Document:

exv10w31

 

EXHIBIT 10.31

Silicon Valley Bank

Loan and Security Agreement

	 	 	 	 	 	 	 
	Borrower:

	 	Three-Five Systems, Inc.
	 	and
	 	TFS Electronic Manufacturing Services, Inc.
	Address:

	 	1600 North Desert Drive
	 	 	 	6640 185th Avenue N.E.
	

	 	Tempe, AZ 85281
	 	 	 	Redmond, WA 98052
	 
	 	 	 	 	 	 
	Date:

	 	June 25, 2004	 	 	 	 

THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between
SILICON VALLEY BANK (“Silicon”), whose address is 3003 Tasman Drive, Santa
Clara, California 95054 and the borrower(s) named above (jointly and
severally, the “Borrower”), whose chief executive office is located at the
above address (“Borrower’s Address”). The Schedule to this Agreement (the
“Schedule”) shall for all purposes be deemed to be a part of this Agreement,
and the same is an integral part of this Agreement. (Definitions of certain
terms used in this Agreement are set forth in Section 8 below.)

1. LOANS.

     1.1 Loans. Silicon will make loans to Borrower (the “Loans”) up to the
amounts (the “Credit Limit”) shown on the Schedule, provided no Default or
Event of Default has occurred and is continuing, and subject to deduction of
Reserves for accrued interest and such other Reserves as Silicon deems proper
from time to time in its good faith business judgment.

     1.2 Interest. All Loans and all other monetary Obligations shall bear
interest at the rate shown on the Schedule, except where expressly set forth to
the contrary in this Agreement. Interest shall be payable monthly, on the last
day of the month. Interest may, in Silicon’s discretion, be charged to
Borrower’s loan account, and the same shall thereafter bear interest at the
same rate as the other Loans. Silicon may, in its discretion, charge interest
to Borrower’s Deposit Accounts maintained with Silicon.

     1.3 Overadvances. If at any time or for any reason the total of all
outstanding Loans and all other monetary Obligations exceeds the Credit Limit
(an “Overadvance”), Borrower shall immediately pay the amount of the excess to
Silicon, without notice or demand. Without limiting Borrower’s obligation to
repay to Silicon the amount of any Overadvance, Borrower agrees to pay Silicon
interest on the outstanding amount of any Overadvance, on demand, at the
Default Rate.

     1.4 Fees. Borrower shall pay Silicon the fees shown on the Schedule,
which are in addition to all interest and other sums payable to Silicon and are
not refundable.

     1.5 Loan Requests. To obtain a Loan, Borrower shall make a request to
Silicon by facsimile or telephone. Loan requests received after 12:00 Noon/*
will not be considered by Silicon until the next Business Day. Silicon may rely
on any telephone request for a Loan given by a person whom Silicon believes is
an authorized representative of Borrower, and Borrower will indemnify Silicon
for any loss Silicon suffers as a result of that reliance.

	*	 	(Pacific Standard Time)

     1.6 Letters of Credit. At the request of Borrower, Silicon may, in its
good faith business judgment, issue or arrange for the issuance of letters of
credit for the account of Borrower, in each case in form and substance
satisfactory to Silicon in its sole discretion (collectively, “Letters of
Credit”). The aggregate face amount of all Letters of Credit from time to time
outstanding shall not exceed the amount shown on the Schedule (the “Letter of
Credit Sublimit”), and shall be reserved against Loans which would otherwise be
available hereunder, and in the event at any time there are insufficient Loans
available to Borrower for such reserve, Borrower shall deposit and
maintain with Silicon cash collateral in an amount at all

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times equal to such
deficiency, which shall be held as Collateral for all purposes of this
Agreement. Borrower shall pay all bank charges (including charges of Silicon)
for the issuance of Letters of Credit, together with such additional fee as
Silicon’s letter of credit department shall charge in connection with the
issuance of the Letters of Credit. Any payment by Silicon under or in
connection with a Letter of Credit shall constitute a Loan hereunder on the
date such payment is made. Each Letter of Credit shall have an expiry date no
later than thirty days prior to the Maturity Date. Borrower hereby agrees to
indemnify and hold Silicon harmless from any loss, cost, expense, or liability,
including payments made by Silicon, expenses, and reasonable attorneys’ fees
incurred by Silicon arising out of or in connection with any Letters of Credit.
Borrower agrees to be bound by the regulations and interpretations of the
issuer of any Letters of Credit guarantied by Silicon and opened for Borrower’s
account or by Silicon’s interpretations of any Letter of Credit issued by
Silicon for Borrower’s account, and Borrower understands and agrees that
Silicon shall not be liable for any error, negligence, or mistake, whether of
omission or commission, in following Borrower’s instructions or those contained
in the Letters of Credit or any modifications, amendments, or supplements
thereto. Borrower understands that Letters of Credit may require Silicon to
indemnify the issuing bank for certain costs or liabilities arising out of
claims by Borrower against such issuing bank. Borrower hereby agrees to
indemnify and hold Silicon harmless with respect to any loss, cost, expense, or
liability incurred by Silicon under any Letter of Credit as a result of
Silicon’s indemnification of any such issuing bank. The provisions of this
Loan Agreement, as it pertains to Letters of Credit, and any other Loan
Documents relating to Letters of Credit are cumulative.

2. SECURITY INTEREST. To secure the payment and performance of all of the
Obligations when due, Borrower hereby grants to Silicon a security interest in
all of the following (collectively, the “Collateral”): all right, title and
interest of Borrower in and to all of the following, whether now owned or
hereafter arising or acquired and wherever located: all Accounts; all
Inventory; all Equipment; all Deposit Accounts; all General Intangibles
(including without limitation all Intellectual Property); all Investment
Property; all Other Property; and any and all claims, rights and interests in
any of the above, and all guaranties and security for any of the above, and all
substitutions and replacements for, additions, accessions, attachments,
accessories, and improvements to, and proceeds (including proceeds of any
insurance policies, proceeds of proceeds and claims against third parties) of,
any and all of the above, and all Borrower’s books relating to any and all of
the above./* *Notwithstanding anything to the contrary contained herein, the
Collateral shall not include any fixtures now or hereafter located upon
Borrower’s premises at 1600 North Desert Drive, Tempe, Arizona 85281.

3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.

     In order to induce Silicon to enter into this Agreement and to make Loans,
Borrower represents and warrants to Silicon as follows, and Borrower covenants
that the following representations will continue to be true, and that Borrower
will at all times comply with all of the following covenants, throughout the
term of this Agreement and until all Obligations have been paid and performed
in full:

     3.1 Corporate Existence and Authority. Borrower is and will continue to
be, duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Borrower is and will continue to be
qualified and licensed to do business in all jurisdictions in which any failure
to do so would result in a Material Adverse Change. The execution, delivery
and performance by Borrower of this Agreement, and all other documents
contemplated hereby (i) have been duly and validly authorized, (ii) are
enforceable against Borrower in accordance with their terms (except as
enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors’
rights generally), and (iii) do not violate Borrower’s articles or certificate
of incorporation, or Borrower’s by-laws, or any law or any material agreement
or instrument which is binding upon Borrower or its property, and (iv) do not
constitute grounds for acceleration of any material indebtedness or obligation
under any agreement or instrument which is binding upon Borrower or its
property.

     3.2 Name; Trade Names and Styles. The name of Borrower set forth in the
heading to this Agreement is its correct name. Listed in the Representations
are all prior names of Borrower and all of Borrower’s present and prior trade
names. Borrower shall give Silicon 30 days’ prior written notice before
changing its name or doing business under any other name. Borrower has
complied, and will in the future comply, in all material respects, with all
laws relating to the conduct of business under a fictitious business name,
except where the failure to so comply would not reasonably be expected to
result in a Material Adverse Change.

     3.3 Place of Business; Location of Collateral. The address set forth in
the heading to this Agreement is Borrower’s chief executive office. In
addition, Borrower has places of business and Collateral is located only at the
locations set forth in the Representations. Borrower will give Silicon at
least 30 days prior written notice before opening any additional place
of business, changing its chief executive office, or moving any of the
Collateral to a location other than Borrower’s Address or one of the locations
set forth in the Representations, except that Borrower may maintain sales
offices in the ordinary course of business at which not more than a total of /*fair market value of Equipment is located. *$100,000

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     3.4 Title to Collateral; Perfection; Permitted Liens.

          (a) Borrower is now, and will at all times in the future be, the sole
owner of all the Collateral, except for items of Equipment which are leased to
Borrower. The Collateral now is and will remain free and clear of any and all
liens, charges, security interests, encumbrances and adverse claims, except for
Permitted Liens. Silicon now has, and will continue to have, a first-priority
perfected and enforceable security interest in all of the Collateral, subject
only to the Permitted Liens, and Borrower will at all times defend Silicon and
the Collateral against all claims of others.

          (b) Borrower has set forth in the Representations all of Borrower’s
Deposit Accounts, and Borrower will give Silicon five Business Days advance
written notice before establishing any new Deposit Accounts and /* will cause
the institution where any such new Deposit Account is maintained to execute and
deliver to Silicon a control agreement in form sufficient to perfect Silicon’s
security interest in the Deposit Account and otherwise satisfactory to Silicon
in its good faith business judgment. Nothing herein limits any requirements
which may be set forth in the Schedule as to where Deposit Accounts will be
maintained.

          * , whenever requested by Silicon,

          (c) In the event that Borrower shall at any time after the date hereof
have any commercial tort claims against others, which it is asserting or
intends to assert, and in which the potential recovery exceeds $100,000,
Borrower shall promptly notify Silicon thereof in writing and provide Silicon
with such information regarding the same as Silicon shall request (unless
providing such information would waive the Borrower’s attorney-client
privilege). Such notification to Silicon shall constitute a grant of a
security interest in the commercial tort claim and all proceeds thereof to
Silicon, and Borrower shall execute and deliver all such documents and take all
such actions as Silicon shall request in connection therewith.

          (d) None of the Collateral now is or will be affixed to any real property
in such a manner, or with such intent, as to become a fixture. Borrower is not
and will not become a lessee under any real property lease pursuant to which
the lessor may obtain any rights in any of the Collateral and no such lease now
prohibits, restrains, impairs or will prohibit, restrain or impair Borrower’s
right to remove any Collateral from the leased premises. Whenever any
Collateral is located upon premises in which any third party has an interest,
Borrower shall, whenever requested by Silicon, use its best efforts to cause
such third party to execute and deliver to Silicon, in form acceptable to
Silicon, such waivers and subordinations as Silicon shall specify in its good
faith business judgment. Borrower will keep in full force and effect, and will
comply with all material terms of, any lease of real property where any of the
Collateral now or in the future may be located.

     3.5 Maintenance of Collateral. Borrower will maintain the Collateral in
good working condition (ordinary wear and tear excepted), and Borrower will not
use the Collateral for any unlawful purpose. Borrower will immediately advise
Silicon in writing of any material loss or damage to the Collateral.

     3.6 Books and Records. Borrower has maintained and will maintain at
Borrower’s Address complete and accurate books and records, comprising an
accounting system in accordance with GAAP.

     3.7 Financial Condition, Statements and Reports. All financial
statements now or in the future delivered to Silicon have been, and will be,
prepared in conformity with GAAP and now and in the future will fairly present
the results of operations and financial condition of Borrower, in accordance
with GAAP, at the times and for the periods therein stated. Between the last
date covered by any such statement provided to Silicon and the date hereof,
there has been no Material Adverse Change.

     3.8 Tax Returns and Payments; Pension Contributions. Borrower has timely
filed, and will timely file, all required tax returns and reports, and Borrower
has timely paid, and will timely pay, all foreign, federal, state and local
taxes, assessments, deposits and contributions now or in the future owed by
Borrower. Borrower may, however, defer payment of any contested taxes,
provided that Borrower (i) in good faith contests Borrower’s obligation to pay
the taxes by appropriate proceedings promptly and diligently instituted and
conducted, (ii) notifies Silicon in writing of the commencement of, and any
material development in, the proceedings, and (iii) posts bonds or takes any
other steps required to keep the contested taxes from becoming a lien upon any
of the Collateral. Borrower is unaware of any claims or adjustments proposed
for any of Borrower’s prior tax years which could result in additional taxes
becoming due and payable by Borrower. Borrower has paid, and shall continue to
pay all amounts necessary to fund all present and future pension, profit
sharing and deferred compensation plans in accordance with their terms, and
Borrower has not and will not withdraw from participation in, permit partial or
complete termination of, or permit the occurrence of any other event with
respect to, any such plan which
could reasonably be expected to result in any liability of Borrower,
including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other governmental agency.

     3.9 Compliance with Law. Borrower has, to the best of its knowledge,
complied, and will comply, in all material respects, with all provisions of all
foreign, federal, state and local laws and regulations applicable to Borrower,
including, but not limited to, those relating to Borrower’s ownership of real
or personal property, the conduct and licensing of Borrower’s business, and all
environmental matters.

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     3.10 Litigation. There is no claim, suit, litigation, proceeding or
investigation pending or (to best of Borrower’s knowledge) threatened against
or affecting Borrower in any court or before any governmental agency (or any
basis therefor known to Borrower) which could reasonably be expected to result,
either separately or in the aggregate, in any Material Adverse Change.
Borrower will promptly inform Silicon in writing of any claim, proceeding,
litigation or investigation in the future threatened or instituted against
Borrower involving any single claim of $50,000 or more, or involving $100,000
or more in the aggregate.

     3.11 Use of Proceeds. All proceeds of all Loans shall be used solely for
lawful business purposes. Borrower is not purchasing or carrying any “margin
stock” (as defined in Regulation U of the Board of Governors of the Federal
Reserve System) and no part of the proceeds of any Loan will be used to
purchase or carry any “margin stock” or to extend credit to others for the
purpose of purchasing or carrying any “margin stock.”

4. ACCOUNTS.

     4.1 Representations Relating to Accounts. Borrower represents and
warrants to Silicon as follows: Each /*Account with respect to which Loans are
requested by Borrower shall, on the date each Loan is requested and made, (i)
represent an undisputed bona fide existing unconditional obligation of the
Account Debtor created by the sale, delivery, and acceptance of goods or the
rendition of services, or the non-exclusive licensing of Intellectual Property,
in the ordinary course of Borrower’s business, and (ii) meet the Minimum
Eligibility Requirements set forth in Section 8 below. *Eligible

     4.2 Representations Relating to Documents and Legal Compliance. Borrower
represents and warrants to Silicon as follows: All statements made and all
unpaid balances appearing in all invoices, instruments and other documents
evidencing the Accounts are and shall be true and correct and all such
invoices, instruments and other documents and all of Borrower’s books and
records are and shall be genuine and in all respects what they purport to be.
All sales and other transactions underlying or giving rise to each Account
shall comply in all material respects with all applicable laws and governmental
rules and regulations. To the best of Borrower’s knowledge, all signatures and
endorsements on all documents, instruments, and agreements relating to all
Accounts are and shall be genuine, and all such documents, instruments and
agreements are and shall be legally enforceable in accordance with their terms.

     4.3 Schedules and Documents relating to Accounts. Borrower shall deliver
to Silicon transaction reports and schedules of collections, as provided in the
Schedule, on Silicon’s standard forms; provided, however, that Borrower’s
failure to execute and deliver the same shall not affect or limit Silicon’s
security interest and other rights in all of Borrower’s Accounts, nor shall
Silicon’s failure to advance or lend against a specific Account affect or limit
Silicon’s security interest and other rights therein. If requested by Silicon,
Borrower shall furnish Silicon with copies (or, at Silicon’s request,
originals) of all contracts, orders, invoices, and other similar documents, and
all shipping instructions, delivery receipts, bills of lading, and other
evidence of delivery, for any goods the sale or disposition of which gave rise
to such Accounts, and Borrower warrants the genuineness of all of the
foregoing. Borrower shall also furnish to Silicon an aged accounts receivable
trial balance as provided in the Schedule. In addition, Borrower shall deliver
to Silicon, on its request, the originals of all instruments, chattel paper,
security agreements, guarantees and other documents and property evidencing or
securing any Accounts, in the same form as received, with all necessary
indorsements, and copies of all credit memos.

     4.4 Collection of Accounts. Borrower shall have the right to collect all
Accounts, unless and until a Default or an Event of Default has occurred and is
continuing. Whether or not an Event of Default has occurred and is continuing,
Borrower shall hold all payments on, and proceeds of, Accounts in trust for
Silicon, and Borrower shall immediately deliver all such payments and proceeds
to Silicon in their original form, duly endorsed, to be applied to the
Obligations in such order as Silicon shall determine. Silicon may, in its good
faith business judgment, require that all proceeds of Collateral be deposited
by Borrower into a lockbox account, or such other “blocked account” as Silicon
may specify, pursuant to a blocked account agreement in such form as Silicon
may specify in its good faith business judgment.

     4.5. Remittance of Proceeds. All proceeds arising from the disposition
of any Collateral shall be delivered, in kind, by Borrower to Silicon in the
original form in which received by Borrower not later than the /*Business Day
after receipt by Borrower, to be applied to the Obligations in such order as
Silicon shall determine; provided that, if no Default or Event of Default has
occurred and is continuing, Borrower shall not be obligated to remit to Silicon
the proceeds of the sale of worn out or obsolete Equipment disposed of by
Borrower in good faith in an arm’s length transaction for an aggregate
purchase price of /**or less (for all such transactions in any fiscal
year). Borrower agrees that it will not commingle proceeds of Collateral with
any of Borrower’s other funds or property, but will hold such proceeds separate
and apart from such other funds and property and in an express trust for
Silicon. Nothing in this Section limits the restrictions on disposition of
Collateral set forth elsewhere in this Agreement. *seventh **$100,000

     4.6 Disputes. Borrower shall notify Silicon promptly of all disputes or
claims relating to Accounts. Borrower shall not forgive (completely or
partially), compromise or settle any Account for less than payment in full, or
agree to do any of the foregoing, except that Borrower may do so, provided
that: (i) Borrower does so in good faith, in a commercially reasonable

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manner,
in the ordinary course of business, and in arm’s length transactions, which are
reported to Silicon on the regular reports provided to Silicon; (ii) no Default
or Event of Default has occurred and is continuing; and (iii) taking into
account all such discounts, settlements and forgiveness, the total outstanding
Loans will not exceed the Credit Limit.

     4.7 Returns. Provided no Event of Default has occurred and is
continuing, if any Account Debtor returns any Inventory to Borrower, Borrower
shall promptly determine the reason for such return and promptly issue a credit
memorandum to the Account Debtor in the appropriate amount. In the event any
attempted return occurs after the occurrence and during the continuance of any
Event of Default, Borrower shall hold the returned Inventory in trust for
Silicon, and immediately notify Silicon of the return of the Inventory.

     4.8 Verification. Silicon may, from time to time, verify directly with
the respective Account Debtors the validity, amount and other matters relating
to the Accounts, by means of mail, telephone or otherwise, either in the name
of Borrower or Silicon or such other name as Silicon may choose.

     4.9 No Liability. Silicon shall not be responsible or liable for any
shortage or discrepancy in, damage to, or loss or destruction of, any goods,
the sale or other disposition of which gives rise to an Account, or for any
error, act, omission, or delay of any kind occurring in the settlement, failure
to settle, collection or failure to collect any Account, or for settling any
Account in good faith for less than the full amount thereof, nor shall Silicon
be deemed to be responsible for any of Borrower’s obligations under any
contract or agreement giving rise to an Account. Nothing herein shall,
however, relieve Silicon from liability for its own gross negligence or willful
misconduct.

5. ADDITIONAL DUTIES OF BORROWER.

     5.1 Financial and Other Covenants. Borrower shall at all times comply
with the financial and other covenants set forth in the Schedule.

     5.2 Insurance. Borrower shall, at all times insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Silicon, in such form and amounts as Silicon
may reasonably require and that are customary and in accordance with standard
practices for Borrower’s industry and locations, and Borrower shall provide
evidence of such insurance to Silicon. All such insurance policies shall name
Silicon as an additional loss payee, and shall contain a lenders loss payee
endorsement in form reasonably acceptable to Silicon. Upon receipt of the
proceeds of any such insurance, Silicon shall apply such proceeds in reduction
of the Obligations as Silicon shall determine in its good faith business
judgment, except that, provided no Default or Event of Default has occurred and
is continuing, Silicon shall release to Borrower insurance proceeds with
respect to Equipment totaling less than $100,000, which shall be utilized by
Borrower for the replacement of the Equipment with respect to which the
insurance proceeds were paid. Silicon may require reasonable assurance that
the insurance proceeds so released will be so used. If Borrower fails to
provide or pay for any insurance, Silicon may, but is not obligated to, obtain
the same at Borrower’s expense. Borrower shall promptly deliver to Silicon
copies of all material reports made to insurance companies.

     5.3 Reports. Borrower, at its expense, shall provide Silicon with the
written reports set forth in the Schedule, and such other written reports with
respect to Borrower (including budgets, sales projections, operating plans and
other financial documentation), as Silicon shall from time to time specify in
its good faith business judgment.

     5.4 Access to Collateral, Books and Records. At reasonable times, and on
one Business Day’s notice, Silicon, or its agents, shall have the right to
inspect the Collateral, and the right to audit and copy Borrower’s books and
records. Silicon shall take reasonable steps to keep confidential all
information obtained in any such inspection or audit, but Silicon shall have
the right to disclose any such information /* to its auditors, regulatory
agencies, and attorneys, and pursuant to any subpoena or other legal process.
The foregoing inspections and audits shall be at Borrower’s expense and the
charge therefor shall be $750 per person per day (or such higher amount as
shall represent Silicon’s then current standard charge for the same), plus
reasonable out-of-pocket expenses. In the event Borrower and Silicon schedule
an audit more than 10 days in advance, and Borrower seeks to reschedules the
audit with less than 10 days written notice to Silicon, then (without limiting
any of Silicon’s rights or remedies), Borrower shall pay Silicon a cancellation
fee of $1,000 plus any out-of-pocket expenses incurred by Silicon, to
compensate Silicon for the anticipated costs and expenses of the cancellation.

     * to its subsidiaries or affiliates in connection with their business
with Borrower and

     5.5 Negative Covenants. Except as may be permitted in the Schedule,
Borrower shall not, without Silicon’s prior written consent (which shall be a
matter of its good faith business judgment), do any of the following: (i)
merge or consolidate with another corporation or entity; (ii) acquire any
assets, except in the ordinary course of business; (iii) enter into any other
transaction outside the ordinary course of business; (iv) sell or transfer any
Collateral, except for the sale of finished Inventory in the ordinary course of
Borrower’s business, and except for the sale of obsolete or unneeded Equipment
in the ordinary course of business; (v) store any Inventory or other Collateral
with any warehouseman or other third party; (vi) sell any

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Inventory on a
sale-or-return, guaranteed sale, consignment, or other contingent basis; (vii)
make any loans of any money or other assets/*; (viii) incur any debts, outside
the ordinary course of business, which would result in a Material Adverse
Change; (ix) guarantee or otherwise become liable with respect to the
obligations of another party or entity/**; (x) pay or declare any dividends on
Borrower’s stock (except for dividends payable solely in stock of Borrower);
(xi) redeem, retire, purchase or otherwise acquire, directly or indirectly, any
of Borrower’s stock; (xii) make any change in Borrower’s capital structure
which would result in a Material Adverse Change; or (xiii) /*** or (xiv)
dissolve or elect to dissolve. Transactions permitted by the foregoing
provisions of this Section are only permitted if no Default or Event of Default
would occur as a result of such transaction.

     *except that Borrower may (a) make loans to subsidiaries

     **except that Borrower may guarantee obligations of subsidiaries incurred
for working capital lines of credit up to an aggregate of $1,000,000 at any one
time

     *** engage in any material line of business other than those lines of
business conducted by Borrower and its subsidiaries on the date hereof and any
business reasonably related, complementary or incidental thereto or reasonable
extensions thereof, provided that Borrower will not, without prior written
notice, change its state of incorporation

     5.6 Litigation Cooperation. Should any third-party suit or proceeding be
instituted by or against Silicon with respect to any Collateral or relating to
Borrower, Borrower shall, without expense to Silicon, make available Borrower
and its officers, employees and agents and Borrower’s books and records, to the
extent that Silicon may deem them reasonably necessary in order to prosecute or
defend any such suit or proceeding.

     5.7 Further Assurances. Borrower agrees, at its expense, on request by
Silicon, to execute all documents and take all actions, as Silicon, may, in its
good faith business judgment, deem necessary or useful in order to perfect and
maintain Silicon’s perfected first-priority security interest in the Collateral
(subject to Permitted Liens), and in order to fully consummate the transactions
contemplated by this Agreement.

6. TERM.

     6.1 Maturity Date. This Agreement shall continue in effect until the
maturity date set forth on the Schedule (the “Maturity Date”), subject to
Section 6.3 below.

     6.2 Early Termination. This Agreement may be terminated prior to the
Maturity Date as follows: (i) by Borrower, effective three Business Days after
written notice of termination is given to Silicon; or (ii) by Silicon at any
time after the occurrence and during the continuance of an Event of Default,
without notice, effective immediately. If this Agreement is terminated by
Borrower or by Silicon under this Section 6.2, Borrower shall pay to Silicon a
termination fee in an amount equal to /*, provided that no termination fee shall
be charged if the credit facility hereunder is replaced with a new facility
from another division of Silicon Valley Bank. The termination fee shall be due
and payable on the effective date of termination and thereafter shall bear
interest at a rate equal to the highest rate applicable to any of the
Obligations.

     *the aggregate Unused Line Fee specified in the Schedule that would have
been paid to Silicon if the Loans and Letters of Credit that were outstanding
on the termination date remained outstanding until the Maturity Date

     6.3 Payment of Obligations. On the Maturity Date or on any earlier
effective date of termination, Borrower shall pay and perform in full all
Obligations, whether evidenced by installment notes or otherwise, and whether
or not all or any part of such Obligations are otherwise then due and payable.
Without limiting the generality of the foregoing, if on the Maturity Date, or
on any earlier effective date of termination, there are any outstanding Letters
of Credit issued by Silicon or issued
by another institution based upon an application, guarantee, indemnity or
similar agreement on the part of Silicon, then on such date Borrower shall
provide to Silicon cash collateral in an amount equal to 105% of the face
amount of all such Letters of Credit plus all interest, fees and cost due or to
become due in connection therewith (as estimated by Silicon in its good faith
business judgment), to secure all of the Obligations relating to said Letters
of Credit, pursuant to Silicon’s then standard form cash pledge agreement.
Notwithstanding any termination of this Agreement, all of Silicon’s security
interests in all of the Collateral and all of the terms and provisions of this
Agreement shall continue in full force and effect until all Obligations have
been paid and performed in full; provided that Silicon may, in its sole
discretion, refuse to make any further Loans after termination. No termination
shall in any way affect or impair any right or remedy of Silicon, nor shall any
such termination relieve Borrower of any Obligation to Silicon, until all of
the Obligations have been paid and performed in full. Upon payment and
performance in full of all the Obligations and termination of this Agreement,
Silicon shall promptly terminate its

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financing statements with respect to the
Borrower and deliver to Borrower such other documents as may be required to
fully terminate Silicon’s security interests.

7. EVENTS OF DEFAULT AND REMEDIES.

     7.1 Events of Default. The occurrence of any of the following events
shall constitute an “Event of Default” under this Agreement, and Borrower shall
give Silicon immediate written notice thereof: (a) Any warranty,
representation, statement, report or certificate made or delivered to Silicon
by Borrower or any of Borrower’s officers, employees or agents, now or in the
future, shall be untrue or misleading in a material respect when made or deemed
to be made; or (b) Borrower shall fail to pay when due any Loan or any interest
thereon or any other monetary Obligation/*; or (c) the total Loans and other
Obligations outstanding at any time shall exceed the Credit Limit; or (d)
Borrower shall fail to comply with any of the financial covenants set forth in
the Schedule, or shall fail to perform any other non-monetary Obligation which
by its nature cannot be cured, or shall fail to permit Silicon to conduct an
inspection or audit as specified in Section 5.4 hereof; or (e) Borrower shall
fail to perform any other non-monetary Obligation, which failure is not cured
within /** Business Days after the date due; or (f)/***; or (g) any default or
event of default occurs under any obligation secured by a Permitted Lien, which
is not cured within any applicable cure period or waived in writing by the
holder of the Permitted Lien; or (h) Borrower breaches any material contract or
obligation, which has resulted or may reasonably be expected to result in a
Material Adverse Change; or (i) dissolution, termination of existence,
insolvency or business failure of Borrower; or appointment of a receiver,
trustee or custodian, for all or any part of the property of, assignment for
the benefit of creditors by, or the commencement of any proceeding by Borrower
under any reorganization, bankruptcy, insolvency, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, now or in
the future in effect; or (j) the commencement of any proceeding against
Borrower or any guarantor of any of the Obligations under any reorganization,
bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or in the future in effect,
which is not cured by the dismissal thereof within 30 days after the date
commenced; or (k) revocation or termination of, or limitation or denial of
liability upon, any guaranty of the Obligations or any attempt to do any of the
foregoing, or commencement of proceedings by any guarantor of any of the
Obligations under any bankruptcy or insolvency law; or (l) revocation or
termination of, or limitation or denial of liability upon, any pledge of any
certificate of deposit, securities or other property or asset of any kind
pledged by any third party to secure any or all of the Obligations, or any
attempt to do any of the foregoing, or commencement of proceedings by or
against any such third party under any bankruptcy or insolvency law; or (m)
Borrower makes any payment on account of any indebtedness or obligation which
has been subordinated to the Obligations other than as permitted in the
applicable subordination agreement, or if any Person who has subordinated such
indebtedness or obligations terminates or in any way limits his subordination
agreement; or (n) there shall be a /****, without the prior written consent of
Silicon; or (o) Borrower shall generally not pay its debts as they become due,
or Borrower shall conceal, remove or transfer any part of its property, with
intent to hinder, delay or defraud its creditors, or make or suffer any
transfer of any of its property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law; or (p) a Material Adverse Change shall
occur. Silicon may cease making any Loans hereunder during any of the above
cure periods, and thereafter if an Event of Default has occurred and is
continuing.

     * which failure is not cured within five Business Days after the date due

     **10

     *** if 20% or more of consolidated total assets of Borrower is attached,
seized, levied on, or comes into possession of a trustee or receiver and the
attachment, seizure or levy is not removed in 10 days, or if Borrower is
enjoined, restrained, or prevented by court order from conducting a material
part of its business or if a judgment or other claim becomes a Lien on a
material portion of Borrower’s assets, or if a notice of lien, levy, or
assessment is filed
against any of Borrower’s assets by any government agency and not paid
within 10 days after Borrower receives notice, provided that these are not
Events of Default if stayed or if a bond is posted pending contest by Borrower.

     **** Change in Control where “Change in Control” is a transaction in which
any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of greater than 35% of the shares of all
classes of stock then outstanding of Borrower ordinarily entitled to vote in
the election of directors.

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     7.2 Remedies. Upon the occurrence and during the continuance of any
Event of Default, and at any time thereafter, Silicon, at its option, and
without notice or demand of any kind (all of which are hereby expressly waived
by Borrower), may do any one or more of the following: (a) Cease making Loans
or otherwise extending credit to Borrower under this Agreement or any other
Loan Document; (b) Accelerate and declare all or any part of the Obligations to
be immediately due, payable, and performable, notwithstanding any deferred or
installment payments allowed by any instrument evidencing or relating to any
Obligation; (c) Take possession of any or all of the Collateral wherever it may
be found, and for that purpose Borrower hereby authorizes Silicon without
judicial process to enter onto any of Borrower’s premises without interference
to search for, take possession of, keep, store, or remove any of the
Collateral, and remain on the premises or cause a custodian to remain on the
premises in exclusive control thereof, without charge for so long as Silicon
deems it necessary, in its good faith business judgment, in order to complete
the enforcement of its rights under this Agreement or any other agreement;
provided, however, that should Silicon seek to take possession of any of the
Collateral by court process, Borrower hereby irrevocably waives: (i) any bond
and any surety or security relating thereto required by any statute, court rule
or otherwise as an incident to such possession; (ii) any demand for possession
prior to the commencement of any suit or action to recover possession thereof;
and (iii) any requirement that Silicon retain possession of, and not dispose
of, any such Collateral until after trial or final judgment; (d) Require
Borrower to assemble any or all of the Collateral and make it available to
Silicon at places designated by Silicon which are reasonably convenient to
Silicon and Borrower, and to remove the Collateral to such locations as Silicon
may deem advisable; (e) Complete the processing, manufacturing or repair of any
Collateral prior to a disposition thereof and, for such purpose and for the
purpose of removal, Silicon shall have the right to use Borrower’s premises,
vehicles, hoists, lifts, cranes, and other Equipment and all other property
without charge; (f) Sell, lease or otherwise dispose of any of the Collateral,
in its condition at the time Silicon obtains possession of it or after further
manufacturing, processing or repair, at one or more public and/or private
sales, in lots or in bulk, for cash, exchange or other property, or on credit,
and to adjourn any such sale from time to time without notice other than oral
announcement at the time scheduled for sale. Silicon shall have the right to
conduct such disposition on Borrower’s premises without charge, for such time
or times as Silicon deems reasonable, or on Silicon’s premises, or elsewhere
and the Collateral need not be located at the place of disposition. Silicon
may directly or through any affiliated company purchase or lease any Collateral
at any such public disposition, and if permissible under applicable law, at any
private disposition. Any sale or other disposition of Collateral shall not
relieve Borrower of any liability Borrower may have if any Collateral is
defective as to title or physical condition or otherwise at the time of sale;
(g) Demand payment of, and collect any Accounts and General Intangibles
comprising Collateral and, in connection therewith, Borrower irrevocably
authorizes Silicon to endorse or sign Borrower’s name on all collections,
receipts, instruments and other documents, to take possession of and open mail
addressed to Borrower and remove therefrom payments made with respect to any
item of the Collateral or proceeds thereof, and, in Silicon’s good faith
business judgment, to grant extensions of time to pay, compromise claims and
settle Accounts and the like for less than face value; (h) Offset against any
sums in any of Borrower’s general, special or other Deposit Accounts with
Silicon against any or all of the Obligations; and (i) Demand and receive
possession of any of Borrower’s federal and state income tax returns and the
books and records utilized in the preparation thereof or referring thereto.
All reasonable attorneys’ fees, expenses, costs, liabilities and obligations
incurred by Silicon with respect to the foregoing shall be added to and become
part of the Obligations, shall be due on demand, and shall bear interest at a
rate equal to the highest interest rate applicable to any of the Obligations.
Without limiting any of Silicon’s rights and remedies, from and after the
occurrence and during the continuance of any Event of Default, the interest
rate applicable to the Obligations shall be increased by an additional three
percent per annum (the “Default Rate”).

     7.3 Standards for Determining Commercial Reasonableness. Borrower and
Silicon agree that a sale or other disposition (collectively, “sale”) of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable: (i) Notice of the sale is given to
Borrower at least ten days prior to the sale, and, in the case of a public
sale, notice of the sale is published at least five days before the sale in a
newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by
Silicon, with or without the Collateral being present; (iv) The sale commences
at any time between 8:00 a.m. and 6:00 p.m; (v) Payment of the purchase price
in cash or by cashier’s check or
wire transfer is required; (vi) With respect to any sale of any of the
Collateral, Silicon may (but is not obligated to) direct any prospective
purchaser to ascertain directly from Borrower any and all information
concerning the same. Silicon shall be free to employ other methods of noticing
and selling the Collateral, in its discretion, if they are commercially
reasonable.

     7.4 Power of Attorney. Upon the occurrence and during the continuance of
any Event of Default, without limiting Silicon’s other rights and remedies,
Borrower grants to Silicon an irrevocable power of attorney coupled with an
interest, authorizing and permitting Silicon (acting through any of its
employees, attorneys or agents) at any time, at its option, but without
obligation, with or without notice to Borrower, and at Borrower’s expense, to
do any or all of the following, in Borrower’s name or otherwise, but Silicon
agrees that if it exercises any right hereunder, it will do so in good faith
and in a commercially reasonable manner: (a) Execute on behalf of Borrower any
documents that Silicon may, in its good faith business judgment, deem advisable
in order to perfect and maintain Silicon’s security interest in the Collateral,
or in order to

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exercise a right of Borrower or Silicon, or in order to fully
consummate all the transactions contemplated under this Agreement, and all
other Loan Documents; (b) Execute on behalf of Borrower, any invoices relating
to any Account, any draft against any Account Debtor and any notice to any
Account Debtor, any proof of claim in bankruptcy, any Notice of Lien, claim of
mechanic’s, materialman’s or other lien, or assignment or satisfaction of
mechanic’s, materialman’s or other lien; (c) Take control in any manner of any
cash or non-cash items of payment or proceeds of Collateral; endorse the name
of Borrower upon any instruments, or documents, evidence of payment or
Collateral that may come into Silicon’s possession; (d) Endorse all checks and
other forms of remittances received by Silicon; (e) Pay, contest or settle any
lien, charge, encumbrance, security interest and adverse claim in or to any of
the Collateral, or any judgment based thereon, or otherwise take any action to
terminate or discharge the same; (f) Grant extensions of time to pay,
compromise claims and settle Accounts and General Intangibles for less than
face value and execute all releases and other documents in connection
therewith; (g) Pay any sums required on account of Borrower’s taxes or to
secure the release of any liens therefor, or both; (h) Settle and adjust, and
give releases of, any insurance claim that relates to any of the Collateral and
obtain payment therefor; (i) Instruct any third party having custody or control
of any books or records belonging to, or relating to, Borrower to give Silicon
the same rights of access and other rights with respect thereto as Silicon has
under this Agreement; and (j) Take any action or pay any sum required of
Borrower pursuant to this Agreement and any other Loan Documents. Any and all
reasonable sums paid and any and all reasonable costs, expenses, liabilities,
obligations and attorneys’ fees incurred by Silicon with respect to the
foregoing shall be added to and become part of the Obligations, shall be
payable on demand, and shall bear interest at a rate equal to the highest
interest rate applicable to any of the Obligations. In no event shall
Silicon’s rights under the foregoing power of attorney or any of Silicon’s
other rights under this Agreement be deemed to indicate that Silicon is in
control of the business, management or properties of Borrower.

     7.5 Application of Proceeds. All proceeds realized as the result of any
sale of the Collateral shall be applied by Silicon first to the reasonable
costs, expenses, liabilities, obligations and attorneys’ fees incurred by
Silicon in the exercise of its rights under this Agreement, second to the
interest due upon any of the Obligations, and third to the principal of the
Obligations, in such order as Silicon shall determine in its sole discretion.
Any surplus shall be paid to Borrower or other persons legally entitled
thereto; Borrower shall remain liable to Silicon for any deficiency. If,
Silicon, in its good faith business judgment, directly or indirectly enters
into a deferred payment or other credit transaction with any purchaser at any
sale of Collateral, Silicon shall have the option, exercisable at any time, in
its good faith business judgment, of either reducing the Obligations by the
principal amount of purchase price or deferring the reduction of the
Obligations until the actual receipt by Silicon of the cash therefor.

     7.6 Remedies Cumulative. In addition to the rights and remedies set
forth in this Agreement, Silicon shall have all the other rights and remedies
accorded a secured party under the California Uniform Commercial Code and under
all other applicable laws, and under any other instrument or agreement now or
in the future entered into between Silicon and Borrower, and all of such rights
and remedies are cumulative and none is exclusive. Exercise or partial
exercise by Silicon of one or more of its rights or remedies shall not be
deemed an election, nor bar Silicon from subsequent exercise or partial
exercise of any other rights or remedies. The failure or delay of Silicon to
exercise any rights or remedies shall not operate as a waiver thereof, but all
rights and remedies shall continue in full force and effect until all of the
Obligations have been fully paid and performed.

8. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:

     “Account Debtor” means the obligor on an Account.

     “Accounts” means all present and future “accounts” as defined in the
California Uniform Commercial Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without
limitation all accounts receivable and other sums owing to Borrower.

     “Affiliate” means, with respect to any Person, a relative, partner,
shareholder, director, officer, or employee of such Person, or any parent or
subsidiary of such Person, or any Person controlling, controlled by or under
common control with such Person.

     “Business Day” means a day on which Silicon is open for business.

     “Code” means the Uniform Commercial Code as adopted and in effect in the
State of California from time to time.

     “Collateral” has the meaning set forth in Section 2 above.

     “continuing” and “during the continuance of” when used with reference to a
Default or Event of Default means that the Default or Event of Default has
occurred and has not been either waived in writing by Silicon or cured within
any applicable cure period.

     “Default” means any event which with notice or passage of time or both,
would constitute an Event of Default.

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     “Default Rate” has the meaning set forth in Section 7.2 above.

     “Deposit Accounts” means all present and future “deposit accounts” as
defined in the California Uniform Commercial Code in effect on the date hereof
with such additions to such term as may hereafter be made, and includes,
without limitation, all general and special bank accounts, demand accounts,
checking accounts, savings accounts and certificates of deposit.

     “Eligible Accounts” means Accounts and General Intangibles arising in the
ordinary course of Borrower’s business from the sale of goods or the rendition
of services, or the non-exclusive licensing of Intellectual Property, which
Silicon, in its good faith business judgment, shall deem eligible for
borrowing. Without limiting the fact that the determination of which Accounts
are eligible for borrowing is a matter of Silicon’s good faith business
judgment, the following (the “Minimum Eligibility Requirements”) are the
minimum requirements for a Account to be an Eligible Account: (i) the Account
must not be outstanding for more than 90 days from its invoice date (the
“Eligibility Period”), (ii) the Account must not represent progress billings,
or be due under a fulfillment or requirements contract with the Account Debtor,
(iii) the Account must not be subject to any contingencies (including Accounts
arising from sales on consignment, guaranteed sale or other terms pursuant to
which payment by the Account Debtor may be conditional), (iv) the Account must
not be owing from an Account Debtor with whom Borrower has any dispute (whether
or not relating to the particular Account), (v) the Account must not be owing
from an Affiliate of Borrower, (vi) the Account must not be owing from an
Account Debtor which is subject to any insolvency or bankruptcy proceeding, or
whose financial condition is not acceptable to Silicon, or which, fails or goes
out of a material portion of its business, (vii) the Account must not be owing
from the United States or any department, agency or instrumentality thereof
(unless there has been compliance, to Silicon’s satisfaction, with the United
States Assignment of Claims Act), (viii) the Account must not be owing from an
Account Debtor located outside the United States or Canada (unless pre-approved
by Silicon in its discretion in writing, or backed by a letter of credit
satisfactory to Silicon, or FCIA insured satisfactory to Silicon), (ix) the
Account must not be owing from an Account Debtor to whom Borrower is or may be
liable for goods purchased from such Account Debtor or otherwise (but, in such
case, the Account will be deemed not eligible only to the extent of any amounts
owed by Borrower to such Account Debtor). Accounts owing from one Account
Debtor will not be deemed Eligible Accounts to the extent they exceed 25% of
the total Accounts outstanding. In addition, if more than 50% of the Accounts
owing from an Account Debtor are outstanding for a period longer than their
Eligibility Period (without regard to unapplied credits) or are otherwise not
eligible Accounts, then all Accounts owing from that Account Debtor will be
deemed ineligible for borrowing. Silicon may, from time to time, in its good
faith business judgment, revise the Minimum Eligibility Requirements, upon
written notice to Borrower/*.

     *,and if, after giving effect to any such revision, the total Loans
outstanding exceed the credit limit specified in the Schedule, Borrower shall
have 15 days to repay any such excess

     “Equipment” means all present and future “equipment” as defined in the
California Uniform Commercial Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without
limitation all machinery, fixtures, goods, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing.

     “Event of Default” means any of the events set forth in Section 7.1 of
this Agreement.

     “GAAP” means generally accepted accounting principles consistently
applied.

     “General Intangibles” means all present and future “general intangibles”
as defined in the California Uniform Commercial Code in effect on the date
hereof with such additions to such term as may hereafter be made, and includes
without limitation all Intellectual Property, payment intangibles, royalties,
contract rights, goodwill, franchise agreements, purchase orders, customer
lists, route lists, telephone numbers, domain names, claims, income tax
refunds, security and other deposits, options to purchase or sell real or
personal property, rights in all litigation presently or hereafter pending
(whether in contract, tort or otherwise), insurance policies (including
without limitation key man, property damage, and business interruption
insurance), payments of insurance and rights to payment of any kind.

     “good faith business judgment” means honesty in fact and good faith (as
defined in Section 1201 of the Code) in the exercise of Silicon’s business
judgment.

     “including” means including (but not limited to).

     “Intellectual Property” means all present and future (a) copyrights,
copyright rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work thereof, whether
published or unpublished, (b) trade secret rights, including all rights to
unpatented inventions and know-how, and confidential information; (c) mask work
or similar rights available for the protection of semiconductor chips; (d)
patents, patent applications and like protections including without limitation
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same; (e) trademarks, servicemarks, trade styles,
and trade names, whether or not any of the foregoing are registered, and all
applications to register and registrations of the same and like protections,
and the entire goodwill of the business of Borrower connected with and
symbolized by any such trademarks; (f) computer software and computer software
products; (g)

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designs and design rights; (h) technology; (i) all claims for
damages by way of past, present and future infringement of any of the rights
included above; (j) all licenses or other rights to use any property or rights
of a type described above.

     “Inventory” means all present and future “inventory” as defined in the
California Uniform Commercial Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without
limitation all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products, including without
limitation such inventory as is temporarily out of Borrower’s custody or
possession or in transit and including any returned goods and any documents of
title representing any of the above.

     “Investment Property” means all present and future investment property,
securities, stocks, bonds, debentures, debt securities, partnership interests,
limited liability company interests, options, security entitlements, securities
accounts, commodity contracts, commodity accounts, and all financial assets
held in any securities account or otherwise, and all options and warrants to
purchase any of the foregoing, wherever located, and all other securities of
every kind, whether certificated or uncertificated.

     “Loan Documents” means, collectively, this Agreement, the Representations,
and all other present and future documents, instruments and agreements between
Silicon and Borrower, including, but not limited to those relating to this
Agreement, and all amendments and modifications thereto and replacements
therefor.

     “Material Adverse Change” means any of the following: (i) a material
adverse change in the business, operations, or financial or other condition of
the Borrower, or (ii) a material impairment of the prospect of repayment of any
portion of the Obligations; or (iii) a material impairment of the value or
priority of Silicon’s security interests in the Collateral.

     “Obligations” means all present and future Loans, advances, debts,
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to Silicon, whether evidenced by this Agreement or any
note or other instrument or document, or otherwise, whether arising from an
extension of credit, opening of a letter of credit, banker’s acceptance, loan,
guaranty, indemnification or otherwise, whether direct or indirect (including,
without limitation, those acquired by assignment and any participation by
Silicon in Borrower’s debts owing to others), absolute or contingent, due or to
become due, including, without limitation, all interest, charges, expenses,
fees, attorney’s fees, expert witness fees, audit fees, letter of credit fees,
collateral monitoring fees, closing fees, facility fees, termination fees,
minimum interest charges and any other sums chargeable to Borrower under this
Agreement or under any other Loan Documents.

     “Other Property” means the following as defined in the California Uniform
Commercial Code in effect on the date hereof with such additions to such term
as may hereafter be made, and all rights relating thereto: all present and
future “commercial tort claims” (including without limitation any commercial
tort claims identified in the Representations), “documents”, “instruments”,
“promissory notes”, “chattel paper”, “letters of credit”, “letter-of-credit
rights”, “fixtures”, “farm products” and “money”; and all other goods and
personal property of every kind, tangible and intangible, whether or not
governed by the California Uniform Commercial Code.

     “Payment” means all checks, wire transfers and other items of payment
received by Silicon (including proceeds of Accounts and payment of the
Obligations in full) for credit to Borrower’s outstanding Loans or, if the
balance of the Loans have been reduced to zero, for credit to its Deposit
Accounts.

     “Permitted Liens” means the following: (i) purchase money security
interests in specific items of Equipment; (ii) leases of specific items of
Equipment; (iii) liens for taxes not yet payable; (iv) additional security
interests and liens consented to
in writing by Silicon, which consent may be withheld in its good faith
business judgment; (v) security interests being terminated substantially
concurrently with this Agreement; (vi) liens of materialmen, mechanics,
warehousemen, carriers, or other similar liens arising in the ordinary course
of business and securing obligations which are not delinquent; (vii) liens
incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by liens of the type described above in clauses (i) or
(ii) above, provided that any extension, renewal or replacement lien is limited
to the property encumbered by the existing lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase; and
(viii) Liens in favor of customs and revenue authorities which secure payment
of customs duties in connection with the importation of goods/*. Silicon will
have the right to require, as a condition to its consent under subparagraph
(iv) above, that the holder of the additional security interest or lien sign an
intercreditor agreement on Silicon’s then standard form, acknowledge that the
security interest is subordinate to the security interest in favor of Silicon,
and agree not to take any action to enforce its subordinate security interest
so long as any Obligations remain outstanding, and that Borrower agree that any
uncured default in any obligation secured by the subordinate security interest
shall also constitute an Event of Default under this Agreement.

     *and as otherwise provided in the Schedule

     “Person” means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
government, or any agency or political division thereof, or any other entity.

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     “Representations” means the written Representations and Warranties
provided by Borrower to Silicon referred to in the Schedule.

     “Reserves” means, as of any date of determination, such amounts as Silicon
may from time to time establish and revise in its good faith business judgment,
reducing the amount of Loans, Letters of Credit and other financial
accommodations which would otherwise be available to Borrower under the lending
formula(s) provided in the Schedule: (a) to reflect events, conditions,
contingencies or risks which, as determined by Silicon in its good faith
business judgment, do or may adversely affect (i) the Collateral or any other
property which is security for the Obligations or its value (including without
limitation any increase in delinquencies of Accounts), (ii) the assets,
business or prospects of Borrower or any Guarantor, or (iii) the security
interests and other rights of Silicon in the Collateral (including the
enforceability, perfection and priority thereof); or (b) to reflect Silicon’s
good faith belief that any collateral report or financial information furnished
by or on behalf of Borrower or any Guarantor to Silicon is or may have been
incomplete, inaccurate or misleading in any material respect; or (c) in respect
of any state of facts which Silicon determines in good faith constitutes an
Event of Default or may, with notice or passage of time or both, constitute an
Event of Default.

     Other Terms. All accounting terms used in this Agreement, unless
otherwise indicated, shall have the meanings given to such terms in accordance
with GAAP, consistently applied. All other terms contained in this Agreement,
unless otherwise indicated, shall have the meanings provided by the Code, to
the extent such terms are defined therein.

9. GENERAL PROVISIONS.

     9.1 Interest Computation. In computing interest on the
Obligations, all Payments received after 12:00 Noon/* on any day shall be
deemed received on the next Business Day. Silicon shall not, however, be
required to credit Borrower’s account for the amount of any item of payment,
which is unsatisfactory to Silicon in its good faith business judgment, and
Silicon may charge Borrower’s loan account for the amount of any item of
payment which is returned to Silicon unpaid.

	*	 	(Pacific Standard Time)

     9.2 Application of Payments. All payments with respect to the
Obligations may be applied, and in Silicon’s good faith business judgment
reversed and re-applied, to the Obligations, in such order and manner as
Silicon shall determine in its good faith business judgment.

     9.3 Charges to Accounts. Silicon may, in its discretion, require that
Borrower pay monetary Obligations in cash to Silicon, or charge them to
Borrower’s Loan account, in which event they will bear interest at the same
rate applicable to the Loans. Silicon may also, in its discretion, charge any
monetary Obligations to Borrower’s Deposit Accounts maintained with Silicon.

     9.4 Monthly Accountings. Silicon shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be deemed correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by Silicon),
unless Borrower notifies Silicon in writing to the contrary within 60 days
after such account is rendered, describing the nature of any alleged errors or
omissions.

     9.5 Notices. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by reputable private delivery
service or by regular first-class mail, or certified mail return receipt
requested, addressed to Silicon or Borrower at the addresses shown in the
heading to this Agreement, or at any other address designated in writing by one
party to the other party. Notices to Silicon shall be directed to the
Commercial Finance Division, to the attention of the Division Manager or the
Division Credit Manager. All notices shall be deemed to have been given upon
delivery in the case of notices personally delivered, or at the expiration of
one Business Day following delivery to the private delivery service, or two
Business Days following the deposit thereof in the United States mail, with
postage prepaid.

     9.6 Severability. Should any provision of this Agreement be held by any
court of competent jurisdiction to be void or unenforceable, such defect shall
not affect the remainder of this Agreement, which shall continue in full force
and effect.

     9.7 Integration. This Agreement and such other written agreements,
documents and instruments as may be executed in connection herewith are the
final, entire and complete agreement between Borrower and Silicon and supersede
all prior and contemporaneous negotiations and oral representations and
agreements, all of which are merged and integrated in this Agreement. There
are no oral understandings, representations or agreements between the parties
which are not set forth in this Agreement or in other written agreements signed
by the parties in connection herewith.

-12-

 

 

	 	 	 
	Silicon Valley Bank

	 	Loan and Security Agreement     

     9.8 Waivers; Indemnity. The failure of Silicon at any time or times to
require Borrower to strictly comply with any of the provisions of this
Agreement or any other Loan Document shall not waive or diminish any right of
Silicon later to demand and receive strict compliance therewith. Any waiver of
any default shall not waive or affect any other default, whether prior or
subsequent, and whether or not similar. None of the provisions of this
Agreement or any other Loan Document shall be deemed to have been waived by any
act or knowledge of Silicon or its agents or employees, but only by a specific
written waiver signed by an authorized officer of Silicon and delivered to
Borrower. Borrower waives the benefit of all statutes of limitations relating
to any of the Obligations or this Agreement or any other Loan Document, and
Borrower waives demand, protest, notice of protest and notice of default or
dishonor, notice of payment and nonpayment, release, compromise, settlement,
extension or renewal of any commercial paper, instrument, account, General
Intangible, document or guaranty at any time held by Silicon on which Borrower
is or may in any way be liable, and notice of any action taken by Silicon,
unless expressly required by this Agreement. Borrower hereby agrees to
indemnify Silicon and its affiliates, subsidiaries, parent, directors,
officers, employees, agents, and attorneys, and to hold them harmless from and
against any and all claims, debts, liabilities, demands, obligations, actions,
causes of action, penalties, costs and expenses (including reasonable
attorneys’ fees), of every kind, which they may sustain or incur based upon or
arising out of any of the Obligations, or any relationship or agreement between
Silicon and Borrower, or any other matter, relating to Borrower or the
Obligations; provided that this indemnity shall not extend to damages
proximately caused by the indemnitee’s own gross negligence or willful
misconduct. Notwithstanding any provision in this Agreement to the contrary,
the indemnity agreement set forth in this Section shall survive any termination
of this Agreement and shall for all purposes continue in full force and effect.

     9.9 No Liability for Ordinary Negligence. Neither Silicon, nor any of
its directors, officers, employees, agents, attorneys or any other Person
affiliated with or representing Silicon shall be liable for any claims,
demands, losses or damages, of any kind whatsoever, made, claimed, incurred or
suffered by Borrower or any other party through the ordinary negligence of
Silicon, or any of its directors, officers, employees, agents, attorneys or any
other Person affiliated with or representing Silicon, but nothing herein shall
relieve Silicon from liability for its own gross negligence or willful
misconduct.

     9.10 Amendment. The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by Borrower and a duly
authorized officer of Silicon.

     9.11 Time of Essence. Time is of the essence in the performance by
Borrower of each and every obligation under this Agreement.

     9.12 Attorneys Fees and Costs. Borrower shall reimburse Silicon for all
reasonable attorneys’ fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by Silicon, pursuant to,
or in connection with, or relating to this Agreement (whether or not a lawsuit
is filed), including, but not limited to, any reasonable attorneys’ fees and
costs Silicon incurs in order to do the following: prepare and negotiate this
Agreement and all present and future documents relating to this Agreement;
obtain legal advice in connection with this Agreement or Borrower; enforce, or
seek to enforce, any of its rights; prosecute actions against, or defend
actions by, Account Debtors; commence, intervene in, or defend any action or
proceeding; initiate any complaint to be relieved of the automatic stay in
bankruptcy; file or prosecute any probate claim, bankruptcy claim, third-party
claim, or other claim; examine, audit, copy,
and inspect any of the Collateral or any of Borrower’s books and records;
protect, obtain possession of, lease, dispose of, or otherwise enforce
Silicon’s security interest in, the Collateral; and otherwise represent Silicon
in any litigation relating to Borrower. In satisfying Borrower’s obligation
hereunder to reimburse Silicon for attorneys fees, Borrower may, for
convenience, issue checks directly to Silicon’s attorneys, but Borrower
acknowledges and agrees that /*representing only Silicon and not Borrower in
connection with this Agreement. If either Silicon or Borrower files any
lawsuit against the other predicated on a breach of this Agreement, the
prevailing party in such action shall be entitled to recover its reasonable
costs and attorneys’ fees, including (but not limited to) reasonable attorneys’
fees and costs incurred in the enforcement of, execution upon or defense of any
order, decree, award or judgment. All attorneys’ fees and costs to which
Silicon may be entitled pursuant to this Paragraph shall immediately become
part of Borrower’s Obligations, shall be due on demand, and shall bear interest
at a rate equal to the highest interest rate applicable to any of the
Obligations.

     *Silicon’s attorneys are

     9.13 Benefit of Agreement. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and representatives of Borrower and Silicon; provided,
however, that Borrower may not assign or transfer any of its rights under this
Agreement without the prior written consent of Silicon, and any prohibited
assignment shall be void. No consent by Silicon to any assignment shall
release Borrower from its liability for the Obligations.

     9.14 Joint and Several Liability. If Borrower consists of more than one
Person, their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Borrower shall not constitute a compromise
with, or a release of, any other Borrower.

-13-

 

 

	 	 	 
	Silicon Valley Bank

	 	Loan and Security Agreement     

     9.15 Limitation of Actions. Any claim or cause of action by Borrower
against Silicon, its directors, officers, employees, agents, accountants or
attorneys, based upon, arising from, or relating to this Loan Agreement, or any
other Loan Document, or any other transaction contemplated hereby or thereby or
relating hereto or thereto, or any other matter, cause or thing whatsoever,
occurred, done, omitted or suffered to be done by Silicon, its directors,
officers, employees, agents, accountants or attorneys, shall be barred unless
asserted by Borrower by the commencement of an action or proceeding in a court
of competent jurisdiction by the filing of a complaint within one year after
the first act, occurrence or omission upon which such claim or cause of action,
or any part thereof, is based, and the service of a summons and complaint on an
officer of Silicon, or on any other person authorized to accept service on
behalf of Silicon, within thirty (30) days thereafter. Borrower agrees that
such one-year period is a reasonable and sufficient time for Borrower to
investigate and act upon any such claim or cause of action. The one-year
period provided herein shall not be waived, tolled, or extended except by the
written consent of Silicon in its sole discretion. This provision shall
survive any termination of this Loan Agreement or any other Loan Document.

     9.16 Paragraph Headings; Construction. Paragraph headings are only used
in this Agreement for convenience. Borrower and Silicon acknowledge that the
headings may not describe completely the subject matter of the applicable
paragraph, and the headings shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement. This Agreement has
been fully reviewed and negotiated between the parties and no uncertainty or
ambiguity in any term or provision of this Agreement shall be construed
strictly against Silicon or Borrower under any rule of construction or
otherwise.

     9.17 Governing Law; Jurisdiction; Venue. This Agreement and all acts and
transactions hereunder and all rights and obligations of Silicon and Borrower
shall be governed by the laws of the State of California. As a material part
of the consideration to Silicon to enter into this Agreement, Borrower (i)
agrees that all actions and proceedings relating directly or indirectly to this
Agreement shall, at Silicon’s option, be litigated in courts located within
California, and that the exclusive venue therefor shall be Santa Clara County;
(ii) consents to the jurisdiction and venue of any such court and consents to
service of process in any such action or proceeding by personal delivery or any
other method permitted by law; and (iii) waives any and all rights Borrower may
have to object to the jurisdiction of any such court, or to transfer or change
the venue of any such action or proceeding.

     9.18 Mutual Waiver of Jury Trial. BORROWER AND SILICON EACH HEREBY WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN SILICON AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF SILICON OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH SILICON OR
BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE.

	 	 	 	 	 	 	 	 	 
	Borrower:	 	 	 	Silicon:
	 
	 	 	 	 	 	 	 	 
	     THREE-FIVE SYSTEMS, INC.	 	SILICON VALLEY BANK
	 
	 	 	 	 	 	 	 	 
	By

	/s/ Jeffrey D. Buchanan	 	By	/s/ Kevin L. Grossman
	 	
 
	 	 	
 
	 	President or Vice President
	 	Title	Senior Vice President
	 
	 	 	 	 	 	 	

	By
	/s/ George A. Pisaruk	 	 	 	 
	 	
 	 	 	 	 
	

	Secretary or Ass’t Secretary	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Borrower:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	TFS ELECTRONIC MANUFACTURING SERVICES,

INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By
	/s/ Jeffrey D. Buchanan	 	 	 	 
	

	
 	 	 	 	 
	 	President or Vice
President	 	 	 	 
	By
	/s/ George A. Pisaruk	 	 	 	 
	 	
 	 	 	 	 
		Secretary or
Ass’t Secretary	 	 	 	 

Form : -3(3/7/02)

Version - 4

-14-

 

 

Silicon Valley Bank

Schedule to

Loan and Security Agreement

	 	 	 	 	 	 	 
	Borrower:

	 	Three-Five Systems, Inc.
	 	and
	 	TFS Electronic Manufacturing

Services, Inc.
	Address:

	 	1600 North Desert Drive

Tempe, AZ 85281
	 	 	 	6640 185th Avenue N.E.

Redmond, WA 98052
	 	 		 	 	 	 
	Date:

	 	June ________, 2004	 	 	 	 

This Schedule forms an integral part of the Loan and Security Agreement between
Silicon Valley Bank and the above-named borrowers of even date, which borrowers
are jointly and severally liable for all Obligations.

	 	 	 
	1. CREDIT LIMIT

    (Section 1.1):

	 	An amount not to exceed the lesser of: (i) $10,000,000.00 at
any one time outstanding (the “Maximum Credit Limit”); or (ii) the sum
of (a) and (b) and (c) below:
	 
	 	 
	

	 	      (a) 80% (an “Advance Rate”) of the amount of
Borrower’s Eligible Accounts (as defined in Section 8
above) billed from Borrower’s Tempe, AZ and Redmond,
WA offices, plus
	 
	 	 
	

	 	      (b) 80% (an “Advance Rate”) of Borrower’s
Eligible Accounts owing from an Account Debtor
located outside the United States or Canada which are
otherwise Eligible Accounts up to $2,000,000.00 (and
any amounts of such foreign Accounts exceeding
$2,000,000.00 must be pre-approved by Silicon in its
discretion in writing, or backed by a letter of
credit satisfactory to Silicon or FCIA insured
satisfactory to Silicon to be included).
	 
	 	 
	

	 	        Silicon may, from time to time, modify the
Advance Rates, in its good faith business judgment,
upon notice to the Borrower, based on changes in
collection experience with respect to Accounts, its
evaluation of other issues or factors relating to the
Accounts or other Collateral, and if, after giving
effect to any such modification, the total Loans
outstanding exceed the credit limit specified above,
Borrower shall have 15 days to repay any such excess.
In addition, Silicon may, in its sole discretion,
reserve against Loans which would otherwise be
available hereunder such sums as Silicon shall
determine in its good

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

	 	 	 
	 	 	faith business judgment in
connection with accounts payable which are outstanding
for more than 60 days from their respective invoice
dates.

	 	 	 
	Letter of Credit Sublimit
(Section 1.6):

	 	A face principal amount outstanding of up to $3,500,000.00,
provided that the aggregate of all Letters of Credit outstanding from
time to time plus obligations for Cash Management Services defined
below plus 10% of the total of FX Forward Contracts defined below
outstanding from time to time shall not, at any time, exceed
$3,500,000.00.
	 
	 	 

	 	 	 
	Cash Management

Sublimit:

	 	$3,500,000.00, provided that the aggregate of all
Letters of Credit outstanding from time to time
plus obligations for Cash Management Services
defined below plus 10% of the total of FX Forward
Contracts defined below outstanding from time to
time shall not, at any time, exceed $3,500,000.00.
	 
	 	 
	Cash Management

Services and Reserves:

	 	Borrower may use Loans available hereunder, up to
the Cash Management Sublimit set forth above, for
Silicon’s Cash Management Services (as defined
below), including, merchant services, business
credit card, ACH and other services identified in
the cash management services agreement related to
such service (the “Cash Management Services”).
Silicon may, in its sole discretion, reserve
against Loans which would otherwise be available
hereunder such sums as Silicon shall determine in
its good faith business judgment in connection with
the Cash Management Services, and Silicon may
charge to Borrower’s Loan account, any amounts that
may become due or owing to Silicon in connection
with the Cash Management Services. Borrower agrees
to execute and deliver to Silicon all standard form
applications and agreements of Silicon in
connection with the Cash Management Services, and,
without limiting any of the terms of such
applications and agreements, Borrower will pay all
standard fees and charges of Silicon in connection
with the Cash Management Services. The Cash
Management Services shall terminate on the Maturity
Date.
	 
	 	 
	Foreign Exchange

Contract Sublimit:

	 	$3,500,000.00, provided that the aggregate of all
Letters of Credit outstanding from time to time
plus obligations for Cash Management Services plus
10% of the total of FX Forward Contracts defined
below outstanding from time to time shall not, at
any time, exceed $3,500,000.00.
	 
	 	 
	FX Forward Contracts:

	 	Borrower may enter into foreign exchange forward
contracts with Silicon, on its standard forms,
under which Borrower commits to purchase from or
sell to Silicon a set amount of foreign currency
more

-2-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

	 	 	 
	

	 	than one business day after the contract date
(the “FX Forward Contracts”); provided that (1) at
the time the FX Forward Contract is entered into
Borrower has Loans available to it under this
Agreement in an amount at least equal to 10% of the
amount of the FX Forward Contract; (2) the total FX
Forward Contracts at any one time outstanding may
not exceed 10 times the amount of the Foreign
Exchange Contract Sublimit set forth above. Silicon
shall have the right to withhold, from the Loans
otherwise available to Borrower under this
Agreement, a reserve (which shall be in addition to
all other reserves) in an amount equal to 10% of
the total FX Forward Contracts from time to time
outstanding, and in the event at any time there are
insufficient Loans available to Borrower for such
reserve, Borrower shall deposit and maintain with
Silicon cash collateral in an amount at all times
equal to such deficiency, which shall be held as
Collateral for all purposes of this Agreement. Silicon may, in its
discretion, terminate the FX Forward Contracts at any
time that an Event of Default occurs and is
continuing. Borrower shall execute all standard form
applications and agreements of Silicon in connection
with the FX Forward Contracts, and without limiting
any of the terms of such applications and agreements,
Borrower shall pay all standard fees and charges of
Silicon in connection with the FX Forward Contracts.

	 	 	 
	 
	 	 
	2. INTEREST.
	 	 
	 
	 	 
	Interest
Rate (Section 1.2):
	 	 
	 
	 	 
	

	 	A rate equal to the “Prime Rate” in effect from time
to time, plus 0.75% per annum, provided that the
interest rate in effect on any day shall not be less
than 4.75% per annum. Interest shall be calculated
on the basis of a 360-day year for the actual number
of days elapsed. “Prime Rate” means the rate
announced from time to time by Silicon as its “prime
rate;” it is a base rate upon which other rates
charged by Silicon are based, and it is not
necessarily the best rate available at Silicon. The
interest rate applicable to the Obligations shall
change on each date there is a change in the Prime
Rate. The interest rate is subject to the potential
increases described in Section 5 below.
	 
	 	 
	3. FEES
(Section 1.4):
	 	 
	 
	 	 
	Loan Fee:

	 	$62,500.00, payable concurrently herewith.
	 
	 	 
	Unused Line Fee:

	 	In the event, in any calendar month (or portion thereof
at the beginning and end of the term hereof), the average
daily principal balance of the

-3-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

	 	 	 
	

	 	Loans and Letters of
Credit outstanding during the month is less than the
amount of the Maximum Credit Limit, Borrower shall pay
Silicon an unused line fee in an amount equal to 0.375%
per annum on the difference between the amount of the
Maximum Credit Limit and the average daily principal
balance of the Loans and Letters of Credit outstanding
during the month, which unused line fee shall be computed
and paid monthly, in arrears, on the first day of the
following month.
	 
	 	 
	4. MATURITY DATE

   (Section 6.1):

	 	The date one (1) year from the date of this Agreement.
	 
	 	 
	5. FINANCIAL
COVENANTS

   (Section 5.1):

	 	Borrower shall comply with each of the following covenants.
Compliance shall be determined as of the end of each month, except as
otherwise specifically provided below:

	 	 	 
	US Quick Ratio:

	 	Borrower shall maintain a ratio of (a) Borrower’s
consolidated, unrestricted cash and cash equivalents held at Silicon
(and, if held at other financial institutions, are subject to account
control agreements in form acceptable to Silicon in its good faith
business judgment ), and net billed accounts receivable owing to
Borrower and its US subsidiaries, and investments with maturities of
fewer than 12 months determined according to GAAP to (b) current
liabilities of Borrower and its US subsidiaries, of not less than
1.20 to 1; provided, however, that, upon 30 days prior written notice
to Silicon, Borrower may request either (i) that this ratio be
reduced to 1:00 to 1, but in such
event, (A) the interest rate shall be increased to the Prime Rate in effect from time to time plus 1.25% per annum, and (B) the
monthly reports required in parts 1 through 5 of the Reporting requirements set forth under Section 6 below shall be semi-monthly
reports due within 10 days of each semi-monthly period end; or (ii) that this ratio be eliminated, but in such event, (A) the
interest rate shall be increased to the Prime Rate in effect from time to time plus 1.25% per annum, (B) a Collateral Monitoring Fee
of $2,000.00 per month shall be payable thereafter, in arrears, (C) the monthly reports required under parts 1 through 5 of the
Reporting requirements set forth in Section 6 below shall be weekly reports due within 5 days of each weekly period end, (D) Silicon
shall require that all proceeds of Collateral be deposited by Borrower into a lockbox account, or such other “blocked account” as
Silicon may specify, pursuant to a blocked account agreement in such form as Silicon may specify, and (E) Silicon shall be entitled
to charge Borrower a “float” charge in an amount equal to one day’s interest, at the interest rate applicable to the Loans, on all
Payments received by Silicon, and the float charge for each month shall be payable on the last day of the month.

-4-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

	 	 	 
	Global EBTDA:

	 	Borrower shall maintain global consolidated earnings before taxes, depreciation and amortization of not
less that the amount set forth below opposite the respective dates shown, calculated monthly on a rolling
3 months basis:

	 	 	 	 	 
	Period
	 	Amount

	04/30/2004 to 06/30/2004
	 	 	($5,000,000.00	)
	07/30/2004 to 09/30/2004
	 	 	($2,500,000.00	)
	10/31/2004 and thereafter
	 	 	($1,000,000.00	)

	 	 	 
	Minimum

Net Worth:

	 	Borrower shall maintain a Net Worth of not less than $101,000,000.00.
	 
	 	 
	Definitions.

	 	For purposes of the foregoing financial covenants, the following term shall have the following meaning:
	 
	 	 
	

	 	“Current liabilities” and “liabilities” shall have the meaning ascribed thereto by GAAP.
	 
	 	 
	

	 	“Net Worth” shall mean the excess of total assets over total liabilities, determined in accordance with
GAAP.

	 	 	 
	6. REPORTING.
   (Section 5.3):

	 	

	 	 	 	 
	

	 	Borrower shall provide Silicon with the following:
	 
	 	 
	

	 	1.	Monthly transaction reports
and schedules of collections, on Silicon’s standard
form.
	 
	 	 
	

	 	2.	Monthly accounts receivable
agings, aged by invoice date, together with a
borrowing base certificate in such form as Silicon
shall specify, signed by the Chief Financial
Officer of Borrower, within 20 days after the end
of each month.
	 
	 	 
	

	 	3.	Monthly accounts payable
agings, aged by invoice date, and outstanding or
held check registers, if any, within 20 days after
the end of each month.
	 
	 	 
	

	 	4.	Monthly reconciliations of
accounts receivable agings (aged by invoice date),
transaction reports, and general ledger, within 20
days after the end of each month.

-5-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

	 	 	 	 
	

	 	5.	Monthly perpetual inventory
reports for the Inventory valued on a first-in,
first-out basis at the lower of cost or market (in
accordance with GAAP) or such other inventory
reports as are requested by Silicon in its good
faith business judgment, all within 20 days after
the end of each month.
	 
	 	 
	

	 	6.	Monthly unaudited
consolidated and consolidating financial
statements, as soon as available, and in any event
within 30 days after the end of each month.
	 
	 	 
	

	 	7.	Monthly Compliance
Certificates, within 30 days after the end of each
month, in such form as Silicon shall reasonably
specify, signed by the Chief Financial Officer of
Borrower, certifying that as of the end of such
month Borrower was in full compliance with all of
the terms and conditions of this Agreement, and
setting forth calculations showing compliance with
the financial covenants set forth in this Agreement
and such other information as Silicon shall
reasonably request, including, without limitation,
a statement that at the end of such month there
were no held checks.
	 
	 	 
	

	 	8.	Quarterly unaudited
consolidated and consolidating financial
statements, as soon as available, and in any event
within 45 days after the end of each fiscal quarter
of Borrower, together with Borrower’s report to the
SEC on 10-Q for such fiscal quarter.
	 
	 	 
	

	 	9.	Annual operating budgets
(including income statements, balance sheets and
cash flow statements, by month) for the upcoming
fiscal year of Borrower within 30 days prior to the
end of each fiscal year of Borrower.
	 
	 	 
	

	 	10.	Annual operating budgets
(including income statements, balance sheets and
cash flow statements) for the upcoming fiscal year
of Borrower approved by Borrower’s Board of
Directors within 45 days after the start of each
fiscal year of Borrower.
	 
	 	 
	

	 	11.	Annual consolidated and
consolidating financial statements, as soon as
available, and in any event within 90 days
following the end of Borrower’s fiscal year,
certified by, and with an unqualified opinion of,
independent certified public accountants acceptable
to Silicon, together with Borrower’s report to the
SEC on 10-K for such fiscal year.
	 
	 	 
	

	 	Borrower’s 10K and 10Q reports required to be
delivered pursuant to Subsections 8 and 11 above
shall be deemed to have been delivered on the date on
which Borrower posts such report or provides a link
thereto on Borrower’s website on the Internet;
provided, that Borrower shall provide paper copies to
Bank of the Compliance Certificates and all other
reporting required by Section 5.3.

-6-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

7. NEGATIVE COVENANTS
- EXCEPTIONS
    
(Section 5.5)

           Notwithstanding the provisions of Section 5.5, Borrower may, without
Silicon’s prior written consent, take the following actions:

           1. Borrower may merge or consolidate, or permit any of its subsidiaries to
merge or consolidate, with any Person other than with Borrower or any
subsidiary, or acquire, or permit any of its subsidiaries to acquire, all or
substantially all of the capital stock or property of a Person other than
Borrower or any subsidiary, as long as (a) no Event of Default has occurred and
is continuing or would result from such action during the term of this
Agreement, and (b) Borrower is the surviving entity, and (c) the cash component
of the cost of any one acquisition does not exceed $3,000,000.00 or, if such
cash component does exceed $3,000,000.00, the amount of Borrower’s cash and
cash equivalents held at financial institutions within the United States, which exceeds $15,000,000.00 at the
time of such acquisition, after giving effect to such acquisition.

          2. Borrower may (a) purchase capital stock from former employees,
consultants and directors pursuant to repurchase agreements or other similar
agreements; (b) purchase for value of any rights distributed in connection with
any stockholder rights plan; (c) purchase capital stock or options to acquire
such capital stock with the proceeds received from a substantially concurrent
issuance of capital stock or convertible securities; (d) purchase capital stock
in connection with the exercise of stock options or stock appreciation rights
by way of cashless exercise or in connection with the satisfaction of
withholding tax obligations; and (e) purchase fractional shares of capital
stock arising out of stock dividends, splits or combinations or business
combinations.

          3. Borrower may incur the following types of debt: (a) Borrower’s
indebtedness to Bank under this Agreement or any other Loan Document; (b)
indebtedness up to the amount shown on Annex 7-3 attached hereto which is
existing on the date hereof and owing to the creditor(s) named on such Annex
7-3; (c) indebtedness to trade creditors and with respect to surety bonds and
similar obligations; (d) Guaranties of permitted indebtedness; (e) indebtedness
consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements designated to protect a Person
against fluctuations in interest rates, currency exchange rates, or commodity
prices; (f) indebtedness between Borrower and any of its subsidiaries, or among
any of Borrower’s subsidiaries; (g) indebtedness with respect to documentary
letters of credit; (h) Capitalized leases and purchase money indebtedness
secured by Permitted Liens; (i) indebtedness of entities acquired in any
permitted merger or acquisition transaction; and (j) refinanced permitted
indebtedness, provided that the amount of such indebtedness is not increased
except by an amount equal to a reasonable premium or other reasonable amount
paid in connection with such refinancing and by an amount equal to any
existing, but unutilized, commitment thereunder.

          4. Borrower may acquire or make the following investments:

     (a) Investments shown on Annex 7-4 attached hereto which are existing on
the date hereof;

-7-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

(b) Marketable direct obligations issued or unconditionally
guaranteed by the United States or its agencies or any State maturing
within 1 year from its acquisition, (ii) commercial paper maturing no more
than 2 years after its creation and having the highest rating from either
Standard & Poor’s Corporation or Moody’s Investors Service, Inc., and
(iii) Bank’s certificates of deposit issued maturing no more than 2 years
after issue;

(c) Investments approved by the Borrower’s Board of Directors or
otherwise pursuant to a Board-approved investment policy;

(d) Investments in or to Borrower and any of its subsidiaries;

(e) Investments consisting of deposit and investment accounts in the
name of Borrower or any subsidiary;

(f) Investments consisting of extensions of credit in the nature of
accounts receivable, prepaid royalties or notes receivable arising from
the sale or lease of goods;

(g) Investments received in satisfaction or partial satisfaction of
obligations owed by financially troubled obligors;

(h) Investments acquired in exchange for any other Investments in
connection with or as a result of a bankruptcy, workout, reorganization or
recapitalization;

(i) Investments acquired as a result of a foreclosure with respect to any
secured Investment;

(j) Investments consisting of interest rate, currency, or commodity
swap agreements, interest rate cap or collar agreements or arrangements
designated to protect a Person against fluctuations in interest rates,
currency exchange rates, or commodity prices; and

(k) Investments consisting of loans and advances to employees.

8. DEFINITIONS “Permitted Liens” shall also mean:

		 	(a) Liens existing on the date hereof which are identified on and in
favor of the respective lienholders named on Annex 8 attached hereto and
Liens arising under this Agreement or other Loan Documents;
	 
	 	 	(b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for
which Borrower maintains adequate reserves on its Books, if they have no
priority over any of Bank’s security interests;
	 
		 	(c) Liens (including with respect to capital leases) (i) on property
(including accessions, additions, parts, replacements, fixtures,
improvements and attachments thereto, and the proceeds thereof) acquired
or held by Borrower or its subsidiaries incurred for financing such
property (including accessions, additions, parts, replacements, fixtures,
improvements and attachments thereto, and the proceeds thereof), or (ii)
existing on property (and accessions, additions, parts, replacements,
fixtures, improvements and attachments thereto, and the proceeds
thereof) when

-8-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

	 	 	acquired, if the Lien is confined to such property
(including accessions, additions, parts, replacements, fixtures,
improvements and attachments thereto, and the proceeds thereof);
	 
		 	(d) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c) and (e) through
(p), but any extension, renewal or replacement Lien must be limited to the
property encumbered by the existing Lien and the principal amount of the
indebtedness it secures may not increase;
	 
		 	(e) Licenses or sublicenses granted in the ordinary course of
Borrower’s business and any interest or title of a licensor or under any
license or sublicense, if the licenses and sublicenses permit granting
Bank a security interest;
	 
		 	(f) Leases or subleases granted in the ordinary course of Borrower’s
business, including in connection with Borrower’s leased premises or
leased property;
	 
		 	(g) Liens in favor of custom and revenue authorities arising as a matter
of law to secure the payment of custom duties in connection with the
importation of goods;
	 
		 	(h) Liens on insurance proceeds securing the payment of financed insurance
premiums;
	 
		 	(i) Customary Liens granted in favor of a trustee to secure fees and other
amounts owing to such trustee under an indenture or other similar
agreement;
	 
		 	(j) Liens on assets acquired in mergers and acquisitions not prohibited by
the covenant limiting mergers and acquisitions;
	 
		 	(k) Liens consisting of pledges of cash, cash equivalents or government
securities to secure swap or foreign exchange contracts or letters of
credit;
	 
		 	(l) Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default;
	 
		 	(m) Carriers’, warehousemen’s, mechanics’, material men’s, repairmen’s or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in
good faith and by appropriate proceeding if adequate reserves with respect
thereto are maintained on the books of the applicable Person;
	 
		 	(n) Pledges or deposits in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other social
security legislation;
	 
		 	(o) Deposits to secure the performance of bids, trade contracts (other
than for borrowed money), contracts for the purchase of property, leases,
statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case, incurred in the ordinary
course of business and not representing an obligation for borrowed money;
and
	 
		 	(p) Easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which do not materially detract from the value of
the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person; and

-9-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

	(q) Liens on any capital stock of Borrower’s foreign subsidiaries which
are superior to Silicon’s security interest pursuant to a written
subordination agreement in such form as Silicon shall specify.

9. BORROWER INFORMATION:

     Borrower represents and warrants that the information set forth in
the Representations and Warranties of the Borrower dated May 23, 2004, as
supplemented on June 24, 2004, previously submitted to Silicon (the
“Representations”) is true and correct as of the date hereof.

10. ADDITIONAL PROVISIONS

(1) Banking Relationship. Borrower shall at all times maintain its
primary banking relationship with Silicon. Without limiting the
generality of the foregoing, Borrower shall, at all times, maintain
on deposit with Silicon not less than 85% of its total consolidated
cash, cash equivalents, and investments held at financial
institutions within the United States, provided, that if 85% of such
total amount exceeds $10,000,000.00, Borrower shall only be required
to maintain $10,000,000.00 with Silicon. As to any deposit accounts
maintained with other financial institutions, within 30 days from
the date of this Agreement, Borrower shall cause such other
financial institutions to enter into an account control agreement in
form acceptable to Silicon in its good faith business judgment in
order to perfect Silicon’s first-priority security interest in said
deposit accounts. As to any investment accounts maintained with SVB
Securities, Borrower shall cause SVB Securities to enter into a
control agreement in form acceptable to Silicon in its good faith
business judgment in order to perfect Silicon’s first-priority
security interest in said investment accounts.

(2) Subordination of Inside Debt. All present and future
indebtedness of Borrower to its officers, directors and
shareholders (“Inside Debt”) shall, at all times, be subordinated
to the Obligations pursuant to a subordination agreement on
Silicon’s standard form. Borrower represents and warrants that
there is no Inside Debt presently outstanding, except for that
described on Annex 10–(2) attached hereto. Prior to incurring any
Inside Debt in the future, Borrower shall cause the person to whom
such Inside Debt will be owed to execute and deliver to Silicon a
subordination agreement on Silicon’s standard form.

(3) Subsidiaries. Borrower represents and warrants to Silicon that
TFS Electronic Manufacturing Services, Inc., f/k/a ETMA
Corporation, a Washington corporation, and TFS-DI, Inc., an Arizona
corporation, are the only two wholly owned subsidiaries of
Three-Five Systems, Inc. organized in the United States. Borrower
covenants and agrees that while this Agreement is in effect,
Borrower shall not transfer any assets or Collateral to TFS-DI,
Inc. or to any other subsidiaries of Borrower. Borrower has no
other subsidiaries other than subsidiaries organized under the laws
of foreign countries.

(4) Conditions Precedent. The making of the first Loan hereunder
is subject to the following conditions precedent: Silicon shall
have received: (a) an opinion of Borrower’s

-10-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

counsel in form
reasonably satisfactory to Silicon; (b) a UCC search with respect
to Three-Five Systems, Inc. in the Office of the Delaware Secretary
of State and with respect to TFS Electronic Manufacturing Services,
Inc. in the Office of Washington State Department of Licensing,
showing the respective UCC-1 Financing Statement in favor of
Silicon to be of record and showing no other filings (other than
those with respect to Permitted Liens); (c) a Pledge Agreement
from Three-Five Systems, Inc. pledging and assigning not less than
100% of the stock of TFS-DI, Inc. and 65% of the stock of its
foreign subsidiaries on Silicon’s specified form, together with the
certificates of stock representing such securities and executed but
undated stock powers or assignments relating to each such
certificate of stock; (d) an Intellectual Property Security
Agreement on Silicon’s standard form executed by each Borrower,
together with related Assignments in blank of copyrights, patents
or trademarks, as the case may be; (e) certificates of resolutions
authorizing the execution and delivery of this Agreement and the
Intellectual Property Security Agreement by each Borrower and the
Pledge Agreement by Three-Five Systems, Inc.; (f) an initial
borrowing base certificate indicating the amount of credit
available under the credit limit specified above in Section 1 of
this Schedule; and (g) the Loan Fee specified above in Section 3 of
this Schedule.

(5) Conditions Subsequent. Within 30 days after the date
hereof, Borrower shall deliver (a) a Pledge Agreement from TFS
International, Ltd. pledging and assigning not less than 65% of the
stock of its foreign subsidiaries, being Three-Five Systems
(Beijing) Co., Ltd. and TFS Electronic Manufacturing Services Sdn.
Bhd., on Silicon’s specified form, together with the certificates of
stock representing such securities or such other evidence of its
equity ownership interest as is acceptable to Silicon and executed
but undated stock powers or assignments relating to each such
certificate of stock or other evidence as is acceptable to Silicon;
(b) a certificate of resolutions authorizing the execution and
delivery of the Pledge Agreement by TFS International, Ltd.; (c) if
required, an approval of the Bermuda Monetary Authority permitting
such pledge; (d) a Consent to Removal of Personal Property (or other
landlord waiver) in form acceptable to Silicon relating to the real
property commonly known as 6640 185th Avenue N.E. Redmond, WA
98052; and (e) the stock certificates and stock powers or
assignments specified above in Section 10(4)(c) of this Schedule but
not delivered at closing. In the event Borrower has been unable to
deliver such documents within 30 days from the date hereof, it shall
not be an Event of Default under this Agreement at such time, as
long as Borrower is using its best efforts to obtain such documents
and is diligently pursuing all reasonable steps to so obtain such
documents. In the event TFS International II, Ltd. ever owns more
than its current ownership interest in TFS Electronic Manufacturing
Services Sdn. Bhd., Borrower shall deliver (a) a Pledge Agreement
from TFS International II, Ltd. pledging and assigning not less than
65% of the stock of its foreign subsidiaries, on Silicon’s specified
form, together with the certificates of stock representing such
securities or such other evidence of its equity ownership interest
as is acceptable to Silicon and executed but undated stock powers or
assignments relating to each such certificate of stock or other
evidence as is acceptable to Silicon, (b) a certificate of
resolutions authorizing the execution and delivery of the Pledge
Agreement by TFS International II, Ltd.; and (c) if required, an
approval of the Bermuda Monetary Authority permitting such pledge.

-11-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

(6) Intellectual Property. Borrower shall provide written notice to
Bank of any new application filed by Borrower in the United States
Patent and Trademark Office for a patent or to register a trademark
or service mark within 30 days of any such filing. Borrower shall
not register any Intellectual Property with the United States
Copyright Office unless it: (i) has given at least fifteen (15)
days’ prior notice to Bank of
its intent to register such Intellectual Property and has provided
Bank with a copy of the application it intends to file with the
United States Copyright Office (excluding exhibits thereto); (ii)
executes a security agreement or such other documents as Bank may
reasonably request in order to maintain the perfection and priority
of Bank’s security interest in the Intellectual Property proposed
to be registered with the United States Copyright Office; and (iii)
records such security documents with the United States Copyright
Office contemporaneously with filing the application(s) with the
United States Copyright Office. Borrower shall promptly provide to
Bank a copy of the application(s) filed with the United States
Copyright Office, together with evidence of the recording of the
security documents necessary for Bank to maintain the perfection and
priority of its security interest in such Intellectual Property.

-12-

 

	 	 	 
	Silicon Valley Bank

	 	Schedule to Loan and Security Agreement

	 	 	 	 	 	 	 	 	 
	Borrower:	 	 	 	Silicon:
	 
	 	 	 	 	 	 	 	 
	     THREE-FIVE SYSTEMS, INC.	 	SILICON VALLEY BANK
	 
	 	 	 	 	 	 	 	 
	By

	 	 	 	 	 	By	 	 
	 	
 
	 	 	
 
	 	President or Vice President
	 	Title	 	 
	 
	 	 	 	 	 	 	

	By
	 	 	 	 	 	 	 	 
	 	
 	 	 	 	 
	

	Secretary or Ass’t Secretary	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Borrower:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	TFS ELECTRONIC MANUFACTURING SERVICES,

INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By
	 	 	 	 	 	 	 	 
	

	
 	 	 	 	 
	 	President or Vice
President	 	 	 	 
	By
	 	 	 	 	 	 	 	 
	 	
 	 	 	 	 
		Secretary or
Ass’t Secretary	 	 	 	 

Form : -3(3/7/02)

Version - 4

-13-

 

ANNEX 7-3

Amount of Existing Debt and Names of Creditors

	1.	 	Data International, Ltd.      Amount Outstanding is $1,550,000
	 
	2.	 	Various equipment leases located at the Company’s facilities in
Washington. Will provided the specific details to these leases within the
next 7 days.

 

ANNEX 7-4

Description of Existing Investments

None

 

ANNEX 8

Description of Existing Liens and Related Lienholders

Existing Liens and Related Lienholders include equipment leases and property
leases located at the Company’s facilities in Washington. Will provided the
specific details to these leases within the next 7 days.

 

ANNEX 10-(2)

Description of Existing Inside Debt

(Debt of Borrower to Insiders)

None<PAGE>
                                                                     Exhibit 4.A

                                  $150,000,000

                                CREDIT AGREEMENT

                            DATED AS OF JUNE 30, 2004

                                      AMONG

                                   VIAD CORP,

                                  THE LENDERS,

                                  BANK ONE, NA
                            AS ADMINISTRATIVE AGENT,

                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                              AS SYNDICATION AGENT

                                       AND

                              BANK OF AMERICA, N.A.

                                       AND

                          KEYBANK NATIONAL ASSOCIATION
                           AS CO-DOCUMENTATION AGENTS

                         BANC ONE CAPITAL MARKETS, INC.
                                       AND
                          WACHOVIA CAPITAL MARKETS, LLC

                EACH AS JOINT LEAD ARRANGER AND JOINT BOOK RUNNER

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                 PAGE
                                                                                                 ----
<S>                                                                                              <C>
ARTICLE I DEFINITIONS..........................................................................    1

ARTICLE II THE CREDITS.........................................................................   16
     2.1.  Commitment..........................................................................   16
     2.2.  Required Payments; Termination......................................................   16
     2.3.  Ratable Loans.......................................................................   16
     2.4.  Types of Advances...................................................................   16
     2.5.  Swing Line Loans....................................................................   16
     2.6.  Commitment Fee; Reductions and Increases in Aggregate Commitment....................   17
     2.7.  Minimum Amount of Each Advance......................................................   18
     2.8.  Optional Principal Payments.........................................................   18
     2.9.  Method of Selecting Types and Interest Periods for New Advances.....................   18
     2.10. Conversion and Continuation of Outstanding Advances.................................   19
     2.11. Changes in Interest Rate, etc.......................................................   19
     2.12. Rates Applicable After Default......................................................   19
     2.13. Method of Payment...................................................................   20
     2.14. Noteless Agreement; Evidence of Indebtedness........................................   20
     2.15. Telephonic Notices..................................................................   21
     2.16. Interest Payment Dates; Interest and Fee Basis......................................   21
     2.17. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions.....   21
     2.18. Lending Installations...............................................................   21
     2.19. Non-Receipt of Funds by the Administrative Agent....................................   22
     2.20. Facility LCs........................................................................   22
     2.21. Replacement of Lender...............................................................   26

ARTICLE III YIELD PROTECTION; TAXES............................................................   26
     3.1.  Yield Protection....................................................................   27
     3.2.  Changes in Capital Adequacy Regulations.............................................   27
     3.3.  Availability of Types of Advances...................................................   28
     3.4.  Funding Indemnification.............................................................   28
     3.5.  Taxes...............................................................................   28
     3.6.  Lender Statements; Survival of Indemnity............................................   30

ARTICLE IV CONDITIONS PRECEDENT................................................................   30
     4.1.  Initial Credit Extension............................................................   30
     4.2.  Each Credit Extension...............................................................   32

ARTICLE V REPRESENTATIONS AND WARRANTIES.......................................................   32
     5.1.  Existence and Standing..............................................................   32
     5.2.  Authorization and Validity..........................................................   32
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                               <C>
     5.3.  No Conflict; Government Consent.....................................................   32
     5.4.  Financial Statements................................................................   33
     5.5.  Material Adverse Change.............................................................   33
     5.6.  Taxes...............................................................................   33
     5.7.  Litigation and Contingent Obligations...............................................   33
     5.8.  Subsidiaries........................................................................   33
     5.9.  ERISA...............................................................................   34
     5.10. Accuracy of Information.............................................................   34
     5.11. Regulation U........................................................................   34
     5.12. Material Agreements.................................................................   34
     5.13. Compliance With Laws................................................................   34
     5.14. Ownership of Properties.............................................................   34
     5.15. Plan Assets; Prohibited Transactions................................................   34
     5.16. Environmental Matters...............................................................   35
     5.17. Investment Company Act..............................................................   35
     5.18. Public Utility Holding Company Act..................................................   35
     5.19. [Subordinated Debt..................................................................   35
     5.20. Insurance...........................................................................   35
     5.21. Solvency............................................................................   35
     5.22. Collateral Documents................................................................   36

ARTICLE VI COVENANTS...........................................................................   36
     6.1.  Financial Reporting.................................................................   36
     6.2.  Use of Proceeds.....................................................................   39
     6.3.  Notice of Default...................................................................   39
     6.4.  Conduct of Business.................................................................   39
     6.5.  Taxes...............................................................................   39
     6.6.  Insurance...........................................................................   39
     6.7.  Compliance with Laws................................................................   39
     6.8.  Maintenance of Properties...........................................................   39
     6.9.  Inspection..........................................................................   39
     6.10. Dividends...........................................................................   40
     6.11. Indebtedness........................................................................   40
     6.12. Merger..............................................................................   41
     6.13. Sale of Assets......................................................................   41
     6.14. Investments and Acquisitions........................................................   41
     6.15. Liens...............................................................................   42
     6.16. Capital Expenditures................................................................   43
     6.17. Affiliates..........................................................................   43
     6.18. Amendments to Agreements............................................................   43
     6.19. Operating Leases....................................................................   43
     6.20. Contingent Obligations..............................................................   44
     6.21. Financial Contracts.................................................................   44
     6.22. Inconsistent Agreements.............................................................   44
     6.23. Subsidiary Guaranties and Personal Property Pledges.................................   44
     6.24. Subsidiary Stock Pledge.............................................................   44
     6.25. Financial Covenants.................................................................   45

ARTICLE VII DEFAULTS...........................................................................   45
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<S>                                                                                               <C>
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES....................................   47
     8.1.  Acceleration; Facility LC Collateral Account........................................   47
     8.2.  Amendments..........................................................................   48
     8.3.  Preservation of Rights..............................................................   49

ARTICLE IX GENERAL PROVISIONS..................................................................   49
     9.1.  Survival of Representations.........................................................   49
     9.2.  Governmental Regulation.............................................................   50
     9.3.  Headings............................................................................   50
     9.4.  Entire Agreement....................................................................   50
     9.5.  Several Obligations; Benefits of this Agreement.....................................   50
     9.6.  Expenses; Indemnification...........................................................   50
     9.7.  Numbers of Documents................................................................   51
     9.8.  Accounting..........................................................................   51
     9.9.  Severability of Provisions..........................................................   51
     9.10. Nonliability of Lenders.............................................................   51
     9.11. Confidentiality.....................................................................   52
     9.12. Nonreliance.........................................................................   52
     9.13. Disclosure..........................................................................   52
     9.14. USA PATRIOT ACT NOTIFICATION........................................................   52

ARTICLE X THE ADMINISTRATIVE AGENT.............................................................   52
     10.1.  Appointment; Nature of Relationship................................................   52
     10.2.  Powers.............................................................................   53
     10.3.  General Immunity...................................................................   53
     10.4.  No Responsibility for Loans, Recitals, etc.........................................   53
     10.5.  Action on Instructions of Lenders..................................................   53
     10.6.  Employment of Administrative Agents and Counsel....................................   54
     10.7.  Reliance on Documents; Counsel.....................................................   54
     10.8.  Administrative Agent's Reimbursement and Indemnification...........................   54
     10.9.  Notice of Default..................................................................   55
     10.10. Rights as a Lender.................................................................   55
     10.11. Lender Credit Decision.............................................................   55
     10.12. Successor Administrative Agent.....................................................   55
     10.13. Administrative Agent and Arranger Fees.............................................   56
     10.14. Delegation to Affiliates...........................................................   56
     10.15. Execution of Collateral Documents..................................................   56
     10.16. Collateral Releases................................................................   56
     10.17. Co-Documentation Agents, Syndication, Agent, etc...................................   56

ARTICLE XI SETOFF; RATABLE PAYMENTS............................................................   56
     11.1. Setoff..............................................................................   56
     11.2. Ratable Payments....................................................................   57

ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..................................   57
     12.1. Successors and Assigns..............................................................   57
     12.2. Participations......................................................................   57
</TABLE>

                                      -iii-

<PAGE>

<TABLE>
<S>                                                                                               <C>
     12.3. Assignments.........................................................................   58
     12.4. Dissemination of Information........................................................   59
     12.5. Tax Treatment.......................................................................   60

ARTICLE XIII NOTICES...........................................................................   60
     13.1. Notices; Effectiveness; Electronic Communication....................................   60

ARTICLE XIV COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION.....................   61
     14.1. Counterparts; Effectiveness.........................................................   61
     14.2. Electronic Execution of Assignments.................................................   61

ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL........................   61
     15.1. CHOICE OF LAW.......................................................................   61
     15.2. CONSENT TO JURISDICTION.............................................................   62
     15.3. WAIVER OF JURY TRIAL................................................................   62
</TABLE>

Exhibit A  Form of Note

Exhibit B  Compliance Certificate

Exhibit C  Money Transfer Instructions

Exhibit D  Form of Assignment and Assumption Agreement

Pricing Schedule
Commitment Schedule
Schedule 1.01     Existing Letters of Credit
Schedule 1.02     Guarantees of Subsidiary Operating Leases
Schedule 5.8      Subsidiaries
Schedule 5.14     Ownership of Properties
Schedule 5.22     Collateral
Schedule 6.11     Indebtedness
Schedule 6.14     Investments
Schedule 6.15     Liens
Schedule 6.19     Operating Leases
Schedule 6.25.1   Pro Forma Fixed Charge Coverage Ratio Amounts

                                      -iv-

<PAGE>

                                CREDIT AGREEMENT

      This Agreement, dated as of June 30, 2004, is among Viad Corp, a Delaware
corporation, the Lenders and Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, as LC Issuer, as Swing Line Lender
and as Administrative Agent, and Wachovia Bank, National Association, a national
banking association, as Syndication Agent. The parties hereto agree as follows:

                                    RECITALS

      A. The Borrower has requested the Lenders to make financial accommodations
to it in the aggregate principal amount of up to $150,000,000; and

      B. The Lenders are willing to extend such financial accommodations on the
terms and conditions set forth below.

      NOW, THEREFORE, in consideration of the promises and of the mutual
agreements made herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      As used in this Agreement:

      "10-1/2 Subordinated Debentures" means the Borrower's 10.5% subordinated
debentures due May 15, 2006, and issued pursuant to that certain indenture dated
as of November 15, 1985, as amended.

      "Acquired Company" is defined in Section 6.14.

      "Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.

      "Administrative Agent" means Bank One in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, and any successor Administrative Agent appointed pursuant
to Article X.

      "Advance" means a borrowing hereunder, (i) made by the Lenders on the same
Borrowing Date, or (ii) converted or continued by the Lenders on the same date
of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of

<PAGE>

Eurodollar Loans, for the same Interest Period. The term "Advance" shall include
Swing Line Loans unless otherwise expressly provided.

      "Affected Lender" is defined in Section 2.21.

      "Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.

      "Agents" means, together, the Administrative Agent and Wachovia Bank,
National Association, as Syndication Agent.

      "Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof. The initial
Aggregate Commitment is $150,000,000.

      "Aggregate Outstanding Credit Exposure" means, at any time, the aggregate
of the Outstanding Credit Exposure of all the Lenders.

      "Agreement" means this credit agreement, as it may be amended or modified
and in effect from time to time.

      "Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.

      "Alternate Cash Equivalent Investments" means, to the extent not
constituting a Cash Equivalent Investment, each of the following: (i) marketable
direct obligations issued or unconditionally guaranteed by the United States
government and backed by the full faith and credit of the United States
government; (ii) certificates of deposit and time deposits, bankers' acceptances
and floating rate certificates of deposit issued by any commercial bank
organized under the laws of the United States, any state thereof, the District
of Columbia, any foreign bank, or its branches or agencies (fully protected
against currency fluctuations for any such deposits with a term of more than
ninety (90) days); (iii) commercial paper of United States and foreign banks and
bank holding companies and their subsidiaries and United States and foreign
finance, commercial industrial or utility companies which, at the time of
acquisition, are rated A-2 (or better) by S&P or P-2 by Moody's; provided that
the maturity of such Cash Equivalent Investments described in the foregoing
clauses (i) through (iii) shall not exceed 365 days; (iv) repurchase obligations
of any commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
having a term not more than thirty (30) days, with respect to securities issued
or fully guaranteed or insured by the United States government; (v) securities
with maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth, territory, political subdivision, taxing
authority or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be), which, at the time of acquisition, are rated at
least BBB by S&P or at least Baa by Moody's; (vi) securities with maturities of
one year or less from the date of acquisition backed by standby letters of
credit issued by any commercial bank organized under the laws of the united
States, any state thereof or the District of Columbia (which commercial bank
shall have a short-term debt rating of A-2 (or better) by S&P Ratings Group or
P-2 by Moody's), or by any foreign bank (which

                                       -2-

<PAGE>

foreign bank shall have a rating of B or better from Thomson Bank Watch Global
Issuer Rating or, if not rated by Thomson Bank Watch Global Issuer Rating, which
foreign bank shall be an institution acceptable to the Administrative Agent), or
its branches or agencies; or (vii) shares of money market mutual or similar
funds at least 95% of the assets of which are invested in the types of
investments satisfying the requirements of clauses (i) through (vi) of this
definition.

      "Applicable Fee Rate" means, at any time, the percentage rate per annum at
which commitment fees are accruing on the unused portion of the Aggregate
Commitment at such time as set forth in the Pricing Schedule.

      "Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.

      "Approved Fund" means any 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.

      "Arrangers" means Banc One Capital Markets, Inc. and Wachovia Capital
Markets, LLC, and their respective successors, in their capacities as Joint Lead
Arranger and Joint Book Runner.

      "Article" means an article of this Agreement unless another document is
specifically referenced.

      "Authorized Officer" means any of the Chairman, Chief Executive Officer,
President, Chief Financial Officer or Treasurer of the Borrower, acting singly.

      "Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.

      "Bank One" means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.

      "Borrower" means Viad Corp, a Delaware corporation, and its successors and
assigns.

      "Borrowing Date" means a date on which an Advance is made hereunder.

      "Borrowing Notice" is defined in Section 2.9.

      "Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York City for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.

      "Capital Expenditures" means, without duplication, any expenditures for
any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP excluding (i) the cost of assets
acquired with Capitalized Lease Obligations, (ii) expenditures of insurance
proceeds to rebuild or replace any asset after a casualty or condemnation loss
and (iii) leasehold improvement expenditures for which the Borrower or a
Subsidiary is reimbursed promptly by the lessor.

                                       -3-

<PAGE>

      "Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with GAAP.

      "Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.

      "Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person other than a corporation and
any and all warrants, rights or options to purchase any of the foregoing.

      "Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; and (v) shares of money
market, mutual or similar funds having assets in excess of $100,000,000 and at
least 95% of the investments of which are limited to investment grade securities
(i.e., securities rated at least Baa by Moody's or at least BBB by S&P);
provided in the case of each of (i) through (iv) above the same provides for
payment of both principal and interest (and not principal alone or interest
alone) and is not subject to any contingency regarding the payment of principal
or interest.

      "Change" is defined in Section 3.2.

      "Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 25% or more of the outstanding shares of voting stock of the
Borrower.

      "Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

      "Collateral" collectively refers to the term "Collateral" as defined in
the Security Agreement and the Subsidiary Security Agreement.

      "Collateral Documents" means, collectively, the Guaranty, the Security
Agreement, the Subsidiary Security Agreement, any intellectual property
assignments and all other security documents hereafter delivered to the
Administrative Agent granting a Lien or purporting to grant a Lien on any
property of any Person to secure the obligations and liabilities of the Borrower
or any of its Subsidiaries under any Loan Document.

      "Collateral Shortfall Amount" is defined in Section 8.1.

      "Commitment" means, for each Lender, the obligation of such Lender to make
Revolving Loans to, and participate in Facility LCs issued upon the application
of, the Borrower in an aggregate amount not exceeding the amount set forth
opposite its name on the Commitment Schedule, as it may be modified as a result
of any assignment that has become effective pursuant to Section 12.3.2 or as
otherwise modified from time to time pursuant to the terms hereof.

      "Commitment Schedule" means the Schedule attached hereto identified as
such.

                                       -4-

<PAGE>

      "Concession Agreement" means that certain Contract No. CX 1430-1-0002
between Glacier Park, Inc. and the United States of America as amended or
supplemented from time to time.

      "Consolidated Capital Expenditures" means, with reference to any period,
the Capital Expenditures of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.

      "Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income and without
duplication, (i) Consolidated Interest Expense, (ii) expense for income taxes
paid or accrued, (iii) depreciation, (iv) amortization, (v) extraordinary or
non-recurring cash losses incurred other than in the ordinary course of business
not to exceed $10,000,000 during any twelve-month period, and $25,000,000 in the
aggregate for all such computation periods before the Facility Termination Date,
(vi) non-cash losses and (vii) expenses incurred in connection with the
Principal Spin-Off Transactions not to exceed $20,000,000 minus, (i) to the
extent included in Consolidated Net Income, extraordinary or non-recurring gains
realized other than in the ordinary course of business and (ii) non-cash gains,
all calculated for the Borrower and its Subsidiaries on a consolidated basis.
For purposes hereof, Consolidated EBITDA for the fiscal quarters ending
September 30, 2003, December 31, 2003 and March 31, 2004 shall be deemed to be
$9,602,000, $6,130,000 and $19,339,000, respectively. For any computation period
during which (i) an Acquired Company is acquired or (ii) a Disposed Company is
sold, Consolidated EBITDA shall be calculated on a pro forma basis as if such
Acquired Company or Disposed Company, as the case may be, had been acquired (and
any related Indebtedness incurred) or sold (and any related Indebtedness
disposed of), as the case may be, on the first day of such computation period.

      "Consolidated Indebtedness" means at any time the Indebtedness of the
Borrower and its Subsidiaries (other than Defeased Debt) calculated on a
consolidated basis as of such time.

      "Consolidated Interest Expense" means, with reference to any period, the
interest expense of the Borrower and its Subsidiaries (other than interest
expense on Defeased Debt) calculated on a consolidated basis for such period.
For any computation period during which an Acquired Company is acquired,
Consolidated Interest Expenses shall be calculated on a pro forma basis as if
any Indebtedness incurred in connection with the acquisition of such Acquired
Company had been incurred on the first day of such computation period.

      "Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period without giving effect to any income or
expense associated with Defeased Debt.

      "Consolidated Net Worth" means at any time the consolidated stockholders'
equity (including minority interests) of the Borrower and its Subsidiaries
calculated on a consolidated basis as of such time without giving effect to any
income or expense associated with Defeased Debt.

      "Consolidated Rentals" means, with reference to any period, the Rentals of
the Borrower and its Subsidiaries calculated on a consolidated basis for such
period.

      "Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees (but excluding guarantees
by the Borrower of the certain Subsidiary Operating Leases set forth on Schedule
1.02), endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the obligation
or liability of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person, or otherwise assures
any creditor of such other Person against loss, including, without

                                       -5-

<PAGE>

limitation, any operating agreement, take-or-pay contract or the obligations of
any such Person as general partner of a partnership with respect to the
liabilities of the partnership.

      "Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.

      "Conversion/Continuation Notice" is defined in Section 2.10.

      "Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.

      "Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC hereunder.

      "Default" means an event described in Article VII.

      "Defeased Debt" means obligations in respect of the Borrower's Medium Term
Notes and the Subordinated Debt which have been legally or, to the reasonable
satisfaction of the Administrative Agent, practically, defeased by the
segregation of cash or other Property to satisfy such obligation.

      "Disposed Company" means an entity or going business sold by the Borrower
or any of its Subsidiaries by way of sale of equity or substantially all of the
assets of such entity and otherwise permitted by this Agreement.

      "Dollars" means lawful currency of the United States of America.

      "Domestic Subsidiary" means any Subsidiary of the Borrower (after giving
effect to the Spin-off Transaction) organized under the laws of any jurisdiction
within the United States.

      "Effective Date" is defined in Section 4.1

      "Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) the effect of the environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.

      "Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.11, bears interest at the applicable Eurodollar Rate.

      "Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers' Association LIBOR rate
for deposits in U.S. dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided

                                       -6-

<PAGE>

that, if no such British Bankers' Association LIBOR rate is available to the
Administrative Agent, the applicable Eurodollar Base Rate for the relevant
Interest Period shall instead be the rate determined by the Administrative Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.

      "Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.

      "Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.

      "Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Administrative Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which such Lender or the Administrative Agent is incorporated or
organized or (ii) the jurisdiction in which the Administrative Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.

      "Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.

      "Existing Credit Agreements" means (i) the Credit Agreement (Short Term
Revolving Credit Facility) dated August 31, 2001 among the Borrower, the lenders
party thereto and Citicorp USA, Inc. as administrative agent and (ii) the
Amended and Restated Credit Agreement (Long Term Revolving Credit Facility)
dated August 31, 2001 among the Borrower, Greyhound Canada Holdings, Inc., the
lenders party thereto and Citicorp USA, Inc. as administrative agent, each as
amended from time to time.

      "Existing Letters of Credit" means the Letters of Credit issued by Bank
One, NA or Bank of America, N.A. and identified on Schedule 1.01 hereto.

      "Facility LC" is defined in Section 2.20.1.

      "Facility LC Application" is defined in Section 2.20.3.

      "Facility LC Collateral Account" is defined in Section 2.20.11.

      "Facility Termination Date" means the earlier of (i) three years from the
Effective Date, (ii) June 30, 2007 or (iii) any earlier date on which the
Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the
terms hereof.

      "Federal Funds Effective Rate" means, for any day, an 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 on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its reasonable discretion.

                                       -7-

<PAGE>

      "Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics or (ii) any Rate Management Transaction.

      "Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.

      "Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.

      "Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the Floating Rate.

      "Foreign Subsidiary" means any Subsidiary of the Borrower that is not a
Domestic Subsidiary.

      "Form 10" means that certain filing on Securities and Exchange Commission
Form 10-12B of MoneyGram filed with the Securities and Exchange Commission on
December 29, 2003, as amended by that certain filing on Securities and Exchange
Commission Form 10-12B/A filed on March 30, 2004 as further amended by those
certain filings on Securities and Exchange Commission Form 10-12B/A filed on
June 3, 2004 and June 17, 2004, respectively.

      "Fund" means 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 of its business.

      "GAAP" means generally accepted accounting principles as in effect from
time to time in the United States, applied in a manner consistent with that used
in preparing the financial statements referred to in Section 5.4.; provided,
however, that, except as provided in Section 9.8, with respect to the
calculation of financial ratios and other financial tests required by this
Agreement, GAAP means generally accepted accounting principles as in effect from
time to time in the United States as of the date of this Agreement, applied in a
manner consistent with that used in preparing financial statements of the
Borrower referred to in Section 5.4 hereof.

      "Guarantor" means a Domestic Subsidiary which is a party to the Guaranty.

      "Guaranty" means that certain Guaranty dated as of the date hereof
executed by the Material Domestic Subsidiaries of the Borrower in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as it may be
amended or modified and in effect from time to time.

      "Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) Letters of Credit, (viii) Contingent Obligations, (ix) Rate
Management Obligations and (x) any other obligation for borrowed money or other
financial accommodation which in accordance with GAAP would be shown as a
liability on the consolidated balance sheet of such Person. For purposes hereof,
the amount of any Contingent Obligation shall be

                                       -8-

<PAGE>

deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing
Person in good faith. Notwithstanding the foregoing, Rate Management Obligations
(to the extent incurred in the ordinary course of business and not for
speculative purposes) shall not constitute Indebtedness.

      "Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.

      "Investment" of a Person means any loan, advance (other than deposits with
financial institutions available for withdrawal on demand, prepaid expenses and
similar items arising in the ordinary course of business and other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.

      "LC Fee" is defined in Section 2.20.4.

      "LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder and
each issuer of an Existing Letter of Credit , in its capacity as issuer thereof.
With respect to any specific Facility LC, LC Issuer means the issuer thereof.

      "LC Obligations" means, at any time, the sum, without duplication, of (i)
the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations.

      "LC Payment Date" is defined in Section 2.20.5.

      "Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns. Unless otherwise
specified, the term "Lenders" includes Bank One in its capacity as Swing Line
Lender.

      "Lending Installation" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent listed on the signature pages hereof or on a
Schedule or otherwise selected by such Lender or the Administrative Agent
pursuant to Section 2.18.

      "Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.

                                       -9-

<PAGE>

      "Leverage Ratio" means, as of any date of calculation, the ratio of (i)
Consolidated Indebtedness outstanding on such date to (ii) Consolidated EBITDA
for the Borrower's then most-recently ended four fiscal quarters.

      "Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).

      "Loan" means a Revolving Loan or a Swing Line Loan.

      "Loan Documents" means this Agreement, the Facility LC Applications, any
Notes issued pursuant to Section 2.14 and the Collateral Documents.

      "Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), prospects or results of
operations of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents to
which it is a party in any material respect, or (iii) the enforceability of any
of the Loan Documents or the rights or remedies of the Administrative Agent or
the Lenders thereunder. The consummation of the Principal Spin-Off Transactions
shall in no event be deemed to create a Material Adverse Effect pursuant to
clause (i) above.

      "Material Domestic Subsidiary" means a Domestic Subsidiary (other than
Glacier Park, Inc. unless and until such time as it becomes a Wholly-Owned
Subsidiary) having an amount in excess of the lesser of (i) 5% of assets (valued
at the greater of book or fair market value) of the Borrower and its
Subsidiaries on a consolidated basis or (ii) 5% of Consolidated Net Income for
the preceding four fiscal quarter period, in each case determined as of the most
recent fiscal quarter end for which financials have been delivered by the
Borrower pursuant to Section 6.1.

      "Material Indebtedness" means Indebtedness in an outstanding principal
amount of $10,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than U.S. dollars).

      "Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).

      "Medium Term Notes" means the 6.09% senior notes due October 25, 2004, the
6.11% senior notes due October 25, 2004, the 6.15% senior notes due October 25,
2004, the 6.63% senior notes due January 21, 2009, and the 6.56% senior notes
due February 7, 2005, in each case, issued pursuant to that certain indenture
dated April 1, 1993, as amended.

      "Modify" or "Modification" is defined in Section 2.20.1.

      "MoneyGram" means MoneyGram International, Inc., a Delaware corporation
and, before giving effect to the Spin-Off Transaction, a wholly-owned Subsidiary
of the Borrower.

      "MoneyGram Merger Consideration" means the $150,000,000 cash payment to be
paid to the Borrower by MoneyGram as part of the Spin-Off Transaction.

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

                                      -10-

<PAGE>

      "Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement to which the Borrower or any member of the Controlled Group
is a party to which more than one employer is obligated to make contributions.

      "Non-Equity Consideration" means, with respect to any Acquisition,
consideration paid and debt assumed in consideration thereof exclusive of (i)
any common stock of the Borrower included in such consideration and (ii) any
cash payments included in such consideration to the extent such cash payments
are made from the traceable cash proceeds received from the issuance and sale of
the Capital Stock of the Borrower specifically in connection with such
Acquisition.

      "Non-U.S. Lender" is defined in Section 3.5(iv).

      "Note" is defined in Section 2.14(iv).

      "Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders, or to the Administrative Agent or any indemnified party
arising under the Loan Documents.

      "Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.

      "Operating Lease Obligations" means, as at any date of determination, the
amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under GAAP if such
Operating Lease were a Capitalized Lease) from the date on which each fixed
lease payment is due under such Operating Lease to such date of determination,
of all fixed lease payments due under all Operating Leases of the Borrower and
its Subsidiaries.

      "Other Taxes" is defined in Section 3.5(ii).

      "Outstanding Credit Exposure" means, as to any Lender at any time, the sum
of (i) the aggregate principal amount of its Revolving Loans outstanding at such
time, plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at
such time, plus (iii) an amount equal to its Pro Rata Share of the aggregate
principal amount of Swing Line Loans outstanding at such time.

      "Participants" is defined in Section 12.2.1.

      "Payment Date" means the last day of each calendar year quarter.

      "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

      "Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

      "Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any

                                      -11-

<PAGE>

member of the Controlled Group may have any liability other than the Viad Corp
Retirement Income Plan.

      "Pricing Schedule" means the Schedule attached hereto identified as such.

      "Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.

      "Principal Spin-Off Transactions" means, together, (i) Travelers Express
Company, Inc. becoming a wholly-owned Subsidiary of MoneyGram, (ii) the
declaration and distribution by the Borrower of a dividend consisting of all of
the issued and outstanding common stock of MoneyGram, (iii) the receipt by the
Borrower of the MoneyGram Merger Consideration, (iv) the Borrower's use of the
MoneyGram Merger Consideration to pay off or defease existing Indebtedness and
(v) the Borrower and MoneyGram entering into the Separation Agreements all
substantially as described in the Form 10.

      "Proceeds" is defined in the Uniform Commercial Code.

      "Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

      "Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment (or, if the
Aggregate Commitment has expired or been terminated, its Outstanding Credit
Exposure) and the denominator of which is the Aggregate Commitment (or, if the
Aggregate Commitment has expired or been terminated, the Aggregate Outstanding
Credit Exposure).

      "Purchasers" is defined in Section 12.3.1.

      "Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by the
Borrower or any Subsidiary which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.

      "Rate Management Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.

      "Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

      "Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of

                                      -12-

<PAGE>

Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the Federal
Reserve System.

      "Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.20 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.

      "Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.

      "Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code. The transfer of sponsorship to MoneyGram of the Viad Corp
Retirement Income Plan in connection with the Spin-off Transaction shall not be
deemed a Reportable Event for purposes of this Agreement.

      "Reports" is defined in Section 9.6.

      "Required Lenders" means Lenders in the aggregate having at least 51% of
the Aggregate Commitment or, if the Aggregate Commitment has expired or been
terminated, Lenders in the aggregate holding at least 51% of the Aggregate
Outstanding Credit Exposure.

      "Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.

      "Revolving Loan" means, with respect to a Lender, such Lender's loan made
pursuant to its commitment to lend set forth in Section 2.1.

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

      "Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.

      "Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

      "Section" means a numbered section of this Agreement, unless another
document is specifically referenced.

      "Security Agreement" means that certain Pledge and Security Agreement
dated as of the date hereof executed by the Borrower in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as it may be
amended or modified and in effect from time to time.

      "Separation Agreements" means (i) the Separation and Distribution
Agreement, (ii) the Employee Benefits Agreement, (iii) the Tax Sharing
Agreement, and (iv) the Interim Services Agreement, in each

                                      -13-

<PAGE>

case, entered into between the Borrower and MoneyGram in connection with the
Spin-Off Transaction as described in the Form 10, in form and substance
reasonably acceptable to the Administrative Agent and Syndication Agent.

      "Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group other than the Viad Corp Retirement Income Plan.

      "Spin-Off Documents" means the operative documents pursuant to which the
Principal Spin-Off Transactions are effected.

      "Spin-Off Transaction" means the tax-free spin-off transaction pursuant to
which the Borrower declares and distributes a dividend constituting all of the
issued and outstanding common stock of MoneyGram on such date substantially as
described in the Form 10.

      "Subordinated Debt" means the Borrower's 10-1/2% Subordinated Debentures.

      "Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.

      "Subsidiary Security Agreement" means that certain Subsidiary Pledge and
Security Agreement dated the date hereof executed by each Material Domestic
Subsidiary in favor of the Administrative Agent, for the ratable benefit of the
Lenders, as it may be amended or modified and in effect from time to time.

      "Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries or property which is
responsible for more than 10% of the consolidated net sales or of the
consolidated net income of the Borrower and its Subsidiaries, in each case, as
would be shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made (or if financial statements have not
been delivered hereunder for that month which begins the twelve-month period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that month).

      "Swing Line Borrowing Notice" is defined in Section 2.5.2.

      "Swing Line Lender" means Bank One or such other Lender which may succeed
to its rights and obligations as Swing Line Lender pursuant to the terms of this
Agreement.

      "Swing Line Loan" means a Loan made available to the Borrower by the Swing
Line Lender pursuant to Section 2.5.

      "Syndication Agent" means Wachovia Bank, National Association, in its
capacity as Syndication Agent, and not in its individual capacity as Lender, and
any successor.

                                      -14-

<PAGE>

      "Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.

      "Transferee" is defined in Section 12.4.

      "Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance and with respect to any Loan, its nature as a
Floating Rate Loan or a Eurodollar Loan.

      "Unfunded Liabilities" means the amount (if any) of the excess of the
current liability (as defined by Section 412(1)(7) of the Code) over the fair
value of assets according to the most recent actuarial valuation within the last
twelve (12) months for all Single Employer Plans.

      "Uniform Commercial Code" means the Uniform Commercial Code as in effect
on the date hereof and from time to time in the State of New York; provided that
if by reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interests in any Collateral or the
availability of any remedy hereunder is governed by the Uniform Commercial Code
as in effect on or after the date hereof in any other jurisdiction, "Uniform
Commercial Code" means the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection or availability of such remedy.

      "Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.

      "Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.

      The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.

                                      -15-

<PAGE>

                                   ARTICLE II

                                   THE CREDITS

      2.1. Commitment. From and including the Effective Date and prior to the
Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to (i) make Revolving Loans to the
Borrower and (ii) participate in Facility LCs issued upon the request of the
Borrower, provided that, after giving effect to the making of each such
Revolving Loan and the issuance of each such Facility LC, such Lender's
Outstanding Credit Exposure shall not exceed in the aggregate at any one time
the amount of its Commitment. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow at any time prior to the Facility
Termination Date. The Commitments to extend credit hereunder shall expire on the
Facility Termination Date. The LC Issuer will issue Facility LCs hereunder on
the terms and conditions set forth in Section 2.20.

      2.2. Required Payments; Termination. Any outstanding Advances and all
other unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date.

      2.3. Ratable Loans. Each Advance hereunder (other than any Swing Line
Loan) shall consist of Revolving Loans made from the several Lenders ratably
according to their Pro Rata Shares.

      2.4. Types of Advances. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.9 and 2.10, or Swing Line Loans selected by the
Borrower in accordance with Section 2.5.

      2.5. Swing Line Loans.

            2.5.1 Amount of Swing Line Loans. Upon the satisfaction of the
            conditions precedent set forth in Section 4.2 and, if such Swing
            Line Loan is to be made on the date of the initial Advance
            hereunder, the satisfaction of the conditions precedent set forth in
            Section 4.1 as well, from and including the Effective Date and prior
            to the Facility Termination Date, the Swing Line Lender may, in its
            sole discretion, on the terms and conditions set forth in this
            Agreement, make Swing Line Loans to the Borrower from time to time
            in an aggregate outstanding principal amount not to exceed
            $15,000,000 provided that the Aggregate Outstanding Credit Exposure
            shall not at any time exceed the Aggregate Commitment, and provided
            further that at no time shall the sum of (i) the Swing Line Lender's
            Pro Rata Share of the Swing Line Loans, plus (ii) the outstanding
            Revolving Loans made by the Swing Line Lender exceed the Swing Line
            Lender's Commitment at such time. Subject to the terms of this
            Agreement, the Borrower may borrow, repay and reborrow Swing Line
            Loans at any time prior to the Facility Termination Date.

            2.5.2 Borrowing Notice. The Borrower shall deliver to the
            Administrative Agent and the Swing Line Lender irrevocable notice (a
            "Swing Line Borrowing Notice") not later than 11:00 a.m. (Chicago
            time) on the Borrowing Date of each Swing Line Loan, specifying (i)
            the applicable Borrowing Date (which date shall be a Business Day),
            and (ii) the aggregate amount of the requested Swing Line Loan which
            shall be an amount not less than $500,000. The Swing Line Loans
            shall bear interest at the Floating Rate.

            2.5.3 Making of Swing Line Loans. Promptly after receipt of a Swing
            Line Borrowing Notice, the Administrative Agent shall notify each
            Lender by fax, or other similar form of

                                      -16-

<PAGE>

            transmission, of the requested Swing Line Loan. If the Swing Line
            Lender elects to make the requested Swing Line Loan, then not later
            than 1:00 p.m. (Chicago time) on the applicable Borrowing Date, the
            Swing Line Lender shall make available the Swing Line Loan, in funds
            immediately available in Chicago, to the Administrative Agent at its
            address specified pursuant to Article XIII. The Administrative Agent
            will promptly make the funds so received from the Swing Line Lender
            available to the Borrower on the Borrowing Date at the
            Administrative Agent's aforesaid address.

            2.5.4 Repayment of Swing Line Loans. Each Swing Line Loan shall be
            paid in full by the Borrower on or before the fifth (5th) Business
            Day after the Borrowing Date for such Swing Line Loan. In addition,
            the Swing Line Lender (i) may at any time in its sole discretion
            with respect to any outstanding Swing Line Loan, or (ii) shall on
            the fifth (5th) Business Day after the Borrowing Date of any Swing
            Line Loan, require each Lender (including the Swing Line Lender) to
            make a Revolving Loan in the amount of such Lender's Pro Rata Share
            of such Swing Line Loan (including, without limitation, any interest
            accrued and unpaid thereon), for the purpose of repaying such Swing
            Line Loan. Not later than noon (Chicago time) on the date of any
            notice received pursuant to this Section 2.5.4, each Lender shall
            make available its required Revolving Loan, in funds immediately
            available in Chicago to the Administrative Agent at its address
            specified pursuant to Article XIII. Revolving Loans made pursuant to
            this Section 2.5.4 shall initially be Floating Rate Loans and
            thereafter may be continued as Floating Rate Loans or converted into
            Eurodollar Loans in the manner provided in Section 2.10 and subject
            to the other conditions and limitations set forth in this Article
            II. Unless a Lender shall have notified the Swing Line Lender, prior
            to its making any Swing Line Loan, that any applicable condition
            precedent set forth in Sections 4.1 or 4.2 had not then been
            satisfied, such Lender's obligation to make Revolving Loans pursuant
            to this Section 2.5.4 to repay Swing Line Loans shall be
            unconditional, continuing, irrevocable and absolute and shall not be
            affected by any circumstances, including, without limitation, (a)
            any set-off, counterclaim, recoupment, defense or other right which
            such Lender may have against the Administrative Agent, the Swing
            Line Lender or any other Person, (b) the occurrence or continuance
            of a Default or Unmatured Default, (c) any adverse change in the
            condition (financial or otherwise) of the Borrower, or (d) any other
            circumstances, happening or event whatsoever. In the event that any
            Lender fails to make payment to the Administrative Agent of any
            amount due under this Section 2.5.4, the Administrative Agent shall
            be entitled to receive, retain and apply against such obligation the
            principal and interest otherwise payable to such Lender hereunder
            until the Administrative Agent receives such payment from such
            Lender or such obligation is otherwise fully satisfied. In addition
            to the foregoing, if for any reason any Lender fails to make payment
            to the Administrative Agent of any amount due under this Section
            2.5.4, such Lender shall be deemed, at the option of the
            Administrative Agent, to have unconditionally and irrevocably
            purchased from the Swing Line Lender, without recourse or warranty,
            an undivided interest and participation in the applicable Swing Line
            Loan in the amount of such Revolving Loan, and such interest and
            participation may be recovered from such Lender together with
            interest thereon at the Federal Funds Effective Rate for each day
            during the period commencing on the date of demand and ending on the
            date such amount is received. On the Facility Termination Date, the
            Borrower shall repay in full the outstanding principal balance of
            the Swing Line Loans.

      2.6. Commitment Fee; Reductions and Increases in Aggregate Commitment.

                                      -17-

<PAGE>

            2.6.1 The Borrower agrees to pay to the Administrative Agent for the
            account of each Lender according to its Pro Rata Share a commitment
            fee at a per annum rate equal to the Applicable Fee Rate on the
            daily unused portion of such Lender's Commitment (regardless of
            whether any condition set forth in Article II is then satisfied)
            from the date hereof to and including the Facility Termination Date,
            payable on each Payment Date hereafter and on the Facility
            Termination Date. Swing Line Loans shall not count as usage of any
            Lender's Commitment for the purposes of calculating the commitment
            fee due hereunder.

            2.6.2 The Borrower may permanently reduce the Aggregate Commitment
            in whole, or in part ratably among the Lenders in a minimum
            aggregate amount of $10,000,000 or any integral multiple of
            $1,000,000 in excess thereof, upon at least three Business Days'
            written notice to the Administrative Agent, which notice shall
            specify the amount of any such reduction, provided, however, that
            the amount of the Aggregate Commitment may not be reduced below the
            Aggregate Outstanding Credit Exposure. All accrued commitment fees
            shall be payable on the effective date of any termination of the
            obligations of the Lenders to make Credit Extensions hereunder.

      2.7. Minimum Amount of Each Advance. Each Eurodollar Advance (other than
an Advance to repay Swing Line Loans) shall be in the minimum amount of
$5,000,000 (and in multiples of $1,000,000 if in excess thereof), and each
Floating Rate Advance shall be in the minimum amount of $5,000,000 (and in
multiples of $1,000,000 if in excess thereof), provided, however, that any
Floating Rate Advance may be in the amount of the unused Aggregate Commitment.

      2.8. Optional Principal Payments. The Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances (other than
Swing Line Loans), or, in a minimum aggregate amount of $1,000,000 or any
integral multiple of $1,000,000 in excess thereof, any portion of the
outstanding Floating Rate Advances (other than Swing Line Loans) upon one
Business Days' prior notice to the Administrative Agent. The Borrower may at any
time pay, without penalty or premium, all outstanding Swing Line Loans, or, in a
minimum amount of $500,000 and increments of $100,000 in excess thereof, any
portion of the outstanding Swing Line Loans, with notice to the Administrative
Agent and the Swing Line Lender by 11:00 a.m. (Chicago time) on the date of
repayment. The Borrower may from time to time pay, subject to the payment of any
funding indemnification amounts required by Section 3.4 but without penalty or
premium, all outstanding Eurodollar Advances, or, in a minimum aggregate amount
of $5,000,000 or any integral multiple of $1,000,000 in excess thereof, any
portion of the outstanding Eurodollar Advances upon three Business Days' prior
notice to the Administrative Agent.

      2.9. Method of Selecting Types and Interest Periods for New Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance, the Interest Period applicable thereto from time to time. The Borrower
shall give the Administrative Agent irrevocable notice (a "Borrowing Notice")
not later than 1:00 p.m. (Chicago time) at least one Business Day before the
Borrowing Date of each Floating Rate Advance (other than a Swing Line Loan) and
three Business Days before the Borrowing Date for each Eurodollar Advance,
specifying:

      (i)   the Borrowing Date, which shall be a Business Day, of such Advance,

      (ii)  the aggregate amount of such Advance,

      (iii) the Type of Advance selected, and

                                      -18-

<PAGE>

      (iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.

Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Revolving Loan or Revolving Loans in funds immediately
available in Chicago to the Administrative Agent at its address specified
pursuant to Article XIII. The Administrative Agent will make the funds so
received from the Lenders available to the Borrower at the Administrative
Agent's aforesaid address.

      2.10. Conversion and Continuation of Outstanding Advances. Floating Rate
Advances (other than Swing Line Loans) shall continue as Floating Rate Advances
unless and until such Floating Rate Advances are converted into Eurodollar
Advances pursuant to this Section 2.10 or are repaid in accordance with Section
2.8. Each Eurodollar Advance shall continue as a Eurodollar Advance until the
end of the then applicable Interest Period therefor, at which time such
Eurodollar Advance shall be automatically converted into a Floating Rate Advance
unless (x) such Eurodollar Advance is or was repaid in accordance with Section
2.8 or (y) the Borrower shall have given the Administrative Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance
for the same or another Interest Period. Subject to the terms of Section 2.7,
the Borrower may elect from time to time to convert all or any part of a
Floating Rate Advance (other than Swing Line Loans) into a Eurodollar Advance.
The Borrower shall give the Administrative Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
10:00 a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:

      (i)   the requested date, which shall be a Business Day, of such
            conversion or continuation,

      (ii)  the aggregate amount and Type of the Advance which is to be
            converted or continued, and

      (iii) the amount of such Advance which is to be converted into or
            continued as a Eurodollar Advance and the duration of the Interest
            Period applicable thereto.

      2.11. Changes in Interest Rate, etc. Each Floating Rate Advance (other
than Swing Line Loans) shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is made or is
automatically converted from a Eurodollar Advance into a Floating Rate Advance
pursuant to Section 2.10, to but excluding the date it is paid or is converted
into a Eurodollar Advance pursuant to Section 2.10 hereof, at a rate per annum
equal to the Floating Rate for such day. Each Swing Line Loan shall bear
interest on the outstanding principal amount thereof, for each day from and
including the day such Swing Line Loan is made to but excluding the date it is
paid hereof, at a rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Administrative Agent as
applicable to such Eurodollar Advance based upon the Borrower's selections under
Sections 2.9 and 2.10 and otherwise in accordance with the terms hereof. No
Interest Period may end after the Facility Termination Date.

      2.12. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8, 2.9, 2.10 or 2.11, during the continuance of
a Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the

                                      -19-

<PAGE>

Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default, unless waived by the Required Lenders, (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum, (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum
and (iii) the LC Fee shall be increased by 2% per annum, without any election or
action on the part of the Administrative Agent or any Lender.

      2.13. Method of Payment. All payments of the Obligations hereunder shall
be made, without setoff, deduction, or counterclaim, in immediately available
funds to the Administrative Agent at the Administrative Agent's address
specified pursuant to Article XIII, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative Agent to the
Borrower, by noon (local time) on the date when due and shall (except with
respect to repayments of Swing Line Loans and except in the case of
Reimbursement Obligations for which the LC Issuer has not been fully indemnified
by the Lenders, or as otherwise specifically required hereunder) be applied
ratably by the Administrative Agent among the Lenders. Each payment delivered to
the Administrative Agent for the account of any Lender shall be delivered
promptly by the Administrative Agent to such Lender in the same type of funds
that the Administrative Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a notice received by
the Administrative Agent from such Lender. The Administrative Agent is hereby
authorized to charge the account of the Borrower maintained with Bank One for
each payment of principal, interest and fees as it becomes due hereunder. Each
reference to the Administrative Agent in this Section 2.13 shall also be deemed
to refer, and shall apply equally, to the LC Issuer, in the case of payments
required to be made by the Borrower to the LC Issuer pursuant to Section 2.20.6.

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

      (ii) The Administrative Agent shall also maintain accounts in which it
will record (a) the amount of each Loan made hereunder, the Type thereof and the
Interest Period with respect thereto, (b) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (c) the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.

      (iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Obligations in accordance with their terms.

      (iv) Any Lender may request that its Loans be evidenced by a promissory
note or, in the case of the Swing Line Lender, promissory notes representing its
Revolving Loans and Swing Line Loans, respectively (each in the form of Exhibit
A (a "Note")). In such event, the Borrower shall prepare, execute and deliver to
such Lender such Note payable to the order of such Lender. Thereafter, the Loans
evidenced by such Note and interest thereon shall at all times (prior to any
assignment pursuant to Section 12.3) be represented by one or more Notes payable
to the order of the payee named therein, except to the

                                      -20-

<PAGE>

extent that any such Lender subsequently returns any such Note for cancellation
and requests that such Loans once again be evidenced as described in paragraphs
(i) and (ii) above.

      2.15. Telephonic Notices. The Borrower hereby authorizes the Lenders and
the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Administrative Agent or any Lender in
good faith believes to be acting on behalf of the Borrower, it being understood
that the foregoing authorization is specifically intended to allow Borrowing
Notices and Conversion/Continuation Notices to be given telephonically. The
Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation, if such confirmation is requested by the Administrative Agent or
any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Administrative Agent and the Lenders, the records of the Administrative
Agent and the Lenders shall govern absent manifest error.

      2.16. Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the Effective Date, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion. Interest
accrued on each Eurodollar Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest on Eurodollar Advances, commitment fees and LC Fees
shall be calculated for actual days elapsed on the basis of a 360-day year.
Interest on Floating Rate Advances shall be calculated for actual days elapsed
on the basis of a 365-day year. Interest shall be payable for the day an Advance
is made but not for the day of any payment on the amount paid if payment is
received prior to noon (local time) at the place of payment. If any payment of
principal of or interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.

      2.17. Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Administrative Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Swing Line Borrowing Notice, Conversion/Continuation Notice,
and repayment notice received by it hereunder. Promptly after notice from the LC
Issuer, the Administrative Agent will notify each Lender of the contents of each
request for issuance of a Facility LC hereunder. The Administrative Agent will
notify each Lender of the interest rate applicable to each Eurodollar Advance
promptly upon determination of such interest rate and will give each Lender
prompt notice of each change in the Alternate Base Rate.

      2.18. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, LCs, participations in LC Obligations and any Notes issued hereunder
shall be deemed held by each Lender or the LC Issuer, as the case may be, for
the benefit of any such Lending Installation. Each Lender and the LC Issuer may,
by written notice to the Administrative Agent and the Borrower in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made

                                      -21-

<PAGE>

by it or Facility LCs will be issued by it and for whose account Loan payments
or payments with respect to Facility LCs are to be made.

      2.19. Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Administrative Agent until the date the Administrative Agent recovers
such amount at a rate per annum equal to (x) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.

      2.20. Facility LCs.

            2.20.1 Issuance. The LC Issuer hereby agrees, on the terms and
            conditions set forth in this Agreement, to issue standby letters of
            credit denominated in Dollars (each, a "Facility LC") and to renew,
            extend, increase, decrease or otherwise modify each Facility LC
            ("Modify," and each such action a "Modification"), from time to time
            from and including the Effective Date and prior to the Facility
            Termination Date upon the request of and for the account of the
            Borrower; provided that immediately after each such Facility LC is
            issued or Modified, (i) the aggregate amount of the outstanding LC
            Obligations shall not exceed $75,000,000 and (ii) the Aggregate
            Outstanding Credit Exposure shall not exceed the Aggregate
            Commitment. No Facility LC shall have an expiry date later than the
            earlier of (x) the fifth Business Day prior to the Facility
            Termination Date and (y) one year after its issuance; provided that
            any Facility LC with a one-year period may provide for the renewal
            thereof for additional one-year periods but in no event shall the
            expiry date of such Facility LCs extend beyond the period in clause
            (x) hereof. Notwithstanding the foregoing, on the initial Borrowing
            Date each Existing Letter of Credit shall be deemed to have been
            issued by the applicable issuer thereof as a Facility LC hereunder
            and each such Existing Letter of Credit shall thereafter be deemed
            to be a Facility LC for all purposes of this Agreement.

            2.20.2 Participations. Upon the issuance, deemed issuance or
            Modification by the LC Issuer of a Facility LC in accordance with
            this Section 2.20, the LC Issuer shall be deemed, without further
            action by any party hereto, to have unconditionally and irrevocably
            sold to each Lender, and each Lender shall be deemed, without
            further action by any party hereto, to have unconditionally and
            irrevocably purchased from the LC Issuer, a participation in such
            Facility LC (and each Modification thereof) and the related LC
            Obligations in proportion to its Pro Rata Share.

            2.20.3 Notice. Subject to Section 2.20.1, the Borrower shall give
            the LC Issuer notice prior to 10:00 a.m. (Chicago time) at least
            three Business Days prior to the proposed

                                      -22-

<PAGE>

            date of issuance or Modification of each Facility LC, specifying the
            beneficiary, the proposed date of issuance (or Modification) and the
            expiry date of such Facility LC, and describing the proposed terms
            of such Facility LC and the nature of the transactions proposed to
            be supported thereby. Upon receipt of such notice, the LC Issuer
            shall promptly notify the Administrative Agent, and the
            Administrative Agent shall promptly notify each Lender, of the
            contents thereof and of the amount of such Lender's participation in
            such proposed Facility LC. The issuance or Modification by the LC
            Issuer of any Facility LC shall, in addition to the conditions
            precedent set forth in Article IV (the satisfaction of which the LC
            Issuer shall have no duty to ascertain), be subject to the
            conditions precedent that such Facility LC shall be satisfactory to
            the LC Issuer and that the Borrower shall have executed and
            delivered such application agreement and/or such other instruments
            and agreements relating to such Facility LC as the LC Issuer shall
            have reasonably requested (each, a "Facility LC Application"). In
            the event of any conflict between the terms of this Agreement and
            the terms of any Facility LC Application, the terms of this
            Agreement shall control.

            2.20.4 Fees. The Borrower shall pay to the Administrative Agent, for
            the account of the Lenders ratably in accordance with their
            respective Pro Rata Shares, with respect to each Facility LC, a
            letter of credit fee at a per annum rate equal to the Applicable Fee
            Rate on the stated amount under such Facility LC, such fee to be
            payable in arrears on each Payment Date (the "LC Fee"). The Borrower
            shall also pay to the LC Issuer for its own account (i) a fronting
            fee at a rate to be agreed upon between the LC Issuer and the
            Borrower (such fee to be payable in arrears on each Payment Date),
            and (ii) documentary and processing charges in connection with the
            issuance or Modification of and draws under Facility LCs in
            accordance with the LC Issuer's standard schedule for such charges
            as in effect from time to time.

            2.20.5 Administration; Reimbursement by Lenders. Upon receipt from
            the beneficiary of any Facility LC of any demand for payment under
            such Facility LC, the LC Issuer shall notify the Administrative
            Agent and the Administrative Agent shall promptly notify the
            Borrower and each other Lender as to the amount to be paid by the LC
            Issuer as a result of such demand and the proposed payment date (the
            "LC Payment Date"). The responsibility of the LC Issuer to the
            Borrower and each Lender shall be only to determine that the
            documents (including each demand for payment) delivered under each
            Facility LC in connection with such presentment shall be in
            conformity in all material respects with such Facility LC. The LC
            Issuer shall endeavor to exercise the same care in the issuance and
            administration of the Facility LCs as it does with respect to
            letters of credit in which no participations are granted, it being
            understood that in the absence of any gross negligence or willful
            misconduct by the LC Issuer, each Lender shall be unconditionally
            and irrevocably liable without regard to the occurrence of any
            Default or any condition precedent whatsoever, to reimburse the LC
            Issuer on demand for (i) such Lender's Pro Rata Share of the amount
            of each payment made by the LC Issuer under each Facility LC to the
            extent such amount is not reimbursed by the Borrower pursuant to
            Section 2.20.6 below, plus (ii) interest on the foregoing amount to
            be reimbursed by such Lender, for each day from the date of the LC
            Issuer's demand for such reimbursement (or, if such demand is made
            after 11:00 a.m. (Chicago time) on such date, from the next
            succeeding Business Day) to the date on which such Lender pays the
            amount to be reimbursed by it, at a rate of interest per annum equal
            to the Federal Funds Effective Rate for the first three days and,
            thereafter, at a rate of interest equal to the rate applicable to
            Floating Rate Advances.

                                      -23-

<PAGE>

            2.20.6 Reimbursement by Borrower. The Borrower shall be irrevocably
            and unconditionally obligated to reimburse the LC Issuer on or
            before the applicable LC Payment Date for any amounts to be paid by
            the LC Issuer upon any drawing under any Facility LC, without
            presentment, demand, protest or other formalities of any kind;
            provided that neither the Borrower nor any Lender shall hereby be
            precluded from asserting any claim for direct (but not
            consequential) damages suffered by the Borrower or such Lender to
            the extent, but only to the extent, caused by (i) the willful
            misconduct or gross negligence of the LC Issuer in determining
            whether a request presented under any Facility LC issued by it
            complied with the terms of such Facility LC or (ii) the LC Issuer's
            failure to pay under any Facility LC issued by it after the
            presentation to it of a request strictly complying with the terms
            and conditions of such Facility LC. All such amounts paid by the LC
            Issuer and remaining unpaid by the Borrower shall bear interest,
            payable on demand, for each day until paid at a rate per annum equal
            to (x) the rate applicable to Floating Rate Advances for such day if
            such day falls on or before the applicable LC Payment Date and (y)
            the sum of 2% plus the rate applicable to Floating Rate Advances for
            such day if such day falls after such LC Payment Date. The LC Issuer
            will pay to each Lender ratably in accordance with its Pro Rata
            Share all amounts received by it from the Borrower for application
            in payment, in whole or in part, of the Reimbursement Obligation in
            respect of any Facility LC issued by the LC Issuer, but only to the
            extent such Lender has made payment to the LC Issuer in respect of
            such Facility LC pursuant to Section 2.20.5. Subject to the terms
            and conditions of this Agreement (including without limitation the
            submission of a Borrowing Notice in compliance with Section 2.9 and
            the satisfaction of the applicable conditions precedent set forth in
            Article IV), the Borrower may request an Advance hereunder for the
            purpose of satisfying any Reimbursement Obligation.

            2.20.7 Obligations Absolute. The Borrower's obligations under this
            Section 2.20 shall be absolute and unconditional under any and all
            circumstances and irrespective of any setoff, counterclaim or
            defense to payment which the Borrower may have or have had against
            the LC Issuer, any Lender or any beneficiary of a Facility LC. The
            Borrower further agrees with the LC Issuer and the Lenders that the
            LC Issuer and the Lenders shall not be responsible for, and the
            Borrower's Reimbursement Obligation in respect of any Facility LC
            shall not be affected by, among other things, the validity or
            genuineness of documents or of any endorsements thereon, even if
            such documents should in fact prove to be in any or all respects
            invalid, fraudulent or forged, or any dispute between or among the
            Borrower, any of its Affiliates, the beneficiary of any Facility LC
            or any financing institution or other party to whom any Facility LC
            may be transferred or any claims or defenses whatsoever of the
            Borrower or of any of its Affiliates against the beneficiary of any
            Facility LC or any such transferee. The LC Issuer shall not be
            liable for any error, omission, interruption or delay in
            transmission, dispatch or delivery of any message or advice, however
            transmitted, in connection with any Facility LC. The Borrower agrees
            that any action taken or omitted by the LC Issuer or any Lender
            under or in connection with each Facility LC and the related drafts
            and documents, if done without gross negligence or willful
            misconduct, shall be binding upon the Borrower and shall not put the
            LC Issuer or any Lender under any liability to the Borrower. Nothing
            in this Section 2.20.7 is intended to limit the right of the
            Borrower to make a claim against the LC Issuer for damages as
            contemplated by the proviso to the first sentence of Section 2.20.6.

            2.20.8 Actions of LC Issuer. The LC Issuer shall be entitled to
            rely, and shall be fully protected in relying, upon any Facility LC,
            draft, writing, resolution, notice, consent, certificate, affidavit,
            letter, cablegram, telegram, telecopy, telex or teletype message,

                                      -24-

<PAGE>

            statement, order or other document believed by it to be genuine and
            correct and to have been signed, sent or made by the proper Person
            or Persons, and upon advice and statements of legal counsel,
            independent accountants and other experts selected by the LC Issuer.
            The LC Issuer shall be fully justified in failing or refusing to
            take any action under this Agreement unless it shall first have
            received such advice or concurrence of the Required Lenders as it
            reasonably deems appropriate or it shall first be indemnified to its
            reasonable satisfaction by the Lenders against any and all liability
            and expense which may be incurred by it by reason of taking or
            continuing to take any such action. Notwithstanding any other
            provision of this Section 2.20, the LC Issuer shall in all cases be
            fully protected in acting, or in refraining from acting, under this
            Agreement in accordance with a request of the Required Lenders, and
            such request and any action taken or failure to act pursuant thereto
            shall be binding upon the Lenders and any future holders of a
            participation in any Facility LC.

            2.20.9 Indemnification. The Borrower hereby agrees to indemnify and
            hold harmless each Lender, the LC Issuer and the Administrative
            Agent, and their respective directors, officers, Administrative
            Agents and employees from and against any and all claims and
            damages, losses, liabilities, costs or expenses which such Lender,
            the LC Issuer or the Administrative Agent may incur (or which may be
            claimed against such Lender, the LC Issuer or the Administrative
            Agent by any Person whatsoever) by reason of or in connection with
            the issuance, execution and delivery or transfer of or payment or
            failure to pay under any Facility LC or any actual or proposed use
            of any Facility LC, including, without limitation, any claims,
            damages, losses, liabilities, costs or expenses which the LC Issuer
            may incur by reason of or in connection with (i) the failure of any
            other Lender to fulfill or comply with its obligations to the LC
            Issuer hereunder (but nothing herein contained shall affect any
            rights the Borrower may have against any defaulting Lender) or (ii)
            by reason of or on account of the LC Issuer issuing any Facility LC
            which specifies that the term "Beneficiary" included therein
            includes any successor by operation of law of the named Beneficiary,
            but which Facility LC does not require that any drawing by any such
            successor Beneficiary be accompanied by a copy of a legal document,
            satisfactory to the LC Issuer, evidencing the appointment of such
            successor Beneficiary; provided that the Borrower shall not be
            required to indemnify any Lender, the LC Issuer or the
            Administrative Agent for any claims, damages, losses, liabilities,
            costs or expenses to the extent, but only to the extent, caused by
            (x) the willful misconduct or gross negligence of the LC Issuer in
            determining whether a request presented under any Facility LC
            complied with the terms of such Facility LC or (y) the LC Issuer's
            failure to pay under any Facility LC after the presentation to it of
            a request strictly complying with the terms and conditions of such
            Facility LC. Nothing in this Section 2.20.9 is intended to limit the
            obligations of the Borrower under any other provision of this
            Agreement.

            2.20.10 Lenders' Indemnification. Each Lender shall, ratably in
            accordance with its Pro Rata Share, indemnify the LC Issuer, its
            affiliates and their respective directors, officers, Administrative
            Agents and employees (to the extent not reimbursed by the Borrower)
            against any cost, expense (including reasonable counsel fees and
            disbursements), claim, demand, action, loss or liability (except
            such as result from such indemnitees' gross negligence or willful
            misconduct or the LC Issuer's failure to pay under any Facility LC
            after the presentation to it of a request strictly complying with
            the terms and conditions of the Facility LC) that such indemnitees
            may suffer or incur in connection with this Section 2.20 or any
            action taken or omitted by such indemnitees hereunder.

                                      -25-

<PAGE>

            2.20.11 Facility LC Collateral Account. The Borrower agrees that it
            will, upon the request of the Administrative Agent or the Required
            Lenders and until the final expiration date of any Facility LC and
            thereafter as long as any amount is payable to the LC Issuer or the
            Lenders in respect of any Facility LC, maintain a special collateral
            account pursuant to arrangements satisfactory to the Administrative
            Agent (the "Facility LC Collateral Account") at the Administrative
            Agent's office at the address specified pursuant to Article XIII, in
            the name of such Borrower but under the sole dominion and control of
            the Administrative Agent, for the benefit of the Lenders and in
            which such Borrower shall have no interest other than as set forth
            in Section 8.1. The Borrower hereby pledges, assigns and grants to
            the Administrative Agent, on behalf of and for the ratable benefit
            of the Lenders and the LC Issuer, a security interest in all of the
            Borrower's right, title and interest in and to all funds which may
            from time to time be on deposit in the Facility LC Collateral
            Account to secure the prompt and complete payment and performance of
            the Obligations. The Administrative Agent will invest any funds on
            deposit from time to time in the Facility LC Collateral Account in
            certificates of deposit of Bank One having a maturity not exceeding
            30 days. Nothing in this Section 2.20.11 shall require the Borrower
            to deposit any funds in the Facility LC Collateral Account, obligate
            the Administrative Agent to require the Borrower to deposit any
            funds in the Facility LC Collateral Account or limit the right of
            the Administrative Agent to release any funds held in the Facility
            LC Collateral Account in each case other than as required by Section
            8.1.

            2.20.12 Rights as a Lender. In its capacity as a Lender, the LC
            Issuer shall have the same rights and obligations as any other
            Lender.

      2.21. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to replace such
Affected Lender as a Lender party to this Agreement, provided that no Default or
Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided further that, concurrently with such replacement, (i)
another bank or other entity which is reasonably satisfactory to the Borrower
and the Administrative Agent shall agree, as of such date, to purchase for cash
the Advances and other Obligations due to the Affected Lender pursuant to an
assignment substantially in the form of Exhibit D and to become a Lender for all
purposes under this Agreement and to assume all obligations of the Affected
Lender to be terminated as of such date and to comply with the requirements of
Section 12.3 applicable to assignments, and (ii) the Borrower shall pay to such
Affected Lender in same day funds on the day of such replacement (A) all
interest, fees and other amounts then accrued but unpaid to such Affected Lender
by the Borrower hereunder to and including the date of termination, including
without limitation payments due to such Affected Lender under Sections 3.1, 3.2
and 3.5, and (B) an amount, if any, equal to the payment which would have been
due to such Lender on the day of such replacement under Section 3.4 had the
Loans of such Affected Lender been prepaid on such date rather than sold to the
replacement Lender.

                                   ARTICLE III

                             YIELD PROTECTION; TAXES

                                      -26-

<PAGE>

      3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:

      (i)   subjects any Lender or any applicable Lending Installation or the LC
            Issuer to any Taxes, or changes the basis of taxation of payments
            (other than with respect to Excluded Taxes) to any Lender or the LC
            Issuer in respect of its Eurodollar Loans, Facility LCs or
            participations therein, or

      (ii)  imposes or increases or deems applicable any reserve, assessment,
            insurance charge, special deposit or similar requirement against
            assets of, deposits with or for the account of, or credit extended
            by, any Lender or any applicable Lending Installation (other than
            reserves and assessments taken into account in determining the
            interest rate applicable to Eurodollar Advances), or

      (iii) imposes any other condition the result of which is to increase the
            cost to any Lender or any applicable Lending Installation or the LC
            Issuer of making, funding or maintaining its Eurodollar Loans, or of
            issuing or participating in Facility LCs, or reduces any amount
            receivable by any Lender or any applicable Lending Installation or
            the LC Issuer in connection with its Eurodollar Loans, Facility LCs
            or participations therein, or requires any Lender or any applicable
            Lending Installation or the LC Issuer to make any payment calculated
            by reference to the amount of Eurodollar Loans, Facility LCs or
            participations therein held or interest or LC Fees received by it,
            by an amount deemed material by such Lender, applicable Lending
            Installation or the LC Issuer as the case may be,

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Commitment, Facility LCs or participations therein, then,
within 15 days of demand by such Lender or the LC Issuer, as the case may be,
the Borrower shall pay such Lender or the LC Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the LC Issuer, as
the case may be, for such increased cost or reduction in amount received.

      3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC Issuer
reasonably determines the amount of capital required or expected to be
maintained by such Lender or the LC Issuer, any Lending Installation of such
Lender or the LC Issuer, or any corporation controlling such Lender or the LC
Issuer is increased as a result of a Change, then, within 15 days of demand by
such Lender or the LC Issuer, the Borrower shall pay such Lender or the LC
Issuer the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender reasonably
determines is attributable to this Agreement, its Outstanding Credit Exposure
Loans or its Commitment to make Loans and issue or participate in Facility LCs,
as the case may be, hereunder (after taking into account such Lender's or the LC
Issuer's policies as to capital adequacy). "Change" means (i) any change after
the date of this Agreement in the Risk-Based Capital Guidelines, or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or the LC
Issuer or any Lending

                                      -27-

<PAGE>

Installation or any corporation controlling any Lender or the LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.

      3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Administrative Agent shall suspend the availability of Eurodollar Advances
and require any affected Eurodollar Advances to be repaid or converted to
Floating Rate Advances, subject to the payment of any funding indemnification
amounts required by Section 3.4.

      3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made, continued or converted on the date specified by the
Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance, but excluding any
loss of margin.

      3.5. Taxes. (i) All payments by the Borrower to or for the account of any
Lender, the LC Issuer or the Administrative Agent hereunder or under any Loan
Document shall be made free and clear of and without deduction for any and all
Taxes. If the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender, the LC Issuer or the
Administrative Agent, (a) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.5) such Lender, the LC Issuer or
the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (b) the Borrower
shall make such deductions, (c) the Borrower shall pay the full amount deducted
to the relevant authority in accordance with applicable law and (d) the Borrower
shall furnish to the Administrative Agent the original copy of a receipt
evidencing payment thereof within 30 days after such payment is made.

      (ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
Facility LC Application or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note or Facility LC Application ("Other
Taxes").

      (iii) The Borrower hereby agrees to indemnify the Administrative Agent,
the LC Issuer and each Lender for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed on amounts
payable under this Section 3.5) paid by the Administrative Agent, the LC Issuer
or such Lender as a result of its Commitment, any Loans made by it hereunder, or
otherwise in connection with its participation in this Agreement and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made within 30
days of the date the Administrative Agent, the LC Issuer or such Lender makes
demand therefor pursuant to Section 3.6.

                                      -28-

<PAGE>

      (iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not more than ten Business Days after the date of this Agreement, (i)
deliver to the Administrative Agent two duly completed copies of United States
Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that
such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, and (ii)
deliver to the Administrative Agent a United States Internal Revenue Service
Form W-8 or W-9, as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the Administrative
Agent (x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Administrative Agent. All forms or amendments
described in the preceding sentence shall certify that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form or amendment with respect to it and such Lender
advises the Borrower and the Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax.

      (v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.

      (vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.

      (vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Administrative Agent did not properly withhold
tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or properly completed, because such Lender
failed to notify the Administrative Agent of a change in circumstances which
rendered its exemption from withholding ineffective, or for any other reason),
such Lender shall indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and including taxes
imposed by any jurisdiction on amounts payable to the Administrative Agent under
this subsection, together with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Administrative Agent, which
attorneys may be employees of the Administrative Agent). The obligations of the
Lenders under this Section 3.5(vii) shall survive the payment of the Obligations
and termination of this Agreement.

                                      -29-

<PAGE>

      3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Administrative Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4
or 3.5. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any Lender shall be
payable on demand after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive
payment of the Obligations and termination of this Agreement.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

      4.1. Initial Credit Extension. The Lenders shall not be required to make
the initial Credit Extension hereunder unless (i) the Borrower has furnished to
the Administrative Agent with sufficient copies for the Lenders each of the
following documents and (ii) each of the following events shall have occurred,
as applicable (such date being the "Effective Date"):

      (i)   Copies of the articles or certificate of incorporation of the
            Borrower and each Material Domestic Subsidiary, together with all
            amendments, and a certificate of good standing, each certified by
            the appropriate governmental officer in its jurisdiction of
            incorporation and each other jurisdiction as requested by
            Administrative Agent, as well as any other information required by
            Section 326 of the USA PATRIOT ACT or necessary for the
            Administrative Agent or any Lender to verify the identity of
            Borrower as required by Section 326 of the USA PATRIOT Act.

      (ii)  Copies, certified by the Secretary or Assistant Secretary of the
            Borrower and each Material Domestic Subsidiary, of its by-laws and
            of the resolutions of its Board of Directors or executive committee
            as the case may be and of resolutions or actions of any other body
            authorizing the execution of the Loan Documents to which the
            Borrower and such Material Domestic Subsidiary is a party.

      (iii) An incumbency certificate, executed by the Secretary or Assistant
            Secretary of the Borrower and each Material Domestic Subsidiary,
            which shall identify by name and title and bear the signatures of
            the Authorized Officers and any other officers of the Borrower and
            each Material Domestic Subsidiary authorized to sign the Loan
            Documents to which the Borrower and such Material Domestic
            Subsidiary is a party, upon which certificate the Administrative
            Agent and the Lenders shall be entitled to rely until informed of
            any change in writing by the Borrower.

                                      -30-

<PAGE>

      (iv)  A certificate, signed by the chief financial officer of the
            Borrower, stating that on the initial Borrowing Date no Default or
            Unmatured Default has occurred and is continuing.

      (v)   A written opinion of the Borrower's counsel, addressed to the
            Administrative Agent and the Lenders in form and substance
            reasonably acceptable to the Administrative Agent.

      (vi)  Any Notes requested by a Lender pursuant to Section 2.14 payable to
            the order of each such requesting Lender.

      (vii) Written money transfer instructions, in substantially the form of
            Exhibit C, addressed to the Administrative Agent and signed by an
            Authorized Officer, together with such other related money transfer
            authorizations as the Administrative Agent may have reasonably
            requested.

     (viii) This Agreement duly completed and executed by Borrower.

      (ix)  the Guaranty, the Security Agreement and the Subsidiary Security
            Agreement each in form and substance reasonably acceptable to the
            Administrative Agent and each duly completed and executed by the
            Borrower or the Subsidiaries party thereto, as applicable.

      (x)   The insurance certificate described in Section 5.20 together with
            insurance certificates for all insurance required to be maintained
            pursuant to Section 4.3.2 of the Security Agreement and the
            Subsidiary Security Agreement naming the Administrative Agent, on
            behalf of the Lenders, as loss payee for any casualty policies and
            additional insured for any liability policies, all in form and
            substance reasonably satisfactory to the Administrative Agent.

      (xi)  A solvency certificate with respect to the Borrower and its
            Subsidiaries signed by an Authorized Officer of Borrower in form and
            substance reasonably acceptable to the Administrative Agent.

      (xii) Copies of the Spin-Off Documents.

     (xiii) The Principal Spin-Off Transactions shall have been consummated.

      (xiv) A pay-off letter in form and substance reasonably satisfactory to
            the Administrative Agent with respect to the Existing Credit
            Agreements. The Existing Credit Agreements shall have been
            terminated and all outstanding indebtedness thereunder shall have
            been paid in full.

      (xv)  (a) Such duly completed UCC-1 financing statements as the
            Administrative Agent shall have previously requested to perfect its
            Lien in the Collateral; (b) copies of searches of financing
            statements filed under the Uniform Commercial Code with respect to
            the assets of the Borrower and its Domestic Subsidiaries in such
            jurisdictions as the Administrative Agent may request; and (c) such
            duly executed UCC-3 termination statements and similar documents as
            the Administrative Agent may request with respect to any security
            interests securing the obligations of the Borrower or its
            Subsidiaries under the Existing Credit Agreements.

      (xvi) Such other documents as any Lender or its counsel may have
            reasonably requested.

                                      -31-

<PAGE>

      4.2. Each Credit Extension. The Lenders shall not be required to make any
Credit Extension unless on the applicable Borrowing Date:

      (i)   There exists no Default or Unmatured Default.

      (ii)  The representations and warranties contained in Article V are true
            and correct in all material respects as of such Credit Extension
            Borrowing Date except to the extent any such representation or
            warranty is stated to relate solely to an earlier date, in which
            case such representation or warranty shall have been true and
            correct on and as of such earlier date.

      (iii) All legal matters incident to the making of such Credit Extension
            shall be reasonably satisfactory to the Lenders and their counsel.

      Each Borrowing Notice, Swing Line Borrowing Notice, or request for
issuance of a Facility LC, as the case may be, with respect to each such Credit
Extension shall constitute a representation and warranty by the Borrower that
the conditions contained in Sections 4.2(i) and (ii) have been satisfied. Any
Lender may require a duly completed compliance certificate in substantially the
form of Exhibit B as a condition to making a Credit Extension.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

      The Borrower represents and warrants to the Lenders as of the date hereof
(solely with respect to Sections 5.1 and 5.2), as of the Effective Date and as
of each Credit Extension Date thereafter, that:

      5.1. Existence and Standing. Each of the Borrower and its Subsidiaries is
a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly and properly incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, except where the failure to be
in good standing or qualified to do business could not reasonably be expected to
result in a Material Adverse Effect.

      5.2. Authorization and Validity. Each of the Borrower and its Subsidiaries
has the power and authority and legal right to execute and deliver the Loan
Documents to which it is a party and to perform its obligations thereunder. The
execution and delivery by each of the Borrower and its Subsidiaries of the Loan
Documents to which it is a party and the performance of its obligations
thereunder have been duly authorized by proper corporate proceedings, and the
Loan Documents to which each of the Borrower and its Subsidiaries is a party
constitute legal, valid and binding obligations of each of the Borrower and its
Subsidiaries enforceable against each of the Borrower and its Subsidiaries in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.

      5.3. No Conflict; Government Consent. Neither the execution and delivery
by each of the Borrower and its Subsidiaries of the Loan Documents to which it
is a party, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will (i) violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any of its

                                      -32-

<PAGE>

Subsidiaries or (ii) violate the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating or other
management agreement, as the case may be, (iii) violate the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, except where such
violation, conflict or default could not reasonably be expected to result in a
Default under Section 7.5 or a Material Adverse Effect, or (iv) result in, or
require, the creation or imposition of any Lien in, of or on the Property of the
Borrower or a Subsidiary pursuant to the terms of any material indenture,
instrument or agreement to which the Borrower or any of its Subsidiaries is a
party or is subject, or by which it, or its Property is bound. No order,
consent, adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in
respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Borrower or any of its Subsidiaries,
is required to be obtained by the Borrower or any of its Subsidiaries in
connection with the execution and delivery of the Loan Documents, the borrowings
under this Agreement, the payment and performance by the Borrower of the
Obligations or the legality, validity, binding effect or enforceability of any
of the Loan Documents.

      5.4. Financial Statements. The December 31, 2003 consolidated financial
statements of the Borrower and its Subsidiaries heretofore delivered to the
Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present, in all material respects, the consolidated financial condition and
operations of the Borrower and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.

      5.5. Material Adverse Change. Since December 31, 2003 there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries, taken as a whole,
which could reasonably be expected to have a Material Adverse Effect.

      5.6. Taxes. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided in accordance with GAAP. The United States income tax returns of the
Borrower and its Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended December 31, 1998. No material tax liens have been
filed and no material claims are being asserted with respect to any such taxes.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any taxes or other governmental charges are adequate.

      5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, neither the Borrower nor any of its Subsidiaries has
any material contingent obligations not provided for or disclosed in the
financial statements referred to in Section 5.4.

      5.8. Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the Effective Date, setting forth their
respective jurisdictions of organization and the percentage of their respective
Capital Stock or other ownership interests owned by the Borrower or other
Subsidiaries. All of

                                      -33-

<PAGE>

the issued and outstanding shares of Capital Stock or other ownership interests
of such Subsidiaries have been (to the extent such concepts are relevant with
respect to such ownership interests) duly authorized and issued and are fully
paid and non-assessable.

      5.9. ERISA. From and after the consummation of the Principal Spin-Off
Transactions, the Unfunded Liabilities of all Single Employer Plans do not in
the aggregate exceed $10,000,000. Neither the Borrower, any of its Subsidiaries,
nor any other member of the Controlled Group has incurred, or is reasonably
expected to incur, any withdrawal liability to Multiemployer Plans in excess of
$10,000,000 in the aggregate. Each Plan complies in all material respects with
all applicable requirements of law and regulations, no Reportable Event has
occurred with respect to any Plan which could reasonably be expected to have a
Material Adverse Effect, neither the Borrower, any of its Subsidiaries nor any
other member of the Controlled Group has withdrawn from any Plan or initiated
steps to do so, and no steps have been taken to reorganize or terminate any
Plan.

      5.10. Accuracy of Information. No information, exhibit or report furnished
by the Borrower or any of its Subsidiaries to the Administrative Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein, in
light of the circumstances under which such statements were made, not
misleading; provided, that with respect to projected or pro-forma financial
information, the Borrower represents only that such information was prepared in
good faith based on assumptions believed to be reasonable at the time prepared.

      5.11. Regulation U. Margin stock (as defined in Regulation U) constitutes
less than 25% of the value of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.

      5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect.

      5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property except for any failure
to comply with any of the foregoing which could not reasonably be expected to
have a Material Adverse Effect.

      5.14. Ownership of Properties. Except as set forth on Schedule 5.14, on
the Effective Date, the Borrower and its Subsidiaries will have good title (fee
or leasehold, as applicable), free of all Liens other than those permitted by
Section 6.15, to all of the Property and assets material to its business.

      5.15. Plan Assets; Prohibited Transactions. Neither the Borrower nor any
of its Subsidiaries is an entity deemed to hold "plan assets" within the meaning
of 29 C.F.R. Section 2510.3-101 of an employee benefit plan (as defined in
Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within
the meaning of Section 4975 of the Code), and neither the execution of this
Agreement nor the making of the Loans or Facility LCs hereunder gives rise to a
prohibited transaction within the meaning of Section 406 of ERISA or Section
4975 of the Code.

                                      -34-

<PAGE>

      5.16. Environmental Matters. In the ordinary course of its business, the
officers of the Borrower and its Subsidiaries consider the effect of
Environmental Laws on the business of the Borrower and its Subsidiaries, in the
course of which they identify and evaluate potential risks and liabilities
accruing to the Borrower due to Environmental Laws. On the basis of this
consideration, the Borrower has concluded that Environmental Laws cannot
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any Subsidiary has received any written notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.

      5.17. Investment Company Act. Neither the Borrower nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.

      5.18. Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

      5.19. Subordinated Debt. The Obligations constitute senior indebtedness
which is entitled to the benefits of the subordination provisions of the
Subordinated Debt.

      5.20. Insurance. The certificate signed by the President or Chief
Financial Officer of the Borrower, that attests to the existence and adequacy
of, and summarizes, the property and casualty insurance program carried by the
Borrower with respect to itself and its Domestic Subsidiaries and that has been
furnished by the Borrower to the Administrative Agent and the Lenders, is
complete and accurate in all material respects. This summary includes the
insurer's or insurers' name(s), policy number(s), expiration date(s), amount(s)
of coverage, type(s) of coverage, and deductibles. This summary also includes
similar information, and describes any reserves, relating to any self-insurance
program that is in effect.

      5.21. Solvency. (i) Immediately after the consummation of the Principal
Spin-Off Transactions and immediately following the making of each Credit
Extension, if any, made on the date thereof and after giving effect to the
application of the proceeds of such Credit Extensions, (a) the fair value of the
assets of the Borrower and its Subsidiaries on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, subordinated, contingent or
otherwise, of the Borrower and its Subsidiaries on a consolidated basis; (b) the
present fair saleable value of the Property of the Borrower and its Subsidiaries
on a consolidated basis will be greater than the amount that will be required to
pay the probable liability of the Borrower and its Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) the Borrower and its Subsidiaries on a consolidated basis will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (d) the Borrower
and its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the
Effective Date.

      (ii) The Borrower does not intend to, or to permit any of its Subsidiaries
to, and does not believe that it or any of its Subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it or any such Subsidiary

                                      -35-

<PAGE>

and the timing of the amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.

      5.22. Collateral Documents. (i) Each of the Security Agreement and the
Subsidiary Security Agreement is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof to the extent a security interest can be created by the execution and
delivery of a security agreement under the Uniform Commercial Code. In the case
of Capital Stock of a Subsidiary that constitutes Certificated Securities (as
defined in the Uniform Commercial Code), when stock certificates representing
such Capital Stock are delivered to the Administrative Agent pursuant to the
Security Agreement or the Subsidiary Security Agreement together with undated
stock powers covering such certificates executed in blank, the grantors
thereunder shall have granted to the Administrative Agent a fully perfected Lien
on, and security interest in, all right, title and interest in the Capital Stock
of such Subsidiary (except as otherwise provided in the Security Agreement or
the Subsidiary Security Agreement with respect to the Capital Stock of any
Foreign Subsidiary) and the proceeds thereof, as security for the Obligations,
in each case prior and superior in right to any other Person (except Liens
permitted by Section 6.15, and subject, in the case of Proceeds, to the
applicable limitations under Section 9-315 of the Uniform Commercial Code). In
the case of any Capital Stock of a Subsidiary that constitute General
Intangibles or Uncertificated Securities (as defined in the Uniform Commercial
Code), when financing statements in appropriate form are filed in the offices
specified on Schedule 5.22 and, in the case of Uncertificated Securities, the
Administrative Agent has obtained "control" (within the meaning of the Uniform
Commercial Code) of such Uncertificated Securities, the grantors thereunder
shall have granted to the Administrative Agent a fully perfected Lien on, and
security interest in, all right, title and interest in such Collateral (except
as otherwise provided in the Security Agreement or the Subsidiary Security
Agreement with respect to the Capital Stock of any Foreign Subsidiary) and the
Proceeds thereof, as security for the Obligations, in each case prior and
superior in right to any other Person (except Liens permitted by Section 6.15
and subject, in the case of Proceeds to the applicable limitations under Section
9-315 of the Uniform Commercial Code). Schedule 5.22 specifies the locations in
which to file the financing statements which may perfect a legal, valid and
enforceable security interest in the Capital Stock of its Subsidiaries granted
under the Security Agreement or Subsidiary Security Agreement in the Investment
Property pursuant to Section 9-305(c) of the Uniform Commercial Code.

                                   ARTICLE VI

                                    COVENANTS

      During the term of this Agreement, beginning on the Effective Date (or, in
the case of Section 6.1(ix) and Section 6.3 only, on the date hereof), unless
the Required Lenders shall otherwise consent in writing:

      6.1. Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with GAAP, and furnish to the Lenders:

      (i)   Within 90 days after the close of each of its fiscal years, an
            unqualified (except for qualifications relating to changes in
            accounting GAAP or practices reflecting changes in generally
            accepted accounting principles and required or approved by the
            Borrower's independent certified public accountants) audit report
            certified by independent certified public accountants reasonably
            acceptable to the Lenders, prepared in accordance with

                                      -36-

<PAGE>

            GAAP on a consolidated and consolidating basis (consolidating
            statements need not be certified by such accountants and shall be in
            a form reasonably satisfactory to the Administrative Agent) for
            itself and its Subsidiaries, including balance sheets as of the end
            of such period, related profit and loss and reconciliation of
            surplus statements, and a statement of cash flows, accompanied by
            any management letter prepared by said accountants.

      (ii)  Within 45 days after the close of the first three quarterly periods
            of each of its fiscal years, for itself and its Subsidiaries,
            consolidated and consolidating unaudited balance sheets as at the
            close of each such period and consolidated and consolidating profit
            and loss and reconciliation of surplus statements and a statement of
            cash flows for the period from the beginning of such fiscal year to
            the end of such quarter, all certified by its chief financial
            officer.

      (iii) As soon as available, but in any event within 30 days after the
            beginning of each fiscal year of the Borrower, a copy of the plan
            and forecast (including a projected consolidated and consolidating
            balance sheet, income statement and funds flow statement) of the
            Borrower and its Subsidiaries for such fiscal year; provided,
            however, that the preceding plan and forecast shall be required to
            be delivered only if, as of September 30 of the year immediately
            preceding the year in which such plan and forecast would otherwise
            be required to be delivered, the Leverage Ratio is greater than 2.00
            to 1.0.

      (iv)  Together with the financial statements required under Sections
            6.1(i) and (ii), a compliance certificate in substantially the form
            of Exhibit B signed by its chief financial officer showing the
            calculations necessary to determine compliance with this Agreement
            and stating that no Default or Unmatured Default exists, or if any
            Default or Unmatured Default exists, stating the nature and status
            thereof.

      (v)   As soon as possible and in any event within 10 Business Days after
            the Borrower knows that any Reportable Event has occurred with
            respect to any Single Employer Plan, a statement, signed by the
            chief financial officer of the Borrower, describing said Reportable
            Event and the action which the Borrower proposes to take with
            respect thereto.

      (vi)  As soon as possible and in any event within 10 days after receipt by
            the Borrower, a copy of (a) any written notice or written claim to
            the effect that the Borrower or any of its Subsidiaries is or may be
            liable to any Person as a result of the release by the Borrower, any
            of its Subsidiaries, or any other Person of any toxic or hazardous
            waste or substance into the environment, and (b) any written notice
            alleging any violation of any federal, state or local environmental,
            health or safety law or regulation by the Borrower or any of its
            Subsidiaries, which, in either case, could reasonably be expected to
            have a Material Adverse Effect.

      (vii) Promptly upon the furnishing thereof to the shareholders of the
            Borrower, copies of all financial statements, reports and proxy
            statements so furnished.

     (viii) Promptly upon the filing thereof, notice of the filing to the
            Administrative Agent of all registration statements and periodic and
            current reports on forms 10-K, 10-Q and 8-K which the Borrower or
            any of its Subsidiaries files with the Securities and Exchange
            Commission.

                                      -37-

<PAGE>

      (ix)  Such other information (including non-financial information) as the
            Administrative Agent or any Lender may from time to time reasonably
            request.

      If any information which is required to be furnished to the Lenders under
this Section 6.1 is required by law or regulation to be filed by the Borrower
with a government body on an earlier date, then the information required
hereunder shall, to the extent reasonably practicable under the circumstances,
be furnished to the Lenders at such earlier date.

                                      -38-

<PAGE>

      6.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Advances for general corporate purposes and
acquisitions permitted hereunder. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Advances to purchase or "carry"
(as defined in Regulation U) any "margin stock" (as defined in Regulation U).

      6.3. Notice of Default. The Borrower will, and will cause each Subsidiary
to, give notice in writing to the Lenders of the occurrence of any Default or
Unmatured Default promptly after an Authorized Officer has knowledge of such
Default or Unmatured Default.

      6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted, except where the failure to be in good standing
or maintain such qualifications could not reasonably be expected to have a
Material Adverse Effect.

      6.5. Taxes. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay when due all taxes, assessments
and governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with GAAP.

      6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
maintain in full force and effect, insurance policies and programs, with such
deductibles or self-insurance amounts as reflect coverage that is reasonably
consistent with prudent industry practice. The Borrower will furnish to any
Lender upon request information in reasonable detail as to the insurance
policies and programs of the Borrower and its Subsidiaries.

      6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, except where the failure to comply
could not reasonably be expected to have a Material Adverse Effect.

      6.8. Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep,
in all material respects, its Property in good repair, working order and
condition, ordinary wear and tear and damage from casualty and condemnation
excepted, and make all necessary and proper repairs, renewals and replacements
so that its business carried on in connection therewith may be properly
conducted at all times.

      6.9. Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Administrative Agent and the Lenders, by their respective
representatives and Administrative Agents, to inspect any of the Property, books
and financial records of the Borrower and each Subsidiary, to examine and make
copies of the books of accounts and other financial records of the Borrower and
each Subsidiary, and to discuss the affairs, finances and accounts of the
Borrower and each Subsidiary with, and to be advised as to the same by, their
respective officers upon reasonable prior notice and at such reasonable times
and intervals as the Administrative Agent or any Lender may designate.

                                      -39-

<PAGE>

      6.10. Dividends. The Borrower will not, nor will it permit any Subsidiary
to, declare or pay any dividends or make any distributions on its Capital Stock
(other than dividends by way of stock split or otherwise payable in its own
common stock) or redeem, repurchase or otherwise acquire or retire any of its
Capital Stock at any time outstanding, except that (i) any Subsidiary may
declare and pay dividends or make distributions to the Borrower or to a
Wholly-Owned Subsidiary, (ii) the Borrower may declare and pay dividends on its
Capital Stock not in excess of (a) $10,500,000 in calendar year 2004 (inclusive
of dividends declared prior to the Effective Date) and (b) $5,000,000 in any
other calendar year provided that (1) no Default or, to the knowledge of an
Authorized Officer after due inquiry, Unmatured Default shall exist before or
after giving effect to the declaration of such dividends or be created as a
result thereof and (2) no Default or Unmatured Default under Section 7.2 or
breach of Section 6.25 shall exist before or after giving effect to the payment
of such dividend or be created as a result thereof, (iii) the Borrower may
declare and make a distribution of all of the stock of MoneyGram as part of the
Spin-Off Transaction, (iv) any non-Wholly-Owned Subsidiary of the Borrower may
declare and pay dividends or make other distributions to its shareholders
generally so long as the Borrower or its respective Subsidiary which owns
Capital Stock in the Subsidiary paying such dividends or making such other
distributions receives at least its proportionate share thereof (based on its
relative holdings of Capital Stock in the Subsidiary paying such dividends or
making such other distributions and taking into account relative preferences, if
any, of the various classes of Capital Stock in such Subsidiary) (v) the
Borrower may redeem all of the outstanding shares of its preferred Capital Stock
as described in the Form 10 in connection with the Spin-Off Transactions and
(vi) the Borrower may redeem, repurchase or otherwise acquire any of its Capital
Stock issued in connection with employee stock options or restricted stock
grants not in excess of $5,000,000 in any calendar year provided that no Default
or, to the knowledge of an Authorized Officer after due inquiry, Unmatured
Default shall exist before or after giving effect to such redemption, repurchase
or acquisition or be created as a result thereof.

      6.11. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

      (i)   The Loans and Indebtedness in respect of Facility LCs outstanding
            from time to time under this Agreement.

      (ii)  Indebtedness existing on the Effective Date and described in
            Schedule 6.11 and extensions, renewals and replacements thereof not
            increasing the aggregate principal amount thereof outstanding at the
            time of such extension, renewal or replacement.

      (iii) Indebtedness arising under Rate Management Transactions related to
            the Loans or otherwise in the ordinary course of business.

      (iv)  Indebtedness in respect of guaranties executed by any Subsidiary
            with respect to any Indebtedness of the Borrower, provided such
            Indebtedness is not incurred by the Borrower in violation of this
            Agreement.

      (v)   Indebtedness in respect of guaranties executed by the Borrower with
            respect to any Indebtedness of a Guarantor entered into in the
            ordinary course of business.

      (vi)  Indebtedness assumed in connection with an Acquisition permitted
            under Section 6.14, provided, such Indebtedness was not created in
            anticipation of or as a result of such Acquisition.

                                      -40-

<PAGE>

      (vii) Other Indebtedness at no time exceeding 10% of Consolidated Net
            Worth in aggregate outstanding principal amount (determined as of
            the most recent fiscal quarter end for which financial statements
            have been provided pursuant to Section 6.1(i) or (ii)).

      6.12. Merger. The Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, except that a Subsidiary may
merge into (i) the Borrower, with the Borrower as the surviving entity, or (ii)
a Wholly-Owned Subsidiary.

      6.13. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:

      (i)   Sales of inventory in the ordinary course of business.

      (ii)  The disposition of the Borrower's 1992 Gulfstream IV aircraft, Tail
            #N99GA, Serial #1198.

      (iii) The disposition in the ordinary course of business of equipment that
            is obsolete, excess or no longer used or useful in the Borrower's or
            its Subsidiaries' businesses,

      (iv)  Leasing of assets between (a) the Borrower and any Guarantor or (b)
            any Guarantor and another Guarantor.

      (v)   Sale or transfer of the Capital Stock or Property of Glacier Park,
            Inc. upon expiration of the Concession Agreement.

      (vi)  Leases, sales or other dispositions of its Property that, together
            with all other Property of the Borrower and its Subsidiaries
            previously leased, sold or disposed of (other than dispositions
            permitted by Sections 6.13(i) through (v)) as permitted by this
            Section during the twelve-month period ending with the month in
            which any such lease, sale or other disposition occurs, do not in
            the aggregate exceed 10% of Consolidated Net Worth as of the end of
            such month.

      6.14. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to become a partner in any
partnership or joint venture, or to make any Acquisition of any Person, except:

      (i)   Cash Equivalent Investments.

      (ii)  Alternate Cash Equivalent Investments; provided, however, that the
            principal amount of such Alternate Cash Equivalent Investments shall
            at no time exceed 35% of the sum of (a) the principal amount of
            outstanding Cash Equivalent Investments and (b) the principal amount
            of outstanding Alternate Cash Equivalent Investments.

      (iii) Existing Investments in Subsidiaries and other Investments in
            existence on the Effective Date and described in Schedule 6.14.

      (iv)  Investments made after the Effective Date in Persons which are
            Subsidiaries, provided that immediately after giving effect to each
            Investment made pursuant to this section Investments in Foreign
            Subsidiaries and non-Wholly-Owned Subsidiaries (other than

                                      -41-

<PAGE>

            Investments disclosed on Schedule 6.14) shall not exceed in the
            aggregate 10% of Consolidated Net Worth (determined as of the most
            recent fiscal quarter end for which financial statements have been
            provided pursuant to Section 6.1(i) or (ii)).

      (v)   Acquisitions after the Effective Date of (or of all or substantially
            all of the assets of) entities engaged in substantially the same or
            related lines of business as the Borrower, so long as (i) the
            Non-Equity Consideration for any such Acquisition shall not exceed
            $30,000,000, and the aggregate Non-Equity Consideration for all such
            Acquisitions in any twelve-month period shall not exceed
            $40,000,000; (ii) after giving effect to such Acquisition, the
            Borrower shall be in compliance with its covenants hereunder, and on
            a pro forma basis, the Borrower would be in compliance therewith for
            the previous four fiscal quarters and for any Acquisition with
            aggregate Non-Equity Consideration in excess of $5,000,000, the
            Borrower shall have delivered to the Administrative Agent a
            certificate executed by an Authorized Officer setting forth the
            calculations demonstrating such compliance and (iii) both before and
            after giving effect to such acquisition no Default exists (each such
            entity, an "Acquired Company"). Notwithstanding the foregoing, no
            Acquisition shall be permitted pursuant to this Subsection 6.14(v)
            if, after giving effect thereto, the aggregate amount of all
            Non-Equity Consideration paid in respect of Acquisitions otherwise
            permitted by this clause (v) plus the value of common stock of the
            Borrower included in the consideration for such Acquisitions would
            exceed either $75,000,000 in any twelve (12) month period or
            $150,000,000 for the period commencing on the Effective Date and
            ending on the Facility Termination Date.

      (vi)  Investments in Rate Management Transactions related to the Loans or
            entered into in the ordinary course of business.

      (vii) Investments received in connection with the bankruptcy or
            reorganization of suppliers and customers and in settlement of
            delinquent obligations of, and other disputes with customers and
            suppliers arising in the ordinary course of business or other
            securities of a de minimis value.

     (viii) Loans to the trustee of the trust fund ("Trust") identified in
            Section 2.1(hh) of the Viad Corp Employees' Stock Ownership Plan,
            effective June 1, 1989 and restated January 1, 2004, to pay in full
            the outstanding principal amount due by the Trust on the 1995 Series
            A and B loans from Wachovia Bank of North Carolina, N.A. in the
            amount of $7,165,322.21 and $6,269,667.79 respectively.

      6.15. Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:

      (i)   Liens for taxes, assessments or governmental charges or levies on
            its Property if the same shall not at the time be delinquent or
            thereafter can be paid without penalty, or are being contested in
            good faith and by appropriate proceedings and for which adequate
            reserves in accordance with GAAP shall have been set aside on its
            books.

      (ii)  Liens imposed by law, such as carriers', warehousemen's and
            mechanics' liens and other similar liens arising in the ordinary
            course of business which secure payment of obligations not more than
            60 days past due or which are being contested in good faith by
            appropriate proceedings and for which adequate reserves shall have
            been set aside on its books.

                                      -42-

<PAGE>

      (iii) Liens arising out of pledges or deposits under worker's compensation
            laws, unemployment insurance, old age pensions, or other social
            security or retirement benefits, or similar legislation.

      (iv)  Easements, building restrictions, zoning restrictions and such other
            encumbrances or charges against real property as are of a nature
            generally existing with respect to properties of a similar character
            and which do not in any material way interfere with the use thereof
            in the business of the Borrower or its Subsidiaries.

      (v)   Liens existing on the Effective Date and described in Schedule 6.15,
            and extensions and renewals of any such Liens on the Property now
            subject thereto to the extent and for so long as the Indebtedness
            secured thereby is not increased, is expressly permitted hereunder
            and remains outstanding.

      (vi)  Liens in favor of the Administrative Agent, for the benefit of the
            Lenders, granted pursuant to any Collateral Document.

      (vii) Liens in favor of, or for the benefit of, the holders of Defeased
            Debt; provided, however, that the aggregate principal amount of
            Defeased Debt shall in no event exceed $53,503,000.

     (viii) Liens existing on Property acquired pursuant to an Acquisition
            permitted under Section 6.14, provided such Liens existed prior to
            the time of such Acquisition and were not created in contemplation
            thereof.

      (ix)  Other Liens securing Indebtedness at no time exceeding 10% of
            Consolidated Net Worth in aggregate outstanding principal amount
            (determined as of the most recent fiscal quarter end for which
            financial statements have been provided pursuant to Section 6.1(i)
            or (ii)).

      6.16. Capital Expenditures. The Borrower will not, nor will it permit any
Subsidiary to, expend, or be committed to expend, in excess of $35,000,000 for
Capital Expenditures during any one fiscal year on a non-cumulative basis in the
aggregate for the Borrower and its Subsidiaries.

      6.17. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (i) in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction or (ii) transactions comprising the Principal
Spin-Off Transactions, or (iii) transactions among the Borrower and any
Subsidiary that has executed a Guaranty.

      6.18. Amendments to Agreements. The Borrower will not, and will not permit
any Subsidiary to (i) amend or terminate its certificate of incorporation,
by-laws or other organizational document or (ii) amend or terminate the
Separation Agreements, or (iii) amend the Subordinated Debt without the consent
of the Required Lenders, other than any such amendment or termination that (A)
does not adversely affect the interests of the Lenders hereunder or under any
other Loan Documents, and (B) of which the Agent has been given at least five
Business Days prior written notice.

      6.19. Operating Leases. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Operating Lease, except for
(i) Operating Leases set forth on Schedule 6.19

                                      -43-

<PAGE>

hereof and extensions thereof and (ii) Operating Leases which have Operating
Lease Obligations of not more than $20,000,000 at any one time outstanding.

      6.20. Contingent Obligations. The Borrower will not, nor will it permit
any Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except (i) by endorsement of instruments for deposit or
collection in the ordinary course of business and (ii) for the Guaranty or any
guaranty entered into pursuant to Section 6.24 or permitted by Section 6.11.

      6.21. Financial Contracts. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Financial Contract, except
Rate Management Obligations permitted under Section 6.11.

      6.22. Inconsistent Agreements. The Borrower shall not, and shall not
permit any Subsidiary to, enter into any indenture, agreement, instrument (or
amendment thereto) or other arrangement which (i) directly or indirectly
prohibits or restrains, or has the effect of prohibiting or restraining, or
imposes materially adverse conditions upon, the incurrence or repayment of the
Obligations, the amendment of the Loan Documents, or the ability of any Material
Domestic Subsidiary or Glacier Park, Inc. to pay dividends or make other
distributions on its capital (except to the extent of existing contractual
constraints of the Concession Agreement and renewals thereof) or (ii) contains
any provision which would be violated or breached by the making of Credit
Extensions or by the performance by the Borrower or any Subsidiary of any of its
obligations under any Loan Document.

      6.23. Subsidiary Guaranties and Personal Property Pledges. Effective upon
any Person becoming a Material Domestic Subsidiary, the Borrower shall cause
such Person to (i) execute and deliver to the Administrative Agent for the
benefit of the Lenders a guaranty of the Obligations pursuant to a guaranty
substantially similar to the Guaranty (or a joinder thereto) and (ii) pledge to
the Administrative Agent for the benefit of the Lenders a first priority
security interest in all personal property owned by such Person pursuant to a
security agreement substantially similar to the Subsidiary Security Agreement
(or a joinder thereto), all pursuant to documentation (including related
certificates, opinions and financing statements) reasonably acceptable to the
Agent; provided, that if any Domestic Subsidiaries which are not party to the
Guaranty or the Subsidiary Security Agreement (other than Glacier Park, Inc.)
hold, on an aggregate basis, an amount in excess of the lesser of (x) 10% of
Consolidated Net Income or (y) 10% of total assets (valued at the higher of book
or fair market value) of the Borrower and its Subsidiaries on a consolidated
basis, then one or more of such Domestic Subsidiaries shall promptly execute a
guaranty substantially in the form of the Guaranty (or a joinder thereto), a
security agreement substantially in the form of the Subsidiary Security
Agreement or joinders thereto so that such threshold is no longer exceeded, all
pursuant to documentation (including related certificates, opinions and
financing statements) reasonably acceptable to the Agent. The Borrower shall
notify the Administrative Agent as promptly as possible but in any event within
thirty (30) days following the date on which any Person is required to join the
Guaranty or Subsidiary Security Agreement in accordance with the provisions of
this Section 6.23. Notwithstanding the foregoing, if Glacier Park, Inc. shall
become a Material Domestic Subsidiary the foregoing provisions shall not be
applicable to it if, at such time, compliance by Glacier Park, Inc. with this
Section 6.23 would result in a breach of then existing contractual obligations
of Glacier Park, Inc. not undertaken in anticipation of its becoming a Material
Domestic Subsidiary.

      6.24. Subsidiary Stock Pledge. Effective upon any Person becoming a
Subsidiary after the Effective Date, the Borrower shall pledge, or shall cause
to be pledged, all of the Capital Stock thereof owned by the Borrower or any
Subsidiary that has executed a Guaranty to the Administrative Agent for

                                      -44-

<PAGE>

the benefit of the Lenders pursuant to an amendment to the Security Agreement or
the Subsidiary Security Agreement, as applicable, and other documentation
(including related certificates, opinions and financing statements) reasonably
acceptable to the Administrative Agent; provided, that only 65% of the
outstanding common stock of any Foreign Subsidiary shall be required to be
pledged pursuant hereto. The Borrower shall promptly notify the Agent any time a
Person becomes a Subsidiary.

      6.25. Financial Covenants.

            6.25.1. Fixed Charge Coverage Ratio. The Borrower will not permit
            the ratio, determined as of the end of each of its fiscal quarters,
            for the then most recently ended four fiscal quarters of (i)
            Consolidated EBITDA plus Consolidated Rentals minus Consolidated
            Capital Expenditures to (ii) cash Consolidated Interest Expense,
            plus Consolidated Rentals, plus scheduled principal payments in
            respect of Indebtedness for money borrowed, plus expense for income
            taxes paid or accrued (but, with respect to any calculation
            encompassing the Borrower's 2003 fourth quarter, excluding the sum
            of $1,746,000 for taxes paid with respect to 2003 fourth quarter
            non-cash interest income of approximately $4,600,000), all
            calculated for the Borrower and its Subsidiaries on a consolidated
            basis, to be less than 1.25 to 1.0. For purposes hereof, the
            components of the foregoing ratio for the three fiscal quarter ends
            most recently preceding the date hereof shall be as set forth on
            Schedule 6.25.1.

            6.25.2. Leverage Ratio. The Borrower will not permit the Leverage
            Ratio determined as of the end of each of its fiscal quarters to be
            greater than 2.65 to 1.0.

            6.25.3. Minimum Net Worth. The Borrower will at all times maintain
            Consolidated Net Worth of not less than the sum of (i) $325,069,000
            plus (ii) 50% of Consolidated Net Income earned in each fiscal
            quarter beginning with the quarter ending June 30, 2004 (without
            deduction for losses).

                                   ARTICLE VII

                                    DEFAULTS

      The occurrence of any one or more of the following events shall constitute
a Default:

      7.1. Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries to the Lenders or the Administrative
Agent under or in connection with this Agreement, any Credit Extension, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be materially false on the date as of which made.

      7.2. Nonpayment of principal of any Loan when due, nonpayment of any
Reimbursement Obligation within one Business Day after the same becomes due, or
nonpayment of interest upon any Loan or of any commitment fee, LC Fee or other
obligations under any of the Loan Documents within five Business Days after the
same becomes due.

      7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.3, 6.4 or Sections 6.10 through 6.25 inclusive.

                                      -45-

<PAGE>

      7.4. The breach by the Borrower (other than a breach which constitutes a
Default under another Section of this Article VII) of any of the terms or
provisions of this Agreement which is not remedied within thirty days after
written notice from the Administrative Agent or any Lender.

      7.5. Failure of the Borrower or any of its Subsidiaries to pay when due
any Material Indebtedness; or the default by the Borrower or any of its
Subsidiaries in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any Material
Indebtedness Agreement, or any other event shall occur or condition exist, the
effect of which default, event or condition is to cause, or to permit the
holder(s) of such Material Indebtedness or the lender(s) under any Material
Indebtedness Agreement to cause, such Material Indebtedness to become due prior
to its stated maturity or any commitment to lend under any Material Indebtedness
Agreement to be terminated prior to its stated expiration date; or any Material
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof.

      7.6. The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6, or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7, or (vii) the
Borrower or any of its Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.

      7.7. Without the application, approval or consent of the Borrower or any
of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 30 consecutive days.

      7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of the Borrower and its Subsidiaries which, when taken together with
all other Property of the Borrower and its Subsidiaries (other than pursuant to
the expiration and non-renewal of the Glacier Park concession agreement) so
condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such action occurs,
constitutes a Substantial Portion.

      7.9. The Borrower or any of its Subsidiaries shall fail within 30 days to
pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of money in excess of $10,000,000 (or the equivalent thereof in
currencies other than U.S. Dollars) in the aggregate, provided, however, that
any such judgment or order shall not give rise to a Default under this Section
7.9(i) if and for so long as the amount of such judgment or order is covered by
a valid and binding policy of insurance between the defendant and the insurer
covering the full payment thereof; or (ii) nonmonetary judgments or orders
which, individually or in the aggregate, could reasonably be expected to have a
Material

                                      -46-

<PAGE>

Adverse Effect, which judgment(s), in any such case, is/are not stayed on appeal
or otherwise being appropriately contested in good faith.

      7.10. The Unfunded Liabilities of all Single Employer Plans shall exceed
in the aggregate $10,000,000 or any Reportable Event shall occur in connection
with any Plan.

      7.11. Nonpayment by the Borrower or any Subsidiary of any Rate Management
Obligation with a termination or settlement value in excess of $10,000,000 when
due or the breach by the Borrower or any Subsidiary of any term, provision or
condition contained in any Rate Management Transaction or any transaction of the
type described in the definition of "Rate Management Transactions," whether or
not any Lender or Affiliate of a Lender is a party thereto, and, after giving
effect to any applicable notice requirement or grace period, there occurs a
liquidation of, acceleration of obligations with a termination or settlement
value in excess of $10,000,000 under or an early termination of such Rate
Management Obligation.

      7.12. Any Change in Control shall occur.

      7.13. The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
liability to such Multiemployer Plan as a result of the withdrawal from such
Multiemployer Plan by the Borrower or a member of the Controlled Group in an
amount which, when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Borrower or any other member of the Controlled Group
as withdrawal liability (determined as of the date of such notification),
exceeds $10,000,000 or requires payments exceeding $3,000,000 per annum.

      7.14. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.

      7.15. Any Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Guaranty, or any guarantor shall fail to comply with any
of the terms or provisions of any Guaranty to which it is a party, or any
guarantor shall deny that it has any further liability under any Guaranty to
which it is a party, or shall give notice to such effect.

      7.16. Any Collateral Document shall for any reason fail to create a valid
and perfected first priority security interest in any collateral purported to be
covered thereby, except as permitted by the terms of this Agreement or any
Collateral Document, or any Collateral Document shall fail to remain in full
force or effect or any action shall be taken by or on behalf of the Borrower of
any Affiliate thereof to discontinue or to assert the invalidity or
unenforceability of any Collateral Document.

                                  ARTICLE VIII

                 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

      8.1. Acceleration; Facility LC Collateral Account. (i) If any Default
described in Section 7.6 or 7.7 occurs with respect to the Borrower, the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs shall automatically terminate and the

                                      -47-

<PAGE>

Obligations shall immediately become due and payable without any election or
action on the part of the Administrative Agent, the LC Issuer or any Lender and
the Borrower will be and become thereby unconditionally obligated, without any
further notice, act or demand, to pay to the Administrative Agent an amount in
immediately available funds, which funds shall be held in the Facility LC
Collateral Account, equal to the difference of (x) the amount of LC Obligations
at such time, less (y) the amount on deposit in the Facility LC Collateral
Account at such time which is free and clear of all rights and claims of third
parties and has not been applied against the Obligations (such difference, the
"Collateral Shortfall Amount"). If any other Default occurs, the Required
Lenders (or the Administrative Agent with the consent of the Required Lenders)
may (a) terminate or suspend the obligations of the Lenders to make Loans
hereunder and the obligation and power of the LC Issuer to issue Facility LCs,
or declare the Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives, and (b) upon notice to the Borrower and in addition to the
continuing right to demand payment of all amounts payable under this Agreement,
make demand on the Borrower to pay, and the Borrower will, forthwith upon such
demand and without any further notice or act, pay to the Administrative Agent
the Collateral Shortfall Amount, which funds shall be deposited in the Facility
LC Collateral Account.

      (ii)  If at any time while any Default is continuing, the Administrative
            Agent determines that the Collateral Shortfall Amount at such time
            is greater than zero, the Administrative Agent may make demand on
            the Borrower to pay, and the Borrower will, forthwith upon such
            demand and without any further notice or act, pay to the
            Administrative Agent the Collateral Shortfall Amount, which funds
            shall be deposited in the Facility LC Collateral Account.

      (iii) The Administrative Agent may at any time or from time to time after
            funds are deposited in the Facility LC Collateral Account, apply
            such funds to the payment of the Obligations and any other amounts
            as shall from time to time have become due and payable by the
            Borrower to the Lenders or the LC Issuer under the Loan Documents.

      (iv)  At any time while any Default is continuing, neither the Borrower
            nor any Person claiming on behalf of or through the Borrower shall
            have any right to withdraw any of the funds held in the Facility LC
            Collateral Account. After all of the Obligations have been
            indefeasibly paid in full and the Aggregate Commitment has been
            terminated, any funds remaining in the Facility LC Collateral
            Account shall be returned by the Administrative Agent to the
            Borrower or paid to whomever may be legally entitled thereto at such
            time.

      (v)   If, within 30 days after acceleration of the maturity of the
            Obligations or termination of the obligations of the Lenders to make
            Loans and the obligation and power of the LC Issuer to issue
            Facility LCs hereunder as a result of any Default (other than any
            Default as described in Section 7.6 or 7.7 with respect to the
            Borrower) and before any judgment or decree for the payment of the
            Obligations due shall have been obtained or entered, the Required
            Lenders (in their sole discretion) shall so direct, the
            Administrative Agent shall, by notice to the Borrower, rescind and
            annul such acceleration and/or termination.

      8.2. Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Administrative Agent with the consent in writing of the
Required Lenders) and the Borrower may enter into agreements supplemental hereto
for the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided, however, that no such supplemental
agreement shall, without the consent of all of the Lenders:

                                      -48-

<PAGE>

      (i)   Extend the final maturity of any Loan, or extend the expiry date of
            any Facility LC to a date after the Facility Termination Date or
            forgive all or any portion of the principal amount thereof or any
            Reimbursement Obligation related thereto, or reduce the rate or
            extend the time of payment of interest or fees thereon or
            Reimbursement Obligations related thereto.

      (ii)  Reduce the percentage specified in the definition of Required
            Lenders.

      (iii) Extend the Facility Termination Date, or reduce the amount or extend
            the payment date for, the mandatory payments required under Section
            2.2, or increase the amount of the Aggregate Commitment or of the
            Commitment of any Lender hereunder or the commitment to issue
            Facility LCs, or permit the Borrower to assign its rights under this
            Agreement.

      (iv)  Amend this Section 8.2 or Section 11.2.

      (v)   Release any guarantor from the Guaranty or, except as provided in
            the Collateral Documents, release all or a material portion of the
            Collateral.

No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent, and no amendment of any provision relating to the LC Issuer shall be
effective without the written consent of the LC Issuer. No amendment of any
provision of this Agreement relating to the Swing Line Lender or any Swing Line
Loans shall be effective without the written consent of the Swing Line Lender.
The Administrative Agent may waive payment of the fee required under Section
12.3.3 without obtaining the consent of any other party to this Agreement

      8.3. Preservation of Rights. No delay or omission of the Lenders, the LC
Issuer or the Administrative Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver of any Default
or an acquiescence therein, and the making of a Credit Extension notwithstanding
the existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Administrative Agent and the Lenders until the Obligations have been paid
in full.

                                   ARTICLE IX

                               GENERAL PROVISIONS

      9.1. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive the making of the Loans
and Facility LCs herein contemplated.

                                      -49-

<PAGE>

      9.2. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.

      9.3. Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.

      9.4. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Administrative Agent, the LC Issuer and
the Lenders and supersede all prior agreements and understandings among the
Borrower, the Administrative Agent, the LC Issuer and the Lenders relating to
the subject matter thereof other than those contained in the fee letter
described in Section 10.13 which shall survive and remain in full force and
effect during the term of this Agreement.

      9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or Administrative Agent of any other (except to the extent
to which the Administrative Agent is authorized to act as such). The failure of
any Lender to perform any of its obligations hereunder shall not relieve any
other Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns, provided,
however, that the parties hereto expressly agree that the Arrangers shall enjoy
the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent
specifically set forth therein and shall have the right to enforce such
provisions on their own behalf and in their own name to the same extent as if
they were a party to this Agreement.

      9.6. Expenses; Indemnification. (i) Subject to the limitations set forth
in that certain fee letter agreement dated February 10, 2004 among the Borrower
and Wachovia Bank, National Association, the Borrower shall reimburse the Agents
and the Arrangers for any reasonable costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the
Agents, which attorneys may be employees of the Agents) paid or incurred by the
Agents or the Arrangers in connection with the preparation, negotiation,
execution, delivery, syndication, distribution (including, without limitation,
via the internet), review, amendment (proposed or actual), modification, and
administration of the Loan Documents. The Borrower also agrees to reimburse the
Agents, the Arrangers, the LC Issuer and the Lenders for any reasonable costs,
internal charges and out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agents, the Arrangers and the Lenders, which
attorneys may be employees of the Agents, the Arrangers, the LC Issuer or the
Lenders) paid or incurred by the Agents, the Arrangers, the LC Issuer or any
Lender in connection with the collection under and enforcement of the Loan
Documents. Expenses being reimbursed by the Borrower under this Section include,
without limitation, costs and expenses incurred in connection with the Reports
described in the following sentence. The Borrower acknowledges that from time to
time Bank One may prepare and may distribute to the Lenders (but shall have no
obligation or duty to prepare or to distribute to the Lenders) certain audit
reports (the "Reports") pertaining to the Borrower's assets for internal use by
Bank One from information furnished to it by or on behalf of the Borrower, after
Bank One has exercised its rights of inspection pursuant to this Agreement.

      (ii) The Borrower hereby further agrees to indemnify the Agents, the
Arrangers, each Lender, their respective affiliates, and each of their
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agents,
the Arrangers, any Lender or any affiliate is a party thereto) which any of them
may pay or incur arising out of or relating to this Agreement, the other

                                      -50-

<PAGE>

Loan Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Credit Extension
hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement. To the extent that the undertakings
to defend, indemnify, pay and hold harmless set forth in this Section 9.6 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the Borrower shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by the indemnitees or any
of them.

      9.7. Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.

      9.8. Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP in a manner consistent with that
used in preparing the financial statements referred to in Section 5.4, except
that any calculation or determination which is to be made on a consolidated
basis shall be made for the Borrower and all of its Subsidiaries, including
those Subsidiaries, if any, which are unconsolidated on the Borrower's audited
financial statements. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and the Borrower, the Administrative Agent or the Required Lenders
shall so request, the Administrative Agent, the Lenders and the Loan Parties
shall negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders), provided that, until so amended, such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and the Borrower shall provide to the Administrative Agent and
the Lenders reconciliation statements showing the difference in such
calculation, together with the delivery of monthly, quarterly and annual
financial statements required hereunder.

      9.9. Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.

      9.10. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders, the LC Issuer and the Administrative Agent on the
other hand shall be solely that of borrower and lender. Neither the
Administrative Agent, the Arrangers, the LC Issuer nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Administrative Agent,
the Arrangers nor any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any phase of the
Borrower's business or operations. The Borrower agrees that neither the
Administrative Agent, the Arrangers, the LC Issuer nor any Lender shall have
liability to the Borrower (whether sounding in tort, contract or otherwise) for
losses suffered by the Borrower in connection with, arising out of, or in any
way related to, the transactions contemplated and the relationship established
by the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined in a final non-appealable judgment by a court
of competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Administrative Agent, the Arrangers, the LC Issuer nor any Lender shall have any
liability with respect to, and the Borrower hereby waives, releases and agrees
not to sue for, any special, indirect,

                                      -51-

<PAGE>

consequential or punitive damages suffered by the Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.

      9.11. Confidentiality. The Administrative Agent and each Lender agrees to
hold any confidential information which it may receive from the Borrower in
connection with this Agreement in confidence, except for disclosure (i) to its
Affiliates and to the Administrative Agent and any other Lender and their
respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which it is a party, (vi) to its direct or indirect contractual
counterparties in swap agreements or to legal counsel, accountants and other
professional advisors to such counterparties, (vii) permitted by Section 12.4,
and (viii) to rating agencies if requested or required by such agencies in
connection with a rating relating to the Advances hereunder. Without limiting
Section 9.4, the Borrower agrees that the terms of this Section 9.11 shall set
forth the entire agreement between the Borrower and each Lender (including the
Administrative Agent) with respect to any confidential information previously or
hereafter received by such Lender in connection with this Agreement, and this
Section 9.11 shall supersede any and all prior confidentiality agreements
entered into by such Lender with respect to such confidential information.

      9.12. Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U) for the repayment of
the Loans provided for herein.

      9.13. Disclosure. The Borrower and each Lender hereby acknowledge and
agree that Bank One and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with the Borrower and its
Affiliates.

      9.14. USA PATRIOT ACT NOTIFICATION. The following notification is provided
to Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C.
Section 5318:

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for
Borrower: When Borrower opens an account, if Borrower is an individual,
Administrative Agent and the Lenders will ask for Borrower's name, residential
address, tax identification number, date of birth, and other information that
will allow Administrative Agent and the Lenders to identify Borrower, and, if
Borrower is not an individual, Administrative Agent and the Lenders will ask for
Borrower's name, tax identification number, business address, and other
information that will allow Administrative Agent and the Lenders to identify
Borrower. Administrative Agent and the Lenders may also ask, if Borrower is an
individual, to see Borrower's driver's license or other identifying documents,
and, if Borrower is not an individual, to see Borrower's legal organizational
documents or other identifying documents.

                                    ARTICLE X

                            THE ADMINISTRATIVE AGENT

      10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Administrative Agent") hereunder and

                                      -52-

<PAGE>

under each other Loan Document, and each of the Lenders irrevocably authorizes
the Administrative Agent to act as the contractual representative of such Lender
with the rights and duties expressly set forth herein and in the other Loan
Documents. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this Article X.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not have any
fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the Administrative Agent is merely acting as the
contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Administrative Agent
(i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of the term "secured party"
as defined in the New York Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Administrative Agent on any
agency theory or any other theory of liability for breach of fiduciary duty, all
of which claims each Lender hereby waives.

      10.2. Powers. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.

      10.3. General Immunity. Neither the Administrative Agent nor any of its
directors, officers, Administrative Agents or employees shall be liable to the
Borrower, the Lenders or any Lender for any action taken or omitted to be taken
by it or them hereunder or under any other Loan Document or in connection
herewith or therewith except to the extent such action or inaction is determined
in a final non-appealable judgment by a court of competent jurisdiction to have
arisen from the gross negligence or willful misconduct of such Person.

      10.4. No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent nor any of its directors, officers, Administrative Agents
or employees shall be responsible for or have any duty to ascertain, inquire
into, or verify (a) any statement, warranty or representation made in connection
with any Loan Document or any borrowing hereunder; (b) the performance or
observance of any of the covenants or agreements of any obligor under any Loan
Document, including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (c) the satisfaction of any condition
specified in Article IV, except receipt of items required to be delivered solely
to the Administrative Agent; (d) the existence or possible existence of any
Default or Unmatured Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or (g) the
financial condition of the Borrower or any guarantor of any of the Obligations
or of any of the Borrower's or any such guarantor's respective Subsidiaries. The
Administrative Agent shall have no duty to disclose to the Lenders information
that is not required to be furnished by the Borrower to the Administrative Agent
at such time, but is voluntarily furnished by the Borrower to the Administrative
Agent (either in its capacity as Administrative Agent or in its individual
capacity).

      10.5. Action on Instructions of Lenders. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders, and such instructions and any action taken or failure
to act pursuant thereto shall be binding on all of the Lenders. The Lenders
hereby

                                      -53-

<PAGE>

acknowledge that the Administrative Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders. The Administrative Agent shall be
fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.

      10.6. Employment of Administrative Agents and Counsel. The Administrative
Agent may execute any of its duties as Administrative Agent hereunder and under
any other Loan Document by or through employees, Administrative Agents, and
attorneys-in-fact and shall not be answerable to the Lenders, except as to money
or securities received by it or its authorized Administrative Agents, for the
default or misconduct of any such Administrative Agents or attorneys-in-fact
selected by it with reasonable care. The Administrative Agent shall be entitled
to advice of counsel concerning the contractual arrangement between the
Administrative Agent and the Lenders and all matters pertaining to the
Administrative Agent's duties hereunder and under any other Loan Document.

      10.7. Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex, electronic mail message, statement, paper or
document believed by it in good faith to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Administrative Agent, which
counsel may be employees of the Administrative Agent. For purposes of
determining compliance with the conditions specified in Sections 4.1 and 4.2,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the applicable date specifying its objection
thereto.

      10.8. Administrative Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Commitments (or, if the Commitments have been
terminated, in proportion to their Commitments immediately prior to such
termination) (i) for any amounts not reimbursed by the Borrower for which the
Administrative Agent is entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Administrative Agent on
behalf of the Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, without
limitation, for any expenses incurred by the Administrative Agent in connection
with any dispute between the Administrative Agent and any Lender or between two
or more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby (including, without limitation, for any
such amounts incurred by or asserted against the Administrative Agent in
connection with any dispute between the Administrative Agent and any Lender or
between two or more of the Lenders), or the enforcement of any of the terms of
the Loan Documents or of any such other documents, provided that (i) no Lender
shall be liable for any of the foregoing to the extent any of the foregoing is
found in a final non-appealable judgment by a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of the
Administrative Agent and (ii) any indemnification required pursuant to Section
3.5(vii) shall, notwithstanding the provisions of this Section 10.8, be paid by
the relevant Lender in accordance with the provisions thereof. The obligations
of the Lenders under this Section 10.8 shall survive payment of the Obligations
and termination of this Agreement.

                                      -54-

<PAGE>

      10.9. Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Borrower referring to this Agreement describing such Default or
Unmatured Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Lenders.

      10.10. Rights as a Lender. In the event the Administrative Agent is a
Lender, the Administrative Agent shall have the same rights and powers hereunder
and under any other Loan Document with respect to its Commitment and its Loans
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the term "Lender" or "Lenders" shall, at any time when the
Administrative Agent is a Lender, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which the Borrower or such Subsidiary is
not restricted hereby from engaging with any other Person.

      10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Arrangers
or any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent, the Arrangers 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 and the other Loan Documents.

      10.12. Successor Administrative Agent. The Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower,
such resignation to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, forty-five days after the retiring Administrative Agent gives notice
of its intention to resign. The Administrative Agent may be removed at any time
with or without cause by written notice received by the Administrative Agent
from the Required Lenders, such removal to be effective on the date specified by
the Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders within thirty days after the resigning
Administrative Agent's giving notice of its intention to resign, then the
resigning Administrative Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Administrative Agent. If the Administrative Agent has
resigned or been removed and no successor Administrative Agent has been
appointed, the Lenders may perform all the duties of the Administrative Agent
hereunder and the Borrower shall make all payments in respect of the Obligations
to the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of the Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the

                                      -55-

<PAGE>

resignation or removal of an Administrative Agent, the provisions of this
Article X shall continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 10.12, then the term "Prime Rate" as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new
Administrative Agent.

      10.13. Administrative Agent and Arranger Fees. The Borrower agrees to pay
to the Administrative Agent and Banc One Capital Markets, Inc., for their
respective accounts, the fees agreed to by the Borrower, the Administrative
Agent and Banc One Capital Markets, Inc. pursuant to that certain fee letter
agreement dated February 10, 2004, or as otherwise agreed from time to time. The
Borrower agrees to pay to Wachovia Bank, National Association and Wachovia
Capital Markets, LLC, for their respective accounts, the fees agreed to by the
Borrower and such parties pursuant to that certain fee letter agreement dated
February 10, 2004, or as otherwise agreed from time to time.

      10.14. Delegation to Affiliates. The Borrower and the Lenders agree that
the Administrative Agent may delegate any of its duties under this Agreement to
any of its Affiliates. Any such Affiliate (and such Affiliate's directors,
officers, Administrative Agents and employees) which performs duties in
connection with this Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective provisions to which the
Administrative Agent is entitled under Articles IX and X.

      10.15. Execution of Collateral Documents. The Lenders hereby empower and
authorize the Administrative Agent to execute and deliver to the Borrower on
their behalf the Collateral Documents and all related financing statements and
any financing statements, agreements, documents or instruments as shall be
necessary or appropriate to effect the purposes of the Collateral Documents.

      10.16. Collateral Releases. The Lenders hereby empower and authorize the
Administrative Agent to execute and deliver to the Borrower on their behalf any
agreements, documents or instruments as shall be necessary or appropriate to
effect any releases of Collateral which shall be permitted by the terms hereof
or of any other Loan Document or which shall otherwise have been approved by the
Required Lenders (or, if required by the terms of Section 8.2, all of the
Lenders) in writing.

      10.17. Co-Documentation Agents, Syndication, Agent, etc. Neither any of
the Lenders identified in this Agreement as a "co-Documentation Agent" nor the
Syndication Agent shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of such Lenders shall have
or be deemed to have a fiduciary relationship with any Lender. Each Lender
hereby makes the same acknowledgments with respect to such Lenders as it makes
with respect to the Administrative Agent in Section 10.11.

                                   ARTICLE XI

                            SETOFF; RATABLE PAYMENTS

      11.1. Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any

                                      -56-

<PAGE>

Lender to or for the credit or account of the Borrower may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part thereof, shall then be due. Each Lender agrees to
notify the Borrower promptly after such set-off and application made by such
Lender, provided the failure to give such notice shall not affect the validity
of such set-off or application.

      11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.

                                   ARTICLE XII

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

      12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns permitted hereby, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (ii) any assignment by any Lender must be made in compliance with
Section 12.3, and (iii) any transfer by Participation must be made in compliance
with Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with Section
12.3.2. The parties to this Agreement acknowledge that clause (ii) of this
Section 12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
(x) any pledge or assignment by any Lender of all or any portion of its rights
under this Agreement and any Note to a Federal Reserve Bank or (y) in the case
of a Lender which is a Fund, any pledge or assignment of all or any portion of
its rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Administrative Agent may treat the Person
which made any Loan or which holds any Note as the owner thereof for all
purposes hereof unless and until such Person complies with Section 12.3;
provided, however, that the Administrative Agent may in its discretion (but
shall not be required to) follow instructions from the Person which made any
Loan or which holds any Note to direct payments relating to such Loan or Note to
another Person. Any assignee of the rights to any Loan or any Note agrees by
acceptance of such assignment to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person, who at the time
of making such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder or assignee of the
rights to such Loan.

      12.2. Participations.

                                      -57-

<PAGE>

            12.2.1. Permitted Participants; Effect. Any Lender may at any time
      sell to one or more banks or other entities ("Participants") participating
      interests in any Outstanding Credit Exposure Loan owing to such Lender,
      any Note held by such Lender, any Commitment of such Lender or any other
      interest of such Lender under the Loan Documents. In the event of any such
      sale by a Lender of participating interests to a Participant, such
      Lender's obligations under the Loan Documents shall remain unchanged, such
      Lender shall remain solely responsible to the other parties hereto for the
      performance of such obligations, such Lender shall remain the owner of its
      Outstanding Credit Exposure Loans and the holder of any Note issued to it
      in evidence thereof for all purposes under the Loan Documents, all amounts
      payable by the Borrower under this Agreement shall be determined as if
      such Lender had not sold such participating interests, and the Borrower
      and the Administrative Agent shall continue to deal solely and directly
      with such Lender in connection with such Lender's rights and obligations
      under the Loan Documents.

            12.2.2. Voting Rights. Each Lender shall retain the sole right to
      approve, without the consent of any Participant, any amendment,
      modification or waiver of any provision of the Loan Documents other than
      any amendment, modification or waiver with respect to any Loan or
      Commitment in which such Participant has an interest which would require
      consent of all of the Lenders pursuant to the terms of Section 8.2 or of
      any other Loan Document.

            12.2.3. Benefit of Certain Provisions. The Borrower agrees that each
      Participant shall be deemed to have the right of setoff provided in
      Section 11.1 in respect of its participating interest in amounts owing
      under the Loan Documents to the same extent as if the amount of its
      participating interest were owing directly to it as a Lender under the
      Loan Documents, provided that each Lender shall retain the right of setoff
      provided in Section 11.1 with respect to the amount of participating
      interests sold to each Participant. The Lenders agree to share with each
      Participant, and each Participant, by exercising the right of setoff
      provided in Section 11.1, agrees to share with each Lender, any amount
      received pursuant to the exercise of its right of setoff, such amounts to
      be shared in accordance with Section 11.2 as if each Participant were a
      Lender. The Borrower further agrees that each Participant shall be
      entitled to the benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same
      extent as if it were a Lender and had acquired its interest by assignment
      pursuant to Section 12.3, provided that (i) a Participant shall not be
      entitled to receive any greater payment under Section 3.1, 3.2 or 3.5 than
      the Lender who sold the participating interest to such Participant would
      have received had it retained such interest for its own account, unless
      the sale of such interest to such Participant is made with the prior
      written consent of the Borrower, and (ii) any Participant not incorporated
      under the laws of the United States of America or any State thereof agrees
      to comply with the provisions of Section 3.5 to the same extent as if it
      were a Lender.

      12.3. Assignments.

            12.3.1. Permitted Assignments. Any Lender may at any time assign to
      one or more banks or other entities ("Purchasers") all or any part of its
      rights and obligations under the Loan Documents. Such assignment shall be
      substantially in the form of Exhibit D or in such other form as may be
      agreed to by the parties thereto. Each such assignment with respect to a
      Purchaser which is not a Lender or an Affiliate of a Lender or an Approved
      Fund shall either be in an amount equal to the entire applicable
      Commitment and Loans of the assigning Lender or be in an aggregate amount
      not less than $5,000,000. The amount of the assignment shall be based on
      the Commitment or outstanding Loans (if the Commitment has been
      terminated) subject to the assignment, determined as of the date of such
      assignment or as of the "Trade Date," if the "Trade Date" is specified in
      the assignment.

                                      -58-

<PAGE>

            12.3.2. Consents. The consent of the Borrower shall be required
      prior to an assignment becoming effective unless the Purchaser is a
      Lender, an Affiliate of a Lender or an Approved Fund, provided that the
      consent of the Borrower shall not be required if a Default has occurred
      and is continuing. The consent of the Administrative Agent and the LC
      Issuer shall be required prior to an assignment becoming effective unless
      the Purchaser is a Lender, an Affiliate of a Lender or an Approved Fund.
      Any consent required under this Section 12.3.2 shall not be unreasonably
      withheld or delayed.

            12.3.3. Effect; Effective Date. Upon (i) delivery to the
      Administrative Agent of an assignment, together with any consents required
      by Sections 12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the
      Administrative Agent for processing such assignment (unless such fee is
      waived by the Administrative Agent), such assignment shall become
      effective on the effective date specified in such assignment. The
      assignment shall contain a representation by the Purchaser to the effect
      that none of the consideration used to make the purchase of the Commitment
      and Loans under the applicable assignment agreement constitutes "plan
      assets" as defined under ERISA and that the rights and interests of the
      Purchaser in and under the Loan Documents will not be "plan assets" under
      ERISA. On and after the effective date of such assignment, such Purchaser
      shall for all purposes be a Lender party to this Agreement and any other
      Loan Document executed by or on behalf of the Lenders and shall have all
      the rights and obligations of a Lender under the Loan Documents, to the
      same extent as if it were an original party thereto, and the transferor
      Lender shall be released with respect to the Commitment and Outstanding
      Credit Exposure Loans assigned to such Purchaser without any further
      consent or action by the Borrower, the Lenders or the Administrative
      Agent. In the case of an assignment covering all of the assigning Lender's
      rights and obligations under this Agreement, such Lender shall cease to be
      a Lender hereunder but shall continue to be entitled to the benefits of,
      and subject to, those provisions of this Agreement and the other Loan
      Documents which survive payment of the Obligations and termination of the
      applicable agreement. Any assignment or transfer by a Lender of rights or
      obligations under this Agreement that does not comply with this Section
      12.3 shall be treated for purposes of this Agreement as a sale by such
      Lender of a participation in such rights and obligations in accordance
      with Section 12.2. Upon the consummation of any assignment to a Purchaser
      pursuant to this Section 12.3.3, the transferor Lender, the Administrative
      Agent and the Borrower shall, if the transferor Lender or the Purchaser
      desires that its Loans be evidenced by Notes, make appropriate
      arrangements so that new Notes or, as appropriate, replacement Notes are
      issued to such transferor Lender and new Notes or, as appropriate,
      replacement Notes, are issued to such Purchaser, in each case in principal
      amounts reflecting their respective Commitments, as adjusted pursuant to
      such assignment.

            12.3.4. Register. The Administrative Agent, acting solely for this
      purpose as an Administrative Agent of the Borrower, shall maintain at one
      of its offices in Chicago, Illinois a copy of each Assignment and
      Assumption delivered to it and a register for the recordation of the names
      and addresses of the Lenders, and the Commitments of, and principal
      amounts of the Loans owing to, each Lender pursuant to the terms hereof
      from time to time (the "Register"). The entries in the Register shall be
      conclusive, and the Borrower, the Administrative Agent and the Lenders may
      treat each Person whose name is recorded in the Register pursuant to the
      terms hereof as a Lender hereunder for all purposes of this Agreement,
      notwithstanding notice to the contrary. The Register shall be available
      for inspection by the Borrower at any reasonable time and from time to
      time upon reasonable prior notice.

      12.4. Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of

                                      -59-

<PAGE>

law (each a "Transferee") and any prospective Transferee any and all information
in such Lender's possession concerning the creditworthiness of the Borrower and
its Subsidiaries, including without limitation any information contained in any
Reports; provided that each Transferee and prospective Transferee agrees to be
bound by Section 9.11 of this Agreement.

      12.5. Tax Treatment. If any interest in any Loan Document is transferred
to any Transferee which is not incorporated under the laws of the United States
or any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(iv).

                                  ARTICLE XIII

                                     NOTICES

      13.1. Notices; Effectiveness; Electronic Communication

            (a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows:

                  (i) if to the Borrower, at its address or telecopier number
                  set forth on the signature page hereof;

                  (ii) if to the Administrative Agent, at its address or
                  telecopier number set forth on the signature page hereof;

                  (iii) if to the LC Issuer, at its address or telecopier number
                  set forth on the signature page hereof;

                  (iv) if to a Lender, to it at its address (or telecopier
                  number) set forth in its administrative questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).

            (b) Electronic Communications. Notices and other communications to
the Lenders may be delivered or furnished by electronic communication (including
e-mail and internet or intranet websites) pursuant to procedures approved by the
Administrative Agent or as otherwise determined by the Administrative Agent,
provided that the foregoing shall not apply to notices to any Lender pursuant to
Article II if such Lender has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic communication.
The Administrative Agent or the Borrower may, in its respective discretion,
agree to accept notices and other communications to it hereunder by electronic

                                      -60-

<PAGE>

communications pursuant to procedures approved by it or as it otherwise
determines, provided that such determination or approval may be limited to
particular notices or communications.

      Unless the Administrative 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 given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given 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.

            (c) Change of Address, Etc. Any party hereto may change its address
or telecopier number for notices and other communications hereunder by notice to
the other parties hereto.

                                   ARTICLE XIV

         COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION

      14.1. Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Article IV, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.

      14.2. Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any assignment and assumption
agreement shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, or any other state laws based on the
Uniform Electronic Transactions Act.

                                   ARTICLE XV

          CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

      15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.

                                      -61-

<PAGE>

      15.2. CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. ANY JUDICIAL PROCEEDING BY ANY PARTY HERETO AGAINST
ANY OTHER PARTY HERETO OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK;
PROVIDED, HOWEVER THAT NOTHING HEREIN SHALL LIMIT THE RIGHT OF ANY PARTY HERETO
TO BRING PROCEEDINGS AGAINST ANY OTHER PARTY HERETO IN THE COURTS OF ANY OTHER
JURISDICTION TO THE EXTENT NECESSARY TO OBTAIN JURISDICTION OVER SUCH OTHER
PARTY OR TO ENFORCE ANY JUDGMENT ENTERED RELATING HERETO.

      15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

                            [signature page follows]

                                      -62-

<PAGE>

      IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent
and Syndication Agent have executed this Agreement as of the date first above
written.

                                        VIAD CORP

                                        By: /s/ Robert H. Bohannon
                                           _____________________________________
                                        Name: Robert H. Bohannon
                                        Title: Chairman of the Board,
                                        President and Chief Executive Officer

                                        By: /s/ Ellen M. Ingersoll
                                           _____________________________________
                                        Name: Ellen M. Ingersoll
                                        Title: Chief Financial Officer

                                              1850 N. Central Ave.
                                              Phoenix, AZ 85077-1012
                                              Attention:  Treasurers' Department
                                                   Telephone: 602-207-7328
                                                   Fax: 602-207-2633

                           [TO VIAD CREDIT AGREEMENT]

                                       S-1

<PAGE>

                                        BANK ONE, NA,
                                        as Lender and as Administrative Agent

                                        By: /s/ Timothy Houlahan
                                           _____________________________________
                                        Its: Managing Director
                                            ____________________________________

                           [TO VIAD CREDIT AGREEMENT]

                                       S-2

<PAGE>

                                        WACHOVIA BANK, NATIONAL ASSOCIATION,
                                        as Lender and as Syndication Agent

                                        By:  /s/ Jeffrey M. Foley
                                            ___________________________________

                                        Its: Vice President
                                            ___________________________________

                           [TO VIAD CREDIT AGREEMENT]

                                       S-3

<PAGE>

                                        BANK OF AMERICA, N.A.

                                        By: /s/ Russell A. McClymont
                                            ____________________________________

                                        Its: Vice President
                                            ____________________________________

                           [TO VIAD CREDIT AGREEMENT]

                                       S-4

<PAGE>

                                        KEY BANK NATIONAL ASSOCIATION

                                        By: /s/ Robert W. Boswell
                                           _____________________________________

                                        Its: Vice President
                                            ____________________________________

                           [TO VIAD CREDIT AGREEMENT]

                                       S-5

<PAGE>

                                        CALYON NEW YORK BRANCH

                                        By: /s/ Philippe Soustra
                                            ____________________________________

                                        Its: Executive Vice President
                                             ___________________________________

                                        By: /s/ F. Frank Herrera
                                            ____________________________________

                                        Its: Director
                                             ___________________________________

                           [TO VIAD CREDIT AGREEMENT]

                                       S-6

<PAGE>

                                        U.S. BANK NATIONAL ASSOCIATION

                                        By: /s/ Karen S. Paris
                                           -------------------------------------
                                        Its: Senior Vice President
                                            ------------------------------------
                           [TO VIAD CREDIT AGREEMENT]

                                       S-7

<PAGE>

                                        BNP PARIBAS

                                        By: /s/ C. Bettles
                                           -------------------------------------
                                        Its: Managing Director
                                            ------------------------------------

                                        By: /s/ Janice S. H. Ho
                                           -------------------------------------
                                        Its: Director
                                            ------------------------------------
                           [TO VIAD CREDIT AGREEMENT]

                                       S-8

<PAGE>

                                        WELLS FARGO BANK, NATIONAL ASSOCIATION

                                        By: /s/ Beth C. McGinnis
                                           -------------------------------------
                                        Its: Senior Vice President
                                            ------------------------------------

                                        By: /s/ James J. Doherty
                                           -------------------------------------
                                        Its: Vice President
                                            ------------------------------------

                           [TO VIAD CREDIT AGREEMENT]

                                       S-9

<PAGE>

                                PRICING SCHEDULE

<TABLE>
<CAPTION>
  APPLICABLE                      LEVEL II  LEVEL III  LEVEL IV   LEVEL V
   MARGIN         LEVEL I STATUS   STATUS    STATUS     STATUS     STATUS
---------------   --------------  --------  ---------  --------   -------
<S>               <C>             <C>       <C>        <C>        <C>
Eurodollar Rate       1.25%         1.50%     1.75%      2.0%      2.25%
Floating Rate         0.00%          .25%      .50%      .75%      1.00%
</TABLE>

<TABLE>
<CAPTION>
   APPLICABLE FEE                     LEVEL II  LEVEL III  LEVEL IV   LEVEL V
       RATE           LEVEL I STATUS   STATUS    STATUS     STATUS     STATUS
--------------------  --------------  --------  ---------  --------   -------
<S>                   <C>             <C>       <C>        <C>        <C>
Letter of Credit Fee      1.25%         1.50%     1.75%      2.0%       2.0%
Commitment Fee             .25%          .30%     .375%      .45%       .50%
</TABLE>

      For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:

      "Financials" means the annual or quarterly financial statements of the
Borrower delivered pursuant to Section 6.1(i) or (ii).

      "Level I Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is less than 1.00 to 1.00.

      "Level II Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status and (ii) the Leverage Ratio is
less than 1.50 to 1.00.

      "Level III Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Leverage Ratio is less than 2.00 to 1.00.

      "Level IV Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status, Level II Status or Level III
Status and (ii) the Leverage Ratio is less than 2.50 to 1.00.

      "Level V Status" exists at any date if the Borrower has not qualified for
Level I Status, Level II Status, Level III Status or Level IV Status.

      "Status" means either Level I Status, Level II Status, Level III Status,
Level IV Status or Level V Status.

      The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as reflected
in the then most recent Financials. Adjustments, if any, to the Applicable
Margin or Applicable Fee Rate shall be effective five Business Days after the
Administrative Agent has received the applicable Financials. Until adjusted as
set forth above, Level III Status shall exist; provided, however, that prior to
the date five Business Days after the

<PAGE>

delivery of Borrower's financial statements to Administrative Agent for the
fiscal quarter ended September 30, 2004 neither Level I Status nor Level II
Status may exist for purposes of this Pricing Schedule. If the Borrower fails to
deliver the Financials to the Administrative Agent at the time required pursuant
to Section 6.1, then the Applicable Margin and Applicable Fee Rate shall be the
highest Applicable Margin and Applicable Fee Rate set forth in the foregoing
table until five days after such Financials are so delivered.

<PAGE>

                               COMMITMENT SCHEDULE

<TABLE>
<CAPTION>
              LENDER                            COMMITMENT
-----------------------------------            ------------
<S>                                            <C>
Bank One, NA                                   $ 30,000,000

Wachovia Bank, National Association            $ 30,000,000

Bank of America, N.A.                          $ 20,000,000

KeyBank National Association                   $ 20,000,000

Calyon New York Branch                         $ 15,000,000

U.S. Bank National Association                 $ 15,000,000

BNP Paribas                                    $ 10,000,000

Wells Fargo Bank, National Association         $ 10,000,000

TOTAL                                          $150,000,000
</TABLE>
<PAGE>

                                    EXHIBIT A

                                      NOTE

                                                                          [Date]

      Viad Corp, a Delaware Corporation (the "Borrower"), promises to pay to the
order of ____________________________________ (the "Lender") the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower pursuant
to Article II of the Agreement (as hereinafter defined), in immediately
available funds at the main office of Bank One, NA in Chicago, Illinois, as
Administrative Agent, together with interest on the unpaid principal amount
hereof at the rates and on the dates set forth in the Agreement. The Borrower
shall pay the principal of and accrued and unpaid interest on the Loans in full
on the Facility Termination Date.

      The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.

      This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Credit Agreement dated as of June __, 2004 (which, as it may be
amended or modified and in effect from time to time, is herein called the
"Agreement"), among the Borrower, the lenders party thereto, including the
Lender, Bank One, NA, as Administrative Agent, and Wachovia Bank, National
Association, as Syndication Agent, to which Agreement reference is hereby made
for a statement of the terms and conditions governing this Note, including the
terms and conditions under which this Note may be prepaid or its maturity date
accelerated. This Note is secured pursuant to the Collateral Documents and
guaranteed pursuant to the Guaranty, all as more specifically described in the
Agreement, and reference is made thereto for a statement of the terms and
provisions thereof. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Agreement.

                                    VIAD CORP

                                    By:
                                        ________________________________________
                                    Print Name:
                                                ________________________________
                                    Title:
                                           _____________________________________

                                    By:
                                        ________________________________________
                                    Print Name:
                                                ________________________________
                                    Title:
                                            ____________________________________

                                      A-1
<PAGE>

                   SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
                                       TO

                          NOTE OF ____________________,
                            DATED __________________,

<TABLE>
<CAPTION>
                   Principal         Maturity     Principal
                   Amount of       of Interest     Amount      Unpaid
Date                 Loan            Period         Paid       Balance
-----------------------------------------------------------------------
<S>                <C>             <C>            <C>          <C>
</TABLE>

                                      A-2
<PAGE>

                                    EXHIBIT B

                             COMPLIANCE CERTIFICATE

To: The Lenders parties to the
    Credit Agreement Described Below

      This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of June __, 2004 (as amended, modified, renewed or extended
from time to time, the "Agreement") among Viad Corp, a Delaware corporation (the
"Borrower"), the lenders party thereto, Bank One, NA, as Administrative Agent
for the Lenders, and Wachovia Bank, National Association, as Syndication Agent.
Unless otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.

      THE UNDERSIGNED HEREBY CERTIFIES THAT:

      1. I am the duly elected __________________ of the Borrower;

      2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;

      3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes a
Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and

      4. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrower's compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct.

      5. Schedule II hereto sets forth the determination of the interest rates
to be paid for Advances and the commitment fee rates commencing on the fifth day
following the delivery hereof.

      6. Except as set forth on Schedule III attached hereto, all reports and
deliveries which are required at this time under the Credit Agreement, the
Security Agreement and the other Loan Documents have been delivered.

      Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:

      ______________________________________________________________________
      ______________________________________________________________________
      ______________________________________________________________________
      ______________________________________________________________________

                                      B-1
<PAGE>

      The foregoing certifications, together with the computations set forth in
Schedule I and Schedule II hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this ____ day of
____________ , ______ .

                                       VIAD CORP

                                       By:
                                          ______________________________________

                                       Its:
                                           _____________________________________

                                       Name:
                                            ____________________________________

                                       By:
                                          ______________________________________

                                       Its:
                                           _____________________________________

                                       Name:
                                            ____________________________________

                                      B-2
<PAGE>

                      SCHEDULE I TO COMPLIANCE CERTIFICATE

                     Compliance as of [_________, ____] with
            Provisions of Sections 6.16, 6.25.1, 6.25.2 and 6.25.3 of
                                  the Agreement

<TABLE>
<CAPTION>
_______________________________________________________________________________
MAXIMUM CAPITAL EXPENDITURES
SECTION 6.16
________________________________________________________________________________
                                                                                 FISCAL YEAR ENDED
                                                                                   [_____________]
<S>                                                                              <C>
CAPITAL EXPENDITURES:                                                             $___________

MAXIMUM CAPITAL EXPENDITURES FOR ANY FISCAL YEAR:  $35,000,000
</TABLE>

<TABLE>
<CAPTION>
________________________________________________________________________________
FIXED CHARGE COVERAGE RATIO
SECTION 6.25.1
________________________________________________________________________________
                                                                                     FOUR FISCAL
                                                                                    QUARTERS ENDED
                                                                                    [____________]
<S>                                                                               <C>
1. (a) Consolidated EBITDA                                                        $___________
   (b) Consolidated Rentals                                                       $___________
   (c) Consolidated Capital Expenditures                                          $___________
2. (d) Cash Consolidated Interest Expense                                         $___________
   (e) Consolidated Rentals                                                       $___________
   (f) Scheduled principal payments for Indebtedness for borrowed money (current  $___________
       maturities of long term debt)
   (g) Expense for income taxes paid or accrued(1)                                $___________

FIXED CHARGE COVERAGE RATIO:  (a + b - c)/(d + e + f + g)                         ___:1.0

MINIMUM REQUIRED:                                                                 1.25:1.0
</TABLE>

----------
(1) This amount to exclude with respect to any calculation encompassing
Borrower's 2003 fourth quarter, the sum of $1,746,000 for taxes paid with
respect to 2003 fourth quarter non-cash interest income in the approximate
amount of $4,600,000.

                                      B-3
<PAGE>

<TABLE>
<CAPTION>
________________________________________________________________________________
LEVERAGE RATIO
SECTION 6.25.2
________________________________________________________________________________
                                                                                    FOUR FISCAL
                                                                                   QUARTERS ENDED
                                                                                   [__________]
<S>                                                                                <C>
1. (a) Consolidated Indebtedness                                                   $ ____________
2. (b) Consolidated EBITDA                                                         $ ____________

LEVERAGE RATIO:  (a/b)                                                             ___:___

MAXIMUM ALLOWED:                                                                   2.65:1.0
</TABLE>

<TABLE>
<CAPTION>
________________________________________________________________________________
MINIMUM CONSOLIDATED NET WORTH
SECTION 6.25.3
________________________________________________________________________________
                                                                                       AT ALL TIMES
<S>                                                                                   <C>
CONSOLIDATED NET WORTH                                                                $ ____________

MINIMUM:

(a) $325,069,000                                                                      $ ____________
(b) 50% of Consolidated Net Income earned in each fiscal quarter beginning            $ ____________
with the quarter ending June 30, 2004 (without deduction for losses):

MINIMUM CONSOLIDATED TANGIBLE NET WORTH: a + b                                        $ ____________
</TABLE>

                                      B-4
<PAGE>

                      SCHEDULE II TO COMPLIANCE CERTIFICATE

                    Borrower's Applicable Margin Calculation

                            Level [I][II][III][IV][V]

<TABLE>
<CAPTION>
APPLICABLE MARGIN OR FEE RATE
-----------------------------
<S>                                         <C>
Eurodollar Rate                             _____%
Floating Rate                               _____%
Letter of Credit Fee                        _____%
Commitment Fee                              _____%
</TABLE>

                                      B-5
<PAGE>

                     SCHEDULE III TO COMPLIANCE CERTIFICATE

                      Reports and Deliveries Currently Due

                                      B-6
<PAGE>

                                    EXHIBIT C

                 LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION

To Bank One, NA,
as Administrative Agent (the " Administrative Agent") under the Credit Agreement
Described Below.

Re:   Credit Agreement, dated June __, 2004 (as the same may be amended or
      modified, the "Credit Agreement"), among Viad Corp (the "Borrower"),
      the Lenders named therein, the Administrative Agent and the Syndication
      Agent. Capitalized terms used herein and not otherwise defined herein
      shall have the meanings assigned thereto in the Credit Agreement.

      The Administrative Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Borrower, provided, however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Borrower in
accordance with Section 13.1 of the Credit Agreement or based on any telephonic
notice made in accordance with Section 2.15 of the Credit Agreement.

Facility Identification Number(s)
                                 _______________________________________________

Customer/Account Name
                     ___________________________________________________________

Transfer Funds To
                 _______________________________________________________________

                       _________________________________________________________

For Account No.
               _________________________________________________________________

Reference/Attention To
                      __________________________________________________________

Authorized Officer (Customer Representative)            Date
                                                              __________________

____________________________________________       _____________________________
(Please Print)                                     Signature

Bank Officer Name                                  Date
                                                       _________________________

____________________________________________       _____________________________
(Please Print)                                     Signature

    (Deliver Completed Form to Credit Support Staff For Immediate Processing)

                                      C-1
<PAGE>

                                    EXHIBIT D

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

      This Assignment and Assumption (the "Assignment and Assumption") is dated
as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

      For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, the interest in and to all of the
Assignor's rights and obligations in its capacity as a Lender under the Credit
Agreement and any other documents or instruments delivered pursuant thereto that
represents the amount and percentage interest identified below of all of the
Assignor's outstanding rights and obligations under the respective facilities
identified below (including without limitation any letters of credit, guaranties
and swingline loans included in such facilities and, to the extent permitted to
be assigned under applicable law, all claims (including without limitation
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity), suits, causes of action and any other right of the
Assignor against any Person whether known or unknown arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby) (the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.

1. Assignor: ___________________________________

2. Assignee: ____________________________________[and is an
Affiliate/Approved Fund of [identify Lender](2)

3. Borrower(s): _________________________________

4. Administrative Agent: ___________________________________________, as the
administrative agent under the Credit Agreement.

5. Credit Agreement: The $150,000,000 Credit Agreement dated as of June __, 2004
among Viad Corp, the Lenders party thereto, Bank One, NA, as Administrative
Agent, and the other agents party thereto.

_______________________
(2) Select as applicable.

                                      D-1
<PAGE>

6. Assigned Interest:

<TABLE>
<CAPTION>
                         Aggregate Amount of         Amount of         Percentage Assigned
                           Commitment/Loans       Commitment/Loans             of
Facility Assigned          for all Lenders*           Assigned*         Commitment/Loans(2)
<S>                      <C>                      <C>                  <C>
____________(3)                 $                       $                      _______%
____________                    $                       $                      _______%
</TABLE>

7. Trade Date: _____________________________ (4)

Effective Date: ____________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE
ADMINISTRATIVE AGENT.]

   The terms set forth in this Assignment and Assumption are hereby agreed to:

                                    ASSIGNOR
                                    [NAME OF ASSIGNOR]

                                    By:
                                         ___________________________________
                                         Title:

                                    ASSIGNEE
                                    [NAME OF ASSIGNEE]

                                    By:
                                        _____________________________________
                                                Title:

[Consented to and](5) Accepted:

[NAME OF ADMINISTRATIVE AGENT], as Administrative Agent

By:
 ____________________________________
Title:

[Consented to:](6)

*Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.

(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.

(3) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. "Revolving
Credit Commitment," etc.)

(4) Insert if satisfaction of minimum amounts is to be determined as of the
Trade Date.

(5) To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.

                                      D-2
<PAGE>

(6) To be added only if the consent of the Borrower and/or other parties (e.g.
Swingline Lender, L/C Issuer) is required by the terms of the Credit Agreement.

[NAME OF RELEVANT PARTY]

By:
   ______________________________________
Title:

                                      D-3
<PAGE>

                                     ANNEX 1

                            TERMS AND CONDITIONS FOR
                            ASSIGNMENT AND ASSUMPTION

            1. Representations and Warranties.

            1.1 Assignor. The Assignor represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be responsible for (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency, perfection, priority,
collectibility, or value of the Loan Documents or any collateral thereunder,
(iii) the financial condition of the Borrower, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Loan Document, (iv)
the performance or observance by the Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Documents, (v) inspecting any of the property, books or records of the
Borrower, or any guarantor, or (vi) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Loans or the Loan Documents.

            1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Lender thereunder, (iii) agrees that its payment
instructions and notice instructions are as set forth in Schedule 1 to this
Assignment and Assumption, (iv) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under ERISA,
(v) agrees to indemnify and hold the Assignor harmless against all losses, costs
and expenses (including, without limitation, reasonable attorneys' fees) and
liabilities incurred by the Assignor in connection with or arising in any manner
from the Assignee's non-performance of the obligations assumed under this
Assignment and Assumption, (vi) it has received a copy of the Credit Agreement,
together with copies of financial statements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Administrative Agent or any other
Lender, and (vii) attached as Schedule 1 to this Assignment and Assumption is
any documentation required to be delivered by the Assignee with respect to its
tax status pursuant to the terms of the Credit Agreement, duly completed and
executed by the Assignee and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with

                                      D-4
<PAGE>

their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

            2. Payments. The Assignee shall pay the Assignor, on the Effective
Date, the amount agreed to by the Assignor and the Assignee. From and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.

            3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of New York.

                                      D-5
<PAGE>

                          ADMINISTRATIVE QUESTIONNAIRE

        (Schedule to be supplied by Closing Unit or Trading Documentation
                                      Unit)

    (For Forms for Primary Syndication call Peterine Svoboda at 312-732-8844)
      (For Forms after Primary Syndication call Jim Bartz at 312-732-1242)

                                      D-6
<PAGE>

              US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS

     (Schedule to be supplied by Closing Unit or Trading Documentation Unit)

    (For Forms for Primary Syndication call Peterine Svoboda at 312-732-8844)
      (For Forms after Primary Syndication call Jim Bartz at 312-732-1242)

                                      D-7
<PAGE>

                          PLEDGE AND SECURITY AGREEMENT

      THIS PLEDGE AND SECURITY AGREEMENT is entered into as of June 30, 2004 by
and between Viad Corp, a Delaware corporation (the "Borrower"), and Bank One,
NA, a national banking association having its principal office in Chicago,
Illinois, in its capacity as Administrative Agent (the "Agent") for the lenders
party to the Credit Agreement referred to below.

                              PRELIMINARY STATEMENT

      The Borrower, the Agent, the Lenders and Wachovia Bank, National
Association, as Syndication Agent, are entering into a Credit Agreement dated as
of June 30, 2004 (as it may be amended or modified from time to time, the
"Credit Agreement"). The Borrower is entering into this Pledge and Security
Agreement (as it may be amended or modified from time to time, the "Security
Agreement") in order to induce the Lenders to enter into and extend credit to
the Borrower under the Credit Agreement.

      NOW THEREFORE, the Borrower and the Agent hereby agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

      1.1. Terms Defined in Credit Agreement. All capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.

      1.2. Terms Defined in New York Uniform Commercial Code. Terms defined in
the New York UCC which are not otherwise defined in this Security Agreement or
in the Credit Agreement are used herein as defined in the New York UCC.

      1.3. Definitions of Certain Terms Used Herein. As used in this Security
Agreement, in addition to the terms defined in the Preliminary Statement, the
following terms shall have the following meanings:

      "Accounts" shall have the meaning set forth in Article 9 of the New York
UCC.

      "Article" means a numbered article of this Security Agreement, unless
another document is specifically referenced.

      "Chattel Paper" shall have the meaning set forth in Article 9 of the New
York UCC.

<PAGE>

      "Collateral" means all Accounts, Chattel Paper, Documents, Equipment,
General Intangibles, Instruments, Inventory, Investment Property, Pledged
Deposits, Pledged Shares, and Other Collateral, wherever located, in which,
after giving effect to the Principal Spin-off Transactions, the Borrower now has
or hereafter acquires any right or interest, and the proceeds (including Stock
Rights), insurance proceeds and products thereof and accessions thereto,
together with all books and records, customer lists, credit files, computer
files, programs, printouts and other computer materials and records related
thereto.

      "Commercial Tort Claims" shall have the meaning set forth in Article 9 of
the New York UCC.

      "Control" shall have the meaning set forth in Article 8 or, if applicable,
in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the New York UCC.

      "Default" means an event described in Section 5.1.

      "Deposit Accounts" shall have the meaning set forth in Article 9 of the
New York UCC, but shall expressly exclude the Excluded Deposit Accounts.

      "Documents" shall have the meaning set forth in Article 9 of the New York
UCC.

      "Equipment" shall have the meaning set forth in Article 9 of the New York
UCC.

      "Excluded Deposit Accounts" means Deposit Accounts specifically and
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit of the Borrower's employees.

      "Excluded Stock" means the Securities and other Investment Property
described in Exhibit F hereto.

      "Exhibit" refers to a specific exhibit to this Security Agreement, unless
another document is specifically referenced.

      "General Intangibles" shall have the meaning set forth in Article 9 of the
New York UCC and shall include patents, trademarks, tradenames and other
intellectual property.

      "Governmental Authority" shall mean any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality or
any court, in each case, whether of the United States or foreign.

      "Instruments" shall have the meaning set forth in Article 9 of the New
York UCC.

      "Inventory" shall have the meaning set forth in Article 9 of the New York
UCC.

      "Investment Property" shall have the meaning set forth in Article 9 of the
New York UCC.

                                      -2-
<PAGE>

      "Lenders" means the lenders party to the Credit Agreement and their
successors and assigns.

      "New York UCC" means the New York Uniform Commercial Code as in effect
from time to time.

      "Obligations" means any and all existing and future indebtedness,
obligation and liability of every kind, nature and character, direct or
indirect, absolute or contingent (including all renewals, extensions and
modifications thereof), of the Borrower to the Agent or any Lender or any
branch, subsidiary or affiliate thereof, arising under or pursuant to this
Security Agreement, the Credit Agreement and any promissory note or notes now or
hereafter issued under the Credit Agreement.

      "Other Collateral" means any property of the Borrower (other than real
estate or as otherwise provided herein) not included within the defined terms
Accounts, Chattel Paper, Documents, Equipment, General Intangibles, Instruments,
Inventory, Investment Property, Pledged Deposits, and Pledged Shares, including,
without limitation, all cash on hand, letter-of-credit rights, letters of
credit, Stock Rights and Deposit Accounts or other deposits (general or special,
time or demand, provisional or final) with any bank or other financial
institution, it being intended that the Collateral include all property of the
Borrower other than real estate, except as otherwise provided herein.

      "Pledged Deposits" means all time deposits of money (other than Deposit
Accounts and Instruments), whether or not evidenced by certificates, which the
Borrower may from time to time designate as pledged to the Agent as security for
any Obligation, and all rights to receive interest on said deposits.

      "Pledged Issuer" means a Person the securities or ownership interests of
which have been pledged pursuant hereto.

      "Pledged Shares" means (i) the shares of Capital Stock described in
Exhibit E hereto issued by the Persons described in such Exhibit E (the
"Existing Issuers"), (ii) the shares of Capital Stock at any time and from time
to time acquired by such Pledgor of any and all Persons now or hereafter
existing and required to be pledged to the Agent pursuant to the terms of the
Credit Agreement (such Persons, together with the Existing Issuers, being
hereinafter referred to collectively as the "Pledged Issuers" and individually
as a "Pledged Issuer"), and (iii) the certificates representing such Capital
Stock, all options and other rights, contractual or otherwise, in respect
thereof, and all dividends, distributions, cash, Instruments, Investment
Property and other property (including, but not limited to, any stock dividend
and any distribution in connection with a stock split) from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing; provided, however, if any Pledged Issuer is a
Foreign Subsidiary, the security interest granted by the Borrower to the Agent
shall be limited to 65% of the voting Capital Stock of such Pledged Issuer.

                                      -3-
<PAGE>

      "Receivables" means the Accounts, Chattel Paper, Documents, Investment
Property, Instruments or Pledged Deposits, and any other rights or claims to
receive money which are General Intangibles or which are otherwise included as
Collateral.

      "Required Secured Parties" means (x) prior to an acceleration of the
obligations under the Credit Agreement, the Required Lenders, (y) after an
acceleration of the obligations under the Credit Agreement but prior to the date
upon which the Credit Agreement has terminated by its terms and all of the
obligations thereunder have been paid in full, Lenders and their Affiliates
holding in the aggregate at least 51% of the total of (i) the unpaid principal
amount of outstanding Advances and (ii) the aggregate net early termination
payments and all other amounts then due and unpaid from the Borrower to the
Lenders or their Affiliates under Rate Management Transactions, as determined by
the Agent in its reasonable discretion, and (z) after the Credit Agreement has
terminated by its terms and all of the obligations thereunder have been paid in
full (whether or not the obligations under the Credit Agreement were ever
accelerated), Lenders and their Affiliates holding in the aggregate at least 51%
of the aggregate net early termination payments and all other amounts then due
and unpaid from the Borrower to the Lenders or their Affiliates under Rate
Management Transactions, as determined by the Agent in its reasonable
discretion.

      "Requirements of Law" means any law, rule, regulation, order, writ,
judgment, injunction decree or award binding on the Borrower or any of its
properties.

      "Section" means a numbered section of this Security Agreement, unless
another document is specifically referenced.

      "Secured Obligations" means the Obligations and Rate Management
Obligations owing to one or more of the Lenders (including Lenders which have
ceased to be party to the Credit Agreement) or their Affiliates.

      "Security" has the meaning set forth in Article 8 of the New York UCC.

      "Stock Rights" means any securities, dividends or other distributions and
any other right or property which the Borrower shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any securities or other ownership interests in a
corporation, partnership, joint venture or limited liability company
constituting Collateral and any securities, any right to receive securities and
any right to receive earnings, in which the Borrower now has or hereafter
acquires any right, issued by an issuer of such securities.

      "Unrestricted Subsidiary Stock" means the Capital Stock of any Subsidiary
that the Borrower is not required to pledge to the Agent pursuant to Section
6.24 of the Credit Agreement.

      The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.

                                      -4-
<PAGE>

                                   ARTICLE II

                           GRANT OF SECURITY INTEREST

      The Borrower hereby pledges, assigns and grants to the Agent, on behalf of
and for the ratable benefit of the Agent and the Lenders and (to the extent
specifically provided herein) their Affiliates, a security interest in all of
the Borrower's right, title and interest in and to the Collateral to secure the
prompt and complete payment and performance of the Secured Obligations.
Notwithstanding any of the other provisions set forth in this Article II, this
Security Agreement shall not constitute a grant of a security interest in (and
the term "Collateral" shall not include) (i) the Excluded Stock and (ii)
Unrestricted Subsidiary Stock.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

      The Borrower represents and warrants to the Agent and the Lenders that:

      3.1. Title, Authorization, Validity and Enforceability. The Borrower has
good and valid rights in or the power to transfer the Collateral and title to
the Collateral with respect to which it has purported to grant a security
interest hereunder, free and clear of all Liens except for Liens permitted under
Section 4.1.6, and has full power and authority to grant to the Agent the
security interest in such Collateral pursuant hereto. The execution and delivery
by the Borrower of this Security Agreement has been duly authorized by proper
corporate proceedings, and this Security Agreement constitutes a legal, valid
and binding obligation of the Borrower and creates a security interest which is
enforceable against the Borrower in all now owned and hereafter acquired
Collateral to the extent governed by Articles 8 and 9 of the New York UCC. When
financing statements have been filed in the appropriate offices against the
Borrower in the locations listed on Exhibit "D", the Agent will have a fully
perfected first priority security interest in that Collateral in which a
security interest may be perfected by filing under the New York UCC, subject
only to Liens permitted under Section 6.15 (i) - (v) and (vii) - (ix) of the
Credit Agreement.

      3.2. Conflicting Laws and Contracts. Neither the execution and delivery by
the Borrower of this Security Agreement, the creation and perfection of the
security interest in the Collateral granted hereunder, nor compliance with the
terms and provisions hereof will (i) violate any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on the Borrower, (ii)
violate the Borrower's certificate of incorporation or by-laws, (iii) violate
the provisions of any indenture, instrument or agreement to which the Borrower
is a party or is subject, or by which it, or its property, is bound, or conflict
with or constitute a default thereunder, except where such violation, conflict
or default could not reasonably be expected to result in a Default under Section
7.5 of the Credit Agreement or a Material Adverse Effect, or (iv) result in the
creation or imposition of any Lien pursuant to the terms of any material

                                      -5-
<PAGE>

indenture, instrument or agreement to which the Borrower is a party or is
subject, or by which it, or its property, is bound (other than any Lien of the
Agent on behalf of the Lenders).

      3.3. Type and Jurisdiction of Organization. The Borrower is a corporation
organized under the laws of the State of Delaware.

      3.4. Principal Location. The Borrower's mailing address and the location
of its place of business (if it has only one) or its chief executive office (if
it has more than one place of business), as of the date hereof, are disclosed in
Exhibit "A"; the Borrower has no other places of business as of the date hereof
except those set forth in Exhibit "A".

      3.5. Property Locations. The Inventory, Equipment and Fixtures are located
solely at the locations described in Exhibit "A". All of said locations are
owned by the Borrower except for locations (i) which are leased by the Borrower
as lessee and designated in Part B of Exhibit "A" and (ii) at which Inventory is
held in a public warehouse or is otherwise held by a bailee or on consignment as
designated in Part C of Exhibit "A", with respect to which Inventory the
Borrower has, to the extent requested by the Agent, delivered bailment
agreements, warehouse receipts, financing statements or other documents
satisfactory to the Lenders to protect the Agent's security interest in such
Inventory.

      3.6. No Other Names. Except as set forth on Schedule 3.6 hereto, the
Borrower has not conducted business under any name in the last five (5) years
except the name in which it has executed this Security Agreement, which is the
exact name as it appears in the Borrower's organizational documents, as amended,
as filed with the Borrower's jurisdiction of organization.

      3.7. Accounts and Chattel Paper. The names of the obligors, amounts owing,
due dates and other information with respect to the Accounts and Chattel Paper
are and will be correctly stated in all material respects in all records of the
Borrower relating thereto and in all invoices and reports with respect thereto
furnished to the Agent by the Borrower from time to time. As of the time when
each Account or each item of Chattel Paper arises, the Borrower shall be deemed
to have represented and warranted that such Account or Chattel Paper, as the
case may be, and all records relating thereto, are genuine and in all material
respects what they purport to be.

      3.8. Filing Requirements. None of the Equipment is covered by any
certificate of title, except for the vehicles described in Part A of Exhibit
"B". None of the Collateral is of a type for which security interests or liens
may be perfected by filing under any federal statute except for (i) the vehicles
described in Part B of Exhibit "B," (ii) patents, trademarks and copyrights held
by the Borrower and described in Part C of Exhibit "B," and (iii) the Borrower's
1992 Gulfstream IV Aircraft, Tail #N99GA, Serial #1198.

      3.9. No Financing Statements. Except as set forth on Schedule 3.9 hereto,
no financing statement describing all or any portion of the Collateral which has
not lapsed or been terminated naming the Borrower as debtor has been filed in
any jurisdiction except financing statements naming the Agent as the secured
party and financing statements filed from time to time in connection with Liens
permitted under Section 4.1.6.

                                      -6-
<PAGE>

      3.10. Federal Employer Identification Number. The Borrower's Federal
employer identification number is 36-1169950.

      3.11. State Organization Number. The Borrower's Delaware State
organization number is 2281868.

      3.12. Pledged Securities and Other Investment Property. Exhibit "C" sets
forth a complete and accurate list of the Instruments, Securities and other
Investment Property constituting Collateral that were delivered to the Agent,
which are all of the Instruments, Securities and Investment Property
constituting Collateral owned by the Borrower as of the date hereof other than
the Pledged Shares. The Borrower is the direct and beneficial owner of each
Instrument, Security and other type of Investment Property listed on Exhibit "C"
as being owned by it, free and clear of any Liens, except for the security
interest granted to the Agent for the benefit of the Lenders hereunder and Liens
permitted under Section 4.1.6.

      3.13. Pledged Shares. The Borrower is the direct and beneficial owner of
the Pledged Shares listed on Exhibit "E" as being owned by it, free and clear of
any Liens, except for the security interest granted to the Agent for the benefit
of the Lenders hereunder and Liens permitted under Section 4.1.6. The Borrower
further represents and warrants that (i) all such Pledged Shares have been (to
the extent such concepts are relevant with respect to such Pledged Shares) duly
and validly issued, are fully paid and non-assessable, and (ii) with respect to
any Pledged Shares delivered to the Agent representing an ownership interest in
a partnership or limited liability company, either such certificates are
Securities as defined in Article 8 of the Uniform Commercial Code of the
applicable jurisdiction as a result of actions by the issuer or otherwise, or,
if such Pledged Shares are not Securities, the Borrower has so informed the
Agent so that the Agent may take steps to perfect its security interest therein
as a General Intangible.

                                   ARTICLE IV

                                    COVENANTS

      From the date of this Security Agreement, and thereafter until this
Security Agreement is terminated:

      4.1. General.

            4.1.1. Inspection. The Borrower will permit the Agent or any Lender,
      by its representatives and agents (i) to inspect the Collateral, (ii) to
      examine and make copies of the records of the Borrower relating to the
      Collateral and (iii) to discuss the Collateral and the related records of
      the Borrower with, and to be advised as to the same by, the Borrower's
      officers and employees (and, in the case of any Receivable, with any
      person or entity which is or may be obligated thereon), all upon
      reasonable prior notice and at such reasonable times and intervals as the
      Agent or such Lender may determine, and all at the Borrower's expense.

                                      -7-
<PAGE>

            4.1.2. Taxes. The Borrower will pay when due all taxes, assessments
      and governmental charges and levies upon the Collateral, except those
      which are being contested in good faith by appropriate proceedings and
      with respect to which adequate reserves have been set aside in accordance
      with GAAP.

            4.1.3. Records and Reports; Notification of Default. The Borrower
      will maintain in all material respects complete and accurate books and
      records with respect to the Collateral, and furnish to the Agent, with
      sufficient copies for each of the Lenders, such reports relating to the
      Collateral as the Agent shall from time to time request. The Borrower will
      give prompt notice in writing to the Agent and the Lenders after becoming
      aware of any material adverse fact or condition which bears upon the value
      of the Collateral including any adverse fact or condition, or the
      occurrence of any event, which causes material loss or depreciation in the
      value of any material item of the Collateral (ordinary wear and tear
      excepted) and the amount of such loss or depreciation.

            4.1.4. Financing Statements and Other Actions; Defense of Title. The
      Borrower hereby authorizes the Agent to file, and if requested will
      execute and deliver to the Agent, all financing statements and other
      documents including, without limitation, notices to be filed with US PTO
      and/or the US Copyright Office and take such other actions as may from
      time to time be requested by the Agent in order to maintain, except as
      otherwise permitted in any Loan Document, a first perfected security
      interest in and, if applicable, Control of, the Collateral. The Borrower
      will take any and all actions necessary to defend title to the Collateral
      against all persons and to defend the security interest of the Agent in
      the Collateral and the priority thereof against any Lien not expressly
      permitted hereunder.

            4.1.5. Disposition of Collateral. The Borrower will not sell, lease
      or otherwise dispose of the Collateral except (i) prior to the occurrence
      of a Default or Unmatured Default, dispositions specifically permitted
      pursuant to Section 6.13 of the Credit Agreement, (ii) until such time
      following the occurrence of a Default as the Borrower receives a notice
      from the Agent instructing the Borrower to cease such transactions, sales
      or leases of Inventory in the ordinary course of business, and (iii) until
      such time as the Borrower receives a notice from the Agent pursuant to
      Article VII, proceeds of Inventory and Accounts collected in the ordinary
      course of business.

            4.1.6. Liens. The Borrower will not create, incur, or suffer to
      exist any Lien on the Collateral except (i) the security interest created
      by this Security Agreement, and (ii) other Liens permitted pursuant to
      Section 6.15 of the Credit Agreement.

            4.1.7. Change in Corporate Existence, Type or Jurisdiction of
      Organization, Location, Name. The Borrower will:

            (a)   preserve its existence as a corporation and not, in one
                  transaction or a series of related transactions, merge into or
                  consolidate with any other entity, or sell all or
                  substantially all of its assets;

            (b)   not change its state of organization;

                                      -8-
<PAGE>

            (c)   not maintain its place of business (if it has only one) or its
                  chief executive office (if it has more than one place of
                  business) at a location other than a location specified on
                  Exhibit "A;" and

            (d)   not (i) have any Inventory or Equipment or proceeds or
                  products thereof (other than Inventory and proceeds thereof
                  disposed of as permitted by Section 4.1.5 or Inventory and
                  Equipment located at or in transit to conventions, trade shows
                  or other similar events in the ordinary course of business) at
                  a location other than a location specified in Exhibit "A",
                  (ii) change its name or taxpayer identification number or
                  (iii) change its mailing address,

      unless the Borrower shall have given the Agent not less than 10 Business
      Days' prior written notice of such event or occurrence and the Agent shall
      have either (x) determined that such event or occurrence will not
      adversely affect the validity, perfection or priority of the Agent's
      security interest in the Collateral, or (y) taken such steps (with the
      cooperation of the Borrower to the extent reasonably necessary or
      advisable) as are reasonably necessary or advisable to properly maintain
      the validity, perfection and priority of the Agent's security interest in
      the Collateral.

            4.1.8. Other Financing Statements. The Borrower will not sign or
      authorize the signing on its behalf or the filing of any financing
      statement naming it as debtor covering all or any portion of the
      Collateral, except as permitted by Section 4.1.6.

      4.2. Receivables.

            4.2.1. Certain Agreements on Receivables. The Borrower will not make
      or agree to make any discount, credit, rebate or other reduction in the
      original amount owing on a Receivable in excess of $100,000 or accept in
      satisfaction of a Receivable in excess of $100,000 less than the original
      amount thereof, except that, prior to the occurrence of a Default, the
      Borrower may reduce the amount of Accounts arising from the sale of
      Inventory or the delivery of services in accordance with its present
      policies and in the ordinary course of business.

            4.2.2. Collection of Receivables. Except as otherwise provided in
      this Security Agreement, the Borrower will collect and enforce, at the
      Borrower's sole expense, all amounts due or hereafter due to the Borrower
      under the Receivables in accordance with its customary collection policies
      and in the ordinary course of business.

            4.2.3. Delivery of Invoices. To the extent reasonably practicable
      under the circumstances, the Borrower will deliver to the Agent
      immediately upon its request after the occurrence of a Default duplicate
      invoices with respect to each Account bearing such language of assignment
      as the Agent shall specify.

            4.2.4. Disclosure of Counterclaims on Receivables. If (i) any
      discount, credit or agreement to make a rebate or to otherwise reduce the
      amount owing on a Receivable in

                                      -9-
<PAGE>

      excess of $100,000 exists or (ii) if, to the knowledge of the Borrower,
      any dispute, setoff, claim, counterclaim or defense exists or has been
      asserted or threatened with respect to a Receivable in excess of $100,000,
      the Borrower will disclose such fact to the Agent in writing in connection
      with the inspection by the Agent of any record of the Borrower relating to
      such Receivable and in connection with any invoice or report furnished by
      the Borrower to the Agent relating to such Receivable.

      4.3. Inventory and Equipment.

            4.3.1. Maintenance of Goods. The Borrower will do all things
      necessary to maintain, preserve, protect and keep the Inventory and the
      Equipment in good repair and working and saleable condition, ordinary wear
      and tear and damage from condemnation or casualty excepted.

            4.3.2. Insurance. The Borrower will (i) maintain fire and extended
      coverage insurance on the Inventory and Equipment containing a lender's
      loss payable clause in favor of the Agent, on behalf of the Lenders, and
      providing that said insurance will not be terminated except after at least
      30 days' written notice from the insurance company to the Agent, (ii)
      maintain such other insurance on the collateral for the benefit of the
      Agent as the Agent shall from time to time request, (iii) upon the request
      of the Agent from time to time, make the originals of all policies of
      insurance on the Collateral available for inspection at Borrower's offices
      and furnish to the Agent certificates with respect to such insurance and
      (iv) maintain general liability insurance naming the Agent, on behalf of
      the Lenders, as an additional insured; provided, that the foregoing
      insurance policies and programs may be subject to such deductibles or
      self-insurance amounts as reflect coverage that is reasonably consistent
      with prudent industry practices.

            4.3.3. Titled Vehicles. If requested by the Agent, the Borrower will
      give the Agent notice of its acquisition of any vehicle covered by a
      certificate of title (other than a vehicle that is subject to a purchase
      money security interest permitted by Section 6.15 of the Credit Agreement)
      and deliver to the Agent, upon request, the original of any vehicle title
      certificate and do all things necessary to have the Lien of the Agent
      noted on any such certificate. So long as no Default shall have occurred
      and be continuing, upon the request of Borrower, the Agent shall execute
      and deliver to Borrower such instruments as Borrower shall reasonably
      request to remove any notation of the Agent as lienholder on any
      certificate of title for any vehicle; provided, that any such instruments
      shall be delivered, and the release effective, only upon receipt by the
      Agent of a certificate from Borrower, stating that the vehicle, the Lien
      on which is to be released, is to be sold in accordance with Section 4.1.5
      or has suffered a casualty loss (with title thereto passing to the
      casualty insurance company therefor in settlement of the claim for such
      loss), and the amount that such Grantor will receive as sale proceeds or
      insurance proceeds.

      4.4. Instruments, Securities, Chattel Paper, Documents and Pledged
Deposits. The Borrower will (i) deliver to the Agent immediately upon execution
of this Security Agreement the originals of all Chattel Paper, certificated
Securities and Instruments constituting Collateral (if any then exist), (ii)
hold in trust for the Agent upon receipt and immediately thereafter deliver

                                      -10-
<PAGE>

to the Agent any Chattel Paper, Securities and Instruments constituting
Collateral, (iii) upon the designation of any Pledged Deposits (as set forth in
the definition thereof), deliver to the Agent such Pledged Deposits which are
evidenced by certificates included in the Collateral endorsed in blank, marked
with such legends and assigned as the Agent shall specify, and (iv) upon the
Agent's request, after the occurrence and during the continuance of a Default,
deliver to the Agent (and thereafter hold in trust for the Agent upon receipt
and immediately deliver to the Agent) any Document evidencing or constituting
Collateral.

      4.5. Uncertificated Securities and Certain Other Investment Property. The
Borrower will permit the Agent from time to time to cause the appropriate
issuers (and, if held with a securities intermediary, such securities
intermediary) of uncertificated securities or other types of Investment Property
not represented by certificates which are Collateral to mark their books and
records with the numbers and face amounts of all such uncertificated securities
or other types of Investment Property not represented by certificates and all
rollovers and replacements therefor to reflect the Lien of the Agent granted
pursuant to this Security Agreement. The Borrower will take any actions
necessary to cause (i) the issuers of uncertificated securities which are
Collateral and which are Securities and (ii) any financial intermediary which is
the holder of any Investment Property which is Collateral, to cause the Agent to
have and retain Control over such Securities or other Investment Property.
Without limiting the foregoing, the Borrower will, with respect to Investment
Property held with a financial intermediary, cause such financial intermediary
to enter into a control agreement with the Agent in form and substance
satisfactory to the Agent.

      4.6. Stock and Other Ownership Interests.

            4.6.1. Changes in Capital Structure of Issuers. Except to the extent
      permitted under the Credit Agreement, the Borrower will not (i) permit or
      suffer any Pledged Issuer to dissolve, liquidate, retire any of its
      Capital Stock or other Instruments or Securities evidencing ownership,
      reduce its capital or merge or consolidate with any other entity, or (ii)
      vote any of the Pledged Shares in favor of any of the foregoing.

            4.6.2. Issuance of Additional Securities. Except to the extent
      permitted under the Credit Agreement, the Borrower will not permit or
      suffer any Pledged Issuer to issue any securities or other ownership
      interests, any right to receive the same or any right to receive earnings.

            4.6.3. Registration of Pledged Securities and other Investment
      Property. The Borrower will permit any registerable Collateral to be
      registered in the name of the Agent or its nominee at any time at the
      option of the Agent or the Required Secured Parties.

            4.6.4. Exercise of Rights in Pledged Securities and other Investment
      Property. The Borrower will permit the Agent or its nominee at any time
      after the occurrence of a Default, without notice, to exercise all voting
      and corporate rights relating to the Collateral, including, without
      limitation, exchange, subscription or any other rights, privileges, or
      options pertaining to any corporate securities or other ownership
      interests or Investment Property in or of a corporation, partnership,
      joint venture or limited

                                      -11-
<PAGE>

      liability company constituting Collateral and the Stock Rights as if it
      were the absolute owner thereof.

            4.6.5. Dividends and Distributions. The Agent may at any time after
      the occurrence of a Default, by giving the Borrower written notice, elect
      to require that any distributions or dividends on any Securities or
      Investment Property received by Borrower be paid directly to the Agent for
      the benefit of the Lenders. Upon receipt of any such notice from the
      Agent, the Borrower shall thereafter hold in trust for the Agent, on
      behalf of the Lenders, all amounts and proceeds received by it with
      respect to such dividends or distributions and immediately and at all
      times thereafter deliver to the Agent all such amounts and proceeds in the
      same form as so received, whether by cash, check, draft or otherwise, with
      any necessary endorsements. The Agent shall hold and apply funds so
      received as provided by the terms of Sections 7.3 and 7.4.

            4.6.6. Foreign Subsidiaries. The Borrower agrees that the security
      interest in the Pledged Shares of Capital Stock of any Foreign Subsidiary
      purported to be granted in favor of the Agent may be supplemented by one
      or more separate pledge agreements, deeds of pledge, share charges, or
      other similar agreements or instruments, executed and delivered by the
      Borrower in favor of the Agent, which pledge agreements the Borrower
      agrees to execute or cause to be executed and which will provide for the
      pledge of such shares of Capital Stock in accordance with the laws of any
      jurisdiction outside of the United States of America under which such
      Foreign Subsidiary is organized or formed. With respect to such shares of
      Capital Stock of any Foreign Subsidiary, the Agent may, at any time and
      from time to time, in it is reasonable discretion, take actions in such
      foreign jurisdictions necessary to perfect the security interest created
      in such shares of Capital Stock, without the consent of the Borrower.

            4.6.7. Margin Stock. Notwithstanding anything in the Credit
      Agreement or any Loan Document to the contrary, the Borrower will not
      acquire any margin stock (as defined in Regulation U) except to the extent
      permitted by Section 6.14(vii) of the Credit Agreement.

      4.7. Pledged Deposits. The Borrower will not withdraw all or any portion
of any Pledged Deposit or fail to rollover said Pledged Deposit without the
prior written consent of the Agent.

      4.8. Deposit Accounts. The Borrower will (i) upon the Agent's request,
cause each bank or other financial institution in which it maintains (a) a
Deposit Account to enter into a control agreement with the Agent, in form and
substance satisfactory to the Agent in order to give the Agent Control of the
Deposit Account or (b) other deposits (general or special, time or demand,
provisional or final and specifically excluding the Excluded Deposit Accounts)
to be notified of the security interest granted to the Agent hereunder and cause
each such bank or other financial institution to acknowledge such notification
in writing and (ii) upon the Agent's request after the occurrence and during the
continuance of a Default, deliver to each such bank or other financial
institution a letter, in form and substance acceptable to the Agent,
transferring

                                      -12-
<PAGE>

ownership of the Deposit Account to the Agent or transferring dominion and
control over each such other deposit to the Agent. In the case of deposits
maintained with Lenders, the terms of such letter shall be subject to the
provisions of the Credit Agreement regarding setoffs.

      4.9. Letter-of-Credit Rights. The Borrower will upon the Agent's request,
cause each issuer of a letter of credit, to consent to the assignment of
proceeds of the letter of credit in order to give the Agent Control of the
letter-of-credit rights to such letter of credit.

      4.10. Federal, State or Municipal Claims. The Borrower will notify the
Agent of any Collateral which constitutes a claim against the United States
government or any state or local government or any instrumentality or agency
thereof, the assignment of which claim is restricted by federal, state or
municipal law.

      4.11. Commercial Tort Claims. The Borrower will notify the Agent of any
and all Commercial Tort Claims, including, but not limited to, any and all
actions, suits and proceedings before any court or Governmental Authority by or
affecting the Borrower and (ii) execute and deliver such statements, documents
and notices and do and cause to be done all such things as may be reasonably
required by the Agent, or required by law, including all things which may from
time to time be necessary under the New York UCC to fully create preserve,
perfect and protect the priority of the Agent's security interest in any such
Commercial Tort Claims.

                                   ARTICLE V

                                    DEFAULT

      5.1. The occurrence of any one or more of the following events shall
constitute a Default:

            5.1.1. Any representation or warranty made by or on behalf of the
      Borrower under or in connection with this Security Agreement shall be
      materially false as of the date on which made.

            5.1.2. The breach by the Borrower of any of the terms or provisions
      of Sections 4.1.2, 4.1.5, 4.1.6, 4.1.7, 4.2.1, 4.3.2, 4.3.3, 4.4, 4.5,
      4.6, 4.7 or Article VII.

            5.1.3. The breach by the Borrower (other than a breach which
      constitutes a Default under Section 5.1.1 or 5.1.2) of any of the terms or
      provisions of this Security Agreement which is not remedied within 30 days
      after the giving of written notice to the Borrower by the Agent.

            5.1.4. Any material portion of the Collateral shall be transferred
      or otherwise disposed of, either voluntarily or involuntarily, in any
      manner not permitted by Section 4.1.5 or 8.7.

                                      -13-
<PAGE>

            5.1.5. Any Secured Obligation shall not be paid when due (after
      giving effect to applicable periods of grace under the Credit Agreement),
      whether at stated maturity, upon acceleration, or otherwise.

            5.1.6. The occurrence of any "Default" under, and as defined in, the
      Credit Agreement.

            5.1.7. Any limited partnership interests or ownership interests in a
      limited liability company which are included within the Collateral shall
      at any time constitute a Security or the issuer of any such interests
      shall take any action to have such interests treated as a Security unless
      (i) all certificates or other documents constituting such Security have
      been delivered to the Agent and such Security is properly defined as such
      under Article 8 of the Uniform Commercial Code of the applicable
      jurisdiction, whether as a result of actions by the issuer thereof or
      otherwise, or (ii) the Agent has entered into a control agreement with the
      issuer of such Security or with a securities intermediary relating to such
      Security and such Security is defined as such under Article 8 of the
      Uniform Commercial Code of the applicable jurisdiction, whether as a
      result of actions by the issuer thereof or otherwise.

      5.2. Acceleration and Remedies. Upon the acceleration of the obligations
under the Credit Agreement pursuant to Section 8.1 thereof, the Obligations and,
to the extent provided for under the Rate Management Transactions evidencing the
same, the Rate Management Obligations, shall immediately become due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, and the Agent may, with the concurrence or at the
direction of the Required Secured Parties, exercise any or all of the following
rights and remedies:

            5.2.1. Those rights and remedies provided in this Security
      Agreement, the Credit Agreement, or any other Loan Document, provided that
      this Section 5.2.1 shall not be understood to limit any rights or remedies
      available to the Agent and the Lenders prior to a Default.

            5.2.2. Those rights and remedies available to a secured party under
      the New York UCC (whether or not the New York UCC applies to the affected
      Collateral) or under any other applicable law (including, without
      limitation, any law governing the exercise of a bank's right of setoff or
      bankers' lien) when a debtor is in default under a security agreement.

            5.2.3. Without notice except as specifically provided in Section 8.1
      or elsewhere herein, sell, lease, assign, grant an option or options to
      purchase or otherwise dispose of the Collateral or any part thereof in one
      or more parcels at public or private sale, for cash, on credit or for
      future delivery, and upon such other terms as the Agent may deem
      commercially reasonable.

                                      -14-
<PAGE>

The Agent may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered to adversely affect the commercial reasonableness of any sale of the
Collateral.

If, after the Credit Agreement has terminated by its terms and all of the
Obligations have been paid in full, there remain Rate Management Obligations
outstanding, the Required Secured Parties may exercise the remedies provided in
this Section 5.2 upon the occurrence of any event which would allow or require
the termination or acceleration of any Rate Management Obligations pursuant to
the terms of the agreement governing any Rate Management Transaction.

      5.3. Debtor's Obligations Upon Default. Upon the request of the Agent
after the occurrence of a Default, the Borrower will:

            5.3.1. Assembly of Collateral. Assemble and make available to the
      Agent the Collateral and all records relating thereto at any place or
      places reasonably specified by the Agent.

            5.3.2. Secured Party Access. Permit the Agent, by the Agent's
      representatives and agents, to enter any premises where all or any part of
      the Collateral, or the books and records relating thereto, or both, are
      located, to take possession of all or any part of the Collateral and to
      remove all or any part of the Collateral.

      5.4. License. The Agent is hereby granted a license or other right to use,
following the occurrence and during the continuance of a Default, without
charge, the Borrower's labels, patents, copyrights, rights of use of any name,
trade secrets, trade names, trademarks, service marks, customer lists and
advertising matter, or any property of a similar nature, as it pertains to the
Collateral, in completing production of, advertising for sale, and selling any
Collateral, and, following the occurrence and during the continuance of a
Default, the Borrower's rights under all licenses and all franchise agreements
shall inure to the Agent's benefit. In addition, the Borrower hereby irrevocably
agrees that the Agent may, following the occurrence and during the continuance
of a Default, sell any of the Borrower's Inventory directly to any person,
including without limitation persons who have previously purchased the
Borrower's Inventory from the Borrower and in connection with any such sale or
other enforcement of the Agent's rights under this Agreement, may sell Inventory
which bears any trademark owned by or licensed to the Borrower and any Inventory
that is covered by any copyright owned by or licensed to the Borrower and the
Agent may finish any work in process and affix any trademark owned by or
licensed to the Borrower and sell such Inventory as provided herein.

                                   ARTICLE VI

                        WAIVERS, AMENDMENTS AND REMEDIES

      No delay or omission of the Agent or any Lender to exercise any right or
remedy granted under this Security Agreement shall impair such right or remedy
or be construed to be a waiver

                                      -15-
<PAGE>

of any Default or an acquiescence therein, and any single or partial exercise of
any such right or remedy shall not preclude any other or further exercise
thereof or the exercise of any other right or remedy. No waiver, amendment or
other variation of the terms, conditions or provisions of this Security
Agreement whatsoever shall be valid unless in writing signed by the Agent with
the concurrence or at the direction of the Lenders required under Section 8.2 of
the Credit Agreement and then only to the extent in such writing specifically
set forth. All rights and remedies contained in this Security Agreement or by
law afforded shall be cumulative and all shall be available to the Agent and the
Lenders until the Secured Obligations have been paid in full.

                                  ARTICLE VII

                       PROCEEDS; COLLECTION OF RECEIVABLES

      7.1. Lockboxes. Upon request of the Agent after the occurrence of a
Default or Unmatured Default, the Borrower shall execute and deliver to the
Agent irrevocable lockbox agreements in the form provided by or otherwise
acceptable to the Agent, which agreements shall be accompanied by an
acknowledgment by the bank where the lockbox is located of the Lien of the Agent
granted hereunder and of irrevocable instructions to wire all amounts collected
therein to a special collateral account at the Agent.

      7.2. Collection of Receivables. The Agent may at any time after the
occurrence of a Default, by giving the Borrower written notice, elect to require
that the Receivables be paid directly to the Agent for the benefit of the
Lenders. In such event, the Borrower shall, and shall permit the Agent to,
promptly notify the account debtors or obligors under the Receivables of the
Lenders' interest therein and direct such account debtors or obligors to make
payment of all amounts then or thereafter due under the Receivables directly to
the Agent. Upon receipt of any such notice from the Agent, the Borrower shall
thereafter hold in trust for the Agent, on behalf of the Lenders, all amounts
and proceeds received by it with respect to the Receivables and Other Collateral
and immediately and at all times thereafter deliver to the Agent all such
amounts and proceeds in the same form as so received, whether by cash, check,
draft or otherwise, with any necessary endorsements. The Agent shall hold and
apply funds so received as provided by the terms of Sections 7.3 and 7.4.

      7.3. Special Collateral Account. If a Default has occurred and is
continuing, the Agent may require all cash proceeds of the Collateral to be
deposited in a special non-interest bearing cash collateral account with the
Agent and held there as security for the Secured Obligations. The Borrower shall
have no control whatsoever over said cash collateral account. The Agent may (and
shall, at the direction of the Required Lenders), from time to time, apply the
collected balances in said cash collateral account to the payment of the Secured
Obligations whether or not the Secured Obligations shall then be due.

      7.4. Application of Proceeds. The proceeds of the Collateral shall be
applied by the Agent to payment of the Secured Obligations in the following
order unless a court of competent jurisdiction shall otherwise direct:

                                      -16-
<PAGE>

            (a) FIRST, to payment of all costs and expenses of the Agent
      incurred in connection with the collection and enforcement of the Secured
      Obligations or of the security interest granted to the Agent pursuant to
      this Security Agreement;

            (b) SECOND, to payment of all costs and expenses of the Lenders in
      protecting their rights hereunder;

            (c) THIRD, to payment of that portion of the Secured Obligations
      constituting accrued and unpaid interest and fees, and any fees, premiums
      and scheduled periodic payments due under Rate Management Transactions
      permitted by the Credit Agreement pro rata among the Lenders and their
      Affiliates in accordance with the amount of such accrued and unpaid
      interest, fees and scheduled periodic payments owing to each of them;

            (d) FOURTH, to payment of the principal of the Secured Obligations
      and the net early termination payments, breakage and any other Rate
      Management Obligations then due and unpaid from the Borrower to any of the
      Lenders or their Affiliates, pro rata among the Lenders and their
      Affiliates in accordance with the amount of such principal and such net
      early termination payments and other Rate Management Obligations then due
      and unpaid owing to each of them;

            (e) FIFTH, to payment of any Secured Obligations (other than those
      listed above) pro rata among those parties to whom such Secured
      Obligations are due in accordance with the amounts owing to each of them;
      and

            (f) SIXTH, the balance, if any, after all of the Secured Obligations
      have been satisfied, shall be deposited by the Agent into the Borrower's
      general operating account with the Agent or as otherwise directed by the
      Borrower in a notice to the Agent.

                                  ARTICLE VIII

                               GENERAL PROVISIONS

      8.1. Notice of Disposition of Collateral; Condition of Collateral. To the
extent permitted by applicable law, the Borrower hereby waives notice of the
time and place of any public sale or the time after which any private sale or
other disposition of all or any part of the Collateral may be made. To the
extent such notice may not be waived under applicable law, any notice made shall
be deemed reasonable if sent to the Borrower, addressed as set forth in Article
IX, at least ten days prior to (i) the date of any such public sale or (ii) the
time after which any such private sale or other disposition may be made. Agent
shall have no obligation to clean-up or otherwise prepare the Collateral for
sale.

      8.2. Compromises and Collection of Collateral. The Borrower and the Agent
recognize that setoffs, counterclaims, defenses and other claims may be asserted
by obligors with respect to certain of the Receivables, that certain of the
Receivables may be or become uncollectible in whole or in part and that the
expense and probability of success in litigating a

                                      -17-
<PAGE>

disputed Receivable may exceed the amount that reasonably may be expected to be
recovered with respect to a Receivable. In view of the foregoing, the Borrower
agrees that the Agent may at any time and from time to time, if a Default has
occurred and is continuing, compromise with the obligor on any Receivable,
accept in full payment of any Receivable such amount as the Agent in its sole
discretion shall determine or abandon any Receivable, and any such action by the
Agent shall be commercially reasonable so long as the Agent acts in good faith
based on information known to it at the time it takes any such action.

      8.3. Secured Party Performance of Debtor Obligations. Without having any
obligation to do so, the Agent may perform or pay any obligation which the
Borrower has agreed to perform or pay in this Security Agreement and the
Borrower shall reimburse the Agent for any amounts paid by the Agent pursuant to
this Section 8.3. The Borrower's obligation to reimburse the Agent pursuant to
the preceding sentence shall be a Secured Obligation payable on demand.

      8.4. Authorization for Secured Party to Take Certain Action. The Borrower
irrevocably authorizes the Agent at any time and from time to time in the sole
discretion of the Agent and appoints the Agent as its attorney in fact (i) to
execute on behalf of the Borrower as debtor and to file financing statements
necessary or desirable in the Agent's sole discretion to perfect and to maintain
the perfection and priority of the Agent's security interest in the Collateral,
(ii) to indorse and collect any cash proceeds of the Collateral, (iii) to file a
carbon, photographic or other reproduction of this Security Agreement or any
financing statement with respect to the Collateral as a financing statement and
to file any other financing statement or amendment of a financing statement
(which does not add new collateral or add a debtor) in such offices as the Agent
in its sole discretion deems necessary or desirable to perfect and to maintain
the perfection and priority of the Agent's security interest in the Collateral,
(iv) to contact and enter into one or more agreements with the issuers of
uncertificated securities which are Collateral and which are Securities or with
financial intermediaries holding other Investment Property as may be necessary
or advisable to give the Agent Control over such Securities or other Investment
Property, (v) subject to the terms of Section 4.1.5, to enforce payment of the
Receivables in the name of the Agent or the Borrower, (vi) to apply the proceeds
of any Collateral received by the Agent to the Secured Obligations as provided
in Article VII and (vii) to discharge past due taxes, assessments, charges, fees
or Liens on the Collateral (except for such Liens as are specifically permitted
hereunder), and the Borrower agrees to reimburse the Agent on demand for any
payment made or any expense incurred by the Agent in connection therewith,
provided that this authorization shall not relieve the Borrower of any of its
obligations under this Security Agreement or under the Credit Agreement.

      8.5. Specific Performance of Certain Covenants. The Borrower acknowledges
and agrees that a breach of any of the covenants contained in Sections 4.1.5,
4.1.6, 4.4, 5.3, or 8.7 or in Article VII will cause irreparable injury to the
Agent and the Lenders, that the Agent and Lenders have no adequate remedy at law
in respect of such breaches and therefore agrees, without limiting the right of
the Agent or the Lenders to seek and obtain specific performance of other
obligations of the Borrower contained in this Security Agreement, that, in such
case, the covenants of the Borrower contained in the Sections referred to in
this Section 8.5 shall be specifically enforceable against the Borrower.

                                      -18-
<PAGE>

      8.6. Use and Possession of Certain Premises. Upon the occurrence of a
Default, the Agent shall be entitled to occupy and use any premises owned or
leased by the Borrower where any of the Collateral or any records relating to
the Collateral are located until the Secured Obligations are paid or the
Collateral is removed therefrom, whichever first occurs, without any obligation
to pay the Borrower for such use and occupancy.

      8.7. Dispositions Not Authorized. The Borrower is not authorized to sell
or otherwise dispose of the Collateral except as set forth in Section 4.1.5 and
notwithstanding any course of dealing between the Borrower and the Agent or
other conduct of the Agent, no authorization to sell or otherwise dispose of the
Collateral (except as set forth in Section 4.1.5) shall be binding upon the
Agent or the Lenders unless such authorization is in writing signed by the Agent
with the consent or at the direction of the Required Lenders.

      8.8. Benefit of Agreement. The terms and provisions of this Security
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Agent and the Lenders and their respective successors and assigns (including all
persons who become bound as a debtor to this Security Agreement), except that
the Borrower shall not have the right to assign its rights or delegate its
obligations under this Security Agreement or any interest herein, without the
prior written consent of the Agent.

      8.9. Survival of Representations. All representations and warranties of
the Borrower contained in this Security Agreement shall survive the execution
and delivery of this Security Agreement.

      8.10. Taxes and Expenses. Any taxes (including income taxes) payable or
ruled payable by Federal or State authority in respect of this Security
Agreement shall be paid by the Borrower, together with interest and penalties,
if any. The Borrower shall reimburse the Agent for any and all reasonable
out-of-pocket expenses and internal charges (including reasonable attorneys',
auditors' and accountants' fees and reasonable time charges of attorneys,
paralegals, auditors and accountants who may be employees of the Agent) paid or
incurred by the Agent in connection with the preparation, execution, delivery,
administration, collection and enforcement of this Security Agreement and in the
audit, analysis, administration, collection, preservation or sale of the
Collateral (including the expenses and charges associated with any periodic or
special audit of the Collateral). Any and all costs and expenses incurred by the
Borrower in the performance of actions required pursuant to the terms hereof
shall be borne solely by the Borrower.

      8.11. Headings. The title of and section headings in this Security
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.

      8.12. Termination. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Secured
Obligations outstanding) until (i) the Credit Agreement has terminated pursuant
to its express terms and (ii) all of the Secured Obligations have been
indefeasibly paid and performed in full and no commitments of the Agent

                                      -19-
<PAGE>

or the Lenders or any Facility LC which could give rise to any Secured
Obligations are outstanding.

      8.13. Entire Agreement. This Security Agreement embodies the entire
agreement and understanding between the Borrower and the Agent relating to the
Collateral and supersedes all prior agreements and understandings between the
Borrower and the Agent relating to the Collateral.

      8.14. CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS.

      8.15. Distribution of Reports. The Borrower authorizes the Agent, as the
Agent may elect in its sole discretion, to discuss with and furnish to its
affiliates and to the Lenders or to any other person or entity having an
interest in the Secured Obligations (whether as a guarantor, pledgor of
collateral, participant or otherwise) all financial statements, audit reports
and other information pertaining to the Borrower and its Subsidiaries whether
such information was provided by the Borrower or prepared or obtained by the
Agent. Neither the Agent nor any of its employees, officers, directors or agents
makes any representation or warranty regarding any audit reports or other
analyses of the Borrower's and its Subsidiaries' condition which the Agent may
in its sole discretion prepare and elect to distribute, nor shall the Agent or
any of its employees, officers, directors or agents be liable to any person or
entity receiving a copy of such reports or analyses for any inaccuracy or
omission contained in or relating thereto.

      8.16. Indemnity. The Borrower hereby agrees to indemnify the Agent and the
Lenders, and their respective successors, assigns, agents and employees, from
and against any and all liabilities, damages, penalties, suits, reasonable
costs, and out-of-pocket expenses of any kind and nature (including, without
limitation, all expenses of litigation or preparation therefor whether or not
the Agent or any Lender is a party thereto) imposed on, incurred by or asserted
against the Agent or the Lenders, or their respective successors, assigns,
agents and employees, in any way relating to or arising out of this Security
Agreement, or the manufacture, purchase, acceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other
disposition of any Collateral (including, without limitation, latent and other
defects, whether or not discoverable by the Agent or the Lenders or the
Borrower, and any claim for patent, trademark or copyright infringement), except
for any and all liabilities, damages, penalties, suits, reasonable costs and
out-of-pocket expenses of any kind and nature resulting from the gross
negligence or willful misconduct of the Agent or the applicable Lenders.

                                   ARTICLE IX

                                     NOTICES

                                      -20-
<PAGE>

      9.1. Sending Notices. Any notice required or permitted to be given under
this Security Agreement shall be sent (and deemed received) in the manner and to
the addresses set forth in Article XIII of the Credit Agreement.

      9.2. Change in Address for Notices. Each of the Borrower, the Agent and
the Lenders may change the address for service of notice upon it by a notice in
writing to the other parties.

                                   ARTICLE X

                                   THE AGENT

      Bank One, NA has been appointed Agent for the Lenders hereunder pursuant
to Article X of the Credit Agreement. It is expressly understood and agreed by
the parties to this Security Agreement that any authority conferred upon the
Agent hereunder is subject to the terms of the delegation of authority made by
the Lenders to the Agent pursuant to the Credit Agreement, and that the Agent
has agreed to act (and any successor Agent shall act) as such hereunder only on
the express conditions contained in such Article X. Any successor Agent
appointed pursuant to Article X of the Credit Agreement shall be entitled to all
the rights, interests and benefits of the Agent hereunder.

                                      -21-
<PAGE>

      IN WITNESS WHEREOF, the Borrower and the Agent have executed this Security
Agreement as of the date first above written.

                                          VIAD CORP, as Borrower

                                          By: /s/ Robert H. Bohannon
                                              --------------------------

                                          Title: Chairman, President & CEO
                                                 --------------------------

                                          By: /s/ Ellen M. Ingersoll
                                              --------------------------

                                          Title: Chief Financial Officer
                                                 --------------------------

                                          BANK ONE, NA,
                                            as Agent

                                          By: /s/ Timothy Houlahan
                                              --------------------------

                                          Title: Managing Director
                                                 --------------------------

                                      -22-
<PAGE>

                                   EXHIBIT "A"
        (See Sections 3.3, 3.4, 3.5, 4.1.7 and 9.1 of Security Agreement)

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

      _________________________________
      _________________________________
      _________________________________
      _________________________________
      Attention:
                _______________________

Locations of Inventory and Equipment:

A. Properties Owned by the Borrower:

B. Properties Leased by the Borrower (Include Landlord's Name):

C. Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements (include name of Warehouse Operator or other Bailee or Consignee):

                                      -23-
<PAGE>

                                   EXHIBIT "B"
                     (See Section 3.9 of Security Agreement)

                  A. Vehicles subject to certificates of title:

      Description                        Title Number & State Where Issued

      B. Aircraft/engines, ships, railcars and other vehicles governed by
federal statute:

      Description                        Registration Number

            C. Patents, copyrights, trademarks protected under federal law*:

---------------------
*For (i) trademarks, show the trademark itself, the registration date and the
registration number; (ii) trademark applications, show the trademark applied
for, the application filing date and the serial number of the application; (iii)
patents, show the patent number, issue date and a brief description of the
subject matter of the patent; and (iv) patent applications, show the serial
number of the application, the application filing date and a brief description
of the subject matter of the patent applied for. Any licensing agreements for
patents or trademarks should be described on a separate schedule.

                                      -24-
<PAGE>

                                   EXHIBIT "C"

            List of Pledged Securities and Other Investment Property
                    (See Section 3.12 of Security Agreement)

                                   A. STOCKS:

Issuer                   Certificate Number                     Number of Shares

                                    B. BONDS:

Issuer      Number         Face Amount               Coupon Rate       Maturity

                            C. GOVERNMENT SECURITIES:

Issuer      Number   Type       Face Amount           Coupon Rate      Maturity

                D. OTHER SECURITIES OR OTHER INVESTMENT PROPERTY
                       (CERTIFICATED AND UNCERTIFICATED):

Issuer          Description of Collateral          Percentage Ownership Interest

Add description of custody accounts or arrangements with securities
intermediary, if applicable.

                                      -25-
<PAGE>

                                   EXHIBIT "D"
                     (See Section 3.1 of Security Agreement)

              OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

                                      -26-
<PAGE>

                                   EXHIBIT "E"

                                 PLEDGED SHARES

<TABLE>
<CAPTION>
                                                             DESCRIPTION OF     NO. OF SHARES / %
              ISSUER                   FOREIGN/DOMESTIC       COLLATERAL        OWNERSHIP INTEREST
<S>                                 <C>                      <C>                <C>
EXG, Inc.                           Domestic Subsidiary

GES Exposition Services, Inc.       Domestic Subsidiary
David H. Gibson Company, Inc.       Domestic Subsidiary
Las Vegas Convention Service Co.    Domestic Subsidiary
VREC, Inc.                          Domestic Subsidiary

GES Exposition Services (Canada)    Foreign Subsidiary
Limited

Viad Holding GmbH                   Foreign Subsidiary
Viad Service Companies Limited      Foreign Subsidiary
Greyhound Canada Holdings, Inc.     Foreign Subsidiary
</TABLE>

                                      -27-
<PAGE>
                                   EXHIBIT "F"

                                 EXCLUDED STOCK

Issuer      Description of Collateral      No. of Shares / % Ownership Interest

[Describe margin stock certificates held at Viad - pending confirmation that
such stock is immaterial.]

                                      -28-
<PAGE>

                                  SCHEDULE 3.6

                                   PRIOR NAMES

                                      -29-
<PAGE>

                                  SCHEDULE 3.9

                          EXISTING FINANCING STATEMENTS

                                      -30-
<PAGE>

                    SUBSIDIARY PLEDGE AND SECURITY AGREEMENT

      THIS SUBSIDIARY PLEDGE AND SECURITY AGREEMENT is entered into as of June
30, 2004 by and among each of the entities signatory hereto from time to time
(individually, a "Guarantor" and collectively, the "Guarantors") and Bank One,
NA, a national banking association having its principal office in Chicago,
Illinois, in its capacity as Administrative Agent (the "Agent") for the lenders
party to the Credit Agreement referred to below.

                              PRELIMINARY STATEMENT

      Viad Corp, a Delaware corporation (the "Borrower"), the Agent, the Lenders
and Wachovia Bank, National Association, as Syndication Agent, are entering into
a Credit Agreement dated as of June 30, 2004 (as it may be amended or modified
from time to time, the "Credit Agreement").

      The Guarantors are parties to a Guaranty dated as of June 30, 2004 (as it
may be amended from time to time, the "Guaranty") pursuant to which the
Guarantors guarantee the obligations of the Borrower under the Credit Agreement.

      The Guarantors are entering into this Subsidiary Pledge and Security
Agreement (as it may be amended or modified from time to time, the "Subsidiary
Security Agreement") in order to secure their respective obligations under the
Guaranty and induce the Lenders to extend credit to the Borrower under the
Credit Agreement.

      NOW THEREFORE, each Guarantor and the Agent hereby agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

      1.1.  Terms Defined in Credit Agreement. All capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.

      1.2.  Terms Defined in New York Uniform Commercial Code. Terms defined in
the New York UCC which are not otherwise defined in this Subsidiary Security
Agreement or in the Credit Agreement are used herein as defined in the New York
UCC.

      1.3.  Definitions of Certain Terms Used Herein. As used in this Subsidiary
Security Agreement, in addition to the terms defined in the Preliminary
Statement, the following terms shall have the following meanings:

      "Accounts" shall have the meaning set forth in Article 9 of the New York
UCC.

<PAGE>

      "Article" means a numbered article of this Subsidiary Security Agreement,
unless another document is specifically referenced.

      "Chattel Paper" shall have the meaning set forth in Article 9 of the New
York UCC.

      "Collateral" means all Accounts, Chattel Paper, Documents, Equipment,
General Intangibles, Instruments, Inventory, Investment Property, Pledged
Deposits, Pledged Shares, and Other Collateral, wherever located, in which,
after giving effect to the Principal Spin-off Transactions, any Guarantor now
has or hereafter acquires any right or interest, and the proceeds (including
Stock Rights), insurance proceeds and products thereof and accessions thereto,
together with all books and records, customer lists, credit files, computer
files, programs, printouts and other computer materials and records related
thereto.

      "Commercial Tort Claims" shall have the meaning set forth in Article 9 of
the New York UCC.

      "Control" shall have the meaning set forth in Article 8 or, if applicable,
in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the New York UCC.

      "Default" means an event described in Section 5.1.

      "Deposit Accounts" shall have the meaning set forth in Article 9 of the
New York UCC, but shall expressly exclude the Excluded Deposit Accounts.

      "Documents" shall have the meaning set forth in Article 9 of the New York
UCC.

      "Equipment" shall have the meaning set forth in Article 9 of the New York
UCC.

      "Excluded Deposit Accounts" means Deposit Accounts specifically and
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit of such Guarantor's employees.

      "Excluded Stock" means the Securities and other Investment Property
described in Exhibit F hereto.

      "Exhibit" refers to a specific exhibit to this Subsidiary Security
Agreement, unless another document is specifically referenced.

      "General Intangibles" shall have the meaning set forth in Article 9 of the
New York UCC and shall include patents, trademarks, tradenames and other
intellectual property.

      "Governmental Authority" shall mean any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality or
any court, in each case, whether of the United States or foreign.

                                      -2-
<PAGE>

      "Instruments" shall have the meaning set forth in Article 9 of the New
York UCC.

      "Inventory" shall have the meaning set forth in Article 9 of the New York
UCC.

      "Investment Property" shall have the meaning set forth in Article 9 of the
New York UCC.

      "Lenders" means the lenders party to the Credit Agreement and their
successors and assigns.

      "New York UCC" means the New York Uniform Commercial Code as in effect
from time to time.

      "Obligations" means any and all existing and future indebtedness,
obligation and liability of every kind, nature and character, direct or
indirect, absolute or contingent (including all renewals, extensions and
modifications thereof), of a Guarantor to the Agent or any Lender or any branch,
subsidiary or affiliate thereof, arising under or pursuant to this Subsidiary
Security Agreement and the Guaranty.

      "Other Collateral" means any property of any Guarantor (other than real
estate or as otherwise provided herein) not included within the defined terms
Accounts, Chattel Paper, Documents, Equipment, General Intangibles, Instruments,
Inventory, Investment Property, Pledged Deposits, and Pledged Shares, including,
without limitation, all cash on hand, letter-of-credit rights, letters of
credit, Stock Rights and Deposit Accounts or other deposits (general or special,
time or demand, provisional or final) with any bank or other financial
institution, it being intended that the Collateral include all property of the
Guarantors other than real estate, except as otherwise provided herein.

      "Pledged Deposits" means all time deposits of money (other than Deposit
Accounts and Instruments), whether or not evidenced by certificates, which such
Guarantor may from time to time designate as pledged to the Agent as security
for any Obligation, and all rights to receive interest on said deposits.

      "Pledged Issuer" means a Person the securities or ownership interests of
which have been pledged pursuant hereto.

      "Pledged Shares" means (i) the shares of Capital Stock described in
Exhibit E hereto issued by the Persons described in such Exhibit E (the
"Existing Issuers"), (ii) the shares of Capital Stock at any time and from time
to time acquired by such Guarantor of any and all Persons now or hereafter
existing and required to be pledged to the Agent pursuant to the terms of the
Credit Agreement (such Persons, together with the Existing Issuers, being
hereinafter referred to collectively as the "Pledged Issuers" and individually
as a "Pledged Issuer"), and (iii) the certificates representing such Capital
Stock, all options and other rights, contractual or otherwise, in respect
thereof, and all dividends, distributions, cash, Instruments, Investment
Property and other property (including, but not limited to, any stock dividend
and any distribution in connection with a stock split) from time to time
received, receivable or otherwise

                                      -3-
<PAGE>

distributed in respect of or in exchange for any or all of the foregoing;
provided, however, if any Pledged Insurer is a Foreign Subsidiary, the security
interest granted by the Guarantor to the Agent shall be limited to 65% of the
voting Capital Stock of such Pledged Issuer.

      "Receivables" means the Accounts, Chattel Paper, Documents, Investment
Property, Instruments or Pledged Deposits, and any other rights or claims to
receive money which are General Intangibles or which are otherwise included as
Collateral.

      "Required Secured Parties" means (x) prior to an acceleration of the
obligations under the Credit Agreement, the Required Lenders, (y) after an
acceleration of the obligations under the Credit Agreement but prior to the date
upon which the Credit Agreement has terminated by its terms and all of the
obligations thereunder have been paid in full, Lenders and their Affiliates
holding in the aggregate at least 51% of the total of (i) the unpaid principal
amount of outstanding Advances and (ii) the aggregate net early termination
payments and all other amounts then due and unpaid from such Guarantor to the
Lenders or their Affiliates under Rate Management Transactions, as determined by
the Agent in its reasonable discretion, and (z) after the Credit Agreement has
terminated by its terms and all of the obligations thereunder have been paid in
full (whether or not the obligations under the Credit Agreement were ever
accelerated), Lenders and their Affiliates holding in the aggregate at least 51%
of the aggregate net early termination payments and all other amounts then due
and unpaid from such Guarantor to the Lenders or their Affiliates under Rate
Management Transactions, as determined by the Agent in its reasonable
discretion.

      "Requirements of Law" means any law, rule, regulation, order, writ,
judgment, injunction decree or award binding on any Guarantor or any of its
properties.

      "Section" means a numbered section of this Subsidiary Security Agreement,
unless another document is specifically referenced.

      "Secured Obligations" means the Obligations and Rate Management
Obligations owing to one or more of the Lenders (including Lenders which have
ceased to be party to the Credit Agreement) or their Affiliates.

      "Security" has the meaning set forth in Article 8 of the New York UCC.

      "Stock Rights" means any securities, dividends or other distributions and
any other right or property which any Guarantor shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any securities or other ownership interests in a
corporation, partnership, joint venture or limited liability company
constituting Collateral and any securities, any right to receive securities and
any right to receive earnings, in which any Guarantor now has or hereafter
acquires any right, issued by an issuer of such securities.

      "Unrestricted Subsidiary Stock" means the Capital Stock of any Subsidiary
that such Guarantor is not required to pledge to the Agent pursuant to Section
6.24 of the Credit Agreement.

                                      -4-
<PAGE>

      The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.

                                   ARTICLE II

                           GRANT OF SECURITY INTEREST

      Each Guarantor hereby pledges, assigns and grants to the Agent, on behalf
of and for the ratable benefit of the Agent and the Lenders and (to the extent
specifically provided herein) their Affiliates, a security interest in all of
such Guarantor's right, title and interest in and to the Collateral to secure
the prompt and complete payment and performance of the Secured Obligations.
Notwithstanding any of the other provisions set forth in this Article II, this
Subsidiary Security Agreement shall not constitute a grant of a security
interest in (and the term "Collateral" shall not include) (i) the Excluded Stock
and (ii) Unrestricted Subsidiary Stock.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

      Each Guarantor represents and warrants to the Agent and the Lenders that:

      3.1.  Title, Authorization, Validity and Enforceability. Such Guarantor
has good and valid rights in or the power to transfer the Collateral and title
to the Collateral with respect to which it has purported to grant a security
interest hereunder, free and clear of all Liens except for Liens permitted under
Section 4.1.6, and has full power and authority to grant to the Agent the
security interest in such Collateral pursuant hereto. The execution and delivery
by such Guarantor of this Subsidiary Security Agreement has been duly authorized
by proper corporate proceedings, and this Subsidiary Security Agreement
constitutes a legal, valid and binding obligation of such Guarantor and creates
a security interest which is enforceable against such Guarantor in all now owned
and hereafter acquired Collateral to the extent governed by Articles 8 and 9 of
the New York UCC. When financing statements have been filed in the appropriate
offices against such Guarantor in the locations listed on Exhibit "D", the Agent
will have a fully perfected first priority security interest in that Collateral
in which a security interest may be perfected by filing under the New York UCC,
subject only to Liens permitted under Section 6.15 (i) - (v) and (vii) - (ix) of
the Credit Agreement.

      3.2.  Conflicting Laws and Contracts. Neither the execution and delivery
by such Guarantor of this Subsidiary Security Agreement, the creation and
perfection of the security interest in the Collateral granted hereunder, nor
compliance with the terms and provisions hereof will (i) violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on such
Guarantor, (ii) violate such Guarantor's certificate of incorporation, by-laws,
or other organizational documents, (iii) violate the provisions of any
indenture, instrument or agreement to which such Guarantor is a party or is
subject, or by which it, or its property, is

                                      -5-
<PAGE>

bound, or conflict with or constitute a default thereunder, except where such
violation, conflict or default could not reasonably be expected to result in a
Default under Section 7.5 of the Credit Agreement or a Material Adverse Effect,
or (iv) result in the creation or imposition of any Lien pursuant to the terms
of any material indenture, instrument or agreement to which such Guarantor is a
party or is subject, or by which it, or its property, is bound (other than any
Lien of the Agent on behalf of the Lenders).

      3.3.  Type and Jurisdiction of Organization. GES Exposition Services, Inc.
("GES") is a corporation organized under the laws of the State of Nevada. Each
other Guarantor is a corporation or limited liability company, as the case may
be, organized under the laws of its respective jurisdiction of organization and
as set forth on Exhibit A hereto.

      3.4.  Principal Location. Each Guarantor's mailing address and the
location of its place of business (if it has only one) or its chief executive
office (if it has more than one place of business), as of the date hereof, are
disclosed in Exhibit "A"; such Guarantor has no other places of business as of
the date hereof except those set forth in Exhibit "A".

      3.5.  Property Locations. The Inventory, Equipment and Fixtures are
located solely at the locations described in Exhibit "A". All of said locations
are owned by such Guarantor except for locations (i) which are leased by such
Guarantor as lessee and designated in Part B of Exhibit "A" and (ii) at which
Inventory is held in a public warehouse or is otherwise held by a bailee or on
consignment as designated in Part C of Exhibit "A", with respect to which
Inventory such Guarantor has, to the extent requested by the Agent, delivered
bailment agreements, warehouse receipts, financing statements or other documents
satisfactory to the Lenders to protect the Agent's security interest in such
Inventory.

      3.6.  No Other Names. Except as set forth on Schedule 3.6 hereto, such
Guarantor has not conducted business under any name in the last five (5) years
except the name in which it has executed this Subsidiary Security Agreement,
which is the exact name as it appears in such Guarantor's organizational
documents, as amended, as filed with such Guarantor's jurisdiction of
organization.

      3.7.  Accounts and Chattel Paper. The names of the obligors, amounts
owing, due dates and other information with respect to the Accounts and Chattel
Paper are and will be correctly stated in all material respects in all records
of such Guarantor relating thereto and in all invoices and reports with respect
thereto furnished to the Agent by such Guarantor from time to time. As of the
time when each Account or each item of Chattel Paper arises, such Guarantor
shall be deemed to have represented and warranted that such Account or Chattel
Paper, as the case may be, and all records relating thereto, are genuine and in
all material respects what they purport to be.

      3.8.  Filing Requirements. None of the Equipment is covered by any
certificate of title, except for the vehicles described in Part A of Exhibit
"B". None of the Collateral is of a type for which security interests or liens
may be perfected by filing under any federal statute except for (i) the vehicles
described in Part B of Exhibit "B," and (ii) patents, trademarks and copyrights
held by such Guarantor and described in Part C of Exhibit "B."

                                      -6-
<PAGE>

      3.9.  No Financing Statements. Except as set forth on Schedule 3.9 hereto,
no financing statement describing all or any portion of the Collateral which has
not lapsed or been terminated naming such Guarantor as debtor has been filed in
any jurisdiction except financing statements naming the Agent as the secured
party and financing statements filed from time to time in connection with Liens
permitted under Section 4.1.6.

      3.10. Federal Employer Identification Number. The Federal employer
identification number of GES is 59-1008863. The Federal employer identification
number of each other Guarantor is set forth on Exhibit "A."

      3.11. State Organization Number. The Nevada State organization number of
GES is C4644-1983. The State organization number of each other Guarantor is set
forth on Exhibit "A."

      3.12. Pledged Securities and Other Investment Property. Exhibit "C" sets
forth a complete and accurate list of the Instruments, Securities and other
Investment Property constituting Collateral that were delivered to the Agent,
which are all of the Instruments, Securities and Investment Property
constituting Collateral owned by such Guarantor as of the date hereof other than
the Pledged Shares. Each Guarantor is the direct and beneficial owner of each
Instrument, Security and other type of Investment Property listed on Exhibit "C"
as being owned by it, free and clear of any Liens, except for the security
interest granted to the Agent for the benefit of the Lenders hereunder and Liens
permitted under Section 4.1.6.

      3.13. Pledged Shares. Each Guarantor is the direct and beneficial owner of
the Pledged Shares listed on Exhibit "E" as being owned by it, free and clear of
any Liens, except for the security interest granted to the Agent for the benefit
of the Lenders hereunder and Liens permitted under Section 4.1.6. Each Guarantor
further represents and warrants that (i) all such Pledged Shares have been (to
the extent such concepts are relevant with respect to such Pledged Shares) duly
and validly issued, are fully paid and non-assessable, and (ii) with respect to
any Pledged Shares delivered to the Agent representing an ownership interest in
a partnership or limited liability company, either such certificates are
Securities as defined in Article 8 of the Uniform Commercial Code of the
applicable jurisdiction as a result of actions by the issuer or otherwise, or,
if such Pledged Shares are not Securities, such Guarantor has so informed the
Agent so that the Agent may take steps to perfect its security interest therein
as a General Intangible.

                                   ARTICLE IV

                                    COVENANTS

      From the date of this Subsidiary Security Agreement, and thereafter until
this Subsidiary Security Agreement is terminated:

      4.1.  General.

                                      -7-
<PAGE>

            4.1.1. Inspection. Each Guarantor will permit the Agent or any
      Lender, by its representatives and agents (i) to inspect the Collateral,
      (ii) to examine and make copies of the records of such Guarantor relating
      to the Collateral and (iii) to discuss the Collateral and the related
      records of such Guarantor with, and to be advised as to the same by, such
      Guarantor's officers and employees (and, in the case of any Receivable,
      with any person or entity which is or may be obligated thereon), all upon
      reasonable prior notice and at such reasonable times and intervals as the
      Agent or such Lender may determine, and all at such Guarantor's expense.

            4.1.2. Taxes. Each Guarantor will pay when due all taxes,
      assessments and governmental charges and levies upon the Collateral,
      except those which are being contested in good faith by appropriate
      proceedings and with respect to which adequate reserves have been set
      aside in accordance with GAAP.

            4.1.3. Records and Reports; Notification of Default. Each Guarantor
      will maintain in all material respects complete and accurate books and
      records with respect to the Collateral, and furnish to the Agent, with
      sufficient copies for each of the Lenders, such reports relating to the
      Collateral as the Agent shall from time to time request. Each Guarantor
      will give prompt notice in writing to the Agent and the Lenders after
      becoming aware of any material adverse fact or condition which bears upon
      the value of the Collateral including any adverse fact or condition, or
      the occurrence of any event, which causes material loss or depreciation in
      the value of any material item of the Collateral (ordinary wear and tear
      excepted) and the amount of such loss or depreciation.

            4.1.4. Financing Statements and Other Actions; Defense of Title.
      Each Guarantor hereby authorizes the Agent to file, and if requested will
      execute and deliver to the Agent, all financing statements and other
      documents including, without limitation, notices to be filed with US PTO
      and/or the US Copyright Office and take such other actions as may from
      time to time be requested by the Agent in order to maintain, except as
      otherwise permitted in any Loan Document, a first perfected security
      interest in and, if applicable, Control of, the Collateral. Each Guarantor
      will take any and all actions necessary to defend title to the Collateral
      against all persons and to defend the security interest of the Agent in
      the Collateral and the priority thereof against any Lien not expressly
      permitted hereunder.

            4.1.5. Disposition of Collateral. No Guarantor will sell, lease or
      otherwise dispose of the Collateral except (i) prior to the occurrence of
      a Default or Unmatured Default, dispositions specifically permitted
      pursuant to Section 6.13 of the Credit Agreement, (ii) until such time
      following the occurrence of a Default as such Guarantor receives a notice
      from the Agent instructing such Guarantor to cease such transactions,
      sales or leases of Inventory in the ordinary course of business, and (iii)
      until such time as such Guarantor receives a notice from the Agent
      pursuant to Article VII, proceeds of Inventory and Accounts collected in
      the ordinary course of business.

                                      -8-
<PAGE>

            4.1.6. Liens. No Guarantor will create, incur, or suffer to exist
      any Lien on the Collateral except (i) the security interest created by
      this Subsidiary Security Agreement, and (ii) other Liens permitted
      pursuant to Section 6.15 of the Credit Agreement.

            4.1.7. Change in Corporate Existence, Type or Jurisdiction of
      Organization, Location, Name. Each Guarantor will:

            (a)   preserve its existence as a corporation and not, in one
                  transaction or a series of related transactions, merge into or
                  consolidate with any other entity, or sell all or
                  substantially all of its assets;

            (b)   not change its state of organization;

            (c)   not maintain its place of business (if it has only one) or its
                  chief executive office (if it has more than one place of
                  business) at a location other than a location specified on
                  Exhibit "A;" and

            (d)   not (i) have any Inventory or Equipment or proceeds or
                  products thereof (other than Inventory and proceeds thereof
                  disposed of as permitted by Section 4.1.5 or Inventory and
                  Equipment located at or in transit to conventions, trade shows
                  or other similar events in the ordinary course of business) at
                  a location other than a location specified in Exhibit "A",
                  (ii) change its name or taxpayer identification number or
                  (iii) change its mailing address,

      unless such Guarantor shall have given the Agent not less than 10 Business
      Days' prior written notice of such event or occurrence and the Agent shall
      have either (x) determined that such event or occurrence will not
      adversely affect the validity, perfection or priority of the Agent's
      security interest in the Collateral, or (y) taken such steps (with the
      cooperation of such Guarantor to the extent reasonably necessary or
      advisable) as are reasonably necessary or advisable to properly maintain
      the validity, perfection and priority of the Agent's security interest in
      the Collateral.

            4.1.8. Other Financing Statements. No Guarantor will sign or
      authorize the signing on its behalf or the filing of any financing
      statement naming it as debtor covering all or any portion of the
      Collateral, except as permitted by Section 4.1.6.

      4.2.  Receivables.

            4.2.1. Certain Agreements on Receivables. No Guarantor will make or
      agree to make any discount, credit, rebate or other reduction in the
      original amount owing on a Receivable in excess of $100,000 or accept in
      satisfaction of a Receivable in excess of $100,000 less than the original
      amount thereof, except that, prior to the occurrence of a Default, such
      Guarantor may reduce the amount of Accounts arising from the sale of
      Inventory or the delivery of services in accordance with its present
      policies and in the ordinary course of business.

                                      -9-
<PAGE>

            4.2.2. Collection of Receivables. Except as otherwise provided in
      this Subsidiary Security Agreement, each Guarantor will collect and
      enforce, at such Guarantor's sole expense, all amounts due or hereafter
      due to such Guarantor under the Receivables in accordance with its
      customary collection policies and in the ordinary course of business.

            4.2.3. Delivery of Invoices. To the extent reasonably practicable
      under the circumstances, each Guarantor will deliver to the Agent
      immediately upon its request after the occurrence of a Default duplicate
      invoices with respect to each Account bearing such language of assignment
      as the Agent shall specify.

            4.2.4. Disclosure of Counterclaims on Receivables. If (i) any
      discount, credit or agreement to make a rebate or to otherwise reduce the
      amount owing on a Receivable in excess of $100,000 exists or (ii) if, to
      the knowledge of such Guarantor, any dispute, setoff, claim, counterclaim
      or defense exists or has been asserted or threatened with respect to a
      Receivable in excess of $100,000, such Guarantor will disclose such fact
      to the Agent in writing in connection with the inspection by the Agent of
      any record of such Guarantor relating to such Receivable and in connection
      with any invoice or report furnished by such Guarantor to the Agent
      relating to such Receivable.

      4.3.  Inventory and Equipment.

            4.3.1. Maintenance of Goods. Each Guarantor will do all things
      necessary to maintain, preserve, protect and keep the Inventory and the
      Equipment in good repair and working and saleable condition, ordinary wear
      and tear and damage from condemnation or casualty excepted.

            4.3.2. Insurance. Each Guarantor will (i) maintain fire and extended
      coverage insurance on such Guarantor's Inventory and Equipment containing
      a lender's loss payable clause in favor of the Agent, on behalf of the
      Lenders, and providing that said insurance will not be terminated except
      after at least 30 days' written notice from the insurance company to the
      Agent, (ii) maintain such other insurance on the collateral for the
      benefit of the Agent as the Agent shall from time to time request, (iii)
      upon the request of the Agent from time to time, make the originals of all
      policies of insurance on the Collateral available for inspection at such
      Guarantor's offices and furnish to the Agent certificates with respect to
      such insurance, and (iv) maintain general liability insurance naming the
      Agent, on behalf of the Lenders, as an additional insured; provided, that
      the foregoing insurance policies and programs may be subject to such
      deductibles or self-insurance amounts as reflect coverage that is
      reasonably consistent with prudent industry practices.

            4.3.3. Titled Vehicles. If requested by the Agent, such Guarantor
      will give the Agent notice of its acquisition of any vehicle covered by a
      certificate of title (other than a vehicle that is subject to a purchase
      money security interest permitted by Section 6.15 of the Credit Agreement)
      and deliver to the Agent, upon request, the original of any vehicle title
      certificate and do all things necessary to have the Lien of the Agent
      noted on any

                                      -10-
<PAGE>

      such certificate. So long as no Default shall have occurred and be
      continuing, upon the request of such Guarantor, the Agent shall execute
      and deliver to such Guarantor instruments as such Guarantor shall
      reasonably request to remove any notation of the Agent as lien holder on
      any certificate of title for any vehicle; provided, that any such
      instruments shall be delivered, and the release effective, only upon
      receipt by the Agent of a certificate from such Guarantor, stating that
      the vehicle, the Lien on which is to be released, is to be sold in
      accordance with Section 4.1.5 or has suffered a casualty loss (with title
      thereto passing to the casualty insurance company therefor in settlement
      of the claim for such loss), and the amount that such Guarantor will
      receive as sale proceeds or insurance proceeds.

      4.4.  Instruments, Securities, Chattel Paper, Documents and Pledged
Deposits. Each Guarantor will (i) deliver to the Agent immediately upon
execution of this Subsidiary Security Agreement the originals of all Chattel
Paper, certificated Securities and Instruments constituting Collateral (if any
then exist), (ii) hold in trust for the Agent upon receipt and immediately
thereafter deliver to the Agent any Chattel Paper, Securities and Instruments
constituting Collateral, (iii) upon the designation of any Pledged Deposits (as
set forth in the definition thereof), deliver to the Agent such Pledged Deposits
which are evidenced by certificates included in the Collateral endorsed in
blank, marked with such legends and assigned as the Agent shall specify, and
(iv) upon the Agent's request, after the occurrence and during the continuance
of a Default, deliver to the Agent (and thereafter hold in trust for the Agent
upon receipt and immediately deliver to the Agent) any Document evidencing or
constituting Collateral.

      4.5.  Uncertificated Securities and Certain Other Investment Property.
Each Guarantor will permit the Agent from time to time to cause the appropriate
issuers (and, if held with a securities intermediary, such securities
intermediary) of uncertificated securities or other types of Investment Property
not represented by certificates which are Collateral to mark their books and
records with the numbers and face amounts of all such uncertificated securities
or other types of Investment Property not represented by certificates and all
rollovers and replacements therefor to reflect the Lien of the Agent granted
pursuant to this Subsidiary Security Agreement. Such Guarantor will take any
actions necessary to cause (i) the issuers of uncertificated securities which
are Collateral and which are Securities and (ii) any financial intermediary
which is the holder of any Investment Property which is Collateral, to cause the
Agent to have and retain Control over such Securities or other Investment
Property. Without limiting the foregoing, such Guarantor will, with respect to
Investment Property held with a financial intermediary, cause such financial
intermediary to enter into a control agreement with the Agent in form and
substance satisfactory to the Agent.

      4.6.  Stock and Other Ownership Interests.

            4.6.1. Changes in Capital Structure of Issuers. Except to the extent
      permitted under the Credit Agreement, such Guarantor will not (i) permit
      or suffer any Pledged Issuer to dissolve, liquidate, retire any of its
      Capital Stock or other Instruments or Securities evidencing ownership,
      reduce its capital or merge or consolidate with any other entity, or (ii)
      vote any of the Pledged Shares in favor of any of the foregoing.

                                      -11-
<PAGE>

            4.6.2. Issuance of Additional Securities. Except to the extent
      permitted under the Credit Agreement, such Guarantor will not permit or
      suffer any Pledged Issuer to issue any securities or other ownership
      interests, any right to receive the same or any right to receive earnings.

            4.6.3. Registration of Pledged Securities and other Investment
      Property. Such Guarantor will permit any registerable Collateral to be
      registered in the name of the Agent or its nominee at any time at the
      option of the Agent or the Required Secured Parties.

            4.6.4. Exercise of Rights in Pledged Securities and other Investment
      Property. Each Guarantor will permit the Agent or its nominee at any time
      after the occurrence of a Default, without notice, to exercise all voting
      and corporate rights relating to the Collateral, including, without
      limitation, exchange, subscription or any other rights, privileges, or
      options pertaining to any corporate securities or other ownership
      interests or Investment Property in or of a corporation, partnership,
      joint venture or limited liability company constituting Collateral and the
      Stock Rights as if it were the absolute owner thereof.

            4.6.5. Dividends and Distributions. The Agent may at any time after
      the occurrence of a Default, by giving such Guarantor written notice,
      elect to require that any distributions or dividends on any Securities or
      Investment Property received by such Guarantor be paid directly to the
      Agent for the benefit of the Lenders. Upon receipt of any such notice from
      the Agent, such Guarantor shall thereafter hold in trust for the Agent, on
      behalf of the Lenders, all amounts and proceeds received by it with
      respect to such dividends or distributions and immediately and at all
      times thereafter deliver to the Agent all such amounts and proceeds in the
      same form as so received, whether by cash, check, draft or otherwise, with
      any necessary endorsements. The Agent shall hold and apply funds so
      received as provided by the terms of Sections 7.3 and 7.4.

            4.6.6. Foreign Subsidiaries. Each Guarantor agrees that the security
      interest in the Pledged Shares of Capital Stock of any Foreign Subsidiary
      purported to be granted in favor of the Agent may be supplemented by one
      or more separate pledge agreements, deeds of pledge, share charges, or
      other similar agreements or instruments, executed and delivered by such
      Guarantor in favor of the Agent, which pledge agreements such Guarantor
      agrees to execute or cause to be executed and which will provide for the
      pledge of such shares of Capital Stock in accordance with the laws of any
      jurisdiction outside of the United States of America under which such
      Foreign Subsidiary is organized or formed. With respect to such shares of
      Capital Stock of any Foreign Subsidiary, the Agent may, at any time and
      from time to time, in its reasonable discretion, take actions in such
      foreign jurisdictions necessary to perfect the security interest created
      in such shares of Capital Stock, without the consent of such Guarantor.

            4.6.7. Margin Stock. Notwithstanding anything in the Credit
      Agreement or any Loan Document to the contrary, no Guarantor will acquire
      any margin stock (as defined

                                      -12-
<PAGE>

      in Regulation U) except to the extent permitted by Section 6.14(vii) of
      the Credit Agreement.

      4.7.  Pledged Deposits. No Guarantor will withdraw all or any portion of
any Pledged Deposit or fail to rollover said Pledged Deposit without the prior
written consent of the Agent.

      4.8.  Deposit Accounts. Such Guarantor will (i) upon the Agent's request,
cause each bank or other financial institution in which it maintains (a) a
Deposit Account to enter into a control agreement with the Agent, in form and
substance satisfactory to the Agent in order to give the Agent Control of the
Deposit Account or (b) other deposits (general or special, time or demand,
provisional or final and specifically excluding the Excluded Deposit Accounts)
to be notified of the security interest granted to the Agent hereunder and cause
each such bank or other financial institution to acknowledge such notification
in writing and (ii) upon the Agent's request after the occurrence and during the
continuance of a Default, deliver to each such bank or other financial
institution a letter, in form and substance acceptable to the Agent,
transferring ownership of the Deposit Account to the Agent or transferring
dominion and control over each such other deposit to the Agent. In the case of
deposits maintained with Lenders, the terms of such letter shall be subject to
the provisions of the Credit Agreement regarding setoffs.

      4.9.  Letter-of-Credit Rights. Each Guarantor will upon the Agent's
request, cause each issuer of a letter of credit, to consent to the assignment
of proceeds of the letter of credit in order to give the Agent Control of the
letter-of-credit rights to such letter of credit.

      4.10. Federal, State or Municipal Claims. Each Guarantor will notify the
Agent of any Collateral which constitutes a claim against the United States
government or any state or local government or any instrumentality or agency
thereof, the assignment of which claim is restricted by federal, state or
municipal law.

      4.11. Commercial Tort Claims. Each Guarantor will notify the Agent of any
and all Commercial Tort Claims, including, but not limited to, any and all
actions, suits and proceedings before any court or Governmental Authority by or
affecting such Guarantor and (ii) execute and deliver such statements, documents
and notices and do and cause to be done all such things as may be reasonably
required by the Agent, or required by law, including all things which may from
time to time be necessary under the New York UCC to fully create preserve,
perfect and protect the priority of the Agent's security interest in any such
Commercial Tort Claims.

                                   ARTICLE V

                                    DEFAULT

      5.1.  The occurrence of any one or more of the following events shall
constitute a Default:

                                      -13-
<PAGE>

            5.1.1. Any representation or warranty made by or on behalf of such
      Guarantor under or in connection with this Subsidiary Security Agreement
      shall be materially false as of the date on which made.

            5.1.2. The breach by such Guarantor of any of the terms or
      provisions of Sections 4.1.2, 4.1.5, 4.1.6, 4.1.7, 4.2.1, 4.3.2, 4.3.3,
      4.4, 4.5, 4.6, 4.7 or Article VII.

            5.1.3. The breach by such Guarantor (other than a breach which
      constitutes a Default under Section 5.1.1 or 5.1.2) of any of the terms or
      provisions of this Subsidiary Security Agreement which is not remedied
      within 30 days after the giving of written notice to such Guarantor by the
      Agent.

            5.1.4. Any material portion of the Collateral shall be transferred
      or otherwise disposed of, either voluntarily or involuntarily, in any
      manner not permitted by Section 4.1.5 or 8.7.

            5.1.5. Any Secured Obligation shall not be paid when due (after
      giving effect to applicable periods of grace under the Credit Agreement),
      whether at stated maturity, upon acceleration, or otherwise.

            5.1.6. The occurrence of any "Default" under, and as defined in, the
      Credit Agreement.

            5.1.7. Any limited partnership interests or ownership interests in a
      limited liability company which are included within the Collateral shall
      at any time constitute a Security or the issuer of any such interests
      shall take any action to have such interests treated as a Security unless
      (i) all certificates or other documents constituting such Security have
      been delivered to the Agent and such Security is properly defined as such
      under Article 8 of the Uniform Commercial Code of the applicable
      jurisdiction, whether as a result of actions by the issuer thereof or
      otherwise, or (ii) the Agent has entered into a control agreement with the
      issuer of such Security or with a securities intermediary relating to such
      Security and such Security is defined as such under Article 8 of the
      Uniform Commercial Code of the applicable jurisdiction, whether as a
      result of actions by the issuer thereof or otherwise.

      5.2.  Acceleration and Remedies. Upon the acceleration of the obligations
under the Credit Agreement pursuant to Section 8.1 thereof, the Obligations and,
to the extent provided for under the Rate Management Transactions evidencing the
same, the Rate Management Obligations, shall immediately become due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, and the Agent may, with the concurrence or at the
direction of the Required Secured Parties, exercise any or all of the following
rights and remedies:

            5.2.1. Those rights and remedies provided in this Subsidiary
      Security Agreement, the Credit Agreement, or any other Loan Document,
      provided that this

                                      -14-
<PAGE>

      Section 5.2.1 shall not be understood to limit any rights or remedies
      available to the Agent and the Lenders prior to a Default.

            5.2.2. Those rights and remedies available to a secured party under
      the New York UCC (whether or not the New York UCC applies to the affected
      Collateral) or under any other applicable law (including, without
      limitation, any law governing the exercise of a bank's right of setoff or
      bankers' lien) when a debtor is in default under a security agreement.

            5.2.3. Without notice except as specifically provided in Section 8.1
      or elsewhere herein, sell, lease, assign, grant an option or options to
      purchase or otherwise dispose of the Collateral or any part thereof in one
      or more parcels at public or private sale, for cash, on credit or for
      future delivery, and upon such other terms as the Agent may deem
      commercially reasonable.

The Agent may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered to adversely affect the commercial reasonableness of any sale of the
Collateral.

If, after the Credit Agreement has terminated by its terms and all of the
Obligations have been paid in full, there remain Rate Management Obligations
outstanding, the Required Secured Parties may exercise the remedies provided in
this Section 5.2 upon the occurrence of any event which would allow or require
the termination or acceleration of any Rate Management Obligations pursuant to
the terms of the agreement governing any Rate Management Transaction.

      5.3.  Debtor's Obligations Upon Default. Upon the request of the Agent
after the occurrence of a Default, such Guarantor will:

            5.3.1. Assembly of Collateral. Assemble and make available to the
      Agent the Collateral and all records relating thereto at any place or
      places reasonably specified by the Agent.

            5.3.2. Secured Party Access. Permit the Agent, by the Agent's
      representatives and agents, to enter any premises where all or any part of
      the Collateral, or the books and records relating thereto, or both, are
      located, to take possession of all or any part of the Collateral and to
      remove all or any part of the Collateral.

      5.4.  License. The Agent is hereby granted a license or other right to
use, following the occurrence and during the continuance of a Default, without
charge, such Guarantor's labels, patents, copyrights, rights of use of any name,
trade secrets, trade names, trademarks, service marks, customer lists and
advertising matter, or any property of a similar nature, as it pertains to the
Collateral, in completing production of, advertising for sale, and selling any
Collateral, and, following the occurrence and during the continuance of a
Default, such Guarantor's rights under all licenses and all franchise agreements
shall inure to the Agent's benefit. In addition, such Guarantor hereby
irrevocably agrees that the Agent may, following the occurrence and during

                                      -15-
<PAGE>

the continuance of a Default, sell any of such Guarantor's Inventory directly to
any person, including without limitation persons who have previously purchased
such Guarantor's Inventory from such Guarantor and in connection with any such
sale or other enforcement of the Agent's rights under this Agreement, may sell
Inventory which bears any trademark owned by or licensed to such Guarantor and
any Inventory that is covered by any copyright owned by or licensed to such
Guarantor and the Agent may finish any work in process and affix any trademark
owned by or licensed to such Guarantor and sell such Inventory as provided
herein.

                                   ARTICLE VI

                        WAIVERS, AMENDMENTS AND REMEDIES

      No delay or omission of the Agent or any Lender to exercise any right or
remedy granted under this Subsidiary Security Agreement shall impair such right
or remedy or be construed to be a waiver of any Default or an acquiescence
therein, and any single or partial exercise of any such right or remedy shall
not preclude any other or further exercise thereof or the exercise of any other
right or remedy. No waiver, amendment or other variation of the terms,
conditions or provisions of this Subsidiary Security Agreement whatsoever shall
be valid unless in writing signed by the Agent with the concurrence or at the
direction of the Lenders required under Section 8.2 of the Credit Agreement and
then only to the extent in such writing specifically set forth. All rights and
remedies contained in this Subsidiary Security Agreement or by law afforded
shall be cumulative and all shall be available to the Agent and the Lenders
until the Secured Obligations have been paid in full.

                                  ARTICLE VII

                       PROCEEDS; COLLECTION OF RECEIVABLES

      7.1.  Lockboxes. Upon request of the Agent after the occurrence of a
Default or Unmatured Default, such Guarantor shall execute and deliver to the
Agent irrevocable lockbox agreements in the form provided by or otherwise
acceptable to the Agent, which agreements shall be accompanied by an
acknowledgment by the bank where the lockbox is located of the Lien of the Agent
granted hereunder and of irrevocable instructions to wire all amounts collected
therein to a special collateral account at the Agent.

      7.2.  Collection of Receivables. The Agent may at any time after the
occurrence of a Default, by giving such Guarantor written notice, elect to
require that the Receivables be paid directly to the Agent for the benefit of
the Lenders. In such event, such Guarantor shall, and shall permit the Agent to,
promptly notify the account debtors or obligors under the Receivables of the
Lenders' interest therein and direct such account debtors or obligors to make
payment of all amounts then or thereafter due under the Receivables directly to
the Agent. Upon receipt of any such notice from the Agent, such Guarantor shall
thereafter hold in trust for the Agent, on behalf of the Lenders, all amounts
and proceeds received by it with respect to the Receivables and Other Collateral
and immediately and at all times thereafter deliver to the Agent all such

                                      -16-
<PAGE>

amounts and proceeds in the same form as so received, whether by cash, check,
draft or otherwise, with any necessary endorsements. The Agent shall hold and
apply funds so received as provided by the terms of Sections 7.3 and 7.4.

      7.3.  Special Collateral Account. If a Default has occurred and is
continuing, the Agent may require all cash proceeds of the Collateral to be
deposited in a special non-interest bearing cash collateral account with the
Agent and held there as security for the Secured Obligations. Such Guarantor
shall have no control whatsoever over said cash collateral account. The Agent
may (and shall, at the direction of the Required Lenders), from time to time,
apply the collected balances in said cash collateral account to the payment of
the Secured Obligations whether or not the Secured Obligations shall then be
due.

      7.4.  Application of Proceeds. The proceeds of the Collateral shall be
applied by the Agent to payment of the Secured Obligations in the following
order unless a court of competent jurisdiction shall otherwise direct:

            (a)   FIRST, to payment of all costs and expenses of the Agent
      incurred in connection with the collection and enforcement of the Secured
      Obligations or of the security interest granted to the Agent pursuant to
      this Subsidiary Security Agreement;

            (b)   SECOND, to payment of all costs and expenses of the Lenders in
      protecting their rights hereunder;

            (c)   THIRD, to payment of that portion of the Secured Obligations
      constituting accrued and unpaid interest and fees, and any fees, premiums
      and scheduled periodic payments due under Rate Management Transactions
      permitted by the Credit Agreement pro rata among the Lenders and their
      Affiliates in accordance with the amount of such accrued and unpaid
      interest, fees and scheduled periodic payments owing to each of them;

            (d)   FOURTH, to payment of the principal of the Secured Obligations
      and the net early termination payments, breakage and any other Rate
      Management Obligations then due and unpaid from such Guarantor to any of
      the Lenders or their Affiliates, pro rata among the Lenders and their
      Affiliates in accordance with the amount of such principal and such net
      early termination payments and other Rate Management Obligations then due
      and unpaid owing to each of them;

            (e)   FIFTH, to payment of any Secured Obligations (other than those
      listed above) pro rata among those parties to whom such Secured
      Obligations are due in accordance with the amounts owing to each of them;
      and

            (f)   SIXTH, the balance, if any, after all of the Secured
      Obligations have been satisfied, shall be deposited by the Agent into such
      Guarantor's general operating account with the Agent or as otherwise
      directed by such Guarantor in a notice to the Agent.

                                      -17-
<PAGE>

                                  ARTICLE VIII

                               GENERAL PROVISIONS

      8.1.  Notice of Disposition of Collateral; Condition of Collateral. To the
extent permitted by applicable law, each Guarantor hereby waives notice of the
time and place of any public sale or the time after which any private sale or
other disposition of all or any part of the Collateral may be made. To the
extent such notice may not be waived under applicable law, any notice made shall
be deemed reasonable if sent to such Guarantor, addressed as set forth in
Article IX, at least ten days prior to (i) the date of any such public sale or
(ii) the time after which any such private sale or other disposition may be
made. Agent shall have no obligation to clean-up or otherwise prepare the
Collateral for sale.

      8.2.  Compromises and Collection of Collateral. Each Guarantor and the
Agent recognize that setoffs, counterclaims, defenses and other claims may be
asserted by obligors with respect to certain of the Receivables, that certain of
the Receivables may be or become uncollectible in whole or in part and that the
expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably may be expected to be recovered with respect
to a Receivable. In view of the foregoing, each Guarantor agrees that the Agent
may at any time and from time to time, if a Default has occurred and is
continuing, compromise with the obligor on any Receivable, accept in full
payment of any Receivable such amount as the Agent in its sole discretion shall
determine or abandon any Receivable, and any such action by the Agent shall be
commercially reasonable so long as the Agent acts in good faith based on
information known to it at the time it takes any such action.

      8.3.  Secured Party Performance of Debtor Obligations. Without having any
obligation to do so, the Agent may perform or pay any obligation which such
Guarantor has agreed to perform or pay in this Subsidiary Security Agreement and
such Guarantor shall reimburse the Agent for any amounts paid by the Agent
pursuant to this Section 8.3. Such Guarantor's obligation to reimburse the Agent
pursuant to the preceding sentence shall be a Secured Obligation payable on
demand.

      8.4.  Authorization for Secured Party to Take Certain Action. Such
Guarantor irrevocably authorizes the Agent at any time and from time to time in
the sole discretion of the Agent and appoints the Agent as its attorney in fact
(i) to execute on behalf of such Guarantor as debtor and to file financing
statements necessary or desirable in the Agent's sole discretion to perfect and
to maintain the perfection and priority of the Agent's security interest in the
Collateral, (ii) to indorse and collect any cash proceeds of the Collateral,
(iii) to file a carbon, photographic or other reproduction of this Subsidiary
Security Agreement or any financing statement with respect to the Collateral as
a financing statement and to file any other financing statement or amendment of
a financing statement (which does not add new collateral or add a debtor) in
such offices as the Agent in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the Agent's security
interest in the Collateral, (iv) to contact and enter into one or more
agreements with the issuers of uncertificated securities which are Collateral
and which are Securities or with financial intermediaries holding other
Investment Property as may be necessary or advisable to give the Agent Control
over such

                                      -18-
<PAGE>

Securities or other Investment Property, (v) subject to the terms of Section
4.1.5, to enforce payment of the Receivables in the name of the Agent or such
Guarantor, (vi) to apply the proceeds of any Collateral received by the Agent to
the Secured Obligations as provided in Article VII and (vii) to discharge past
due taxes, assessments, charges, fees or Liens on the Collateral (except for
such Liens as are specifically permitted hereunder), and such Guarantor agrees
to reimburse the Agent on demand for any payment made or any expense incurred by
the Agent in connection therewith, provided that this authorization shall not
relieve such Guarantor of any of its obligations under this Subsidiary Security
Agreement or under the Credit Agreement.

      8.5.  Specific Performance of Certain Covenants. Such Guarantor
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1.5, 4.1.6, 4.4, 5.3, or 8.7 or in Article VII will cause irreparable
injury to the Agent and the Lenders, that the Agent and Lenders have no adequate
remedy at law in respect of such breaches and therefore agrees, without limiting
the right of the Agent or the Lenders to seek and obtain specific performance of
other obligations of such Guarantor contained in this Subsidiary Security
Agreement, that, in such case, the covenants of such Guarantor contained in the
Sections referred to in this Section 8.5 shall be specifically enforceable
against such Guarantor.

      8.6.  Use and Possession of Certain Premises. Upon the occurrence of a
Default, the Agent shall be entitled to occupy and use any premises owned or
leased by such Guarantor where any of the Collateral or any records relating to
the Collateral are located until the Secured Obligations are paid or the
Collateral is removed therefrom, whichever first occurs, without any obligation
to pay such Guarantor for such use and occupancy.

      8.7.  Dispositions Not Authorized. No Guarantor is authorized to sell or
otherwise dispose of the Collateral except as set forth in Section 4.1.5 and
notwithstanding any course of dealing between such Guarantor and the Agent or
other conduct of the Agent, no authorization to sell or otherwise dispose of the
Collateral (except as set forth in Section 4.1.5) shall be binding upon the
Agent or the Lenders unless such authorization is in writing signed by the Agent
with the consent or at the direction of the Required Lenders.

      8.8.  Benefit of Agreement. The terms and provisions of this Subsidiary
Security Agreement shall be binding upon and inure to the benefit of such
Guarantor, the Agent and the Lenders and their respective successors and assigns
(including all persons who become bound as a debtor to this Subsidiary Security
Agreement), except that such Guarantor shall not have the right to assign its
rights or delegate its obligations under this Subsidiary Security Agreement or
any interest herein, without the prior written consent of the Agent.

      8.9.  Survival of Representations. All representations and warranties of
such Guarantor contained in this Subsidiary Security Agreement shall survive the
execution and delivery of this Subsidiary Security Agreement.

      8.10. Taxes and Expenses. Any taxes (including income taxes) payable or
ruled payable by Federal or State authority in respect of this Subsidiary
Security Agreement shall be paid by such Guarantor, together with interest and
penalties, if any. Such Guarantor shall

                                      -19-
<PAGE>

reimburse the Agent for any and all reasonable out-of-pocket expenses and
internal charges (including reasonable attorneys', auditors' and accountants'
fees and reasonable time charges of attorneys, paralegals, auditors and
accountants who may be employees of the Agent) paid or incurred by the Agent in
connection with the preparation, execution, delivery, administration, collection
and enforcement of this Subsidiary Security Agreement and in the audit,
analysis, administration, collection, preservation or sale of the Collateral
(including the expenses and charges associated with any periodic or special
audit of the Collateral). Any and all costs and expenses incurred by such
Guarantor in the performance of actions required pursuant to the terms hereof
shall be borne solely by such Guarantor.

      8.11. Headings. The title of and section headings in this Subsidiary
Security Agreement are for convenience of reference only, and shall not govern
the interpretation of any of the terms and provisions of this Subsidiary
Security Agreement.

      8.12. Termination. This Subsidiary Security Agreement shall continue in
effect (notwithstanding the fact that from time to time there may be no Secured
Obligations outstanding) until (i) the Credit Agreement has terminated pursuant
to its express terms and (ii) all of the Secured Obligations have been
indefeasibly paid and performed in full and no commitments of the Agent or the
Lenders or any Facility LC which could give rise to any Secured Obligations are
outstanding.

      8.13. Entire Agreement. This Subsidiary Security Agreement embodies the
entire agreement and understanding among the Guarantors and the Agent relating
to the Collateral and supersedes all prior agreements and understandings between
the Guarantors and the Agent relating to the Collateral.

      8.14. CHOICE OF LAW. THIS SUBSIDIARY SECURITY AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.

      8.15. Distribution of Reports. Each Guarantor authorizes the Agent, as the
Agent may elect in its sole discretion, to discuss with and furnish to its
affiliates and to the Lenders or to any other person or entity having an
interest in the Secured Obligations (whether as a guarantor, pledgor of
collateral, participant or otherwise) all financial statements, audit reports
and other information pertaining to such Guarantor and its Subsidiaries whether
such information was provided by such Guarantor or prepared or obtained by the
Agent. Neither the Agent nor any of its employees, officers, directors or agents
makes any representation or warranty regarding any audit reports or other
analyses of such Guarantor's and its Subsidiaries' condition which the Agent may
in its sole discretion prepare and elect to distribute, nor shall the Agent or
any of its employees, officers, directors or agents be liable to any person or
entity receiving a copy of such reports or analyses for any inaccuracy or
omission contained in or relating thereto.

      8.16. Indemnity. Each Guarantor hereby agrees to indemnify the Agent and
the Lenders, and their respective successors, assigns, agents and employees,
from and against any

                                      -20-
<PAGE>

and all liabilities, damages, penalties, suits, reasonable costs, and
out-of-pocket expenses of any kind and nature (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent or
any Lender is a party thereto) imposed on, incurred by or asserted against the
Agent or the Lenders, or their respective successors, assigns, agents and
employees, in any way relating to or arising out of this Subsidiary Security
Agreement, or the manufacture, purchase, acceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other
disposition of any Collateral (including, without limitation, latent and other
defects, whether or not discoverable by the Agent or the Lenders or such
Guarantor, and any claim for patent, trademark or copyright infringement),
except for any and all liabilities, damages, penalties, suits, reasonable costs
and out-of-pocket expenses of any kind and nature resulting from the gross
negligence or willful misconduct of the Agent or the applicable Lenders.

                                   ARTICLE IX

                                    NOTICES

      9.1.  Sending Notices. Any notice required or permitted to be given under
this Subsidiary Security Agreement shall be sent (and deemed received) in the
manner and to the addresses set forth in Article XIII of the Credit Agreement.

      9.2.  Change in Address for Notices. Each of Guarantors, the Agent and the
Lenders may change the address for service of notice upon it by a notice in
writing to the other parties.

                                   ARTICLE X

                                   THE AGENT

      Bank One, NA has been appointed Agent for the Lenders hereunder pursuant
to Article X of the Credit Agreement. It is expressly understood and agreed by
the parties to this Subsidiary Security Agreement that any authority conferred
upon the Agent hereunder is subject to the terms of the delegation of authority
made by the Lenders to the Agent pursuant to the Credit Agreement, and that the
Agent has agreed to act (and any successor Agent shall act) as such hereunder
only on the express conditions contained in such Article X. Any successor Agent
appointed pursuant to Article X of the Credit Agreement shall be entitled to all
the rights, interests and benefits of the Agent hereunder.

                                      -21-
<PAGE>

      IN WITNESS WHEREOF, each Guarantor and the Agent have executed this
Subsidiary Security Agreement as of the date first above written.

                                 GES EXPOSITION SERVICES, INC.,
                                 as Guarantor

                                 By: /s/ Robert H. Bohannon
                                     --------------------------

                                 Title: Chairman of the Board
                                        -----------------------

                                 By: /s/ Ellen M. Ingersoll
                                     --------------------------

                                 Title: Chief Financial Officer
                                        -----------------------

                                 BANK ONE, NA,
                                  as Agent

                                 By: /s/ Timothy Houlahan
                                     --------------------------

                                 Title: Managing Director
                                        -----------------------

                                      -22-
<PAGE>

                                   EXHIBIT "A"
  (See Sections 3.3, 3.4, 3.5, 4.1.7 and 9.1 of Subsidiary Security Agreement)

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

        _______________________________
        _______________________________
        _______________________________
        _______________________________
        Attention: ____________________

Locations of Inventory and Equipment:

A.    Properties Owned by each Guarantor:

B.    Properties Leased by each Guarantor (Include Landlord's Name):

C.    Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements (include name of Warehouse Operator or other Bailee or Consignee):

                                      -23-
<PAGE>

                                   EXHIBIT "B"
               (See Section 3.9 of Subsidiary Security Agreement)

                  A. Vehicles subject to certificates of title:

Description     Title Number & State Where Issued

B. Aircraft/engines, ships, railcars and other vehicles governed by federal
statute:

Description     Registration Number

        C. Patents, copyrights, trademarks protected under federal law*:

----------------------------
*For (i) trademarks, show the trademark itself, the registration date and the
registration number; (ii) trademark applications, show the trademark applied
for, the application filing date and the serial number of the application; (iii)
patents, show the patent number, issue date and a brief description of the
subject matter of the patent; and (iv) patent applications, show the serial
number of the application, the application filing date and a brief description
of the subject matter of the patent applied for. Any licensing agreements for
patents or trademarks should be described on a separate schedule.

                                      -24-
<PAGE>

                                   EXHIBIT "C"

            List of Pledged Securities and Other Investment Property
               (See Section 3.12 of Subsidiary Security Agreement)

                                   A. STOCKS:

Issuer                     Certificate Number                   Number of Shares

                                    B. BONDS:

Issuer          Number          Face Amount           Coupon Rate       Maturity

                            C. GOVERNMENT SECURITIES:

Issuer          Number      Type       Face Amount      Coupon Rate     Maturity

                     D. OTHER SECURITIES OR OTHER INVESTMENT PROPERTY
                              (CERTIFICATED AND UNCERTIFICATED):

Issuer          Description of Collateral          Percentage Ownership Interest

Add description of custody accounts or arrangements with securities
intermediary, if applicable.

                                      -25-
<PAGE>

                                   EXHIBIT "D"
               (See Section 3.1 of Subsidiary Security Agreement)

              OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED

                                      -26-
<PAGE>

                                   EXHIBIT "E"

                                 PLEDGED SHARES

                                      DESCRIPTION OF          NO. OF SHARES / %
ISSUER          FOREIGN/DOMESTIC        COLLATERAL            OWNERSHIP INTEREST

ESR Exposition Service, Inc.        Domestic
                                    Subsidiary

Expo Accessories, Inc.              Domestic
                                    Subsidiary

Expo Display & Design, Inc.         Domestic
                                    Subsidiary

Shows Unlimited, Inc.               Domestic
                                    Subsidiary

Tradeshow Convention Services,      Domestic
Inc.                                Subsidiary

                                      -27-
<PAGE>

                                   EXHIBIT "F"

                                 EXCLUDED STOCK

Issuer       Description of Collateral      No. of Shares / % Ownership Interest

[Describe margin stock certificates held at Viad - pending confirmation that
such stock is immaterial.]

                                      -28-
<PAGE>

                                  SCHEDULE 3.6

                                   PRIOR NAMES

                                      -29-
<PAGE>

                                  SCHEDULE 3.9

                          EXISTING FINANCING STATEMENTS

                                      -30-
<PAGE>

                                    GUARANTY

      THIS GUARANTY (this "Guaranty") is made as of the thirtieth day of June,
2004, by GES Exposition Services, Inc. ("GES") and each of the other
Subsidiaries of the Borrower (as herein defined) from time to time party hereto
(the "Subsidiary Guarantors") in favor of the Agent, for the benefit of the
Lenders, under the Credit Agreement referred to below;

                                   WITNESSETH:

      WHEREAS, Viad Corp, a Delaware corporation (the "Borrower") and Bank One,
NA, a national banking association having its principal office in Chicago,
Illinois, as Administrative Agent (the "Agent"), and certain other Lenders from
time to time party thereto have entered into a certain Credit Agreement dated as
of June 30, 2004 (as same may be amended or modified from time to time, the
"Credit Agreement"), providing, subject to the terms and conditions thereof, for
extensions of credit to be made by the Lenders to the Borrower;

      WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement that GES execute and deliver this Guaranty whereby GES shall guarantee
the payment when due, subject to Section 9 hereof, of all Guaranteed
Obligations, as defined below; and

      WHEREAS, in consideration of the financial and other support that the
Borrower has provided, and such financial and other support as the Borrower may
in the future provide, to the Subsidiary Guarantors, and in order to induce the
Lenders and the Agent to enter into the Credit Agreement, and the Lenders and
their Affiliates to enter into one or more Rate Management Transactions with the
Borrower, and because each Subsidiary Guarantor has determined that executing
this Guaranty is in its interest and to its financial benefit, each of the
Subsidiary Guarantors is willing to guarantee the obligations of the Borrower
under the Credit Agreement, any Note, any Rate Management Transaction, and the
other Loan Documents;

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

      SECTION 1.1. Selected Terms Used Herein.

      "Guaranteed Obligations" is defined in Section 3 below.

<PAGE>

      SECTION 1.2. Terms in Credit Agreement. Other capitalized terms used
herein but not defined herein shall have the meaning set forth in the Credit
Agreement.

      SECTION 2.1. Representations and Warranties. Each of the Subsidiary
Guarantors represents and warrants (which representations and warranties shall
be deemed to have been renewed upon each Borrowing Date under the Credit
Agreement) that:

            (a)   It is a corporation, partnership or limited liability company
duly and properly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted except where the failure to be in good standing
or qualified to do business could not reasonably be expected to have a Material
Adverse Effect.

            (b)   It has the power and authority and legal right to execute and
deliver this Guaranty and to perform its obligations hereunder. The execution
and delivery by it of this Guaranty and the performance of its obligations
hereunder have been duly authorized by proper corporate proceedings, and this
Guaranty constitutes a legal, valid and binding obligation of such Subsidiary
Guarantor enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.

            (c)   Neither the execution and delivery by it of this Guaranty, nor
the consummation of the transactions herein contemplated, nor compliance with
the provisions hereof will (i) violate any material law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on it or any of its
subsidiaries, (ii) violate its articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management agreement, as the case
may be, (iii) violate the provisions of any material indenture, instrument or
agreement to which it or any of its subsidiaries is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a default
thereunder, except where such violation, conflict or default could not
reasonably be expected to result in a Default under Section 7.5 of the Credit
Agreement or a Material Adverse Effect, or (iv) result in, or require, the
creation or imposition of any Lien in, of or on the Property of such Subsidiary
Guarantor or a subsidiary thereof pursuant to the terms of any material
indenture, instrument or agreement to which it or any of its subsidiaries is a
party or is subject, or by which it, or its Property, is bound. No order,
consent, adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in
respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by it or any of its subsidiaries, is
required to be obtained by it or any of its subsidiaries in connection with the
execution and delivery of this Guaranty or the performance by it of its
obligations hereunder or the legality, validity, binding effect or
enforceability of this Guaranty.

                                      -2-
<PAGE>

      SECTION 2.2. Covenants. Each of the Subsidiary Guarantors covenants that,
so long as any Lender has any Commitment outstanding under the Credit Agreement,
any Rate Management Transaction remains in effect or any of the Guaranteed
Obligations shall remain unpaid, that it will, and, if necessary, to the extent
practicable under the circumstances, will enable the Borrower to, fully comply
with those covenants and agreements set forth in the Credit Agreement.

      SECTION 3. The Guaranty. Subject to Section 9 hereof, each of the
Subsidiary Guarantors hereby absolutely and unconditionally guarantees, as
primary obligor and not as surety, the full and punctual payment (whether at
stated maturity, upon acceleration or early termination or otherwise, and at all
times thereafter) and performance of the Obligations and the Rate Management
Obligations owed to one or more of the Lenders (including Lenders that have
ceased to be a party to the Credit Agreement) or their Affiliates, including
without limitation any such Obligations or Rate Management Obligations incurred
or accrued during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, whether or not allowed or allowable in such proceeding
(collectively, subject to the provisions of Section 9 hereof, being referred to
collectively as the "Guaranteed Obligations"). Upon failure by the Borrower to
pay punctually any such amount, each of the Subsidiary Guarantors agrees that it
shall forthwith on demand pay to the Agent for the benefit of the Lenders and,
if applicable, their Affiliates, the amount not so paid at the place and in the
manner specified in the Credit Agreement, any Note, any Rate Management
Transaction or the relevant Loan Document, as the case may be. This Guaranty is
a guaranty of payment and not of collection. Each of the Subsidiary Guarantors
waives any right to require the Lender to sue the Borrower, any other guarantor,
or any other person obligated for all or any part of the Guaranteed Obligations,
or otherwise to enforce its payment against any collateral securing all or any
part of the Guaranteed Obligations.

      SECTION 4. Guaranty Unconditional. Subject to Section 9 hereof, the
obligations of each of the Subsidiary Guarantors hereunder shall be
unconditional and absolute and, without limiting the generality of the
foregoing, and to the extent permitted by applicable law, shall not be released,
discharged or otherwise affected by:

            (a)   any extension, renewal, settlement, compromise, waiver or
release in respect of any of the Guaranteed Obligations, by operation of law or
otherwise, or any obligation of any other guarantor of any of the Guaranteed
Obligations, or any default, failure or delay, willful or otherwise, in the
payment or performance of the Guaranteed Obligations;

            (b)   any modification or amendment of or supplement to the Credit
Agreement, any Note, any Rate Management Transaction or any other Loan Document;

            (c)   any release, nonperfection or invalidity of any direct or
indirect security for any obligation of the Borrower under the Credit Agreement,
any Note, the Collateral Documents, any Rate Management Transaction, any other
Loan Document, or any obligations of any other guarantor of any of the
Guaranteed Obligations, or any action or failure to act by the

                                      -3-
<PAGE>

Agent, any Lender or any Affiliate of any Lender with respect to any collateral
securing all or any part of the Guaranteed Obligations;

            (d)   any change in the corporate existence, structure or ownership
of the Borrower or any other guarantor of any of the Guaranteed Obligations, or
any insolvency, bankruptcy, reorganization or other similar proceeding affecting
the Borrower, or any other guarantor of the Guaranteed Obligations, or its
assets or any resulting release or discharge of any obligation of the Borrower,
or any other guarantor of any of the Guaranteed Obligations;

            (e)   the existence of any claim, setoff or other rights which the
Subsidiary Guarantors may have at any time against the Borrower, any other
guarantor of any of the Guaranteed Obligations, the Agent, any Lender or any
other Person, whether in connection herewith or any unrelated transactions;

            (f)   any invalidity or unenforceability relating to or against the
Borrower, or any other guarantor of any of the Guaranteed Obligations, for any
reason related to the Credit Agreement, any Rate Management Transaction, any
other Loan Document, or any provision of applicable law or regulation purporting
to prohibit the payment by the Borrower, or any other guarantor of the
Guaranteed Obligations, of the principal of or interest on any Note or any other
amount payable by the Borrower under the Credit Agreement, any Note, any Rate
Management Transaction or any other Loan Document; or

            (g)   any other act or omission to act or delay of any kind by the
Borrower, any other guarantor of the Guaranteed Obligations, the Agent, any
Lender or any other Person or any other circumstance whatsoever which might, but
for the provisions of this paragraph, constitute a legal or equitable discharge
of any Subsidiary Guarantor's obligations hereunder.

                                      -4-
<PAGE>

      SECTION 5. Discharge Only Upon Payment In Full: Reinstatement In Certain
Circumstances. Each of the Subsidiary Guarantor's obligations hereunder shall
remain in full force and effect until all Guaranteed Obligations shall have been
indefeasibly paid in full, the Commitments under the Credit Agreement shall have
terminated or expired and all Rate Management Transactions have terminated or
expired. If at any time any payment of the principal of or interest on any Note
or any other amount payable by the Borrower or any other party under the Credit
Agreement, any Rate Management Transaction or any other Loan Document is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, each of the
Subsidiary Guarantor's obligations hereunder with respect to such payment shall
be reinstated as though such payment had been due but not made at such time.

      SECTION 6. Waivers. Each of the Subsidiary Guarantors irrevocably waives,
to the extent permitted by applicable law, acceptance hereof, presentment,
demand, protest and, to the fullest extent permitted by law, any notice not
provided for herein, as well as any requirement that at any time any action be
taken by any Person against the Borrower, any other guarantor of any of the
Guaranteed Obligations, or any other Person.

      SECTION 7. Subrogation. Each of the Subsidiary Guarantors hereby agrees
not to assert any right, claim or cause of action, including, without
limitation, a claim for subrogation, reimbursement, indemnification or
otherwise, against the Borrower arising out of or by reason of this Guaranty or
the obligations hereunder, including, without limitation, the payment or
securing or purchasing of any of the Guaranteed Obligations by any of the
Subsidiary Guarantors unless and until the Guaranteed Obligations are
indefeasibly paid in full, any commitment to lend under the Credit Agreement and
any other Loan Documents is terminated and all Rate Management Transactions have
terminated or expired.

      SECTION 8. Stay of Acceleration. If acceleration of the time for payment
of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy
or reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of the Credit Agreement, any Note, any Rate
Management Transaction or any other Loan Document shall nonetheless be payable
by each of the Subsidiary Guarantors hereunder forthwith on demand by the Agent
made at the request of the Required Lenders.

      SECTION 9. Limitation on Obligations.

            (a)   The provisions of this Guaranty are severable, and in any
action or proceeding involving any state corporate law, or any state, federal or
foreign bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Subsidiary Guarantor under
this Guaranty would otherwise be held or determined to be avoidable, invalid or
unenforceable on account of the amount of such Subsidiary Guarantor's liability
under this Guaranty, then, notwithstanding any other provision of this Guaranty
to the contrary, the amount of such liability shall, without any further action
by the Subsidiary Guarantors, the Agent or any Lender, be automatically limited
and reduced to the

                                      -5-
<PAGE>

highest amount that is valid and enforceable as determined in such action or
proceeding (such highest amount determined hereunder being the relevant
Subsidiary Guarantor's "Maximum Liability"). This Section 9(a) with respect to
the Maximum Liability of the Subsidiary Guarantors is intended solely to
preserve the rights of the Agent hereunder to the maximum extent not subject to
avoidance under applicable law, and neither the Subsidiary Guarantor nor any
other person or entity shall have any right or claim under this Section 9(a)
with respect to the Maximum Liability, except to the extent necessary so that
the obligations of the Subsidiary Guarantor hereunder shall not be rendered
voidable under applicable law.

            (b)   Each of the Subsidiary Guarantors agrees that the Guaranteed
Obligations may at any time and from time to time exceed the Maximum Liability
of each Subsidiary Guarantor, and may exceed the aggregate Maximum Liability of
all other Subsidiary Guarantors, without impairing this Guaranty or affecting
the rights and remedies of the Agent hereunder. Nothing in this Section 9(b)
shall be construed to increase any Subsidiary Guarantor's obligations hereunder
beyond its Maximum Liability.

            (c)   In the event any Subsidiary Guarantor (a "Paying Subsidiary
Guarantor") shall make any payment or payments under this Guaranty or shall
suffer any loss as a result of any realization upon any collateral granted by it
to secure its obligations under this Guaranty, each other Subsidiary Guarantor
(each a "Non-Paying Subsidiary Guarantor") shall contribute to such Paying
Subsidiary Guarantor an amount equal to such Non-Paying Subsidiary Guarantor's
"Pro Rata Share" of such payment or payments made, or losses suffered, by such
Paying Subsidiary Guarantor. For the purposes hereof, each Non-Paying Subsidiary
Guarantor's "Pro Rata Share" with respect to any such payment or loss by a
Paying Subsidiary Guarantor shall be determined as of the date on which such
payment or loss was made by reference to the ratio of (i) such Non-Paying
Subsidiary Guarantor's Maximum Liability as of such date (without giving effect
to any right to receive, or obligation to make, any contribution hereunder) or,
if such Non-Paying Subsidiary Guarantor's Maximum Liability has not been
determined, the aggregate amount of all monies received by such Non-Paying
Subsidiary Guarantor from the Borrower after the date hereof (whether by loan,
capital infusion or by other means) to (ii) the aggregate Maximum Liability of
all Subsidiary Guarantors hereunder (including such Paying Subsidiary Guarantor)
as of such date (without giving effect to any right to receive, or obligation to
make, any contribution hereunder), or to the extent that a Maximum Liability has
not been determined for any Subsidiary Guarantors, the aggregate amount of all
monies received by such Subsidiary Guarantors from the Borrower after the date
hereof (whether by loan, capital infusion or by other means). Nothing in this
Section 9 (c) shall affect any Subsidiary Guarantor's several liability for the
entire amount of the Guaranteed Obligations (up to such Subsidiary Guarantor's
Maximum Liability). Each of the Subsidiary Guarantors covenants and agrees that
its right to receive any contribution under this Guaranty from a Non-Paying
Subsidiary Guarantor shall be subordinate and junior in right of payment to all
the Guaranteed Obligations. The provisions of this Section 9(c) are for the
benefit of both the Agent and the Subsidiary Guarantors and may be enforced by
any one, or more, or all of them in accordance with the terms hereof.

                                      -6-
<PAGE>

      SECTION 10. Application of Payments. All payments received by the Agent
hereunder shall be applied by the Agent to payment of the Guaranteed Obligations
in the following order unless a court of competent jurisdiction shall otherwise
direct:

            (a)   FIRST, to payment of all reasonable costs and expenses of the
Agent incurred in connection with the collection and enforcement of the
Guaranteed Obligations or of any security interest granted to the Agent in
connection with any collateral securing the Guaranteed Obligations;

            (b)   SECOND, to payment of all costs and expenses of the Lenders in
protecting their rights hereunder;

            (c)   THIRD, to payment of that portion of the Guaranteed
Obligations constituting accrued and unpaid interest and fees, and any premiums
and scheduled periodic payments due under Rate Management Transactions permitted
by the Credit Agreement pro rata among the Lenders and their Affiliates in
accordance with the amount of such accrued and unpaid interest and fees and
premiums and scheduled periodic payments owing to each of them;

            (d)   FOURTH, to payment of the principal of the Guaranteed
Obligations and the net early termination payments, breakage and any other Rate
Management Obligations then due and unpaid from the Borrower to any of the
Lenders or their Affiliates, pro rata among the Lenders and their Affiliates in
accordance with the amount of such principal and such net early termination
payments and other Rate Management Obligations then due and unpaid owing to each
of them; and

            (e)   FIFTH, to payment of any Guaranteed Obligations (other than
those listed above) pro rata among those parties to whom such Guaranteed
Obligations are due in accordance with the amounts owing to each of them.

      SECTION 11 Joinder. Pursuant to Section 6.23 of the Credit Agreement,
certain Subsidiaries are from time to time required to enter into this Guaranty
as a Subsidiary Guarantor. Upon execution and delivery after the date hereof by
the Agent and such Subsidiary of a supplement in the form of Exhibit A hereto,
such Subsidiary shall become a subsidiary Guarantor hereunder with the same
force and effect as if originally named as a Subsidiary Guarantor herein. The
execution and delivery of any instrument adding an additional Subsidiary
Guarantor as a party to this Agreement shall not require the consent of any
Subsidiary Guarantor hereunder, of the Borrower or of any Lender. The rights and
obligations of each Subsidiary Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Subsidiary Guarantor as a
party hereto.

      SECTION 12. Notices. All notices, requests and other communications to any
party hereunder shall be given or made by telecopier or other writing and
telecopied, or mailed or delivered to the intended recipient at its address or
telecopier number set forth on the signature pages hereof or such other address
or telecopy number as such party may hereafter specify for such purpose by
notice to the Agent in accordance with the provisions of Article XIII of the

                                      -7-
<PAGE>

Credit Agreement. Except as otherwise provided in this Guaranty, all such
communications shall be deemed to have been duly given when transmitted by
telecopier, or personally delivered or, in the case of a mailed notice sent by
certified mail return-receipt requested, on the date set forth on the receipt
(provided, that any refusal to accept any such notice shall be deemed to be
notice thereof as of the time of any such refusal), in each case given or
addressed as aforesaid.

      SECTION 13. No Waivers. No failure or delay by the Agent or any Lenders in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided in this Guaranty, the Credit Agreement, any
Note, any Rate Management Transaction and the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies provided by law.

      SECTION 14. No Duty to Advise. Each of the Subsidiary Guarantors assumes
all responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks that each of the Subsidiary Guarantors assumes and incurs
under this Guaranty, and agrees that neither the Agent nor any Lender has any
duty to advise any of the Subsidiary Guarantors of information known to it
regarding those circumstances or risks.

      SECTION 15. Successors and Assigns. This Guaranty is for the benefit of
the Agent and the Lenders and their respective successors and permitted assigns
and in the event of an assignment of any amounts payable under the Credit
Agreement, any Note, any Rate Management Transaction, or the other Loan
Documents, the rights hereunder, to the extent applicable to the indebtedness so
assigned, shall be transferred with such indebtedness. This Guaranty shall be
binding upon each of the Subsidiary Guarantors and their respective successors
and permitted assigns.

      SECTION 16. Changes in Writing. Neither this Guaranty nor any provision
hereof may be changed, waived, discharged or terminated orally, but only in
writing signed by each of the Subsidiary Guarantors and the Agent with the
consent of the Required Lenders.

      SECTION 17. Costs of Enforcement. Each of the Subsidiary Guarantors agrees
to pay all reasonable costs and expenses including, without limitation, all
court costs and attorneys' fees and expenses paid or incurred by the Agent or
any Lender or any Affiliate of any Lender in endeavoring to collect all or any
part of the Guaranteed Obligations from, or in prosecuting any action against,
the Borrower, the Subsidiary Guarantors or any other guarantor of all or any
part of the Guaranteed Obligations.

      SECTION 18. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS. EACH OF THE SUBSIDIARY GUARANTORS HEREBY SUBMITS
TO THE NONEXCLUSIVE

                                      -8-
<PAGE>

JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK AND FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS GUARANTY (INCLUDING, WITHOUT LIMITATION, ANY OF THE OTHER LOAN
DOCUMENTS) OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE SUBSIDIARY
GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH OF THE SUBSIDIARY GUARANTORS, AND THE AGENT AND THE LENDERS ACCEPTING THIS
GUARANTY, HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

      SECTION 19. Taxes. etc. All payments required to be made by any of the
Subsidiary Guarantors hereunder shall be made without setoff or counterclaim and
free and clear of and without deduction or withholding for or on account of, any
present or future taxes, levies, imposts, duties or other charges of whatsoever
nature imposed by any government or any political or taxing authority thereof
(but excluding Excluded Taxes), provided, however, that if any of the Subsidiary
Guarantors is required by law to make such deduction or withholding, such
Subsidiary Guarantor shall forthwith (i) pay to the Agent or any Lender, as
applicable, such additional amount as results in the net amount received by the
Agent or any Lender, as applicable, equaling the full amount which would have
been received by the Agent or any Lender, as applicable, had no such deduction
or withholding been made, (ii) pay the full amount deducted to the relevant
authority in accordance with applicable law, and (iii) furnish to the Agent or
any Lender, as applicable, certified copies of official receipts evidencing
payment of such withholding taxes within 30 days after such payment is made.

      SECTION 20. Setoff. Without limiting the rights of the Agent or the
Lenders under applicable law, if all or any part of the Guaranteed Obligations
is then due, whether pursuant to the occurrence of a Default or otherwise, then
the Guarantor authorizes the Agent and the Lenders to apply any sums standing to
the credit of the Guarantor with the Agent or any Lender or any Lending
Installation of the Agent or any Lender toward the payment of the Guaranteed
Obligations.

                                      -9-
<PAGE>

      IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly
executed, under seal, by its authorized officer as of the day and year first
above written.

                                         GES EXPOSITION SERVICES, INC.

                                         By: /s/ Robert H. Bohannon
                                             --------------------------

                                         Title: Chairman of the Board
                                                --------------------------

                                         By: /s/ Ellen M. Ingersoll
                                             --------------------------

                                         Title: Chief Financial Officer
                                                --------------------------

                                      -10-
<PAGE>

                                    EXHIBIT A

      SUPPLEMENT NO. __________ dated as of ____________________, to the
Guaranty dated as of June 30, 2004 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Guaranty"), by GES Exposition
Services, Inc. in favor of the Agent and the Lenders.

      Reference is made to the Credit Agreement dated as of June 30, 2004, (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Viad Corp, the lenders from time to time party thereto (the
"Lenders") and Bank One, NA, a national banking association with its principal
office in Chicago, Illinois, as agent (in such capacity, the "Agent").

      Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Guaranty and the Credit Agreement.

      The Guarantors have entered into the Guaranty in order to induce the
Lenders to extend credit pursuant to the Credit Agreement. Pursuant to Section
6.23 of the Credit Agreement, the undersigned Subsidiary is required to enter
into the Guaranty as a Guarantor. Section 11 of the Guaranty provides that
additional subsidiaries of the Borrower may become Guarantors under the Guaranty
by execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary of the Borrower (the "New Guarantor") is executing this
Supplement in accordance with the requirements of the Credit Agreement to become
a Guarantor under the Guaranty in order to induce the Lenders to extend and
continue the extension of credit pursuant to the Credit Agreement.

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

      SECTION 1. In accordance with Section 11 of the Guaranty, the New
Guarantor by its signature below becomes a Guarantor under the Guaranty with the
same force and effect as if originally named therein as a Guarantor and the New
Guarantor hereby (a) agrees to all the terms and warrants that the
representations and warranties made by it as a Guarantor thereunder are true and
correct in all material respects on and as of the date hereof (except to the
extent such representations and warranties expressly relate to an earlier date).
Each reference to a "Subsidiary Guarantor" in the Guaranty shall be deemed to
include the New Guarantor. The Guaranty is hereby incorporated herein by
reference.

      SECTION 2. The New Guarantor represents and warrants to the Agent and the
Lenders that this Supplement has been duly authorized, executed and delivered by
it and constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms.

                                      -11-
<PAGE>

      SECTION 3. This Supplement may be executed in counterparts, each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. The Supplement shall become effective when the
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Agents.

      SECTION 4. Except as expressly supplemented hereby, the Guaranty shall
remain in full force and effect.

      SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT
TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

      SECTION 6. All communications and notices hereunder shall be in writing
and given as provided in Section 12 of the Guaranty. All communications and
notices hereunder to the New Guarantor shall be given to it at the address set
forth under its signature below, with a copy to the Borrower. IN WITNESS
WHEREOF, the New Guarantor and the agent have duly executed this Supplement to
the Guaranty as of the day and year first above written.

                                      [Name of New Guarantor]

                                      By: ______________________________________

                                      Name: ____________________________________

                                      Title: ___________________________________

                                      Address __________________________________

                                      By: ______________________________________

                                      Name: ____________________________________

                                      Title: ___________________________________

                                      Address __________________________________

                                      BANK ONE, NA, as Agent

                                      By: ______________________________________

                                      Name: ____________________________________

                                      Title: ___________________________________

                                      Address __________________________________

                                      -12-

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