Document:

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                                                                   Exhibit 10.19

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                                               Published CUSIP Number: 53567VAA3

                                CREDIT AGREEMENT

                          Dated as of November 23, 2004

                                      among

                             LINENS 'N THINGS, INC.
                                       and
                     The Subsidiary Borrowers party hereto,
                                as the Borrowers,

                             BANK OF AMERICA, N.A.,
                   as Administrative Agent, Swing Line Lender
                               and an L/C Issuer,

                                       and

                         The Other Lenders Party Hereto

                         BANC OF AMERICA SECURITIES LLC,
                                       as
                    Sole Lead Arranger and Sole Book Manager

================================================================================

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                                TABLE OF CONTENTS
Section                                                                     Page

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.....................................1
      1.01   DEFINED TERMS.....................................................1
      1.02   OTHER INTERPRETIVE PROVISIONS....................................20
      1.03   ACCOUNTING TERMS.................................................21
      1.04   ROUNDING.........................................................21
      1.05   TIMES OF DAY.....................................................21
      1.06   LETTER OF CREDIT AMOUNTS.........................................22

ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS..............................22
      2.01   COMMITTED LOANS..................................................22
      2.02   BORROWINGS, CONVERSIONS AND CONTINUATIONS OF COMMITTED LOANS.....22
      2.03   BID LOANS........................................................24
      2.04   LETTERS OF CREDIT................................................27
      2.05   SWING LINE LOANS.................................................36
      2.06   PREPAYMENTS......................................................39
      2.07   TERMINATION OR REDUCTION OF COMMITMENTS..........................40
      2.08   REPAYMENT OF LOANS...............................................40
      2.09   INTEREST.........................................................40
      2.10   FEES.............................................................41
      2.11   COMPUTATION OF INTEREST AND FEES.................................42
      2.12   EVIDENCE OF DEBT.................................................42
      2.13   PAYMENTS GENERALLY; FUNDING BY ADMINISTRATIVE AGENT..............43
      2.14   SHARING OF PAYMENTS BY LENDERS...................................45
      2.15   INCREASE IN COMMITMENTS..........................................45
      2.16   SUBSIDIARY BORROWER JOINDER AGREEMENT............................46

ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY............................47
      3.01   TAXES............................................................47
      3.02   ILLEGALITY.......................................................49
      3.03   INABILITY TO DETERMINE RATES.....................................50
      3.04   INCREASED COSTS; RESERVES ON EURODOLLAR RATE LOANS...............50
      3.05   COMPENSATION FOR LOSSES..........................................52
      3.06   MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS...................52
      3.07   SURVIVAL.........................................................53

ARTICLE IV CONDITIONS PRECEDENT TO CLOSING DATE AND CREDIT EXTENSIONS.........53
      4.01   CONDITIONS OF CLOSING DATE AND INITIAL CREDIT EXTENSION..........53
      4.02   CONDITIONS TO ALL CREDIT EXTENSIONS..............................55

ARTICLE V REPRESENTATIONS AND WARRANTIES......................................56
      5.01   EXISTENCE AND POWER..............................................56
      5.02   AUTHORITY........................................................56

                                       i
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      5.03   BINDING AGREEMENT................................................56
      5.04   LITIGATION.......................................................56
      5.05   NO CONFLICTING AGREEMENT.........................................57
      5.06   TAXES............................................................57
      5.07   COMPLIANCE WITH APPLICABLE LAW, FILINGS..........................58
      5.08   GOVERNMENTAL REGULATIONS.........................................58
      5.09   FEDERAL RESERVE REGULATIONS; USE OF LOAN PROCEEDS................58
      5.10   NO MISREPRESENTATION.............................................58
      5.11   PLANS............................................................59
      5.12   ENVIRONMENTAL MATTERS............................................59
      5.13   FINANCIAL STATEMENTS.............................................59
      5.14   SOLVENCY; EVENTS OF DEFAULT......................................60
      5.15   TITLE TO PROPERTIES..............................................60
      5.16   SUBSIDIARIES.....................................................60
      5.17   CONTRACTS WITH AFFILIATES........................................60
      5.18   DISCLOSURE.......................................................61
      5.19   RESTRICTIONS ON LOAN PARTIES.....................................61

ARTICLE VI AFFIRMATIVE AND FINANCIAL COVENANTS................................61
      6.01   LEGAL EXISTENCE..................................................61
      6.02   TAXES............................................................61
      6.03   INSURANCE........................................................62
      6.04   PERFORMANCE OF OBLIGATIONS.......................................62
      6.05   CONDITION OF PROPERTY............................................62
      6.06   OBSERVANCE OF LEGAL REQUIREMENTS.................................62
      6.07   FINANCIAL STATEMENTS AND OTHER INFORMATION.......................62
      6.08   RECORDS..........................................................65
      6.09   AUTHORIZATIONS...................................................65
      6.10   FINANCIAL COVENANTS..............................................65
      6.11   FURTHER ASSURANCES...............................................66
      6.12   ADDITIONAL SUBSIDIARY GUARANTORS.................................66
      6.13   USE OF PROCEEDS..................................................66
      6.14   CHANGES TO FISCAL YEAR...........................................66

ARTICLE VII NEGATIVE COVENANTS................................................66
      7.01   INDEBTEDNESS.....................................................67
      7.02   LIENS............................................................67
      7.03   DISPOSITIONS.....................................................68
      7.04   MERGER OR CONSOLIDATION, ETC.....................................68
      7.05   ACQUISITIONS.....................................................69
      7.06   RESTRICTED PAYMENTS..............................................69
      7.07   LIMITATION ON UPSTREAM DIVIDENDS BY SUBSIDIARIES.................70
      7.08   LIMITATION ON NEGATIVE PLEDGES...................................70
      7.09   CERTAIN DOCUMENTS................................................70
      7.10   BUSINESS CHANGE..................................................70
      7.11   INVESTMENTS......................................................70
      7.12   SALE AND LEASEBACK...............................................71

                                       ii
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      7.13   TRANSACTIONS WITH AFFILIATES.....................................71

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES...................................71
      8.01   EVENTS OF DEFAULT................................................71
      8.02   REMEDIES UPON EVENT OF DEFAULT...................................74
      8.03   APPLICATION OF FUNDS.............................................75

ARTICLE IX ADMINISTRATIVE AGENT...............................................76
      9.01   APPOINTMENT AND AUTHORITY........................................76
      9.02   RIGHTS AS A LENDER...............................................76
      9.03   EXCULPATORY PROVISIONS...........................................76
      9.04   RELIANCE BY ADMINISTRATIVE AGENT.................................77
      9.05   DELEGATION OF DUTIES.............................................77
      9.06   RESIGNATION OF ADMINISTRATIVE AGENT..............................78
      9.07   NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS...........79
      9.08   NO OTHER DUTIES, ETC.............................................79
      9.09   ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM....................79
      9.10   COLLATERAL AND GUARANTY MATTERS..................................80

ARTICLE X MISCELLANEOUS.......................................................80
      10.01  AMENDMENTS, ETC..................................................80
      10.02  NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.................82
      10.03  NO WAIVER; CUMULATIVE REMEDIES...................................83
      10.04  EXPENSES; INDEMNITY; DAMAGE WAIVER...............................83
      10.05  PAYMENTS SET ASIDE...............................................85
      10.06  SUCCESSORS AND ASSIGNS...........................................86
      10.07  TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY................90
      10.08  RIGHT OF SETOFF..................................................90
      10.09  INTEREST RATE LIMITATION.........................................91
      10.10  COUNTERPARTS; INTEGRATION; EFFECTIVENESS.........................91
      10.11  SURVIVAL OF REPRESENTATIONS AND WARRANTIES.......................91
      10.12  SEVERABILITY.....................................................92
      10.13  REPLACEMENT OF LENDERS...........................................92
      10.14  GOVERNING LAW; JURISDICTION; ETC.................................93
      10.15  WAIVER OF JURY TRIAL.............................................94
      10.16  USA PATRIOT ACT NOTICE...........................................94

ARTICLE XI GUARANTY OF THE COMPANY............................................94
      11.01  GUARANTY.........................................................94
      11.02  ABSOLUTE OBLIGATION..............................................95
      11.03  GUARANTY OF PAYMENT..............................................95
      11.04  REPAYMENT IN BANKRUPTCY..........................................96
      11.05  OTHER PROVISIONS IN GUARANTY.....................................97

                                      iii
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SCHEDULES

      1.01   Existing Letters of Credit
      2.01   Commitments and Applicable Percentages
      5.16   Subsidiaries
      5.17   Contracts with Affiliates
      7.01   Existing Indebtedness
      7.02   Existing Liens
      7.11   Existing Investments
      10.02  Administrative Agent's Office; Certain Addresses for Notices

EXHIBITS
             FORM OF

      A      Committed Loan Notice
      B-1    Bid Request
      B-2    Competitive Bid
      C      Swing Line Loan Notice
      D      Note
      E      Compliance Certificate
      F      Assignment and Assumption
      G      Subsidiary Guaranty
      H      Subsidiary Borrower Joinder Agreement

                                       iv
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                                CREDIT AGREEMENT

        This CREDIT AGREEMENT ("AGREEMENT") is entered into as of November 23,
2004, among LINENS 'N THINGS, INC., a Delaware corporation (the "COMPANY"), each
Subsidiary Borrower that is a signatory hereto or that becomes a party hereto
pursuant to the provisions of SECTION 2.16, each lender from time to time party
hereto (collectively, the "LENDERS" and individually, a "LENDER"), and BANK OF
AMERICA, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer.

        The Company has requested that the Lenders provide a revolving credit
facility to the Borrowers hereunder, and the Lenders are willing to do so on the
terms and conditions set forth herein.

        In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

                                    ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS

        1.01    DEFINED TERMS.

        As used in this Agreement, the following terms shall have the meanings
set forth below:

        "ABSOLUTE RATE" means a fixed rate of interest expressed in multiples of
1/100th of one basis point.

        "ABSOLUTE RATE LOAN" means a Bid Loan that bears interest at a rate
determined with reference to an Absolute Rate.

        "ACQUISITION" means, with respect to any Person, the purchase or other
acquisition by such Person, by any means whatsoever (including by devise,
bequest, gift, through a dividend or otherwise), of (a) stock of, or other
equity securities of, any other Person if, immediately thereafter, such other
Person would be either a consolidated subsidiary of such Person or otherwise
under the control of such Person, (b) any business, going concern or division or
segment thereof, or (c) the Property of any other Person other than in the
ordinary course of business, provided, however, that no acquisition of
substantially all of the assets, or any division or segment, of such other
Person shall be deemed to be in the ordinary course of business.

        "ADMINISTRATIVE AGENT" means Bank of America in its capacity as
Administrative Agent under any of the Loan Documents, or any successor
Administrative Agent.

        "ADMINISTRATIVE AGENT'S OFFICE" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Company and the Lenders.

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

        "AFFILIATE" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

        "AGGREGATE COMMITMENTS" means the Commitments of all the Lenders. The
Aggregate Commitments of all the Lenders on the Closing Date shall be
$250,000,000.

        "AGREEMENT" means this Credit Agreement.

        "APPLICABLE PERCENTAGE" means with respect to any Lender at any time,
the percentage (carried out to the ninth decimal place) of the Aggregate
Commitments represented by such Lender's Commitment at such time. If the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to SECTION 8.02 or if
the Aggregate Commitments have expired, then the Applicable Percentage of each
Lender shall be determined based on the Applicable Percentage of such Lender
most recently in effect, giving effect to any subsequent assignments. The
initial Applicable Percentage of each Lender is set forth opposite the name of
such Lender on SCHEDULE 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.

        "APPLICABLE RATE" means, from time to time, for the purposes of
calculating (a) the Facility Fee for the purposes of SECTION 2.10(A); (b) the
interest rate applicable to Eurodollar Rate Loans for the purposes of SECTION
2.09; (c) the interest rate applicable to Base Rate Loans for the purposes of
SECTION 2.09, and (d) each of the Commercial Letter of Credit Fee and the
Standby Letter of Credit Fee for the purposes of SECTION 2.04(I), the following
percentages per annum, based upon the Fixed Charge Coverage Ratio as set forth
in the most recent Compliance Certificate received by the Administrative Agent
pursuant to SECTION 6.02(B):

<TABLE>
<CAPTION>
<S>                                                                           <C>
-------------- ---------------------------- -------------- ----------------- ------------------ -------------------
                                                              EURODOLLAR
                                                              RATE LOANS
                                                           ----------------
                                                            STANDBY LETTER
               FIXED CHARGE                                       OF                             COMMERCIAL LETTER
PRICING LEVEL  COVERAGE RATIO                FACILITY FEE     CREDIT FEE       BASE RATE LOANS    OF CREDIT FEE
-------------- ---------------------------- -------------- ----------------- ------------------ -------------------
      1        >  2.10:1.00                    0.150%           0.725%             0.00%             0.3625%
-------------- ---------------------------- -------------- ----------------- ------------------ -------------------
      2        > 1.85:1.00 but < 2.10:1:00     0.175%           0.825%             0.00%             0.4125%
                               -
-------------- ---------------------------- -------------- ----------------- ------------------ -------------------
      3        > 1.70:1.00 but < 1.85:1:00     0.200%           0.925%             0.00%             0.4625%
                               -
-------------- ---------------------------- -------------- ----------------- ------------------ -------------------
      4        > 1.60:1.00 but < 1.70:1:00     0.250%           1.00%              0.00%              0.500%
                               -
-------------- ---------------------------- -------------- ----------------- ------------------ -------------------
      5        < 1.60:1:00                     0.300%           1.20%              0.20%              0.600%
               -
-------------- ---------------------------- -------------- ----------------- ------------------ -------------------
</TABLE>

Any increase or decrease in the Applicable Rate resulting from a change in the
Fixed Charge Coverage Ratio shall become effective as of the fifth Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
SECTION 6.07(C); PROVIDED, HOWEVER, that if

<PAGE>

a Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Level 5 shall apply as of the first Business Day after the
date on which such Compliance Certificate was required to have been delivered
until the fifth Business Day after delivery of the overdue Compliance
Certificate. The Applicable Rate in effect from the Closing Date through the
fifth Business Day after the date on which the Company delivers the required
financial statements and Compliance Certificate for the fiscal quarter ending
January 1, 2005 shall be determined based upon Pricing Level 3.

        "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.

        "ARRANGER" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.

        "ASSIGNMENT AND ASSUMPTION" means an assignment and assumption entered
into by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.06(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit F or any other form approved by the
Administrative Agent.

        "ATTRIBUTABLE INDEBTEDNESS" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

        "AVAILABILITY PERIOD" means the period from and including the Closing
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.07, and (c) the date of
termination of the commitment of each Lender to make Loans and of the obligation
of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

        "BANK OF AMERICA" means Bank of America, N.A. and its successors.

        "BASE RATE" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

        "BASE RATE COMMITTED LOAN" means a Committed Loan that is a Base Rate
Loan.

<PAGE>

        "BASE RATE LOAN" means a Loan that bears interest based on the Base
Rate.

        "BID BORROWING" means a borrowing consisting of simultaneous Bid Loans
of the same Type from each of the Lenders whose offer to make one or more Bid
Loans as part of such borrowing has been accepted under the auction bidding
procedures described in Section 2.03.

        "BID LOAN" has the meaning specified in SECTION 2.03(A).

        "BID LOAN LENDER" means, in respect of any Bid Loan, the Lender making
such Bid Loan to the Borrower.

        "BID LOAN SUBLIMIT" means an amount equal to $35,000,000. The Bid Loan
Sublimit is part of, and not in addition to, the Aggregate Commitments.

        "BID REQUEST" means a written request for one or more Bid Loans
substantially in the form of EXHIBIT B-1.

        "BORROWERS" means, collectively, the Company and the Subsidiary
Borrowers, and "BORROWER" means any one of them.

        "BORROWING" means a Committed Borrowing, a Bid Borrowing or a Swing Line
Borrowing, as the context may require.

        "BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.

        "CASH COLLATERALIZE" has the meaning specified in SECTION 2.04(G).

        "CASH EQUIVALENTS": means (i) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than six months from the date
of acquisition, (ii) Dollar denominated time deposits, certificates of deposit
and bankers acceptances of (x) any Lender or (y) any Approved Bank, in each case
with maturities of not more than six months from the date of acquisition, (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial or financial company with a long term
unsecured debt rating of at least A or A-2, or the equivalent of each thereof,
by S&P or Moody's, as the case may be, and in each case maturing within six
months after the date of acquisition, (iv) marketable direct obligations issued
by any state of the United States or any political subdivision of any such state
or any public instrumentality thereof maturing within six months from the date
of acquisition thereof and, at the time of acquisition, having one of the two
highest ratings

<PAGE>

obtainable from either S&P or Moody's, (v) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in clauses (i) through (iv) above, (vi) investments in tax-exempt
municipal bonds maturing within six months from the date of acquisition thereof
and, at the time of acquisition, having one of the two highest ratings
obtainable with respect thereto from either S&P or Moody's and (vii) investments
in overnight repurchase agreements with any Lender or any primary securities
dealer to the extent that such Lender or securities dealer is able to segregate
the securities subject to such repurchase agreements and such securities consist
of the type described in clauses (i) and (iii) above.

        "CHANGE IN LAW" means the occurrence, after the date of this Agreement,
of any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

        "CLOSING DATE" means the first date all the conditions precedent in
SECTION 4.01 are satisfied or waived in accordance with SECTION 10.01.

        "CODE" means the Internal Revenue Code of 1986.

        "COMMITMENT" means, as to each Lender, its obligation to (a) make
Committed Loans to the Borrowers pursuant to SECTION 2.01, (b) purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on SCHEDULE 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

        "COMMITTED BORROWING" means a borrowing consisting of simultaneous
Committed Loans of the same Type and, in the case of Eurodollar Rate Committed
Loans, having the same Interest Period made by each of the Lenders pursuant to
SECTION 2.01.

        "COMMITTED LOAN" has the meaning specified in SECTION 2.01.

        "COMMITTED LOAN NOTICE" means a notice of (a) a Committed Borrowing, (b)
a conversion of Committed Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Committed Loans, pursuant to SECTION 2.02(A),
which, if in writing, shall be substantially in the form of EXHIBIT A.

        "COMPANY" has the meaning specified in the introductory paragraph
hereto.

        "COMPANY GUARANTEED OBLIGATIONS" has the meaning specified in SECTION
11.01.

        "COMPANY GUARANTY" means the Guaranty made by the Company in favor of
the Administrative Agent and the Lenders pursuant to ARTICLE XI hereof.

<PAGE>

        "COMPETITIVE BID" means a written offer by a Lender to make one or more
Bid Loans, substantially in the form of EXHIBIT B-2, duly completed and signed
by a Lender.

        "COMPLIANCE CERTIFICATE" has the meaning specified in SECTION 6.07.

        "CONSOLIDATED" means the Company and its Subsidiaries on a consolidated
basis in accordance with GAAP.

        "CONTINGENT OBLIGATION" means, as to any Person (the "secondary
obligor"), (a) any obligation of such secondary obligor guaranteeing or in
effect guaranteeing any return on any investment made by another Person, (b) any
obligation of such secondary obligor guaranteeing or in effect guaranteeing any
Indebtedness, lease, dividend or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including any obligation of such secondary obligor, whether
contingent, (i) to purchase any such primary obligation or any Property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (A) for the purchase or payment of any such primary obligation or (B) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
Property, securities or services primarily for the purpose of assuring the
beneficiary of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, (iv) otherwise to assure or hold
harmless the beneficiary of such primary obligation against loss in respect
thereof, and (v) in respect of the Indebtedness of any partnership in which such
secondary obligor is a general partner, except to the extent that such
Indebtedness of such partnership is nonrecourse to such secondary obligor and
its separate Property, or (c) any Lien on any assets of such secondary obligor
securing any Indebtedness or other obligation of any other Person, whether or
not such Indebtedness or other obligation is assumed by such secondary obligor
(or any right, contingent or otherwise, of any holder of such Indebtedness to
obtain any such Lien); provided that the term "Contingent Obligation" shall not
include the indorsement of instruments for deposit or collection in the ordinary
course of business.

        "CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.

        "CREDIT EXTENSION" means each of the following: (a) a Borrowing and (b)
an L/C Credit Extension.

        "DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.

        "DEFAULT" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.

<PAGE>

        "DEFAULT RATE" means (a) when used with respect to Obligations other
than Letter of Credit Fees, an interest rate equal to (i) the Base Rate PLUS
(ii) the Applicable Rate, if any, applicable to Base Rate Loans PLUS (iii) 2%
per annum; PROVIDED, HOWEVER, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b)
when used with respect to Letter of Credit Fees, a rate equal to the Applicable
Rate plus 2% per annum.

        "DEFAULTING LENDER" means any Lender that (a) has failed to fund any
portion of the Committed Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
date when due, unless the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

        "DISCRETIONARY L/C ISSUER" has the meaning specified in SECTION
2.04(B)(V).

        "DISPOSITION" means with respect to any Person, any sale, assignment,
transfer or other disposition by such Person by any means, of: (a) the Stock of,
or other equity interests of, any other Person, (b) any business, operating
entity, division or segment thereof, or (c) any other Property of such Person,
other than sales of inventory (other than in connection with bulk transfers);
provided, however, that the term "Disposition" shall not include a sale,
assignment, transfer or other disposition by a Subsidiary to any other
Subsidiary, provided that the same does not materially and adversely affect the
interests of the Lenders under the Loan Documents.

        "DOLLAR" and "$" mean lawful money of the United States.

        "DOMESTIC SUBSIDIARY" means any Subsidiary that is organized under the
laws of any political subdivision of the United States.

        "EBITDA" means earnings from operations of the Company and its
Subsidiaries on a Consolidated basis for the immediately preceding four fiscal
quarter period, plus the sum of, without duplication, (i) interest expense, (ii)
provision for income taxes and (iii) depreciation and amortization for such
period, each to the extent deducted from such earnings for such period. EBITDA
shall be adjusted to exclude nonrecurring gains and losses, and excluding any
impact resulting from the Financial Accounting Standards Board's Emerging Issue
Task Force ("EITF") Issue No. 02-16, accounting for vender allowances, or any
other EITF accounting adjustments that are non-cash in nature.

        "ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, the L/C Issuer and the Swing Line
Lender, and (ii) unless an Event of Default has occurred and is continuing, the
Company (each such approval not to be unreasonably withheld or

<PAGE>

delayed); PROVIDED that notwithstanding the foregoing, "Eligible Assignee" shall
not include the Company or any of the Company's Affiliates or Subsidiaries.

        "EMPLOYEE BENEFIT PLAN" means an employee benefit plan, within the
meaning of Section 3(3) of ERISA, maintained, sponsored or contributed to by the
Company, any Subsidiary or any ERISA Affiliate.

        "ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

        "ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor thereto, and the rules and
regulations issued thereunder, as from time to time in effect.

        "ERISA AFFILIATE" means, when used with respect to an Employee Benefit
Plan, ERISA, the PBGC or a provision of the Code pertaining to employee benefit
plans, any Person that is a member of any group of organizations within the
meaning of Sections 414(b) or (c) of the Code or, solely with respect to the
applicable provisions of the Code, Sections 414(m) or (o) of the Code, of which
the Company or any Subsidiary is a member.

        "EURODOLLAR BID MARGIN" means the margin above or below the Eurodollar
Rate to be added to or subtracted from the Eurodollar Rate, which margin shall
be expressed in multiples of 1/100th of one basis point.

        "EURODOLLAR MARGIN BID LOAN" means a Bid Loan that bears interest at a
rate based upon the Eurodollar Rate.

        "EURODOLLAR RATE" means, for any Interest Period with respect to a
Eurodollar Rate Loan, the rate per annum equal to the British Bankers
Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by
the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for
Dollar deposits (for delivery on the first day of such Interest Period) with a
term equivalent to

<PAGE>

such Interest Period. If such rate is not available at such time for any reason,
then the "Eurodollar Rate" for such Interest Period shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America's London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period.

        "EURODOLLAR RATE COMMITTED LOAN" means a Committed Loan that bears
interest at a rate based on the Eurodollar Rate.

        "EURODOLLAR RATE LOAN" means a Eurodollar Rate Committed Loan or a
Eurodollar Margin Bid Loan.

        "EVENT OF DEFAULT" has the meaning specified in SECTION 8.01.

        "EXCLUDED TAXES" means, with respect to the Administrative Agent, any
Lender, the L/C Issuer or any other recipient of any payment to be made by or on
account of any obligation of a Borrower hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which a Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Company
under SECTION 10.13), any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party hereto (or
designates a new Lending Office) or is attributable to such Foreign Lender's
failure or inability (other than as a result of a Change in Law) to comply with
SECTION 3.01(E), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new Lending Office (or
assignment), to receive additional amounts from a Borrower with respect to such
withholding tax pursuant to SECTION 3.01(A).

        "EXISTING CREDIT AGREEMENT" means the Credit Agreement, dated as of
October 20, 2000, among the Company, the subsidiary borrowers party thereto, the
lenders party thereto, Fleet National Bank, as administrative agent, The Bank of
New York, as syndication agent, Wachovia Bank National Association (f/k/a First
Union National Bank), as documentation agent, and Summit Bank, as managing
agent, as amended prior to the Closing Date.

        "EXISTING LETTERS OF CREDIT" means the letters of credit described on
SCHEDULE 1.01.

        "FEDERAL FUNDS RATE" means, for any day, the 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 by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; PROVIDED that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such

<PAGE>

transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by the
Administrative Agent.

        "FEE LETTER" means the letter agreement, dated October 18, 2004, among
the Company, the Administrative Agent and the Arranger.

        "FINANCIAL STATEMENTS" has the meaning specified in SECTION 5.13.

        "FIXED CHARGE COVERAGE RATIO" means, as of any date of determination,
the ratio of (i) the sum of EBITDA and Rental Expense to (ii) the sum of
Interest Expense and Rental Expense.

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

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

        "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 in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

        "GOVERNMENTAL AUTHORITY" means the government of the United States or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

        "GRANTING LENDER" has the meaning specified in SECTION 10.06(H).

        "GUARANTIES" means, collectively, the Company Guaranty and the
Subsidiary Guaranty, each individually, a "GUARANTY."

<PAGE>

        "GUARANTORS" means, collectively, the Company and each Subsidiary
Guarantor, and "GUARANTOR" means any one of them.

        "HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

        "INDEBTEDNESS" means, as to any Person at a particular time, all items
of such Person which constitute, without duplication, (a) indebtedness for
borrowed money or the deferred purchase price of Property (other than trade
payables and accrued expenses incurred in the ordinary course of business), (b)
indebtedness evidenced by notes, bonds, debentures or similar instruments, (c)
obligations with respect to any conditional sale or other title retention
agreement, (d) indebtedness arising under acceptance facilities and the amount
available to be drawn under all letters of credit (excluding, however, for
purposes of SECTION 6.10(B) only, documentary letters of credit obtained in the
ordinary course of business by the Company or any Subsidiary) issued for the
account of such Person and, without duplication, all drafts drawn thereunder to
the extent such Person shall not have reimbursed the issuer in respect of the
issuer's payment of such drafts, (e) all liabilities secured by any Lien on any
Property owned by such Person even though such Person shall not have assumed or
otherwise become liable for the payment thereof (other than carriers',
warehousemen's, mechanics', repairmen's or other like non-consensual Liens
arising in the ordinary course of business), (f) capital leases and Synthetic
Lease Obligations, (g) the outstanding attributed principal amount under any
asset securitization program of such Person (h) Contingent Obligations
(excluding for purposes of SECTION 6.10(B) Contingent Obligations in respect of
any indebtedness, obligation or liability other than those described in items
(a) - (g) above), (i) net obligations of such Person under any Swap Contract
(except for the purposes of SECTION 6.10(B) only), and (j) all obligations of
such Person to purchase, redeem, retire, defease or otherwise make any payment
in respect of any Equity Interest in such Person or any other Person, valued, in
the case of a redeemable preferred interest, at the greater of its voluntary or
involuntary liquidation preference PLUS accrued and unpaid dividends. The amount
of any net obligation under any Swap Contract on any date shall be deemed to be
the Swap Termination Value thereof as of such date. The amount of any capital
lease or Synthetic Lease Obligation as of any date shall be deemed to be the
amount of Attributable Indebtedness in respect thereof as of such date. For all
purposes hereof, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made non
recourse to such Person.

        "INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.

        "INDEMNITEES" has the meaning specified in SECTION 10.04(B).

<PAGE>

        "INTERCOMPANY DEBT" means (i) Indebtedness of the Company to one or more
of the Subsidiaries and (ii) demand Indebtedness of one or more of the
Subsidiaries to the Company or any one or more of the other Subsidiaries.

        "INTEREST EXPENSE" means the sum of all interest (adjusted to give
effect to all interest rate swap, cap or other similar interest rate hedging
arrangements, all as determined in accordance with GAAP) paid or accrued in
respect of Consolidated Indebtedness for the immediately preceding four fiscal
quarter period, determined in accordance with GAAP.

        "INTEREST PAYMENT DATE" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; PROVIDED, HOWEVER, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the last Business Day of each March, June, September and December and the
Maturity Date.

        "INTEREST PERIOD" means (a) as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or (in the case of
any Eurodollar Rate Committed Loan) converted to or continued as a Eurodollar
Rate Loan and ending on the date one, two, three or six months thereafter, as
selected by a Borrower in its Committed Loan Notice or Bid Request, as the case
may be; and (b) as to each Absolute Rate Loan, a period of not less than 3 days
and not more than 90 days as selected by a Borrower in its Bid Request; PROVIDED
that:

                (i)     any Interest Period that would otherwise end on a day
        that is not a Business Day shall be extended to the next succeeding
        Business Day unless, in the case of a Eurodollar Rate Loan, such
        Business Day falls in another calendar month, in which case such
        Interest Period shall end on the next preceding Business Day;

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

                (iii)   no Interest Period shall extend beyond the Maturity
        Date.

        "INVESTMENTS" has the meaning specified in SECTION 7.11.

        "IRS" means the United States Internal Revenue Service.

        "ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
issuance).

        "ISSUER DOCUMENTS" means with respect to any Letter of Credit, the
Letter Credit Application, and any other document, agreement and instrument
entered into by the L/C Issuer

<PAGE>

and a Borrower (or any Subsidiary) or in favor the L/C Issuer and relating to
any such Letter of Credit.

        "LAWS" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

        "L/C ADVANCE" means, with respect to each Lender, such Lender's funding
of its participation in any L/C Borrowing in accordance with its Applicable
Percentage.

        "L/C BORROWING" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Committed Borrowing.

        "L/C CREDIT EXTENSION" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.

        "L/C ISSUER" means Bank of America in its capacity as issuer of Letters
of Credit hereunder, any Discretionary L/C Issuer, any Lender that has issued an
Existing Letter of Credit (including for the purpose hereof, Fleet National Bank
and its sucessors), or any successor issuer of Letters of Credit hereunder.

        "L/C OBLIGATIONS" means, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit PLUS the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with SECTION 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.

        "LENDER" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the Swing Line Lender.

        "LENDING OFFICE" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Company and
the Administrative Agent.

        "LETTER OF CREDIT" means any letter of credit issued hereunder and shall
include the Existing Letters of Credit. A Letter of Credit may be a commercial
letter of credit or a standby letter of credit.

<PAGE>

        "LETTER OF CREDIT APPLICATION" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the applicable L/C Issuer.

        "LETTER OF CREDIT EXPIRATION DATE" means the day that is five (5) days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).

        "LETTER OF CREDIT FEE" has the meaning specified in SECTION 2.04(I).

        "LETTER OF CREDIT SUBLIMIT" means an amount equal to $80,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments

        "LEVERAGE RATIO" means, as of any date of determination, the ratio of
(a) Consolidated Indebtedness as of such date TO (b) EBITDA at such time.

        "LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

        "LOAN" means an extension of credit by a Lender to a Borrower under
ARTICLE II in the form of a Committed Loan, a Bid Loan or a Swing Line Loan.

        "LOAN DOCUMENTS" means this Agreement, each Note, each Issuer Document,
each Subsidiary Borrower Joinder Agreement, each Subsidiary Guarantor Joinder
Agreement and the Fee Letter.

        "LOAN PARTIES" means, collectively, the Company, each other Borrower and
each Subsidiary Guarantor.

        "MARGIN STOCK" means any "margin stock", as said term is defined in
Regulation U of the Board of Governors of the Federal Reserve System, as the
same may be amended or supplemented from time to time.

        "MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole; (b) a material impairment of the ability of
any Loan Party to perform its obligations under any Loan Document to which it is
a party; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Loan Party of any Loan Document to which it
is a party.

        "MATURITY DATE" means November __________, 2009.

<PAGE>

        "MOODY'S" means Moody's Investors Service, Inc., or any successor
thereto.

        "MULTIEMPLOYER PLAN" means A Pension Plan which is a multiemployer plan
defined in Section 4001(a)(3) of ERISA.

        "NET WORTH" means, as of any date of determination, the sum of all
amounts which would be included under shareholders' equity on a Consolidated
balance sheet of the Company and its Subsidiaries determined in accordance with
GAAP as at such date.

        "NOTE" means a promissory note made by a Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of EXHIBIT D.

        "OBLIGATIONS" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under (i) any Loan
Document or otherwise with respect to any Loan or Letter of Credit, and (ii) any
Swap Contract of a Loan Party to which a Lender or any Affiliate of such Lender
is a party, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
any Loan Party or any Affiliate thereof of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding.

        "ORGANIZATION DOCUMENTS" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

        "OTHER TAXES" means all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

        "OUTSTANDING AMOUNT" means (i) with respect to Committed Loans and Swing
Line Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Committed Loans
and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements by the Borrowers of
Unreimbursed Amounts.

<PAGE>

        "PARTICIPANT" has the meaning specified in SECTION 10.06(D).

        "PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any Governmental Authority
succeeding to the functions thereof.

        "PENSION PLAN" means, at any time, any Employee Benefit Plan (including
a Multiemployer Plan) subject to Section 302 of ERISA or Section 412 of the
Code, the funding requirements of which are, or at any time within the six years
immediately preceding the time in question, were in whole or in part, the
responsibility of the Company, any Subsidiary or an ERISA Affiliate.

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

        "PROHIBITED TRANSACTION" means a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA.

        "PROPERTY" means, in respect of any Person, all types of real, personal
or mixed property and all types of tangible or intangible property owned or
leased by such Person.

        "REGISTER" has the meaning specified in SECTION 10.06(C).

        "RELATED PARTIES" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, Administrative
Agents and advisors of such Person and of such Person's Affiliates.

        "RENTAL EXPENSE" means the sum of all rental expense (determined in the
same manner as set forth in the notes to the Financial Statements) of the
Company and its Subsidiaries on a Consolidated basis for the immediately
preceding four fiscal quarter period, determined in accordance with GAAP.

        "REPORTABLE EVENT" MEANS, with respect to any Pension Plan, (a) any
event set forth in Sections 4043(b) (other than a Reportable Event as to which
the 30 day notice requirement is waived by the PBGC under applicable
regulations), 4062(e) or 4063(a) of ERISA, or the regulations thereunder, (b) an
event requiring the Company, any Subsidiary or any ERISA Affiliate to provide
security to a Pension Plan under Section 401(a)(29) of the Code, or (c) the
failure to make any payment required by Section 412(m) of the Code.

        "REQUEST FOR CREDIT EXTENSION" means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with
respect to a Bid Loan, a Bid Request, (c) with respect to an L/C Credit
Extension, a Letter of Credit Application, and (d) with respect to a Swing Line
Loan, a Swing Line Loan Notice.

<PAGE>

        "REQUIRED LENDERS" means, as of any date of determination, Lenders
having more than 50% of the Aggregate Commitments or, if the commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to SECTION 8.02, Lenders holding in the
aggregate more than 50% of the Total Outstandings (with the aggregate amount of
each Lender's risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed "held" by such Lender for purposes of this
definition, but excluding for the purposes hereof the outstanding principal
balance of any Competitive Bid Loans); PROVIDED that the Commitment of, and the
portion of the Total Outstandings held or deemed held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Required Lenders.

        "RESPONSIBLE OFFICER" means the president, chief financial officer or
treasurer of a Loan Party. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.

        "RESTRICTED PAYMENT" means with respect to any Person, any of the
following, whether direct or indirect: (a) the declaration or payment by such
Person of any dividend or distribution on any class of Stock of such Person,
other than a dividend payable solely in shares of that class of Stock to the
holders of such class, (b) the declaration or payment by such Person of any
distribution on any other type or class of equity interest or equity investment
in such Person, and (c) any redemption, retirement, purchase or acquisition of,
or sinking fund or other similar payment in respect of, any class of Stock of,
or other type or class of equity interest or equity investment in, such Person.

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

        "SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

        "SOLVENT" means, with respect to any Person on a particular date, the
condition that on such date, (i) the fair value of the Property of such Person
is greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (iii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature, and (iv) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's Property would constitute an unreasonably small amount of
capital. For purposes of this definition, the amount of any contingent liability
at any time shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability after taking into account
probable payments by co-obligors.

<PAGE>

        "SPC" has the meaning specified in SECTION 10.06(H).

        "STOCK" means any and all shares, interests, participations or other
equivalents (however designated) of corporate stock.

        "SUBSIDIARY" means at any time and from time to time, any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which the Company and/or any Subsidiary of the Company,
directly or indirectly at such time, either (a) in respect of a corporation,
owns or controls more than 50% of the outstanding stock having ordinary voting
power to elect a majority of the board of directors or similar managing body,
irrespective of whether a class or classes shall or might have voting power by
reason of the happening of any contingency, or (b) in respect of an association,
partnership, limited liability company, joint venture or other business entity,
is entitled to share in more than 50% of the profits and losses, however
determined.

        "SUBSIDIARY BORROWERS" means, collectively, each wholly-owned Subsidiary
of the Company party to this Agreement as of the Closing Date, and each other
wholly-owned Subsidiary of the Company that subsequently becomes a party to this
Agreement as a "Subsidiary Borrower" by executing a Subsidiary Borrower Joinder
Agreement pursuant to SECTION 2.16, and "SUBSIDIARY BORROWER" means any one of
them.

        "SUBSIDIARY BORROWER JOINDER AGREEMENT" means a joinder agreement
substantially in the form of EXHIBIT H hereto, executed and delivered by a new
Subsidiary Borrower in accordance with the provisions of SECTION 2.16.

        "SUBSIDIARY GUARANTOR" means each Subsidiary of the Company in existence
on the Closing Date and party to the Subsidiary Guaranty, and each Subsidiary of
the Company that subsequently becomes a Subsidiary Guarantor by executing a
Subsidiary Guarantor Joinder Agreement pursuant to SECTION 6.12, and "SUBSIDIARY
GUARANTOR" means any one of them.

        "SUBSIDIARY GUARANTOR JOINDER AGREEMENT" means a joinder agreement
substantially in the form of ANNEX B to the Subsidiary Guaranty, executed and
delivered by a new Subsidiary Guarantor in accordance with the provisions of
SECTION 6.12.

        "SUBSIDIARY GUARANTY" means the guaranty made by the Subsidiary
Guarantors pursuant to that certain Subsidiary Guaranty dated as of November ,
2004, and in the form of EXHIBIT G.

        "SWAP CONTRACT" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing),

<PAGE>

whether or not any such transaction is governed by or subject to any master
agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a "MASTER AGREEMENT"), including any such
obligations or liabilities under any Master Agreement.

        "SWAP TERMINATION VALUE" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

        "SWING LINE" means the revolving credit facility made available by the
Swing Line Lender pursuant to SECTION 2.05.

        "SWING LINE BORROWING" means a borrowing of a Swing Line Loan pursuant
to SECTION 2.05.

        "SWING LINE LENDER" means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.

        "SWING LINE LOAN" has the meaning specified in SECTION 2.05(A).

        "SWING LINE LOAN NOTICE" means a notice of a Swing Line Borrowing
pursuant to SECTION 2.05(B), which, if in writing, shall be substantially in the
form of EXHIBIT C.

        "SWING LINE SUBLIMIT" means an amount equal to the lesser of (a)
$25,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Commitments.

        "TANGIBLE NET WORTH" means, at any time of determination, Net Worth less
all assets of the Company and its Subsidiaries included in such Net Worth,
determined on a Consolidated basis at such date, which would be classified as
intangible assets in accordance with GAAP.

        "TAXES" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.

        "TERMINATION EVENT" means, with respect to any Pension Plan, (a) a
Reportable Event, (b) the termination of a Pension Plan under Section 4041(c) of
ERISA, or the filing of a notice of intent to terminate a Pension Plan under
Section 4041 (c) of ERISA, or the treatment of a

<PAGE>

Pension Plan amendment as a termination under Section 4041(e) of ERISA (except
an amendment made after such Pension Plan satisfies the requirement for a
standard termination under Section 4041 (b) of ERISA), (c) the institution of
proceedings by the PBGC to terminate a Pension Plan under Section 4042 of ERISA,
or (d) the appointment of a trustee to administer any Pension Plan under Section
4042 of ERISA.

        "TOTAL OUTSTANDINGS" means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.

        "TYPE" means (a) with respect to a Committed Loan, its character as a
Base Rate Loan or a Eurodollar Rate Loan, and (b) with respect to a Bid Loan,
its character as an Absolute Rate Loan or a Eurodollar Margin Bid Loan.

        "UNITED STATES" and "U.S." mean the United States of America.

        "UNREIMBURSED AMOUNT" has the meaning specified in SECTION 2.04(C)(I).

        "UPSTREAM DIVIDENDS" has the meaning specified in SECTION 8.7.

        1.02    OTHER INTERPRETIVE PROVISIONS.

        With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:

                (a)     The definitions of terms herein shall apply equally to
        the singular and plural forms of the terms defined. Whenever the context
        may require, any pronoun shall include the corresponding masculine,
        feminine and neuter forms. The words "INCLUDE," "INCLUDES" and
        "INCLUDING" shall be deemed to be followed by the phrase "without
        limitation." The word "WILL" shall be construed to have the same meaning
        and effect as the word "SHALL." Unless the context requires otherwise,
        (i) any definition of or reference to any agreement, instrument or other
        document (including any Organization Document) shall be construed as
        referring to such agreement, instrument or other document as from time
        to time amended, supplemented or otherwise modified (subject to any
        restrictions on such amendments, supplements or modifications set forth
        herein or in any other Loan Document), (ii) any reference herein to any
        Person shall be construed to include such Person's successors and
        assigns, (iii) the words "HEREIN," "HEREOF" and "HEREUNDER," and words
        of similar import when used in any Loan Document, shall be construed to
        refer to such Loan Document in its entirety and not to any particular
        provision thereof, (iv) all references in a Loan Document to Articles,
        Sections, Exhibits and Schedules shall be construed to refer to Articles
        and Sections of, and Exhibits and Schedules to, the Loan Document in
        which such references appear, (v) any reference to any law shall include
        all statutory and regulatory provisions consolidating, amending
        replacing or interpreting such law and any reference to any law or
        regulation shall, unless otherwise specified, refer to such law or
        regulation as amended, modified or supplemented from time to time, and
        (vi) the words "ASSET" and "PROPERTY" shall be construed to have the
        same meaning

<PAGE>

        and effect and to refer to any and all tangible and intangible assets
        and properties, including cash, securities, accounts and contract
        rights.

                (b)     In the computation of periods of time from a specified
        date to a later specified date, the word "FROM" means "FROM AND
        INCLUDING;" the words "TO" and "UNTIL" each mean "TO BUT EXCLUDING;" and
        the word "THROUGH" means "TO AND INCLUDING."

                (c)     Section headings herein and in the other Loan Documents
        are included for convenience of reference only and shall not affect the
        interpretation of this Agreement or any other Loan Document.

        1.03    ACCOUNTING TERMS.

        (a)     GENERALLY. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Financial Statements, EXCEPT
as otherwise specifically prescribed herein.

        (b)     CHANGES IN GAAP. 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 either the Company or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Company 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, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the
Company shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.

        1.04    ROUNDING.

        Any financial ratios required to be maintained by the Loan Parties
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

        1.05    TIMES OF DAY.

        Unless otherwise specified, all references herein to times of day shall
be references to Eastern time (daylight or standard, as applicable).

<PAGE>

        1.06    LETTER OF CREDIT AMOUNTS.

        Unless otherwise specified herein, the amount of a Letter of Credit at
any time shall be deemed to be the stated amount of such Letter of Credit in
effect at such time; PROVIDED, HOWEVER, that with respect to any Letter of
Credit that, by its terms or the terms of any Issuer Document related thereto,
provides for one or more automatic increases in the stated amount thereof, the
amount of such Letter of Credit shall be deemed to be the maximum stated amount
of such Letter of Credit after giving effect to all such increases, whether or
not such maximum stated amount is in effect at such time.

                                   ARTICLE II
                      THE COMMITMENTS AND CREDIT EXTENSIONS

        2.01    COMMITTED LOANS.

        Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans (each such loan, a "COMMITTED LOAN") to one or
more Borrowers from time to time, on any Business Day during the Availability
Period, in an aggregate amount not to exceed at any time outstanding the amount
of such Lender's Commitment; PROVIDED, HOWEVER, that after giving effect to any
Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, PLUS such Lender's Applicable Percentage of the Outstanding Amount
of all L/C Obligations, PLUS such Lender's Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Commitment. Within the limits of each Lender's Commitment, and subject to the
other terms and conditions hereof, each Borrower may borrow under this SECTION
2.01, prepay under SECTION 2.06, and reborrow under this SECTION 2.01. Committed
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.

        2.02    BORROWINGS, CONVERSIONS AND CONTINUATIONS OF COMMITTED LOANS.

        (a)     Each Committed Borrowing, each conversion of Committed Loans
from one Type to the other, and each continuation of Eurodollar Rate Committed
Loans shall be made upon the Company's irrevocable notice on behalf of such
Borrower to the Administrative Agent, which may be given by telephone. Each such
notice must be received by the Administrative Agent not later than 11:00 a.m.
(i) three Business Days prior to the requested date of any Borrowing of,
conversion to or continuation of Eurodollar Rate Committed Loans or of any
conversion of Eurodollar Rate Committed Loans to Base Rate Committed Loans, and
(ii) on the requested date of any Borrowing of Base Rate Committed Loans. Each
telephonic notice by the Company pursuant to this SECTION 2.02(A) must be
confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of the Company. Each Borrowing of, conversion to or continuation of
Eurodollar Rate Committed Loans shall be in a principal amount of $5,000,000 or
a whole multiple of $1,000,000 in excess thereof. Except as provided in SECTIONS
2.04(C) AND 2.05(C), each Borrowing of or conversion to Base Rate Committed
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof. Each Committed Loan Notice

<PAGE>

(whether telephonic or written) shall specify (i) whether the applicable
Borrower is requesting a Committed Borrowing, a conversion of Committed Loans
from one Type to the other, or a continuation of Eurodollar Rate Committed
Loans, (ii) the requested date of the Borrowing, conversion or continuation, as
the case may be (which shall be a Business Day), (iii) the principal amount of
Committed Loans to be borrowed, converted or continued, (iv) the Type of
Committed Loans to be borrowed or to which existing Committed Loans are to be
converted, and (v) if applicable, the duration of the Interest Period with
respect thereto. If the Company fails to specify a Type of Committed Loan in a
Committed Loan Notice or if the Company fails to give a timely notice requesting
a conversion or continuation, then the applicable Committed Loans shall be made
as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Committed Loans. If the
Company requests a Borrowing of, conversion to, or continuation of Eurodollar
Rate Committed Loans in any such Committed Loan Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period of one
month.

        (b)     Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Applicable
Percentage of the applicable Committed Loans, and if no timely notice of a
conversion or continuation is provided by the Borrower, the Administrative Agent
shall notify each Lender of the details of any automatic conversion to Base Rate
Loans described in the preceding subsection. In the case of a Committed
Borrowing, each Lender shall make the amount of its Committed Loan available to
the Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m. on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable conditions
set forth in SECTION 4.02 (and, if such Borrowing is the initial Credit
Extension, SECTION 4.01), the Administrative Agent shall make all funds so
received available to the applicable Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of such Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Company on behalf of
such Borrower; PROVIDED, HOWEVER, that if, on the date the Committed Loan Notice
with respect to such Borrowing is given by the Company, there are L/C Borrowings
outstanding, then the proceeds of such Borrowing, FIRST, shall be applied to the
payment in full of any such L/C Borrowings, and SECOND, shall be made available
to the applicable Borrower as provided above.

        (c)     Except as otherwise provided herein, a Eurodollar Rate Committed
Loan may be continued or converted only on the last day of an Interest Period
for such Eurodollar Rate Committed Loan. During the existence of a Default, no
Loans may be requested as, converted to or continued as Eurodollar Rate
Committed Loans without the consent of the Required Lenders.

        (d)     The Administrative Agent shall promptly notify the Company, on
behalf of the applicable Borrower, and the Lenders of the interest rate
applicable to any Interest Period for Eurodollar Rate Committed Loans upon
determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Company, on behalf

<PAGE>

of the applicable Borrower, and the Lenders of any change in Bank of America's
prime rate used in determining the Base Rate promptly following the public
announcement of such change.

        (e)     After giving effect to all Committed Borrowings, all conversions
of Committed Loans from one Type to the other, and all continuations of
Committed Loans as the same Type, there shall not be more than ten Interest
Periods in effect with respect to Committed Loans.

        2.03    BID LOANS.

        (a)     GENERAL. Subject to the terms and conditions set forth herein,
each Lender agrees that the Company on behalf of any Borrower may from time to
time request the Lenders to submit offers to make loans (each such loan, a "BID
LOAN") to such Borrower prior to the Maturity Date pursuant to this SECTION
2.03; PROVIDED, HOWEVER, that after giving effect to any Bid Borrowing, (i) the
Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the
aggregate Outstanding Amount of all Bid Loans shall not exceed the Bid Loan
Sublimit. There shall not be more than five different Interest Periods in effect
with respect to Bid Loans at any time.

        (b)     REQUESTING COMPETITIVE BIDS. The Company, on behalf of the
applicable Borrower, may request the submission of Competitive Bids by
delivering a Bid Request to the Administrative Agent not later than 12:00 noon
(i) one Business Day prior to the requested date of any Bid Borrowing that is to
consist of Absolute Rate Loans, or (ii) four Business Days prior to the
requested date of any Bid Borrowing that is to consist of Eurodollar Margin Bid
Loans. Each Bid Request shall specify (i) the name of the Borrower requesting
the Bid Loan and the requested date of the Bid Borrowing (which shall be a
Business Day), (ii) the aggregate principal amount of Bid Loans requested (which
must be $5,000,000 or a whole multiple of $1,000,000 in excess thereof), (iii)
the Type of Bid Loans requested, and (iv) the duration of the Interest Period
with respect thereto, and shall be signed by a Responsible Officer of the
Company. No Bid Request shall contain a request for (i) more than one Type of
Bid Loan or (ii) Bid Loans having more than three different Interest Periods.
Unless the Administrative Agent otherwise agrees in its sole and absolute
discretion, the Company may not submit a Bid Request if it has submitted another
Bid Request within the prior five Business Days.

        (c)     SUBMITTING COMPETITIVE BIDS.

                (i)     The Administrative Agent shall promptly notify each
        Lender of each Bid Request received by it from the Company and the
        contents of such Bid Request.

                (ii)    Each Lender may (but shall have no obligation to) submit
        a Competitive Bid containing an offer to make one or more Bid Loans in
        response to such Bid Request. Such Competitive Bid must be delivered to
        the Administrative Agent not later than 10:30 a.m. (A) on the requested
        date of any Bid Borrowing that is to consist of Absolute Rate Loans, and
        (B) three Business Days prior to the requested date of any Bid Borrowing
        that is to consist of Eurodollar Margin Bid Loans; PROVIDED, HOWEVER,
        that any Competitive Bid submitted by Bank of America in its capacity as
        a Lender in response to any Bid Request must be submitted to the
        Administrative Agent not later than 10:15 a.m.

<PAGE>

        on the date on which Competitive Bids are required to be delivered by
        the other Lenders in response to such Bid Request. Each Competitive Bid
        shall specify (A) the proposed date of the Bid Borrowing; (B) the
        principal amount of each Bid Loan for which such Competitive Bid is
        being made, which principal amount (x) may be equal to, greater than or
        less than the Commitment of the bidding Lender, (y) must be $5,000,000
        or a whole multiple of $1,000,000 in excess thereof, and (z) may not
        exceed the principal amount of Bid Loans for which Competitive Bids were
        requested; (C) if the proposed Bid Borrowing is to consist of Absolute
        Rate Bid Loans, the Absolute Rate offered for each such Bid Loan and the
        Interest Period applicable thereto; (D) if the proposed Bid Borrowing is
        to consist of Eurodollar Margin Bid Loans, the Eurodollar Bid Margin
        with respect to each such Eurodollar Margin Bid Loan and the Interest
        Period applicable thereto; and (E) the identity of the bidding Lender.

                (iii)   Any Competitive Bid shall be disregarded if it (A) is
        received after the applicable time specified in clause (ii) above, (B)
        is not substantially in the form of a Competitive Bid as specified
        herein, (C) contains qualifying, conditional or similar language, (D)
        proposes terms other than or in addition to those set forth in the
        applicable Bid Request, or (E) is otherwise not responsive to such Bid
        Request. Any Lender may correct a Competitive Bid containing a manifest
        error by submitting a corrected Competitive Bid (identified as such) not
        later than the applicable time required for submission of Competitive
        Bids. Any such submission of a corrected Competitive Bid shall
        constitute a revocation of the Competitive Bid that contained the
        manifest error. The Administrative Agent may, but shall not be required
        to, notify any Lender of any manifest error it detects in such Lender's
        Competitive Bid.

                (iv)    Subject only to the provisions of SECTIONS 3.02, 3.03
        and 4.02 and clause (iii) above, each Competitive Bid shall be
        irrevocable.

        (d)     NOTICE TO BORROWER OF COMPETITIVE BIDS. Not later than 11:00
a.m. (i) on the requested date of any Bid Borrowing that is to consist of
Absolute Rate Loans, or (ii) three Business Days prior to the requested date of
any Bid Borrowing that is to consist of Eurodollar Margin Bid Loans, the
Administrative Agent shall notify the Company, on behalf of the applicable
Borrower of the identity of each Lender that has submitted a Competitive Bid
that complies with SECTION 2.03(C) and of the terms of the offers contained in
each such Competitive Bid.

        (e)     ACCEPTANCE OF COMPETITIVE BIDS. Not later than 11:30 a.m. (i) on
the requested date of any Bid Borrowing that is to consist of Absolute Rate
Loans, and (ii) three Business Days prior to the requested date of any Bid
Borrowing that is to consist of Eurodollar Margin Bid Loans, the Company, on
behalf of the applicable Borrower, shall notify the Administrative Agent of its
acceptance or rejection of the offers notified to it pursuant to SECTION
2.03(D). The Company, on behalf of the applicable Borrower, shall be under no
obligation to accept any Competitive Bid and may choose to reject all
Competitive Bids. In the case of acceptance, such notice shall specify the
aggregate principal amount of Competitive Bids for each Interest Period that is
accepted. The Company, on behalf of the applicable Borrower, may accept any
Competitive Bid in whole or in part; PROVIDED that:

<PAGE>

                (i)     the aggregate principal amount of each Bid Borrowing may
        not exceed the applicable amount set forth in the related Bid Request;

                (ii)    the principal amount of each Bid Loan must be $5,000,000
        or a whole multiple of $1,000,000 in excess thereof;

                (iii)   the acceptance of offers may be made only on the basis
        of ascending Absolute Rates or Eurodollar Bid Margins within each
        Interest Period; and

                (iv)    the Company may not accept any offer that is described
        in SECTION 2.03(C)(III) or that otherwise fails to comply with the
        requirements hereof.

        (f)     PROCEDURE FOR IDENTICAL BIDS. If two or more Lenders have
submitted Competitive Bids at the same Absolute Rate or Eurodollar Bid Margin,
as the case may be, for the same Interest Period, and the result of accepting
all of such Competitive Bids in whole (together with any other Competitive Bids
at lower Absolute Rates or Eurodollar Bid Margins, as the case may be, accepted
for such Interest Period in conformity with the requirements of SECTION
2.03(E)(III)) would be to cause the aggregate outstanding principal amount of
the applicable Bid Borrowing to exceed the amount specified therefor in the
related Bid Request, then, unless otherwise agreed by the Company, on behalf of
the applicable Borrower, the Administrative Agent and such Lenders, such
Competitive Bids shall be accepted as nearly as possible in proportion to the
amount offered by each such Lender in respect of such Interest Period, with such
accepted amounts being rounded to the nearest whole multiple of $1,000,000.

        (g)     NOTICE TO LENDERS OF ACCEPTANCE OR REJECTION OF BIDS. The
Administrative Agent shall promptly notify each Lender having submitted a
Competitive Bid whether or not its offer has been accepted and, if its offer has
been accepted, of the amount of the Bid Loan or Bid Loans to be made by it on
the date of the applicable Bid Borrowing. Any Competitive Bid or portion thereof
that is not accepted by the Company, on behalf of the applicable Borrower, by
the applicable time specified in SECTION 2.03(E) shall be deemed rejected.

        (h)     NOTICE OF EURODOLLAR RATE. If any Bid Borrowing is to consist of
Eurodollar Margin Loans, the Administrative Agent shall determine the Eurodollar
Rate for the relevant Interest Period, and promptly after making such
determination, shall notify the Company, on behalf of the Borrowers, and the
Lenders that will be participating in such Bid Borrowing of such Eurodollar
Rate.

        (i)     FUNDING OF BID LOANS. Each Lender that has received notice
pursuant to SECTION 2.03(G) that all or a portion of its Competitive Bid has
been accepted by the Company, on behalf of the applicable Borrower, shall make
the amount of its Bid Loan(s) available to the Administrative Agent in
immediately available funds at the Administrative Agent's Office not later than
1:00 p.m. on the date of the requested Bid Borrowing. Upon satisfaction of the
applicable conditions set forth in SECTION 4.02, the Administrative Agent shall
make all funds so received available to the applicable Borrower in like funds as
received by the Administrative Agent.

<PAGE>

        (j)     NOTICE OF RANGE OF BIDS. After each Competitive Bid auction
pursuant to this SECTION 2.03, the Administrative Agent shall notify each Lender
that submitted a Competitive Bid in such auction of the ranges of bids submitted
(without the bidder's name) and accepted for each Bid Loan and the aggregate
amount of each Bid Borrowing.

        2.04    LETTERS OF CREDIT.

        (a)     THE LETTER OF CREDIT COMMITMENT.

                (i)     Subject to the terms and conditions set forth herein,
        (A) the L/C Issuer agrees, in reliance upon the agreements of the
        Lenders set forth in this SECTION 2.04, (1) from time to time on any
        Business Day during the period from the Closing Date until the Letter of
        Credit Expiration Date, to issue Letters of Credit for the account of a
        Borrower, and to amend or extend Letters of Credit previously issued by
        it, in accordance with subsection (b) below, and (2) to honor drawings
        under the Letters of Credit; and (B) the Lenders severally agree to
        participate in Letters of Credit issued for the account of a Borrower
        and any drawings thereunder; PROVIDED that after giving effect to any
        L/C Credit Extension with respect to any Letter of Credit, (x) the Total
        Outstandings shall not exceed the Aggregate Commitments, (y) the
        aggregate Outstanding Amount of the Committed Loans of any Lender, PLUS
        such Lender's Applicable Percentage of the Outstanding Amount of all L/C
        Obligations, PLUS such Lender's Applicable Percentage of the Outstanding
        Amount of all Swing Line Loans shall not exceed such Lender's
        Commitment, and (z) the Outstanding Amount of the L/C Obligations shall
        not exceed the Letter of Credit Sublimit. Each request by the Company,
        on behalf of the applicable Borrower, for the issuance or amendment of a
        Letter of Credit shall be deemed to be a representation by Loan Parties
        that the L/C Credit Extension so requested complies with the conditions
        set forth in the proviso to the preceding sentence. Within the foregoing
        limits, and subject to the terms and conditions hereof, the Borrowers'
        ability to obtain Letters of Credit shall be fully revolving, and
        accordingly each Borrower may, during the foregoing period, obtain
        Letters of Credit to replace Letters of Credit that have expired or that
        have been drawn upon and reimbursed. All Existing Letters of Credit
        shall be deemed to have been issued pursuant hereto, and from and after
        the Closing Date shall be subject to and governed by the terms and
        conditions hereof.

                (ii)    The L/C Issuer shall not issue any Letter of Credit, if:

                        (A)     subject to Section 2.04(b)(iii), the expiry date
                of such requested Letter of Credit would occur more than twelve
                months after the date of issuance or last extension, unless the
                Required Lenders have approved such expiry date; or

                        (B)     the expiry date of such requested Letter of
                Credit would occur after the Letter of Credit Expiration Date,
                unless all the Lenders have approved such expiry date.

<PAGE>

                (iii)   The L/C Issuer shall not be under any obligation to
        issue any Letter of Credit if:

                        (A)     any order, judgment or decree of any
                Governmental Authority or arbitrator shall by its terms purport
                to enjoin or restrain the L/C Issuer from issuing such Letter of
                Credit, or any Law applicable to the L/C Issuer or any request
                or directive (whether or not having the force of law) from any
                Governmental Authority with jurisdiction over the L/C Issuer
                shall prohibit, or request that the L/C Issuer refrain from, the
                issuance of letters of credit generally or such Letter of Credit
                in particular or shall impose upon the L/C Issuer with respect
                to such Letter of Credit any restriction, reserve or capital
                requirement (for which the L/C Issuer is not otherwise
                compensated hereunder) not in effect on the Closing Date, or
                shall impose upon the L/C Issuer any unreimbursed loss, cost or
                expense which was not applicable on the Closing Date and which
                the L/C Issuer in good faith deems material to it;

                        (B)     the issuance of such Letter of Credit would
                violate one or more policies of the L/C Issuer;

                        (C)     except as otherwise agreed by the Administrative
                Agent and the L/C Issuer, such Letter of Credit is in an initial
                stated amount less than $100,000, in the case of a commercial
                Letter of Credit, or $500,000, in the case of a standby Letter
                of Credit;

                        (D)     such Letter of Credit is to be denominated in a
                currency other than Dollars;

                        (E)     such Letter of Credit contains any provisions
                for automatic reinstatement of the stated amount after any
                drawing thereunder; or

                        (F)     a default of any Lender's obligations to fund
                under SECTION 2.04(C) exists or any Lender is at such time a
                Defaulting Lender hereunder, unless the L/C Issuer has entered
                into satisfactory arrangements with the applicable Borrower or
                such Lender to eliminate the L/C Issuer's risk with respect to
                such Lender.

                (iv)    The L/C Issuer shall not amend any Letter of Credit if
        the L/C Issuer would not be permitted at such time to issue such Letter
        of Credit in its amended form under the terms hereof.

                (v)     The L/C Issuer shall be under no obligation to amend any
        Letter of Credit if (A) the L/C Issuer would have no obligation at such
        time to issue such Letter of Credit in its amended form under the terms
        hereof, or (B) the beneficiary of such Letter of Credit does not accept
        the proposed amendment to such Letter of Credit.

                (vi)    The L/C Issuer shall act on behalf of the Lenders with
        respect to any Letters of Credit issued by it and the documents
        associated therewith, and the L/C Issuer

<PAGE>

        shall have all of the benefits and immunities (A) provided to the
        Administrative Agent in ARTICLE IX with respect to any acts taken or
        omissions suffered by the L/C Issuer in connection with Letters of
        Credit issued by it or proposed to be issued by it and Issuer Documents
        pertaining to such Letters of Credit as fully as if the term
        "Administrative Agent" as used in ARTICLE IX included the L/C Issuer
        with respect to such acts or omissions, and (B) as additionally provided
        herein with respect to the L/C Issuer.

        (b)     PROCEDURES FOR ISSUANCE AND AMENDMENT OF LETTERS OF CREDIT;
AUTO-EXTENSION LETTERS OF CREDIT.

                (i)     Each Letter of Credit shall be issued or amended, as the
        case may be, upon the request of Company, on behalf of the applicable
        Borrower, delivered to the L/C Issuer (with a copy to the Administrative
        Agent) in the form of a Letter of Credit Application, appropriately
        completed and signed by a Responsible Officer of the Company. Such
        Letter of Credit Application must be received by the L/C Issuer and the
        Administrative Agent not later than 11:00 a.m. at least two Business
        Days (or such later date and time as the Administrative Agent and the
        L/C Issuer may agree in a particular instance in their sole discretion)
        prior to the proposed issuance date or date of amendment, as the case
        may be. In the case of a request for an initial issuance of a Letter of
        Credit, such Letter of Credit Application shall specify in form and
        detail satisfactory to the L/C Issuer: (A) the name of the applicable
        Borrower and the proposed issuance date of the requested Letter of
        Credit (which shall be a Business Day); (B) the amount thereof; (C) the
        expiry date thereof; (D) the name and address of the beneficiary
        thereof; (E) the documents to be presented by such beneficiary in case
        of any drawing thereunder; (F) the full text of any certificate to be
        presented by such beneficiary in case of any drawing thereunder; and (G)
        such other matters as the L/C Issuer may require. In the case of a
        request for an amendment of any outstanding Letter of Credit, such
        Letter of Credit Application shall specify in form and detail
        satisfactory to the L/C Issuer (A) the Letter of Credit to be amended;
        (B) the proposed date of amendment thereof (which shall be a Business
        Day); (C) the nature of the proposed amendment; and (D) such other
        matters as the L/C Issuer may require. Additionally, the Company and the
        applicable Borrower shall furnish to the L/C Issuer and the
        Administrative Agent such other documents and information pertaining to
        such requested Letter of Credit issuance or amendment, including any
        Issuer Documents, as the L/C Issuer or the Administrative Agent may
        require.

                (ii)    Promptly after receipt of any Letter of Credit
        Application, the L/C Issuer will confirm with the Administrative Agent
        (by telephone or in writing) that the Administrative Agent has received
        a copy of such Letter of Credit Application, and, if not, the L/C Issuer
        will provide the Administrative Agent with a copy thereof. Unless the
        L/C Issuer has received written notice from any Lender, the
        Administrative Agent or any Loan Party, at least one Business Day prior
        to the requested date of issuance or amendment of the applicable Letter
        of Credit, that one or more applicable conditions contained in ARTICLE
        IV shall not then be satisfied, then, subject to the terms and
        conditions hereof, the L/C Issuer shall, on the requested date, issue a
        Letter of Credit for the account of the applicable Borrower or enter
        into the applicable amendment, as the case may be, in each case in
        accordance with the L/C Issuer's usual and customary

<PAGE>

        business practices. Immediately upon the issuance of each Letter of
        Credit, each Lender shall be deemed to, and hereby irrevocably and
        unconditionally agrees to, purchase from the L/C Issuer a risk
        participation in such Letter of Credit in an amount equal to the product
        of such Lender's Applicable Percentage TIMES the amount of such Letter
        of Credit.

                (iii)   If the Company, on behalf of the applicable Borrower, so
        requests in any applicable Letter of Credit Application, the L/C Issuer
        may, in its sole and absolute discretion, agree to issue a Letter of
        Credit that has automatic extension provisions (each, an "AUTO-EXTENSION
        LETTER OF CREDIT"); PROVIDED that any such Auto-Extension Letter of
        Credit must permit the L/C Issuer to prevent any such extension at least
        once in each twelve-month period (commencing with the date of issuance
        of such Letter of Credit) by giving prior notice to the beneficiary
        thereof not later than a day (the "NON-EXTENSION NOTICE DATE") in each
        such twelve-month period to be agreed upon at the time such Letter of
        Credit is issued. Unless otherwise directed by the L/C Issuer, the
        Company, on behalf of the applicable Borrower, shall not be required to
        make a specific request to the L/C Issuer for any such extension. Once
        an Auto-Extension Letter of Credit has been issued, the Lenders shall be
        deemed to have authorized (but may not require) the L/C Issuer to permit
        the extension of such Letter of Credit at any time to an expiry date not
        later than the Letter of Credit Expiration Date; PROVIDED, HOWEVER, that
        the L/C Issuer shall not permit any such extension if (A) the L/C Issuer
        has determined that it would not be permitted, or would have no
        obligation, at such time to issue such Letter of Credit in its revised
        form (as extended) under the terms hereof (by reason of the provisions
        of clause (ii) or (iii) of SECTION 2.04(A) or otherwise), or (B) it has
        received notice (which may be by telephone or in writing) on or before
        the day that is five Business Days before the Non-Extension Notice Date
        (1) from the Administrative Agent that the Required Lenders have elected
        not to permit such extension or (2) from the Administrative Agent, any
        Lender or the Company, on behalf of the applicable Borrower, that one or
        more of the applicable conditions specified in SECTION 4.02 is not then
        satisfied, and in each such case directing the L/C Issuer not to permit
        such extension.

                (iv)    Promptly after its delivery of any Letter of Credit or
        any amendment to a Letter of Credit to an advising bank with respect
        thereto or to the beneficiary thereof, the L/C Issuer will also deliver
        to the Company, on behalf of the applicable Borrower, and the
        Administrative Agent a true and complete copy of such Letter of Credit
        or amendment.

                (v)     Any Lender with a Commitment (in such capacity, a
        "DISCRETIONARY L/C ISSUER") may from time to time, at the written
        request of the Company, on behalf of the applicable Borrower (with a
        copy to the Administrative Agent) and with the consent of the
        Administrative Agent (such consent not to be unreasonably withheld), and
        in such Lender's sole discretion, agree to issue one or more Letters of
        Credit for the account of a Borrower on the same terms and conditions in
        all respects as are applicable to the Letters of Credit issued by the
        L/C Issuer hereunder by executing and delivering to the Administrative
        Agent a written agreement to such effect, among (and in form and
        substance satisfactory to) the Borrower, the Administrative Agent and
        such Discretionary

<PAGE>

        L/C Issuer. With respect to each of the Letters of Credit issued (or to
        be issued) thereby, each of the Discretionary L/C Issuers shall have all
        of the same rights and obligations under and in respect of this
        Agreement and the other Loan Documents, and shall be entitled to all of
        the same benefits (including, without limitation, the rights,
        obligations and benefits set forth in SECTIONS 2.04, 9.07 and 10.01), as
        are afforded to the L/C Issuer hereunder and thereunder. The
        Administrative Agent shall promptly notify each of the Lenders with a
        Commitment of the appointment of any Discretionary L/C Issuer. Each
        Discretionary L/C Issuer shall provide to the Administrative Agent, on a
        monthly basis, a report that details the activity with respect to each
        Letter of Credit issued by such Discretionary L/C Issuer (including an
        indication of the maximum amount then in effect with respect to each
        such Letter of Credit).

        (c)     DRAWINGS AND REIMBURSEMENTS; FUNDING OF PARTICIPATIONS.

                (i)     Upon receipt from the beneficiary of any Letter of
        Credit of any notice of a drawing under such Letter of Credit, the L/C
        Issuer shall notify the Company, on behalf of the applicable Borrower,
        and the Administrative Agent thereof. Not later than 11:00 a.m. on the
        date of any payment by the L/C Issuer under a Letter of Credit (each
        such date, an "HONOR DATE"), such Borrower shall reimburse the L/C
        Issuer through the Administrative Agent in an amount equal to the amount
        of such drawing. If the applicable Borrower fails to so reimburse the
        L/C Issuer by such time, the Administrative Agent shall promptly notify
        each Lender of the Honor Date, the amount of the unreimbursed drawing
        (the "UNREIMBURSED Amount"), and the amount of such Lender's Applicable
        Percentage thereof. In such event, such Borrower shall be deemed to have
        requested a Committed Borrowing of Base Rate Loans to be disbursed on
        the Honor Date in an amount equal to the Unreimbursed Amount, without
        regard to the minimum and multiples specified in SECTION 2.02 for the
        principal amount of Base Rate Loans, but subject to the amount of the
        unutilized portion of the Aggregate Commitments and the conditions set
        forth in SECTION 4.02 (other than the delivery of a Committed Loan
        Notice). Any notice given by the L/C Issuer or the Administrative Agent
        pursuant to this SECTION 2.04(C)(I) may be given by telephone if
        immediately confirmed in writing; PROVIDED that the lack of such an
        immediate confirmation shall not affect the conclusiveness or binding
        effect of such notice.

                (ii)    Each Lender shall upon any notice pursuant to SECTION
        2.04(C)(I) make funds available to the Administrative Agent for the
        account of the L/C Issuer at the Administrative Agent's Office in an
        amount equal to its Applicable Percentage of the Unreimbursed Amount not
        later than 1:00 p.m. on the Business Day specified in such notice by the
        Administrative Agent, whereupon, subject to the provisions of SECTION
        2.04(C)(III), each Lender that so makes funds available shall be deemed
        to have made a Base Rate Committed Loan to the applicable Borrower in
        such amount. The Administrative Agent shall remit the funds so received
        to the L/C Issuer.

                (iii)   With respect to any Unreimbursed Amount that is not
        fully refinanced by a Committed Borrowing of Base Rate Loans because the
        conditions set forth in SECTION 4.02 cannot be satisfied or for any
        other reason, the applicable Borrower shall be

<PAGE>

        deemed to have incurred from the L/C Issuer an L/C Borrowing in the
        amount of the Unreimbursed Amount that is not so refinanced, which L/C
        Borrowing shall be due and payable on demand (together with interest)
        and shall bear interest at the Default Rate. In such event, each
        Lender's payment to the Administrative Agent for the account of the L/C
        Issuer pursuant to SECTION 2.04(C)(II) shall be deemed payment in
        respect of its participation in such L/C Borrowing and shall constitute
        an L/C Advance from such Lender in satisfaction of its participation
        obligation under this SECTION 2.04.

                (iv)    Until each Lender funds its Committed Loan or L/C
        Advance pursuant to this SECTION 2.04(C) to reimburse the L/C Issuer for
        any amount drawn under any Letter of Credit, interest in respect of such
        Lender's Applicable Percentage of such amount shall be solely for the
        account of the L/C Issuer.

                (v)     Each Lender's obligation to make Committed Loans or L/C
        Advances to reimburse the L/C Issuer for amounts drawn under Letters of
        Credit, as contemplated by this SECTION 2.04(C), shall be absolute and
        unconditional and shall not be affected by any circumstance, including
        (A) any setoff, counterclaim, recoupment, defense or other right which
        such Lender may have against the L/C Issuer, any Borrower or any other
        Person for any reason whatsoever; (B) the occurrence or continuance of a
        Default, or (C) any other occurrence, event or condition, whether or not
        similar to any of the foregoing; PROVIDED, HOWEVER, that each Lender's
        obligation to make Committed Loans pursuant to this SECTION 2.04(C) is
        subject to the conditions set forth in SECTION 4.02 (other than delivery
        by the Company, on behalf of the applicable Borrower of a Committed Loan
        Notice). No such making of an L/C Advance shall relieve or otherwise
        impair the obligation of the applicable Borrower to reimburse the L/C
        Issuer for the amount of any payment made by the L/C Issuer under any
        Letter of Credit, together with interest as provided herein.

                (vi)    If any Lender fails to make available to the
        Administrative Agent for the account of the L/C Issuer any amount
        required to be paid by such Lender pursuant to the foregoing provisions
        of this SECTION 2.04(C) by the time specified in SECTION 2.04(C)(II),
        the L/C Issuer shall be entitled to recover from such Lender (acting
        through the Administrative Agent), on demand, such amount with interest
        thereon for the period from the date such payment is required to the
        date on which such payment is immediately available to the L/C Issuer at
        a rate per annum equal to the greater of the Federal Funds Rate and a
        rate determined by the L/C Issuer in accordance with banking industry
        rules on interbank compensation. A certificate of the L/C Issuer
        submitted to any Lender (through the Administrative Agent) with respect
        to any amounts owing under this clause (vi) shall be conclusive absent
        manifest error.

        (d)     REPAYMENT OF PARTICIPATIONS.

                (i)     At any time after the L/C Issuer has made a payment
        under any Letter of Credit and has received from any Lender such
        Lender's L/C Advance in respect of such payment in accordance with
        SECTION 2.04(C), if the Administrative Agent receives for the account of
        the L/C Issuer any payment in respect of the related Unreimbursed Amount

<PAGE>

        or interest thereon (whether directly from the applicable Borrower or
        otherwise, including proceeds of Cash Collateral applied thereto by the
        Administrative Agent), the Administrative Agent will distribute to such
        Lender its Applicable Percentage thereof (appropriately adjusted, in the
        case of interest payments, to reflect the period of time during which
        such Lender's L/C Advance was outstanding) in the same funds as those
        received by the Administrative Agent.

                (ii)    If any payment received by the Administrative Agent for
        the account of the L/C Issuer pursuant to SECTION 2.04(C)(I) is required
        to be returned under any of the circumstances described in SECTION 10.05
        (including pursuant to any settlement entered into by the L/C Issuer in
        its discretion), each Lender shall pay to the Administrative Agent for
        the account of the L/C Issuer its Applicable Percentage thereof on
        demand of the Administrative Agent, plus interest thereon from the date
        of such demand to the date such amount is returned by such Lender, at a
        rate per annum equal to the Federal Funds Rate from time to time in
        effect. The obligations of the Lenders under this clause shall survive
        the payment in full of the Obligations and the termination of this
        Agreement.

        (e)     OBLIGATIONS ABSOLUTE. The obligation of a Borrower to reimburse
the L/C Issuer for each drawing under each Letter of Credit and to repay each
L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

                (i)     any lack of validity or enforceability of such Letter of
        Credit, this Agreement, or any other Loan Document;

                (ii)    the existence of any claim, counterclaim, setoff,
        defense or other right that any Borrower or any Subsidiary may have at
        any time against any beneficiary or any transferee of such Letter of
        Credit (or any Person for whom any such beneficiary or any such
        transferee may be acting), the L/C Issuer or any other Person, whether
        in connection with this Agreement, the transactions contemplated hereby
        or by such Letter of Credit or any agreement or instrument relating
        thereto, or any unrelated transaction;

                (iii)   any draft, demand, certificate or other document
        presented under such Letter of Credit proving to be forged, fraudulent,
        invalid or insufficient in any respect or any statement therein being
        untrue or inaccurate in any respect; or any loss or delay in the
        transmission or otherwise of any document required in order to make a
        drawing under such Letter of Credit;

                (iv)    any payment by the L/C Issuer under such Letter of
        Credit against presentation of a draft or certificate that does not
        strictly comply with the terms of such Letter of Credit; or any payment
        made by the L/C Issuer under such Letter of Credit to any Person
        purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
        for the benefit of creditors, liquidator, receiver or other
        representative of or successor to any beneficiary or any transferee of
        such Letter of Credit, including any arising in connection with any
        proceeding under any Debtor Relief Law; or

<PAGE>

                (v)     any other circumstance or happening whatsoever, whether
        or not similar to any of the foregoing, including any other circumstance
        that might otherwise constitute a defense available to, or a discharge
        of, the applicable Borrower or any Subsidiary.

        The applicable Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it and, in the event of
any claim of noncompliance with the Borrower's instructions or other
irregularity, the Company, on behalf of the applicable Borrower, will
immediately notify the L/C Issuer. The Borrowers shall be conclusively deemed to
have waived any such claim against the L/C Issuer and its correspondents unless
such notice is given as aforesaid.

        (f)     ROLE OF L/C ISSUER. Each Lender and each Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Lenders, as applicable; (ii)
any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. Each Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, HOWEVER, that this assumption is not intended to, and shall
not, preclude the Borrower's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of the L/C Issuer shall
be liable or responsible for any of the matters described in clauses (i) through
(v) of SECTION 2.04(E); PROVIDED, HOWEVER, that anything in such clauses to the
contrary notwithstanding, a Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to such Borrower, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by such Borrower which such Borrower proves were caused by the L/C
Issuer's willful misconduct or gross negligence or the L/C Issuer's willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

        (g)     CASH COLLATERAL. Upon the request of the Administrative Agent,
(i) if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any L/C Obligation for any reason
remains outstanding, the Company and/or the applicable

<PAGE>

Borrower shall, in each case, immediately Cash Collateralize the then
Outstanding Amount of all L/C Obligations. SECTIONS 2.06 and 8.02(C) set forth
certain additional requirements to deliver Cash Collateral hereunder. For
purposes of this SECTION 2.04, SECTION 2.06 and SECTION 8.02(C), "CASH
COLLATERALIZE" means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the
L/C Obligations, cash or deposit account balances pursuant to documentation in
form and substance satisfactory to the Administrative Agent and the L/C Issuer
(which documents are hereby consented to by the Lenders). Derivatives of such
term have corresponding meanings. Each Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America.

        (h)     APPLICABILITY OF ISP AND UCP. Unless otherwise expressly agreed
by the L/C Issuer and a Borrower when a Letter of Credit is issued (including
any such agreement applicable to an Existing Letter of Credit), (i) the rules of
the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently published
by the International Chamber of Commerce at the time of issuance shall apply to
each commercial Letter of Credit.

        (i)     LETTER OF CREDIT FEES. The Company shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage (i) for each commercial Letter of Credit a (the
"COMMERCIAL LETTER OF CREDIT FEE") (i) for each commercial Letter of Credit
equal to the Applicable Rate times the daily amount available to be drawn under
such commercial Letter of Credit, and (ii) for each standby Letter of Credit a
fee (the "STANDBY LETTER OF CREDIT FEE") equal to the Applicable Rate times the
daily amount available to be drawn under such Letter of Credit. For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with SECTION
1.06. Letter of Credit Fees shall be (i) computed on a quarterly basis in
arrears and (ii) due and payable on the first Business Day after the end of each
March, June, September and December, commencing with the first such date to
occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any quarter, the daily amount available to be drawn under
each Letter of Credit shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect. Notwithstanding anything to the contrary contained herein, upon the
request of the Required Lenders, while any Event of Default exists, all Letter
of Credit Fees shall accrue at the Default Rate.

        (j)     FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO
L/C ISSUER. The Borrowers also agree to pay to the L/C Issuer, for the L/C
Issuer's account, a fronting fee agreed upon with the L/C Issuer, payable
quarterly in arrears. In addition, the Borrowers shall pay directly to the L/C
Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.

<PAGE>

        (k)     CONFLICT WITH ISSUER DOCUMENTS. In the event of any conflict
between the terms hereof and the terms of any Issuer Document, the terms hereof
shall control.

        2.05    SWING LINE LOANS.

        (a)     THE SWING LINE. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees, in reliance upon the agreements of the
other Lenders set forth in this SECTION 2.05, to make loans (each such loan, a
"SWING LINE LOAN") to one or more of the Borrowers from time to time on any
Business Day during the Availability Period in an aggregate amount not to exceed
at any time outstanding the amount of the Swing Line Sublimit, notwithstanding
the fact that such Swing Line Loans, when aggregated with the Applicable
Percentage of the Outstanding Amount of Committed Loans and L/C Obligations of
the Lender acting as Swing Line Lender, may exceed the amount of such Lender's
Commitment; PROVIDED, HOWEVER, that after giving effect to any Swing Line Loan,
(i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii)
the aggregate Outstanding Amount of the Committed Loans of any Lender, PLUS such
Lender's Applicable Percentage of the Outstanding Amount of all L/C Obligations,
PLUS such Lender's Applicable Percentage of the Outstanding Amount of all Swing
Line Loans shall not exceed such Lender's Commitment, and PROVIDED, FURTHER,
that the applicable Borrower shall not use the proceeds of any Swing Line Loan
to refinance any outstanding Swing Line Loan. Within the foregoing limits, and
subject to the other terms and conditions hereof, each Borrower may borrow under
this SECTION 2.05, prepay under SECTION 2.06, and reborrow under this SECTION
2.05. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the
making of a Swing Line Loan, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product of
such Lender's Applicable Percentage TIMES the amount of such Swing Line Loan.

        (b)     BORROWING PROCEDURES. Each Swing Line Borrowing shall be made
upon the irrevocable notice from the Company, on behalf of the applicable
Borrower, to the Swing Line Lender and the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Swing Line Lender
and the Administrative Agent not later than 1:00 p.m. on the requested borrowing
date, and shall specify (i) the name of the applicable Borrower and the amount
to be borrowed, which shall be a minimum of $250,000, and (ii) the requested
borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Company. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of
the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to
make such Swing Line Loan as a result of the limitations set forth in the
proviso to the first sentence of SECTION 2.05(A), or (B) that one or more of the
applicable conditions specified in ARTICLE IV is not then satisfied, then,
subject to the terms and conditions hereof, the Swing Line Lender will, not

<PAGE>

later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the applicable
Borrower at its office by crediting the account of the applicable Borrower on
the books of the Swing Line Lender in immediately available funds.

        (c)     REFINANCING OF SWING LINE LOANS.

                (i)     The Swing Line Lender at any time in its sole and
        absolute discretion may request, on behalf of the applicable Borrower
        (which hereby irrevocably authorizes the Swing Line Lender to so request
        on its behalf), that each Lender make a Base Rate Committed Loan in an
        amount equal to such Lender's Applicable Percentage of the amount of
        Swing Line Loans then outstanding. Such request shall be made in writing
        (which written request shall be deemed to be a Committed Loan Notice for
        purposes hereof) and in accordance with the requirements of SECTION
        2.02, without regard to the minimum and multiples specified therein for
        the principal amount of Base Rate Loans, but subject to the unutilized
        portion of the Aggregate Commitments and the conditions set forth in
        SECTION 4.02. The Swing Line Lender shall furnish the Company, on behalf
        of the applicable Borrower, with a copy of the applicable Committed Loan
        Notice promptly after delivering such notice to the Administrative
        Agent. Each Lender shall make an amount equal to its Applicable
        Percentage of the amount specified in such Committed Loan Notice
        available to the Administrative Agent in immediately available funds for
        the account of the Swing Line Lender at the Administrative Agent's
        Office not later than 1:00 p.m. on the day specified in such Committed
        Loan Notice, whereupon, subject to SECTION 2.05(C)(II), each Lender that
        so makes funds available shall be deemed to have made a Base Rate
        Committed Loan to the applicable Borrower in such amount. The
        Administrative Agent shall remit the funds so received to the Swing Line
        Lender.

                (ii)    If for any reason any Swing Line Loan cannot be
        refinanced by such a Committed Borrowing in accordance with SECTION
        2.05(C)(I), the request for Base Rate Committed Loans submitted by the
        Swing Line Lender as set forth herein shall be deemed to be a request by
        the Swing Line Lender that each of the Lenders fund its risk
        participation in the relevant Swing Line Loan and each Lender's payment
        to the Administrative Agent for the account of the Swing Line Lender
        pursuant to SECTION 2.05(C)(I) shall be deemed payment in respect of
        such participation.

                (iii)   If any Lender fails to make available to the
        Administrative Agent for the account of the Swing Line Lender any amount
        required to be paid by such Lender pursuant to the foregoing provisions
        of this SECTION 2.05(C) by the time specified in SECTION 2.05(C)(I), the
        Swing Line Lender shall be entitled to recover from such Lender (acting
        through the Administrative Agent), on demand, such amount with interest
        thereon for the period from the date such payment is required to the
        date on which such payment is immediately available to the Swing Line
        Lender at a rate per annum equal to the greater of the Federal Funds
        Rate and a rate determined by the Swing Line Lender n accordance with
        banking industry rules on interbank compensation. A certificate of the
        Swing Line Lender submitted to any Lender (through the Administrative
        Agent) with

<PAGE>

        respect to any amounts owing under this clause (iii) shall be conclusive
        absent manifest error.

                (iv)    Each Lender's obligation to make Committed Loans or to
        purchase and fund risk participations in Swing Line Loans pursuant to
        this SECTION 2.05(C) shall be absolute and unconditional and shall not
        be affected by any circumstance, including (A) any setoff, counterclaim,
        recoupment, defense or other right which such Lender may have against
        the Swing Line Lender, any Borrower or any other Person for any reason
        whatsoever, (B) the occurrence or continuance of a Default, or (C) any
        other occurrence, event or condition, whether or not similar to any of
        the foregoing; PROVIDED, HOWEVER, that each Lender's obligation to make
        Committed Loans pursuant to this SECTION 2.05(C) is subject to the
        conditions set forth in SECTION 4.02. No such funding of risk
        participations shall relieve or otherwise impair the obligation of the
        Borrowers to repay Swing Line Loans, together with interest as provided
        herein.

        (d)     REPAYMENT OF PARTICIPATIONS.

                (i)     At any time after any Lender has purchased and funded a
        risk participation in a Swing Line Loan, if the Swing Line Lender
        receives any payment on account of such Swing Line Loan, the Swing Line
        Lender will distribute to such Lender its Applicable Percentage of such
        payment (appropriately adjusted, in the case of interest payments, to
        reflect the period of time during which such Lender's risk participation
        was funded) in the same funds as those received by the Swing Line
        Lender.

                (ii)    If any payment received by the Swing Line Lender in
        respect of principal or interest on any Swing Line Loan is required to
        be returned by the Swing Line Lender under any of the circumstances
        described in SECTION 10.05 (including pursuant to any settlement entered
        into by the Swing Line Lender in its discretion), each Lender shall pay
        to the Swing Line Lender its Applicable Percentage thereof on demand of
        the Administrative Agent, plus interest thereon from the date of such
        demand to the date such amount is returned, at a rate per annum equal to
        the Federal Funds Rate. The Administrative Agent will make such demand
        upon the request of the Swing Line Lender. The obligations of the
        Lenders under this clause shall survive the payment in full of the
        Obligations and the termination of this Agreement.

        (e)     INTEREST FOR ACCOUNT OF SWING LINE LENDER. The Swing Line Lender
shall be responsible for invoicing the Company, on behalf of the applicable
Borrower, for interest on the Swing Line Loans. Until each Lender funds its Base
Rate Committed Loan or risk participation pursuant to this SECTION 2.05 to
refinance such Lender's Applicable Percentage of any Swing Line Loan, interest
in respect of such Applicable Percentage shall be solely for the account of the
Swing Line Lender.

        (f)     PAYMENTS DIRECTLY TO SWING LINE LENDER. The Borrowers shall make
all payments of principal and interest in respect of the Swing Line Loans
directly to the Swing Line Lender.

<PAGE>

         2.06     PREPAYMENTS.

        (a)     Each Borrower may, upon notice to the Administrative Agent, at
any time or from time to time (i) voluntarily prepay Base Rate Committed Loans
in whole or in part without premium or penalty, and (ii) voluntarily prepay
Eurodollar Rate Loans in whole or in part on the last day of the applicable
Interest Period without premium or penalty; PROVIDED that (i) such notice must
be received by the Administrative Agent not later than 11:00 a.m. (A) three
Business Days prior to any date of prepayment of Eurodollar Rate Committed Loans
and (B) on the date of prepayment of Base Rate Committed Loans; (ii) any
prepayment of Eurodollar Rate Committed Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any
prepayment of Base Rate Committed Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if
less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment and the Type(s) of
Committed Loans to be prepaid. The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender's Applicable Percentage of such prepayment. If such notice is given by a
Borrower, such Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued
interest on the amount prepaid, together with any additional amounts required
pursuant to SECTION 3.05. Each such prepayment shall be applied to the Committed
Loans of the Lenders in accordance with their respective Applicable Percentages.

        (b)     No Bid Loan may be prepaid without the prior consent of the
applicable Bid Loan Lender.

        (c)     Each Borrower may, upon notice to the Swing Line Lender (with a
copy to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole or in part without premium or penalty; PROVIDED
that (i) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and
(ii) any such prepayment shall be in a minimum principal amount of $100,000.
Each such notice shall specify the date and amount of such prepayment. If such
notice is given by a Borrower, such Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein.

        (d)     If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrowers shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; PROVIDED, HOWEVER, that the Borrowers shall not be required to
Cash Collateralize the L/C Obligations pursuant to this SECTION 2.06(D) unless
after the prepayment in full of the Committed Loans and Swing Line Loans the
Total Outstandings exceed the Aggregate Commitments then in effect.

        (e)     All amounts required to be paid pursuant to SECTION 7.03(C)
shall be applied, FIRST, to the payment in full of any L/C Borrowings then
outstanding, SECOND, to the payment in full of any Swing Line Loans then
outstanding, and THIRD, to Committed Loans (without a corresponding reduction of
the Aggregate Commitments). Such prepayments shall (i) be

<PAGE>

applied to the Committed Loans of the Lenders in accordance with their
respective Applicable Percentages, (ii) be applied first to Base Rate Loans and
then to Eurodollar Rate Loans in direct order of interest rate maturities, (iii)
be subject to SECTION 3.05, but otherwise without premium or penalty, and (iv)
be accompanied by interest on the principal amount prepaid through the date of
prepayment.

        2.07    TERMINATION OR REDUCTION OF COMMITMENTS.

        The Company may, upon notice to the Administrative Agent, terminate the
Aggregate Commitments, or from time to time permanently reduce the Aggregate
Commitments; PROVIDED that (i) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof, (iii) the Company shall not terminate or reduce the Aggregate
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments, and
(iv) if, after giving effect to any reduction of the Aggregate Commitments, the
Bid Loan Sublimit, the Letter of Credit Sublimit or the Swing Line Sublimit
exceeds the amount of the Aggregate Commitments, such Sublimit shall be
automatically reduced by the amount of such excess. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction
of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall
be applied to the Commitment of each Lender according to its Applicable
Percentage. All fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.

        2.08    REPAYMENT OF LOANS.

        (a)     The Borrowers shall repay to the Lenders on the Maturity Date
the aggregate principal amount of Committed Loans outstanding on such date.

        (b)     The Borrowers shall repay each Bid Loan on the last day of the
Interest Period in respect thereof.

        (c)     The Borrowers shall repay each Swing Line Loan on the earlier to
occur of (i) the date ten Business Days after such Loan is made, (ii) the demand
of the Swing Line Lender, and (ii) the Maturity Date.

        2.09    INTEREST.

        (a)     Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Committed Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurodollar Rate for such Interest Period PLUS the Applicable Rate; (ii) each
Base Rate Committed Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate PLUS the Applicable Rate; (iii) each Bid Loan shall bear interest on the
outstanding principal amount thereof for the Interest Period therefor at a rate
per annum equal to the

<PAGE>

Eurodollar Rate for such Interest Period plus (or minus) the Eurodollar Bid
Margin, or at the Absolute Rate for such Interest Period, as the case may be;
and (iv) each Swing Line Loan shall bear interest on the outstanding principal
amount thereof from the applicable borrowing date at a rate per annum equal to
(A) the Base Rate or (B) such other rate as the Swing Line Lender and the
Company shall mutually agree from time to time.

        (b)     (i)     If any amount of principal of any Loan is not paid when
due (without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

                (ii)    If any amount (other than principal of any Loan) payable
        by any Borrower under any Loan Document is not paid when due (without
        regard to any applicable grace periods), whether at stated maturity, by
        acceleration or otherwise, then upon the request of the Required
        Lenders, such amount shall thereafter bear interest at a fluctuating
        interest rate per annum at all times equal to the Default Rate to the
        fullest extent permitted by applicable Laws.

                (iii)   Upon the request of the Required Lenders, while any
        Event of Default exists, the Borrowers shall pay interest on the
        principal amount of all outstanding Obligations hereunder at a
        fluctuating interest rate per annum at all times equal to the Default
        Rate to the fullest extent permitted by applicable Laws.

                (iv)    Accrued and unpaid interest on past due amounts
        (including interest on past due interest) shall be due and payable upon
        demand.

        (c)     Interest on each Loan shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

        2.10    FEES.

        In addition to certain fees described in subsections (i) and (j) of
Section 2.04:

                (a)     FACILITY FEE. The Company shall pay to the
        Administrative Agent for the account of each Lender in accordance with
        its Applicable Percentage, a facility fee equal to the Applicable Rate
        TIMES the actual daily amount of the Aggregate Commitments (or, if the
        Aggregate Commitments have terminated, on the Outstanding Amount of all
        Committed Loans, Swing Line Loans and L/C Obligations), regardless of
        usage. The facility fee shall accrue at all times during the
        Availability Period (and thereafter so long as any Committed Loans,
        Swing Line Loans or L/C Obligations remain outstanding), including at
        any time during which one or more of the conditions in ARTICLE IV is not
        met, and shall be due and payable quarterly in arrears on the last
        Business Day of each March, June, September and December, commencing
        with the first such date to occur after the

<PAGE>

        Closing Date, and on the Maturity Date (and, if applicable, thereafter
        on demand). The facility fee shall be calculated quarterly in arrears,
        and if there is any change in the Applicable Rate during any quarter,
        the actual daily amount shall be computed and multiplied by the
        Applicable Rate separately for each period during such quarter that such
        Applicable Rate was in effect.

                (b)     OTHER FEES.

                        (i)     The Company shall pay to the Arranger and the
                Administrative Agent for their own respective accounts fees in
                the amounts and at the times specified in the Fee Letter. Such
                fees shall be fully earned when paid and shall not be refundable
                for any reason whatsoever

                        (ii)    The Borrowers shall pay to the Lenders such fees
                as shall have been separately agreed upon in writing in the
                amounts and at the times so specified. Such fees shall be fully
                earned when paid and shall not be refundable for any reason
                whatsoever.

        2.11    COMPUTATION OF INTEREST AND FEES.

        All computations of interest for Base Rate Loans when the Base Rate is
determined by Bank of America's "prime rate" shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such portion
is paid, PROVIDED that any Loan that is repaid on the same day on which it is
made shall, subject to SECTION 2.13(A), bear interest for one day. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

        2.12    EVIDENCE OF DEBT.

        (a)     The Credit Extensions made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Credit Extensions made by the Lenders
to the Borrowers and the interest and payments thereon. Any failure to so record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of each Borrower hereunder to pay any amount owing with respect to
the Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, each Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender's Loans to such Borrower in addition to such accounts or
records. Each Lender may attach schedules to its

<PAGE>

Note and endorse thereon the date, Type (if applicable), amount and maturity of
its Loans and payments with respect thereto.

        (b)     In addition to the accounts and records referred to in
subsection (a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit and Swing Line
Loans. In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.

        2.13    PAYMENTS GENERALLY; FUNDING BY ADMINISTRATIVE AGENT.

        (a)     GENERAL. All payments to be made by each Borrower shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. Except as otherwise expressly provided herein, all payments by each
Borrower hereunder shall be made to the Administrative Agent, for the account of
the respective Lenders to which such payment is owed, at the Administrative
Agent's Office in Dollars and in immediately available funds not later than 2:00
p.m. on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its Applicable Percentage (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer
to such Lender's Lending Office. All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue. If any payment
to be made by a Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.

        (b)     (i)      FUNDING BY LENDERS; PRESUMPTION BY ADMINISTRATIVE
AGENT. Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Committed Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such Committed
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with SECTION 2.02 and may, in
reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Committed Borrowing available to the Administrative Agent,
then the applicable Lender and such Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to such Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation and (B) in the case of a payment to be made by
such Borrower, the interest rate applicable to Base Rate Loans. If the
applicable Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to such Borrower the amount of such interest paid by
such Borrower for such period. If such Lender pays its share of the applicable
Committed Borrowing to the Administrative Agent, then the amount so paid

<PAGE>

shall constitute such Lender's Committed Loan included in such Committed
Borrowing. Any payment by a Borrower shall be without prejudice to any claim
such Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

                (ii)     PAYMENTS BY BORROWER; PRESUMPTIONS BY ADMINISTRATIVE
        AGENT. Unless the Administrative Agent shall have received notice from
        the Company, on behalf of the applicable Borrower, prior to the date on
        which any payment is due to the Administrative Agent for the account of
        the Lenders or the L/C Issuer hereunder that such Borrower will not make
        such payment, the Administrative Agent may assume that such Borrower has
        made such payment on such date in accordance herewith and may, in
        reliance upon such assumption, distribute to the Lenders or the L/C
        Issuer, as the case may be, the amount due. In such event, if the
        applicable Borrower has not in fact made such payment, then each of the
        Lenders or the L/C Issuer, as the case may be, severally agrees to repay
        to the Administrative Agent forthwith on demand the amount so
        distributed to such Lender or the L/C Issuer, in immediately available
        funds with interest thereon, for each day from and including the date
        such amount is distributed to it to but excluding the date of payment to
        the Administrative Agent, at the greater of the Federal Funds Rate and a
        rate determined by the Administrative Agent in accordance with banking
        industry rules on interbank compensation.

        A notice of the Administrative Agent to any Lender or to the Company, on
behalf of the applicable Borrower, with respect to any amount owing under this
subsection (b) shall be conclusive, absent manifest error.

        (c)     FAILURE TO SATISFY CONDITIONS PRECEDENT. If any Lender makes
available to the Administrative Agent funds for any Loan to be made by such
Lender as provided in the foregoing provisions of this ARTICLE II, and such
funds are not made available to the applicable Borrower by the Administrative
Agent because the conditions to the applicable Credit Extension set forth in
ARTICLE IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

        (d)     OBLIGATIONS OF LENDERS SEVERAL. The obligations of the Lenders
hereunder to make Committed Loans, to fund participations in Letters of Credit
and Swing Line Loans and to make payments pursuant to SECTION 10.04(C) are
several and not joint. The failure of any Lender to make any Committed Loan, to
fund any such participation or to make any payment under SECTION 10.04(C) on any
date required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Committed Loan, to purchase its
participation or to make its payment under SECTION 10.04(C).

        (e)     FUNDING SOURCE. Nothing herein shall be deemed to obligate any
Lender to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.

<PAGE>

        2.14    SHARING OF PAYMENTS BY LENDERS.

        If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of the Committed Loans made by it, or the participations in L/C Obligations or
in Swing Line Loans held by it resulting in such Lender's receiving payment of a
proportion of the aggregate amount of such Committed Loans or participations and
accrued interest thereon greater than its PRO RATA share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Committed Loans and subparticipations in L/C Obligations
and Swing Line Loans of the other Lenders, or make such other adjustments as
shall be equitable, so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Committed Loans and other amounts owing
them, PROVIDED that:

                (i)     if any such participations or subparticipations are
        purchased and all or any portion of the payment giving rise thereto is
        recovered, such participations or subparticipations shall be rescinded
        and the purchase price restored to the extent of such recovery, without
        interest; and

                (ii)    the provisions of this Section shall not be construed to
        apply to (x) any payment made by a Borrower pursuant to and in
        accordance with the express terms of this Agreement or (y) any payment
        obtained by a Lender as consideration for the assignment of or sale of a
        participation in any of its Committed Loans or subparticipations in L/C
        Obligations or Swing Line Loans to any assignee or participant, other
        than to the Company or any Subsidiary thereof (as to which the
        provisions of this Section shall apply).

        Each Loan Party consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.

        2.15    INCREASE IN COMMITMENTS.

        (a)     Provided there exists no Default, upon notice from the Company,
on behalf of the Borrowers, to the Administrative Agent (which shall promptly
notify the Lenders), the Company, on behalf of the Borrowers, may from time to
time, request an increase in the Aggregate Commitments by an amount (for all
such requests) not exceeding $25,000,000; PROVIDED that (i) the maximum amount
of the Aggregate Commitments after giving effect to any such increase may not
exceed $275,000,000, (ii) any such request for an increase shall be in a minimum
amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, and
(iii) the Borrowers may make a maximum of three such requests. To achieve the
full amount of a requested increase, the Company, on behalf of the Borrowers,
may solicit increased commitments from existing Lenders and also invite
additional Eligible Assignees to become

<PAGE>

Lenders; PROVIDED, however, that no existing Lender shall be obligated and/or
required to accept an increase in its Commitment pursuant to this SECTION 2.15
unless it specifically consents to such increase in writing and no additional
Eligible Assignee shall become a Lender unless its Commitment is at least
$5,000,000. Any Lender or Eligible Assignee agreeing to increase its Commitment
or provide a new Commitment pursuant to this SECTION 2.15 shall, in connection
therewith, deliver to the Administrative Agent a new commitment agreement in
form and substance satisfactory to the Administrative Agent and its counsel.

        (b)     If the Aggregate Commitments are increased in accordance with
this SECTION 2.15, the Administrative Agent and the Company, on behalf of the
Borrowers, shall determine the effective date (the "INCREASE EFFECTIVE DATE")
and the final allocation of such increase. The Administrative Agent shall
promptly notify the Company, on behalf of the Borrowers, and the Lenders of the
final allocation of such increase and the Increase Effective Date and SCHEDULE
2.01 hereto shall be deemed amended to reflect such increase and final
allocation. As a condition precedent to such increase, in addition to any
deliveries pursuant to subsection (a) above, each Borrower shall deliver to the
Administrative Agent each of the following in form and substance satisfactory to
the Administrative Agent: (1) a certificate dated as of the Increase Effective
Date (in sufficient copies for each Lender) signed by a Responsible Officer of
such Borrower (i) certifying and attaching the resolutions adopted by such
Borrower approving or consenting to such increase, and (ii) certifying that,
before and after giving effect to such increase, (A) the representations and
warranties contained in ARTICLE V and the other Loan Documents are true and
correct on and as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for
purposes of this SECTION 2.15, the representations and warranties contained in
SECTION 5.13 shall be deemed to refer to the most recent statements furnished
pursuant to subsections (a) and (b), respectively, of SECTION 6.07, and (B) no
Default exists; (2) a statement of reaffirmation from such Borrower pursuant to
which each such Borrower ratifies this Agreement and the other Loan Documents
and acknowledges and reaffirms that, after giving effect to such increase, it is
bound by all terms of this Agreement and the other Loan Documents; and (3) if
the increase is being provided by a new Lender, a Note in favor of such Lender
if so requested by such Lender. The Borrowers shall prepay any Committed Loans
outstanding on the Increase Effective Date (and pay any additional amounts
required pursuant to SECTION 3.05) to the extent necessary to keep the
outstanding Committed Loans ratable with any revised Applicable Percentages
arising from any nonratable increase in the Commitments under this SECTION 2.15.

        (c)     This Section shall supersede any provisions in SECTIONS 2.14 or
10.01 to the contrary.

        2.16    SUBSIDIARY BORROWER JOINDER AGREEMENT.

        Provided that no Default or Event of Default has occurred and is
continuing, the Company may direct that any of its domestic wholly-owned
Subsidiaries which is a Subsidiary Guarantor and which is not then a Borrower
become a Borrower by submitting a Subsidiary Borrower Joinder Agreement to the
Administrative Agent with respect to such Subsidiary duly executed by a
Responsible Officer of each of the Company and such Subsidiary together with (a)

<PAGE>

a certificate, dated the date of such Subsidiary Borrower Joinder Agreement of
the Secretary or Assistant Secretary of such Subsidiary (i) attaching a true and
complete copy of the resolutions of its Board of Directors and of all documents
evidencing other necessary corporate action (in form and substance satisfactory
to the Administrative Agent) taken by it to authorize such Subsidiary Borrower
Joinder Agreement, this Agreement and the transactions contemplated hereby, (ii)
attaching a true and complete copy of its certificate of incorporation, by-laws
or other organizational documents, (iii) setting forth the incumbency of its
officer or officers who may sign such Subsidiary Borrower Joinder Agreement,
including therein a signature specimen of such officer or officers and (iv)
attaching a certificate of good standing (or equivalent) issued by the
jurisdiction of its incorporation or formation, and (b) an opinion of counsel to
such Subsidiary with respect to such Subsidiary Borrower Joinder Agreement in
all respects reasonably satisfactory to the Administrative Agent. Upon receipt
of a Subsidiary Borrower Joinder Agreement and the supporting documentation
referred to above, the Administrative Agent shall confirm such Subsidiary
Borrower Joinder Agreement by signing a copy thereof and shall deliver a copy
thereof to the Company and each Lender. Thereupon the Subsidiary which executed
such Subsidiary Borrower Joinder Agreement shall become a "SUBSIDIARY BORROWER"
hereunder.

                                   ARTICLE III
                     TAXES, YIELD PROTECTION AND ILLEGALITY

        3.01    TAXES.

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

        (b)     PAYMENT OF OTHER TAXES BY THE BORROWER. Without limiting the
provisions of subsection (a) above, each Borrower shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.

        (c)     INDEMNIFICATION BY THE COMPANY. The Company and each Borrower
shall indemnify the Administrative Agent, each Lender and the L/C Issuer, within
10 days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect

<PAGE>

thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to a
Borrower by a Lender or the L/C Issuer (with a copy to the Administrative
Agent), or by the Administrative Agent on its own behalf or on behalf of a
Lender or the L/C Issuer, shall be conclusive absent manifest error.

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

        (e)     STATUS OF LENDERS. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which a Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Company, on behalf of such Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by Company or the Administrative Agent, 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 of
withholding. In addition, any Lender, if requested by the Company, on behalf of
the applicable Borrower, or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Company or the Administrative Agent as will enable such Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.

        Without limiting the generality of the foregoing, in the event that such
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to such Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Company, on behalf of such Borrower or the
Administrative Agent, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:

                (i)     duly completed copies of Internal Revenue Service Form
        W-8BEN claiming eligibility for benefits of an income tax treaty to
        which the United States is a party,

                (ii)    duly completed copies of Internal Revenue Service Form
        W-8ECI,

                (iii)   in the case of a Foreign Lender claiming the benefits of
        the exemption for portfolio interest under section 881(c) of the Code,
        (x) a certificate to the effect that such Foreign Lender is not (A) a
        "bank" within the meaning of section 881(c)(3)(A) of the Code, (B) a "10
        percent shareholder" of such Borrower within the meaning of section
        881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation"
        described in

<PAGE>

        section 881(c)(3)(C) of the Code and (y) duly completed copies of
        Internal Revenue Service Form W-8BEN, or

                (iv)    any other form prescribed by applicable law as a basis
        for claiming exemption from or a reduction in United States Federal
        withholding tax duly completed together with such supplementary
        documentation as may be prescribed by applicable law to permit such
        Borrower to determine the withholding or deduction required to be made.

        (f)     TREATMENT OF CERTAIN REFUNDS. If the Administrative Agent, any
Lender or the L/C Issuer determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Company and the Borrowers with respect to which the
applicable Borrower has paid additional amounts pursuant to this Section, it
shall pay to such Borrower an amount equal to such refund (but only to the
extent of indemnity payments made, or additional amounts paid, by such Borrower
under this Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent, such
Lender or the L/C Issuer, as the case may be, and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund), PROVIDED that such Borrower, upon the request of the Administrative
Agent, such Lender or the L/C Issuer, agrees to repay the amount paid over to
such Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent, such Lender or the
L/C Issuer in the event the Administrative Agent, such Lender or the L/C Issuer
is required to repay such refund to such Governmental Authority. This subsection
shall not be construed to require the Administrative Agent, any Lender or the
L/C Issuer to make available its tax returns (or any other information relating
to its taxes that it deems confidential) to any Borrower or any other Person.

        3.02    ILLEGALITY.

        If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to Company, on behalf
of the applicable Borrower, through the Administrative Agent, any obligation of
such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Committed Loans to Eurodollar Rate Committed Loans shall be suspended until such
Lender notifies the Administrative Agent and the Company, on behalf of the
applicable Borrower, that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, the applicable Borrower shall, upon
demand from such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Upon any such prepayment or conversion, the applicable
Borrower shall also pay accrued interest on the amount so prepaid or converted.

<PAGE>

        3.03    INABILITY TO DETERMINE RATES.

        If the Required Lenders determine that for any reason in connection with
any request for a Eurodollar Rate Loan or a conversion to or continuation
thereof that (a) Dollar deposits are not being offered to banks in the London
interbank eurodollar market for the applicable amount and Interest Period of
such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Committed Loan, or (c) the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Committed
Loan does not adequately and fairly reflect the cost to such Lenders of funding
such Loan, the Administrative Agent will promptly so notify the Company, on
behalf of the applicable Borrower and each Lender. Thereafter, the obligation of
the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until
the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, the Company, on behalf of the
applicable Borrower, may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Rate Committed Loans or, failing
that, will be deemed to have converted such request into a request for a
Committed Borrowing of Base Rate Loans in the amount specified therein.

        3.04    INCREASED COSTS; RESERVES ON EURODOLLAR RATE LOANS.

        (a)     Increased Costs Generally. If any Change in Law shall:

                (i)     impose, modify or deem applicable any reserve, special
        deposit, compulsory loan, insurance charge or similar requirement
        against assets of, deposits with or for the account of, or credit
        extended or participated in by, any Lender (except any reserve
        requirement contemplated by SECTION 3.04(E)) or the L/C Issuer;

                (ii)    subject any Lender or the L/C Issuer to any tax of any
        kind whatsoever with respect to this Agreement, any Letter of Credit,
        any participation in a Letter of Credit or any Eurodollar Loan made by
        it, or change the basis of taxation of payments to such Lender or the
        L/C Issuer in respect thereof (except for Indemnified Taxes or Other
        Taxes covered by SECTION 3.01 and the imposition of, or any change in
        the rate of, any Excluded Tax payable by such Lender or the L/C Issuer);
        or

                (iii)   impose on any Lender or the L/C Issuer or the London
        interbank market any other condition, cost or expense affecting this
        Agreement or Eurodollar Loans made by such Lender or any Letter of
        Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or
of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, the applicable
Borrower will pay to such Lender or the L/C Issuer, as the case

<PAGE>

may be, such additional amount or amounts as will compensate such Lender or the
L/C Issuer, as the case may be, for such additional costs incurred or reduction
suffered.

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

        (c)     CERTIFICATES FOR REIMBURSEMENT. A certificate of a Lender or the
L/C Issuer setting forth the amount or amounts necessary to compensate such
Lender or the L/C Issuer or its holding company, as the case may be, as
specified in subsection (a) or (b) of this Section and delivered to the Company,
on behalf of the Borrowers, shall be conclusive absent manifest error. Such
Borrower shall pay such Lender or the L/C Issuer, as the case may be, the amount
shown as due on any such certificate within 10 days after receipt thereof.

        (d)     DELAY IN REQUESTS. Failure or delay on the part of any Lender or
the L/C Issuer to demand compensation pursuant to the foregoing provisions of
this Section shall not constitute a waiver of such Lender's or the L/C Issuer's
right to demand such compensation, PROVIDED that the applicable Borrower shall
not be required to compensate a Lender or the L/C Issuer pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender or
the L/C Issuer, as the case may be, notifies the Company, on behalf of the
applicable Borrower, of the Change in Law giving rise to such increased costs or
reductions and of such Lender's or the L/C Issuer's intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

        (e)     RESERVES ON EURODOLLAR RATE LOANS. Each Borrower shall pay to
each Lender, as long as such Lender shall be required to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency funds
or deposits (currently known as "Eurocurrency liabilities"), additional interest
on the unpaid principal amount of each Eurodollar Rate Loan made to such
Borrower equal to the actual costs of such reserves allocated to such Loan by
such Lender (as determined by such Lender in good faith, which determination
shall be conclusive), which shall be due and payable on each date on which
interest is payable on such Loan, PROVIDED the Company, on behalf of the
applicable Borrower, shall have received at least 10 days' prior notice (with a
copy to the Administrative Agent) of such additional interest from such Lender.

<PAGE>

If a Lender fails to give notice 10 days prior to the relevant Interest Payment
Date, such additional interest shall be due and payable 10 days from receipt of
such notice.

        3.05    COMPENSATION FOR LOSSES.

        Upon demand of any Lender (with a copy to the Administrative Agent) from
time to time, each Borrower shall promptly compensate such Lender for and hold
such Lender harmless from any loss, cost or expense incurred by it as a result
of:

                (a)     any continuation, conversion, payment or prepayment of
        any Loan other than a Base Rate Loan on a day other than the last day of
        the Interest Period for such Loan (whether voluntary, mandatory,
        automatic, by reason of acceleration, or otherwise);

                (b)     any failure by such Borrower (for a reason other than
        the failure of such Lender to make a Loan) to prepay, borrow, continue
        or convert any Loan other than a Base Rate Loan on the date or in the
        amount notified by the Borrower; or

                (c)     any assignment of a Eurodollar Rate Loan on a day other
        than the last day of the Interest Period therefor as a result of a
        request by the Company, on behalf of such Borrower pursuant to SECTION
        10.13;

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrowers shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrowers to the Lenders
under this SECTION 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Committed Loan made by it at the Eurodollar Rate for such Loan
by a matching deposit or other borrowing in the London interbank eurodollar
market for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Committed Loan was in fact so funded.

        3.06    MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.

        (a)     DESIGNATION OF A DIFFERENT LENDING OFFICE. If any Lender
requests compensation under SECTION 3.04, or a Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to SECTION 3.01, or if any Lender gives a notice pursuant to
SECTION 3.02, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to SECTION 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to SECTION 3.02, as applicable, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Company hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

<PAGE>

        (b)     REPLACEMENT OF LENDERS. If any Lender requests compensation
under SECTION 3.04, or if a Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to SECTION 3.01, the Company may replace such Lender in accordance with SECTION
10.13.

        3.07    SURVIVAL.

        All of the Borrowers' obligations under this ARTICLE III shall survive
termination of the Aggregate Commitments and repayment of all other Obligations
hereunder.

                                   ARTICLE IV
           CONDITIONS PRECEDENT TO CLOSING DATE AND CREDIT EXTENSIONS

        4.01    CONDITIONS OF CLOSING DATE AND INITIAL CREDIT EXTENSION.

        The occurrence of the Closing Date, the effectiveness of this Agreement
and the obligation of the L/C Issuer and each Lender to make its initial Credit
Extension hereunder is subject to satisfaction of the following conditions
precedent:

                (a)     The Administrative Agent's receipt of the following,
        each of which shall be originals or telecopies (followed promptly by
        originals) unless otherwise specified, each properly executed by a
        Responsible Officer (which shall include, for the purposes of the items
        required by Section 4.01(a)(iii) below only, a secretary or assistant
        secretary) of the signing Loan Party, each dated the Closing Date (or,
        in the case of certificates of governmental officials, a recent date
        before the Closing Date) and each in form and substance satisfactory to
        the Administrative Agent and each of the Lenders:

                        (i)     executed counterparts of this Agreement,
                sufficient in number for distribution to the Administrative
                Agent, each Lender and the Company;

                        (ii)    a Note executed by the applicable Borrower in
                favor of each Lender requesting a Note;

                        (iii)   such certificates of resolutions or other
                action, incumbency certificates and/or other certificates of
                Responsible Officers of each Loan Party as the Administrative
                Agent may require evidencing the identity, authority and
                capacity of each Responsible Officer thereof authorized to act
                as a Responsible Officer in connection with this Agreement and
                the other Loan Documents to which such Loan Party is a party;

                        (iv)    such documents and certifications as the
                Administrative Agent may reasonably require to evidence that
                each Loan Party is duly organized or formed, and that each Loan
                Party is validly existing, in good standing and qualified to
                engage in business in its jurisdiction or organization;

<PAGE>

                        (v)     a favorable opinion of in house counsel to the
                Loan Parties, addressed to the Administrative Agent and each
                Lender, in form and substance reasonably satisfactory to the
                Administrative Agent and its legal counsel,

                        (vi)    a certificate of a Responsible Officer of each
                Loan Party either (A) attaching copies of all consents, licenses
                and approvals required in connection with the execution,
                delivery and performance by such Loan Party and the validity
                against such Loan Party of the Loan Documents to which it is a
                party, and such consents, licenses and approvals shall be in
                full force and effect, or (B) stating that no such consents,
                licenses or approvals are so required;

                        (vii)   a certificate signed by a Responsible Officer of
                the Company certifying (A) that the conditions specified in
                SECTIONS 4.02(A) and (B) have been satisfied, and (B) that there
                has been no event or circumstance since the date of the
                Financial Statements that has had or could be reasonably
                expected to have, either individually or in the aggregate, a
                Material Adverse Effect;

                        (viii)  evidence that the Existing Credit Agreement has
                been or concurrently with the Closing Date is being terminated;
                and

                        (ix)    such other assurances, certificates, documents,
                consents or opinions as the Administrative Agent, the L/C
                Issuer, the Swing Line Lender or the Required Lenders reasonably
                may require.

                (b)     Any fees required to be paid on or before the Closing
        Date shall have been paid.

                (c)     Unless waived by the Administrative Agent, the Company
        shall have paid all fees, charges and disbursements of counsel to the
        Administrative Agent to the extent invoiced prior to or on the Closing
        Date, plus such additional amounts of such fees, charges and
        disbursements as shall constitute its reasonable estimate of such fees,
        charges and disbursements incurred or to be incurred by it through the
        closing proceedings (provided that such estimate shall not thereafter
        preclude a final settling of accounts between the Company and the
        Administrative Agent).

                (d)     The representations and warranties of the Loan Parties
        contained in ARTICLE V or any other Loan Document, or which are
        contained in any document furnished at any time under or in connection
        herewith or therewith, shall be true and correct on and as of the
        Closing Date.

                (e)     No Default shall exist and be continuing as of the
        Closing Date.

        Without limiting the generality of the provisions of SECTION 9.04, for
purposes of determining compliance with the conditions specified in this SECTION
4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be

<PAGE>

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
proposed Closing Date specifying its objection thereto.

        4.02    CONDITIONS TO ALL CREDIT EXTENSIONS.

        The obligation of each Lender to honor any Request for Credit Extension
(other than a Committed Loan Notice requesting only a conversion of Committed
Loans to the other Type, or a continuation of Eurodollar Rate Committed Loans)
is subject to the following conditions precedent:

                (a)     The representations and warranties of the Company and
        each other Loan Party contained in ARTICLE V or any other Loan Document,
        or which are contained in any document furnished at any time under or in
        connection herewith or therewith, shall be true and correct on and as of
        the date of such Credit Extension, except to the extent that such
        representations and warranties specifically refer to an earlier date, in
        which case they shall be true and correct as of such earlier date, and
        except that for purposes of this SECTION 4.02, the representations and
        warranties contained in SECTION 5.13 shall be deemed to refer to the
        most recent statements furnished pursuant to clauses (a) and (b),
        respectively, of SECTION 6.07.

                (b)     No Default shall exist, or would result from such
        proposed Credit Extension or from the application of the proceeds
        thereof.

                (c)     The Administrative Agent and, if applicable, the L/C
        Issuer or the Swing Line Lender shall have received a Request for Credit
        Extension in accordance with the requirements hereof.

        Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type or a
continuation of Eurodollar Rate Committed Loans) submitted by the Company shall
be deemed to be a representation and warranty that the conditions specified in
SECTIONS 4.02(A) and (B) have been satisfied on and as of the date of the
applicable Credit Extension.

<PAGE>

                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

        In order to induce the Administrative Agent, the Lenders and the L/C
Issuer to enter into this Agreement, the Lenders to make the Loans and the L/C
Issuer to issue Letters of Credit, each Borrower hereby makes the following
representations and warranties to the Administrative Agent, the Lenders and the
L/C Issuer:

        5.01    EXISTENCE AND POWER.

        Each of the Company and the Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation (except, in the case of the Subsidiaries, where the
failure to be in such good standing could not reasonably be expected to have a
Material Adverse Effect), has all requisite corporate power and authority to own
its Property and to carry on its business as now conducted, and is qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which it owns or leases real Property or in which the nature of
its business requires it to be so qualified (except those jurisdictions where
the failure to be so qualified or to be in good standing could not reasonably be
expected to have a Material Adverse Effect).

        5.02    AUTHORITY.

        Each Loan Party has full corporate power and authority to enter into,
execute, deliver and perform the terms of the Loan Documents to which it is a
party, all of which have been duly authorized by all proper and necessary
corporate action and are not in contravention of any applicable law or the terms
of its Certificate of Incorporation and By-Laws. No consent or approval of, or
other action by, shareholders of any Loan Party, any Governmental Authority, or
any other Person (which has not already been obtained and delivered to the
Administrative Agent) is required to authorize in respect of such Loan Party, or
is required in connection with the execution, delivery, and performance by such
Loan Party of the Loan Documents to which it is a party, or is required as a
condition to the enforceability of the Loan Documents to which it is a party
against such Loan Party.

        5.03    BINDING AGREEMENT.

        The Loan Documents to which it is a party constitute the valid and
legally binding obligations of each Loan Party, enforceable in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by equitable
principles relating to the availability of specific performance as a remedy.

        5.04    LITIGATION.

        Except as specified in the most recent report filed prior to the Closing
Date by the Company with the SEC on Form 10-Q and/or 10-K (but only to the
extent actually discussed in such filing(s) (i.e. without giving effect to any
material deterioration since the date of such

<PAGE>

filings)), there are no actions, suits, arbitration proceedings or claims
(whether purportedly on behalf of the Company or any Subsidiary or otherwise)
pending or, to the knowledge of the Company, threatened against the Company or
any Subsidiary or any of its respective Properties, or maintained by the Company
or any Subsidiary, at law or in equity, before any Governmental Authority which
could reasonably be expected to have a Material Adverse Effect. There are no
proceedings pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary (a) which call into question the validity or
enforceability of, or otherwise seek to invalidate any Loan Document, or (b)
which might, individually or in the aggregate, materially and adversely affect
any of the transactions contemplated by any Loan Document.

        5.05    NO CONFLICTING AGREEMENT.

        (a)     Neither the Company nor any Subsidiary is in default under any
agreement to which it is a party or by which it or any of its Property is bound
the effect of which could reasonably be expected to have a Material Adverse
Effect. No notice to, or filing with, any Governmental Authority is required for
the due execution, delivery and performance by any Loan Party of the Loan
Documents to which it is a party.

        (b)     No provision of any existing material mortgage, material
indenture, material contract or material agreement or of any existing statute,
rule, regulation, judgment, decree or order binding on the Company or any
Subsidiary or affecting the Property of the Company or any Subsidiary conflicts
with, or requires any consent which has not already been obtained under, or
would in any way prevent the execution, delivery or performance by any Loan
Party of the terms of, any Loan Document to which it is a party. The execution,
delivery or performance by each Loan Party of the terms of each Loan Document to
which it is a party will not constitute a default under, or result in the
creation or imposition of, or obligation to create, any Lien upon the Property
of any Loan Party pursuant to the terms of any such mortgage, indenture,
contract or agreement.

        5.06    TAXES.

        The Company and each Subsidiary has filed or caused to be filed all tax
returns, and has paid, or has made adequate provision for the payment of, all
taxes shown to be due and payable on said returns or in any assessments made
against it, the failure of which to file or pay could reasonably be expected to
have a Material Adverse Effect, and no tax Liens (other than Liens permitted
under SECTION 7.02) have been filed against such Loan Party and no claims are
being asserted with respect to such taxes which are required by GAAP to be
reflected in the Financial Statements and are not so reflected, except for taxes
which have been assessed but which are not yet due and payable. The charges,
accruals and reserves on the books of the Company and each Subsidiary with
respect to all federal, state, local and other taxes are considered by the
management of the Company to be adequate, and the Company knows of no unpaid
assessment which (a) could reasonably be expected to have a Material Adverse
Effect, or (b) is or might be due and payable against it or any Subsidiary or
any Property of the Company or any Subsidiary, except such thereof as are being
contested in good faith and by appropriate proceedings diligently conducted, and
for which adequate reserves have been set aside in accordance with GAAP or which
have been assessed but are not yet due and payable.

<PAGE>

        5.07    COMPLIANCE WITH APPLICABLE LAW, FILINGS.

        Neither the Company nor any Subsidiary is in default with respect to any
judgment, order, writ, injunction, decree or decision of any Governmental
Authority which default could reasonably be expected to have a Material Adverse
Effect. The Company and each Subsidiary is complying with all applicable
statutes, rules and regulations of all Governmental Authorities, a violation of
which could reasonably be expected to have a Material Adverse Effect. The
Company and each Subsidiary has filed or caused to be filed with all
Governmental Authorities all reports, applications, documents, instruments and
information required to be filed pursuant to all applicable laws, rules,
regulations and requests which, if not so filed, could reasonably be expected to
have a Material Adverse Effect.

        5.08    GOVERNMENTAL REGULATIONS.

        Neither the Company nor any Subsidiary nor any corporation controlling
the Company or any Subsidiary or under common control with the Company or any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, or is subject to any statute or regulation which regulates the
incurrence of Indebtedness.

        5.09    FEDERAL RESERVE REGULATIONS; USE OF LOAN PROCEEDS.

        No Loan Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, as amended. No part of the proceeds of
the Loans or the Letters of Credit has been or will be used, directly or
indirectly, to purchase, acquire or carry any Margin Stock or for a purpose
which violates any law, rule or regulation of any Governmental Authority,
including, without limitation, the provisions of Regulations T, U or X of the
Board of Governors of the Federal Reserve System, as amended. Anything in this
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to a Borrower in violation of any limitation or prohibition
provided by any applicable law, regulation or statute, including Regulation U of
the Board of Governors of the Federal Reserve System.

        5.10    NO MISREPRESENTATION.

        No representation or warranty contained in any Loan Document and no
certificate or written report furnished by a Loan Party to the Administrative
Agent or any Lender contains or will contain, as of its date, a misstatement of
material fact, or omits or will omit to state, as of its date, a material fact
required to be stated in order to make the statements therein contained not
misleading in the light of the circumstances under which made.

<PAGE>

        5.11    PLANS.

        Each Employee Benefit Plan of the Company, each Subsidiary and each
ERISA Affiliate is in compliance with ERISA and the Code, where applicable,
except where the failure to so comply would not be material. The Company, each
Subsidiary and each ERISA Affiliate have complied with the material requirements
of Section 515 of ERISA with respect to each Pension Plan which is a
Multiemployer Plan, except where the failure to so comply would not be material.
The Company and each Subsidiary and each ERISA Affiliate has, as of the date
hereof, made all contributions or payments to or under each such Pension Plan
required by law or the terms of such Pension Plan or any contract or agreement.
No liability to the PBGC has been, or is reasonably expected by the Company, any
Subsidiary or any ERISA Affiliate to be, incurred by the Company or such
Subsidiary or ERISA Affiliate. Liability, as referred to in this SECTION 5.11,
includes any joint and several liability, but excludes any liability for
premiums under Section 4007 of ERISA. Each Employee Benefit Plan which is a
group health plan within the meaning of Section 5000(b)(1) of the Code is in
material compliance with the continuation of health care coverage requirements
of Section 4980B of the Code.

        5.12    ENVIRONMENTAL MATTERS.

        Neither the Company nor any Subsidiary (a) has received written notice
or otherwise learned of any claim, demand, action, event, condition, report or
investigation indicating or concerning any potential or actual liability which
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect, arising in connection with (i) any non-compliance with or
violation of the requirements of any applicable Environmental Law, or (ii) the
release or threatened release of any toxic or hazardous waste, substance or
constituent, or other substance into the environment, (b) to the best knowledge
of the Company, has any threatened or actual liability in connection with the
release or threatened release of any toxic or hazardous waste, substance or
constituent, or other substance into the environment which individually or in
the aggregate could reasonably be expected to have a Material Adverse Effect,
(c) has received notice of any federal or state investigation evaluating whether
any remedial action is needed to respond to a release or threatened release of
any toxic or hazardous waste, substance or constituent or other substance into
the environment for which the Company or such Subsidiary is or would be liable,
which liability would reasonably be expected to have a Material Adverse Effect,
or (d) has received notice that the Company or such Subsidiary is or may be
liable to any Person under the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601 ET SEQ., or
any analogous state law, which liability would reasonably be expected to have a
Material Adverse Effect. The Company and each Subsidiary is in compliance with
the financial responsibility requirements of Environmental Laws to the extent
applicable, including those contained in 40 C.F.R., parts 264 and 265, subpart
H, and any analogous state law, except in those cases in which the failure so to
comply would not reasonably be expected to have a Material Adverse Effect.

        5.13    FINANCIAL STATEMENTS.

        The Company has heretofore delivered to the Lenders through the
Administrative Agent (i) copies of the audited Consolidated Balance Sheet of the
Company and its Subsidiaries as of

<PAGE>

January 3, 2004, and the related Consolidated Statement of Income and Retained
Earnings, and Consolidated Statement of Cash Flows, for the fiscal year then
ended (collectively, together with any related notes and schedules, the "ANNUAL
FINANCIAL STATEMENTS") and (ii) copies of the unaudited Consolidated Balance
Sheet of the Company and its Subsidiaries as of July 3, 2004, and the related
Consolidated Statement of Cash Flows, for the six months then ended (without
footnotes and subject to year-end adjustments, none of which shall be materially
adverse) (together with the Annual Financial Statements, the "FINANCIAL
STATEMENTS"). The Financial Statements fairly present the Consolidated financial
condition and results of the operations of the Company and the Subsidiaries, in
each case as of the dates and for the periods indicated therein and, except as
noted therein, have been prepared in conformity with GAAP as then in effect.
Neither the Company nor any Subsidiary has any obligation or liability of any
kind (whether fixed, accrued, contingent, unmatured or otherwise) which, in
accordance with GAAP as then in effect, should have been disclosed in the
Financial Statements and was not. Since January 3, 2004 (x) there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have, a Material Adverse Effect, and (y) the
Company and its Subsidiaries have conducted their businesses only in the
ordinary course.

        5.14    SOLVENCY; EVENTS OF DEFAULT.

        Immediately after giving effect to the making of each Loan and the
issuance of each Letter of Credit, the Company and each Subsidiary is and will
be Solvent. As of the date of this Agreement, no Default or Event of Default
exists.

        5.15    TITLE TO PROPERTIES.

        Each Loan Party has good and marketable title to all of its material
properties, assets and rights of every name and nature now purported to be owned
by it (including intellectual property), which properties, assets and rights
include all those necessary to permit each Loan Party to conduct its business as
such business was conducted on January 3, 2004, free from all liens, charges and
encumbrances whatsoever except for insubstantial and immaterial defects in title
and liens, charges and encumbrances permitted under SECTION 7.2.

        5.16    SUBSIDIARIES.

        As of the date of this Agreement, no Loan Party has any Subsidiaries or
business divisions except as set forth on SCHEDULE 5.16 with respect to such
Loan Party.

        5.17    CONTRACTS WITH AFFILIATES.

        Except as disclosed on SCHEDULE 5.17, and except for agreements or
transactions (in each case) in the ordinary course of business and on an
arm's-length basis, no Loan Party is a party to or otherwise bound by any
agreements, instruments or contracts (whether written or oral) with any
Affiliate, except for any such agreement, instrument or contract (other than any
agreement, instrument or contract for borrowed money) as could not reasonably be
expected to have a Material Adverse Effect.

<PAGE>

        5.18    DISCLOSURE.

        No representations and warranties made by the Company or any other Loan
Party in this Agreement, any other Loan Document or in any other agreement,
instrument, document, certificate, statement or letter furnished to the
Administrative Agent or any Lender by or on behalf of the Company or any other
Loan Party, and no other factual information heretofore or contemporaneously
furnished by or on behalf of the Company or any other Loan Party to the
Administrative Agent or any Lender, in connection with any of the transactions
contemplated by any of the Loan Documents contains (as of the date given) any
untrue statement of material fact or omits to state a material fact necessary in
order to make the statements contained therein not misleading in any material
respect in light of the circumstances in which they are made. Except as
disclosed herein, there is no fact known to the Company or any other Loan Party
that results in or which could in the future reasonably be expected to have a
Materially Adverse Effect.

        5.19    RESTRICTIONS ON LOAN PARTIES.

        No Loan Party is a party to or bound by any contract, agreement or
instrument, nor subject to any charter or other corporate restriction which
could, under current or foreseeable conditions, be reasonably expected to have a
Material Adverse Effect.

                                   ARTICLE VI
                       AFFIRMATIVE AND FINANCIAL COVENANTS

        The Company covenants and agrees that on and after the Closing Date and
until the later to occur of (a) the Maturity Date, and (b) the payment in full
of all Loans and other Obligations hereunder and all other sums which are
payable under the Loan Documents, the Company will:

        6.01    LEGAL EXISTENCE.

        Except as may otherwise be permitted by SECTIONS 8.3 and 8.4, maintain,
and cause each Subsidiary to maintain, its corporate existence in good standing
in the jurisdiction of its incorporation or formation and in each other
jurisdiction in which the failure so to do could reasonably be expected to have
a Material Adverse Effect, except that the corporate existence of Subsidiaries
operating closing or discontinued operations may be terminated.

        6.02    TAXES.

        Pay and discharge when due, and cause each Subsidiary so to do, all
taxes, assessments, governmental charges, license fees and levies upon or with
respect to the Company and such Subsidiary, and upon the income, profits and
Property thereof unless, and only to the extent, that either (i)(a) such taxes,
assessments, governmental charges, license fees and levies shall be contested in
good faith and by appropriate proceedings diligently conducted by the Company or
such Subsidiary, and (b) such reserve or other appropriate provision as shall be
required by GAAP shall have been made therefor, or (ii) the failure to pay or
discharge such taxes,

<PAGE>

assessments, governmental charges, license fees and levies could not reasonably
be expected to have a Material Adverse Effect.

        6.03    INSURANCE.

        Keep, and cause each Subsidiary to keep, insurance with responsible
insurance companies in such amounts and against such risks as is usually carried
by businesses similar to the Company and the Subsidiaries.

        6.04    PERFORMANCE OF OBLIGATIONS.

        Pay and discharge promptly when due, and cause each Subsidiary so to do,
all lawful Indebtedness, obligations and claims for labor, materials and
supplies or otherwise which, if unpaid, could reasonably be expected to (a) have
a Material Adverse Effect, or (b) become a Lien on the Property of the Company
or any Subsidiary, except those Liens permitted under SECTION 8.2, PROVIDED that
neither the Company nor any Subsidiary shall be required to pay or discharge or
cause to be paid or discharged any such Indebtedness, obligation or claim so
long as (i) the validity thereof shall be contested in good faith and by
appropriate proceedings diligently conducted by the Company or such Subsidiary,
and (ii) such reserve or other appropriate provision as shall be required by
GAAP shall have been made therefore.

        6.05    CONDITION OF PROPERTY.

        Except for ordinary wear and tear, at all times, maintain, protect and
keep in good repair, working order and condition, all material Property
necessary for the operation of its business (other than Property which is
replaced with similar Property) as then being operated, and cause each
Subsidiary so to do.

        6.06    OBSERVANCE OF LEGAL REQUIREMENTS.

        Observe and comply in all material respects, and cause each Subsidiary
so to do, with all laws, ordinances, orders, judgments, rules, regulations,
certifications, franchises, permits, licenses, directions and requirements of
all Governmental Authorities, which now or at any time hereafter may be
applicable to it or to such Subsidiary, a violation of which could reasonably be
expected to have a Material Adverse Effect.

        6.07    FINANCIAL STATEMENTS AND OTHER INFORMATION.

        Maintain, and cause each Subsidiary to maintain, a standard system of
accounting in accordance with GAAP, and furnish to the Administrative Agent and
each Lender:

                (a)     As soon as available and, in any event, no later than
        the date that is five (5) Business Days after the Borrower's quarterly
        report on Form 10-K is required to be filed with the SEC, a copy of (x)
        the Company's 10-K in respect of such fiscal year, and (y) (i) the
        Company's Consolidated Balance Sheet as of the end of such fiscal year,
        and (ii) the related Consolidated Statements of Earnings, Shareholders'
        Equity and Cash

<PAGE>

        Flows, as of and through the end of such fiscal year, setting forth in
        each case in comparative form the corresponding figures in respect of
        the previous fiscal year, all in reasonable detail, and accompanied by a
        report of the Company's auditors, which report shall contain no
        qualification as to scope of audit or going concern and shall state that
        (A) such auditors audited such financial statements, (B) such audit was
        made in accordance with generally accepted auditing standards in effect
        at the time and provides a reasonable basis for such opinion, and (C)
        said financial statements have been prepared in accordance with GAAP;

                (b)     As soon as available and, in any event, no later than
        the date that is five (5) Business Days after the Borrower's quarterly
        report on Form 10-Q is required to be filed with the SEC, a copy of (x)
        the Company's 10-Q in respect of such fiscal quarter, and (y) (i) the
        Company's Consolidated Balance Sheet as of the end of such quarter, and
        (ii) the related Consolidated Statements of Earnings, Shareholders'
        Equity and Cash Flows for (A) such quarter, and (B) the period from the
        beginning of the then current fiscal year to the end of such quarter, in
        each case in comparable form with the prior fiscal year, all in
        reasonable detail and prepared in accordance with GAAP (without
        footnotes and subject to year-end adjustments);

                (c)     Within five (5) Business Days after the delivery of the
        financial statements required by clauses (a) and (b) above, a
        certificate of the chief financial officer or treasurer of the Company
        (or such other officer as shall be acceptable to the Administrative
        Agent), substantially in the form of EXHIBIT E (such certificate, a
        "COMPLIANCE Certificate"), (1) certifying that no Default or Event of
        Default shall have occurred or be continuing or, if so, specifying in
        such certificate all such Defaults and Events of Default, (2) setting
        forth computations in reasonable detail demonstrating compliance with
        SECTIONS 6.10, 7.1, 7.5 and 7.12 as at the end of such fiscal quarter or
        fiscal year, as the case may be, and (3) setting forth a list of all
        Persons that became Domestic Subsidiaries during such fiscal quarter or
        fiscal year, as the case may be.

                (d)     Promptly upon becoming available, copies of all regular
        or periodic reports (including, without limitation, current reports on
        Form 8-K) which the Company or any Subsidiary may now or hereafter be
        required to file with or deliver to the Securities and Exchange
        Commission, or any other Governmental Authority succeeding to the
        functions thereof, and copies of all material news releases sent to all
        stockholders;

                (e)     Prompt written notice of: (i) any citation, summons,
        subpoena, order to show cause or other order naming the Company or any
        Subsidiary a party to any proceeding before any Governmental Authority
        which could reasonably be expected to have a Material Adverse Effect,
        and include with such notice a copy of such citation, summons, subpoena,
        order to show cause or other order, and (ii) (A) any lapse or other
        termination of any license, permit, franchise or other authorization
        issued to the Company or any Subsidiary by any Governmental Authority,
        (B) any refusal by any Governmental Authority to renew or extend any
        license, permit, franchise or other authorization, and (C) any dispute
        between the Company or any Subsidiary and any Governmental Authority, in
        each case where any such lapse, termination, refusal or dispute referred

<PAGE>

        to in clause (ii)(A), (ii)(B) or (ii)(C) above could reasonably be
        expected to have a Material Adverse Effect;

                (f)     Prompt written notice of the occurrence of (i) each
        Default, (ii) each Event of Default, and (iii) each change which has had
        or could reasonably be expect to have a Material Adverse Effect;

                (g)     If requested by the Administrative Agent, copies of any
        audit reports and management letters delivered in connection with the
        statements referred to in SECTION 6.07(A) and (B);

                (h)     From time to time, such other information regarding the
        financial position or business of the Company and the Subsidiaries, as
        the Administrative Agent, at the request of any Lender, may reasonably
        request.

        Documents required to be delivered pursuant to SECTION 6.07(A), (B) or
(D) (to the extent any such documents are included in materials otherwise filed
with the SEC) may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date (i) on which the Company posts such
documents, or provides a link thereto, on the Company's website on the Internet
at the website address listed on SCHEDULE 10.02; or (ii) on which such documents
are posted on the Company's behalf on an Internet or intranet website, if any,
to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); PROVIDED that: (i) the Company shall deliver paper copies of such
documents to the Administrative Agent or any Lender that requests the Company to
deliver such paper copies until a written request to cease delivering paper
copies is given by the Administrative Agent or such Lender and (ii) the Company
shall notify the Administrative Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (I.E., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
the Company shall be required to provide paper copies of the Compliance
Certificates required by SECTION 6.07(C) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrowers with any such request for delivery, and each Lender shall be
solely responsible for requesting delivery to it or maintaining its copies of
such documents.

        The Company hereby acknowledges that (a) the Administrative Agent and/or
the Arranger will make available to the Lenders and the L/C Issuer materials
and/or information provided by or on behalf of the Loan Parties hereunder
(collectively, "BORROWER Materials") by posting the Borrower Materials on
IntraLinks or another similar electronic system (the "PLATFORM") and (b) certain
of the Lenders may be "public-side" Lenders (I.E., Lenders that do not wish to
receive material non-public information with respect to the Borrowers or their
securities) (each, a "PUBLIC LENDER"). The Company agrees that (w) all Borrower
Materials that are to be made available to Public Lenders shall be clearly and
conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word
"PUBLIC" shall appear prominently on the first page

<PAGE>

thereof; (x) by marking Borrower Materials "PUBLIC," The Company shall be deemed
to have authorized the Administrative Agent, the Arranger, the L/C Issuer and
the Lenders to treat such Borrower Materials as either publicly available
information or not material information (although it may be sensitive and
proprietary) with respect to the Borrowers or their securities for purposes of
United States Federal and state securities laws; (y) all Borrower Materials
marked "PUBLIC" are permitted to be made available through a portion of the
Platform designated "Public Investor;" and (z) the Administrative Agent and the
Arranger shall be entitled to treat any Borrower Materials that are not marked
"PUBLIC" as being suitable only for posting on a portion of the Platform not
designated "Public Investor."

        6.08    RECORDS.

        Upon reasonable notice and during normal business hours, permit
representatives of the Administrative Agent and each Lender to visit the offices
of the Company and each Subsidiary, to examine the books and records (other than
tax returns and work papers related to tax returns) thereof and auditors'
reports relating thereto, to discuss the affairs of the Company and each
Subsidiary with the respective officers thereof, and to meet and discuss the
affairs of the Company and each Subsidiary with the Company's auditors, PROVIDED
that if a Default shall have occurred and be continuing, no notice shall be
required and such visits shall not be restricted to normal business hours. Any
meeting with the Company's auditors shall be at the expense of the Company if,
at the time thereof, a Default shall have occurred and be continuing.

        6.09    AUTHORIZATIONS.

        Maintain and cause each Subsidiary to maintain, in full force and
effect, all copyrights, patents, trademarks, trade names, franchises, licenses,
permits, applications, reports, and other authorizations and rights, which, if
not so maintained, would individually or in the aggregate have a Material
Adverse Effect.

        6.10    FINANCIAL COVENANTS.

                (a)     FIXED CHARGE COVERAGE RATIO. Maintain at all times a
        Fixed Charge Coverage Ratio of not less than 1.50: 1.00.

                (b)     LEVERAGE RATIO. Maintain at all times a Leverage Ratio
        of not more than 1.75: 1. 00.

                (c)     MINIMUM TANGIBLE NET WORTH. Maintain at all times
        Tangible Net Worth in an amount not less than the sum of (i)
        $559,347,000 (which represents 75% of Tangible Net Worth as of July 3,
        2004), (ii) 50% of cumulative Consolidated net income (without giving
        effect to any net losses) for each fiscal quarter commencing with the
        fiscal quarter ending September 30, 2004 and (iii) 100% of the
        cumulative net proceeds received by the Company from any sale to the
        public of its capital Stock for the period commencing after the Closing
        Date.

<PAGE>

        6.11    FURTHER ASSURANCES.

        Each Loan Party shall do, make, execute and deliver all such additional
and further acts, things, assurances, and instruments as the Administrative
Agent may reasonably require more completely to vest in and assure to the
Administrative Agent and the Lenders their rights hereunder and under the other
Loan Documents and to carry into effect the provisions and intent of this
Agreement.

        6.12    ADDITIONAL SUBSIDIARY GUARANTORS.

        Within 30 days after the end of each fiscal quarter of the Company, the
Company shall cause each Person that became a Domestic Subsidiary during such
quarter, and that is not already a Subsidiary Guarantor, to execute and deliver
to the Administrative Agent a Subsidiary Guaranty Joinder Agreement and such
other documents and opinions as the Administrative Agent shall require in
connection therewith. In addition, at any time the Company may cause any
Subsidiary which is not a Subsidiary Guarantor to become a Subsidiary Guarantor
by executing and delivering to the Administrative Agent a Subsidiary Guaranty
Joinder Agreement and such other documents and opinions as the Administrative
Agent shall require in connection therewith.

        6.13    USE OF PROCEEDS.

        Use the proceeds of the Loans and Letters of Credit solely to repay in
full certain existing indebtedness outstanding under the Existing Credit
Agreement, and for the Borrowers' general corporate purposes, including working
capital and capital expenditures, and in any case in a manner not inconsistent
with the provisions hereof. Notwithstanding anything to the contrary contained
in any Loan Document, each Borrower further agrees that no part of the proceeds
of any Loan or Letter of Credit will be used, directly or indirectly, for a
purpose which violates any law, rule or regulation of any Governmental
Authority, including the provisions of Regulations T, U or X of the Board of
Governors of the Federal Reserve System, as amended or any provision of this
Agreement, including, without limitation, the provisions of SECTION 5.09.

        6.14    CHANGES TO FISCAL YEAR.

        Provide at least 30 days' prior notice to the Administrative Agent and
the Lenders of any change to the fiscal year of the Company or any Subsidiary
from that in effect on the Closing Date.

                                   ARTICLE VII
                               NEGATIVE COVENANTS

        The Company covenants and agrees that on and after the Effective Date
and until the later to occur of (a) the Maturity Date, and (b) the payment in
full of all Loans and other Obligations hereunder and all other sums which are
payable under the Loan Documents, the Company will not:

<PAGE>

        7.01    INDEBTEDNESS.

        Create, incur, assume or suffer to exist any Indebtedness, or permit any
Subsidiary so to do, except (i) the Loans and the Letters of Credit, (ii)
capitalized lease, purchase money and real estate mortgage Indebtedness of the
Company and the Subsidiary Guarantors in an aggregate outstanding principal
amount not exceeding $50,000,000, (iii) Intercompany Debt, (iv) additional
unsecured Indebtedness of the Company and the Subsidiary Guarantors in an
aggregate outstanding principal amount not exceeding $50,000,000, (v) additional
short-term Indebtedness of the Company in an aggregate outstanding principal
amount not exceeding $30,000,000 to finance the construction of new stores and
the acquisition of the Company's corporate headquarters, and (vi) Indebtedness
existing as of the Closing Date and set forth on SCHEDULE 7.01 (or incurred
under a credit facility existing as of the Closing Date and set forth on
Schedule 7.01) and any refinancings, refundings, renewals or extensions thereof;
provided that (i) the amount of such Indebtedness is not increased at the time
of such refinancing, refunding, renewal or extension except by an amount equal
to a reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder.

        7.02    LIENS.

        Create, incur, assume or suffer to exist any Lien against or on any
Property now owned or hereafter acquired by the Company or any of the
Subsidiaries, or permit any Subsidiary so to do, except any one or more of the
following types of Liens: (a) Liens in connection with workers' compensation,
unemployment insurance or other social security obligations (which phrase shall
not be construed to refer to ERISA or the minimum funding obligations under
Section 412 of the Code), (b) Liens to secure the performance of bids, tenders,
letters of credit (other than letters of credit securing the payment of
Indebtedness), contracts (other than contracts for the payment of Indebtedness),
leases, statutory obligations, surety, customs, appeal, performance and payment
bonds and other obligations of like nature, in each such case arising in the
ordinary course of business, (c) mechanics', workmen's, carriers',
warehousemen's, materialmen's, landlords', or other like Liens arising in the
ordinary course of business with respect to obligations which are not due or
which are being contested in good faith and by appropriate proceedings
diligently conducted, (d) Liens for taxes, assessments, fees or governmental
charges the payment of which is not required by SECTION 6.02, (e) easements,
rights of way, restrictions, leases of Property to others, easements for
installations of public utilities, title imperfections and restrictions, zoning
ordinances and other similar encumbrances affecting Property which in the
aggregate do not materially impair its use for the operation of the business of
the Company or such Subsidiary, (f) Liens on Property under capital leases and
Liens on Property (excluding Liens on the Stock of any Subsidiary) acquired
(whether as a result of purchase, capital lease, merger or other acquisition)
and either existing on such Property when acquired, or created contemporaneously
with such acquisition to secure the payment or financing of the purchase price
of such Property (including the construction, development, substantial repair,
alteration or improvement thereof), PROVIDED that such Liens attach only to the
Property so purchased or acquired (including any such construction, development,
substantial repair, alteration or improvement thereof) and PROVIDED FURTHER that
the Indebtedness secured by such Liens is permitted by SECTION 7.01, (g)
statutory Liens in favor of lessors arising in connection with Property leased
to the Company or

<PAGE>

any of the Subsidiaries, (h) Liens of attachments, judgments or awards against
the Company or any of the Subsidiaries with respect to which an appeal or
proceeding for review shall be pending or a stay of execution shall have been
obtained, or which are otherwise being contested in good faith and by
appropriate proceedings diligently conducted, and in respect of which adequate
reserves shall have been established in accordance with GAAP on the books of the
Company or such Subsidiary, (i) Liens securing Indebtedness of a Subsidiary to
the Company or another Subsidiary, and (j) Liens existing as of the Closing Date
and set forth on SCHEDULE 7.02.

        7.03    DISPOSITIONS.

        Make any Disposition, or permit any Subsidiary so to do, except any one
or more of the following:

        (a)     Dispositions of inventory in the ordinary course of business;

        (b)     Dispositions of individual stores consistent with past
practices;

        (c)     Dispositions in the form of a sale/lease-back transaction with
respect to any store, distribution center or corporate headquarters constructed
or owned by the Company or any Subsidiary; PROVIDED that 50% of the net proceeds
from such sale/lease-back transaction are immediately applied to the prepayment
of L/C Borrowings and the Loans in accordance with SECTION 2.06(E) hereof; and

        (d)     Restricted Payments to the extent permitted pursuant to SECTION
7.6.

        7.04    MERGER OR CONSOLIDATION, ETC.

        Consolidate with, be acquired by, or merge into or with any Person, or
convey or otherwise transfer all or substantially all of its Property, or permit
any Subsidiary so to do, except that:

        (a)     any wholly-owned Subsidiary may consolidate with or merge with
any other wholly-owned Subsidiary, or convey or transfer all or substantially
all of its Property to any other wholly-owned Subsidiary, PROVIDED that
immediately before and after giving effect thereto no Default or Event of
Default shall or would exist;

        (b)     any wholly-owned Subsidiary may consolidate with or merge with
the Company, or convey or transfer all or substantially all of its Property to
the Company, PROVIDED that (x) immediately before and after giving effect
thereto no Default or Event of Default shall or would exist and (y) the Company
shall be the survivor of such consolidation or merger; and

        (c)     any Subsidiary may consolidate with or merge with another
Person, or any Subsidiary may convey or transfer all or substantially all of its
Property to such other Person, in each case solely in connection with and as
part of a permitted Disposition under SECTION 7.03 or a permitted Acquisition
under SECTION 7.05, PROVIDED that (x) immediately before and after giving effect
thereto no Default or Event of Default shall or would exist and (y) in the event

<PAGE>

that the Company is party to any such merger or consolidation, the Company shall
be the survivor of such consolidation or merger;

provided that in connection with each such merger, conveyance or transfer the
Company and each Subsidiary party thereto shall execute and deliver to the
Administrative Agent such documents and opinions as the Administrative Agent
shall require in connection therewith.

        7.05    ACQUISITIONS.

        Make any Acquisition, or permit any of the Subsidiaries so to do, except
any one or more of the following: (a) Acquisitions of store leaseholds in the
ordinary course of the Company's business and (b) other Acquisitions by the
Company or any of the Subsidiaries, PROVIDED that (i) immediately before and
after giving effect to each such other Acquisition, no Default or Event of
Default shall or would exist and (ii) as of the date of such Acquisition and
after giving effect thereto, the aggregate amount of consideration (including
cash and non-cash consideration, any assumption of Indebtedness and any earn-out
payments (as reasonably determined by the Company based on its estimate at the
time such consideration is calculated), but excluding consideration consisting
of any Stock in the Company) expended on such other Acquisitions does not exceed
the sum of (x) $125,000,000 PLUS (y) on a cumulative basis, an amount equal to
50% of the Consolidated net income of the Company and its Subsidiaries for each
fiscal quarter (commencing with the fiscal quarter ending April 3, 2004), as
reflected in the financial statements required to be delivered by the Company to
the Lenders pursuant to SECTIONS 6.07(A) or (B), as applicable; and, PROVIDED,
FURTHER, that the aggregate amount of consideration expended by the Company and
its Subsidiaries on such other Acquisitions pursuant to this SECTION 7.05(B),
when combined with the aggregate amount of all Restricted Payments made by the
Company and its Subsidiaries since the Closing Date pursuant to SECTION 7.06(B),
shall not exceed the sum of (x) $175,000,000, PLUS (y) on a cumulative basis, an
amount equal to 50% of the Consolidated net income of the Company and its
Subsidiaries for each fiscal quarter (commencing with the fiscal quarter ending
April 3, 2004), as reflected in the financial statements required to be
delivered by the Company to the Lenders pursuant to SECTIONS 6.07(A) or (B), as
applicable.

        7.06    RESTRICTED PAYMENTS.

        Make any Restricted Payment, or permit any Subsidiary so to do, except
any one or more of the following Restricted Payments: (a) any direct or indirect
wholly-owned Subsidiary may make dividends or other distributions to the Company
or to any other direct or indirect wholly-owned Subsidiary, and (b) the Company
may make Restricted Payments in the form of repurchases of its Stock pursuant to
and in accordance with the Company's Incentive Compensation Plan or in the form
of other repurchases of its Stock or dividends to its shareholders, PROVIDED
that, in the case of this clause (b), (i) as of such date of repurchase and/or
dividend and after giving effect thereto, the aggregate amount of all such stock
repurchases and dividends since the Closing Date shall not exceed the sum of (x)
$50,000,000 PLUS (y) on a cumulative basis, an amount equal to 25% of the
Consolidated net income of the Company and its Subsidiaries for each fiscal
quarter (commencing with the fiscal quarter ending April 3, 2004), as reflected
in the financial statements required to be delivered by the Company to the
Lenders pursuant to SECTIONS 6.07(A) or (B), as applicable; and, PROVIDED,
FURTHER, that the aggregate

<PAGE>

amount of all Restricted Payments made by the Company and its Subsidiaries
pursuant to this SECTION 7.06(B), when combined with all consideration expended
by the Company and its Subsidiaries on Acquisitions since the Closing Date
pursuant to SECTION 7.05(B), shall not exceed the sum of (x) $175,000,000, PLUS
(y) on a cumulative basis, an amount equal to 50% of the Consolidated net income
of the Company and its Subsidiaries for each fiscal quarter (commencing with the
fiscal quarter ending April 3, 2004), as reflected in the financial statements
required to be delivered by the Company to the Lenders pursuant to SECTIONS
6.07(A) or (B), as applicable.

        7.07    LIMITATION ON UPSTREAM DIVIDENDS BY SUBSIDIARIES.

        Permit or cause any of the Subsidiaries to enter into or agree, or
otherwise be or become subject, to any agreement, contract or other arrangement
(other than this Agreement) with any Person pursuant to the terms of which (a)
such Subsidiary is or would be prohibited from declaring or paying any cash
dividends on any class of its stock owned directly or indirectly by the Company
or any of the other Subsidiaries or from making any other distribution on
account of any class of any such stock (herein referred to as "UPSTREAM
DIVIDENDS"), or (b) the declaration or payment of Upstream Dividends by a
Subsidiary to the Company or another Subsidiary, on an annual or cumulative
basis, is or would be otherwise limited or restricted.

        7.08    LIMITATION ON NEGATIVE PLEDGES.

        Enter into any agreement, other than (i) this Agreement and (ii)
purchase money Lien documentation or capital leases permitted by this Agreement
(in which cases, any prohibition or limitation shall only be effective against
the assets financed thereby), or permit any Subsidiary so to do, which prohibits
or limits the ability of the Company or such Subsidiary to create, incur, assume
or suffer to exist any Lien upon any of its Property or revenues, whether now
owned or hereafter acquired.

        7.09    CERTAIN DOCUMENTS.

        Amend, modify or otherwise change any term or provision of the
organizational documents of any Loan Party if such change would have a Material
Adverse Effect.

        7.10    BUSINESS CHANGE.

        Materially change the nature of the business of the Company and the
Subsidiaries as conducted on the Closing Date.

        7.11    INVESTMENTS.

        At any time, purchase or otherwise acquire, hold or invest in the Stock
or Property of, or any other interest in, any Person, or make any loan or
advance to, or enter into any arrangement for the purpose of providing funds or
credit to, or make any other investment (excluding entering into any swap
agreement (as defined in 11 U.S.C. ss.101)), whether by way of capital

<PAGE>

contribution, deposit or otherwise, in or with any Person, or permit any
Subsidiary so to do (all of which are sometimes referred to herein as
"INVESTMENTS"), except:

                (a)     Investments in cash or Cash Equivalents;

                (b)     normal business banking accounts and short-term
certificates of deposit and time deposits in, or issued by, federally insured
institutions in amounts not exceeding the limits of such insurance;

                (c)     Investments in the form of purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business;

                (d)     Investments permitted by SECTIONS 7.04, 7.05, and 7.06;

                (e)     Investments in any Person that is a Loan Party prior to
giving effect to such Investment;

                (f)     Investments in the form of the creation of a new
Subsidiary; PROVIDED that the Borrower delivers the items required by SECTION
6.12 in accordance with the terms thereof; and

                (g)     Investments existing as of the Closing Date and set
forth on SCHEDULE 7.11.

        7.12    SALE AND LEASEBACK.

        Enter into any arrangement with any Person providing for the leasing by
it of Property which has been or is to be sold or transferred by it to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such Property or its rental obligations, or
permit any Subsidiary so to do, except to the extent permitted under SECTION
7.03.

        7.13    TRANSACTIONS WITH AFFILIATES.

        Become a party to any transaction with an Affiliate unless the terms and
conditions relating thereto are as favorable to it as those which would be
obtainable at the time in a comparable arms-length transaction with a Person
other than an Affiliate, or permit any Subsidiary so to do.

                                  ARTICLE VIII
                         EVENTS OF DEFAULT AND REMEDIES

        8.01    EVENTS OF DEFAULT.

        The following shall each constitute an "EVENT OF DEFAULT" hereunder:

<PAGE>

        (a)     NON-PAYMENT OF PRINCIPAL Any payment of principal on any Loan or
any L/C Obligation shall not be paid when due and payable; or

        (b)     NON-PAYMENT OF INTEREST. Any payment of interest on any Loan or
of any Fee shall not be paid when due and payable and such default shall
continue unremedied for a period of 5 Business Days after the same shall be due
and payable; or

        (c)     SPECIFIC COVENANTS. The failure of the Company to observe or
perform any covenant or agreement contained in SECTIONS 6.01, 6.10, 6.13 or in
ARTICLE VII; or

        (d)     OTHER DEFAULTS. The failure of any Loan Party to observe or
perform any other covenant or agreement contained in this Agreement or any other
Loan Document, and such failure shall have continued unremedied for a period of
30 days after the Company or any Borrower shall have become aware of such
failure; or

        (e)     REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made in any Loan Document, or made in any certificate, report, opinion (other
than an opinion of counsel) or other document delivered on or after the date
hereof shall in any such case prove to have been incorrect or misleading
(whether because of misstatement or omission) in any material respect when made;
or

        (f)     CROSS-DEFAULT: (i) obligations (1) in an aggregate Consolidated
amount in excess of $7,500,000 of the Company and the Subsidiaries, (other than
the Obligations) whether as principal, guarantor, surety or other obligor, for
the payment of any Indebtedness or any net liability under interest rate swap,
collar, exchange or cap agreements, or (2) of the Company and the Subsidiaries
(other than the Obligations) whether as principal, guarantor, surety or other
obligor for the payment of any net liability under any swap agreement (as
defined in 11 U.S.C. ss.101) with any Lender or any affiliate of a Lender, (A)
shall become or shall be declared to be due and payable prior to the expressed
maturity thereof, or (B) shall not be paid when due or within any grace period
for the payment thereof, or (ii) any holder of any such obligations shall have
the right to declare the Indebtedness evidenced thereby due and payable prior to
its stated maturity; or

        (g)     INSOLVENCY PROCEEDINGS, ETC.

                (A)     The Company or any Subsidiary shall (i) suspend or
        discontinue its business (except for store closings in the ordinary
        course of business and except in connection with a permitted Disposition
        under SECTION 7.03 and as may otherwise be expressly permitted herein),
        or (ii) make an assignment for the benefit of creditors, or (iii)
        generally not be paying its debts as such debts become due, or (iv)
        admit in writing its inability to pay its debts as they become due, or
        (v) file a voluntary petition in bankruptcy, or (vi) become insolvent
        (however such insolvency shall be evidenced), or (vii) file any petition
        or answer seeking for itself any reorganization, arrangement,
        composition, readjustment of debt, liquidation or dissolution or similar
        relief under any present or future statute, law or regulation of any
        jurisdiction (including under any law applicable to insurance
        companies), or (viii) petition or apply to any tribunal, or any other

<PAGE>

        Governmental Authority, for any receiver, custodian or any trustee for
        any substantial part of its Property, or (ix) be the subject of any
        proceeding specified in clause (vii) or (viii) filed against it which
        remains undismissed for a period of 60 consecutive days, or (x) file any
        answer admitting or not contesting the material allegations of any such
        petition filed against it, or of any order, judgment or decree approving
        such petition in any such proceeding, or (xi) seek, approve, consent to,
        or acquiesce in any such proceeding, or in the appointment of any
        trustee, receiver, custodian, liquidator, or fiscal agent for it, or any
        substantial part of its Property, or an order is entered appointing any
        such trustee, receiver, custodian, liquidator or fiscal agent and such
        order remains unstayed and in effect for 60 consecutive days, or (xii)
        take any formal action for the purpose of effecting any of the foregoing
        (except as may otherwise be expressly permitted herein); or

                (B)     An order for relief is entered under the United States
        bankruptcy laws or any other decree or order is entered by a court or
        other Governmental Authority having jurisdiction and continues unstayed
        and in effect for a period of 60 consecutive days (i) adjudging the
        Company or any Subsidiary bankrupt or insolvent, or (ii) approving as
        properly filed a petition seeking reorganization, liquidation,
        arrangement, adjustment or composition of, or in respect of the Company
        or any Subsidiary under the United States bankruptcy laws or any other
        applicable Federal or state law, or (iii) appointing a receiver,
        liquidator, assignee, trustee, custodian, sequestrator (or other similar
        official) of the Company or any Subsidiary or of substantially all of
        the Property of any thereof, or (iv) ordering the winding up or
        liquidation of the affairs of the Company or any Subsidiary; or

        (h)     JUDGMENTS. Judgments or decrees in an aggregate Consolidated
amount in excess of $7,500,000 against the Company and the Subsidiaries shall
remain unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a
period of 60 days; or

        (i)     CHANGE OF CONTROL. After the Closing Date any Person, acting
alone or with a group of Persons (within the meaning of Section 13(d) of the
Securities Act of 1934, as amended) acting in concert, (i) shall have or acquire
beneficial ownership of securities (or options therefor) having 20% or more of
the ordinary voting power of the Company, or (ii) shall possess, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the Company, whether through the ownership of voting securities, by
contract or otherwise; or

        (j)     ERISA. (i) Any Termination Event shall occur (x) with respect to
any Pension Plan (other than a Multiemployer Plan) or (y) with respect to any
other retirement plan subject to Section 302 of ERISA or Section 412 of the
Code, which plan, during the five year period prior to such Termination Event,
was the responsibility in whole or in part of the Company, any Subsidiary or any
ERISA Affiliate, PROVIDED that this clause (y) shall only apply if, in
connection with such Termination Event, it is reasonably likely that liability
under Section 4069 of ERISA in an aggregate Consolidated amount in excess of
$1,000,000 will be imposed upon the Company, any Subsidiary or any ERISA
Affiliate; (ii) any Accumulated Funding Deficiency, whether or not waived, in an
aggregate Consolidated amount in excess of $1,000,000 shall exist

<PAGE>

with respect to any Pension Plan (other than a Multiemployer Plan); (iii) any
Person shall engage in any Prohibited Transaction involving any Employee Benefit
Plan; (iv) the Company, any Subsidiary or any ERISA Affiliate shall fail to pay
when due an amount which is payable by it to the PBGC or to a Pension Plan
(including a Multiemployer Plan) under Title IV of ERISA; (v) the imposition of
any tax under Section 4980(B)(a) of the Code; or (vi) the assessment of a civil
penalty with respect to any Employee Benefit Plan under Section 502(c) of ERISA;
in each case, to the extent such event or condition would have a Material
Adverse Effect; or

        (k)     INVALIDITY OF LOAN DOCUMENTS. Any Loan Document, at any time
after its execution and delivery and for any reason other than as expressly
permitted hereunder or satisfaction in full of all the Obligations, ceases to be
in full force and effect; or any Loan Party or any other Person contests in any
manner the validity or enforceability of any Loan Document; or any Loan Party
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document.

        8.02    REMEDIES UPON EVENT OF DEFAULT.

        If any Event of Default occurs and is continuing, the Administrative
Agent shall, at the request of, or may, with the consent of, the Required
Lenders, take any or all of the following actions:

                (a)     declare the commitment of each Lender to make Loans and
        any obligation of the L/C Issuer to make L/C Credit Extensions to be
        terminated, whereupon such commitments and obligation shall be
        terminated;

                (b)     declare the unpaid principal amount of all outstanding
        Loans, all interest accrued and unpaid thereon, and all other amounts
        owing or payable hereunder or under any other Loan Document to be
        immediately due and payable, without presentment, demand, protest or
        other notice of any kind, all of which are hereby expressly waived by
        the Borrower;

                (c)     require that the Company Cash Collateralize the L/C
        Obligations (in an amount equal to the then Outstanding Amount thereof);
        and

                (d)     exercise on behalf of itself and the Lenders all rights
        and remedies available to it and the Lenders under the Loan Documents;

PROVIDED, HOWEVER, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Company to Cash Collateralize the L/C Obligations as aforesaid
shall automatically become effective, in each case without further act of the
Administrative Agent or any Lender.

<PAGE>

        8.03    APPLICATION OF FUNDS.

        After the exercise of remedies provided for in SECTION 8.02 (or after
the Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set
forth in the proviso to SECTION 8.02), any amounts received on account of the
Obligations shall be applied by the Administrative Agent in the following order:

                FIRST, to payment of that portion of the Obligations
        constituting fees, indemnities, expenses and other amounts (including
        fees, charges and disbursements of counsel to the Administrative Agent
        and amounts payable under ARTICLE III) payable to the Administrative
        Agent in its capacity as such;

                SECOND, to payment of that portion of the Obligations
        constituting fees, indemnities and other amounts (other than principal
        and interest) payable to the Lenders and the L/C Issuer (including fees,
        charges and disbursements of counsel to the respective Lenders and the
        L/C Issuer and amounts payable under ARTICLE III), ratably among them in
        proportion to the amounts described in this clause SECOND payable to
        them;

                THIRD, to payment of that portion of the Obligations
        constituting accrued and unpaid interest on the Loans, L/C Borrowings
        and other Obligations, ratably among the Lenders and the L/C Issuer in
        proportion to the respective amounts described in this clause THIRD
        payable to them;

                FOURTH, to (a) payment of that portion of the Obligations
        constituting unpaid principal of the Loans and L/C Borrowings, (b)
        payment of breakage, termination or other amounts owing in respect of
        any Swap Contract between any Loan Party and any Lender or any Affiliate
        of a Lender, and (c) to the Administrative Agent for the account of the
        L/C Issuer, to Cash Collateralize that portion of L/C Obligations
        comprised of the aggregate undrawn amount of Letters of Credit, ratably
        among such parties in proportion to the respective amounts described in
        this clause FOURTH held by them; and

                LAST, the balance, if any, after all of the Obligations have
        been indefeasibly paid in full, to the Company or as otherwise required
        by Law.

Subject to SECTION 2.04(C), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fourth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

<PAGE>

                                   ARTICLE IX
                              ADMINISTRATIVE AGENT

        9.01    APPOINTMENT AND AUTHORITY.

        Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank
of America to act on its behalf as the Administrative Agent hereunder and under
the other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article
are solely for the benefit of the Administrative Agent, the Lenders and the L/C
Issuer, and neither the Company nor any other Loan Party shall have rights as a
third party beneficiary of any of such provisions.

        9.02    RIGHTS AS A LENDER.

        The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity. Such Person and its Affiliates may
accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Company or any Subsidiary or other Affiliate thereof as if such Person were
not the Administrative Agent hereunder and without any duty to account therefor
to the Lenders.

        9.03    EXCULPATORY PROVISIONS.

        The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Administrative Agent:

                (a)     shall not be subject to any fiduciary or other implied
        duties, regardless of whether a Default has occurred and is continuing;

                (b)     shall not have any duty to take any discretionary action
        or exercise any discretionary powers, except discretionary rights and
        powers expressly contemplated hereby or by the other Loan Documents that
        the Administrative Agent is required to exercise as directed in writing
        by the Required Lenders (or such other number or percentage of the
        Lenders as shall be expressly provided for herein or in the other Loan
        Documents), PROVIDED that the Administrative Agent shall not be required
        to take any action that, in its opinion or the opinion of its counsel,
        may expose the Administrative Agent to liability or that is contrary to
        any Loan Document or applicable law; and

                (c)     shall not, except as expressly set forth herein and in
        the other Loan Documents, have any duty to disclose, and shall not be
        liable for the failure to disclose,

<PAGE>

        any information relating to the Company or any of its Affiliates that is
        communicated to or obtained by the Person serving as the Administrative
        Agent or any of its Affiliates in any capacity.

        The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in SECTIONS 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Company, a
Lender or the L/C Issuer.

        The Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in ARTICLE IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

        9.04    RELIANCE BY ADMINISTRATIVE AGENT.

        The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit, that by its terms must be fulfilled to the satisfaction
of a Lender or the L/C Issuer, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the L/C Issuer unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the L/C Issuer prior to the making of such Loan or the issuance of such
Letter of Credit. The Administrative Agent may consult with legal counsel (who
may be counsel for the Company), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

        9.05    DELEGATION OF DUTIES.

        The Administrative Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub-agents appointed by the Administrative Agent. The
Administrative Agent and any such

<PAGE>

sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory
provisions of this Article shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

        9.06    RESIGNATION OF ADMINISTRATIVE AGENT.

        The Administrative Agent may at any time give notice of its resignation
to the Lenders, the L/C Issuer and the Company. Upon receipt of any such notice
of resignation, the Required Lenders shall have the right, in consultation with
the Company, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a
successor Administrative Agent meeting the qualifications set forth above;
PROVIDED that if the Administrative Agent shall notify the Company and the
Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (1) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents and (2) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender and
the L/C Issuer directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section). The fees payable by the
Company to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Company and such
successor. After the retiring Administrative Agent's resignation hereunder and
under the other Loan Documents, the provisions of this Article and SECTION 10.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

        Any resignation by Bank of America as Administrative Agent pursuant to
this Section shall also constitute its resignation as an L/C Issuer and Swing
Line Lender. Upon the acceptance of a successor's appointment as Administrative
Agent hereunder, (a) such successor shall succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring L/C Issuer and
Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be
discharged from all of their respective duties and obligations hereunder or
under the other Loan Documents, and (c) the successor L/C Issuer shall issue
letters of credit in substitution for the Letters of Credit, if any, outstanding
at the time of such succession or make other arrangement satisfactory to the
retiring L/C Issuer to effectively assume the obligations of the retiring L/C
Issuer with respect to such Letters of Credit.

<PAGE>

        9.07    NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.

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

        9.08    NO OTHER DUTIES, ETC.

        Anything herein to the contrary notwithstanding, none of the Book
Managers, Arrangers or other agents listed on the cover page hereof shall have
any powers, duties or responsibilities under this Agreement or any of the other
Loan Documents, except in its capacity, as applicable, as the Administrative
Agent, a Lender or the L/C Issuer hereunder.

        9.09    ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.

        In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the applicable Borrower) shall be entitled and empowered, by intervention in
such proceeding or otherwise

                (a)     to file and prove a claim for the whole amount of the
        principal and interest owing and unpaid in respect of the Loans, L/C
        Obligations and all other Obligations that are owing and unpaid and to
        file such other documents as may be necessary or advisable in order to
        have the claims of the Lenders, the L/C Issuer and the Administrative
        Agent (including any claim for the reasonable compensation, expenses,
        disbursements and advances of the Lenders, the L/C Issuer and the
        Administrative Agent and their respective agents and counsel and all
        other amounts due the Lenders, the L/C Issuer and the Administrative
        Agent under SECTIONS 2.04(I) and (J), 2.10 and 10.04) allowed in such
        judicial proceeding; and

                (b)     to collect and receive any monies or other property
        payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the

<PAGE>

Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under SECTIONS 2.10
and 10.04.

        Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender or
the L/C Issuer any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.

        9.10    COLLATERAL AND GUARANTY MATTERS.

        The Lenders and the L/C Issuer irrevocably authorize the Administrative
Agent, at its option and in its discretion,

                (a)     to release any Lien on any property now or hereafter
        granted to or held by the Administrative Agent under any Loan Document
        (i) upon termination of the Aggregate Commitments and payment in full of
        all Obligations (other than contingent indemnification obligations) and
        the expiration or termination of all Letters of Credit, (ii) that is
        sold or to be sold as part of or in connection with any sale permitted
        hereunder or under any other Loan Document, or (iii) subject to SECTION
        10.01, if approved, authorized or ratified in writing by the Required
        Lenders;

                (b)     to subordinate any Lien on any property granted to or
        held by the Administrative Agent under any Loan Document to the holder
        of any Lien on such property that is permitted by SECTION 7.01(I); and

                (c)     to release any Guarantor from its obligations under the
        Guaranty if such Person ceases to be a Subsidiary as a result of a
        transaction permitted hereunder.

        Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
or subordinate its interest in particular types or items of property, or to
release any Guarantor from its obligations under the Guaranty pursuant to this
SECTION 9.10.

                                    ARTICLE X
                                  MISCELLANEOUS

        10.01   AMENDMENTS, ETC.

        No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Company or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Company or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and

<PAGE>

each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; PROVIDED, HOWEVER, that no such
amendment, waiver or consent shall:

                (a)     waive any condition set forth in SECTION 4.01(A) without
        the written consent of each Lender;

                (b)     extend or increase the Commitment of any Lender (or
        reinstate any Commitment terminated pursuant to SECTION 8.02) without
        the written consent of such Lender;

                (c)     postpone any date fixed by this Agreement or any other
        Loan Document for any payment of principal, interest, fees or other
        amounts due to the Lenders (or any of them) hereunder or under any other
        Loan Document without the written consent of each Lender directly
        affected thereby;

                (d)     reduce the principal of, or the rate of interest
        specified herein on, any Loan or L/C Borrowing, or (subject to clause
        (v) of the second proviso to this SECTION 10.01) any fees or other
        amounts payable hereunder or under any other Loan Document without the
        written consent of each Lender directly affected thereby; PROVIDED,
        HOWEVER, that only the consent of the Required Lenders shall be
        necessary (i) to amend the definition of "Default Rate" or to waive any
        obligation of the Borrowers to pay interest or Letter of Credit Fees at
        the Default Rate or (ii) to amend any financial covenant hereunder (or
        any defined term used therein) even if the effect of such amendment
        would be to reduce the rate of interest on any Loan or L/C Borrowing or
        to reduce any fee payable hereunder;

                (e)     change SECTION 2.14 or SECTION 8.03 in a manner that
        would alter the pro rata sharing of payments required thereby without
        the written consent of each Lender;

                (f)     change any provision of this Section or the definition
        of "Required Lenders" or any other provision hereof specifying the
        number or percentage of Lenders required to amend, waive or otherwise
        modify any rights hereunder or make any determination or grant any
        consent hereunder, without the written consent of each Lender; or

                (g)     release all or substantially all of the Subsidiary
        Guarantors from the Subsidiary Guaranty, or release the Company as a
        Guarantor hereunder, without the written consent of each Lender;

and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or

<PAGE>

any other Loan Document; (IV) SECTION 10.06(H) may not be amended, waived or
otherwise modified without the consent of each Granting Lender all or any part
of whose Loans are being funded by an SPC at the time of such amendment, waiver
or other modification; and (v) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.

        10.02   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 subsection (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, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

                (i)     if to Company, the Administrative Agent, the L/C Issuer
        or the Swing Line Lender, to the address, telecopier number, electronic
        mail address or telephone number specified for such Person on SCHEDULE
        10.02; and

                (ii)    if to any other Lender, to the address, telecopier
        number, electronic mail address or telephone number specified 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 subsection (b) below, shall be effective as provided in such
subsection (b).

        (b)     ELECTRONIC COMMUNICATIONS. Notices and other communications to
the Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, PROVIDED that the
foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to
ARTICLE II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Company
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
PROVIDED that approval of such procedures 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"

<PAGE>

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

        (c)     CHANGE OF ADDRESS, ETC. Each of the Company, the Administrative
Agent, the L/C Issuer and the Swing Line Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the other parties hereto. Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the Company, the Administrative Agent, the L/C Issuer and the Swing
Line Lender.

        (d)     RELIANCE BY ADMINISTRATIVE AGENT, L/C ISSUER AND LENDERS. The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Committed Loan Notices and Swing
Line Loan Notices) purportedly given by or on behalf of the Company and/or any
Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Loan Parties shall jointly and
severally shall indemnify the Administrative Agent, the L/C Issuer, each Lender
and the Related Parties of each of them from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of any Borrower. All telephonic notices to and
other telephonic communications with the Administrative Agent may be recorded by
the Administrative Agent, and each of the parties hereto hereby consents to such
recording.

        10.03   NO WAIVER; CUMULATIVE REMEDIES.

        No failure by any Lender, the L/C Issuer or the Administrative Agent to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.

        10.04   EXPENSES; INDEMNITY; DAMAGE WAIVER.

        (a)     COSTS AND EXPENSES. The Company shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable

<PAGE>

out-of-pocket expenses incurred by the L/C Issuer in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, any Lender or the L/C Issuer (including the fees, charges
and disbursements of any counsel for the Administrative Agent, any Lender or the
L/C Issuer). in connection with the enforcement or protection of its rights (A)
in connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Loans made or Letters
of Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.

        (b)     INDEMNIFICATION BY THE BORROWERS. Each Borrower jointly and
severally agrees to indemnify the Administrative Agent (and any sub-agent
thereof), each Lender and the L/C Issuer, and each Related Party of any of the
foregoing Persons (each such Person being called an "INDEMNITEE") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the fees, charges and disbursements
of any counsel for any Indemnitee), incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by the Company or any other Loan
Party arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Company or any of its Subsidiaries, or any Environmental Liability related
in any way to the Company or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Company or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto; PROVIDED that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Company or any other Loan Party against
an Indemnitee for breach in bad faith of such Indemnitee's obligations hereunder
or under any other Loan Document, if the Company or such Loan Party has obtained
a final and nonappealable judgment in its favor on such claim as determined by a
court of competent jurisdiction.

        (c)     REIMBURSEMENT BY LENDERS. To the extent that the Company and/or
any other Loan Party for any reason fails to indefeasibly pay any amount
required under subsection (a) or (b) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related
Party of any of the foregoing, each Lender severally agrees to pay to the
Administrative Agent (or any such sub-agent), the L/C Issuer or such Related
Party, as the case may be, such Lender's Applicable Percentage (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, PROVIDED that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the

<PAGE>

case may be, was incurred by or asserted against the Administrative Agent (or
any such sub-agent) or the L/C Issuer in its capacity as such, or against any
Related Party of any of the foregoing acting for the Administrative Agent (or
any such sub-agent) or L/C Issuer in connection with such capacity. The
obligations of the Lenders under this subsection (c) are subject to the
provisions of SECTION 2.12(D).

        (d)     WAIVER OF CONSEQUENTIAL DAMAGES, ETC. To the fullest extent
permitted by applicable law, each Loan Party agrees that it shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. No Indemnitee referred to in
subsection (b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

        (e)     PAYMENTS. All amounts due under this Section shall be payable
not later than ten Business Days after demand therefor.

        (f)     SURVIVAL. The agreements in this Section shall survive the
resignation of the Administrative Agent and the L/C Issuer, the replacement of
any Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.

        10.05   PAYMENTS SET ASIDE.

        To the extent that any payment by or on behalf of a Borrower is made to
the Administrative Agent, the L/C Issuer or any Lender, or the Administrative
Agent, the L/C Issuer or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent,
the L/C Issuer or such Lender in its discretion) to be repaid to a trustee,
receiver or any other party, in connection with any proceeding under any Debtor
Relief Law or otherwise, then (a) to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such
setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees
to pay to the Administrative Agent upon demand its applicable share (without
duplication) of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect. The obligations of the Lenders and the L/C Issuer under clause
(b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.

<PAGE>

        10.06   SUCCESSORS AND ASSIGNS.

        (a)     SUCCESSORS AND ASSIGNS GENERALLY. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that
neither the Company nor any other Loan Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection (d)
of this Section, (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) of this Section, or (iv) to an SPC
in accordance with the provisions of subsection (h) of this Section (and any
other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the L/C Issuer and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

        (b)     ASSIGNMENTS BY LENDERS. Any Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this subsection (b), participations in L/C
Obligations and in Swing Line Loans) at the time owing to it); PROVIDED that

                (i)     except in the case of an assignment of the entire
        remaining amount of the assigning Lender's Commitment and the Loans at
        the time owing to it or in the case of an assignment to a Lender or an
        Affiliate of a Lender or an Approved Fund with respect to a Lender, the
        aggregate amount of the Commitment (which for this purpose includes
        Loans outstanding thereunder) or, if the Commitment is not then in
        effect, the principal outstanding balance of the Loans of the assigning
        Lender subject to each such assignment, determined as of the date the
        Assignment and Assumption with respect to such assignment is delivered
        to the Administrative Agent or, if "Trade Date" is specified in the
        Assignment and Assumption, as of the Trade Date, shall not be less than
        $5,000,000 unless each of the Administrative Agent and, so long as no
        Event of Default has occurred and is continuing, the Company, on behalf
        of the Borrowers, otherwise consents (each such consent not to be
        unreasonably withheld or delayed);

                (ii)    each partial assignment shall be made as an assignment
        of a proportionate part of all the assigning Lender's rights and
        obligations under this Agreement with respect to the Loans or the
        Commitment assigned, except that this clause (ii) shall not apply to
        rights in respect of Bid Loans or Swing Line Loans;

                (iii)   any assignment of a Commitment must be approved by the
        Administrative Agent, the L/C Issuer, the Swing Line Lender and, so long
        as no Event of Default has occurred and is continuing, the Company, on
        behalf of the Borrowers (each such consent

<PAGE>

        not to be unreasonably withheld or delayed), unless the Person that is
        the proposed assignee is itself a Lender (whether or not the proposed
        assignee would otherwise qualify as an Eligible Assignee); and

                (iv)    the parties to each assignment shall execute and deliver
        to the Administrative Agent an Assignment and Assumption, together with
        a processing and recordation fee of $3,500, and the Eligible Assignee,
        if it shall not be a Lender, shall deliver to the Administrative Agent
        an Administrative Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of SECTIONS 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the applicable Borrower (at its expense) shall execute
and deliver a Note to the assignee Lender. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection 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
subsection (d) of this Section.

        (c)     REGISTER. The Administrative Agent, acting solely for this
purpose as an agent of the Borrowers, shall maintain at the Administrative
Agent's Office 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 and L/C Obligations 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 Borrowers, 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 each of the Company and the L/C
Issuer at any reasonable time and from time to time upon reasonable prior
notice. In addition, at any time that a request for a consent for a material or
substantive change to the Loan Documents is pending, any Lender wishing to
consult with other Lenders in connection therewith may request and receive from
the Administrative Agent a copy of the Register.

        (d)     PARTICIPATIONS. Any Lender may at any time, without the consent
of, or notice to, the Borrowers or the Administrative Agent, sell participations
to any Person (other than a natural person or the Company or any of the
Company's Affiliates or Subsidiaries) (each, a "PARTICIPANT") in all or a
portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender's participations in L/C Obligations and/or Swing Line Loans) owing to
it); PROVIDED that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain

<PAGE>

solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Administrative Agent, the Lenders and
the L/C Issuer shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement.

        Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
SECTION 10.01 that affects such Participant. Subject to subsection (e) of this
Section, each Borrower agrees that each Participant shall be entitled to the
benefits of SECTIONS 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of SECTION 10.08 as though it were a Lender, PROVIDED
such Participant agrees to be subject to SECTION 2.13 as though it were a
Lender.

        (e)     LIMITATIONS UPON PARTICIPANT RIGHTS. A Participant shall not be
entitled to receive any greater payment under SECTION 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Company's prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of SECTION 3.01 unless the Company is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
applicable Borrower, to comply with SECTION 3.01(E) as though it were a Lender.

        (f)     CERTAIN PLEDGES. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; PROVIDED that no such pledge or assignment shall release such Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.

        (g)     ELECTRONIC EXECUTION OF ASSIGNMENTS. The words "execution,"
"signed," "signature," and words of like import in any Assignment and Assumption
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, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

        (h)     SPECIAL PURPOSE FUNDING VEHICLES. Notwithstanding anything to
the contrary contained herein, any Lender (a "GRANTING LENDER") may grant to a
special purpose funding vehicle identified as such in writing from time to time
by the Granting Lender to the Administrative Agent and the Company, on behalf of
the Borrowers (an "SPC") the option to

<PAGE>

provide all or any part of any Committed Loan that such Granting Lender would
otherwise be obligated to make pursuant to this Agreement; PROVIDED that (i)
nothing herein shall constitute a commitment by any SPC to fund any Committed
Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails
to make all or any part of such Committed Loan, the Granting Lender shall be
obligated to make such Committed Loan pursuant to the terms hereof or, if it
fails to do so, to make such payment to the Administrative Agent as is required
under SECTION 2.12(B)(II). Each party hereto hereby agrees that (i) neither the
grant to any SPC nor the exercise by any SPC of such option shall increase the
costs or expenses or otherwise increase or change the obligations of any
Borrower under this Agreement (including its obligations under SECTION 3.04),
(ii) no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement for which a Lender would be liable, and (iii) the Granting
Lender shall for all purposes, including the approval of any amendment, waiver
or other modification of any provision of any Loan Document, remain the lender
of record hereunder. The making of a Committed Loan by an SPC hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Committed Loan were made by such Granting Lender. In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior debt of any SPC, it will not institute against, or join any other Person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding under the laws of the United States or any
State thereof. Notwithstanding anything to the contrary contained herein, any
SPC may (i) with notice to, but without prior consent of the Company, on behalf
of the Borrowers, and the Administrative Agent, assign all or any portion of its
right to receive payment with respect to any Committed Loan to the Granting
Lender and (ii) disclose on a confidential basis any non-public information
relating to its funding of Committed Loans to any rating agency, commercial
paper dealer or provider of any surety or guarantee or credit or liquidity
enhancement to such SPC.

        (i)     RESIGNATION AS L/C ISSUER OR SWING LINE LENDER AFTER ASSIGNMENT.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its Commitment and Loans pursuant to subsection (b)
above, Bank of America may, (i) upon 30 days' notice to the Company and the
Lenders, resign as an L/C Issuer and/or (ii) upon 30 days' notice to the
Company, resign as Swing Line Lender. In the event of any such resignation as an
L/C Issuer or Swing Line Lender, the Company shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder;
PROVIDED, HOWEVER, that no failure by the Company to appoint any such successor
shall affect the resignation of Bank of America as an L/C Issuer or Swing Line
Lender, as the case may be. If Bank of America resigns as L/C Issuer, it shall
retain all the rights and obligations of the L/C Issuer hereunder with respect
to all Letters of Credit outstanding as of the effective date of its resignation
as an L/C Issuer and all L/C Obligations with respect thereto (including the
right to require the Lenders to make Base Rate Committed Loans or fund risk
participations in Unreimbursed Amounts pursuant to SECTION 2.04(C)). If Bank of
America resigns as Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Base Rate Committed Loans or fund risk
participations in outstanding Swing Line Loans pursuant to SECTION 2.05(C).

<PAGE>

        10.07   TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.

        Each of the Administrative Agent, the Lenders and the L/C Issuer agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its Affiliates and to its and its
Affiliates' respective partners, directors, officers, employees, agents,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
a Loan Party and its obligations, (g) with the consent of the Company or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than the Company.

        For purposes of this Section, "INFORMATION" means all information
received from the Company or any Subsidiary relating to the Company or any
Subsidiary or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the L/C
Issuer on a nonconfidential basis prior to disclosure by the Company or any
Subsidiary, PROVIDED that, in the case of information received from the Company
or any Subsidiary after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

        10.08   RIGHT OF SETOFF.

        If an Event of Default shall have occurred and be continuing, each
Lender, the L/C Issuer and each of their respective Affiliates is hereby
authorized at any time and from time to time, after obtaining the prior written
consent of the Administrative Agent, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender, the
L/C Issuer or any such Affiliate to or for the credit or the account of the
Company or any other Loan Party against any and all of the obligations of the
Company or such Loan Party now or hereafter existing under this Agreement or any
other Loan Document to such Lender or the L/C Issuer, irrespective of whether or
not such Lender or the L/C Issuer shall have made any demand under this
Agreement or any other

<PAGE>

Loan Document and although such obligations of the Company or such Loan Party
may be contingent or unmatured or are owed to a branch or office of such Lender
or the L/C Issuer different from the branch or office holding such deposit or
obligated on such indebtedness. The rights of each Lender, the L/C Issuer and
their respective Affiliates under this Section are in addition to other rights
and remedies (including other rights of setoff) that such Lender, the L/C Issuer
or their respective Affiliates may have. Each Lender and the L/C Issuer agrees
to notify the Company and the Administrative Agent promptly after any such
setoff and application, PROVIDED that the failure to give such notice shall not
affect the validity of such setoff and application.

        10.09   INTEREST RATE LIMITATION.

        Notwithstanding anything to the contrary contained in any Loan Document,
the interest paid or agreed to be paid under the Loan Documents shall not exceed
the maximum rate of non-usurious interest permitted by applicable Law (the
"MAXIMUM RATE"). If the Administrative Agent or any Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the applicable Borrower. In determining whether the
interest contracted for, charged, or received by the Administrative Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

        10.10   COUNTERPARTS; INTEGRATION; 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. This
Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in SECTION 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
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.

        10.11   SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

        All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof. Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and

<PAGE>

notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Credit Extension, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.

        10.12   SEVERABILITY.

        If any provision of this Agreement or the other Loan Documents is held
to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby and (b) the parties shall
endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

        10.13   REPLACEMENT OF LENDERS.

        If any Lender requests compensation under SECTION 3.04, or if a Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to SECTION 3.01, or if any
Lender is a Defaulting Lender, then the Company may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, SECTION 10.06), all
of its interests, rights and obligations under this Agreement and the related
Loan Documents to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment), PROVIDED that:

                (a)     the Company shall have paid to the Administrative Agent
        the assignment fee specified in SECTION 10.06(B);

                (b)     such Lender shall have received payment of an amount
        equal to the outstanding principal of its Loans and L/C Advances,
        accrued interest thereon, accrued fees and all other amounts payable to
        it hereunder and under the other Loan Documents (including any amounts
        under SECTION 3.05) from the assignee (to the extent of such outstanding
        principal and accrued interest and fees) or the Company (in the case of
        all other amounts);

                (c)     in the case of any such assignment resulting from a
        claim for compensation under SECTION 3.04 or payments required to be
        made pursuant to SECTION 3.01, such assignment will result in a
        reduction in such compensation or payments thereafter; and

                (d)     such assignment does not conflict with applicable Laws.

<PAGE>

        A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Company to require such assignment and delegation
cease to apply.

        10.14   GOVERNING LAW; JURISDICTION; ETC.

        (a)     GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

        (b)     SUBMISSION TO JURISDICTION. THE COMPANY AND EACH OTHER LOAN
PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN
NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT
OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE COMPANY OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION.

        (c)     WAIVER OF VENUE. THE COMPANY AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS
SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

        (d)     SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY

<PAGE>

PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

        10.15   WAIVER OF JURY TRIAL.

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

        10.16   USA PATRIOT ACT NOTICE.

        Each Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies each Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "ACT"), it
is required to obtain, verify and record information that identifies such
Borrower, which information includes the name and address of such Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify such Borrower in accordance with the Act.

                                   ARTICLE XI
                             GUARANTY OF THE COMPANY

        In order to induce the Administrative Agent, the L/C Issuer and the
Lenders to enter into this Agreement, to make the Loans contemplated hereby and
to issue and participate in the Letters of Credit, the Company hereby agrees as
follows:

        11.01   GUARANTY.

        The Company hereby absolutely, irrevocably and unconditionally
guarantees to the Administrative Agent, the L/C Issuer, the Swing Line Lender,
the Lenders, and each Affiliate of a Lender that enters into a Swap Contract,
the full and prompt payment of the Obligations when due, whether at stated
maturity, by acceleration, by mandatory prepayment, by notice of intention to
prepay or otherwise, including all principal and interest (whether accruing
before or after any event set forth in SECTIONS 8.01 (H)(A) or (B) and whether
or not allowed) under this Agreement to which it is a party and whether direct,
indirect or contingent, incurred as primary

<PAGE>

obligor or otherwise, secured or unsecured and all costs and expenses incurred
by the Administrative Agent, the L/C Issuer, the Swing Line Lender, the Lenders
or any such Affiliate of a Lender in enforcing any thereof, whether or not suit
is instituted (as the same may be amended, increased, modified, renewed,
refunded, extended, increased or refinanced from time to time, collectively, the
"COMPANY GUARANTEED OBLIGATIONS"). Regardless of whether the Administrative
Agent, the L/C Issuer, the Swing Line Lender, the Lenders or any such Affiliate
of a Lender are prevented or otherwise hindered by law from collecting or
otherwise enforcing any of the Company Guaranteed Obligations in accordance with
their terms, whether as the result of the commencement of any bankruptcy or
similar proceedings against any of the Subsidiary Borrowers or otherwise, the
Administrative Agent, the L/C Issuer, the Swing Line Lender, the Lenders and any
such Affiliate of a Lender shall be entitled to receive hereunder from the
Company upon demand therefor the sums which would have been otherwise due had
such collection or enforcement not been prevented or hindered.

        11.02   ABSOLUTE OBLIGATION.

        The obligations of the Company under this Guaranty shall be absolute,
irrevocable, unconditional and continuing until the Aggregate Commitments have
been terminated, all Letters of Credit have expired or otherwise terminated and
all of the Company Guaranteed Obligations are indefeasibly paid in full in cash
and shall not be subject to any counterclaim, right or set-off or any defense
whatsoever. The Company acknowledges and agrees that the Administrative Agent,
the L/C Issuer, the Swing Line Lender, the Lenders and each applicable Affiliate
of any Lender have no responsibility or liability, and shall not be deemed to
have made any representation or warranty, with respect to the validity,
enforceability or collectibility of this Agreement or any document executed or
delivered in connection therewith, or any preference or priority ranking with
respect to the payment of the Company Guaranteed Obligations or the validity or
perfection of any security interest under any of this Agreement. The
Administrative Agent, the L/C Issuer, the Swing Line Lender, the Lenders and any
such Affiliate of a Lender shall have no obligation to enforce this Agreement or
any collateral security hereunder, by any action, including, without limitation,
making or perfecting any claim against any of the Subsidiary Borrowers, prior to
being entitled to the benefits of this Guaranty. Nothing except the indefeasible
cash payment in full of the Company Guaranteed Obligations shall release the
Company from liability under this Guaranty. The Company hereby irrevocably and
forever waives any right to succeed to any of the rights of the Administrative
Agent, the L/C Issuer, the Swing Line Lender, the Lenders or any Affiliate of a
Lender against the Subsidiary Borrowers under this Agreement or any Swap
Contract, whether by way of subrogation or otherwise until all Company
Guaranteed Obligations have been indefeasibly paid in full in cash.

        11.03   GUARANTY OF PAYMENT.

        This Guaranty is a guaranty of payment. The liability and obligations of
the Company shall be primary, direct and absolute, and the Company hereby waives
any right to require that resort be had by the Administrative Agent, the L/C
Issuer, the Swing Line Lender, the Lenders and any Affiliate of any Lender
against any of the Subsidiary Borrowers or any other Person, or to require that
resort be had by the Administrative Agent, the L/C Issuer, the Swing Line
Lender, the Lenders or any such Affiliate of a Lender to any direct or indirect
collateral security. The

<PAGE>

Administrative Agent may, at its option, proceed against the Company in the
first instance to enforce any obligation to collect any monies, the payment of
which is guaranteed hereby, without first proceeding against any of the
Subsidiary Borrowers or any other Person and without first resorting to any
other remedies, as the Administrative Agent may deem advisable. The liability of
the Company hereunder shall in no way be affected or impaired by any acceptance
by the Administrative Agent, the L/C Issuer, the Swing Line Lender, the Lenders
or any such Affiliate of a Lender or any direct or indirect security for, or
other guarantor upon, any indebtedness, liability or obligation of the
Subsidiary Borrowers to the Administrative Agent, the L/C Issuer, the Swing Line
Lender, the Lenders or any Affiliate of a Lender, or by any failure, delay,
neglect or omission of the Administrative Agent, the L/C Issuer, the Swing Line
Lender, any Lenders or any Affiliate of a Lender to realize upon or perfect any
such security, indebtedness, liability or obligation, or by any direct or
indirect collateral security therefor, or by the bankruptcy, reorganization or
insolvency of, or by any other proceeding for the relief of debtors commenced
against, any of the Subsidiary Borrowers or any other Person, or by the release,
exchange, substitution or any loss or impairment of any collateral security, or
the liability of any other Person in respect of the Company Guaranteed
Obligations, including, without limitation, the release of any other guarantor
or any collateral security provided thereby, or by the invalidity or
unenforceability of this Agreement or any Swap Contract, or any of the Company
Guaranteed Obligations against any of the Subsidiary Borrowers for any reason,
or by any amendment or waiver of or any consent to or departure from this
Agreement or any Swap Contract, or by any reason or circumstance which might
constitute a defense available to or a discharge of any Subsidiary Borrower or
the Company in its capacity as a guarantor, including, without limitation, any
defense of sovereign immunity or any similar defense available to any Subsidiary
Borrower or the Company under applicable law, from any of its obligations
(including, without limitation, in respect of the Company Guaranteed
Obligations), or by the fact that at any time or from time to time none of the
Company Guaranteed Obligations may be outstanding, or by the merger or
consolidation of any Subsidiary Borrower with any other Person, or by the
dissolution or liquidation of any Subsidiary Borrower, or by any law, rule,
regulation or decree now or hereafter in effect which might affect any of the
terms or conditions of the Company Guaranteed Obligations, or by the preference,
priority ranking or collectibility of any of the Company Guaranteed Obligations,
or by the existence or exercise of any right of set-off by the Administrative
Agent, the L/C Issuer, the Swing Line Lender, any Lender or any Affiliate of a
Lender, or by any other reason whatsoever.

        11.04   REPAYMENT IN BANKRUPTCY.

        If, at any time or times subsequent to the performance by the Company of
its obligations hereunder or the termination of this Guaranty, the
Administrative Agent, the L/C Issuer, the Swing Line Lender, any Lender of any
Affiliate of any Lender shall be required to repay any amounts previously paid
by or on behalf of any of the Subsidiary Borrowers in reduction of the Company
Guaranteed Obligations under this Agreement or any Swap Contract by virtue of an
order of any court having jurisdiction in the premises, including, without
limitation, as a result of an adjudication that such amounts constituted
preferential payments or fraudulent conveyances, this Guaranty shall continue to
be effective, or shall be reinstated, as the case may be, all as though such
payments had not been made.

<PAGE>

        11.05   OTHER PROVISIONS IN GUARANTY.

        (i)     No failure by the Administrative Agent, the L/C Issuer, the
Swing Line Lender, any Lender or any Affiliate of any Lender to exercise, and no
delay by the Administrative Agent in exercising, any right or remedy under this
Agreement or any Swap Contract shall operate as a waiver thereof.

        (ii)    The Company waives all errors or omissions of the Administrative
Agent, the L/C Issuer, the Swing Line Lender, any Lender or any Affiliate of any
Lender in connection with the administration of this Agreement, the Letters of
Credit and each Swap Contract, and any collateral security therefor, except
errors or omissions which constitute gross negligence or willful misconduct.

        (iii)   Without limiting the foregoing, the Company waives any act or
omission of the Administrative Agent, the L/C Issuer, the Swing Line Lender, any
Lender or any Affiliate of a Lender which may affect or change in any way the
liability of the Company under this Guaranty.

        (iv)    This Guaranty shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of the Administrative
Agent, the L/C Issuer, the Swing Line Lender, the Lenders any each applicable
Affiliate of any Lender and their respective successors and assigns, provided
that the Company may not assign its obligations under this Guaranty without the
consent of all of the Lenders.

        (v)     Except as expressly provided in SECTION 8.01, the Company hereby
waives presentment, demand for payment, notice of default, non-performance and
dishonor, protest and notice of protest of or in respect of this Agreement and
the incurrence of the Company Guaranteed Obligations, and notice of acceptance
of this Guaranty and reliance hereupon by the Administrative Agent, the L/C
Issuer, the Swing Line Lender, the Lenders and each applicable Affiliate of any
Lender.

        (vi)    The Company agrees that this Guaranty shall automatically
extend, without any further action, to this Agreement and each Swap Contract and
the Company Guaranteed Obligations as the same may be amended, increased,
extended, modified, supplemented or waived from time to time in accordance with
the terms hereof.

<PAGE>
<TABLE>
<CAPTION>
<S>                                                                           <C>
                                         SCHEDULE 2.01

                                          COMMITMENTS
                                  AND APPLICABLE PERCENTAGES

------------------------------------------------- -------------------- ----------------------

LENDER                                                 COMMITMENT         PRO RATA SHARE
------------------------------------------------- -------------------- ----------------------
Bank of America, N.A.                                $30,000,000.00        12.000000000%
------------------------------------------------- -------------------- ----------------------
The Bank of New York                                 $22,500,000.00        9.000000000%
------------------------------------------------- -------------------- ----------------------
Credit Suisse First Boston, acting through its
Cayman Islands Branch                                $22,500,000.00        9.000000000%
------------------------------------------------- -------------------- ----------------------
SunTrust Bank                                        $22,500,000.00        9.000000000%
------------------------------------------------- -------------------- ----------------------
Wachovia Bank National Association                   $22,500,000.00        9.000000000%
------------------------------------------------- -------------------- ----------------------
JPMorgan Chase Bank, N.A.                            $20,000,000.00        8.000000000%
------------------------------------------------- -------------------- ----------------------
Wells Fargo Bank, National Association               $20,000,000.00        8.000000000%
------------------------------------------------- -------------------- ----------------------
National City Bank                                   $20,000,000.00        8.000000000%
------------------------------------------------- -------------------- ----------------------
Fifth Third Bank                                     $20,000,000.00        8.000000000%
------------------------------------------------- -------------------- ----------------------
U.S. Bank National Association                       $15,000,000.00        6.000000000%
------------------------------------------------- -------------------- ----------------------
Sovereign Bank                                       $15,000,000.00        6.000000000%
------------------------------------------------- -------------------- ----------------------
Bank of Montreal                                     $10,000,000.00        4.000000000%
------------------------------------------------- -------------------- ----------------------
Israel Discount Bank of New York                     $10,000,000.00        4.000000000%
------------------------------------------------- -------------------- ----------------------
TOTAL:                                               $250,000,000.00      100.0000000000%
------------------------------------------------- -------------------- ----------------------
</TABLE>

<PAGE>

                                  SCHEDULE 5.16

                              LIST OF SUBSIDIARIES

LINENS `N THINGS CENTER, INC.

BLOOMINGTON MN, L.T., INC.

LNT, INC.

LNT WEST, INC.

LNT SERVICES, INC.

LNT MERCHANDISING COMPANY, LLC

LNT LEASING LLC

LNT LEASING II LLC

LNT LEASING III LLC

LNT VIRGINIA LLC

CITADEL LNT LLC

LINENS `N THINGS INVESTMENT CANADA I COMPANY

LINENS `N THINGS INVESTMENT CANADA II COMPANY

LINENS `N THINGS CANADA LIMITED PARTNERSHIP

LINENS `N THINGS CANADA CORP.

<PAGE>

                                  SCHEDULE 5.17

                        LIST OF CONTRACTS WITH AFFILIATES

NONE.

<PAGE>

                                  SCHEDULE 7.01

                        LIST OF OUTSTANDING INDEBTEDNESS

Mortgage - Real Property
Amount:           $2,200,825.69
Beneficiary:      IDS Life Insurance Company of New York
                  c/o American Express Financial Corp.
                  2522 AXP Financial Center
                  Minneapolis, MN  55474
Maturity:         August 1, 2012

Standby L/C       #35243
Amount:           $395,189.00
Issuer:           The Bank of New York
Beneficiary:      Reliance Insurance Company
                  5 Hanover Square, 8th Floor
                  New York, NY  10004
Expiration:       December 13, 2004

Committed Lines of Credit

Bank:                      National City Bank
Available Amount:          Canadian $20,000,000.
Amount Outstanding:        Canadian $0.
Expiration:                December 31, 2004

Bank                       Canadian Imperial Bank of Commerce
Available Amount:          Canadian $15,000,000.
Amount Outstanding:        Canadian $0.
Expiration:                June 16, 2005

<PAGE>

                                  SCHEDULE 7.02

                             LIST OF EXISTING LIENS

Mortgage - Real Property
Amount:           $2,200,825.69
Beneficiary:      IDS Life Insurance Company of New York
                  c/o American Express Financial Corp.
                  2522 AXP Financial Center
                  Minneapolis, MN  55474
Maturity:         August 1, 2012

<PAGE>

                                  SCHEDULE 7.12

                    LIST OF INVESTMENTS, ACQUISITIONS, LOANS

NONE.

<PAGE>

                                 SCHEDULE 10.02

                         ADMINISTRATIVE AGENT'S OFFICE,
                          CERTAIN ADDRESSES FOR NOTICES

BORROWERS:

Linens 'N Things, Inc.
6 Brighton Road
Clifton, New Jersey 07012
Attn:  David J. Dick
Telephone: (973) 614-7054
Facsimile: (973) 249-4330
Electronic Mail: ddick@lnt.com

ADMINISTRATIVE AGENT:

ADMINISTRATIVE AGENT'S OFFICE
(FOR PAYMENTS AND REQUESTS FOR CREDIT EXTENSIONS):
Bank of America, N.A.
Street Address:              1850 Gateway Blvd.
Mail Code:                   CA4-706-05-09
City, State, ZIP Code:       Concord, CA 94520
Attention:                   Rachel Warford
Telephone:                   (925) 675-8361
Facsimile:                   (888) 969-9285
Electronic Mail:             Rachel.Warford@bankofamerica.com

PAYMENT INSTRUCTIONS:

Bank of America
ABA No.: 111000012
Credit Account No.: 3750836479
Attn:  Rachel Warford, Credit Services
Ref.:  Linens 'N Things, Inc.

<PAGE>

OTHER NOTICES AS ADMINISTRATIVE AGENT:

Bank of America, N.A.
Agency Management
Street Address:              100 N. Tryon St.
Mail Code:                   NC1-007-14-24
City, State, ZIP Code:       Charlotte, NC 28255
Attention:                   Judy D. Payne, Vice President
Telephone:                   (704) 386-2941
Facsimile:                   (704) 409-0310
Electronic Mail:             judy.d.payne@bankofamerica.com

L/C ISSUER:

Bank of America, N.A.
Trade Operations-Los Angeles #22621
Street Address:              333 S. Beaudry Avenue, 19th Floor
Mail Code:                   CA9-703-19-23
City, State, ZIP Code:       Los Angeles, CA 900017-1466
Attention:                   Sandra Leon
                             Vice President
Telephone:                   213-345-5231
Facsimile:                   213-345-6692
Electronic Mail:             sandra.leon@bankofamerica.com

Fleet National Bank
Street Address:              1 Fleet Way
Mail Code:                   PA6-580-02-30
City, State, ZIP Code:       Scranton, PA 18507
Attention:                   Dave Bartnik
Telephone:                   (570) 330-4319
Facsimile:                   (570) 330-3573
Electronic Mail:             david.j.bartnick@bankofamerica.com

<PAGE>

SWING LINE LENDER:

Bank of America, N.A.
Street Address:              1850 Gateway Blvd.
Mail Code:                   CA4-706-05-09
City, State, ZIP Code:       Concord, CA 94520
Attention:                   Rachel Warford
Telephone:                   (925) 675-8361
Facsimile:                   (888) 969-9285
Electronic Mail:             Rachel.Warford@bankofamerica.com

PAYMENT INSTRUCTIONS:

Bank of America
ABA No.: 111000012
Credit Account No.: 3750836479
Attn:  Rachel Warford, Credit Services
Ref.:    Linens 'N Things, Inc.

<PAGE>

                                                                       EXHIBIT A

                          FORM OF COMMITTED LOAN NOTICE

Date:  ___________, 20__

To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

        Reference is made to that certain Credit Agreement, dated as of November
23, 2004 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among Linens `N Things, Inc. a Delaware corporation
(the "COMPANY"), the Subsidiary Borrowers party thereto, the Lenders from time
to time party thereto, and Bank of America, N.A., as Administrative Agent, an
L/C Issuer and Swing Line Lender.

        The undersigned hereby requests [on behalf of [Insert name of Subsidiary
Borrower, if applicable]] (select one):

        [ ] A Borrowing of              [ ] A conversion or
            Committed Loans                 continuation of Loans

         1.   On ___________________________ (a Business Day).

         2.   In the amount of $ ___________.

         3.   Comprised of _________________.
              [Type of Committed Loan requested]

         4.   For Eurodollar Rate Loans:  with an Interest Period of  ______
              months.

        The Committed Borrowing, if any, requested herein complies with the
provisos to the first sentence of SECTION 2.01 of the Agreement.

                                               LINENS `N THINGS, INC.

                                               By: _____________________________
                                               Name: ___________________________
                                               Title: __________________________

<PAGE>

                                                                     EXHIBIT B-1

                               FORM OF BID REQUEST

To:     Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

        Reference is made to that certain Credit Agreement, dated as of November
23, 2004 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among Linens `N Things, Inc., a Delaware corporation
(the "COMPANY"), the Subsidiary Borrowers party thereto, the Lenders from time
to time party thereto, and Bank of America, N.A., as Administrative Agent, an
L/C Issuer and Swing Line Lender..

        The Lenders are invited to make Bid Loans:

        1.  On ____________________ (a Business Day).

        2.  In an aggregate amount not exceeding $_________ (with any sublimits
            set forth below).

        3.  Comprised of (select one):

        [ ] Bid Loans based on           [ ] Bid Loans based on Eurodollar
            an Absolute Rate                 [Base] Rate

<TABLE>
<CAPTION>
<S>                                                                           <C>
           BID LOAN NO.         INTEREST PERIOD REQUESTED          MAXIMUM PRINCIPAL AMOUNT REQUESTED
        -------------------- -------------------------------- ---------------------------------------------
        1                    _______days/mos                  $
        2                    _______days/mos                  $
        3                    _______days/mos                  $
</TABLE>

        The Bid Borrowing requested herein complies with the requirements of the
proviso to the first sentence of SECTION 2.03(A) of the Agreement.

        The Company authorizes the Administrative Agent to deliver this Bid
Request to the Lenders. Responses by the Lenders must be in substantially the
form of EXHIBIT B-2 to the Agreement and must be received by the Administrative
Agent by the time specified in SECTION 2.03 of the Agreement for submitting
Competitive Bids.

                                               LINENS `N THINGS, INC.

                                               By: _____________________________
                                               Name: ___________________________
                                               Title: __________________________

<PAGE>

                                                                     EXHIBIT B-2

                             FORM OF COMPETITIVE BID

                                                           _______________, 20__

To:     Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

        Reference is made to that certain Credit Agreement, dated as of November
23, 2004 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among Linens `N Things, Inc., a Delaware corporation
(the "COMPANY"), the Subsidiary Borrowers party thereto, the Lenders from time
to time party thereto, and Bank of America, N.A., as Administrative Agent, an
L/C Issuer and Swing Line Lender.

        In response to the Bid Request dated , _______________, 20__, the
undersigned offers to make the following Bid Loan(s):

        1.   Borrowing date:  (a Business Day).

        2.   In an aggregate amount not exceeding $     (with any sublimits set
             forth below).

        3.   Comprised of:

<TABLE>
<CAPTION>
<S>                                                                           <C>
                                                                                            ABSOLUTE RATE BID OR
                                INTEREST PERIOD OFFERED                                   EURODOLLAR MARGIN BID*
            BID LOAN NO.                                            BID MAXIMUM
        --------------------- ----------------------------- ----------------------------- -------------------------
        1                     _______days/mos               $                             (- +)  _______%
        2                     _______days/mos               $                             (- +)  _______%
        3                     _______days/mos               $                             (- +)  _______%
</TABLE>

Contact Person: _________________________   Telephone: _________________________

                                               [LENDER]

                                               By: _____________________________
                                               Name: ___________________________
                                               Title: __________________________

----------------------------
* Expressed in multiples of 1/100th of a basis point.

<PAGE>

.................................................................................

        THIS SECTION IS TO BE COMPLETED BY THE BORROWER IF IT WISHES TO ACCEPT
ANY OFFERS CONTAINED IN THIS COMPETITIVE BID:

The offers made above are hereby accepted in the amounts set forth below:

                     ---------------- ----------------------------
                       BID LOAN NO.    PRINCIPAL AMOUNT ACCEPTED
                     ---------------- ----------------------------
                                       $
                     ---------------- ----------------------------
                                       $
                     ---------------- ----------------------------
                                       $
                     ---------------- ----------------------------

LINENS `N THINGS, INC.

By: ________________________________
Name: ______________________________
Title: _____________________________
Date: ______________________________

<PAGE>

                                                                       EXHIBIT C

                         FORM OF SWING LINE LOAN NOTICE

                                                        Date: ___________, 20___

To:     Bank of America, N.A., as Swing Line Lender
        Bank of America, N.A., as Administrative Agent

        Ladies and Gentlemen:

        Reference is made to that certain Credit Agreement, dated as of November
23, 2004 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among Linens `N Things, Inc., a Delaware corporation
(the "COMPANY"), the Subsidiary Borrowers party thereto, the Lenders from time
to time party thereto, and Bank of America, N.A., as Administrative Agent, an
L/C Issuer and Swing Line Lender.

        The undersigned hereby requests [on behalf of [Insert name of Subsidiary
Borrower, if applicable]] a Swing Line Loan:

        1.   On _____________________   (a Business Day).

        2.   In the amount of $________________.

        The Swing Line Borrowing requested herein complies with the requirements
of the provisos to the first sentence of SECTION 2.05(A) of the Agreement.

                                               LINENS `N THINGS, INC.

                                               By: _____________________________
                                               Name: ___________________________
                                               Title: __________________________

<PAGE>

                                                                       EXHIBIT D

                                  FORM OF NOTE

                                                       Date: _____________, 20__

        FOR VALUE RECEIVED, the undersigned (the "BORROWER"), hereby promises to
pay to _____________________ or registered assigns (the "Lender"), in accordance
with the provisions of the Agreement (as hereinafter defined), the principal
amount of each Loan from time to time made by the Lender to the Borrower under
that certain Credit Agreement, dated as of November 23, 2004 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to
time, the "AGREEMENT;" the terms defined therein being used herein as therein
defined), among the Company, the Subsidiary Borrowers party thereto, the Lenders
from time to time party thereto, and Bank of America, N.A., as Administrative
Agent, an L/C Issuer and Swing Line Lender.

        The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement.
Except as otherwise provided in Section 2.05(f) of the Agreement with respect to
Swing Line Loans, all payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.

        This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. This Note is also entitled to the
benefits of the Guaranties. Upon the occurrence and continuation of one or more
of the Events of Default specified in the Agreement, all amounts then remaining
unpaid on this Note shall become, or may be declared to be, immediately due and
payable all as provided in the Agreement. Loans made by the Lender shall be
evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this
Note and endorse thereon the date, amount and maturity of its Loans and payments
with respect thereto.

        The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.

<PAGE>

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

                                               LINENS `N THINGS, INC.

                                               By: _____________________________
                                               Name: ___________________________
                                               Title: __________________________

<PAGE>
<TABLE>
<CAPTION>
<S>                                                                           <C>

                                              LOANS AND PAYMENTS WITH RESPECT THERETO

                                                                               AMOUNT OF        OUTSTANDING
                                                             END OF          PRINCIPAL OR       PRINCIPAL
                         TYPE OF           AMOUNT OF        INTEREST         INTEREST PAID      BALANCE THIS
       DATE             LOAN MADE          LOAN MADE          PERIOD          THIS DATE            DATE         NOTATION MADE BY
----------------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

                                                                       EXHIBIT E

                         FORM OF COMPLIANCE CERTIFICATE

                                 Financial Statement Date: ______________, _____

To:     Bank of America, N.A., as Administrative Agent

Re:     Credit Agreement, dated as of November 23, 2004 (as amended, restated,
        extended, supplemented or otherwise modified in writing from time to
        time, the "AGREEMENT;" among Linens `N Things, Inc., a Delaware
        corporation (the "COMPANY"), the Subsidiary Borrowers party thereto, the
        Lenders from time to time party thereto, and Bank of America, N.A., as
        Administrative Agent, an L/C Issuer and Swing Line Lender.

        Capitalized terms used herein, which are not otherwise defined herein,
        shall have the respective meanings ascribed thereto in the Credit
        Agreement.

        With respect to the financial statements delivered herewith, I hereby
        certify, on behalf of the Borrowers, to the best of my knowledge as
        follows:

                (A)     All such financial statements are true, complete and
                        correct, and

                (B)     All such financial statements have been prepared in
                        accordance with GAAP.

        In addition, I hereby certify, on behalf of the Borrowers, that to the
        best of my knowledge there exists no violation of any term, covenant or
        condition of any Loan Document and that no condition or event has
        occurred that would constitute a Default or Event of Default.

        Attached are the calculations required to establish that the Borrowers
        are in compliance with SECTIONS 6.10(A), (B) and (C), and SECTIONS 7.1,
        7.5 and 7.12 of the Agreement.

                                               LINENS `N THINGS, INC.

                                               By: _____________________________
                                               Name: ___________________________
                                               Title: __________________________

<PAGE>

                       Attachment to Officer's Certificate

                       COMPUTATION OF FINANCIAL COVENANTS

<PAGE>
<TABLE>
<CAPTION>
<S>                                                                           <C>
                                                           SCHEDULE 3
                                                 TO THE COMPLIANCE CERTIFICATE
                                                         ($ IN 000'S)

                                                             EBITDA
                                          (IN ACCORDANCE WITH THE DEFINITION OF EBITDA
                                                 AS SET FORTH IN THE AGREEMENT)

---------------------------------- ---------------- ----------------- ----------------- ----------------- ----------------
                                                                                                              Twelve
             EBITDA                    Quarter          Quarter           Quarter           Quarter           Months
                                        Ended            Ended             Ended             Ended             Ended
                                     ----------        ----------        ----------        ----------       ----------
---------------------------------- ---------------- ----------------- ----------------- ----------------- ----------------
Earnings for operations of the
Company an its Subsidiaries on a
Consolidated basis for Subject
Period
---------------------------------- ---------------- ----------------- ----------------- ----------------- ----------------
+ interest expense
---------------------------------- ---------------- ----------------- ----------------- ----------------- ----------------
+ income taxes
---------------------------------- ---------------- ----------------- ----------------- ----------------- ----------------
+ depreciation expense
---------------------------------- ---------------- ----------------- ----------------- ----------------- ----------------
+ amortization expense
---------------------------------- ---------------- ----------------- ----------------- ----------------- ----------------
+ non-recurring losses
---------------------------------- ---------------- ----------------- ----------------- ----------------- ----------------
- non recurring gains
---------------------------------- ---------------- ----------------- ----------------- ----------------- ----------------
= EBITDA
---------------------------------- ---------------- ----------------- ----------------- ----------------- ----------------
</TABLE>

<PAGE>

                                                                       EXHIBIT F

                            ASSIGNMENT AND ASSUMPTION

        This Assignment and Assumption (this "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 (the "CREDIT
AGREEMENT"), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard 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 Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, the Letters of Credit and the Swing Line Loans
included in such facilities1) and (ii) to the extent permitted to be assigned
under applicable law, all claims, suits, causes of action and any other right of
the Assignor (in its capacity as a Lender) 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 or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, 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]]

        3.      Borrower(s): Linens `N Things, Inc (the "COMPANY") and any
Subsidiary Borrowers

-------------------------
1 Include all applicable subfacilities

<PAGE>

        4.      Administrative Agent: Bank of America, N.A., as the
administrative agent under the Credit Agreement

        5.      Credit Agreement: Credit Agreement, dated as of November , 2004,
among the Company, the Subsidiary Borrowers, the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, an L/C Issuer, and
Swing Line Lender

        6.      Assigned Interest:

<TABLE>
<CAPTION>
<S>                                                                           <C>
----------------------------------- --------------------------- ------------------------------ -----------------------

            AGGREGATE
            AMOUNT OF                       AMOUNT OF                    PERCENTAGE
         COMMITMENT/LOANS                COMMITMENT/LOANS                ASSIGNED OF
         FOR ALL LENDERS*                   ASSIGNED*                 COMMITMENT/LOANS              CUSIP NUMBER
----------------------------------- --------------------------- ------------------------------ -----------------------
           $225,000,000                 $________________              ______________%
----------------------------------- --------------------------- ------------------------------ -----------------------
</TABLE>

        [7.     Trade Date: __________________]2

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

        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:

--------------------------------
* 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 To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

<PAGE>

[Consented to and]3 Accepted:

BANK OF AMERICA, N.A.,
as Administrative Agent

By: _________________________________
      Title:

[Consented to:]4

By: _________________________________
      Title:

------------------------------
3 To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.
4 To be added only if the consent of the Company and/or other parties (e.g.
Swing Line Lender, L/C Issuer) is required by the terms of the Credit Agreement.

<PAGE>

                      ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

                        STANDARD TERMS AND CONDITIONS FOR
                            ASSIGNMENT AND ASSUMPTION

        1.      REPRESENTATIONS AND WARRANTIES.

                1.1.    ASSIGNOR. The Assignor (a) 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; and (b) assumes no
responsibility with respect to (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
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Company, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Company, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

                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) it meets all requirements of an Eligible Assignee under the
Credit Agreement (subject to receipt of such consents as may be required under
the Credit Agreement), (iii) 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, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to SECTION
6.07 thereof, as applicable, 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 (v) if it is a
Foreign Lender, attached hereto is any documentation required to be delivered by
it 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 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. 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.

<PAGE>

                                                                       EXHIBIT G

                                     FORM OF
                               SUBSIDIARY GUARANTY

                                  SEE ATTACHED

<PAGE>

                                                                       EXHIBIT H

                                     FORM OF
                     SUBSIDIARY BORRROWER JOINDER AGREEMENT

        THIS SUBSIDIARY BORROWER JOINDER AGREEMENT (the "AGREEMENT"), dated as
of _____________, 20__, is by and between _____________________, a
___________________ (the "NEW BORROWER"), LINENS N' THINGS, INC., a Delaware
corporation (the "COMPANY"), and BANK OF AMERICA, N.A., in its capacity as
Administrative Agent under that certain Credit Agreement (as it may be amended,
modified, restated or supplemented from time to time, the "CREDIT AGREEMENT"),
dated as of November 23, 2004, by and among the Company, the Subsidiary
Borrowers party thereto, the Lenders and Bank of America, N.A., as
Administrative Agent, an L/C Issuer and Swing Line Lender.

                I.      Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.

                II.     The Company desires to designate the New Borrower as a
Subsidiary Borrower pursuant to SECTION 2.16 of the Credit Agreement and the New
Borrower desires to become a Subsidiary Borrower pursuant thereto. The New
Borrower is a wholly-owned domestic Subsidiary and a Subsidiary Guarantor.

                Accordingly, the Company and the New Borrower agree as follows
with the Administrative Agent, for the benefit of the Lenders:

                A.      The Company represents that no Default or Event of
Default has occurred and is continuing.

                B.      Pursuant to SECTION 2.16 of the Credit Agreement the
Company hereby designates the New Borrower as a Subsidiary Borrower under the
Credit Agreement and the New Borrower agrees that upon the acceptance hereof by
the Agent, the New Borrower (i) shall be, and shall be deemed to be, a
"Subsidiary Borrower" under, and as such term is defined in, the Credit
Agreement with the same force and effect as if originally named therein as a
Subsidiary Borrower, and shall have all of the obligations of a Subsidiary
Borrower thereunder as if it had executed the Credit Agreement, and (ii) shall
have made, and shall be deemed to have made, the representations and warranties
as to itself contained in ARTICLE V of the Credit Agreement. The New Borrower
hereby ratifies, as of the date hereof, and agrees to be bound by, all of the
terms, provisions and conditions applicable to the Subsidiary Borrowers
contained in the Credit Agreement.

                C.      There is submitted herewith by the New Borrower the
certificate required by SECTION 2.16 of the Credit Agreement together with the
required attachments thereto.

<PAGE>

                D.      The New Borrower hereby designates the following address
as its address for notices:

                ____________________________________
                ____________________________________
                Attention:__________________________
                ____________________________________
                Telephone:  (___) _______-__________
                Fax:        (___) _______-__________

                E.      This Borrower Addendum shall be governed by and
construed in accordance with the laws of the New York without regard to
conflicts of laws rules.

                F.      This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute one contract.

<PAGE>

        IN WITNESS WHEREOF, the New Borrower and the Company have each caused
this Subsidiary Borrower Joinder Agreement to be duly executed by its authorized
officers, and the Administrative Agent, for the benefit of the Lenders, has
caused the same to be accepted by its authorized officer, as of the day and year
first above written.

                                               [NEW BORROWER]

                                               By: _____________________________
                                               Name: ___________________________
                                               Title: __________________________

                                               LINENS 'N THINGS, INC.

                                               By: _____________________________
                                               Name: ___________________________
                                               Title: __________________________

Acknowledged and accepted:

BANK OF AMERICA, N.A.,
as Administrative Agent

By: _____________________________
Name: ___________________________
Title: __________________________<PAGE>

                                                                    EXHIBIT 10.1

                                     FORM OF

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                     BEHRINGER HARVARD OPPORTUNITY OP I, LP

                               NOVEMBER ___, 2004

<PAGE>

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                     BEHRINGER HARVARD OPPORTUNITY OP I, LP

                               NOVEMBER ___, 2004

        This Agreement of Limited Partnership (this "AGREEMENT") is entered into
effective as of the __ day of November __, 2004 by and among Behringer Harvard
Opportunity REIT I, Inc., a Maryland corporation (the "GENERAL PARTNER"), BHO
Partners, LLC, a Delaware limited liability company (the "ORIGINAL LIMITED
PARTNER"), and the Limited Partner(s) set forth or which may, in the future, be
set forth on EXHIBIT A hereto, as amended from time to time, with respect to
Behringer Harvard Opportunity OP I, LP (the "PARTNERSHIP"), a limited
partnership formed under the laws of the State of Texas, pursuant to a
Certificate of Limited Partnership filed with the Office of the Secretary of
State of the State of Texas effective as of November __, 2004.

                                    RECITALS

        WHEREAS, the parties hereto desire to enter into this Agreement in order
to set forth the terms and conditions under which the Partnership will be
operated as well as the rights, obligations, and limitations of the General
Partner and the Limited Partners with respect to each other and the Partnership
as a whole;

        NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties, the
parties hereto agree as follows:

                                    AGREEMENT

                                    ARTICLE I

                                  DEFINED TERMS

        The following defined terms used in this Agreement shall have the
meanings specified below:

"ACT" means the Texas Revised Uniform Limited Partnership Act, as it may be
amended from time to time.

"ADDITIONAL FUNDS" has the meaning set forth in Section 4.03 hereof.

"ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership as a
Limited Partner pursuant to Section 4.02 hereof and who is shown as such on the
books and records of the Partnership.

"ADDITIONAL SECURITIES" means any additional REIT Shares (other than REIT Shares
issued in connection with an exchange pursuant to Section 8.05 hereof) or
rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase REIT Shares, as set forth in Section
4.02(a)(ii).

<PAGE>

"ADMINISTRATIVE EXPENSES" means (i) all administrative and operating costs and
expenses incurred by the Partnership, (ii) those administrative costs and
expenses of the General Partner, including any salaries or other payments to
directors, officers or employees of the General Partner, and any accounting and
legal expenses of the General Partner, which expenses, the Partners have agreed,
are expenses of the Partnership and not the General Partner, and (iii) to the
extent not included in clause (ii) above, REIT Expenses; provided, however, that
Administrative Expenses shall not include any administrative costs and expenses
incurred by the General Partner that are attributable to Properties or
partnership interests in a Subsidiary Partnership that are owned by the General
Partner directly.

"ADVISOR" or "ADVISORS" means the Person or Persons, if any, appointed, employed
or contracted with by the General Partner pursuant to its Articles of
Incorporation and responsible for directing or performing the day-to-day
business affairs of the General Partner, including any Person to whom the
Advisor subcontracts all or substantially all of such functions.

"AFFILIATE" or "AFFILIATED" means, with respect to any Person, (i) any Person
directly or indirectly owning, controlling or holding, with the power to vote,
10% or more of the outstanding voting securities of such other Person; (ii) any
Person 10% or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held, with the power to vote, by such other
Person; (iii) any Person directly or indirectly controlling, controlled by or
under common control with such other Person; (iv) any executive officer,
director, trustee or general partner of such other Person; and (v) any legal
entity for which such Person acts as an executive officer, director, trustee or
general partner.

"AGREED VALUE" means (i) the fair market value of a Partner's non-cash Capital
Contribution as of the date of contribution as agreed to by such Partner and the
General Partner as of the date of contribution as set forth on EXHIBIT A hereto,
as it may be amended from time to time, or (ii) in the case of any contribution
or distribution of property other than cash not set forth on EXHIBIT A, the fair
market value of such property as determined by the General Partner at the time
such property is contributed or distributed, reduced by liabilities either
assumed by the Partnership or Partner upon such contribution or distribution or
to which such property is subject when the property is contributed or
distributed.

"AGREEMENT" means this Agreement of Limited Partnership, as it may be amended or
restated from time to time.

"ARTICLES OF INCORPORATION" means the Articles of Incorporation of the General
Partner filed with the Maryland State Department of Assessments and Taxation, as
amended or restated from time to time.

"BEHRINGER HARVARD OPPORTUNITY REIT I" means Behringer Harvard Opportunity REIT
I, Inc., a Maryland corporation.

"CALL NOTICE" means a Call Notice, as defined in Section 8.06(a) hereof and
substantially in the form of EXHIBIT C hereto.

"CALL RIGHT" has the meaning provided in Section 8.06(a) hereof.

"CAPITAL ACCOUNT" has the meaning provided in Section 4.04 hereof.

"CAPITAL CONTRIBUTION" means the total amount of cash, cash equivalents, and the
Agreed Value of any Property or other asset contributed or agreed to be
contributed, as the context requires, to the Partnership by each Partner
pursuant to the terms of the Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.

<PAGE>

"CASH AMOUNT" means an amount of cash equal to the Value of the REIT Shares
Amount on the date of receipt by the General Partner of an Exchange Notice.

"CERTIFICATE" means any instrument or document that is required under the laws
of the State of Texas, or any other jurisdiction in which the Partnership
conducts business, to be signed and sworn to by the Partners of the Partnership
(either by themselves or pursuant to the power-of-attorney granted to the
General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the State of Texas or such other jurisdiction
to perfect or maintain the Partnership as a limited partnership, to effect the
admission, withdrawal, or substitution of any Partner from or to the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the State of Texas or such other
jurisdiction.

"CODE" means the Internal Revenue Code of 1986, as amended, and as hereafter
amended from time to time. Reference to any particular provision of the Code
shall mean that provision in the Code at the date hereof and any successor
provision of the Code.

"COMMISSION" means the U.S. Securities and Exchange Commission.

"COMPETENT INDEPENDENT EXPERT" shall mean a Person with no material current or
prior business or personal relationship with the General Partner or the
Partnership who is engaged to a substantial extent in the business of rendering
opinions regarding the value of the assets of the type held by the Partnership
and who is qualified to perform such work. Membership in a nationally recognized
appraisal society such as the American Institute of Real Estate Appraisers or
the Society of Real Estate Appraisers shall be conclusive evidence of such
qualification.

"CONVERSION FACTOR" means 1.0, provided, that in the event that the General
Partner (i) declares or pays a dividend on its outstanding REIT Shares in REIT
Shares or makes a distribution to all holders of its outstanding REIT Shares in
REIT Shares, (ii) subdivides its outstanding REIT Shares, or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, subdivision or combination
(assuming for such purposes that such dividend, distribution, subdivision or
combination has occurred as of such time), and the denominator of which shall be
the actual number of REIT Shares (determined without the above assumption)
issued and outstanding on such date, and provided further, that in the event
that an entity other than an Affiliate of the General Partner shall become
General Partner pursuant to any merger, consolidation or combination of the
General Partner with or into another entity (the "SUCCESSOR ENTITY"), the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by the
number of shares of the Successor Entity into which one REIT Share is converted
pursuant to such merger, consolidation or combination, determined as of the date
of such merger, consolidation or combination. Any adjustment to the Conversion
Factor shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event; provided, however, that
if the General Partner receives an Exchange Notice after the record date, but
prior to the effective date of such dividend, distribution, subdivision or
combination, the Conversion Factor shall be determined as if the General Partner
had received the Exchange Notice immediately prior to the record date for such
dividend, distribution, subdivision or combination.

"DISSENTING LIMITED PARTNER" has the meaning provided in Section 12.03(a)
hereof.

"EVENT OF BANKRUPTCY" as to any Person means (i) the filing of a petition for
relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978
or similar provision of law of any jurisdiction

<PAGE>

(except if such petition is contested by such Person and has been dismissed
within 90 days); (ii) the insolvency or bankruptcy of such Person as finally
determined by a court proceeding; (iii) the filing by such Person of a petition
or application to accomplish the same or for the appointment of a receiver or a
trustee for such Person or a substantial part of his assets; and (iv) the
commencement of any proceedings relating to such Person as a debtor under any
other reorganization, arrangement, insolvency, adjustment of debt or liquidation
law of any jurisdiction, whether now in existence or hereinafter in effect,
either by such Person or by another, provided, that if such proceeding is
commenced by another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is contested by such
Person and has not been finally dismissed within 90 days.

"EXCHANGE AMOUNT" means either the Cash Amount or the REIT Shares Amount, as
selected by the General Partner in its sole and absolute discretion pursuant to
Section 8.05(b) hereof.

"EXCHANGE NOTICE" means a Notice of Exercise of Exchange Right, as defined in
Section 8.05(a) hereof and substantially in the form of EXHIBIT B hereto.

"EXCHANGE RIGHT" has the meaning provided in Section 8.05(a) hereof.

"EXCHANGING PARTNER" has the meaning provided in Section 8.05(a) hereof.

"GENERAL PARTNER" means Behringer Harvard Opportunity REIT I, and any Person who
becomes a substitute or additional General Partner as provided herein, and any
successors thereto.

"GENERAL PARTNERSHIP INTEREST" means a Partnership Interest held by the General
Partner that is a general partnership interest.

"GP CAPITAL" means the aggregate of Capital Contributions of cash made by the
General Partner in accordance with Sections 4.01 and 4.02 hereof.

"GP MINIMUM RETURN" means such amount as may be necessary or required to allow
the General Partner to meet its distribution requirement for qualification as a
REIT as set forth in Section 857 of the Code and to avoid any federal income or
excise tax liability imposed by the Code.

"HOLDING PERIOD" means, with respect to Partnership Units acquired by Additional
Limited Partners hereunder, the period commencing on the date of issuance of
such Units through and including the fourth anniversary of such date of
acquisition.

"INDEMNITEE" means (i) any Person made a party to a proceeding by reason of its
status as the General Partner or a director, officer or employee of the General
Partner or the Partnership, and (ii) such other Persons (including Affiliates of
the General Partner or the Partnership) as the General Partner may designate
from time to time, in its sole and absolute discretion.

"INDEPENDENT DIRECTOR" means a member of the board of directors of the General
Partner who is not on the date of determination, and within the last two (2)
years from the date of determination has not been, directly or indirectly
associated with the General Partner, the Sponsor or the Advisor or any of their
respective Affiliates by virtue of (i) ownership of an interest in the Sponsor
or the Advisor or any of their respective Affiliates, other than the General
Partner, (ii) employment by the General Partner, the Sponsor or the Advisor or
any of their respective Affiliates, (iii) service as an officer or director of
the Sponsor or the Advisor or their respective Affiliates, other than as a
director of the General Partner, (iv) performance of services, other than as a
director of the General Partner, (v) service as a director or trustee of more
than three (3) real estate investment trusts organized by the Sponsor or advised
by the Advisor, or

<PAGE>

(vi) maintenance of a material business or professional relationship with the
General Partner, the Sponsor or the Advisor or any of their respective
Affiliates. A business or professional relationship is considered "material" if
the gross revenue derived by the director from the Sponsor and the Advisor and
their Affiliates exceeds five percent (5%) of either the director's annual gross
income during either of the last two (2) years or the director's net worth on a
fair market value basis. An indirect relationship with the Sponsor or the
Advisor shall include circumstances in which a director's spouse, parent, child,
sibling, mother- or father-in-law, son- or daughter-in-law or brother- or
sister-in-law is or has been associated with the Sponsor or the Advisor, any of
their respective Affiliates or the General Partner.

"JOINT VENTURE" means any joint venture or partnership arrangement in which the
Partnership is a co-venturer or general partner established to acquire or hold
Properties, Mortgages or other investments of the General Partner.

"LIMITED PARTNER" means the Original Limited Partner, any Person named as a
Limited Partner on EXHIBIT A attached hereto, and any Person who becomes a
Substitute or Additional Limited Partner in such person's capacity as a Limited
Partner in the Partnership.

"LIMITED PARTNERSHIP INTEREST" means the ownership interest of a Limited Partner
in the Partnership at any particular time, including the right of such Limited
Partner to any and all benefits to which such Limited Partner may be entitled as
provided in this Agreement and in the Act, together with the obligations of such
Limited Partner to comply with all the provisions of this Agreement and of such
Act.

"LIQUIDATING EVENT" has the meaning set forth in Section 2.04 hereof.

"LOSS" has the meaning provided in Section 5.01(f) hereof.

"LP CAPITAL" means the aggregate of Capital Contributions in cash or cash
equivalents and the Agreed Value of any non-cash contributions to the
Partnership made by a Limited Partner in accordance with Sections 4.01 and 4.02
hereof.

"LP RETURN" means, with regard to any Limited Partner, an amount equal to the
aggregate cash dividends that would have been payable to such Limited Partner
with respect to the applicable fiscal period if such Limited Partner had owned
REIT Shares equal in number to the number of Partnership Units owned by such
Limited Partner during such fiscal period.

"MORTGAGE" means, in connection with mortgage financing provided, invested in or
purchased by the Partnership, any note, deed of trust, security interest or
other evidence of indebtedness or obligations, which is secured or
collateralized by real property owned by the borrower under such note, deed of
trust, security interest or other evidence of indebtedness or obligations.

"NET CAPITAL PROCEEDS" means the net cash proceeds received by the Partnership
in connection with (i) any Sale, (ii) any borrowing or refinancing of
borrowing(s) by the Partnership, (iii) any condemnation or deeding in lieu of
condemnation of all or a portion of any Property, (iv) any collection in respect
of property, hazard, or casualty insurance (but not business interruption
insurance) or any damage award; or (v) any other transaction the proceeds of
which, in accordance with generally accepted accounting principles, are
considered to be capital in nature, in each case, after deduction of (a) all
costs and expenses incurred by the Partnership with regard to such transactions
(including, without limitation, any repayment of any indebtedness required to be
repaid as a result of such transaction or which the General Partner elects to
pay out of the proceeds of such transaction, together with accrued interest and
premium, if any, thereon and any sales commissions or other costs or expenses
due and payable to any Person in connection therewith, including to a Partner or
its Affiliates), and (b) all amounts expended by the

<PAGE>

Partnership for the acquisition of additional Properties, Mortgages or other
investments or for capital repairs or improvements to any Property with such
cash proceeds.

"OFFER" has the meaning set forth in Section 7.01(c)(ii) hereof.

"OFFERING" means the initial offer and sale by the General Partner and the
purchase by the Dealer Manager (as defined in the Prospectus) of REIT Shares for
sale to the public.

"ORIGINAL LIMITED PARTNER" means the Limited Partner designated as such on
EXHIBIT A hereto.

"PARTNER" means any General Partner or Limited Partner.

"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set forth in Regulations
Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt Minimum Gain
shall be determined in accordance with Regulations Section 1.704-2(i)(5).

"PARTNERSHIP" means Behringer Harvard Opportunity OP I, LP, a Texas limited
partnership.

"PARTNERSHIP INTEREST" means an ownership interest in the Partnership held by
either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.

"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations Section
1.704-2(b)(2). In accordance with Regulations Section 1.704-2(d), the amount of
Partnership Minimum Gain is determined by first computing, for each Partnership
nonrecourse liability, any gain the Partnership would realize if it disposed of
the property subject to that liability for no consideration other than full
satisfaction of the liability, and then aggregating the separately computed
gains. A Partner's share of Partnership Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(g)(1).

"PARTNERSHIP RECORD DATE" means the record date established by the General
Partner for the distribution of cash pursuant to Section 5.02 hereof, which
record date shall be the same as the record date established by the General
Partner for a distribution to its stockholders.

"PARTNERSHIP UNIT" means a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder. The allocation of Partnership Units
among the Partners shall be as set forth on EXHIBIT A, as it may be amended from
time to time.

"PERCENTAGE INTEREST" means the percentage ownership interest in the Partnership
of each Partner, as determined by dividing the number of Partnership Units owned
by a Partner by the aggregate number of Partnership Units owned by all Partners.

"PERSON" means any individual, partnership, corporation, joint venture, limited
liability company, trust or other entity.

"PROFIT" has the meaning provided in Section 5.01(f) hereof.

"PROPERTY" means any office, industrial or other commercial real property in
which the Partnership holds an ownership interest, either directly or pursuant
to the Partnership's ownership of an interest in a subsidiary which owns an
interest in any such office, industrial or other commercial real property.

<PAGE>

"PROSPECTUS" means the final prospectus delivered to purchasers of REIT Shares
in the Offering.

"REGULATIONS" means the Federal Income Tax Regulations, including temporary or
proposed regulations, issued under the Code, as amended and as hereafter amended
from time to time. Reference to any particular provision of the Regulations
shall mean that provision of the Regulations on the date hereof and any
successor provision of the Regulations.

"REIT" means a real estate investment trust under Sections 856 through 860 of
the Code.

"REIT EXPENSES" means (i) costs and expenses relating to the formation and
continuity of existence and operation of the General Partner and any
Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included
within the definition of General Partner), including taxes, fees and assessments
associated therewith, any and all costs, expenses or fees payable to any
director, officer, or employee of the General Partner, (ii) costs and expenses
relating to (A) any registration and public offering of securities by the
General Partner, the net proceeds of which were used to make a contribution to
the Partnership, and (B) all statements and reports incidental thereto,
including, without limitation, underwriting discounts and selling commissions
applicable to any such offering of securities, and any costs and expenses
associated with any claims made by any holders of such securities or any
underwriters or placement agents thereof, (iii) costs and expenses associated
with any repurchase of any securities by the General Partner, (iv) costs and
expenses associated with the preparation and filing, of any periodic or other
reports and communications by the General Partner under federal, state or local
laws or regulations, including filings with the Commission, (v) costs and
expenses associated with compliance by the General Partner with laws, rules and
regulations promulgated by any regulatory body, including the Commission and any
securities exchange, (vi) costs and expenses associated with any section 401(k)
plan, incentive plan, bonus plan or other plan providing for compensation for
the employees of the General Partner, (vii) costs and expenses incurred by the
General Partner relating to any issuance or redemption of Partnership Interests
or REIT Shares, and (viii) all other operating or administrative costs of the
General Partner incurred in the ordinary course of its business on behalf of or
in connection with the Partnership.

"REIT SHARE" means a share of common stock in the General Partner (or Successor
Entity, as the case may be).

"REIT SHARES AMOUNT" means a number of REIT Shares equal to the product of the
number of Partnership Units offered for exchange by an Exchanging Partner,
multiplied by the Conversion Factor as adjusted to and including the Specified
Exchange Date; provided that in the event the General Partner issues to all
holders of REIT Shares rights, options, warrants or convertible or exchangeable
securities entitling the stockholders to subscribe for or purchase REIT Shares,
or any other securities or property (collectively, the "RIGHTS"), and the rights
have not expired at the Specified Exchange Date, then the REIT Shares Amount
shall also include the rights issuable to a holder of the REIT Shares on the
record date fixed for purposes of determining the holders of REIT Shares
entitled to Rights.

"SALE" means any transaction or series of transactions whereby (i) the
Partnership directly or indirectly (except as described in other subsections of
this definitions) sells, grants, transfers, conveys or relinquishes its
ownership of any Property or portion thereof, including the lease of any
Property consisting of a building only, and including any event with respect to
any Property which gives rise to a significant amount of insurance proceeds or
condemnation awards; (ii) the Partnership directly or indirectly (except as
described in other subsections of this definition) sells, grants, transfers,
conveys or relinquishes its ownership of all or substantially all the interest
of the Partnership in any Joint Venture in which it is a co-venturer or partner;
(iii) any Joint Venture directly or indirectly (except as described in other
subsections of this definition) in which the Partnership as a co-venturer or
partner sells, grants, transfers, conveys or relinquishes its ownership of any
Property or portion thereof, including any event

<PAGE>

with respect to any Property which gives rise to insurance claims or
condemnation awards; (iv) the Partnership directly or indirectly (except as
described in other subsections of this definition) sells, grants, conveys or
relinquishes its interest in any Mortgage or portion thereof (including with
respect to any Mortgage, all payments thereunder or in satisfaction thereof
other than regularly scheduled interest payments) of amounts owed pursuant to
such Mortgage and any event with respect to a Mortgage which gives rise to a
significant amount of insurance proceeds or similar awards, or (v) the
Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, transfers, conveys or relinquishes its ownership
of any other asset (other than investments in bank accounts, money market funds
or other current assets) not previously described in this definition or any
portion thereof.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SERVICE" means the Internal Revenue Service.

"SPECIFIED EXCHANGE DATE" means the first business day of the month first
occurring after the expiration of 60 business days from the date of receipt by
the General Partner of the Exchange Notice.

"SPONSOR" means any Person which (i) is directly or indirectly instrumental in
organizing, wholly or in part, Behringer Harvard Opportunity REIT I, (ii) will
manage or participate in the management of Behringer Harvard Opportunity REIT I,
and any Affiliate of any such Person, other than a Person whose only
relationship with Behringer Harvard Opportunity REIT I is that of an independent
property manager and whose only compensation is as such, (iii) takes the
initiative, directly or indirectly, in founding or organizing Behringer Harvard
Opportunity REIT I, either alone or in conjunction with one or more other
Persons, (iv) receives a material participation in Behringer Harvard Opportunity
REIT I in connection with the founding or organizing of the business of
Behringer Harvard Opportunity REIT I, in consideration of services or property,
or both services and property, (v) has a substantial number of relationships and
contacts with Behringer Harvard Opportunity REIT I, (vi) possesses significant
rights to control Properties, (vii) receives fees for providing services to
Behringer Harvard Opportunity REIT I which are paid on a basis that is not
customary in the industry, or (viii) provides goods or services to Behringer
Harvard Opportunity REIT I on a basis which was not negotiated at arm's-length
with Behringer Harvard Opportunity REIT I.

"SUBSIDIARY" means, with respect to any Person, any corporation or other entity
of which a majority of (i) the voting power of the voting equity securities or
(ii) the outstanding equity interests is owned, directly or indirectly, by such
Person.

"SUBSIDIARY PARTNERSHIP" means any partnership, limited liability company or
other entity taxed as a partnership for federal income tax purposes in which
interests are owned by the General Partner or by a wholly-owned Subsidiary or
Subsidiaries of the General Partner.

"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the Partnership as a
Limited Partner pursuant to Section 9.03 hereof.

"SUCCESSOR ENTITY" has the meaning provided in the definition of "Conversion
Factor" contained herein.

"SURVIVOR" has the meaning set forth in Section 7.01(d) hereof.

"TRANSACTION" has the meaning set forth in Section 7.01(c) hereof.

"TRANSFER" has the meaning set forth in Section 9.02(a) hereof.

<PAGE>

"TRANSFER RESTRICTION DATE" means the effective date upon which Behringer
Harvard Opportunity Advisors I LP, a Texas limited partnership, shall cease
acting as the advisor to the General Partner under the terms of an advisory
agreement entered into between Behringer Harvard Opportunity Advisors I LP and
the General Partner.

"UNPAID RETURN" means any accrued but unpaid LP Return or GP Minimum Return less
all amounts distributed by the Partnership to a Limited Partner or the General
Partner in reduction thereof.

"VALUE" means, with respect to any security, the average of the daily market
price of such security for the ten consecutive trading days immediately
preceding the date as of which such Value is to be determined. The market price
for each such trading day shall be: (i) if the security is listed or admitted to
trading on any securities exchange, the sale price, regular way, on such day, or
if no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, on such day; (ii) if the security is not listed or
admitted to trading on any securities exchange, the last reported sale price on
such day or, if no sale takes place on such day, the average of the closing bid
and asked prices on such day, as reported by a reliable quotation source
designated by the General Partner; or (iii) if the security is not listed or
admitted to trading on any securities exchange and no such last reported sale
price or closing bid and asked prices are available, the average of the reported
high bid and low asked prices on such day, as reported by a reliable quotation
source designated by the General Partner, or if there shall be no bid and asked
prices on such day, the average of the high bid and low asked prices, as so
reported, on the most recent day (not more than ten days prior to the date in
question) for which prices have been so reported; provided, that if there are no
bid and asked prices reported during the ten days prior to the date in question,
the value of the security shall be determined by the General Partner acting in
good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate. In the event the security
includes any additional rights, then the value of such rights shall be
determined by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate.

                                   ARTICLE II

                    PARTNERSHIP FORMATION AND IDENTIFICATION

2.01    FORMATION. The Partnership is a limited partnership formed pursuant to
the Act and upon the terms and conditions set forth in this Agreement.

2.02    NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership is
"Behringer Harvard Opportunity OP I, LP" The registered office and principal
place of business of the Partnership shall be 15601 Dallas Pkwy., Ste. 600,
Addison, Texas 75001. The General Partner may at any time change the location of
such office, provided the General Partner gives notice to the Partners of any
such change. The name and address of the Partnership's registered agent is
Robert M. Behringer, 15601 Dallas Pkwy., Ste. 600, Addison, Texas 75001. The
sole duty of the registered agent as such is to forward to the Partnership any
notice that is served on it as registered agent.

2.03    PARTNERS.

        (a)     The General Partner of the Partnership is Behringer Harvard
Opportunity REIT I, Inc., a Maryland corporation. Its principal place of
business is the same as that of the Partnership.

        (b)     The Limited Partners are those Persons identified as Limited
Partners (including the Original Limited Partner) on EXHIBIT A hereto, as it may
be amended from time to time.

2.04    TERM AND DISSOLUTION.

        (a)     The term of the Partnership shall continue in full force and
effect until December 31, 2054, except that the Partnership shall be dissolved
earlier upon the first to occur of any of the following events ("LIQUIDATING
EVENTS"):

                (i)     the occurrence of an Event of Bankruptcy as to a General
        Partner or the dissolution, death, removal or withdrawal of a General
        Partner unless the business of the Partnership is continued pursuant to
        Section 7.03(b) hereof, provided, that if a General Partner is on the
        date of such occurrence a partnership, the dissolution of such General
        Partner as a result of the dissolution, death, withdrawal, removal or
        Event of Bankruptcy of a partner in such partnership shall not be an
        event of dissolution of the Partnership if the business of such General
        Partner is continued by the remaining partner or partners thereof,
        either alone or with additional partners, and such General Partner and
        such partners comply with any other applicable requirements of this
        Agreement;

                (ii)    the passage of 90 days after the sale or other
        disposition of all or substantially all of the assets of the Partnership
        (provided, that if the Partnership receives an installment obligation as
        consideration for such sale or other disposition, the Partnership shall
        continue, unless sooner dissolved under the provisions of this
        Agreement, until such time as such obligation is paid in full);

                (iii)   the exchange of all Limited Partnership Interests (other
        than any of such interests held by the General Partner or Affiliates of
        the General Partner); or

                (iv)    the election by the General Partner that the Partnership
        should be dissolved.

        (b)     Upon dissolution of the Partnership (unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership's assets and apply
and distribute the proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, the liquidating General Partner may either (i)
defer liquidation of, or withhold from distribution for a reasonable time, any
assets of the Partnership (including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the assets to the
Partners in kind.

2.05    FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP. The General
Partner shall execute, acknowledge, record and file, at the expense of the
Partnership, the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.

2.06    CERTIFICATES DESCRIBING PARTNERSHIP UNITS. At the request of a Limited
Partner, the General Partner may, at its option and in its discretion, issue a
certificate summarizing the terms of such Limited Partner's interest in the
Partnership, including the number of Partnership Units owned as of the date of
such certificate. If issued, any such certificates (a) shall be in form and
substance as approved by the General Partner, (b) shall not be negotiable, and
(c) shall bear a legend substantially similar to the following:

"THIS CERTIFICATE IS NOT NEGOTIABLE. THE PARTNERSHIP UNITS REPRESENTED BY THIS
CERTIFICATE ARE GOVERNED BY AND TRANSFERABLE ONLY IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT OF LIMITED PARTNERSHIP OF BEHRINGER HARVARD
OPPORTUNITY OP I, LP, AS AMENDED FROM TIME TO TIME."

<PAGE>

                                   ARTICLE III

                           BUSINESS OF THE PARTNERSHIP

        The purpose and nature of the business to be conducted by the
Partnership is (a) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act, provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to qualify as a REIT, unless the General Partner
otherwise ceases to qualify as a REIT, (b) to enter into any partnership, joint
venture or other similar arrangement to engage in any of the foregoing or the
ownership of interests in any entity engaged in any of the foregoing, and (c) to
do anything necessary or incidental to the foregoing. In connection with the
foregoing, and without limiting the General Partner's right in its sole and
absolute discretion to cease qualifying as a REIT, the Partners acknowledge that
the General Partner's current status as a REIT and the avoidance of income and
excise taxes on the General Partner inures to the benefit of all the Partners
and not solely to the General Partner. Notwithstanding the foregoing, the
Limited Partners agree that the General Partner may terminate its status as a
REIT under the Code at any time to the full extent permitted under its Articles
of Incorporation. The General Partner shall also be empowered to do any and all
acts and things necessary or prudent to ensure that the Partnership will not be
classified as a "publicly traded partnership" for purposes of Section 7704 of
the Code.

                                   ARTICLE IV

                       CAPITAL CONTRIBUTIONS AND ACCOUNTS

4.01    CAPITAL CONTRIBUTIONS. The General Partner and the Original Limited
Partner have made Capital Contributions to the Partnership in exchange for the
Partnership Units set forth opposite their names on EXHIBIT A. At such time as
Additional Limited Partners are admitted to the Partnership, each shall make
Capital Contributions as set forth opposite their names on EXHIBIT A, as it may
be amended from time to time.

4.02    ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL PARTNERSHIP
INTERESTS. Except as provided in this Section 4.02 or in Section 4.03, the
Partners shall have no right or obligation to make any additional Capital
Contributions or loans to the Partnership. The General Partner may contribute
additional capital to the Partnership, from time to time, and receive additional
Partnership Units in respect thereof in the manner contemplated by this Section
4.02.

        (a)     Issuances of Additional Partnership Interests.

                (i)     GENERAL. The General Partner is hereby authorized to
        cause the Partnership to issue additional Partnership Interests in the
        form of Partnership Units for any Partnership purpose, at any time or
        from time to time, to the Partners (including the General Partner) or to
        other Persons for such consideration and on such terms and conditions as
        shall be established by the General Partner in its sole and absolute
        discretion, all without the approval of any Limited Partners. Any
        additional Partnership Interests issued thereby may be issued in one or
        more classes, or one or more series of any of such classes, with such
        designations, preferences and relative participating, optional or other
        special rights, powers and duties, including rights, powers and duties
        senior to Limited Partnership Interests, all as shall be determined by
        the General

<PAGE>

        Partner in its sole and absolute discretion and without the approval of
        any Limited Partner, subject to Texas law, including, without
        limitation, (A) the allocations of items of Partnership income, gain,
        loss, deduction and credit to each such class or series of Partnership
        Interests; (B) the right of each such class or series of Partnership
        Interests to share in Partnership distributions; and (C) the rights of
        each such class or series of Partnership Interests upon dissolution and
        liquidation of the Partnership; provided, however, that no additional
        Partnership Interests shall be issued to the General Partner or the
        Original Limited Partner unless:

                (1)     the additional Partnership Interests are issued in
\                connection with an issuance of REIT Shares or other interests
                in, the General Partner, which shares or interests have
                designations, preferences and other rights such that the
                economic interests are substantially similar to the
                designations, preferences and other rights of the additional
                Partnership Interests issued to the General Partner by the
                Partnership in accordance with this Section 4.02, and the
                General Partner, on its own or with the Original Limited
                Partner, shall make a Capital Contribution to the Partnership in
                an amount equal to the aggregate proceeds raised in connection
                with the issuance of such shares of stock of or other interests
                in the General Partner;

                (2)     the additional Partnership Interests are issued in
                exchange for property or other assets owned by the General
                Partner or Original Limited Partner with a fair market value, as
                determined by the General Partner, in good faith, equal to the
                value of the Partnership Interests; or

                (3)     the additional Partnership Interests are issued to all
                Partners in proportion to their respective Percentage Interests.

        Without limiting the foregoing, the General Partner is expressly
authorized to cause the Partnership to issue Partnership Units for less than
fair market value, so long as the General Partner concludes in good faith that
such issuance is in the best interests of the General Partner and the
Partnership.

                (ii)    ISSUANCE OF ADDITIONAL SECURITIES. The General Partner
        shall not issue any additional REIT Shares (other than REIT Shares
        issued in connection with an exchange made pursuant to Section 8.05
        hereof) or rights, options, warrants or convertible or exchangeable
        securities containing the right to subscribe for or purchase REIT Shares
        (collectively, "Additional Securities") other than to all holders of
        REIT Shares, unless (A) the General Partner shall cause the Partnership
        to issue to the General Partner (or to the General Partner and the
        Original Limited Partner), as the General Partner may designate,
        Partnership Interests or rights, options, warrants or convertible or
        exchangeable securities of the Partnership having designations,
        preferences and other rights such that the economic interests are
        substantially similar to those of the Additional Securities, and (B) the
        General Partner (or the General Partner and the Original Limited
        Partner) contributes the proceeds from the issuance of such Additional
        Securities and from any exercise of rights contained in such Additional
        Securities, directly and through the General Partner (or the General
        Partner and the Original Limited Partner), to the Partnership; provided,
        however, that the General Partner is allowed to issue Additional
        Securities in connection with an acquisition of a Property or other
        asset to be held directly by the General Partner, but if and only if,
        such direct acquisition and issuance of Additional Securities have been
        approved and determined to be in the best interests of the General
        Partner and the Partnership by a majority of the Independent Directors.
        Without limiting the foregoing, the General Partner is expressly
        authorized to issue Additional Securities for less than fair market
        value, and to cause the Partnership to issue to the General Partner (or
        to the General Partner and the Original Limited Partner) corresponding

<PAGE>

        Partnership Interests, so long as (1) the General Partner concludes in
        good faith that such issuance is in the best interests of the General
        Partner and the Partnership, including without limitation, the issuance
        of REIT Shares and corresponding Partnership Units pursuant to an
        employee share purchase plan providing for employee purchases of REIT
        Shares at a discount from fair market value or employee stock options
        that have an exercise price that is less than the fair market value of
        the REIT Shares, either at the time of issuance or at the time of
        exercise, and (2) the General Partner contributes directly or directly
        and through the Original Limited Partnership all proceeds from such
        issuance to the Partnership.

        (b)     CERTAIN DEEMED CONTRIBUTIONS OF PROCEEDS OF ISSUANCE OF REIT
SHARES. In connection with any and all issuances of REIT Shares, the General
Partner shall make directly or directly and through the Original Limited Partner
Capital Contributions to the Partnership of the proceeds therefrom, provided,
that if the proceeds actually received and contributed by the General Partner
are less than the gross proceeds of such issuance as a result of any
underwriter's discount or other fees or expenses paid or incurred in connection
with such issuance, then the General Partner (or the General Partner together
with the Original Limited Partner, as applicable) shall be deemed to have made
Capital Contributions to the Partnership in the aggregate amount of the gross
proceeds of such issuance and the Partnership shall be deemed simultaneously to
have paid such offering expenses in accordance with Section 6.05 hereof and in
connection with the required issuance of additional Partnership Units for such
Capital Contributions pursuant to Section 4.02(a) hereof.

        (c)     ORIGINAL LIMITED PARTNER DEEMED CONTRIBUTIONS. In the event the
Original Limited Partner elects to defer any distribution of cash hereunder to
be made to it pursuant to Section 5.02(a) hereof, then such amount shall be
deemed to be an additional contribution of capital to the Partnership by the
Original Limited Partner, which shall be added to the Original Limited Partner's
Capital Contribution to the Partnership and the Original Limited Partner's
Capital Account as established and maintained under Section 4.04 hereof.

4.03    ADDITIONAL FUNDING. If the General Partner determines that it is in the
best interests of the Partnership to provide for additional Partnership funds
("ADDITIONAL FUNDS") for any Partnership purpose, the General Partner may (a)
cause the Partnership to obtain such funds from outside borrowings, or (b) elect
to have the General Partner or any of its Affiliates provide such Additional
Funds to the Partnership through loans or otherwise.

4.04    CAPITAL ACCOUNTS. A separate capital account (a "CAPITAL ACCOUNT") shall
be established and maintained for each Partner in accordance with Regulations
Section 1.704-1(b)(2)(iv). If (a) a new or existing Partner acquires an
additional Partnership Interest in exchange for more than a de minimis Capital
Contribution, (b) the Partnership distributes to a Partner more than a de
minimis amount of Partnership property as consideration for the redemption of a
Partnership Interest, or (c) the Partnership is liquidated within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue the
property of the Partnership to its fair market value (as determined by the
General Partner, in its sole and absolute discretion, and taking into account
Section 7701(g) of the Code) in accordance with Regulations Section 1.704-
l(b)(2)(iv)(f). When the Partnership's property is revalued by the General
Partner, the Capital Accounts of the Partners shall be adjusted in accordance
with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require
such Capital Accounts to be adjusted to reflect the manner in which the
unrealized gain or loss inherent in such property (that has not been reflected
in the Capital Accounts previously) would be allocated among the Partners
pursuant to Section 5.01 hereof if there were a taxable disposition of such
property for its fair market value (as determined by the General Partner, in its
sole and absolute discretion, and taking into account Section 7701(g) of the
Code) on the date of the revaluation.

<PAGE>

4.05    PERCENTAGE INTERESTS. If the number of outstanding Partnership Units
increases or decreases during a taxable year, each Partner's Percentage Interest
shall be adjusted by the General Partner effective as of the date of each such
increase or decrease to a percentage equal to the number of Partnership Units
held by such Partner divided by the aggregate number of Partnership Units
outstanding after giving effect to such increase or decrease. In such event, the
General Partner shall revalue the property of the Partnership and the Capital
Account for each Partner shall be adjusted as set forth in Section 4.04 hereof.
If the Partners' Percentage Interests are adjusted pursuant to this Section
4.05, the Profit and Loss for the taxable year in which the adjustment occurs
shall be prorated between the part of the year ending on the day when the
Partnership's property is revalued by the General Partner and the part of the
year beginning on the following day and, as so divided, shall be allocated to
the Partners based on their Percentage Interests before adjustment, and their
adjusted Percentage Interests, respectively, either (a) as if the taxable year
had ended on the date of the adjustment or (b) based on the number of days in
each part. The General Partner, in its sole and absolute discretion, shall
determine which method shall be used to allocate Profit and Loss for the taxable
year in which an adjustment occurs, as may be required or permitted under
Section 706 of the Code.

4.06    NO INTEREST ON CONTRIBUTIONS. No Partner shall be entitled to interest
on its Capital Contribution.

4.07    RETURN OF CAPITAL CONTRIBUTIONS. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided herein, there shall be no
obligation to return to any Partner or withdrawn Partner any part of such
Partner's Capital Contribution for so long as the Partnership continues in
existence.

4.08    NO THIRD-PARTY BENEFICIARY. No creditor or other third party having
dealings with the Partnership shall have the right to enforce the right or
obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed that the provisions of this Agreement shall be solely for the benefit
of, and may be enforced solely by, the parties hereto and their respective
successors and assigns. None of the rights or obligations of the Partners herein
set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners. In
addition, it is the intent of the parties hereto that no distribution to any
Limited Partner shall be deemed a return of money or other property in violation
of the Act. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to return such money or property, such obligation shall be the
obligation of such Limited Partner and not of the General Partner. Without
limiting the generality of the foregoing, a deficit Capital Account of a Partner
shall not be deemed to be a liability of such Partner nor an asset or property
of the Partnership.

                                    ARTICLE V

                         PROFIT AND LOSS; DISTRIBUTIONS

5.01    ALLOCATION OF PROFIT AND LOSS.

        (a)     After giving effect to the special allocations set forth in
Sections 5.01(b), (c) and (d), Profit for each fiscal year of the Partnership
shall be allocated as follows: (i) first to the Partners, pro rata, in
accordance with and in proportion to their respective Partnership Interests, in
amounts equal to the amount of cash distributed to the Partners pursuant to
Section 5.02(a) hereof with respect to such fiscal

<PAGE>

year; (ii) second, to the extent the amount of Profit for such fiscal year
exceeds the amount of cash distributed to the Partners pursuant to Section
5.02(a) hereof, such excess shall be allocated to the General Partner and the
Limited Partners in amounts and in proportion to the cumulative Loss allocated
to the General Partner pursuant to clause (y) of this Section 5.01(a) and the
cumulative Loss allocated to the Limited Partners pursuant to clause (x) of this
Section 5.01(a), respectively; and (iii) finally, the balance, if any, of Profit
shall be allocated to the Partners in accordance with and in proportion to their
respective Percentage Interests. Notwithstanding the foregoing, however, it is
the intent of the Partners that allocations of Profit to the Limited Partners be
such that the amount of Profit allocated to each Limited Partner be equal to the
amount of income that would have been allocated to such Limited Partner with
respect to the applicable fiscal period if such Limited Partner had owned REIT
Shares equal in number to the number of Partnership Units owned by such Limited
Partner during such fiscal period, and if, for any reason, the foregoing
allocations of Profit result in any material variation from this concept, Profit
shall be allocated to each Limited Partner in an amount equal to the aggregate
amount of income that would have been allocated to such Limited Partner with
respect to the applicable fiscal period if such Limited Partner had owned REIT
Shares equal in number to the number of Partnership Units owned by such Limited
Partner during such fiscal period. After giving effect to the special
allocations set forth in Sections 5.01(b), (c) and (d), Loss for a fiscal year
of the Partnership shall be allocated as follows: (w) first, to the Partners,
pro rata, in accordance with and in proportion to their respective Partnership
Interests, until the cumulative Loss allocated to each Partner under this clause
(w) equals the cumulative Profit allocated to each Partner under clause (ii) of
this Section 5.01(a); (x) second, to the Limited Partners in an amount equal to
each such Limited Partner's Capital Account balance prior to the allocation made
under this clause (x); (y) third, to the General Partner in an amount equal to
the General Partner's Capital Account balance prior to the allocation made under
this clause (y); and (z) fourth, to the General Partner to the extent that any
further allocation of Loss to Limited Partners would result in any such Limited
Partners having a deficit balance in their Capital Accounts.

        (b)     Notwithstanding any provision to the contrary herein, (i) any
expense of the Partnership that is a "nonrecourse deduction" within the meaning
of Regulations Section 1.704-2(b)(1) shall be allocated in accordance with the
Partners' respective Percentage Interests, (ii) any expense of the Partnership
that is a "partner nonrecourse deduction" within the meaning of Regulations
Section 1.704-2(i)(2) shall be allocated to the Partner that bears the "economic
risk of loss" of such deduction in accordance with Regulations Section 1.704-
2(i)(1), (iii) if there is a net decrease in Partnership Minimum Gain within the
meaning of Regulations Section 1.704-2(f)(1) for any Partnership taxable year,
then, subject to the exceptions set forth in Regulations Section 1.704-2(f)(2),
(3), (4) and (5), items of gain and income shall be allocated among the Partners
in accordance with Regulations Section 1.704-2(f) and the ordering rules
contained in Regulations Section 1.704-2(j), and (iv) if there is a net decrease
in Partner nonrecourse debt minimum gain within the meaning of Regulations
Section 1.704-2(i)(4) for any Partnership taxable year, then, subject to the
exceptions set forth in Regulations Section 1.704-2(g), items of gain and income
shall be allocated among the Partners, in accordance with Regulations Section
1.704-2(i)(4) and the ordering rules contained in Regulations Section
1.704-2(j). A Partner's "interest in partnership profits" for purposes of
determining its share of the nonrecourse liabilities of the Partnership within
the meaning of Regulations Section 1.752- 3(a)(3) shall be such Partner's
Percentage Interest.

        (c)     If a Partner receives in any taxable year an adjustment,
allocation, or distribution described in subparagraphs (4), (5), or (6) of
Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a deficit
balance in such Partner's Capital Account that exceeds the sum of such Partner's
shares of Partnership Minimum Gain and Partner nonrecourse debt minimum gain, as
determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i),
such Partner shall be allocated specially for such taxable year (and, if
necessary, later taxable years) items of income and gain in an amount and manner
sufficient to eliminate such deficit Capital Account balance as quickly as
possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d). After the
occurrence of an allocation of income or gain to a

<PAGE>

Partner in accordance with this Section 5.01(c), to the extent permitted by
Regulations Section 1.704-1(b), items of expense or loss shall be allocated to
such Partner in an amount necessary to offset the income or gain previously
allocated to such Partner under this Section 5.01(c).

        (d)     Loss shall not be allocated to a Limited Partner to the extent
that such allocation would cause a deficit in such Partner's Capital Account
(after reduction to reflect the items described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Partner's shares
of Partnership Minimum Gain and Partner nonrecourse debt minimum gain. Any Loss
in excess of that limitation shall be allocated to the General Partner. After
the occurrence of an allocation of Loss to the General Partner in accordance
with this Section 5.01(d), to the extent permitted by Regulations Section
1.704-1(b), Profit shall be allocated to the General Partner in an amount
necessary to offset the Loss previously allocated to the General Partner under
this Section 5.01(d).

        (e)     If a Partner transfers any part or all of its Partnership
Interest, the distributive shares of the various items of Profit and Loss
allocable among the Partners during such fiscal year of the Partnership shall be
allocated between the transferor and the transferee Partner either (i) as if the
Partnership's fiscal year had ended on the date of the transfer, or (ii) based
on the number of days of such fiscal year that each was a Partner without regard
to the results of Partnership activities in the respective portions of such
fiscal year in which the transferor and the transferee were Partners. The
General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate the distributive shares of the various items of
Profit and Loss between the transferor and the transferee Partner.

        (f)     "PROFIT" and "LOSS" and any items of income, gain, expense, or
loss referred to in this Agreement shall be determined in accordance with
federal income tax accounting principles, as modified by Regulations Section
1.704-(b)(2)(iv), except that Profit and Loss shall not include items of income,
gain and expense that are specially allocated pursuant to Sections 5.01(b),
5.01(c), or 5.01(d). All allocations of income, Profit, gain, Loss, and expense
(and all items contained therein) for federal income tax purposes shall be
identical to all allocations of such items set forth in this Section 5.01,
except as otherwise required by Section 704(c) of the Code and Regulations
Section 1.704-1(b)(4). The General Partner shall have the authority, in its sole
and absolute discretion and without the need for consent from any Partner, to
elect the method or methods to be used by the Partnership for allocating items
of income, gain, expense and deductions as required by Section 704(c) of the
Code, including election of a method that may result in one or more Partners
receiving or being allocated a disproportionately larger share of items of
Partnership income, gain, expense or deduction, and any such election shall be
binding on all Partners.

5.02    DISTRIBUTIONS OF CASH.

        (a)     The Partnership shall distribute cash on a quarterly (or, at the
election of the General Partner, more frequent) basis, in an amount determined
by the General Partner in its sole and absolute discretion, to the Partners who
are Partners on the Partnership Record Date with respect to such quarter (or
other distribution period) in the following manner: (i) first, to the General
Partner in an amount equal to the GP Minimum Return with respect to the fiscal
year of the General Partner; (ii) second, to the Limited Partners pro rata among
them in proportion to the their respective Unpaid Return, if any, owing to each
such Limited Partners with respect to prior fiscal years, in an amount equal to
their respective Unpaid Return for such prior fiscal years owing to each such
Limited Partner; (iii) third, after the establishment of reasonable cash
reserves to meet REIT Expenses and other obligations of the Partnership, as
determined in the sole and absolute discretion of the General Partner, to the
General Partner and the Limited Partners in such aggregate amount as may be
determined by the General Partner in its sole and absolute discretion to be
allocated among the General Partner and the Limited Partners such that each
Limited Partner will receive an amount equal to its LP Return for such fiscal
year; and

<PAGE>

(iv) finally, to the Partners in accordance with and in proportion to their
respective Percentage Interests; provided, however, that if a new or existing
Partner acquires an additional Partnership Interest in exchange for a Capital
Contribution on any date other than a Partnership Record Date, the cash
distribution attributable to such additional Partnership Interest relating to
the Partnership Record Date next following the issuance of such additional
Partnership Interest shall be reduced to the proportion thereof which equals (i)
the number of days that such additional Partnership Interest is held by such
Partner divided by (ii) the number of days between such Partnership Record Date
and the immediately preceding Partnership Record Date. Notwithstanding the
foregoing, however, the Original Limited Partner may, in its sole and absolute
discretion, elect to defer any distribution to be made to it, in which case the
amount so deferred shall be deemed to be an additional Capital Contribution made
on behalf of the Original Limited Partner under Section 4.02(c) hereof, to be
distributed to the Original Limited Partner upon liquidation of the Partnership
under Section 5.06 hereof, or at such time as the Original Limited Partner may
otherwise be allowed to withdraw from the Partnership after the Transfer
Restriction Date.

        (b)     Notwithstanding any other provision of this Agreement, the
General Partner is authorized to take any action that it determines to be
necessary or appropriate to cause the Partnership to comply with any withholding
requirements established under the Code or any other federal, state or local law
including, without limitation, the requirements of Sections 1441, 1442, 1445 and
1446 of the Code. To the extent that the Partnership is required to withhold and
pay over to any taxing authority any amount resulting from the allocation or
distribution of income to a Partner or its assignee (including by reason of
Section 1446 of the Code), either (i) if the actual amount to be distributed to
the Partner or assignee equals or exceeds the amount required to be withheld by
the Partnership, the amount withheld shall be treated as a distribution of cash
in the amount of such withholding to such Partner or assignee, or (ii) if the
actual amount to be distributed to the Partner or assignee is less than the
amount required to be withheld by the Partnership, the amount required to be
withheld shall be treated as a loan (a "PARTNERSHIP LOAN") from the Partnership
to the Partner or assignee on the day the Partnership pays over such amount to a
taxing authority. A Partnership Loan shall be repaid through withholding by the
Partnership with respect to subsequent distributions to the applicable Partner
or assignee. In the event that a Limited Partner (a "DEFAULTING LIMITED
PARTNER") fails to pay any amount owed to the Partnership with respect to the
Partnership Loan within 15 days after demand for payment thereof is made by the
Partnership on the Limited Partner, the General Partner, in its sole and
absolute discretion, may elect to make the payment to the Partnership on behalf
of such Defaulting Limited Partner. In such event, on the date of payment, the
General Partner shall be deemed to have extended a loan (a "GENERAL PARTNER
LOAN") to the Defaulting Limited Partner in the amount of the payment made by
the General Partner and shall succeed to all rights and remedies of the
Partnership against the Defaulting Limited Partner as to that amount. Without
limitation, the General Partner shall have the right to receive any
distributions that otherwise would be made by the Partnership to the Defaulting
Limited Partner until such time as the General Partner Loan has been paid in
full, and any such distributions so received by the General Partner shall be
treated as having been received by the Defaulting Limited Partner and
immediately paid to the General Partner. Any amounts treated as a Partnership
Loan or a General Partner Loan pursuant to this Section 5.02(b) shall bear
interest at the lesser of (A) the base rate on corporate loans at large United
States money center commercial banks, as published from time to time in The Wall
Street Journal, or (B) the maximum lawful rate of interest on such obligation,
such interest to accrue from the date the Partnership or the General Partner, as
applicable, is deemed to extend the loan until such loan is repaid in full.

        (c)     To the extent not utilized for expenses of the Partnership or
for investment in additional Properties, the General Partner may, in its
discretion, cause the Partnership to distribute Net Capital Proceeds in such
amount as shall be determined by the General Partner in its discretion in
accordance with the provisions of Section 5.02(a) hereof.

<PAGE>

        (d)     In no event may a Partner receive a distribution of cash with
respect to a Partnership Unit if such Partner is entitled to receive a cash
dividend as the holder of record of a REIT Share for which all or part of such
Partnership Unit has been or will be exchanged, and the Unpaid Return with
respect to such Partnership Unit shall be deemed to be reduced by the amount of
any such cash dividend.

5.03    REIT DISTRIBUTION REQUIREMENTS. The General Partner shall use its
reasonable efforts to cause the Partnership to distribute amounts sufficient to
enable the General Partner to pay stockholder dividends that will allow the
General Partner to (a) meet its distribution requirement for qualification as a
REIT as set forth in Section 857 of the Code and (b) avoid any federal income or
excise tax liability imposed by the Code.

5.04    NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner shall be entitled to
demand property other than cash in connection with any distributions by the
Partnership.

5.05    LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS. Notwithstanding any of
the provisions of this Article V, no Partner shall have the right to receive and
the General Partner shall not have the right to make a distribution that
includes a return of all or part of a Partner's Capital Contributions, unless
after giving effect to the return of a Capital Contribution, the sum of all
Partnership liabilities, other than the liabilities to a Partner for the return
of its Capital Contribution, does not exceed the fair market value of the
Partnership's assets.

5.06    DISTRIBUTIONS UPON LIQUIDATION. Upon liquidation of the Partnership,
after payment of, or adequate provision for, debts and obligations of the
Partnership, including any Partner loans, any remaining assets of the
Partnership shall be distributed to all Partners with positive Capital Accounts
in accordance with their respective positive Capital Account balances. For
purposes of the preceding sentence, the Capital Account of each Partner shall be
determined after all adjustments made in accordance with Sections 5.01 and 5.02
resulting from Partnership operations and from all sales and dispositions of all
or any part of the Partnership's assets have been made. To the extent deemed
advisable by the General Partner, appropriate arrangements (including the use of
a liquidating trust) may be made to assure that adequate funds are available to
pay any contingent debts or obligations.

5.07    SUBSTANTIAL ECONOMIC EFFECT. It is the intent of the Partners that the
allocations of Profit and Loss under this Agreement have substantial economic
effect (or be consistent with the Partners' interests in the Partnership in the
case of the allocation of losses attributable to nonrecourse debt) within the
meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.

                                   ARTICLE VI

                             RIGHTS, OBLIGATIONS AND
                          POWERS OF THE GENERAL PARTNER

6.01    MANAGEMENT OF THE PARTNERSHIP.

        (a)     Except as otherwise expressly provided in this Agreement, the
General Partner shall have full, complete and exclusive discretion to manage and
control the business of the Partnership for the purposes herein stated, and
shall make all decisions affecting the business and assets of the Partnership.
Subject to the restrictions specifically contained in this Agreement, the powers
and obligations, as the context requires, of the General Partner shall include,
without limitation, the authority to take the following actions on behalf of the
Partnership:

<PAGE>

                (i)     to acquire, purchase, own, operate, lease and dispose of
        any real property and any other property or assets including, but not
        limited to notes, Mortgages, partnership or joint venture interests or
        securities, that the General Partner determines are necessary or
        appropriate or in the best interests of the business of the Partnership;

                (ii)    to construct buildings and make other improvements on
        the Properties owned or leased by the Partnership;

                (iii)   to authorize, issue, sell, redeem or otherwise purchase
        any Partnership Interests or any securities (including secured and
        unsecured debt obligations of the Partnership, debt obligations of the
        Partnership convertible into any class or series of Partnership
        Interests, or options, rights, warrants or appreciation rights relating
        to any Partnership Interests) of the Partnership;

                (iv)    to borrow or lend money for the Partnership, issue or
        receive evidences of indebtedness in connection therewith, refinance,
        increase the amount of, modify, amend or chance the terms of, or extend
        the time for the payment of, any such indebtedness, and secure such
        indebtedness by mortgage, deed of trust, pledge or other lien on the
        Partnership's assets;

                (v)     to pay, either directly or by reimbursement, for all
        operating costs and general administrative expenses of the Partnership
        to third parties or to the General Partner or its Affiliates as set
        forth in this Agreement;

                (vi)    to guarantee or become a co-maker of indebtedness of the
        General Partner or any Subsidiary thereof, refinance, increase the
        amount of, modify, amend or change the terms of, or extend the time for
        the payment of, any such guarantee or indebtedness, and secure such
        guarantee or indebtedness by mortgage, deed of trust, pledge or other
        lien on the Partnership's assets;

                (vii)   to use assets of the Partnership (including, without
        limitation, cash on hand) for any purpose consistent with this
        Agreement, including, without limitation, payment, either directly or by
        reimbursement, of all operating costs and general administrative
        expenses of the General Partner, the Partnership or any Subsidiary of
        either, to third parties or to the General Partner as set forth in this
        Agreement;

                (viii)  to lease all or any portion of any of the Partnership's
        assets, whether or not the terms of such leases extend beyond the
        termination date of the Partnership and whether or not any portion of
        the Partnership's assets so leased are to be occupied by the lessee, or,
        in turn, subleased in whole or in part to others, for such consideration
        and on such terms as the General Partner may determine;

                (ix)    to prosecute, defend, arbitrate, or compromise any and
        all claims or liabilities in favor of or against the Partnership, on
        such terms and in such manner as the General Partner may reasonably
        determine, and similarly, to prosecute, settle or defend litigation with
        respect to the Partners, the Partnership, or the Partnership's assets;

                (x)     to file applications, communicate, and otherwise deal
        with any and all governmental agencies having jurisdiction over, or in
        any way affecting, the Partnership's assets or any other aspect of the
        Partnership business;

<PAGE>

                (xi)    to make or revoke any election permitted or required of
        the Partnership by any taxing authority;

                (xii)   to maintain such insurance coverage for public
        liability, fire and casualty, and any and all other insurance for the
        protection of the Partnership, for the conservation of Partnership
        assets, or for any other purpose convenient or beneficial to the
        Partnership, in such amounts and such types, as it shall determine from
        time to time;

                (xiii)  to determine whether or not to apply any insurance
        proceeds for any Property to the restoration of such Property or to
        distribute the same;

                (xiv)   to establish one or more divisions of the Partnership,
        to hire and dismiss employees of the Partnership or any division of the
        Partnership, and to retain legal counsel, accountants, consultants, real
        estate brokers, and such other persons, as the General Partner may deem
        necessary or appropriate in connection with the Partnership business and
        to pay such persons remuneration as the General Partner may deem
        reasonable and proper;

                (xv)    to retain other services of any kind or nature in
        connection with Partnership business and to pay such remuneration as the
        General Partner may deem reasonable and proper for same;

                (xvi)   to negotiate and conclude agreements on behalf of the
        Partnership with respect to any of the rights, powers and authority
        conferred upon the General Partner;

                (xvii)  to maintain accurate accounting records and to file
        promptly all federal, state and local income tax returns on behalf of
        the Partnership;

                (xviii) to distribute Partnership cash or other Partnership
        assets in accordance with this Agreement;

                (xix)   to form or acquire an interest in, and contribute
        property to, any further limited or general partnerships, joint
        ventures, limited liability companies or other entities or relationships
        that it deems desirable (including, without limitation, the acquisition
        of interests in, and the contributions of property to, its Subsidiaries
        and any other Person in which it has an equity interest from time to
        time);

                (xx)    to establish Partnership reserves for working capital,
        capital expenditures, contingent liabilities, or any other valid
        Partnership purpose;

                (xxi)   to merge, consolidate or combine the Partnership with or
        into another Person;

                (xxii)  to do any and all acts and things necessary or prudent
        to ensure that the Partnership will not be classified as a "publicly
        traded partnership" for purposes of Section 7704 of the Code; and

                (xxiii) to take such other action, execute, acknowledge, swear
        to or deliver such other documents and instruments, and perform any and
        all other acts that the General Partner deems necessary or appropriate
        for the formation, continuation and conduct of the business and affairs
        of the Partnership (including, without limitation, all actions
        consistent with allowing the General Partner at all times to qualify as
        a REIT unless the General Partner voluntarily terminates its

<PAGE>

        REIT status) and to possess and enjoy all of the rights and powers of a
        general partner as provided by the Act.

        (b)     Except as otherwise provided herein, to the extent the duties of
the General Partner require expenditures of funds to be paid to third parties,
the General Partner shall not have any obligations hereunder except to apply
Partnership funds to the extent that Partnership funds are reasonably available
to it for the performance of such duties, and nothing herein contained shall be
deemed to authorize or require the General Partner, in its capacity as such, to
expend its individual funds for payment to third parties or to undertake any
individual liability or obligation on behalf of the Partnership.

        (c)     Any actions taken by the General Partner pursuant to its
authority under this Agreement on behalf of the Partnership regarding the
approval of any transaction between the Partnership and the Sponsor, Advisor, a
member of the Board of Directors of Behringer Harvard Opportunity REIT I or any
Affiliate thereof, shall require approval by a majority of the members of the
Board of Directors of Behringer Harvard Opportunity REIT I (including a majority
of the independent directors) not otherwise interested in such transaction as
being fair and reasonable to Behringer Harvard Opportunity REIT I and the
Partnership on terms and conditions not less favorable to Behringer Harvard
Opportunity REIT I or the Partnership, as applicable, than those available from
unaffiliated third parties.

6.02    DELEGATION OF AUTHORITY. The General Partner may delegate any or all of
its powers, rights and obligations hereunder, and may appoint, employ, contract
or otherwise deal with any Person (including without limitation officers or
other agents of the Partnership or the General Partner appointed by the General
Partner) for the transaction of the business of the Partnership, which Person
may, under supervision of the General Partner, perform any acts or services for
the Partnership as the General Partner may approve.

6.03    INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.

        (a)     The Partnership shall indemnify an Indemnitee from and against
any and all losses, claims, damages, liabilities, joint or several, expenses
(including reasonable legal fees and expenses), judgments, fines, settlements,
and other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the Partnership as set forth in this Agreement in which any
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, as a result of acting on behalf of or performing services for the
Partnership, only if it is determined that (i) the Indemnitee acted in good
faith and (ii) that the Indemnitee reasonably believed that the act or omission
was in the Partnership's best interests, or if the act or omission was outside
the Indemnitee's official capacity as a general partner of the Partnership, that
the act or omission was at least not opposed to the Partnership's best
interests. Notwithstanding the foregoing, each Indemnitee shall be liable,
responsible and accountable, and the Partnership shall not be liable to an
Indemnitee, other than for reasonable expenses actually incurred by the
Indemnitee with respect to a proceeding in which (i) the Indemnitee is found
liable on the basis that the Indemnitee improperly received personal benefit,
whether or not the benefit resulted from an action taken in the Indemnitee's
official capacity, or (ii) the Indemnitee is found liable to the Partnership or
the Limited Partners. The Partnership shall not indemnify or hold harmless the
Indemnitee: (a) in the case in which the Indemnitee is an Independent Director,
if the loss or liability was the result of gross negligence or willful
misconduct by the Indemnitee, or (b) in any other case, if the loss or liability
was the result of negligence or misconduct by the Indemnitee. The termination of
any proceeding by judgment, order or settlement does not create a presumption
that the Indemnitee did not meet the requisite standard of conduct set forth in
this Section 6.03(a). The termination of any proceeding by conviction or upon a
plea of nolo contendere or its equivalent, or an entry of an order of probation
prior to judgment, does not alone determine that the

<PAGE>

Indemnitee acted in a manner contrary to that specified in this Section 6.03(a).
Any indemnification pursuant to this Section 6.03 shall be made only out of the
assets of the Partnership.

        (b)     Notwithstanding anything to the contrary contained in the
provisions of subsection (a) of this Section, the Partnership shall not provide
indemnification for any loss, liability or expense arising from or out of an
alleged violation of federal or state securities laws by an Indemnitee unless
one or more of the following conditions are met: (i) there has been a successful
adjudication on the merits of each count involving alleged securities law
violations as to the particular Indemnitee, (ii) such claims have been dismissed
with prejudice on the merits by a court of competent jurisdiction as to the
particular Indemnitee, or (iii) a court of competent jurisdiction approves a
settlement of the claims against a particular Indemnitee and finds that
indemnification of the settlement and the related costs should be made, and the
court considering the request for indemnification has been advised of the
position of the SEC and of the published position of any state securities
regulatory authority in which securities of the Partnership were offered or sold
as to indemnification for violations of securities laws.

        (c)     The Partnership shall pay or reimburse reasonable legal expenses
and other costs incurred by an Indemnitee in advance of final disposition of a
proceeding if all of the following are satisfied: (i) the proceeding relates to
acts or omissions with respect to the performance of duties for services on
behalf of the Partnership, (ii) the Indemnitee provides the Partnership with
written affirmation of the Indemnitee's good faith belief that the Indemnitee
has met the standard of conduct necessary for indemnification by the Partnership
as authorized in this Section 6.03, (iii) the legal proceeding was initiated by
a third party who is not a stockholder of the General Partner or, if by a
stockholder of the General Partner acting in his or her capacity as such, a
court of competent jurisdiction approves such advancement, and (iv) the
Indemnitee provides the Partnership with a written agreement to repay the amount
paid or reimbursed by the Partnership, together with the applicable legal rate
of interest thereon, if it is ultimately determined that the Indemnitee did not
comply with the requisite standard of conduct and is not entitled to
indemnification.

        (d)     The Indemnification provided by this Section 6.03 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity.

        (e)     The Partnership may purchase and maintain insurance or establish
other arrangements, including without limitation trust arrangements and letters
of credit on behalf of or to secure indemnification obligations owed to the
Indemnitees and such other Persons as the General Partner shall determine
against any liability that may be asserted against or expenses that may be
incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.

        (f)     For purposes of this Section 6.03, (i) the Partnership shall be
deemed to have requested an Indemnitee to serve as a fiduciary of an employee
benefit plan whenever the performance by the Indemnitee of its duties to the
Partnership also imposes duties on the Indemnitee, or otherwise involves
services by the Indemnitee to the plan or participants or beneficiaries of the
plan; (ii) excise taxes assessed on an Indemnitee with respect to an employee
benefit plan pursuant to applicable law shall constitute fines within the
meaning of this Section 6.03; and (iii) actions taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.

<PAGE>

        (g)     In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.

        (h)     An Indemnitee shall not be denied indemnification in whole or in
part under this Section 6.03 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.

        (i)     The provisions of this Section 6.03 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights in or be for the benefit of any other Persons.

6.04    LIABILITY OF THE GENERAL PARTNER.

        (a)     Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary damages to the
Partnership or any Partners for losses sustained or liabilities incurred as a
result of errors in judgment or any act or omission if the General Partner acted
in good faith. The General Partner shall not be in breach of any duty that the
General Partner may owe to the Limited Partners or the Partnership or any other
Persons under this Agreement or of any duty stated or implied by law or equity,
provided, the General Partner, acting in good faith, abides by the terms of this
Agreement. In addition, to the extent the General Partner or any officer,
director, employee, agent or stockholder of the General Partner performs its
duties in accordance with the standards provided by the Act, as it may be
amended from time to time, or under any successor statute thereto, such Person
or Persons shall have no liability by reason of being or having been the General
Partner, or by reason of being an officer, director, employee, agent or
stockholder of the General Partner. To the maximum extent that the Act and the
general laws of the State of Texas, in effect from time to time, permit
limitation of the liability of general partners of a limited partnership, the
General Partner and its officers, directors, employees, agents and stockholders
shall not be liable to the Partnership or to any Partner for money damages
except to the extent that (i) the General Partner or its officers, directors,
employees, agents or stockholders actually received an improper benefit or
profit in money, property or services, in which case the liability shall not
exceed the amount of the benefit or profit in money, property or services
actually received; or (ii) a judgment or other final adjudication adverse to the
General Partner or one or more of its officers, directors, employees, agents or
stockholders is entered in a proceeding based on a finding in the proceeding
that the action or failure to act of the General Partner or one or more of its
officers, directors, employees, agents or stockholders was the result of active
and deliberate dishonesty and was material to the cause of action adjudicated in
the proceeding. Neither the amendment nor repeal of this Section 6.04(a), nor
the adoption or amendment of any other provision of this Agreement inconsistent
with this Section 6.04(a), shall apply to or affect in any respect the
applicability of the preceding sentence with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption. In the absence
of any Texas statute limiting the liability of the General Partner or its
directors or officers for money damages in a suit by or on behalf of the
Partnership or by any Partner, the General Partner and the officers, directors,
employees, agents and stockholders of the General Partner shall not be liable to
the Partnership or to any Partner for money damages except to the extent that
(i) the General Partner or one or more of its officers, directors, employees,
agents or stockholders actually received an improper benefit or profit in money,
property or services, in which case the liability shall not exceed the amount of
the benefit or profit in money, property or services actually received; or (ii)
a judgment or other final adjudication adverse to the General Partner or one or
more of its officers, directors, employees, agents or stockholders is entered in
a proceeding based on a finding in the proceeding that the action of the General
Partner or one or more of its officers, directors, employees or stockholders
action or failure to act was the result of active and deliberate dishonesty and
was material to the cause of action adjudicated in the proceeding.

<PAGE>

        (b)     The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership, itself and its stockholders
collectively, that the General Partner is under no obligation to consider the
separate interests of the Limited Partners (including, without limitation, the
tax consequences to Limited Partners or the tax consequences of some, but not
all, of the Limited Partners) in deciding whether to cause the Partnership to
take (or decline to take) any actions. In the event of a conflict between the
interests of its stockholders on the one hand and the Limited Partners on the
other, the General Partner shall endeavor in good faith to resolve the conflict
in a manner not adverse to either its stockholders or the Limited Partners;
provided, however, that for so long as the General Partner directly owns a
controlling interest in the Partnership, any such conflict that the General
Partner, in its sole and absolute discretion, determines cannot be resolved in a
manner not adverse to either its stockholders or the Limited Partners shall be
resolved in favor of its stockholders. The General Partner shall not be liable
for monetary damages for losses sustained, liabilities incurred, or benefits not
derived by Limited Partners in connection with such decisions, provided that the
General Partner has acted in good faith.

        (c)     Subject to its obligations and duties as General Partner set
forth in Section 6.01 hereof, the General Partner may exercise any of the powers
granted to it under this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.

        (d)     Notwithstanding any other provisions of this Agreement or the
Act, any action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order to (i) protect the ability of the General
Partner to continue to qualify as a REIT or (ii) prevent the General Partner
from incurring any taxes under Section 857, Section 4981, or any other provision
of the Code, is expressly authorized under this Agreement and is deemed approved
by all of the Limited Partners.

        (e)     Any amendment, modification or repeal of this Section 6.04 or
any provision hereof shall be prospective only and shall not in any way affect
the limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 6.04 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
claims relating to such matters may arise or be asserted.

6.05    REIMBURSEMENT OF GENERAL PARTNER.

        (a)     Except as provided in this Section 6.05 and elsewhere in this
Agreement (including the provisions of Articles V and VI regarding
distributions, payments, and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.

        (b)     The General Partner shall be reimbursed on a monthly basis, or
such other basis as the General Partner may determine in its sole and absolute
discretion, for all REIT Expenses and Administrative Expenses.

6.06    OUTSIDE ACTIVITIES. Subject to Section 6.08 hereof, the Articles of
Incorporation and any agreements entered into by the General Partner or its
Affiliates with the Partnership or a Subsidiary, or any officer, director,
employee, agent, trustee, Affiliate or stockholder of the General Partner, the
General Partner shall be entitled to and may have business interests and engage
in business activities in addition to

<PAGE>

those relating to the Partnership, including business interests and activities
substantially similar or identical to those of the Partnership. Neither the
Partnership nor any of the Limited Partners shall have any rights by virtue of
this Agreement in any such business ventures, interests or activities. None of
the Limited Partners or any other Person shall have any rights by virtue of this
Agreement or the partnership relationship established hereby in any such
business ventures, interests or activities, and the General Partner shall have
no obligation pursuant to this Agreement to offer any interest in any such
business ventures, interests and activities to the Partnership or any Limited
Partner, even if such opportunity is of a character which. if presented to the
Partnership or any Limited Partner, could be taken by such Person.

6.07    EMPLOYMENT OR RETENTION OF AFFILIATES.

        (a)     Any Affiliate of the General Partner may be employed or retained
by the Partnership and may otherwise deal with the Partnership (whether as an
advisor, buyer, lessor, lessee, manager, property management agent, asset
manager, furnisher of goods or services, broker, agent, lender or otherwise) and
may receive from the Partnership any compensation, price, or other payment
therefor which the General Partner determines to be fair and reasonable.

        (b)     The Partnership may lend or contribute to its Subsidiaries or
other Persons in which it has an equity investment, and such Persons may borrow
funds from the Partnership, on terms and conditions established in the sole and
absolute discretion of the General Partner. The foregoing authority shall not
create any right or benefit in favor of any Subsidiary or any other Person.

        (c)     The Partnership may transfer assets to joint ventures, limited
liability companies, other partnerships, corporations or other business entities
in which it is or thereby becomes a participant upon such terms and subject to
such conditions as the General Partner deems to be consistent with this
Agreement and applicable law.

        (d)     Except as expressly permitted by this Agreement, neither the
General Partner nor any of its Affiliates shall sell, transfer or convey any
property to, or purchase any property from, the Partnership, directly or
indirectly, except pursuant to transactions that are on terms that are fair and
reasonable to the Partnership.

6.08    GENERAL PARTNER PARTICIPATION. The General Partner agrees that all
business activities of the General Partner, including activities pertaining to
the acquisition, development or ownership of commercial real property or other
property, including Mortgages, shall be conducted through the Partnership or one
or more Subsidiary Partnerships; provided, however, that the General Partner is
allowed to make a direct acquisition, but if and only if, such acquisition is
made in connection with the issuance of Additional Securities, which direct
acquisition and issuance have been approved and determined to be in the best
interests of the General Partner and the Partnership by a majority of the
Independent Directors.

6.09    TITLE TO PARTNERSHIP ASSETS. Partnership assets, whether real, personal
or mixed and whether tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partner, individually or collectively, shall
have any ownership interest in such Partnership assets or any portion thereof;
provided, that title to any or all of the Partnership assets may be held in the
name of the Partnership, the General Partner or one or more nominees, as the
General Partner may determine, including Affiliates of the General Partner. The
General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by such Person for the use and
benefit of the Partnership in accordance with the provisions of this Agreement;
provided, that the General Partner shall use its best efforts to cause legal
title to such assets to be vested in the Partnership as soon as reasonably
practicable.

<PAGE>

All Partnership assets shall be recorded as the property of the Partnership in
its books and records, irrespective of the name in which legal title to such
Partnership assets is held.

6.10    MISCELLANEOUS. In the event the General Partner redeems any REIT Shares,
then the General Partner shall cause the Partnership to purchase from the
General Partner or the Original Limited Partner a number of Partnership Units
determined by, and based upon, the application of the Conversion Factor on the
same terms upon which the General Partner redeemed such REIT Shares. Moreover,
if the General Partner makes a cash tender offer or other offer to acquire REIT
Shares, then the General Partner shall cause the Partnership to make a
corresponding offer to the General Partner or the Original Limited Partner to
acquire an equal number of Partnership Units held by the General Partner. In the
event any REIT Shares are redeemed by the General Partner pursuant to such
offer, the Partnership shall redeem an equivalent number of the General
Partner's or the Original Limited Partner's Partnership Units for an equivalent
purchase price based on the application of the Conversion Factor.

                                   ARTICLE VII

                           CHANGES IN GENERAL PARTNER

7.01    TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST.

        (a)     The General Partner shall not transfer all or any portion of its
General Partnership Interest or withdraw as General Partner except as provided
in or in connection with a transaction contemplated by Sections 7.01(c), 7.01(d)
or 7.01(e).

        (b)     The General Partner agrees that the Percentage Interest for it
will at all times, be in the aggregate, at least 0.1%.

        (c)     Except as otherwise provided in Section 7.01(d) or (e) hereof,
the General Partner shall not engage in any merger, consolidation or other
combination with or into another Person or sale of all or substantially all of
its assets (other than in connection with a change in the General Partner's
state of incorporation or organizational form), which, in any such case, results
in a change of control of the General Partner (a "TRANSACTION"), unless:

                (i)     the consent of Limited Partners holding more than 50% of
        the Percentage Interests of the Limited Partners is obtained; or

                (ii)    as a result of such Transaction all Limited Partners are
        granted the right to receive for each Partnership Unit an amount of
        cash, securities, or other property equal to the product of the
        Conversion Factor and the greatest amount of cash, securities or other
        property paid in the Transaction to a holder of one REIT Share in
        consideration of the transfer of one REIT Share; provided, that if, in
        connection with the Transaction, a purchase, tender or exchange offer
        ("OFFER") shall have been made to and accepted by the holders of more
        than 50% of the outstanding REIT Shares, each holder of Partnership
        Units shall be given the option to exchange its Partnership Units for
        the greatest amount of cash, securities, or other property which a
        Limited Partner would have received had it (A) exercised its Exchange
        Right and (B) sold, tendered or exchanged pursuant to the Offer the REIT
        Shares received upon exercise of the Exchange Right immediately prior to
        the expiration of the Offer; or

                (iii)   the General Partner is the surviving entity in the
        Transaction and either (A) the holders of REIT Shares do not receive
        cash, securities, or other property in the Transaction or (B) all
        Limited Partners (other than the General Partner or any Subsidiary)
        receive an amount of

<PAGE>

        cash, securities, or other property (expressed as an amount per REIT
        Share) that is no less than the product of the Conversion Factor and the
        greatest amount of cash, securities, or other property (expressed as an
        amount per REIT Share) received in the Transaction by any holder of REIT
        Shares.

        (d)     Notwithstanding Section 7.01(c), the General Partner may merge
with or into or consolidate with another entity if immediately after such merger
or consolidation (i) substantially all of the assets of the successor or
surviving entity (the "Survivor"), other than Partnership Units held by the
General Partner, are contributed, directly or indirectly, to the Partnership as
a Capital Contribution in exchange for Partnership Units with a fair market
value equal to the value of the assets so contributed as determined by the
Survivor in good faith and (ii) the Survivor expressly agrees to assume all
obligations of the General Partner, as appropriate, hereunder. Upon such
contribution and assumption, the Survivor shall have the right and duty to amend
this Agreement as set forth in this Section 7.01(d). The Survivor shall in good
faith arrive at a new method for the calculation of the Cash Amount, the REIT
Shares Amount and the Conversion Factor for a Partnership Unit after any such
merger or consolidation so as to approximate the existing method for such
calculation as closely as reasonably possible. Such calculation shall take into
account, among other things, the kind and amount of securities, cash and other
property that was receivable upon such merger or consolidation by a holder of
REIT Shares or options, warrants or other rights relating thereto, and which a
holder of Partnership Units could have acquired had such Partnership Units been
exchanged immediately prior to such merger or consolidation. Such amendment to
this Agreement shall provide for adjustments to such method of calculation,
which shall be as nearly equivalent as may be practicable to the adjustments
provided for herein with respect to the Conversion Factor. The Survivor also
shall in good faith modify the definition of REIT Shares and make such
amendments to Section 8.05 hereof so as to approximate the existing rights and
obligations set forth in Section 8.05 as closely as reasonably possible. The
above provisions of this Section 7.01(d) shall similarly apply to successive
mergers or consolidations permitted hereunder.

        In respect of any transaction described in the preceding paragraph, the
General Partner is required to use its commercially reasonable efforts to
structure such transaction to avoid causing the Limited Partners to recognize a
gain for federal income tax purposes by virtue of the occurrence of or their
participation in such transaction, provided, such efforts are consistent with
the exercise of the Board of Directors' fiduciary duties to the stockholders of
the General Partner under applicable law.

        (e)     Notwithstanding Section 7.01(c),

                (i)     a General Partner may transfer all or any portion of its
        General Partnership Interest to (A) a wholly-owned Subsidiary of such
        General Partner or (B) the owner of all of the ownership interests of
        such General Partner, and following a transfer of all of its General
        Partnership Interest, may withdraw as General Partner; and

                (ii)    the General Partner may engage in a transaction not
        required by law or by the rules of any national securities exchange on
        which the REIT Shares are listed to be submitted to the vote of the
        holders of the REIT Shares.

7.02    ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER. A Person shall
be admitted as a substitute or additional General Partner of the Partnership
only if the following terms and conditions are satisfied:

        (a)     the Person to be admitted as a substitute or additional General
Partner shall have accepted and agreed to be bound by all the terms and
provisions of this Agreement by executing a counterpart hereof and such other
documents or instruments as may be required or appropriate in order to effect
the

<PAGE>

admission of such Person as a General Partner, a certificate evidencing the
admission of such Person as a General Partner shall have been filed for
recordation and all other actions required by Section 2.05 hereof in connection
with such admission shall have been performed;

        (b)     if the Person to be admitted as a substitute or additional
General Partner is a corporation or a partnership, it shall have provided the
Partnership with evidence satisfactory to counsel for the Partnership of such
Person's authority to become a General Partner and to be bound by the terms and
provisions of this Agreement; and

        (c)     counsel for the Partnership shall have rendered an opinion
(relying on such opinions from other counsel in the state or any other
jurisdiction as may be necessary) that the admission of the Person to be
admitted as a substitute or additional General Partner is in conformity with the
Act, and that none of the actions taken in connection with the admission of such
Person as a substitute or additional General Partner will cause (i) the
Partnership to be classified other than as a partnership for federal income tax
purposes, or (ii) the loss of any Limited Partner's limited liability.

7.03    EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A GENERAL
        PARTNER.

        (a)     Upon the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.04(a) hereof) or the death,
withdrawal, removal or dissolution of a General Partner (except that, if a
General Partner is, on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a
partner in, such partnership shall be deemed not to be a dissolution of such
General Partner if the business of such General Partner is continued by the
remaining partner or partners thereof), the Partnership shall be dissolved and
terminated unless the Partnership is continued pursuant to Section 7.03(b)
hereof. The merger of the General Partner with or into any entity that is
admitted as a substitute or successor General Partner pursuant to Section 7.02
hereof shall not be deemed to be the withdrawal, dissolution or removal of the
General Partner.

        (b)     Following the occurrence of an Event of Bankruptcy as to a
General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
death, withdrawal, removal or dissolution of a General Partner (except that, if
a General Partner is, on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a
partner in, such partnership shall be deemed not to be a dissolution of such
General Partner if the business of such General Partner is continued by the
remaining partner or partners thereof), the Limited Partners, within 90 days
after such occurrence, may elect to continue the business of the Partnership for
the balance of the term specified in Section 2.04 hereof by selecting, subject
to Section 7.02 hereof and any other provisions of this Agreement, a substitute
General Partner by consent of a majority in interest of the Limited Partners. If
the Limited Partners elect to continue the business of the Partnership and admit
a substitute General Partner, the relationship with the Partners and of any
Person who has acquired an interest of a Partner in the Partnership shall be
governed by this Agreement.

7.04    REMOVAL OF A GENERAL PARTNER.

        (a)     Upon the occurrence of an Event of Bankruptcy as to, or the
dissolution of, a General Partner, such General Partner shall be deemed to be
removed automatically; provided, however, that if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution, Event
of Bankruptcy as to or removal of a partner in such partnership shall be deemed
not to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners thereof. The Limited
Partners may not remove the General Partner, with or without cause.

<PAGE>

        (b)     If a General Partner has been removed pursuant to this Section
7.04 and the Partnership is continued pursuant to Section 7.03 hereof, such
General Partner shall promptly transfer and assign its General Partnership
Interest in the Partnership to the substitute General Partner approved by a
majority in interest of the Limited Partners in accordance with Section 7.03(b)
hereof and otherwise admitted to the Partnership in accordance with Section 7.02
hereof. At the time of assignment, the removed General Partner shall be entitled
to receive from the substitute General Partner the fair market value of the
General Partnership Interest of such removed General Partner as reduced by any
damages caused to the Partnership by such General Partner's removal. Such fair
market value shall be determined by an appraiser mutually agreed upon by the
General Partner and Limited Partners holding more than 50% of the Percentage
Interests of the Limited Partners within 10 days following the removal of the
General Partner. In the event that the parties are unable to agree upon an
appraiser, the removed General Partner and Limited Partners holding more than
50% of the Percentage Interests of the Limited Partners shall each select an
appraiser. Each such appraiser shall complete an appraisal of the fair market
value of the removed General Partner's General Partnership Interest within 30
days of the General Partner's removal, and the fair market value of the removed
General Partner's General Partnership Interest shall be the average of the two
appraisals; provided, however, that if the higher appraisal exceeds the lower
appraisal by more than 20% of the amount of the lower appraisal, the two
appraisers, no later than 40 days after the removal of the General Partner,
shall select a third appraiser who shall complete an appraisal of the fair
market value of the removed General Partner's General Partnership Interest no
later than 60 days after the removal of the General Partner. In such case, the
fair market value of the removed General Partner's General Partnership Interest
shall be the average of the two appraisals closest in value.

        (c)     The General Partnership Interest of a removed General Partner,
during the time after removal until the date of transfer under Section 7.04(b),
shall be converted to that of a special Limited Partner; provided, however, such
removed General Partner shall not have any rights to participate in the
management and affairs of the Partnership, and shall not be entitled to any
portion of the income, expense, Profit, gain or Loss allocations or cash
distributions allocable or payable, as the case may be, to the Limited Partners.
Instead, such removed General Partner shall receive and be entitled only to
retain distributions or allocations of such items that it would have been
entitled to receive in its capacity as General Partner, until the transfer is
effective pursuant to Section 7.04(b).

        (d)     All Partners shall have given and hereby do give such consents,
shall take such actions and shall execute such documents as shall be legally
necessary and sufficient to effect all the foregoing provisions of this Section
7.04.

                                  ARTICLE VIII

                             RIGHTS AND OBLIGATIONS
                             OF THE LIMITED PARTNERS

8.01    MANAGEMENT OF THE PARTNERSHIP. The Limited Partners shall not
participate in the management or control of Partnership business nor shall they
transact any business for or on behalf of the Partnership, nor shall they have
the power to sign for or bind the Partnership, such powers being vested solely
and exclusively in the General Partner.

8.02    POWER OF ATTORNEY. Each Limited Partner hereby irrevocably appoints the
General Partner its true and lawful attorney-in-fact, who may act for each
Limited Partner and in its name, place and stead, and for its use and benefit,
sign, acknowledge, swear to, deliver, file or record, at the appropriate public
offices, any and all documents, certificates, and instruments as may be deemed
necessary or desirable by the General Partner to carry out fully the provisions
of this Agreement and the Act in accordance with their terms, which power of
attorney is coupled with an interest and shall survive the death, dissolution or

<PAGE>

legal incapacity of the Limited Partner, or the transfer by the Limited Partner
of any part or all of its Partnership Interest.

8.03 LIMITATION ON LIABILITY OF LIMITED PARTNERS. No Limited Partner shall be
liable for any debts, liabilities, contracts or obligations of the Partnership.
A Limited Partner shall be liable to the Partnership only to make payments of
its Capital Contribution, if any, as and when due hereunder. After its Capital
Contribution is fully paid, no Limited Partner shall, except as otherwise
required by the Act, be required to make any further Capital Contributions or
other payments or lend any funds to the Partnership.

8.04    OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR AFFILIATE.
No Limited Partner shall at any time, either directly or indirectly, own any
stock or other interest in the General Partner or in any Affiliate thereof, if
such ownership by itself or in conjunction with other stock or other interests
owned by other Limited Partners would, in the opinion of counsel for the
Partnership, jeopardize the classification of the Partnership as a partnership
for federal income tax purposes. The General Partner shall be entitled to make
such reasonable inquiry of the Limited Partners as is required to establish
compliance by the Limited Partners with the provisions of this Section 8.04.

8.05    EXCHANGE RIGHT.

        (a)     Subject to Sections 8.05(b), 8.05(c), 8.05(d) and 8.05(e)
hereof, and subject to the potential modification of any rights or obligations
provided for herein by agreement(s) between the Partnership and any one or more
Limited Partners with respect to Partnership Units held by them, each Limited
Partner shall have the right (the "EXCHANGE RIGHT") to require the Partnership
to redeem on a Specified Exchange Date all or a portion of the Partnership Units
held by such Limited Partner at an exchange price equal to and in the form of
the Cash Amount to be paid by the Partnership; provided, that such Partnership
Units shall have been outstanding for at least one year. The Exchange Right
shall be exercised pursuant to the delivery of an Exchange Notice to the
Partnership (with a copy to the General Partner) by the Limited Partner who is
exercising the Exchange Right (the "EXCHANGING PARTNER"); provided, however,
that the Partnership shall not be obligated to satisfy such Exchange Right if
the General Partner elects to purchase the Partnership Units subject to the
Exchange Notice pursuant to Section 8.05(b); and provided further, that no
Limited Partner may deliver more than two Exchange Notices during each calendar
year. A Limited Partner may not exercise the Exchange Right for less than 1,000
Partnership Units or, if such Limited Partner holds less than 1,000 Partnership
Units, all of the Partnership Units held by such Partner. The Exchanging Partner
shall have no right, with respect to any Partnership Units so exchanged, to
receive any distribution paid with respect to such Partnership Units if the
record date for such distribution is on or after the Specified Exchange Date.

        (b)     Notwithstanding the provisions of Section 8.05(a), a Limited
Partner that exercises the Exchange Right shall be deemed to have also offered
to sell the Partnership Units described in the Exchange Notice to the General
Partner, and the General Partner may, in its sole and absolute discretion, elect
to purchase directly and acquire such Partnership Units by paying to the
Exchanging Partner either the Cash Amount or the REIT Shares Amount, as elected
by the General Partner (in its sole and absolute discretion), on the Specified
Exchange Date, whereupon the General Partner shall acquire the Partnership Units
offered for exchange by the Exchanging Partner and shall be treated for all
purposes of this Agreement as the owner of such Partnership Units. If the
General Partner shall elect to exercise its right to purchase Partnership Units
under this Section 8.05(b) with respect to an Exchange Notice, it shall so
notify the Exchanging Partner within five business days after the receipt by the
General Partner of such Exchange Notice. Unless the General Partner (in its sole
and absolute discretion) shall exercise its right to purchase Partnership Units
from the Exchanging Partner pursuant to this Section 8.05(b), the General
Partner shall have no obligation to the Exchanging Partner or the Partnership
with respect to the Exchanging Partner's exercise of an Exchange Right. In the
event the General Partner shall exercise its

<PAGE>

right to purchase Partnership Units with respect to the exercise of an Exchange
Right in the manner described in the first sentence of this Section 8.05(b), the
Partnership shall have no obligation to pay any amount to the Exchanging Partner
with respect to such Exchanging Partner's exercise of such Exchange Right, and
each of the Exchanging Partner and the General Partner shall treat the
transaction between the General Partner and the Exchanging Partner for federal
income tax purposes as a sale of the Exchanging Partner's Partnership Units to
the General Partner. Each Exchanging Partner agrees to execute such documents as
the General Partner may reasonably require in connection with the issuance of
REIT Shares to such Exchanging Partner upon exercise of its Exchange Right.

        (c)     Notwithstanding the provisions of Sections 8.05(a) and 8.05(b),
a Limited Partner shall not be entitled to exercise the Exchange Right if the
delivery of REIT Shares to such Partner on the Specified Exchange Date by the
General Partner pursuant to Section 8.05(b) (regardless of whether or not the
General Partner would in fact exercise its rights under Section 8.05(b)) would
(i) result in such Partner or any other person owning, directly or indirectly,
REIT Shares in excess of the ownership limitations described in the Articles of
Incorporation and calculated in accordance therewith, (ii) result in REIT Shares
being owned by fewer than 100 persons (determined without reference to any rules
of attribution), except as provided in the Articles of Incorporation, (iii)
result in the General Partner being "closely held" within the meaning of Section
856(h) of the Code, (iv) cause the General Partner to own, directly or
constructively, 10% or more of the ownership interests in a tenant of the
General Partner's, the Partnership's, or a Subsidiary Partnership's real
property within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause
the acquisition of REIT Shares by such Partner to be "integrated" with any other
distribution of REIT Shares for purposes of complying with the registration
provisions of the Securities Act. The General Partner, in its sole and absolute
discretion, may waive any of the restrictions on exchange set forth in this
Section 8.05(c); provided, however, that in the event any such restriction is
waived, the Exchanging Partner shall be paid the Cash Amount.

        (d)     Any Cash Amount to be paid to an Exchanging Partner pursuant to
this Section 8.05 shall be paid on the Specified Exchange Date; provided,
however, that the General Partner may elect to cause the Specified Exchange Date
to be delayed for up to 180 days to the extent required for the General Partner
to cause additional REIT Shares to be issued to provide financing to be used to
make such payment of the Cash Amount. Notwithstanding the foregoing, the General
Partner agrees to use its best efforts to cause the closing of the acquisition
of exchanged Partnership Units hereunder to occur as quickly as reasonably
possible.

        (e)     Notwithstanding any other provision of this Agreement, the
General Partner shall place appropriate restrictions on the ability of the
Limited Partners to exercise their Exchange Rights as and if deemed necessary to
ensure that the Partnership does not constitute a "publicly traded partnership"
under Section 7704 of the Code. If and when the General Partner determines that
imposing such restrictions is necessary, the General Partner shall give prompt
written notice thereof (a "RESTRICTION NOTICE") to each of the Limited Partners,
which notice shall be accompanied by a copy of an opinion of counsel to the
Partnership which states that, in the opinion of such counsel, restrictions are
necessary in order to avoid the Partnership being treated as a "publicly traded
partnership" under Section 7704 of the Code.

8.06    CALL RIGHT.

        (a)     Subject to Section 8.06(c) below, and subject to the
modification of any rights or obligations provided for herein by agreement(s)
between the General Partner and any one or more Limited Partners with respect to
the Partnership Units held by them, at any time after the expiration of the
Holding Period for the Partnership Units in question, the General Partner shall
have the right (the "CALL RIGHT") to purchase all of the Partnership Units held
by a Limited Partner at a price equal to the Cash Amount; provided, however,
that the General Partner may, in its sole and absolute discretion, elect to

<PAGE>

purchase such Partnership Units by paying to the Partner in question the REIT
Shares Amount in lieu of the Cash Amount. The Call Right shall be exercised
pursuant to a Call Notice delivered by the General Partner to any such Limited
Partner. The General Partner may not exercise the Call Right for less than the
entire interest of a Limited Partner in the Partnership. A Limited Partner
receiving the Call Notice described above shall have no rights with respect to
any interest in the Partnership other than the right to receive payment for its
interest in the Partnership in cash or REIT Shares in accordance with this
Section 8.06. An assignee of a Limited Partner shall be bound by and subject to
the Call Right of the General Partner pursuant to this Section 8.06. In
connection with any exercise of such Call Right by the General Partner with
respect to an assignee, the Cash Amount (or REIT Shares Amount) shall be paid by
the General Partner directly to such assignee and not to the Limited Partner
from which such assignee acquired its Partnership Units. The General Partner
shall be unable to exercise the Call Right and the Call Right shall lapse upon
the occurrence of a Liquidating Event unless and until the Partners shall
continue the business of the Partnership under Section 7.03 hereof.

        (b)     (i)     Within 30 days after the delivery of the Call Notice by
the General Partner to a Limited Partner under this Section 8.06, the General
Partner (subject to the limitations set forth in Section 8.06(c)) shall transfer
and deliver the Cash Amount (or the REIT Shares Amount) to such Limited Partner
or, as applicable, its assignee, whereupon the General Partner (or its designee)
shall acquire the Partnership Units of such Limited Partner or, as applicable,
its assignee, and shall be treated for all purposes of this Agreement as the
owner of such Partnership Units (and as a Limited Partner with respect to such
Partnership Units).

                (ii)    In the event that the General Partner elects to pay such
        Limited Partner in the form of the REIT Shares Amount and such REIT
        Shares Amount is not a whole number of REIT Shares, the Limited Partner
        shall be paid (A) the number of REIT Shares which equals the nearest
        whole number less than such amount plus (B) an amount of cash which the
        General Partner determines, in its reasonable discretion, to represent
        the fair value of the remaining fractional REIT Share which would
        otherwise be payable to the Limited Partner.

                (iii)   Each Limited Partner agrees to deliver to the General
        Partner the Partnership Unit Certificate(s) representing its Limited
        Partnership Interest and to execute such documents as the General
        Partner may reasonably require in connection with the issuance of REIT
        Shares upon exercise of the Call Right (including without limitation an
        assignment of Partnership Units pursuant to the terms of which such
        Limited Partner (A) represents, warrants and certifies that it has
        marketable and unencumbered title to its Partnership Units, free and
        clear of the rights of or interest of any other person or entity, that
        it has the full right, power and authority to transfer and surrender its
        Partnership Units, and that it has obtained the consent or approval of
        all persons or entities, if any, having the right to consent to or
        approve of such transfer and surrender, and (B) agrees to indemnify and
        hold the General Partner harmless from and against any and all
        liabilities, charges, costs and expenses relating to such Limited
        Partner's Partnership Units which are subject to the Call Right or the
        exercise of the Call Right).

        (c)     Notwithstanding the provisions of Sections 8.06(a) and 8.06(b)
above, the General Partner shall not be entitled to exercise the Call Right if
(i) a Liquidating Event has occurred with regard to the Partnership and the
Partnership has not been continued under Section 7.03 hereof; or (ii) the
delivery of REIT Shares to the Limited Partner (A) would be prohibited under the
Articles of Incorporation, (B) would adversely affect the ability of the General
Partner to continue to qualify as a REIT or subject the General Partner to any
additional taxes under Section 857 or Section 4981 of the Code, or (C) would be
prohibited under applicable federal or state securities laws or regulations.

<PAGE>

        (d)     Each Limited Partner covenants and agrees with the General
Partner that all Partnership Units delivered in connection with the Call Right
shall be delivered to the General Partner free and clear of all liens and
encumbrances and, notwithstanding anything contained herein to the contrary, the
General Partner shall not be under any obligation to acquire a Limited Partner's
Partnership Units (i) to the extent that any such Partnership Units are subject
to any such liens or encumbrances or (ii) in the event that the Limited Partner
shall fail to give the General Partner adequate assurances that such Partnership
Units are not subject to any such liens or encumbrances or shall fail to agree
to fully indemnify the General Partner from any such liens or encumbrances as
well as the liabilities, charges, costs and expenses referenced in the last
section of Section 8.06(b)(iii). Each Limited Partner further agrees that, in
the event any state or local transfer tax is payable as a result of the transfer
of its Partnership Units to the General Partner, such Limited Partner shall
assume and pay such transfer tax.

8.07    DUTIES AND CONFLICTS. The General Partner recognizes that the Limited
Partners and their Affiliates have or may have other business interests,
activities and investments, some of which may be in conflict or competition with
the business of the Partnership, and that such Persons are entitled to carry on
such other business interests, activities and investments. The Limited Partners
and their Affiliates may engage in or possess an interest in any other business
or venture of any kind, independently or with others, on their own behalf or on
behalf of other entities with which they are affiliated or associated, and such
Persons may engage in any activities, whether or not competitive with the
Partnership, without any obligation to offer any interest in such activities to
the Partnership or to any Partner. Neither the Partnership nor any Partner shall
have any right, by virtue of this Agreement, in or to such activities, or the
income or profits derived therefrom, and the pursuit of such activities, even if
competitive with the business of the Partnership, and such activities shall not
be deemed wrongful or improper.

                                   ARTICLE IX

                   TRANSFERS OF LIMITED PARTNERSHIP INTERESTS

9.01    PURCHASE FOR INVESTMENT.

        (a)     Each Limited Partner hereby represents and warrants to the
General Partner and to the Partnership that the acquisition of its Partnership
Interest is made as a principal for its account for investment purposes only and
not with a view to the resale or distribution of such Partnership Interest.

        (b)     Each Limited Partner agrees that it will not sell, assign or
otherwise transfer its Partnership Interest or any fraction thereof, whether
voluntarily or by operation of law or at judicial sale or otherwise, to any
Person who does not make the representations and warranties to the General
Partner set forth in Section 9.01(a) above.

9.02    RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.

        (a)     Subject to the provisions of Sections 9.02(b), 9.02(c) and
9.02(d), no Limited Partner may offer, sell, assign, hypothecate, pledge or
otherwise transfer all or any portion of its Limited Partnership Interest, or
any of such Limited Partner's economic rights as a Limited Partner, whether
voluntarily or by operation of law or at judicial sale or otherwise
(collectively, a "TRANSFER"), without the consent of the General Partner, which
consent may be granted or withheld in its sole and absolute discretion. Any such
purported transfer undertaken without such consent shall be considered to be
null and void ab initio and shall not be given effect. The Original Limited
Partner acknowledges that the General Partner has agreed not to grant its
consent with respect to any Transfer by the Original Limited Partner prior to
the Transfer Restriction Date; provided, that the Original Limited Partner shall
not be prohibited from a Transfer of its Partnership Interest pursuant to the
exercise of its right to exchange its

<PAGE>

Partnership Interest for REIT Shares pursuant to Section 8.05 above, in which
case the Original Limited Partner acknowledges that the General Partner has also
agreed not to grant its consent with respect to any Transfer of said REIT Shares
prior to the Transfer Restriction Date. The General Partner may require, as a
condition of any Transfer to which it consents, that the transferor assume all
costs incurred by the Partnership in connection therewith.

        (b)     No Limited Partner may withdraw from the Partnership other than
as a result of: (i) a permitted Transfer (i.e., a Transfer consented to as
contemplated by paragraph (a) above or paragraph (c) below or a Transfer made
pursuant to Section 9.05 below) of all of its Partnership Units pursuant to this
Article IX pursuant to an exchange of all of its Partnership Units pursuant to
Section 8.05 above; or (iii) a Transfer made pursuant to the sale of all its
Partnership Units pursuant to Section 8.06 above. Upon the permitted Transfer or
redemption of all of a Limited Partner's Partnership Units, such Limited Partner
shall cease to be a Limited Partner.

        (c)     Subject to Sections 9.02(d), 9.02(e) and 9.02(f), a Limited
Partner may Transfer, with the consent of the General Partner, all or a portion
of its Partnership Units to (i) a parent or parent's spouse, natural or adopted
descendants, a spouse of any such descendant, a brother or sister, or a trust
created by such Limited Partner for the benefit of such Limited Partner and/or
any such person(s), for which trust such Limited Partner or any such person(s)
is a trustee, (ii) a corporation controlled by a Person or Persons named in (i)
above, or (iii) if the Limited Partner is an entity, its beneficial owners.

        (d)     No Limited Partner may effect a Transfer of its Limited
Partnership Interest, in whole or in part, if, in the opinion of legal counsel
for the Partnership, such proposed Transfer would require the registration of
the Limited Partnership Interest under the Securities Act, or would otherwise
violate any applicable federal or state securities or blue sky law (including
investment suitability standards).

        (e)     No Transfer by a Limited Partner of its Partnership Units, in
whole or in part, may be made to any Person if (i) in the opinion of legal
counsel for the Partnership, the transfer would result in the Partnership's
being treated as an association taxable as a corporation (other than a qualified
REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) in the
opinion of legal counsel for the Partnership, it would adversely affect the
ability of the General Partner to continue to qualify as a REIT or subject the
General Partner to any additional taxes under Section 857 or Section 4981 of the
Code, or (iii) such transfer is effectuated through an "established securities
market" or a "secondary market" (or the substantial equivalent thereof) within
the meaning of Section 7704 of the Code.

        (f)     No transfer of any Partnership Units may be made to a lender to
the Partnership or any Person who is related (within the meaning of Regulations
Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a
nonrecourse liability (within the meaning of Regulations Section 1.752-1(a)(2)),
without the consent of the General Partner, which may be withheld in its sole
and absolute discretion; provided, that as a condition to such consent the
lender will be required to enter into an arrangement with the Partnership and
the General Partner to exchange or redeem for the Cash Amount any Partnership
Units in which a security interest is held simultaneously with the time at which
such lender would be deemed to be a partner in the Partnership for purposes of
allocating liabilities to such lender under Section 752 of the Code.

        (g)     Any Transfer in contravention of any of the provisions of this
Article IX shall be void and ineffectual and shall not be binding upon, or
recognized by, the Partnership.

        (h)     Prior to the consummation of any Transfer under this Article IX,
the transferor and/or the transferee shall deliver to the General Partner such
opinions, certificates and other documents as the General Partner shall request
in connection with such Transfer.

<PAGE>

9.03    ADMISSION OF SUBSTITUTE LIMITED PARTNER.

        (a)     Subject to the other provisions of this Article IX, an assignee
of the Limited Partnership Interest of a Limited Partner (which shall be
understood to include any purchaser, transferee, donee or other recipient of any
disposition of such Limited Partnership Interest) shall be deemed admitted as a
Limited Partner of the Partnership only with the consent of the General Partner
and upon the satisfactory completion of the following:

                (i)     the assignee shall have accepted and agreed to be bound
        by the terms and provisions of this Agreement by executing a counterpart
        or an amendment thereof, including a revised EXHIBIT A, and such other
        documents or instruments as the General Partner may require in order to
        effect the admission of such Person as a Limited Partner;

                (ii)    to the extent required, an amended Certificate
        evidencing the admission of such Person as a Limited Partner shall have
        been signed, acknowledged and filed for record in accordance with the
        Act;

                (iii)   the assignee shall have delivered a letter containing
        the representation set forth in Section 9.01(a) hereof and the agreement
        set forth in Section 9.01(b) hereof;

                (iv)    if the assignee is a corporation, partnership or trust,
        the assignee shall have provided the General Partner with evidence
        satisfactory to counsel for the Partnership of the assignee's authority
        to become a Limited Partner under the terms and provisions of this
        Agreement;

                (v)     the assignee shall have executed a power of attorney
        containing the terms and provisions set forth in Section 8.02 hereof;

                (vi)    the assignee shall have paid all legal fees and other
        expenses of the Partnership and the General Partner and filing and
        publication costs in connection with its substitution as a Limited
        Partner; and

                (vii)   the assignee shall have obtained the prior written
        consent of the General Partner to its admission as a Substitute Limited
        Partner, which consent may be given or denied in the exercise of the
        General Partner's sole and absolute discretion.

        (b)     For the purpose of allocating Profit and Loss and distributing
cash received by the Partnership, a Substitute Limited Partner shall be treated
as having become, and appearing in the records of the Partnership as, a Partner
upon the filing of the Certificate described in Section 9.03(a)(ii) hereof or,
if no such filing is required, the later of the date specified in the transfer
documents or the date on which the General Partner has received all necessary
instruments of transfer and substitution.

        (c)     The General Partner shall cooperate with the Person seeking to
become a Substitute Limited Partner by preparing the documentation required by
this Section 9.03 and making all official filings and publications. The
Partnership shall take all such action as promptly as practicable after the
satisfaction of the conditions in this Article IX to the admission of such
Person as a Limited Partner of the Partnership.

<PAGE>

9.04    RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.

        (a)     Subject to the provisions of Sections 9.01 and 9.02 hereof,
except as required by operation of law, the Partnership shall not be obligated
for any purposes whatsoever to recognize the assignment by any Limited Partner
of its Partnership Interest until the Partnership has received notice thereof.

        (b)     Any Person who is the assignee of all or any portion of a
Limited Partner's Limited Partnership Interest, but who does not become a
Substitute Limited Partner and desires to make a further assignment of such
Limited Partnership Interest, shall be subject to all the provisions of this
Article IX to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of its Limited Partnership Interest.

9.05    EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A LIMITED
PARTNER. The occurrence of an Event of Bankruptcy as to a Limited Partner, the
death of a Limited Partner or a final adjudication that a Limited Partner is
incompetent (which term shall include, but not be limited to, insanity) shall
not cause the termination or dissolution of the Partnership, and the business of
the Partnership shall continue if an order for relief in a bankruptcy proceeding
is entered against a Limited Partner, the trustee or receiver of his estate or,
if he dies, his executor, administrator or trustee, or, if he is finally
adjudicated incompetent, his committee, guardian or conservator, and any such
Person shall have the rights of such Limited Partner for the purpose of settling
or managing his estate property and such power as the bankrupt, deceased or
incompetent Limited Partner possessed to assign all or any part of his
Partnership Interest and to join with the assignee in satisfying conditions
precedent to the admission of the assignee as a Substitute Limited Partner.

9.06    JOINT OWNERSHIP OF INTERESTS. A Partnership Interest may be acquired by
two individuals as joint tenants with right of survivorship, provided, that such
individuals either are married or are related and share the same personal
residence. The written consent or vote of both owners of any such jointly-held
Partnership Interest shall be required to constitute the action of the owners of
such Partnership Interest; provided, however, that the written consent of only
one joint owner will be required if the Partnership has been provided with
evidence satisfactory to the counsel for the Partnership that the actions of a
single joint owner can bind both owners under the applicable laws of the state
of residence of such joint owners. Upon the death of one owner of a Partnership
Interest held in a joint tenancy with a right of survivorship, the Partnership
Interest shall become owned solely by the survivor as a Limited Partner and not
as an assignee. The Partnership need not recognize the death of one of the
owners of a jointly held Partnership Interest until it shall have received
notice of such death. Upon notice to the General Partner from either owner, the
General Partner shall cause the Partnership Interest to be divided into two
equal Partnership Interests, which shall thereafter be owned separately by each
of the former joint owners.

                                    ARTICLE X

                   BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS

10.01   BOOKS AND RECORDS. At all times during the continuance of the
Partnership, the Partners shall keep or cause to be kept at the Partnership's
specified office true and complete books of account maintained in accordance
with generally accepted accounting principles, including (a) a current list of
the full name and last-known business address of each Partner; (b) a copy of the
Certificate of Limited Partnership and all certificates of amendment thereto;
(c) copies of the Partnership's federal, state and local income tax returns and
reports; (d) copies of the Agreement and any financial statements of the
Partnership for the three most recent years; and (e) all documents and
information required under the Act.

<PAGE>

Any Partner or its duly authorized representative, and any stockholder of the
General Partner, upon paying the costs of collection, duplication and mailing,
shall be entitled to inspect or copy such records during ordinary business
hours.

10.02   CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS.

        (a)     All funds of the Partnership not otherwise invested shall be
deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be
made only on such signature or signatures as the General Partner may, from time
to time, determine.

        (b)     All deposits and other funds not needed in the operation of the
business of the Partnership may be invested by the General Partner in investment
grade instruments (or investment companies whose portfolio consists primarily
thereof, government obligations, certificates of deposit, bankers' acceptances
and municipal notes and bonds. The funds of the Partnership shall not be
commingled with the funds of any other Person except for such commingling as may
necessarily result from an investment in those investment companies permitted by
this Section 10.02(b).

10.03   FISCAL AND TAXABLE YEAR. The fiscal and taxable year of the Partnership
shall be the calendar year.

10.04   ANNUAL TAX INFORMATION AND REPORT. The General Partner will use its best
efforts to supply within 75 days after the end of each fiscal year of the
Partnership to each person who was a Limited Partner at any time during such
year the tax information necessary to file such Limited Partner's individual tax
returns as shall be reasonably required by law, and in all events the General
Partner shall furnish such information within the time required by applicable
law.

10.05   TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS.

        (a)     The General Partner shall be the Tax Matters Partner of the
Partnership within the meaning of Section 6231(a)(7) of the Code. As Tax Matters
Partner, the General Partner shall have the right and obligation to take all
actions authorized and required, respectively, by the Code for the Tax Matters
Partner. The General Partner shall have the right to retain professional
assistance in respect of any audit of the Partnership by the Service and all
out-of-pocket expenses and fees incurred by the General Partner on behalf of the
Partnership as Tax Matters Partner shall constitute Partnership expenses. In the
event the General Partner receives notice of a final Partnership adjustment
under Section 6223(a)(2) of the Code, the General Partner shall either (i) file
a court petition for judicial review of such final adjustment within the period
provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all Limited Partners on the date such petition is filed, or (ii) mail
a written notice to all Limited Partners, within such period, that describes the
General Partner's reasons for determining not to file such a petition.

        (b)     All elections required or permitted to be made by the
Partnership under the Code or any applicable state or local tax law shall be
made by the General Partner in its sole and absolute discretion.

        (c)     In the event of a transfer of all or any part of the Partnership
Interest of any Partner, the Partnership, at the option and in the sole and
absolute discretion of the General Partner, may elect pursuant to Section 754 of
the Code to adjust the basis of the Properties. Notwithstanding anything
contained in Article V of this Agreement, any adjustments made pursuant to
Section 754 shall affect only the successor-in-interest to the transferring
Partner and in no event shall be taken into account in establishing, maintaining
or computing Capital Accounts for the other Partners for any purpose under this

<PAGE>

Agreement. Each Partner will furnish the Partnership with all information
necessary to give effect to such election.

10.06   REPORTS TO LIMITED PARTNERS.

        (a)     As soon as practicable after the close of each fiscal quarter
(other than the last quarter of the fiscal year), the General Partner shall
cause to be mailed to each Limited Partner a quarterly report containing
financial statements of the Partnership, or of the General Partner if such
statements are prepared solely on a consolidated basis with the General Partner,
for such fiscal quarter presented in accordance with generally accepted
accounting principles. As soon as practicable after the close of each fiscal
year, the General Partner shall cause to be mailed to each Limited Partner an
annual report containing financial statements of the Partnership, or of the
General Partner if such statements are prepared solely on a consolidated basis
with the General Partner, for such fiscal year, presented in accordance with
generally accepted accounting principles. The annual financial statements shall
be audited by accountants selected by the General Partner.

        (b)     Any Partner shall further have the right to a private audit of
the books and records of the Partnership, provided such audit is made for
Partnership purposes and at the expense of the Partner desiring it, and it is
made during normal business hours.

                                   ARTICLE XI

                        AMENDMENT OF AGREEMENT; MEETINGS

11.01   AMENDMENT. The General Partner's consent shall be required for any
amendment to this Agreement. The General Partner, without the consent of the
Limited Partners, may amend this Agreement in any respect; provided, however,
that the following amendments shall require the consent of Limited Partners
holding more than 50% of the Percentage Interests of the Limited Partners:

        (a)     any amendment affecting the operation of the Conversion Factor
or the Exchange Right (except as provided in Sections 8.05(d) or 7.01(d) hereof)
in a manner adverse to the Limited Partners;

        (b)     any amendment that would adversely affect the rights of the
Limited Partners to receive the distributions payable to them hereunder, other
than with respect to the issuance of additional Partnership Units pursuant to
Section 4.02 hereof;

        (c)     any amendment that would alter the Partnership's allocations of
Profit and Loss to the Limited Partners, other than with respect to the issuance
of additional Partnership Units pursuant to Section 4.02 hereof; or

        (d)     any amendment that would impose on the Limited Partners any
obligation to make additional Capital Contributions to the Partnership.

        The foregoing notwithstanding, the approval of any amendment to this
Agreement that shall be part of a plan of merger, plan of exchange or plan of
conversion involving the Partnership or the Partnership Interests shall be
governed by Article XII.

<PAGE>

11.02   MEETINGS OF PARTNERS.

        (a)     The Partners may but shall not be required to hold any annual,
periodic or other formal meetings. Meetings of the Partners may be called by the
General Partner or by any Limited Partner or Limited Partners holding at least
10% of the Partnership Units in the Partnership.

        (b)     The Partner or Partners calling the meeting may designate any
place within the State of Texas as the place of meeting for any meeting of the
Partners; and Partners holding at least a majority of the Partnership Units in
the Partnership may designate any place outside the State of Texas as the place
of meeting for any meeting of the Partners. If no designation is made, or if a
special meeting is called, the place of meeting shall be the principal place of
business of the Partnership.

        (c)     Except as provided in Section 11.02(d), written notice stating
the place, day and hour of the meeting and the purpose or purposes for which the
meeting is called shall be delivered not less than ten (10) nor more than ninety
(90) days before the date of the meeting, either personally or by mail, by or at
the direction of the Partner or Partners calling the meeting, to each Partner
entitled to vote at such meeting and to each Partner not entitled to vote who is
entitled to notice of the meeting.

        (d)     Anything in this Agreement to the contrary notwithstanding, with
respect to any meeting of the Partners, any Partner who in person or by proxy
shall have waived in writing notice of the meeting, either before or after such
meeting, or who shall attend the meeting in person or by proxy, shall be deemed
to have waived notice of such meeting unless such Partner attends for the
express purpose of objecting, at the beginning of the meeting, and does so
object to the transaction of any business because the meeting is not lawfully
called or convened.

        (e)     If all of the Partners shall meet at any time and place, either
within or outside of the State of Texas, in person or by proxy, and consent to
the holding of a meeting at such time and place, such meeting shall be valid
without call or notice, and at such meeting lawful action may be taken.

        (f)     For the purpose of determining Partners entitled to notice of or
to vote at any meeting of Partners or any adjournment thereof, the date on which
notice of the meeting is mailed shall be the record date. When a determination
of Partners entitled to vote at any meeting of Partners has been made as
provided in this Section, such determination shall apply to any adjournment
thereof.

        (g)     Partners holding at least a majority of the Partnership Units
entitled to vote at a meeting, represented in person or by proxy, shall
constitute a quorum at any meeting of Partners. In the absence of a quorum at
any such meeting, Partners holding at least a majority of Partnership Units so
represented may adjourn the meeting to another time and place. Any business
which might have been transacted at the original meeting may be transacted at
any adjourned meeting at which a quorum is present. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken unless the adjournment is for more than 120 days.
The Partners present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal during such meeting
of that number Partnership Units whose absence would cause less than a quorum to
be present.

        (h)     If a quorum is present, the affirmative vote of Partners holding
a majority of the Partnership Units entitled to vote, present in person or
represented by proxy, shall be binding on all Partners, unless the vote of a
greater or lesser proportion or number of Partnership Units or Partners is
otherwise required by applicable law or by this Agreement. Unless otherwise
expressly provided herein or required under applicable law, Partners who have an
interest (economic or otherwise) in the outcome of any particular matter upon
which the Partners' vote or consent is required may vote or consent upon

<PAGE>

any such matter and their Partnership Units, vote or consent, as the case may
be, shall be counted in the determination of whether the requisite matter was
approved by the Partners.

        (i)     At all meetings of Partners, a Partner may vote in person or by
proxy executed in writing by the Partner or by the Partner's duly authorized
attorney-in-fact. Such proxy shall be filed with the General Partner before or
at the time of the meeting. No proxy shall be valid after eleven months from the
date of its execution, unless otherwise provided in the proxy.

        (j)     Action required or permitted to be taken at a meeting of
Partners may be taken without a meeting if the action is evidenced by one or
more written consents or approvals describing the action taken and signed by
sufficient Partners or Partners holding sufficient Partnership Units, as the
case may be, to approve such action had such action been properly voted on at a
duly called meeting of the Partners. Action taken under this Section 11.02(j) is
effective when the requisite Partners or Partners with the requisite Partnership
Units, as the case may be, have signed the consent or approval, unless the
consent specifies a different effective date.

                                   ARTICLE XII

                         MERGER, EXCHANGE OR CONVERSION

12.01   MERGER, EXCHANGE OR CONVERSION OF PARTNERSHIP. (a) The Partnership may
(i) adopt a plan of merger and may merge with or into one or more domestic or
foreign limited partnerships or other entities with the resulting entity being
one or more surviving entities, (ii) adopt a plan of exchange by which a
domestic or foreign limited partnership or other entity is to acquire all of the
outstanding Partnership Interests of the Partnership in exchange for cash,
securities or other property of the acquiring domestic or foreign limited
partnership or other entity or (iii) adopt a plan of conversion and convert to a
foreign limited partnership or other entity. Any such plan of merger, plan of
exchange, or plan of conversion shall otherwise comply with the requirements of
this Agreement and the Act.

        (b)     Any merger pursuant to a plan of merger described in Section
12.01(a)(i) hereof shall be conditioned upon the merger being permitted by the
laws under which each other entity that is a party to the merger is incorporated
or organized or by the constituent documents of such other entity that are not
inconsistent with such laws. Any exchange pursuant to a plan of exchange
described in Section 12.01(a)(ii) hereof shall be conditioned upon the issuance
of shares or other interests of the acquiring foreign limited partnership or
other entity being permitted by the laws under which such foreign limited
partnership or other entity is incorporated or organized or is not inconsistent
with such laws. Any conversion pursuant to a plan of conversion described in
Section 12.01(a)(iii) hereof shall be conditioned upon such conversion being
permitted by, or not inconsistent with, the laws of the jurisdiction in which
the converted entity is to be incorporated, formed or organized and the
incorporation, formation or organization of the converted entity is effected in
compliance with such laws.

        (c)     The Partnership may adopt a plan of merger, plan of exchange or
plan of conversion if the General Partner acts upon and the Limited Partners (if
required by Section 12.02 below) approve the plan of merger, plan of exchange or
plan of conversion in the manner prescribed in Section 12.02 below.

12.02   APPROVAL OF PLAN OF MERGER, EXCHANGE OR CONVERSION.

        (a)     Except as provided by Section 12.02(g) below, after acting on a
plan of merger, plan of exchange or plan of conversion in the manner prescribed
by Section 12.02(b)(i), the General Partner shall submit the plan of merger,
plan of exchange or plan of conversion for approval by the Limited Partners.

<PAGE>

        (b)     Except as provided by Section 12.02(f) below, for a plan of
merger, plan of exchange or plan of conversion to be approved:

                (i)     the General Partner shall adopt a resolution
        recommending that the plan of merger, plan of exchange or plan of
        conversion be approved by the Limited Partners, unless the General
        Partner determines that for any reason it should not make that
        recommendation, in which case the General Partner shall adopt a
        resolution directing that the plan of merger, plan of exchange or plan
        of conversion be submitted to the Limited Partners for approval without
        recommendation; and

                (ii)    the Limited Partners entitled to vote on the plan of
        merger, plan of exchange or plan of conversion must approve the plan.

        (c)     The General Partner may condition its submission to the Limited
Partners of a plan of merger, plan of exchange or plan of conversion, and the
effectiveness of such plan, on any basis, including without limitation that a
specified percentage of the Percentage Interests of the Limited Partners in
excess of a majority of the Percentage Interests of the Limited Partners be
required for the approval of the plan of merger, plan of exchange or plan of
conversion.

        (d)     The General Partner shall notify each Limited Partner, whether
or not entitled to vote, of the meeting of the Limited Partners at which the
plan of merger, plan of exchange or plan of conversion is to be submitted for
approval in accordance with this Section 12.02 and applicable law. The notice
shall be given at least twenty (20) days before the meeting and shall state that
the purpose, or one of the purposes, of the meeting is to consider the plan of
merger, plan of exchange or plan of conversion and shall contain or be
accompanied by a copy or summary of the plan. Any such approval may be by
written consent of the requisite Limited Partners as would be required to
approve the plan at any meeting where all the Limited Partners are present.

        (e)     Unless the General Partner (acting pursuant to Section 12.02(c))
requires a greater vote, the vote of the Limited Partners required for approval
of a plan of merger, plan of exchange or plan of conversion shall be the
affirmative vote of the holders of more than 50% of the Percentage Interests of
the Limited Partners entitled to vote thereon.

        (f)     Unless applicable law otherwise requires (in which case the
approval of the Limited Partners shall continue to be required and the foregoing
provisions of this Section 12.02 shall continue to apply), (1) approval by the
Limited Partners on a plan of exchange shall not be required, and the foregoing
provisions of this Section 12.02 do not apply, if the Partnership is the
acquiring entity in the plan of exchange, and (2) approval by the Limited
Partners on a plan of merger or a plan of conversion shall not be required and
the foregoing provisions of this Section 12.02 do not apply, if:

                (i)     a limited partnership is the sole surviving or resulting
        entity;

                (ii)    the partnership agreement of the surviving or resulting
        limited partnership will not materially differ from this Agreement
        before the merger or conversion in any manner other than as to
        applicable law or other insignificant conforming differences;

                (iii)   Limited Partners who held Limited Partnership Interests
        immediately before the effective date of the merger or conversion will
        hold interests in the surviving or resulting entity in the same
        proportions, immediately after the effective date of the merger or
        conversion; and

                (iv)    the General Partner adopts a resolution approving the
        plan of merger or plan of conversion.

<PAGE>

        (g)     After a plan of merger, plan of exchange or plan of conversion
is approved, and at any time before the merger, exchange or conversion has
become effective, the plan of merger, plan of exchange or plan of conversion may
be abandoned (subject to any contractual rights by any of the entities that are
a party thereto), without action by the Limited Partners, in accordance with the
procedures set forth in the plan of merger, plan of exchange or plan of
conversion or, if no such procedures are set forth in the plan, in the manner
determined by the General Partner.

12.03   RIGHTS OF DISSENTING LIMITED PARTNERS.

        (a)     In the absence of fraud in the transaction, the remedy provided
by this Section 12.03 to a Limited Partner voting against any merger, exchange
or conversion or objecting to a merger, exchange or conversion approved by the
written consent of Limited Partners (a "DISSENTING LIMITED PARTNER") is the
exclusive remedy for the recovery of the value of his Limited Partnership
interests or money damages with respect to the transaction. If the existing,
surviving, or new corporation or limited partnership (foreign or domestic) or
other entity, as the case may be, complies with the requirements of this Section
12.03, any Dissenting Limited Partner who fails to comply with the requirements
of this Section 12.03 shall not be entitled to bring suit for the recovery of
the value of his Limited Partnership interests or money damages with respect to
the transaction. A "Dissenting Limited Partner" in respect of any merger,
exchange or conversion shall expressly exclude any Limited Partner who votes in
favor of the related plan of merger, plan of exchange or plan of conversion or
who abstains or fails to timely vote therefor. In the event of a plan of merger,
plan of exchange or plan of conversion approved by written consent, a
"Dissenting Limited Partner" in respect of any related merger, exchange or
conversion shall expressly exclude Limited Partners who provide such written
consent and Limited Partners who fail to object to the merger, exchange or
conversion and demands payment for such Limited Partner's Limited Partnership
Interest in writing to the General Partner within twenty (20) days after notice
to the Limited Partners of the receipt by the Partnership of written consents
sufficient to approve such merger, exchange or conversion. All such Limited
Partners who are not included within the definition of Dissenting Limited
Partner in respect of any merger, exchange or conversion shall participate in
the merger, exchange or conversion according to the approved plan of merger,
plan of exchange or plan of conversion.

        (b)     Any Dissenting Limited Partner who has opted for payment for his
Limited Partnership interests shall not thereafter be entitled to vote or
exercise any other rights of a Limited Partner except the right to receive
payment for his Limited Partnership interests and the right to maintain an
appropriate action to obtain relief on the ground that the transaction would be
or was fraudulent. Limited Partnership Interests of Dissenting Limited Partners
for which payment has been made shall not thereafter be considered outstanding
for the purposes of any subsequent vote of the Limited Partners.

        (c)     Within twenty (20) days after a Dissenting Limited Partner votes
against any plan of merger, plan of exchange or plan of conversion which is
approved by a vote of the Limited Partners, or in connection with a Limited
Partner's objection to any plan of merger, plan of exchange or plan of
conversion approved by the written consent of the Limited Partners, the
Dissenting Limited Partner may demand by written notice to the General Partner
that payment for his Limited Partnership Interest be made. Upon receipt of such
a payment demand, the General Partner shall (i) make a notation on the records
of the Partnership that such demand has been made and (ii) within a reasonable
period of time after the later of the receipt of a payment demand or the
consummation of the merger, exchange or conversion, cause the Partnership to pay
to the Dissenting Limited Partner the fair value of such Dissenting Limited
Partner's Partnership Interest without interest. The fair value of a Dissenting
Limited Partner's Partnership Interest shall be an amount equal to the
Dissenting Limited Partner's pro rata share (as would be determined under
Section 5.06 hereof if the Partnership were liquidating) of the appraised

<PAGE>

value of the net assets of the Partnership based on an appraisal of all assets
of the Partnership from a Competent Independent Expert. The assets of the
Partnership shall be appraised on a consistent basis. The appraisal shall be
based on an evaluation of all relevant information and shall include the current
value of the Partnership's assets as of the date immediately prior to the
proposed merger, exchange or conversion. The appraisal shall assume an orderly
liquidation of the Partnership's assets over a twelve (12) month period, shall
consider other balance sheet items, and shall be net of the assumed cost of
sale. The terms of the engagement of the appraiser shall clearly state that the
engagement is for the benefit of the Partnership and its Limited Partners. A
summary of the independent appraisal, including all material assumptions
underlying the appraisal, shall be provided to Dissenting Limited Partners in
connection with the payment of the fair value of their Limited Partnership
Interests.

        (d)     If a Dissenting Limited Partner shall fail to make a payment
demand within the period provided in Section 12.03(c) hereof or, in respect of a
plan of merger, plan of exchange or plan of conversion approved by written
consent of the Limited Partners, shall fail to provide notice of dissent within
the period set forth in Section 12.03(a) hereof, such Dissenting Limited Partner
and all persons claiming under him shall be conclusively presumed to have
approved and ratified the merger, conversion or exchange and shall be bound
thereby, the right of such Dissenting Limited Partner to be paid the fair value
of his Limited Partnership Interest shall cease, and his status as a Limited
Partner shall be restored without prejudice to any proceedings which may have
been taken during the interim, and such Dissenting Limited Partner shall be
entitled to receive any distributions made to Limited Partners in the interim.

12.04   ROLL-UP TRANSACTIONS. If the Partnership adopts any plan of merger, plan
of exchange or plan of conversion which, if effected, would result in a "Roll-Up
Transaction", as defined in the Articles of Incorporation, then any such
transaction shall be subject to and effected strictly in compliance with the
provisions applicable to Roll-Up Transactions set forth in Section 13.3 of the
Articles of Incorporation.

                                  ARTICLE XIII

                               GENERAL PROVISIONS

13.01   NOTICES. All communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or upon deposit in the United States mail, registered, postage
prepaid return receipt requested, to the Partners at the addresses set forth in
EXHIBIT A attached hereto; provided, however, that any Partner may specify a
different address by notifying the General Partner in writing of such different
address. Notices to the Partnership shall be delivered at or mailed to its
specified office.

13.02   SURVIVAL OF RIGHTS. Subject to the provisions hereof limiting transfers,
this Agreement shall be binding upon and inure to the benefit of the Partners
and the Partnership and their respective legal representatives, successors,
transferees and assigns.

13.03   ADDITIONAL DOCUMENTS. Each Partner agrees to perform all further acts
and execute, swear to, acknowledge and deliver all further documents which may
be reasonable, necessary, appropriate or desirable to carry out the provisions
of this Agreement or the Act.

13.04   SEVERABILITY. If any provision of this Agreement shall be declared
illegal, invalid, or unenforceable in any jurisdiction, then such provision
shall be deemed to be severable from this Agreement (to the extent permitted by
law) and in any event such illegality, invalidity or unenforceability shall not
affect the remainder hereof.

<PAGE>

13.05   ENTIRE AGREEMENT. This Agreement and exhibits attached hereto constitute
the entire Agreement of the Partners and supersede all prior written agreements
and prior and contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof, except as otherwise set forth herein.

13.06   PRONOUNS AND PLURALS. When the context in which words are used in the
Agreement indicates that such is the intent, words in the singular number shall
include the plural and the masculine gender shall include the neuter or female
gender as the context may require.

13.07   HEADINGS. The Article and Section headings in this Agreement are for
convenience only and shall not be used in construing the scope of this Agreement
or any particular Article or Section hereof.

13.08   COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original copy and all of which together
shall constitute one and the same instrument binding on all parties hereto,
notwithstanding that all parties shall not have signed the same counterpart.

13.09   GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas; provided, however, that any
cause of action for violation of federal or state securities law shall not be
governed by this Section 13.09.

13.10   ARBITRATION. Notwithstanding anything to the contrary contained in this
Agreement, all claims, disputes and controversies between the parties hereto
(including, without limitation, any claims, disputes and controversies between
the Partnership and any one or more of the Partners and between or among any
Partners) arising out of or in connection with this Agreement or the Partnership
created hereby, or any act or failure to act by the General Partner or any other
Partner hereunder, shall be resolved by binding arbitration in Dallas, Texas by
the American Arbitration Association (the "AAA"), in accordance with this
Section 13.10. Any arbitration called for by this Section 13.10 shall be
conducted in accordance with the following procedures:

        (a)     The Partnership or any Partner (the "REQUESTING PARTY") may
demand arbitration pursuant to this Section 13.10 at any time by giving written
notice of such demand (the "DEMAND NOTICE") to all other Partners and (if the
Requesting Party is not the Partnership) to the Partnership which Demand Notice
shall describe in reasonable detail the nature of the claim, dispute or
controversy.

        (b)     Within 15 days after the giving of a Demand Notice or such
additional time as required by the AAA, the AAA shall select and designate in
writing three reputable, disinterested individuals willing to act as an
arbitrator of the claim, dispute or controversy in question.

        (c)     The presentations of the parties hereto in the arbitration
proceeding shall be commenced and completed within sixty (60) days after the
selection of the arbitration panel pursuant to subsection B above, and the
arbitration panel shall render its decision (and specify in reasonable detail
its reasons therefor) in writing within thirty (30) days after the completion of
such presentations. Any decision concurred in by any two (2) of the arbitrators
shall constitute the decision of the arbitration panel, and unanimity shall not
be required.

        (d)     The arbitration panel shall include in its decision a direction
that all of the attorneys' fees and costs of any party or parties and the costs
of such arbitration be paid by the losing party or parties in the arbitration.
On the application of a party before or after the initial decision of the
arbitration panel, and proof of its attorneys' fees and costs, the arbitration
panel shall order the other party to make any payments directed pursuant to the
preceding sentence.

<PAGE>

        Any decision rendered by the arbitration panel in accordance herewith
shall be final and binding on the parties hereto, and judgment thereon may be
entered by any state or federal court of competent jurisdiction. Arbitration
shall be the exclusive method available for resolution of claims, disputes and
controversies arising between and among the parties relating to this Agreement
and the conduct of the parties hereto in relation to Partnership matters, and
the Partnership and its Partners stipulate that the provisions hereof shall be a
complete defense to any suit, action or proceeding in any court or before any
administrative or arbitration tribunal with respect to any such claim,
controversy or dispute. The provisions of this Section 13.10 shall survive the
dissolution of the Partnership.

        Nothing contained herein shall be deemed to give the arbitrators any
authority, power or right to alter, change, amend, modify, add to, or subtract
from any of the provisions of this Agreement.

13.11   VOTE OF AFFILIATED LIMITED PARTNERS. Notwithstanding any provision to
the contrary set forth in this Agreement, in each instance in which the consent,
approval or vote of Limited Partners is required hereunder, any Partnership
Interest held as a Limited Partner by any Affiliate of the Sponsor shall not be
included for purposes of calculating whether the requisite approval of Partners
is obtained unless, as of the date of determination, there are no Limited
Partners entitled to vote or consent who are not Affiliates of the Sponsor.

13.12   ACKNOWLEDGEMENT AS TO EXCULPATION AND INDEMNIFICATION. THE PARTIES
HERETO ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT CONTAINS EXCULPATION AND
INDEMNIFICATION IN RESPECT OF THE ACTIONS OR OMISSIONS OF THE GENERAL PARTNER
AND DIRECTORS, OFFICERS AND AFFILIATES OF THE GENERAL PARTNER BY THE PARTNERSHIP
EVEN IF SUCH ACTIONS OR OMISSIONS CONSTITUTE NEGLIGENCE OF SUCH PERSONS.

<PAGE>

        IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Agreement of Limited Partnership of Behringer Harvard
Opportunity OP I, LP as of the _____ day of November, 2004.

GENERAL PARTNER:

BEHRINGER HARVARD
OPPORTUNITY REIT I, INC.

By:
    ----------------------------------------------------------
      Gerald J. Reihsen, III, Executive Vice President

ORIGINAL LIMITED PARTNER:

BHO PARTNERS, LLC

By:
    ----------------------------------------------------------
      Joshua C. Miller, Vice President

<PAGE>

                               INDEX OF EXHIBITS

EXHIBIT A - Partners, Capital Contributions and Partnership Units

EXHIBIT B - Notice of Exercise of Exchange Right

EXHIBIT C - Call Notice

<PAGE>
<TABLE>
<CAPTION>

                                            EXHIBIT A

                      PARTNERS, CAPITAL CONTRIBUTIONS AND PARTNERSHIP UNITS

                                    As of November ____, 2004

                                                             Agreed Value
                                         Cash                of Property       Partnership
Partners                                 Contribution        Contribution      Units
                                         ------------        ------------      -----
<S>                                      <C>                                   <C>
GENERAL PARTNER:

Behringer Harvard                        $170                N/A               17 Units
Opportunity REIT I, Inc.
15601 Dallas Parkway
Suite 600
Addison, Texas 75001

ORIGINAL LIMITED PARTNER:

BHO Partners, LLC                        $170,000            N/A               170,000 Units

MAIL:
-----
P. O. Box 50401
Henderson, Nevada  89016

HAND DELIVERY:
101 Convention Center Drive
Suite 850
Las Vegas, Nevada  89101

ADDITIONAL LIMITED PARTNERS:
</TABLE>

<PAGE>

                                    EXHIBIT B

                      NOTICE OF EXERCISE OF EXCHANGE RIGHT

        In accordance with the Agreement of Limited Partnership of Behringer
Harvard Opportunity OP I, LP, as amended (the "AGREEMENT"), the undersigned
hereby irrevocably (i) presents for exchange ___________ Partnership Units in
Behringer Harvard Opportunity OP I, LP in accordance with the terms of the
Agreement and the Exchange Right referred to therein; (ii) surrenders such
Partnership Units and all right, title and interest therein; and (iii) directs
that the Cash Amount or REIT Shares Amount (as defined in the Agreement) as
determined by the General Partner deliverable upon exercise of the Exchange
Right be delivered to the address specified below, and if REIT Shares (as
defined in the Agreement) are to be delivered, such REIT Shares be registered or
placed in the name(s) and at the address(es) specified below.

Dated:___________________                   _________________________________
                                             (Signature of Limited Partner)

                                            _________________________________
                                            (Printed Name of Limited Partner)

                                            Mailing Address and Phone No.:

                                            _________________________________
                                            _________________________________
                                            _________________________________
                                            _________________________________

                                            (_____) ___________ _____________

Signature Guaranteed by:  __________________________________

If REIT Shares are to be issued, issue to:

Name: ____________________________________

Mailing Address and Phone No.:

  _________________________________
  _________________________________
  _________________________________
  _________________________________

  (_____) ___________ _____________

Social security or other tax identification number: ___________________________

<PAGE>

                                    EXHIBIT C

                                   CALL NOTICE

        In accordance with the Agreement of Limited Partnership of Behringer
Harvard Opportunity OP I, LP, as amended (the "AGREEMENT"), the undersigned
hereby irrevocably exercises its Call Right (as defined in the Agreement) with
regard to all of the Partnership Units owned by _______________________ in
Behringer Harvard Opportunity OP I, LP. The undersigned shall pay the [Cash
Amount/REIT Shares Amount] to _____________________ at the notice address of
provided in the Agreement upon receipt of (i) the duly executed Partnership Unit
Certificate of ______________________________ transferring all right, title and
interest in Partnership Units to the undersigned, (ii) if REIT Shares are to be
delivered, instructions as to the name, address and taxpayer identification
number of the person to whom such REIT Shares will be registered or placed, and
(iii) the representation, warranty and certification of that
___________________________ (a) has marketable and unencumbered title to such
Partnership Units, free and clear of the rights of or interests of any other
person or entity; (b) has the full right, power and authority to transfer and
surrender such Partnership Units as provided herein; and (c) has obtained the
consent or approval of all persons or entities, if any, having the right to
consent to or approve of such transfer and surrender.

                                      BEHRINGER HARVARD OPPORTUNITY REIT I, INC.

                                      By:_______________________________________
                                      Name:_____________________________________
                                      Title:____________________________________

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