Document:

Exhibit 10.1

Exhibit 10.1

 

CREDIT AND GUARANTY AGREEMENT

Dated as of January 31,
2008

Among

GERBER SCIENTIFIC, INC., 

GERBER SCIENTIFIC INTERNATIONAL, INC.,

as Borrowers,

THE GUARANTORS PARTY HERETO,

as Guarantors,

THE LENDERS
PARTY HERETO,

as Lenders,

RBS CITIZENS, N.A,

as Administrative Agent for the Lenders,

SOVEREIGN BANK,

as Documentation
Agent,

and

RBS SECURITIES CORPORATION
D/B/A RBS GREENWICH CAPITAL,

as Sole Lead Arranger and Book Runner.

 

TABLE OF CONTENTS

                                                                                                                                                     Page

ARTICLE 1.
DEFINITIONS AND ACCOUNTING TERMS............................................................. 1

            Section 1.1. Definitions.............................................................................................................. 1

            Section 1.2. Accounting Terms.................................................................................................. 17

            Section 1.3. Construction of Terms............................................................................................ 17

ARTICLE 2. THE
REVOLVING
CREDIT........................................................................................... 17

            Section 2.1. The Revolving Credit.............................................................................................. 17

            Section 2.2. Making of Revolving Credit Advances.................................................................... 17

            Section 2.3. Interest on Base Rate Loans................................................................................... 19

            Section 2.4. Election of LIBOR Pricing Options;
Alternative Currencies...................................... 19

            Section 2.5. Additional Payments............................................................................................... 20

            Section 2.6. Letters of Credit..................................................................................................... 20

            Section 2.7. Swingline Credit..................................................................................................... 22

            Section 2.8. Interest on Swingline Loans..................................................................................... 23

            Section 2.9. Refunded Swingline Loans; Swingline Loan
Participations........................................ 23

            Section 2.10. Computation of Interest, Etc................................................................................. 24

            Section 2.11. Fees..................................................................................................................... 25

            Section 2.12. Set‐Off................................................................................................................ 25

            Section 2.13. Sharing of Payments............................................................................................. 25

            Section 2.14. Reduction of Commitment by the Borrowers......................................................... 26

            Section 2.15. Increased Costs, Etc............................................................................................ 26

            Section 2.16. Changed Circumstances....................................................................................... 27

            Section 2.17. Use of Proceeds.................................................................................................. 28

            Section 2.18. Incremental Commitments.................................................................................... 28

            Section 2.19. Replacement of Lenders....................................................................................... 30

ARTICLE 3.
CONDITIONS TO LOANS AND ADVANCES........................................................... 30

            Section 3.1. Conditions to First Revolving Credit
Advance; Swingline Loan................................ 30

            Section 3.2. Conditions to All Revolving Credit
Advances; Swingline Loans; Letters of Credit..... 32

ARTICLE 4.
PAYMENT AND REPAYMENT.................................................................................... 33

            Section 4.1. Mandatory Prepayment.......................................................................................... 33

            Section 4.2.Voluntary Prepayments............................................................................................ 33

            Section 4.3. Payment and Interest Cutoff.................................................................................... 34

            Section 4.4. Payment or Other Actions on Non‐Business
Days................................................... 34

            Section 4.5. Method, Timing and Application of Payments.......................................................... 34

            Section 4.6. Payments Not at End of Interest Period................................................................... 35

            Section 4.7. Taxes..................................................................................................................... 36

ARTICLE 5.
REPRESENTATIONS AND WARRANTIES................................................................ 38

            Section 5.1. Corporate Existence, Charter Documents,
Etc........................................................ 38

            Section 5.2. Principal Place of Business; Location of
Records..................................................... 38

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            Section 5.3. Qualification........................................................................................................... 38

            Section 5.4. Subsidiaries............................................................................................................ 38

            Section 5.5. Corporate Power................................................................................................... 38

            Section 5.6. Valid and Binding Obligations................................................................................. 39

            Section 5.7. Other Agreements.................................................................................................. 39

            Section 5.8. Payment of Taxes................................................................................................... 39

            Section 5.9. Financial Statements............................................................................................... 40

            Section 5.10. Other Materials Furnished.................................................................................... 40

            Section 5.11. Stock................................................................................................................... 40

            Section 5.12. Changes in Condition........................................................................................... 41

            Section 5.13. Assets, Licenses, Patents, Trademarks, Etc.......................................................... 41

            Section 5.14. Litigation.............................................................................................................. 41

            Section 5.15. Pension Plans....................................................................................................... 42

            Section 5.16. Outstanding Indebtedness..................................................................................... 42

            Section 5.17. Environmental Matters.......................................................................................... 42

            Section 5.18. Governmental Regulations.................................................................................... 43

            Section 5.19. Margin Stock....................................................................................................... 43

            Section 5.20. Solvency.............................................................................................................. 43

            Section 5.21. Labor Matters...................................................................................................... 43

            Section 5.22. Advantageous Business Relationships.................................................................... 44

ARTICLE 6.
REPORTS AND INFORMATION................................................................................. 44

            Section 6.1. Interim Financial Statements and Reports................................................................ 44

            Section 6.2. Annual Financial Statements; Budget....................................................................... 44

            Section 6.3. Notice of Defaults.................................................................................................. 45

            Section 6.4. Notice of Litigation................................................................................................. 45

            Section 6.5. Communications with Others.................................................................................. 45

            Section 6.6. Reports to other Creditors...................................................................................... 45

            Section 6.7. Communications with Independent Public
Accountants............................................ 46

            Section 6.8. Environmental Reports............................................................................................ 46

            Section 6.9.
Permitted Acquisitions............................................................................................ 46

            Section 6.10. Miscellaneous...................................................................................................... 46

ARTICLE 7.
FINANCIAL COVENANTS......................................................................................... 47

            Section 7.1. Ratio of Consolidated EBIT to Consolidated
Interest Expense................................ 47

            Section 7.2. Ratio of Total Funded Debt to Consolidated
EBITDA............................................ 47

            Section 7.3. Consolidated Capital Expenditures......................................................................... 47

ARTICLE 8.
AFFIRMATIVE COVENANTS..................................................................................... 47

            Section 8.1. Existence and Business........................................................................................... 47

            Section 8.2. Taxes and Other Obligations.................................................................................. 47

            Section 8.3. Maintenance of Properties and Leases.................................................................... 48

            Section 8.4. Insurance............................................................................................................... 48

            Section 8.5. Records, Accounts and Places of Business............................................................. 48

            Section 8.6. Inspection.............................................................................................................. 48

            Section 8.7. Maintenance of Accounts....................................................................................... 49

            Section 8.8. Newly Acquired Subsidiaries................................................................................. 49

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            Section 8.9. Environmental........................................................................................................ 49

ARTICLE 9.
NEGATIVE COVENANTS........................................................................................... 49

            Section 9.1. Restrictions on Indebtedness.................................................................................. 49

            Section 9.2. Restriction on Liens................................................................................................ 50

            Section 9.3. Investments............................................................................................................ 51

            Section 9.4. Dispositions of Assets............................................................................................. 52

            Section 9.5. Assumptions, Guaranties, Etc. of Indebtedness of Other Persons............................. 52

            Section 9.6. Mergers, Etc.......................................................................................................... 52

            Section 9.7. ERISA................................................................................................................... 53

            Section 9.8. Distributions...........................................................................................................
53

            Section 9.9. Sale and Leaseback................................................................................................ 53

            Section 9.10. Transactions with Affiliates.................................................................................... 53

           
Section 9.11. No Impairment of Cross-Streaming, Upstreaming, Downstreaming or Liens........... 54

            Section 9.12. Hazardous Substances.......................................................................................... 54

ARTICLE 10.
EVENTS OF DEFAULT AND REMEDIES................................................................. 54

            Section 10.1. Events of Default.................................................................................................. 54

            Section 10.2. Remedies............................................................................................................. 56

            Section 10.3. Distribution of Proceeds....................................................................................... 57

ARTICLE 11.
CONSENTS; AMENDMENTS; WAIVERS; REMEDIES........................................... 57

            Section 11.1. Actions by Lenders.............................................................................................. 57

            Section 11.2. Actions by Loan Parties........................................................................................ 58

ARTICLE 12.
SUCCESSORS AND ASSIGNS.................................................................................. 59

            Section 12.1. General................................................................................................................ 59

            Section 12.2. Assignments......................................................................................................... 59

ARTICLE 13.
THE AGENT................................................................................................................. 61

            Section 13.1. Authorization and Action...................................................................................... 61

            Section 13.2. Agent's Reliance, Etc............................................................................................ 61

            Section 13.3. Agent as a Lender................................................................................................ 62

            Section 13.4. Lender Credit Decision......................................................................................... 62

            Section 13.5. Indemnification of Agent....................................................................................... 62

            Section 13.6. Successor Agent.................................................................................................. 63

            Section 13.7. Fonde de Pouvoir................................................................................................. 63

            Section 13.8. No Other Duties, Etc............................................................................................ 64

            Section 13.9. Amendment of Article 13...................................................................................... 64

ARTICLE 14.
GUARANTY................................................................................................................. 65

            Section 14.1. Guaranty.............................................................................................................. 65

            Section 14.2. Continuing Guaranty............................................................................................. 65

            Section 14.3. Effect of Debtor Relief Laws................................................................................ 66

            Section 14.4. Partial Waiver of Subrogation............................................................................... 66

            Section 14.5. Subordination....................................................................................................... 67

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            Section 14.6. Waiver................................................................................................................. 67

            Section 14.7. Full Force and Effect............................................................................................ 68

            Section 14.8. Negative Pledge................................................................................................... 68

            Section 14.9. Additional Guarantors.......................................................................................... 68

ARTICLE 15.
MISCELLANEOUS..................................................................................................... 68

            Section 15.1. Notices................................................................................................................ 68

            Section 15.2. Merger................................................................................................................. 69

            Section 15.3. Governing Law; Consent to Jurisdiction................................................................ 69

            Section 15.4. Counterparts; Replacement of Instruments............................................................ 70

            Section 15.5. Expenses and Indemnification............................................................................... 70

            Section 15.6. Confidentiality...................................................................................................... 71

            Section 15.7. Usury Limitation................................................................................................... 72

            Section 15.8. Joint and Several Obligations................................................................................ 72

            Section 15.9. Judgment............................................................................................................. 72

            Section 15.10. Reliance on Representations and Actions of
Gerber............................................. 73

            Section 15.11. Platform............................................................................................................. 73

            Section 15.12. WAIVER OF JURY TRIAL; VENUE............................................................... 74

            Section 15.13. USA Patriot Act................................................................................................. 75

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LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A-1          Form of Revolving Credit Note

Exhibit A-2          Form of Swingline Note

Exhibit B              Form of Notice of Revolving Credit Borrowing

Exhibit C              Form of Compliance Certificate

Exhibit D              Form of Pricing Notice

Exhibit E              Form of Opinion of Borrowers' Counsel

Exhibit F              Form of Assignment and Acceptance Agreement

Schedule 1          Schedule of Commitment Percentages

Schedule 2          Pricing Schedule

Schedule 2.6       Schedule of Existing Letters of Credit

Schedule 5.2       Schedule of Principal Places of Business

Schedule 5.4       Schedule of Subsidiaries

Schedule 5.9       Schedule of Financial Statements

Schedule 5.11     Schedule of Issued and Outstanding Stock

Schedule 5.13     Schedule of Licenses, Patents, Copyrights and Trademarks

Schedule 5.15     Schedule of Pension Plans

Schedule 5.16     Schedule of Indebtedness, Liens, Charges and Encumbrances

Schedule 5.17     Environmental Matters

Schedule 8.4       Schedule of Insurance

Schedule 8.8       Schedule of Excluded Subsidiaries

Schedule 15.1     Notices

v

 

CREDIT AND GUARANTY AGREEMENT

        This CREDIT AND GUARANTY AGREEMENT is entered
into as of January 31, 2008 by and among GERBER SCIENTIFIC, INC., a Connecticut
corporation ("Gerber"), and GERBER SCIENTIFIC INTERNATIONAL INC., a
Connecticut corporation ("Gerber International"), as borrowers, each
of GERBER COBURN OPTICAL INTERNATIONAL, INC., GERBER SCIENTIFIC UK, LTD.,
SPANDEX LTD., and GERBER SCIENTIFIC INTERNATIONAL LTD., as guarantors, the
lenders from time to time party hereto, RBS CITIZENS, N.A., a national banking
association, as administrative agent for the lenders from time to time party
hereto, SOVEREIGN BANK, as documentation agent, and RBS SECURITIES CORPORATION
d/b/a RBS GREENWICH CAPITAL, as sole lead arranger and bookrunner.

Recitals

        WHEREAS, the Borrowers have requested that the Lenders provide
certain credit facilities and make other financial accommodations to the
Borrowers; and

        WHEREAS, the Lenders and the Agent are each willing to
accommodate such request for credit upon and subject to the terms, conditions
and provisions of the Loan Documents, including without limitation, the Agent
having a security interest in the Collateral and with the priority as set forth
in the Security Documents.

        NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto do hereby agree as follows:

ARTICLE 1. DEFINITIONS AND
ACCOUNTING TERMS

        Section 1.1.         
Definitions.  In addition to the terms defined elsewhere in this
Agreement, unless otherwise specifically provided herein, the following terms
shall have the following meanings for all purposes when used in this Agreement,
and in any note, agreement, certificate, report or other document made or
delivered in connection with this Agreement:

"Affiliate" as applied to any
Person, shall mean any other Person directly or indirectly controlling,
controlled by, or under common control with, that Person. For the purposes of
this definition, "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of the Person, whether through the ownership of voting securities
or by contract or otherwise.

"Agent" shall mean RBS Citizens,
N.A., in its capacity as agent for the Lenders, and its successors in that
capacity.

"Agreement" shall mean this Credit
and Guaranty Agreement, as amended or supplemented from time to time.
References to Articles, Sections, Exhibits, Schedules and the like refer to the
Articles, Sections, Exhibits, Schedules and the like of this Agreement unless
otherwise indicated, as amended and supplemented from time to time.

1

 

"Alternative
Currency" shall mean Canadian Dollars, Australian Dollars, British
Pounds Sterling, Hong Kong Dollars, Euros and each other currency (other than
U.S. Dollars), that is approved in writing by the Agent and the Issuing Bank.

"Alternative
Currency Equivalent" shall mean, at any time, with respect to any
amount denominated in U.S. Dollars, the equivalent amount thereof in the
applicable Alternative Currency as determined by the Agent at such time on the
basis of the Spot Rate (as of the date of determination) for the purchase of
such Alternative Currency with U.S. Dollars.

"Alternative
Currency Loan" shall mean any Revolving Credit Advance denominated in
an Alternative Currency.

"Alternative
Currency Sublimit" shall mean US$50,000,000. The Alternative Currency
Sublimit is part of, and not in addition to, the Maximum Revolving Credit
Amount.

"Applicable Base Rate" shall mean
the sum of (a) the Base Rate plus (b) the Base Rate Margin, as each is
in effect from time to time.

"Applicable LIBOR Rate" shall mean
the sum of (a) the LIBOR Lending Rate plus (b) the LIBOR Rate Margin, as
each is in effect from time to time.

"Applicable Period" shall have the
meaning ascribed thereto in Section 6.1.

"Approved Fund" shall mean a Fund
that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.

"Australian Dollars" shall mean the
lawful currency of Australia.

"Assignment and Acceptance Agreement"
shall mean an Assignment and Acceptance Agreement substantially in the form of Exhibit
F hereto. 

"Base Rate" shall mean the greater
of (a) the Prime Rate and (b) the Federal Funds Effective Rate plus 1/2 of 1% per
annum (rounded upwards, if necessary, to the next 1/8 of 1%).

"Base Rate Loan" shall mean any
Revolving Credit Advance bearing interest at a fluctuating rate determined by
reference to the Applicable Base Rate.  All Base Rate Loans shall be
denominated in U.S. Dollars.

"Base Rate Margin" shall mean a
rate per annum determined in accordance with the Pricing Schedule.

"Borrowers" shall mean Gerber and
Gerber International.

"British Pounds Sterling" shall
mean the lawful currency of the United Kingdom.

2

 

"Business Day" shall mean any day
that is not a Saturday, Sunday or other day on which commercial banks in New
York City are authorized or required by law to remain closed; provided that (a)
when used in connection with a LIBOR Rate Loan in any currency, the term
"Business Day" shall also include any day on which banks are not open for dealings in deposits
in such currency in the London interbank market and (b) when used
in connection with any LIBOR Rate Loan denominated in Euro, the term "Business
Day" shall also exclude any day on which TARGET is not open for the
settlement of payments in Euro.

"Canadian Dollars" shall mean the
lawful currency of Canada.

"Capital Expenditure" shall mean
amounts paid or Indebtedness incurred by any Person in connection with the
purchase or lease by such Person of assets that would be required to be
capitalized and shown on the balance sheet of such Person in accordance with
GAAP.

"Capitalized Lease" shall mean any
lease which is or should be capitalized on the balance sheet of the lessee in
accordance with generally accepted accounting principles and Statement of
Financial Accounting Standards No. 13.

"Capitalized Lease Obligations"
shall mean the amount of the liability reflecting the aggregate discounted
amount of future payments under all Capitalized Leases calculated in accordance
with generally accepted accounting principles and Statement of Financial
Accounting Standards No. 13.

"Change in Control" shall mean (a)
the acquisition of ownership, directly or indirectly, beneficially or of
record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities Exchange Commission thereunder), of
Equity Interests representing more than 30% of the aggregate ordinary voting
power or the aggregate equity value represented by the issued and outstanding
Equity Interests in Gerber or (b) occupation of a majority of the seats (other
than vacant seats) on the board of directors of Gerber by Persons who were
neither (i) nominated by the board of directors of Gerber nor (ii) appointed by
directors so nominated.

"Closing Date" shall mean the date
on which all of the conditions set forth in Section 3.1 have been satisfied.

"Collateral" shall mean any and all
assets of the Loan Parties subject to Liens under the Security Documents.

"Commitment Percentage" shall mean
as to each Lender its percentage interest in the Maximum Revolving Credit
Amount as set forth on Schedule 1 hereto.

"Compliance Certificate" shall mean
a certificate in the form of Exhibit C hereto and executed by the Chief
Executive Officer, Chief Financial Officer or Vice President of Finance of the
Borrowers.

3

 

"Consolidated" and "Consolidating,"
and "consolidated" and "consolidating" when
used with reference to any term, mean that term (or the terms "combined"
and "combining", as the case may be, in the case of partnerships,
joint ventures and Affiliates that are not Subsidiaries) as applied to the
accounts of Gerber (or other specified Person) and all of its Subsidiaries (or
other specified Persons), or such of its Subsidiaries as may be specified,
consolidated (or combined) in accordance with generally accepted accounting
principles and with appropriate deductions for minority interests in
Subsidiaries, as required by generally accepted accounting principles.

"Consolidated Current Liabilities"
shall mean, at any date as of which the amount thereof shall be determined, all
liabilities of Gerber and its Subsidiaries which should properly be classified
as current in accordance with generally accepted accounting principles
consistently applied, including, without limitation, all fixed prepayments of,
and sinking fund payments with respect to, Indebtedness and all estimated taxes
of Gerber and its Subsidiaries required to be made within one year from the
date of determination.

"Consolidated EBIT" shall mean for
any period the sum of (a) Consolidated Net Income and (b) all amounts deducted
in computing Consolidated Net Income in respect of (i) Consolidated Interest
Expense, and (ii) taxes based on or measured by income, in each case for the
period under review.

"Consolidated EBITDA" shall mean
for any period the sum of (a) Consolidated Net Income and (b) all amounts deducted
in computing Consolidated Net Income in respect of (i) Consolidated Interest
Expense, (ii) taxes based on or measured by income, (iii) consolidated
depreciation and amortization expense, in each case for the period under
review, and (iv) all non-cash expenses incurred in connection with the
termination of the Existing Credit Agreement.

"Consolidated Interest Expense"
shall mean, for any period, interest expense for such period of Gerber and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.

"Consolidated Net Income" shall
mean the net income (or deficit) from operations of Gerber and its
Subsidiaries, after taxes, determined in accordance with generally accepted
accounting principles consistently applied.

"Costs of Collection" shall mean
(a) any and all reasonable and documented sums advanced by the Agent after
the occurrence and during the continuance of an Event of Default in order to
preserve the Collateral or preserve its security interest in the Collateral and
(b) in the event of any proceeding for the collection or enforcement of
any obligations or liabilities after the occurrence and during the continuance
of an Event of Default the reasonable and documented expenses of re‐taking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral or of any exercise by the Agent of its rights
hereunder and under the Loan Documents, together with reasonable attorneys'
fees and court costs.

4

 

"Credit Participants" shall have
the meaning set forth in Section 12.2(f) hereof.

"Default" shall mean an Event of
Default or an event or condition which with the passage of time or giving of
notice, or both, would become such an Event of Default.

"Defaulting Lender" shall have the
meaning set forth in Section 11.1 hereof.

"Distribution" shall mean as to any
Person: (a) the declaration or payment of any dividend on or in respect of any
shares of any class of capital stock of such Person, other than dividends
payable solely in shares of common stock of such Person, (b) the purchase,
redemption, or other acquisition or retirement of any shares of any class of
capital stock of such Person directly or indirectly, (c) any other distribution
on or in respect of any shares of any class of capital stock of such Person,
(d) any setting apart or allocating any sum for the payment of any dividend or
distribution, or for the purchase, redemption or retirement of any shares of
capital stock of such Person and (e) any payment of, principal of, interest on,
or fees or any other amounts with respect to Subordinated Indebtedness.

"Eligible Assignee" shall mean (a)
any Lender, any Affiliate of any Lender and any Approved Fund of any Lender;
and (b) (i) a commercial bank organized under the laws of the United States or
any state thereof, (ii) a savings and loan association or savings bank
organized under the laws of the United States or any state thereof; (iii) a
commercial bank organized under the laws of any other country or a political
subdivision thereof; provided that (A) such bank is acting through a
branch or agency located in the United States or (B) such bank is organized
under the laws of a country that is a member of the Organization for Economic
Cooperation and Development or a political subdivision of such country; and
(iv) any other entity that is an "accredited investor" (as defined in
Regulation D under the Securities Act) that extends credit or buys loans in the
ordinary course including insurance companies, mutual funds and lease financing
companies; provided that no Loan Party nor any Affiliate of a Loan Party shall
be an Eligible Assignee.

"Environmental Law" means any
judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, or any federal, state, county or local statute,
regulation, ordinance, order or decree relating to public health, welfare, the
environment, worker health or safety, or the handling, manufacturing,
processing, generation, storage or disposal of Hazardous Substances, whether
now existing or hereafter enacted.

"Equity Interest" shall mean (a)
shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person or (b) warrants, options or other rights to
acquire such shares or interests.

"ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended from time to time.

5

 

"ERISA Affiliate" shall mean any
entity that would be considered a single employer with Gerber or any Subsidiary
under Section 4001(b) of ERISA or part of the same "controlled group"
as Gerber or any Subsidiary for purposes of Section 302(d)(8)(C) of ERISA.

"EURIBOR" shall mean, in relation to any Loan in Euro, (a) the percentage rate per annum determined by the Banking
Federation of the European Union for the relevant period, displayed on the
appropriate page of the internationally recognized service as selected by the Agent; or (b) if the service ceases to
be available, for any reason, the arithmetic mean of the rates (rounded upwards
to four decimal places) as supplied to the Agent at its request by leading
banks in the European interbank market, as of the specified time on the quotation day for the offering of
deposits in Euro for a period comparable to
the Interest Period of the relevant Loan.

"Euro" means the lawful currency
of the participating member states introduced in accordance with the
legislative measures of the European Council for the introduction of,
changeover to or operation of a single or unified European currency.

"Event of Default" shall have the
meaning set forth in Section 10.1 hereof.

"Excluded
Collateral" shall mean: (a) pledges of cash and cash equivalents to
Travelers Insurance Company to secure obligations of the Borrowers or their
Subsidiaries under or in connection with property and casualty insurance
policies issued by Travelers Insurance Company (or any successor insurers) for
the benefit of the Borrowers or their Subsidiaries; provided, however,
that the amount of such pledges shall not exceed $2,000,000 in the aggregate at
any one time, (b) any agreements now existing which by their terms prohibit the
granting of a security interest therein or assignment thereof; provided,
however, that if the UCC or any other law now or hereafter permits the
granting of a security interest or assignment thereof notwithstanding such
terms, such contracts and agreements shall not be Excluded
Collateral, and (c) equipment subject to a capitalized lease or purchase money
lien permitted hereunder that prohibits the granting of any other lien on such
equipment; provided, however, that such equipment shall not be
Excluded Collateral upon the release of such capitalized lease or purchase
money lien (d) stock or other equity interests in Subsidiaries which are not
Guarantors, and (e) all real property owned by a Loan Party, the fixtures
thereupon, and personal property generally used solely in the operation of such
real property (including without limitation, service equipment, heating
ventilation and air conditioning equipment, phones, heating, lighting, air
conditioning, ventilating, plumbing, electrical or other mechanical equipment,
refrigeration, security and control systems, building operation and maintenance
equipment, sprinkler and irrigation facilities and equipment).

"Existing Credit Agreement" shall
mean the Loan and Security Agreement dated as of October 31, 2005 by and among
the Borrowers, Citizens Bank of Massachusetts and the other parties thereto, as
amended, restated or otherwise modified from time to time.

"Existing Letters of Credit" shall
mean the Issuing Bank's letters of credit issued for the account of one or more
Loan Parties and described on Schedule 2.6 hereto.

6

 

"Federal Funds Effective Rate"
shall mean for any day, a fluctuating interest rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York or, if such rate is not
so published for any day that is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three federal
funds brokers of recognized standing selected by the Agent.

"Fee Letter" shall have the meaning
set forth in Section 2.11(b) hereof.

"Foreign Security Documents" shall
mean the documents described in clauses (b), (c), and, to the extent they
relate to assets of foreign Loan Parties, (d) of the definition of Security
Documents.

"Fund" shall mean any Person (other
than a natural Person) that is (or will be) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course.

"Gerber Australia" shall mean
Gerber Scientific International (Australia) Pty. Ltd.

"Gerber Belgium" shall mean Gerber
Technology NV/SA.

"Gerber Technology" shall mean
Gerber Technology, Ltd. 

"Generally accepted accounting principles"
or "GAAP" shall mean accounting principles generally accepted
in the United States of America as defined by controlling pronouncements of the
Financial Accounting Standards Board, as from time to time supplemented and
amended.

"Guarantor" shall mean each of the
Persons set forth on the signature pages hereto as a "Guarantor" and
each other wholly-owned Subsidiary of Gerber that may hereafter become a
Guarantor hereunder in accordance with the provisions of Section 14.9
hereof.

"Guaranty" or "Guarantee"
or "Guaranties" shall include any arrangement whereby a Person
is or becomes liable in respect of any Indebtedness or other obligation of
another and any other arrangement whereby credit is extended to another obligor
on the basis of any promise of a guarantor, whether that promise is expressed
in terms of an obligation to pay the Indebtedness of such obligor, or to
purchase or lease assets under circumstances that would enable such obligor to
discharge one or more of its obligations, or to maintain the capital, the
working capital, solvency or general financial condition of such obligor,
whether or not such arrangement is listed in the balance sheet of the guarantor
or referred to in a footnote thereto.

"Hong Kong Dollars" shall mean the
lawful currency of the Hong Kong Special Administrative Region.

7

 

"Indebtedness" shall mean, as to
any Person, all obligations, contingent and otherwise, which in accordance with
generally accepted accounting principles consistently applied should be
classified upon such Person's balance sheet as liabilities, but in any event
including (i) liabilities secured by any Lien on property owned or acquired by
such Person whether or not the liability secured thereby shall have been
assumed, (ii) letters of credit open for account, (iii) obligations under
banker's acceptance facilities, (iv) Capitalized Lease Obligations and (v) all
obligations on account of Guaranties, endorsements and any other contingent
obligations of a similar nature in respect of the Indebtedness of others
whether or not reflected on such balance sheet or in a footnote thereto.

"Indemnified Taxes" has the meaning
specified in Section 4.7(a) hereof.

"Interest Period" shall mean with
respect to each LIBOR Rate Loan, the period commencing on the date of such
LIBOR Rate Loan and ending one, two, three, six or, if available to all
Lenders, twelve months thereafter, as the Borrowers may request as provided in
Sections 2.2(a) or 2.4 hereof, provided, that:

(a) any Interest Period (other
than an Interest Period determined pursuant to clause (c) below) that would
otherwise end on a day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in the next calendar
month, in which case such Interest Period shall end on the immediately
preceding Business Day;

(b) any Interest Period that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to clause (c) below, end on the last
Business Day of a calendar month;

(c) any Interest Period that
would otherwise end after the Revolving Credit Termination Date shall end on
the Revolving Credit Termination Date; and

(d) notwithstanding clause (c)
above, no Interest Period shall have a duration of less than one month, and if
any Interest Period applicable to any LIBOR Rate Loan would be for a shorter
period, such Interest Period shall not be available hereunder.

"Interest Rate Protection Agreement"
means any interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedging agreement, interest rate floor
agreement or other similar agreement or arrangement.

"Internal Revenue Code" shall mean
the Internal Revenue Code of 1986, as amended from time to time.

"Investment" shall mean (a) any
stock, evidence of Indebtedness or other security of another Person, (b) any
loan, advance, contribution to capital, extension of credit (except for trade
and customer accounts receivable for inventory sold or services rendered in the
ordinary course of business and payable in accordance with the terms thereof
set in the ordinary course of business) to another Person, and (c) any purchase
of

8

 

(i) stock or other securities of another Person or (ii) any business or
undertaking of another Person (whether by purchase of assets or securities),
and any commitment or option to make any such purchase if, in the case of an
option, the aggregate consideration paid for such option was in excess of $100.

"Issuing
Bank" shall mean RBS Citizens, N.A., in its capacity as the issuer of
Letters of Credit hereunder, and any successor to RBS Citizens, N.A. in such
capacity. The Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by affiliates of the Issuing Bank, in which case
the term "Issuing Bank" shall include any such affiliate with respect
to Letters of Credit issued by such affiliate.

"Lender Obligations" shall mean all
present and future obligations and Indebtedness of the Borrowers or any
Subsidiary owing to the Agent or the Lenders (a) under this Agreement or any
other Loan Document, including, without limitation, the obligations to pay the
Indebtedness from time to time evidenced by the Revolving Credit Notes or the
Swingline Note, to reimburse the Issuing Bank for any drawings paid under
Letters of Credit, obligations to pay interest, commitment fees, balance
deficiency fees, charges, expenses and indemnification from time to time owed
under any Loan Document and Costs of Collection and (b) under any Secured
Interest Rate Protection Agreements.

"Lenders" shall mean (a) initially,
each Lender listed on the signature pages hereof as "Lenders", (b)
any other Person who becomes a Successor Lender hereunder in accordance with
the terms of Section 12.2 hereof, (c) with respect to Swingline Loans, the
Swingline Lender, and (d) their respective successors.

"Letter of Credit" shall mean the
Existing Letters of Credit and any letter of credit issued pursuant to Section
2.6.

"Letter of Credit Exposure" shall
mean, at any time, the sum of (a) the Maximum Drawing Amount with respect to
all Letters of Credit and (b) all unpaid Reimbursement Obligations.

"Letter of Credit Sublimit" shall
mean US$20,000,000. The Letter of Credit Sublimit is part of, and not in
addition to, the Maximum Revolving Credit Amount. For the purposes of
determining the Letter of Credit Sublimit Letters of Credit denominated in an
Alternative Currency shall be converted into the U.S. Dollar equivalent as of
the date of such determination.

"LIBOR Lending Rate" shall mean,
relative to any LIBOR Rate Loan to be made, continued or maintained as, or
converted into, a LIBOR Rate Loan for any Interest Period, a rate per annum
determined pursuant to the following formula:

                 LIBOR Lending Rate =                     LIBOR Rate                    
                                                         (1.00 -
LIBOR Reserve Percentage)

9

 

"LIBOR Pricing Option" shall mean
the option granted to the Borrowers pursuant to Section 2.4 hereof to have
interest on all or a portion of the Loans computed on the basis of the
Applicable LIBOR Rate for an applicable Interest Period.

"LIBOR Rate" shall mean, relative to any Interest Period for LIBOR Rate
Loans, (i) the rate per annum (rounded upwards, if necessary, to the
nearest 1/100th of 1%) as calculated by the British Bankers' Association and
obtained through a nationally recognized service such as the Dow Jones Market
Service (Telerate) or Reuters (the "Service") at approximately
11:00 a.m., London time, two (2) Business Days prior to the commencement of
such Interest Period, as the rate for the relevant currency with a maturity
comparable to such Interest Period; and (ii) if the
Alternative Currency is in Euro, at the EURIBOR Rate provided that, to the
extent that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the "LIBOR Rate" shall be the interest
rate per annum determined by Agent to be the average of the rates per annum at
which deposits in the relevant currency are offered for such Interest Period to
major banks in the London interbank market or the European interbank market as
the case may be at approximately 11:00 a.m. London time on the date that is two
(2) Business Days prior to the beginning of such Interest Period. Each
determination by the Agent pursuant to this definition shall be conclusive
absent manifest or mathematical error. 

"LIBOR Rate Fixing Day" shall mean,
in the case of any LIBOR Rate Loan, the second Business Day preceding the
Business Day on which an Interest Period begins.

"LIBOR Rate Loan" shall mean any
Loan hereunder upon which interest will accrue on the basis of a formula
including as a component thereof the LIBOR Rate. The expiration date of any
LIBOR Rate Loan shall be the last day of the Interest Period applicable to such
LIBOR Rate Loan. LIBOR Rate Loans may be denominated in U.S. Dollars or in an
Alternate Currency.

"LIBOR Rate Margin" shall mean a
rate per annum determined in accordance with the Pricing Schedule.

"LIBOR Reserve Percentage" shall
mean, relative to any day of any Interest Period for LIBOR Rate Loans, the
maximum aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
under any regulations of the Board of Governors of the Federal Reserve System
(the "Board") or other governmental authority having jurisdiction
with respect thereto as issued from time to time and then applicable to assets
or liabilities consisting of "Eurocurrency Liabilities", as currently
defined in Regulation D of the Board, having a term approximately equal or
comparable to such Interest Period.

"Lien" shall mean any lien,
mortgage, pledge, assignment (only for the purposes of creating a security
interest), security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement or any lease in the

10

 

nature
thereof) and, solely in the case of securities, any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.

"Liquid Securities" shall mean
Investments described in clauses (a) through (d) of the definition of Permitted
Investments. 

"Loan" shall mean any Revolving
Credit Advance or Swingline Loan outstanding hereunder or made to the Borrowers
by the Lenders pursuant to Article 2 of this Agreement, and "Loans"
means all of such loans, collectively.

"Loan Documents" shall mean this
Agreement, the Revolving Credit Notes, the Swingline Note, the Security
Documents, any Secured Interest Rate Protection Agreements any Notices of
Revolving Credit Borrowing hereunder and any other present or future agreement
from time to time entered into between Gerber or any Subsidiary and the Agent
or the Lenders in connection with this Agreement, each as from time to time
amended or supplemented, and all statements, reports and certificates delivered
by the Borrowers to the Agent or the Lenders in connection therewith.

"Loan Parties" means the Borrowers
and each Guarantor.

"Majority Lenders" shall mean, at
any time, the Lenders (excluding Defaulting Lenders) having made greater than
fifty percent (50%) of the outstanding principal amount of the Loans (excluding
Loans made by a Defaulting Lender) hereunder, or, if no Loans are outstanding,
the Lenders (excluding Defaulting Lenders) having aggregate Commitment
Percentages of greater than fifty percent (50%) (excluding Commitment
Percentages of Defaulting Lenders).

"Material Adverse Effect" shall
mean any event, fact, circumstance, change in, or effect on, the operations,
business, properties, or condition (financial or otherwise) of any Borrower or
Guarantor, which individually, in the aggregate or on a cumulative basis with
any other events, facts, circumstances, changes in, or effects on, the
Borrowers and Guarantors, taken as a whole, has had or would reasonably be
expected to have a material adverse effect on (a) the ability of the Borrowers
and Guarantors taken as a whole to (i) operate or conduct business in
substantially the manner in which such business is operated or conducted on the
Closing Date, or (ii) perform or pay any Lender Obligations, (b) the assets,
properties, business, operations, or condition (financial or otherwise) of the
Borrowers and Guarantors taken as a whole, (c) the validity or enforceability
of this Agreement or any of the other Loan Documents or any of the rights or
remedies of the Agent or any Lender hereunder or thereunder or (d) the value,
enforceability, or collectibility of the collateral under the Security
Documents. In determining whether any individual event would result in a
Material Adverse Effect, notwithstanding that such event in and of itself does
not have such effect, a Material Adverse Effect shall be deemed to have
occurred if the cumulative effect of such event and all other then existing
events would result in a Material Adverse Effect.

"Maximum Drawing Amount" means the
maximum aggregate amount that the beneficiaries may at any time draw under
outstanding Letters of Credit, as such aggregate

11

 

amount may be reduced from
time to time pursuant to the terms of the Letters of Credit. For the purposes
of determining the Maximum Drawing Amount Letters of Credit denominated in an
Alternative Currency shall be converted into the U.S. Dollar equivalent as of
the date of such determination.

"Maximum Revolving Credit Amount"
shall mean, subject to Section 2.18, as of any date of determination, the
lesser of (a) $125,000,000 and (b) the amount to which the Maximum Revolving
Credit Amount may have been reduced pursuant to Section 2.14 hereof; provided
that if the obligation of the Lenders to make further Revolving Credit Advances
is terminated upon the occurrence of an Event of Default, the Maximum Revolving
Credit Amount as of any date of determination thereafter shall be deemed to be
$0. For the purposes of determining the Maximum Revolving Credit Amount
Revolving Credit Advances denominated in an Alternative Currency shall be
converted into the U.S. Dollar equivalent as of the date of such determination.

"Notes" shall mean the Revolving
Credit Notes and the Swingline Note.

"Notice of Revolving Credit Borrowing"
shall have the meaning set fort in Section 2.2(a).

"Other Taxes" has the meaning
specified in Section 4.7(b) hereof.

"Patriot Act" shall mean the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)).

"Pension Plan" shall mean an
employee benefit plan or other plan sponsored, maintained or contributed to by
Gerber, any Subsidiary or any ERISA Affiliate as described in Section 4021(a)
of ERISA.

"Permitted Acquisition" shall mean
the acquisition by, or merger into, any Loan Party, of any Person or the assets
or business of any Person constituting an operating business engaged in the
same business line or a business reasonably related thereto as Gerber or a
Subsidiary; provided, however, that (i) such acquisition or
merger is accretive to Consolidated EBITDA based on the target's results for
the most recently ended twelve-month period, (ii) after the consummation of any
such acquisition or merger, the Borrowers will be in compliance with all
covenants both before and on a pro forma basis after such acquisition or merger
(as evidenced by a certificate of the Borrowers certifying such pro forma
compliance in the case of any Permitted Acquisition in excess of $10,000,000),
(iii) such Permitted Acquisition has been approved by the Board of Directors of
each of the constituent parties thereto, (iv) after the consummation of any
such acquisition or merger, the ratio of (A) Total Funded Debt of Gerber and
its Subsidiaries to (B) Consolidated EBITDA, on a pro forma basis, shall be
less than 2.5-to-1, and (v) after the consummation of any such acquisition or
merger, Gerber and its Subsidiaries shall have cash, Liquid Securities and/or
borrowing availability under this Agreement in an aggregate amount in excess of
$15,000,000.
12

 

"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the
United States of America or the United Kingdom (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the United
States of America or the United Kingdom), in each case maturing within one year
from the date of acquisition thereof; (b)investments
in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard and Poor's Ratings Service or
from Moody's Investors Service, Inc.; (c) investments
in certificates of deposit, banker's acceptances and time deposits maturing
within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which has a
combined capital and surplus and undivided profits of not less than
$1,000,000,000; (d) investments in money market
mutual funds that are rated AAA by Standard &
Poor's Rating Service, (e) investments received in connection with the
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, customers and suppliers, and (f) tender bonds the payment of
which is supported by a letter of credit issued by a recognized United States
financial institution.

"Permitted Liens" shall have the
meaning set forth in Section 9.2 hereof.

"Person" shall mean an individual,
corporation, partnership, joint venture, association, estate, joint stock
company, trust, organization, business, or a government or agency or political
subdivision thereof.

"Pledge Agreement" shall mean the
Pledge Agreement dated as of January 31, 2008 executed by Gerber and each
Subsidiary that owns stock of any Guarantor in favor of the Agent, as amended
as of the date hereof, and as further amended and in effect from time to time.

"Pricing Notice" shall have the
meaning set forth in Section 2.4 hereof.

"Pricing Schedule" shall mean
Pricing Schedule attached hereto as Schedule 2.

"Prime Rate" shall mean the
variable per annum rate of interest so designated from time to time by the
Agent as its prime rate. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer.

"Reimbursement Obligations" means
(a) the Borrowers' obligations to reimburse the Issuing Bank on account of any
drawing under any Letter of Credit and (b) without duplication, the Borrowers'
obligation to reimburse any Lender on account of any drawing under any Letters
of Credit. For the purposes of determining Reimbursement Obligations, Letters
of Credit denominated in an Alternative Currency shall be converted into the
U.S. Dollar equivalent as of the date of such determination.

"Related Subsidiary" shall mean,
with respect to any wholly-owned Subsidiary of Gerber, any other wholly-owned
Subsidiary or Subsidiaries of Gerber which conduct

13

 

substantially all of their
operations in the same foreign jurisdiction and constitute one business unit.

"Reportable Event" shall mean an
event reportable to the Pension Benefit Guaranty Corporation under Section 4043
of Title IV of ERISA (other than any event for which the notice requirement is
waived by the regulations thereunder).

"Revolving Commitments" shall mean
the commitments of the Lenders to make Revolving Credit Advances in accordance
with the terms hereof, which in the aggregate shall not exceed the Maximum
Revolving Credit Amount.

"Revolving Credit Advance" shall
mean any loan or advance from any Lender to the Borrowers pursuant to Section
2.1 this Agreement.

"Revolving Credit Notes" shall mean
the Revolving Credit Notes substantially in the form of Exhibit A-1
hereto executed by the Borrowers in favor of each Lender to evidence the
Revolving Credit Advances to be made by the Lenders from time to time
hereunder.

"Revolving Credit Termination Date"
shall mean January 31, 2013.

"Secured Interest Rate Protection Agreement"
shall mean any Interest Rate Protection Agreement entered into by a Loan Party
and a party which is and remains a Lender throughout the term of such Interest
Rate Protection Agreement.

"Security Agreement" shall mean the
Security Agreement dated as of the date hereof by and among the Borrowers,
Gerber Coburn Optical International, Inc. and RBS Citizens, N.A., as collateral
agent, as amended, restated or otherwise modified from time to time.

"Security Documents" shall mean (a)
the Security Agreement, the Pledge Agreement, (b) the General Security
Agreement, Pledge of Debentures, Delivery Order-Debenture and Power of Attorney
and Deed of Hypothec to secure Payment of Debentures by and between the Agent
and Gerber Scientific International Ltd. dated as of the date hereof, (c) the
Debenture by and among the Agent, Gerber Scientific UK Limited and Spandex
Limited dated as of the date hereof, the Charge over Shares by and between the
Agent and Gerber Scientific International, Inc. dated as of the date hereof and
(d) any other security agreements, debentures, pledge agreements, charges,
deposit account control agreements and other similar documents and agreements
of the Loan Parties or other Persons that secure the Lender Obligations.

"Solvent" shall mean, with respect
to any Person on a particular date, that on such date (a) the fair value of the
property of such Person is greater than the total amount of liabilities,
including contingent liabilities, of such Person; (b) the present fair salable
value of the assets of such Person, as part of a going concern, is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and

14

 

liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about
to engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guarantees and pension plan liabilities) at any time shall
be computed as the amount which, in light of all the facts and circumstances
existing at the time, represents the amount which can reasonably be expected to
become an actual or matured liability.

"Spot Rate" shall mean, for a
currency, the rate quoted by the Agent as the spot rate for the purchase of
such currency with another currency through its principal foreign exchange
trading office at approximately 11:00 a.m. (in the applicable time zone) on the
date two (2) Business Days prior to the date as of which the foreign exchange
computation is made; provided that the Agent may obtain such spot
rate from another financial institution designated by the Agent if the Agent
does not have as of the date of determination a spot buying rate for any such
currency.

"Stock" shall mean all shares,
options, warrants, general or limited partnership interests or other
equivalents (regardless of how designated) of or in a corporation, partnership
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
as amended).

"Subordinated Indebtedness" shall
mean Indebtedness of any Borrower which is subordinated to the Indebtedness of
the Borrowers hereunder and under the Revolving Credit Notes or the Swingline
Note and to all other Lender Obligations, on terms and conditions approved in
writing by the Agent.

"Subsidiary" shall mean any Person
of which Gerber or other specified parent shall now or hereafter at the time
own, directly or indirectly through one or more Subsidiaries or otherwise,
sufficient voting stock (or other beneficial interest) to entitle it to elect
at least a majority of the board of directors or trustees or similar managing
body.

"Swap Termination Value" shall
mean, in respect of any one or more Interest Rate Protection Agreements, after
taking into account the effect of any legally enforceable netting agreement
relating to such Interest Rate Protection Agreements, for any date, the
amount(s) determined as the mark-to-market value(s) for such Interest Rate
Protection Agreements, as determined based upon one or more mid-market or other
readily available quotations provided by any recognized dealer in such Interest
Rate Protection Agreements (which may include a Lender or any Affiliate of a
Lender).

"Swingline
Commitment" has the meaning specified in Section 2.7 hereof.

"Swingline
Lender" shall mean RBS Citizens, N.A.

"Swingline
Loan" has the meaning specified in Section 2.7 hereof.

"Swingline
Loan Account" has the meaning specified in Section 2.7 hereof.

15

 

"Swingline
Loan Closing Date" has the meaning specified in Section 2.7 hereof.

"Swingline
Note" shall mean the Swingline Note in substantially the form of Exhibit
A-2 hereto executed by the Borrowers to the order of the Swingline Lender
to evidence the Swingline Loans.

"Swingline
Loan Notice" has the meaning specified in Section 2.7 hereof.

"Swingline
Participation Amount" has the meaning specified in Section 2.9(c)
hereof.

"TARGET"
means the Trans-European Automated
Real-time Gross Settlement Express Transfer payment system.

"Tax"
or "Taxes" shall mean all present or future fees, taxes
(including, without limitation, income taxes, sales taxes, use taxes, stamp
taxes, value-added taxes, excise taxes, ad valorem taxes and property
taxes (personal and real, tangible and intangible)), levies, assessments,
withholding and other charges and impositions of any nature, plus all
related interest, penalties, fines and additions to tax, now or hereafter
imposed by any federal, state, local or foreign government of other taxing
authority. 

"Total Funded
Debt" of any Person means, without duplication, Indebtedness under
this Agreement, in the case of the Borrowers, and all other Indebtedness for
borrowed money of any such Person (including the Borrowers).

"Treasury
Regulations" shall mean the regulations promulgated under the Internal
Revenue Code, as amended from time to time (including corresponding provisions
of succeeding regulations). 

"U.S. Dollar
Equivalent" shall mean, at any time, (a) with respect to any
amount denominated in U.S. Dollars, such amount; and (b) with respect to
any amount denominated in any Alternative Currency, the equivalent amount
thereof in U.S. Dollars as determined by the Agent at such time on the basis of
the Spot Rate (as of the date of determination) for the purchase of U.S.
Dollars with, such Alternative Currency.

"2007 Financial Statements" shall
mean the Consolidated Balance Sheet of Gerber and its Subsidiaries as of April
30, 2007 and the related Consolidated Statements of Operations, Cash Flows and
Changes in Shareholders' Equity for the fiscal year then ended and notes to
such financial statements.

"UCC" shall mean the Massachusetts
Uniform Commercial Code, Massachusetts General Laws c. 106, as amended from
time to time.

"Unasserted Lender Obligations" shall
mean, at any time, Lender Obligations for taxes, costs, indemnifications,
reimbursements, damages and other liabilities (except for (i) the principal of
and interest on, and fees relating to, any Indebtedness and (ii) contingent
reimbursement obligations in respect of amounts that may be drawn under Letters
of Credit) in respect of which no claim or demand for payment has been made
(or,

16

 

in the case of Lender Obligations for indemnification, no notice for
indemnification has been issued by the indemnitee) at such time.

"U.S. Dollars", "Dollars"
and "$" shall mean the lawful currency of the United States.

        Section 1.2.         

Accounting Terms.   All accounting terms used and not defined in this
Agreement shall be construed in accordance with generally accepted accounting
principles consistently applied, and all financial data required to be
delivered hereunder shall be prepared in accordance with such principles.

        Section
1.3.         
Construction of Terms.  As used herein, the masculine, feminine or neuter
gender, and the singular or plural number, shall be deemed to be or to include
the other genders or number, as the case may be, whenever the context so
indicates or requires.

ARTICLE 2. THE REVOLVING
CREDIT

        Section
2.1.         

The Revolving Credit.  

(a)        Subject to the terms and conditions of this Agreement and so long as
there exists no Default, at any time prior to the Revolving Credit Termination
Date, each Lender, severally and not jointly, shall make such Revolving Credit
Advances to the Borrowers as the Borrowers may from time to time request, by
notice to the Agent in accordance with Section 2.2, in an aggregate amount (i)
as to each Lender, not to exceed at any time such Lender's Commitment
Percentage of the Maximum Revolving Credit Amount less its Commitment
Percentage of the Letter of Credit Exposure, and (ii) as to all Lenders, not to
exceed the Maximum Revolving Credit Amount less the Letter of Credit Exposure.
The outstanding principal amount of the Revolving Credit Advances, together
with all accrued interest and other fees and charges related thereto, shall be
repaid in full on the Revolving Credit Termination Date. On the Closing Date,
the Borrowers shall execute and deliver to each Lender who so requests a
Revolving Credit Note to evidence the Revolving Credit Advances from time to
time made by such Lender to the Borrowers hereunder. 

(b)        Subject to the foregoing limitations and the provisions of Section 4.2,
the Borrowers shall have the right to make prepayments reducing the outstanding
balance of Revolving Credit Advances and to request further Revolving Credit
Advances, all in accordance with Section 2.2, without other restrictions
hereunder; provided that the Lenders shall have the absolute right to refuse to
make any Revolving Credit Advances for so long as there exists any Default or
any other condition which would constitute a Default upon the making of such a
Revolving Credit Advance.

        Section
2.2.         

Making of Revolving Credit Advances.

(a)        Each Revolving Credit Advance shall be made on notice given by Gerber to
the Agent not later than 3:00 p.m., Boston time on the date one (1) Business
Day prior to the date of the proposed Borrowing (a "Notice of Revolving
Credit Borrowing"); provided, however that if Gerber
elects a LIBOR Rate Pricing Option or an Alternative Currency Loan with respect
to any Revolving Credit Advance in accordance with Section 2.4 hereof, such
Notice of

17

 

Revolving Credit Borrowing shall so specify and be given by Gerber
contemporaneously with a Pricing Notice (in the case of a LIBOR Rate Pricing
Option) and in the manner and within the time specified in Section 2.4. The
Agent shall give the Lenders notice of each Notice of Revolving Credit
Borrowing in accordance with the Agent's customary practice. Each such Notice
of Revolving Credit Borrowing shall be by telephone or telecopy, in each case
confirmed immediately in writing by Gerber in substantially the form of Exhibit
B hereto, specifying therein (i) the requested date of such Revolving
Credit Advance, and (ii) the amount of such Revolving Credit Advance (which
must be a minimum of $3,000,000 and in increments of $1,000,000). The
Borrowers agree to indemnify and hold the Lenders harmless for any action,
including the making of any Revolving Credit Advances hereunder, or loss or
expense, taken or incurred by the Agent and the Lenders in good faith reliance
upon such telephone request, absent its gross negligence or willful misconduct.

(b)        Subject to the terms and conditions of this Agreement, each Lender shall
make available on or before 12:00 p.m., Boston time on the date of each
proposed Revolving Credit Advance, to the Agent at the Agent's address and in
immediately available funds, such Lender's Commitment Percentage of such
Revolving Credit Advance. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article 3, the Agent will
credit such funds to an account designated by Gerber on the date of the
proposed Revolving Credit Advance.

(c)        Unless the Agent shall have received notice from a Lender prior to the
date of any Revolving Credit Advance that such Lender will not make available
to the Agent such Lender's Commitment Percentage of such Revolving Credit
Advance, the Agent may assume that such Lender has made such amount available
to the Agent on the date of such Revolving Credit Advance in accordance with
and as provided in this Section 2.2 and the Agent may, in reliance upon such
assumption, make available on such date a corresponding amount to the
Borrowers. If and to the extent such Lender shall not have so made its
Commitment Percentage of such Revolving Credit Advance available to the Agent
and the Agent shall have made available such corresponding amount to the
Borrowers, such Lender agrees to pay to the Agent forthwith on demand, and the
Borrowers agree to repay to the Agent on demand (but only after demand for payment
has first been made to such Lender and such Lender has failed to make such
payment), an amount equal to such corresponding amount together with interest
thereon for each day from the date the Agent shall make such amount available
to the Borrowers until the date such amount is paid or repaid to the Agent, at
an interest rate equal to the interest rate applicable at the time to such
Revolving Credit Advances. If such Lender shall pay to the Agent such
corresponding amount, such amount so paid shall constitute such Lender's
Revolving Credit Advance for purposes of this Agreement. If the Borrowers make
a repayment required by the foregoing provisions of this Section 2.2(c) and
thereafter the applicable Lender or Lenders make the payments to the Agent required
by this Section 2.2(c), the Agent shall promptly refund the amount of the
Borrowers' payment.

(d)       The failure of any Lender to make the Revolving Credit Advance to be
made by it on any date shall not relieve any other Lender of its obligation, if
any, hereunder to make its Revolving Credit Advance on such date, but no Lender
shall be responsible for the failure of any other Lender to make the Revolving
Credit Advance to be made by such other Lender.

18

 

        Section 2.3.         

Interest on Base Rate Loans.  The Borrowers shall pay interest on the unpaid balance
of the Revolving Credit Advances that are
outstanding as Base Rate Loans from time to time outstanding at a per annum
rate equal to the Applicable Base Rate. Interest on Base Rate Loans shall be
payable quarterly in arrears on the first Business Day of April, July, October
and January, commencing April 1, 2008 and continuing until such Base Rate Loans
shall have been paid in full.

        Section
2.4.         

Election of LIBOR Pricing Options; Alternative Currencies.

(a)               
Subject to all the terms and conditions hereof and so long as there
exists no Default, the Borrowers may, by delivering a Pricing Notice to the
Agent received at or before 3:00 p.m., Boston time on the date three (3)
Business Days prior to the commencement of the Interest Period selected in such
Pricing Notice, elect to have all or a portion of the outstanding (or newly
requested) Revolving Credit Advances, as Gerber may specify in such Pricing
Notice, accrue and bear daily interest during the Interest Period so selected
at a per annum rate equal to the Applicable LIBOR Rate for such Interest
Period; provided, however, that any such election made with
respect to the Revolving Credit Advances shall be in an amount not less than
$3,000,000 and in increments of $1,000,000; and provided further
that no such election will be made if it would result in there being more than
ten (10) LIBOR Pricing Options in the aggregate outstanding at any one time.
Interest on Loans bearing interest at the Applicable LIBOR Rate shall be paid
for the applicable Interest Period on the last day thereof and when such Loan
is due (whether at maturity, by reason of acceleration or otherwise); provided,
however, in the event of an Interest Period longer than three (3)
months, Interest shall be paid on the date three (3) months following the
beginning of such Interest Period and then at the end of each three (3) month
interval thereafter. Upon the expiration of an Interest Period with respect to
a LIBOR Rate Loan, such LIBOR Rate Loan shall automatically be continued as a LIBOR
Rate Loan having an Interest Period equal to one (1) month, subject to the
Borrowers' option to request a new LIBOR Rate Loan having an Interest Period
longer than one (1) month or a Base Rate Loan and provided that if such Loan
could not be continued as a LIBOR Rate Loan under the terms of this Agreement,
such Loan shall automatically convert into a Base Rate Loan.

(b)              
Each Pricing Notice shall be substantially in the form of Exhibit D
attached hereto (the "Pricing Notice") and shall specify: (i)
the selection of a LIBOR Pricing Option; (ii) the effective date and amount of
Revolving Credit Advances subject to such LIBOR Pricing Option, subject to the
limitations set forth herein; and (iii) the duration of the applicable Interest
Period. Each Pricing Notice shall be irrevocable.

(c)               
The Agent will promptly inform each Lender of a Pricing Notice and the
Interest Period specified by the Borrowers therein. Upon determination by the
Agent of the Applicable LIBOR Rate for any Interest Period selected by the
Borrowers, the Agent will promptly inform the Borrowers and each Lender of such
Applicable LIBOR Rate so determined or, if applicable, the reason why the
Borrowers' election will not become effective.

(d)              
Subject to all the terms and conditions hereof and so long as there
exists no Default, by delivering a Notice of Revolving Credit Borrowing to the
Agent on or before 12:00 p.m., Boston time, on a Business Day, the Borrowers
may from time to time irrevocably request, on not less than three (3) Business
Days' notice (and subject to Section 2.4(a)), that an

19

 

Alternative Currency Loan
be made in an amount not less than the Alternative Currency Equivalent of
$5,000,000 and in increments of $1,000,000. Such Alternative Currency Loan
shall be a LIBOR Rate Loan. All Alternative Currency Loans shall be repayable
in the Alternative Currency in which the applicable Alternative Currency Loan
is denominated. The Revolving Credit Lenders shall not be required to make an
Alternative Currency Loan, unless the Agent shall have received from the
Borrowers a request for such Alternative Currency Loan, in a Notice of
Revolving Credit Borrowing.

(e)               
The aggregate principal amount of all Revolving Credit Advances that are
Alternative Currency Loans shall not exceed the Alternative Currency Sublimit.
If the U.S. Dollar Equivalent of the aggregate outstanding principal amount of
all Alternative Currency Loans at any time exceeds an amount equal to 105% of
the Alternative Currency Sublimit then, within five (5) Business Days after
receipt of notice from the Agent thereof, the Borrowers shall prepay
Alternative Currency Loans in an aggregate amount, rounded up to the nearest
U.S.Dollar Equivalent of $500,000 (notwithstanding the limitations on the
amount of prepayments under Section 4.2), sufficient to reduce such U.S. Dollar
Equivalent of the aggregate outstanding principal amount as of such date of
payment to an amount not to exceed 100% of the Alternative Currency Sublimit
then in effect.

        Section 2.5.         

Additional Payments.  Upon
any Default under Section 10.1(a) or (f) (whether or not any of the Lender
Obligations have been accelerated), or after maturity or after judgment has
been rendered on the Notes, the unpaid principal of all Revolving Credit
Advances shall, at the option of the Agent, bear interest at a rate per annum
equal to the rate otherwise applicable thereto, plus 2%.

        Section
2.6.         

Letters of Credit.  

(a)               
From time to time upon request by either Borrower and upon the execution
of letter of credit documentation reasonably satisfactory to Agent and the
Issuing Bank, the Issuing Bank within the limits of the Maximum Revolving
Credit Amount, shall issue commercial or standby letters of credit denominated
in U.S. Dollars or an Alternative Currency from time to time by the Issuing
Bank for the account of the applicant-Borrower (collectively, "Letters
of Credit"), provided that the Maximum Drawing Amount of outstanding
Letters of Credit hereunder shall at no time exceed the Letter of Credit
Sublimit. The Letters of Credit shall be on other terms mutually and
reasonably acceptable to the Issuing Bank and such Borrower provided in no
event shall the terms of such documents (i) conflict with, be contrary to, or
supersede the terms of this Agreement, (ii) provide for fees, costs or expenses
other than those specified or contemplated herein, or (iii) provide for greater
liability or security than exists with respect to the Revolving Credit
Advances, and no Letter of Credit shall have an expiration date later than five
(5) Business Days prior to the Revolving Credit Termination Date unless prior
to such date, the applicant-Borrower has provided the Issuing Bank with cash
collateral at least equal to the Issuing Bank's obligation under such Letter of
Credit. The Borrowers shall, jointly and severally, reimburse the Issuing Bank
in an amount equal to any amount paid by the Issuing Bank under a Letter of
Credit on the date of such payment, and if the Borrowers fail to do so, a
Revolving Credit Advance, in such amount shall be deemed made to the Borrower,
without request therefor, immediately upon any payment by the Issuing Bank on
such Letter of Credit in accordance with the terms thereof. In connection with
the issuance of any Letter of Credit, the

20

 

Borrowers shall pay to the Agent, for
the account of the Issuing Bank and the Revolving Credit Lenders, in advance on
the date of issuance, a fee (each, a "Letter of Credit Fee")
equal to the then LIBOR Rate Margin multiplied by the face amount of the
undrawn Letters of Credit. The Borrowers shall also pay to Issuing Bank, for
its own account, (a) with respect to any Letter of Credit, on the date of
issuance thereof, a fronting fee equal to 1/8th of 1% per annum of the stated
amount of such Letter of Credit, and (b) transaction fees at the customary
rates charged by the Issuing Bank and all other normal and customary fees
charged by the Issuing Bank in connection with the issuance and administration
of each Letter of Credit as notified to the Borrowers from time to time. The
Borrower hereby authorizes and directs the Agent, in the Agent's sole
discretion (provided, however, the Agent shall have no obligation to do so) to
pay all such fees and costs as the same become due and payable and to treat the
same as a Revolving Credit Advance to the Borrowers, which shall be added to
Borrowers' loan balance pursuant to this Agreement; provided, further, that
unless an Event of Default then exists and is continuing, the Agent shall
promptly furnish the applicable Borrower notice of any such charge. The
Maximum Revolving Credit Amount shall be reduced by the Letter of Credit
Exposure outstanding at any time.

(b)              (A) Immediately upon the issuance of any Letter of Credit by the Issuing
Bank (or the amendment of a Letter of Credit increasing the amount thereof),
and without any further action on the part of the Agent or the Issuing Bank,
the Issuing Bank shall be deemed to have sold to each Lender, and each such
Lender shall be deemed unconditionally and irrevocably to have purchased from
the Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Commitment Percentage, in such
Letter of Credit, each drawing thereunder and the obligations of the Borrowers
under this Agreement and the other Loan Documents with respect thereto. Upon
any change in the Maximum Revolving Credit Amount under this Agreement, it is
hereby agreed that with respect to all outstanding Letters of Credit, there
shall be an automatic adjustment to the participations hereby created to
reflect the new Commitment Percentages of the assigning and assignee Lenders.
Any action taken or omitted by the Issuing Bank under or in connection with a
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for the Issuing Bank any resulting liability
to any Lender, and (B) on the Closing Date, and without any further action
on the part of the Agent or the Issuing Bank, the Issuing Bank shall be deemed
to have sold to each Lender, and each Lender shall be deemed unconditionally
and irrevocably to have purchased from the Issuing Bank, without recourse or
warranty, an undivided interest and participation, to the extent of such Lender's
Commitment Percentage, in the Existing Letters of Credit, each drawing
thereunder and the obligations of the Borrowers thereunder and hereunder with
respect thereto. Upon any change in the Maximum Revolving Credit Amount under
this Agreement, it is hereby agreed that with respect to the Existing Letters
of Credit, there shall be an automatic adjustment to the participations hereby
created to reflect the new Commitment Percentages of the assigning and assignee
Lenders. Any action taken or omitted by the Issuing Bank under or in
connection with the Existing Letters of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for the
Issuing Bank any resulting liability to any Lender.

(c)               
In the event that the Issuing Bank makes any disbursement pursuant to
any Letter of Credit in accordance with the terms thereof and the Borrowers
shall not have reimbursed such amount in full to the Issuing Bank pursuant to
this Agreement, the Issuing Bank

21

 

shall promptly notify the Agent of such
failure, and the Agent shall promptly notify each Lender of such failure, and
each Lender shall promptly and unconditionally pay in U.S. Dollars and in same
day funds to the Agent for the account of the Issuing Bank the amount of such
Lender's Commitment Percentage of such unreimbursed payment. Such Lender
agrees to pay to the Agent forthwith on demand such amount, together with
interest thereon, for each day from the date of such unreimbursed payment until
the date such amount is paid to the Agent for the account of the Issuing Bank
at the greater of the Federal Funds Effective Rate and a rate determined by the
Agent in accordance with banking industry rules on interbank compensation.
Each Lender agrees to fund its Commitment Percentage of such unreimbursed
payment notwithstanding a failure to satisfy any applicable lending conditions,
or the occurrence of the Revolving Credit Termination Date. The failure of any
Lender to make available to the Agent its Commitment Percentage of any payment
under any Letter of Credit shall neither relieve any Lender of its obligation
hereunder to make available to the Agent its Commitment Percentage of any
payment under any Letter of Credit on the date required, as specified above,
nor increase the obligation of such other Lender. Whenever any Lender has made
payments to the Agent in respect of any reimbursement obligation for any Letter
of Credit, such Lender shall be entitled to share ratably, based on its
Commitment Percentage, in all payments and collections thereafter received on
account of such reimbursement obligation.

        Section
2.7.         

Swingline Credit. Subject to all the terms and
conditions hereof, and so long as no Default exists, on such Business Days
prior to the Revolving Credit Termination Date
as Gerber may from time to time request (each a "Swingline Loan Closing
Date") by telephone notice (the "Swingline Loan Notice")
to the Swingline Lender and to the Agent, if other than the Swingline Lender,
given not later than 3:00 p.m., Boston time, on the Swingline Loan Closing
Date, which telephone notice shall be promptly confirmed in writing, the
Swingline Lender will lend to the Borrowers such amount, which shall not be
less than $500,000 and shall be in an integral
multiple of $100,000, as Gerber shall have so requested, by causing the Agent
to debit the amount of such loan to the Swingline Loan Account and to credit
the amount thereof to the general account of Gerber with the Agent; provided,
however, that in no event shall the aggregate principal amount of all
loans at any one time outstanding under this Section 2.7 exceed $10,000,000
(the "Swingline Commitment"); and provided, further,
that in no event shall the combined aggregate principal amount of the Revolving
Credit Advances, Swingline Loans and the Letter of Credit Exposure exceed the
Maximum Revolving Credit Amount. In connection with each request for a loan
under this Section 2.7, if requested by Agent, Gerber shall furnish to the
Agent by telecopy no later than 2:00 p.m., Boston time, on the applicable
Swingline Loan Closing Date (with a duplicate furnished promptly by mail) a
certificate dated such Swingline Loan Closing Date and signed by Gerber,
attesting to satisfaction of the conditions contained in Section 3.2 hereof.
The Borrowers may use the proceeds of Revolving Credit Advances from time to
time to repay any outstanding Swingline Loans. The Borrowers shall repay all
outstanding Swingline Loans on the Revolving Credit Termination Date. On the
Closing Date, the Borrowers shall deliver to the Swingline Lender a Swingline
Note to evidence the Swingline Loans from time to time made by the Swingline
Lender to the Borrowers hereunder. The Agent shall establish on its books a
loan account for the Borrowers (the "Swingline Loan Account"),
which shall reflect the loans made by the Swingline Lender pursuant to this
Section 2.7 and which shall be administered by the Agent as follows: (a) the
Agent shall debit to the Swingline Loan Account, and the Swingline Loan Account
shall evidence, the principal amount of loans from time to time made by the
Swingline Lender to the Borrowers pursuant to this Section 2.7,

22

 

and (b) the Agent
shall credit the Swingline Loan Account with all payments made on account of
the principal amount of Indebtedness evidenced thereby. The principal amount
of Indebtedness from time to time evidenced by the Swingline Loan Account is
referred to as the "Swingline Loan."

        Section 2.8.         

Interest on Swingline Loans. The Borrowers shall pay
interest on the unpaid balance of the Swingline Loans from time to time
outstanding at a per annum rate equal to the Applicable Base Rate. Interest on
the Swingline Loans shall be payable quarterly in arrears in the same manner as
Revolving Credit Advances and continuing until all of the Swingline Loans of
the Borrowers to the Swingline Lender hereunder shall have been paid in full.

        Section 2.9.         

Refunded Swingline Loans; Swingline Loan Participations.

(a)               
The Swingline Lender, on a weekly basis, or at any shorter or longer
time as selected by the Swingline Lender and from time to time in its sole and
absolute discretion may, on behalf of the Borrowers (which hereby irrevocably
directs the Swingline Lender to act on its behalf) on one (1) Business Day's
notice given by the Swingline Lender no later than 12:00 noon, Boston
time, request each Lender to make, and each Lender hereby agrees to make, a
Revolving Credit Advance in an amount equal to such Lender's Commitment
Percentage of the aggregate amount of the Swingline Loans (the "Refunded
Swingline Loans") outstanding on the date of such notice, to repay the
Swingline Lender. Each Lender shall make the amount of such Revolving Credit
Advance available to the Agent at its office set forth in Section 15.1 in
immediately available funds, not later than 10:00 a.m., Boston time, one (1)
Business Day after the date of such notice. The proceeds of such Revolving
Credit Advances shall be immediately applied by the Swingline Lender to repay
the Refunded Swingline Loans. Effective on the date such Revolving Credit
Advances are made, the portion of the Swingline Loans so paid shall no longer
be outstanding as Swingline Loans and shall be outstanding as Revolving Credit
Advances and owed to the Lenders in accordance with their respective Commitment
Percentages. The Borrowers irrevocably authorize the Swingline Lender to
charge the Borrowers' accounts with the Agent (up to the amount available in
each such account) to immediately pay the amount of such Refunded Swingline
Loans to the extent amounts received from the Lenders are not sufficient to
repay in full such Refunded Swingline Loans (the "Refunded Swingline
Loan Deficit"), and if there are insufficient funds in such accounts
to pay the amount of such Refunded Swingline Loan Deficit, the Borrowers shall,
within two (2) Business Days after notice thereof, pay the Refunded Swingline
Loan Deficit and all accrued interest thereon to the Swingline Lender.

(b)              
The making of any Swingline Loan hereunder shall be subject to the
satisfaction of the applicable conditions precedent thereto set forth in
Section 3.1, in the case of any Swingline Loan to be made on the date of the
first Revolving Credit Advance, and Section 3.2, in the case of all other
Swingline Loans. The Swingline Lender shall notify the Borrowers of its
election not to make Swingline Loans hereunder as a result of the failure to
satisfy such conditions precedent, unless an Event of Default of the type
specified in Section 10.1(f) shall have occurred and be continuing.

23

 

(c)               
If prior to the time a Revolving Credit Advance would have otherwise
been made pursuant to Section 2.9(a) one of the events described in
Section 10.1(f) shall have occurred and be continuing, each Lender shall, on
the date such Revolving Credit Advance was to have been made pursuant to the
notice referred to in Section 2.9(a) (the "Refunding Date"),
purchase an undivided participating interest in an amount equal to (i) its
Commitment Percentage multiplied by (ii) the aggregate principal amount of
Swingline Loans then outstanding which were to have been repaid with such
Revolving Credit Advance (the "Swingline Participation Amount"). On the Refunding Date, each Lender shall transfer to the Swingline Lender, in
immediately available funds, such Lender's Swingline Participation Amount and
upon receipt thereof the Swingline Lender shall deliver to such Lender a
certificate for such Swingline Loan participation dated the date of the
Swingline Lender's receipt of such funds and in such Swingline Participation
Amount.

(d)              
Whenever, at any time after the Swingline Lender has received from any
Lender such Lender's Swingline Participation Amount, the Swingline Lender
receives any payment on account of the Swingline Loans, the Swingline Lender
will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was
outstanding and funded and, in the case of principal and interest payments, to
reflect such Lender's pro rata portion of such payment if such
payment is not sufficient to pay the principal of and interest on all Swingline
Loans then due); provided, however, that in the event that such
payment received by the Swingline Lender is required to be returned, such
Lender will return to the Swingline Lender any portion thereof previously
distributed to it by the Swingline Lender.

(e)               
Each Lender's obligation to make the Loans referred to in
Section 2.9(a) and to purchase participating interest pursuant to Section
2.9(c) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender or any
Borrower may have against the Swingline Lender, any Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the other conditions
specified in Section 3; (iii) any adverse change in the condition
(financial or otherwise) of any Borrower; (iv) any breach of this
Agreement or any other Loan Document by any Borrower or any other Lender; or
(v) any other circumstances, happening or event whatsoever, whether or not
similar to any of the foregoing.

        Section 2.10.     
 Computation
of Interest, Etc.  All computations of interest
hereunder and under the Revolving Credit Advances with respect to Loans bearing
interest at a fluctuating rate determined by reference to the Prime Rate shall
be made on the basis of a three hundred sixty five (365) day year and the
actual number of days elapsed. All computations of interest hereunder and
under the Revolving Credit Advances with respect to Loans bearing interest at a
fluctuating rate determined by reference to the LIBOR Rate or the Federal Funds
Effective Rate shall be made on the basis of a three hundred sixty (360) day
year and the actual number of days elapsed. Changes in the rate of interest on
the Revolving Credit Advances resulting from changes in the Base Rate shall
take place immediately without notice or demand of any kind. The outstanding
balance of the Revolving Credit Notes or Swingline Note as reflected on the
Agent's or Swingline Lender's, respectively, records from time to time shall be
considered correct and binding on the Borrowers and the Lenders (absent
manifest or mathematical error) unless within thirty (30) days after receipt of
any notice by the Agent or any Lender of such outstanding amount, the Borrowers
or a Lender notifies the Agent to the contrary. The Agent shall provide
statements of the outstanding balance of the Revolving Credit Notes and
Swingline Notes regularly and upon request by Borrowers and such statements
shall be considered correct and binding on the Borrowers (absent manifest or
mathematical error)

24

 

unless the Borrowers notify the Agent that such statements
are in error within 30 days thereafter.

        Section
2.11.       Fees.

(a)               
The Borrowers shall pay to the Agent, for the accounts of the Lenders in
accordance with their respective Commitment Percentages, a commitment fee (the "Revolving
Commitment Fee") computed at a rate set forth on the Pricing Schedule
per annum (based upon a three hundred sixty (360) day year and the actual
number of days elapsed) on the average daily unused amount of the Maximum
Revolving Credit Amount from time to time in effect from the date hereof to and
including the Revolving Credit Termination Date. The Revolving Commitment Fee
shall be payable quarterly in arrears on the first day of each April, July,
October and January, commencing April 1, 2008, for the quarter ended March 31,
2008.

(b)              
The Borrowers shall pay to the Agent, for the Agent's own account, such
closing, syndication and agency fees as are provided in a letter agreement
dated December 3, 2007 between Gerber and the Agent (as such letter agreement
may from time to time be amended or supplemented, the "Fee Letter").

        Section 2.12.      Set‐Off.  Each Loan Party hereby grants the Agent and each
Lender, a continuing lien, security interest and right of setoff as security
for all Lender Obligations (other than Unasserted Lender Obligations), whether
now existing or hereafter arising, upon and against all deposits, credits,
collateral and property, now or hereafter in the possession, custody,
safekeeping or control of the Agent or any Lender or any entity under the
control of or common control with such Agent or Lender and their successors and
assigns or in transit to any of them, provided such rights may be exercised
only while an Event of Default has occurred and is continuing. At any time
upon the occurrence and during the continuance of an Event of Default, without
demand or notice except as required hereby in connection with an Event of
Default (any such other notice being expressly waived by each Loan Party), the
Agent and each Lender may setoff the same or any part thereof and apply the
same to any liability or obligation of any Borrower and any Guarantor even
though unmatured and regardless of the adequacy of any other collateral securing
the Lender Obligations. ANY AND ALL RIGHTS TO REQUIRE THE AGENT OR ANY LENDER
TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE LENDER OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF ANY BORROWER OR ANY
GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
Notwithstanding anything to the contrary contained herein or in the other Loan
Documents, the rights specified in this Section 2.12 shall not apply to
Excluded Collateral (as defined in the Security Agreement).

        Section 2.13.      Sharing
of Payments.  If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set‐off, or otherwise) on account of the Loans made by it in excess of
its ratable share (according to the then outstanding principal amount of the
Loans) of payments on account of

25

 

the Loans obtained by all the Lenders, such
Lender shall purchase from the other Lenders such participations in the Loans
held by such other Lenders as shall cause such purchasing Lender to share such
payment ratably according to the then outstanding principal amount of the Loans
with each of such other Lenders; provided, however, that if all
or any portion of such payment is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery, with interest at an interest rate per annum equal to
the Applicable Base Rate. The Borrowers agree that any Lender so purchasing a
participation in the Loans from another Lender pursuant to this Section 2.13
may, to the fullest extent permitted by law, exercise all its rights of payment
with respect to such participation as fully as if such Lender were the direct
creditor of each Borrower in the amount of such participation.

        Section 2.14.      Reduction
of Commitment by the Borrowers.  The Borrowers at their option may, at any time and
from time to time, irrevocably reduce in part (in a minimum amount of at least
$5,000,000 and in increments of $1,000,000) or terminate in whole the unused
portion of the Maximum Revolving Credit Amount on not less than five (5)
Business Days' prior written notice to the Agent. No such reduction or
termination, may be reinstated by the Borrowers.

        Section
2.15.       Increased
Costs, Etc.

(a)               
Anything herein to the contrary notwithstanding, if any changes in
present or future applicable law (which term "applicable law", as
used in this Agreement, includes statutes and rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at
any time or from time to time heretofore or hereafter made upon or otherwise
issued to any Lender by any central bank or other fiscal, monetary or other
authority, whether or not having the force of law), including without
limitation any change according to a prescribed schedule of increasing requirements,
whether or not known or in effect as of the date hereof, shall (i) subject such
Lender to any Tax with respect to this Agreement or the payment to such Lender
of any amounts due to it hereunder, or (ii) change the basis of taxation of
payments to such Lender of the principal of or the interest on the Revolving
Credit Advances or any other amounts payable to such Lender hereunder, or (iii)
impose or increase or render applicable any special or supplemental deposit or
reserve or similar requirements or assessment against assets held by, or
deposits in or for the account of, or any liabilities of, or loans by an office
of such Lender in respect of the transactions contemplated herein (except any
reserve requirement reflected in the LIBOR Lending Rate), or (iv) impose on
such Lender any other condition or requirement with respect to this Agreement
or any Revolving Credit Advance, and the result of any of the foregoing is (A)
to increase the cost to such Lender of making, funding or maintaining all or any
part of the Revolving Credit Advances or its commitment hereunder, or (B) to
reduce the amount of principal, interest or other amount payable to such Lender
hereunder, or (C) to require such Lender to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by such Lender from the Borrowers
hereunder, then, and in each such case not otherwise provided for hereunder,
the Borrowers will upon demand made by such Lender promptly following such
Lender's receipt of notice

26

 

pertaining to such matters accompanied by
calculations thereof in reasonable detail, pay to such Lender such additional
amounts as will be sufficient to compensate such Lender for such additional
cost, reduction, payment or foregone interest or other sum; provided that the
foregoing provisions of this sentence shall not apply in the case of any
additional cost, reduction, payment or foregone interest or other sum resulting
from any Taxes charged upon or by reference to the overall net income, profits
or gains of any Lender. In determining the additional amounts payable
hereunder, the Lenders may use any reasonable and non-discriminatory method of
averaging, allocating or attributing such additional costs, reductions,
payments, foregone interest or other sums among their respective customers.

(b)              
Anything herein to the contrary notwithstanding, if, after the date
hereof, any Lender shall have reasonably determined in good faith that any
present or future applicable law, rule, regulation, guideline, directive or
request (whether or not having force of law), including without limitation any
change according to a prescribed schedule of increasing requirements, whether
or not known or in effect as of the date hereof, regarding capital requirements
for banks or bank holding companies generally, or any change therein or in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Lender with any of the foregoing, either imposes
a requirement upon such Lender to allocate additional capital resources or
increases such Lender's requirement to allocate capital resources or such
Lender's commitment to make, or to such Lender's maintenance of, the Revolving
Credit Advances hereunder, which has or would have the effect of reducing the
return on such Lender's capital to a level below that which such Lender would
have achieved (taking into consideration such Lender's then existing policies
with respect to capital adequacy and assuming full utilization of such Lender's
capital) but for such applicability, change, interpretation, administration or
compliance, by any material amount, such Lender shall promptly after its
determination of such occurrence give notice thereof to the Borrowers. The
Borrowers and such Lender shall thereafter attempt to negotiate in good faith
an adjustment to the compensation payable hereunder which will adequately
compensate such Lender for such reduction. If the Borrowers and such Lender
are unable to agree to such adjustment within thirty (30) days of the day on
which the Borrowers receives such notice, then commencing on the date of such
notice (but not earlier than the effective date of any such applicability,
change, interpretation, administration or compliance), the fees payable
hereunder shall increase by an amount which will, in such Lender's reasonable
determination, evidenced by calculations in reasonable detail furnished to the
Borrowers, compensate such Lender for such reduction, such Lender's
determination of such amount to be conclusive and binding upon the Borrowers,
absent manifest or mathematical error. In determining such amount, such Lender
may use any reasonable and non-discriminatory methods of averaging, allocating
or attributing such reduction among its customers.

        Section
2.16.      Changed
Circumstances. In the event that:

(a)               
on any date on which the Applicable LIBOR Rate would otherwise be set
the Agent shall have determined in good faith (which good faith determination
shall be final and conclusive) that adequate and fair means do not exist for
ascertaining the LIBOR Rate, as applicable; or

27

 

(b)              
at any time the Agent shall have determined in good faith (which good
faith determination shall be final and conclusive) that

	
		(i)            
the implementation of LIBOR Pricing Option has been made impracticable
or unlawful by (A) the occurrence of a contingency that materially and
adversely affects the London interbank market, or (B) compliance by any Lender
in good faith with any applicable law or governmental regulation, guideline or
order or interpretation or change thereof by any governmental authority charged
with the interpretation or administration thereof or with any request or
directive of any such governmental authority (whether or not having the force
of law); or
		
(ii)          
the LIBOR Rate shall no longer represent the effective cost to the
Lenders of obtaining the relevant currency in the London interbank market, as
applicable for deposits in which they regularly participate;
	

then, and in such event, the Agent shall forthwith so
notify the Borrowers thereof. Until the Agent notifies the Borrowers that the
circumstances giving rise to such notice no longer apply, the obligation of the
Lenders and the Agent to allow election by the Borrowers of a LIBOR Pricing
Option shall be suspended. If at the time the Agent so notifies the Borrowers,
the Borrowers have previously given the Agent a Pricing Notice with respect to
a LIBOR Pricing Option, but the LIBOR Pricing Option requested therein has not
yet gone into effect, such Pricing Notice shall automatically be deemed to be
withdrawn and be of no force or effect. Upon such date as shall be specified
in such notice (which shall not be earlier than the date such notice is given),
the LIBOR Pricing Option with respect to all LIBOR Rate Loans shall be
terminated and the Borrowers shall pay all interest due on such LIBOR Rate
Loans and any amounts required to be paid pursuant to Section 4.3 (except in
the case of the termination of LIBOR Loans pursuant to Section 2.16(b)(ii) in
which case such LIBOR Loans shall continue until the end of the applicable
Interest Period).

        Section 2.17.      Use
of Proceeds. The proceeds of all Revolving Credit Advances shall be
used by the Borrowers to refinance the outstanding amounts under the Existing
Credit Agreement, for working capital and general corporate purposes and to
finance Permitted Acquisitions. No portion of the proceeds of the Revolving
Credit Advances shall be used, in whole or in part, for the purpose of
purchasing or carrying any "margin stock" as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System or to
extend credit to any Person for the purpose of purchasing or carrying any such
margin stock.

        Section
2.18.      Incremental
Commitments. 

(a)               
The Borrowers may, by written notice to the Agent on up to two (2)
occasions, request incremental increases in the Maximum Revolving Credit Amount
in an amount not to exceed the aggregate amount of $25,000,000 from one or more
additional Lenders (which may include any existing Lender) willing to provide
such incremental Revolving Commitments, in their sole discretion; provided,
that each additional Lender shall be subject to the approval of the Agent
(which approval shall not be unreasonably withheld or delayed). Such notice
shall set forth (i) the amount of the increase in the Maximum Revolving Credit
Amount being requested, which shall be not less than $10,000,000, and (ii) the
date on which such

28

 

incremental increase in the Maximum Revolving Credit Amount
is to become effective (the "Increased Amount Date"). The
Borrowers shall be responsible for all reasonable, out of pocket, fees and
expenses in connection with such increase, and, to the extent agreed in writing
by the Borrowers pursuant to Section 2.18(b), syndication expenses and fees
paid to Lenders providing the additional Revolving Commitments.

(b)              
The Borrowers and each new Lender shall execute and deliver to the Agent
such documentation as the Agent shall reasonably specify to evidence the
commitment of such new increase in the Maximum Revolving Credit Amount. Each
such documentation shall specify the terms of the applicable incremental Revolving
Commitments; provided, that from and after the effectiveness of each
amendment or other documentation, the associated incremental Revolving
Commitments shall thereafter be Revolving Commitments with the same terms as
the Revolving Commitments (including as to pricing and maturity). Each of the
parties hereto hereby agrees that, upon the effectiveness of any such
documentation, this Agreement shall be amended to the extent (but only to the
extent) necessary to reflect the existence and terms of the incremental
Revolving Commitments evidenced thereby (including adjusting the Commitment
Percentages), and new Revolving Credit Notes shall be issued and the Borrowers
shall make such borrowings and repayments as shall be necessary to effect the
reallocation of the Maximum Revolving Credit Amount, in each case without the
consent of the Lenders other than those Lenders with incremental Revolving
Commitments. The fees payable by the Borrowers upon any such incremental
Revolving Commitments shall be agreed upon by the Agent, the Lenders with
incremental Revolving Commitments and the Borrowers at the time of such
increase. Notwithstanding the forgoing, nothing in this Section 2.18 shall
constitute or be deemed to constitute an agreement by any Lender to increase its
Commitment Percentage hereunder.

(c)               
Notwithstanding the foregoing, no incremental Revolving Commitment shall
become effective under this Section 2.18 unless (i) on the date of such
effectiveness, the conditions set forth in Section 3.2 shall be satisfied and
the Agent shall have received a certificate to that effect dated such date and
executed by a duly authorized officer of the Borrowers, (ii) the Agent shall
have received customary legal opinions, board resolutions and other customary
closing certificates and documentation as required by the relevant amendment or
other documentation and, to the extent required by the Agent, consistent with
those delivered on the Closing Date under Section 3.1 and such additional
customary documents and filings as the Agent may reasonably require, and (iii)
the Borrowers shall be in pro forma compliance with the covenants set forth in
Section 7 after giving effect to such incremental Revolving Commitments, the
Loans to be made thereunder and the application of the proceeds therefrom as if
made and applied on such date.

(d)              
Each of the parties hereto hereby agrees that the Agent may take any and
all action as may be reasonably necessary to ensure that all Revolving Credit
Advances in respect of incremental Revolving Commitments, when originally made,
are included in such aggregate Revolving Credit Advance of outstanding
Revolving Credit Advances on a pro rata basis. The Borrowers agree that
Section 2.18 shall apply to any conversion of any Loan bearing interest at the
Applicable LIBOR Rate to a Loan bearing interest at the Applicable Base Rate
reasonably required by the Lenders to effect the foregoing.

29

 

        Section 2.19.      Replacement
of Lenders. If (a) any Borrower is required to pay any additional
amount to any Lender (other than the Agent) pursuant to Section 2.15 or 4.7,
(b) any Lender (other than the Agent) defaults in its obligation to fund Loans
hereunder, or if any Lender (other than the Agent) is unable to make LIBOR Rate
Loans pursuant to Section 2.16 or (c) if a Lender fails to consent to a proposed
amendment, modification or waiver of this Agreement that, pursuant to Article
11, requires consent of all Lenders, then the Borrowers may, at their sole
expense and effort, upon notice to such Lender and the Agent, require such
Lender (other than the Agent) to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 12.2), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided, however, that (i) the
Borrowers shall have received the prior written consent of the Agent and the
Issuing Bank (which consent shall not be unreasonably withheld or delayed),
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in unreimbursed drawings
under Letters of Credit, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts), and (iii) in the case of any such assignment
resulting from payments required to be made pursuant to Section 2.15 or 4.7,
such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
within 5 days after the receipt from Borrowers of a notice of its intent to
assign, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrowers to require such assignment and delegation cease to
apply.

ARTICLE 3. CONDITIONS TO
LOANS AND ADVANCES

        Section 3.1.         
Conditions to First Revolving Credit Advance; Swingline Loan. The Lenders' or Swingline Lender's, as applicable,
obligations to make the first Revolving Credit Advance or Swingline Loan, as
the case may be, shall be subject to compliance by the Borrowers with their
agreements contained in this Agreement, and to the following conditions:

(a)               
Evidence of repayment of all obligations under the Existing Credit
Agreement and the termination of all commitments thereunder in connection with
the first Revolving Credit Advances hereunder.

(b)              
The Revolving Credit Notes duly executed by the Borrowers.

(c)               
The Swingline Note duly executed by the Borrowers.

(d)              
The Security Documents duly executed by the applicable Loan Parties.

(e)               
A true and correct copy of any and all leases pursuant to which any
Borrower is leasing any real property if the value of Collateral located
thereon exceeds $1,000,000, and if the location thereof is in the United States
or Canada, a landlord waiver with respect to such real property.

30

 

(f)               
A true and correct copy of any and all written warehouse or storage
agreements pursuant to which Collateral having a value in excess of $1,000,000
is held in the possession of any bailee or warehouseman, together with a
warehouseman's consent and waiver with respect to such Collateral (other than
with respect to demonstration Inventory (as defined in the Security Agreement)
held by third parties, including without limitation, at trade shows). 

(g)              
Current searches of appropriate filing offices showing that (i) no state
or federal tax Liens have been filed and remain in effect against any Loan
Party, (ii) no financing statements have been filed and remain in effect
against any domestic Loan Party, except those financing statements relating to
Liens set forth on Schedule 5.16 hereto, the Liens of the secured
lenders to be paid with the proceeds of the initial loan and those financing
statements filed by the Agent, and (iii) the Agent has duly filed all financing
statements necessary to perfect the security interests granted hereunder, to
the extent the security interests are capable of being perfected by filing.

(h)              
Certificates of the insurance required hereunder and under the Security
Documents, with all hazard insurance containing a lender's loss payable
endorsement in favor of the Agent.

(i)                
Copies of the resolutions of the Board of Directors or equivalent body
of each Loan Party authorizing the execution, delivery and performance of this
Agreement, the Revolving Credit Notes, the Swingline Note and the other Loan
Documents to which such Borrower is a party, certified by the Secretary or an
Assistant Secretary (or Clerk or Assistant Clerk) of each Loan Party (which
certificate shall state that such resolutions are in full force and effect).

(j)                
A certificate of the Borrowers signed by their Chief Financial Officer
or Vice President of Finance certifying that no Material Adverse Effect has
occurred since April 30, 2007.

(k)              
A certificate of the Secretary or an Assistant Secretary (or Clerk or
Assistant Clerk) of each Loan Party certifying the name and signatures of the
officers of such Loan Party authorized to sign this Agreement, the Revolving
Credit Notes, the Swingline Note, the other Loan Documents to which such Loan
Party is a party and the other documents to be delivered by such Loan Party
hereunder.

(l)                
Certificates of legal existence and corporate good standing for the Loan
Parties of recent date issued by the appropriate Canadian, Connecticut,
Delaware, Massachusetts and United Kingdom governmental authorities.

(m)            
The opinions of (i) Cummings & Lockwood LLC, United States counsel
to the Loan Parties and (ii) Goodmans, LLP Canadian counsel to the Guarantors,
each dated the date of execution of this Agreement.

(n)              
The opinions of (i) Goodmans LLP, Canadian counsel to the Guarantors,
(ii) local provincial counsel to the Agent and (iii) Hammonds, UK counsel to
the Agent.

31

 

(o)              
A certificate of a duly authorized officer of the Borrowers, dated the
date of the first Revolving Credit Advances, to the effect that all conditions
precedent on the part of the Borrowers to the execution and delivery hereof and
the making of the first Revolving Credit Advances have been satisfied.

(p)              
A Compliance Certificate dated the date of the first Revolving Credit
Advances, demonstrating pro forma compliance with the financial covenants set
forth in Article 7 hereof.

(q)              
Each Lender shall be reasonably satisfied that any financial statements
delivered to it fairly present the business and financial condition of Gerber
and its Subsidiaries and that there has been no Material Adverse Effect since
the date of the most recent financial information delivered to such Lender, and
there shall be no material misstatements or omissions from any materials
previously furnished to such Lender for its review;

(r)                
There shall not be pending any litigation or other proceeding against
any Loan Party, the result of which would reasonably be expected to have a
Material Adverse Effect;

(s)               
There shall not have occurred any default of any material agreement,
including, without limitation, any agreement evidencing subordinated
indebtedness of any Loan Party which would reasonably be expected to have a Material
Adverse Effect, and the consummation of the transactions contemplated hereby
shall not (i) violate any law to which any Loan Party is bound or any Loan
Party's organizational documents or (ii) conflict with, or result in a default
or event of default under, any material agreement.

(t)               A pledge of 65% of
the outstanding equity interests of Gerber Australia, Gerber Belgium and Gerber
Technology, together with opinions of counsel with respect to the perfection
and enforcement of such pledge.

(u) Such other documents, certificates and opinions as the Agent or
the Lenders may reasonably request.

The request for funding of the
Loans and issuance of Letters of Credit constituting the initial Borrowing
hereunder and acceptance thereof by the Borrowers shall be deemed a
representation by the Borrowers that the conditions contained in
Section 3.1 have been satisfied. For purposes of determining compliance
with this Section 3.1, the Agent and each Lender that has signed this Agreement
on the Closing Date shall be deemed to have consented to, approved, accepted or
to be satisfied with, each document or other matter required under this
Section 3.1 to be consented to, approved by, or acceptable or satisfactory
to the Agent or such Lender.

        Section 3.2.         
Conditions to All Revolving Credit Advances; Swingline Loans; Letters
of Credit. The obligations of the parties hereto to make any
Revolving Credit Advances, Swingline Loan or issue Letters of Credit pursuant
to this Agreement shall be subject to compliance by the Borrowers with their
agreements contained in this Agreement and each other Loan Document, and to the
satisfaction, at or before the making of each Revolving Credit Advance or
Swingline Loan or issuance of a Letter of Credit, of all of the following
conditions precedent:

32

 

(a)               
The representations and warranties herein and those made by any of the
Loan Parties in any other Loan Document shall be correct as of the date on
which any Revolving Credit Advance or Swingline Loan is made or any Letter of
Credit is issued, with the same effect as if made at and as of such time,
except (i) as to changes resulting from transactions permitted hereunder, (ii)
that the references in Article 5 to the 2007 Financial Statements (except in
Section 5.12) shall be deemed to refer to the most recent annual audited
consolidated financial statements of Gerber and its Subsidiaries furnished to
the Agent, and (iii) in each case where the applicable representation or
warranty speaks as of a specific date, such representation or warranty shall be
correct as of such date.

(b)              
On the date of any Revolving Credit Advance or Swingline Loan made or
Letter of Credit issued hereunder, there shall exist no Default.

(c)               
The making of the requested Revolving Credit Advance or Swingline Loan
or issuance of the requested Letter of Credit shall not be prohibited by any
law or governmental order or regulation applicable to the Lenders or to the
Borrowers, and all necessary consents, approvals and authorizations of any
Person for any such Revolving Credit Advance, Swingline Loan or Letter of
Credit shall have been obtained.

The request by the Borrowers for the making,
continuation or conversion of each Revolving Credit Advance or Swingline Loan
or issuance of any Letter of Credit as provided above, and the acceptance by
the Borrowers of each such Revolving Credit Advance or Swingline Loan or
issuance of any Letter of Credit and of each such continuation or conversion of
such Loan, shall be deemed a representation and warranty by the Borrowers that
the conditions specified above in this Section 3.2 have been satisfied.

ARTICLE 4. PAYMENT AND
REPAYMENT

        Section 4.1.         
Mandatory Prepayment. If at any time the aggregate outstanding principal
balance of all Revolving Credit Advances or Swingline Loans made hereunder and
Letter of Credit Exposure exceeds the Maximum Revolving Credit Amount, the
Borrowers shall immediately repay to the Agent for the ratable accounts of the
Lenders an amount equal to such excess.

        Section
4.2.         
Voluntary Prepayments.

(a)               
The Borrowers may make prepayments to the Agent for the ratable accounts
of the Lenders of any outstanding principal amount of the Revolving Credit
Advances in a minimum amount equal to $3,000,000 and then in integral amounts
of $1,000,000 which are Base Rate Loans in accordance with Section 4.3 at any
time prior to 12:00 noon (Boston time) on any Business Day without premium or
penalty.

(b)              
The Borrowers may make prepayments to the Agent for the ratable accounts
of the Lenders of any Revolving Credit Advances in a minimum amount equal to
$3,000,000 and then in integral amounts of $1,000,000 which are LIBOR Rate
Loans on any Business Day in accordance with and subject to the premiums and
penalties set forth in Section 4.6.

33

 

(c)               
The Borrowers may make prepayments to the Agent for the account of the
Swingline Lender of any outstanding principal amount of a Swingline Loan in a
minimum amount equal to $500,000 and then in integral amounts of $100,000 in
accordance with Section 4.3 at any time prior to 12:00 noon (Boston time) on
any Business Day without premium or penalty.

(d)              
In the event the Borrowers elect to repay all Loans and terminate in
whole the unused portion of the Maximum Revolving Credit Amount in accordance
with Section 2.14, the Borrowers may prepay Loans in amounts other than as
required under paragraphs (a), (b) and (c) above, subject to the premiums and
penalties set forth in Section 4.6.

        Section 4.3.         
Payment and Interest Cutoff. Notice of each prepayment pursuant to Section 4.2 shall
be given to the Agent, (a) in the case of prepayment of Base Rate Loans, not
later than 12:00 noon, Boston time, on the date of payment, and (b) in the case
of prepayment of LIBOR Rate Loans on any day other than the last day of the
Interest Period applicable thereto, not later than 3:00 p.m, Boston time, three
(3) Business Days prior to the proposed date of payment, and, in each case,
shall specify the total principal amount of the Revolving Credit Advances to be
paid on such date. Notice of prepayment having been given in compliance with
this Section 4.3, the amount specified to be prepaid shall become due and
payable on the date specified for prepayment and from and after said date
(unless the Borrowers shall default in the payment thereof) interest thereon
shall cease to accrue. Unpaid interest on the principal amount of any Loans so
prepaid accrued to the date of prepayment shall be due on the date of
prepayment.

        Section 4.4.         
Payment or Other Actions on Non‐Business Days. If any payment to be made hereunder or under any other
Loan Document becomes due on a day which is not a Business Day, the due date of
such payment shall be extended to the next succeeding Business Day, and such
extension of time shall be included in computing interest and fees in
connection with such payment. In the case of any other action the last day for
performance of which shall be a day other than a Business Day, the date for
performance shall be extended to the next succeeding Business Day.

        Section
4.5.         
Method, Timing and Application of Payments.

(a)               
All payments required to be made pursuant to the provisions of this
Agreement and any other Loan Document, and all prepayments pursuant to Section
4.1, may be charged by the Agent against the Borrowers' accounts with the
Agent. Each Borrower hereby authorizes the Agent and the Lenders, without
notice to such Borrower, to charge against any account of such Borrower with
the Agent or such Lender an amount equal to the accrued interest, principal and
other amounts from time to time due and payable to the Agent and the Lenders
hereunder and under all other Loan Documents.

(b)              
All payments shall be made by the Borrowers to the Agent at the Agent's
address set forth in Section 15.1 hereof or such other place as the Agent may
from time to time specify in writing not later than 12:00 noon (Boston time) in
lawful currency of the United States

34

 

 of America (except in the case of an
Alternative Currency Loan, in which case such payments shall be made in the
Alternative Currency in which such Loan is denominated) in immediately
available funds without counterclaim or setoff and free and clear of, and
without any deduction or withholding for, any taxes or other payments (as
provided for in Section 4.7). The Agent will, after its receipt thereof,
distribute like funds relating to the payment of principal, interest or any
other amounts payable hereunder ratably to the Lenders in accordance with their
respective Commitment Percentages. Any payment made by the Borrowers to the
Agent under this Agreement or under the Notes in the manner provided in this
Agreement shall be deemed to be a payment to each of the respective Lenders,
unless the provisions of this Agreement expressly provide that any such payment
shall be solely for the account of the Agent or any specific Lender.

(c)               
All payments shall be applied first to the payment of all fees, expenses
and other amounts due by the Borrowers to the Agent and the Lenders (excluding
principal and interest) under the Loan Documents, then to accrued interest, and
the balance on account of outstanding principal; provided, however,
that after an Event of Default payments will be applied to the obligations of
the Borrowers to Agent and the Lenders as provided in Section 10.3 or otherwise
as the Agent and the Lenders determine in their sole discretion.

        Section 4.6.         
Payments Not at End of Interest Period. The Borrowers may prepay a LIBOR Rate Loan only upon at
least three (3) Business Days prior written notice to the Agent (which notice
shall be irrevocable). The Borrowers shall pay to Agent, for the account of
the Lenders, upon request of the Agent, the yield maintenance fee described
below, to compensate for any loss, cost, or expense incurred as a result of:
(i) any payment of a LIBOR Rate Loan on a date other than the last day of the
Interest Period for such LIBOR Rate Loan; (ii) any failure by the Borrowers to
borrow a LIBOR Rate Loan on the date specified by the Borrowers; and (iii) any
failure by the Borrowers to pay a LIBOR Rate Loan on the date for payment
specified by the Borrowers. The "yield maintenance fee" is an amount
computed as follows: The current rate for United States Treasury securities
(bills on a discounted basis shall be converted to a bond equivalent) with a
maturity date closest to the term of such LIBOR Rate Loan as to which the
prepayment is made, shall be subtracted from the LIBOR Rate in effect at the
time of prepayment. If the result is zero or a negative number, there shall be
no yield maintenance fee. If the result is a positive number, then the
resulting percentage shall be multiplied by the amount of the principal balance
being repaid. The resulting amount shall be divided by 360 and multiplied by
the number of days remaining in the term for such LIBOR Rate Loan as to which
the prepayment is made. Said amount shall be reduced to present value
calculated by using the above referenced United States Treasury securities rate
and the number of days remaining in the term for such LIBOR Rate Loan as to
which prepayment is made. The resulting amount shall be the yield maintenance
fee due to the Agent, for the account of the Lenders, upon the prepayment of a
LIBOR Rate Loan and the Agent shall request such yield maintenance fee from the
Borrower upon the request of any Lender. If by reason of an Event of Default,
any of the Lender Obligations are declared to be immediately due and payable,
then any yield maintenance fee with respect to a LIBOR Rate Loan shall become
due and payable in the same manner as though the Borrowers had exercised such
right of prepayment. If the Borrowers for any reason make any payment of
principal with respect to any LIBOR Rate Loan on any day other than the last
day of the Interest Period applicable to such LIBOR Rate Loan, including
without limitation by reason of acceleration, or fails to borrow a LIBOR Rate
Loan after electing a LIBOR Pricing Option

35

 

 with respect thereto pursuant to
Section 2.2(a) or 2.4, the Borrowers shall pay to the Agent, for the ratable
account of the Lenders, any amounts required to compensate the Lenders for any
additional losses, costs or expenses which they may reasonably incur as a
result of such payment or failure to borrow, including without limitation, any
loss, including lost profits, costs or expenses incurred by reason of the
liquidation, reutilization or reemployment of deposits or other funds acquired
by the Lenders to fund or maintain such Revolving Credit Advances.
Notwithstanding the foregoing, such compensation shall not exceed an amount
equal to (a) the amount of interest which would have accrued on the amount so
paid or not borrowed, for the period from the date of such payment or failure
to borrow, to the last day of the then current Interest Period for such
Revolving Credit Advance (or, in the case of a failure to borrow, to the last
day of the Interest Period for the Revolving Credit Advance which would have
commenced on the date of such failure to borrow), at the applicable rate of interest
for such Revolving Credit Advance provided for herein minus (b) the
amount of interest (as reasonably determined by the Agent), which would accrue
and become payable to the Lenders during such period on the principal repaid or
not borrowed if the Lenders, following such repayment or failure to borrow,
were to reinvest such principal in U.S. Treasury securities selected by the
Agent in an amount equal (as nearly as may be) to the principal so repaid or
not borrowed and having a term equal (as near as may be) to such period. The
Borrowers shall pay such amount upon presentation by the Agent of a statement
setting forth the amount and the Agent's calculation thereof pursuant hereto,
which statement shall be deemed true and correct absent manifest or mathematical
error.

        Section
4.7.         
Taxes.

(a)               
Any and all payments by the Borrowers under the Loan Documents shall be
made without counterclaim or setoff and free and clear of, and without any
deduction or withholding for, any and all Taxes, or other payments, and all
liabilities with respect thereto, excluding, in the case of each Lender and the
Agent, taxes imposed on its income, and franchise taxes imposed on it, (i) by
the United States or by any political subdivision thereof or therein and (ii)
by the jurisdiction under the laws of which such Lender or the Agent (as the
case may be) is organized or any political subdivision thereof or therein (all
such nonexcluded Taxes, and liabilities being hereinafter referred to as "Indemnified
Taxes"). If the Borrowers shall be required by law to deduct any
Taxes from or in respect of any sum payable to any Lender or the Agent (as the
case may be), in the case of Indemnified Taxes, the sum payable shall be
increased as may be necessary so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 4.7), such
Lender or the Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made; provided, however, that
if the Borrowers' obligations to deduct or withhold Taxes is caused solely by
such Lender's or the Agent's (as the case may be) failure to provide the forms
described in paragraph (f) of this Section 4.7 and such Lender or the Agent (as
the case may be) could have legally provided such forms, no such increase shall
be required; and in all cases (i) the Borrowers shall make such deductions; and
(ii) the Borrowers shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.

(b)              
In addition, the Borrowers agree to pay 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 or from the execution, delivery or
registration of, or otherwise with 

36

 

respect to, this Agreement, the Notes, or
the other Loan Documents (hereinafter referred to as "Other Taxes").

(c)               
The Borrowers shall indemnify each Lender and the Agent for the full
amount of Indemnified Taxes or Other Taxes (including, without limitation, any
Indemnified Taxes or Other Taxes imposed by any Governmental Authority on
amounts payable under this Section 4.7) paid by such Lender or the Agent (as
the case may be) and any liability (including interest and expenses) arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally asserted. Each payment required to be
made by the Borrowers in respect of this indemnification shall be made to the
Agent for the benefit of any party claiming such indemnification within thirty
(30) days from the date the Borrowers receives written demand therefor
detailing the calculation of such amounts from the Agent on behalf of itself as
Agent or any such Lender. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.

(d)              
The Borrowers will pay prior to delinquency all Taxes payable in respect
of any payment. As soon as practicable after any payment of Taxes, the
Borrowers will furnish to the Agent for its own account or for the account of
the affected Lender, as the case may be, the original or a certified copy of a
receipt evidencing payment of such Taxes or Other Taxes.

(e)               
If a Lender or the Agent receives a refund in respect of any Taxes or
Other Taxes as to which it has been indemnified by the Borrowers or with
respect to which the Borrowers have paid additional amounts pursuant to this
Section 4.7, it shall promptly following the date of such receipt pay over the
amount of such refund to the Borrowers, net of all reasonable out-of-pocket
expenses of such Lender or the Agent and without interest (other than interest
paid by the relevant taxation authority with respect to such refund); provided
that the Borrowers, upon the request of such Lender or the Agent, agrees to
repay the amount paid over to the Borrowers (plus penalties, interest or other
reasonable charges) to such Lender or the Agent in the event such Lender or the
Agent is required to repay such refund to such taxation authority.

(f)               
Each Lender that is not incorporated under the laws of the United States
of America or a state thereof agrees that it will deliver to the Borrowers and
the Agent on the date of this Agreement or upon the effectiveness of any
Assignment and Acceptance Agreement (i) two duly completed copies of either
United States Internal Revenue Service Form W-8BEN or W-8ECI or successor
applicable form, as the case may be, certifying in each case that such Lender
is entitled to receive payments under this Agreement and the Notes payable to
it, without deduction or withholding of any United States federal income taxes
and (ii) any other governmental forms which are necessary or required under an
applicable tax treaty or otherwise by law to eliminate any withholding tax,
which have been reasonably requested by the Borrowers. Such forms shall be
delivered by each non-U.S. Lender claiming complete exemption from U.S. federal
withholding tax on all payments by the Borrowers under this Agreement on or
before the date such Lender becomes a party to this Agreement and from time to
time thereafter as reasonably requested by the Borrower. Each non-U.S. Lender
hereby represents that, under applicable law and treaties in effect on the date
of this Agreement, no U.S. federal taxes will be required to be withheld by the
Borrowers with respect to any payments to be

37

 

 made to such non-U.S. Lender in
respect of this Agreement and the Notes issued to it. If an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any delivery required by the preceding sentence would
otherwise be required which renders all such forms inapplicable or which would
prevent any Lender from duly completing and delivering any such letter or form
with respect to it and such Lender advises the Borrowers and the Agent that it
is not capable of receiving payments without any deduction or withholding of
United States federal income tax, such Lender shall not be required to deliver
such forms. 

ARTICLE 5. REPRESENTATIONS
AND WARRANTIES

In order to induce the Agent and the Lenders to
enter into this Agreement and to induce the Lenders to make the Loans or issue
Letters of Credit as contemplated hereby, the Loan Parties, jointly and
severally, hereby make the following representations and warranties:

        Section 5.1.         
Corporate Existence, Charter Documents, Etc. Gerber and each Subsidiary is
a corporation validly organized, legally existing and in good standing under
the laws of the jurisdiction in which it is organized and has corporate power
to own its properties and conduct its business as now conducted and as proposed
to be conducted by it. Certified copies of the charter documents and By‐Laws
of Gerber and each other Loan Party have been delivered to the Lenders and are
true, accurate and complete as of the date hereof.

        Section 5.2.         
Principal Place of Business; Location of Records. Gerber's and each Subsidiary's
principal place of business is located at the address set forth on Schedule
5.2, and Gerber and each Subsidiary has had no other principal place of
business during the last six months. All of the books and records or true and
complete copies thereof relating to the accounts and contracts of Gerber and
each Subsidiary are and will be kept at such location.

        Section 5.3.         
Qualification. Gerber and each Subsidiary is duly qualified, licensed
and authorized to do business and is in good standing as a foreign corporation
in each jurisdiction where its ownership or leasing of properties or the
conduct of its business requires it to be qualified, except where the failure
to be so qualified would not result in a Material Adverse Effect.

        Section 5.4.         
Subsidiaries. Gerber has no Subsidiaries except for those listed in Schedule
5.4 and except for foreign Subsidiaries organized after the Closing Date
under the laws of jurisdictions other than jurisdictions in the United States,
Canada and the United Kingdom. All of the issued and outstanding capital stock
of each Subsidiary listed on Schedule 5.4 is owned of record and
beneficially as described in Schedule 5.4. The Borrowers shall update
and deliver to the Agent a revised Schedule 5.4 (a) upon the
formation of each Subsidiary organized under jurisdictions in the United
States, Canada or the United Kingdom and (b) annually in connection with delivery
of the Compliance Certificate under Section 6.2(a) hereof with respect to
all other Subsidiaries formed after the Closing Date.

        Section 5.5.         
Corporate Power. The execution, delivery and performance of this
Agreement, the Revolving Credit Notes, the Swingline Note and all other Loan
Documents and other documents delivered or to be delivered by Gerber or any
Subsidiary to the Agent or the 

38

 

Lenders, and the incurrence of Indebtedness to
the Lenders hereunder or thereunder, now or hereafter owing:

(a)               
are within the corporate powers of Gerber and each Subsidiary, as the
case may be, having been duly authorized by its Board of Directors or other
similar governing body, and, if required by law, by its charter documents or by
its By‐Laws, by its stockholders;

(b)              
do not require any approval or consent of, or filing with, any
governmental agency or other Person (or such approvals and consents have been
obtained and delivered to the Lenders) and are not in contravention of law or
the terms of the charter documents or By‐Laws of Gerber and each
Subsidiary or any amendment thereof;

(c)               
do not and will not

                    (i)            
result in a breach of or constitute a default under any material
indenture or loan or credit agreement or any other agreement, lease or
instrument to which Gerber or any Subsidiary is a party or by which Gerber, any
Subsidiary or any of their respective properties are bound or affected,

                    (ii)          
result in, or require, the creation or imposition of any mortgage, deed
of trust, pledge, lien, security interest or other charge or encumbrance of any
nature on any property now owned or hereafter acquired by Gerber or any
Subsidiary, except as provided in the Loan Documents, or

                    (iii)        
result in a violation of or default under any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award having
applicability to Gerber or any Subsidiary, or to any of their respective
properties.

        Section 5.6.         
Valid and Binding Obligations. This Agreement, the Revolving Credit Notes, Swingline
Note and all the other Loan Documents executed in connection herewith and
therewith constitute, or will constitute when delivered, the valid and binding
obligations of Gerber and its Subsidiaries, as the case may be, enforceable in
accordance with their respective terms, except as the enforceability thereof
may be subject to bankruptcy, insolvency, moratorium and other laws affecting
the rights and remedies of creditors and secured parties and to the exercise of
judicial discretion in accordance with general equitable principles.

        Section 5.7.         
Other Agreements. Neither Gerber nor any Subsidiary is a party to any
indenture, loan or credit agreement, or any lease or other agreement or
instrument, or subject to any charter or corporate restriction, which could
reasonably be expected to have a Material Adverse Effect, or which restricts
the ability of Gerber or any Subsidiary to carry out any of the provisions of
this Agreement, the Revolving Credit Notes, the Swingline Note or any of the
Loan Documents executed in connection herewith and therewith.

        Section 5.8.         
Payment of Taxes. Gerber and its Subsidiaries have filed all Tax returns
which are required to be filed by them and have paid, or made adequate
provision for the payment of, all Taxes which have or may become due pursuant
to said returns or to assessments received. All federal Tax returns of Gerber
and its Subsidiaries through their fiscal year ended in 2003 have been audited
by the Internal Revenue Service or are not subject to such audit by virtue

39

 

of
the expiration of the applicable statute of limitation, and the results of such
audits are fully reflected in the balance sheet contained in the 2007 Financial
Statements. Gerber knows of no additional assessments since such date for
which adequate reserves appearing in the balance sheet contained in the 2007
Financial Statements have not been established. Gerber and its Subsidiaries
have made reasonable provision for all current Taxes, and to the best of the
Borrowers' knowledge there will not be any additional assessments for amounts
exceeding $5,000,000 for any fiscal periods prior to and including that which
ended on the date of said balance sheet in excess of the amounts reserved therefor.

        Section
5.9.         
Financial Statements. 

(a)               
All balance sheets and financial statements furnished to the Lenders in
connection with this Agreement and the transactions contemplated hereby
including, without limitation, the 2007 Financial Statements, have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except for normal
year-end adjustments and for the absence of footnotes with interim statements)
and present fairly the consolidated financial condition of Gerber and its
Subsidiaries in all material respects as of the dates and for the periods
specified therein and all such information so furnished was true, correct and
complete in all material respects for the dates and periods specified
therein(except for normal year-end adjustments and for the absence of footnotes
with interim statements).

(b)              
The projections of the annual operating budgets of Gerber and its
Subsidiaries, balance sheets, cash flow statements and annual financial
projections furnished to the Agent or any Loan Party and listed on Schedule
5.9 hereto, disclose on and as of the Closing Date all material assumptions
made with respect to general economic, financial and market conditions used in
formulating such projections. To the knowledge of each Borrower, on and as of
the Closing Date, no facts exist that (individually or in the aggregate) would
result in any materially adverse change in any of such projections. The
projections are based upon reasonable estimates and assumptions, have been
prepared on the basis of the assumptions stated therein and reflect the
reasonable estimates of the Borrowers, based on their respective business
experience, of the results of operations and other information projected
therein.

        Section 5.10.      Other
Materials Furnished. No written information, exhibits, memoranda or reports
furnished to the Lenders by or on behalf of Gerber or any Subsidiary in
connection with the negotiation of this Agreement contains any material
misstatement of fact or omits to state a material fact necessary to make the
statements contained therein not misleading; provided that, with respect
to projected financial information, the Loan Parties represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time. There is no material fact directly relating to the
assets, liabilities, business, operations or condition (financial or other) of
any Borrower (including any competitive developments other than facts that
relate to general economic or industry trends or conditions) that materially
adversely affects the same that has not been set forth in this Agreement, in
the schedules attached hereto in Compliance Certificates or otherwise certified
in writing to the Agent.

        Section 5.11.      Stock. There are presently issued by Gerber and its
Subsidiaries and outstanding the number of shares of capital stock indicated on
Schedule 5.11. Gerber and its 

40

 

Subsidiaries have received the
consideration for which such stock was authorized to be issued and have
otherwise complied with all legal requirements relating to the authorization
and issuance of shares of stock and all such shares are validly issued, fully
paid and non‐assessable. Gerber and its Subsidiaries have no other
capital stock of any class outstanding.

        Section 5.12.      Changes
in Condition. Since the date of the balance sheet contained in the
2007 Financial Statements, there has been no material adverse change in the
business or assets or in the condition, financial or otherwise, of Gerber and
its Subsidiaries taken as a whole. Neither Gerber nor any Subsidiary has any
contingent liabilities of any material amount which are not referred to in the
2007 Financial Statements except for those incurred in the ordinary course of
business or disclosed to the Agent on Schedule 5.12.

        Section 5.13.     
Assets, Licenses, Patents, Trademarks, Etc.

(a)               
Gerber and its Subsidiaries have good and marketable title to, or valid
leasehold interests in, or valid rights to, all of their assets, real and
personal, including the assets carried on their books and reflected in the 2007
Financial Statements, subject to no Liens, except for assets sold, abandoned or
otherwise disposed of in the ordinary course of business or as otherwise
permitted under Section 9.4 of this Agreement. The Collateral is subject
to no Liens, except for Permitted Liens.

(b)              
Gerber and its Subsidiaries own all material licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications,
and trade names necessary to continue to conduct their business as heretofore
conducted by them, now conducted by them and proposed to be conducted by them,
each of which is listed, together with Patent and Trademark Office application
or registration numbers, where applicable, on Schedule 5.13 hereto,
subject, after the date hereof, to additions and deletions thereto as are not
restricted by the terms of the Loan Documents. Gerber and its Subsidiaries
conduct their respective businesses without infringement or claim of
infringement of any license, patent, copyright, service mark, trademark, trade
name, trade secret or other intellectual property right of others, except as
could not reasonably be anticipated to have a Material Adverse Effect. Except
as specified on Schedule 5.13, to the best knowledge of the Borrowers,
there is no infringement or claim of infringement by others of any material
license, patent, copyright, service mark, trademark, trade name, trade secret
or other intellectual property right of Gerber or any of its Subsidiaries,
except as could not reasonably be anticipated to have a Material Adverse
Effect.

        Section 5.14.      Litigation. There is no litigation, at law or in equity, or any
proceeding before any federal, state, provincial or municipal board or other
governmental or administrative agency pending or, to the knowledge of the
Borrowers, threatened, or any basis therefor, which involves a material risk of
any judgment or liability which could result in any material adverse change in
the business or assets or in the condition, financial or otherwise, of Gerber
and its Subsidiaries taken as a whole, and no judgment, decree, or order of any
federal, state, provincial or municipal court, board or other governmental or
administrative agency has been issued against Gerber or any Subsidiary which
has or could reasonably be expected to have a Material Adverse Effect.

41

 

        Section 5.15.      Pension
Plans. No Pension Plan has an accumulated funding deficiency
(as such term is defined in Section 302 of ERISA) in excess of $500,000 as of
the last day of the most recent fiscal year of such Pension Plan ended prior to
the date hereof, or would have had an accumulated funding deficiency (as so
defined) on such day if such year were the first year of such Pension Plan and
no material liability under Title IV of ERISA has been, or is expected by
Gerber or any Subsidiary to be, incurred with respect to any Pension Plan by
Gerber or any Subsidiary or any Pension Affiliate. With respect to each
Pension Plan, there has been no (i) Reportable Event, and (ii) event or
condition that presents a material risk of a plan termination or any other
event that may cause Gerber or any Subsidiary to incur liability or have a lien
imposed on its assets under Title IV of ERISA which remains outstanding on the
date hereof. No Pension Plan has any "unfunded benefit liabilities"
within the meaning of Section 4001(a)(18) of ERISA. The execution, delivery
and performance by the Loan Parties of this Agreement and the other Loan
Documents executed on the date hereof will not involve any non-exempt
prohibited transaction within the meaning of ERISA or Section 4975 of the
Internal Revenue Code. There are no Pension Plans other than those described
on Schedule 5.15.

        Section 5.16.      Outstanding
Indebtedness. The outstanding amount of Indebtedness for borrowed
money, including Capitalized Lease Obligations and Guaranties of borrowed
money, of Gerber and its Subsidiaries as of the date hereof (other than
Indebtedness for borrowed money which does not exceed $5,000,000 in the
aggregate), is correctly set forth in Schedule 5.16 hereto, and said
Schedule correctly describes the credit agreements, guaranties, leases and
other instruments pursuant to which such Indebtedness has been incurred.

        Section
5.17.      Environmental
Matters. Except as set forth in Schedule 5.17 and except
for matters which are no longer outstanding or have been resolved without
continuing liability to Gerber or any Subsidiary:

(a)               
None of Gerber or any Subsidiary has received notice from any third
party, including without limitation any federal, state, county, or local
governmental authority, (i) that it is or may be liable or held responsible
under Environmental Laws; (ii) that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA") or any
equivalent state law, with respect to any site or location; (iii) that any
hazardous waste, as defined in 42 U.S.C. § 6903(5), any hazardous substances,
as defined in 42 U.S.C. § 9601(14), any pollutant or contaminant, as defined in
42 U.S.C. § 9601(33), or any toxic substance, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which it has generated, transported or disposed of, has
been found at any site at which a federal, state, county, or local agency or
other third party has conducted or has ordered Gerber or any Subsidiary to
conduct a remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iv) that it is or shall be a named party to any
claim, action, cause of action, complaint (contingent or otherwise) or legal or
administrative proceeding arising out of any actual or alleged violation of
Environmental Law, or any actual or alleged Release or threatened Release of
Hazardous Substances. For purposes of this Agreement, "Release"
means any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or dumping of
Hazardous Substances into the environment.

42

 

(b)              
(i) Gerber and each Subsidiary is in compliance, in all material
respects, with all applicable Environmental Laws, including those relating to
the handling, manufacturing, processing, generation, storage or disposal of any
Hazardous Substances; (ii) to the best of the Borrowers' knowledge, no portion
of property owned, operated or controlled by Gerber or any Subsidiary has been
used for the handling, manufacturing, processing, generation, storage or
disposal of Hazardous Substances except in accordance with applicable
Environmental Laws; (iii) to the best of the Borrowers' knowledge, there have
been no Releases or threatened Releases of Hazardous Substances on, upon, into
or from any property owned, operated or controlled by Gerber or any Subsidiary;
(iv) to the best of the Borrowers' knowledge, there have been no Releases of
Hazardous Substances on, upon, from or into any real property in the vicinity
of the real properties owned, operated or controlled by Gerber or any
Subsidiary which may have come to be located on the properties of Gerber or any
Subsidiary; (v) to the best of the Borrowers' knowledge, there have been no
Releases of Hazardous Substances on, upon, from or into any real property
formerly but no longer owned, operated or controlled by Gerber or any
Subsidiary.

(c)               
None of the properties of Gerber or any Subsidiary is or shall be
subject to any applicable environmental cleanup responsibility law or
environmental restrictive transfer law or regulation by virtue of the
transactions set forth herein and contemplated hereby.

        Section 5.18.      Governmental
Regulations. None of Gerber, any Subsidiary or any Affiliate of any
Loan Party is subject to regulation under the Federal Power Act, the Investment
Company Act of 1940, or is a common carrier under the Interstate Commerce Act,
or is engaged in a business or activity subject to any statute or regulation
which regulates the incurring by the Borrowers of Indebtedness for borrowed
money, including statutes or regulations relating to common or contract
carriers or to the sale of electricity, gas, steam, water, telephone or
telegraph or other public utility services.

        Section 5.19.      Margin
Stock. Neither Gerber nor any Subsidiary owns any "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, or any regulations, interpretations or rulings
thereunder, nor is Gerber or any Subsidiary engaged principally or as one of
its important activities in extending credit which is used for the purpose of purchasing
or carrying margin stock.

        Section 5.20.      Solvency. Both before and after giving effect to (a) the Loans
and Letters of Credit to be made or extended on the Closing Date or such other
date as Loans and Letters of Credit requested hereunder are made or extended,
(b) the disbursement and application of the proceeds of such Loans and (c) the
payment and accrual of all transaction costs in connection with the foregoing,
each Loan Party is Solvent.

        Section
5.21.      Labor
Matters. Except as set forth on Schedule 5.21, as of the
Closing Date, no Borrower is presently a party to any collective bargaining
agreement and there are no strikes, lockouts or slowdowns against any Borrower
pending or, to the knowledge of any Borrower, threatened. The hours worked by
and payments made to employees of the Borrowers have not been in violation of
the Fair Labor Standards Act or any other applicable federal, state, local or
foreign law dealing with such matters except as would not have a Material
Adverse Effect. All payments due from any Borrower, or for which any claim may
be made against any Borrower, on account of wages and employee health and
welfare insurance and other benefits, 

43

 

have been paid (or are being paid in the
ordinary course) or accrued as a liability on the books of such member, except
where the failure thereof would not result in any material liability to a Loan
Party. The consummation of the transactions contemplated by the Loan Documents
(as hereafter defined) will not give rise to any right of termination or right
of renegotiation on the part of any union under any collective bargaining
agreement to which any Borrower is bound.

        Section 5.22.      Advantageous
Business Relationships. As of the Closing Date, there exists no actual or, to
the knowledge of any Borrower, threatened, termination, cancellation or
limitation of, or any adverse modification or change in, the business
relationship of such Borrower or any of its Subsidiaries or their respective
businesses with any customer or any group of customers whose purchases are
individually or in the aggregate material to the business of Gerber and its
Subsidiaries taken as a whole, or with any material supplier that could
reasonably be expected to have a Material Adverse Effect, and to the knowledge
of any Borrower, as of the Closing Date, there exists no present condition or
state of facts or circumstances that could reasonably be expected to have a
Material Adverse Effect or prevent any Borrower or any of its Subsidiaries from
conducting its business after the consummation of the transactions contemplated
by this Agreement, in substantially the same manner in which such business has
heretofore been conducted.

ARTICLE 6. REPORTS AND
INFORMATION

        Section 6.1.         
Interim Financial Statements and Reports. As soon as available, and in any event within
forty‐five (45) days after the end of each of the first three quarters of
each fiscal year of Gerber, the Borrowers shall furnish to the Agent and each
Lender: (i) consolidated balance sheets of Gerber and its Subsidiaries as of
the end of such quarter and consolidated statements of operations, cash flows
and changes in shareholders' equity of Gerber and its Subsidiaries for such
quarter and for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding period of the preceding
fiscal year, all in reasonable detail; and (ii) a Compliance Certificate. In
the event that any financial statement or Compliance Certificate delivered
pursuant to this Section 6.1 is shown to be inaccurate (and regardless of
whether this Agreement is in effect or whether the obligation of the Lenders to
make Revolving Credit Advances has been terminated when such inaccuracy is
discovered) and such inaccuracy, if corrected, would have led to the
application of a higher LIBOR Rate Margin for any period (an "Applicable
Period") than the LIBOR Rate Margin applied for such Applicable Period,
then (i) the Borrowers shall immediately deliver to the Agent and each Lender a
correct Compliance Certificate for such Applicable Period, (ii) the Agent shall
determine the LIBOR Rate Margin for such Applicable Period based on the
corrected Compliance Certificate and (iii) the Borrowers shall immediately pay
to the Agent the accrued additional interest and fees owing as a result of such
increased LIBOR Rate Margin for such Applicable Period, which payment shall be
promptly applied by the Agent to the Lender Obligations. This Section 6.1
shall not limit the rights of the Agent or the Lenders with respect to Sections
2.4, Section 2.5 or Article 10.

        Section
6.2.         
Annual Financial Statements; Budget. 

(a)               
As soon as available, but in any event within ninety (90) days after the
end of each fiscal year of Gerber, the Borrowers shall furnish to the Agent and
each Lender: (a)

44

 

consolidated balance sheets of Gerber and its Subsidiaries as
of the end of such fiscal year and consolidated statements of operations, cash
flows and changes in shareholders' equity of Gerber and its Subsidiaries for
such fiscal year, in each case (other than the consolidating statements)
reported on by PricewaterhouseCoopers LLP or other independent certified public
accountants of recognized national standing selected by Borrowers and
reasonably acceptable to the Lenders, which report shall express, without
reliance upon others, a positive opinion regarding the fairness of the
presentation of such financial statements in accordance with generally accepted
accounting principles consistently applied, said report to be without
qualification, except in cases of unresolved litigation and accounting changes
with which such accountants concur, together with the statement of such
accountants that they have caused the provisions of this Agreement to be
reviewed and that nothing has come to their attention to lead them to believe
that any Default exists hereunder or specifying any Default and the nature
thereof; and (b) a Compliance Certificate.

(b)              
As soon as available, but in any event within sixty (60) days after the
beginning of each fiscal year of Gerber, a detailed consolidated budget, in
form and substance reasonably satisfactory to the Agent, based on assumptions
that the Chief Financial Officer or Vice President of Finance of Gerber
certifies that he or she believes in good faith are reasonable (the "Operating
Budget"), for Gerber and its Subsidiaries for the such fiscal year
and, promptly when available, any significant revisions of such Operating
Budget

        Section 6.3.         
Notice of Defaults. As soon as possible, and in any event within five (5)
days after the occurrence of each Default, the Borrowers shall furnish to the
Agent and each Lender the statement of its Chief Executive Officer, Chief
Financial Officer or Vice President of Finance setting forth details of such
Default and the action which the Borrowers have taken or propose to take with
respect thereto.

        Section 6.4.         
Notice of Litigation. Promptly after the commencement thereof, the Borrowers
shall furnish to the Agent and each Lender written notice of all actions, suits
and proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, affecting any Loan
Party which, if adversely determined, would have a Material Adverse Effect.

        Section 6.5.         
Communications with Others. The Borrowers shall furnish to the Agent and each Lender
copies of all regular, periodic and special reports and all registration
statements which Gerber files with the Securities and Exchange Commission or
any governmental authority which may be substituted therefor, or with any
national or regional securities exchange. To the extent that any such regular,
periodic or special reports sets forth the information required to be provided
to the Agent and the Lenders pursuant to Section 6.4, 6.6, 6.8 or 6.10 hereof,
the obligations of the Borrowers to provide such information shall be satisfied
by the provision of such regular, periodic or special report.

        Section 6.6.         
Reports to other Creditors. Promptly as the same is filed, the Borrowers shall
furnish to the Agent and each Lender copies of any compliance certificate and
other information furnished to any other holder of the securities (including
debt obligations) of Gerber or any Subsidiary pursuant to the terms of any
indenture, loan or credit or similar agreement and 

45

 

not otherwise required to be
furnished to the Agent or the Lenders pursuant to any other provision of this
Agreement.

        Section 6.7.         
Communications with Independent Public Accountants. At any reasonable time and from time to time, the
Borrowers shall provide the Agent and the Lenders and any agents or
representatives of the Lenders access to the independent public accountants of
the Borrowers to discuss the Borrowers' financial condition, including, without
limitation any recommendations of such independent public accountants
concerning the management, finances, financial controls or operations of Gerber
and its Subsidiaries. The Borrowers shall request that its certified public
accountants provide, and shall furnish to the Agent and each Lender copies of,
written recommendations concerning the management, finances, financial
controls, or operations of Gerber or any Subsidiary within ninety (90) days of
the end of each fiscal year, commencing with the fiscal year ending April 30,
2008.

        Section 6.8.         
Environmental Reports. The Borrowers shall furnish to the Agent and each
Lender to the extent that the same could reasonably be expected to result in
liabilities of Gerber and its Subsidiaries exceeding $5,000,000 in the
aggregate for all such matters: (a) not later than seven (7) days after notice
thereof, notice of any enforcement actions, or, to the knowledge of Gerber,
threatened enforcement actions affecting Gerber or any Subsidiary by any
Governmental Agency related to Environmental Laws; (b) copies, promptly after
they are received, of all orders, notices of responsibility, notices of
violation, notices of enforcement actions, and assessments, and other written
communications pertaining to any such orders, notices, claims and assessments
received by Gerber or any Subsidiary from any Governmental Agency and related
to Environmental Laws; (c) not later than seven (7) days after notice thereof,
notice of any civil claims or threatened civil claims affecting Gerber or any
Subsidiary by any third party alleging any harm to human health or the
environment, or any violation of, or liability under, any Environmental Laws;
(d) copies of all cleanup plans, site assessment reports, response plans,
remedial proposals, or other submissions of Gerber or any Subsidiary, other
third party (e.g., committee of potentially responsible parties at a Superfund
site), or any combination of same, submitted to a Governmental Agency in
response to any communication referenced in subsections (a) and (b) herein
simultaneously with their submission to such Governmental Agency; and (e) from
time to time, on request of the Agent, evidence satisfactory to the Agent of
Gerber's and its Subsidiaries' insurance coverage, if any, for any
environmental liabilities.

        Section 6.9.         
Permitted Acquisitions. Not later than 10 Business Days prior to the
consummation of a Permitted Acquisition, Gerber will notify the Agent and the
Lenders of such proposed acquisition and, if the Permitted Acquisition requires
delivery of a pro forma compliance certificate under clause (ii) of the
definition thereof, such notice shall be accompanied by a draft pro forma
compliance certificate. Within thirty (30) days following the consummation of
any Permitted Acquisition having a total consideration (including reasonably
estimated earn-out or contingent obligations) in excess of $20,000,000, Gerber
will provide the Agent with copies of all material documents related to such
acquisition; provided, however, that unless an Event of Default has occurred
and is continuing, the Borrowers shall not be responsible for any legal
expenses of the Agent or the Lender for reviewing such documents.

        Section 6.10.      Miscellaneous. The Borrowers shall promptly provide the Agent and the
Lenders with such other information as the Agent or the Lenders may from time
to time 

46

 

reasonably request respecting the business, properties, prospects,
condition or operations, financial or otherwise, of Gerber and its Subsidiaries
or regarding the compliance of Gerber and its Subsidiaries with the terms of
any Loan Document.

ARTICLE 7. FINANCIAL
COVENANTS

On and after the date hereof, until all of the
Lender Obligations, other than Unasserted Lender Obligations, shall have been
paid in full and the Lenders shall have no commitment hereunder, Gerber and its
Subsidiaries shall observe the following covenants:

        Section 7.1.         
Ratio of Consolidated EBIT to Consolidated Interest Expense. Gerber and its Subsidiaries shall not permit the ratio
of (a) Consolidated EBIT to (b) Consolidated Interest Expense to be less than 3‐to‐1,
each determined on a trailing four quarter basis commencing with the
four-quarter period ending January 31, 2008.

        Section 7.2.         
Ratio of Total Funded Debt to Consolidated EBITDA. Gerber and its Subsidiaries
shall not permit the ratio of (a) Total Funded Debt of Gerber and its
Subsidiaries as of the end of any four-quarter period to (b) Consolidated
EBITDA for the trailing four quarters ending on such date, commencing with the
four-quarter period ending January 31, 2008, to be greater than 3‐to‐1.

        Section 7.3.         
Consolidated Capital Expenditures. Gerber and its Subsidiaries shall not make or incur any
Capital Expenditures, including assets financed under Capitalized Leases, if,
after giving effect thereto, the aggregate of all such expenditures made by
Gerber and its Subsidiaries would exceed $15,000,000 in any fiscal year,
commencing with the fiscal year ending April 30, 2008.

ARTICLE 8. AFFIRMATIVE
COVENANTS

On and after the date hereof, until all of the
Lender Obligations, other than Unasserted Lender Obligations, shall have been
paid in full and the Lenders shall have no commitments hereunder, Gerber
covenants that it will, and will cause each of its Subsidiaries to, comply with
the following covenants and provisions:

        Section 8.1.         
Existence and Business. Gerber and each Loan Party will subject to Section 9.6,
preserve and maintain its corporate existence and qualify and remain qualified
as a foreign corporation in each jurisdiction in which such qualification is
required (except where the failure to be so foreign qualified would not result
in a Material Adverse Effect. Gerber and each Loan Party will (a) preserve and
maintain in full force and effect all rights, licenses, patents and franchises,
and (b) comply with all valid and applicable statutes, rules and regulations
necessary for the conduct of business, except in each case where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect.

        Section 8.2.         
Taxes and Other Obligations. Gerber and each Subsidiary (a) will duly pay and
discharge, or cause to be paid and discharged, before the same shall become
delinquent, all Taxes, assessments and other governmental charges, imposed upon
it and its properties, sales and activities, or upon the income or profits
therefrom, as well as the claims for labor, materials, or supplies which if
unpaid might by law result in a Lien upon any of its properties; provided,

47

 

however, that Gerber and any Subsidiary may contest any such charges or claims
in good faith so long as (i) an adequate reserve therefor has been established
and is maintained if and as required by generally accepted accounting
principles and (ii) no action to foreclose any such lien has been commenced,
unless such Lien is permitted under Section 9.2(c) hereof. Gerber and
each Subsidiary shall cause all applicable Tax returns and all amounts due
thereunder to be filed and paid, as the case may be, in order to maintain its
good standing with the Internal Revenue Service and state, local and foreign
tax authorities.

        Section 8.3.         
Maintenance of Properties and Leases. Gerber and each Subsidiary shall maintain, keep and
preserve all of its properties (tangible and intangible) in good repair and
working order, except for ordinary wear and tear, casualty and condemnation or
dispositions permitted by Section 9.4 of this Agreement. Gerber and each
Subsidiary shall replace and improve its properties as necessary for the
conduct of its business. Gerber and each Loan Party shall comply with all
material leases naming it as lessee.

        Section 8.4.         
Insurance. Gerber and each Subsidiary (a) will keep its principal
assets which are of an insurable character insured by financially sound and
reputable insurers against loss or damage by fire, explosion or hazards, by
extended coverage in an amount sufficient to avoid co-insurance liability, and
(b) will maintain with financially sound and reputable insurers insurance
against other hazards and risks and liability to persons and property to the
extent as is customary for companies in similar businesses similarly situated; provided,
however, that on prior notice to the Agent and the Lenders it may effect
workmen's compensation insurance through an insurance fund operated by such
state or jurisdiction and may also be a self‐insurer with respect to
workmen's compensation and with respect to group medical benefits under any
medical benefit plan. The provisions of the Security Documents relating to
insurance shall not be limited by the provisions of this Section 8.4. On
request of the Agent from time to time, the Borrowers will render to the Agent
and the Lenders a statement in reasonable detail as to all insurance coverage
required by this Section 8.4. A description of the material elements of insurance
coverages of Gerber and its Subsidiaries as of the date hereof is set forth on Schedule
8.4.

        Section 8.5.         
Records, Accounts and Places of Business. Gerber and each Subsidiary shall maintain comprehensive
and accurate records and accounts in accordance with generally accepted
accounting principles consistently applied. Gerber and each Subsidiary shall
maintain adequate and proper reserves. Gerber and each Subsidiary shall
promptly notify the Agent of (a) any changes in the places of business of
Gerber and its Subsidiaries and (b) any additional places of business which may
arise hereafter.

        Section 8.6.         
Inspection. At any reasonable time and from time to time, and, so
long as no Default has occurred and is continuing upon reasonable prior notice,
the Borrowers shall permit the Agent and the Lenders and any of the Lenders'
agents or representatives to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, Gerber and its
Subsidiaries and to discuss the affairs, finances and accounts of Gerber and
its Subsidiaries with any of their officers or directors and with Gerber's
independent accountants. Notwithstanding anything to the contrary contained
herein, in no event shall the Loan Parties be required to pay or reimburse the
Agent or the Lenders for any inspection or 

48

 

examination conducted under this
Section 8.6 more than one time in any 24 month period, unless an Event of
Default has occurred and is continuing.

        Section 8.7.         
Maintenance of Accounts. Gerber and its Subsidiaries shall maintain their
primary United States based depository, operating, concentration and
disbursement accounts with the Agent.

        Section 8.8.         
Newly Acquired Subsidiaries. Except for the Subsidiaries
set forth on Schedule 8.8 (the "Excluded Subsidiaries"),
if any Loan Party shall form or acquire a Subsidiary
organized under the laws of any jurisdiction of the United States, Canada or
the United Kingdom after the Closing Date, such Loan Party will promptly notify
the Agent thereof and (a) such Loan Party will take such action to create and
perfect Liens on such Subsidiary's assets to secure the Lender Obligations as
the Agent shall reasonably request (to the same extent as other similarly
situated Loan Parties), (b) shall cause such Subsidiary to become a Guarantor
hereunder and (c) if any shares of capital stock or other ownership interests
of such Subsidiary are owned by or on behalf of any Loan Party, such Loan Party
will cause such shares or other ownership interests to be pledged within ten
(10) Business Days after such subsidiary is formed or acquired. In no event
shall compliance with this section waive or be deemed a waiver of or consent to
any transaction prohibited by this Agreement.

        Section 8.9.         
Environmental. Gerber and its subsidiaries shall comply with, and
maintain its real property, whether owned, leased, subleased or otherwise
operated or occupied, in compliance with, all applicable Environmental Laws
except for failures to comply that would not, in the aggregate, have a Material
Adverse Effect.

ARTICLE 9. NEGATIVE
COVENANTS

On and after the date hereof, until all of the
Lender Obligations, other than Unasserted Lender Obligations, shall have been
paid in full and the Lenders shall have no commitments hereunder, Gerber
covenants that neither Gerber nor any of its Subsidiaries will:

        Section 9.1.         
Restrictions on Indebtedness. Create, incur, suffer or permit to exist, or assume or
guarantee, either directly or indirectly, or otherwise become or remain liable
with respect to, any Indebtedness, except the following (which Indebtedness is
expressly permitted):

(a)               
Indebtedness outstanding at the date of this Agreement as set forth on Schedule
5.16 and refinancings and replacements thereof, provided the principal
amount thereof is not increased.

(b)              
Indebtedness on account of Consolidated Current Liabilities (other than
for money borrowed) incurred in the normal and ordinary course of business.

(c)               
Indebtedness in respect of (i) Taxes, assessments, governmental charges
or levies and claims for labor, materials and supplies to the extent that
payment thereof shall not at the time be required to be made in accordance with
the provisions of Section 8.2 hereof, (ii) 

49

 

judgments or awards which have been
in force for less than the applicable appeal period so long as execution is not
levied thereunder or in respect of which Gerber or any Subsidiary shall at the
time in good faith be prosecuting an appeal or proceedings for review in a
manner satisfactory to the Lenders and in respect of which a stay of execution
shall have been obtained pending such appeal or review and for which adequate
reserves have been established in accordance with generally accepted accounting
principles, and (iii) endorsements made in connection with the deposit of items
for credit or collection in the ordinary course of business.

(d)              
Indebtedness in an amount not to exceed $5,000,000 in respect of
purchase money security interests permitted under Section 9.2(b) hereof.

(e)               
Indebtedness to the Lenders under the Loan Documents.

(f)               
(i) Indebtedness of any Loan Party to another Loan Party; (ii)
short-term Indebtedness (i.e. Indebtedness to be repaid within 90 days) of (A)
any of Gerber's Subsidiaries to Gerber or any other Subsidiary or (B) Gerber to
any of its Subsidiaries for short-term working capital needs; (iii)
Indebtedness of any wholly-owned Subsidiaries of Gerber that are not Loan
Parties to Loan Parties in an aggregate amount together with (A) the amount of
Indebtedness of any Related Subsidiaries to any Loan Party, (B) the amount of
Indebtedness of such wholly-owned Subsidiaries and any Related Subsidiaries under
clause (v) of this Section 9.1(f) and (C) the amount of Investments described
in Section 9.3(d)(ii) with respect to such Subsidiaries and Related
Subsidiaries, in each case made after the Closing Date, not to exceed (x)
$10,000,000 at any time outstanding with respect to any one Subsidiary and its
Related Subsidiaries (other than Gerber Australia for which such amount shall
not exceed $5,000,000) or (y) $40,000,000 with respect to all Subsidiaries;
(iv) Indebtedness of any Loan Party to any wholly-owned Subsidiary of Gerber
that is not a Loan Party so long as such Indebtedness is subordinated to all
Lender Obligations; and (v) Indebtedness of any wholly-owned Subsidiary of
Gerber that is not a Loan Party to any other wholly-owned Subsidiary of Gerber that
is not a Loan Party.

(g)              
Other Indebtedness of the Loan Parties, including without limitation
Indebtedness arising as a result of the failure to pay when due or in
conformance with customary trade terms, any lease obligations or trade debt and
including the net obligations under Interest Rate Protection Agreements which
are not Secured Interest Rate Protection Agreements valued at their Swap
Termination Value, in an aggregate amount not to exceed $10,000,000, provided
that not more than $5,000,000 of such other Indebtedness may be secured by
Liens permitted under Section 9.2(h).

        Section 9.2.         
Restriction on Liens. Create or incur or suffer to be created or incurred or
to exist any Lien, of any kind upon any of its property or assets of any
character, whether now owned or hereafter acquired; provided, however,
that Gerber or any Subsidiary may create or incur or suffer to be created or
incurred or to exist (the following, collectively, "Permitted Liens"):

(a)               
Existing liens and security interests described in Schedule 5.16
securing Indebtedness permitted by Section 9.1(a).

50

 

(b)              
Purchase money security interests (which term shall include mortgages,
conditional sale contracts, Capitalized Leases and all other title retention or
deferred purchase devices) to secure the purchase price of property acquired
hereafter by Gerber or a Subsidiary, or to secure Indebtedness incurred solely
for the purpose of financing such acquisitions; provided, however,
that no such purchase money security interests shall extend to or cover any
property other than the property the purchase price of which is secured by it,
and that the principal amount of Indebtedness (whether or not assumed) with
respect to each item of property subject to such a security interest shall not
exceed the fair value of such item on the date of its acquisition.

(c)               
Deposits or pledges made in connection with, or to secure payment of,
workmen's compensation, unemployment insurance, old age pensions or other
social security and similar obligations; liens in respect of judgments or
awards to the extent such judgments or awards are permitted as Indebtedness by
the provisions of Section 9.1(c); and liens for taxes, assessments or
governmental charges or levies and liens to secure claims for labor, material
or supplies (i) to the extent that payment thereof shall not at the time be
required to be made in accordance with Section 8.2, (ii) to the extent that the
aggregate amount secured by such Liens against assets of Gerber and the other
Loan Parties does not exceed $1,000,000 in the aggregate, or (iii) to the
extent the aggregate amount secured by such Liens against assets of
Subsidiaries of Gerber which are not Loan Parties is permitted under
Section 9.2(h) hereof.

(d)              
Encumbrances in the nature of zoning restrictions, easements, and rights
or restrictions of record on the use of real property which do not materially
detract from the value of such property or materially impair its use in the
business of the owner or lessee.

(e)               
Liens securing judgments for the payment of money not constituting an
Event of Default under Section 10.1(g) or securing appeal or other
surety bonds related to such judgments.

(f)               
Liens arising by operation of law to secure landlords, lessors or
renters under leases or rental agreements made in the ordinary course of
business and confined to the premises or property rented.

(g)              
Liens on Excluded Collateral (as such term is defined in the Security
Agreement).

(h)              
Other Liens securing Indebtedness permitted under Section 9.1 not in
excess of $5,000,000.

(i)                
Liens in favor of the Agent for the benefit of the Lenders.

Nothing contained in this Section 9.2 shall permit Gerber
to incur any Indebtedness or take any other action or permit to exist any other
condition which would be in contravention of any other provision of this
Agreement.

        Section
9.3.         
Investments. Have outstanding or hold or acquire or make or commit
itself to acquire or make any Investment except the following:

(a)               
Permitted Investments.

51

 

(b)              
Existing Investments of Gerber and its Subsidiaries in their
Subsidiaries, as described on Schedule 5.4.

(c)               
Investments permitted under Section 9.1(f) hereof.

(d)              
(i) Capital contributions to Loan Parties; (ii) capital contributions to
any wholly-owned Subsidiary of Gerber that is not a Loan Party in an aggregate
amount, together with (A) the amount of any capital contributions to any
Related Subsidiaries, (B) the amount of capital contributions to such
Subsidiary and any Related Subsidiaries made pursuant to clause (iii) of this
Section 9.3(d) and (C) outstanding indebtedness incurred by such Subsidiary and
any Related Subsidiaries in accordance with Section 9.1(f)(iii) and (v), in
each case after the Closing Date, not to exceed (x) $10,000,000 with respect to
any one Subsidiary (other than Gerber Australia for which such amount shall not
exceed $5,000,000) or (z) $40,000,000 with respect to all Subsidiaries; and
(iii) capital contributions made by any wholly-owned Subsidiary of Gerber that
is not a Loan Party to any other wholly-owned Subsidiary of Gerber that is not
a Loan Party.

(e)               
Investments consisting of normal travel and similar advances to
employees of Gerber and its Subsidiaries not exceeding $250,000 in the
aggregate at any one time outstanding.

(f)               
Other Investments as of the date hereof described on Schedule 5.4.

(g)              
Permitted Acquisitions subject to the limitations contained in Section
9.3(d).

        Section 9.4.         
Dispositions of Assets. Sell, lease or otherwise dispose of any assets except
for (i) the sale, lease or other disposition of inventory or other property
(not including receivables) in the ordinary course of business, and (ii) the
sale, lease or other disposition in any fiscal year of property not in excess
of $3,500,000 in the aggregate.

        Section 9.5.         
Assumptions, Guaranties, Etc. of Indebtedness of Other Persons. Assume, guarantee, endorse or otherwise be or become
directly or contingently liable (including, without limitation, by way of
agreement, contingent or otherwise, to purchase, provide funds for payment,
supply funds to or otherwise invest in any Person or otherwise assure the
creditors of any such Person against loss) in connection with any Indebtedness
of any other Person, except for (i) Guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, and (ii) Guarantees by a Loan Party or Subsidiary thereof
of (A) Indebtedness of another Loan Party or Subsidiary thereof permitted by
Section 9.1 hereof and (B) other obligations of a Loan Party or a
Subsidiary (e.g. obligations for leases of real property) not otherwise
prohibited by the Loan Documents.

        Section 9.6.         
Mergers, Etc. Enter into any merger or consolidation with or acquire
all or substantially all of the assets of any Person, or sell, assign, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to any Person, except (a) any Subsidiary or any Loan Party
may merge into any other Loan Party (provided that the Loan Party is the
surviving entity), (b) any Subsidiary that is not a Loan Party may merge into
any other Subsidiary, and (c) any Permitted Acquisition may be consummated.

52

 

        Section 9.7.         
ERISA. Permit any accumulated funding deficiency to occur with
respect to any Pension Plan or other employee benefit plans established or
maintained by Gerber or any Subsidiary or to which contributions are made by
Gerber or any Subsidiary (the "Plans"), and which are subject to the "Pension
Reform Act" and the rules and regulations thereunder or to Section 412 of
the Internal Revenue Code, and at all times comply in all material respects
with the provisions of the Act and Code which are applicable to the Plans. Gerber will not permit the Pension Benefit Guaranty Corporation to cause the
termination of any Pension Plan under circumstances which would cause the lien
provided for in Section 4068 of the Pension Reform Act to attach to the assets
of Gerber or any Subsidiary in any amount in excess of $500,000 in the
aggregate.

        Section 9.8.         
Distributions. Make any Distribution or make any other payment on
account of the purchase, acquisition, redemption, or other retirement of any
shares of stock, whether now or hereafter outstanding, except that (a) any
Subsidiary may make a Distribution to Gerber or any other Subsidiary, (b) any
Loan Party may make payments of principal, interest on or fees with respect to
Subordinated Indebtedness to the extent that such payments are permitted by the
terms of the documents evidencing such Subordinated Indebtedness, and (c)
during each twelve month period (the "Distribution Period")
from the first day of the second fiscal quarter of Gerber through the last day
of the first fiscal quarter of Gerber in the following fiscal year, Gerber may
make Distributions to its shareholders in an aggregate amount not to exceed
twenty five percent (25%) of Consolidated Net Income of Gerber and its
Subsidiaries for the fiscal year ended on the April 30 prior to the
commencement of such Distribution Period so long as no Default exists on the
date of any such Distribution both before and after giving effect thereto.

        Section 9.9.         
Sale and Leaseback. Sell or transfer any of its properties with the
intention of taking back a lease of the same property or leasing other property
for substantially the same use as the property being sold or transferred.

        Section 9.10.      Transactions
with Affiliates. Enter into any transaction, including, without
limitation, the purchase, sale or exchange of property or the rendering of any
service, with any Affiliate, except that Gerber and its Subsidiaries (a) may
pay salaries, fees and bonuses to its directors, officers and employees as are
usual and customary in Gerber's or its Subsidiaries' business and (b) may enter
into other transactions with Affiliates on terms that are no less favorable to
Gerber or any Subsidiary than those which could be obtained at the time from
Persons who are not Affiliates. In addition, Borrowers may (i) make grants,
rebates, commissions or other similar payments that are made by book entry, but
which are not paid in cash or by transfer of any other assets, from Borrowers
to Subsidiaries of Borrowers to ensure that such Subsidiaries remain in
compliance with all local laws applicable to such Subsidiaries, including
capital requirements, (ii) intercompany loans, conversions of intercompany
loans into capital of Subsidiaries and capital contributions to Subsidiaries in
compliance with Sections 9.1(f) and 9.3(d), and (iii) enter into other
transactions otherwise in the ordinary course of business on a basis generally
consistent with historical practices; provided, however, that the aggregate of
the transactions permitted by clause (iii) above with respect to Subsidiaries
of the Borrowers that have not executed the Pledge Agreement and all of whose
stock has not been pledged under the Pledge Agreement shall not exceed
$2,000,000 in any one year.

53

 

        Section 9.11.      No
Impairment of Cross-Streaming, Upstreaming, Downstreaming or Liens. Gerber shall not, and shall not cause or permit any
Subsidiary thereof to, directly or indirectly, enter into or become bound by
any agreement, instrument, indenture or other obligation (other than the Loan
Documents) which could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to (a) the payment of dividends or
distributions by, between or among Gerber and any of its Subsidiaries or
stockholders or (b) the creation of a lien in favor of the Agent, on behalf of
itself and the Lenders, as additional collateral for the Lenders Obligations,
on the properties or other assets of Gerber or such Subsidiary (except for
customary restrictions against liens on assets leased, on assets subject to
purchase money financing permitted hereunder and on assets subject to Liens
securing Indebtedness permitted under Section 9.2(h)).

        Section 9.12.      Hazardous
Substances. Neither Gerber nor any Subsidiary shall cause or suffer
to exist any Release of any Hazardous Substances at, to or from any real
property owned, leased, subleased or otherwise operated or occupied by Gerber
or any Subsidiary that would violate any Environmental Law, form the basis of
any liability under Environmental Law, or adversely affect the value or
marketability of any real property (whether or not owned, leased, subleased or
otherwise occupied by Gerber or any subsidiary), other than such violations,
liability, and effects that would not, in the aggregate, have a Material Adverse
Effect.

ARTICLE 10. EVENTS OF
DEFAULT AND REMEDIES

        Section
10.1.      Events
of Default. Each of the following events shall be deemed to be
Events of Default hereunder:

(a)               
The Borrowers shall fail to make any payment in respect of (i) the
principal of any of the Loans or reimbursement of any amounts drawn under any
Letter of Credit as the same shall become due, whether at the stated payment
dates, required prepayment or by acceleration, demand or otherwise, or (ii)
interest or commitment fees on or in respect of any of the Lender Obligations
or payment of any other Lender Obligations within five (5) days after the same
shall become due.

(b)              
The Borrowers or any Subsidiary shall fail to perform or observe any of
the terms, covenants, conditions or provisions of Articles 7 or 9 hereof.

(c)               
Any Loan Party shall fail to perform or observe any other term,
covenant, condition or provision to be performed or observed by such Loan Party
under this Agreement or any other Loan Document, and such failure shall not be
rectified or cured within thirty (30) days after the earlier of (i) any Loan
Party becoming aware of such failure or (ii) notice from the Agent to the
Borrowers of such failure.

(d)              
Any representation or warranty of any Loan Party herein or in any other
Loan Document or any amendment to any thereof shall have been materially false
or misleading at the time made or intended to be effective.

54

 

(e)               
Gerber or any Subsidiary shall fail to make any payment of principal of
or interest on Indebtedness for money borrowed by Gerber or any Subsidiary or
any Guaranty of money borrowed in either case an outstanding principal amount
of not less than $2,000,000 when such payment is due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) or shall fail
to perform or observe any provision of any agreement or instrument relating to
such Indebtedness, and such failure shall permit the holder thereof to
accelerate such Indebtedness.

(f)               
Gerber or any Subsidiary shall be involved in financial difficulties as
evidenced:

                    (i)            
by its commencement of a voluntary case under Title 11 of the United
States Code as from time to time in effect, or by its authorizing, by
appropriate proceedings of its board of directors or other governing body, the
commencement of such a voluntary case;

                    (ii)          
by its filing an answer or other pleading admitting or failing to deny
the material allegations of a petition filed against it commencing an
involuntary case under said Title 11, or seeking, consenting to or acquiescing
in the relief therein provided, or by its failing to controvert timely the
material allegations of any such petition;

                    (iii)        
by the entry of an order for relief in any involuntary case commenced
under said Title 11;

                    (iv)        
by its seeking relief as a debtor under any applicable law, other than
said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors, or by its consenting to or acquiescing in such relief;

                    (v)          
by the entry of an order by a court of competent jurisdiction (1) by
finding it to be bankrupt or insolvent, (2) ordering or approving its
liquidation, reorganization or any modification or alteration of the rights of
its creditors, or (3) assuming custody of, or appointing a receiver or other
custodian for all or a substantial part of its property and such order shall
not be vacated or stayed on appeal or otherwise stayed within 60 days;

                    (vi)        
by the filing of a petition against Gerber or any Subsidiary under said
Title 11 which shall not be vacated within 60 days; or

                    (vii)      
by its making an assignment for the benefit of, or entering into a
composition with, its creditors, or appointing or consenting to the appointment
of a receiver or other custodian for all or a substantial part of its property.

(g)              
There shall have occurred a judgment against Gerber or any Subsidiary in
any court (i) for an amount in excess of $2,000,000, and from which no appeal
has been taken or with respect to which all appeal periods have expired, unless
such judgment is, to the Agent's 

55

 

satisfaction, insured against in full, or (ii)
which shall have a materially adverse effect upon the assets, properties or
condition, financial or otherwise, of any Loan Party.

(h)              
Any of the following events occur or exist, which would reasonably be
expected to subject any Loan Party or Loan Parties, individually or in the
aggregate, to liability in excess of $500,000: (A) any non-exempt "prohibited
transaction" (within the meaning of ERISA or Section 4975 of the Internal
Revenue Code) involving any Pension Plan; (B) any Reportable Event shall occur
with respect to any Pension Plan; (C) the filing under Section 4041 of ERISA of
a notice of intent to terminate any Pension Plan or the termination of any
Pension Plan; (D) any event or circumstance exists which would constitute
grounds entitling the Pension Benefit Guaranty Corporation ("PBGC")
to institute proceedings under Section 4042 of ERISA for the termination of, or
for the appointment of a trustee to administer, any Pension Plan, or the
institution by the PBGC of any such proceedings; (E) or partial withdrawal
under Section 4201 or 4204 of ERISA from a Pension Plan that is a multiemployer
plan (as defined in Section 4001(a)(3) of ERISA) or the reorganization,
insolvency, or termination of any multiemployer plan; and in each case above,
such event or condition, together with all other events or conditions, if any,
could in the opinion of the Agent subject any Loan Party to any Tax, penalty,
or other liability to a Pension Plan the PBGC, or otherwise.

(i)                
Any "Event of Default" under any other Loan Document shall
have occurred after giving effect to any applicable notice and cure periods.

(j)                
The occurrence of a Change in Control.

        Section 10.2.      Remedies. Upon the occurrence and during the continuance of an
Event of Default, in each and every case, the Agent may, and upon the request
of the Majority Lenders, shall proceed to protect and enforce the rights of the
Agent and the Lenders by suit in equity, action at law and/or other appropriate
proceeding either for specific performance of any covenant or condition
contained in this Agreement or any other Loan Document or in any instrument
delivered to the Agent or the Lenders pursuant hereto or thereto, or in aid of
the exercise of any power granted in this Agreement, any Loan Document or any
such instrument, and (unless there shall have occurred an Event of Default
under Section 10.1(f), in which case the unpaid balance of Lender Obligations
shall automatically become due and payable without notice or demand) by notice
in writing to the Borrowers declare (a) the obligations of the Lenders to make
Revolving Credit Advances to be terminated, whereupon such obligations shall be
terminated, (b) the obligations of the Swingline Lender to make Swingline Loans
to be terminated, whereupon such obligations shall be terminated, (c) the obligations
of the Issuing Bank to issue Letters of Credit to be terminated, whereupon such
obligations shall be terminated, and (d) all or any part of the unpaid balance
of the Lender Obligations then outstanding to be forthwith due and payable,
whereupon such unpaid balance or part thereof shall become so due and payable
without presentation, protest or further demand or notice of any kind, all of
which are hereby expressly waived, and the Agent may proceed to enforce payment
of such balance or part thereof in such manner as the Agent may elect, and the
Agent and each Lender may offset and apply toward the payment of such balance
or part thereof any Indebtedness of the Agent or any Lender to any Loan Party
any offsets permitted pursuant to Section 2.12.

56

 

        Section 10.3.      Distribution
of Proceeds. Notwithstanding anything to the contrary contained
herein, in the event that following the occurrence and during the continuance
of any Event of Default, the Agent or any Lender receives any monies on account
of the Lender Obligations from any Loan Party or otherwise, such monies shall
be distributed for application as follows:

(a)               
First, to the payment of or the reimbursement of, the Agent for or in
respect of all costs, expenses, disbursements and losses which shall have been
incurred or sustained by the Agent in connection with the collection of such
monies by the Agent, or in connection with the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent or the Lenders under this Agreement or any other Loan
Document;

(b)              
Second, to the payment of all interest, including interest on overdue
amounts, and late charges, then due and payable with respect to the Loans,
allocated among the Lenders in proportion to their respective Commitment
Percentages;

(c)               
Third, to the payment of the outstanding principal balance of the Loans,
allocated among the Lenders in proportion to their respective Commitment
Percentages;

(d)              
Fourth, to provide cash collateral to the Agent for the account of the
Issuing Bank for that portion of the Letter of Credit Exposure comprised of the
aggregate undrawn amount of the Letters of Credit;

(e)               
Fifth, to any other outstanding Lender Obligations, other than
Unasserted Lender Obligations, allocated among the Lenders in proportion to
their respective Commitment Percentages; and to 

(f)               
Sixth, the excess, if any, shall be returned to the Borrowers or to such
other Persons as are entitled thereto.

ARTICLE 11. CONSENTS;
AMENDMENTS; WAIVERS; REMEDIES

        Section 11.1.      Actions
by Lenders. Except as otherwise expressly set forth in any
particular provision of this Agreement, any consent or approval required or
permitted by this Agreement to be given by the Lenders, including without
limitation under Section 11.2, may be given, and any term of this Agreement or
of any other instrument related hereto or mentioned herein may be amended, and
the performance or observance by the Borrowers of any term of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrowers and the Majority Lenders; provided, however, that without the written
consent of all Lenders, or in the case of Swingline Loans or Letters of Credit
the applicable Swingline Lender or Issuing Bank:

(a)               
no reduction in or waiver or forgiveness of the principal of, accrued
interest in the interest rates on or any fees relating to the Revolving Credit
Advances, the Swingline Loans or the Letters of Credit, shall be made;

57

 

(b)              
no extension or postponement shall be made of the stated time of payment
of the scheduled payments of principal of, interest on, or fees payable to the
Lenders relating to the Revolving Credit Advances, Swingline Loans or Letters
of Credit;

(c)               
no increase in the Maximum Revolving Credit Amount except in accordance
with Section 2.18 hereof, or extension of the Revolving Credit Termination Date
shall be made;

(d)              
no release of all or substantially all of the collateral security for,
or any guarantor of, the Lender Obligations shall be made;

(e)               
no change in the definition of the term "Majority Lenders"
shall be made; and

(f)               
no change in the provisions of this Section 11.1 shall be made.

Any Lender that fails to perform its obligations under
this Agreement (a "Defaulting Lender") shall not have any
right to consent to any amendment, approval or waiver hereunder.

        Section 11.2.      Actions
by Loan Parties. No delay or omission on the Agent's or the Lenders'
part in exercising their rights and remedies against any Loan Party or any
other interested party shall constitute a waiver. A breach by any Loan Party
of its obligations under this Agreement may be waived only by a written waiver
executed by the Agent and the Lenders in accordance with Section 11.1. The
Agent's and the Lenders' waiver of any Loan Party's breach in one or more instances
shall not constitute or otherwise be an implicit waiver of subsequent
breaches. To the extent permitted by applicable law and except as otherwise
expressly specified in the Loan Documents, the Loan Parties hereby agree to
waive, and do hereby absolutely and irrevocably waive (a) all presentments,
demands for performance, notices of protest and notices of dishonor in
connection with any of the Indebtedness evidenced by the Revolving Credit Notes
or Swingline Note, (b) any requirement of diligence or promptness on the Agent's
or the Lenders' part in the enforcement of its rights under the provisions of
this Agreement or any Loan Document, and (c) any and all notices of every kind
and description which may be required to be given by any statute or rule of law
with respect to its liability (i) under this Agreement or in respect of the
Indebtedness evidenced by the Revolving Credit Notes, Swingline Note or any
other Lender Obligation or (ii) under any other Loan Document. No course of
dealing between any Loan Party and the Agent or the Lenders shall operate as a
waiver of any of the Agent's or the Lenders' rights under this Agreement or any
Loan Document or with respect to any of the Lender Obligations. This Agreement
shall be amended only by a written instrument executed by the Agent and the
Lenders in accordance with Section 11.1 making explicit reference to this
Agreement. The Agent's and the Lenders' rights and remedies under this
Agreement and under all subsequent agreements between the Agent, the Lenders
and any Loan Party shall be cumulative and any rights and remedies expressly
set forth herein shall be in addition to, and not in limitation of, any other
rights and remedies which may be applicable to the Agent and the Lenders in law
or at equity.

58

ARTICLE 12. SUCCESSORS AND
ASSIGNS

        Section 12.1.      General. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors (which shall
include in the case of the Agent or any Lender any entity resulting from a
merger or consolidation) and assigns, except that (a) Gerber may not assign its
rights or obligations under this Agreement, and (b) each Lender may assign its
rights in this Agreement only as set forth below in this Article 12.

        Section
12.2.      Assignments.

(a)               
Assignments. Any Lender may assign to one or more Eligible Assignees
all or any portion of its rights and obligations under this Agreement and the
other Loan Documents; provided that (i), except (A) in the case of an
assignment of the entire remaining amount of the assigning Lender's rights and
obligations under this Agreement and the other Loan Documents or (B) in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund of a Lender, the aggregate amount of the Revolving Commitment of the
assigning Lender and the assignee subject to each such assignment shall not be
less than $5,000,000 (aggregating concurrent assignments to or by two or more
Affiliated Funds for the purposes of determining such minimum amount), unless
each of Agent and, so long as no Event of Default has occurred and is
continuing, Borrowers otherwise consent (each such consent not to be
unreasonably withheld or delayed), (ii) each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender's rights
and obligations under this Agreement with respect to the Loans and Revolving
Commitments assigned, and any assignment of all or any portion of a Revolving
Commitment, Loan or Letter of Credit participation shall be made only as an
assignment of the same proportionate part of the assigning Lender's Revolving
Commitment, Loans and Letter of Credit participations, (iii) the parties to
each assignment shall (A) execute and deliver to Agent an Assignment and
Acceptance Agreement via an electronic settlement system acceptable to Agent or
(B) manually execute and deliver to the Agent an Assignment and Acceptance
Agreement, together with a processing and recordation fee of $3,500, and the
Eligible Assignee, if it shall not already be a party to this Agreement, shall
deliver to Agent information reasonably requested by Agent, including an
administrative questionnaire and such forms, certificates or other evidence, if
any, with respect to United States federal income tax withholding matters as
the assignee under such Assignment and Acceptance Agreement may be required to
deliver to the Agent pursuant to subsection 4.7(f) and with respect to
information requested under the Patriot Act, and (iv) (A) Agent and (B) if no
Event of Default has occurred and is continuing, Borrowers shall have consented
(which consents shall not be unreasonably withheld) thereto; provided that no
consent of Borrowers shall be required in the case of any assignment to a
Lender, any Affiliate of a Lender or any Approved Fund of a Lender.
(b)              
Assignment Procedures. In the event of an assignment in accordance with
Section 12.2(a), upon execution and delivery of such an assignment and payment
by such Successor Lender to the assigning Lender of an amount equal to the
purchase price agreed between such assigning Lender and such Successor Lender,
such Successor Lender shall become party to this Agreement as a signatory
hereto and shall have all the rights and obligations of a Lender under this
Agreement and the other Loan Documents with an interest therein as set forth in
such assignment, and such assignor making such assignment shall be released
from its obligations hereunder to a corresponding extent, and no further
consent or action by any party
59

 

shall be required. Upon the consummation of any
such assignment, the assigning Lender, the Successor Lender and the Borrowers
shall make appropriate arrangements so that, if required, a new Revolving
Credit Note is issued to the Successor Lender and a replacement Revolving
Credit Note is issued to the assigning Lender in principal amounts reflecting
their respective revised interests.
(c)               
Register. The Agent, acting as agent for the Borrowers solely for
purposes of Treasury Regulations Section 5f.103-1(c), shall maintain a register
(the "Register") for the recordation of (i) the names and
addresses of all Lenders, (ii) the interests of each Lender, and (iii) the
amounts of principal and interest payable and paid to each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrowers, the Agent and the Lenders shall treat each Person
whose name is registered therein for all purposes as a party to this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender (with respect to its respective Lender Obligations) at any
reasonable time and from time to time upon reasonable prior notice.
(d)              
Further Assurances. The Loan Parties shall sign such documents and take
such other actions from time to time reasonably requested by the Agent or a
Lender to enable any Successor Lender to share in the benefits and rights
created by the Loan Documents to the same extent as the assignor of the
interest to the Successor Lender.
(e)               
Assignments to Federal Reserve Bank. Any Lender may at any time pledge or assign all or any
portion of its rights under the Loan Documents, including any portion of the
Notes, to any of the twelve (12) Federal Reserve Banks organized under Section
4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or assignment
or enforcement thereof shall release such Lender from its obligations under any
of the Loan Documents.
(f)               
Participations. Each Lender shall have the unrestricted right at
any time and from time to time, and without the consent of or notice to any Loan
Party, to grant to one or more banks or other financial institutions ("Credit
Participants") participating interests in such Lender's obligation to
lend hereunder and/or any or all of the Revolving Credit Advances held by such
Lender hereunder. In the event of any such grant by a Lender of a
participating interest to a Credit Participant, whether or not upon notice to
the Loan Parties, such Lender shall remain responsible for the performance of
its obligations hereunder and under all other Loan Documents and the Borrowers
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations hereunder and under all other Loan
Documents. A Lender may furnish any information concerning the Loan Parties in
its possession from time to time to prospective Credit Participants, provided
that such Lender shall require any such prospective Credit Participant to agree
in writing to maintain the confidentiality of such information.

(g)              
Amount. Each such participation shall be in a minimum amount of
at least $5,000,000.
(h)              
Procedure. Each Lender granting such participation shall comply
with all applicable laws with respect to such transfer and shall retain the
sole right and responsibility to exercise its rights and to enforce the
obligations of the Borrowers hereunder and under the other Loan Documents,
including the right to consent to any amendment, modification or waiver of

60

 

any
provision of any Loan Document, except for those matters referred to in Section
11.1 which require the consent of all Lenders and which may also require the
consent of each Credit Participant. Each Lender granting a participating
interest represents that it will not agree to restrict its discretion in
dealing with the Loans and this Agreement by or with the Participant.
(i)                
Rights of Credit Participants. The Loan Parties agree that each Credit Participant
shall, to the extent provided in its participation instrument, be entitled to
the benefits of Sections 2.11, 2.12, 2.13, 2.15, 2.16 and 15.5, and the setoff
rights in Section 10.2 with respect to its participating interest; provided,
however, that no Credit Participant shall be entitled to receive any
greater payment under such Sections than the Lender granting such participation
would have been entitled to receive with respect to the interests transferred.
(j)                
Notice. Promptly following any participation, the Lender
granting such participation shall notify the Agent and the Borrowers.

ARTICLE 13. THE AGENT

        Section 13.1.      Authorization
and Action. Each Lender hereby appoints and authorizes the Agent to
take such action on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agent by the terms hereof
and thereof, together with such powers as are reasonably incidental thereto.
As to any matters not expressly provided for by this Agreement and the other
Loan Documents (including, without limitation, enforcement or collection of the
Revolving Credit Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected with respect to the Lenders in so acting
or refraining from acting) upon the instructions of the Majority Lenders, and
such instructions shall be binding upon all Lenders; provided, however,
that the Agent shall not be required to take any action which exposes the Agent
to liability or which is contrary to this Agreement or the other Loan Documents
or applicable law. Subject to the foregoing provisions and to the other
provisions of this Article 13, the Agent shall, on behalf of the Lenders: (a)
execute any documents on behalf of the Lenders providing collateral for or
guarantees of the Lender Obligations; (b) hold and apply any collateral for the
Lender Obligations, and the proceeds thereof, at any time received by it, in
accordance with the provisions of this Agreement and the other Loan Documents;
(c) exercise any and all rights, powers and remedies of the Lenders under this
Agreement or any of the other Loan Documents, including the giving of any
consent or waiver or the entering into of any amendment, subject to the
provisions of Section 11.1; (d) at the direction of the Lenders, execute,
deliver and file UCC financing statements, mortgages, deeds of trust, lease
assignments and such other agreements in respect of any collateral for the
Lender Obligations, and possess instruments included in the collateral on
behalf of the Lenders; and (e) in the event of acceleration of the Borrowers'
Indebtedness hereunder, act at the direction of the Majority Lenders to
exercise the rights of the Lenders hereunder and under the other Loan
Documents. The Agent may undertake any actions required or permitted hereunder
through one or more Affiliates.

        Section 13.2.      Agent's
Reliance, Etc. Neither the Agent nor any of its directors, officers,
agents or employees shall be liable to the Lenders for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for 

61

 

its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, the
Agent: (a) may treat the payee of any Revolving Credit Note as the holder
thereof until the Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form required under Article 12 hereof; (b)
may consult with legal counsel, independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representations to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of the Loan Parties or any
other Person or to inspect the property (including the books and records) of
the Loan Parties or any other Person; (e) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (f) shall
incur no liability under or in respect of this Agreement or the other Loan
Documents by acting upon any notice, consent, certificate or other instrument
or writing (which may be by telecopy or telegram) believed by the Agent to be
genuine and signed or sent by the proper party or parties.

        Section 13.3.      Agent
as a Lender. With respect to its Commitment Percentage of the
Revolving Credit Advances hereunder, RBS Citizens, N.A shall have the same
rights and powers under this Agreement and the other Loan Documents as any
other Lender and may exercise the same as though it were not the Agent; and the
term "Lender" or "Lender(s)" shall, unless otherwise
expressly indicated, include RBS Citizens, N.A in its individual capacity. RBS
Citizens, N.A and its affiliates may lend money to, and generally engage in any
kind of business with, the Borrowers, any of the Borrowers' Affiliates and any
Person who may do business with or own securities of the Borrowers or any such
Affiliate of the Borrowers, all as if RBS Citizens, N.A were not the Agent and
without any duty to account therefor to the Lenders.

        Section 13.4.      Lender
Credit Decision. Each Lender acknowledges that it has, independently and
without reliance upon the Agent or any other Lender and based on the financial
statements referred to in Section 5.9 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.

        Section 13.5.      Indemnification
of Agent. Each Lender agrees to indemnify the Agent and its
directors, officers, employees and agents (to the extent that the Agent is not
reimbursed by the Borrowers), ratably according to each Lender's Commitment
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent or its directors, officers, employees or agents in
any way relating to or arising out of this Agreement or any other Loan Document
or any action taken or omitted by the Agent in such capacity under this
Agreement; provided that no Lender shall be

62

 

liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) 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 and each other Loan Document, to the
extent that the Agent is not reimbursed for such expenses by the Borrowers.

        Section 13.6.      Successor
Agent. Except as provided below, the Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrowers. Upon
any such resignation, the Lenders shall have the right to appoint a successor
Agent which, so long as no Event of Default exists, shall be reasonably
acceptable to the Borrowers. If no successor Agent shall have been so
appointed by the Lenders (other than the resigning Agent) and, if applicable, approved
by the Borrowers, and shall have accepted such appointment, within thirty (30)
days after the retiring Agent's giving notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be
a commercial bank or financial institution organized under the laws of the
United States of America or of any state thereof and having a combined capital
and surplus of at least $50,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement and the other Loan Documents. After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article 13 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement and the other Loan
Documents. If no successor Agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Lenders appoint a successor agent as provided for
above.

        Section 13.7.      Fonde de Pouvoir. Without prejudice to the other provisions hereof, each
Loan Party hereby irrevocably designates and appoints the Agent as the person
holding the power of attorney (fonde de pouvoir) of the Lenders and the
Issuing Bank (each a "Credit Party") as contemplated under
Article 2692 of the Civil Code of Quebec, to enter into, to take and to
hold on their behalf, and for their benefit, a deed of hypothec ("Deed
of Hypothec") to be executed by any Borrower or Guarantor (as the case
may be) under the laws of the Province of Quebec and creating a Lien on such
Borrower's or Guarantor's Collateral located in such Province and to exercise
such powers and duties which are conferred upon the Agent under such deed. Each Credit Party hereby additionally designates and appoints the Agent as
agent for and on behalf of each of them (i) to hold and to be the sole
registered holder of any debenture ("Debenture") issued under
the Deed of Hypothec, the whole notwithstanding Section 32 of the Act
respecting the special powers of legal persons (Quebec) or any other
applicable law, and (ii) to enter into, to take and to hold on their behalf,
and for their benefit, a Pledge of Debenture agreement ("Debenture
Pledge") to be executed by such Borrower or Guarantor under the laws
of the Province of Quebec and creating a Lien on the Debenture as security for
the payment and 

63

 

performance of the obligations set forth therein. In this
respect, (a) the Agent shall keep a record indicating the names and addresses
of, and the pro rata portion of the obligations and indebtedness secured
by the Debenture Pledge, owing to the Persons for and on behalf of whom the
Debenture is so held from time to time, and (b) each Credit Party will be
entitled to the benefits of any collateral charged under the Deed of Hypothec
and the Debenture Pledge and will participate in the proceeds of realization of
any such collateral, the whole in accordance with the terms hereof. The Agent,
in such aforesaid capacities shall (x) have the sole and exclusive right and
authority to exercise, except as may be otherwise specifically restricted by
the terms hereof, all rights and remedies given to the Agent with respect to
the collateral under the Deed of Hypothec and Debenture Pledge, applicable law
or otherwise, and (y) benefit from and be subject to all provisions hereof with
respect to the Agent mutatis mutandis, including, without limitation,
all such provisions with respect to the liability or responsibility to and
indemnification by the Credit Parties. Any Person who becomes a Credit Party
shall be deemed to have consented to and confirmed the Agent as the person
holding the power of attorney (fonde de pouvoir) and as the agent as
aforesaid and to have ratified, as of the date it becomes a Credit Party, all
actions taken by the Agent in such capacities. The Agent shall be entitled to
delegate from time to time any of its powers or duties under the Deed of
Hypothec and the Debenture Pledge to any Person and on such terms and
conditions as the Agent may determine from time to time. The general
administration of the Loan Documents shall be by the Agent in its various
capacities. Each Credit Party hereby irrevocably authorizes the Agent (i) to
enter into the Loan Documents to which it is a party, and (ii) at its
discretion, to take or refrain from taking such actions as agent on its behalf
and to exercise or refrain from exercising such powers and such trusts (in the
case of the Agent in its capacity as Security Trustee under the Foreign
Security Documents, as applicable) under the Loan Documents as are delegated by
the terms hereof or thereof, as appropriate, together with all powers
reasonably incidental thereto. The Agent shall have no duties or
responsibilities except as set forth in this Agreement and the other Loan
Documents, nor shall it have any fiduciary relationship (save, in the case of
the Agent in its capacity as Security Trustee, to the extent of its limited
role as trustee as required under any applicable Foreign Security Documents)
with any other Credit Party, and no implied covenants, responsibilities,
duties, obligations, or liabilities shall be read into the Loan Documents or
otherwise exist against the Agent.

        Section 13.8.      No
Other Duties, Etc. Notwithstanding anything
herein to the contrary, neither of the Sole Lead Arranger and Book Runner or
Documentation Agent listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, if applicable, as a Lender or an Issuing
Bank hereunder.

        Section 13.9.      Amendment
of Article 13. The Borrowers hereby agree that the foregoing
provisions of this Article 13 constitute an agreement among the Agent and the
Lenders (and the Agent and the Lenders acknowledge that except for the
provisions of Section 13.6, the Borrowers are not parties to or bound by such
foregoing provisions) and that any and all of the provisions of this Article 13
may be amended at any time by the Lenders without the consent or approval of,
or notice to, the Borrowers (other than the requirement of notice to the
Borrowers of the resignation of the Agent and the appointment of a successor Agent
and provided no amendment adversely affecting the Borrowers shall be binding
upon the Borrowers).

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ARTICLE 14. GUARANTY

        Section 14.1.      Guaranty. In consideration of, and in order to induce the
Lenders to make Loans hereunder, each Guarantor, jointly and severally with all
other Guarantors, hereby absolutely, unconditionally and irrevocably guarantees
the punctual payment and performance when due, whether at stated maturity, by
acceleration or otherwise, of the Lender Obligations, and all other obligations
and covenants of the Loan Parties now or hereafter existing under this
Agreement and the other Loan Documents whether for principal, interest
(including interest accruing or becoming owing both prior to and subsequent to
the commencement of any proceeding against or with respect to any Loan Party
under any chapter of the Bankruptcy Code), fees, indemnification payments,
commissions, expenses (including reasonable attorneys' fees and expenses) or
otherwise, and all reasonable costs and expenses, if any, incurred by the Agent
or any Lender in connection with enforcing any rights under this guaranty and
any and all other Lender Obligations (all such obligations being the "Guaranteed
Obligations"), and agrees to pay any and all reasonable expenses
incurred by each Lender and the Agent in enforcing this guaranty. This
guaranty is an absolute, unconditional, present and continuing guaranty of
payment and not of collectibility and is in no way conditioned upon any attempt
to collect from the Borrowers or any other action, occurrence or circumstance
whatsoever.

        Section
14.2.      Continuing
Guaranty. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of this
Agreement and the other Loan Documents. Each Guarantor agrees that the
Guaranteed Obligations and the Loan Documents may be extended or renewed, and
Loans repaid and reborrowed in whole or in part, without notice to or assent by
each Guarantor, and that it will remain bound upon this guaranty
notwithstanding any extension, renewal or other alteration of any Guaranteed
Obligations or the Loan Documents, or any repayment or reborrowing of Loans.
To the maximum extent permitted by applicable law, the obligations of each
Guarantor under this guaranty shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms hereof under any
circumstances whatsoever, including, without limitation:

(a)               
any extension, renewal, modification, settlement, compromise, waiver or
release in respect of any Guaranteed Obligations;

(b)              
any extension, renewal, amendment, modification, rescission, waiver or
release in respect of any of the Loan Documents;

(c)               
any release, exchange, substitution, non-perfection or invalidity of, or
failure to exercise rights or remedies with respect to, any direct or indirect
security for any Guaranteed Obligations, including the release of any Guarantor
or other Person liable on any Guaranteed Obligations;

(d)              
any change in the corporate existence, structure or ownership of any
Borrower, any Guarantor, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting either Borrower, such Guarantor, any other
Guarantor or any of their respective assets;

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(e)               
the existence of any claim, defense, set-off or other rights or remedies
which such Guarantor at any time may have against either Borrower, or either
Borrower or such Guarantor may have at any time against the Agent, any Lender,
any other Guarantor or any other Person, whether in connection with this
guaranty, the Loan Documents, the transactions contemplated thereby or any
other transaction other than by the payment in full by the Borrowers of the
Guaranteed Obligations after the termination of the Commitments of the Lenders;
or

(f)               
any invalidity or unenforceability for any reason of this Agreement or
any other Loan Document, or any provision of law purporting to prohibit the
payment or performance by either Borrower, such Guarantor or any other
guarantor of the Guaranteed Obligations or any of the Loan Documents, or of any
other obligation to the Agent or any Lender.

        Section
14.3.      Effect
of Debtor Relief Laws. If after receipt of any payment of, or proceeds of any
security applied (or intended to be applied) to the payment of all or any part
of, the Guaranteed Obligations, the Agent or any Lender is for any reason
compelled to surrender or voluntarily surrenders (under circumstances in which
it believes it could reasonably be expected to be so compelled if it did not
voluntarily surrender), such payment or proceeds to any Person (a) because such
payment or application of proceeds is or may be avoided, invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
fraudulent conveyance, fraudulent transfer, impermissible set-off or a
diversion of trust funds or (b) for any other similar reason, including (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over the Agent, any Lender or any of their respective properties
or (ii) any settlement or compromise of any such claim effected by the Agent or
any Lender with any such claimant (including either Borrower), then the
Guaranteed Obligations or part thereof intended to be satisfied shall be
reinstated and continue, and this guaranty shall continue in full force as if
such payment or proceeds had not been received, notwithstanding any revocation
thereof or the cancellation of any other instrument evidencing any Guaranteed
Obligations or otherwise; and the Guarantors, jointly and severally, shall be
liable to pay the Agent and the Lenders, and hereby do indemnify the Agent and
the Lenders and hold them harmless for, the amount of such payment or proceeds
so surrendered and all expenses (including reasonable attorneys' fees, court
costs and expenses attributable thereto) incurred by the Agent or any Lender in
defense of any claim made against any of them that any payment or proceeds
received by the Agent or any Lender in respect of all or part of the Guaranteed
Obligations must be surrendered. The provisions of this paragraph shall
survive the termination of this guaranty, and any satisfaction and discharge of
the Borrowers by virtue of any payment, court order or any federal or state
law.

        Section
14.4.      Partial
Waiver of Subrogation. Notwithstanding any payment or payments made by any
Guarantor hereunder, or any set-off or application by the Agent or any Lender
of any security or of any credits or claims, if an Event of Default exists, no
Guarantor will assert or exercise any rights of the Agent or any Lender or of
such Guarantor against either Borrower to recover the amount of any payment
made by such Guarantor to the Agent or any Lender hereunder by way of any
claim, remedy or subrogation, reimbursement, exoneration, contribution,
indemnity, participation or otherwise arising by contract, by statute, under
common law or otherwise, and such Guarantor shall not have any right of
recourse to or any claim against assets or property of either Borrower, in each
case unless and until the Guaranteed Obligations have been paid in full. Until
such time (but not thereafter), each Guarantor hereby 

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expressly subordinates
any right to exercise any claim, right or remedy which such Guarantor may now
have or hereafter acquire against either Borrower or any other Guarantor that
arises under this Agreement or any other Loan Document or from the performance
by any Guarantor of this guaranty including any claim, remedy or right of
subrogation, reimbursement, exoneration, contribution, indemnification or
participation in any claim, right or remedy of the Agent or any Lender against
either Borrower or any Guarantor, or any security that the Agent or any Lender
now has or hereafter acquires, whether or not such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise. If any amount shall be paid to a Guarantor by either Borrower or another
Guarantor after payment in full of the Guaranteed Obligations, and all or any
portion of the Guaranteed Obligations shall thereafter be reinstated in whole
or in part and the Agent or any Lender is required to repay any sums received
by any of them in payment of the Obligations, this guaranty shall be
automatically reinstated and such amount shall be held in trust for the benefit
of the Agent and the Lenders and shall forthwith be paid to the Agent to be
credited and applied to the Guaranteed Obligations, whether matured or unmatured. The provisions of this paragraph shall survive the termination of
this guaranty, and any satisfaction and discharge of the Borrowers by virtue of
any payment, court order or any federal or state law.

        Section
14.5.      Subordination. If any Guarantor becomes the holder of any indebtedness
payable by either Borrower or another Guarantor, each Guarantor hereby
subordinates all indebtedness owing to it from the Borrowers or such other
Guarantor to all indebtedness of either Borrower to the Agent and the Lenders,
and agrees that during the continuance of any Event of Default it shall not
accept any payment on the same until payment in full of the Guaranteed
Obligations after the termination of the Commitments of the Lenders and shall
in no circumstance whatsoever attempt to set-off or reduce any obligations
hereunder because of such indebtedness. If any amount shall nevertheless be
paid in violation of the foregoing to a Guarantor by either Borrower or another
Guarantor prior to payment in full of the Guaranteed Obligations, such amount
shall be held in trust for the benefit of the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
Obligations, whether matured or unmatured.

        Section
14.6.      Waiver. Each Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this guaranty and waives presentment, demand of payment, notice
of intent to accelerate, notice of dishonor or nonpayment and any requirement
that the Agent or any Lender institute suit, collection proceedings, or take
any other action to collect the Guaranteed Obligations, including any
requirement that the Agent or any Lender protect, secure, perfect or insure any
Lien against any property subject thereto or exhaust any right or take any
action against either Borrower or any other Person or any collateral (it being
the intention of the Agent, the Lenders and each Guarantor that this guaranty
is to be a guaranty of payment and not of collection). It shall not be
necessary for the Agent or any Lender, in order to enforce any payment by any
Guarantor hereunder, to institute suit or exhaust its rights and remedies
against the Borrowers, any other Guarantor or any other Person, including
others liable to pay any Guaranteed Obligations, or to enforce its rights
against any security ever given to secure payment thereof. Each Guarantor
hereby expressly waives to the maximum extent permitted by applicable law each
and every right to which it may be entitled by virtue of any suretyship laws.
Each Guarantor hereby waives marshaling of assets and liabilities, notice by
the Agent or any Lender of any indebtedness or liability to which such Lender
applies or may apply any amounts received by such Lender, and 

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of the creation,
advancement, increase, existence, extension, renewal, rearrangement or
modification of the Guaranteed Obligations. Each Guarantor expressly waives,
to the extent permitted by applicable law, the benefit of any and all laws
providing for exemption of property from execution or for valuation and
appraisal upon foreclosure.

        Section
14.7.      Full
Force and Effect. This guaranty is a continuing guaranty and shall remain
in full force and effect until all of the Obligations of the Borrowers under
this Agreement and the other Loan Documents and all other amounts payable under
this guaranty have been paid in full (after the termination of the Commitments
of the Lenders). All rights, remedies and powers provided in this Article 14
may be exercised, and all waivers contained in this guaranty may be enforced,
only to the extent that the exercise or enforcement thereof does not violate
any provisions of applicable law which may not be waived.

        Section
14.8.      Negative
Pledge. No Guarantor will create any Lien on its assets to any
other Person during the pendency of this Agreement except for Liens permitted
by Section 9.2 hereof nor will any of them enter into any agreement with
any Person not to grant Liens or to pledge assets to the Agent.

        Section 14.9.      Additional
Guarantors. At the Borrowers' request, any wholly-owned Subsidiary
of Gerber may become an additional Guarantor hereunder upon delivery to the
Agent of (a) a joinder hereto, (b) a joinder to the Pledge Agreement to perfect
a pledge of all of the equity interests of such Subsidiary to the Agent to
secure the Lender Obligations, (c) such documents as the Agent may reasonably
request to create and perfect liens on such Subsidiaries assets to secure the
Lender Obligations under the Security Documents, and (d) such other
certificates, instruments and opinions consistent with the documents delivered
on the Closing Date with respect to the other Guarantors, all in form and
substance reasonably acceptable to the Agent.

ARTICLE 15. MISCELLANEOUS

        Section
15.1.      Notices.

(a)               
Generally. All notices and other communications made or
required to be given pursuant to this Agreement shall be in writing and shall
be mailed by United States mail, postage prepaid, or sent by hand, by telecopy
or by nationally‐recognized overnight carrier service, addressed as
follows:

                    (i)            
If to the Agent, at the address set forth on Schedule 15.1, with
a copy to: Goodwin Procter LLP, Exchange
Place, Boston, MA 02109, Telecopier No. 617-523-1231, Attention: Edward Matson
Sibble, Jr., or at such other address(es) or to the attention of such other
Person(s) as the Agent shall from time to time designate in writing to the
Borrowers and the Lenders.

                    (ii)          
If to the Borrowers, at the address set forth on Schedule 15.1,
or at such other address(es) or to the attention of such other Person(s) as the
Borrowers shall from time to time designate in writing to the Agent and the
Lenders.

                    (iii)        
If to any Lender, at the address(es) and to the attention of the
Person(s) specified below such Lender's name on the execution page of this
Agreement (or in the case of a Successor Lender, at the address(es) and to the
attention of the

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Person(s) specified in the Assignment and Acceptance Agreement
executed by such Successor Lender), or at such other address(es) and to the
attention of such other Person(s) as any Lender shall from time to time
designate in writing to the Agent and the Borrowers.

Any notice so addressed and mailed by
registered or certified mail and any notice so addressed and sent by hand, by
telecopy or by overnight carrier service shall be deemed to have been given
when received or willfully refused. A notice from the Agent stating that it
has been given on behalf of the Lenders shall be relied upon by the Borrowers
as having been given by the Lenders.

(b)              
Electronic Communications. Notices and other communications to
the Lenders and the Issuing Bank hereunder may be delivered or furnished by
electronic communication (including e‐mail and Internet or intranet
websites) pursuant to procedures approved by the Agent, provided that
the foregoing shall not apply to notices to any Lender or an Issuing Bank
pursuant to Article 2 if such Lender or Issuing Bank, as applicable, has
notified the Agent that it is incapable of receiving notices under such Article
by electronic communication. The Agent or the Borrowers may, in their
respective discretion, agree to accept notices and other communications
hereunder by electronic communications pursuant to procedures approved by them,
provided that approval of such procedures may be limited to particular
notices or communications.

Unless the Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address
shall be deemed received upon the sender's receipt of an acknowledgement from
the intended recipient (such as by the "return receipt requested"
function, as available, return e-mail or other written acknowledgement), provided
that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been sent at the opening of business on the next business day for the
recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(i) of notification that such notice or communication is available and
identifying the website address therefor.

        Section 15.2.      Merger. This Agreement and the other Loan Documents are
intended by the parties as the final, complete and exclusive statement of the
transactions evidenced by this Agreement and the other Loan Documents, as
applicable. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superseded by this
Agreement and the other Loan Documents, and no party is relying on any promise,
agreement or understanding not set forth in this Agreement and the other Loan
Documents. This Agreement may not be amended or modified except by a written
instrument describing such amendment or modification executed in accordance
with Section 11.1 hereof.

        Section 15.3.      Governing
Law; Consent to Jurisdiction. This Agreement and the rights and obligations of the
parties hereunder shall be construed and interpreted in accordance with the
laws of The Commonwealth of Massachusetts (excluding the laws applicable to
conflicts or choice of law). The Borrowers and each other Loan Party and the
Agent, the Issuing Bank and each Lender hereby irrevocably submits itself to
the non-exclusive jurisdiction of the courts of 

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The Commonwealth of
Massachusetts and to the non-exclusive jurisdiction of any Federal court of the
United States located in the District of Massachusetts for the purpose of any
suit, action or other proceeding arising out of this Agreement or any other
Loan Document or any of the transactions contemplated hereby or thereby.

        Section 15.4.      Counterparts;
Replacement of Instruments. This Agreement and all amendments to this Agreement may
be executed in several counterparts, each of which shall be an original. The
several counterparts shall constitute a single Agreement. Upon receipt of an
affidavit of an officer of the Agent or any Lender as to the loss, theft,
destruction or mutilation of any Note or any other security document which is not
of public record, and, in the case of any such loss, theft, destruction or
mutilation, upon cancellation of such Note or other security document, the
Borrowers will issue, in lieu thereof, a replacement note or other security
document in the same principal amount thereof and otherwise of like tenor.

        Section
15.5.      Expenses
and Indemnification.

(a)               
The Borrowers shall pay, on demand, all reasonable expenses of the Agent
and the Lenders in connection with the preparation, default, collection, waiver
or amendment of this Agreement, any other Loan Document or any other loan
terms, or in connection with the Agent's and the Lenders' exercise,
preservation or enforcement of any of its rights, remedies or options hereunder
or under any other Loan Document or in connection with the Agent's
administration hereof to the extent such expenses are customarily charged to
borrowers by the Agent for similar credit facilities, including in each case,
without limitation, fees of the Agent's outside legal counsel, Goodwin Procter LLP, accounting, consulting, brokerage and other
similar professional fees or expenses, expenses for Intralinks or similar
services, and any fees or expenses associated with travel and other costs
relating to any appraisals or examinations conducted in connection with the
credits extended hereunder or any collateral therefor. The Borrowers also
agree to pay all stamp and other taxes in connection with the execution and
delivery of this Agreement and related instruments and documents. Upon
request, the Agent and the Lenders shall provide documentation relating to any
expenses claimed hereunder.

(b)              
Without limitation of any other obligation or liability of the Borrowers
or right or remedy of the Agent or the Lenders contained herein, the Borrowers
hereby covenant and agree to indemnify and hold the Agent, the Lenders, and the
directors, officers, subsidiaries, shareholders, agents, affiliates and Persons
controlling the Agent and the Lenders, harmless from and against any and all
damages, losses, setoff, settlement payments, obligations, liabilities, claims,
including, without limitation, claims for finder's or broker's fees, actions or
causes of action, and reasonable costs and expenses incurred, suffered,
sustained or required to be paid by any such indemnified party in each case by
reason of or resulting from any claim relating to the transactions contemplated
hereby, including, without limitation, any account control agreement entered
into by and among Gerber Scientific International Ltd., the Agent and the Royal
Bank of Canada, other than any such claims which are determined by a final, non‐appealable
judgment or order of a court of competent jurisdiction to be the result of the
gross negligence or willful misconduct of such indemnified party. In no event
will any Borrower be responsible to indemnify any Lender for any matter that
arises out of or in connection with any claim, litigation, investigation or
proceeding that does not involve an act or omission by any Loan Party or any of
its Affiliates and that is brought by an indemnified party hereunder against
any other indemnified party. Promptly upon receipt by any indemnified party
hereunder of notice of the 

70

 

commencement of any action against such indemnified
party for which a claim is to be made against the Borrowers hereunder, such
indemnified party shall notify the Borrowers in writing of the commencement
thereof, although the failure to provide such notice shall not affect the
indemnification rights of any such indemnified party hereunder. The Borrowers
shall have the right, at their option upon notice to the indemnified parties,
to defend any such matter at its own expense and with their own counsel, except
as provided below, which counsel must be reasonably acceptable to the
indemnified parties. The indemnified party shall cooperate with the Borrowers
in the defense of such matter. The indemnified party shall have the right to
employ separate counsel and to participate in the defense of such matter at its
own expense. In the event that (a) the employment of separate counsel by an
indemnified party has been authorized in writing by the Borrowers, (b) the
Borrowers have failed to assume the defense of such matter within fifteen (15)
days of notice thereof from the indemnified party, or (c) the named parties to
any such action (including impleaded parties) include any indemnified party who
has been advised by counsel that there may be one or more legal defenses
available to it or prospective bases for liability against it, which are
different from those available to or against the Borrowers, then the Borrowers
shall not have the right to assume the defense of such matter with respect to
such indemnified party. The Borrowers shall not compromise or settle any such
matter against an indemnified party without the written consent of the
indemnified party, which consent may not be unreasonably withheld or delayed.

(c)               
All amounts payable by the Borrowers under this Section 14.5 shall,
until paid, bear interest at the rate applicable to Base Rate Loans hereunder
(including any default rate) and be an obligation secured by the Collateral.

(d)              
Notwithstanding anything to the contrary contained herein, unless an
Event of Default exists, the aggregate maximum amount the Loan Parties shall be
charged for inspections, appraisals, field audits and similar investigations
and audits shall be $10,000 per calendar year.

        Section 15.6.      Confidentiality. The Agent and the Lenders agree to use commercially
reasonable efforts to keep in confidence all financial data and other
information relative to the affairs of Gerber and its Subsidiaries heretofore
furnished or which may hereafter be furnished to them pursuant to the
provisions of this Agreement and identified by the Borrowers as "Confidential";
provided, however, that this Section 15.6 shall not be applicable
to information otherwise disseminated to the public by Gerber or any of its
Affiliates; and provided further, however, that such
obligation of the Agent and the Lenders shall be subject to the Agent's or the
Lenders', as the case may be, (a) obligation to disclose such information
pursuant to a request or order under applicable laws and regulations or
pursuant to a subpoena or other legal process, (b) right to disclose any such
information to bank examiners, affiliates, auditors, accountants and counsel who
agree to keep such information confidential, and (c) right to disclose any such
information (i) in connection with the transactions set forth herein including
assignments or the sale of participation interests pursuant to Article 12, so
long as such potential assignees or participants shall agree in writing to be
bound by the terms of this Section 15.6, or (ii) in connection with any
litigation or dispute involving the Agent or any transfer or other disposition
by the Agent or the Lenders, as the case may be, of any of the Lender
Obligations; provided that information disclosed pursuant to this provision
shall be so disclosed subject to such procedures as are reasonably calculated
to maintain the confidentiality thereof.

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        Section 15.7.      Usury
Limitation. All agreements between the Borrowers and any Guarantor,
the Agent and/or the Lenders are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of acceleration of maturity
of the indebtedness evidenced hereby or otherwise, shall the amount paid or
agreed to be paid to the Lenders for the use or the forbearance of the Lender
Obligations exceed the maximum permissible under applicable law. As used
herein, the term "applicable law" shall mean the law in effect as of
the date hereof; provided, however, that in the event there is a change
in the law which results in a higher permissible rate of interest, then this
provision shall be governed by such new law as of its effective date. In this
regard, it is expressly agreed that it is the intent of the Borrowers, the
Agent, and the Lenders in the execution, delivery and acceptance of this
Agreement and the other Loan Documents to contract in strict compliance with
the laws of The Commonwealth of Massachusetts from time to time in effect. If,
under or from any circumstances whatsoever, fulfillment of any provision hereof
or of any of the Loan Documents at the time of performance of such provision
shall be due, shall involve transcending the limit of such validity prescribed
by applicable law, then the obligation to be fulfilled shall automatically be
reduced to the limits of such validity, and if under or from any circumstances
whatsoever the Lenders should ever receive as interest an amount which would
exceed the highest lawful rate, such amount which would be excessive interest
shall be applied to the reduction of the principal balance of the Lender
Obligations and not to the payment of interest. This provision shall control
every other provision of all Loan Documents.

        Section
15.8.      Joint
and Several Obligations. All obligations of the Borrowers hereunder and under
the Revolving Credit Notes, the Swingline Notes and all other Loan Documents
shall be joint and several obligations. Except as otherwise expressly provided
in the Loan Documents, the Borrowers waive presentment, demand, protest, notice
of acceptance, notice of indebtedness incurred and all other notices of any
kind, all defenses which may be available by virtue of any valuation, stay,
moratorium law or other similar law now or hereafter in effect, any right to
require the marshaling of assets of the Borrowers and their Subsidiaries, and
all suretyship defenses generally.

        Section
15.9.      Judgment.

(a)               
If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due hereunder in U.S. Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase U.S. Dollars with such other currency
at the Spot Rate at 11:00 A.M. (Boston time) on the Business Day preceding that
on which final judgment is given.

(b)              
If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due hereunder in another currency into U.S. Dollars, the
parties agree to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase such alternative currency with U.S. Dollars
at the Spot Market at 11:00 A.M. (Boston time) on the Business Day preceding
that on which final judgment is given.

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(c)               
The obligation of each Borrower in respect of any sum due from it in any
currency (the "Primary Currency") to any Lender or the Agent
hereunder shall, notwithstanding any judgment in any other currency, be
discharged only to the extent that on the Business Day following receipt by
such Lender or the Agent (as the case may be), of any sum adjudged to be so due
in such other currency, such Lender or the Agent (as the case may be) may in
accordance with normal banking procedures purchase the applicable Primary
Currency with such other currency; if the amount of the applicable Primary
Currency so purchased is less than such sum due to such Lender or the Agent (as
the case may be) in the applicable Primary Currency, each Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Agent (as the case may be) against such loss, and if the amount
of the applicable Primary Currency so purchased exceeds such sum due to any
Lender or the Agent (as the case may be) in the applicable Primary Currency,
such Lender or the Agent (as the case may be) agrees to remit to each Borrower
such excess.

        Section 15.10.  Reliance on Representations
and Actions of Gerber. The Loan Parties hereby appoint Gerber as the agent of
the Loan Parties to execute, deliver and perform, on behalf of the Borrowers,
any and all notices, certificates, documents and actions to be executed,
delivered or performed hereunder or under any of the other Loan Documents, and
the Loan Parties hereby agree that the Agent and the Lenders may rely upon any
representation, warranty, certificate, notice (electronic or otherwise),
document or telephone request which purports to be executed or made or which
the Agent or the Lenders in good faith believe to have been executed or made by
Gerber or any of its executive officers, and the Loan Parties hereby further,
jointly and severally, agree to indemnify and hold the Agent and the Lenders
harmless for any action, including the making of the Revolving Credit Advances
or the Swingline Loans hereunder, and any loss or expense, taken or incurred by
any of them as a result of their good faith reliance upon any such
representation, warranty, certificate, notice, document or telephone request,
absent their gross negligence or willful misconduct.

        Section
15.11.  Platform. Documents required to be delivered pursuant to Section 6.1 or Section
6.2 (to the extent any such documents are included in materials otherwise filed
with the Securities and Exchange Commission) may be delivered electronically
and if so delivered, shall be deemed to have been delivered on the Business Day ( if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient) (i) on which Gerber posts such
documents, or provides a link thereto on Gerber's website on the Internet at
the website address listed on Schedule 15.1; or (ii) on which such
documents are posted on Gerber's behalf on an Internet or intranet website, if
any, to which each Lender and the Agent have access (whether a commercial,
third-party website or whether sponsored by the Agent); provided that: (i) the
Borrowers shall deliver paper copies of such documents to the Agent or any
Lender that requests the Borrowers to deliver such paper copies until a written
request to cease delivering paper copies is given by the Agent or such Lender
and (ii) the Borrowers shall notify the Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the Agent
by electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrowers
shall be required to provide paper copies of any Compliance Certificate
required hereunder to the Agent. Except for such Compliance Certificates, the
Agent shall have no obligation to request the delivery or to maintain copies of
the documents referred to above, 

73

 

and in any event shall have no responsibility
to monitor compliance by the Borrowers with any such request for delivery, and
each Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.

(b)              
Each Borrower hereby acknowledges that (a) the Agent will make available
to the Lenders and the Issuing Bank materials and/or information provided by or
on behalf of such Borrower hereunder (collectively, "Borrower Materials")
by posting the Borrower Materials on IntraLinks or another similar electronic
system (the "Platform") and (b) certain of the Lenders may be "public-side"
Lenders (i.e., Lenders that do not wish to receive material non-public
information with respect to any Borrower or its securities) (each, a "Public
Lender"). Each Borrower hereby agrees that (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and
conspicuously marked "PUBLIC" which, at a minimum, shall mean that
the word "PUBLIC" shall appear prominently on the first page thereof;
(x) by marking Borrower Materials "PUBLIC," the Borrowers shall be
deemed to have authorized the Agent and the Issuing Bank and the Lenders to
treat such Borrower Materials as either publicly available information or not
material information (although it may be sensitive and proprietary) with
respect to the Borrowers or their respective securities for purposes of United
States federal and state securities laws; (y) all Borrower Materials marked "PUBLIC"
are permitted to be made available through a portion of the Platform designated
"Public Investor;" and (z) the Agent shall be entitled to treat any
Borrower Materials that are not marked "PUBLIC" as being suitable
only for posting on a portion of the Platform not designated "Public
Investor."

        Section 15.12.  WAIVER OF JURY TRIAL;
VENUE. THE BORROWER, THE OTHER LOAN PARTIES, THE AGENT, THE
ISSUING BANK AND THE LENDERS BY ACCEPTANCE OF THIS AGREEMENT MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF THE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE
CREDITS HEREUNDER OR ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, AND AGREE THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT
AS PROHIBITED BY LAW, THE BORROWERS AND THE OTHER LOAN PARTIES HEREBY WAIVE ANY
RIGHT THEY MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. THE LOAN PARTIES CERTIFY THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR THE AGENT AND THE LENDERS TO ENTER INTO THIS AGREEMENT AND
PROVIDE THE CREDITS HEREUNDER. THE 

74

 

LOAN PARTIES AGREE THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE
OF PROCESS IN ANY SUCH SUIT BEING MADE UPON BORROWERS BY MAIL AT THE ADDRESS
SET FORTH IN SECTION 14.1. THE LOAN PARTIES HEREBY WAIVE ANY OBJECTION THAT
THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT
OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT FORUM.

        Section 15.13.  USA Patriot Act. Each Lender and Agent hereby notifies the Loan Parties
that pursuant to the requirements of the Patriot Act, it is required to obtain,
verify and record information that identifies Loan Parties, which information
includes the name and address of each Loan Party and other information that
will allow such Lender to identify such Loan in accordance with the Patriot
Act.

[Remainder of page
intentionally left blank]

75

 

        IN WITNESS WHEREOF, the Borrowers, the
Guarantors, the Agent and the Lenders have caused this Credit and Guaranty
Agreement to be executed by their duly authorized officers as of the date set
forth above.

                                                                                   
THE BORROWERS:

                                                                                    GERBER SCIENTIFIC, INC.

                                                                                    By:  /s/                                                          

                                                                                    Name:

                                                                                   
Title:

 

                                                                                    GERBER SCIENTIFIC INTERNATIONAL, INC.

By:  /s/                                                          

Name:

Title:

76

 

GUARANTORS:

GERBER COBURN OPTICAL INTERNATIONAL, INC.

 

By:  /s/                                                         

Name: 

Title:

GERBER SCIENTIFIC UK LTD.

 

By:  /s/                                                         

Name: 

Title:

SPANDEX LIMITED

 

By:  /s/                                                         

Name: 

Title:

GERBER SCIENTIFIC INTERNATIONAL LTD.

 

By:  /s/                                                         

Name: 

Title:

 

                                                                                   
THE AGENT:

                                                                                    RBS CITIZENS, N.A., as Agent

                                                                                    By:  /s/                                                         

                                                                                    Name:
                                                                                   
Title:

 

THE LENDERS:

                                                                                    RBS CITIZENS, N.A.

                                                                                    By:  /s/                                                         

                                                                                    Name:

                                                                                   
Title:

                                                                                    Address:

                                                                                   
Telecopier No:

                                                                                   
Attention:

 

                                                                                    SOVEREIGN BANK

                                                                                    By:  /s/                                                          

                                                                                    Name:

                                                                                   
Title:

                                                                                    Address:

                                                                                    Telecopier No:

                                                                                   
Attention:

 

                                                                                    BANK OF AMERICA, N.A.

                                                                                    By:  /s/                                                         

                                                                                    Name:

                                                                                   
Title:

                                                                                    Address:

                                                                                   
Telecopier No:

                                                                                   
Attention:

 

                                                                                    HSBC BANK USA, NATIONAL ASSOCIATION

                                                                                    By:  /s/                                                          

                                                                                    Name:

                                                                                   
Title:

                                                                                    Address:

                                                                                   
Telecopier No:

                                                                                   
Attention:

 

                                                                                    JP MORGAN CHASE BANK N.A.

                                                                                    By:  /s/                                                         

                                                                                    Name:

                                                                                   
Title:

                                                                                    Address:

                                                                                   
Telecopier No:

                                                                                   
Attention:

                                                                                    

 

                                                                                    MERRILL LYNCH CAPITAL CORPORATION

                                                                                    By:  /s/                                                          

                                                                                    Name:

                                                                                   
Title:

                                                                                    Address:

                                                                                    Telecopier No:

                                                                                   
Attention:exhibit.htm

    

      Execution
        Version

      

       

      
        
          

        

      

      $325,000,000
        REVOLVING CREDIT FACILITY

       

      

       

      CREDIT
        AGREEMENT

       

      by
        and among

       

      NEW
        JERSEY RESOURCES CORPORATION

       

      and

       

      EACH
        OF THE GUARANTORS PARTY HERETO

       

      and

       

      THE
        BANKS PARTY HERETO

       

      and

       

      PNC
        BANK, NATIONAL ASSOCIATION,

       

      as
        Administrative Agent

       

      JPMORGAN
        CHASE BANK, N.A. and BANK OF AMERICA, N.A. as Syndication
        Agents

       

      CITIBANK,
        N.A. and THE BANK OF NOVA SCOTIA as Documentation Agents

       

      and

       

      PNC
        CAPITAL MARKETS LLC,

       

      as
        Lead Arranger

       

      

       

      Dated
        as of December 13, 2007

       

      
         

         

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                1.

              	
                CERTAIN
                  DEFINITIONS

              	 1
	 	
                1.1

              	
                Certain
                  Definitions.

              	 1
	 	
                1.2

              	
                Construction.

              	 17
	 	 	
                1.2.1.

              	
                Number;
                  Inclusion.

              	 17
	 	 	
                1.2.2.

              	
                Determination.

              	 17
	 	 	
                1.2.3.

              	
                Agent's
                  Discretion and Consent.

              	 18
	 	 	
                1.2.4.

              	
                Documents
                  Taken as a Whole.

              	 18
	 	 	
                1.2.5.

              	
                Headings.

              	 18
	 	 	
                1.2.6.

              	
                Implied
                  References to this Agreement.

              	 18
	 	 	
                1.2.7.

              	
                Persons.

              	 18
	 	 	
                1.2.8.

              	
                Modifications
                  to Documents.

              	 18
	 	 	
                1.2.9.

              	
                From,
                  To and Through.

              	 18
	 	 	
                1.2.10.

              	
                Shall;
                  Will.

              	 18
	 	
                1.3

              	
                Accounting
                  Principles.

              	 19
	 	 	 	 	 
	
                2.

              	
                REVOLVING
                  CREDIT AND SWING LOAN FACILITIES

              	 
	 	
                2.1

              	
                Commitments.

              	 19
	 	 	
                2.1.1.

              	
                Revolving
                  Credit Loans.

              	 19
	 	 	
                2.1.2.

              	
                Swing
                  Loan Commitment.

              	 19
	 	
                2.2

              	
                Nature
                  of Banks' Obligations with Respect to Revolving Credit
                  Loans.

              	 19
	 	
                2.3

              	
                Facility
                  Fees.

              	 20
	 	
                2.4

              	
                Revolving
                  Credit Loan Requests.

              	 20
	 	
                2.5

              	
                Swing
                  Loan Requests.

              	 20
	 	
                2.6

              	
                Making
                  Revolving Credit Loans and Swing Loans.

              	 21
	 	 	
                2.6.1.

              	
                Making
                  Revolving Credit Loans.

              	 21
	 	 	
                2.6.2.

              	
                Making
                  Swing Loans.

              	 21
	 	
                2.7

              	
                Swing
                  Loan Note.

              	 21
	 	
                2.8

              	
                Use
                  of Proceeds.

              	 21
	 	
                2.9

              	
                Letter
                  of Credit Subfacility.

              	 21
	 	 	
                2.9.1.

              	
                Issuance
                  of Letters of Credit.

              	 21
	 	 	
                2.9.2.

              	
                Letter
                  of Credit Fees.

              	 22
	 	 	
                2.9.3.

              	
                Disbursements,
                  Reimbursement.

              	 22
	 	 	
                2.9.4.

              	
                Repayment
                  of Participation Advances.

              	 23
	 	 	
                2.9.5.

              	
                Documentation.

              	 23
	 	 	
                2.9.6.

              	
                Determinations
                  to Honor Drawing Requests.

              	 23
	 	 	
                2.9.7.

              	
                Nature
                  of Participation and Reimbursement Obligations.

              	 24
	 	 	
                2.9.8.

              	
                Indemnity.

              	 25
	 	 	
                2.9.9.

              	
                Liability
                  for Acts and Omissions.

              	 26
	 	
                2.10

              	
                Borrowings
                  to Repay Swing Loans.

              	 27
	 	
                2.11

              	
                Right
                  to Increase Commitments.

              	 27
	 	 	 	 	 
	
                3.

              	
                INTENTIONALLY
                  OMITTED

              	 27
	 	 	 	 	 
	
                4.

              	
                INTEREST
                  RATES

              	 27
	 	
                4.1

              	
                Interest
                  Rate Options.

              	 27
	 	 	
                4.1.1.

              	
                Revolving
                  Credit Interest Rate Options.

              	 28
	 	 	
                4.1.2.

              	
                Rate
                  Quotations.

              	 28
	 	 	
                4.1.3.

              	
                Change
                  in Fees or Interest Rates.

              	 28
	 	
                4.2

              	
                Interest
                  Periods.

              	 29
	 	 	
                4.2.1.

              	
                Amount
                  of Borrowing Tranche.

              	 29
	 	 	
                4.2.2.

              	
                Renewals.

              	 29
	 	
                4.3

              	
                Interest
                  After Default.

              	 29

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	 	
                4.3.1.

              	
                Letter
                  of Credit Fees, Interest Rate.

              	 29
	 	 	
                4.3.2.

              	
                Other
                  Obligations.

              	 29
	 	 	
                4.3.3.

              	
                Acknowledgment.

              	 29
	 	
                4.4

              	
                LIBOR
                  Rate Unascertainable; Illegality; Increased Costs; Deposits Not
                  Available.

              	 30
	 	 	
                4.4.1.

              	
                Unascertainable.

              	 30
	 	 	
                4.4.2.

              	
                Illegality;
                  Increased Costs; Deposits Not Available.

              	 30
	 	 	
                4.4.3.

              	
                Agent's
                  and Banks' Rights.

              	 30
	 	
                4.5

              	
                Selection
                  of Interest Rate Options.

              	 31
	 	 	 	 	 
	
                5.

              	
                PAYMENTS

              	 31
	 	
                5.1

              	
                Payments.

              	 31
	 	
                5.2

              	
                Pro
                  Rata Treatment of Banks.

              	 31
	 	
                5.3

              	
                Interest
                  Payment Dates.

              	 32
	 	
                5.4

              	
                Prepayments.

              	 32
	 	 	
                5.4.1.

              	
                Voluntary
                  Prepayments.

              	 32
	 	 	
                5.4.2.

              	
                Replacement
                  of a Bank.

              	 33
	 	 	
                5.4.3.

              	
                Change
                  of Lending Office.

              	 33
	 	
                5.5

              	
                Voluntary
                  Commitment Reductions.

              	 33
	 	
                5.6

              	
                Additional
                  Compensation in Certain Circumstances.

              	 34
	 	 	
                5.6.1.

              	
                Increased
                  Costs or Reduced Return Resulting From Taxes, Reserves, Capital
                  Adequacy
                  Requirements, Expenses, Etc.

              	 34
	 	 	
                5.6.2.

              	
                Indemnity.

              	 34
	 	
                5.7

              	
                Interbank
                  Market Presumption.

              	 35
	 	
                5.8

              	
                Taxes.

              	 35
	 	 	
                5.8.1.

              	
                No
                  Deductions.

              	 35
	 	 	
                5.8.2.

              	
                Stamp
                  Taxes.

              	 36
	 	 	
                5.8.3.

              	
                Indemnification
                  for Taxes Paid by a Bank.

              	 36
	 	 	
                5.8.4.

              	
                Certificate.

              	 36
	 	 	
                5.8.5.

              	
                Survival.

              	 36
	 	
                5.9

              	
                Notes.

              	 36
	 	
                5.10

              	
                Settlement
                  Date Procedures.

              	 36
	 	 	 	 	 
	
                6.

              	
                REPRESENTATIONS
                  AND WARRANTIES

              	 37
	 	
                6.1

              	
                Representations
                  and Warranties.

              	 37
	 	 	
                6.1.1.

              	
                Organization
                  and Qualification.

              	 37
	 	 	
                6.1.2.

              	
                Subsidiaries.

              	 37
	 	 	
                6.1.3.

              	
                Power
                  and Authority.

              	 37
	 	 	
                6.1.4.

              	
                Validity
                  and Binding Effect.

              	 37
	 	 	
                6.1.5.

              	
                No
                  Conflict.

              	 38
	 	 	
                6.1.6.

              	
                Litigation.

              	 38
	 	 	
                6.1.7.

              	
                Title
                  to Properties.

              	 38
	 	 	
                6.1.8.

              	
                Financial
                  Statements.

              	 38
	 	 	
                6.1.9.

              	
                Use
                  of Proceeds; Margin Stock; Section 20 Subsidiaries.

              	 39
	 	 	
                6.1.10.

              	
                Full
                  Disclosure.

              	 39
	 	 	
                6.1.11.

              	
                Taxes.

              	 39
	 	 	
                6.1.12.

              	
                Consents
                  and Approvals.

              	 40
	 	 	
                6.1.13.

              	
                No
                  Event of Default; Compliance With Instruments.

              	 40
	 	 	
                6.1.14.

              	
                Patents,
                  Trademarks, Copyrights, Licenses, Etc.

              	 40
	 	 	
                6.1.15.

              	
                Insurance.

              	 40
	 	 	
                6.1.16.

              	
                Compliance
                  With Laws.

              	 41
	 	 	
                6.1.17.

              	
                Material
                  Contracts; Burdensome Restrictions.

              	 41

      

      

      
        
          ii

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	 	
                6.1.18.

              	
                Investment
                  Companies; Regulated Entities.

              	 41
	 	 	
                6.1.19.

              	
                Plans
                  and Benefit Arrangements.

              	 41
	 	 	
                6.1.20.

              	
                Employment
                  Matters.

              	 42
	 	 	
                6.1.21.

              	
                Environmental
                  Matters.

              	 42
	 	 	
                6.1.22.

              	
                Senior
                  Debt Status.

              	 42
	 	 	
                6.1.23.

              	
                Reserved.

              	 43
	 	 	
                6.1.24.

              	
                Permitted
                  Related Business Opportunities.

              	 43
	 	 	
                6.1.25.

              	
                Anti-Terrorism
                  Laws; Executive Order No. 13224.

              	 43
	 	
                6.2

              	
                Continuation
                  of Representations.

              	 43
	 	 	 	 	 
	
                7.

              	
                CONDITIONS
                  OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

              	 44
	 	
                7.1

              	 	
                Conditions
                  to First Loans and Letters of Credit.

              	 44
	 	 	
                7.1.1.

              	
                Officer's
                  Certificate.

              	 44
	 	 	
                7.1.2.

              	
                Secretary's
                  Certificate.

              	 44
	 	 	
                7.1.3.

              	
                Opinion
                  of Counsel.

              	 45
	 	 	
                7.1.4.

              	
                Legal
                  Details.

              	 45
	 	 	
                7.1.5.

              	
                Payment
                  of Fees.

              	 45
	 	 	
                7.1.6.

              	
                Consents.

              	 45
	 	 	
                7.1.7.

              	
                Officer's
                  Certificate Regarding MACs.

              	 45
	 	 	
                7.1.8.

              	
                No
                  Violation of Laws.

              	 45
	 	 	
                7.1.9.

              	
                No
                  Actions or Proceedings.

              	 45
	 	 	
                7.1.10.

              	
                Delivery
                  of Guaranty Agreement.

              	 46
	 	 	
                7.1.11.

              	
                Hedging
                  Contract Policies.

              	 46
	 	 	
                7.1.12.

              	
                Termination
                  of Commitments and Repayment of Outstanding Indebtedness.

              	 46
	 	
                7.2

              	
                Each
                  Additional Loan or Letter of Credit.

              	 46
	 	 	 	 	 
	
                8.

              	
                COVENANTS

              	 46
	 	
                8.1

              	
                Affirmative
                  Covenants.

              	 46
	 	 	
                8.1.1.

              	
                Preservation
                  of Existence, Etc.

              	 47
	 	 	
                8.1.2.

              	
                Payment
                  of Liabilities, Including Taxes, Etc.

              	 47
	 	 	
                8.1.3.

              	
                Maintenance
                  of Insurance.

              	 47
	 	 	
                8.1.4.

              	
                Maintenance
                  of Properties and Leases.

              	 47
	 	 	
                8.1.5.

              	
                Maintenance
                  of Patents, Trademarks, Etc.

              	 47
	 	 	
                8.1.6.

              	
                Visitation
                  Rights.

              	 47
	 	 	
                8.1.7.

              	
                Keeping
                  of Records and Books of Account.

              	 48
	 	 	
                8.1.8.

              	
                Plans
                  and Benefit Arrangements.

              	 48
	 	 	
                8.1.9.

              	
                Compliance
                  With Laws.

              	 48
	 	 	
                8.1.10.

              	
                Use
                  of Proceeds.

              	 48
	 	 	
                8.1.11.

              	
                Reserved.

              	 49
	 	
                8.2

              	
                Negative
                  Covenants.

              	 49
	 	 	
                8.2.1.

              	
                Indebtedness.

              	 49
	 	 	
                8.2.2.

              	
                Liens.

              	 50
	 	 	
                8.2.3.

              	
                Guaranties.

              	 51
	 	 	
                8.2.4.

              	
                Loans
                  and Investments.

              	 51
	 	 	
                8.2.5.

              	
                Liquidations,
                  Mergers, Consolidations, Acquisitions.

              	 51
	 	 	
                8.2.6.

              	
                Dispositions
                  of Assets or Unregulated Subsidiaries.

              	 53
	 	 	
                8.2.7.

              	
                Affiliate
                  Transactions.

              	 53
	 	 	
                8.2.8.

              	
                Subsidiaries,
                  Partnerships and Joint Ventures.

              	 54
	 	 	
                8.2.9.

              	
                Continuation
                  of or Change in Business.

              	 54
	 	 	
                8.2.10.

              	
                Plans
                  and Benefit Arrangements.

              	 54
	 	 	
                8.2.11.

              	
                Fiscal
                  Year.

              	 54
	 	 	
                8.2.12.

              	
                Maximum
                  Leverage Ratio.

              	 54

      

      
        
          iii

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	 	
                8.2.13.

              	
                Reserved.

              	 55
	 	 	
                8.2.14.

              	
                Reserved.

              	 55
	 	 	
                8.2.15.

              	
                Payment
                  of Dividends; Redemptions.

              	 55
	 	 	
                8.2.16.

              	
                Reserved.

              	 55
	 	 	
                8.2.17.

              	
                Off-Balance
                  Sheet Financing.

              	 55
	 	 	
                8.2.18.

              	
                Amendments
                  to NJR Note Agreements.

              	 55
	 	 	
                8.2.19.

              	
                No
                  Violation of Anti-Terrorism Laws.

              	 55
	 	
                8.3

              	
                Reporting
                  Requirements.

              	 56
	 	 	
                8.3.1.

              	
                Quarterly
                  Financial Statements.

              	 56
	 	 	
                8.3.2.

              	
                Annual
                  Financial Statements.

              	 56
	 	 	
                8.3.3.

              	
                Certificate
                  of the Borrower.

              	 57
	 	 	
                8.3.4.

              	
                Notice
                  of Default.

              	 57
	 	 	
                8.3.5.

              	
                Notice
                  of Litigation.

              	 57
	 	 	
                8.3.6.

              	
                Notice
                  of Change in Debt Rating.

              	 57
	 	 	
                8.3.7.

              	
                Sale
                  of Assets.

              	 58
	 	 	
                8.3.8.

              	
                Budgets,
                  Forecasts, Other Reports and Information.

              	 58
	 	 	
                8.3.9.

              	
                Notices
                  Regarding Plans and Benefit Arrangements.

              	 58
	 	 	 	 	 
	
                9.

              	
                DEFAULT

              	 60
	 	
                9.1

              	 	
                Events
                  of Default.

              	 60
	 	 	
                9.1.1.

              	
                Payments
                  Under Loan Documents.

              	 60
	 	 	
                9.1.2.

              	
                Breach
                  of Warranty.

              	 60
	 	 	
                9.1.3.

              	
                Breach
                  of Negative Covenants or Visitation Rights.

              	 60
	 	 	
                9.1.4.

              	
                Breach
                  of Other Covenants.

              	 60
	 	 	
                9.1.5.

              	
                Defaults
                  in Other Agreements or Indebtedness.

              	 60
	 	 	
                9.1.6.

              	
                Final
                  Judgments or Orders.

              	 61
	 	 	
                9.1.7.

              	
                Loan
                  Document Unenforceable.

              	 61
	 	 	
                9.1.8.

              	
                Uninsured
                  Losses; Proceedings Against Assets.

              	 61
	 	 	
                9.1.9.

              	
                Notice
                  of Lien or Assessment.

              	 61
	 	 	
                9.1.10.

              	
                Insolvency.

              	 62
	 	 	
                9.1.11.

              	
                Events
                  Relating to Plans and Benefit Arrangements.

              	 62
	 	 	
                9.1.12.

              	
                Cessation
                  of Business.

              	 62
	 	 	
                9.1.13.

              	
                Change
                  of Control.

              	 62
	 	 	
                9.1.14.

              	
                Involuntary
                  Proceedings.

              	 63
	 	 	
                9.1.15.

              	
                Voluntary
                  Proceedings.

              	 63
	 	 	
                9.1.16.

              	
                No
                  Limitation on Dividends and Distributions by Subsidiaries.

              	 63
	 	
                9.2

              	
                Consequences
                  of Event of Default.

              	 63
	 	
                9.2.1.

              	 	
                Events
                  of Default Other Than Bankruptcy, Insolvency or
                  Reorganization

              	 63
	 	 	 	
                Proceedings.

              	 63
	 	 	
                9.2.2.

              	
                Bankruptcy,
                  Insolvency or Reorganization Proceedings.

              	 64
	 	 	
                9.2.3.

              	
                Set-off.

              	 64
	 	 	
                9.2.4.

              	
                Suits,
                  Actions, Proceedings.

              	 64
	 	 	
                9.2.5.

              	
                Application
                  of Proceeds; Collateral Sharing.

              	 64
	 	 	
                9.2.6.

              	
                Other
                  Rights and Remedies.

              	 65
	 	 	 
	
                10.

              	
                THE
                  AGENT

              	 65
	 	
                10.1

              	
                Appointment.

              	 65
	 	
                10.2

              	
                Delegation
                  of Duties.

              	 65
	 	
                10.3

              	
                Nature
                  of Duties; Independent Credit Investigation.

                Actions
                  in Discretion of Agent; Instructions From the Banks.

                Reimbursement
                  and Indemnification of Agent by the Borrower.

              	 66
	 	
                10.4

              	 66
	 	
                10.5

              	 66

      

      
        
          	 	
                  10.6

                	
                  Exculpatory
                    Provisions; Limitation of Liability.

                	 67

        

      
        
          iv

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	
                10.7

              	
                Reimbursement
                  and Indemnification of Agent by Banks.

              	 68
	 	
                10.8

              	
                Reliance
                  by Agent.

                Notice
                  of Default.

                Notices.

                Banks
                  in Their Individual Capacities; Agents in Its Individual
                  Capacity.

                Holders
                  of Notes.

                Equalization
                  of Banks.

                Successor
                  Agent.

                Agent's
                  Fee.

                Availability
                  of Funds.

                Calculations.

                Beneficiaries.

                No
                  Reliance on Agent's Customer Identification Program.

              	 68
	 	
                10.9

              	 68
	 	
                10.10

              	 68
	 	
                10.11

              	 68
	 	
                10.12

              	 69
	 	
                10.13

              	 69
	 	
                10.14

              	 69
	 	
                10.15

              	 70
	 	
                10.16

              	 70
	 	
                10.17

              	 70
	 	
                10.18

              	 70
	 	
                10.19

              	 70
	 	 	 	 	 71
	
                11

              	
                MISCELLANEOUS

              	 71
	 	
                11.1

              	
                Modifications,
                  Amendments or Waivers.

              	 71
	 	
                .

              	
                11.1.1

              	
                Increase
                  of Revolving Credit Commitments; Extension of Expiration
                  Date.

              	 71
	 	 	
                11.1.2.

              	
                Release
                  of Collateral or Guarantor.

              	 71
	 	 	
                11.1.3.

              	
                Miscellaneous.

              	 72
	 	
                11.2

              	
                No
                  Implied Waivers; Cumulative Remedies; Writing Required.

              	 72
	 	
                11.3

              	
                Reimbursement
                  and Indemnification of Banks by the Borrower; Taxes.

              	 72
	 	
                11.4

              	
                Holidays.

              	 73
	 	
                11.5

              	
                Funding
                  by Branch, Subsidiary or Affiliate.

              	 73
	 	 	
                11.5.1.

              	
                Notional
                  Funding.

              	 73
	 	 	
                11.5.2.

              	
                Actual
                  Funding.

              	 73
	 	
                11.6

              	
                Notices;
                  Lending Offices.

              	 74
	 	
                11.7

              	
                Severability.

              	 74
	 	
                11.8

              	
                Governing
                  Law.

              	 75
	 	
                11.9

              	
                Prior
                  Understanding.

              	 75
	 	
                11.10

              	
                Duration;
                  Survival.

              	 75
	 	
                11.11

              	
                Successors
                  and Assigns; Joinder of a Bank.

              	 75
	 	
                11.12

              	
                Confidentiality.

              	 77
	 	 	
                11.12.1.

              	
                General.

              	 77
	 	 	
                11.12.2.

              	
                Sharing
                  Information With Affiliates of the Banks.

              	 77
	 	
                11.13

              	
                Counterparts.

              	 77
	 	
                11.14

              	
                Agent's
                  or Bank's Consent.

              	 78
	 	
                11.15

              	
                Exceptions.

              	 78
	 	
                11.16

              	
                WAIVER
                  OF JURY TRIAL.

              	 78
	 	
                11.17

              	
                JURISDICTION
                  & VENUE.

              	 78
	 	
                11.18

              	 	
                Certifications
                  From Banks and Participants.

              	 79
	 	 	
                11.18.1.

              	
                Tax
                  Withholding.

              	 79
	 	 	
                11.18.2.

              	
                USA
                  Patriot Act.

              	 79
	 	
                11.19

              	Joinder
                of Guarantors.	 80

      

      

      

      

      
        
          v

        

        
          
          

          
            

          

        

        
          
          

        

      

      LIST
        OF SCHEDULES AND EXHIBITS

       

      SCHEDULES

       

      
        	
                 

              	
                SCHEDULE
                  1.1(A)

              	
                -

              	
                PRICING
                  GRID

              

      

      
        	
                 

              	
                SCHEDULE
                  1.1(B)

              	
                -

              	
                COMMITMENTS
                  OF BANKS AND ADDRESSES FOR NOTICES

              

      

      
        	
                 

              	
                SCHEDULE
                  1.1(P)

              	
                -

              	
                PERMITTED
                  LIENS

              

      

      
        	
                 

              	
                SCHEDULE
                  6.1.2

              	
                -

              	
                SUBSIDIARIES

              

      

      
        	
                 

              	
                SCHEDULE
                  6.1.12

              	
                -

              	
                CONSENTS
                  AND APPROVALS

              

      

      
        	
                 

              	
                SCHEDULE
                  6.1.23

              	
                -

              	
                RESERVED

              

      

      
        	
                 

              	
                SCHEDULE
                  6.1.24

              	
                -

              	
                PERMITTED
                  RELATED BUSINESS OPPORTUNITIES

              

      

      
        	
                 

              	
                SCHEDULE
                  8.2.1

              	
                -

              	
                EXISTING
                  INDEBTEDNESS

              

      

      

      
        	
                 

              	
                EXHIBITS

              

      

       

      
        	
                 

              	
                EXHIBIT
                  1.1(A)

              	
                -

              	
                ASSIGNMENT
                  AND ASSUMPTION AGREEMENT

              

      

      
        	
                 

              	
                EXHIBIT
                  1.1(B)

              	
                -

              	
                BANK
                  JOINDER

              

      

      
        	
                 

              	
                EXHIBIT
                  1.1(G)(1)

              	
                -

              	
                GUARANTOR
                  JOINDER

              

      

      
        	
                 

              	
                EXHIBIT
                  1.1(G)(2)

              	
                -

              	
                GUARANTY
                  AGREEMENT

              

      

      
        	
                 

              	
                EXHIBIT
                  1.1(R)

              	
                -

              	
                REVOLVING
                  CREDIT NOTE

              

      

      
        	
                 

              	
                EXHIBIT
                  1.1(S)

              	
                -

              	
                SWING
                  LOAN NOTE

              

      

      
        	
                 

              	
                EXHIBIT
                  2.4

              	
                -

              	
                LOAN
                  REQUEST

              

      

      
        	
                 

              	
                EXHIBIT
                  2.5

              	
                -

              	
                SWING
                  LOAN REQUEST

              

      

      
        	
                 

              	
                EXHIBIT
                  5.5

              	
                -

              	
                COMMITMENT
                  REDUCTION NOTICE

              

      

      
        	
                 

              	
                EXHIBIT
                  7.1.3(A)

              	
                -

              	
                OPINION
                  OF COUNSEL

              

      

      
        	
                 

              	
                EXHIBIT
                  7.1.3(B)

              	
                -

              	
                OPINION
                  OF IN-HOUSE COUNSEL

              

      

      
        	
                 

              	
                EXHIBIT
                  8.2.5

              	
                -

              	
                ACQUISITION
                  COMPLIANCE CERTIFICATE

              

      

      
        	
                 

              	
                EXHIBIT
                  8.3.3

              	
                -

              	
                COMPLIANCE
                  CERTIFICATE

              

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      CREDIT
        AGREEMENT

       

      THIS
        CREDIT AGREEMENT is dated as of December 13, 2007 and is made by and among
NEW JERSEY RESOURCES CORPORATION, a New Jersey corporation (the
        "Borrower"), EACH OF THE GUARANTORS (as hereinafter defined),
        the BANKS (as hereinafter defined), JPMORGAN CHASE
        BANK, N.A. and BANK OF AMERICA,
        N.A., each in its capacity as a syndication
        agent, CITIBANK, N.A. and THE BANK OF NOVA
        SCOTIA, each in its capacity as a documentation agent, and PNC
        BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for
        the Banks under this Agreement (hereinafter referred to in such capacity
        as the
        "Agent").

       

      WITNESSETH:

       

      WHEREAS,
        the Borrower has requested the Banks to provide a revolving credit facility
        to
        the Borrower in an aggregate principal amount not to exceed $325,000,000;
        and

       

      WHEREAS,
        the revolving credit facility shall be used for refinancing existing
        indebtedness and general corporate purposes of the Borrower; and

       

      WHEREAS,
        the Banks are willing to provide such credit upon the terms and conditions
        hereinafter set forth;

       

      NOW,
        THEREFORE, the parties hereto, in consideration of their mutual covenants
        and
        agreements hereinafter set forth and intending to be legally bound hereby,
        covenant and agree as follows:

       

       

      1.           CERTAIN
        DEFINITIONS

       

      1.1  Certain
        Definitions.

       

      In
        addition to words and terms defined elsewhere in this Agreement, the following
        words and terms shall have the following meanings, respectively, unless the
        context hereof clearly requires otherwise:

       

      Acquired
        Person shall mean a Person or business acquired by any Loan Party in a
        transaction which is a Permitted Acquisition.

       

      Acquisition
        Compliance Certificate shall have the meaning assigned to that term in
        Section 8.2.5.

       

      Additional
        Bank shall have the meaning assigned to that term in
        Section 11.11(iv).

       

      Affiliate
        as to any Person shall mean any other Person (i) which directly or
        indirectly controls, is controlled by, or is under common control with such
        Person, (ii) which beneficially owns or holds 10% or more of any class of
        the voting or other equity interests of such Person, or (iii) 10% or more
        of any class of voting interests or other equity interests of which is
        beneficially owned or held, directly or indirectly, by such
        Person.  Control, as used in this definition, shall mean the
        possession, directly or indirectly, of the power to direct or cause the
        direction of the management or policies of a Person, whether through the
        ownership of voting securities, by contract or otherwise, including the power
        to
        elect a majority of the directors or trustees of a corporation or trust,
        as the
        case may be.

       

      Agent
        shall mean PNC Bank, National Association, and its successors and
        assigns.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      Agent's
        Fee shall have the meaning assigned to that term in
        Section 10.15.

       

      Agent's
        Letter shall have the meaning assigned to that term in
        Section 10.15.

       

      Agreement
        shall mean this Credit Agreement, as the same may be supplemented or amended
        from time to time, including all schedules and exhibits.

       

      Anti-Terrorism
        Laws shall mean any Laws relating to terrorism or money laundering,
        including Executive Order No. 13224, the USA Patriot Act, the Laws comprising
        or
        implementing the Bank Secrecy Act, and the Laws administered by the United
        States Treasury Department's Office of Foreign Asset Control (as any of the
        foregoing Laws may from time to time be amended, renewed, extended, or
        replaced).

       

      Applicable
        Facility Fee Rate shall mean the percentage rate per annum at the indicated
        level of Debt Rating in the pricing grid on Schedule 1.1(A)
        below the heading "Facility Fee."  The Applicable Facility Fee
        Rate shall be computed in accordance with the parameters set forth on
Schedule 1.1(A).

       

      Applicable
        Letter of Credit Fee Rate shall mean the percentage rate per annum at the
        indicated level of Debt Rating in the pricing grid on Schedule
1.1(A) below the heading "Letter of Credit
        Fee."  The Applicable Letter of Credit Fee Rate shall be computed
        in accordance with the parameters set forth on Schedule
1.1(A).

       

      Applicable
        Margin shall mean, as applicable:

       

      (A)           the
        percentage spread to be added to Base Rate under the Base Rate Option at
        the
        indicated level of Debt Rating in the pricing grid on Schedule
1.1(A) below the heading "Base Rate Spread"
        or

       

      (B)           the
        percentage spread to be added to LIBOR Rate under the LIBOR Rate Option at
        the
        indicated level of Debt Rating in the pricing grid on Schedule
1.1(A) below the heading "LIBOR Rate
        Spread."

       

      The
        Applicable Margin shall be computed in accordance with the parameters set
        forth
        on Schedule 1.1(A).

       

      Approved
        Fund shall mean, with respect to any Bank, any Person (other than a natural
        person) that is engaged in making, purchasing, holding or investing in bank
        loans and similar extensions of credit in the ordinary course of its business
        and that is administered by such Bank, an Affiliate of such Bank or an entity
        or
        an Affiliate of an entity that administers or manages such Bank.

       

      Assignment
        and Assumption Agreement shall mean an Assignment and Assumption Agreement
        by and among a Purchasing Bank, a Transferor Bank and the Agent, as Agent
        and on
        behalf of the remaining Banks, substantially in the form of Exhibit
1.1(A).

       

      Authorized
        Officer shall mean those individuals, designated by written notice to the
        Agent from the Borrower, authorized to execute notices, reports and other
        documents on behalf of the Loan Parties required hereunder.  The
        Borrower may amend such list of individuals from time to time by giving written
        notice of such amendment to the Agent.

       

      Bank
        Joinder shall mean a Bank Joinder substantially in the form of
Exhibit 1.1(B).

       

      Bank
        Provided Interest Rate Hedge shall mean an Interest Rate Hedge which is
        provided by any Bank and that meets the following requirements:  such
        Interest Rate Hedge (i) is documented in a standard International Swap Dealer
        Association Agreement, (ii) provides for the method of calculating the
        reimbursable

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      amount
        of the provider's credit exposure in a reasonable and customary manner, and
        (iii) is entered into for hedging (rather than speculative)
        purposes.  The liabilities of the Loan Parties to the provider of any
        Bank-Provided Interest Rate Hedge shall be "Obligations" hereunder, guaranteed
        obligations under the Guaranty Agreement and otherwise treated as Obligations
        for purposes of each of the other Loan Documents.

       

      Banks
        shall mean the financial institutions named on Schedule
1.1(B) and their respective successors and assigns as
        permitted hereunder, each of which is referred to herein as a Bank.

       

      Base
        Rate shall mean the greater of (i) the interest rate per annum
        announced from time to time by the Agent at its Principal Office as its then
        prime rate, which rate may not be the lowest rate then being charged commercial
        borrowers by the Agent, or (ii) the Federal Funds Open Rate plus 1/2% per
        annum.

       

      Base
        Rate Option shall mean the option of the Borrower to have Revolving Credit
        Loans bear interest at the rate and under the terms and conditions set forth
        in
        Section 4.1.1(i).

       

      Benefit
        Arrangement shall mean at any time an "employee benefit plan" within the
        meaning of Section 3(3) of ERISA, which is neither a Plan nor a
        Multiemployer Plan and which is maintained, sponsored or otherwise contributed
        to by any member of the ERISA Group.

       

      Blocked
        Person shall have the meaning assigned to such term in Subsection
        6.1.25.

       

      Borrower
        shall mean New Jersey Resources Corporation, a corporation organized and
        existing under the laws of the State of New Jersey.

       

      Borrowing
        Date shall mean, with respect to any Loan, the date for the making thereof
        or the renewal or conversion thereof at or to the same or a different Interest
        Rate Option, which shall be a Business Day.

       

      Borrowing
        Tranche shall mean specified portions of Loans outstanding as
        follows:  (i) any Loans to which a LIBOR Rate Option applies
        which become subject to the same Interest Rate Option under the same Loan
        Request by the Borrower and which have the same Interest Period shall constitute
        one Borrowing Tranche, and (ii) all Loans to which a Base Rate Option
        applies shall constitute one Borrowing Tranche.

       

      Business
        Day shall mean any day other than a Saturday or Sunday or a legal holiday
        on
        which commercial banks are authorized or required to be closed for business
        in
        Pittsburgh, Pennsylvania and if the applicable Business Day relates to any
        Loan
        to which the LIBOR Rate Option applies, such day must also be a day on which
        dealings are carried on in the London interbank market.

       

      Closing
        Date shall mean the Business Day on which the first Loan shall be made,
        which shall be December 13, 2007.  The closing shall take place
        on the Closing Date at such time and place as the parties agree.

       

      Commercial
        Letter of Credit shall mean any letter of credit which is issued in respect
        of the purchase of goods or services by one or more of the Loan Parties in
        the
        ordinary course of their business.

       

      Commitment
        shall mean, as to any Bank, its Revolving Credit Commitment and, in the case
        of
        the Agent, its Swing Loan Commitment, and Commitments shall mean the
        aggregate of the Revolving Credit Commitments and Swing Loan Commitment of
        all
        of the Banks.

       

      Compliance
        Certificate shall have the meaning assigned to such term in Section 8.3.3.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      Consideration
        shall mean with respect to any Permitted Acquisition, the aggregate of
        (i) the cash paid by any of the Loan Parties, directly or indirectly, to
        the seller in connection therewith, (ii) the Indebtedness incurred or
        assumed by any of the Loan Parties, whether in favor of the seller or otherwise
        and whether fixed or contingent, (iii) any Guaranty given or incurred by
        any Loan Party in connection therewith, and (iv) any other consideration
        given or obligation incurred by any of the Loan Parties in connection
        therewith.

       

      Consolidated
        Shareholders' Equity shall mean as of any date of determination the sum of
        the amounts of common shareholders' equity and preferred shareholders' equity
        on
        the balance sheet, prepared in accordance with GAAP, for the Borrower and
        its
        Subsidiaries on a consolidated basis as of such date of
        determination.

       

      Consolidated
        Total Capitalization shall mean as of any date of determination the sum of
        (i) Consolidated Total Indebtedness, plus (ii) Consolidated
        Shareholders' Equity.

       

      Consolidated
        Total Indebtedness shall mean as of any date of determination total
        Indebtedness (excluding non-recourse Indebtedness of Project Subsidiaries),
        without duplication, of the Borrower and its Subsidiaries.

       

      Contamination
        shall mean the presence or release or threat of release of Regulated Substances
        in, on, under or migrating to or from the Property, which pursuant to
        Environmental Laws requires notification or reporting to an Official Body,
        or
        which pursuant to Environmental Laws requires the performance of a Remedial
        Action or which otherwise constitutes a violation of Environmental
        Laws.

       

      Debt
        Rating shall mean the rating of New Jersey Natural Gas's senior secured
        long-term debt by each of Standard & Poor's and Moody's.

       

      Dollar,
        Dollars, U.S. Dollars and the symbol $ shall mean lawful money of the
        United States of America.

       

      Drawing
        Date shall have the meaning assigned to that term in
        Section 2.9.3.2.

       

      Environmental
        Complaint shall mean any (i) written notice of non-compliance or
        violation, citation or order relating in any way to any Environmental Law,
        Environmental Permit, Contamination or Regulated Substance; (ii) civil,
        criminal, administrative or regulatory investigation instituted by an Official
        Body relating in any way to any Environmental Law, Environmental Permit,
        Contamination or Regulated Substance; (iii) administrative, regulatory or
        judicial action, suit, claim or proceeding instituted by any Person or Official
        Body or any other written notice of liability or potential liability from
        any
        Person or Official Body, in either instance, relating to or setting forth
        allegations or a cause of action for personal injury (including but not limited
        to death), property damage, natural resource damage, contribution or indemnity
        for the costs associated with the performance of Remedial Actions, direct
        recovery for the costs associated with the performance of Remedial Actions,
        liens or encumbrances attached to or recorded or levied against property
        for the
        costs associated with the performance of Remedial Actions, civil or
        administrative penalties, criminal fines or penalties or declaratory or
        equitable relief arising under any Environmental Laws; or (iv) subpoena,
        request
        for information or other written notice or demand of any type issued by an
        Official Body pursuant to any Environmental Laws.

       

      Environmental
        Laws shall mean all federal, tribal, state, local and foreign Laws
        (including, but not limited to, the Comprehensive Environmental Response,
        Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq., the Resource
        Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Hazardous
        Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Toxic
        Substances Control Act, 15 U.S.C. § 2601 et seq., the Federal Water
        Pollution Control Act, 33 U.S.C. §§ 1251 et seq., the Federal Safe Drinking
        Water Act, 42 U.S.C. §§ 300f-300j, the Federal Air Pollution Control Act,
        42 U.S.C. § 7401 et seq., the Oil Pollution Act, 33 U.S.C. § 2701 et
        seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
§§ 136 to 136y, the Occupational

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      Safety
        and Health Act, 29 U.S.C. § 651 et seq., each as amended, and any
        regulations promulgated or any equivalent state or local Law, and any amendments
        thereto)  and any consent decrees, consent orders, consent agreements,
        settlement agreements, judgments, orders, directives, policies or programs
        issued by or entered into with an Official Body pertaining or relating to:
        (i) pollution or pollution control; (ii) protection of human health
        from exposure to Regulated Substances; (iii) protection of the environment
        and/or natural resources; (iv) protection of employee safety in the
        workplace and protection of employees from exposure to Regulated Substances
        in
        the workplace (but excluding workers compensation and wage and hour Laws);
        (v) the presence, use, management, generation, manufacture, processing,
        extraction, treatment, recycling, refining, reclamation, labeling, sale,
        transport, storage, collection, distribution, disposal or release or threat
        of
        release of Regulated Substances; (vi) the presence of Contamination;
        (vii) the protection of endangered or threatened species; and
        (viii) the protection of Environmentally Sensitive Areas.

       

      Environmental
        Permits shall mean all permits, licenses, bonds or other forms of financial
        assurances, waivers, exemptions, consents, registrations, identification
        numbers, approvals or authorizations required under Environmental Laws
        (i) to own, occupy or maintain the Property; (ii) for the operations
        and business activities of any Loan Party; or (iii) for the performance of
        a Remedial Action.

       

      Environmental
        Records shall mean all notices, reports, records, plans, applications, forms
        or other filings relating or pertaining to the Property, Contamination, the
        performance of a Remedial Action and the operations and business activities
        of
        any Loan Party which pursuant to Environmental Laws, Environmental Permits
        or at
        the request or direction of an Official Body either must be submitted to
        an
        Official Body or which otherwise must be maintained.

       

      Environmentally
        Sensitive Area shall mean (i) any wetland as defined by applicable
        Environmental Laws; (ii) any area designated as a coastal zone pursuant to
        applicable Laws, including Environmental Laws; (iii) any area of historic
        or archeological significance or scenic area as defined or designated by
        applicable Laws, including Environmental Laws; (iv) habitats of endangered
        species or threatened species as designated by applicable Laws, including
        Environmental Laws; or (v) a floodplain or other flood hazard area as
        defined pursuant to any applicable Laws.

       

      ERISA
        shall mean the Employee Retirement Income Security Act of 1974, as the same
        may
        be amended or supplemented from time to time, and any successor statute of
        similar import, and the rules and regulations thereunder, as from time to
        time
        in effect.

       

      ERISA
        Group shall mean, at any time, the Borrower and all members of a controlled
        group of corporations and all trades or businesses (whether or not incorporated)
        under common control and all other entities which, together with the Borrower,
        are treated as a single employer under Section 414 of the Internal Revenue
        Code.

       

      Event
        of Default shall mean any of the events described in Section 9.1 and referred to therein as an "Event of
        Default."

       

      Executive
        Order No. 13224 shall mean the Executive Order No. 13224 on Terrorist
        Financing, effective September 24, 2001, as the same has been, or shall
        hereafter be, renewed, extended, amended or replaced.

       

      Existing
        Credit Facility shall mean that certain Credit Agreement among the Borrower,
        the guarantors party thereto, the banks party thereto, Fleet National Bank
        and
        SunTrust Bank, each in its capacity as a syndication agent, Bank of
        Tokyo-Mitsubishi Trust Company and JPMorgan Chase Bank NA, previously known
        as
        JPMorgan Chase Bank, each in its capacity as a documentation agent, Bank
        One,
        NA, Citizens Bank of Massachusetts and The Bank of New York, each in its
        capacity as a co-agent, and PNC Bank, National
        Association,

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      in
        its capacity as administrative agent for the Banks, dated December 16, 2004
        (as amended by that certain First Amendment, dated November 15,
        2005).

       

      Expiration
        Date shall mean December 13, 2012.

       

      Facility
        Fees collectively and Facility Feeseparately shall have the meaning
        given to such terms in Section 2.3.

       

      Federal
        Funds Effective Rate for any day shall mean the rate per annum (based on a
        year of 360 days and actual days elapsed and rounded upward to the nearest
        1/100
        of 1%) announced by the Federal Reserve Bank of New York (or any successor)
        on
        such day as being the weighted average of the rates on overnight federal
        funds
        transactions arranged by federal funds brokers on the previous trading day,
        as
        computed and announced by such Federal Reserve Bank (or any successor) in
        substantially the same manner as such Federal Reserve Bank computes and
        announces the weighted average it refers to as the "Federal Funds Effective
        Rate" as of the date of this Agreement; provided, if such Federal Reserve
        Bank (or its successor) does not announce such rate on any day, the "Federal
        Funds Effective Rate" for such day shall be the Federal Funds Effective Rate
        for
        the last day on which such rate was announced.

       

      Federal
        Funds Open Rate for any day shall mean the rate per annum (based on a year
        of 360 days and actual days elapsed) which is the daily federal funds open
        rate
        as quoted by ICAP North America, Inc. (or any successor) as set forth on
        the
        Bloomberg Screen BTMM for that day opposite the caption "OPEN" (or on such
        other
        substitute Bloomberg Screen that displays such rate), or as set forth on
        such
        other recognized electronic source used for the purpose of displaying such
        rate
        as selected by the Agent (an "Alternate Source") (or if such rate for
        such day does not appear on the Bloomberg Screen BTMM (or any substitute
        screen)
        or on any Alternate Source, or if there shall at any time, for any reason,
        no
        longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate
        Source, a comparable replacement rate determined by the Agent at such time
        (which determination shall be conclusive absent manifest error); provided
        however, that if such day is not a Business Day, the Federal Funds Open Rate
        for
        such day shall be the "open" rate on the immediately preceding Business
        Day.  If and when the Federal Funds Open Rate changes, the rate of
        interest with respect to any advance to which the Federal Funds Open Rate
        applies will change automatically without notice to the Borrower, effective
        on
        the date of any such change.

       

      GAAP
        shall mean generally accepted accounting principles as are in effect in the
        United States from time to time, subject to the provisions of Section 1.3,
        and applied on a consistent basis both as to classification of items and
        amounts.

       

      Governmental
        Acts shall have the meaning assigned to that term in
        Section 2.9.8.

       

      Guarantor
        shall mean each of the parties to this Agreement which is designated as a
        "Guarantor" on the signature page hereof and each other Person which joins
        this
        Agreement as a Guarantor after the date hereof pursuant to Section 11.19; provided, however, that the Project
        Subsidiaries shall not be designated as a "Guarantor" nor required to join
        this
        Agreement as a Guarantor pursuant to Section 11.19.

       

      Guarantor
        Joinder shall mean a joinder by a Person as a Guarantor under this
        Agreement, the Guaranty Agreement and the other Loan Documents in the form
        of
Exhibit 1.1(G)(1).

       

      Guaranty
        of any Person shall mean any obligation of such Person guaranteeing or in
        effect
        guaranteeing any liability or obligation of any other Person in any manner,
        whether directly or indirectly, including any agreement to indemnify or hold
        harmless any other Person, any performance bond or other suretyship arrangement
        and any other form of assurance against loss, except endorsement of negotiable
        or other instruments for deposit or collection in the ordinary course of
        business.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      Guaranty
        Agreement shall mean the Guaranty and Suretyship Agreement in substantially
        the form of Exhibit 1.1(G)(2) executed and delivered by
        each of the Guarantors to the Agent for the benefit of the Banks.

       

      Hedging
        Contract Policies shall mean the written internal policies and procedures
        with respect to hedging or trading of gas contracts or other commodity, hedging
        contracts of any kind, or any derivatives or other similar financial instruments
        of the Borrower and its Subsidiaries, as in effect on the date of this
        Agreement, a copy of which has been delivered to the Agent and each Bank.
        

       

      Hedging
        Transaction shall mean any transaction entered into by a Loan Party or any
        of its Subsidiaries in accordance with the Hedging Contract Policies, as
        the
        same may be amended, restated, modified, or supplemented from time to
        time.

       

      Historical
        Statements shall have the meaning assigned to that term in
        Section 6.1.8.1.

       

      Hybrid
        Security shall mean any of the following:  (i) beneficial
        interests issued by a trust which constitutes a Subsidiary of any Loan Party,
        substantially all of the assets of which trust are unsecured Indebtedness
        of any
        Loan Party or any Subsidiary of any Loan Party or proceeds thereof, and all
        payments of which Indebtedness are required to be, and are, distributed to
        the
        holders of beneficial interests in such trust promptly after receipt by such
        trust, or (ii) any shares of capital stock or other equity interest that,
        other
        than solely at the option of the issuer thereof, by their terms (or by the
        terms
        of any security into which they are convertible or exchangeable) are, or
        upon
        the happening of an event or the passage of time would be, required to be
        redeemed or repurchased, in whole or in part, or have, or upon the happening
        of
        an event or the passage of time would have, a redemption or similar
        payment.

       

      Inactive
        Subsidiary shall mean, at any time, any Subsidiary of any Person, which
        Subsidiary (i) does not conduct any business or have operations, and
        (ii) does not have total assets with a net book value, as of any date of
        determination, in excess of $100,000.

       

      Indebtedness
        shall mean, as to any Person at any time, any and all indebtedness, obligations
        or liabilities (whether matured or unmatured, liquidated or unliquidated,
        direct
        or indirect, absolute or contingent, or joint or several) of such Person
        for or
        in respect of:  (i) borrowed money, (ii) amounts raised
        under or liabilities in respect of any note purchase or acceptance credit
        facility, (iii) reimbursement obligations (contingent or otherwise) under
        any letter of credit, currency swap agreement, interest rate swap, cap, collar
        or floor agreement or other interest rate or currency exchange rate management
        device, (iv) any other transaction (including forward sale or purchase
        agreements, capitalized leases and conditional sales agreements) having the
        commercial effect of a borrowing of money entered into by such Person to
        finance
        its operations or capital requirements (but not including trade payables
        and
        accrued expenses incurred in the ordinary course of business which are not
        represented by a promissory note or other evidence of indebtedness and which
        are
        not more than thirty (30) days past due), (v) any Hedging Transaction, to
        the extent that any net indebtedness, obligations or liabilities of such
        Person
        in respect thereof constitutes "indebtedness" as determined in accordance
        with
        GAAP, (vi) any Guaranty of any Hedging Transaction described in the
        immediately preceding clause (v), (vii) any Guaranty of Indebtedness for
        borrowed money, (viii) any Hybrid Security described in clause (i) of the
        definition of Hybrid Security, or (ix) the mandatory repayment obligation
        of the issuer of any Hybrid Security described in clause (ii) of the definition
        of Hybrid Security.

       

      Ineligible
        Security shall mean any security which may not be underwritten or dealt in
        by member banks of the Federal Reserve System under Section 16 of the
        Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
        amended.

       

      Insolvency
        Proceeding shall mean, with respect to any Person, (a) a case, action
        or proceeding with respect to such Person (i) before any court or any other
        Official Body under any bankruptcy,

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      insolvency,
        reorganization or other similar Law now or hereafter in effect, or (ii) for
        the appointment of a receiver, liquidator, assignee, custodian, trustee,
        sequestrator, conservator (or similar official) of such Person or otherwise
        relating to the liquidation, dissolution, winding-up or relief of such Person,
        or (b) any general assignment for the benefit of creditors, composition,
        marshaling of assets for creditors, or other, similar arrangement in respect
        of
        such Person's creditors generally or any substantial portion of its creditors;
        undertaken under any Law.

       

      Interest
        Period shall mean the period of time selected by the Borrower in connection
        with (and to apply to) any election permitted hereunder by the Borrower to
        have
        Revolving Credit Loans bear interest under the LIBOR Rate
        Option.  Subject to the last sentence of this definition, such period
        shall be one, two, three or six Months, and solely with approval of the Agent
        a
        shorter period.  Such Interest Period shall commence on the effective
        date of such Interest Rate Option, which shall be (i) the Borrowing Date if
        the Borrower is requesting new Loans, or (ii) the date of renewal of or
        conversion to the LIBOR Rate Option if the Borrower is renewing or converting
        to
        the LIBOR Rate Option applicable to outstanding
        Loans.  Notwithstanding the second sentence
        hereof:  (A) any Interest Period which would otherwise end on a
        date which is not a Business Day shall be extended to the next succeeding
        Business Day unless such Business Day falls in the next calendar month, in
        which
        case such Interest Period shall end on the next preceding Business Day, and
        (B) the Borrower shall not select, convert to or renew an Interest Period
        for any portion of the Loans that would end after the Expiration
        Date.

       

      IRH
        Provider shall have the meaning assigned to such term in Section 9.2.5.2 [Collateral Sharing].

       

      Interest
        Rate Hedge shall mean an interest rate exchange, collar, cap, swap,
        adjustable strike cap, adjustable strike corridor or similar agreements entered
        into by the Loan Parties or their Subsidiaries in order to provide protection
        to, or minimize the impact upon, the Borrower, any other Loan Party and/or
        their
        Subsidiaries of increasing floating rates of interest applicable to
        Indebtedness.

       

      Interest
        Rate Option shall mean any LIBOR Rate Option or Base Rate
        Option.

       

      Internal
        Revenue Code shall mean the Internal Revenue Code of 1986, as the same may
        be amended or supplemented from time to time, and any successor statute of
        similar import, and the rules and regulations thereunder, as from time to
        time
        in effect.

       

      Investment
        shall have the meaning assigned to that term in Section 8.2.4.

       

      Labor
        Contracts shall mean all employment agreements, employment contracts,
        collective bargaining agreements and other agreements among any Loan Party
        or
        Subsidiary of a Loan Party and its employees.

       

      Law
        shall mean any law (including common law), constitution, statute, treaty,
        regulation, rule, ordinance, opinion, release, ruling, order, injunction,
        writ,
        decree, bond, judgment, authorization or approval, lien or award of or
        settlement agreement with any Official Body.

       

      Letter
        of Credit shall have the meaning assigned to that term in
        Section 2.9.1.

       

      Letter
        of Credit Borrowing shall have the meaning assigned to such term in Section
        2.9.3.4.

       

      Letter
        of Credit Fee shall have the meaning assigned to that term in
        Section 2.9.2.

       

      Letters
        of Credit Outstanding shall mean at any time the sum of (i) the
        aggregate undrawn face amount of outstanding Letters of Credit, and
        (ii) the aggregate amount of all unpaid and outstanding Reimbursement
        Obligations and Letter of Credit Borrowings.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      LIBOR
        Rate shall mean, with respect to the Loans comprising any Borrowing Tranche
        to which the LIBOR Rate Option applies for any Interest Period, the interest
        rate per annum determined by the Agent by dividing (the resulting quotient
        rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i)
        the
        rate which appears on the Bloomberg Page BBAM1 (or on such other substitute
        Bloomberg page that displays rates at which US dollar deposits are offered
        by
        leading banks in the London interbank deposit market), or the rate which
        is
        quoted by another source selected by the Agent which has been approved by
        the
        British Bankers' Association as an authorized information vendor for the
        purpose
        of displaying rates at which U.S. Dollar deposits are offered by leading
        banks
        in the London interbank deposit market (an "Alternate Source"), at
        approximately 11:00 a.m., London time, two (2) Business Days prior to the
        commencement of such Interest Period as the London interbank offered rate
        for
        U.S. Dollars for an amount comparable to such Borrowing Tranche and having
        a
        borrowing date and a maturity comparable to such Interest Period (or if there
        shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1
        (or
        any substitute page) or any Alternate Source, a comparable replacement rate
        determined by the Administrative Agent at such time (which determination
        shall
        be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus
        the
        LIBOR Reserve Rate Percentage.  LIBOR may also be expressed by the
        following formula:

       

      Average
        of London interbank offered rates quoted

       

      by
        Bloomberg or appropriate successor as shown on

       

      
        	
                 

              	
                LIBOR
                  =

              	
                Bloomberg
                  Page BBAM1

              

      

       

      
        	
                 

              	
                1.00
                  - LIBOR Reserve Rate Percentage

              

      

       

      The
        LIBOR Rate shall be adjusted with respect to any Loan to which the LIBOR
        Rate
        Option applies that is outstanding on the effective date of any change in
        the
        LIBOR Rate Reserve Percentage as of such effective date.  The Agent
        shall give prompt notice to the Borrower of the LIBOR Rate as determined
        or
        adjusted in accordance herewith, which determination shall be conclusive
        absent
        manifest error.

       

      LIBOR
        Rate Option shall mean shall mean the option of the Borrower to have Loans
        bear interest at the rate and under the terms set forth in
        Section 4.1.1(ii) [Revolving Credit LIBOR Rate Option].

       

      LIBOR
        Rate Reserve Percentage shall mean as of any day the maximum percentage in
        effect on such day, as prescribed by the Board of Governors of the Federal
        Reserve System (or any successor) for determining the reserve requirements
        (including supplemental, marginal and emergency reserve requirements) with
        respect to eurocurrency funding (currently referred to as "Eurocurrency
        Liabilities").

       

      Lien
        shall mean any mortgage, deed of trust, pledge, lien, security interest,
        charge
        or other encumbrance or security arrangement of any nature whatsoever, whether
        voluntarily or involuntarily given, including any conditional sale or title
        retention arrangement, and any assignment, deposit arrangement or lease intended
        as, or having the effect of, security and any filed financing statement or
        other
        notice of any of the foregoing (whether or not a lien or other encumbrance
        is
        created or exists at the time of the filing).

       

      LLC
        Interests shall have the meaning given to such term in
        Section 6.1.2.

       

      Loan
        Documents shall mean this Agreement, the Agent's Letter, the Guaranty
        Agreement, the Notes (if any) and any other instruments, certificates or
        documents delivered or contemplated to be delivered hereunder or thereunder
        or
        in connection herewith or therewith, as the same may be supplemented or amended
        from time to time in accordance herewith or therewith, and Loan Document
        shall mean any of the Loan Documents.

       

      Loan
        Parties shall mean the Borrower and the Guarantors.

       

      Loan
        Request shall mean a request for a Revolving Credit Loan or a request to
        select, convert to or renew a Base Rate Option or LIBOR Rate Option with
        respect
        to an outstanding Revolving Credit Loan in accordance with Sections 2.4,
        2.5,
        4.1 and 4.2.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      Loans
        shall mean collectively and Loan shall mean separately all Revolving
        Credit Loans and Swing Loans or any Revolving Credit Loan or Swing
        Loan.

       

      Material
        Adverse Change shall mean any set of circumstances or events which
        (i) has or could reasonably be expected to have any material adverse effect
        whatsoever upon the validity or enforceability of this Agreement or any other
        Loan Document, (ii) is or could reasonably be expected to be material and
        adverse to the business, properties, assets, financial condition, results
        of
        operations or prospects of the Loan Parties taken as a whole, (iii) impairs
        materially or could reasonably be expected to impair materially the ability
        of
        the Loan Parties taken as a whole to duly and punctually pay and perform
        the
        Obligations in accordance with the Loan Documents, or (iv) impairs
        materially or could reasonably be expected to impair materially the ability
        of
        the Agent or any of the Banks, to the extent permitted, to enforce their
        legal
        remedies pursuant to this Agreement or any other Loan Document.

       

      Month,
        with respect to an Interest Period under the LIBOR Rate Option, shall mean
        the
        interval between the days in consecutive calendar months numerically
        corresponding to the first day of such Interest Period.  If any LIBOR
        Rate Interest Period begins on a day of a calendar month for which there
        is no
        numerically corresponding day in the month in which such Interest Period
        is to
        end, the final month of such Interest Period shall be deemed to end on the
        last
        Business Day of such final month.

       

      Moody's
        shall mean Moody's Investors Service, Inc. and its successors.

       

      Mortgage
        Indenture shall mean that certain Indenture of Mortgage and Deed of Trust
        dated April 1, 1952 from New Jersey Natural Gas Company to BNY Midwest
        Trust Company, as successor to Harris Trust and Savings Bank, Trustee, as
        heretofore and hereafter amended, modified and supplemented.

       

      Multiemployer
        Plan shall mean any employee benefit plan which is a "multiemployer plan"
        within the meaning of Section 4001(a)(3) of ERISA and to which the Borrower
        or any member of the ERISA Group is then making or accruing an obligation
        to
        make contributions or, within the preceding five Plan years, has made or
        had an
        obligation to make such contributions.

       

      Multiple
        Employer Plan shall mean a Plan which has two or more contributing sponsors
        (including the Borrower or any member of the ERISA Group) at least two of
        whom
        are not under common control, as such a plan is described in Sections 4063
        and 4064 of ERISA.

       

      New
        Jersey Natural Gas shall mean New Jersey Natural Gas Company, a corporation
        organized and existing under the laws of the State of New Jersey, which
        corporation is a Subsidiary of the Borrower.

       

      NJNG
        Credit Agreement shall mean that certain Credit Agreement, dated as of
        December 16, 2004, among New Jersey Natural Gas, as the borrower, JPMorgan
        Chase Bank NA and Fleet National Bank, each as syndication agent, Bank of
        Tokyo-Mitsubishi Trust Company and Citicorp North America, Inc., each as
        documentation agent, PNC Bank, National Association, as
        the administrative agent, and the Banks party thereto, as the same has been
        amended and may be further restated, amended, modified or supplemented from
        time
        to time.

       

      NJR
        Note Agreements shall mean the Note Purchase Agreements, dated March 15,
        2004 and September 24, 2007, respectively, by and among the Borrower and
        the
        respective purchasers party thereto, as the same may be supplemented, amended,
        or modified from time to time as permitted by Section 8.2.18 [Amendments
        to NJR
        Note Agreements] hereof.

       

      NJR
        Notes shall mean the unsecured Indebtedness issued by the Borrower pursuant
        to the NJR Note Agreements.

       

      Notes
        shall mean the Revolving Credit Notes and Swing Loan Note, if any.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      Notices
        shall have the meaning assigned to that term in Section 11.6.

       

      Obligations
        shall mean any obligation or liability of any of the Loan Parties to the
        Agent
        or any of the Banks, howsoever created, arising or evidenced, whether direct
        or
        indirect, absolute or contingent, now or hereafter existing, or due or to
        become
        due, under or in connection with this Agreement, any
        Notes, the Letters of Credit, the Agent's Letter or any
        other Loan Document.  Obligations shall include the liabilities to any
        Bank under any Bank-Provided Interest Rate Hedge but shall not include the
        liabilities to other Persons under any other Interest Rate Hedge.

       

      Official
        Body shall mean any national, federal, state, local or other government or
        political subdivision or any agency, authority, board, bureau, central bank,
        commission, department or instrumentality of either, or any court, tribunal,
        grand jury or arbitrator, in each case whether foreign or domestic.

       

      Participation
        Advance shall mean, with respect to any Bank, such Bank's payment in respect
        of its participation in a Letter of Credit Borrowing according to its Ratable
        Share pursuant to Section 2.9.3.4.

       

      Partnership
        Interests shall have the meaning given to such term in
        Section 6.1.2.

       

      PBGC
        shall mean the Pension Benefit Guaranty Corporation established pursuant
        to
        Subtitle A of Title IV of ERISA or any successor.

       

      Permitted
        Acquisitions shall have the meaning assigned to such term in Section 8.2.5 [Liquidations, Mergers, Consolidations,
        Acquisitions].

       

      Permitted
        Investments shall mean:

       

      (i)           direct
        obligations of the United States of America or any agency or instrumentality
        thereof or obligations backed by the full faith and credit of the United
        States
        of America maturing in twelve (12) months or less from the date of
        acquisition;

       

      (ii)           repurchase
        agreements having a duration of not more than sixty (60) days that are
        collateralized by full faith and credit obligations of the United States
        Government or obligations guaranteed by the United States Government and
        its
        agencies;

       

      (iii)           interests
        in investment companies registered under the Investment Company Act of 1940,
        as
        amended (or in a separate portfolio of such an investment company), that
        invest
        primarily in full faith and credit obligations of the United States Government
        or obligations guaranteed by the United States Government and its agencies
        and
        repurchase agreements collateralized by such obligations;

       

      (iv)           time
        deposits with any office located in the United States of the Banks or any
        other
        bank or trust company which is organized under the laws of the United States
        and
        has combined capital, surplus and undivided profits of not less than
        $500,000,000 or with any bank which is organized other than under the laws
        of
        the United States (y) the commercial paper of which is rated at least A-1
        by
        Standard & Poor's and P-1 by Moody's (or, if such commercial paper is rated
        only by Standard & Poor's, at least A-1 by Standard & Poor's, or if such
        commercial paper is rated only by Moody's, at least P-1 by Moody's) or (z)
        the
        long term senior debt of which is rated at least AA by Standard & Poor's and
        Aa2 by Moody's (or, if such debt is rated only by Standard & Poor's, at
        least AA by Standard & Poor's, or if such debt is rated only by Moody's, at
        least Aa2 by Moody's);

       

      (v)           commercial
        paper having a maturity of not more than one year from the date of such
        investment and rated at least A-1 by Standard & Poor's and P-1 by Moody's
        (or, if such commercial paper is rated only by Standard & Poor's, at least
        A-1 by Standard & Poor's or, if such commercial paper is rated only by
        Moody's, at least P-1 by Moody's);

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      (vi)           instruments
        held for collection in the ordinary course of business;

       

      (vii)           any
        equity or debt securities or other form of debt instrument obtained in
        settlement of debts previously contracted;

       

      (viii)           any
        Investment arising out of a Permitted Related Business Opportunity;
        and

       

      (ix)           any
        other form of Investment by the Borrower or any of its Subsidiaries in any
        Person so long as the consideration paid or exchanged by the Borrower, or
        any of
        its Subsidiaries, for such investment (whether in cash or the value of
        payment-in-kind, with the value of payment-in-kind as reasonably determined
        by
        the Borrower) does not exceed $30,000,000 in the aggregate for all Investments
        permitted by this clause (ix).

       

      Permitted
        Liens shall mean:

       

      (i)           Liens
        for taxes, assessments, or similar charges, incurred in the ordinary course
        of
        business and which are not yet due and payable;

       

      (ii)           Pledges
        or deposits made in the ordinary course of business to secure payment of
        workmen's compensation, or to participate in any fund in connection with
        workmen's compensation, unemployment insurance, old-age pensions or other
        social
        security programs;

       

      (iii)           Liens
        of mechanics, materialmen, warehousemen, carriers, or other like Liens, securing
        obligations incurred in the ordinary course of business that are not yet
        due and
        payable and Liens of landlords securing obligations to pay lease payments
        that
        are not yet due and payable or in default;

       

      (iv)           Any
        Lien arising out of judgments or awards but only to the extent that the creation
        of any such Lien shall not be an event or condition which, with or without
        notice or lapse of time or both, would cause Borrower to be in violation
        of
        Section 9.1.6, but after giving affect to the
        thirty (30) day period in Section 9.1.6;

       

      (v)           Security
        interests in favor of lessors of personal property, which property is the
        subject of a true lease;

       

      (vi)           Good-faith
        pledges or deposits made in the ordinary course of business to secure
        performance of bids, tenders, contracts (other than for the repayment of
        borrowed money) or leases, not in excess of the aggregate amount due thereunder,
        or to secure statutory obligations, or surety, appeal, indemnity, performance
        or
        other similar bonds required in the ordinary course of business;

       

      (vii)           Encumbrances
        consisting of zoning restrictions, easements, rights-of-way or other
        restrictions on the use of real property and minor defects to title to real
        property, none of which materially impairs the use of such property or the
        value
        thereof;

       

      (viii)           Liens
        on property leased by any Loan Party or Subsidiary of a Loan Party securing
        obligations of such Loan Party or Subsidiary to the lessor under such leases,
        so
        long as to the extent the payments or other amounts due and owing under any
        such
        lease constitute Indebtedness, such Indebtedness is permitted under Section
        8.2.1(vi);

       

      (ix)           Any
        Lien existing on the date of this Agreement and described on Schedule
1.1(P), provided, that, to the extent any such Lien
        secures Indebtedness permitted by Section 8.2.1(ii), such Lien may continue to secure any
        renewals or extensions of such Indebtedness permitted by Section 8.2.1(ii) so long as (i) the principal amount of the
        Indebtedness secured by any such Lien is not hereafter increased and (ii)
        no
        additional assets become subject to such Lien;

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

       

      (x)           Reserved;

       

      (xi)           Purchase
        Money Security Interests, provided, that the aggregate amount of loans and
        deferred payments secured by such Purchase Money Security Interests shall
        not
        exceed $20,000,000 (excluding for the purpose of this computation any loans
        or
        deferred payments secured by Liens described on Schedule
        1.1(P));

       

      (xii)           Liens
        on any property or asset of an Acquired Person so long as: (a) such Liens
        secure
        Indebtedness of the Acquired Person and such Indebtedness and such Liens
        on
        property or assets of the Acquired Person existed prior to the consummation
        of
        the Permitted Acquisition and were not created in contemplation of or in
        connection with such acquisition, (b) such Liens apply solely to the assets
        of
        the Acquired Person and do not apply to any asset of any Loan Party, and
        (c)
        after giving effect to such Permitted Acquisition and all other Permitted
        Acquisitions made by the Loan Parties from and after the Closing Date, the
        aggregate outstanding amount of all Indebtedness secured by Liens permitted
        by
        this clause (xii) shall not exceed $75,000,000; and

       

      (xiii)           The
        following, (A) if the validity or amount thereof is being contested in good
        faith by appropriate and lawful proceedings diligently conducted so long
        as levy
        and execution thereon have been stayed and continue to be stayed or (B) if
        a final judgment is entered and such judgment is discharged within thirty
        (30)
        days of entry, and could not be reasonably expected to result in a Material
        Adverse Change:

       

      (1)           Claims
        or Liens for taxes, assessments or charges due and payable and subject to
        interest or penalty, provided that the applicable Loan Party maintains
        such reserves or other appropriate provisions as shall be required by GAAP
        and
        pays all such taxes, assessments or charges forthwith upon the commencement
        of
        proceedings to foreclose any such Lien;

       

      (2)           Claims,
        Liens or encumbrances upon, and defects of title to, real or personal property,
        including any attachment of personal or real property or other legal process
        prior to adjudication of a dispute on the merits; or

       

      (3)           Claims
        or Liens of mechanics, materialmen, warehousemen, carriers, or other statutory
        nonconsensual Liens.

       

      Notwithstanding
        the foregoing definition of Permitted Lien or any other provision of the
        Loan
        Documents to the contrary, each of the Loan Parties shall not, and shall
        not
        permit any of its Subsidiaries to, at any time create, incur, assume or suffer
        to exist any Lien on any of the capital stock of New Jersey Natural Gas,
        or
        agree or become liable to do so.

      

      Permitted
        Related Business Opportunity shall mean any transaction with another Person
        (other than any Inactive Subsidiary of the Borrower) involving business
        activities or assets reasonably related or complementary to the business
        of the
        Borrower and its Subsidiaries as conducted on the Closing Date or as may
        be
        conducted pursuant to Section 8.2.9, including, without limitation, the
        ownership, management and marketing of storage, capacity and transportation
        of
        gas and other forms of energy, the generation, transmission or storage of
        gas
        and other forms of energy, or the access to gas and energy transmission lines,
        and business initiatives for the conservation and efficiency of gas and
        energy.

       

      Permitted
        Transferee shall mean, as of any date of determination, any of the following
        with respect to any then current officer or director of the Borrower: (i)
        such
        Person's spouse, lineal descendants or lineal descendant's of such Person's
        spouse, (ii) any charitable corporation or trust established by such officer
        or
        director or by any Person described in the immediately preceding clause (i),
        (iii) any trust (or in the case of a minor, a custodial account under a Uniform
        Gifts or Transfers to Minors Act) of which the beneficiary or beneficiaries
        are

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      one
        or more Persons described in the immediately preceding clauses (i) or (ii),
        or
        (iv) any executor or administrator upon the death of such officer or director
        or
        the death of any Person described in the immediately preceding clauses (i)
        or
        (ii).

       

      Person
        shall mean any individual, corporation, partnership, limited liability company,
        association, joint-stock company, trust, unincorporated organization, joint
        venture, government or political subdivision or agency thereof, or any other
        entity.

       

      Plan
        shall mean at any time an employee pension benefit plan (including a Multiple
        Employer Plan, but not a Multiemployer Plan) which is covered by Title IV
        of
        ERISA or is subject to the minimum funding standards under Section 412 of
        the Internal Revenue Code and either (i) is maintained by any member of the
        ERISA Group for employees of any member of the ERISA Group or (ii) has at
        any time within the preceding five years been maintained by any entity which
        was
        at such time a member of the ERISA Group for employees of any entity which
        was
        at such time a member of the ERISA Group.

       

      PNC
        Bank shall mean PNC Bank, National Association, its successors and
        assigns.

       

      Potential
        Default shall mean any event or condition which with notice, passage of
        time, or both, would constitute an Event of Default.

       

      Principal
        Office shall mean the main banking office of the Agent in Pittsburgh,
        Pennsylvania.

       

      Prohibited
        Transaction shall mean any prohibited transaction as defined in
        Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
        which neither an individual nor a class exemption has been issued by the
        United
        States Department of Labor.

       

      Project
        Subsidiaries shall mean the present Subsidiaries of NJR Energy Corporation,
        a New Jersey corporation, NJR Storage Holdings Company, a Delaware corporation,
        and any other future midstream asset project Subsidiaries of the Borrower
        or of
        NJR Energy Corporation, NJR Storage Holdings Company and their respective
        Subsidiaries.

       

      Property
        shall mean all real property, both owned and leased, of any Loan Party or
        Subsidiary of a Loan Party.

       

      Purchase
        Money Security Interest shall mean Liens upon tangible personal property
        securing loans to any Loan Party or Subsidiary of a Loan Party or deferred
        payments by such Loan Party or Subsidiary for the purchase of such tangible
        personal property.

       

      Purchasing
        Bank shall mean a Bank which becomes a party to this Agreement by executing
        an Assignment and Assumption Agreement.

       

      Ratable
        Share shall mean the proportion that a Bank's Commitment (excluding its
        Swing Loan Commitment) bears to the Commitments (excluding the Swing Loan
        Commitment) of all of the Banks.

       

      Regulated
        Entity shall mean any Person which is subject under Law to any of the laws,
        rules or regulations respecting the financial, organizational or rate regulation
        of electric companies, public utilities, or public utility holding
        companies.

       

      Regulated
        Substances shall mean, without limitation, any substance, material or waste,
        regardless of its form or nature, defined under Environmental Laws as a
        "hazardous substance," "pollutant," "pollution," "contaminant," "hazardous
        or
        toxic substance," "extremely hazardous substance," "toxic
        chemical,"

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      "toxic
        substance," "toxic waste," "hazardous waste," "special handling waste,"
        "industrial waste," "residual waste," "solid waste," "municipal waste," "mixed
        waste," "infectious waste," "chemotherapeutic waste," "medical waste," or
        "regulated substance" or any other substance, material or waste, regardless
        of
        its form or nature, which is regulated, controlled or governed by Environmental
        Laws due to its radioactive, ignitable, corrosive, reactive, explosive, toxic,
        carcinogenic or infectious properties or nature or any other material, substance
        or waste, regardless of its form or nature, which otherwise is regulated,
        controlled or governed by Environmental Laws, including without limitation,
        petroleum and petroleum products (including crude oil and any fractions
        thereof), natural gas, synthetic gas and any mixtures thereof, asbestos,
        urea
        formaldehyde, polychlorinated biphenlys, mercury, radon and radioactive
        materials.

       

      Regulation
        U shall mean Regulation U, T, or X as promulgated by the Board of Governors
        of the Federal Reserve System, as amended from time to time.

       

      Reimbursement
        Obligation shall have the meaning assigned to such term in
        Section 2.9.3.2.

       

      Remedial
        Action shall mean any investigation, identification, characterization,
        delineation, cleanup, removal, remediation, containment, control or abatement
        of
        or other response actions to Regulated Substances and any closure or
        post-closure measures associated therewith.

       

      Reportable
        Event shall mean a reportable event described in Section 4043 of ERISA
        and regulations thereunder with respect to a Plan or Multiemployer
        Plan.

       

      Required
        Banks shall mean

       

      (A)           if
        there are no Loans, Reimbursement Obligations or Letter of Credit Borrowings
        outstanding, Required Banks shall mean Banks whose Commitments (excluding
        the
        Swing Loan Commitments) aggregate at least 51% of the Commitments of all
        of the
        Banks (excluding the Swing Loan Commitments), or

       

      (B)           if
        there are Loans, Reimbursement Obligations, or Letter of Credit Borrowings
        outstanding, Required Banks shall mean:

       

      (i)           prior
        to a termination of the Commitments hereunder pursuant to Section 9.2.1 or
        9.2.2, any Bank or group of Banks if the sum of the Loans (excluding the
        Swing
        Loans), Reimbursement Obligations and Letter of Credit Borrowings of such
        Banks
        then outstanding aggregates at least 51% of the total principal amount of
        all of
        the Loans (excluding the Swing Loans), Reimbursement Obligations and Letter
        of
        Credit Borrowings then outstanding.

       

      (ii)           after
        a termination of the Commitments hereunder pursuant to Section 9.2.1 or 9.2.2,
        any Bank or group of Banks if the sum of the Loans, Reimbursement Obligations
        and Letter of Credit Borrowings of such Banks then outstanding aggregates
        at
        least 51% of the total principal amount of all of the Loans, Reimbursement
        Obligations and Letter of Credit Borrowings then outstanding.

       

      Reimbursement
        Obligations and Letter of Credit Borrowings shall be deemed, for purposes
        of
        this definition, to be in favor of the Agent and not a participating Bank
        if
        such Bank has not made its Participation Advance in respect thereof and shall
        be
        deemed to be in favor of such Bank to the extent of its Participation Advance
        if
        it has made its Participation Advance in respect thereof.

       

      Required
        Share shall have the meaning assigned to such term in Section
        5.10.

       

      Revolving
        Credit Commitment shall mean, as to any Bank at any time, the amount
        initially set forth opposite its name on Schedule 1.1(B) in
        the column labeled "Amount of Commitment for Revolving Credit Loans," and
        thereafter as determined by the Agent after giving effect to each applicable
        Bank

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      Joinder
        and Assignment and Assumption Agreement executed by such Bank and delivered
        to
        the Agent, and Revolving Credit Commitments shall mean the aggregate
        Revolving Credit Commitments of all of the Banks.

       

      Revolving
        Credit Loans shall mean collectively and Revolving Credit Loan shall
        mean separately all Revolving Credit Loans or any Revolving Credit Loan made
        by
        the Banks or one of the Banks to the Borrower pursuant to Section 2.1.1 or
        2.9.3.

       

      Revolving
        Credit Note shall mean any Revolving Credit Note of
        the Borrower in the form of Exhibit 1.1(R) issued by
        the Borrower at the request of a Bank pursuant to Section 5.9 evidencing the Revolving Credit Loans to such
        Bank,
        together with all amendments, extensions, renewals, replacements, refinancings
        or refundings thereof in whole or in part.

       

      Revolving
        Facility Usage shall mean at any time the sum of the Revolving Credit Loans
        outstanding, the Swing Loans outstanding and the Letters of Credit
        Outstanding.

       

      SEC
        shall mean the Securities and Exchange Commission or any governmental agencies
        substituted therefor.

       

      SEC
        Filings shall mean the Borrower's Form 10-K, filed with the SEC for the
        fiscal year ended September 30, 2007.

       

      Section 20
        Subsidiary shall mean the Subsidiary of the bank holding company controlling
        any Bank, which Subsidiary has been granted authority by the Federal Reserve
        Board to underwrite and deal in certain Ineligible Securities.

       

      Settlement
        Date shall mean the 7th day of each week (if such day is a Business Day and
        if not, the next succeeding Business Day) and any other Business Day on which
        the Agent elects to effect settlement pursuant to Section 5.10.

       

      Significant
        Subsidiary shall mean, New Jersey Natural Gas, NJR Energy Services Company,
        or any Subsidiary of the Borrower which at any time (i) has gross revenues
        equal to or in excess of five percent (5%) of the gross revenues of the Borrower
        and its Subsidiaries on a consolidated basis, or (ii) has total assets
        equal to or in excess of five percent (5%) of the total assets of the Borrower
        and its Subsidiaries on a consolidated basis, in either case, as determined
        and
        consolidated in accordance with GAAP.

       

      Solvent
        shall mean, with respect to any Person on a particular date, that on such
        date
        (i) such Person is able to realize upon its assets and pay its debts and
        other liabilities as they mature in the normal course of business, and
        (ii) such Person has not incurred debts or liabilities beyond such Person's
        ability to pay as such debts and liabilities mature.

       

      Standard
        & Poor's shall mean Standard & Poor's Ratings Services, a division
        of The McGraw-Hill Companies, Inc., and its successors.

       

      Standby
        Letter of Credit shall mean a Letter of Credit issued to support obligations
        of one or more of the Loan Parties, contingent or otherwise, which finance
        the
        working capital and business needs of the Loan Parties incurred in the ordinary
        course of business, but excluding any Letter of Credit under which the stated
        amount of such Letter of Credit increases automatically over time.

       

      Subsidiary
        of any Person at any time shall mean (i) any corporation or trust of which
        50% or more (by number of shares or number of votes) of the outstanding capital
        stock or shares of beneficial interest normally entitled to vote for the
        election of one or more directors or trustees (regardless of any contingency
        which does or may suspend or dilute the voting rights) is at such time owned
        directly or indirectly by such Person or one or

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      more
        of such Person's Subsidiaries, (ii) any partnership of which such Person is
        a general partner or of which 50% or more of the partnership interests is
        at the
        time directly or indirectly owned by such Person or one or more of such Person's
        Subsidiaries, (iii) any limited liability company of which such Person is a
        member or of which 50% or more of the limited liability company interests
        is at
        the time directly or indirectly owned by such Person or one or more of such
        Person's Subsidiaries or (iv) any corporation, trust, partnership, limited
        liability company or other entity which is controlled or capable of being
        controlled by such Person or one or more of such Person's
        Subsidiaries.

       

      Subsidiary
        Shares shall have the meaning assigned to that term in
        Section 6.1.2.

       

      Swing
        Loan Commitment shall mean PNC Bank's commitment to make Swing Loans to the
        Borrower pursuant to Section 2.1.2 hereof in an aggregate principal amount
        up to
        $50,000,000.

       

      Swing
        Loan Interest Rate shall mean as to each Swing Loan the rate of interest
        quoted by PNC Bank applicable thereto and accepted by the Borrower with respect
        to such Swing Loan.

       

      Swing
        Loan Note shall mean the Swing Loan Note of the Borrower in the form of
Exhibit 1.1(S) evidencing the Swing Loans, together
        with all amendments, extensions, renewals, replacements, refinancings or
        refundings thereof in whole or in part.

       

      Swing
        Loan Request shall mean a request for Swing Loans made in accordance with
        Section 2.5 hereof.

       

      Swing
        Loans shall mean collectively and Swing Loan shall mean separately
        all Swing Loans or any Swing Loan made by PNC Bank to the Borrower pursuant
        to
        Section 2.1.2 hereof.

       

      Transferor
        Bank shall mean the selling Bank pursuant to an Assignment and Assumption
        Agreement.

       

      Unregulated
        Subsidiary shall mean any Subsidiary of the Borrower other than New Jersey
        Natural Gas.

       

      USA
        Patriot Act shall mean the Uniting and Strengthening America by Providing
        Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
        Public Law 107-56, as the same has been, or shall hereafter be, renewed,
        extended, amended or replaced.

       

      1.2  Construction.

       

      Unless
        the context of this Agreement otherwise clearly requires, the following rules
        of
        construction shall apply to this Agreement and each of the other Loan
        Documents:

       

      
        	
                1.2.1.  

              	
                Number;
                  Inclusion.

              

      

       

      references
        to the plural include the singular, the plural, the part and the whole; "or"
        has
        the inclusive meaning represented by the phrase "and/or" and "including"
        has the
        meaning represented by the phrase "including without limitation";

       

      
        	
                1.2.2.  

              	
                Determination.

              

      

       

      references
        to "determination" of or by the Agent or the Banks shall be deemed to include
        good-faith estimates by the Agent or the Banks (in the case of quantitative
        determinations) and good-faith

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      beliefs
        by the Agent or the Banks (in the case of qualitative determinations) and
        such
        determination shall be conclusive absent manifest error;

       

      
        	
                1.2.3.  

              	
                Agent's
                  Discretion and Consent.

              

      

       

      whenever
        the Agent or the Banks are granted the right herein to act in its or their
        sole
        discretion or to grant or withhold consent such right shall be exercised
        in good
        faith;

       

      
        	
                1.2.4.  

              	
                Documents
                  Taken as a Whole.

              

      

       

      the
        words "hereof," "herein," "hereunder," "hereto," and similar terms in this
        Agreement or any other Loan Document refer to this Agreement or such other
        Loan
        Document as a whole and not to any particular provision of this Agreement
        or
        such other Loan Document;

       

      
        	
                1.2.5.  

              	
                Headings.

              

      

       

      the
        section and other headings contained in this Agreement or such other Loan
        Document and the Table of Contents (if any), preceding this Agreement or
        such
        other Loan Document are for reference purposes only and shall not control
        or
        affect the construction of this Agreement or such other Loan Document or
        the
        interpretation thereof in any respect;

       

      
        	
                1.2.6.  

              	
                Implied
                  References to this Agreement.

              

      

       

      article,
        section, subsection, clause, schedule and exhibit references are to this
        Agreement or other Loan Document, as the case may be, unless otherwise
        specified;

       

      
        	
                1.2.7.  

              	
                Persons.

              

      

       

      reference
        to any Person includes such Person's successors and assigns but, if applicable,
        only if such successors and assigns are permitted by this Agreement or such
        other Loan Document, as the case may be, and reference to a Person in a
        particular capacity excludes such Person in any other capacity;

       

      
        	
                1.2.8.  

              	
                Modifications
                  to Documents.

              

      

       

      reference
        to any agreement (including this Agreement and any other Loan Document together
        with the schedules and exhibits hereto or thereto), document or instrument
        means
        such agreement, document or instrument as amended, modified, replaced,
        substituted for, superseded or restated;

       

      
        	
                1.2.9.  

              	
                From,
                  To and Through.

              

      

       

      relative
        to the determination of any period of time, "from" means "from and including,"
        "to" means "to but excluding," and "through" means "through and including";
        and

       

      
        	
                1.2.10.  

              	
                Shall;
                  Will.

              

      

       

      references
        to "shall" and "will" are intended to have the same meaning.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

       

      
        1.3           Accounting
          Principles.

         

        Except
          as otherwise provided in this Agreement, all computations and determinations
          as
          to accounting or financial matters and all financial statements to be delivered
          pursuant to this Agreement shall be made and prepared in accordance with
          GAAP
          (including principles of consolidation where appropriate), and all accounting
          or
          financial terms shall have the meanings ascribed to such terms by GAAP;
          provided, however, that all accounting terms used in
          Section 8.2 [Negative Covenants] (and all
          defined terms used in the definition of any accounting term used in
          Section 8.2) shall have the meaning given to
          such terms (and defined terms) under GAAP as in effect on the date hereof
          applied on a basis consistent with those used in preparing the Annual Statements
          referred to in Section 6.1.8.1 [Historical Statements].  In the
          event of any change after the date hereof in GAAP, and if such change would
          result in the inability to determine compliance with the financial covenants
          set
          forth in Section 8.2 based upon the Borrower's
          regularly prepared financial statements by reason of the preceding sentence,
          then the parties hereto agree to endeavor, in good faith, to agree upon
          an
          amendment to this Agreement that would adjust such financial covenants
          in a
          manner that would not affect the substance thereof, but would allow compliance
          therewith to be determined in accordance with the Borrower's financial
          statements at that time.  

         

      

       

      2.           REVOLVING
        CREDIT AND SWING LOAN FACILITIES

       

      2.1  Commitments.

       

      
        	
                2.1.1.  

              	
                Revolving
                  Credit Loans.

              

      

       

      Subject
        to the terms and conditions hereof and relying upon the representations and
        warranties herein set forth, each Bank severally agrees to make Revolving
        Credit
        Loans to the Borrower at any time or from time to time on or after the date
        hereof to the Expiration Date, provided that, after giving effect to each
        such Revolving Credit Loan the aggregate amount of Revolving Credit Loans
        from
        such Bank shall not exceed such Bank's Revolving Credit Commitment minus
        such
        Bank's Ratable Share of the amount of Letters of Credit Outstanding; and
        provided further that the Revolving Facility Usage at any time shall not
        exceed the Revolving Credit Commitments of all the Banks.  Within such
        limits of time and amount and subject to the other provisions of this Agreement,
        the Borrower may borrow, repay and reborrow pursuant to this Section 2.1.1.  The outstanding principal amount of
        all Revolving Credit Loans, together with accrued interest thereon, shall
        be due
        and payable on the Expiration Date.

       

      
        	
                2.1.2.  

              	
                Swing
                  Loan Commitment.

              

      

       

      Subject
        to the terms and conditions hereof and relying upon the representations and
        warranties herein set forth, PNC Bank agrees to make Swing Loans to the Borrower
        at any time or from time to time after the date hereof to, but not including,
        the Expiration Date, in an aggregate principal amount of up to but not in
        excess
        of the Swing Loan Commitment, provided that the Revolving Facility Usage
        at any time shall not exceed the Revolving Credit Commitments of all the
        Banks.  Within such limits of time and amount and subject to the other
        provisions of this Agreement, the Borrower may borrow, repay and reborrow
        pursuant to this Section 2.1.2.  The outstanding principal amount of
        all Swing Loans, together with accrued interest thereon, shall be due and
        payable on the earlier of the Settlement Date applicable thereto or the
        Expiration Date.

       

      2.2  Nature
        of Banks' Obligations with Respect to Revolving Credit Loans.

       

      Each
        Bank shall be obligated to participate in each request for Revolving Credit
        Loans pursuant to Section 2.4 [Revolving Credit Loan Requests] in accordance
        with its Ratable Share.  The aggregate amount of each Bank's Revolving
        Credit Loans outstanding hereunder to the Borrower at any time shall never
        exceed its Revolving Credit Commitment minus its Ratable Share of the amount
        of
        Letters of Credit Outstanding.  The obligations of each

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      Bank
        hereunder are several.  The failure of any Bank to perform its
        obligations hereunder shall not affect the Obligations of the Borrower to
        any
        other party nor shall any other party be liable for the failure of such Bank
        to
        perform its obligations hereunder.  The Banks shall have no obligation
        to make Revolving Credit Loans hereunder on or after the Expiration
        Date.

       

      2.3  Facility
        Fees.

       

      Accruing
        from the date hereof until
        the Expiration Date, the Borrower agrees to pay to the Agent for the account
        of
        each Bank, as consideration for such Bank's Revolving Credit Commitment
        hereunder, a nonrefundable facility fee (the "Facility Fee") equal to the
        Applicable Facility Fee Rate (computed on the basis of a year of 360 days
        and
        actual days elapsed) on the average daily amount of such Bank's Revolving
        Credit
        Commitment as the same may be constituted from time to time.  All
        Facility Fees shall be payable quarterly in arrears on the first day of each
        January, April, July and October after the date hereof and on the Expiration
        Date or upon acceleration of the Loans.

       

      2.4  Revolving
        Credit Loan Requests.

       

      Except
        as otherwise provided herein, the Borrower may from time to time prior to
        the
        Expiration Date request the Banks to make Revolving Credit Loans or renew
        or
        convert the Interest Rate Option applicable to existing Revolving Credit
        Loans
        pursuant to Section 4.2 [Interest Periods], by
        delivering to the Agent, not later than 10:00 a.m., Pittsburgh time,
        (i) three (3) Business Days prior to the proposed Borrowing Date with
        respect to the making of Revolving Credit Loans to which the LIBOR Rate Option
        applies or the date of conversion to or the renewal of the LIBOR Rate Option
        for
        any such Loans; and (ii) one (1) Business Day prior to either the proposed
        Borrowing Date with respect to the making of a Revolving Credit Loan to which
        the Base Rate Option applies or the last day of the preceding Interest Period
        with respect to the conversion to the Base Rate Option for any Loan, of a
        Loan
        Request therefor duly completed by an Authorized Officer or an individual
        previously designated by an Authorized Officer substantially in the form
        of
Exhibit 2.4 or a Loan Request by telephone immediately confirmed in
        writing by letter, facsimile or telex in the form of such Exhibit, it being
        understood that the Agent may rely on the authority of any individual making
        such a telephonic request without the necessity of receipt of such written
        confirmation, provided such individual purports to be an Authorized Officer
        or
        an individual previously designated by an Authorized Officer as having such
        authority.  Each Loan Request shall be irrevocable and shall specify
        (i) the proposed Borrowing Date; (ii) the aggregate amount of the
        proposed Revolving Credit Loans comprising each Borrowing Tranche, the amount
        of
        which shall be in integral multiples of $1,000,000 and not less than $3,000,000
        for each Borrowing Tranche to which the LIBOR Rate Option applies and not
        less
        than the lesser of $1,000,000 and in integral multiples of $100,000 or the
        maximum amount available for Borrowing Tranches to which the Base Rate Option
        applies; (iii) whether the LIBOR Rate Option or Base Rate Option shall
        apply to the proposed Loans comprising the applicable Borrowing Tranche;
        and
        (iv) in the case of a Borrowing Tranche to which the LIBOR Rate Option
        applies, an appropriate Interest Period for the Loans comprising such Borrowing
        Tranche.

       

      2.5  Swing
        Loan Requests.

       

      Except
        as otherwise provided herein, the Borrower may from time to time prior to
        the
        Expiration Date request PNC Bank to make a Swing Loan by delivery to PNC
        Bank,
        not later than 12:00 noon Pittsburgh time, on the proposed Borrowing Date
        of a
        request therefor duly completed by an Authorized Officer or an individual
        previously designated by an Authorized Officer substantially in the form
        of
Exhibit 2.5 hereto or a request by telephone immediately confirmed
        in writing by letter, facsimile or telex, it being understood that PNC Bank
        may
        rely on the authority of any individual making such a telephonic request
        without
        the necessity of receipt of such written confirmation, provided such individual
        purports to be an Authorized Officer or an individual previously designated
        by
        an Authorized Officer as having such authority.  Each Swing Loan
        Request shall be irrevocable and shall specify (i) the proposed Borrowing
        Date, (ii) the term of the proposed Swing Loan, which shall be no less than
        one day and no longer than seven (7) days, and (iii) the principal amount
        of such Swing Loan, which shall not be less than $250,000 and shall be an
        integral multiple of $100,000.

       

      
        
          
          

        

        
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      2.6. 
Making
        Revolving Credit
        Loans and Swing Loans.

       

      
        	
                2.6.1.  

              	
                Making
                  Revolving Credit Loans.

              

      

       

      The
        Agent shall, promptly after receipt by it of a Loan Request for or with respect
        to Revolving Credit Loans pursuant to Section 2.4 [Revolving Credit Loan
        Requests], notify the Banks with Revolving Credit Commitments of its receipt
        of
        such Loan Request specifying:  (i) the proposed Borrowing Date
        and the time and method of disbursement of the Revolving Credit Loans requested
        thereby; (ii) the amount and type of each such Revolving Credit Loan and
        the applicable Interest Period (if any); and (iii) the apportionment among
        the Banks of such Revolving Credit Loans as determined by the Agent in
        accordance with Section 2.2 [Nature of Banks' Obligations
        etc.].  Each Bank shall remit the principal amount of each Revolving
        Credit Loan to the Agent such that the Agent is able to, and the Agent shall,
        to
        the extent the Banks have made funds available to it for such purpose and
        subject to Section 7.2 [Each Additional Loan or
        Letter of Credit], fund such Revolving Credit Loans to the Borrower in U.S.
        Dollars and immediately available funds at the Principal Office prior to
        2:00
        p.m., Pittsburgh time, on the applicable Borrowing Date, provided that if
        any Bank fails to remit such funds to the Agent in a timely manner, the Agent
        may elect in its sole discretion to fund with its own funds the Revolving
        Credit
        Loans of such Bank on such Borrowing Date, and such Bank shall be subject
        to the
        repayment obligation in Section 10.16 [Availability of Funds].

       

      
        	
                2.6.2.  

              	
                Making
                  Swing Loans.

              

      

       

      So
        long as PNC Bank elects to make Swing Loans, PNC Bank shall, after receipt
        by it
        of a Swing Loan Request pursuant to Section 2.5 fund such Swing Loan to the
        Borrower in U.S. Dollars and immediately available funds at the Principal
        Office
        prior to 2:00 p.m. Pittsburgh time on the Borrowing Date.  Each Swing
        Loan shall bear interest at the Swing Loan Interest Rate applicable
        thereto.

       

      2.7  Swing
        Loan Note.

       

      The
        obligation of the Borrower to repay the unpaid principal amount of the Swing
        Loans made to it by PNC Bank together with interest thereon shall be evidenced
        by a demand promissory note of the Borrower dated the Closing Date in
        substantially the form attached hereto as
Exhibit 1.1(S) payable to the order of PNC Bank in a
        face amount equal to the Swing Loan Commitment.

       

      2.8  Use
        of Proceeds.

       

      The
        proceeds of the Loans shall be used by the Borrower for general corporate
        purposes (including Permitted Investments in any Loan Party or in any Project
        Subsidiary) of the Borrower and in accordance with Section 8.1.10 [Use of
        Proceeds].

       

      2.9  Letter
        of Credit Subfacility.

       

      
        	
                2.9.1.  

              	
                Issuance
                  of Letters of Credit.

              

      

       

      Borrower
        may request the issuance of a letter of credit (each a "Letter of
        Credit") on behalf of itself by delivering to the Agent an application and
        agreement for letters of credit in such form as the Agent may specify from
        time
        to time duly completed by an Authorized Officer or an individual previously
        designated by an Authorized Officer by no later than 10:00 a.m., Pittsburgh
        time, at least five (5) Business Days, or such shorter period as may be agreed
        to by the Agent, in advance of the proposed date of issuance.  Each
        Letter of Credit shall be a Standby Letter of Credit (and may not be a
        Commercial Letter of Credit).  Subject to the terms and conditions
        hereof and in reliance on the agreements of the other Banks set forth in
        this
        Section 2.9, the Agent or any of the Agent's Affiliates reasonably acceptable
        to
        Borrower will issue a Letter of Credit provided that each Letter of

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      Credit
        shall (A) have a maximum maturity of twelve (12) months from the date of
        issuance, and (B) in no event expire later than ten (10) Business Days
        prior to the Expiration Date and provided, further, that in no event shall
        the
        Revolving Facility Usage exceed, at any one time, the Revolving Credit
        Commitments.

       

      
        	
                2.9.2.  

              	
                Letter
                  of Credit Fees.

              

      

       

      The
        Borrower shall pay (i) to the Agent for the ratable account of the Banks a
        fee (the "Letter of Credit Fee") equal to the Applicable Letter of Credit
        Fee Rate then in effect (computed on the basis of a year of 360 days and
        actual
        days elapsed) per annum, and (ii) to the Agent for its own account a
        fronting fee equal to 0.125% per annum (computed on the basis of a year of
        360
        days and actual days elapsed), which fees shall be computed on the daily
        average
        amount of Letters of Credit Outstanding and shall be payable quarterly in
        arrears commencing with the first Business Day of each January, April, July
        and
        October following issuance of each Letter of Credit and on the Expiration
        Date.  The Borrower shall also pay to the Agent for the Agent's sole
        account the Agent's then in effect customary fees and administrative expenses
        payable with respect to the Letters of Credit as the Agent may generally
        charge
        or incur from time to time in connection with the issuance, maintenance,
        modification (if any), assignment or transfer (if
        any), negotiation, and administration of Letters of
        Credit.

       

      
        	
                2.9.3.  

              	
                Disbursements,
                  Reimbursement.

              

      

       

      2.9.3.1  Immediately
        upon the issuance of each Letter of Credit, each Bank shall be deemed to,
        and
        hereby irrevocably and unconditionally agrees to, purchase from the Agent
        a
        participation in such Letter of Credit and each drawing thereunder in an
        amount
        equal to such Bank's Ratable Share of the maximum amount available to be
        drawn
        under such Letter of Credit and the amount of such drawing,
        respectively.

       

      2.9.3.2  In
        the event of any request for a drawing under a Letter of Credit by the
        beneficiary or transferee thereof, the Agent will promptly notify the
        Borrower.  Provided that it shall have received such notice, the
        Borrower shall reimburse (such obligation to reimburse the Agent shall sometimes
        be referred to as a "Reimbursement Obligation") the Agent prior to 12:00
        noon, Pittsburgh time on each date that an amount is paid by the Agent under
        any
        Letter of Credit (each such date, an "Drawing Date") in an amount equal
        to the amount so paid by the Agent.  In the event the Borrower fails
        to reimburse the Agent for the full amount of any drawing under any Letter
        of
        Credit by 12:00 noon, Pittsburgh time, on the Drawing Date, the Agent will
        promptly notify each Bank thereof, and the Borrower shall be deemed to have
        requested that Revolving Credit Loans be made by the Banks under the Base
        Rate
        Option to be disbursed on the Drawing Date under such Letter of Credit, subject
        to the amount of the unutilized portion of the Revolving Credit Commitment
        and
        subject to the conditions set forth in Section 7.2 [Each Additional Loan] other than any notice
        requirements.  Any notice given by the Agent pursuant to this
        Section 2.9.3.2 may be oral if immediately confirmed in writing; provided
        that the lack of such an immediate confirmation shall not affect the
        conclusiveness or binding effect of such notice.

       

      2.9.3.3  Each
        Bank shall upon any notice pursuant to Section 2.9.3.2 make available to
        the Agent an amount in immediately available funds equal to its Ratable Share
        of
        the amount of the drawing, whereupon the participating Banks shall (subject
        to
        Section 2.9.3.4) each be deemed to have made a Revolving Credit Loan under
        the Base Rate Option to the Borrower in that amount.  If any Bank so
        notified fails to make available to the Agent for the account of the Agent
        the
        amount of such Bank's Ratable Share of such amount by no later than 2:00
        p.m.,
        Pittsburgh time on the Drawing Date, then interest shall accrue on such Bank's
        obligation to make such payment, from the Drawing Date to the date on which
        such
        Bank makes such payment (i) at a rate per annum equal to the Federal Funds
        Effective Rate during the first three (3) days following the Drawing Date
        and
        (ii) at a rate per annum equal to the rate applicable to Loans under the
        Base
        Rate Option on and after the fourth (4th) day following the Drawing
        Date.  The Agent will promptly give notice of the occurrence of the
        Drawing Date, but failure of the Agent to give any such notice on the Drawing
        Date or in sufficient time to enable any Bank to effect such payment on such
        date shall not relieve such Bank from its obligation under this
        Section 2.9.3.3, provided, however, interest shall not accrue on any Bank's
        obligation to make a payment under this Section 2.9.3.3, until such Bank
        has
        received notice of the Drawing Date from the Agent.

       

      
        
          
          

        

        
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      2.9.3.4  With
        respect to any unreimbursed drawing that is not converted into Revolving
        Credit
        Loans under the Base Rate Option to the Borrower in whole or in part as
        contemplated by Section 2.9.3.2, because of the Borrower's failure to
        satisfy the conditions set forth in Section 7.2
        [Each Additional Loan or Letter of Credit] other than any notice requirements
        or
        for any other reason, the Borrower shall be deemed to have incurred from
        the
        Agent a borrowing (each a "Letter of Credit Borrowing") in the amount of
        such drawing.  Such Letter of Credit Borrowing shall be due and
        payable on demand (together with interest) and shall bear interest at the
        rate
        per annum applicable to the Revolving Credit Loans under the Base Rate
        Option.  Each Bank's payment to the Agent pursuant to
        Section 2.9.3.3 shall be deemed to be a payment in respect of its
        participation in such Letter of Credit Borrowing and shall constitute a
        "Participation Advance" from such Bank in satisfaction of its
        participation obligation under this Section 2.9.3.

       

      
        	
                2.9.4.  

              	
                Repayment
                  of Participation Advances.

              

      

       

      2.9.4.1  Upon
        (and only upon) receipt by the Agent for its account of immediately available
        funds from the Borrower (i) in reimbursement of any payment made by the
        Agent under the Letter of Credit with respect to which any Bank has made
        a
        Participation Advance to the Agent, or (ii) in payment of interest on such
        a payment made by the Agent under such a Letter of Credit, the Agent will
        pay to
        each Bank, in the same funds as those received by the Agent, the amount of
        such
        Bank's Ratable Share of such funds, except the Agent shall retain the amount
        of
        the Ratable Share of such funds of any Bank that did not make a Participation
        Advance in respect of such payment by Agent.

       

      2.9.4.2  If
        the Agent is required at any time to return to any Loan Party, or to a trustee,
        receiver, liquidator, custodian, or any official in any Insolvency Proceeding,
        any portion of the payments made by any Loan Party to the Agent pursuant
        to
        Section 2.9.4.1 in reimbursement of a payment made under the Letter of
        Credit or interest or fee thereon, each Bank shall, on demand of the Agent,
        forthwith return to the Agent the amount of its Ratable Share of any amounts
        so
        returned by the Agent plus interest thereon from the date such demand is
        made to
        the date such amounts are returned by such Bank to the Agent, at a rate per
        annum equal to the Federal Funds Effective Rate in effect from time to
        time.

       

      
        	
                2.9.5.  

              	
                Documentation.

              

      

       

      Each
        Loan Party agrees to be bound by the terms of the Agent's application and
        agreement for letters of credit and the Agent's written regulations and
        customary practices relating to letters of credit, though such interpretation
        may be different from such Loan Party's own.  In the event of a
        conflict between such application or agreement and this Agreement, this
        Agreement shall govern.  It is understood and agreed that, except in
        the case of gross negligence or willful misconduct, the Agent shall not be
        liable for any error and/or mistakes, whether of omission or commission,
        in
        following any Loan Party's written instructions or those contained in the
        Letters of Credit or any modifications, amendments or supplements thereto,
        provided that each Loan Party agrees that all instructions provided to the
        Agent
        by a Loan Party with respect to any Letter of Credit shall be provided in
        writing.

       

      
        	
                2.9.6.  

              	
                Determinations
                  to Honor Drawing Requests.

              

      

       

      In
        determining whether to honor any request for drawing under any Letter of
        Credit
        by the beneficiary thereof, the Agent shall be responsible only to determine
        that the documents and certificates required to be delivered under such Letter
        of Credit have been delivered and that they comply on their face with the
        requirements of such Letter of Credit.

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      

       

      
        	
                2.9.7.  

              	
                Nature
                  of Participation and Reimbursement
                  Obligations.

              

      

       

      Each
        Bank's obligation in accordance with this Agreement to make the Revolving
        Credit
        Loans or Participation Advances, as contemplated by Section 2.9.3, as a
        result of a drawing under a Letter of Credit, and the Obligations of the
        Borrower to reimburse the Agent upon a draw under a Letter of Credit, shall
        be
        absolute, unconditional and irrevocable, and shall be performed strictly
        in
        accordance with the terms of this Section 2.9 under all circumstances,
        including the following circumstances:

       

      (i)  any
        set-off, counterclaim, recoupment, defense or other right which such Bank
        may
        have against the Agent or any of its Affiliates, the Borrower or any other
        Person for any reason whatsoever;

       

      (ii)  the
        failure of any Loan Party or any other Person to comply, in connection with
        a
        Letter of Credit Borrowing, with the conditions applicable to Revolving Credit
        Loans set forth in Section 2.1.1 [Revolving Credit Loans], 2.4 [Revolving
        Credit Loan Requests], 2.6 [Making Revolving Credit
        Loans and Swing Loans] or 7.2 [Each Additional Loan
        or Letter of Credit] or as otherwise set forth in this Agreement for the
        making
        of a Revolving Credit Loan, it being acknowledged that such conditions are
        not
        required for the making of a Letter of Credit Borrowing and the obligation
        of
        the Banks to make Participation Advances under Section 2.9.3
        [Disbursements; Reimbursement];

       

      (iii)  any
        lack of validity or enforceability of any Letter of Credit;

       

      (iv)  any
        claim of breach of warranty that might be made by any Loan Party or any Bank
        against any beneficiary of a Letter of Credit, or the existence of any claim,
        set-off, recoupment, counterclaim, crossclaim, defense or other right which
        any
        Loan Party or any Bank may have at any time against a beneficiary, successor
        beneficiary any transferee or assignee of any Letter of Credit or the proceeds
        thereof (or any Persons for whom any such transferee may be acting), the
        Agent
        or its Affiliates or any Bank or any other Person or, whether in connection
        with
        this Agreement, the transactions contemplated herein or any unrelated
        transaction (including any underlying transaction between any Loan Party
        or
        Subsidiaries of a Loan Party and the beneficiary for which any Letter of
        Credit
        was procured);

       

      (v)  the
        lack of power or authority of any signer of (or any defect in or forgery
        of any
        signature or endorsement on) or the form of or lack of validity, sufficiency,
        accuracy, enforceability or genuineness of any draft, demand, instrument,
        certificate or other document presented under or in connection with any Letter
        of Credit, or any fraud or alleged fraud in connection with any Letter of
        Credit, or the transport of any property or provisions of services relating
        to a
        Letter of Credit, in each case even if the Agent or any of the Agent's
        Affiliates has been notified thereof;

       

      (vi)  payment
        by the Agent or any of its Affiliates under any Letter of Credit against
        presentation of a demand, draft or certificate or other document which does
        not
        comply with the terms of such Letter of Credit;

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      

       

      (vii)  the
        solvency of, or any acts of omissions by, any beneficiary of any Letter of
        Credit, or any other Person having a role in any transaction or obligation
        relating to a Letter of Credit, or the existence, nature, quality, quantity,
        condition, value or other characteristic of any property or services relating
        to
        a Letter of Credit;

       

      (viii)  any
        failure by the Agent or any of Agent's Affiliates to issue any Letter of
        Credit
        in the form requested by any Loan Party, unless the Agent has received written
        notice from such Loan Party of such failure within three Business Days after
        the
        Agent shall have furnished such Loan Party a copy of such Letter of Credit
        and
        such error is material and no drawing has been made thereon prior to receipt
        of
        such notice;

       

      (ix)  any
        adverse change in the business, operations, properties, assets, condition
        (financial or otherwise) or prospects of any Loan Party or Subsidiaries of
        a
        Loan Party;

       

      (x)  any
        breach of this Agreement or any other Loan Document by any party
        thereto;

       

      (xi)  the
        occurrence or continuance of an Insolvency Proceeding with respect to any
        Loan
        Party;

       

      (xii)  the
        fact that an Event of Default or a Potential Default shall have occurred
        and be
        continuing;

       

      (xiii)  the
        fact that the Expiration Date shall have passed or this Agreement or the
        Commitments hereunder shall have been terminated; and

       

      (xiv)  any
        other circumstance or happening whatsoever, whether or not similar to any
        of the
        foregoing.

       

      Notwithstanding
        the foregoing, no Bank shall be required to make a Revolving Credit Advance
        or a
        Participation Advance in excess of its Revolving Credit Commitment minus
        its
        Ratable Share of any Letters of Credit Outstanding.

       

      
        	
                2.9.8.  

              	
                Indemnity.

              

      

       

      In
        addition to amounts payable as provided in Section 10.5 [Reimbursement and
        Indemnification of Agent by the Borrower], the Borrower
        hereby agrees to protect, indemnify, pay and save harmless the Agent and
        any of
        Agent's Affiliates that has issued a Letter of Credit from and against any
        and
        all claims, demands, liabilities, damages, taxes, penalties, interest,
        judgments, losses, costs, charges and expenses (including reasonable fees,
        expenses and disbursements of counsel and allocated costs of internal counsel)
        which the Agent or any of Agent's Affiliates may incur or be subject to as
        a
        consequence of the issuance of any Letter of Credit, other than as a result
        of
        (A) the gross negligence or willful misconduct of the Agent as determined
        by a final judgment of a court of competent jurisdiction or (B) the
        wrongful dishonor by the Agent or any of Agent's Affiliates of a proper demand
        for payment made under any Letter of Credit, except if such dishonor resulted
        from any act or omission, whether rightful or wrongful, of any present or
        future
        de jure or de facto government or governmental authority (all such acts or
        omissions herein called "Governmental Acts").

       

      
        
          
          

        

        
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                2.9.9.  

              	
                Liability
                  for Acts and Omissions.

              

      

       

      As
        between any Loan Party and the Agent, or the Agent's Affiliates, such Loan
        Party
        assumes all risks of the acts and omissions of, or misuse of the Letters
        of
        Credit by, the respective beneficiaries of such Letters of Credit.  In
        furtherance and not in limitation of the foregoing, the Agent shall not be
        responsible for any of the following including any losses or damages to any
        Loan
        Party or other Person or property relating therefrom:  (i) the
        form, validity, sufficiency, accuracy, genuineness or legal effect of any
        document submitted by any party in connection with the application for an
        issuance of any such Letter of Credit, even if it should in fact prove to
        be in
        any or all respects invalid, insufficient, inaccurate, fraudulent or forged
        (even if the Agent or the Agent's Affiliates shall have been notified thereof);
        (ii) the validity or sufficiency of any instrument transferring or
        assigning or purporting to transfer or assign any such 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; (iii) the failure of
        the beneficiary of any such Letter of Credit, or any other party to which
        such
        Letter of Credit may be transferred, to comply fully with any conditions
        required in order to draw upon such Letter of Credit or any other claim of
        any
        Loan Party against any beneficiary of such Letter of Credit, or any such
        transferee, or any dispute between or among any Loan Party and any beneficiary
        of any Letter of Credit or any such transferee; (iv) 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;
        (v) errors in interpretation of technical terms; (vi) any loss or
        delay in the transmission or otherwise of any document required in order
        to make
        a drawing under any such Letter of Credit or of the proceeds thereof;
        (vii) the misapplication by the beneficiary of any such Letter of Credit of
        the proceeds of any drawing under such Letter of Credit; or (viii) any
        consequences arising from causes beyond the control of the Agent or the Agent's
        Affiliates, as applicable, including any Governmental Acts, and none of the
        above shall affect or impair, or prevent the vesting of, any of the Agent's
        or
        the Agent's Affiliates rights or powers hereunder.  Nothing in the
        preceding sentence shall relieve the Agent from liability for the Agent's
        gross
        negligence or willful misconduct in connection with actions or omissions
        described in such clauses (i) through (viii) of such sentence.  In no
        event shall the Agent or the Agent's Affiliates be liable to any Loan Party
        for
        any indirect, consequential, incidental, punitive, exemplary or special damages
        or expenses (including without limitation attorneys' fees), or for any damages
        resulting from any change in the value of any property relating to a Letter
        of
        Credit.

       

      Without
        limiting the generality of the foregoing, the Agent and each of its Affiliates
        (i) may rely on any oral or other communication believed in good faith by
        the
        Agent or such Affiliate to have been authorized or given by or on behalf
        of the
        applicant for a Letter of Credit; (ii) may honor any presentation if the
        documents presented appear on their face substantially to comply with the
        terms
        and conditions of the relevant Letter of Credit; (iii) may honor a previously
        dishonored presentation under a Letter of Credit, whether such dishonor was
        pursuant to a court order, to settle or compromise any claim of wrongful
        dishonor, or otherwise, and shall be entitled to reimbursement to the same
        extent as if such presentation had initially been honored, together with
        any
        interest paid by the Agent or its Affiliate; (iv) may honor any drawing that
        is
        payable upon presentation of a statement advising negotiation or payment,
        upon
        receipt of such statement (even if such statement indicates that a draft
        or
        other document is being delivered separately), and shall not be liable for
        any
        failure of any such draft or other document to arrive, or to conform in any
        way
        with the relevant Letter of Credit; (v) may pay any paying or negotiating
        bank
        claiming that it rightfully honored under the laws or practices of the place
        where such bank is located; and (vi) may settle or adjust any claim or demand
        made on the Agent or its Affiliate in any way related to any order issued
        at the
        applicant's request to an air carrier, a letter of guarantee or of indemnity
        issued to a carrier or any similar document (each an "Order") and honor
        any drawing in connection with any Letter of Credit that is the subject to
        such
        Order, notwithstanding that any drafts or other documents presented in
        connection with such Letter of Credit fail to conform in any way with such
        Letter of Credit.

       

      In
        furtherance and extension and not in limitation of the specific provisions
        set
        forth above, any action taken or omitted by the Agent or the Agent's Affiliates
        under or in connection with the Letters

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      of
        Credit issued by it or any documents and certificates delivered thereunder,
        if
        taken or omitted in good faith, shall not put the Agent or the Agent's
        Affiliates under any resulting liability to the Borrower or any
        Bank.

       

      2.10  Borrowings
        to Repay Swing Loans.

       

      PNC
        Bank may, at its option, exercisable at any time for any reason whatsoever,
        demand repayment of the Swing Loans, and each Bank shall make a Revolving
        Credit
        Loan in an amount equal to such Bank's Ratable Share of the aggregate principal
        amount of the outstanding Swing Loans, plus, if PNC Bank so requests, accrued
        interest thereon, provided that no Bank shall be obligated in any event to
        make
        Revolving Credit Loans in excess of its Revolving Credit Commitment minus
        such
        Bank's Ratable Share of the amount of Letters of Credit
        Outstanding.  Revolving Credit Loans made pursuant to the preceding
        sentence shall bear interest at the Base Rate Option and shall be deemed
        to have
        been properly requested in accordance with Section 2.4 without regard to
        any of
        the requirements of that provision.  PNC Bank shall provide notice to
        the Banks (which may be telephonic or written notice by letter, facsimile
        or
        telex) that such Revolving Credit Loans are to be made under this Section
        2.10
        and of the apportionment among the Banks, and the Banks shall be unconditionally
        obligated to fund such Revolving Credit Loans (whether or not the conditions
        specified in Section 2.4 or Section 7.2 are then satisfied) by the time PNC
        Bank
        so requests, which shall not be earlier than 3:00 p.m. Pittsburgh time on
        the
        Business Day next after the date the Banks receive such notice from PNC
        Bank.

       

      2.11  Right
        to Increase Commitments.

       

      Provided
        that there is no Event of Default or Potential Default, if the Borrower wishes
        to increase the Revolving Credit Commitments, the Borrower shall notify the
        Agent thereof, provided that any such increase shall be in a minimum of
        $5,000,000 and the aggregate of all such increases in the Revolving Credit
        Commitments shall not exceed $100,000,000 from and after the Closing
        Date.  Each Bank shall have the right at any time within fifteen (15)
        days following such notice to increase its respective Revolving Credit
        Commitment so as to provide such added commitment pro rata in accordance
        with
        such Bank's Ratable Share, and any portion of such requested increase that
        is
        not provided by any Bank shall:  (i) first be available to the
        other Banks pro rata in accordance with their Ratable Share, (ii) next be
        available to the other Banks in such a manner as the Borrower, the Agent
        and
        those Banks shall agree, and (iii) thereafter, to the extent not provided
        by the Banks, to any additional bank proposed by the Borrower, which is approved
        by the Agent (which approval shall not be unreasonably withheld) and that
        becomes a party to this Agreement pursuant to Section 11.11 [Successors and Assigns; Joinder of a
        Bank].  In the event of any such increase in the aggregate Revolving
        Credit Commitments effected pursuant to the terms of this Section 2.11, new
        Notes shall, to the extent necessary, be executed and delivered by the Borrower
        in exchange for the surrender of the existing Notes.  In addition,
        Borrower shall deliver to Agent a Secretary's Certificate, including
        resolutions, a confirmation of Guaranty Agreement executed by the Guarantors,
        a
        legal opinion and such other documentation as the Agent reasonably may require,
        all of which shall be in form and substance satisfactory to the
        Agent.

       

       

      3.           INTENTIONALLY
        OMITTED

       

       

      4.           INTEREST
        RATES

       

      4.1  Interest
        Rate Options.

       

      The
        Borrower shall pay interest in respect of the outstanding unpaid principal
        amount of the Loans as selected by it from the Base Rate Option or LIBOR
        Rate
        Option set forth below applicable to the Loans, it being understood that,
        subject to the provisions of this Agreement, the Borrower may select different
        Interest Rate Options and different Interest Periods to apply simultaneously
        to
        the Loans comprising different Borrowing Tranches and may convert to or renew
        one or more Interest Rate Options with respect to all or any portion of the
        comprising any

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      Borrowing
        Tranche, provided that there shall not be at any one time outstanding
        more than ten (10) Borrowing Tranches in the aggregate
        among all of the Loans, and providedfurther that only the Swing
        Loan Interest Rate shall apply to the Swing Loans.  If at any time the
        designated rate applicable to any Loan made by any Bank exceeds such Bank's
        highest lawful rate, the rate of interest on such Bank's Loan shall be limited
        to such Bank's highest lawful rate.

       

      
        	
                4.1.1.  

              	
                Revolving
                  Credit Interest Rate Options.

              

      

       

      The
        Borrower shall have the right to select from the following Interest Rate
        Options
        applicable to the Revolving Credit Loans (subject to the provision above
        regarding Swing Loans):

       

      (i)  Base
        Rate Option:  A fluctuating rate per annum (computed on the basis
        of a year of 365 or 366 days, as the case may be, and actual days elapsed)
        equal
        to the Base Rate plus the Applicable Margin, such interest rate to change
        automatically from time to time effective as of the effective date of each
        change in the Base Rate; or

       

      (ii)  LIBOR
        Rate Option:  A rate per annum (computed on the basis of a year of
        360 days and actual days elapsed) equal to the LIBOR Rate plus the Applicable
        Margin.

       

      Notwithstanding
        the foregoing, if any Event of Default has occurred and is continuing, no
        Loan
        may be made, converted to or renewed under any LIBOR Rate Option.

       

      
        	
                4.1.2.  

              	
                Rate
                  Quotations.

              

      

       

      The
        Borrower may call the Agent on or before the date on which a Loan Request
        is to
        be delivered to receive an indication of the interest rates then in effect,
        but
        it is acknowledged that such projection shall not be binding on the Agent
        or the
        Banks nor affect the rate of interest which thereafter is actually in effect
        when the election is made.

       

      
        	
                4.1.3.  

              	
                Change
                  in Fees or Interest Rates.

              

      

       

      If
        the Applicable Margin, Applicable Letter of Credit Fee Rate or Applicable
        Facility Fee Rate is increased or reduced with respect to any period for
        which
        the Borrower has already paid interest, the Facility Fee or the Letter of
        Credit
        Fee, the Agent shall recalculate the additional interest, Facility Fee or
        Letter
        of Credit Fee due from or to the Borrower and shall, within fifteen (15)
        Business Days after the Borrower notifies the Agent of such increase or
        decrease, give the Borrower and the Banks notice of such
        recalculation.

       

      4.1.3.1  Any
        additional interest, Facility Fee or Letter of Credit Fee due from the Borrower
        shall be paid to the Agent for the account of the Banks on the next date
        on
        which an interest or fee payment is due; provided, however, that if there
        are no Loans outstanding or if the Loans are due and payable, such additional
        interest, Facility Fee or Letter of Credit Fee shall be paid promptly after
        receipt of written request for payment from the Agent.

       

      4.1.3.2  Any
        interest, Facility Fee or Letter of Credit Fee refund due to the Borrower
        shall
        be credited against payments otherwise due from the Borrower on the next
        interest or fee payment due date or, if the Loans have been repaid and the
        Banks
        are no longer committed to lend under this Agreement, the Banks shall pay
        the
        Agent for the account of the Borrower such interest, Facility Fee or Letter
        of
        Credit Fee refund not later than five Business Days after written notice
        from
        the Agent to the Banks.

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      

       

      4.2  Interest
        Periods.

       

      At
        any time when the Borrower shall select, convert to or renew a LIBOR Rate
        Option, the Borrower shall notify the Agent thereof by delivering a Loan
        Request
        at least three (3) Business Days prior to the effective date of such
        Interest Rate Option.  The notice shall specify
        an Interest Period during which such Interest Rate Option
        shall apply.  Notwithstanding the preceding sentence, the following
        provisions shall apply to any selection of, renewal of, or conversion to
        a LIBOR
        Rate Option:

       

      
        	
                4.2.1.  

              	
                Amount
                  of Borrowing Tranche.

              

      

       

      the
        amount of each Borrowing Tranche of Loans to which a LIBOR Rate Option applies
        shall be in integral multiples of $1,000,000 and not less than
        $3,000,000;

       

      
        	
                4.2.2.  

              	
                Renewals.

              

      

       

      in
        the case of the renewal of a LIBOR Rate Option at the end of an Interest
        Period,
        the first day of the new Interest Period shall be the last day of the preceding
        Interest Period, without duplication in payment of interest for such
        day.

       

      4.3  Interest
        After Default.

       

      To
        the extent permitted by Law, upon the occurrence of an Event of Default and
        until such time such Event of Default shall have been cured or
        waived:

       

      
        	
                4.3.1.  

              	
                Letter
                  of Credit Fees, Interest Rate.

              

      

       

      the
        Letter of Credit Fee and the rate of interest for each Loan otherwise applicable
        pursuant to Section 2.9.2 [Letter of Credit Fees] or Section 4.1
        [Interest Rate Options], respectively, shall be increased by 2.0% per annum;
        and

       

      
        	
                4.3.2.  

              	
                Other
                  Obligations.

              

      

       

      each
        other Obligation hereunder if not paid when due shall bear interest at a
        rate
        per annum equal to the sum of the rate of interest applicable under the Base
        Rate Option plus an additional 2% per annum from the time such Obligation
        becomes due and payable and until it is paid in full.

       

      
        	
                4.3.3.  

              	
                Acknowledgment.

              

      

       

      The
        Borrower acknowledges that the increase in rates referred to in this
        Section 4.3 reflects, among other things, the fact that such Loans or other
        amounts have become a substantially greater risk given their default status
        and
        that the Banks are entitled to additional compensation for such risk; and
        all
        such interest shall be payable by Borrower upon demand by Agent.

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      

       

      4.4  LIBOR
        Rate Unascertainable; Illegality; Increased Costs; Deposits Not
        Available.

       

      
        	
                4.4.1.  

              	
                Unascertainable.

              

      

       

      If
        on any date on which a LIBOR Rate would otherwise be determined with respect
        to
        Loans, the Agent shall have determined that:

       

      (i)  adequate
        and reasonable means do not exist for ascertaining such LIBOR Rate,
        or

       

      (ii)  a
        contingency has occurred which materially and adversely affects the London
        interbank eurodollar market relating to the LIBOR Rate, the Agent shall have
        the
        rights specified in Section 4.4.3.

       

      
        	
                4.4.2.  

              	
                Illegality;
                  Increased Costs; Deposits Not
                  Available.

              

      

       

      If
        at any time any Bank shall have determined that:

       

      (i)  the
        making, maintenance or funding of any Loan to which a LIBOR Rate Option applies
        has been made unlawful or materially impracticable by compliance by such
        Bank in
        good faith with any Law or any interpretation or application thereof by any
        Official Body or with any request or directive of any such Official Body
        (whether or not having the force of Law), or

       

      (ii)  such
        LIBOR Rate Option will not adequately and fairly reflect the cost to such
        Bank
        of the establishment or maintenance of any such Loan in a material respect,
        or

       

      (iii)  after
        making all reasonable efforts, deposits of the relevant amount in Dollars
        for
        the relevant Interest Period for a Loan, or to banks generally, to which
        a LIBOR
        Rate Option applies, respectively, are not available to such Bank with respect
        to such Loan, or to banks generally, in the interbank eurodollar
        market,

       

      then
        the Agent shall have the rights specified in Section 4.4.3.

       

      
        	
                4.4.3.  

              	
                Agent's
                  and Banks' Rights.

              

      

       

      In
        the case of any event specified in Section 4.4.1 above, the Agent shall
        promptly so notify the Banks and the Borrower thereof, and in the case of
        an
        event specified in Section 4.4.2 above, such Bank shall promptly so notify
        the Agent and endorse a certificate to such notice as to the specific
        circumstances of such notice, and the Agent shall promptly send copies of
        such
        notice and certificate to the other Banks and the Borrower.  Upon such
        date as shall be specified in such notice (which shall not be earlier than
        the
        date such notice is given), the obligation of (A) the Banks, in the case of
        such notice given by the Agent, or (B) such Bank, in the case of such
        notice given by such Bank, to allow the Borrower to select, convert to or
        renew
        a LIBOR Rate Option shall be suspended until the Agent shall have later notified
        the Borrower, or such Bank shall have later notified the Agent, of the Agent's
        or such Bank's, as the case may be, determination that the circumstances
        giving
        rise to such previous determination no longer exist.  If at any time
        the Agent makes a determination under Section 4.4.1 and the Borrower has
        previously notified the Agent of its selection of, conversion to or renewal
        of a
        LIBOR Rate Option and such

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      Interest
        Rate Option has not yet gone into effect, such notification shall be deemed
        to
        provide for the selection of, conversion to or renewal of the Base Rate Option
        otherwise available with respect to such Loans if the Borrower has requested
        the
        LIBOR Rate Option.  If any Bank notifies the Agent of a determination
        under Section 4.4.2, the Borrower shall, subject to the Borrower's
        indemnification Obligations under Section 5.6.2 [Indemnity], as to any Loan
        of the Bank to which a LIBOR Rate Option applies, on the date specified in
        such
        notice either (i) as applicable, convert such Loan to the Base Rate Option
        otherwise available with respect to such Loan, or (ii) prepay such Loan in
        accordance with Section 5.4.1 [Voluntary Prepayments].  Absent
        due notice from the Borrower of conversion or prepayment, such Loan shall
        automatically be converted to the Base Rate Option otherwise available with
        respect to such Loan upon such specified date.

       

      4.5  Selection
        of Interest Rate Options.

       

      If
        the Borrower fails to select a new Interest Period to apply to any Borrowing
        Tranche of Loans under the LIBOR Rate Option at the expiration of an existing
        Interest Period applicable to such Borrowing Tranche in accordance with the
        provisions of Section 4.2 [Interest Periods], the Borrower shall be deemed
        to have converted such Borrowing Tranche to the Base Rate Option, commencing
        upon the last day of the existing Interest Period.

       

       

      5.           PAYMENTS

       

      5.1  Payments.

       

      All
        payments and prepayments to be made in respect of principal, interest, Facility
        Fees, Letter of Credit Fees, Agent's Fee or other fees or amounts due from
        the
        Borrower hereunder shall be payable prior to 11:00 a.m., Pittsburgh time,
        on the
        date when due without presentment, demand, protest or notice of any kind,
        all of
        which are hereby expressly waived by the Borrower, and without set-off,
        counterclaim or other deduction of any nature, and an action therefor shall
        immediately accrue.  Such payments shall be made to the Agent at the
        Principal Office for the account of PNC Bank with respect to the Swing Loans
        and
        for the ratable accounts of the Banks with respect to the Revolving Credit
        Loans
        and in immediately available funds, and the Agent shall promptly distribute
        such
        amounts to the Banks in immediately available funds, provided that in the
        event payments are received by 11:00 a.m., Pittsburgh time, by the Agent
        with
        respect to the Loans and such payments are not distributed to the Banks on
        the
        same day received by the Agent, the Agent shall pay the Banks the Federal
        Funds
        Effective Rate, with respect to the amount of such payments for each day
        held by
        the Agent and not distributed to the Banks.  The Agent's and each
        Bank's statement of account, ledger or other relevant record shall, in the
        absence of manifest error, be conclusive as the statement of the amount of
        principal of and interest on the Loans and other amounts owing under this
        Agreement and shall be deemed an "account stated."

       

      5.2  Pro
        Rata Treatment of Banks.

       

      Each
        borrowing of Revolving Credit Loans shall be allocated to each Bank according
        to
        its Ratable Share and each selection of, conversion to or renewal of any
        Interest Rate Option applicable to Revolving Credit Loans and each payment
        or
        prepayment by the Borrower with respect to principal or interest on the
        Revolving Credit Loans or Facility Fees, Letter of Credit Fees, or other
        fees
        (except for the Agent's Fee) or amounts due from the Borrower hereunder to
        the
        Banks with respect to the Revolving Credit Loans shall (except as provided
        in
        Section 4.4.3 [Agent's and Banks' Rights] in the case of an event specified
        in Section 4.4 [LIBOR Rate Unascertainable; Etc.], Section 5.4.2
        [Replacement of a Bank] or Section 5.6 [Additional Compensation in Certain
        Circumstances]) be made in proportion to the applicable Revolving Credit
        Loans
        outstanding from each Bank and, if no such Loans are then outstanding, in
        proportion to the Ratable Share in the case of each
        Bank.  Notwithstanding any of the foregoing, each borrowing or payment
        or prepayment by the Borrower of principal, interest, fees or other amounts
        from
        the Borrower with respect to Swing Loans shall be made by or to PNC Bank
        according to Section 2.

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      

       

      5.3  Interest
        Payment Dates.

       

      Interest
        on Swing Loans and on Loans to which the Base Rate Option applies shall be
        due
        and payable quarterly in arrears on the first day of each January, April,
        July
        and October after the date hereof and on the Expiration Date or upon
        acceleration of the Loans.  Interest on Loans to which the LIBOR Rate
        Option applies shall be due and payable on the last day of each Interest
        Period
        for those Loans and, if such Interest Period is longer than three (3) Months,
        also on the 90th day of such Interest Period.

       

      5.4  Prepayments.

       

      
        	
                5.4.1.  

              	
                Voluntary
                  Prepayments.

              

      

       

      The
        Borrower shall have the right at its option from time to time to prepay the
        Loans in whole or part without premium or penalty (except as provided in
        Section 5.4.2 below or in Section 5.6 [Additional Compensation in
        Certain Circumstances]):

       

      (i)  at
        any time with respect to Swing Loans or with respect to any Loan to which
        the
        Base Rate Option applies,

       

      (ii)  on
        the last day of the applicable Interest Period with respect to Loans to which
        a
        LIBOR Rate Option applies, or

       

      (iii)  on
        the date specified in a notice by any Bank pursuant to Section 4.4 [LIBOR
        Rate Unascertainable, Etc.] with respect to any Loan to which a LIBOR Rate
        Option applies.

       

      Whenever
        the Borrower desires to prepay any part of the Loans, it shall provide a
        prepayment notice to the Agent by 1:00 p.m., Pittsburgh time, at least one
        (1)
        Business Day prior to the date of prepayment of the Revolving Credit Loans
        or no
        later than 2:00 p.m., Pittsburgh time, on the date of prepayment of Swing
        Loans
        setting forth the following information:

       

      (w)           the
        date, which shall be a Business Day, on which the proposed prepayment is
        to be
        made;

       

      (x)           a
        statement indicating the application of the prepayment among the Revolving
        Credit Loans and Swing Loans;

       

      (y)           the
        total principal amount of such prepayment which, with respect to Loans to
        which
        the Base Rate Option applies, shall not be less than $500,000 for any Revolving
        Credit Loan and which, with respect to Swing Loans, shall not be less than
        $500,000, and

       

      (z)           the
        total principal amount of such prepayment, which, with respect to Loans to
        which
        the LIBOR Rate Option applies, shall not be less than $1,000,000 for any
        Revolving Credit Loan.

       

      All
        prepayment notices shall be irrevocable.  The principal amount of the
        Loans for which a prepayment notice is given, together with interest on such
        principal amount except with respect to Loans to which the Base Rate Option
        applies, shall be due and payable on the date specified in such prepayment
        notice as the date on which the proposed prepayment is to be
        made.  Except as provided in Section 4.4.3 [Agent's and Banks'
        Rights], if

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

      the
        Borrower prepays a Loan but fails to specify the applicable Borrowing Tranche
        which the Borrower is prepaying, the prepayment shall be applied (i) first
        to Swing Loans and second to Revolving Credit Loans; and (ii) after giving
        effect to the allocations in clause (i) above and in the preceding sentence,
        first to Loans to which the Swing Loan Interest Rate applies, second to Loans
        to
        which the Base Rate Option applies, and then to Loans to which the LIBOR
        Rate
        Option applies.  Any prepayment hereunder shall be subject to the
        Borrower's Obligation to indemnify the Banks under Section 5.6.2
        [Indemnity].

       

      
        	
                5.4.2.  

              	
                Replacement
                  of a Bank.

              

      

       

      In
        the event any Bank (i) gives notice under Section 4.4 [LIBOR Rate
        Unascertainable, Etc.] or Section 5.6.1 [Increased Costs, Etc.],
        (ii) does not fund Revolving Credit Loans because the making of such Loans
        would contravene any Law applicable to such Bank, (iii) becomes subject to
        the control of an Official Body (other than normal and customary supervision),
        or (iv) causes the Borrower to pay, withhold or indemnify any Taxes or
        Other Taxes pursuant to Section 5.8, then the
        Borrower shall have the right at its option, with the consent of the Agent,
        which shall not be unreasonably withheld, to prepay the Loans of such Bank
        in
        whole, together with all interest accrued thereon, and terminate such Bank's
        Commitment within ninety (90) days after (w) receipt of such Bank's notice
        under Section 4.4 [LIBOR Rate Unascertainable, Etc.] or 5.6.1 [Increased
        Costs, Etc.], (x) the date such Bank has failed to fund Revolving Credit
        Loans because the making of such Loans would contravene Law applicable to
        such
        Bank, (y) the date such Bank became subject to the control of an Official
        Body, as applicable, or (z) the date such payment of Taxes or Other Taxes
        pursuant to Section 5.8 is due; provided
        that the Borrower shall also pay to such Bank at the time of such prepayment
        any
        amounts required under Section 5.6 [Additional Compensation in Certain
        Circumstances] and Section 5.8 [Taxes] and any
        accrued interest due on such amount and any related fees; provided,
        however, that the Commitment of such Bank shall be provided by one or more
        of
        the remaining Banks or a replacement bank reasonably acceptable to the Agent;
        provided, further, the remaining Banks shall have no obligation hereunder
        to increase their Commitments.  Notwithstanding the foregoing, the
        Agent may only be replaced subject to the requirements of Section 10.14
        [Successor Agent] and provided that all Letters of Credit have expired or
        been terminated or replaced.

       

      
        	
                5.4.3.  

              	
                Change
                  of Lending Office.

              

      

       

      Each
        Bank agrees that prior to giving notice to any claim for increased costs,
        indemnification or other special payments under Section 4.4.2 [Illegality,
        Etc.], 5.6.1 [Increased Costs, Etc.] or Section 5.8 [Taxes] with respect to such Bank, it will
        have
        initiated reasonable efforts (subject to overall policy considerations of
        such
        Bank) to designate another lending office for any Loans or Letters of Credit
        affected by such event, provided that such designation is made on such
        terms that such Bank and its lending office suffer no economic, legal or
        regulatory disadvantage, with the object of avoiding the consequence of the
        event giving rise to the operation of such Section.  Nothing in this
        Section 5.4.3 shall affect or postpone any of the Obligations of the
        Borrower or any other Loan Party or the rights of the Agent or any Bank provided
        in this Agreement.

       

      5.5  Voluntary
        Commitment Reductions.

       

      The
        Borrower shall have the right, upon not less than five (5) Business Days'
        written irrevocable notice to the Agent, to terminate the Commitments or,
        from
        time to time, to reduce the amount of the Commitments, which notice shall
        specify the date and amount of any such reduction and otherwise be substantially
        in the form of Exhibit 5.5 (a
        "Commitment Reduction Notice").  Any such reduction shall be in
        a minimum amount equal to $5,000,000 or an integral multiple thereof, provided,
        that the Revolving Credit Commitments may not be reduced below the aggregate
        principal amount of the Revolving Facility Usage.  Each reduction of
        Revolving Credit Commitments shall ratably reduce the Revolving Credit
        Commitments of the Banks.

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

      

       

      5.6  Additional
        Compensation in Certain Circumstances.

       

      
        	
                5.6.1.  

              	
                Increased
                  Costs or Reduced Return Resulting From Taxes, Reserves, Capital
                  Adequacy
                  Requirements, Expenses, Etc.

              

      

       

      If
        any Law, guideline or interpretation or any change in any Law, guideline
        or
        interpretation or application thereof by any Official Body charged with the
        interpretation or administration thereof or compliance with any request or
        directive (whether or not having the force of Law) of any central bank or
        other
        Official Body:

       

      (i)  subjects
        any Bank to any tax or changes the basis of taxation with respect to this
        Agreement, the Loans or payments by the Borrower of principal, interest,
        Facility Fees, Letter of Credit Fees or other amounts due from the Borrower
        hereunder (except for taxes on the overall net income of such
        Bank),

       

      (ii)  imposes,
        modifies or deems applicable any reserve, special deposit or similar requirement
        against credits or commitments to extend credit extended by, or assets (funded
        or contingent) of, deposits with or for the account of, or other acquisitions
        of
        funds by, any Bank or any lending office of any Bank, or

       

      (iii)  imposes,
        modifies or deems applicable any capital adequacy or similar requirement
        (A) against assets (funded or contingent) of, or letters of credit, other
        credits or commitments to extend credit extended by, any Bank, or
        (B) otherwise applicable to the obligations of any Bank or any lending
        office of any Bank under this Agreement,

       

      and
        the result of any of the foregoing is to increase the cost to, reduce the
        income
        receivable by, or impose any expense (including loss of margin) upon any
        Bank or
        its lending office with respect to this Agreement or the making, maintenance
        or
        funding of any part of the Loans (or, in the case of any capital adequacy
        or
        similar requirement, to have the effect of reducing the rate of return on
        any
        Bank's capital, taking into consideration such Bank's customary policies
        with
        respect to capital adequacy) by an amount which such Bank in its reasonable
        discretion deems to be material, such Bank shall from time to time notify
        the
        Borrower and the Agent of the amount determined in good faith (using any
        averaging and attribution methods employed in good faith) by such Bank to
        be
        necessary to compensate such Bank for such increase in cost, reduction of
        income, additional expense or reduced rate of return.  Such notice
        shall set forth in reasonable detail the basis for such
        determination.  Such amount shall be due and payable by the Borrower
        to such Bank thirty (30) days after such notice is given.

       

      
        	
                5.6.2.  

              	
                Indemnity.

              

      

       

      In
        addition to the compensation required by Section 5.6.1 [Increased Costs,
        Etc.], the Borrower shall indemnify each Bank against all liabilities, losses
        or
        expenses (including loss of margin, any loss or expense incurred in liquidating
        or employing deposits from third parties and any loss or expense incurred
        in
        connection with funds acquired by a Bank to fund or maintain Loans subject
        to a
        LIBOR Rate Option) which such Bank sustains or incurs as a consequence of
        any:

       

      (i)  payment,
        prepayment, conversion or renewal of any Loan to which a LIBOR Rate Option
        applies on a day other than the last day of the corresponding Interest Period
        (whether or not such payment or prepayment is mandatory,

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

      (ii)  voluntary
        or automatic and whether or not such payment or prepayment is then
        due),

       

      (iii)  attempt
        by the Borrower to revoke (expressly, by later inconsistent notices or
        otherwise) in whole or part any Loan Requests under Section 2.4 [Revolving
        Credit Loan Requests], Section 2.5 [Swing Loan Requests] or Section 4.2 [Interest Periods] or notice relating to voluntary
        prepayments under Section 5.4.1 [Voluntary Prepayments] or notice relating
        to voluntary Commitment reductions under Section 5.5 [Voluntary Commitment Reductions], or

       

      (iv)  default
        by the Borrower in the performance or observance of any covenant or condition
        contained in this Agreement or any other Loan Document, including any failure
        of
        the Borrower to pay when due (by acceleration or otherwise) any principal
        of or
        interest on the Loans, Letter of Credit Fees, or Facility Fees or any other
        amount due hereunder.

       

      If
        any Bank sustains or incurs any such loss or expense, it shall from time
        to time
        notify the Borrower of the amount determined in good faith by such Bank (which
        determination may include such assumptions, allocations of costs and expenses
        and averaging or attribution methods as such Bank shall deem reasonable)
        to be
        necessary to indemnify such Bank for such loss or expense.  Such
        notice shall set forth in reasonable detail the basis for such
        determination.  Such amount shall be due and payable by the Borrower
        to such Bank thirty (30) days after such notice is given.

       

      5.7  Interbank
        Market Presumption.

       

      For
        all purposes of this Agreement and each Note with respect to any aspects
        of the
        LIBOR Rate or any Loan under the LIBOR Rate Option, each Bank and Agent shall
        be
        presumed to have obtained rates, funding, currencies, deposits, and the like
        in
        the London interbank market regardless whether it did so or not; and, each
        Bank's and Agent's determination of amounts payable under, and actions required
        or authorized by, Sections 4.4 [LIBOR Rate Unascertainable; Illegality;
        Increased Costs; Deposits Not Available] and 5.6 [Additional Compensation
        in
        Certain Circumstances] shall be calculated, at each Bank's and Agent's option,
        as though each Bank and Agent funded its pro rata share of each Borrowing
        Tranche of Loans under the LIBOR Rate Option through the purchase of deposits
        of
        the types and maturities corresponding to the deposits used as a reference
        in
        accordance with the terms hereof in determining the LIBOR Rate applicable
        to
        such Loans, whether in fact that is the case.

       

      5.8  Taxes.

       

      
        	
                5.8.1.  

              	
                No
                  Deductions.

              

      

       

      All
        payments made by Borrower hereunder and under each Note shall be made free
        and
        clear of and without deduction for any present or future taxes, levies, imposts,
        deductions, charges, or withholdings, and all liabilities with respect thereto,
        excluding taxes imposed on the net income of any Bank and all income and
        franchise taxes applicable to any Bank of the United States (all such
        non-excluded taxes, levies, imposts, deductions, charges, withholdings, and
        liabilities being hereinafter referred to as "Taxes").  If
        Borrower shall be required by Law to deduct any Taxes from or in respect
        of any
        sum payable hereunder or under any Note, (i) the sum payable shall be
        increased as may be necessary so that after making all required deductions
        (including deductions applicable to additional sums payable under this
        Section 5.8.1) each Bank receives an amount equal to the sum it would have
        received had no such deductions been made, (ii) Borrower shall make such
        deductions, and (iii) Borrower shall timely pay the full amount deducted to
        the relevant tax authority or other authority in accordance with applicable
        Law.

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

      

       

      
        	
                5.8.2.  

              	
                Stamp
                  Taxes.

              

      

       

      In
        addition, Borrower agrees to pay 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 Note
        (hereinafter referred to as "Other Taxes").

       

      
        	
                5.8.3.  

              	
                Indemnification
                  for Taxes Paid by a Bank.

              

      

       

      Borrower
        shall indemnify each Bank for the full amount of Taxes or Other Taxes
        (including, without limitation, any Taxes or Other Taxes imposed by any
        jurisdiction on amounts payable under this Section 5.8.3) paid by any Bank
        and
        any liability (including penalties, interest, and expenses) arising therefrom
        or
        with respect thereto, whether or not such Taxes or Other Taxes were correctly
        or
        legally asserted.  This indemnification shall be made within 30 days
        from the date a Bank makes written demand therefor.

       

      
        	
                5.8.4.  

              	
                Certificate.

              

      

       

      Within
        thirty (30) days after the date of any payment of any Taxes by Borrower,
        Borrower shall furnish to each Bank, at its address referred to herein, the
        original or a certified copy of a receipt evidencing payment
        thereof.  If no Taxes are payable in respect of any payment by
        Borrower, such Borrower shall, if so requested by a Bank, provide a certificate
        of an officer of Borrower to that effect.

       

      
        	
                5.8.5.  

              	
                Survival.

              

      

       

      Without
        prejudice to the survival of any other agreement of Borrower hereunder, the
        agreements and obligations of Borrower contained in Sections 5.8.1 through
        and
        including 5.8.4 shall survive the payment in full of principal and interest
        hereunder and under any instrument delivered hereunder.

       

      5.9  Notes.

       

      Upon
        the request of any Bank, the Revolving Credit Loans made by such Bank may
        be
        evidenced by a Revolving Credit Note in the form of
Exhibit 1.1(R).

       

      5.10  Settlement
        Date Procedures.

       

      In
        order to minimize the transfer of funds between the Banks and the Agent,
        the
        Borrower may borrow, repay and reborrow Swing Loans and PNC Bank may make
        Swing
        Loans as provided in Section 2.1.2 [Swing Loan Commitment] hereof during
        the
        period between Settlement Dates.  Not later than 11:00 a.m.,
        Pittsburgh time, on each Settlement Date, the Agent shall notify each Bank
        of
        its Ratable Share of the total of the Revolving Credit Loans and the Swing
        Loans
        (each a "Required Share").  Prior to 2:00 p.m., Pittsburgh
        time, on such Settlement Date, each Bank shall pay to the Agent the amount
        equal
        to the difference between its Required Share and its Revolving Credit Loans,
        and
        the Agent shall pay to each Bank its Ratable Share of all payments made by
        the
        Borrower to the Agent with respect to the Revolving Credit Loans.  The
        Agent shall also effect settlement in accordance with the foregoing sentence
        on
        the proposed Borrowing Dates for Revolving Credit Loans and may at its option
        effect settlement on any other Business Day.  These settlement
        procedures are established solely as a matter of administrative convenience,
        and
        nothing contained in this Section 5.10 shall relieve the Banks of their
        obligations to fund Revolving Credit Loans on dates other than a Settlement
        Date
        pursuant to Sections 2.1.1 [Revolving Credit
        Loans] and 2.2 [Nature of Banks' Obligations with
        Respect to Revolving Credit Loans].  The Agent may at any time at its
        option for any reason whatsoever require each Bank to pay immediately to
        the
        Agent such Bank's Ratable Share

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

      of
        the outstanding Revolving Credit Loans and each Bank may at any time require
        the
        Agent to pay immediately to such Bank its Revolving Credit  Ratable
        Share of all payments made by the Borrower to the Agent with respect to the
        Revolving Credit Loans.

       

       

      6.           REPRESENTATIONS
        AND WARRANTIES

       

      6.1  Representations
        and Warranties.

       

      The
        Loan Parties, jointly and severally, represent and warrant to the Agent and
        each
        of the Banks as follows:

       

      
        	
                6.1.1.  

              	
                Organization
                  and Qualification.

              

      

       

      Each
        Loan Party and each Subsidiary that is not an Inactive Subsidiary of each
        Loan
        Party is a corporation, partnership or limited liability company duly organized,
        validly existing and in good standing under the laws of its jurisdiction
        of
        organization.  Each Loan Party and each Subsidiary that is not an
        Inactive Subsidiary of each Loan Party has the lawful power to own or lease
        its
        properties and to engage in the business it presently conducts or proposes
        to
        conduct.  Each Loan Party and each Subsidiary that is not an Inactive
        Subsidiary of each Loan Party is duly licensed or qualified and in good standing
        in each jurisdiction where the failure to be so licensed or qualified could
        reasonably be expected to result in a Material Adverse Change.

       

      
        	
                6.1.2.  

              	
                Subsidiaries.

              

      

       

      Schedule
        6.1.2 states the name of each of the Borrower's Subsidiaries, its
        jurisdiction of formation, its authorized capital stock, the issued and
        outstanding shares (referred to herein as the "Subsidiary Shares") and
        the owners thereof if it is a corporation, its outstanding partnership interests
        (the "Partnership Interests") if it is a partnership and its outstanding
        limited liability company interests, interests assigned to managers thereof
        and
        the voting rights associated therewith (the "LLC Interests") if it is a
        limited liability company and also indicates if such Subsidiary is an Inactive
        Subsidiary.  The Borrower and each Subsidiary of the Borrower has good
        and marketable title to all of the Subsidiary Shares, Partnership Interests
        and
        LLC Interests it purports to own, free and clear in each case of any
        Lien.  All Subsidiary Shares, Partnership Interests and LLC Interests
        have been validly issued, and all Subsidiary Shares are fully paid and
        nonassessable.  All capital contributions and other consideration
        required to be made or paid in connection with the issuance of the Partnership
        Interests and LLC Interests have been made or paid, as the case may
        be.  There are no options, warrants or other
        rights outstanding to purchase any such Subsidiary Shares, Partnership Interests
        or LLC Interests except as indicated on Schedule
6.1.2.

       

      
        	
                6.1.3.  

              	
                Power
                  and Authority.

              

      

       

      Each
        Loan Party has full power to enter into, execute, deliver and carry out this
        Agreement and the other Loan Documents to which it is a party, to incur the
        Indebtedness contemplated by the Loan Documents and to perform its Obligations
        under the Loan Documents to which it is a party, and all such actions have
        been
        duly authorized by all necessary proceedings on its part.

       

      
        	
                6.1.4.  

              	
                Validity
                  and Binding Effect.

              

      

       

      This
        Agreement has been duly and validly executed and delivered by each Loan Party,
        and each other Loan Document which any Loan Party is required to execute
        and
        deliver on or after the date hereof will have been duly executed and delivered
        by such Loan Party on the required date of delivery of such Loan
        Document.  This Agreement and each other Loan Document constitutes, or
        will constitute, legal, valid and binding

       

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

      obligations
        of each Loan Party which is or will be a party thereto on and after its date
        of
        delivery thereof, enforceable against such Loan Party in accordance with
        its
        terms, except to the extent that enforceability of any of such Loan Document
        may
        be limited by bankruptcy, insolvency, reorganization, moratorium or other
        similar laws affecting the enforceability of creditors' rights generally
        or
        limiting the right of specific performance.

       

      
        	
                6.1.5.  

              	
                No
                  Conflict.

              

      

       

      Neither
        the execution and delivery of this Agreement or the other Loan Documents
        by any
        Loan Party nor the consummation of the transactions herein or therein
        contemplated or compliance with the terms and provisions hereof or thereof
        by
        any of them will conflict with, constitute a default under or result in any
        breach of (i) the terms and conditions of the certificate of incorporation,
        bylaws, certificate of limited partnership, partnership agreement, certificate
        of formation, limited liability company agreement or other organizational
        documents of any Loan Party or (ii) any Law or any material agreement or
        instrument or order, writ, judgment, injunction or decree to which any Loan
        Party or any of its Subsidiaries is a party or by which it or any of its
        Subsidiaries is bound or to which it is subject, or result in the creation
        or
        enforcement of any Lien, charge or encumbrance whatsoever upon any property
        (now
        or hereafter acquired) of any Loan Party or any of its Subsidiaries (other
        than
        Liens granted under the Loan Documents).

       

      
        	
                6.1.6.  

              	
                Litigation.

              

      

       

      Except
        as set forth in the SEC Filings, there are no actions, suits, proceedings
        or
        investigations (other than Environmental Complaints which are specifically
        addressed in Section 6.1.21 [Environmental
        Matters]) pending or, to the knowledge of any Loan Party, threatened against
        such Loan Party or any Subsidiary of such Loan Party at law or equity before
        any
        Official Body which individually or in the aggregate could reasonably be
        expected to result in a Material Adverse Change.  None of the Loan
        Parties or any Subsidiaries of any Loan Party is in violation of any order,
        writ, injunction or any decree of any Official Body which could reasonably
        be
        expected to result in any Material Adverse Change.

       

      
        	
                6.1.7.  

              	
                Title
                  to Properties.

              

      

       

      Each
        Loan Party and each Subsidiary of each Loan Party has good and marketable
        title
        to or valid leasehold interest in all properties, assets and other rights
        which
        it purports to own or lease or which are reflected as owned or leased on
        its
        books and records, free and clear of all Liens and encumbrances (other than
        Environmental Complaints which are specifically addressed in Section 6.1.21 [Environmental Matters]) except Permitted Liens,
        and subject to the terms and conditions of the applicable leases.  All
        leases of property are in full force and effect without the necessity for
        any
        consent which has not previously been obtained upon consummation of the
        transactions contemplated hereby.

       

      
        	
                6.1.8.  

              	
                Financial
                  Statements.

              

      

       

      6.1.8.1  Historical
        Statements.

       

      The
        Borrower has delivered to the Agent copies of its audited consolidated year-end
        financial statements for and as of the end of the fiscal year ended
        September 30, 2007 (the "Historical Statements").  The
        Historical Statements were compiled from the books and records maintained
        by the
        Borrower's management, are correct and complete in all material respects
        and
        fairly represent the consolidated financial condition of the Borrower and
        its
        Subsidiaries as of their dates and the results of operations for the fiscal
        periods then ended and have been prepared in accordance with GAAP consistently
        applied.

       

      6.1.8.2  Accuracy
        of Financial Statements.

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

      

       

      Neither
        the Borrower nor any Subsidiary of the Borrower has any liabilities, contingent
        or otherwise, or forward or long-term commitments that are not disclosed
        in the
        Historical Statements or in the notes thereto, and except as disclosed therein
        there are no unrealized or anticipated losses from any commitments of the
        Borrower or any Subsidiary of the Borrower that could reasonably be expected
        to
        cause a Material Adverse Change.  Except as disclosed in the financial
        statements contained in the SEC Filings with regard to the results of operations
        of the Company and its consolidated Subsidiaries for the fiscal year of the
        Company ended September 30, 2005, since September 30,
        2007, no Material Adverse Change has
        occurred.

       

      
        	
                6.1.9.  

              	
                Use
                  of Proceeds; Margin Stock; Section 20
                  Subsidiaries.

              

      

       

      6.1.9.1  General.

       

      The
        Loan Parties intend to use the proceeds of the Loans in accordance with
        Sections 2.8 and 8.1.10.

       

      6.1.9.2  Margin
        Stock.

       

      None
        of the Loan Parties or any Subsidiaries of any Loan Party engages or intends
        to
        engage principally, or as one of its important activities, in the business
        of
        extending credit for the purpose, immediately, incidentally or ultimately,
        of
        purchasing or carrying margin stock (within the meaning of Regulation
        U).  No part of the proceeds of any Loan has been or will be used,
        immediately, incidentally or ultimately, to purchase or carry any margin
        stock
        or to extend credit to others for the purpose of purchasing or carrying any
        margin stock or to refund Indebtedness originally incurred for such purpose,
        or
        for any purpose which entails a violation of or which is inconsistent with
        the
        provisions of the regulations of the Board of Governors of the Federal Reserve
        System.  None of the Loan Parties or any Subsidiary of any Loan Party
        holds or intends to hold margin stock in such amounts that more than 25%
        of the
        reasonable value of the assets of any Loan Party or Subsidiary of any Loan
        Party
        is or will be represented by margin stock.

       

      6.1.9.3  Section
        20 Subsidiaries.

       

      The
        Loan Parties are unaware of any circumstances where any portion of the proceeds
        of the Loans would be used to purchase any Ineligible Securities being
        underwritten by a Section 20 Subsidiary.

       

      
        	
                6.1.10.  

              	
                Full
                  Disclosure.

              

      

       

      Neither
        this Agreement nor any other Loan Document, nor any certificate, statement,
        agreement or other documents furnished to the Agent or any Bank in connection
        herewith or therewith, contains any untrue statement of a material fact or
        omits
        to state a material fact necessary in order to make the statements contained
        herein and therein, in light of the circumstances under which they were made,
        not misleading.  There is no fact known to any Loan Party that could
        reasonably be expected to result in a Material Adverse Change which has not
        been
        set forth in this Agreement or in the certificates, statements, agreements
        or
        other documents furnished in writing to the Agent and the Banks prior to
        or at
        the date hereof in connection with the transactions contemplated hereby or
        otherwise disclosed in the SEC Filings.

       

      
        	
                6.1.11.  

              	
                Taxes.

              

      

       

      All
        federal, state, local and other tax returns required to have been filed with
        respect to each Loan Party and each Subsidiary of each Loan Party have been
        filed, and payment or adequate

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

      provision
        has been made for the payment of all taxes, fees, assessments and other
        governmental charges which have or may become due pursuant to said returns
        or to
        assessments received, except (i) to the extent that such taxes, fees,
        assessments and other charges are being contested in good faith by appropriate
        proceedings diligently conducted and for which such reserves or other
        appropriate provisions if any, as shall be required by GAAP shall have been
        made
        or (ii) to the extent that with respect to taxes (other than any U.S. federal
        or
        state income taxes, state taxes on equity or capital or comparable state
        taxes
        on income, equity or capital and which are otherwise related to the conduct
        of
        business, or local real property taxes all of which taxes are subject to
        the
        requirements of the immediately preceding clause (i)), fees, assessments
        or
        other government charges, the failure to so pay or so contest could not
        reasonably be expected to result in a Material Adverse Change.  There
        are no agreements or waivers extending the statutory period of limitations
        applicable to any federal income tax return of any Loan Party or Subsidiary
        of
        any Loan Party for any period.

       

      
        	
                6.1.12.  

              	
                Consents
                  and Approvals.

              

      

       

      No
        consent, approval, exemption, order or authorization of, or a registration
        or
        filing with, any Official Body or any other Person is required by any Law
        or any
        agreement in connection with the execution, delivery and carrying out of
        this
        Agreement and the other Loan Documents by any Loan Party, except as listed
        on
Schedule 6.1.12, all of which shall have been obtained or made on
        or prior to the Closing Date except as otherwise indicated on Schedule
6.1.12.

       

      
        	
                6.1.13.  

              	
                No
                  Event of Default; Compliance With
                  Instruments.

              

      

       

      No
        event has occurred and is continuing and no condition exists or will exist
        after
        giving effect to the borrowings or other extensions of credit to be made
        on the
        Closing Date under or pursuant to the Loan Documents which constitutes an
        Event
        of Default or Potential Default.  None of the Loan Parties or any
        Subsidiaries of any Loan Party is in violation of (i) any term of its
        certificate of incorporation, bylaws, certificate of limited partnership,
        partnership agreement, certificate of formation, limited liability company
        agreement or other organizational documents or (ii) any material agreement
        or instrument to which it is a party or by which it or any of its properties
        may
        be subject or bound where such violation could reasonably be expected to
        result
        in a Material Adverse Change.

       

      
        	
                6.1.14.  

              	
                Patents,
                  Trademarks, Copyrights, Licenses,
                  Etc.

              

      

       

      Each
        Loan Party and each Subsidiary of each Loan Party owns or has the contractual
        right to use all the patents, trademarks, service marks, trade names,
        copyrights, licenses, registrations, franchises, permits and rights reasonably
        necessary to own and operate its properties and to carry on its business
        as
        presently conducted and planned to be conducted by such Loan Party or
        Subsidiary, without known possible, alleged or actual conflict with the rights
        of others, except where the failure to do so could not reasonably be expected
        to
        have a Material Adverse Change.

       

      
        	
                6.1.15.  

              	
                Insurance.

              

      

       

      No
        notice has been given or claim made and no grounds exist to cancel or avoid
        any
        insurance policies or bonds to which any Loan Party or any Subsidiary of
        any
        Loan Party is a party or to reduce the coverage provided
        thereby.  Such policies and bonds provide adequate coverage from
        reputable and financially sound insurers in amounts sufficient to insure
        the
        assets and risks of each Loan Party and each Subsidiary of each Loan Party
        in
        accordance with prudent business practice in the industry of the Loan Parties
        and their Subsidiaries.

       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

      

       

      
        	
                6.1.16.  

              	
                Compliance
                  With Laws.

              

      

       

      The
        Loan Parties and their Subsidiaries are in compliance in all material respects
        with all applicable Laws (other than Environmental Laws which are specifically
        addressed in Section 6.1.21 [Environmental Matters]) in all jurisdictions
        in which any Loan Party or Subsidiary of any Loan Party is presently or will
        be
        doing business except where the failure to do so could not reasonably be
        expected to result in a Material Adverse Change.

       

      
        	
                6.1.17.  

              	
                Material
                  Contracts; Burdensome
                  Restrictions.

              

      

       

      All
        material contracts relating to the business operations of each Loan Party
        and
        each Subsidiary of any Loan Party, including all Plans and material Labor
        Contracts, are valid, binding and enforceable upon such Loan Party or Subsidiary
        and, to the best of such Loan Parties' knowledge, each of the other parties
        thereto in accordance with their respective terms; and there is no material
        default thereunder, to the Loan Parties' knowledge, with respect to parties
        other than such Loan Party or Subsidiary.  None of the Loan Parties or
        their Subsidiaries is bound by any contractual obligation, or subject to
        any
        restriction in any organization document, or any requirement of Law which
        could
        reasonably be expected to result in a Material Adverse Change

       

      
        	
                6.1.18.  

              	
                Investment
                  Companies; Regulated Entities.

              

      

       

      None
        of the Loan Parties or any Subsidiaries of any Loan Party is an "investment
        company" registered or required to be registered under the Investment Company
        Act of 1940 or under the "control" of an "investment company" as such terms
        are
        defined in the Investment Company Act of 1940 and shall not become such an
        "investment company" or under such "control".  None of the Loan
        Parties or any Subsidiaries of any Loan Party is subject to any other federal
        or
        state statute or regulation limiting its ability to incur Indebtedness for
        borrowed money.

       

      
        	
                6.1.19.  

              	
                Plans
                  and Benefit Arrangements.

              

      

       

      (i)  The
        Borrower and each other member of the ERISA Group are in compliance in all
        material respects with any applicable provisions of ERISA with respect to
        all
        Benefit Arrangements, Plans and Multiemployer Plans.  There has been
        no Prohibited Transaction with respect to any Benefit Arrangement or any
        Plan
        or, to the best knowledge of the Borrower, with respect to any Multiemployer
        Plan or Multiple Employer Plan, which could result in any material liability
        of
        the Borrower or any other member of the ERISA Group.  The Borrower and
        all other members of the ERISA Group have made when due any and all payments
        required to be made under any agreement relating to a Multiemployer Plan
        or a
        Multiple Employer Plan or any Law pertaining thereto.  With respect to
        each Plan and Multiemployer Plan, the Borrower and each other member of the
        ERISA Group (i) have fulfilled in all material respects their obligations
        under the minimum funding standards of ERISA, (ii) have not incurred any
        liability to the PBGC, and (iii) have not had asserted against them any
        penalty for failure to fulfill the minimum funding requirements of
        ERISA.  All Plans, Benefit Arrangements and Multiemployer Plans have
        been administered in all material respects in accordance with their terms
        and
        applicable Law.

       

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

      

       

      (ii)  No
        event requiring notice to the PBGC under Section 302(f)(4)(A) of ERISA has
        occurred or is reasonably expected to occur with respect to any Plan, and
        no
        amendment with respect to which security is required under Section 307 of
        ERISA has been made or is reasonably expected to be made to any
        Plan.

       

      (iii)  Neither
        the Borrower nor any other member of the ERISA Group has incurred or reasonably
        expects to incur any material withdrawal liability under ERISA to any
        Multiemployer Plan or Multiple Employer Plan.  Neither the Borrower
        nor any other member of the ERISA Group has been notified by any Multiemployer
        Plan or Multiple Employer Plan that such Multiemployer Plan or Multiple Employer
        Plan has been terminated within the meaning of Title IV of ERISA and, to
        the
        best knowledge of the Borrower, no Multiemployer Plan or Multiple Employer
        Plan
        is reasonably expected to be reorganized or terminated, within the meaning
        of
        Title IV of ERISA.

       

      
        	
                6.1.20.  

              	
                Employment
                  Matters.

              

      

       

      Each
        of the Loan Parties and each of their Subsidiaries is in compliance with
        the
        Labor Contracts and all applicable federal, state and local labor and employment
        Laws including those related to equal employment opportunity and affirmative
        action, labor relations, minimum wage, overtime, child labor, medical insurance
        continuation, worker adjustment and relocation notices, immigration controls
        and
        worker and unemployment compensation, where the failure to comply could
        reasonably be expected to result in a Material Adverse Change.  There
        are no outstanding grievances, arbitration awards or appeals therefrom arising
        out of the Labor Contracts or current or threatened strikes, picketing,
        handbilling or other work stoppages or slowdowns at facilities of any of
        the
        Loan Parties or any of their Subsidiaries which in any case could reasonably
        be
        expected to result in a Material Adverse Change.  The Borrower has
        delivered to the Agent true and correct copies of each of the Labor
        Contracts.

       

      
        	
                6.1.21.  

              	
                Environmental
                  Matters.

              

      

       

      None
        of the Loan Parties or any Subsidiaries of any Loan Party has received any
        Environmental Complaint and none of the Loan Parties has any reason to believe
        that such an Environmental Complaint might be received which could reasonably
        be
        expected to result in a Material Adverse Change.  There are no pending
        or, to any Loan Party's knowledge, threatened Environmental Complaints relating
        to any Loan Party or Subsidiary of any Loan Party or any of the Properties
        or,
        to any Loan Party's knowledge, any prior owner, operator or occupant of any
        of
        the Properties pertaining to, or arising out of, any Contamination or violations
        of Environmental Laws or Environmental Permits which could reasonably be
        expected to result in a Material Adverse Change.  The Loan Parties and
        their Subsidiaries are in compliance with all applicable Environmental Laws
        in
        all jurisdictions in which any Loan Party or Subsidiary of any Loan Party
        is
        doing business except where the failure to do so could not reasonably be
        expected to result in a Material Adverse Change.  The Loan Parties and
        their Subsidiaries hold and are operating in compliance with Environmental
        Permits, except where the failure to do so could not reasonably be expected
        to
        result in a Material Adverse Change.

       

      
        	
                6.1.22.  

              	
                Senior
                  Debt Status.

              

      

       

      The
        Obligations of each Loan Party under this Agreement, the Guaranty Agreement
        and
        each of the other Loan Documents to which it is a party do rank and will
        rank at
        least paripassu in priority of payment with all other Indebtedness
        of such Loan Party except Indebtedness of such Loan Party to the extent secured
        by Permitted Liens.  There is no Lien upon or with respect to any of
        the properties or income of any

       

      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

      

      Loan
        Party or Unregulated Subsidiary of any Loan Party which secures indebtedness
        or
        other obligations of any Person except for Permitted Liens.

       

      
        	
                6.1.23.  

              	
                Reserved.

              

      

       

      
        	
                6.1.24.  

              	
                Permitted
                  Related Business Opportunities.

              

      

       

      The
        information set forth on Schedule 6.1.24 is true, complete and correct in
        all material respects and sets forth a list of the Investments in Permitted
        Related Business Opportunities by the Loan Parties and their Subsidiaries
        as of
        the Closing Date and includes, without limitation, the amount and nature
        of each
        such Investment, a description of the activities engaged in by the Loan Parties
        and their Subsidiaries in connection with such Investment, and a description
        of
        the activities engaged in by the Person in which the Investment has been
        made.

       

      
        	
                6.1.25.  

              	
                Anti-Terrorism
                  Laws; Executive Order No.
                  13224.

              

      

       

      None
        of the Loan Parties nor any Subsidiary of any Loan Party is any of the following
        (each a "Blocked Person"):

       

      (i)           a
        Person that is listed in the annex to, or is otherwise subject to the provisions
        of, the Executive Order No. 13224;

       

      (ii)           a
        Person owned or controlled by, or acting for or on behalf of, any Person
        that is
        listed in the annex to, or is otherwise subject to the provisions of, the
        Executive Order No. 13224;

       

      (iii)           a
        Person or entity with which any Bank is prohibited from dealing or otherwise
        engaging in any transaction by any Anti-Terrorism Law;

       

      (iv)           a
        Person or entity that commits, threatens or conspires to commit or supports
        "terrorism" as defined in the Executive Order No. 13224;

       

      (v)           a
        Person or entity that is named as a "specially designated national" on the
        most
        current list published by the United States Treasury Department Office of
        Foreign Asset Control at its official website or any replacement website
        or
        other replacement official publication of such list, or

       

      (vi)           a
        Person or entity who is affiliated or associated with a Person or entity
        listed
        above.

       

      6.2  Continuation
        of Representations.

       

      The
        Loan Parties make the representations and warranties in this Section 6 on
        the date hereof, on the Closing Date, and each date thereafter on which a
        Loan
        is made or a Letter of Credit is issued as provided in and subject to Sections
        7.1 and 7.2.  Should any of the
        information or disclosures provided on any of the Schedules attached hereto
        become outdated or incorrect in any material respect, the Borrower shall
        promptly provide the Agent in writing with such revisions or updates to such
        Schedule as may be necessary or appropriate to update or correct same;
provided, however, that no Schedule shall be deemed to have been amended,
        modified or superseded by any such correction or update, nor shall any breach
        of
        warranty or representation resulting from the inaccuracy or incompleteness
        of
        any such Schedule be deemed to have been cured thereby, unless and until
        the
        Required Banks, in their sole and absolute discretion, shall have accepted
        in
        writing such revisions or updates to such Schedule; provided further
        however that any update to Schedule 6.1.2, delivered to the Agent in form
        and substance satisfactory to the Agent, as a result of the creation,
        acquisition, liquidation, dissolution or winding-up of affairs of a

       

      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

      Subsidiary
        in accordance with Sections 8.2.8 [Subsidiaries, Partnerships and Joint
        Ventures] and 8.2.5 [Liquidations, Mergers, Consolidations, Acquisitions]
        as
        otherwise permitted hereunder shall be deemed to amend the existing Schedule
        6.1.2 upon acceptance thereof in writing by the Agent..

       

       

      7.  CONDITIONS
        OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

       

      The
        obligation of each Bank to make Loans and of the Agent to issue Letters of
        Credit hereunder is subject to the performance by each of the Loan Parties
        of
        its Obligations to be performed hereunder at or prior to the making of any
        such
        Loans or issuance of such Letters of Credit and to the satisfaction of the
        following further conditions:

       

      7.1  Conditions
        to First Loans and Letters of Credit.

       

      On
        the Closing Date:

       

      
        	
                7.1.1.  

              	
                Officer's
                  Certificate.

              

      

       

      The
        representations and warranties of each of the Loan Parties contained in
        Section 6 and in each of the other Loan
        Documents shall be true and accurate on and as of the Closing Date with the
        same
        effect as though such representations and warranties had been made on and
        as of
        such date (except representations and warranties which relate solely to an
        earlier date or time, which representations and warranties shall be true
        and
        correct on and as of the specific dates or times referred to therein), and
        each
        of the Loan Parties shall have performed and complied with all covenants
        and
        conditions hereof and thereof, no Event of Default or Potential Default shall
        have occurred and be continuing or shall exist; and there shall be delivered
        to
        the Agent for the benefit of each Bank a certificate of each of the Loan
        Parties, dated the Closing Date and signed by the Chief Executive Officer,
        President, Chief Financial Officer or other Authorized Officer of each of
        the
        Loan Parties, to each such effect.

       

      
        	
                7.1.2.  

              	
                Secretary's
                  Certificate.

              

      

       

      There
        shall be delivered to the Agent for the benefit of each Bank a certificate
        dated
        the Closing Date and signed by the Secretary or an Assistant Secretary of
        each
        of the Loan Parties, certifying as appropriate as to:

       

      (i)  all
        action taken by each Loan Party in connection with this Agreement and the
        other
        Loan Documents;

       

      (ii)  the
        names of the officer or officers authorized to sign this Agreement and the
        other
        Loan Documents and the true signatures of such officer or officers and
        specifying the Authorized Officers permitted to act on behalf of each Loan
        Party
        for purposes of this Agreement and the true signatures of such officers,
        on
        which the Agent and each Bank may conclusively rely; and

       

      (iii)  copies
        of its organizational documents, including its certificate of incorporation,
        bylaws, certificate of limited partnership, partnership agreement, certificate
        of formation, and limited liability company agreement as in effect on the
        Closing Date certified by the appropriate state official where such documents
        are filed in a state office together with certificates from the appropriate
        state officials as to the continued existence and good standing of each Loan
        Party in each state where organized or qualified to do business and a bring-down
        certificate by facsimile dated the Closing Date.

       

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

      

       

      
        	
                7.1.3.  

              	
                Opinion
                  of Counsel.

              

      

       

      There
        shall be delivered to the Agent for the benefit of each Bank a written opinion
        of (a) Troutman Sanders LLP, counsel for the Loan Parties (who may rely on
        the opinions of such other counsel and Certificates of the Borrower's in-house
        counsel as may be reasonably acceptable to the Agent), dated the Closing
        Date
        and in substantially the form attached hereto as Exhibit 7.1.3(A),
        and (b) Richard Reich, in-house counsel for the Loan Parties, dated the
        Closing Date and in substantially the form attached hereto as
Exhibit 7.1.3(B).

       

      
        	
                7.1.4.  

              	
                Legal
                  Details.

              

      

       

      All
        legal details and proceedings in connection with the transactions contemplated
        by this Agreement and the other Loan Documents shall be in form and substance
        satisfactory to the Agent and counsel for the Agent, and the Agent shall
        have
        received all such other counterpart originals or certified or other copies
        of
        such documents and proceedings in connection with such transactions, in form
        and
        substance satisfactory to the Agent and said counsel, as the Agent or said
        counsel may reasonably request.  The Agent shall have received this
        Agreement executed by the Borrower and each Bank and the Notes executed by
        the
        Borrower.

       

      
        	
                7.1.5.  

              	
                Payment
                  of Fees.

              

      

       

      The
        Borrower shall have paid or caused to be paid to the Agent for itself and
        for
        the account of the Banks to the extent not previously paid all fees accrued
        through the Closing Date and the costs and expenses for which the Agent and
        the
        Banks are entitled to be reimbursed.

       

      
        	
                7.1.6.  

              	
                Consents.

              

      

       

      The
        material consents, if any, required to effectuate the transactions contemplated
        hereby as set forth on Schedule 6.1.12 shall have been
        obtained.

       

      
        	
                7.1.7.  

              	
                Officer's
                  Certificate Regarding MACs.

              

      

       

      Except
        as disclosed in the financial statements contained in the SEC Filings with
        regard to the results of operations of the Company and its consolidated
        Subsidiaries for the fiscal year of the Company ended September 30, 2005,
        since
        September 30, 2007, no Material Adverse Change shall have occurred; since
        that
        date through and including the Closing Date, there shall have been no material
        change in the management of any Loan Party or Subsidiary of any Loan Party;
        and
        there shall have been delivered to the Agent for the benefit of each Bank
        a
        certificate dated the Closing Date and signed by the Chief Executive Officer,
        President, Chief Financial Officer or other Authorized Officer of each Loan
        Party to each such effect.

       

      
        	
                7.1.8.  

              	
                No
                  Violation of Laws.

              

      

       

      The
        making of the Loans and the issuance of the Letters of Credit shall not
        contravene any Law applicable to any Loan Party or any of the
        Banks.

       

      
        	
                7.1.9.  

              	
                No
                  Actions or Proceedings.

              

      

       

      No
        action, proceeding, investigation, regulation or legislation shall have been
        instituted, threatened or proposed before any court, governmental agency
        or
        legislative body to enjoin, restrain or prohibit, or to obtain damages in
        respect of, this Agreement, the other Loan Documents or the consummation
        of
        the

       

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

      transactions
        contemplated hereby or thereby or which, in the Agent's sole discretion,
        would
        make it inadvisable to consummate the transactions contemplated by this
        Agreement or any of the other Loan Documents.

       

      
        	
                7.1.10.  

              	
                Delivery
                  of Guaranty Agreement.

              

      

       

      The
        Guaranty Agreement shall have been duly executed and delivered to the Agent
        for
        the benefit of the Banks.

       

      
        	
                7.1.11.  

              	
                Hedging
                  Contract Policies.

              

      

       

      The
        Loan Parties shall have delivered to the Agent and each Bank a true and complete
        copy of the Hedging Contract Policies, and the Hedging Contract Policies
        shall
        be satisfactory in form and substance to each Bank.

       

      
        	
                7.1.12.  

              	
                Termination
                  of Commitments and Repayment of Outstanding
                  Indebtedness.

              

      

       

      The
        Loan Parties shall have repaid all obligations, indebtedness, interest fees,
        expenses and other amounts due and owing under the Existing Credit Facility,
        all
        commitments to lend thereunder shall have been irrevocably terminated and
        all
        letters of credit issued thereunder shall have been terminated, all to the
        satisfaction of the Agent.

       

      7.2  Each
        Additional Loan or Letter of Credit.

       

      At
        the time of making any Loans or issuing any Letters of Credit other than
        Loans
        made or Letters of Credit issued on the Closing Date and after giving effect
        to
        the proposed extensions of credit:  (i) the representations and
        warranties of the Loan Parties contained in Section 6 (other than the
        representations and warranties contained in the first sentence of Section
        6.1.6
        [Litigation], the last sentence of Section 6.1.8.2 [Financial Statements],
        and
        Section 6.1.21 [Environmental Matters]) and in the other Loan Documents shall
        be
        true on and as of the date of such additional Loan or Letter of Credit with
        the
        same effect as though such representations and warranties had been made on
        and
        as of such date (except representations and warranties which expressly relate
        solely to an earlier date or time, which representations and warranties shall
        be
        true and correct on and as of the specific dates or times referred to therein),
        and the Loan Parties shall have performed and complied with all covenants
        and
        conditions hereof; (ii) no Event of Default or Potential Default shall have
        occurred and be continuing or shall exist; (iii) the making of the Loans or
        issuance of such Letters of Credit shall not contravene any Law applicable
        to
        any Loan Party or any Subsidiary of any Loan Party or any of the Banks;
        (iv) and the Borrower shall have delivered to the Agent a duly executed and
        completed Loan Request, Swing Loan Request, or application for a Letter of
        Credit as the case may be.

       

       

      8.           COVENANTS

       

      8.1  Affirmative
        Covenants.

       

      The
        Loan Parties, jointly and severally, covenant and agree that until payment
        in
        full of the Loans, Reimbursement Obligations and Letter of Credit Borrowings,
        and interest thereon, expiration or termination of all Letters of Credit,
        satisfaction of all of the Loan Parties' other Obligations under the Loan
        Documents and termination of the Commitments, the Loan Parties shall comply
        at
        all times with the following affirmative covenants:

       

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

      

       

      
        	
                8.1.1.  

              	
                Preservation
                  of Existence, Etc.

              

      

       

      Each
        Loan Party shall, and shall cause each of its Subsidiaries to, maintain its
        legal existence as a corporation, partnership or limited liability company
        and
        its license or qualification and good standing in each jurisdiction in which
        its
        ownership or lease of property or the nature of its business makes such license
        or qualification necessary, except (i) where the lack of legal existence of
        any Subsidiary or the failure to be so licensed or qualified could not
        reasonably be expected to have a Material Adverse Change, or (ii) as
        otherwise expressly permitted in Section 8.2.5 [Liquidations, Mergers,
        Etc.].

       

      
        	
                8.1.2.  

              	
                Payment
                  of Liabilities, Including Taxes,
                  Etc.

              

      

       

      Each
        Loan Party shall, and shall cause each of its Subsidiaries to, duly pay and
        discharge all liabilities to which it is subject or which are asserted against
        it, promptly as and when the same shall become due and payable, including
        all
        taxes, assessments and governmental charges upon it or any
        of its properties, assets, income or profits, prior to the date on which
        penalties attach thereto, except to the extent that such liabilities, including
        taxes, assessments or charges, are being contested in good faith and by
        appropriate and lawful proceedings diligently conducted and for which such
        reserve or other appropriate provisions, if any, as shall be required by
        GAAP
        shall have been made, but only to the extent that failure to discharge any
        such
        liabilities would not result in any additional liability which could reasonably
        be expected to result in a Material Adverse Change.

       

      
        	
                8.1.3.  

              	
                Maintenance
                  of Insurance.

              

      

       

      Each
        Loan Party shall, and shall cause each of its Subsidiaries to, insure its
        properties and assets against loss or damage by fire and such other insurable
        hazards as such assets are commonly insured (including fire, extended coverage,
        property damage, workers' compensation, public liability and business
        interruption insurance) and against other risks (including errors and omissions)
        in such amounts as similar properties and assets are insured by prudent
        companies in similar circumstances carrying on similar businesses, and with
        reputable and financially sound insurers, including self-insurance to the
        extent
        customary.

       

      
        	
                8.1.4.  

              	
                Maintenance
                  of Properties and Leases.

              

      

       

      Each
        Loan Party shall, and shall cause each of its Subsidiaries to, maintain in
        good
        repair, working order and condition (ordinary wear and tear excepted) in
        accordance with the general practice of other businesses of similar character
        and size, all of those properties useful or necessary to its business, and
        from
        time to time, such Loan Party will make or cause to be made all appropriate
        repairs, renewals or replacements thereof.

       

      
        	
                8.1.5.  

              	
                Maintenance
                  of Patents, Trademarks, Etc.

              

      

       

      Each
        Loan Party shall, and shall cause each of its Subsidiaries to, maintain in
        full
        force and effect all patents, trademarks, service marks, trade names,
        copyrights, licenses, franchises, permits and other authorizations necessary
        for
        the ownership and operation of its properties and business if the failure
        so to
        maintain the same could constitute a Material Adverse Change.

       

      
        	
                8.1.6.  

              	
                Visitation
                  Rights.

              

      

       

      Each
        Loan Party shall, and shall cause each of its Subsidiaries to, permit any
        of the
        officers or authorized employees or representatives of the Agent or any of
        the
        Banks to visit and inspect any of its properties and to examine and make
        excerpts from its books and records and discuss its business affairs, finances
        and

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

      accounts
        with its officers, all in such detail and at such times and as often as any
        of
        the Banks may reasonably request, provided that each Bank shall provide
        the Borrower and the Agent with reasonable notice prior to any visit or
        inspection, and, prior to an Event of Default, any such visit or inspection
        shall occur during regular business hours.  In the event any Bank
        desires to conduct an audit of any Loan Party, such Bank shall make a reasonable
        effort to conduct such audit contemporaneously with any audit to be performed
        by
        the Agent, and prior to an Event of Default, any such audit (whether by the
        Agent or any Bank) shall be at the sole cost and expense of the Agent or
        such
        Bank, as the case may be.

       

      
        	
                8.1.7.  

              	
                Keeping
                  of Records and Books of
                  Account.

              

      

       

      The
        Borrower shall, and shall cause each Subsidiary of the Borrower to, maintain
        and
        keep proper books of record and account which enable the Borrower and its
        Subsidiaries to issue financial statements in accordance with GAAP and as
        otherwise required by applicable Laws of any Official Body having jurisdiction
        over the Borrower or any Subsidiary of the Borrower, and in which full, true
        and
        correct entries shall be made in all material respects of all its dealings
        and
        business and financial affairs.

       

      
        	
                8.1.8.  

              	
                Plans
                  and Benefit Arrangements.

              

      

       

      The
        Borrower shall, and shall cause each other member of the ERISA Group to,
        comply
        with ERISA, the Internal Revenue Code and other applicable Laws applicable
        to
        Plans and Benefit Arrangements except where such failure, alone or in
        conjunction with any other failure, would not reasonably be expected to result
        in a Material Adverse Change.  Without limiting the generality of the
        foregoing, the Borrower shall cause all of its Plans and all Plans maintained
        by
        any member of the ERISA Group to be funded in accordance with the minimum
        funding requirements of ERISA and shall make, and cause each member of the
        ERISA
        Group to make, in a timely manner, all contributions due to Plans, Benefit
        Arrangements and Multiemployer Plans.

       

      
        	
                8.1.9.  

              	
                Compliance
                  With Laws.

              

      

       

      Each
        Loan Party shall, and shall cause each of its Subsidiaries to, comply with
        all
        applicable Laws, including all Environmental Laws, in all material respects,
        provided that it shall not be deemed to be a violation of this
        Section 8.1.9 if any failure to comply with any Law would not result in
        fines, penalties, costs associated with the performance of any Remedial Actions,
        other similar liabilities or injunctive relief which in the aggregate could
        not
        reasonably be expected to result in a Material Adverse
        Change.  Without limiting the generality of the foregoing, each Loan
        Party shall, and shall cause each of its Subsidiaries to, obtain, maintain,
        renew and comply with all Environmental Permits applicable to their respective
        operations and activities, provided that it shall not be deemed to be a
        violation of this Section 8.1.9 if any failure to do so would not result in
        cease and desist orders or fines, penalties or other similar liabilities
        or
        injunctive relief which in the aggregate could not reasonably be expected
        to
        result in a Material Adverse Change.

       

      
        	
                8.1.10.  

              	
                Use
                  of Proceeds.

              

      

       

      The
        Loan Parties will use the Letters of Credit and the proceeds of the Loans
        only
        for general corporate purposes of the Borrower and for working capital of
        the
        Borrower (including, without limitation (i) the use of Letters of Credit
        to
        support obligations arising in the ordinary course of the business of the
        Loan
        Parties, as such business is permitted to be conducted pursuant to Section
        8.2.9
        [Continuation of or Change in Business] and (ii) to repay and terminate
        Indebtedness outstanding under the Existing Credit Facility).  The
        Loan Parties shall not use the Letters of Credit or the proceeds of the Loans
        for any purposes which contravenes any applicable Law or any provision
        hereof.

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

      

       

      
        	
                8.1.11.  

              	
                Reserved.

              

      

       

      8.2  Negative
        Covenants.

       

      The
        Loan Parties, jointly and severally, covenant and agree that until payment
        in
        full of the Loans, Reimbursement Obligations and Letter of Credit Borrowings,
        and interest thereon, expiration or termination of all Letters of Credit,
        satisfaction of all of the Loan Parties' other Obligations hereunder and
        termination of the Commitments, the Loan Parties shall comply with the following
        negative covenants:  

       

      
        	
                8.2.1.  

              	
                Indebtedness.

              

      

       

      Each
        of the Loan Parties shall not, and shall not permit any of its Unregulated
        Subsidiaries to, at any time create, incur, assume or suffer to exist any
        Indebtedness, except:

       

      (i)  Indebtedness
        under the Loan Documents;

       

      (ii)  Existing
        Indebtedness as set forth on Schedule 8.2.1 (including any extensions or
        renewals thereof, provided there is no increase in the amount thereof or
        other significant change in the terms thereof unless otherwise specified
        on
Schedule 8.2.1);

       

      (iii)  Indebtedness
        of a Loan Party to another Loan Party;

       

      (iv)  Intentionally
        omitted;

       

      (v)  Additional,
        unsecured Indebtedness of the Borrower incurred after the Closing Date, not
        to
        exceed at any time outstanding, after giving effect thereto, 65% of Consolidated
        Total Capitalization, so long as, both before and after giving effect to
        any
        proposed additional Indebtedness:  (a) no Potential Default or Event
        of Default shall have occurred and be continuing, and (b) provided that
        such additional Indebtedness shall not contain (i) covenants, defaults and
        other
        terms and conditions more restrictive than those contained in this Agreement
        or
        (ii) any negative covenants, financial covenants, and defaults that are not
        also
        contained in this Agreement;

       

      (vi)  Additional
        Indebtedness, in respect of capitalized leases (including, without limitation,
        capitalized leases for metered assets) not to exceed at any time outstanding
        in
        the aggregate for the Loan Parties and their Unregulated Subsidiaries
        $60,000,000;

       

      (vii)  Additional
        Indebtedness of NJR Energy Services Company arising under any Hedging
        Transaction;

       

      (viii)  Additional
        Indebtedness, at any time outstanding not to exceed $10,000,000, secured
        by
        Liens permitted by Section 8.2.2(i);

       

      (ix)  Intentionally
        omitted;

       

      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

      

       

      (x)  the
        NJR Notes and any refinancing thereof, so long as any Indebtedness refinancing
        the NJR Notes:  (a) is unsecured, (b) is on terms (including, without
        limitation the events of default, covenants, and prepayment, redemption and
        repurchase provisions) no more restrictive in any material respect than the
        NJR
        Note Agreements unless the Borrower shall have irrevocably offered the Agent
        and
        the Banks to enter at any time into an amendment of this Agreement to add
        to
        this Agreement substantially similar covenants, provisions or Events of Default,
        as the case may be, (c) has a maturity date no earlier than 180 days after
        the
        Expiration Date, and (d) has an interest rate not materially in excess of
        prevailing rates at such time for like transactions with a borrower of
        comparable credit rating to the Borrower;

       

      (xi)  Intentionally
        omitted;

       

      (xii)  Indebtedness,
        secured by Purchase Money Security Interests as permitted by clause (xi)
        of the
        definition of Permitted Liens, not to exceed at any time outstanding in the
        aggregate for the Loan Parties and their Unregulated Subsidiaries
        $20,000,000;

       

      (xiii)  Indebtedness
        not to exceed at any time outstanding in the aggregate for the Loan Parties
        and
        their Unregulated Subsidiaries $75,000,000, so long as:  (a) such
        Indebtedness is Indebtedness of an Acquired Person which existed prior to
        the
        consummation of the Permitted Acquisition in connection with which such Acquired
        Person was acquired by a Loan Party and such Indebtedness was not incurred
        in
        contemplation of or in connection with such Permitted Acquisition; and (b)
        such
        Indebtedness if secured is secured by Liens permitted by clause (xii) of
        the
        definition of Permitted Liens; and

       

      (xiv)  Non-recourse
        Indebtedness of the Project Subsidiaries.

       

      
        	
                8.2.2.  

              	
                Liens.

              

      

       

      Each
        of the Loan Parties shall not, and shall not permit any of its Unregulated
        Subsidiaries (other than Project Subsidiaries) to, at any time create, incur,
        assume or suffer to exist any Lien on any of its property or assets, tangible
        or
        intangible, now owned or hereafter acquired, or agree or become liable to
        do
        so, except:

       

      (i)  Liens
        existing on such property at the time of the acquisition of such property;
        provided that the fair market value of all assets secured as permitted by
        this
        Section 8.2.2 clause (i) shall not exceed, at any time, $10,000,000 and provided
        further that the Indebtedness secured by Liens permitted by this Section
        8.2.2
        clause (i) shall not at any time outstanding exceed $10,000,000;

       

      (ii)  Permitted
        Liens; and

       

      (iii)  Extensions
        or renewals of any Lien described in clause (i) or (ii) of this Section 8.2.2,
        provided that:  (a) any such extension or renewal shall be limited to
        the property theretofore subject to such Lien, and (b) the principal amount
        of
        the Indebtedness secured by such Lien shall not be increased and shall otherwise
        be permitted by Section 8.2.1.

       

      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

      

       

      
        	
                8.2.3.  

              	
                Guaranties.

              

      

       

      Each
        of the Loan Parties shall not, and shall not permit any of its Unregulated
        Subsidiaries to, at any time, directly or indirectly, become or be liable
        in
        respect of any Guaranty, or assume, guarantee, become surety for, endorse
        or
        otherwise agree, become or remain directly or contingently liable upon or
        with
        respect to any obligation or liability of any other Person, except
        for

       

      (i)  Guaranties
        of Indebtedness of the Loan Parties permitted pursuant to Section 8.2.1
        [Indebtedness], (provided however, that the NJR Notes shall not be guaranteed
        by
        any Loan Party or any Subsidiary of a Loan Party unless such Person is also
        a
        Guarantor);

       

      (ii)  Guaranties
        of any Loan Party or any of its Unregulated Subsidiaries of obligations of
        NJR
        Energy Services Company arising under any Hedging Transaction; and

       

      (iii)  Guaranties
        by the Borrower of various obligations of any of its Unregulated Subsidiaries
        in
        connection with any transaction arising in connection with its ordinary course
        of business as conducted on the Closing Date or as otherwise permitted to
        be
        conducted pursuant to Section 8.2.9.

       

      
        	
                8.2.4.  

              	
                Loans
                  and Investments.

              

      

       

      Each
        of the Loan Parties shall not, and shall not permit any of its Unregulated
        Subsidiaries to, at any time make or suffer to remain outstanding any loan
        or
        advance to, or purchase, acquire or own any stock, bonds, notes or securities
        of, or any partnership interest (whether general or limited) or limited
        liability company interest in, or any other investment or interest
        in, or make any capital contribution to, any other Person,
        or agree, become or remain liable to do any of the foregoing (any of the
        foregoing being an "Investment"), except:

       

      (i)           trade
        credit extended on usual and customary terms in the ordinary course of
        business;

       

      (ii)           advances
        to employees to meet expenses incurred by such employees in the ordinary
        course
        of business;

       

      (iii)           Permitted
        Investments; 

       

      (iv)           loans,
        advances and investments in other Loan Parties and in the Project Subsidiaries;
        and

       

      (v)           any
        Investment which constitutes a Permitted Acquisition in accordance with Section
        8.2.5 [Liquidations, Mergers, Consolidations, Acquisitions].

       

      
        	
                8.2.5.  

              	
                Liquidations,
                  Mergers, Consolidations,
                  Acquisitions.

              

      

       

      Each
        of the Loan Parties shall not, and shall not permit any of its Unregulated
        Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a
        party
        to any merger or consolidation, or acquire by purchase, lease or otherwise
        all
        or substantially all of the assets or capital stock of any other Person,
        provided that:

       

      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

      

      

       

      (1)           any
        Loan Party other than the Borrower may consolidate or merge into another
        Loan
        Party which is wholly-owned by one or more of the other Loan
        Parties,

       

      (2)           any
        Inactive Subsidiary of the Borrower may dissolve, liquidate or wind-up its
        affairs or any Inactive Subsidiary of the Borrower may consolidate or merge
        into:  (a) any other Inactive Subsidiary of the Borrower, or (b) any
        Loan Party, other than the Borrower, so long as such Inactive Subsidiary
        has no
        liabilities, contingent or otherwise, other than Indebtedness permitted by
        Section 8.2.1, and

       

      (3)           any
        Loan Party may acquire, whether by purchase or by merger, (A) all of the
        ownership interests of another Person or (B) substantially all of assets
        of
        another Person or of a business or division of another Person (each a
        "Permitted Acquisition"), provided that each of the following
        requirements is met:

       

      a.           if
        the Loan Parties are acquiring the ownership interests in such Person, such
        Person (other than Project Subsidiaries) shall execute a Guarantor Joinder
        and
        join this Agreement as a Guarantor pursuant to Section 11.19 [Joinder of Guarantors] on or before the date
        of
        such Permitted Acquisition;

       

      b.           the
        Loan Parties, such Person (other than Project Subsidiaries) and its owners,
        as
        applicable, shall comply with Section 11.19
        [Joinder of Guarantors] on or before the date of such Permitted
        Acquisition;

       

      c.           the
        board of directors or other equivalent governing body of such Person shall
        have
        approved such Permitted Acquisition and, if the Loan Parties shall use any
        portion of the Loans to fund such Permitted Acquisition, the Loan Parties
        also
        shall have delivered to the Banks written evidence of the approval of the
        board
        of directors (or equivalent body) of such Person for such Permitted
        Acquisition;

       

      d.           the
        business acquired, or the business conducted by the Person whose ownership
        interests are being acquired, as applicable, shall be substantially the same
        as
        one or more line or lines of business conducted by the Loan Parties or otherwise
        be compliant with Section 8.2.9 [Continuation
        of or Change in Business];

       

      e.           no
        Potential Default or Event of Default shall exist immediately prior to and
        after
        giving effect to such Permitted Acquisition;

       

      f.           the
        Borrower shall demonstrate that it shall be in compliance with the covenants
        contained in Section 8.2.12 [Maximum Leverage Ratio] after giving effect
        to such
        Permitted Acquisition (including in such computation Indebtedness or other
        liabilities assumed or incurred in connection with such Permitted Acquisition
        but excluding income earned or expenses incurred by the Person, business
        or
        assets to be acquired prior to the date of such Permitted Acquisition) by
        delivering at least five (5) Business Days prior to such Permitted Acquisition
        a
        certificate in the form of Exhibit 8.2.5 (the "Acquisition Compliance
        Certificate") evidencing such compliance; and

       

      g.           the
        Loan Parties shall deliver to the Agent at least five (5) Business Days before
        such Permitted Acquisition copies of any agreements entered into or proposed
        to
        be entered into by such Loan Parties in connection with such Permitted
        Acquisition and shall deliver to the Agent such other information about such
        Person or its assets as the Agent or any Bank may reasonably
        require.

       

      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

      

       

      
        	
                8.2.6.  

              	
                Dispositions
                  of Assets or Unregulated
                  Subsidiaries.

              

      

       

      Each
        of the Loan Parties shall not, and shall not permit any of its Unregulated
        Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer
        or
        dispose of, voluntarily or involuntarily, any of its properties or assets,
        tangible or intangible (including sale, assignment, discount or other
        disposition of accounts, contract rights, chattel paper, equipment or general
        intangibles with or without recourse or of capital stock, shares of beneficial
        interest, partnership interests or limited liability company interests of
        an
        Unregulated Subsidiary of such Loan Party), except:

       

      (i)           transactions
        involving the sale of inventory in the ordinary course of business;

       

      (ii)           any
        sale, transfer or lease of assets in the ordinary course of business which
        are
        no longer necessary or required in the conduct of such Loan Party's or such
        Unregulated Subsidiary's business;

       

      (iii)           any
        sale, transfer or lease of assets by any wholly owned Unregulated Subsidiary
        of
        such Loan Party to another Loan Party;

       

      (iv)           any
        sale, transfer or lease of assets in the ordinary course of business which
        are
        replaced by substitute assets acquired or leased;

       

      (v)           intentionally
        omitted;

       

      (vi)           any
        sale, transfer or lease of assets of any Inactive Subsidiary of the
        Borrower;

       

      (vii)           any
        sale, transfer or lease of assets of any Project Subsidiary provided that
        at the
        time of any such sale, transfer or lease, no Event of Default shall exist
        or
        shall result from such sale, transfer or lease; and

       

      (viii)           any
        sale, transfer or lease of assets, other than those specifically excepted
        pursuant to clauses (i) through (vii) above, provided that (i) at the time
        of any disposition, no Event of Default shall exist or shall result from
        such
        disposition, and (ii) the aggregate net book value of all assets so sold by
        the Loan Parties and their Unregulated Subsidiaries shall not exceed in any
        fiscal year five (5%) of the consolidated total assets of the Loan Parties
        and
        their Unregulated Subsidiaries as determined on a consolidated basis in
        accordance with GAAP.

       

      
        	
                8.2.7.  

              	
                Affiliate
                  Transactions.

              

      

       

      Except
        solely with respect to any Permitted Related Business Opportunities as
        previously disclosed to the Agent and each of the Banks, each of the Loan
        Parties shall not, and shall not permit any of its Unregulated Subsidiaries
        to,
        enter into or carry out any transaction (including purchasing property or
        services from or selling property or services to any Affiliate of any Loan
        Party
        or other Person) unless such transaction is not otherwise prohibited by this
        Agreement, is entered into in the ordinary course of business upon fair and
        reasonable arm's-length terms and conditions and is in accordance with all
        applicable Law.

       

      
        
          
          

        

        
          53

          
            

          

        

        
          
          

        

      

      

       

      
        	
                8.2.8.  

              	
                Subsidiaries,
                  Partnerships and Joint
                  Ventures.

              

      

       

      Each
        of the Loan Parties shall not, and shall not permit any of its Unregulated
        Subsidiaries to, own or create directly or indirectly any Subsidiaries other
        than (i) any Subsidiary which is a Regulated Entity, (ii) any Subsidiary
        which
        is an Inactive Subsidiary of the Borrower, (iii) New Jersey Resources Foundation
        Inc., a non-profit corporation organized under the laws of the State of New
        Jersey, (iv) any Subsidiary which has joined this Agreement as Guarantor
        on the
        Closing Date, (v) any Project Subsidiary, and (vi) any Subsidiary formed
        after
        the Closing Date which joins this Agreement as a Guarantor pursuant to
        Section 11.19 [Joinder of
        Guarantors].  Each of the Loan Parties shall not become or agree to
        (1) become a general or limited partner in any general or limited
        partnership, except that the Loan Parties may be general or limited partners
        in
        other Loan Parties and except that the Loan Parties or their Subsidiaries
        may be
        a limited partner in a Permitted Related Business Opportunity, (2) become
        a
        member or manager of, or hold a limited liability company interest in, a
        limited
        liability company, except that the Loan Parties may be members or managers
        of,
        or hold limited liability company interests in, other Loan Parties and except
        that the Loan Parties or their Subsidiaries may be members or managers of,
        or
        hold limited liability company interests in a Permitted Related Business
        Opportunity, or (3) become a joint venturer or hold a joint venture interest
        in
        any joint venture, except that the Loan Parties or their Subsidiaries may
        become
        a joint venturer in or hold a joint venture interest in any joint venture
        that
        is a Permitted Related Business Opportunity. 

       

      
        	
                8.2.9.  

              	
                Continuation
                  of or Change in Business.

              

      

       

      Each
        of the Loan Parties shall not, and shall not permit any of its Unregulated
        Subsidiaries to, engage in any business other than the business of each Loan
        Party or Unregulated Subsidiary substantially as conducted and operated by
        such
        Loan Party or Unregulated Subsidiary during the present fiscal
        year, and any line of business or business activity
        related or complementary to the business of the Loan Parties conducted as
        of the
        Closing Date.

       

      
        	
                8.2.10.  

              	
                Plans
                  and Benefit Arrangements.

              

      

       

      Each
        of the Loan Parties shall not, and shall not permit any of its Unregulated
        Subsidiaries to, engage in a Prohibited Transaction with any Plan, Benefit
        Arrangement or Multiemployer Plan which, alone or in conjunction with any
        other
        circumstances or set of circumstances resulting in liability under ERISA
        or
        otherwise violate ERISA.

       

      
        	
                8.2.11.  

              	
                Fiscal
                  Year.

              

      

       

      The
        Borrower shall not, and shall not permit any Subsidiary (other than Project
        Subsidiaries) of the Borrower to, change its fiscal year from the twelve-month
        period beginning October 1 and ending September 30.

       

      
        	
                8.2.12.  

              	
                Maximum
                  Leverage Ratio.

              

      

       

      The
        Loan Parties shall not at any time permit the ratio of Consolidated Total
        Indebtedness of the Borrower and its Subsidiaries to Consolidated Total
        Capitalization to exceed 0.65 to 1.00.

       

      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

      

      

       

      
        	
                8.2.13.  

              	
                Reserved.

              

      

       

      
        	
                8.2.14.  

              	
                Reserved.

              

      

       

      
        	
                8.2.15.  

              	
                Payment
                  of Dividends; Redemptions.

              

      

       

      The
        Loan Parties shall not, and shall not permit any Subsidiary to, declare or
        make
        any dividend payment or other distribution of assets, properties, cash, rights,
        obligations or securities on account of any shares of any class of capital
        stock
        of any Loan Party, or purchase, redeem or otherwise acquire for value (or
        permit
        any of its Subsidiaries to do so) any shares of any class of capital stock
        or
        other securities of any Loan Party or any warrants, rights or options to
        acquire
        any such shares or other securities, now or hereafter outstanding, except
        that
        (a) the Borrower may (i) declare and make any dividend payment or other
        distribution payable in common stock of the Borrower, (ii) purchase, redeem
        or otherwise acquire shares of its common stock or warrants, rights or options
        to acquire any such shares so long as no Event of Default or Potential Default
        shall have occurred and is continuing or would result therefrom, and
        (iii) declare and make its quarterly dividend, so long as, after giving
        effect thereto, no Event of Default shall have occurred and is continuing,
        and
        (b) that any (i) Unregulated Subsidiary of the Borrower may declare
        and make any dividend payment or other distribution to the Borrower or to
        any
        other Loan Party, and (ii) Project Subsidiary may declare and make any
        dividend payment or other distribution to any Person.

       

      
        	
                8.2.16.  

              	
                Reserved.

              

      

       

      
        	
                8.2.17.  

              	
                Off-Balance
                  Sheet Financing.

              

      

       

      Each
        Loan Party and each Unregulated Subsidiary of each Loan Party shall not engage
        in any off-balance sheet transaction (i.e., the liabilities in respect of
        which
        do not appear on the liability side of the balance sheet, with such balance
        sheet prepared in accordance with GAAP) providing the functional equivalent
        of
        borrowed money (including asset securitizations, sale/leasebacks or Synthetic
        Leases (other than any sale/leaseback transaction or Synthetic Lease entered
        into, in either case, with respect to meter assets and which transaction
        is
        otherwise permitted by this Agreement)) with liabilities in excess, in the
        aggregate for the Borrower and its Subsidiaries as of any date of determination,
        of five (5%) of the total assets of the Borrower and its Subsidiaries,
        determined and consolidated in accordance with GAAP as of the date of
        determination.  For purposes of this Section 8.2.17 (a) "Synthetic
        Lease" shall mean any lease transaction under which the parties intend that
        (i) the lease will be treated as an "operating lease" by the lessee pursuant
        to
        Statement of Financial Accounting Standards No. 13, as amended, or appropriate
        successor thereto, and (ii) the lessee will be entitled to various tax benefits
        ordinarily available to owners (as opposed to lessees) of like property and
        (b)
        the amount of any lease which is not a capital lease in accordance with GAAP
        is
        the aggregate amount of minimum lease payments due pursuant to such lease
        for
        any non-cancelable portion of its term.

       

      8.2.18.  Amendments
        to NJR Note Agreements.

       

      Each
        Loan Party and each Unregulated Subsidiary of each Loan Party shall not enter
        into any one or more amendments, modifications, restatements, or the like
        of any
        of the NJR Note Agreements containing covenants or events of default materially
        more restrictive than the covenants or Events of Default contained in this
        Agreement (a " Modification Agreement") unless no later than five (5)
        Business Days after entering into any such Modification Agreement, Borrower
        shall have irrevocably offered the Agent and the Banks to enter at any time
        into
        an amendment of this Agreement to add to this Agreement substantially similar
        covenants or Events of Default, as the case may be.

       

      The
        foregoing shall not be construed as:  (i) a consent by the Agent or
        any Bank to any action or inaction otherwise restricted or prohibited by
        this
        Agreement, or (ii) a waiver by the Agent or any Bank of any Potential Default
        or
        Event of Default resulting from any Modification Agreement.

       

      8.2.19.  No
        Violation of Anti-Terrorism Laws.

       

      The
        Loan Parties and each Unregulated Subsidiary of any Loan Party shall
        not:  (i) violate any of the prohibitions set forth in the Executive
        Order No. 13224, the USA Patriot Act or any other Anti-Terrorism Law applicable
        to any of them or the business that they conduct, and (ii) require the Agent
        or
        the Banks to take any action that would cause the Agent or the Banks to be
        in
        violation of the prohibitions set forth in the Executive Order No. 13224,
        the
        USA Patriot Act or any other Anti-Terrorism Law, it being understood that
        the
        Agent or any Bank can refuse to honor any such request or demand otherwise
        validly made by any such Loan Party or any Unregulated Subsidiary of any
        Loan
        Party under this Agreement or any other Loan Document.

       

      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

      8.3  Reporting
        Requirements.

       

      The
        Loan Parties, jointly and severally, covenant and agree that until payment
        in
        full of the Loans, Reimbursement Obligations and Letter of Credit Borrowings,
        and interest thereon, expiration or termination of all Letters of Credit,
        satisfaction of all of the Loan Parties' other Obligations hereunder and under
        the other Loan Documents and termination of the Commitments, the Loan Parties
        will furnish or cause to be furnished to the Agent and each of the
        Banks:

       

      
        	
                8.3.1.  

              	
                Quarterly
                  Financial Statements.

              

      

       

      As
        soon as available and in any event within forty-five (45) calendar days after
        the end of each of the first three fiscal quarters in each fiscal year (or
        such
        earlier or later date, from time to time established by the SEC in accordance
        with the Securities Exchange Act of 1934, as amended, or within fifty (50)
        days
        in the event the Borrower shall file its Form 10-Q within the extension period
        pursuant to Rule 12b-25 of the Securities Exchange Act of 1934, as amended),
        financial statements of the Borrower, consisting of a consolidated and
        consolidating balance sheet as of the end of such fiscal quarter and related
        consolidated and consolidating statements of income, stockholders' equity
        and
        cash flows for the fiscal quarter then ended and the fiscal year through
        that
        date, all in reasonable detail and certified (subject to normal year-end
        audit
        adjustments) by the Chief Executive Officer, President or Chief Financial
        Officer of the Borrower as having been prepared in accordance with GAAP,
        consistently applied, and setting forth in comparative form the respective
        financial statements for the corresponding date and period in the previous
        fiscal year.  The Loan Parties will be deemed to have complied with
        the delivery requirements of this Section 8.3.1 if within forty-five (45)
        days after the end of their fiscal quarter (or such earlier or later date,
        from
        time to time established by the SEC in accordance with the Securities Exchange
        Act of 1934, as amended), the Borrower delivers to the Agent and each of
        the
        Banks a copy of its Form 10-Q as filed with the SEC and the financial statements
        contained therein meets the requirements described in this Section.

       

      
        	
                8.3.2.  

              	
                Annual
                  Financial Statements.

              

      

       

      As
        soon as available and in any event within ninety (90) days after the end
        of each
        fiscal year of the Borrower (or such earlier or later date, from time to
        time
        established by the SEC in accordance with the Securities Exchange Act of
        1934,
        as amended, or within one hundred five (105) days in the event the Borrower
        shall file its Annual Report on Form 10-K within the extension period pursuant
        to Rule 12b-25 of the Securities Exchange Act of 1934, as amended), financial
        statements of the Borrower consisting of a consolidated balance sheet as
        of the
        end of such fiscal year, and related consolidated statements of income,
        stockholders' equity and cash flows for the fiscal year then ended, all in
        reasonable detail and setting forth in comparative form the financial statements
        as of the end of and for the preceding fiscal year, and certified by independent
        certified public accountants of nationally recognized standing satisfactory
        to
        the Agent.  The certificate or report of accountants shall be
        free of qualifications (other than any consistency qualification that may
        result
        from a change in the method used to prepare the financial statements as to
        which
        such accountants concur) and shall not indicate the occurrence or existence
        of
        any event, condition or contingency which would materially impair the prospect
        of payment or performance of any covenant, agreement or duty of any Loan
        Party
        under any of the Loan Documents.  The Loan Parties will be deemed to
        have complied with the delivery requirements of this Section 8.3.2 if
        within ninety (90) days (or one hundred five (105) days, if applicable) after
        the end of their fiscal year (or such earlier or later date, from time to
        time
        established by the SEC in accordance with the Securities Exchange Act of
        1934,
        as amended), the Borrower delivers to the Agent and each of the Banks a copy
        of
        its Annual Report on Form 10-K as filed with the SEC and the financial
        statements and certification of public accountants contained therein meets
        the
        requirements described in this Section.
         

      

      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

      

      It
        is expressly agreed that any financial information or financial statements
        (including, without limitation the annual financial statements required pursuant
        to this Section 8.3.2) submitted to the Agent or the Banks which has been
        prepared by an independent public accountant or other outside accountant
        shall
        be accompanied by a statement in writing signed by such accountant disclosing
        that the accountant is aware that the financial information or financial
        statements prepared by the accountant would be submitted to and relied upon
        by
        the Agent and/or the Banks in connection with the Agent's or the Banks'
        determination to grant or continue credit.

       

      
        	
                8.3.3.  

              	
                Certificate
                  of the Borrower.

              

      

       

      Concurrently
        with the financial statements of the Borrower furnished to the Agent and
        to the
        Banks pursuant to Sections 8.3.1 [Quarterly Financial Statements] and 8.3.2
        [Annual Financial Statements], a certificate (each a "Compliance
        Certificate") of the Borrower signed, in the case of financial statements
        furnished pursuant to Section 8.3.1, by the Chief Executive Officer, Chief
        Financial Officer or Treasurer of the Borrower and in the case of the financial
        statements furnished pursuant to Section 8.3.2, by the Chief Executive
        Officer, Chief Financial Officer or Treasurer of the Borrower in the form
        of
Exhibit 8.3.3.

       

      
        	
                8.3.4.  

              	
                Notice
                  of Default.

              

      

       

      Promptly
        after any Authorized Officer (or other executive officer) of any Loan Party
        has
        learned of the occurrence of an Event of Default or Potential Default, a
        certificate signed by the Chief Executive Officer, President or Chief Financial
        Officer of such Loan Party setting forth the details of such Event of Default
        or
        Potential Default and the action which the such Loan Party proposes to take
        with
        respect thereto.

       

      
        	
                8.3.5.  

              	
                Notice
                  of Litigation.

              

      

       

      Promptly
        after the commencement thereof, notice of (i) all actions, suits, proceedings
        or
        investigations before or by any Official Body or any other Person against
        any
        Loan Party or Subsidiary of any Loan Party, involve a claim or series of
        claims
        in excess of $10,000,000 or, (ii) any Environmental Complaint, individually
        or
        in the aggregate exceed $10,000,000, and in either case which if adversely
        determined could reasonably be expected to result in a Material Adverse
        Change.

       

      
        	
                8.3.6.  

              	
                Notice
                  of Change in Debt Rating.

              

      

       

      Within
        five (5) Business Days after Standard & Poor's or Moody's announces a change
        in the  Debt Rating of New Jersey Natural Gas, notice of such
        change.  The Borrower will deliver, together with such notice, a copy
        of any written notification which Borrower or New Jersey Natural Gas received
        from the applicable rating agency regarding such change of Debt
        Rating.

       

      
        
          
          

        

        
          57

          
            

          

        

        
          
          

        

      

      

       

      
        	
                8.3.7.  

              	
                Sale
                  of Assets.

              

      

       

      At
        least thirty (30) calendar days prior thereto, notice with respect to any
        proposed sale or transfer of assets pursuant to Section 8.2.6(viii) where
        the consideration for such sale or transfer of assets is in excess of
        $5,000,000.

       

      
        	
                8.3.8.  

              	
                Budgets,
                  Forecasts, Other Reports and
                  Information.

              

      

       

      Promptly
        upon their becoming available to the Borrower:

       

      (i)  any
        reports, notices or proxy statements generally distributed by the Borrower
        to
        its stockholders on a date no later than the date supplied to such
        stockholders,

       

      (ii)  regular
        or periodic reports, including Forms 10-K, 10-Q and 8-K, registration statements
        and prospectuses, filed by the Borrower with the SEC,

       

      (iii)  to
        the extent not previously reported in regular or periodic reports, including
        Forms 10-K, 10-Q and 8-K, registration statements and prospectuses, filed
        by the
        Borrower with the SEC, the Borrower shall notify the Banks promptly of the
        enactment or adoption of any Law which may result in a Material Adverse
        Change,

       

      (iv)  to
        the extent requested by the Agent or any Bank, the annual budget and any
        forecasts or projections of the Loan Parties, and

       

      (v)  with
        respect to the Hedging Transaction activities of the Loan Parties and their
        Subsidiaries, to the extent not previously reported in regular or periodic
        reports, including Forms 10-K, 10-Q and 8-K, registration statements and
        prospectuses, filed by the Borrower with the SEC, such other reports and
        information as any of the Banks may from time to time reasonably
        request.

       

      
        	
                8.3.9.  

              	
                Notices
                  Regarding Plans and Benefit
                  Arrangements.

              

      

       

      8.3.9.1  Certain
        Events.

       

      Promptly
        upon becoming aware of the occurrence thereof, notice (including the nature
        of
        the event and, when known, any action taken or threatened by the Internal
        Revenue Service or the PBGC with respect thereto) of:

       

      (i)  any
        Reportable Event with respect to the Borrower or any other member of the
        ERISA
        Group (regardless of whether the obligation to report said Reportable Event
        to
        the PBGC has been waived),

       

      (ii)  any
        Prohibited Transaction which could subject the Borrower or any other member
        of
        the ERISA Group to a civil penalty assessed pursuant to Section 502(i) of
        ERISA or a tax imposed by Section 4975 of the Internal Revenue Code in
        connection with any Plan, any Benefit Arrangement or any trust created
        thereunder,

       

      
        
          
          

        

        
          58

          
            

          

        

        
          
          

        

      

      

       

      (iii)  any
        assertion of material withdrawal liability with respect to any Multiemployer
        Plan,

       

      (iv)  any
        partial or complete withdrawal from a Multiemployer Plan by the Borrower
        or any
        other member of the ERISA Group under Title IV of ERISA (or assertion thereof),
        where such withdrawal is likely to result in material withdrawal
        liability,

       

      (v)  any
        cessation of operations (by the Borrower or any other member of the ERISA
        Group)
        at a facility in the circumstances described in Section 4062(e) of
        ERISA,

       

      (vi)  withdrawal
        by the Borrower or any other member of the ERISA Group from a Multiple Employer
        Plan,

       

      (vii)  a
        failure by the Borrower or any other member of the ERISA Group to make a
        payment
        to a Plan required to avoid imposition of a Lien under Section 302(f) of
        ERISA,

       

      (viii)  the
        adoption of an amendment to a Plan requiring the provision of security to such
        Plan pursuant to Section 307 of ERISA, or

       

      (ix)  any
        change in the actuarial assumptions or funding methods used for any Plan,
        where
        the effect of such change is to materially increase or materially reduce
        the
        unfunded benefit liability or obligation to make periodic
        contributions.

       

      8.3.9.2  Notices
        of Involuntary Termination and Annual Reports.

       

      Promptly
        after receipt thereof, copies of (a) all notices received by the Borrower
        or any other member of the ERISA Group of the PBGC's intent to terminate
        any
        Plan administered or maintained by the Borrower or any member of the ERISA
        Group, or to have a trustee appointed to administer any such Plan; and
        (b) at the request of the Agent or any Bank each annual report (IRS Form
        5500 series) and all accompanying schedules, the most recent actuarial reports,
        the most recent financial information concerning the financial status of
        each
        Plan administered or maintained by the Borrower or any other member of the
        ERISA
        Group, and schedules showing the amounts contributed to each such Plan by
        or on
        behalf of the Borrower or any other member of the ERISA Group in which any
        of
        their personnel participate or from which such personnel may derive a benefit,
        and each Schedule B (Actuarial Information) to the annual report filed by
        the
        Borrower or any other member of the ERISA Group with the Internal Revenue
        Service with respect to each such Plan.

       

      8.3.9.3  Notice
        of Voluntary Termination.

       

      Promptly
        upon the filing thereof, copies of any Form 5310, or any successor or equivalent
        form to Form 5310, filed with the PBGC in connection with the termination
        of any
        Plan.

       

      
        
          
          

        

        
          59

          
            

          

        

        
          
          

        

      

      

       

       

      9.           DEFAULT

       

      9.1  Events
        of Default.

       

      An
        Event of Default shall mean the occurrence or existence of any one or more
        of
        the following events or conditions (whatever the reason therefor and whether
        voluntary, involuntary or effected by operation of Law):

       

      
        	
                9.1.1.  

              	
                Payments
                  Under Loan Documents.

              

      

       

      The
        Borrower shall fail to pay (i) any principal of any Loan (including
        scheduled installments, mandatory prepayments or the payment due at maturity),
        Reimbursement Obligation or Letter of Credit Borrowing when such principal
        is
        due hereunder or (ii) any interest on any Loan, Facility Fee, Reimbursement
        Obligation or Letter of Credit Borrowing or any other amount owing hereunder
        or
        under the other Loan Documents within three (3) Business Days after such
        interest, fee, or other amount becomes due in accordance with the terms hereof
        or thereof;

       

      
        	
                9.1.2.  

              	
                Breach
                  of Warranty.

              

      

       

      Any
        representation or warranty made at any time by any of the Loan Parties herein
        or
        by any of the Loan Parties in any other Loan Document, or in any certificate,
        other instrument or statement furnished pursuant to the provisions hereof
        or
        thereof, shall prove to have been false or misleading in any material respect
        as
        of the time it was made or furnished;

       

      
        	
                9.1.3.  

              	
                Breach
                  of Negative Covenants or Visitation
                  Rights.

              

      

       

      Any
        of the Loan Parties shall default in the observance or performance of any
        covenant contained in Section 8.1.6 [Visitation Rights] or Section 8.2 [Negative Covenants];

       

      
        	
                9.1.4.  

              	
                Breach
                  of Other Covenants.

              

      

       

      Any
        of the Loan Parties shall default in the observance or performance of any
        other
        covenant, condition or provision hereof or of any other Loan Document and
        such
        default shall continue unremedied for a period of thirty (30) Days after
        any
        Authorized Officer (or other executive officer) of any Loan Party becomes
        aware
        of the occurrence thereof (such grace period to be applicable only in the
        event
        such default can be remedied by corrective action of the Loan Parties as
        determined by the Agent in its reasonable discretion);

       

      
        	
                9.1.5.  

              	
                Defaults
                  in Other Agreements or
                  Indebtedness.

              

      

       

      (i)  A
        default or event of default shall occur at any time under the terms of any
        other
        agreement involving borrowed money or the extension of credit or any other
        Indebtedness under which any Loan Party or Subsidiary of any Loan Party may
        be
        obligated as a borrower or guarantor in excess of $10,000,000 in the aggregate,
        and such breach, default or event of default consists of the failure to pay
        (beyond any period of grace permitted with respect thereto, whether waived
        or
        not) any indebtedness when due (whether at stated maturity, by acceleration
        or
        otherwise) or if such breach or default permits or causes the acceleration
        of
        any

       

      
        
          
          

        

        
          60

          
            

          

        

        
          
          

        

      

      indebtedness
        (whether or not such right shall have been waived) or the termination of
        any
        commitment to lend;

       

      (ii)  There
        shall occur under the NJNG Credit Agreement an "Event of Default" (as
        such term is defined in the NJNG Credit Agreement);

       

      (iii)  A
        default or event of default shall occur at any time under the terms of any
        agreement involving any off balance sheet transaction (including any asset
        securitization, sale/leaseback transaction, or Synthetic Lease) with obligations
        in the aggregate thereunder for which any Loan Party or Subsidiary of any
        Loan
        Party may be obligated in excess of $10,000,000, and such breach, default
        or
        event of default consists of the failure to pay (beyond any period of grace
        permitted with respect thereto, whether waived or not) any obligation when
        due
        (whether at stated maturity, by acceleration or otherwise) or if such breach
        or
        default permits or causes the acceleration of any obligation (whether or
        not
        such right shall have been waived) or the termination of any such
        agreement;

       

      
        	
                9.1.6.  

              	
                Final
                  Judgments or Orders.

              

      

       

      Any
        final judgments or orders for the payment of money in excess of $10,000,000
        in
        the aggregate, to the extent not covered by insurance, shall be entered against
        any Loan Party by a court having jurisdiction in the premises, which judgment
        is
        not discharged, vacated, bonded or stayed pending appeal within a period
        of
        thirty (30) days from the date of entry;

       

      
        	
                9.1.7.  

              	
                Loan
                  Document Unenforceable.

              

      

       

      Any
        of the Loan Documents shall cease to be legal, valid and binding agreements
        enforceable against the party executing the same or such party's successors
        and
        assigns (as permitted under the Loan Documents) in accordance with the
        respective terms thereof or shall in any way be terminated (except in accordance
        with its terms) or become or be declared ineffective or inoperative or shall
        in
        any way be challenged or contested or cease to give or provide the respective
        rights, titles, interests, remedies, powers or privileges intended to be
        created
        thereby;

       

      
        	
                9.1.8.  

              	
                Uninsured
                  Losses; Proceedings Against
                  Assets.

              

      

       

      The
        assets of any Loan Party or the assets of any Subsidiary of any Loan Party
        are
        attached, seized, levied upon or subjected to a writ or distress warrant;
        or
        such come within the possession of any receiver, trustee, custodian or assignee
        for the benefit of creditors and the same is not cured within thirty (30)
        days
        thereafter or otherwise fully bonded or covered by insurance (subject to
        reasonable and customary deductible amounts);

       

      
        	
                9.1.9.  

              	
                Notice
                  of Lien or Assessment.

              

      

       

      A
        notice of Lien or assessment in excess of $10,000,000 which is not a Permitted
        Lien or Environmental Complaint in excess of $10,000,000 is filed of record
        with
        respect to all or any part of any of the Loan Parties' or any of their
        Subsidiaries' assets by the United States, or any department, agency or
        instrumentality thereof, or by any state, county, municipal or other
        governmental agency, including the PBGC, or any taxes or debts owing at any
        time
        or times hereafter to any one of these becomes payable and the same is not
        paid
        within thirty (30) days after the same becomes payable;

       

      
        
          
          

        

        
          61

          
            

          

        

        
          
          

        

      

      

       

      
        	
                9.1.10.  

              	
                Insolvency.

              

      

       

      Any
        Loan Party or any Significant Subsidiary of a Loan Party ceases to be Solvent
        or
        admits in writing to a creditor or Official Body its inability to pay its
        debts
        as they mature;

       

      
        	
                9.1.11.  

              	
                Events
                  Relating to Plans and Benefit
                  Arrangements.

              

      

       

      Any
        of the following occurs:  (i) any Reportable Event, which the
        Agent determines in good faith constitutes grounds for the termination of
        any
        Plan by the PBGC or the appointment of a trustee to administer or liquidate
        any
        Plan, shall have occurred and be continuing; (ii) proceedings shall have
        been instituted or other action taken to terminate any Plan, or a termination
        notice shall have been filed with respect to any Plan; (iii) a trustee
        shall be appointed to administer or liquidate any Plan; (iv) the PBGC shall
        give notice of its intent to institute proceedings to terminate any Plan
        or
        Plans or to appoint a trustee to administer or liquidate any Plan; and, in
        the
        case of the occurrence of (i), (ii), (iii) or (iv) above, the Agent determines
        in good faith that the amount of the Borrower's liability is likely to exceed
        10% of its consolidated tangible net worth; (v) the Borrower or any member
        of the ERISA Group shall fail to make any contributions when due to a Plan
        or a
        Multiemployer Plan; (vi) the Borrower or any other member of the ERISA
        Group shall make any amendment to a Plan with respect to which security is
        required under Section 307 of ERISA; (vii) the Borrower or any other
        member of the ERISA Group shall withdraw completely or partially from a
        Multiemployer Plan; (viii) the Borrower or any other member of the ERISA
        Group shall withdraw (or shall be deemed under Section 4062(e) of ERISA to
        withdraw) from a Multiple Employer Plan; or (ix) any applicable Law is
        adopted, changed or interpreted by any Official Body with respect to or
        otherwise affecting one or more Plans, Multiemployer Plans or Benefit
        Arrangements and, with respect to any of the events specified in (v), (vi),
        (vii), (viii) or (ix), the Agent determines in good faith that any such
        occurrence would be reasonably likely to materially and adversely affect
        the
        total enterprise represented by the Borrower and the other members of the
        ERISA
        Group;

       

      
        	
                9.1.12.  

              	
                Cessation
                  of Business.

              

      

       

      Any
        Loan Party or Subsidiary of a Loan Party ceases to conduct its business as
        contemplated, except as expressly permitted under Section 8.2.5
        [Liquidations, Mergers, Etc.], Section 8.2.6 [Disposition of Assets or
        Unregulated Subsidiaries] or Section 8.2.9 [Continuation of or Change of
        Business] or any Loan Party or Subsidiary of a Loan Party is enjoined,
        restrained or in any way prevented by court order from conducting all or
        any
        material part of its business and such injunction, restraint or other preventive
        order is not dismissed within thirty (30) days after the entry
        thereof;

       

      
        	
                9.1.13.  

              	
                Change
                  of Control.

              

      

       

      (i)  Any
        person or group of persons (within the meaning of Sections 13(d) or 14(a)
        of the Securities Exchange Act of 1934, as amended) shall have acquired
        beneficial ownership of (within the meaning of Rule 13d-3 promulgated by
        the SEC
        under said Act) 25% or more of the voting capital stock of the Borrower
        (provided that, for purposes of calculating the acquisition of beneficial
        ownership, any transfer of voting stock of the Borrower by any Person or
        group
        of Persons to a Permitted Transferee shall be deemed not to constitute a
        conveyance and acquisition of such stock), or (ii) within a period of
        twelve (12) consecutive calendar months, individuals who were directors of
        the
        Borrower on the first day of such period shall cease to constitute a majority
        of
        the board of directors of the Borrower unless the individuals who were elected
        or appointed directors during such twelve (12) month period were elected
        or
        appointed by a

       

      
        
          
          

        

        
          62

          
            

          

        

        
          
          

        

      

      majority
        of the individuals who were directors of the Borrower on the first day of
        such
        period or by their duly appointed or elected successors; or (iii) Borrower
        shall cease to own 100% of the issued and outstanding equity interests of
        New
        Jersey Natural Gas; or (iv) Borrower shall cease to own 51% of the issued
        and outstanding interest in any other Loan Party;

       

      
        	
                9.1.14.  

              	
                Involuntary
                  Proceedings.

              

      

       

      A
        proceeding shall have been instituted in a court having jurisdiction in the
        premises seeking a decree or order for relief in respect of any Loan Party
        or
        Subsidiary of a Loan Party in an involuntary case under any applicable
        bankruptcy, insolvency, reorganization or other similar law now or hereafter
        in
        effect, or for the appointment of a receiver, liquidator, assignee, custodian,
        trustee, sequestrator, conservator (or similar official) of any Loan Party
        or
        Subsidiary of a Loan Party for any substantial part of its property, or for
        the
        winding-up or liquidation of its affairs, and such proceeding shall remain
        undismissed or unstayed and in effect for a period of sixty (60) consecutive
        days or such court shall enter a decree or order granting any of the relief
        sought in such proceeding; or

       

      
        	
                9.1.15.  

              	
                Voluntary
                  Proceedings.

              

      

       

      Any
        Loan Party or Subsidiary of a Loan Party shall commence a voluntary case
        under
        any applicable bankruptcy, insolvency, reorganization or other similar law
        now
        or hereafter in effect, shall consent to the entry of an order for relief
        in an
        involuntary case under any such law, or shall consent to the appointment
        or
        taking possession by a receiver, liquidator, assignee, custodian, trustee,
        sequestrator, conservator (or other similar official) of itself or for any
        substantial part of its property or shall make a general assignment for the
        benefit of creditors, or shall fail generally to pay its debts as they become
        due, or shall take any action in furtherance of any of the
        foregoing.

       

      
        	
                9.1.16.  

              	
                No
                  Limitation on Dividends and Distributions by
                  Subsidiaries.

              

      

       

      Any
        Loan Party or Subsidiary of a Loan Party (including, without limitation,
        New
        Jersey Natural Gas) enters into or otherwise agrees to be bound by any agreement
        not to pay dividends or make distributions to the Borrower, except for the
        restrictions that are no more onerous than the restrictions set forth in
        this
        Agreement and the restrictions set forth in the Mortgage Indenture, in each
        case
        as such restrictions exist as of the Closing Date.

       

      9.2  Consequences
        of Event of Default.

       

      
        	
                9.2.1.  

              	
                Events
                  of Default Other Than Bankruptcy, Insolvency or Reorganization
                  Proceedings.

              

      

       

      If
        an Event of Default specified under Sections 9.1.1 through 9.1.13 shall
        occur and be continuing, the Banks and the Agent shall be under no further
        obligation to make Loans or issue Letters of Credit, as the case may be,
        and the
        Agent may, and upon the request of the Required Banks shall, by written notice
        to the Borrower, take one or more of the following actions: (i) terminate
        the Commitments and thereupon the Commitments shall be terminated and of
        no
        further force and effect, or (ii) declare the unpaid principal amount of
        the Notes and Loans then outstanding and all interest accrued thereon, any
        unpaid fees and all other Indebtedness of the Borrower to the Banks hereunder
        and thereunder to be forthwith due and payable, and the same shall thereupon
        become and be immediately due and payable to the Agent for the benefit of
        each
        Bank without presentment, demand, protest or any other notice of any kind,
        all
        of which are hereby expressly waived, and (iii) require the Borrower to,
        and the Borrower shall thereupon, deposit in a non-interest-bearing account
        with
        the Agent, as cash collateral for its Obligations under the Loan Documents,
        an
        amount equal to the maximum amount currently or at any time
        thereafter

       

      
        
          
          

        

        
          63

          
            

          

        

        
          
          

        

      

      available
        to be drawn on all outstanding Letters of Credit, and the Borrower hereby
        pledges to the Agent and the Banks, and grants to the Agent and the Banks
        a
        security interest in, all such cash as security for such
        Obligations.  Upon the curing of all existing Events of Default to the
        satisfaction of the Required Banks, the Agent shall return such cash collateral
        to the Borrower; and

       

      
        	
                9.2.2.  

              	
                Bankruptcy,
                  Insolvency or Reorganization
                  Proceedings.

              

      

       

      If
        an Event of Default specified under Section 9.1.14 [Involuntary
        Proceedings] or 9.1.15 [Voluntary Proceedings] shall occur, the Commitments
        shall automatically terminate and be of no further force and effect, the
        Agent
        and the Banks shall be under no further obligations to make Loans or issue
        Letters of Credit, as the case may be, and the unpaid principal amount of
        the
        Loans then outstanding and all interest accrued thereon, any unpaid fees
        and all
        other Indebtedness of the Borrower to the Banks hereunder and thereunder
        shall
        be immediately due and payable, without presentment, demand, protest or notice
        of any kind, all of which are hereby expressly waived; and

       

      
        	
                9.2.3.  

              	
                Set-off.

              

      

       

      If
        an Event of Default shall occur and be continuing, any Bank to whom any
        Obligation is owed by any Loan Party hereunder or under any other Loan Document
        or any participant of such Bank which has agreed in writing to be bound by
        the
        provisions of Section 10.13 [Equalization of Banks] and any branch,
        Subsidiary or Affiliate of such Bank or participant anywhere in the world
        shall
        have the right, in addition to all other rights and remedies available to
        it,
        without notice to such Loan Party, to set-off against and apply to the then
        unpaid balance of all the Loans and all other Obligations of the Borrower
        and
        the other Loan Parties hereunder or under any other Loan Document any debt
        owing
        to, and any other funds held in any manner for the account of, the Borrower
        or
        such other Loan Party by such Bank or participant or by such branch, Subsidiary
        or Affiliate, including all funds in all deposit accounts (whether time or
        demand, general or special, provisionally credited or finally credited, or
        otherwise) now or hereafter maintained by the Borrower or such other Loan
        Party
        for its own account (but not including funds held in custodian or trust
        accounts) with such Bank or participant or such branch, Subsidiary or
        Affiliate.  Such right shall exist whether or not any Bank or the
        Agent shall have made any demand under this Agreement or any other Loan
        Document, whether or not such debt owing to or funds held for the account
        of the
        Borrower or such other Loan Party is or are matured or unmatured and regardless
        of the existence or adequacy of any Guaranty or any other security, right
        or
        remedy available to any Bank or the Agent; and

       

      
        	
                9.2.4.  

              	
                Suits,
                  Actions, Proceedings.

              

      

       

      If
        an Event of Default shall occur and be continuing, and whether or not the
        Agent
        shall have accelerated the maturity of Loans pursuant to any of the foregoing
        provisions of this Section 9.2, the Agent or any Bank, if owed any amount
        with respect to the Loans, may proceed to protect and enforce its rights
        by suit
        in equity, action at law and/or other appropriate proceeding, whether for
        the
        specific performance of any covenant or agreement contained in this Agreement
        or
        the other Loan Documents; and

       

      
        	
                9.2.5.  

              	
                Application
                  of Proceeds; Collateral
                  Sharing.

              

      

       

      9.2.5.1  Application
        of Proceeds.

       

      From
        and after the date on which the Agent has taken any action pursuant to this
        Section 9.2 and until all Obligations of the Loan Parties have been paid in
        full, any and all proceeds received by the Agent from the exercise of any
        remedy
        by the Agent, shall be applied as follows:

       

      (i)  first,
        to reimburse the Agent and the Banks for out-of-pocket costs, expenses and
        disbursements, including reasonable attorneys' and paralegals' fees

       

      
        
          
          

        

        
          64

          
            

          

        

        
          
          

        

      

      and
        legal expenses, incurred by the Agent or the Banks in connection with collection
        of any Obligations of any of the Loan Parties under any of the Loan
        Documents;

       

      (ii)  second,
        to the repayment of all Indebtedness then due and unpaid of the Loan Parties
        to
        the Banks incurred under this Agreement or any of the other Loan Documents,
        whether of principal, interest, fees, expenses or otherwise, in such manner
        as
        the Agent may determine in its discretion; and

       

      (iii)  the
        balance, if any, as required by Law.

       

      9.2.5.2  Collateral
        Sharing.

       

      All
        Liens granted under each Loan Document (the "Collateral Documents") shall
        secure ratably and on a paripassu basis (i) the Obligations
        in favor of the Agent and the Banks hereunder and (ii) the Obligations
        incurred by any of the Loan Parties in favor of any Bank which provides a
        Bank
        Provided Interest Rate Hedge (the "IRH Provider").  The Agent
        under the Collateral Documents shall be deemed to serve as the collateral
        agent
        (the "Collateral Agent") for the IRH Provider and the Banks hereunder,
        provided that the Collateral Agent shall comply with the instructions and
        directions of the Agent (or the Banks under this Agreement to the extent
        that
        this Agreement or any other Loan Documents empowers the Banks to direct the
        Agent), as to all matters relating to the collateral, including the maintenance
        and disposition thereof.  No IRH Provider (except in its capacity as a
        Bank hereunder) shall be entitled or have the power to direct or instruct
        the
        Collateral Agent on any such matters or to control or direct in any manner
        the
        maintenance or disposition of the collateral.

       

      
        	
                9.2.6.  

              	
                Other
                  Rights and Remedies.

              

      

       

      In
        addition to all of the rights and remedies contained in this Agreement or
        in any
        of the other Loan Documents, the Agent shall have all of the rights and remedies
        under applicable Law, all of which rights and remedies shall be cumulative
        and
        non-exclusive, to the extent permitted by Law.  The Agent may, and
        upon the request of the Required Banks shall, exercise all post-default rights
        granted to the Agent and the Banks under the Loan Documents or applicable
        Law.

       

       

      10.           THE
        AGENT

       

      10.1  Appointment.

       

      Each
        Bank hereby irrevocably designates, appoints and authorizes PNC Bank to act
        as
        Agent for such Bank under this Agreement and to execute and deliver or accept
        on
        behalf of each of the Banks the other Loan Documents.  Each Bank
        hereby irrevocably authorizes, the Agent to take such action on its behalf
        under
        the provisions of this Agreement and the other Loan Documents and any other
        instruments and agreements referred to herein, and to exercise such powers
        and
        to perform such duties hereunder as are specifically delegated to or required
        of
        the Agent by the terms hereof, together with such powers as are reasonably
        incidental thereto.  PNC Bank agrees to act as the Agent on behalf of
        the Banks to the extent provided in this Agreement.

       

      10.2  Delegation
        of Duties.

       

      The
        Agent may perform any of its duties hereunder by or through agents or employees
        (provided such delegation does not constitute a relinquishment of its
        duties as Agent) and, subject to Sections 10.5 [Reimbursement and
        Indemnification of Agent by the Borrower] and Section 10.6 [Exculpatory
        Provisions; Limitation of Liability], shall be entitled to engage and pay
        for
        the advice or services of any attorneys, accountants or

       

      
        
          
          

        

        
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      other
        experts concerning all matters pertaining to its duties hereunder and to
        rely
        upon any advice so obtained.  It is acknowledged and agreed that
        JPMorgan Chase Bank, N.A. and Bank of America, N.A. each have received the
        title
        of syndication agent under this Agreement, that Citibank, N.A. and The Bank
        of
        Nova Scotia each have received the title of documentation agent under this
        Agreement, however such designations are solely to give JPMorgan Chase Bank,
        N.A., Bank of America, N.A., Citibank, N.A. and The Bank of Nova
        Scotia  their respective titles and each of JPMorgan Chase Bank, N.A.,
        Bank of America, N.A., Citibank, N.A. and The Bank of Nova
        Scotia.:  (i) has no duties, responsibilities, functions obligations
        or liabilities implied or otherwise under the Loan Documents solely as a
        result
        of being so designated as a syndication agent or documentation agent,
        respectively, and (ii) is not entitled to any fee solely as a result of being
        so
        designated as a syndication agent or documentation agent, respectively, other
        than the closing fees payable on the Closing Date in accordance with the
        Agent's
        Letter.

       

      10.3  Nature
        of Duties; Independent Credit Investigation.

       

      The
        Agent shall have no duties or responsibilities except those expressly set
        forth
        in this Agreement and no implied covenants, functions, responsibilities,
        duties,
        obligations, or liabilities shall be read into this Agreement or otherwise
        exist.  The duties of the Agent shall be mechanical and administrative
        in nature; the Agent shall not have by reason of this Agreement a fiduciary
        or
        trust relationship in respect of any Bank; and nothing in this Agreement,
        expressed or implied, is intended to or shall be so construed as to impose
        upon
        the Agent any obligations in respect of this Agreement except as expressly
        set
        forth herein.  Without limiting the generality of the foregoing, 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.  Each Bank expressly acknowledges (i) that the Agent has
        not made any representations or warranties to it and that no act by the Agent
        hereafter taken, including any review of the affairs of any of the Loan Parties,
        shall be deemed to constitute any representation or warranty by the Agent
        to any
        Bank; (ii) that it has made and will continue to make, without reliance
        upon the Agent, its own independent investigation of the financial condition
        and
        affairs and its own appraisal of the creditworthiness of each of the Loan
        Parties in connection with this Agreement and the making and continuance
        of the
        Loans hereunder; and (iii) except as expressly provided herein, that the
        Agent shall have no duty or responsibility, either initially or on a continuing
        basis, to provide any Bank with any credit or other information with respect
        thereto, whether coming into its possession before the making of any Loan
        or at
        any time or times thereafter.

       

      10.4  Actions
        in Discretion of Agent; Instructions From the Banks.

       

      The
        Agent agrees, upon the written request of the Required Banks, to take or
        refrain
        from taking any action of the type specified as being within the Agent's
        rights,
        powers or discretion herein, provided that the Agent shall not be
        required to take any action which exposes the Agent to personal liability
        or
        which is contrary to this Agreement or any other Loan Document or applicable
        Law.  In the absence of a request by the Required Banks, the Agent
        shall have authority, in its sole discretion, to take or not to take any
        such
        action, unless this Agreement specifically requires the consent of the Required
        Banks or all of the Banks.  Any action taken or failure to act
        pursuant to such instructions or discretion shall be binding on the Banks,
        subject to Section 10.6 [Exculpatory Provisions, Etc.].  Subject
        to the provisions of Section 10.6, no Bank shall have any right of action
        whatsoever against the Agent as a result of the Agent acting or refraining
        from
        acting hereunder in accordance with the instructions of the Required Banks,
        or
        in the absence of such instructions, in the absolute discretion of the
        Agent.

       

      10.5  Reimbursement
        and Indemnification of Agent by the Borrower.

       

      The
        Borrower agrees to pay or reimburse the Agent and hold the Agent harmless
        against (a) liability for the payment of all reasonable out-of-pocket
        costs, expenses and disbursements, including fees and expenses of counsel
        (including the allocated costs of staff counsel), appraisers and environmental
        consultants, incurred by the Agent (i) in connection with the negotiation,
        preparation, printing, execution, administration, syndication, interpretation
        and performance of this Agreement and the other Loan Documents,
        (ii) relating to any

       

      
        
          
          

        

        
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      amendments,
        waivers or consents pursuant to the provisions hereof, requested by the Borrower
        or required by applicable law, (iii) in connection with the enforcement of
        this Agreement or any other Loan Document or collection of amounts due hereunder
        or thereunder or the proof and allowability of any claim arising under this
        Agreement or any other Loan Document, whether in bankruptcy or receivership
        proceedings or otherwise, (iv) in any workout or restructuring or in
        connection with the protection, preservation, exercise or enforcement of
        any of
        the terms hereof or of any rights hereunder or under any other Loan Document
        or
        in connection with any foreclosure, collection or bankruptcy proceedings,
        and
        (v) in connection with any Environmental Complaint threatened or asserted
        against the Agent or the Banks in any way relating to or arising out of this
        Agreement or any other Loan Documents (including, without limitation, the
        protection, preservation, exercise or enforcement of any of the terms hereof
        or
        of any rights hereunder or under any other Loan Document or in connection
        with
        any foreclosure, collection or bankruptcy proceedings or in any workout or
        restructuring) and (b) all liabilities, obligations, losses, damages,
        penalties, actions, judgments, suits, costs, expenses or disbursements of
        any
        kind or nature whatsoever which may be imposed on, incurred by or asserted
        against the Agent, in its capacity as such, in any way relating to or arising
        out of (i) this Agreement or any other Loan Documents or any action taken
        or omitted by the Agent hereunder or thereunder, and (ii) any Environmental
        Complaint in any way relating to or arising out of this Agreement or any
        other
        Loan Documents or any action taken or omitted by the Agent hereunder or
        thereunder, provided that the Borrower shall not be liable for any
        portion of such liabilities, obligations, losses, damages, penalties, actions,
        judgments, suits, costs, expenses or disbursements if the same results from
        the
        Agent's gross negligence or willful misconduct, or if the Borrower was not
        given
        notice of the subject claim and the opportunity to participate in the defense
        thereof, at its expense (except that the Borrower shall remain liable to
        the
        extent such failure to give notice does not result in a loss to the Borrower),
        or if the same results from a compromise or settlement agreement entered
        into
        without the consent of the Borrower, which shall not be unreasonably
        withheld.  In addition, the Borrower agrees to reimburse and pay all
        reasonable out-of-pocket expenses of the Agent's regular employees and agents
        engaged periodically to perform audits of the Loan Parties' books, records
        and
        business properties, subject in all cases to the limitation set forth in
        Section 8.1.6 [Visitation Rights].

       

      10.6  Exculpatory
        Provisions; Limitation of Liability.

       

      Neither
        the Agent nor any of its directors, officers, employees, agents, attorneys
        or
        Affiliates shall (a) be liable to any Bank for any action taken or omitted
        to be taken by it or them hereunder, or in connection herewith including
        pursuant to any Loan Document, unless caused by its or their own gross
        negligence or willful misconduct, (b) be responsible in any manner to any
        of the Banks for the effectiveness, enforceability, genuineness, validity
        or the
        due execution of this Agreement or any other Loan Documents or for any recital,
        representation, warranty, document, certificate, report or statement herein
        or
        made or furnished under or in connection with this Agreement or any other
        Loan
        Documents, or (c) be under any obligation to any of the Banks to ascertain
        or to inquire as to the performance or observance of any of the terms, covenants
        or conditions hereof or thereof on the part of the Loan Parties, or the
        financial condition of the Loan Parties, or the existence or possible existence
        of any Event of Default or Potential Default.  No claim may be made by
        any of the Loan Parties, any Bank, the Agent or any of their respective
        Subsidiaries against the Agent, any Bank or any of their respective directors,
        officers, employees, agents, attorneys or Affiliates, or any of them, for
        any
        special, indirect or consequential damages or, to the fullest extent permitted
        by Law, for any punitive damages in respect of any claim or cause of action
        (whether based on contract, tort, statutory liability, or any other ground)
        based on, arising out of or related to any Loan Document or the transactions
        contemplated hereby or any act, omission or event occurring in connection
        therewith, including the negotiation, documentation, administration or
        collection of the Loans, and each of the Loan Parties (for itself and on
        behalf
        of each of its Subsidiaries), the Agent and each Bank hereby waives, releases
        and agrees never to sue upon any claim for any such damages, whether such
        claim
        now exists or hereafter arises and whether or not it is now known or suspected
        to exist in its favor.  Each Bank agrees that, except for notices,
        reports and other documents expressly required to be furnished to the Banks
        by
        the Agent hereunder or given to the Agent for the account of or with copies
        for
        the Banks, the Agent and each of its directors, officers, employees, agents,
        attorneys or Affiliates shall not have any duty or responsibility to provide
        any
        Bank with any credit or other information concerning the business, operations,
        property, condition (financial or otherwise), prospects or creditworthiness
        of
        the Loan Parties

       

      
        
          
          

        

        
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      which
        may come into the possession of the Agent or any of its directors, officers,
        employees, agents, attorneys or Affiliates.

       

      10.7  Reimbursement
        and Indemnification of Agent by Banks.

       

      Each
        Bank agrees to reimburse and indemnify, defend and save the Agent (to the
        extent
        not reimbursed by the Borrower and without limiting the Obligation of the
        Borrower to do so) in proportion to its Ratable Share harmless from and against
        all liabilities, obligations, losses, damages, penalties, actions, judgments,
        suits, costs, expenses or disbursements, including attorneys' fees and
        disbursements (including the allocated costs of staff counsel), and costs
        of
        appraisers and environmental consultants, of any kind or nature whatsoever
        which
        may be imposed on, incurred by or asserted against the Agent, in its capacity
        as
        such, in any way relating to or arising out of this Agreement or any other
        Loan
        Documents or any action taken or omitted by the Agent hereunder or thereunder,
        provided that no Bank shall be liable for any portion of such
        liabilities, obligations, losses, damages, penalties, actions, judgments,
        suits,
        costs, expenses or disbursements (a) if the same results from the Agent's
        gross negligence or willful misconduct, or (b) if such Bank was not given
        notice of the subject claim and the opportunity to participate in the defense
        thereof, at its expense (except that such Bank shall remain liable to the
        extent
        such failure to give notice does not result in a loss to the Bank), or
        (c) if the same results from a compromise and settlement agreement entered
        into without the consent of such Bank, which shall not be unreasonably
        withheld.  In addition, each Bank agrees promptly upon demand to
        reimburse the Agent (to the extent not reimbursed by the Borrower and without
        limiting the Obligation of the Borrower to do so) in proportion to its Ratable
        Share for all amounts due and payable by the Borrower to the Agent in connection
        with the Agent's periodic audit of the Loan Parties' books, records and business
        properties.

       

      10.8  Reliance
        by Agent.

       

      The
        Agent shall be entitled to rely upon any writing, telex or teletype message,
        resolution, notice, consent, certificate, letter, statement, order or other
        document or conversation by telephone or otherwise believed by it to be genuine
        and correct and to have been signed, sent or made by the proper Person or
        Persons, and upon the advice and opinions of counsel and other professional
        advisers selected by the Agent.  The Agent shall be fully justified in
        failing or refusing to take any action hereunder unless it shall first be
        indemnified to its satisfaction by the Banks against any and all liability
        and
        expense which may be incurred by it by reason of taking or continuing to
        take
        any such action.

       

      10.9  Notice
        of Default.

       

      The
        Agent shall not be deemed to have knowledge or notice of the occurrence of
        any
        Potential Default or Event of Default unless the Agent has received written
        notice from a Bank or the Borrower referring to this Agreement, describing
        such
        Potential Default or Event of Default and stating that such notice is a "notice
        of default."

       

      10.10  Notices.

       

      The
        Agent shall promptly send to each Bank a copy of all notices received from
        the
        Borrower pursuant to the provisions of this Agreement or the other Loan
        Documents promptly upon receipt thereof.  The Agent shall promptly
        notify the Borrower and the other Banks of each change in the Base Rate and
        the
        effective date thereof.

       

      10.11  Banks
        in Their Individual Capacities; Agents in Its Individual
        Capacity.

       

      With
        respect to its Commitment and the Loans made by it and any other rights and
        powers given to it as a Bank hereunder or under any of the other Loan Documents,
        the Agent shall have the same rights and powers

       

      
        
          
          

        

        
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      hereunder
        as any other Bank and may exercise the same as though it were not the Agent,
        and
        the term "Bank" and "Banks" shall, unless the context otherwise
        indicates, include the Agent in its individual capacity.  PNC Bank and
        its Affiliates and each of the Banks and their respective Affiliates may,
        without liability to account, except as prohibited herein, make loans to,
        issue
        letters of credit for the account of, acquire equity interests in, accept
        deposits from, discount drafts for, act as trustee under indentures of, and
        generally engage in any kind of banking, trust, financial advisory, underwriting
        or other business with, the Loan Parties and their Affiliates, in the case
        of
        the Agent, as though it were not acting as Agent hereunder and in the case
        of
        each Bank, as though such Bank were not a Bank hereunder, in each case without
        notice to or consent of the other Banks.  The Banks acknowledge that,
        pursuant to such activities, the Agent or its Affiliates may (i) receive
        information regarding the Loan Parties or any of their Subsidiaries or
        Affiliates (including information that may be subject to confidentiality
        obligations in favor of the Loan Parties or such Subsidiary or Affiliate)
        and
        acknowledge that the Agent shall be under no obligation to provide such
        information to them, and (ii) accept fees and other consideration from the
        Loan Parties for services in connection with this Agreement and otherwise
        without having to account for the same to the Banks.

       

      10.12  Holders
        of Notes.

       

      The
        Agent may deem and treat any payee of any Note as the owner thereof for all
        purposes hereof unless and until written notice of the assignment or transfer
        thereof shall have been filed with the Agent.  Any request, authority
        or consent of any Person who at the time of making such request or giving
        such
        authority or consent is the holder of any Note shall be conclusive and binding
        on any subsequent holder, transferee or assignee of such Note or of any Note
        or
        Notes issued in exchange therefor.

       

      10.13  Equalization
        of Banks.

       

      The
        Banks and the holders of any participations in any Commitments or Loans or
        other
        rights or obligations of a Bank hereunder agree among themselves
        that, with respect to all amounts received by any Bank or
        any such holder for application on any Obligation hereunder or under any
        such
        participation, whether received by voluntary payment, by realization upon
        security, by the exercise of the right of set-off or banker's lien, by
        counterclaim or by any other non-pro rata source, equitable adjustment will
        be
        made in the manner stated in the following sentence so that, in effect, all
        such
        excess amounts will be shared ratably among the Banks and such holders in
        proportion to their interests in payments on the Loans, except as otherwise
        provided in Sections 4.4.3 [Agent's and Banks' Rights], 5.4.2 [Replacement
        of a Bank] or 5.6 [Additional Compensation in Certain
        Circumstances].  The Banks or any such holder receiving any such
        amount shall purchase for cash from each of the other Banks an interest in
        such
        Bank's Loans in such amount as shall result in a ratable participation by
        the
        Banks and each such holder in the aggregate unpaid amount of the Loans,
provided that if all or any portion of such excess amount is thereafter
        recovered from the Bank or the holder making such purchase, such purchase
        shall
        be rescinded and the purchase price restored to the extent of such recovery,
        together with interest or other amounts, if any, required by law (including
        court order) to be paid by the Bank or the holder making such
        purchase.

       

      10.14  Successor
        Agent.

       

      The
        Agent (i) may resign as Agent or (ii) shall resign if such resignation
        is requested by the Required Banks (if the Agent is a Bank, the Agent's Loans
        and its Commitment shall be considered in determining whether the Required
        Banks
        have requested such resignation) or required by Section 5.4.2 [Replacement
        of a Bank], in either case of (i) or (ii) by giving not less than thirty
        (30)
        days' prior written notice to the Borrower.  If the Agent shall resign
        under this Agreement, then either (a) the Required Banks shall appoint from
        among the Banks a successor agent for the Banks, subject to the consent of
        the
        Borrower, such consent not to be unreasonably withheld and such consent not
        to
        be required if an Event of Default exists and is continuing, or (b) if a
        successor agent shall not be so appointed and approved within the thirty
        (30)
        day period following the Agent's notice to the Banks of its resignation,
        then
        the Agent shall appoint, with the consent of the Borrower, such consent not
        to
        be unreasonably withheld, a successor agent who shall serve as Agent until
        such
        time as the Required Banks appoint and the Borrower consents to the appointment
        of a successor agent.  Upon its appointment pursuant to either clause
        (a) or (b)

       

      
        
          
          

        

        
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      above,
        such successor agent shall succeed to the rights, powers and duties of the
        Agent, and the term "Agent" shall mean such successor
        agent, effective upon its appointment, and the former
        Agent's rights, powers and duties as Agent shall be terminated without any
        other
        or further act or deed on the part of such former Agent or any of the parties
        to
        this Agreement.  After the resignation of any Agent hereunder, the
        provisions of this Section 10 shall inure to the benefit of such former
        Agent and such former Agent shall not by reason of such resignation be deemed
        to
        be released from liability for any actions taken or not taken by it while
        it was
        an Agent under this Agreement.

       

      10.15  Agent's
        Fee.

       

      The
        Borrower shall pay to the Agent a nonrefundable fee (the "Agent's Fee")
        for Agent's services hereunder under the terms of a letter (the "Agent's
        Letter") between the Borrower and Agent dated July 24, 2007, as the same may
        be amended, restated, modified or supplemented.

       

      10.16  Availability
        of Funds.

       

      The
        Agent may assume that each Bank has made or will make the proceeds of a Loan
        available to the Agent unless the Agent shall have been notified by such
        Bank on
        or before the later of (1) the close of Business on the Business Day
        preceding the Borrowing Date with respect to such Loan or two (2) hours before
        the time on which the Agent actually funds the proceeds of such Loan to the
        Borrower (whether using its own funds pursuant to this Section 10.16 or
        using proceeds deposited with the Agent by the Banks and whether such funding
        occurs before or after the time on which Banks are required to deposit the
        proceeds of such Loan with the Agent).  The Agent may, in reliance
        upon such assumption (but shall not be required to), make available to the
        Borrower a corresponding amount.  If such corresponding amount is not
        in fact made available to the Agent by such Bank, the Agent shall be entitled
        to
        recover such amount on demand from such Bank (or, if such Bank fails to pay
        such
        amount forthwith upon such demand from the Borrower) together with interest
        thereon, in respect of each day during the period commencing on the date
        such
        amount was made available to the Borrower and ending on the date the Agent
        recovers such amount, at a rate per annum equal to (i) the Federal Funds
        Open
        Rate during the first three (3) days after such interest shall begin to accrue
        and (ii) the applicable interest rate in respect of such Loan after the end
        of
        such three-day period.

       

      10.17  Calculations.

       

      In
        the absence of gross negligence or willful misconduct, the Agent shall not
        be
        liable for any error in computing the amount payable to any Bank whether
        in
        respect of the Loans, fees or any other amounts due to the Banks under this
        Agreement.  In the event an error in computing any amount payable to
        any Bank is made, the Agent, the Borrower and each affected Bank shall,
        forthwith upon discovery of such error, make such adjustments as shall be
        required to correct such error, and any compensation therefor will be calculated
        at the Federal Funds Open Rate.

       

      10.18  Beneficiaries.

       

      Except
        as expressly provided herein, the provisions of this Section 10 are solely
        for the benefit of the Agent and the Banks, and the Loan Parties shall not
        have
        any rights to rely on or enforce any of the provisions hereof.  In
        performing its functions and duties under this Agreement, the Agent shall
        act
        solely as agent of the Banks and does not assume and shall not be deemed
        to have
        assumed any obligation toward or relationship of agency or trust with or
        for any
        of the Loan Parties.

       

      10.19  No
        Reliance on Agent's Customer Identification Program.

       

      Each
        Bank acknowledges and agrees that neither such Bank, nor any of its Affiliates,
        participants or assignees, may rely on the Agent to carry out such Bank's,
        Affiliate's, participant's or assignee's customer

       

      
        
          
          

        

        
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      identification
        program, or other obligations required or imposed under or pursuant to the
        USA
        Patriot Act or the regulations thereunder, including the regulations contained
        in 31 CFR 103.121 (as hereafter amended or replaced, the "CIP
        Regulations"), or any other Anti-Terrorism Law, including any programs
        involving any of the following items relating to or in connection with any
        of
        the Loan Parties, their Affiliates or their agents, the Loan Documents or
        the
        transactions hereunder or contemplated hereby: (1) any identity
        verification procedures, (2) any record keeping, (3) comparisons with
        government lists, (4) customer notices, or (5) other procedures
        required under the CIP Regulations or such other Laws.

       

       

      11.           MISCELLANEOUS

       

      11.1  Modifications,
        Amendments or Waivers.

       

      With
        the written consent of the Required Banks, the Agent, acting on behalf of
        all
        the Banks, and the Borrower, on behalf of the Loan Parties, may from time
        to
        time enter into written agreements amending or changing any provision of
        this
        Agreement or any other Loan Document or the rights of the Banks or the Loan
        Parties hereunder or thereunder, or may grant written waivers or consents
        to a
        departure from the due performance of the Obligations of the Loan Parties
        hereunder or thereunder.  Any such agreement, waiver or consent made
        with such written consent shall be effective to bind all the Banks and the
        Loan
        Parties; provided, that, no such agreement, waiver or consent may be made
        which will:

       

      
        	
                11.1.1.  

              	
                Increase
                  of Revolving Credit Commitments; Extension of Expiration
                  Date.

              

      

       

      Without
        the written consent of the Required Banks and all Banks which have a Revolving
        Credit Commitment:

       

      (i)
        increase the amount of the Revolving Credit Commitment of any Bank hereunder
        (other than any increase in the amount of the Revolving Credit Commitments
        in
        accordance with Section 2.11, which increase shall not require the consent
        of
        any Bank, other than each Bank increasing its Revolving Credit
        Commitment),

       

      (ii)
        extend the Expiration Date,

       

      (iii)
        whether or not any Revolving Credit Loans are outstanding extend the time
        for
        payment of principal or interest of any Revolving Credit Loan (excluding
        the due
        date of any mandatory prepayment of a Revolving Credit Loan or any mandatory
        Revolving Credit Commitment reduction in connection with such a mandatory
        prepayment hereunder except for mandatory reductions of the Revolving Credit
        Commitments on the Expiration Date), the Facility Fee, or any other fee payable
        to any Bank which has a Revolving Credit Commitment, or

       

      (iv)
        reduce the principal amount of or the rate of interest borne by any Revolving
        Credit Loan or reduce the Facility Fee or any other fee payable to any Bank
        which has a Revolving Credit Commitment, or otherwise affect the terms of
        payment of the principal of or interest of any Revolving Credit Loan, the
        Facility Fee, or any other fee payable to any Bank which has a Revolving
        Credit
        Commitment;

       

      
        	
                11.1.2.  

              	
                Release
                  of Collateral or Guarantor.

              

      

       

      Without
        the written consent of all Banks, release any Guarantor from its Obligations
        under the Guaranty Agreement or any other security for any of the Loan Parties'
        Obligations; or

       

      
        
          
          

        

        
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                11.1.3.  

              	
                Miscellaneous.

              

      

       

      Without
        the written consent of all Banks, amend Sections 5.2 [Pro Rata Treatment of
        Banks], 9.2.5 [Application of Proceeds; Collateral Sharing], 10.6 [Exculpatory
        Provisions, Etc.] or 10.13 [Equalization of Banks] or this Section 11.1,
        alter any provision regarding the pro rata treatment of the Banks, change
        the
        definition of Required Banks, or change any requirement providing for the
        Banks
        or the Required Banks to authorize the taking of any action
        hereunder;

       

      provided,
        further, that no agreement, waiver or consent which would modify the interests,
        rights or obligations of the Agent in its capacity as Agent or as the issuer
        of
        Letters of Credit shall be effective without the written consent of the Agent,
        and no agreement, waiver or consent which would modify the interests, rights
        or
        obligations of PNC Bank with respect to its Swing Loan Commitment shall be
        effective without the written consent of PNC Bank.

       

      11.2  No
        Implied Waivers; Cumulative Remedies; Writing Required.

       

      No
        course of dealing and no delay or failure of the Agent or any Bank in exercising
        any right, power, remedy or privilege under this Agreement or any other Loan
        Document shall affect any other or future exercise thereof or operate as
        a
        waiver thereof, nor shall any single or partial exercise thereof or any
        abandonment or discontinuance of steps to enforce such a right, power, remedy
        or
        privilege preclude any further exercise thereof or of any other right, power,
        remedy or privilege.  The rights and remedies of the Agent and the
        Banks under this Agreement and any other Loan Documents are cumulative and
        not
        exclusive of any rights or remedies which they would otherwise
        have.  Any waiver, permit, consent or approval of any kind or
        character on the part of any Bank of any breach or default under this Agreement
        or any such waiver of any provision or condition of this Agreement must be
        in
        writing and shall be effective only to the extent specifically set forth
        in such
        writing.

       

      11.3  Reimbursement
        and Indemnification of Banks by the Borrower; Taxes.

       

      The
        Borrower agrees upon demand to pay or reimburse to each Bank (other than
        the
        Agent, as to which the Borrower's Obligations are set forth in Section 10.5
        [Reimbursement and Indemnification of Agent by the Borrower]) and to save
        such
        Bank harmless against (i) liability for the payment of all reasonable
        out-of-pocket costs, expenses and disbursements (including fees and expenses
        of
        counsel (including allocated costs of staff counsel) for each Bank except
        with
        respect to (A) and (B) below), incurred by such Bank (a) in connection with
        the administration and interpretation of this Agreement, and other instruments
        and documents to be delivered hereunder, (b) relating to any amendments,
        waivers or consents pursuant to the provisions hereof requested by the Borrower
        or required by applicable law, (c) in connection with the enforcement of
        this Agreement or any other Loan Document, or collection of amounts due
        hereunder or thereunder or the proof and allowability of any claim arising
        under
        this Agreement or any other Loan Document, whether in bankruptcy or receivership
        proceedings or otherwise, (d) in any workout or restructuring or in
        connection with the protection, preservation, exercise or enforcement of
        any of
        the terms hereof or of any rights hereunder or under any other Loan Document
        or
        in connection with any foreclosure, collection or bankruptcy proceedings,
        and
        (e) in connection with any Environmental Complaint threatened or asserted
        against such Bank in any way relating to or arising out of this Agreement
        or any
        other Loan Documents (including, without limitation, the protection,
        preservation, exercise or enforcement of any of the terms hereof or of any
        rights hereunder or under any other Loan Document or in connection with any
        foreclosure, collection or bankruptcy proceedings or in any workout or
        restructuring), or (ii) all liabilities, obligations, losses, damages,
        penalties, actions, judgments, suits, costs, expenses or disbursements of
        any
        kind or nature whatsoever which may be imposed on, incurred by or asserted
        against such Bank, in its capacity as such, in any way relating to or arising
        out of (y) this Agreement or any other Loan Documents or any action taken
        or
        omitted by such Bank hereunder or thereunder, and (z) any Environmental
        Complaint in any way relating to or arising out of this Agreement or any
        other
        Loan Documents or any action taken or omitted by such Bank hereunder or
        thereunder, provided that the Borrower shall not be liable for any
        portion of such liabilities, obligations, losses, damages, penalties, actions,
        judgments, suits,

       

      
        
          
          

        

        
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      costs,
        expenses or disbursements (A) if the same results from such Bank's gross
        negligence or willful misconduct, or (B) if the Borrower was not given
        notice of the subject claim and the opportunity to participate in the defense
        thereof, at its expense (except that the Borrower shall remain liable to
        the
        extent such failure to give notice does not result in a loss to the Borrower),
        or (C) if the same results from a compromise or settlement agreement
        entered into without the consent of the Borrower, which shall not be
        unreasonably withheld.  The Banks will attempt to minimize the fees
        and expenses of legal counsel for the Banks which are subject to reimbursement
        by the Borrower hereunder by considering the usage of one law firm to represent
        the Banks and the Agent if appropriate under the circumstances.  The
        Borrower agrees unconditionally to pay all stamp, document, transfer, recording
        or filing taxes or fees and similar impositions now or hereafter determined
        by
        the Agent or any Bank to be payable in connection with this Agreement or
        any
        other Loan Document, and the Borrower agrees unconditionally to save the
        Agent
        and the Banks harmless from and against any and all present or future claims,
        liabilities or losses with respect to or resulting from any omission to pay
        or
        delay in paying any such taxes, fees or impositions.

       

      11.4  Holidays.

       

      Whenever
        payment of a Loan to be made or taken hereunder shall be due on a day which
        is
        not a Business Day such payment shall be due on the next Business Day (except
        as
        provided in Section 4.2 [Interest Periods]
        with respect to Interest Periods under the LIBOR Rate Option) and such extension
        of time shall be included in computing interest and fees, except that the
        Revolving Credit Loans and Swing Loans shall be due on the Business Day
        preceding the Expiration Date if the Expiration Date is not a Business
        Day.  Whenever any payment or action to be made or taken hereunder
        (other than payment of the Loans) shall be stated to be due on a day which
        is
        not a Business Day, such payment or action shall be made or taken on the
        next
        following Business Day, and such extension of time shall not be included
        in
        computing interest or fees, if any, in connection with such payment or
        action.

       

      11.5  Funding
        by Branch, Subsidiary or Affiliate.

       

      
        	
                11.5.1.  

              	
                Notional
                  Funding.

              

      

       

      Each
        Bank shall have the right from time to time, without notice to the Borrower,
        to
        deem any branch, Subsidiary or Affiliate (which for the purposes of this
        Section 11.5 shall mean any corporation or association which is directly or
        indirectly controlled by or is under direct or indirect common control with
        any
        corporation or association which directly or indirectly controls such Bank)
        of
        such Bank to have made, maintained or funded any Loan to which the LIBOR
        Rate
        Option applies at any time, provided that immediately following (on the
        assumption that a payment were then due from the Borrower to such other office),
        and as a result of such change, the Borrower would not be under any greater
        financial obligation pursuant to Section 5.6 [Additional Compensation in
        Certain Circumstances] or Section 5.8 [Taxes]
        than it would have been in the absence of such change.  Notional
        funding offices may be selected by each Bank without regard to such Bank's
        actual methods of making, maintaining or funding the Loans or any sources
        of
        funding actually used by or available to such Bank.

       

      
        	
                11.5.2.  

              	
                Actual
                  Funding.

              

      

       

      Each
        Bank shall have the right from time to time to make or maintain any Loan
        by
        arranging for a branch, Subsidiary or Affiliate of such Bank to make or maintain
        such Loan subject to the last sentence of this
        Section 11.5.2.  If any Bank causes a branch, Subsidiary or
        Affiliate to make or maintain any part of the Loans hereunder, all terms
        and
        conditions of this Agreement shall, except where the context clearly requires
        otherwise, be applicable to such part of the Loans to the same extent as
        if such
        Loans were made or maintained by such Bank, but in no event shall any Bank's
        use
        of such a branch, Subsidiary or Affiliate to make or maintain any part of
        the
        Loans hereunder cause such Bank or such branch, Subsidiary or Affiliate to
        incur
        any cost or expenses payable by the Borrower hereunder or require the Borrower
        to pay any other compensation to any Bank (including

       

      
        
          
          

        

        
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      any
        expenses incurred or payable pursuant to Section 5.6 [Additional
        Compensation in Certain Circumstances]) or Section 5.8 [Taxes] which would otherwise not be
        incurred.

       

      11.6  Notices;
        Lending Offices.

       

      Any
        notice, request, demand, direction or other communication (for purposes of
        this
        Section 11.6 only, a "Notice") to be given
        to or made upon any party hereto under any provision of this Agreement shall
        be
        given or made by telephone or in writing (which includes means of electronic
        transmission (i.e., "e-mail") or facsimile transmission or by setting
        forth such Notice on a restricted access site on the World Wide Web (a
        "Website Posting") if Notice of such Website Posting (including the
        information necessary to access such site) has previously been delivered
        to the
        applicable parties hereto by another means set forth in this Section 11.6) in accordance with this Section 11.6.  Any such Notice
        must be delivered to
        the applicable parties hereto at the addresses and numbers set forth under
        their
        respective names on Schedule 1.1(B) hereof or in
        accordance with any subsequent unrevoked Notice from any such party that
        is
        given in accordance with this Section 11.6.  Any Notice shall be
        effective:

       

      (i)  In
        the case of hand-delivery, when delivered;

       

      (ii)  If
        given by mail, four days after such Notice is deposited with the United States
        Postal Service, with first-class postage prepaid, return receipt
        requested;

       

      (iii)  In
        the case of a telephonic Notice, when a party is contacted by telephone,
        if
        delivery of such telephonic Notice is confirmed no later than the next Business
        Day by hand delivery, a facsimile or electronic transmission, a Website Posting
        or overnight courier delivery of a confirmatory notice (received at or before
        noon on such next Business Day);

       

      (iv)  In
        the case of a facsimile transmission, when sent to the applicable party's
        facsimile machine's telephone number if the party sending such Notice receives
        confirmation of the delivery thereof from its own facsimile
        machine;

       

      (v)  In
        the case of electronic transmission, when actually received;

       

      (vi)  In
        the case of a Website Posting, upon delivery of a Notice of such posting
        (including the information necessary to access such web site) by another
        means
        set forth in this Section 11.6; and

       

      (vii)  If
        given by any other means (including by overnight courier), when actually
        received.

       

      Any
        Bank giving a Notice to a Loan Party shall concurrently send a copy thereof
        to
        the Agent, and the Agent shall promptly notify the other Banks of its receipt
        of
        such Notice.

       

      11.7  Severability.

       

      The
        provisions of this Agreement are intended to be severable.  If any
        provision of this Agreement shall be held invalid or unenforceable in whole
        or
        in part in any jurisdiction, such provision shall, as to such jurisdiction,
        be
        ineffective to the extent of such invalidity or unenforceability without
        in any
        manner affecting the validity or enforceability thereof in any other
        jurisdiction or the remaining provisions hereof in any
        jurisdiction.

       

      
        
          
          

        

        
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      11.8  Governing
        Law.

       

      Each
        Letter of Credit and Section 2.9 [Letter of Credit Subfacility] shall be
        subject to either to the rules of the Uniform Customs and Practice for
        Documentary Credits, as most recently published by the International Chamber
        of
        Commerce (the "ICC") at the time of issuance ("UCP") or the International
        Standby Practices (ICC Publication Number 590) ("ISP98") and any
        subsequent official revision thereof, and to the extent not inconsistent
        therewith, shall, pursuant to New York General Obligations Law Section 5-1401,
        for all purposes be governed by and construed and enforced in accordance
        with
        the laws of the State of New York and shall, pursuant to New York General
        Obligations Law Section 5-1401, for all purposes be governed by and construed
        and enforced in accordance with the laws of the State of New York.

       

      11.9  Prior
        Understanding.

       

      This
        Agreement and the other Loan Documents supersede all prior understandings
        and
        agreements, whether written or oral, between the parties hereto and thereto
        relating to the transactions provided for herein and therein, including any
        prior confidentiality agreements and commitments.

       

      11.10  Duration;
        Survival.

       

      All
        representations and warranties of the Loan Parties contained herein or made
        in
        connection herewith shall survive the making of Loans and issuance of Letters
        of
        Credit and shall not be waived by the execution and delivery of this Agreement,
        any investigation by the Agent or the Banks, the making of Loans, issuance
        of
        Letters of Credit, or payment in full of the Loans.  All covenants and
        agreements of the Loan Parties contained in Sections 8.1 [Affirmative
        Covenants], 8.2 [Negative Covenants] and 8.3
        [Reporting Requirements] herein shall continue in full force and effect from
        and
        after the date hereof so long as the Borrower may borrow or request Letters
        of
        Credit hereunder and until termination of the Commitments and payment in
        full of
        the Loans and expiration or termination of all Letters of Credit.  All
        covenants and agreements of the Borrower contained herein relating to the
        payment of principal, interest, premiums, additional compensation or expenses
        and indemnification, including those set forth in Section 5 [Payments] and
        Sections 10.5 [Reimbursement and Indemnification of Agent by the Borrower],
        10.7 [Reimbursement and Indemnification of Agent by Banks] and 11.3
        [Reimbursement and Indemnification of Banks by the Borrower; Taxes], shall
        survive payment in full of the Loans, expiration or termination of the Letters
        of Credit and termination of the Commitments.

       

      11.11  Successors
        and Assigns; Joinder of a Bank.

       

      (i)  This
        Agreement shall be binding upon and shall inure to the benefit of the Banks,
        the
        Agent, the Loan Parties and their respective successors and assigns, except
        that
        none of the Loan Parties may assign or transfer any of its rights and
        Obligations hereunder or any interest herein.  Each Bank may, at its
        own cost, make assignments of or sell participations in all or any part of
        its
        Commitments and the Loans made by it to one or more banks or other entities,
        subject to the consent of the Borrower and the Agent with respect to any
        assignee, such consent not to be unreasonably withheld, provided that
        (1) no consent of the Borrower shall be required (A) if an Event of Default
        exists and is continuing, or (B) in the case of an assignment by a Bank to
        an
        Affiliate of such Bank or an Approved Fund of such Bank which assignment
        also
        shall not require the consent of the Agent and (2) any assignment by a Bank
        to a Person other than an Affiliate of such Bank may not be made in amounts
        less
        than the lesser of $5,000,000 or the amount of the assigning Bank's
        Commitment.  In the case of

       

      
        
          
          

        

        
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      an
        assignment, upon receipt by the Agent of the Assignment and Assumption
        Agreement, the assignee shall have, to the extent of such assignment (unless
        otherwise provided therein), the same rights, benefits and obligations as
        it
        would have if it had been a signatory Bank hereunder, the Commitments shall
        be
        adjusted accordingly, and upon surrender of any Revolving Credit Note subject
        to
        such assignment, the Borrower shall execute and deliver a new Revolving Credit
        Note to the assignee, if such assignee requests such a Note in an amount
        equal
        to the amount of the Revolving Credit Commitment assumed by it and a new
        Revolving Credit Note to the assigning Bank, if the assigning Bank requests
        such
        a Note, in an amount equal to the Revolving Credit Commitment retained by
        it
        hereunder.  Any Bank which assigns any or all of its Commitment or
        Loans to a Person other than an Affiliate of such Bank shall pay to the Agent
        a
        service fee in the amount of $3,500 for each assignment.  In the case
        of a participation, the participant shall only have the rights specified
        in
        Section 9.2.3 [Set-off] (the participant's rights against such Bank in
        respect of such participation to be those set forth in the agreement executed
        by
        such Bank in favor of the participant relating thereto and not to include
        any
        voting rights except with respect to changes of the type referenced in
        Section 11.1.1 [Increase of Revolving Credit Commitments; Extension of
        Expiration Date], all of such Bank's obligations under this Agreement or
        any
        other Loan Document shall remain unchanged, and all amounts payable by any
        Loan
        Party hereunder or thereunder shall be determined as if such Bank had not
        sold
        such participation.

       

      (ii)  Any
        assignee or participant which is not incorporated under the Laws of the United
        States of America or a state thereof shall deliver to the Borrower and the
        Agent
        the form of certificate described in Section 11.18.1 [Tax Withholding] relating to federal income
        tax withholding.  Each Bank may furnish any publicly available
        information concerning any Loan Party or its Subsidiaries and any other
        information concerning any Loan Party or its Subsidiaries in the possession
        of
        such Bank from time to time to assignees and participants (including prospective
        assignees or participants), provided that such assignees and participants
        agree to be bound by the provisions of Section 11.12
        [Confidentiality].

       

      (iii)  Notwithstanding
        any other provision in this Agreement, any Bank may at any time pledge or
        grant
        a security interest in all or any portion of its rights under this Agreement,
        its Note (if any) and the other Loan Documents to any Federal Reserve Bank
        in
        accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR
        Section 203.14 without notice to or consent of the Borrower or the
        Agent.  No such pledge or grant of a security interest shall release
        the transferor Bank of its obligations hereunder or under any other Loan
        Document.

       

      (iv)  A
        bank which is to become a party to this Agreement pursuant to Section 2.11
        hereof or otherwise (each an "Additional Bank") shall execute and deliver
        to Agent a Bank Joinder to this Agreement in substantially the form attached
        hereto as Exhibit 1.1(B).  Upon execution and delivery of
        a Bank Joinder, such Additional Bank shall be a party hereto and a Bank under
        each of the Loan Documents for all purposes, except that such Additional
        Bank
        shall not participate in any Loans to which the LIBOR Rate Option applies
        which
        are outstanding on the effective date of such Bank Joinder.  If
        Borrower should renew after the effective date of such Bank Joinder the LIBOR
        Rate Option with

       

      
        
          
          

        

        
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      respect
        to Loans existing on such date, Borrower shall be deemed to repay the applicable
        Loans on the renewal date and then reborrow a similar amount on such date
        so
        that the Additional Bank shall participate in such Loans after such renewal
        date.  Schedule 1.1(B) shall be amended and restated on the
        date of such Bank Joinder to revise the information contained therein as
        appropriate to reflect the information on the attachment to such Bank
        Joinder.  Simultaneously with the execution and delivery of such Bank
        Joinder, Borrower shall execute a Revolving Credit Note, and deliver it to
        such
        Additional Bank together with originals of such other documents described
        in
        Section 7.1 hereof as such Additional Bank may reasonably
        require.

       

      11.12  Confidentiality.

       

      
        	
                11.12.1.  

              	
                General.

              

      

       

      The
        Agent and the Banks each agree to keep confidential all information obtained
        from any Loan Party or its Subsidiaries which is nonpublic and confidential
        or
        proprietary in nature (including any information the Borrower specifically
        designates as confidential), except as provided below, and to use such
        information only in connection with their respective capacities under this
        Agreement and for the purposes contemplated hereby.  The Agent and the
        Banks shall be permitted to disclose such information (i) to outside legal
        counsel, accountants and other professional advisors who need to know such
        information in connection with the administration and enforcement of this
        Agreement, subject to agreement of such Persons to maintain the confidentiality,
        (ii) to assignees and participants as contemplated by Section 11.11,
        and prospective assignees and participants, provided that prior to such
        disclosure, such parties agree to be bound by this undertaking of
        confidentiality set forth in this Section 11.12, (iii) to the extent
        requested by any regulatory authority or, with notice to the Borrower, as
        otherwise required by applicable Law or by any subpoena or similar legal
        process, or in connection with any investigation or proceeding arising out
        of
        the transactions contemplated by this Agreement, (iv) if it becomes
        publicly available other than as a result of a breach of this Agreement or
        becomes available and is not reasonably known to be subject to confidentiality
        restrictions, or (v) if the Borrower shall have consented to such
        disclosure.

       

      
        	
                11.12.2.  

              	
                Sharing
                  Information With Affiliates of the
                  Banks.

              

      

       

      Each
        Loan Party acknowledges that from time to time financial advisory, investment
        banking and other services may be offered or provided to the Borrower or
        one or
        more of its Affiliates (in connection with this Agreement or otherwise) by
        any
        Bank or by one or more Subsidiaries or Affiliates of such Bank and each of
        the
        Loan Parties hereby authorizes each Bank to share any information delivered
        to
        such Bank by such Loan Party and its Subsidiaries pursuant to this Agreement,
        or
        in connection with the decision of such Bank to enter into this Agreement,
        to
        any such Subsidiary or Affiliate of such Bank, it being understood that any
        such
        Subsidiary or affiliate of any Bank receiving such information shall be bound
        by
        the provisions of Section 11.12.1 as if it were a Bank
        hereunder.  Such Authorization shall survive the repayment of the
        Loans and other Obligations and the termination of the Commitments.

       

      11.13  Counterparts.

       

      This
        Agreement may be executed by different parties hereto on any number of separate
        counterparts, each of which, when so executed and delivered, shall be an
        original, and all such counterparts shall together constitute one and the
        same
        instrument.

       

      
        
          
          

        

        
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      11.14  Agent's
        or Bank's Consent.

       

      Whenever
        the Agent's or any Bank's consent is required to be obtained under this
        Agreement or any of the other Loan Documents as a condition to any action,
        inaction, condition or event, the Agent and each Bank shall be authorized
        to
        give or withhold such consent in its sole and absolute discretion and to
        condition its consent upon the giving of additional collateral, the payment
        of
        money or any other matter.

       

      11.15  Exceptions.

       

      The
        representations, warranties and covenants contained herein shall be independent
        of each other, and no exception to any representation, warranty or covenant
        shall be deemed to be an exception to any other representation, warranty
        or
        covenant contained herein unless expressly provided, nor shall any such
        exceptions be deemed to permit any action or omission that would be in
        contravention of applicable Law.

       

      11.16  WAIVER
        OF JURY TRIAL.

       

      EACH
        LOAN PARTY, THE AGENT AND THE BANKS HEREBY KNOWINGLY, VOLUNTARILY AND
        INTENTIONALLY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
        COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY
        OTHER
        LOAN DOCUMENT OR ANY COLLATERAL, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
        STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
        WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
        OR
        ACTIONS OF THE AGENT OR THE BANKS RELATING TO THE ADMINISTRATION OF THE LOANS
        OR
        ENFORCEMENT OF THIS AGREEMENT OR THE LOAN DOCUMENTS, TO THE FULLEST EXTENT
        PERMITTED BY LAW.  NO LOAN PARTY WILL SEEK TO CONSOLIDATE ANY SUCH
        ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
        WAIVED.  EACH LOAN PARTY CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
        ATTORNEY OF AGENT OR THE BANKS, HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
        THAT
        AGENT OR THE BANKS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
        THE
        FOREGOING WAIVER.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR
        AGENT AND THE BANKS TO ACCEPT THIS AGREEMENT AND THE LOAN DOCUMENTS AND MAKE
        THE
        LOANS.

       

      11.17  JURISDICTION
        & VENUE.

       

      EACH
        LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF
        COURTS IN THE COUNTY OF NEW YORK IN THE STATE OF NEW YORK AND THE UNITED
        STATES
        DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND WAIVES PERSONAL
        SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE
        OF
        PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL (RETURN RECEIPT REQUESTED)
        DIRECTED TO SUCH LOAN PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 11.6
        [NOTICES; LENDING OFFICES] AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
        UPON ACTUAL RECEIPT THEREOF.  NOTHING CONTAINED HEREIN SHALL AFFECT
        THE RIGHT OF AGENT TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY
        LAW.  EACH LOAN PARTY IRREVOCABLY WAIVES ANY OBJECTION TO JURISDICTION
        AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES
        NOT
        TO ASSERT ANY DEFENSE BASED ON FORUM NON CONVENIENS OR ANY LACK OF
        JURISDICTION OR VENUE THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
        ANY
        ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT.

       

      
        
          
          

        

        
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      11.18  Certifications
        From Banks and Participants.

       

      
        	
                11.18.1.  

              	
                Tax
                  Withholding.

              

      

       

      Each
        Bank or assignee or Participant of a Bank that is not incorporated under
        the
        laws of the United States of America or a state thereof (and, upon the written
        request of the Agent, each other Bank or assignee or Participant or a Bank)
        agrees that it will deliver to each of the Borrower and the Agent two (2)
        duly
        completed appropriate valid Withholding Certificates (as defined under
§1.1441-1(c)(16) of the Income Tax Regulations (the "Regulations"))
        certifying its status (i.e., United States or foreign person) and, if
        appropriate, making a claim of reduced, or exemption from, United States
        withholding tax on the basis of an income tax treaty or an exemption provided
        by
        the Internal Revenue Code (the "Code").  Such delivery may be
        made by electronic transmission as described in §1.1441-1(e)(4)(iv) of the
        Regulations if the Agent establishes an electronic delivery
        system.  The term "Withholding Certificate" means a Form W-9; a
        Form W-8BEN; a Form W-8ECI; a Form W-81MY and the related statements and
        certifications as required under §1.1441-1(e)(3) of the Regulations; a statement
        described in §1.871-14(c)(2)(v) of the Regulations; or any other certificates
        under the Code or Regulations that certify or establish the status of a payee
        or
        beneficial owner as a United States or foreign person.  Each Bank,
        assignee or Participant required to deliver to the Borrower and the Agent
        a
        valid Withholding Certificate pursuant to the preceding sentence shall deliver
        such valid Withholding Certificate as follows:  (A) each Bank
        which is a party hereto on the Closing Date shall deliver such valid Withholding
        Certificate at least five (5) Business Days prior to the first date on which
        any
        interest or Fees are payable by the Borrower hereunder for the account of
        such
        Bank; (B) each assignee or Participant shall deliver such valid Withholding
        Certificate at least five (5) Business Days before the effective date of
        such
        assignment or Participation (unless the Agent in its sole discretion shall
        permit such assignee or Participant to deliver such Withholding Certificate
        less
        than five (5) Business Days before such date in which case it shall be due
        on
        the date specified by the Agent).  Each Bank, assignee or Participant
        which so delivers a valid Withholding Certificate further undertakes to deliver
        to each of the Borrower and the Agent two (2) additional copies of such
        Withholding Certificate (or a successor form) on or before the date that
        such
        Withholding Certificate expires or becomes obsolete or after the occurrence
        of
        any event requiring a change in the most recent Withholding Certificate so
        delivered by it, and such amendments thereto or extensions or renewals thereof
        as may be reasonably requested by the Borrower or the
        Agent.  Notwithstanding the submission of a Withholding Certificate
        claiming a reduced rate of, or exemption from, United States withholding
        taxes,
        the Agent shall be entitled to withhold United States federal income taxes
        at
        the full 30% withholding rate if in its reasonable judgment it is required
        to do
        so under the due diligence requirements imposed upon a withholding agent
        under
§1.1441-7(b) of the Regulations.  Further, the Agent is indemnified
        under §1.1461-1(e) of the Regulations against any claims and demands of any Bank
        or assignee or Participant of a Bank for the amount of any tax it deducts
        and
        withholds in accordance with regulations under §1441 of the Internal Revenue
        Code.

       

      
        	
                11.18.2.  

              	
                USA
                  Patriot Act.

              

      

       

      Each
        Bank or assignee or participant of a Bank that is not incorporated under
        the
        laws of the United States of America or a state thereof (and is not excepted
        from the certification requirement contained in Section 313 of the USA Patriot
        Act and the applicable regulations because it is both (i) an affiliate of a
        depository institution or foreign bank that maintains a physical presence
        in the
        United States or foreign county, and (ii) subject to supervision by a
        banking authority regulating such affiliated depository institution or foreign
        bank) shall deliver to the Agent the certification, or, if applicable,
        recertification, certifying that such Bank is not a "shell" and certifying
        to
        other matters as required by Section 313 of the USA Patriot Act and the
        applicable regulations: (1) within 10 days after the Closing Date, and
        (2) as such other times as are required under the USA Patriot
        Act.

       

      
        
          
          

        

        
          79

          
            

          

        

        
          
          

        

      

      

       

      11.19  Joinder
        of Guarantors.

       

      Any
        Subsidiary of the Borrower which is required to join this Agreement as a
        Guarantor pursuant to Section 8.2.5
        [Liquidations, Mergers, Consolidations, Acquisitions] and Section 8.2.8
        [Subsidiaries, Partnerships and Joint Ventures] shall (i) execute and deliver
        to
        the Agent a Guarantor Joinder in substantially the form attached hereto as
Exhibit 1.1(G)(1) pursuant to which it shall join as a
        Guarantor each of the documents to which the Guarantors are parties; and
        (ii) execute and deliver to the Agent documents in the forms described in
        Section 7.1.2 [Secretary's Certificate]
        modified as appropriate to relate to such Subsidiary and (iii) satisfy such
        other requirements as reasonably requested by the Agent.  The Loan
        Parties shall deliver such Guarantor Joinder and related documents to the
        Agent
        within five (5) Business Days after the date of the filing of such Subsidiary's
        articles of incorporation if the Subsidiary is a corporation, the date of
        the
        filing of its certificate of limited partnership if it is a limited partnership
        or the date of its organization if it is an entity other than a limited
        partnership or corporation.

       

      [SIGNATURE
        PAGES FOLLOW]

       

      
        
          
          

        

        
          80

          
            

          

        

        
          
          

        

      

      

      
        

        [SIGNATURE
          PAGE TO NEW JERSEY

        RESOURCES
          CORPORATION CREDIT AGREEMENT]

        

        

        IN
          WITNESS WHEREOF, and intending to be legally bound hereby, the parties
          hereto
          have executed this Agreement as of the date first above written.

         

        BORROWER:

        

        ATTEST:                                                                NEW
          JERSEY RESOURCES CORPORATION

        

        
          	 	
                  /s/Rhonda
                    Figueroa

                	 	 	
                  /s/
                    Glenn C. Lockwood

                
	
                  Name:

                	
                  Rhonda
                    Figueroa

                	 	
                  Name:

                	
                  Glenn
                    C. Lockwood

                
	
                  Title:

                	
                  Corporate
                    Secretary

                	 	
                  Title:

                	
                  Senior
                    Vice President and 

                  Chief
                    Financial Officer

                

        

        

        

      

      

      

      
        
                

                    4231712      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

         

        
          

          [SIGNATURE
            PAGE TO NEW JERSEY

          RESOURCES
            CORPORATION CREDIT AGREEMENT]

          

          

          
            	
                     

                  	
                    NJR
                      ENERGY CORPORATION

                  

          

          

          
            	 	
                    By:/s/
                      Glenn C. Lockwood

                  
	 	
                    Glenn
                      C. Lockwood

                  
	 	
                    Senior
                      Vice President and

                  
	 	
                    Chief
                      Financial Officer

                  

          

          

        
                                            

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

              	
                NJR
                  ENERGY SERVICES COMPANY

              

      

      

      

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial
                    Officer

                

        
                                                                          

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

              	
                NJR
                  HOME SERVICES COMPANY

              

      

      

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial Officer

                

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

              	
                COMMERCIAL
                  REALTY AND RESOURCES CORP.

              

      

      

      

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial
                    Officer

                

        
                                                                    

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

              	
                PNC
                  BANK, NATIONAL ASSOCIATION, individually and as Administrative
                  Agent

              

      

      

      

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial Officer

                

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

              	
                BANK
                  OF AMERICA, N.A., individually and as Syndication
                  Agent

              

      

       

      
 

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial
                    Officer

                

        
                                                                        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

              	
                CITIBANK,
                  N.A., individually and as Documentation
                  Agent

              

      

      
 

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial Officer

                

        

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

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

              

      

      

      

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial Officer

                

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

              	
                THE
                  BANK OF NOVA SCOTIA, individually and as
                  Documentation Agent

              

      

      

      

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial Officer

                

        

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

              	
                THE
                  BANK OF NEW YORK MELLON

              

      

      

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial Officer

                

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

              	
                WACHOVIA
                  BANK, NATIONAL ASSOCIATION

              

      

      

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial
                    Officer

                

        
                                                                    

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [SIGNATURE
        PAGE TO NEW JERSEY

      RESOURCES
        CORPORATION CREDIT AGREEMENT]

      

      

      
        	
                 

              	
                WILLIAM
                  STREET COMMITMENT
                  CORPORATION

              

      

      

      
        
          	 	
                  By:/s/
                    Glenn C. Lockwood

                
	 	
                  Glenn
                    C. Lockwood

                
	 	
                  Senior
                    Vice President and

                
	 	
                  Chief
                    Financial Officer

                

        

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        1.1(A)

       

      Pricing
        Grid

       

      

      
        	
                 

                Level

              	
                Debt
                  Rating

                [Standard
                  and Poor's and Moody's, Respectively]

              	
                Facility

                Fee

              	
                Base
                  Rate Spread

              	
                LIBOR
                  Rate Spread

              	
                Letter
                  of Credit Fee

              
	
                I

              	
                A+
                  or above

                or

                A1
                  or above

              	
                .05%

              	
                0%

              	
                .20%

              	
                .20%

              
	
                II

              	
                A-
                  or above but less than A+

                or

                A3
                  or above but less than A1

              	
                .075%

              	
                0%

              	
                .275%

              	
                .275%

              
	
                III

              	
                BBB
                  or above but less than A-

                or

                Baa2
                  or above but less than A3

              	
                .10%

              	
                0%

              	
                .35%

              	
                .35%

              
	
                IV

              	
                Less
                  than BBB or

                less
                  than Baa2 or unrated

              	
                .15%

              	
                0%

              	
                .55%

              	
                .55%

              

      

       

      For
        purposes of determining the Applicable Margin, the Applicable Facility Fee
        Rate
        and the Applicable Letter of Credit Fee Rate:

       

      (a)           With
        respect to the Debt Ratings of Moody's and Standard and
        Poor's:  (i) if one or both of Moody's or Standard and Poor's
        shall fail to have a Debt Rating in effect, then such rating agency which
        fails
        to have a Debt Rating in effect shall be deemed to have established a Debt
        Rating at Level IV, and (ii) if the Debt Rating established by Moody's and
        the Debt Rating established by Standard and Poor's differ, the pricing Level
        above shall be determined based upon the higher of the Debt Rating established
        by Moody's and the Debt Rating established by Standard and Poor's, provided,
        however, if one of the Debt Ratings is two or more Levels lower than the
        other, the applicable pricing Level shall be determined at the Level next
        above
        that of the Level of the lower of the two Debt Ratings.

       

      (b)           Any
        change in the Applicable Margin, the Applicable Facility Fee Rate, or the
        Applicable Letter of Credit Fee Rate shall become effective on the date of
        any
        public announcement of the change in the Debt Rating requiring such an increase
        or decrease.

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        
          	
                  Schedule
                    1.1(P):  New Jersey Resources Corporation

                  Permitted
                    Liens

                   

                

        

        

        None

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      
         

        
          
            	
                    Schedule
                      6.1.2: New Jersey Resources Corporation

                    Subsidiaries

                     

                     

                  
	
                     

                    Name
                      of Subsidiary

                  	
                     

                    Jurisdiction
                      of Incorporation

                  	
                     

                    Authorized
                      Capital Stock (Shares)

                  	
                    Issued
                      and Outstanding Shares –

                    “Subsidiary
                      Shares”

                  	
                     

                    Shareholder

                     

                  
	
                     

                    New
                      Jersey Natural Gas Company

                     

                  	
                     

                    New
                      Jersey

                  	
                     

                    3,214,923
                      (Common)

                    310,000

                    (Preferred)

                  	
                    1,679,846

                    (Common)

                    0

                    (Preferred)

                  	
                     

                    New
                      Jersey Resources Corporation

                  
	
                     

                    NJR
                      Retail Holdings Corporation

                     

                  	
                     

                    New
                      Jersey

                  	
                     

                    1,000

                  	
                     

                    1,000

                  	
                     

                    New
                      Jersey Resources Corporation

                  
	
                     

                    NJR
                      Energy Investments Corporation

                     

                  	
                     

                    New
                      Jersey

                  	
                     

                    1,000

                  	
                     

                    1,000

                  	
                     

                    New
                      Jersey Resources Corporation

                  
	
                     

                    NJR
                      Service Corporation

                     

                  	
                     

                    New
                      Jersey

                  	
                     

                    1,000

                  	
                     

                    1,000

                  	
                     

                    New
                      Jersey Resources Corporation

                     

                  
	
                     

                    NJR
                      Energy Services Company

                     

                  	
                     

                    New
                      Jersey

                  	
                     

                    1,000

                  	
                     

                    1,000

                  	
                     

                    New
                      Jersey Resources Corporation

                  
	
                     

                    NJR
                      Home Services Company

                  	
                     

                    New
                      Jersey

                  	
                     

                    1,000

                  	
                     

                    1,000

                  	
                     

                    NJR
                      Retail Holdings Corporation

                     

                  
	
                     

                    NJR
                      Plumbing Services, Inc.

                     

                  	
                     

                    New
                      Jersey

                  	
                     

                    1,000

                  	
                     

                    1,000

                  	
                     

                    NJR
                      Home Services Company

                     

                  
	
                     

                    NJR
                      Energy Corporation

                     

                  	
                     

                    New
                      Jersey

                  	
                     

                    2,500

                  	
                     

                    2,500

                  	
                     

                    NJR
                      Energy Holdings Corporation

                  

          

          

          
 

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      
        	
                Schedule
                  6.1.2: New Jersey Resources Corporation

                Subsidiaries

                 

              
	
                 

                Name
                  of Subsidiary

              	
                 

                Jurisdiction
                  of Incorporation

              	
                 

                Authorized
                  Capital Stock (Shares)

              	
                Issued
                  and Outstanding Shares –

                “Subsidiary
                  Shares”

              	
                 

                Shareholder

                 

              
	
                 

                NJR
                  Storage Holdings Company

                 

              	
                 

                Delaware

              	
                 

                1,000

              	
                 

                1,000

              	
                 

                NJR
                  Energy Holdings Corporation

                 

              
	
                 

                NJR
                  Steckman Ridge Storage Company

                 

              	
                 

                Delaware

              	
                 

                1,000

              	
                 

                1,000

              	
                 

                NJR
                  Storage Holdings Company

                 

              
	
                 

                Steckman
                  Ridge, LP

              	
                 

                Delaware

                Limited
                  Partnership

              	
                 

                N/A

              	
                 

                N/A

              	
                 

                NJR
                  Steckman Ridge Storage Company (49.5%)

                 

                Steckman
                  Ridge GP, LLC (1%)

                 

              
	
                 

                Steckman
                  Ridge, GP, LLC

                 

              	
                 

                Delaware

                Limited
                  Liability Company

                 

              	
                 

                N/A

              	
                 

                N/A

              	
                 

                NJR
                  Steckman Ridge Storage Company (50%)

                 

              
	
                 

                NJR
                  Storage Partners

              	
                 

                New
                  Jersey General Partnership

                 

              	
                 

                N/A

              	
                 

                N/A

              	
                 

                NJR
                  Energy Services Company (Managing Partner)

                 

                New
                  Jersey Resources Corporation

                 

              
	
                 

                NJNR
                  Pipeline Company

                 

              	
                 

                New
                  Jersey

              	
                 

                2,500

              	
                 

                2,500

              	
                 

                NJR
                  Energy Corporation

              
	
                 

                NJR
                  Pipeline Company

                 

              	
                 

                New
                  Jersey

              	
                 

                1,000

              	
                 

                1,000

              	
                 

                NJR
                  Energy Corporation

                 

              
	
                 

                Commercial
                  Realty & Resources Corp.

              	
                 

                New
                  Jersey

              	
                 

                2,500

              	
                 

                2,500

              	
                 

                NJR
                  Energy Investments Corporation

                 

              
	
                 

                NJR
                  Investment Company

              	
                 

                New
                  Jersey

              	
                 

                1,000

              	
                 

                1,000

              	
                 

                NJR
                  Energy Investments Corporation

              
	
                 

                NJR
                  Energy Holdings Corporation

              	
                 

                New
                  Jersey

              	
                 

                1,000

              	
                 

                1,000

              	
                 

                NJR
                  Energy Investments Corporation

                 

              
	 	 	 	 	 
	
                Options,
                  warrants or other rights outstanding to purchase any Subsidiary
                  Shares,
                  Partnership Interests or LLC Interests:

                 

                None

              

      

      
 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Schedule
        6.1.12:  New Jersey Resources Corporation and
        Subsidiaries

      Consents
        and Approvals

      

      None

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      Schedule
        6.1.24: Permitted Related Business Opportunities

      

      None

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                  Schedule
                    8.2.1:  New Jersey Resources Corporation

                   

                  Existing
                    Indebtedness

                   

                
	 	 	 	 	 	
                  Principal

                
	
                  ($000)

                	
                  Rate

                	 	
                  Maturity
                    Date

                	 	
                  Amount

                
	 	 	 	 	 	 
	 	 	 	 	 	 
	
                  Unsecured
                    Senior  Notes (Private

                  Placement)

                	
                   

                  3.75%

                	 	
                   

                  3/15/09

                	 	
                   

                  $25,000

                
	
                  Unsecured
                    Senior  Notes (Private

                  Placement)

                	
                   

                  6.05%

                	 	
                   

                  09/24/17

                	 	
                   

                  50,000

                
	
                  TOTAL

                	 	 	 	 	
                  $75,000

                

        

        

        Letters
          of Credit

        

        
          	
                  Applicant

                	
                  Issuer

                	
                  L/C#

                	
                  Amount

                	
                  Beneficiary

                	
                  Expiration

                
	
                   

                  NJR

                	
                   

                  PNC
                    Bank, National Association

                	
                   

                  18103566-00

                	
                   

                  $3,995,000

                	
                   

                  Liberty
                    Gas Storage

                	
                   

                  12/31/07

                   

                
	
                   

                  NJR

                	
                   

                  PNC
                    Bank, National Association

                	
                   

                  18107905-00

                	
                   

                  $500,000

                	
                   

                  Caledonia
                    Energy Partners

                   

                	
                   

                  12/31/07

                   

                

        

        

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

     

    
      
        

        
          	
                  Schedule
                    8.2.1:  NJR Energy Services Company

                  Existing
                    Indebtedness

                   

                
	 	 	 	 	 	
                  Principal

                
	
                  ($000)

                	
                  Rate

                	 	
                  Maturity
                    Date

                	 	
                  Amount

                
	 	 	 	 	 	 
	
                  Indebtedness
                    arising under $30 million committed revolving credit
                    agreement

                	
                  Var.

                	 	
                  10/12/09

                	 	
                  $30,000

                
	
                  TOTAL

                	 	 	 	 	
                  $30,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]