, however, that no Lender
shall be liable for the payment to the Agent-Related Persons of any portion of such
Indemnified Liabilities resulting solely from such Persons gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender shall reimburse the
Agent upon demand for its Pro Rata Share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not reimbursed for
such expenses by or on behalf of the Obligors. The undertaking in this Section 12.7
shall survive the payment of all Obligations hereunder and the resignation or replacement
of the Agent.

12.8             Agent in Individual
Capacity. The Bank and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business with any
Obligors and their Subsidiaries and Affiliates as though the Bank were not the Agent
hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that
the Bank or its Affiliates may receive information regarding any Obligor, its Affiliates
and Account Debtors (including information that may be subject to confidentiality
obligations in favor of such Obligor or such Subsidiary), and the Lenders acknowledge that
the Agent and the Bank shall be under no obligation to provide such information to them.
With respect to its Loans, the Bank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not the Agent,
and the terms Lender and Lenders include the Bank in its
individual capacity.

12.9             Successor Agent. The
Agent may resign as Agent upon at least 30 days prior notice to the Lenders and the
Borrowers Agent, such resignation to be effective upon the acceptance of a successor
agent to its appointment as Agent. In the event the Bank sells all of its Commitment and
Loans as part of a sale, transfer or other disposition by the Bank of substantially all of
its loan portfolio, the Bank shall resign as Agent and such purchaser or transferee shall
become the successor Agent hereunder. Subject to the foregoing, if the Agent resigns under
this Agreement, the Required Lenders shall appoint from among the Lenders a successor
agent for the Lenders. If no successor agent is appointed prior to the effective date of
the resignation of the Agent, the Agent may appoint, after consulting with the Lenders and
the Borrowers Agent, a successor agent from among the Lenders. Upon the acceptance
of its appointment as successor agent hereunder, such successor agent shall succeed to all
the rights, powers and duties of the retiring Agent and the term Agent shall
mean such successor agent and the retiring Agents appointment, powers and duties as
Agent shall be terminated. After any retiring Agents resignation hereunder as Agent,
the provisions of this Article 12 shall continue to inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this Agreement.

12.10             Withholding Tax.

(a)       
          If any Lender is a foreign corporation, partnership or trust within
          the meaning of the Code and such Lender is eligible to claim exemption from, or
          a reduction of, the U.S. withholding tax imposed by Sections 1441 or 1442 of the
          Code, such Lender agrees with and in favor of the Agent, to deliver to the
          Agent:

| | (i)                        if
such Lender is eligible to claim an exemption from, or a reduction of,
          withholding tax under a United States of America tax treaty, properly completed
          IRS Form W-8BEN before the payment of any interest in the first calendar year
          and before the payment of any interest in each third succeeding calendar year
          during which interest may be paid under this Agreement;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        if
such Lender is eligible to claim that interest paid under this Agreement is
          exempt from United States of America withholding tax because it is effectively
          connected with a United States of America trade or business of such Lender, two
          properly completed and executed copies of IRS Form W-8ECI before the payment of
          any interest is due in the first taxable year of such Lender and in each
          succeeding taxable year of such Lender during which interest may be paid under
          this Agreement, and IRS Form W-9; and
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)                        such
other form or forms as may be required under the Code or other laws of the
          United States of America as a condition to exemption from, or reduction of,
          United States of America withholding tax.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Such Lender agrees to promptly notify
the Agent of any change in circumstances which would modify or render invalid any claimed
exemption or reduction.

(b)       
          If any Lender claims exemption from, or reduction of, withholding tax under a
          United States of America tax treaty by providing IRS Form FW-8BEN and such
          Lender sells, assigns, grants a participation in, or otherwise transfers all or
          part of the Obligations owing to such Lender, such Lender agrees to notify the
          Agent of the percentage amount in which it is no longer the beneficial owner of
          Obligations of the Borrowers to such Lender. To the extent of such percentage
          amount, the Agent will treat such Lenders IRS Form W-8BEN as no longer
          valid.

(c)       
          If any Lender claiming exemption from United States of America withholding tax
          by filing IRS Form W-8ECI with the Agent sells, assigns, grants a participation
          in, or otherwise transfers all or part of the Obligations owing to such Lender,
          such Lender agrees to undertake sole responsibility for complying with the
          withholding tax requirements imposed by Sections 1441 and 1442 of the Code.

(d)       
          If any Lender is entitled to a reduction in the applicable withholding tax, the
          Agent may withhold from any interest payment to such Lender an amount equivalent
          to the applicable withholding tax after taking into account such reduction. If
          the forms or other documentation required by subsection (a) of this
          Section are not delivered to the Agent, then the Agent may withhold from any
          interest payment to such Lender not providing such forms or other documentation
          an amount equivalent to the applicable withholding tax and the Borrowers shall
          be under no obligation under Section 4.1(a), Section 4.1(c)(i) or
          otherwise to increase the amount of any payment to such Lender or to indemnify
          such Lender in respect of the withholding taxes to the extent that such
          withholding taxes would have been avoided had such Lender supplied such
          documentation.

(e)       
          If the IRS or any other Governmental Authority of the United States of America
          or other jurisdiction asserts a claim that the Agent did not properly withhold
          tax from amounts paid to or for the account of any Lender (because the
          appropriate form was not delivered, was not properly executed, or because such
          Lender failed to notify the Agent of a change in circumstances which rendered
          the exemption from, or reduction of, withholding tax ineffective, or for any
          other reason), such Lender shall indemnify the Agent fully for all amounts paid,
          directly or indirectly, by the Agent as tax or otherwise, including penalties
          and interest, and including any taxes imposed by any jurisdiction on the amounts
          payable to the Agent under this Section, together with all costs and expenses
          (including Attorney Costs). The obligation of the Lenders under this subsection
          shall survive the payment of all Obligations and the resignation or replacement
          of the Agent.

12.11             Collateral Matters.

(a)       
          The Lenders hereby irrevocably authorize the Agent, at its option and in its
          sole discretion, to release any Agents Liens upon any Collateral
          (i) upon the termination of the Commitments and payment and satisfaction in
          full by the Borrowers of all Loans and Letter of Credit Obligations, and the
          termination of all outstanding Letters of Credit (whether or not any of such
          obligations are due) and all other Obligations; (ii) constituting property
          being sold or disposed of if the Borrowers Agent certifies to the Agent
          that the sale or disposition is made in compliance with Section 7.9
          (and the Agent may rely conclusively on any such certificate, without further
          inquiry); (iii) constituting property in which the Obligors owned no
          interest at the time the Lien was granted or at any time thereafter; or (iv)
          constituting property leased to an Obligor under a lease which has expired or
          been terminated in a transaction permitted under this Agreement. Except as
          provided above, the Agent will not release any of the Agents Liens without
          the prior written authorization of the Lenders; provided that the Agent
          may, in its discretion, release the Agents Liens on any Subsidiary being
          sold (whether through a stock or asset sale), and on Collateral valued in the
          aggregate not in excess of $5,000,000 during each Fiscal Year, with the prior
          written authorization of the Required Lenders. Upon request by the Agent or the
          Borrowers Agent at any time, the Lenders will confirm in writing the
          Agents authority to release any Agents Liens upon particular types
          or items of Collateral pursuant to this Section 12.11.

(b)       
          Upon receipt by the Agent of any authorization required pursuant to Section
          12.11(a) from the Lenders of the Agents authority to release the
          Agents Liens upon particular types or items of Collateral, and upon at
          least five (5) Business Days prior written request by the Borrowers Agent,
          the Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
          such documents as may be necessary to evidence the release of the Agents
          Liens upon such Collateral (including amendments or terminations of UCC
          financing statements, if any, the return of stock certificates, if any, and the
          release of any Subsidiary being released in its entirety from its obligations,
          if any, under the Loan Documents); provided, however, that (i) the
          Agent shall not be required to execute any such document on terms which, in the
          Agents opinion, would expose the Agent to liability or create any
          obligation or entail any consequence other than the release of such Liens
          without recourse or warranty, and (ii) such release shall not in any manner
          discharge, affect or impair the Obligations or any Liens (other than those
          expressly being released) upon (or obligations of any Obligor in respect of) all
          interests retained by the applicable Obligor, including the proceeds of any
          sale, all of which shall continue to constitute part of the Collateral.

(c)       
          The Agent shall have no obligation whatsoever to any of the Lenders to assure
          that the Collateral exists or is owned by any Obligor or is cared for, protected
          or insured or has been encumbered, or that the Agents Liens have been
          properly or sufficiently or lawfully created, perfected, protected or enforced
          or are entitled to any particular priority, or to exercise at all or in any
          particular manner or under any duty of care, disclosure or fidelity, or to
          continue exercising, any of the rights, authorities and powers granted or
          available to the Agent pursuant to any of the Loan Documents, it being
          understood and agreed that in respect of the Collateral, or any act, omission or
          event related thereto, the Agent may act in any manner it may deem appropriate,
          in its sole discretion, given the Agents own interest in the Collateral in
          its capacity as one of the Lenders and that the Agent shall have no other duty
          or liability whatsoever to any Lender as to any of the foregoing.

12.12             Restrictions on Actions by Lenders; Sharing of Payments.

(a)       
          Each of the Lenders agrees that it shall not, without the express consent of all
          Lenders, and that it shall, to the extent it is lawfully entitled to do so, upon
          the request of all Lenders, set off against the Obligations, any amounts owing
          by such Lender to any Obligor or any accounts of any Obligor now or hereafter
          maintained with such Lender. Each of the Lenders further agrees that it shall
          not, unless specifically requested to do so by the Agent, take or cause to be
          taken any action to enforce its rights under this Agreement or against any
          Obligor, including the commencement of any legal or equitable proceedings, to
          foreclose any Lien on, or otherwise enforce any security interest in, any of the
          Collateral.

(b)       
          If at any time or times any Lender shall receive (i) by payment, foreclosure,
          setoff or otherwise, any proceeds of Collateral or any payments with respect to
          the Obligations of any Obligor to such Lender arising under, or relating to,
          this Agreement or the other Loan Documents, except for any such proceeds or
          payments received by such Lender from the Agent pursuant to the terms of this
          Agreement, or (ii) payments from the Agent in excess of such Lenders
          ratable portion of all such distributions by the Agent, such Lender shall
          promptly (A) turn the same over to the Agent, in kind, and with such
          endorsements as may be required to negotiate the same to the Agent, or in same
          day funds, as applicable, for the account of all of the Lenders and for
          application to the Obligations in accordance with the applicable provisions of
          this Agreement, or (B) purchase, without recourse or warranty, an undivided
          interest and participation in the Obligations owed to the other Lenders so that
          such excess payment received shall be applied ratably as among the Lenders in
          accordance with their Pro Rata Shares; provided, however, that if
          all or part of such excess payment received by the purchasing party is
          thereafter recovered from it, those purchases of participations shall be
          rescinded in whole or in part, as applicable, and the applicable portion of the
          purchase price paid therefor shall be returned to such purchasing party, but
          without interest except to the extent that such purchasing party is required to
          pay interest in connection with the recovery of the excess payment.

12.13             Agency for Perfection.
Each Lender hereby appoints each other Lender as agent for the purpose of perfecting the
Lenders security interest in assets which, in accordance with Article 9 of the UCC
can be perfected only by possession. Should any Lender (other than the Agent) obtain
possession of any such Collateral, such Lender shall notify the Agent thereof, and,
promptly upon the Agents request therefor, shall deliver such Collateral to the
Agent or in accordance with the Agents instructions.

12.14             Payments by the Agent to the
Lenders. All payments to be made by the Agent to the Lenders shall be made by bank
wire transfer or internal transfer of immediately available funds to each Lender pursuant
to wire transfer instructions delivered in writing to the Agent on or prior to the Closing
Date (or if such Lender is an Assignee, on the applicable Assignment and Acceptance), or
pursuant to such other wire transfer instructions as each party may designate for itself
by written notice to the Agent. Concurrently with each such payment, the Agent shall
identify whether such payment (or any portion thereof) represents principal, premium or
interest on the Revolving Loans or otherwise. Unless the Agent receives notice from the
Borrowers prior to the date on which any payment is due to the Lenders that the Borrowers
will not make such payment in full as and when required, the Agent may assume that the
Borrowers have made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Borrowers have not made such payment in full to
the Agent, each Lender shall repay to the Agent on demand such amount distributed to such
Lender, together with interest thereon at the Federal Funds Rate for each day from the
date such amount is distributed to such Lender until the date repaid.

12.15             Settlement.

(a)

| | (i)                        Each
Lenders funded portion of the Revolving Loans is intended by the           Lenders
to be equal at all times to such Lenders Pro Rata Share of the
          outstanding Revolving Loans. Notwithstanding such agreement, the Agent, the
          Bank, and the other Lenders agree (which agreement shall not be for the benefit
          of or enforceable by any Obligor) that in order to facilitate the
administration           of this Agreement and the other Loan Documents, settlement among
them as to the           Revolving Loans, the Non-Ratable Loans and the Agent Advances
shall take place           on a periodic basis in accordance with the following
provisions:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)                        The
Agent shall request settlement (Settlement) with the           Lenders
on at least a weekly basis, or on a more frequent basis at Agents
          election, (A) on behalf of the Bank, with respect to each outstanding
          Non-Ratable Loan, (B) for itself, with respect to each Agent Advance, and (C)
          with respect to collections received, in each case, by notifying the Lenders of
          such requested Settlement by telecopy, telephone or other similar form of
          transmission, of such requested Settlement, no later than 12:00 noon (Atlanta,
          Georgia time) on the date of such requested Settlement (the Settlement
          Date). Each Lender (other than the Bank, in the case of Non-Ratable
          Loans, and the Agent, in the case of Agent Advances) shall transfer the amount
          of such Lenders Pro Rata Share of the outstanding principal amount of the
          Non-Ratable Loans and Agent Advances with respect to each Settlement to the
          Agent, to Agents account, not later than 2:00 p.m. (Atlanta, Georgia
          time), on the Settlement Date applicable thereto. Settlements may occur during
          the continuation of a Default or an Event of Default and whether or not the
          applicable conditions precedent set forth in Article 8 have then
          been satisfied. Such amounts made available to the Agent shall be applied
          against the amounts of the applicable Non-Ratable Loan or Agent Advance and,
          together with the portion of such Non-Ratable Loan or Agent Advance
representing           the Banks Pro Rata Share thereof, shall constitute Revolving
Loans of such           Lenders. If any such amount is not transferred to the Agent by
any Lender on the           Settlement Date applicable thereto, the Agent shall be
entitled to recover such           amount on demand from such Lender together with
interest thereon at the Federal           Funds Rate for the first three (3) days from
and after the Settlement Date and           thereafter at the Interest Rate then
applicable to the Revolving Loans (A) on           behalf of the Bank, with respect to
each outstanding Non-Ratable Loan, and (B)           for itself, with respect to each
Agent Advance.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)                        Notwithstanding
the foregoing, not more than one (1) Business Day after demand           is made by the
Agent (whether before or after the occurrence of a Default or an           Event of
Default and regardless of whether the Agent has requested a Settlement           with
respect to a Non-Ratable Loan or Agent Advance), each other Lender (A)           shall
irrevocably and unconditionally purchase and receive from the Bank or the
          Agent, as applicable, without recourse or warranty, an undivided interest and
          participation in such Non-Ratable Loan or Agent Advance equal to such
          Lenders Pro Rata Share of such Non-Ratable Loan or Agent Advance, and (B)
          if Settlement has not previously occurred with respect to such Non-Ratable
Loans           or Agent Advances, upon demand by Bank or Agent, as applicable, shall pay
to           Bank or Agent, as applicable, as the purchase price of such participation an
          amount equal to one-hundred percent (100%) of such Lenders Pro Rata Share
          of such Non-Ratable Loans or Agent Advances. If such amount is not in fact made
          available to the Agent by any Lender, the Agent shall be entitled to recover
          such amount on demand from such Lender together with interest thereon at the
          Federal Funds Rate for the first three (3) days from and after such demand and
          thereafter at the Interest Rate then applicable to Base Rate Revolving Loans.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)                        From
and after the date, if any, on which any Lender purchases an undivided           interest
and participation in any Non-Ratable Loan or Agent Advance pursuant to clause (iii) above,
the Agent shall promptly distribute to such Lender           such Lenders Pro Rata
Share of all payments of principal and interest and           all proceeds of Collateral
received by the Agent in respect of such Non-Ratable           Loan or Agent Advance.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v)                        Between
Settlement Dates, the Agent, to the extent no Agent Advances are           outstanding,
may pay over to the Bank any payments received by the Agent, which           in
accordance with the terms of this Agreement would be applied to the reduction
          of the Revolving Loans, for application to the Banks Revolving Loans,
          including Non-Ratable Loans. If, as of any Settlement Date, collections
received           since the then immediately preceding Settlement Date have been applied
to the           Banks Revolving Loans (other than to Non-Ratable Loans or Agent
Advances           in which such Lender has not yet funded its purchase of a
participation pursuant           to clause (iii) above), as provided for in the
previous sentence, the Bank           shall pay to the Agent for the accounts of the
Lenders, to be applied to the           outstanding Revolving Loans of such Lenders, an
amount such that each Lender           shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro           Rata Share of the Revolving Loans. During the
period between Settlement Dates,           the Bank with respect to Non-Ratable Loans,
the Agent with respect to Agent           Advances, and each Lender with respect to the
Revolving Loans other than           Non-Ratable Loans and Agent Advances, shall be
entitled to interest at the           applicable rate or rates payable under this
Agreement on the actual average           daily amount of funds employed by the Bank, the
Agent and the other Lenders.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(vi)       
          Unless the Agent has received written notice from a Lender to the contrary, the
          Agent may assume that the applicable conditions precedent set forth in
          Article 8 have been satisfied and the requested Borrowing will not exceed
          the Maximum Revolver Amount on any Funding Date for a Revolving Loan or
          Non-Ratable Loan.

(b)       
          Lenders Failure to Perform. All Revolving Loans (other than
          Non-Ratable Loans and Agent Advances) shall be made by the Lenders
          simultaneously and in accordance with their Pro Rata Shares. It is understood
          that (i) no Lender shall be responsible for any failure by any other Lender to
          perform its obligation to make any Revolving Loans hereunder, nor shall any
          Commitment of any Lender be increased or decreased as a result of any failure by
          any other Lender to perform its obligation to make any Revolving Loans
          hereunder, (ii) no failure by any Lender to perform its obligation to make any
          Revolving Loans hereunder shall excuse any other Lender from its obligation to
          make any Revolving Loans hereunder, and (iii) the obligations of each Lender
          hereunder shall be several, not joint and several.

(c)       
          Defaulting Lenders. Unless the Agent receives notice from the Required
          Lenders on or prior to the Closing Date or, with respect to any Borrowing after
          the Closing Date, at least one Business Day prior to the date of such Borrowing,
          that such Lenders will not make available to the Agent those Lenders Pro
          Rata Shares of a requested Borrowing, (i) the Agent may assume that each Lender
          has made such amount available to the Agent in immediately available funds on
          the Funding Date, and (ii) each Lender shall be obligated to make its Pro Rata
          Share of such Borrowing available notwithstanding the existence of any Default
          or Event of Default or the non-satisfaction of any condition precedent in
          Article 8 (other than the conditions precedent set forth in
          Section 8.2(b), (c) and (d)). Furthermore, the Agent may,
          in reliance upon such assumption, make available to the Borrowers on such date a
          corresponding amount and all Lenders shall be liable to the Agent for such
          amount. If any Lender has not transferred its full Pro Rata Share to the Agent
          in immediately available funds, and the Agent has transferred the corresponding
          amount to the Borrowers, on the Business Day following such Funding Date that
          Lender shall make such amount available to the Agent, together with interest at
          the Federal Funds Rate for that day. A notice by the Agent submitted to any
          Lender with respect to amounts owing shall be conclusive, absent manifest error.
          If a Lenders full Pro Rata Share is transferred to the Agent as required,
          the amount transferred to the Agent shall constitute that Lenders Loan for
          all purposes of this Agreement. If that amount is not transferred to the Agent
          on the Business Day following the Funding Date, the Agent will notify the
          Borrowers Agent of such failure to fund and, upon demand by the Agent, the
          Borrowers shall pay such amount to the Agent for the Agents account,
          together with interest thereon for each day elapsed since the date of such
          Borrowing, at a rate per annum equal to the Interest Rate applicable at the time
          to the Loans comprising that particular Borrowing. The failure of any Lender to
          make any Loan on any Funding Date (any such Lender, prior to the cure of such
          failure, being hereinafter referred to as a Defaulting
          Lender) shall not relieve any other Lender of its obligation hereunder
          to make a Loan on that Funding Date. No Lender shall be responsible for any
          other Lenders failure to advance such other Lenders Pro Rata Share
          of any Borrowing.

(d)       
          Retention of Defaulting Lenders Payments. The Agent shall not be
          obligated to transfer to a Defaulting Lender any payments made by any Obligor to
          the Agent for the Defaulting Lenders benefit; nor shall a Defaulting
          Lender be entitled to the sharing of any payments hereunder. Amounts payable to
          a Defaulting Lender shall instead be paid to or retained by the Agent. In its
          discretion, the Agent may loan to the Borrowers the amount of all such payments
          received or retained by it for the account of such Defaulting Lender. Any
          amounts so loaned to the Borrowers shall bear interest at the rate applicable to
          Base Rate Revolving Loans and for all other purposes of this Agreement shall be
          treated as if they were Revolving Loans, provided, however, that for purposes of
          voting or consenting to matters with respect to the Loan Documents and
          determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
          Lender. Until a Defaulting Lender cures its failure to fund its Pro
          Rata Share of any Borrowing (i) such Defaulting Lender shall not be entitled to
          any portion of the Unused Line Fee, and (ii) the Unused Line Fee shall accrue in
          favor of the Lenders which have funded their respective Pro Rata Shares of such
          requested Borrowing and shall be allocated among such performing Lenders ratably
          based upon their relative Commitments. This Section 12.15(d) shall remain
          effective with respect to such Lender until such time as the Defaulting Lender
          shall no longer be in default of any of its obligations under this Agreement.
          The terms of this Section 12.15(d) shall not be construed to increase or
          otherwise affect the Commitment of any Lender, or relieve or excuse the
          performance by any Obligor of its duties and obligations hereunder.

(e)       
          Removal of Defaulting Lender. At the Borrowers request, the Agent
          or an Eligible Assignee reasonably acceptable to the Agent and the
          Borrowers Agent shall have the right (but not the obligation) to purchase
          from any Defaulting Lender, and each Defaulting Lender shall, upon such request,
          sell and assign to the Agent or such Eligible Assignee, all of the Defaulting
          Lenders outstanding Commitments hereunder. Such sale shall be consummated
          promptly after the Agent has arranged for a purchase by the Agent or an Eligible
          Assignee pursuant to an Assignment and Acceptance, and at a price equal to the
          outstanding principal balance of the Defaulting Lenders Loans, plus
          accrued interest and fees, without premium or discount.

12.16             Letters of Credit;
Intra-Lender Issues.

(a)       
          Notice of Letter of Credit Balance. On each Settlement Date the Agent
          shall notify each Lender of the issuance of all Letters of Credit since the
          prior Settlement Date.

(b)       
          Participations in Letters of Credit.

| | (i)              Purchase
of Participations. Immediately upon issuance of any Letter of           Credit in
accordance with Section 1.3(d), each Lender shall be deemed to           have
irrevocably and unconditionally purchased and received without recourse or
          warranty, an undivided interest and participation equal to such Lenders
          Pro Rata Share of the face amount of such Letter of Credit or the Credit
Support           provided through the Agent to the Letter of Credit Issuer, if not the
Bank, in           connection with the issuance of such Letter of Credit (including all
obligations           of the Obligors with respect thereto, and any security therefor or
guaranty           pertaining thereto).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)              Sharing
of Reimbursement Obligation Payments. Whenever the Agent receives           a payment
from any Obligor on account of reimbursement obligations in respect of           a Letter
of Credit or Credit Support as to which the Agent has previously           received for
the account of the Letter of Credit Issuer thereof payment from a           Lender, the
Agent shall promptly pay to such Lender such Lenders Pro Rata           Share of
such payment from such Obligor. Each such payment shall be made by the           Agent on
the next Settlement Date.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)              Documentation.
Upon the request of any Lender, the Agent shall furnish to           such Lender copies
of any Letter of Credit, Credit Support for any Letter of           Credit, reimbursement
agreements executed in connection therewith, applications           for any Letter of
Credit, and such other documentation as may reasonably be           requested by such
Lender.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)              Obligations
Irrevocable. The obligations of each Lender to make payments           to the Agent
with respect to any Letter of Credit or with respect to their           participation
therein or with respect to any Credit Support for any Letter of           Credit or with
respect to the Revolving Loans made as a result of a drawing           under a Letter of
Credit and the obligations of the Obligor for whose account           the Letter of
Credit or Credit Support was issued to make payments to the Agent,           for the
account of the Lenders, shall be irrevocable and shall not be subject to           any
qualification or exception whatsoever, including any of the following
          circumstances:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (1)                        any
lack of validity or enforceability of this Agreement or any of the other
| | -------------------------------------------------------------------------------------------------------

Loan Documents;

| | (2)                        the
existence of any claim, setoff, defense or other right which any Obligor may
          have at any time against a beneficiary named in a Letter of Credit or any
          transferee of any Letter of Credit (or any Person for whom any such transferee
          may be acting), any Lender, the Agent, the issuer of such Letter of Credit, or
          any other Person, whether in connection with this Agreement, any Letter of
          Credit, the transactions contemplated herein or any unrelated transactions
          (including any underlying transactions between any Obligor or any other Person
          and the beneficiary named in any Letter of Credit);
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3)                        any
draft, certificate or any other document presented under the Letter of           Credit
proving to be forged, fraudulent, invalid or insufficient in any respect           or any
statement therein being untrue or inaccurate in any respect;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4)                        the
surrender or impairment of any security for the performance or observance of
          any of the terms of any of the Loan Documents;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5)                        the
occurrence of any Default or Event of Default; or
| | --------------------------------------------------------------------------------

| | (6)                        the
failure of the Obligors to satisfy the applicable conditions precedent set
          forth in Article 8.
| | ---------------------------------------------------------------------------------------------------------------------------------------

(c)       
          Recovery or Avoidance of Payments; Refund of Payments In Error. In the
          event any payment by or on behalf of any Obligor received by the Agent with
          respect to any Letter of Credit or Credit Support provided for any Letter of
          Credit and distributed by the Agent to the Lenders on account of their
          respective participations therein is thereafter set aside, avoided or recovered
          from the Agent in connection with any receivership, liquidation or bankruptcy
          proceeding, the Lenders shall, upon demand by the Agent, pay to the Agent their
          respective Pro Rata Shares of such amount set aside, avoided or recovered,
          together with interest at the rate required to be paid by the Agent upon the
          amount required to be repaid by it. Unless the Agent receives notice from the
          Borrowers prior to the date on which any payment is due to the Lenders that the
          Borrowers will not make such payment in full as and when required, the Agent may
          assume that the Borrowers have made such payment in full to the Agent on such
          date in immediately available funds and the Agent may (but shall not be so
          required), in reliance upon such assumption, distribute to each Lender on such
          due date an amount equal to the amount then due such Lender. If and to the
          extent the Borrowers have not made such payment in full to the Agent, each
          Lender shall repay to the Agent on demand such amount distributed to such
          Lender, together with interest thereon at the Federal Funds Rate for each day
          from the date such amount is distributed to such Lender until the date repaid.

(d)       
          Indemnification by Lenders. To the extent not reimbursed by the Obligors
          and without limiting the obligations of the Obligors hereunder, the Lenders
          agree to indemnify the Letter of Credit Issuer ratably in accordance with their
          respective Pro Rata Shares, for any and all liabilities, obligations, losses,
          damages, penalties, actions, judgments, suits, costs, expenses (including
          attorneys fees) or disbursements of any kind and nature whatsoever that
          may be imposed on, incurred by or asserted against the Letter of Credit Issuer
          in any way relating to or arising out of any Letter of Credit or the
          transactions contemplated thereby or any action taken or omitted by the Letter
          of Credit Issuer under any Letter of Credit or any Loan Document in connection
          therewith; provided that no Lender shall be liable for any of the
          foregoing to the extent it arises from the gross negligence or willful
          misconduct of the Person to be indemnified. Without limitation of the foregoing,
          each Lender agrees to reimburse the Letter of Credit Issuer promptly upon demand
          for its Pro Rata Share of any costs or expenses payable by the Obligors to the
          Letter of Credit Issuer, to the extent that the Letter of Credit Issuer is not
          promptly reimbursed for such costs and expenses by the Obligors. The agreement
          contained in this Section 12.16(d) shall survive payment in full of all
          other Obligations.

12.17             Concerning the Collateral
and the Related Loan Documents. Each Lender authorizes and directs the Agent to enter
into the other Loan Documents, for the ratable benefit and obligation of the Agent and the
Lenders. Each Lender agrees that any action taken by the Agent or the Required Lenders, as
applicable, in accordance with the terms of this Agreement or the other Loan Documents,
and the exercise by the Agent or the Required Lenders, as applicable, of their respective
powers set forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders. The Lenders acknowledge that
the Revolving Loans, Agent Advances, Non-Ratable Loans, Bank Products and all interest,
fees and expenses hereunder constitute one Debt, secured pari passu by all
of the Collateral.

12.18             Field Audit and Examination Reports; Disclaimer by Lenders..
By signing this Agreement, each Lender:

(a)       
          is deemed to have requested that the Agent furnish such Lender, promptly after
          it becomes available, a copy of each field audit or examination report (each a
          Report and collectively, Reports) prepared
          by or on behalf of the Agent;

(b)       
          expressly agrees and acknowledges that neither the Bank nor the Agent (i) makes
          any representation or warranty as to the accuracy of any Report, or (ii) shall
          be liable for any information contained in any Report;

(c)       
          expressly agrees and acknowledges that the Reports are not comprehensive audits
          or examinations, that the Agent or the Bank or other party performing any audit
          or examination will inspect only specific information regarding the Obligors and
          will rely significantly upon the Obligors books and records, as well as on
          representations of the Obligors personnel;

(d)       
          agrees to keep all Reports confidential and strictly for its internal use, and
          not to distribute except to its participants, or use any Report in any other
          manner; and

(e)       
          without limiting the generality of any other indemnification provision contained
          in this Agreement, agrees: (i) to hold the Agent and any such other Lender
          preparing a Report harmless from any action the indemnifying Lender may take or
          conclusion the indemnifying Lender may reach or draw from any Report in
          connection with any loans or other credit accommodations that the indemnifying
          Lender has made or may make to the Borrowers, or the indemnifying Lenders
          participation in, or the indemnifying Lenders purchase of, a loan or loans
          of the Borrowers; and (ii) to pay and protect, and indemnify, defend and hold
          the Agent and any such other Lender preparing a Report harmless from and
          against, the claims, actions, proceedings, damages, costs, expenses and other
          amounts (including Attorney Costs) incurred by the Agent and any such other
          Lender preparing a Report as the direct or indirect result of any third parties
          who might obtain all or part of any Report through the indemnifying Lender.

12.19             Relation Among Lenders.
The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts
or omissions of, or (except as otherwise set forth herein in case of the Agent) authorized
to act for, any other Lender.

ARTICLE 13

SUBSIDIARY GUARANTIES

13.1             Subsidiary Guaranties.
Each of the Guarantors hereby unconditionally and irrevocably, jointly and severally,
guarantees the full payment and performance by the Borrowers of all of the Obligations,
whether now existing or hereafter arising. Each Guarantor hereby unconditionally and
irrevocably agrees that upon default in the payment when due (whether at stated maturity,
by acceleration or otherwise) of any principal of, or interest on, any Loan or any other
Obligation, it will forthwith pay the same, without notice or demand.

13.2             Obligations Absolute.
Each Guarantor agrees that the Obligations will be paid strictly in accordance with the
terms of the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the Agent or
any Lender with respect thereto. All Obligations shall be conclusively presumed to have
been created in reliance hereon. The Guarantors obligations under this Agreement
shall be absolute and unconditional irrespective of: (a) any lack of validity or
enforceability of any Loan Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payments of, or in any other term of, all
or any part of the Obligations, or any other amendment or waiver thereof or any consent to
departure therefrom, including any increase in the Obligations resulting from the
extension of additional credit to any Borrower or otherwise; (c) any taking, exchange,
release or non-perfection of any Collateral, or any release or amendment or waiver of or
consent to departure from any guaranty for all or any of the Obligations; (d) any change,
restructuring or termination of the corporate structure or existence of any Obligor; or
(e) any other circumstance which might otherwise constitute a defense available to, or a
discharge of, any Obligor. The Guarantors obligations under this Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time any payment
of any of the Obligations is rescinded or must otherwise be returned by the Agent or any
Lender upon the insolvency, bankruptcy or reorganization of any Obligor or otherwise, all
as though such payment had not been made. The Guarantors obligations under this
Agreement may be deemed by the Agent to be an agreement of guaranty or surety.

13.3             Waiver of Suretyship
Defenses. Each Guarantor agrees that the joint and several liability of the Guarantors
provided for in Section 13.1 shall not be impaired or affected by any modification,
supplement, extension or amendment of any contract or agreement to which any other Obligor
may hereafter agree (other than an agreement signed by the Agent and the Lenders
specifically releasing such liability), nor by any delay, extension of time, renewal,
compromise or other indulgence granted by the Agent or any Lender with respect to any of
the Obligations, nor by any other agreements or arrangements whatever with the other
Obligors or with anyone else, each Guarantor hereby waiving all notice of such delay,
extension, release, substitution, renewal, compromise or other indulgence, and hereby
consenting to be bound thereby as fully and effectually as if it had expressly agreed
thereto in advance. The liability of each Guarantor is direct and unconditional as to all
of the Obligations, and may be enforced without requiring the Agent or any Lender first to
resort to any other right, remedy or security. Each Guarantor hereby expressly waives
promptness, diligence, notice of acceptance and any other notice (except to the extent
expressly provided for herein or in another Loan Document) with respect to any of the
Obligations, this Agreement or any other Loan Document and any requirement that the Agent
or any Lender protect, secure, perfect or insure any Lien or any property subject thereto
or exhaust any right or take any action against any Obligor or any other Person or any
Collateral, including any rights any Guarantor may otherwise have under Official Code of
Georgia Annotated Section 10-7-24 or any successor statute or any analogous statute in any
jurisdiction under the laws of which any Guarantor is incorporated or in which any
Guarantor conducts business.

13.4             Contribution and
Indemnification. To the extent that any Guarantor shall repay any of the Obligations
(an Accommodation Payment), then, to the extent that such Guarantor has
not received the benefit of such repaid Obligations (whether through an inter-company loan
or otherwise), the Guarantor making such Accommodation Payment shall be entitled to
contribution and indemnification from, and be reimbursed by, each of the other Obligors in
an amount, for each of such other Obligors, equal to a fraction of such Accommodation
Payment, the numerator of which fraction is such other Obligors
Allocable Amount (as defined below) and the denominator of which
is the sum of the Allocable Amounts of all of the Obligors. As of any date of
determination, the Allocable Amount of each Guarantor shall be equal to
the maximum amount of liability for Accommodation Payments which could be asserted against
such Guarantor hereunder without (a) rendering such Guarantor insolvent within
the meaning of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act
(the UFTA), Section 2 of the Uniform Fraudulent Conveyance Act
(UFCA), (b) leaving such Guarantor with unreasonably small capital or assets,
within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or
Section 4 of the UFCA, or (c) leaving such Guarantor unable to pay its debts as they
become due within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the
UFTA, or Section 5 of the UFCA. All rights and claims of contribution,
indemnification and reimbursement under this Section 13.4 shall be subordinate in
right of payment to the prior payment in full of the Obligations.

13.5             Subordination of Intercompany
Debt. Each of the Obligors hereby agrees that (a) all Debt owing by any Obligor or any
Subsidiary to any other Obligor or any Subsidiary shall be subject and subordinate in all
respects to the Obligations, provided that, as long as no Event of Default exists,
payments may be made on such Debt to the extent expressly permitted hereunder, (b) it
shall deliver, or cause to be delivered, to the Agent the original of each promissory note
evidencing such Debt, properly endorsed over to the Agent, and (c) all such promissory
notes shall contain a legend in the form set forth below:

| | THE
INDEBTEDNESS EVIDENCED BY THIS PROMISSORY NOTE IS SUBJECT AND SUBORDINATE TO THE
OBLIGATIONS AS DESCRIBED IN THAT CERTAIN AMENDED AND RESTATED CREDIT
AGREEMENT, DATED AS OF MAY 20, 2003, AMONG PSS WORLD MEDICAL, INC. AND CERTAIN OF ITS
SUBSIDIARIES, THE LENDERS FROM TIME TO TIME PARTY THERETO, AND BANK OF AMERICA, N.A., AS
AGENT, AS AMENDED, MODIFIED AND SUPPLEMENTED FROM TIME TO TIME.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ARTICLE 14

MISCELLANEOUS

14.1             No Waivers; Cumulative
Remedies. No failure by the Agent or any Lender to exercise any right, remedy, or
option under this Agreement or any present or future supplement thereto, or in any other
agreement between or among any Obligor and the Agent and/or any Lender, or delay by the
Agent or any Lender in exercising the same, will operate as a waiver thereof. No waiver by
the Agent or any Lender will be effective unless it is in writing, and then only to the
extent specifically stated. No waiver by the Agent or the Lenders on any occasion shall
affect or diminish the Agents and each Lenders rights thereafter to require
strict performance by the Obligors of any provision of this Agreement. The Agent and the
Lenders may proceed directly to collect the Obligations without any prior recourse to the
Collateral. The Agents and each Lenders rights under this Agreement will be
cumulative and not exclusive of any other right or remedy which the Agent or any Lender
may have.

14.2             Severability. The
illegality or unenforceability of any provision of this Agreement or any Loan Document or
any instrument or agreement required hereunder shall not in any way affect or impair the
legality or enforceability of the remaining provisions of this Agreement or any instrument
or agreement required hereunder.

14.3             Governing Law; Choice of Forum; Service of Process..

(a)       
          THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE
          PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
          THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH RESPECT TO
          ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW
          RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF GEORGIA; PROVIDED THAT
          THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

(b)       
          ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
          DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF GEORGIA OR OF THE UNITED
          STATES OF AMERICA LOCATED IN THE NORTHERN DISTRICT OF GEORGIA, AND BY EXECUTION
          AND DELIVERY OF THIS AGREEMENT, EACH OF THE OBLIGORS, THE AGENT AND THE LENDERS
          CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
          JURISDICTION OF THOSE COURTS. EACH OF THE OBLIGORS, THE AGENT AND THE LENDERS
          IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
          OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
          HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
          IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE
          FOREGOING: (1) THE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY
          ACTION OR PROCEEDING AGAINST ANY OBLIGOR OR ITS PROPERTY IN THE COURTS OF ANY
          OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN
          ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2)
          EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS
          DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT
          LOCATED OUTSIDE THOSE JURISDICTIONS.

(c)       
          EACH OBLIGOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
          CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN
          RECEIPT REQUESTED) DIRECTED TO SUCH OBLIGOR AT THE BORROWERS AGENTS
          ADDRESS SET FORTH IN SECTION 14.8 AND SERVICE SO MADE SHALL BE
          DEEMED TO BE COMPLETED FIVE (5) BUSINESS DAYS AFTER THE SAME SHALL HAVE BEEN SO
          DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL
          AFFECT THE RIGHT OF AGENT OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER
          MANNER PERMITTED BY LAW.

14.4             WAIVER OF JURY TRIAL.
EACH OBLIGOR, THE LENDERS AND THE AGENT EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO
A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH OBLIGOR, THE
LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY
A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE
THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS
TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

14.5             Survival of Representations
and Warranties. All of the Obligors representations and warranties contained in
this Agreement shall survive the execution, delivery, and acceptance thereof by the
parties, notwithstanding any investigation by the Agent or the Lenders or their respective
agents.

14.6             Other Security and
Guaranties. The Agent may, without notice or demand and without affecting the
Obligors obligations hereunder, from time to time: (a) take from any Person and hold
collateral (other than the Collateral) for the payment of all or any part of the
Obligations and exchange, enforce or release such collateral or any part thereof; and (b)
accept and hold any endorsement or guaranty of payment of all or any part of the
Obligations and release or substitute any such endorser or guarantor, or any Person who
has given any Lien in any other collateral as security for the payment of all or any part
of the Obligations, or any other Person in any way obligated to pay all or any part of the
Obligations.

14.7             Fees and Expenses. The
Borrowers agree to pay to the Agent, for its benefit, on demand, all reasonable costs and
expenses that the Agent pays or incurs in connection with the negotiation, preparation,
syndication, consummation, administration, enforcement, and termination of this Agreement
or any of the other Loan Documents, including: (a) Attorney Costs; (b) reasonable
costs and expenses (including attorneys and paralegals fees and disbursements)
for any amendment, supplement, waiver, consent, or subsequent closing in connection with
the Loan Documents and the transactions contemplated thereby; (c) costs and expenses
of lien searches; (d) taxes, fees and other charges for filing financing statements
and continuations, and other actions to perfect, protect, and continue the Agents
Liens (including reasonable costs and expenses paid or incurred by the Agent in connection
with the consummation of Agreement); (e) sums paid or incurred to pay any amount or
take any action required of any Obligor under the Loan Documents that such Obligor fails
to pay or take; (f) costs of appraisals (including all Appraisals), inspections, and
verifications of the Collateral, including travel, lodging, and meals for inspections of
the Collateral and the Obligors operations by the Agent plus the Agents then
customary charge for field examinations and audits and the preparation of reports thereof
(such charge is currently $750 per day (or portion thereof) for each Person retained or
employed by the Agent with respect to each field examination or audit); and (g) costs
and expenses of forwarding loan proceeds, collecting checks and other items of payment,
and establishing and maintaining Payment Accounts and lock boxes, and costs and expenses
of preserving and protecting the Collateral. In addition, the Borrowers agree to pay on
demand to the Agent, for its benefit, all costs and expenses incurred by the Agent
(including Attorneys Costs), and to the other Lenders, for their benefit, on demand,
all reasonable fees, expenses and disbursements incurred by such other Lenders for one law
firm retained by such other Lenders, in each case, paid or incurred to obtain payment of
the Obligations, enforce the Agents Liens, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of the Loan Documents, or to defend any
claims made or threatened against the Agent or any Lender arising out of the transactions
contemplated hereby (including preparations for and consultations concerning any such
matters). The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrowers. All of the foregoing
costs and expenses shall be charged to the Borrowers Loan Account as Revolving Loans
as described in Section 3.5.

14.8             Notices. Except as
otherwise provided herein, all notices, demands and requests that any party is required or
elects to give to any other shall be in writing, or by a telecommunications device capable
of creating a written record, and any such notice shall become effective (a) upon
personal delivery thereof, including, but not limited to, delivery by overnight mail and
courier service, (b) five (5) days after it shall have been mailed by United States
mail, first class, certified or registered, with postage prepaid, or (c) in the case
of notice by such a telecommunications device, when properly transmitted, in each case
addressed to the party to be notified as follows:

|                                                                               | 
|------------------------------------------------------------------------------ | 
|If to the Agent or to the Bank:                                                | 
|Bank of America, N.A                                                          
|600 Peachtree Street, 5th Floor                                               
|Atlanta, GA 30308                                                             
|Attention: Business Credit-Account Executive                                  
|Telecopy No.: 404-607-6439                                                    
|with copies to:                                                               
|Troutman Sanders LLP                                                          
|600 Peachtree Street, 52nd Floor                                              
|Atlanta, GA 30308                                                             
|Attention: Michael Leveille                                                   
|Telecopy No.: 404-885-3995                                                    
|If to any Borrower or Guarantor:                                              
|PSS World Medical, Inc.                                                       
|4345 Southpoint Boulevard                                                     
|Jacksonville, FL 32216                                                        
|Attention:  David Klarner                                                     
|Telecopy No.: 904-332-3214                                                    
|with copies to:                                                               
|Foley & Lardner                                                               
|The Greenleaf Building                                                        
|200 Laura Street                                                              
|Jacksonville, FL  32202                                                       
|Attention:  Charles V. Hedrick                                                
|Telecopy No.:  904-359-8700                                                   
|If to a Lender:                                                               
|To the address of such Lender set forth on the signature page hereto or on the
|Assignment and Acceptance for such Lender, as applicable                      

or to such other address as each
party may designate for itself by like notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other communication to the
persons designated above to receive copies shall not adversely affect the effectiveness of
such notice, demand, request, consent, approval, declaration or other communication.

14.9            
Waiver of Notices. Unless otherwise expressly provided herein, each
Obligor waives presentment, and notice of demand or dishonor and protest as to any
instrument, notice of intent to accelerate the Obligations and notice of acceleration of
the Obligations, as well as any and all other notices to which it might otherwise be
entitled. No notice to or demand on any Obligor which the Agent or any Lender may elect to
give shall entitle any Obligor to any or further notice or demand in the same, similar or
other circumstances.

14.10             Binding Effect. The
provisions of this Agreement shall be binding upon and inure to the benefit of the
respective representatives, successors, and assigns of the parties hereto;
provided, however, that no interest herein may be assigned by any Obligor
without prior written consent of the Agent and each Lender. The rights and benefits of the
Agent and the Lenders hereunder shall, if such Persons so agree, inure to any party
acquiring any interest in the Obligations or any part thereof.

14.11            
Indemnity of the Agent and the Lenders by the Borrowers.

(a)       
          The Borrowers agree to defend, indemnify and hold the Agent-Related Persons and
          each Lender, and each of their respective officers, directors, employees,
          counsel, representatives, agents and attorneys-in-fact (each, an
          Indemnified Person) harmless from and against any and all
          liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
          costs, charges, expenses and disbursements (including Attorney Costs) of any
          kind or nature whatsoever which may at any time (including at any time following
          repayment of the Loans and the termination, resignation or replacement of the
          Agent or replacement of any Lender) be imposed on, incurred by or asserted
          against any such Person in any way relating to or arising out of this Agreement
          or any document contemplated by or referred to herein, or the transactions
          contemplated hereby, or any action taken or omitted by any such Person under or
          in connection with any of the foregoing, including with respect to any
          investigation, litigation or proceeding (including any Insolvency Proceeding or
          appellate proceeding) related to or arising out of this Agreement, any other
          Loan Document, or the Loans or the use of the proceeds thereof, whether or not
          any Indemnified Person is a party thereto (all the foregoing, collectively, the
          Indemnified Liabilities); provided, that the Borrowers
          shall have no obligation hereunder to any Indemnified Person with respect to
          Indemnified Liabilities resulting solely from the gross negligence or willful
          misconduct of such Indemnified Person. The agreements in this Section
          14.11 shall survive payment of all other Obligations and the termination of
          this Agreement.

(b)       
          The Borrowers agree to indemnify, defend and hold harmless the Agent and the
          Lenders from any loss or liability directly or indirectly arising out of the
          use, generation, manufacture, production, storage, release, threatened release,
          discharge, disposal or presence of a hazardous substance attributable to any
          Borrower or to real property owned or leased by any Borrower. This indemnity
          will apply whether the hazardous substance is on, under or about real property
          owned or leased by any Borrower. The indemnity includes but is not limited to
          Attorneys Costs. The indemnity extends to the Agent and the Lenders, their
          parents, affiliates, subsidiaries and all of their directors, officers,
          employees, agents, successors, attorneys and assigns. Hazardous
          substances means any substance, material or waste that is or becomes
          designated or regulated as toxic, hazardous,
          pollutant, or contaminant or a similar designation or
          regulation under any applicable Environmental Law including petroleum or natural
          gas. This indemnity will survive repayment of all other Obligations and the
          termination of this Agreement. Notwithstanding anything to the contrary
          contained herein, the Borrowers shall have no obligation hereunder with respect
          to any liability or loss resulting from the gross negligence or willful
          misconduct of any party indemnified hereunder or with respect to any hazardous
          substance placed or deposited on, under or about any real property by any party
          indemnified hereunder in violation of Environmental Laws.

(c)       
          Unless an Event of Default (other than an Event of Default under Section
          9.1(c)) exists at the time of any settlement, the Borrowers shall not be
          liable under this Agreement for any settlement made by any Indemnified Person
          without the Borrowers prior written consent (which consent shall not be
          unreasonably withheld). The Borrowers agree to indemnify and hold harmless any
          Indemnified Person from and against any loss or liability by reason of the
          settlement of any claim or action with the consent of the Borrowers. The
          Borrowers shall not settle any claim or action without the prior written consent
          of the applicable Indemnified Person, which consent shall not be unreasonably
          withheld.

14.12             Limitation of Liability.
NO CLAIM MAY BE MADE BY ANY OBLIGOR, ANY LENDER OR OTHER PERSON AGAINST THE AGENT, ANY
LENDER, OR THE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, REPRESENTATIVES,
AGENTS OR ATTORNEYS-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF
LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH,
AND EACH OBLIGOR AND EACH LENDER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY
CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO
EXIST IN ITS FAVOR.

14.13             Final Agreement. This
Agreement and the other Loan Documents are intended by the Obligors, the Agent and the
Lenders to be the final, complete, and exclusive expression of the agreement between them.
This Agreement supersedes any and all prior oral or written agreements relating to the
subject matter hereof (except for the Fee Letter). No modification, rescission, waiver,
release, or amendment of any provision of this Agreement or any other Loan Document shall
be made, except by a written agreement signed by the Obligors and a duly authorized
officer of each of the Agent and the requisite Lenders.

14.14             Counterparts. This
Agreement may be executed in any number of counterparts, and by the Agent, each Lender and
each Obligor in separate counterparts, each of which shall be an original, but all of
which shall together constitute one and the same agreement; signature pages may be
detached from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.

14.15             Captions. The captions
contained in this Agreement are for convenience of reference only, are without substantive
meaning and should not be construed to modify, enlarge, or restrict any provision.

14.16             Right of Setoff. In
addition to any rights and remedies of the Lenders provided by law, if an Event of Default
exists or the Loans have been accelerated, each Lender is authorized at any time and from
time to time, without prior notice to any Obligor, any such notice being waived by the
Obligors 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 by, and other
indebtedness at any time owing by, such Lender or any Affiliate of such Lender to or for
the credit or the account of any Obligor against any and all Obligations owing to such
Lender, now or hereafter existing, irrespective of whether or not the Agent or such Lender
shall have made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. Each Lender agrees promptly to notify the
Borrowers Agent and the Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. NOTWITHSTANDING THE FOREGOING, NO
LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF, BANKERS LIEN, OR THE LIKE AGAINST ANY
DEPOSIT ACCOUNT OR PROPERTY OF ANY OBLIGOR HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE
PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.

14.17             Confidentiality.

(a)       
          Each Obligor hereby consents that the Agent and each Lender may issue and
          disseminate to the public general information describing the credit
          accommodations entered into pursuant to this Agreement, including the names and
          addresses of the Obligors and a general description of the Obligors
          business and may use each Obligors name in advertising and other
          promotional material.

(b)       
          Each Lender severally agrees to take normal and reasonable precautions and
          exercise due care to maintain the confidentiality of all information identified
          as confidential or secret by any Obligor and provided to
          the Agent or such Lender by or on behalf of any Obligor, under this Agreement or
          any other Loan Document, except to the extent that such information (i) was or
          becomes generally available to the public other than as a result of disclosure
          by the Agent or such Lender, or (ii) was or becomes available on a
          nonconfidential basis from a source other than an Obligor, provided that such
          source is not bound by a confidentiality agreement with any Obligor known to the
          Agent or such Lender; provided, however, that the Agent and any
          Lender may disclose such information (1) at the request or pursuant to any
          requirement of any Governmental Authority to which the Agent or such Lender is
          subject or in connection with an examination of the Agent or such Lender by any
          such Governmental Authority; (2) pursuant to subpoena or other court process;
          (3) when required to do so in accordance with the provisions of any applicable
          Requirement of Law; (4) to the extent reasonably required in connection with any
          litigation or proceeding (including, but not limited to, any bankruptcy
          proceeding) to which the Agent, any Lender or their respective Affiliates may be
          party; (5) to the extent reasonably required in connection with the exercise of
          any remedy hereunder or under any other Loan Document; (6) to the Agents
          or such Lenders independent auditors, accountants, attorneys and other
          professional advisors; (7) to any prospective Participant or Assignee under any
          Assignment and Acceptance, actual or potential, provided that such prospective
          Participant or Assignee agrees to keep such information confidential to the same
          extent required of the Agent and the Lenders hereunder; (8) as expressly
          permitted under the terms of any other document or agreement regarding
          confidentiality to which any Obligor is party or is deemed party with the Agent
          or such Lender, and (9) to its Affiliates. Notwithstanding anything herein to
          the contrary, the information subject to this Section 14.17(b)shall not
          include, and the Agent and each Lender may disclose without limitation of any
          kind, any information with respect to the tax treatment and
          tax structure (in each case, within the meaning of Treasury
          Regulation Section 1.6011-4) of the transactions contemplated hereby and all
          materials of any kind (including opinions or other tax analyses) that are
          provided to the Agent or such Lender relating to such tax treatment and tax
          structure; provided that with respect to any document or similar item
          that in either case contains information concerning the tax treatment or tax
          structure of the transactions as well as other information, this sentence shall
          only apply to such portions of the document or similar item that relate to the
          tax treatment or tax structure of the Loans, Letters of Credit and transactions
          contemplated hereby.

14.18             Conflicts with Other Loan
Documents. Unless otherwise expressly provided in this Agreement (or in another Loan
Document by specific reference to the applicable provision contained in this Agreement),
if any provision contained in this Agreement conflicts with any provision of any other
Loan Document, the provision contained in this Agreement shall govern and control.

14.19             No Novation. The
amendment and restatement of the terms of the Existing Agreement, as more fully set forth
in this Agreement, shall not constitute a novation of any of the indebtedness outstanding
under the Existing Agreement.

[REMAINDER OF PAGE LEFT
INTENTIONALLY BLANK]

---

Credit Agmt (Receivables
and Inventory) PSS.DOCCredit Agreement

IN WITNESS WHEREOF, the parties have
entered into this Amended and Restated Credit Agreement on the date first above written.

| | "BORROWERS"                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------
| | PSS WORLD MEDICAL, INC.
By:
Name:
Title:                                                                                     
| | GULF SOUTH MEDICAL SUPPLY, INC.
By:
Name:
Title:                                                                             
| | PHYSICIAN SALES & SERVICE
LIMITED PARTNERSHIP
By:      PSS World Medical, Inc.,
         its general partner
By:
Name:
Title:

| | "GUARANTORS"                                    
| | ------------------------------------------------
| | PSS HOLDING, INC.
By:
Name:
Title:              
| | PSS SERVICE, INC.
By:
Name:
Title:              
| | PHYSICIAN SALES & SERVICE, INC.
By:
Name:
Title:
| | THRIFTYMED, INC.
By:
Name:
Title:               

| | "AGENT"                                             
| | ----------------------------------------------------
| | Bank of America, N.A., as the Agent
By:
Name:
Title:

|                                                                                                                                                                              | "LENDERS"                                          
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------
|Address:
                                           
600 Peachtree Street, 5th Floor
Atlanta, GA 30308
Attn:  Business Credit - Account Executive 
Telecopy No:  404-607-6439 | Bank of America, N.A., as a Lender
By:
Name:
Title:

---

# ANNEX A

# to

# Credit Agreement

# Definitions

Capitalized terms used in the Loan
Documents shall have the following respective meanings (unless otherwise defined therein),
and all section references in the following definitions shall refer to sections of the
Agreement:

Account Debtor
means each Person obligated in any way on or in connection with an Account.

Accounts means all
of any Obligors now owned or hereafter acquired or arising accounts, as defined in
the UCC, including any rights to payment for the sale or lease of goods or rendition of
services, whether or not they have been earned by performance.

Accounts Payable
Turnover means (a) in the case of the determination thereof as of any fiscal
month end of the Obligors, the quotient obtained by dividing (i) 360 by (ii) the quotient
of (A) the product obtained by multiplying (1) the Obligors cost of goods sold
during the three fiscal month period ending on such fiscal month end, by (2) four, divided
by (B) the aggregate outstanding accounts payable of the Obligors as of such fiscal month
end, and (b) in the case of the determination thereof as of the date of any Permitted
Acquisition or Permitted Stock Redemption, the quotient obtained by dividing (i) 360 by
(ii) the quotient of (A) the product obtained by multiplying (1) the Obligors cost
of goods sold during the three fiscal month period ending on the last day of the most
recently ended fiscal month for which the Borrowers have delivered the financial
statements required under Section 5.2(b) or (c), as the case may be, by (2)
four, divided by (B) the aggregate outstanding accounts payable of the Obligors as of the
close of business on the Business Day immediately preceding such Permitted Acquisition or
Permitted Stock Redemption.

ACH Transactions
means any cash management, disbursement or related services, including overdrafts and the
automatic clearing house transfer of funds by the Bank or any Affiliate of the Bank for
the account of any Obligor.

Adjusted Net Earnings from
Operations means, with respect to any fiscal period of the Obligors, the net
income of the Obligors and their consolidated Subsidiaries after provision for income
taxes for such fiscal period, as determined in accordance with GAAP and reported on the
Financial Statements for such period, excluding any and all of the following included in
such net income: (a) gain or loss arising from the sale of any capital assets; (b) gain
arising from any write-up in the book value of any asset; (c) earnings of any Person,
substantially all the assets of which have been acquired by an Obligor in any manner, to
the extent realized by such other Person prior to the date of acquisition; (d) earnings of
any Person in which an Obligor has an ownership interest unless (and only to the extent)
such earnings shall actually have been received by such Obligor in the form of cash
distributions; (e) earnings of any Person (other than an Obligor or another consolidated
Subsidiary) to which assets of any Obligor shall have been sold, transferred or disposed
of, or into which an Obligor shall have been merged, or which has been a party with any
Obligor to any consolidation or other form of reorganization, prior to the date of such
transaction; (f) gain arising from the acquisition of debt or equity securities of any
Obligor or from cancellation or forgiveness of Debt; (g) to the extent such fiscal period
includes March 28, 2003, the actual cash prepayment premium paid by PSS in the amount of
$4,505,000 in connection with the redemption of the Senior Subordinated Notes on March 28,
2003; (h) gain (and non-cash loss) arising from extraordinary items, as determined in
accordance with GAAP, or from any other non-recurring transaction; and (i) gain or loss
resulting from the operations or disposition of PSSs former Subsidiaries forming the
Diagnostic Imaging division.

Affiliate means,
as to any Person, any other Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person or which owns, directly or
indirectly, five percent (5%) or more of the outstanding equity interest of such Person. A
Person shall be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting securities, by
contract, or otherwise.

Agent means the
Bank, solely in its capacity as agent for the Lenders, and any successor agent.

Agent Advances has
the meaning specified in Section 1.2(i).

Agents Liens means
the Liens in the Collateral granted to the Agent, for the benefit of the Lenders, the Bank
and the Agent pursuant to this Agreement and the other Loan Documents.

Agent-Related
Persons means the Agent, together with its Affiliates, and the officers,
directors, employees, counsel, representatives, agents and attorneys-in-fact of the Agent
and such Affiliates.

Aggregate Revolver
Outstandings means, at any date of determination, the sum of (a) the aggregate
unpaid principal balance of Revolving Loans, (b) the aggregate amount of Pending Revolving
Loans, (c) one hundred percent (100%) of the aggregate undrawn face amount of all
outstanding Letters of Credit, and (d) the aggregate amount of any unpaid reimbursement
obligations in respect of Letters of Credit.

Agreement means
the Amended and Restated Credit Agreement to which this Annex A is attached, as from time
to time amended, modified or restated.

Anniversary Date
means each anniversary of the Closing Date.

Applicable
Margin means

| | (i)        with
respect to Base Rate Loans and all other Obligations (other than LIBOR
               Loans), 0.25%; and
| | ------------------------------------------------------------------------------------------------------------------------

| | (ii)        with
respect to LIBOR Loans, 2.25%.
| | -----------------------------------------------

The
Applicable Margins shall be adjusted (up or down) prospectively on a quarterly basis as
determined by the Leverage Ratio, commencing with the first day of the first calendar
month that occurs more than 5 days after delivery of the Borrowers quarterly
Financial Statements to Lenders for the fiscal quarter ending September 26, 2003.
Adjustments in Applicable Margins shall be determined by reference to the following grids:

|If the Ratio of AdjustedFunded Debt to
EBITDA is: | Level ofApplicable Margins:
|------------------------------------------------- | ---------------------------
|> 3.5 to 1.0                                      | Level I                    
|> 3.0 to 1.0 but < 3.5 to 1.0                     | Level II                   
|> 2.5 to 1.0 but < 3.0 to 1.0                     | Level III                  
|> 2.0 to 1.0 but < 2.5 to 1.0                     | Level IV                   
|> 1.35 to 1.0 but < 2.0 to 1.0                    | Level V                    
|< 1.35 to 1.0                                     | Level VI                   

|                | Applicable Margins
|--------------- | ------------------
|
|Base Rate Loans | 1.00%             
|LIBOR Loans     | 3.00%             

All
adjustments in the Applicable Margins after the adjustments with respect to the fiscal
quarter ending September 26, 2003 shall be implemented quarterly on a prospective basis,
for each calendar month commencing at least 5 days after the date of delivery to the
Lenders of quarterly unaudited or annual audited (as applicable) Financial Statements
evidencing the need for an adjustment. Concurrently with the delivery of those Financial
Statements, the Borrowers shall deliver to the Agent and the Lenders a certificate, signed
by a Designated Financial Officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. In the event that, subsequent to
the setting of the Applicable Margins based on the Borrowers unaudited Financial
Statements as of the end of the last fiscal quarter of any Fiscal Year, the Borrowers
deliver their audited Financial Statements as of the end of such Fiscal Year and such
audited Financial Statements call for a higher level set forth in the foregoing grid, such
higher level shall apply retroactively to the date of the setting of the Applicable
Margins based on such unaudited Financial Statements. Failure to timely deliver such
Financial Statements shall, at the election of the Agent and in addition to any other
remedy provided for in the Agreement, result in an increase in the Applicable Margins to
the highest level set forth in the foregoing grid, until the first day of the first
calendar month following the delivery of those Financial Statements demonstrating that
such an increase is not required. If a Default or Event of Default has occurred and is
continuing at the time any reduction in the Applicable Margins is to be implemented, no
reduction may occur until the first day of the first calendar month following the date on
which such Default or Event of Default is waived or cured.

Appraisal means an
appraisal, prepared on a basis satisfactory to the Agent, setting forth the Net Orderly
Liquidation Value of all of each Borrowers Inventory, which appraisal shall be
prepared in accordance with Section 7.4(c).

Asset Dispositions
has the meaning set forth in Section 7.9.

Assignee has the
meaning specified in Section 11.2(a).

Assignment and
Acceptance has the meaning specified in Section 11.2(a).

Attorney Costs
means and includes all reasonable fees, expenses and disbursements of any law firm or
other counsel engaged by the Agent, including the reasonably allocated costs and expenses
of internal legal services of the Agent.

Availability
means, at any time (a) the lesser of the Maximum Revolver Amount or the Borrowing Base,
minus (b) without duplication, Reserves, minus (c) the Aggregate Revolver
Outstandings.

Bank means Bank of
America, N.A., a national banking association, or any successor entity thereto.

Bank Products
means any one or more of the following types of services or facilities extended to an
Obligor by the Bank or by any Affiliate of the Bank: (a) credit cards; (b) ACH
Transactions; and (c) Hedge Agreements.

Bank Products
Reserves means all reserves which the Agent from time to time establishes in its
reasonable discretion with respect to Bank Products.

Base Rate means,
for any day, the rate of interest in effect for such day as publicly announced from time
to time by the Bank in Charlotte, North Carolina as its prime rate (the
prime rate being a rate set by the Bank based upon various factors including
the Banks costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate). Any change in the prime rate announced by the Bank shall take
effect at the opening of business on the day specified in the public announcement of such
change. Each Interest Rate based upon the Base Rate shall be adjusted simultaneously with
any change in the Base Rate.

Base Rate Loans
means all Base Rate Revolving Loans.

Base Rate Revolving
Loan means a Revolving Loan during any period in which it bears interest based
on the Base Rate.

Blocked Account
Agreement means an agreement among the Borrowers, the Agent and a Clearing Bank,
in form and substance reasonably satisfactory to the Agent, concerning the collection of
payments which represent the proceeds of Accounts or of any other Collateral.

Borrowers
Agent means PSS, in its capacity as agent for the Borrowers in accordance with
Section 3.9.

Borrowing means a
borrowing hereunder consisting of Revolving Loans made on the same day by the Lenders to
the Borrowers or by the Bank in the case of a Borrowing funded by Non-Ratable Loans or by
the Agent in the case of a Borrowing consisting of an Agent Advance, or the issuance of a
Letter of Credit hereunder.

Borrowing Base
means, at any time, an amount equal to (a) the sum of (i) eighty percent (80%) of the Net
Amount of Eligible Accounts; plus (ii) the lesser of (A) the Maximum Inventory Loan
Amount, (B) fifty-five percent (55%) of the net amount of Eligible Inventory (provided
such advance rate shall be forty-five percent (45%) until the Agent has received and had a
reasonable amount of time to review the initial Appraisal), or (C) eighty percent (80%) of
the Net Orderly Liquidation Value of Eligible Inventory (which shall be determined between
Appraisal dates by reference to the ratio of the Net Orderly Liquidation Value of Eligible
Inventory as set forth in the most recent Appraisal to the book value of Eligible
Inventory as of the effective date of such Appraisal); minus(b) the sum of (i) a
Reserve in the amount of three (3) months of rental, storage and other charges with
respect to leased and warehouse premises at which Inventory is located from time to time
for which a landlord or similar waiver acceptable to the Agent has not been obtained, as
such Reserve may be modified by the Agent from time to time in its reasonable credit
judgment, plus (ii) the amount of such other Reserves from time to time established
by the Agent in its reasonable credit judgment.

Borrowing Base
Certificate means a certificate by a Responsible Officer of the Borrowers,
substantially in the form of Exhibit A (or another form acceptable to the Agent)
setting forth the calculation of the Borrowing Base, including a calculation of each
component thereof, all in such detail as shall be reasonably satisfactory to the Agent.
All calculations of the Borrowing Base in connection with the preparation of any Borrowing
Base Certificate shall originally be made by the Borrowers and certified to the Agent;
provided, that the Agent shall have the right to review and adjust, in the exercise of its
reasonable credit judgment, any such calculation (a) to reflect its reasonable estimate of
declines in value of any of the Collateral described therein, and (b) to the extent that
such calculation is not in accordance with this Agreement.

Business Day means
(a) any day that is not a Saturday, Sunday, or a day on which banks in Atlanta, Georgia or
Charlotte, North Carolina are required or permitted to be closed, and (b) with respect to
all notices, determinations, fundings and payments in connection with LIBOR or LIBOR
Loans, any day that is a Business Day pursuant to clause (a) above and that is also
a day on which trading in Dollars is carried on by and between banks in the London
interbank market.

Capital Adequacy
Regulation means any guideline, request or directive of any central bank or
other Governmental Authority, or any other law, rule or regulation, whether or not having
the force of law, in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.

Capital
Expenditures means all payments due (whether or not paid during any fiscal
period) in respect of the cost of any fixed asset or improvement, or replacement,
substitution, or addition thereto, which has a useful life of more than one year,
including, without limitation, those costs arising in connection with the direct or
indirect acquisition of such asset by way of increased product or service charges or in
connection with a Capital Lease. Capital Expenditures do not include the purchase price
payable under any Permitted Acquisition.

Capital Lease
means any lease of property by any Obligor which, in accordance with GAAP, should be
reflected as a capital lease on the balance sheet of such Obligor.

Cash
Equivalents means:

(a)       
          direct obligations of the United States of America, or any agency thereof, or
          obligations guaranteed by the United States of America, provided that
          such obligations mature within ninety days from the date of acquisition thereof;

(b)       
          acquisitions of certificates of deposit maturing within ninety days from the
          date of acquisition, bankers acceptances, Eurodollar bank deposits, or
          overnight bank deposits, in each case issued by, created by, or with (i) any
          Lender, (ii) any bank or trust company organized under the laws of the United
          States of America or any state thereof having capital and surplus aggregating at
          least $100,000,000, or (iii) any bank having one of the two highest ratings from
          both Moodys Investors Service, Inc. and Standard & Poors
          Corporation;

(c)       
          repurchase agreements with a bank or trust company (including any of the Lenders
          that are banks) or recognized securities dealer having capital and surplus in
          excess of $100,000,000 for direct obligations issued by or fully guaranteed by
          the United States of America in which the applicable Obligor shall have a
          perfected first priority security interest (subject to no other Liens) and
          having, on the date of purchase thereof, a fair market value of at least 100% of
          the amount of the repurchase obligations; and

(d)       
          Investments, classified in accordance with GAAP as current assets, in money
          market investment programs registered under the Investment Company Act of 1940,
          as amended, which are administered by reputable financial institutions having
          capital of at least $500,000,000 and the portfolios of which are limited to
          investments of the character described in the foregoing clauses (a)
          through (c).

Change of Control
means the occurrence of any of the following: (a) a Person or group of Persons
(within the meaning of Section 13(d) of the Exchange Act), shall acquire, beneficially or
of record, 30% or more of the outstanding voting stock (stock entitled to vote for
election of directors) of PSS; (b) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the Board of Directors of PSS
(together with any new directors whose election by the Board of Directors of PSS or whose
nomination for election by the shareholders of PSS, as the case may be, was approved by a
vote of a majority of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the directors of PSS, as the
case may be, then in office; or (c) PSS shall cease to own 100% of the voting stock of any
other Obligor or such ownership shall cease to vest in PSS voting control with respect to
any other Obligor, except as a result of a transaction permitted under this Agreement.

Chattel Paper
means all of any Obligors now owned or hereafter acquired chattel paper, as defined
in the UCC, including electronic chattel paper.

Clearing Bank
means the Bank or any other banking institution with whom a Payment Account has been
established pursuant to a Blocked Account Agreement.

Closing Date
means the date of this Agreement.

Code means the
Internal Revenue Code of 1986.

Collateral means
all of the Collateral, as defined in the Security Agreement, all of the
Pledged Collateral, as defined in the Pledge Agreements, and all other assets
of any Person from time to time subject to Agents Liens securing payment or
performance of the Obligations.

Commitment means,
at any time with respect to a Lender, the principal amount set forth beside such
Lenders name under the heading Commitment on
Schedule 1.1 attached to this Agreement or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 11.2, as such Commitment may be
adjusted from time to time in accordance with the provisions of Section 11.2,
and Commitments means, collectively, the aggregate amount of the
commitments of all of the Lenders.

Contaminant means
any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special
waste, petroleum or petroleum-derived substance or waste, asbestos in any form or
condition, polychlorinated biphenyls (PCBs), or any constituent of any such
substance or waste.

Continuation/Conversion
Date means the date on which a Loan is converted into or continued as a LIBOR
Loan.

Copyright Security
Agreement means the Amended and Restated Conditional Assignment and Copyright
Security Agreement dated as of the date hereof, executed and delivered by the Obligors to
the Agent, for the benefit of the Agent and the Lenders, to evidence and perfect the
Agents Liens in the Obligors present and future copyrights and related
licenses and rights.

Credit Support has
the meaning specified in Section 1.3(a).

Debt means,
without duplication, all liabilities, obligations and indebtedness of any Obligor to any
Person, of any kind or nature, now or hereafter owing, arising, due or payable, howsoever
evidenced, created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed or otherwise, in each case to the extent such liabilities, obligations
and indebtedness consist of (a) indebtedness for borrowed money or the deferred purchase
price of property (including obligations to be paid in one or more installments under
non-compete arrangements entered into in connection with Permitted Acquisitions),
excluding trade payables; (b) the Obligations; (c) obligations and liabilities of any
Person secured by any Lien on any Obligors property, even though such Obligor shall
not have assumed or become liable for the payment thereof; provided,
however, that all such obligations and liabilities which are limited in recourse to
such property shall be included in Debt only to the extent of the book value of such
property as would be shown on a balance sheet of such Obligor prepared in accordance with
GAAP; (d) the principal amount of all obligations or liabilities created or arising under
any Capital Lease or conditional sale or other title retention agreement with respect to
property used or acquired by any Obligor, even if the rights and remedies of the lessor,
seller or lender thereunder are limited to repossession of such property; provided,
however, that all such obligations and liabilities which are limited in recourse to
such property shall be included in Debt only to the extent of the book value of such
property as would be shown on a balance sheet of such Obligor prepared in accordance with
GAAP; (e) obligations and liabilities under Guaranties of Debt; and (f) the
present value (discounted at the Base Rate) of lease payments due under synthetic leases.

Default means any
event or circumstance which, with the giving of notice, the lapse of time, or both, would
(if not cured, waived, or otherwise remedied during such time) constitute an Event of
Default.

Default Rate
means a fluctuating per annum interest rate at all times equal to the sum of (a) the
otherwise applicable Interest Rate, plus (b) two percent (2%) per annum. Each
Default Rate shall be adjusted simultaneously with any change in the applicable Interest
Rate. In addition, the Default Rate shall result in an increase in the Letter of Credit
Fee by two percentage points per annum.

Defaulting Lender
has the meaning specified in Section 12.15(c).

Designated Account
has the meaning specified in Section 1.2(c).

Designated Financial
Officer means each of the chief financial officer, the treasurer and any other
financial officer of PSS reasonably acceptable to the Agent.

Distribution
means, in respect of any corporation: (a) the payment or making of any dividend or
other distribution of property in respect of capital stock (or any options or warrants
for, or other rights with respect to, such stock) of such corporation, other than
distributions in capital stock (or any options or warrants for such stock) of such
corporation; or (b) the redemption or other acquisition by such corporation of any capital
stock (or any options or warrants for such stock) of such corporation other than through
the issuance of capital stock of such corporation.

Documents means
all documents as such term is defined in the UCC, including bills of lading, warehouse
receipts or other documents of title, now owned or hereafter acquired by any Obligor.

DOL means the
United States Department of Labor or any successor department or agency.

Dollar and
$ means dollars in the lawful currency of the United States. Unless
otherwise specified, all payments under this Agreement and the other Loan Documents shall
be made in Dollars.

Early Termination
Fee means the fee due and payable to the Agent, for the benefit of the Lenders
in accordance with their Pro Rata Shares, in an amount equal to (a) two percent (2%) of
the Maximum Revolver Amount if the Agreement is terminated by the Borrowers on or prior to
March 31, 2004, or (b) one percent (1%) of the Maximum Revolver Amount if the Agreement is
terminated by the Borrowers after March 31, 2004 but on or prior to March 31, 2005;
provided, however, no such fee shall be due and payable if the Agreement is
terminated in connection with a refinancing in full of the Obligations under the Agreement
with another lending department of the Bank.

EBITDA means, with
respect to any fiscal period of the Obligors, Adjusted Net Earnings from Operations,
plus, to the extent deducted in the determination of Adjusted Net Earnings from
Operations for that fiscal period, Interest Expense, federal, state, local and foreign
income taxes, depreciation and amortization, plus, unless paid in cash during the
applicable period, all restructuring charges of the Obligors for periods subsequent to the
Closing Date.

Eligible Accounts
means the Accounts arising from the sale of goods or rendition of services in the ordinary
course of business which the Agent in the exercise of its reasonable commercial discretion
determines to be Eligible Accounts. Without limiting the discretion of the Agent to
establish other criteria of ineligibility, Eligible Accounts shall not, unless the
Required Lenders in their sole discretion elect, include any Account:

(a)       
          with respect to which more than 90 days have elapsed since the date of the
          original invoice therefor or which is more than 60 days past due;

(b)       
          with respect to which any of the representations, warranties, covenants, and
          agreements contained in the Security Agreement are incorrect or have been
          breached;

(c)       
          which represents a progress billing (as hereinafter defined) or as to which the
          applicable Borrower has extended the time for payment without the consent of the
          Agent; for the purposes hereof, progress billing means any invoice
          for goods sold or leased or services rendered under a contract or agreement
          pursuant to which the Account Debtors obligation to pay such invoice is
          conditioned upon a Borrowers completion of any further performance under
          the contract or agreement (and progress billings shall include
          deferred service revenue billings);

(d)       
          with respect to which any one or more of the following events has occurred to
          the Account Debtor on such Account: death or judicial declaration of
          incompetency of an Account Debtor who is an individual; the filing by or against
          the Account Debtor of a request or petition for liquidation, reorganization,
          arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or
          other relief under the bankruptcy, insolvency, or similar laws of the United
          States, any state or territory thereof, or any foreign jurisdiction, now or
          hereafter in effect; the making of any general assignment by the Account Debtor
          for the benefit of creditors; the appointment of a receiver or trustee for the
          Account Debtor or for any of the assets of the Account Debtor, including,
          without limitation, the appointment of or taking possession by a
          custodian, as defined in the Federal Bankruptcy Code; the
          institution by or against the Account Debtor of any other type of insolvency
          proceeding (under the bankruptcy laws of the United States or otherwise) or of
          any formal or informal proceeding for the dissolution or liquidation of,
          settlement of claims against, or winding up of affairs of, the Account Debtor;
          the sale, assignment, or transfer of all or substantially all of the assets of
          the Account Debtor; the nonpayment generally by the Account Debtor of its debts
          as they become due; or the cessation of the business of the Account Debtor as a
          going concern;

(e)       
          owing by an Account Debtor for which fifty percent (50%) or more of the
          aggregate Dollar amount of outstanding Accounts owed at such time by such
          Account Debtor are classified as ineligible under this definition;

(f)       
          owed by an Account Debtor which: (i) does not maintain its chief executive
          office in the United States of America; or (ii) is not organized under the laws
          of the United States of America; or (iii) is the government of any foreign
          country or sovereign state, or of any state, province, municipality, or other
          political subdivision thereof, or of any department, agency, public corporation,
          or other instrumentality thereof; except to the extent that such Account is
          secured or payable by a letter of credit satisfactory to the Agent in its
          discretion;

(g)       
          owed by an Account Debtor which is an Affiliate or employee of a Borrower;

(h)       
          except as provided in clause (j) below, with respect to which either the
          perfection, enforceability, or validity of the Agents Liens in such
          Account, or the Agents right or ability to obtain direct payment to the
          Agent of the proceeds of such Account, is governed by any federal, state, or
          local statutory requirements other than those of the UCC;

(i)       
          owed by an Account Debtor to which any Borrower or any of its Subsidiaries is
          indebted in any way, or which is subject to any right of setoff or recoupment by
          the Account Debtor, unless the Account Debtor has entered into an agreement
          acceptable to the Agent to waive setoff rights; or if the Account Debtor thereon
          has disputed liability or made any claim with respect to any other Account due
          from such Account Debtor; but in each such case only to the extent of such
          indebtedness, setoff, recoupment, dispute, or claim;

(j)       
          owed by the government of the United States of America, or any department,
          agency, public corporation, or other instrumentality thereof, unless the Federal
          Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727
          et seq.), and any other steps necessary to perfect the
          Agents Liens therein, have been complied with to the Agents
          satisfaction with respect to such Account;

(k)       
          owed by any state, municipality, or other political subdivision of the United
          States of America, or any department, agency, public corporation, or other
          instrumentality thereof and as to which the Agent determines that its Lien
          therein is not or cannot be perfected;

(l)       
          which represents a sale on a bill-and-hold, guaranteed sale, sale and return,
          sale on approval, consignment, or other repurchase or return basis;

(m)       
          which is evidenced by a promissory note or other instrument or by chattel paper;

(n)       
          if the Agent believes, in the exercise of its reasonable judgment, that the
          prospect of collection of such Account is impaired or that the Account may not
          be paid by reason of the Account Debtors financial inability to pay;

(o)       
          with respect to which the Account Debtor is located in any state requiring the
          filing of a Notice of Business Activities Report or similar report in order to
          permit the applicable Borrower to seek judicial enforcement in such State of
          payment of such Account, unless such Borrower has qualified to do business in
          such state or has filed a Notice of Business Activities Report or equivalent
          report for the then current year;

(p)       
          which arises out of a sale not made in the ordinary course of the applicable
          Borrowers business, or to the extent such Account arises out of finance
          charges;

(q)       
          with respect to which the goods giving rise to such Account have not been
          shipped and delivered to and accepted by the Account Debtor or the services
          giving rise to such Account have not been performed by the applicable Borrower,
          and, if applicable, accepted by the Account Debtor, or the Account Debtor
          revokes its acceptance of such goods or services;

(r)       
          owed by an Account Debtor which is obligated to the Borrowers respecting
          Accounts the aggregate unpaid balance of which exceeds five percent (5%) (or,
          with the approval of the Agent, ten percent (10%)) of the aggregate unpaid
          balance of all Accounts owed to the Borrowers at such time by all of the
          Borrowers Account Debtors, but only to the extent of such excess; or

(s)       
          which is not subject to a first priority and perfected security interest in
          favor of the Agent for the benefit of the Lenders.

If any Account at any time ceases to
be an Eligible Account, then such Account shall promptly be excluded from the calculation
of Eligible Accounts.

With the consent of the Agent, the
amount of Accounts included as ineligible under one or more categories above may be
estimated as a fixed percentage of total Accounts or otherwise. The consent of the Agent
may be evidenced by the use of a form of Borrowing Base Certificate specifying the
estimated amounts or in such other manner as the Agent may designate. Such consent may be
withdrawn by the Agent in its discretion by written notice to the Borrowers Agent.

Eligible Assignee
means (a) a commercial bank, commercial finance company or other asset based lender,
having total assets in excess of $1,000,000,000; (b) any Lender listed on the signature
page of this Agreement; (c) any Affiliate of any Lender capable, in the good faith
judgment of such Lender, of performing its obligations hereunder; and (d) if an Event of
Default has occurred and is continuing, any Person reasonably acceptable to the Agent.

Eligible Inventory
means Inventory, valued at the lower of cost (on a first-in, first-out basis) or market,
which the Agent, in its reasonable commercial discretion, determines to be Eligible
Inventory. Without limiting the discretion of the Agent to establish other criteria of
ineligibility, Eligible Inventory shall not, unless the Required Lenders in their sole
discretion elect, include any Inventory:

(a)       
          that is not owned by a Borrower;

(b)       
          that is not subject to the Agents Liens, which are perfected as to such
          Inventory, or that are subject to any other Lien whatsoever (other than the
          Liens described in clause (d) of the definition of Permitted Liens
          provided that such Permitted Liens (i) are junior in priority to the
          Agents Liens or subject to Reserves, and (ii) do not impair directly or
          indirectly the ability of the Agent to realize on or obtain the full benefit of
          the Collateral);

(c)       
          that does not consist of finished goods;

(d)       
          that consists of raw materials, work-in-process, samples, prototypes, supplies,
          or packing and shipping materials;

(e)       
          that is not in good condition, is unmerchantable, or does not meet all standards
          imposed by any Governmental Authority, having regulatory authority over such
          goods, their use or sale;

(f)       
          that is not currently either usable or salable, at prices approximating at least
          cost, in the normal course of the Borrowers business, or that is slow
          moving or stale;

(g)       
          that is returned goods, unless such returned goods are in readily saleable
          condition and the Agent consents to their inclusion in the Borrowing Base, or
          that is obsolete or repossessed or used goods taken in trade;

(h)       
          that is located outside the United States of America (or that is in-transit from
          vendors or suppliers);

(i)       
          that is located in a public warehouse or in possession of a bailee or in a
          facility leased by a Borrower, if the warehouseman, bailee or lessor has not
          delivered to the Agent, if requested by the Agent, a subordination agreement in
          form and substance satisfactory to the Agent or if a Reserve for rents or
          storage charges has not been established for Inventory at that location;

(j)       
          that constitutes (i) flu vaccines, (ii) pharmaceutical products with an
          expiration date that is less than one year after the date of the corresponding
          Borrowing Base Certificate or that have been held in inventory by a Borrower for
          more than 90 days, and (iii) other pharmaceutical goods, and other goods the
          sale of which is subject to or requires any license or permit from any
          Governmental Authority, which the Agent in its reasonable commercial discretion
          determines to be ineligible;

(k)       
          that contains or bears any Proprietary Rights licensed to a Borrower by any
          Person, if the Agent is not satisfied that it may sell or otherwise dispose of
          such Inventory in accordance with the terms of the Security Agreement and
          Section 9.2 without infringing the rights of the licensor of such
          Proprietary Rights or violating any contract with such licensor (and without
          payment of any royalties other than any royalties due with respect to the sale
          or disposition of such Inventory pursuant to the existing license agreement),
          and as to which the applicable Borrower has not delivered to the Agent a consent
          or sublicense agreement from such licensor in form and substance acceptable to
          the Agent if requested;

(l)       
          that is not reflected in the details of a current perpetual inventory report;

(m)       
          that is Inventory placed on consignment; or

(n)       
          that is located in a Flood Zone A5, as designated by the Federal Emergency
          Management Agency, unless covered by flood insurance.

If any Inventory at any time ceases
to be Eligible Inventory, such Inventory shall promptly be excluded from the calculation
of Eligible Inventory.

Environmental
Claims means all claims, however asserted, by any Governmental Authority or
other Person alleging potential liability or responsibility for violation of any
Environmental Law, or for a Release or injury to the environment.

Environmental Laws
means all federal, state or local laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative orders, directed duties, licenses,
authorizations and permits of, and agreements with, any Governmental Authority, in each
case relating to environmental, health and safety matters.

Environmental Lien
means a Lien in favor of any Governmental Authority for (a) any liability under
Environmental Laws, or (b) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a Contaminant
into the environment.

Equipment means
all of any Obligors now owned and hereafter acquired machinery, equipment,
furniture, furnishings, fixtures, and other tangible personal property (except Inventory),
including embedded software, motor vehicles with respect to which a certificate of title
has been issued, aircraft, dies, tools, jigs, molds and office equipment, as well as all
of such types of property leased by any Obligor and all of such Obligors rights and
interests with respect thereto under such leases (including, without limitation, options
to purchase); together with all present and future additions and accessions thereto,
replacements therefor, component and auxiliary parts and supplies used or to be used in
connection therewith, and all substitutes for any of the foregoing, and all manuals,
drawings, instructions, warranties and rights with respect thereto; wherever any of the
foregoing is located.

ERISA means the
Employee Retirement Income Security Act of 1974, and regulations promulgated thereunder.

ERISA Affiliate means
any trade or business (whether or not incorporated) under common control with any Obligor
within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o)
of the Code for purposes of provisions relating to Section 412 of the Code).

ERISA Event means
(a) a Reportable Event with respect to a Pension Plan, (b) a withdrawal by any
Obligor or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during
a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA, (c) a complete or partial withdrawal by any Obligor or any ERISA
Affiliate from a Multi-employer Plan or notification that a Multi-employer Plan is in
reorganization, (d) the filing of a notice of intent to terminate, the treatment of a Plan
amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multi-employer Plan, (e) the
occurrence of an event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multi-employer Plan, or (f) the imposition
of any liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon any Obligor or any ERISA Affiliate.

Event of Default
has the meaning specified in Section 9.1.

Excess
Availability means, at any time (a) the Borrowing Base, minus (b) without
duplication, Reserves, minus(c) the Aggregate Revolver Outstandings.

Exchange Act means
the Securities Exchange Act of 1934, and regulations promulgated thereunder.

FDIC means the
Federal Deposit Insurance Corporation, and any Governmental Authority succeeding to any of
its principal functions.

Federal Funds Rate
means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers
on such day, as published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate charged to the Bank on such day on such transactions as
determined by the Agent.

Federal Reserve
Board means the Board of Governors of the Federal Reserve System or any
successor thereto.

Fee Letter means
the fee letter dated as of the Closing Date between the Agent and the Borrowers
Agent.

Financial
Statements means, according to the context in which it is used, the financial
statements referred to in Sections 5.2 and 6.6 or any other financial
statements required to be given to the Lenders pursuant to this Agreement.

Fiscal Year means
the Obligors fiscal year for financial accounting purposes. The current Fiscal Year
of the Obligors will end on April 2, 2004.

Fixed Assets means
the Equipment and Real Estate of each Obligor.

Funded Debt means
(a) all principal of Debt under this Agreement, and, without duplication, (b) (i) Debt for
money borrowed, (ii) Debt, whether or not in any such case the same was for money
borrowed, (A) represented by notes payable, and drafts accepted, that represent extensions
of credit, (B) constituting obligations evidenced by bonds, debentures, notes or similar
instruments, or (C) upon which interest charges are customarily paid or that was issued or
assumed as full or partial payment for property (other than trade credit that is incurred
in the ordinary course of business), including Debt to be paid in one or more installments
under non-compete arrangements entered into in connection with Permitted Acquisitions,
(iii) Debt that constitutes an obligation under a Capital Lease, and (iv) Debt that is
such by virtue of clause (d) of the definition thereof, but only to the extent that
the obligations guaranteed are obligations that would constitute Funded Debt.

Funding Date means
the date on which a Borrowing occurs.

GAAP means
generally accepted accounting principles and practices set forth from time to time in the
opinions and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to the
circumstances as of the Closing Date. Notwithstanding anything to the contrary set forth
in the Agreement, all references to GAAP as they relate to monthly financial statements
shall be deemed to refer to GAAP as described in the preceding sentence with the exception
of those non-GAAP practices of the Borrowers consistent with their historical practices
immediately prior to the Closing Date. All calculations made for the purposes of
determining compliance with this Agreement shall (except as otherwise expressly provided
herein) be made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly Financial Statements delivered pursuant to Section 5.2 (or,
prior to the delivery of the first Financial Statements pursuant to Section 5.2,
consistent with the Financial Statements as at March 29, 2002); provided, however, that if
(a) the Borrowers shall object to determining such compliance on such basis at the time of
delivery of such Financial Statements due to any change in GAAP or the rules promulgated
with respect thereto after the Closing Date or (b) the Agent or the Required Lenders shall
so object in writing within 90 days after delivery of such Financial Statements, then such
calculations shall be made on a basis consistent with the most recent Financial Statements
delivered by the Borrowers to the Lenders as to which no such objection shall have been
made.

General
Intangibles means all of each Obligors now owned or hereafter acquired
general intangibles, choses in action and causes of action and all other intangible
personal property of each Obligor of every kind and nature (other than Accounts),
including, without limitation, all contract rights, payment intangibles, Proprietary
Rights, corporate or other business records, inventions, designs, blueprints, plans,
specifications, patents, patent applications, trademarks, service marks, trade names,
trade secrets, goodwill, copyrights, computer software, customer lists, registrations,
licenses, franchises, tax refund claims, any funds which may become due to such Obligor in
connection with the termination of any Plan or other employee benefit plan or any rights
thereto and any other amounts payable to such Obligor from any Plan or other employee
benefit plan, rights and claims against carriers and shippers, rights to indemnification,
business interruption insurance and proceeds thereof, property, casualty or any similar
type of insurance and any proceeds thereof, proceeds of insurance covering the lives of
key employees on which such Obligor is beneficiary, rights to receive dividends,
distributions, cash, Instruments and other property in respect of or in exchange for
pledged equity interests or Investment Property and any letter of credit, guarantee,
claim, security interest or other security held by or granted to such Obligor.

Governmental
Authority means any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory authority)
thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any corporation or other
entity owned or controlled, through stock or capital ownership or otherwise, by any of the
foregoing.

Guarantor means
each Guarantor, as defined in the first paragraph of the Agreement, together
with any hereafter acquired or formed Subsidiary of PSS that becomes a
Guarantor after the Closing Date pursuant to Section 7.20 or the
provisions of the definition of Permitted Acquisition.

Guaranty means,
with respect to any Person, all obligations of such Person which in any manner directly or
indirectly guarantee or assure, or in effect guarantee or assure, the payment or
performance of any indebtedness, dividend or other obligations of any other Person (the
guaranteed obligations), or assure or in effect assure the holder of the
guaranteed obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the guaranteed
obligations or any property constituting security therefor; (b) to advance or supply funds
for the purchase or payment of the guaranteed obligations or to maintain a working capital
or other balance sheet condition; or (c) to lease property or to purchase any debt or
equity securities or other property or services.

Hedge Agreement
means any and all transactions, agreements or documents now existing or hereafter entered
into, which provides for an interest rate, credit, commodity or equity swap, cap, floor,
collar, forward foreign exchange transaction, currency swap, cross currency rate swap,
currency option, or any combination of, or option with respect to, these or similar
transactions, for the purpose of hedging any Obligors exposure to fluctuations in
interest or exchange rates, loan, credit exchange, security or currency valuations or
commodity prices.

Instruments means
all instruments as such term is defined in the UCC, now owned or hereafter acquired by any
Obligor.

Interest Expense
means, for any fiscal period, the aggregate amount of interest required to be paid or
accrued by the Borrowers and their consolidated Subsidiaries during such period on all
Debt of the Borrowers and their consolidated Subsidiaries during all or any part of such
period, whether such interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of Capital Leases or
synthetic leases and unused commitment fees, facility fees and similar fees or expenses in
connection with the borrowing of money.

Interest Period
means, as to any LIBOR Loan, the period commencing on the Funding Date of such Loan or on
the Continuation/Conversion Date on which the Loan is converted into or continued as a
LIBOR Loan, and ending on the date one, two, three or six months thereafter as selected by
a Borrower in its Notice of Borrowing, in the form attached hereto as
Exhibit B, or Notice of Continuation/Conversion, in the form attached hereto
as Exhibit C, provided that:

(a)       
          if any Interest Period would otherwise end on a day that is not a Business Day,
          that Interest Period shall be extended to the following Business Day unless the
          result of such extension would be to carry such Interest Period into another
          calendar month, in which event such Interest Period shall end on the preceding
          Business Day;

(b)       
          any Interest Period pertaining to a LIBOR Loan that begins on the last Business
          Day of a calendar month (or on a day for which there is no numerically
          corresponding day in the calendar month at the end of such Interest Period)
          shall end on the last Business Day of the calendar month at the end of such
          Interest Period; and

(c)       
          no Interest Period shall extend beyond the Stated Termination Date.

Interest Rate
means each or any of the interest rates, including the Default Rate, set forth in
Section 2.1.

Inventory means
all of each Obligors now owned and hereafter acquired inventory, goods and
merchandise, wherever located, to be furnished under any contract of service or held for
sale or lease, all returned goods, raw materials, work-in-process, finished goods
(including embedded software), other materials and supplies of any kind, nature or
description which are used or consumed in such Obligors business or used in
connection with the packing, shipping, advertising, selling or finishing of such goods,
merchandise, and all documents of title or other Documents representing them.

Investment
Property means all of each Obligors right title and interest in and to any
and all (a) securities, whether certificated or uncertificated, (b) securities
entitlements, (c) securities accounts, (d) commodity contracts, or (e) commodity accounts,
as each such term is defined in the UCC.

IRS means the
Internal Revenue Service and any Governmental Authority succeeding to any of its principal
functions under the Code.

Latest Projections
means: (a) on the Closing Date and thereafter until the Agent receives new projections
pursuant to Section 5.2(e), the projections of the Obligors financial
condition, results of operations, and cash flows, for the period commencing on March 29,
2003 and ending on March 31, 2006 and delivered to the Agent prior to the Closing Date;
and (b) thereafter, the projections most recently received by the Agent pursuant to
Section 5.2(f).

Lender and
Lenders have the meanings specified in the introductory paragraph
hereof and shall include the Agent to the extent of any Agent Advance outstanding and the
Bank to the extent of any Non-Ratable Loan outstanding.

Letter of Credit
has the meaning specified in Section 1.3(a).

Letter of Credit
Fee has the meaning specified in Section 2.6.

Letter of Credit Issuer
means the Bank or any affiliate of the Bank that issues any Letter of Credit pursuant to
this Agreement.

Letter of Credit
Obligations means, at any date of determination, the sum of (a) one hundred
percent (100%) of the aggregate undrawn face amount of all outstanding Letters of Credit
and Credit Support, plus (b) the aggregate amount of any unpaid reimbursement obligations
in respect of Letters of Credit and Credit Support.

Letter of Credit
Subfacility means $15,000,000.

Leverage Ratio
means, with respect to any fiscal period of the Borrowers, the ratio of (a) all Funded
Debt of the Borrowers and their consolidated Subsidiaries as of the last day of such
fiscal period, to (b) EBITDA of the Borrowers and their consolidated Subsidiaries for the
twelve fiscal month period ending on the last day of such fiscal period, in each case on a
consolidated basis for the Borrowers and their consolidated Subsidiaries.

LIBOR means, for
any Interest Period, with respect to LIBOR Loans, the rate of interest per annum
determined pursuant to the following formula:

|        
|--------
|LIBOR  =

Where,

| | Offshore
Base Rate means the rate per annum appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for any reason such rate
is not available, the Offshore Base Rate shall be, for any Interest Period, the rate per
annum appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO Page,
the applicable rate shall be the arithmetic mean of all such rates. If for any reason none
of the foregoing rates is available, the Offshore Base Rate shall be, for any Interest
Period, the rate per annum determined by Agent as the rate of interest at which dollar
deposits in the approximate amount of the LIBOR Loan comprising part of such Borrowing
would be offered by the Banks London Branch to major banks in the offshore dollar
market at their request at or about 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest Period.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Eurodollar
Reserve Percentage means, for any day during any Interest Period, the reserve
percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%)
in effect on such day applicable to member banks under regulations issued from time to
time by the Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as Eurocurrency liabilities).
The Offshore Rate for each outstanding LIBOR Loan shall be adjusted automatically as of
the effective date of any change in the Eurodollar Reserve Percentage.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

LIBOR Interest Payment
Date means, with respect to a LIBOR Loan, the Termination Date, the first day of
each calendar month while such LIBOR Loan is outstanding and the last day of each Interest
Period applicable to such Loan.

LIBOR Loans means
all LIBOR Revolving Loans.

LIBOR Revolving
Loan means a Revolving Loan during any period in which it bears interest based
on LIBOR.

Lien means: (a)
any interest in property securing an obligation owed to, or a claim by, a Person other
than the owner of the property, whether such interest is based on the common law, statute,
or contract, and including a security interest, charge, claim, or lien arising from a
mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit
arrangement, agreement, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes; (b) to the extent not included under
clause (a), any reservation, exception, encroachment, easement, right-of-way,
covenant, condition, restriction, lease or other title exception or encumbrance affecting
real property; and (c) any contingent or other agreement to provide any of the foregoing,
except any agreement conditioned on the termination of the Commitments and the payment in
full of the Obligations.

Loan Account means
the loan account of the Borrowers, which account shall be maintained by the Agent.

Loan Documents
means this Agreement, the Fee Letter,the Trademark Security Agreement, the
Copyright Security Agreement, the Security Agreement, each Pledge Agreement, and any other
agreements, instruments, and documents heretofore, now or hereafter evidencing, securing,
guaranteeing or otherwise relating to the Obligations, the Collateral, or any other aspect
of the transactions contemplated by this Agreement.

Loans means,
collectively, all loans and advances provided for in Article 1.

Margin Stock means
margin stock as such term is defined in Regulation T, U or X of the Federal
Reserve Board.

Material Adverse
Effect means (a) a material adverse change in, or a material adverse effect
upon, the operations, business, properties, condition (financial or otherwise) or
prospects of the Obligors, taken as a whole, or the Collateral, taken as a whole; (b) a
material impairment of the ability of any Obligor to perform any material obligation under
any Loan Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Obligor of any Loan
Document to which it is a party.

Maximum Inventory
Loan Amount means $65,000,000.

Maximum Revolver
Amount means $150,000,000.

Multi-employer
Plan means a multi-employer plan as defined in Section 4001(a)(3) of
ERISA which is or was at any time during the current year or the immediately preceding six
(6) years contributed to by any Obligor or any ERISA Affiliate.

Net Amount of Eligible
Accounts means, at any time, the gross amount of Eligible Accounts less sales,
excise or similar taxes, and less returns, discounts, claims, credits, allowances, accrued
rebates, offsets, deductions, counterclaims, disputes and other defenses of any nature at
any time issued, owing, granted, outstanding, available or claimed.

Net Orderly Liquidation
Value means the net orderly liquidation value of the Inventory, as reflected in
the most recent Appraisal received by the Agent in accordance with Section 7.4(c).

Non-Ratable Loan
and Non-Ratable Loans have the meanings specified in
Section 1.2(h).

Notice of
Borrowing has the meaning specified in Section 1.2(b).

Notice of Continuation/Conversion
has the meaning specified in Section 2.2(b).

Obligations means
all present and future loans, advances, liabilities, obligations, covenants, duties, and
debts owing by any Obligor to the Agent and/or any Lender, arising under or pursuant to
this Agreement or any of the other Loan Documents, whether or not evidenced by any note,
or other instrument or document, whether arising from an extension of credit, opening of a
letter of credit, acceptance, loan, guaranty, indemnification or otherwise, whether direct
or indirect, absolute or contingent, due or to become due, primary or secondary, as
principal or guarantor, and including all principal, interest, charges, expenses, fees,
attorneys fees, filing fees and any other sums chargeable to any Obligor hereunder
or under any of the other Loan Documents. Obligations includes, without
limitation, (a) all debts, liabilities, and obligations now or hereafter arising from or
in connection with the Letters of Credit, and (b) all debts, liabilities and obligations
now or hereafter arising from or in connection with Bank Products.

Obligor means any
Borrower or any Guarantor, and Obligors means the Borrowers and the
Guarantors, collectively.

Other Taxes means
any present or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this Agreement or
any other Loan Documents.

Participant means
any Person who shall have been granted the right by any Lender to participate in the
financing provided by such Lender under this Agreement, and who shall have entered into a
participation agreement in form and substance satisfactory to such Lender.

Payment Account
means each bank account established pursuant to the Security Agreement, to which the
proceeds of Accounts and other Collateral are deposited or credited, and which is
maintained in the name of the Agent or any Obligor, as the Agent may determine, on terms
acceptable to the Agent.

PBGC means the
Pension Benefit Guaranty Corporation or any Governmental Authority succeeding to the
functions thereof.

Pending Revolving
Loans means, at any time, the aggregate principal amount of all Revolving Loans
requested in any Notice of Borrowing received by the Agent which have not yet been
advanced.

Pension Plan means
a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which
any Obligor sponsors, maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at any time
during the immediately preceding five (5) plan years.

Permitted
Acquisition means the acquisition by an Obligor of all or a substantial portion
of the assets or equity interests of another Person in the same or a similar line of
business to that conducted by the Obligors (the Target) so long as: (a) the
Obligors shall provide the Agent notice of the proposed Acquisition, and such pro forma
and historical financial statements and other information and documents relating to the
proposed Acquisition as the Agent may request, at least 15 days prior to the date of the
consummation of the proposed Acquisition; (b) the purchase price for such acquisition does
not exceed $10,000,000 individually or $25,000,000 in the aggregate for all such
acquisitions (it being understood that purchase price shall include all cash paid at
closing, all Debt described in Section 7.13(f), and all other purchase price
consideration (other than good faith earn out consideration not intended as a
substitute for cash consideration to circumvent the limitations contained in this
definition) in connection with such acquisition); (c) no Default or Event of Default
exists before or after giving effect to such acquisition; (d) after giving effect to the
consummation of such acquisition (including any Loans made hereunder to finance such
acquisition), Excess Availability is greater than $20,000,000; provided, that no assets of
the Target shall be included in the calculation of Excess Availability for purposes of
this clause (d) or otherwise until the Agent has completed a satisfactory field
examination with respect to the Target and its assets (it being understood that,
notwithstanding the completion of a satisfactory field examination, the Agent shall have
the right, in its reasonable commercial discretion, to establish lower advance rates
and/or reserves against the Accounts and Inventory of the Target and/or to elect not to
include any such Accounts or Inventory as Eligible Accounts or Eligible Inventory); (e)
after giving effect to the consummation of such Acquisition, the Borrowers are in
compliance with the financial covenants set forth in Section 7.23 on a pro forma
basis (it being understood that this requirement shall apply whether or not Excess
Availability is greater than $25,000,000 after giving effect to the consummation of such
Acquisition); provided, that such financial covenants shall be measured as of the most
recently ended fiscal month for which the Borrowers have delivered the financial
statements required under Section 5.2(b) or (c), as the case may be, for the
twelve fiscal month period then ended; (f) the Accounts Payable Turnover, calculated as of
the date of such proposed Acquisition and as of the most recently ended fiscal month for
which the Borrowers have delivered the financial statements required under Section
5.2(b) or (c), as the case may be, shall not in either case exceed 45 days; (g)
such acquisition does not involve a hostile takeover or tender offer; (h) a
Responsible Officer delivers to the Agent a certificate (i) demonstrating compliance with
clauses (d), (e) and (f) above, and (ii) stating that no Default or
Event of Default exists before or after giving effect to such acquisition; (i) after
giving effect to the consummation of such acquisition (including any Loans made hereunder
to finance such acquisition) the Aggregate Revolver Outstandings shall not exceed the
Maximum Revolver Amount minus $20,000,000; and (j) if the Target will become a Subsidiary
of a Borrower in connection with such acquisition, the Borrowers and the Target shall
cause the Target to become a Borrower (or, if the Agent requires, a Guarantor) hereunder
and grant to the Agent, for the benefit of the Agent and the Lenders, a perfected,
first-priority Lien on substantially all of the assets of the Target, all pursuant to
documentation in form and substance acceptable to the Agent in its discretion.

Permitted Debt has
the meaning set forth in Section 7.13.

Permitted Liens means:

(a)       
          Liens for taxes not delinquent or statutory Liens for taxes in an amount not to
          exceed $500,000 provided that the payment of such taxes which are due and
          payable is being contested in good faith and by appropriate proceedings
          diligently pursued and as to which adequate financial reserves have been
          established on the Obligors books and records and a stay of enforcement of
          any such Lien is in effect;

(b)       
          the Agents Liens;

(c)       
          Liens consisting of deposits made in the ordinary course of business in
          connection with, or to secure payment of, obligations under workers
          compensation, unemployment insurance, social security and other similar laws, or
          to secure the performance of bids, tenders or contracts (other than for the
          repayment of Debt) or to secure indemnity, performance or other similar bonds
          for the performance of bids, tenders or contracts (other than for the repayment
          of Debt) or to secure statutory obligations (other than liens arising under
          ERISA or Environmental Liens) or surety or appeal bonds, or to secure indemnity,
          performance or other similar bonds;

(d)       
          Liens securing the claims or demands of materialmen, mechanics, carriers,
          warehousemen, landlords and other like Persons, provided that such Liens
          secure only amounts which are not yet due and payable (or, if due and payable,
          are unfiled and no other action has been taken to enforce the same) or are being
          contested in good faith by appropriate proceedings diligently pursued and for
          which adequate reserves determined in accordance with GAAP have been established
          (and as to which the property subject to any such Lien is not yet subject to
          foreclosure, sale or loss on account thereof);

(e)       
          Liens constituting encumbrances in the nature of leases, reservations,
          exceptions, encroachments, easements, rights of way, covenants running with the
          land, and other similar title exceptions or encumbrances affecting any Real
          Estate; provided that they do not in the aggregate materially detract
          from the value of the Real Estate or materially interfere with its use in the
          ordinary conduct of the applicable Obligors business;

(f)       
          Liens arising from judgments and attachments in connection with court
          proceedings provided that the attachment or enforcement of such Liens would not
          result in an Event of Default hereunder and such Liens are being contested in
          good faith by appropriate proceedings, adequate reserves have been set aside and
          no material Property is subject to a material risk of loss or forfeiture and the
          claims in respect of such Liens are fully covered by insurance (subject to
          ordinary and customary deductibles) and a stay of execution pending appeal or
          proceeding for review is in effect;

(g)       
          Liens in favor of customs and revenue authorities arising as a matter of law to
          secure payment of customs duties not yet due and payable in connection the
          importation of goods;

(h)       
          Liens securing Refinancings permitted under this Agreement limited to the
          property securing the Debt subject to the Refinancing;

(i)       
          Liens consisting of limitations on dispositions of property arising under
          contracts for Asset Dispositions on the property subject to the Asset
          Disposition pending the closing of such Asset Disposition; and

(j)       
          Liens in cash or Cash Equivalents in an aggregate amount at any time not to
          exceed $250,000 as security for the Obligors obligations with respect to
          Bank Products.

Permitted Stock
Redemptions means redemptions of capital stock of PSS so long as: (a) the
aggregate redemption price for such redemptions does not exceed $35,000,000, (b) no
Default or Event of Default exists before or after giving effect to such redemption, (c)
after giving effect to the consummation of any such redemption (including any Loans made
hereunder to finance such redemption), Excess Availability is greater than $20,000,000;
(d) after giving effect to the consummation of any such redemption, the Obligors are in
compliance with the financial covenants set forth in Section 7.23 on a pro forma
basis (it being understood that this requirement shall apply whether or not Excess
Availability is greater than $25,000,000 after giving effect to the consummation of such
redemption), provided, that such financial covenants shall be measured as of the most
recently ended fiscal month for which the Borrowers have delivered the financial
statements required under Section 5.2(b) or (c), as the case may be, for the
twelve fiscal month period then ended; (e) the Accounts Payable Turnover, calculated as of
the date of such proposed redemption and as of the most recently ended fiscal month for
which the Borrowers have delivered the financial statements required under Section
5.2(b) or (c), as the case may be, shall not in either case exceed 45 days; (f)
a Responsible Officer delivers to the Agent a certificate (i) demonstrating compliance
with clauses (c), (d) and (e) above, and (ii) stating that no Default
or Event of Default exists before or after giving effect to such redemption; and (f) after
giving effect to the consummation of such redemption (including any Loans made hereunder
to finance such redemption) the Aggregate Revolver Outstandings shall not exceed the
Maximum Revolver Amount minus $20,000,000.

Person means any
individual, sole proprietorship, partnership, limited liability company, joint venture,
trust, unincorporated organization, association, corporation, Governmental Authority, or
any other entity.

Plan means an
employee benefit plan (as defined in Section 3(3) of ERISA) which any Obligor sponsors or
maintains or to which any Obligor makes, is making, or is obligated to make contributions
and includes any Pension Plan.

Pledge Agreement
means each Pledge Agreement dated on or about the Closing Date pursuant to which an
Obligor pledges to the Agent, for the benefit of itself and the Lenders, 100% of the
capital stock or other equity interests of each Subsidiary owned by such Obligor.

Pro Rata Share
means, with respect to a Lender, a fraction (expressed as a percentage), the numerator of
which is the amount of such Lenders Commitment and the denominator of which is the
sum of the amounts of all of the Lenders Commitments, or if no Commitments are
outstanding, a fraction (expressed as a percentage), the numerator of which is the amount
of Obligations owed to such Lender and the denominator of which is the aggregate amount of
the Obligations owed to the Lenders, in each case giving effect to a Lenders
participation in Non-Ratable Loans and Agent Advances.

Proprietary Rights
means all of each Obligors now owned and hereafter arising or acquired: licenses,
franchises, permits, patents, patent rights, copyrights, works which are the subject
matter of copyrights, trademarks, service marks, trade names, trade styles, patent,
trademark and service mark applications, and all licenses and rights related to any of the
foregoing, including those patents, trademarks, service marks, trade names and copyrights
set forth on Schedule 6.12 hereto, and all other rights under any of the
foregoing, all extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and all rights to sue for past, present and
future infringement of any of the foregoing.

Real Estate means
all of each Obligors now or hereafter owned or leased estates in real property,
including, without limitation, all fees, leaseholds and future interests, together with
all of each Obligors now or hereafter owned or leased interests in the improvements
thereon, the fixtures attached thereto and the easements appurtenant thereto.

Refinance means,
in respect of any security or Debt, to refinance, extend, renew, refund, repay, prepay,
redeem, defease or retire, or to issue a security or Debt in exchange or replacement for,
such security or Debt in whole or in part. Refinanced and
Refinancing shall have correlative meanings.

Release means a
release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration of a Contaminant into the indoor or outdoor environment
or into or out of any Real Estate or other property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater or Real Estate or
other property other than in accordance with Environmental Laws.

Reportable Event
means, any of the events set forth in Section 4043(b) of ERISA or the regulations
thereunder, other than any such event for which the 30-day notice requirement under ERISA
has been waived in regulations issued by the PBGC.

Required Lenders
means at any time Lenders whose Pro Rata Shares aggregate more than 50%.

Requirement of Law
means, as to any Person, any law (statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental Authority, in each case applicable to
or binding upon the Person or any of its property or to which the Person or any of its
property is subject.

Reserves means
reserves that limit the availability of credit hereunder, consisting of reserves against
Availability, Excess Availability, the Maximum Revolver Amount, Eligible Accounts or
Eligible Inventory, established by the Agent from time to time in the Agents
reasonable credit judgment. Without limiting the generality of the foregoing, the
following reserves shall be deemed to be a reasonable exercise of the Agents credit
judgment: (a) Bank Products Reserves, (b) reserves for rent at leased locations and
storage charges at warehouse locations (only if the Agent has not received a
landlords or warehousemans waiver or subordination in form and substance
satisfactory to the Agent), (c) Inventory shrinkage reserves, and (d) dilution reserves.

Responsible
Officer means the chief executive officer or the president of PSS, or any other
officer having substantially the same authority and responsibility; or, with respect to
compliance with financial covenants and the preparation of the Borrowing Base Certificate,
a Designated Financial Officer.

Restricted Investment
means, as to each Obligor, any acquisition of property by such Obligor in exchange for
cash or other property, whether in the form of an acquisition of stock, Debt, or other
indebtedness or obligation, or the purchase or acquisition of any other property, or a
loan, advance, capital contribution, or subscription (each an
Investment), except the following:

(a)       
          acquisitions of Equipment to be used in the business of such Obligor so long as
          the acquisition costs thereof constitute Capital Expenditures permitted
          hereunder;

(b)       
          acquisitions of Inventory, Real Estate and Proprietary Rights in the ordinary
          course of business of such Obligor;

(c)       
          acquisitions of assets (including assets received in connection with the
          settlement of Accounts with bankrupt or insolvent Account Debtors) acquired in
          the ordinary course of business of such Obligor, but in any event excluding
          acquisitions of all or a substantial portion of the assets or equity interests
          of another Person;

(d)       
          direct obligations of the United States of America, or any agency thereof, or
          obligations guaranteed by the United States of America, provided that
          such obligations mature within one year from the date of acquisition thereof;

(e)       
          acquisitions of certificates of deposit maturing within one year from the date
          of acquisition, bankers acceptances, Eurodollar bank deposits, or
          overnight bank deposits, in each case issued by, created by, or with (i) any
          Lender, (ii) any bank or trust company organized under the laws of the United
          States of America or any state thereof having capital and surplus aggregating at
          least $100,000,000, or (iii) any bank having one of the two highest ratings from
          both Moodys Investors Service, Inc. and Standard & Poors
          Corporation;

(f)       
          acquisitions of commercial paper given a rating of A2 or better by
          Standard & Poors Corporation or P2 or better by
          Moodys Investors Service, Inc. and maturing not more than 90 days from the
          date of creation thereof;

(g)       
          repurchase agreements with a bank or trust company (including any of the Lenders
          that are banks) or recognized securities dealer having capital and surplus in
          excess of $100,000,000 for direct obligations issued by or fully guaranteed by
          the United States of America in which the applicable Borrower or any other
          Obligor shall have a perfected first priority security interest (subject to no
          other Liens) and having, on the date of purchase thereof, a fair market value of
          at least 100% of the amount of the repurchase obligations;

(h)       
          marketable direct obligations issued by any state of the United States of
          America or any political subdivision of any such state or any public
          instrumentality thereof maturing within one year from the date of acquisition
          thereof or which the holder has the right to require the issuer to repurchase at
          a price greater than or equal to the principal amount thereof within one year
          from the date of acquisition and, at the time of acquisition, having one of the
          two highest ratings obtainable from both Standard & Poors Corporation
          and Moodys Investors Service, Inc.;

(i)       
          Investments, classified in accordance with GAAP as current assets, in money
          market investment programs registered under the Investment Company Act of 1940,
          as amended, which are administered by reputable financial institutions having
          capital of at least $500,000,000 and the portfolios of which are limited to
          investments of the character described in the foregoing clauses (d)
          through (h);

(j)       
          other liquid Investments with a maturity within 60 days after the acquisition
          thereof so long as the aggregate outstanding amount of such liquid Investments
          (net of return of such Investments through repayment of principal, return of
          capital or sale) does not exceed $10,000,000 at any time;

(k)       
          Hedge Agreements;

(l)       
          investments in cash collateral for Letter of Credit Obligations, in each case
          deposited with the Agent as provided in this Agreement;

(m)       
          Permitted Acquisitions;

(n)       
          Investments existing as of the Closing Date and set forth on Schedule
          1.2;

(o)       
          Investments by an Obligor in another Obligor;

(p)       
          advances to officers, directors and employees (i) existing as of the Closing
          Date in an aggregate amount not to exceed $250,000, (ii) for moving, travel and
          other expenses (including commission draws) incurred in the ordinary course of
          business consistent with the Borrowers past practices, and (iii) arising
          after the Closing Date for other purposes in an aggregate outstanding amount not
          to exceed $500,000;

(q)       
          Investments consisting of Guarantees otherwise permitted under Section
          7.12; and

(r)       
          Investments consisting of consideration received in Asset Dispositions permitted
          under Section 7.9.

Revolving Loans
has the meaning specified in Section 1.2 and includes each Agent Advance and
Non-Ratable Loan.

Security Agreement
means the Amended and Restated Security Agreement of even date herewith among the Obligors
and the Agent for the benefit of the Agent and the Lenders.

Senior Subordinated
Notes means the PSSs 81⁄2% Senior Subordinated Notes due 2007 issued
pursuant to the Senior Subordinated Notes Indenture.

Senior Subordinated Notes
Indenture means PSSs October 7, 1997 Indenture with respect to its
81⁄2% Senior Subordinated Notes due 2007.

Settlement and
Settlement Date have the meanings specified in
Section 12.15(a)(ii).

Solvent means,
when used with respect to any Person, that at the time of determination:

(a)       
          the assets of such Person, at a fair valuation, are in excess of the total
          amount of its debts (including contingent liabilities); and

(b)       
          the present fair saleable value of its assets is greater than its probable
          liability on its existing debts as such debts become absolute and matured; and

(c)       
          it is then able and expects to be able to pay its debts (including contingent
          debts and other commitments) as they mature; and

(d)       
          it has capital sufficient to carry on its business as conducted and as proposed
          to be conducted.

For purposes of determining whether a
Person is Solvent, the amount of any contingent liability shall be computed as the amount
that, in light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.

Stated Termination
Date means March 31, 2006.

Subsidiary of a
Person means any corporation, association, partnership, limited liability company, joint
venture or other business entity of which more than fifty percent (50%) of the voting
stock or other equity interests (in the case of Persons other than corporations), is owned
or controlled directly or indirectly by the Person, or one or more of the Subsidiaries of
the Person, or a combination thereof. Unless the context otherwise clearly requires,
references herein to a Subsidiary refer to a Subsidiary of the Borrowers.

Supporting Letter of
Credit has the meaning specified in Section 1.3(g).

Supporting
Obligations means all supporting obligations as such term is defined in the UCC.

Taxes means any
and all present or future taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Lender and the Agent,
such taxes (including income taxes or franchise taxes) as are imposed on or measured by
the Agents or each Lenders net income in any the jurisdiction (whether
federal, state or local and including any political subdivision thereof) under the laws of
which such Lender or the Agent, as the case may be, is organized or maintains a lending
office; provided, however, that the term Taxes shall not include Other
Taxes.

Termination Date
means the earliest to occur of (a) the Stated Termination Date, (b) the date the Agreement
is terminated either by the Borrowers pursuant to Section 3.2 or by the Required
Lenders pursuant to Section 9.2, and (c) the date this Agreement is otherwise
terminated for any reason whatsoever pursuant to the terms of this Agreement.

Trademark Agreement
means the Amended and Restated Conditional Assignment and Trademark Security Agreement,
dated as of the date hereof, executed and delivered by the Obligors to the Agent to
evidence and perfect the Agents Liens in each Obligors present and future
patents, trademarks, and related licenses and rights.

UCC means the
Uniform Commercial Code, as in effect from time to time, of the State of Georgia or of any
other state the laws of which are required as a result thereof to be applied in connection
with the issue of perfection of security interests.

Unfunded Pension
Liability means the excess of a Plans benefit liabilities under Section
4001(a)(16) of ERISA, over the current value of that Plans assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.

Unused Letter of Credit
Subfacility means an amount equal to the Letter of Credit Subfacility
minus the sum of (a) the aggregate undrawn amount of all outstanding Letters of
Credit plus, without duplication, (b) the aggregate unpaid reimbursement
obligations with respect to all Letters of Credit.

Unused Line Fee
has the meaning specified in Section 2.5.

Accounting Terms.    
          Any accounting term used in the Agreement shall have, unless otherwise
          specifically provided herein, the meaning customarily given in accordance with
          GAAP, and all financial computations in the Agreement shall be computed, unless
          otherwise specifically provided therein, in accordance with GAAP as consistently
          applied and using the same method for inventory valuation as used in the
          preparation of the Financial Statements.

(b)       
          The words hereof, herein, hereunder and
          similar words refer to the Agreement as a whole and not to any particular
          provision of the Agreement; and Subsection, Section, Schedule and Exhibit
          references are to the Agreement unless otherwise specified.

(c)       
          (i) The term documents includes any and all instruments, documents,
          agreements, certificates, indentures, notices and other writings, however
          evidenced.

| | (ii)                        The
term including is not limiting and means including without
          limitation.
| | --------------------------------------------------------------------------------------------------------------------

| | (iii)                             In
the computation of periods of time from a specified date to a later specified
               date, the word from means from and including, the
words                to and until each mean to but excluding and
               the word through means to and including.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)       
               The word or is not exclusive.
| | ----------------------------------------------------------

(d)       
          Unless otherwise expressly provided herein, (i) references to agreements
          (including the Agreement) and other contractual instruments shall be deemed to
          include all subsequent amendments and other modifications thereto, but only to
          the extent such amendments and other modifications are not prohibited by the
          terms of any Loan Document, and (ii) references to any statute or regulation are
          to be construed as including all statutory and regulatory provisions
          consolidating, amending, replacing, supplementing or interpreting the statute or
          regulation.

(e)       
          The captions and headings of the Agreement and other Loan Documents are for
          convenience of reference only and shall not affect the interpretation of the
          Agreement.

(f)       
          The Agreement and other Loan Documents may use several different limitations,
          tests or measurements to regulate the same or similar matters. All such
          limitations, tests and measurements are cumulative and shall each be performed
          in accordance with their terms.

(g)       
          For purposes of Section 9.1, a breach of a financial covenant
          contained in Sections 7.22 and 7.23 shall be deemed to have
          occurred as of any date of determination thereof by the Agent or as of the last
          day of any specified measuring period, regardless of when the Financial
          Statements reflecting such breach are delivered to the Agent.

(h)       
          The Agreement and the other Loan Documents are the result of negotiations among
          and have been reviewed by counsel to the Agent, each Obligor and the other
          parties, and are the products of all parties. Accordingly, they shall not be
          construed against the Lenders or the Agent merely because of the Agents or
          Lenders involvement in their preparation.