Document:

<PAGE>

                                                                    EXHIBIT 10.4

                                                                [EXECUTION COPY]

================================================================================
                                  $870,000,000

                                CREDIT AGREEMENT

                           Dated as of April 27, 2005

                                      among

                               MOVIE GALLERY, INC.
                        as U.S. Borrower and a Guarantor

                           MOVIE GALLERY CANADA, INC.
                              as Canadian Borrower

                  THE INITIAL LENDERS AND INITIAL ISSUING BANKS
                                  NAMED HEREIN
                  as Initial Lenders and Initial Issuing Banks

                       WACHOVIA BANK, NATIONAL ASSOCIATION
                          as U.S. Administrative Agent

                     CONGRESS FINANCIAL CORPORATION (CANADA)
                        as Canadian Administrative Agent

               MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
                              as Syndication Agent

                                       and

                BANK OF AMERICA, N.A., CALYON NEW YORK BRANCH and
                       CANADIAN IMPERIAL BANK OF COMMERCE
                           as Co-Documentation Agents

                          WACHOVIA CAPITAL MARKETS, LLC
                              as Sole Lead Arranger

                                       and

                           as Sole Bookrunning Manager

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

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                                TABLE OF CONTENTS

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ARTICLE I         DEFINITIONS...........................................................................       3

      Section 1.1       Defined Terms...................................................................       3

      Section 1.2       Computation of Time Periods; Other Definitional Provisions......................      45

      Section 1.3       Accounting Terms................................................................      46

      Section 1.4       Pro Forma Calculations..........................................................      46

ARTICLE II        LOANS AND LETTERS OF CREDIT...........................................................      46

      Section 2.1       The Loans and the Letters of Credit.............................................      46

      Section 2.2       Manner of Borrowing and Disbursement............................................      50

      Section 2.3       Interest........................................................................      58

      Section 2.4       Repayment.......................................................................      60

      Section 2.5       Fees............................................................................      63

      Section 2.6       Optional Prepayments............................................................      64

      Section 2.7       Borrower's Optional Cancellation of the Commitments.............................      65

      Section 2.8       Mandatory Prepayments...........................................................      65

      Section 2.9       Evidence of Debt................................................................      68

      Section 2.10      Manner of Payment...............................................................      69

      Section 2.11      Reimbursement...................................................................      72

      Section 2.12      Pro Rata Treatment..............................................................      73

      Section 2.13      Capital Adequacy................................................................      73

      Section 2.14      Taxes...........................................................................      74

      Section 2.15      Replacement Lenders.............................................................      76

ARTICLE III       CONDITIONS PRECEDENT..................................................................      77

      Section 3.1       Conditions Precedent to Initial U.S. Advance....................................      77

      Section 3.2       Conditions Precedent to Initial Canadian Advance................................      85

      Section 3.3       Conditions Precedent to Each Advance............................................      88

ARTICLE IV        REPRESENTATIONS AND WARRANTIES........................................................      88

      Section 4.1       Representations and Warranties..................................................      88

      Section 4.2       Survival of Representations and Warranties, Etc.................................      97

ARTICLE V         GENERAL COVENANTS.....................................................................      97

      Section 5.1       Preservation of Existence and Similar Matters...................................      97
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                                TABLE OF CONTENTS
                                  (continued)

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      Section 5.2       Business; Compliance with Applicable Law and Material Contracts.................      98

      Section 5.3       Maintenance of Properties.......................................................      98

      Section 5.4       Accounting Methods and Financial Records........................................      98

      Section 5.5       Insurance.......................................................................      98

      Section 5.6       Payment of Taxes and Claims.....................................................      99

      Section 5.7       Visits and Inspections..........................................................     100

      Section 5.8       Payment of Indebtedness; Loans..................................................     100

      Section 5.9       Use of Proceeds.................................................................     100

      Section 5.10      Real Estate.....................................................................     100

      Section 5.11      Indemnity.......................................................................     101

      Section 5.12      Interest Rate Hedging...........................................................     104

      Section 5.13      Future Subsidiaries.............................................................     104

      Section 5.14      Payment of Wages................................................................     106

      Section 5.15      Environmental Law...............................................................     106

      Section 5.16      Further Assurances..............................................................     106

ARTICLE VI        INFORMATION COVENANTS.................................................................     107

      Section 6.1       Quarterly Financial Statements and Information..................................     107

      Section 6.2       Annual Financial Statements and Information.....................................     107

      Section 6.3       Performance Certificates........................................................     107

      Section 6.4       Copies of Other Reports.........................................................     108

      Section 6.5       Notice of Litigation and Other Matters..........................................     109

ARTICLE VII       NEGATIVE COVENANTS....................................................................     110

      Section 7.1       Indebtedness of the U.S. Borrower, the Canadian Borrower and Subsidiaries.......     110

      Section 7.2       Limitation on Liens.............................................................     112

      Section 7.3       Modification of Certain Agreements..............................................     113

      Section 7.4       Disposition of Assets; Liquidation, Amalgamation or Merger......................     113

      Section 7.5       Investments.....................................................................     115

      Section 7.6       Restricted Payments, etc........................................................     117

      Section 7.7       Capital Expenditures............................................................     118
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                                TABLE OF CONTENTS
                                  (continued)

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      Section 7.8       No Prepayment of Subordinated Debt or Pari Passu Debt...........................     118

      Section 7.9       Equity Interest.................................................................     118

      Section 7.10      Transactions with Affiliates....................................................     119

      Section 7.11      Restrictive Agreements, etc.....................................................     119

      Section 7.12      Sale and Leaseback..............................................................     120

      Section 7.13      Financial Covenants.............................................................     120

      Section 7.14      Pension Plan....................................................................     120

      Section 7.15      Speculative Transactions........................................................     120

      Section 7.16      Change to Fiscal Year...........................................................     121

ARTICLE VIII      DEFAULT...............................................................................     121

      Section 8.1       Events of Default...............................................................     121

      Section 8.2       Remedies........................................................................     125

      Section 8.3       Payments Subsequent to Declaration of Event of Default..........................     126

      Section 8.4       Actions in Respect of the Letters of Credit and Canadian BA upon Default........     126

ARTICLE IX        THE AGENTS............................................................................     127

      Section 9.1       Appointment and Authorization...................................................     127

      Section 9.2       Interest Holders................................................................     127

      Section 9.3       Consultation with Counsel.......................................................     127

      Section 9.4       Documents.......................................................................     127

      Section 9.5       Administrative Agents and Affiliates............................................     127

      Section 9.6       Responsibility of the Administrative Agents.....................................     128

      Section 9.7       Collateral and Guaranty Matters.................................................     128

      Section 9.8       Action by the Administrative Agents.............................................     128

      Section 9.9       Notice of Default or Event of Default...........................................     129

      Section 9.10      Responsibility Disclaimed.......................................................     129

      Section 9.11      Indemnification.................................................................     130

      Section 9.12      Credit Decision.................................................................     131

      Section 9.13      Successor Administrative Agents.................................................     131

      Section 9.14      Delegation of Duties............................................................     132
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                                TABLE OF CONTENTS
                                  (continued)

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      Section 9.15      Additional Agents...............................................................     132

      Section 9.16      Administrative Agents May File Proofs of Claim..................................     132

ARTICLE X         CHANGE IN CIRCUMSTANCES AFFECTING FIXED RATE ADVANCES.................................     133

      Section 10.1      Eurodollar Basis Determination Inadequate or Unfair; Circumstances Making
                        Canadian BA Unavailable.........................................................     133

      Section 10.2      Illegality......................................................................     134

      Section 10.3      Increased Costs.................................................................     134

      Section 10.4      Effect On Other Advances........................................................     135

ARTICLE XI        GUARANTY..............................................................................     136

      Section 11.1      Guaranty........................................................................     136

ARTICLE XII       MISCELLANEOUS.........................................................................     139

      Section 12.1      Notices.........................................................................     139

      Section 12.2      Costs and Expenses..............................................................     142

      Section 12.3      Waivers.........................................................................     143

      Section 12.4      Set-Off.........................................................................     143

      Section 12.5      Binding Effect and Assignment...................................................     143

      Section 12.6      Counterparts....................................................................     146

      Section 12.7      Governing Law and Jurisdiction..................................................     146

      Section 12.8      Severability....................................................................     147

      Section 12.9      Interest........................................................................     147

      Section 12.10     Table of Contents and Headings..................................................     147

      Section 12.11     Amendment and Waiver............................................................     148

      Section 12.12     Entire Agreement................................................................     149

      Section 12.13     Other Relationships.............................................................     149

      Section 12.14     Directly or Indirectly..........................................................     149

      Section 12.15     Reliance on and Survival of Various Provisions..................................     149

      Section 12.16     Senior Debt.....................................................................     149

      Section 12.17     Obligations Several.............................................................     149

      Section 12.18     Confidentiality.................................................................     149

      Section 12.19     No Liability of the Issuing Banks...............................................     150
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                                TABLE OF CONTENTS
                                  (continued)

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      Section 12.20     Patriot Act Notice..............................................................     151

      Section 12.21     Waiver of Jury Trial............................................................     151

      Section 12.22     Service of Process, Appointment of Process Agent................................     151

      Section 12.23     Judgment Currency...............................................................     151
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                                       v
<PAGE>

SCHEDULES
---------

SCHEDULE I       -    Disclosure Schedule
SCHEDULE II      -    Notice Information
SCHEDULE III     -    Commitments
SCHEDULE IV      -    Capital and Tax Structure
SCHEDULE V       -    EBITDA Calculation for Fiscal Year 2004

EXHIBITS
--------

EXHIBIT A-1      -    Form of U.S. Revolving Note
EXHIBIT A-2      -    Form of U.S. Swing Line Note
EXHIBIT A-3      -    Form of Term A Note
EXHIBIT A-4      -    Form of Term B Note
EXHIBIT A-5      -    Form of Canadian Revolving Note
EXHIBIT A-6      -    Form of Canadian Swing Line Note
EXHIBIT A-7      -    Form of Acceptance Note
EXHIBIT B-1      -    Form of Request for U.S. Advance
EXHIBIT B-2      -    Form of Request for Canadian Advance
EXHIBIT C-1      -    Form of U.S. Closing Date Certificate
EXHIBIT C-2      -    Form of Canadian Closing Date Certificate
EXHIBIT D        -    [Reserved]
EXHIBIT E        -    Form of Performance Certificate
EXHIBIT F-1      -    Form of U.S. Subsidiary Guaranty
EXHIBIT F-2      -    Form of Canadian Subsidiary Guaranty
EXHIBIT G-1      -    Form of U.S. Borrower Pledge and Security Agreement
EXHIBIT G-2      -    Form of U.S. Subsidiary Pledge and Security Agreement
EXHIBIT G-3      -    Form of Canadian Borrower Pledge and Security Agreement
EXHIBIT G-4      -    Form of Canadian Subsidiary Pledge and Security Agreement
EXHIBIT H        -    Form of Perfection Certificate
EXHIBIT I        -    Form of Financial Condition and Solvency Certificate
EXHIBIT J        -    Form of Assignment and Acceptance
EXHIBIT K        -    Form of Interco Subordination Agreement

                                       vi

<PAGE>

                                CREDIT AGREEMENT

      THIS CREDIT AGREEMENT, dated as of April 27, 2005, among (a) MOVIE
GALLERY, INC., a Delaware corporation (the "U.S. Borrower") and MOVIE GALLERY
CANADA, INC. a New Brunswick corporation (the "Canadian Borrower"), (b) the
banks, financial institutions and other lenders listed on the signature pages
hereof as the Initial U.S. Lenders that extend Commitments to the U.S. Borrower
(the "Initial U.S. Lenders"), WACHOVIA BANK, NATIONAL ASSOCIATION ("Wachovia"),
as the Initial U.S. Issuing Bank (the "Initial U.S. Issuing Bank" and, together
with the Initial U.S. Lenders, the "Initial U.S. Lender Parties") and as
administrative agent (together with any successor administrative agent appointed
pursuant to Article 9, in such capacity, the "U.S. Administrative Agent") for
the U.S. Lender Parties (as hereinafter defined), (c) the banks, financial
institutions and other lenders listed on the signature pages hereof as the
Canadian Initial Lenders that extend Commitments to the Canadian Borrower (the
"Initial Canadian Lenders"), CONGRESS FINANCIAL CORPORATION (CANADA), through
its appointee or designee as the Initial Canadian Issuing Bank (the "Initial
Canadian Issuing Bank" and, together with Initial Canadian Lenders, the "Initial
Canadian Lender Parties") and as administrative agent (together with any
successor administrative agent appointed pursuant to Article 9, in such
capacity, the "Canadian Administrative Agent" and, together with the U.S.
Administrative Agent, the "Administrative Agents") for the Canadian Lender
Parties (as hereinafter defined), and (d) MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as syndication agent (in such capacity, the "Syndication Agent"),
and BANK OF AMERICA, N.A., CALYON NEW YORK BRANCH and CANADIAN IMPERIAL BANK OF
COMMERCE, as co-documentation agents (in such capacity, each a "Co-Documentation
Agent" and, collectively, the "Co-Documentation Agents").

                             PRELIMINARY STATEMENTS:

      (a) The U.S. Borrower, its wholly-owned Subsidiary TG Holdings Inc., an
Oregon corporation ("Holdings"), and Hollywood Entertainment Corporation, an
Oregon corporation ("Target") have entered into an Agreement and Plan of Merger,
dated as of January 9, 2005 (as amended in accordance herewith, the "Merger
Agreement"), pursuant to which the U.S. Borrower will acquire Target and its
Subsidiaries (the "Target Acquisition") as a result of Holdings being merged
with and into Target, with Target as the surviving corporation (the "Merger");

      (b) In connection with the Target Acquisition and Merger, (i) the U.S.
Borrower will repay, directly or indirectly, certain Indebtedness for Money
Borrowed of the U.S. Borrower and its Subsidiaries (other than Target and its
Subsidiaries), as more fully set forth in Item 7.1(b)(i) of the Disclosure
Schedule and terminate all commitments to make extensions of credit thereunder
(the "Borrower Refinancing") and (ii) Target and/or the U.S. Borrower will
repay, directly or indirectly, all Indebtedness for Money Borrowed of Target and
its Subsidiaries (other than Existing Notes not tendered in the Tender Offer
described below) as more fully set forth in Item 7.1(b)(ii) of the Disclosure
Schedule and terminate all commitments to make extensions of credit thereunder
(the "Target Refinancing" and, together with the Borrower Refinancing, the
"Refinancing");

<PAGE>

      (c) As part of the Target Refinancing, Target will make a tender offer
(the "Tender Offer") for Target's 9.625% Senior Subordinated Notes due 2011 (the
"Existing Notes"), together with a related consent solicitation;

      (d) Approximately $1,116,119,500 will be required in order to consummate
the Target Acquisition and the Refinancing and to pay related fees, costs and
expenses, including severance costs and other restructuring charges in an
aggregate amount not to exceed $76,100,000 (the foregoing, including the Target
Acquisition, the Refinancing, the Tender Offer and the Merger, and all
transactions related thereto (including the transactions contemplated by the
Loan Documents and the other capital raising transactions described below in
this recital), being herein referred to as the "Transactions"), which amount
will be raised from the following sources:

            (i) except to the extent provided below, at least $177,700,000 from
      cash on hand of Target and the U.S. Borrower;

            (ii) the issuance or incurrence by the U.S. Borrower of at least
      $321,119,500 in aggregate gross proceeds of unsecured senior indebtedness
      pursuant to the following:

                  (A) a public offering or Rule 144A or other private placement
            of senior unsecured notes (the "Senior Notes", with such offering or
            placement being, collectively, the "Senior Notes Offering"); or

                  (B) in the event the Senior Notes are not issued, or the
            proceeds therefrom are not otherwise available to the U.S. Borrower
            on the date of consummation of the Tender Offer (the "Tender Offer
            Closing Date"), the borrowing of senior unsecured bridge loans (such
            bridge loans, together with (1) any senior unsecured term loans into
            which any such bridge loans may be converted pursuant to the terms
            of the applicable Other Debt Documents and (2) any senior unsecured
            exchange notes for which such bridge loans or term loans, as the
            case may be, may be exchanged pursuant to the terms of the
            applicable Other Debt Documents, being, collectively, the "Bridge
            Loans") made pursuant to the applicable Other Debt Documents;

            (iii) the borrowing by the U.S. Borrower of $795,000,000 in
      aggregate principal amount of Term Loans under this Agreement.

      (e) In connection with the foregoing and to finance the ongoing working
capital needs and general corporate purposes of the Borrowers and the
Subsidiaries, the Borrowers desire to obtain the following financing facilities
from the Lenders:

            (i) a Commitment pursuant to which Term Loans, in a maximum
      aggregate principal amount not to exceed $795,000,000, consisting of a
      Term A Loan in a maximum principal amount not to exceed $95,000,000 and a
      Term B Loan in a maximum principal amount not to exceed $700,000,000,
      which, in each case, may be made to the U.S. Borrower in a single drawing
      on the Closing Date;

                                        2
<PAGE>

            (ii) a Commitment pursuant to which U.S. Dollar denominated and
      Canadian Dollar denominated Revolving Loans, in a maximum aggregate
      principal amount (together with the sub-facilities set forth in clauses
      (iii), (iv) and (v) below) not to exceed $75,000,000 (with an uncommitted
      option to increase such amount by up to $25,000,000 pursuant to Section
      2.1(f)) will be made to the each relevant Borrower from time to time on
      and subsequent to the Closing Date but prior to the Initial Maturity Date;

            (iii) a Commitment pursuant to which the U.S. Issuing Bank will
      issue U.S. Letters of Credit for the account of the U.S. Borrower and its
      U.S. Subsidiaries from time to time on and subsequent to the Closing Date
      but prior to the Initial Maturity Date in a maximum aggregate stated
      amount at any one time outstanding not to exceed $30,000,000;

            (iv) a Commitment pursuant to which U.S. Swing Line Loans in an
      aggregate outstanding principal amount not to exceed $20,000,000 will be
      made on and subsequent to the Closing Date but prior to the Initial
      Maturity Date; and

            (v) a Commitment (to include availability for Canadian Revolving
      Loans, Canadian Swing Line Loans and Canadian Letters of Credit) pursuant
      to which Canadian Revolving Loans, in a maximum aggregate principal amount
      (together with all Canadian Swing Line Loans and Canadian Letter of Credit
      and Canadian BA outstandings) not to exceed Cdn $ Equivalent of
      $20,000,000.

      NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:

                                   ARTICLE I

                                   DEFINITIONS

      Section 1.1 Defined Terms. For the purposes hereof, the following terms
shall have the following meanings:

      "Acceptance Note" is defined in clause (B) of Section 2.2(f)(iii)(A).

      "Acquisition" shall mean (whether by purchase, exchange, issuance of stock
or other equity or debt securities, merger, amalgamation, reorganization or any
other method) (a) any acquisition by the U.S. Borrower or any of its
Subsidiaries of all or substantially all of the Equity Interests of any other
Person, which Person shall then become consolidated with the U.S. Borrower or
any such Subsidiary in accordance with GAAP, or (b) any acquisition by the U.S.
Borrower or any of its Subsidiaries of all or substantially all or any
substantial amount of the assets of any other Person; provided that the purchase
of equipment and other goods and services in the ordinary course of business
shall not be deemed to be "Acquisitions."

      "Administrative Agents" is defined in the recital of the parties to this
Agreement.

      "Administrative Agent's Account" means, collectively, the U.S.
Administrative Agent's Account and the Canadian Administrative Agent's Account.

                                        3
<PAGE>

      "Advance" means, collectively, the U.S. Advances and the Canadian
Advances.

      "Affiliate" means, with respect to a Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, such first
Person. For purposes of this definition, "control" when used with respect to any
Person includes, without limitation, the direct or indirect beneficial ownership
of more than ten percent (10%) of the voting securities or voting equity of such
Person, or the power to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise. Unless otherwise
specified, "Affiliate" means an Affiliate of the U.S. Borrower. Notwithstanding
the foregoing, no Lender Party shall be deemed an Affiliate of any Borrower or
any Subsidiary.

      "Agents" means, collectively, the Administrative Agents, the Syndication
Agent and the Co-Documentation Agents.

      "Agreement" means this Credit Agreement, as may be amended, supplemented,
amended and restated or otherwise modified from time to time.

      "Aircraft Security Agreement" means that certain Aircraft Security
Agreement, dated as of the date hereof, among Movie Gallery US, Inc., Target and
the U.S. Administrative Agent.

      "Annualized Basis" means, with respect to the determination of any amount
for any period (for purposes of this definition, the "Subject Period"), the
product obtained by multiplying (a) the amount accrued during the period
commencing with (and including) the Closing Date and ending on the last day of
the Subject Period and (b) the quotient obtained by dividing (i) 365 by (ii) the
number of days from (and including) the Closing Date to (and including) the last
day of the Subject Period.

      "Applicable Canadian BA Stamping Fee" means, with respect to Canadian
Loans maintained as Canadian BA, the applicable percentage set forth under the
column entitled "Applicable Canadian BA Stamping Fee" with respect thereto
within the definition of Applicable Margin set forth herein.

      "Applicable Law" means, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person, and all orders, decisions,
judgments and decrees of all courts and arbitrators in proceedings or actions to
which the Person in question is a party or by which it is bound.

      "Applicable Margin" means the interest rate margin applicable to Advances
hereunder as determined in accordance with Section 2.3(g) hereof.

      "Approval Lenders" means, collectively, (a) Wachovia and Merrill Lynch
Capital Corporation or (b) any of their respective successors or assignees
approved by the U.S. Borrower (such approval not to be unreasonably withheld,
delayed or conditioned) and otherwise subject to Section 5.5 of the Merger
Agreement.

      "Approved Fund" means, with respect to any Lender Party, any fund that
invests in commercial loans and is managed or advised by such Lender Party or an
Affiliate of such Lender

                                        4
<PAGE>

Party, or by the same investment advisor as such Lender Party or by an Affiliate
of such investment advisor.

      "Assignment and Acceptance" means an Assignment and Acceptance Agreement
substantially in the form attached hereto as Exhibit J.

      "Authorized Officer" means any of the U.S. Borrower's President, Chief
Executive Officer, Chief Financial Officer, Treasurer, its principal accounting
officer, the General Counsel, any Executive Vice President, and any additional
officer who performs a policy-making function as designated by the Board of
Directors of the U.S. Borrower on an annual basis.

      "Authorized Signatory" means, with respect to any Person, such senior
officer of such Person as may be duly authorized and designated in writing by
such Person to execute documents, agreements and instruments on behalf of such
Person.

      "Available Amount" of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).

      "Base Rate" means, with respect to U.S. Loans, a fluctuating interest rate
per annum in effect from time to time, which rate per annum shall at all times
be equal to the higher of:

            (a) the rate of interest established by the U.S. Administrative
      Agent in Charlotte, North Carolina, from time to time, as its prime rate
      for dollars loaned in the United States of America; and

            (b) -1/2 of 1% per annum above the Federal Funds Rate.

      The Base Rate is an index rate and is not necessarily intended to be the
lowest or best rate of interest charged to customers in connection with
extensions of credit or to other banks.

      "Base Rate Advance" means an Advance which the U.S. Borrower requests to
be made as a Base Rate Advance or is reborrowed as a Base Rate Advance, and
which bears interest at the Base Rate Basis, in accordance with the provisions
of Section 2.2 hereof, and which, except in the case of an Advance the proceeds
of which shall be used solely to repay or prepay in full outstanding U.S. Letter
of Credit Loans or outstanding U.S. Swing Line Loans, shall be in a principal
amount of at least $1,000,000 and in an integral multiple of $500,000.

      "Base Rate Basis" means a simple interest rate equal to the sum of (a) the
Base Rate and (b) the Applicable Margin. The Base Rate Basis shall be adjusted
automatically as of the opening of business on the effective date of each change
in the Base Rate to account for such change and shall also be changed to reflect
adjustments in the Applicable Margin pursuant to Section 2.3(g) hereof.

      "Boards Transaction" means the acquisition by the U.S. Borrower or a U.S.
Subsidiary thereof of up to 20 Hollywood Video stores from Boards, Inc. pursuant
to, and on the terms and conditions of, that certain License Agreement.

                                        5
<PAGE>

      "Borrowers" means, collectively, the U.S. Borrower and the Canadian
Borrower.

      "Bridge Loans" is defined in the recital of the parties to this Agreement.

      "Business Day" means a day of the year on which banks are not required or
authorized by law to close in (a) relative to matters with respect to the U.S.
Loans, New York, New York or Charlotte, North Carolina or (b) relative to
matters with respect to the Canadian Loans, Toronto, Ontario, Canada and, if the
applicable Business Day relates to any Eurodollar Advances, on which dealings
are carried on in the London interbank market.

      "Canadian Acquisition" means the Acquisition by the Canadian Borrower of
all or substantially all of the Equity Interests of VHQ Entertainment, Inc. for
an aggregate purchase price not to exceed Cdn $19,200,000 in substantially in
accordance with terms previously disclosed to the Approval Lenders.

      "Canadian Acquisition Transaction Documents" means each material agreement
related to the Canadian Acquisition (other than the Loan Documents), in each
case reasonably acceptable to the Administrative Agents, and as amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with this Agreement.

      "Canadian Administrative Agent" is defined in the recital of the parties
to this Agreement.

      "Canadian Administrative Agent's Account" means the account of the
Canadian Administrative Agent maintained by the Canadian Administrative Agent at
the Bank of Montreal located at 1 First Canadian Place, Toronto, Ontario,
Transit No. 00022, Canadian Account No. 1258246, or such other account as the
Canadian Administrative Agent shall specify in writing to the Canadian Lender
Parties.

      "Canadian Advance" means the aggregate amount advanced by the Canadian
Lenders to the Canadian Borrower under any Type of Canadian Commitment pursuant
to Article 2 hereof on the occasion of any borrowing.

      "Canadian BA" means a depository bill as defined in the Depository Bills
and Notes Act (Canada) in Canadian Dollars that is in the form of an order
signed by the Canadian Borrower and accepted by a Canadian Lender pursuant to
this Agreement or, for Canadian Lenders not participating in clearing services
contemplated in that Act, a draft or bill of exchange in Canadian Dollars that
is drawn by the Canadian Borrower and accepted by a Canadian Lender pursuant to
this Agreement. Orders that become depository bills, drafts and bills of
exchange are sometimes collectively referred to in this Agreement as "drafts."
Canadian BA shall have a term of approximately one (1), two (2), three (3) or
six (6) months, shall be issued and payable only in Canada and shall have a face
amount of an integral multiple of Cdn $100,000. In addition, to the extent the
context shall require, each Acceptance Note shall be deemed to be a Canadian BA.

      "Canadian BA Advance" means a Canadian Advance which the Canadian Borrower
requests to be made as a Canadian BA Advance or is reborrowed as a Canadian BA
Advance, and which bears interest at the Canadian BA Rate Basis, in accordance
with the provisions of Section 2.2 hereof, and which, except in the case of an
Advance the proceeds of which shall be

                                        6
<PAGE>

used solely to repay or prepay in full outstanding Canadian Letter of Credit
Loans or Canadian Swing Line Loans, shall be in a principal amount of at least
Cdn $500,000 and in an integral multiple of Cdn $100,000.

      "Canadian BA Rate" means, for a particular term, the discount rate per
annum or interest (rounded upward to the nearest 1/100 of 1% of which is the
arithmetic average of the discount rates for such term of the Canadian BA
denominated in Canadian Dollars, calculated on the basis of a year of 365 days
or 366 days, as the case may be, equal to (a) in the case of any Lender that is
listed on Schedule I of the Bank Act (Canada), the average rate per annum for
Canadian Dollar bankers' acceptances having such term that appears on the
Reuters Screen CDOR Page (or any successor page) as of 10:00 a.m., Toronto time,
on the first day of such term as determined by the Canadian Administrative
Agent, (b) if such rate is not available at such time, the average discount rate
for bankers acceptances (accepted by Canadian chartered banks agreed to by the
Canadian Administrative Agent and the Canadian Borrower) having such term as
calculated by the Canadian Administrative Agent in accordance with normal market
practice on such day or (c) in the case of all Lenders other than those listed
on Schedule I of the Bank Act (Canada), the applicable rate set forth in clause
(a) or (b) above plus 0.10%.

      "Canadian BA Rate Basis" means a simple interest rate equal to the sum of
(a) the Canadian BA Rate and (b) the Applicable Canadian BA Stamping Fee. The
Canadian BA Rate Basis shall be changed to reflect adjustments in the Applicable
Canadian BA Stamping Fee Margin pursuant to Section 2.3(g) hereof.

      "Canadian Borrower" is defined in the recital of the parties to this
Agreement.

      "Canadian Borrower Pledge and Security Agreement" means that certain
Canadian Borrower Pledge and Security Agreement of even date herewith between
the Canadian Borrower and the Canadian Administrative Agent, substantially in
the form of Exhibit G-3 attached hereto.

      "Canadian Closing Date Certificate" means the closing date certificate
executed and delivered by the Canadian Borrower pursuant to the terms of this
Agreement, substantially in the form of Exhibit C-2 hereto.

      "Canadian Commitment" means, collectively, the Canadian Revolving
Commitment, the Canadian Swing Line Commitment, Canadian BA, and the Canadian
Letter of Credit Commitment, which is not to exceed, in the aggregate, the Cdn $
Equivalent of $20,000,000 less, an amount, which in the Canadian Administrative
Agent's good faith estimate, is the amount of any reserve necessary to reflect
changes or fluctuations in applicable currency exchange markets and exchange
rates, or to reflect the aggregate Mark to Market Exposure of the Canadian
Borrower under all Hedge Agreements.

      "Canadian Dollar" and "Cdn $" each mean the lawful money of Canada.

      "Canadian Issuing Bank" means the Initial Canadian Issuing Bank and any
assignee to which a Canadian Letter of Credit Commitment hereunder has been
assigned pursuant to Section 12.5 so long as each such assignee expressly agrees
to perform in accordance with their terms all of the obligations that by the
terms of this Agreement are required to be performed by it as the Canadian
Issuing Bank and notifies the Canadian Administrative Agent of the amount of

                                        7
<PAGE>

its Canadian Letter of Credit Commitment (which information shall be recorded by
the Canadian Administrative Agent in the Register), for so long as the Canadian
Initial Issuing Bank or assignee, as the case may be, shall have a Canadian
Letter of Credit Commitment.

      "Canadian L/C Collateral Account" means an interest bearing cash
collateral account to be established and maintained by the Canadian
Administrative Agent, over which the Canadian Administrative Agent shall have
sole dominion and control, upon terms as may be satisfactory to the Canadian
Administrative Agent.

      "Canadian L/C Disbursement" means a payment or disbursement made by the
Canadian Issuing Bank pursuant to a Canadian Letter of Credit.

      "Canadian Lenders" means each Lender with a Canadian Commitment or a
Canadian Advance; provided that on the Closing Date any such Lender shall also
be a Canadian Resident.

      "Canadian Lender Parties" means, collectively, any Canadian Lender and the
Canadian Issuing Bank.

      "Canadian Letter of Credit" is defined in Section 2.1(e)(ii).

      "Canadian Letter of Credit Commitment" means, with respect to the Canadian
Issuing Bank, an initial amount equal to Cdn $ Equivalent of $5,000,000 or, if
the Canadian Issuing Bank has entered into one or more Assignment and
Acceptances, set forth for the Canadian Issuing Bank in the Register maintained
by the Canadian Administrative Agent pursuant to Section 12.5(c) as the Canadian
Issuing Bank's "Canadian Letter of Credit Commitment", as such amount may be
reduced from time to time pursuant to Sections 2.7 and 2.8.

      "Canadian Letter of Credit Loans" means a funding made by the Canadian
Issuing Bank or any Canadian Revolving Lender pursuant to Section 2.2 (j)(ii).

      "Canadian Loan Parties" means, collectively, the U.S. Borrower Guarantor,
the Canadian Borrower and each Canadian Subsidiary that is a Loan Party.

      "Canadian Loans" means the Canadian Revolving Loans.

      "Canadian Notice of Renewal" is defined in Section 2.1(e)(ii).

      "Canadian Notice of Termination" is defined in Section 2.1(e) (ii).

      "Canadian Obligations" means (a) all payment and performance obligations
of every kind, nature and description of the Canadian Loan Parties, and any
other obligors to the Canadian Lender Parties, Affiliates of the Canadian Lender
Parties under or in connection with Secured Hedge Agreements (including, without
limitation, Hedging Liabilities) entered into with any Canadian Lender Party,
the Administrative Agents, or any of them, under this Agreement and the other
Loan Documents (including any Letter of Credit commissions, interest, fees and
other charges on the Loans, Canadian BA or otherwise under the Loan Documents
that would accrue but for the filing of a bankruptcy action with respect to any
such Canadian Loan Party, or any such other obligor, whether or not such claim
is allowed in such bankruptcy action), as they

                                        8
<PAGE>

may be amended from time to time, or as a result of making the Canadian Loans or
acceptance of Canadian BA, whether such obligations are direct or indirect,
absolute or contingent, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of law or otherwise, now existing or
hereafter arising, and (b) the obligation to pay an amount equal to the amount
of any and all damages which the Canadian Lender Parties, the Administrative
Agents, or any of them, may suffer by reason of a breach by any Canadian Loan
Party, or any other obligor, of any obligation, covenant or undertaking with
respect to this Agreement or any other Loan Document.

      "Canadian Pension Plan" means (a) a "pension plan" or "plan" which is
subject to applicable pension benefits legislation in any jurisdiction of Canada
and is applicable to employees resident in Canada of the U.S. Borrower or any
Subsidiary, including, without limitation, each of the pension plans, if any,
registered in accordance with the Tax Act which any Borrower sponsors or
administers or into which it makes contributions, or (b) any pension benefit
plan or similar arrangement applicable to employees resident in Canada of the
U.S. Borrower or any Subsidiary.

      "Canadian Pledge and Security Agreements" means, collectively, the
Canadian Borrower Pledge and Security Agreement and the Canadian Subsidiary
Pledge and Security Agreement.

      "Canadian Prime Rate" means, on any date and relative to any Canadian
Prime Rate Advance, a fluctuating rate of interest per annum (rounded upward, if
necessary, to the next highest 1/100 of 1%) equal to the higher of

            (a) the rate of interest per annum most recently announced or
      established by the Bank of Montreal, or its successors and assigns, or
      such other bank as the Canadian Administrative Agent may from time to time
      designate, as its prime rate in effect on such day for determining
      interest rates for Canadian Dollar denominated commercial loans in Canada
      and commonly known as the "prime rate" of the Canadian Administrative
      Agent (such rate not being intended to be the lowest rate of interest
      charged by the Canadian Administrative Agent in connection with extensions
      of credit to debtors); and

            (b) the Canadian BA Rate most recently determined by the Canadian
      Administrative Agent for 30-days bankers' acceptances plus 3/4 of 1%.

      Changes in the rate of interest on that portion of any Canadian Loans
maintained as Canadian Prime Rate Advance will take effect simultaneously with
each change in the Canadian Prime Rate. The Canadian Administrative Agent will
give notice promptly to the Canadian Borrower and the Canadian Lenders of
changes in the Canadian Prime Rate.

      "Canadian Prime Rate Advance" means an Advance which the Canadian Borrower
requests to be made as a Canadian Prime Rate Advance or is reborrowed as a
Canadian Prime Rate Advance, and which bears interest at the Canadian Prime Rate
Basis, in accordance with the provisions of Section 2.2 hereof, and which,
except in the case of an Advance the proceeds of which shall be used solely to
repay or prepay in full outstanding Canadian Letter of Credit Loans or Canadian
Swing Line Loans, shall be in a principal amount of at least Cdn $500,000 and in
an integral multiple of Cdn $100,000.

                                        9
<PAGE>

      "Canadian Prime Rate Basis" means a simple interest rate equal to the sum
of (a) the Canadian Prime Rate and (b) the Applicable Margin. The Canadian Prime
Rate Basis shall be adjusted automatically as of the opening of business on the
effective date of each change in the Canadian Prime Rate to account for such
change and shall also be changed to reflect adjustments in the Applicable Margin
pursuant to Section 2.3(g) hereof.

      "Canadian Resident" shall mean, at any time, a Person who at that time is
(a) not a non-resident of Canada for purposes of the Tax Act or (b) an
authorized foreign bank deemed to be resident in Canada for purposes of the Tax
Act in respect of all amounts paid or credited to such Person under the Canadian
Revolving Commitment, Canadian Letter of Credit Commitment or Canadian Swing
Line Commitment pursuant to this Agreement.

      "Canadian Revolving Commitment" means, with respect to any Canadian
Revolving Lender at any time, the amount set forth opposite such Canadian
Lender's name on Schedule III hereto under the caption "Canadian Revolving
Commitment" or, if such Canadian Lender has entered into one or more Assignment
and Acceptances, set forth for such Canadian Lender in the Register maintained
by the Canadian Administrative Agent pursuant to Section 12.5(c) as such
Canadian Lender's "Canadian Revolving Commitment", as such amount may be reduced
from time to time pursuant to Sections 2.7 and 2.8.

      "Canadian Revolving Lender" means a Canadian Lender that has a Canadian
Revolving Commitment. "Canadian Revolving Loans" means, collectively, the amount
advanced by the Canadian Revolving Lenders to the Canadian Borrower under the
Canadian Revolving Commitment, not to exceed the aggregate amount of the
Canadian Revolving Commitments.

      "Canadian Revolving Loan Outstandings" means the sum (without
double-counting) of (a) the aggregate principal amount of all Canadian Revolving
Loans and Canadian Letter of Credit Loans made by such Canadian Lender (in its
capacity as a Canadian Lender) and outstanding at such time and (b) such
Canadian Lender's Pro Rata Share of (i) the aggregate principal amount of all
Canadian Swing Line Loans then outstanding, (ii) the aggregate Available Amount
of all Canadian Letters of Credit outstanding at such time and (iii) the
aggregate principal amount of all Canadian Letter of Credit Loans made by the
Canadian Issuing Bank pursuant to Section 2.2(j)(ii) and outstanding at such
time.

      "Canadian Revolving Notes" means those certain revolving promissory notes
in the aggregate original principal amount of Cdn $ Equivalent of $20,000,000,
one issued by the Canadian Borrower to each of the Canadian Lenders issuing a
Canadian Revolving Commitment that requests a promissory note, in accordance
with each such Canadian Lender's Canadian Revolving Commitment, each one
substantially in the form of Exhibit A-5 attached hereto, and any extensions,
modifications, renewals, endorsements or replacements of or amendments to any of
the foregoing.

      "Canadian Secured Parties" means the Canadian Administrative Agent, the
Canadian Lender Parties and the Hedge Banks that enter into Hedge Agreements
with the Canadian Borrower.

                                       10
<PAGE>

      "Canadian Subsidiary" means any Subsidiary organized under the laws of
Canada or any province or territory thereof.

      "Canadian Subsidiary Guarantor" means each Canadian Subsidiary of the
Canadian Borrower (other than any Joint Venture Entity) that has executed and
delivered to the Canadian Administrative Agent a Canadian Subsidiary Guaranty.

      "Canadian Subsidiary Guaranty" shall mean, collectively, that certain
Canadian Subsidiary Guaranty of even date herewith in favor of the Canadian
Administrative Agent, for itself and for the ratable benefit of the Canadian
Secured Parties, given by each Canadian Subsidiary of the Canadian Borrower
(other than any Joint Venture Entity), substantially in the form of Exhibit F-2
attached hereto, and any similar guaranty delivered pursuant to Section 5.13
hereof.

      "Canadian Subsidiary Pledge and Security Agreement" means, collectively,
that certain Canadian Subsidiary Pledge and Security Agreement of even date
herewith between each Canadian Subsidiary of the Canadian Borrower (other than
any Joint Venture Entity), on the one hand, and the Canadian Administrative
Agent, on the other hand, substantially in the form of Exhibit G-4 attached
hereto, and any similar security agreement delivered pursuant to Section 5.13
hereof.

      "Canadian Swing Line Commitment" means an amount equal to the lesser of
(a) Cdn $ Equivalent of $5,000,000 and (b) the aggregate Unused Revolving
Commitments.

      "Canadian Swing Line Lender" means Congress in its capacity as provider of
Canadian Swing Line Loans, or any successor swing line lender hereunder.

      "Canadian Swing Line Loans" means, collectively, the amount advanced by
the Canadian Swing Line Lender to the Canadian Borrower under the Canadian Swing
Line Commitment, not to exceed the aggregate amount of the Canadian Swing Line
Commitment.

      "Canadian Swing Line Note" means that certain swing line promissory note
in the aggregate original principal amount of Cdn $ Equivalent of $5,000,000,
issued by the Canadian Borrower to the Canadian Swing Line Lender issuing the
Canadian Swing Line Commitment, substantially in the form of Exhibit A-6
attached hereto, and any extensions, modifications, renewals, endorsements or
replacements of or amendments to any of the foregoing.

      "Canadian Welfare Plan" means any medical, health, hospitalization,
insurance or other employee benefit or welfare plan, agreement or arrangement
applicable to employees resident in Canada of the U.S. Borrower or any
Subsidiary.

      "Capital Expenditures" means, in respect of any Person, expenditures for
the purchase of tangible assets of long-term use which are capitalized in
accordance with GAAP, excluding purchases of Rental Items.

      "Capitalized Lease Obligation" means that portion of any obligation of a
Person as lessee under a lease which is required to be capitalized on the
balance sheet of such lessee in accordance with GAAP.

                                       11
<PAGE>

      "Cash Equivalents" means any of the following, to the extent owned by the
U.S. Borrower or any of its Subsidiaries free and clear of all Liens other than
Liens permitted under this Agreement and having a maturity of not greater than
180 days from the date of issuance thereof: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System, issues (or the parent of
which issues) commercial paper rated as described in clause (c) below, is
organized under the laws of the United States or any State thereof and has
combined capital and surplus of at least $1,000,000,000, (c) commercial paper in
an aggregate amount of no more than $10,000,000 per issuer outstanding at any
time, issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
Moody's or "A-1" (or the then equivalent grade) by S&P, (d) Investments,
classified in accordance with GAAP as Current Assets of the U.S. Borrower or any
of its Subsidiaries, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by financial
institutions that have the highest rating obtainable from either Moody's or S&P,
and the portfolios of which are limited solely to Investments of the character,
quality and maturity described in clauses (a), (b) and (c) of this definition,
(e) other like liquid investments reasonably acceptable to the U.S.
Administrative Agent or (f) solely in respect of the cash management activities
of the Canadian Borrower or its Canadian Subsidiaries, equivalents to the
investments described in clause (a) above to the extent guaranteed by the full
faith and credit of the government of Canada and equivalents of investments
described in clauses (b) and (c) above issued, accepted or offered by the local
office of any commercial bank organized under the laws of Canada, or any
Province or Territory thereof of the Canadian Borrower or such Canadian
Subsidiary, which bank has combined capital and surplus of not less than
$1,000,000,000.

      "Casualty Event" means the damage, destruction or condemnation, as the
case may be, of assets or property of the U.S. Borrower or any of its
Subsidiaries.

      "CCAA" shall mean the Companies' Creditors Arrangement Act (Canada), as
amended, supplemented, restated and superseded, in whole or in part, from time
to time.

      "CCAA Plan" is defined in Section 4.1(bb).

      "Cdn $ Equivalent" means the Exchange Equivalent in Canadian Dollars of
any amount of U.S. Dollars.

      "CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.

      "CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.

      "Change in Control" means

            (a) any person or group (within the meaning of Sections 13(d) and
      14(d) under the Exchange Act), other than a Permitted Holder, shall become
      the ultimate

                                       12
<PAGE>

      "beneficial owner" (as defined in Rules 13d 3 and 13d 5 under the Exchange
      Act), directly or indirectly, of Equity Interests representing more than
      50% of the Equity Interests of the U.S. Borrower on a fully diluted basis;
      or

            (b) during any period of 24 consecutive months, individuals who at
      the beginning of such period constituted the Board of Directors of the
      U.S. Borrower (together with any new directors whose election to such
      Board or whose nomination for election by the stockholders of the U.S.
      Borrower was approved by a vote of a majority of the directors then still
      in office who were either directors at the beginning of such period or
      whose election or nomination for election was previously so approved)
      cease for any reason to constitute a majority of the Board of Directors of
      the U.S. Borrower then in office; or

            (c) the occurrence of any "Change of Control" (or similar term)
      under (and as defined in) any Other Debt Document.

      "Class Shareholders" is defined in Section 3.1(n).

      "Closing Date" means the date of the initial Advance hereunder; provided
that such date shall be no later than May 1, 2005.

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

      "Co-Documentation Agents" is defined in the recital of parties to this
Agreement.

      "Collateral" means any property of any kind provided as collateral for the
Obligations under any of the Security Documents.

      "Commitment" means the Term A Commitment, the Term B Commitment, the U.S.
Revolving Commitment, the U.S. Swing Line Commitment, the U.S. Letter of Credit
Commitment, the Canadian Revolving Commitment, the Canadian Swing Line
Commitment, the Canadian Letter of Credit Commitment or any other commitment
issued after the Closing Date pursuant to Section 2.1(f) hereof.

      "Commitment Letter" means the confidential letter captioned "Project Top
Gun - Amended and Restated Credit Facilities Commitment Letter", dated January
9, 2005, among the U.S. Borrower, Wachovia, Wachovia Capital Investments, Inc.,
Wachovia Capital Markets, LLC and Merrill Lynch Capital Corporation.

      "Conduit Lender" is defined in Section 12.5(h).

      "Confidential Information Memorandum" means the Confidential Information
Memorandum, dated March 2005, used by the U.S. Administrative Agent and the
Syndication Agent, based upon information supplied by, or on behalf of, the U.S.
Borrower and Target, in connection with the syndication of the Commitments.

      "Contingent Liability" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or

                                       13
<PAGE>

indirect agreement, contingent or otherwise, to provide funds for payment, to
supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a
creditor against loss) the Indebtedness of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the Equity Interests of any
other Person. The amount of any Person's obligation under any Contingent
Liability shall (subject to any limitation set forth therein) be deemed to be
the outstanding principal amount of the debt, obligation or other liability
guaranteed thereby.

      "Control Agreements" means, collectively, all "Control Agreements," as
defined in each U.S. Pledge and Security Agreements and all "Blocked Account
Agreements," as defined in each Canadian Pledge and Security Agreement.

      "Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the U.S. Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.

      "Currency" means, collectively, U.S. Dollars and Canadian Dollars.

      "Default" means any Event of Default, and any of the events specified in
Section 8.1, regardless of whether there shall have occurred any passage of time
or giving of notice, or both, that would be necessary in order to constitute
such event an Event of Default.

      "Default Rate" means a simple per annum interest rate equal to the sum of
the otherwise applicable Interest Rate Basis plus two percent (2%). With respect
to amounts (other than principal) bearing interest at the Default Rate, for
purposes of the foregoing sentence, the words "otherwise applicable Interest
Rate Basis," shall be deemed to mean the Base Rate Basis in respect of U.S.
Loans and Canadian Prime Rate Basis in respect of Canadian Loans.

      "Defaulting Lender" is defined in Section 2.2(h)(iv).

      "Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrowers with the written consent
of the Majority Lenders; provided that, so long as the Administrative Agents
shall have received notice of such modifications, no consent shall be necessary
in connection with modifying Items 4.1(c)(i), 4.1(g)(i), 4.1(g)(ii), 4.1(p) and
4.1(x) of the Disclosure Schedule to reflect changes made thereto in the
ordinary course of business and as permitted under this Agreement.

      "Disposition" (or similar words such as "Dispose") means any sale,
transfer, lease, contribution or other conveyance (including by way of merger or
amalgamation) of, or the granting of options, warrants or other rights to, any
of the U.S. Borrower's or its Subsidiaries' assets (including accounts
receivable, Equity Interests of Subsidiaries) to any other Person (other than to
another Loan Party) in a single transaction or series of transactions.

      "Dollars" or "$" means the basic unit of the lawful currency of the United
States of America.

                                       14
<PAGE>

      "Dothan Distribution Centers" means the distribution center of the U.S.
Borrower located at 900 West Main Street, Dothan, AL and the distribution center
of the U.S. Borrower being constructed at 985 Technology Drive, Dothan, AL.

      "Dothan Headquarters" means the headquarters of the U.S. Borrower located
at 900 West Main Street, Dothan, AL.

      "EBITDA" means, for any period of determination, for the U.S. Borrower and
its Subsidiaries on a consolidated basis, Net Income (exclusive of (i) any
non-cash gains or losses, (ii) gains and losses from Dispositions made other
than in the ordinary course of business, (iii) gains and losses from Hedge
Agreements, (iv) any extraordinary or non-recurring gains or losses, (v) income
or losses from discontinued operations, (vi) income or losses from changes in
accounting principals, (vii) fees and costs associated with the early
extinguishment of debt, and (viii) fees, charges and other expenses made or
incurred in connection with the Transactions that are paid or accounted for
(without duplication) within 180 days of the consummation of the Transactions
(and any reasonable fees, expenses or charges relating to any issuance of Equity
Interests, Permitted Investments, Permitted Acquisitions or Indebtedness,
whether or not such transaction is consummated, to the extent deducted in
computing Net Income) for such period, plus, to the extent deducted or accrued
in determining Net Income, the sum of each of the following for such period
(without duplication): (a) depreciation, amortization (excluding Rental Items
amortization, except for one time and incremental charges resulting from changes
in accounting principals), and other non-cash charges, (b) income tax expense,
(c) Interest Expense and (d) losses from Permitted Investments in Persons
engaged in alternative delivery of movie content (x) in an aggregate amount not
to exceed $5,750,000 for the 2004 Fiscal Year and (y) in an aggregate amount not
to exceed $5,000,000 for each subsequent Fiscal Year; provided that, if any
Permitted Acquisition is made in any Measuring Period, such Permitted
Acquisition shall be deemed, for purposes of this definition, to have been made
on the first day of such Measuring Period; provided, further, that for any
period of determination occurring during the four-Fiscal Quarter period prior to
the Closing Date, "EBITDA" shall be deemed to be for the U.S. Borrower and its
Subsidiaries, including Target and its Subsidiaries, on a consolidated basis.

      Notwithstanding the foregoing, EBITDA for the Fiscal Year ended January 2,
2005 shall be deemed to be $366,004,000 (which calculation is set forth on
Schedule V).

      "EBITDAR" means, with respect to any period, the sum of EBITDA for such
period plus Rent for such period.

      "Environmental Laws" means, with respect to any Person, all applicable
federal (including, without limitation, with respect to the United States and
Canada), state, provincial and local laws, statutes, rules, regulations, by-laws
and ordinances, codes, common law, consent agreements to which such Person is a
party or by which it is bound, orders, decrees, judgments and injunctions
issued, promulgated, approved or entered thereunder affecting such Person or its
property and relating to public health, safety or the pollution or protection of
the environment, including, without limitation, those relating to releases,
discharges, emissions, spills, leaching, or disposals to, on, or in air, water,
land or ground water, to the withdrawal or use of ground water, to the use,
handling or disposal of polychlorinated biphenyls, asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous
substances (including, without

                                       15
<PAGE>

limitation, petroleum, crude oil or any fraction thereof, or other
hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous or
other controlled, prohibited, or regulated substances, including, without
limitation, any such provisions under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. ss. 9601 et seq.),
or the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. ss.
6901 et seq.).

      "Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or other acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
other acquisition from such Person of such shares (or such other interests), and
all of the other ownership or profit interests in such Person (including,
without limitation, partnership, member or trust interests therein), whether
voting or nonvoting, and whether or not such shares, warrants, options, rights
or other interests are authorized or otherwise existing on any date of
determination.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to Sections of ERISA also refer to any successor Sections thereto.

      "Eurocurrency Liabilities" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.

      "Eurodollar Advance" means an Advance which a Borrower requests to be made
as a Eurodollar Advance or which is reborrowed as a Eurodollar Advance, and
which bears interest at the Eurodollar Basis, in accordance with the provisions
of Section 2.2 hereof, and which, except in the case of an Advance the proceeds
of which shall be used solely to repay or prepay in full outstanding Letter of
Credit Loans or outstanding Swing Line Loans, shall be in a principal amount of
at least $5,000,000 and in an integral multiple of $1,000,000.

      "Eurodollar Basis" means a simple per annum interest rate (rounded upward,
if necessary, to the nearest one-hundredth (1/100th) of one percent) equal to
the sum of (a) the quotient of (i) the Eurodollar Rate divided by (ii) one minus
the Eurodollar Reserve Percentage, stated as a decimal, plus (b) the Applicable
Margin. The Eurodollar Basis shall apply to Interest Periods of one (1), two
(2), three (3) and six (6) months, and, once determined, shall remain unchanged
during the applicable Interest Period, except for changes to reflect adjustments
in the Eurodollar Reserve Percentage and the Applicable Margin pursuant to
Section 2.3(g) hereof.

      "Eurodollar Rate" means, for any Interest Period, an interest rate per
annum equal to (a) the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in U.S. dollars at 11:00 A.M.
(London time) or as soon thereafter as possible, two Business Days before the
first day of such Interest Period for a period equal to such Interest Period
(provided that, if for any reason such rate is not available, the term
"Eurodollar Rate" means, for any

                                       16
<PAGE>

Interest Period for any Eurodollar Advance, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page
as the London interbank offered rate for deposits in U.S. Dollars at
approximately 11:00 A.M. (London time) or as soon thereafter as possible, two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided if more than one rate is specified
on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates), or (b) if such rate is for any reason not available, the rate
per annum equal to the rate at which the U.S. Administrative Agent or its
designee is offered U.S. Dollar deposits at or about 11:00 A.M. (London time)
two Business Days prior to the beginning of such Interest Period in the
interbank Eurodollar market for delivery on the first day of such Interest
Period for the number of days comprised therein and in the amount requested to
be outstanding.

      "Eurodollar Reserve Percentage" for any Interest Period, means the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Advances is determined) having a term equal to such Interest Period.

      "Event of Default" means any of the events specified in Section 8.1,
provided that any requirement for notice or lapse of time or both has been
satisfied.

      "Excess Cash Flow" means, for any Measuring Period, based on the audited
financial statements for such Measuring Period required to be provided under
Section 6.2 hereof, the remainder, if any, without duplication, of (a) the sum
of (i) EBITDA for such Measuring Period plus (ii) the net decrease in Working
Capital of the U.S. Borrower and its Subsidiaries during such Measuring Period
plus the amount by which rental amortization exceeds cash purchases of Rental
Items minus (b) the sum of the following: (i) cash Capital Expenditures by the
U.S. Borrower and its Subsidiaries during such Measuring Period (other than such
Capital Expenditures to the extent funded from the Net Proceeds of a Disposition
or a Casualty Event); (ii) cash purchases of Rental Items, to the extent that
the value of such Rental Items, net of rental amortization, is greater than
zero; (iii) cash taxes paid by the U.S. Borrower and its Subsidiaries during
such Measuring Period; (iv) the aggregate Interest Expense, and amortized fees,
costs and expenses associated with the early extinguishment of Indebtedness,
paid in cash of the U.S. Borrower and its Subsidiaries during such Measuring
Period, including the portion of any payments made in respect of Capitalized
Lease Obligations allocable to Interest Expense, (v) principal repayments in
respect of Indebtedness for Money Borrowed (other than Revolving Loans), of the
U.S. Borrower and its Subsidiaries on a consolidated basis during such Measuring
Period (for purposes of this definition, `principal' shall include the principal
component of payments for such period in respect of Capitalized Lease
Obligations), (vi) any Permitted Acquisition or any Permitted Investment under
Sections 7.5(g), (h), (l), (m) (n), (o), (p) or (q) to the extent actually paid
in cash and not funded with the proceeds of Indebtedness or the issuance of any
Equity Interests of the U.S. Borrower and its Subsidiaries, (vii) the net
increase in Working Capital of the U.S. Borrower and its Subsidiaries during
such Measuring Period and

                                       17
<PAGE>

(viii) any Restricted Payments permitted hereunder to the extent actually paid
in cash and not funded with the proceeds of Indebtedness or the issuance of any
Equity Interests of the U.S. Borrower and its Subsidiaries.

      "Exchange Act" means the Securities Exchange Act of 1934, as it may be
amended, and any successor act thereto.

      "Exchange Equivalent" means, on any date, relative to any amount (the
"Original Amount") expressed in either Canadian Dollars or U.S. Dollars (the
"Original Currency"), the amount expressed in the other currency which would be
required to buy the Original Amount of the Original Currency using the noon spot
rate exchange for Canadian interbank transactions applied in converting the
other currency into the Original Currency published by the Bank of Canada for
such date.

      "Excluded Disposition" means any and all of the following Dispositions
made in the ordinary course of its business (as reasonably determined by the
board of directors of the U.S. Borrower):

            (a) Disposition of inventory or obsolete, damaged, worn out or
      surplus property;

            (b) Dispositions of all or substantially all of its assets (i) of
      any U.S. Subsidiary to the U.S. Borrower or any U.S. Subsidiary Guarantor,
      so long as the First Priority security interests in the Collateral shall
      remain in full force and effect and perfected (to at least the same extent
      as in effect immediately prior to such Disposition) and (ii) by any
      Foreign Subsidiary of the U.S. Borrower to the U.S. Borrower or any Wholly
      Owned Subsidiary of the U.S. Borrower;

            (c) leases of fee properties and other real property owned in fee
      and subleases of leased property; provided, that in the case of any lease
      of property subject to a Mortgage, such lease shall be subject to the
      provisions of the applicable Mortgage;

            (d) the payment of Restricted Payments permitted under Section 7.6;

            (e) Permitted Investments permitted under Section 7.5; and

            (f) licenses or sublicenses by the U.S. Borrower or any of its
      Subsidiaries of software, Intellectual Property and general intangibles
      and leases, licenses or subleases of other property in the ordinary course
      of business and which do not materially interfere with the business of
      U.S. Borrower or any such Subsidiary to the extent not prohibited under
      any Loan Document.

      "Existing Notes" is defined in the recital of the parties to this
Agreement.

      "Existing Notes Indenture" means that certain base indenture, dated as of
January 25, 2002, as supplemented by that certain first supplemental indenture,
dated as of December 18, 2002, under which the Existing Notes were issued, among
Target, Hollywood Management Company and BNY Western Trust Company, as trustee.

                                       18
<PAGE>

      "Federal Funds Rate" means, as of any date, the weighted average of the
rates on overnight federal funds transactions with the members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the U.S. Administrative Agent or its Affiliate from
three (3) federal funds brokers of recognized standing selected by the U.S.
Administrative Agent or its Affiliate.

      "Fee Letter" means that certain letter agreement, dated as of January 9,
2005, between the U.S. Borrower and the U.S. Administrative Agent.

      "Filing Agent" is defined in Section 3.1(a)(ix).

      "Filing Statements" is defined in Section 3.1(a)(ix).

      "Financial Condition and Solvency Certificate" means a certificate,
substantially in the form set forth in Exhibit I attached hereto, signed by the
chief financial officer of the U.S. Borrower, together with any schedules,
exhibits or annexes appended thereto.

      "First Priority" means, with respect to any Lien purported to be created
in any Collateral pursuant to any Security Document, that such Lien senior to
all other Liens to which such Collateral is subject, other than Permitted Liens.

      "Fiscal Quarter" means the period ending three months after the end of the
Fiscal Year and each three month period thereafter.

      "Fiscal Year" means any 365 day period (or 366 day period for any leap
year) ending on the first Sunday following December 30; references to a Fiscal
Year with a number corresponding to any calendar year (e.g., the "2005 Fiscal
Year") refer to the Fiscal Year ending on the first Sunday following December 30
of such calendar year.

      "Fixed Charge Coverage Ratio" means, as of the close of any Fiscal
Quarter, the ratio computed for the period consisting of such Fiscal Quarter and
each of the three immediately preceding Fiscal Quarters of:

            (a) the sum of (i) EBITDAR (for such period) minus (ii) cash Capital
      Expenditures for such period (other than such Capital Expenditures to the
      extent funded from the Net Proceeds of a Disposition or a Casualty Event);

to

            (b) the sum (for such period) of (i) the aggregate Interest Expense
      paid in cash of the U.S. Borrower and its Subsidiaries during such period,
      including the portion of any cash payments made in respect of Capitalized
      Lease Obligations allocable to Interest Expense less any cash interest
      income received during such period, (ii) scheduled principal repayments in
      respect of Indebtedness for Money Borrowed, of the U.S. Borrower and its
      Subsidiaries on a consolidated basis during such period (for purposes of
      this definition, `principal' shall include the principal component of cash
      payments for

                                       19
<PAGE>

      such period in respect of Capitalized Lease Obligations), (iii) any cash
      repurchases of Equity Interests during such period permitted under Section
      7.9, (iv) Rent for such period, (v) all income taxes actually paid in cash
      by the U.S. Borrower and its Subsidiaries during such period, and (vi) all
      Restricted Payments in the form of dividends (other than dividends paid in
      respect of common stock of the U.S. Borrower as permitted under Section
      7.6) actually paid in cash by the U.S. Borrower and its Subsidiaries
      during such period;

provided that in the event the applicable four-Fiscal-Quarter period would
include any period of time prior to the Closing Date, the amounts referred to in
clause (b)(i) above shall be determined, for the purposes of this definition, on
an Annualized Basis.

      "Foreign Subsidiary" means any Subsidiary of a Loan Party which is
organized under the laws of any jurisdiction outside of the United States of
America.

      "GAAP" is defined in Section 1.3.

      "Governmental Authority" means any nation or government, any state,
province, city, municipal entity or other political subdivision thereof, and any
governmental, executive, legislative, judicial, administrative or regulatory
agency, department, authority, instrumentality, commission, board, bureau or
similar body, whether federal, state, provincial, territorial, local or foreign.

      "Governmental Authorization" means any authorization, approval, consent,
franchise, license, covenant, order, ruling, permit, certification, exemption,
notice, declaration or similar right, undertaking or other action of, to or by,
or any filing, qualification or registration with, any Governmental Authority.

      "Granting Lender" is defined in Section 12.5(h).

      "Guarantors" means, collectively, the U.S. Borrower Guarantor and the
Subsidiary Guarantors.

      "Hazardous Material" means

            (a) any "hazardous substance", as defined by CERCLA or any other
      Environmental Laws;

            (b) any "hazardous waste", as defined by the Resource Conservation
      and Recovery Act, as amended; or

            (c) any pollutant or contaminant or hazardous, dangerous or toxic
      chemical, material or substance (including any petroleum product) within
      the meaning of any other applicable federal, state or local law,
      regulation, ordinance or requirement (including consent decrees and
      administrative orders) relating to or imposing liability or standards of
      conduct concerning any hazardous, toxic or dangerous waste, substance or
      material, all as amended.

                                       20
<PAGE>

      "Hedge Agreements" means interest rate, commodity or currency swap, cap or
collar agreements, future or option contracts and other hedging agreements
(including, without limitation, all "swap agreements" as defined in 11 U.S.C.
ss. 101).

      "Hedging Liabilities" means, with respect to the Canadian Administrative
Agent, in its capacity as a party to a Secured Hedge Agreement, at any date of
calculation, an amount equal to the aggregate of all amounts that would be owing
to it by the Canadian Borrower under all Hedge Agreements if those agreements
were terminated on the date of calculation. Unless netting or setting off is not
permitted as a result of the operation of law or judicial authority, "Hedging
Liabilities" shall equal the amount so determined after netting or setting off
any amounts which might be owing under the Hedge Agreements by the Canadian
Administrative Agent, in its capacity as a party to a Secured Hedge Agreement,
to the Canadian Borrower on that date. If netting or setting off is not
permitted as a result of the operation of law or judicial authority, "Hedging
Liabilities" shall equal the amount owing by the Canadian Borrower to the
Canadian Administrative Agent, in its capacity as a party to a Secured Hedge
Agreement, under all Hedge Agreements without netting or setting off any amounts
which might be owing under the Hedge Agreements by it to the Canadian Borrower
on that date.

      "Hedge Bank" means any Lender Party or Affiliate of a Lender Party in its
capacity as a party to a Secured Hedge Agreement.

      "Holdings" is defined in the recital of the parties to this Agreement.

      "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.

      "Impermissible Qualification" means any qualification or exception to the
opinion or certification of any independent public accountant as to any
financial statement of the U.S. Borrower (a) which is of a "going concern" or
similar nature; (b) which relates to the limited scope of examination of matters
relevant to such financial statement; or (c) which relates to the treatment or
classification of any item in such financial statement and which, as a condition
to its removal, would require an adjustment to such item the effect of which
would be to cause a Default.

      "Incremental Facility" shall have the meaning assigned thereto in Section
2.1(f).

      "Incremental Facility Loans" means, collectively, the amount advanced by
certain of the U.S. Lenders to the U.S. Borrower under the Incremental Facility.

      "Indebtedness" of any Person means:

            (a) all obligations of such Person for borrowed money or advances
      and all obligations of such Person evidenced by bonds, debentures, notes
      or similar instruments;

            (b) all obligations, contingent or otherwise, relative to the face
      amount of all letters of credit, whether or not drawn, and banker's
      acceptances issued for the account of such Person;

                                       21
<PAGE>

            (c) all Capitalized Lease Obligations of such Person;

            (d) for purposes of Section 8.1(n) only, all other items which, in
      accordance with GAAP, would be included as liabilities on the balance
      sheet of such Person as of the date at which Indebtedness is to be
      determined;

            (e) net liabilities of such Person under all Hedge Agreements;

            (f) whether or not so included as liabilities in accordance with
      GAAP, all obligations of such Person to pay the deferred purchase price of
      property or services excluding trade accounts payable in the ordinary
      course of business which are not overdue for a period of more than 90 days
      or, if overdue for more than 90 days, as to which a dispute exists and
      adequate reserves in conformity with GAAP have been established on the
      books of such Person, and Indebtedness secured by (or for which the holder
      of such Indebtedness has an existing right, contingent or otherwise, to be
      secured by) a Lien on property owned or being acquired by such Person
      (including Indebtedness arising under conditional sales or other title
      retention agreements), whether or not such Indebtedness shall have been
      assumed by such Person or is limited in recourse to such Lien; provided,
      however, that if such Indebtedness is limited in recourse, the amount of
      such Indebtedness shall, for purposes of this clause (f) equals the lesser
      of the amount of the face amount of such Indebtedness or the fair market
      value of the assets to which such Indebtedness has recourse;

            (g) obligations arising under Synthetic Leases;

            (h) Indebtedness of such Person (including any partnership in which
      such Person is a general partner and any unincorporated joint venture in
      which such Person is a joint venturer) to the extent such Person would be
      liable therefor under applicable law or any agreement or instrument by
      virtue of such Person's ownership interest in or other relationship with
      such entity, except to the extent the terms of such Indebtedness provide
      that such person shall not be liable therefor; and

            (i) all Contingent Liabilities of such Person.

      "Indebtedness for Money Borrowed" means, with respect to any Person,
Indebtedness for money borrowed and Indebtedness represented by notes payable
and drafts accepted representing extensions of credit, all obligations evidenced
by bonds, debentures, notes or other similar instruments, all Indebtedness upon
which interest charges are customarily paid, all Capitalized Lease Obligations,
all reimbursement obligations with respect to outstanding letters of credit, all
Indebtedness issued or assumed as full or partial payment for property or
services (other than trade payables arising in the ordinary course of business,
but only if and so long as such accounts are payable on customary trade terms),
whether or not any such notes, drafts, obligations or Indebtedness represent
Indebtedness for money borrowed, and all Indebtedness of the sort listed above
of any other Person (including any partnership in which such Person is general
partner and any unincorporated joint venture in which such Person is a joint
venturer) to the extent such Person would be liable therefor under any
Applicable Law or any agreement or instrument by virtue of such Person's
ownership interests in or other relationship with such entity, except to the

                                       22
<PAGE>

extent the terms of such Indebtedness provide that such Person shall not be
liable therefor; and, without duplication, Contingent Liabilities in respect of
any of the foregoing. For purposes of this definition, interest which is accrued
but not paid on the scheduled due date for such interest shall be deemed
Indebtedness for Money Borrowed.

      "Indemnified Costs" shall have the meaning ascribed to it in Section 9.11
hereof.

      "Indemnitee" shall have the meaning ascribed to it in Section 5.11 hereof.

      "Initial U.S. Issuing Bank", "Initial Canadian Issuing Bank", "Initial
U.S. Lender Parties", "Initial Canadian Lender Parties", "Initial U.S. Lenders"
and "Initial Canadian Lenders" each is defined in the recital of parties to this
Agreement.

      "Initial Issuing Banks" means, collectively, the Initial U.S. Issuing
Banks and the Initial Canadian Issuing Banks.

      "Initial Lender Parties" means, collectively, the Initial U.S. Lender
Parties and the Initial Canadian Lender Parties.

      "Initial Lenders" means, collectively, the Initial U.S. Lenders and the
Initial Canadian Lenders.

      "Initial Maturity Date" means the earliest of (a) April 27, 2010, (b) the
date on which the payment of all outstanding Obligations shall be due (whether
by acceleration or otherwise) and (c) solely with respect to the Revolving
Commitments, the Revolving Loans, the Swing Line Commitment, the Swing Line
Loans, the Letters of Credit, the Letter of Credit Commitment and the Letter of
Credit Loans, the date of termination in whole or reduction to zero of the
Revolving Commitments pursuant to Section 2.7 or 2.8.

      "Interco Subordination Agreement" means the Intercompany Subordination
Agreement, substantially in the form of Exhibit K hereto, executed and delivered
by two or more Loan Parties pursuant to the terms of this Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time.

      "Interest Coverage Ratio" means, as of the close of any Fiscal Quarter,
the ratio computed for the period consisting of such Fiscal Quarter and each of
the three immediately preceding Fiscal Quarters of:

            (a) EBITDA (for such period)

to

            (b) Interest Expense (for such period);

provided that in the event the applicable four-Fiscal-Quarter period would
include any period of time prior to the Closing Date, the amounts referred to in
clause (b) above shall be determined, for the purposes of this definition, on an
Annualized Basis.

                                       23
<PAGE>

      "Interest Expense" means, for any applicable period, the aggregate
interest expense (both accrued and paid without duplication), of the U.S.
Borrower and its Subsidiaries for such period, including the portion of any
payments made in respect of Capitalized Lease Obligations allocable to interest
expense (but in any event excluding amortized fees, costs and expenses of the
U.S. Borrower and its Subsidiaries in connection with the Transactions and
amortized fees, costs and expenses associated with the early extinguishment of
Indebtedness); provided that, if any Permitted Acquisition is made in any
Measuring Period, such Permitted Acquisition shall be deemed, for purposes of
this definition, to have been made on the first day of such Measuring Period and
any Indebtedness incurred and/or assumed in connection with such Permitted
Acquisition shall be deemed, for purposes of this definition, to have been
incurred on the first day of such Measuring Period.

      "Interest Period" means (a) in connection with any Base Rate Advance or
Canadian Prime Rate Advance, as the case may be, the period beginning on the
date such Advance is made or deemed continued and ending on the last Business
Day of the calendar quarter in which such Advance is made or deemed continued,
provided that, if a Base Rate Advance or Canadian Prime Rate Advance, as
applicable, is made or deemed continued on the last day of any calendar quarter,
it shall have an Interest Period ending on, and its Payment Date shall be, the
last day of the following calendar quarter, (b) in connection with any
Eurodollar Advance, the term of such Advance selected by the relevant Borrower
or otherwise determined in accordance with this Agreement (including, without
limitation, the definition of "Eurodollar Basis") and (c) in connection with any
Canadian BA or Acceptance Note, the period beginning on (and including) the date
on which such Canadian BA is accepted or rolled over pursuant to Section 2.2(e)
or such Acceptance Note is issued pursuant to Section 2.2(f)(iii) and continuing
to (but excluding) the date which is approximately 30, 60, 90 or 180 days
thereafter as the Canadian Borrower may select in its relevant notice pursuant
to Section 2.2(e) or (f). Notwithstanding the foregoing, however, (i) any
applicable Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless, with
respect to Eurodollar Advances only, such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day, (ii) any applicable Interest Period, with respect to Eurodollar
Advances only, which begins on a day for which there is no numerically
corresponding day in the calendar month during which such Interest Period is to
end shall (subject to clause (i) above) end on the last day of such calendar
month, and (iii) no Interest Period shall extend beyond the Initial Maturity
Date with respect to Interest Periods applicable to Revolving Loans and Term A
Loans, the Maturity Date with respect to Interest Periods applicable to the Term
B Loans or such earlier date as would interfere with the relevant Borrower's
repayment obligations hereunder. Interest shall be due and payable with respect
to any Advance as provided in Section 2.3 hereof.

      "Interest Rate Basis" means the Base Rate Basis, Canadian Prime Rate
Advance, Canadian BA Rate Basis or the Eurodollar Basis, as appropriate.

      "Investment" means, relative to any Person, (a) any loan, advance or
extension of credit made by such Person to any other Person, including the
purchase by such Person of any bonds, notes, debentures or other debt securities
of any other Person, (but excluding, however, commission, travel and similar
advances to officers and employees of such Person made in the ordinary course of
business), (b) Contingent Liabilities of such Person incurred with respect to

                                       24
<PAGE>

Indebtedness of any other Person, (c) capital contributions or purchases (or
other acquisitions for consideration) of Indebtedness, Equity Interests or other
securities, (d) payments in respect of tax savings or liabilities made by such
Person to or for the benefit of any other Person with whom such Person files a
consolidated tax return which are not reimbursed by such other Person and (e)
any other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP. The amount of any Investment shall be
the original principal or capital amount thereof less all returns of principal
or equity thereon and shall, if made by the transfer or exchange of property
other than cash, be deemed to have been made in an original principal or capital
amount equal to the fair market value of such property at the time of such
Investment.

      "IP Security Agreements" means, collectively, each (i) U.S. Borrower
Patent Security Agreement duly executed and delivered by the U.S. Borrower to
the U.S. Administrative Agent substantially in the form of Exhibit A to the U.S.
Borrower Pledge and Security Agreement, (ii) U.S. Borrower Trademark Security
Agreement duly executed and delivered by the U.S. Borrower to the U.S.
Administrative Agent substantially in the form of Exhibit B to the U.S. Borrower
Pledge and Security Agreement, (iii) U.S. Borrower Copyright Security Agreement
duly executed and delivered by the U.S. Borrower to the U.S. Administrative
Agent substantially in the form of Exhibit C to the U.S. Borrower Pledge and
Security Agreement, (iv) Canadian Borrower Patent Security Agreement duly
executed and delivered by the Canadian to the Canadian Administrative Agent
substantially in the form of Exhibit A to the Canadian Borrower Pledge and
Security Agreement, (v) Canadian Borrower Trademark Security Agreement duly
executed and delivered by the Canadian Borrower to the Canadian Administrative
Agent substantially in the form of Exhibit B to the Canadian Borrower Pledge and
Security Agreement, (vi) Canadian Borrower Copyright Security Agreement duly
executed and delivered by the Canadian Borrower to the Canadian Administrative
Agent substantially in the form of Exhibit C to the Canadian Borrower Pledge and
Security Agreement, (vii) U.S. Subsidiary Patent Security Agreement duly
executed and delivered by a U.S. Subsidiary to the U.S. Administrative Agent,
substantially in the form of Exhibit A to the U.S. Subsidiary Pledge and
Security Agreement, (viii) U.S. Subsidiary Trademark Security Agreement duly
executed and delivered by a U.S. Subsidiary to the U.S. Administrative Agent,
substantially in the form of Exhibit B to the U.S. Subsidiary Pledge and
Security Agreement, (ix) U.S. Subsidiary Copyright Security Agreement duly
executed and delivered by a U.S. Subsidiary to the U.S. Administrative Agent,
substantially in the form of Exhibit C to the U.S. Subsidiary Pledge and
Security Agreement, (x) Canadian Subsidiary Patent Security Agreement duly
executed and delivered by a Canadian Subsidiary to the Canadian Administrative
Agent, substantially in the form of Exhibit A to the Canadian Subsidiary Pledge
and Security Agreement, (xi) Canadian Subsidiary Trademark Security Agreement
duly executed and delivered by a Canadian Subsidiary to the Canadian
Administrative Agent, substantially in the form of Exhibit B to the Canadian
Subsidiary Pledge and Security Agreement and (xii) Canadian Subsidiary Copyright
Security Agreement duly executed and delivered by a Canadian Subsidiary to the
Canadian Administrative Agent, substantially in the form of Exhibit C to the
Canadian Subsidiary Pledge and Security Agreement.

      "Issuing Banks" means, collectively, the U.S. Issuing Bank and the
Canadian Issuing Bank.

      "Joint Venture Entity" is defined in Section 7.5(l).

                                       25
<PAGE>

      "L/C Collateral Account" means, collectively, the U.S. L/C Collateral
Account and the Canadian L/C Collateral Account.

      "L/C Disbursement" means, collectively, the U.S. L/C Disbursement and the
Canadian L/C Disbursement.

      "L/C Related Documents" is defined in Section 2.4(e)(ii)(A).

      "Lead Arranger" means Wachovia Capital Markets, LLC.

      "Lender Parties" means, collectively, the U.S. Lender Parties and the
Canadian Lender Parties.

      "Lenders" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 12.5 for so long as such Initial Lender or
Person, as the case may be, shall be a party to this Agreement.

      "Letter of Credit Agreement" is defined in Section 2.2(j)(i).

      "Letters of Credit" means, collectively, U.S. Letters of Credit and the
Canadian Letters of Credit.

      "Letters of Credit Commitments" means, collectively, U.S. Letters of
Credit Commitments and the Canadian Letters of Credit Commitments.

      "Letter of Credit Loans" means, collectively, the U.S. Letter of Credit
Loans and the Canadian Letter of Credit Loans.

      "Leverage Ratio" means, as of the last day of any Fiscal Quarter, the
ratio of

            (a) Total Debt outstanding on the last day of such Fiscal Quarter
      minus cash and Cash Equivalents on hand to the extent such cash and Cash
      Equivalents are not subject to any Lien (except for Permitted Liens);

to

            (b) EBITDA computed for the period consisting of such Fiscal Quarter
      and each of the three immediately preceding Fiscal Quarters.

      "License Agreement" means that certain License Agreement and Product
Support Agreement, each dated January 25, 2001, by and between Boards, Inc. and
Target.

      "Lien" means, with respect to any property, any mortgage, lien, pledge,
assignment, charge, security interest, title retention agreement, levy,
execution, seizure, attachment, garnishment or other similar encumbrance of any
kind in respect of such property, whether created by statute, contract, the
common law or otherwise, and whether or not choate, vested or perfected.

                                       26
<PAGE>

      "Loan Documents" means this Agreement, each Note, the Security Documents,
each Letter of Credit Agreement, each Canadian BA, all legal opinions issued by
counsel to each Loan Party, any reliance letters issued with respect to legal
opinions, the Fee Letter, all Requests for Advances, and all other material
documents, agreements and certificates executed or delivered in connection with
or contemplated by this Agreement.

      "Loan Parties" means, collectively, U.S. Loan Parties and the Canadian
Loan Parties.

      "Loans" means, collectively, the Revolving Loans, the Swing Line Loans,
all Canadian BA, the Letter of Credit Loans and the Term Loans and, if the
Incremental Facility is effected, any Incremental Facility Loans made under the
Incremental Facility. References herein to the "principal amount" of a Loan
shall, when referring to a Canadian BA, mean the face amount thereof.

      "Majority Canadian Lenders" means, at any time, Canadian Revolving Lenders
owed or holding at least a majority in interest of the sum, without duplication,
of (a) the aggregate principal amount of the Canadian Revolving Loans
outstanding at such time, (b) the aggregate Available Amount of all Canadian
Letters of Credit outstanding at such time and (c) the aggregate Unused Canadian
Revolving Commitments at such time; provided that if any Canadian Revolving
Lender shall be a Defaulting Lender at such time, there shall be excluded from
the determination of Majority Canadian Revolving Lenders at such time (i) the
aggregate principal amount of the Canadian Revolving Loans owing to such Lender
(in its capacity as a Canadian Revolving Lender) and outstanding at such time,
(ii) such Canadian Lender's Pro Rata Share of the aggregate Available Amount of
all Canadian Letters of Credit outstanding at such time and (iii) the Unused
Canadian Revolving Commitment of such Lender at such time. For purposes of this
definition, the aggregate principal amount of (x) Canadian Swing Line Loans, (y)
Canadian Letter of Credit Loans owing to the Canadian Issuing Bank and (z) the
Available Amount of each Canadian Letter of Credit shall be deemed "owed to" the
Canadian Revolving Lenders ratably in accordance with their respective Canadian
Revolving Commitments.

      "Majority Lenders" means, at any time, Lenders owed or holding at least a
majority in interest of the sum, without duplication, of (a) the aggregate
principal amount of the Loans outstanding at such time, (b) the aggregate
Available Amount of all Letters of Credit outstanding at such time and (c) the
aggregate Unused Revolving Commitments at such time; provided that if any Lender
shall be a Defaulting Lender at such time, there shall be excluded from the
determination of Majority Lenders at such time (i) the aggregate principal
amount of the Loans owing to such Lender (in its capacity as a Lender) and
outstanding at such time, (ii) such Lender's Pro Rata Share of the aggregate
Available Amount of all Letters of Credit outstanding at such time and (iii) the
Unused Revolving Commitment of such Lender at such time. For purposes of this
definition, the aggregate principal amount of (x) Swing Line Loans, (y) Letter
of Credit Loans owing to the relevant Issuing Bank and (z) the Available Amount
of each Letter of Credit shall be deemed "owed to" the Revolving Lenders ratably
in accordance with their respective Revolving Commitments.

      "Majority Term A Lenders" means, at any time, Term A Lenders owed or
holding at least a majority in interest of the sum, without duplication, of the
aggregate principal amount of the Term A Loans outstanding at such time;
provided that if any Term A Lender shall be a

                                       27
<PAGE>

Defaulting Lender at such time, there shall be excluded from the determination
of Majority Term A Lenders at such time the aggregate principal amount of the
Term A Loans owing to such Term A Lender (in its capacity as a Term A Lender)
and outstanding at such time.

      "Majority Term B Lenders" means, at any time, Term B Lenders owed or
holding at least a majority in interest of the sum, without duplication, of the
aggregate principal amount of the Term B Loans outstanding at such time;
provided that if any Term B Lender shall be a Defaulting Lender at such time,
there shall be excluded from the determination of Majority Term B Lenders at
such time the aggregate principal amount of the Term B Loans owing to such Term
B Lender (in its capacity as a Term B Lender) and outstanding at such time.

      "Majority U.S. Revolving Lenders" means, at any time, U.S. Revolving
Lenders owed or holding at least a majority in interest of the sum, without
duplication, of (a) the aggregate principal amount of the U.S. Revolving Loans
outstanding at such time, (b) the aggregate Available Amount of all U.S. Letters
of Credit outstanding at such time and (c) the aggregate Unused U.S. Revolving
Commitments at such time; provided that if any U.S. Revolving Lender shall be a
Defaulting Lender at such time, there shall be excluded from the determination
of Majority U.S. Revolving Lenders at such time (i) the aggregate principal
amount of the U.S. Revolving Loans owing to such Lender (in its capacity as a
U.S. Revolving Lender) and outstanding at such time, (ii) such U.S. Lender's Pro
Rata Share of the aggregate Available Amount of all U.S. Letters of Credit
outstanding at such time and (iii) the Unused U.S. Revolving Commitment of such
Lender at such time. For purposes of this definition, the aggregate principal
amount of (x) U.S. Swing Line Loans, (y) U.S. Letter of Credit Loans owing to
the U.S. Issuing Bank and (z) the Available Amount of each U.S. Letter of Credit
shall be deemed "owed to" the U.S. Revolving Lenders ratably in accordance with
their respective U.S. Revolving Commitments.

      "Mark to Market Exposure" means, in connection with Canadian Borrower's
liability under any Hedge Agreement to which the Canadian Administrative Agent
is a party to a Secured Hedge Agreement, as at the Measurement Date, the "Early
Termination Amount" that would be payable by the Canadian Borrower under such
Hedge Agreement as though such day was an "Early Termination Date" and the
"Transaction" was a "Terminated Transaction" in accordance with the payment
measures provided for in Section 6(e)(i) of the 2002 ISDA Master Agreement as
published by the International Swaps and Derivatives Association, Inc., as
amended or replaced from time to time. For the purposes of this Agreement, such
liability shall be expressed in the Canadian $ Equivalent as at the end of any
such month. Furthermore, the amount of such liability shall be established by
the Canadian Administrative Agent, as a party to the Hedge Agreement, in good
faith after consultation with the relevant counterparties to such Hedge
Agreements who themselves shall determine same in accordance with the
aforementioned payment measures.

      "Material Adverse Change" means a material adverse change or any
condition, fact, event or development that has resulted or could reasonably be
expected to result in a material adverse change in the business, results of
operations, or financial condition, assets, liabilities or prospects of (a) the
U.S. Borrower and Target and their respective Subsidiaries taken as a whole
after giving pro forma effect to the Transactions, or (b) solely for the
purposes of Section 3.1(h), Target and its Subsidiaries as a whole both before
and after giving effect to the Transactions.

                                       28
<PAGE>

      "Material Adverse Effect" means any material adverse effect upon (a) the
business, results of operations, or financial condition, assets, liabilities or
prospects of the U.S. Borrower and its Subsidiaries taken as a whole, or (b) the
binding nature, validity, or enforceability of this Agreement, any Notes, and
the other Loan Documents or upon the ability of the U.S. Borrower and its
Subsidiaries to perform the payment obligations or other material obligations
under this Agreement or any other Loan Document, or upon the value of the
Collateral, taken as a whole or upon the rights, benefits or interests of the
Lender Parties in and to the Loans or the rights of the Administrative Agents
and the Lenders in the Collateral taken as a whole; in either case, whether
resulting from any single act, omission, situation, status, event or
undertaking, or taken together with other such acts, omissions, situations,
statuses, events or undertakings.

      "Material Subsidiary" means, at any time, any Subsidiary (a) that has
assets with an aggregate book value greater than 5% of the consolidated assets
of the U.S. Borrower and its Subsidiaries, as determined on the last day of the
then most recently ended Fiscal Quarter for which financial statements have been
delivered pursuant to Section 6.1 and Section 6.2, or (b) that accounts for 5%
or more of EBITDA, as determined for the period of the four Fiscal Quarters
ended on the last day of the most recently ended Fiscal Quarter for which
financial statements have been delivered pursuant to Section 6.1 and Section 6.2
(such calculation to be made, in the case of any such Subsidiary acquired or
formed after the first day of such period, on a pro forma basis as if such
Subsidiary had been acquired or formed on the first day of such period), or (c)
the inclusion of which as a Material Subsidiary is necessary in order that the
aggregate book value of the assets of the U.S. Borrower and the Material
Subsidiaries be at least 85% of (A) the book value of U.S. Borrower and its
Subsidiaries, taken as a whole, and (B) EBITDA, in each case, as determined on
the last day of the most recently ended Fiscal Quarter for which financial
statements have been delivered pursuant to Section 6.1 and Section 6.2 (such
calculation to be made, in the case of any such Subsidiary acquired or formed
after the first day of such period, on a pro forma basis as if such Subsidiary
had been acquired or formed on the first day of such period), or (d) that the
U.S. Borrower or any of its Subsidiaries has incurred Indebtedness in connection
therewith pursuant to Section 7.1 in an aggregate amount in excess of
$5,000,000.

      "Material Transaction Documents" means each of the Merger Agreement, each
Other Debt Document and each other material agreement related to the
Transactions (other than the Loan Documents), in each case as amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with this Agreement.

      "Maturity Date" means the earlier of (a) April 27, 2011, and (b) such
earlier date on which the payment of all outstanding Obligations shall be due
(whether by acceleration or otherwise).

      "Measuring Period" means, (a) with respect to the 2005 Fiscal Year, the
period from the Closing Date to the end of such Fiscal Year and (b) with respect
to each other Fiscal Year, the period from the beginning of such Fiscal Year to
the end of such Fiscal Year.

      "Measurement Date" means the last Business Day of the prior calendar month
or such other date as the Canadian Administrative Agent may determine, acting
reasonably upon providing written notice to the Canadian Borrower.

                                       29
<PAGE>

      "Merger" is defined in the recital of the parties to this Agreement.

      "Merger Agreement" is defined in the recital of the parties to this
Agreement.

      "Merger Agreement Event" means any breach of any term or provision of the
Merger Agreement, any other claim of the Loan Parties or their respective
Subsidiaries under the Merger Agreement or otherwise arising out of the Target
Acquisition or the Merger.

      "Moody's" means Moody's Investors Service, Inc. and any successor thereto.

      "Mortgage" is defined in Section 5.10.

      "Net Income" means, for any period, the aggregate of all amounts which
would be included as net income on the consolidated financial statements of the
U.S. Borrower and its Subsidiaries for such period as determined in accordance
with GAAP.

      "Net Proceeds" means, with respect to any Disposition, any Casualty Event,
any Merger Agreement Event, the incurrence or issuance of any Indebtedness for
Money Borrowed, or the sale or issuance of any Equity Interests in any Person,
the aggregate amount of cash received from time to time (whether as initial
consideration or through payment or disposition of deferred consideration) by or
on behalf of such Person for its own account in connection with any such
transaction, after deducting therefrom (without duplication) only:

            (a) reasonable and customary brokerage commissions, appraisal fees,
      underwriting fees and discounts, legal fees, accounting fees, finder's
      fees and other similar fees and commissions and reasonable and customary
      printing expenses and, solely in the case of any sale, lease, transfer or
      other disposition of any property or assets, other reasonable and
      customary costs and expenses incurred in connection with such sale, lease,
      transfer or other disposition, in each case under this clause (a) to the
      extent, but only to the extent, that the amounts so deducted are actually
      paid (i) at the time of the receipt of such cash or (ii) if later, within
      ninety (90) days after the consummation of such transaction (based on such
      Person's reasonable estimate of the aggregate amount of all such
      commissions, discounts, fees, costs and expenses therefor at the time of
      the consummation of such transaction) and, in each case, only to the
      extent accrued (and not reversed) in accordance with GAAP;

            (b) the amount of taxes payable in connection with or as a result of
      such transaction to the extent, but only to the extent, that the amounts
      so deducted are actually paid at the time of receipt of such cash or, so
      long as such Person is not otherwise indemnified therefor, are reserved
      for in accordance with GAAP at the time of receipt of such cash based upon
      such Person's reasonable estimate of such taxes;

            (c) in the case of any Disposition, the outstanding principal amount
      of, the premium or penalty, if any, on, and any accrued and unpaid
      interest and premium (to the extent accrued (and not reversed) in
      accordance with GAAP), on, any Indebtedness (other than the Indebtedness
      under or in respect of the Loan Documents) that is secured by a Lien on
      the property and assets subject to such sale, lease, transfer or other
      disposition and is required to be repaid under the terms thereof as a
      result of such sale, lease, transfer

                                       30
<PAGE>

      or other disposition, in each case under this clause (c) to the extent,
      but only to the extent, that the amounts so deducted are actually paid;
      and

            (d) amounts provided as a reserve, in accordance with GAAP, against
      any liabilities under any indemnification obligations or purchase price
      adjustments associated with any Disposition or any liabilities retained by
      the U.S. Borrower or any of its Subsidiaries associated with the assets
      sold in such Disposition (provided, that, to the extent and at the time
      any such amounts are released from such reserve, such amounts shall
      constitute Net Proceeds);

provided that, notwithstanding any of the foregoing provisions of this
definition, any and all amounts so deducted by any such Person pursuant to
clauses (a) through (d) of this definition shall be properly attributable to the
transaction or Casualty Event or to the property or assets that are the subject
thereof and shall be payable solely to one or more Persons that are not
Affiliates of such Person or of any of the Loan Parties or any Affiliate of any
of the Loan Parties.

      "Notes" means, collectively, the U.S. Revolving Notes, the Canadian
Revolving Notes, the Swingline Notes and the Term Notes.

      "Notice of Issuance" is defined in Section 2.2(j)(i).

      "Notices of Renewal" means, collectively, the U.S. Notice of Renewal and
the Canadian Notice of Renewal.

      "Notices of Termination" means, collectively, the U.S. Notice of
Termination and the Canadian Notice of Termination.

      "Notional BA Proceeds" means, relative to a particular Canadian Loan by
way of Canadian BA, the aggregate face amount of such Canadian BA less the
aggregate of:

            (a) a discount from the aggregate face amount of such Canadian BA
      calculated in accordance with normal market practice based on the Canadian
      BA Rate for the term of such Canadian BA; and

            (b) an acceptance fee calculated at the rate per annum, on the basis
      of a year of 365 days or 366 days, as the case may be, equal to the
      Applicable Canadian BA Stamping Fee on the face amount of such Canadian BA
      for its term, being the actual number of days in the period commencing on
      the date of acceptance by such Lender of such Canadian BA and continuing
      to (but excluding) the maturity date of such Canadian BA, such acceptance
      fee to be non-refundable and fully earned when due.

      "Obligations" means, collectively, the U.S. Obligations and the Canadian
Obligations.

      "OFAC" shall mean the U.S. Department of the Treasury's Office of Foreign
Assets Control.

      "Organic Document" means, relative to any Loan Party, as applicable, its
certificate of incorporation, by laws, certificate of partnership, partnership
agreement, certificate of formation,

                                       31
<PAGE>

limited liability agreement, operating agreement, constating documents, and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of such Loan Party's Equity Interests.

      "Other Debt Documents" means, collectively, each of the loan agreements,
indentures, note purchase agreements, promissory notes, guarantees and other
instruments and agreements evidencing the terms of any Indebtedness constituting
or evidenced by, as the case may be, any Pari Passu Debt, Subordinated Debt or
any Permitted Seller Notes, in each case, in form and substance satisfactory to
the U.S. Administrative Agent and as amended, supplemented, amended and restated
or otherwise modified in accordance with this Agreement.

      "Other Permitted Dispositions" means each of the following:

            (a) substantially like-kind exchanges of real property or equipment;

            (b) any Disposition in connection with a sale-leaseback transaction
      permitted under Section 7.12; and

            (c) Dispositions of VHS inventory.

      "Other Taxes" is defined in Section 2.14(b).

      "Pari Passu Debt" means any unsecured senior Indebtedness of the U.S.
Borrower incurred in connection with the financing of the Target Acquisition or
the Refinancing (including the Tender Offer and the Merger), whether in respect
of the Senior Notes, the Bridge Loans or any other Indebtedness issued in
exchange or substitution therefor pursuant to the terms thereof.

      "Patriot Act" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L. 107-56, signed into law October 26, 2001.

      "Payment Date" means, with respect to any Advance, the last day of any
Interest Period and the date of payment in full of such Advance.

      "PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to any or all of its functions under ERISA.

      "Perfection Certificate" means the Perfection Certificate executed and
delivered by an Authorized Signatory of each Loan Party that is a party to a
Security Document pursuant to Section 3.1(a)(viii) or Section 5.13(a),
substantially in the form of Exhibit H hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.

      "Performance Certificate" means a certificate of an executive officer of
the U.S. Borrower as to its financial performance, in substantially the form
attached hereto as Exhibit E.

      "Permitted Acquisition" means an Acquisition (whether pursuant to an
acquisition of Equity Interests, assets or otherwise) by the U.S. Borrower or
any of its Subsidiaries from any Person of a business in which the following
conditions are satisfied:

                                       32
<PAGE>

            (a) immediately before and after giving effect to such Acquisition
      no Default shall have occurred and be continuing or would result therefrom
      (including under Section 5.2);

            (b) such Acquisition is consummated pursuant to a negotiated merger,
      amalgamation, purchase or similar agreement between the U.S. Borrower
      and/or any of its Subsidiaries, on the one hand, and such Person and/or
      any of its Affiliates, on the other hand;

            (c) in the case of an Acquisition of all or substantially all of the
      Equity Interests or assets of another Person in an aggregate amount
      exceeding $20,000,000, the most recent available audited and unaudited
      financial statements of such Person, in either case, in conformity with
      GAAP consistently applied shall be delivered to the U.S. Administrative
      Agent; and

            (d) in the case of all such Acquisitions, the cash consideration for
      which is in excess of (x) $5,000,000, individually, or (y) $15,000,000 in
      the aggregate since the Closing Date or, thereafter, since the date the
      last such Performance Certificate reflecting compliance with the covenants
      set forth in Section 7.13 was delivered, the U.S. Borrower shall have
      delivered to the U.S. Administrative Agent a Performance Certificate for
      the period of four full Fiscal Quarters immediately preceding such
      Acquisition (prepared in good faith and in a manner and using such
      methodology which is consistent with the most recent financial statements
      delivered pursuant to Sections 6.1 and 6.2) giving pro forma effect to the
      consummation of such Acquisition and evidencing compliance with the
      covenants set forth in Section 7.13; provided that, with respect to each
      such calculation, the U.S. Borrower may elect not to include the pro forma
      EBITDA for any Permitted Acquisition, the consideration for which is less
      than $5,000,000, so long as the aggregate pro forma EBITDA of such
      Permitted Acquisition would be positive.

      "Permitted Acquisition Indebtedness" shall mean (i) Indebtedness acquired
or assumed by either Borrower or any of its Subsidiaries in connection with a
Permitted Acquisition, provided that such Indebtedness existed at the time of
such Permitted Acquisition and was not created in connection therewith or in
contemplation thereof and (ii) Seller Notes issued in connection with a
Permitted Acquisition.

      "Permitted Holders" means J.T. Malugen, H. Harrison Parrish, any senior
executive officer of the U.S. Borrower on the date hereof and their respective
estates, spouses, and lineal descendants, and their legal representatives of any
of the foregoing, and the trustees of any bona fide trusts of which any of the
foregoing are the sole beneficiaries and grantors, or any corporation, limited
partnership, limited liability company and similar entity, a majority of the
voting Equity Interests of which is owned by any of the foregoing.

      "Permitted Investments" means Investments permitted to be made under
Section 7.5 hereof.

      "Permitted Liens" means each of the following:

            (a) Liens securing the Obligations;

                                       33
<PAGE>

            (b) Liens in favor of carriers, warehousemen, mechanics, materialmen
      and landlords granted in the ordinary course of business for amounts not
      overdue or being diligently contested in good faith by appropriate
      proceedings and for which adequate reserves in accordance with GAAP shall
      have been set aside on its books;

            (c) Liens incurred or deposits made in the ordinary course of
      business in connection with worker's compensation, unemployment insurance
      or other forms of governmental insurance or benefits, or to secure
      performance of tenders, statutory obligations, bids, leases or other
      similar obligations (other than for borrowed money) entered into in the
      ordinary course of business or to secure obligations on surety and appeal
      bonds or performance bonds;

            (d) judgment Liens in existence for less than 45 days after the
      entry thereof or with respect to which execution has been stayed or the
      payment of which is covered in full (subject to a customary deductible) by
      insurance maintained with responsible insurance companies and which do not
      otherwise result in an Event of Default under Section 8.1(h);

            (e) easements, rights-of-way, zoning restrictions, minor defects or
      irregularities in title and other similar encumbrances not interfering in
      any material respect with the value or use of the property to which such
      Lien is attached;

            (f) Liens for Taxes, assessments or other governmental charges or
      levies not at the time delinquent or thereafter payable without penalty or
      being diligently contested in good faith by appropriate proceedings and
      for which adequate reserves in accordance with GAAP shall have been set
      aside on its books; and

            (g) Liens consisting of rights of set-off of a customary nature or
      bankers' liens on amount of deposit, whether arising by contract or
      operation of law, incurred in the ordinary course of business so long as
      such deposits are not intended as collateral for any obligation.

      "Permitted Pro Forma Adjustments" as applied to any Person acquired after
the Closing Date means, as of any date of determination, the actual results of
operations of such Person for the period of 12 months ended nearest to the date
of determination, if such Person has been acquired pursuant to a Permitted
Acquisition (and any related Indebtedness had been incurred in connection
therewith) on the first day of such 12-month period, as adjusted to reflect
verifiable and adequately documented severance payments and reductions in office
and employee compensation, insurance expenses, interest expense, rental expense
and other overhead expense that will be or were realized effective upon
completion of such Acquisition and, for all Acquisitions in any Fiscal Year,
excluding from the calculation of EBITDA transaction expenses and other
quantifiable expenses which are not anticipated to be incurred on an on-going
basis following such Acquisition, in each case provided that such pro forma
adjustments are reasonably acceptable to the applicable Administrative Agent.

                                       34
<PAGE>

      "Person" means an individual, corporation, limited liability company,
association, partnership, joint venture, trust or estate, an unincorporated
organization, a government or any agency or political subdivision thereof, or
any other entity.

      "PPSA" means the Personal Property Security Act, as in effect from time to
time in Ontario, Alberta, Saskatchewan, Manitoba, British Columbia, Northwest
Territories and Nova Scotia, as applicable, as amended, supplemented, restated
and superceded, in whole or in part, from time to time; provided that, if the
attachment, perfection or priority of the Canadian Secured Parties' security in
respect of any Collateral governed by the laws of any other jurisdiction, PPSA
shall mean those other laws for the purposes hereof relating to the attachment,
perfection or priority in respect of such Collateral.

      "Proceeding" is defined in clause (a) of Section 5.11.

      "Pro Rata Share" of any amount means, with respect to any Revolving Lender
at any time, the product of such amount times a fraction the numerator of which
is the amount of such Lender's relevant Revolving Commitment at such time (or,
if such Revolving Commitments shall have been terminated or reduced to zero
pursuant to Section 2.7, 2.8 or 8.2, such Lender's relevant Revolving Commitment
as in effect immediately prior to such termination) and the denominator of which
is the aggregate relevant Revolving Commitments at such time (or, if such
Revolving Commitments shall have been terminated or reduced to zero pursuant to
Section 2.7, 2.8 or 8.2, the aggregate relevant Revolving Commitments as in
effect immediately prior to such termination).

      "Refinancing" is defined in the recital of the parties to this Agreement.

      "Register" shall have the meaning set forth in Section 12.5(c) hereof.

      "Release" means a "release", as such term is defined in CERCLA.

      "Relevant Percentage" means the lesser of (a) 105%, (b) at the end of
every calendar month, 101% and (c) a percentage equal to or greater than 100%,
but less than 105%, as determined by the Canadian Administrative Agent in its
sole discretion and notified to the Canadian Borrower one day prior to such
determination becoming effective, in each case, based on a determination made by
the Canadian Administrative Agent in accordance with its customary banking
practice for determining currency exchange rates, which shall be conclusive and
binding on the Borrowers absent manifest error.

      "Rent" means, with respect to any period, rental payments under operating
leases of real property, personal property or a mix of real and personal
property of the U.S. Borrower and its Subsidiaries on a consolidated basis which
were deducted in determining Net Income during such period.

      "Rental Items" means videotapes, video discs (regardless of format), video
games, audiotapes and related equipment to the extent that such items were
acquired by the U.S. Borrower or any of its Subsidiaries for sale or rental to
their customers or are held by the U.S. Borrower or such Subsidiary for sale or
rental to their customers.

                                       35
<PAGE>

      "Replacement Date" is defined in Section 2.15.

      "Replacement Lender" is defined in Section 2.15.

      "Request for Advance" means a certificate designated as a "Request for
Advance," signed by an Authorized Signatory of the relevant Borrower requesting
an Advance hereunder, which shall be in substantially the form of Exhibit B-1 or
Exhibit B-2, as the case may be, attached hereto and shall, among other things,
(a) specify the date of the Advance, which shall be a Business Day, the amount
of the Advance, the Type of Advance, the Type of Loans consisting of such
Advance, and, with respect to a Eurodollar Advance, the Interest Period selected
by the relevant Borrower, (b) state that no Default has occurred and is
continuing, or would result from such Advance or from the application of the
proceeds therefrom, and (c) as to an Advance made under the Swing Line
Commitment, the maturity date of such Advance (which maturity date shall be no
later than the fifth Business Day after the requested date of such Advance).

      "Restricted Payment" means the declaration or payment of any dividend
(other than dividends payable solely in Equity Interests of the U.S. Borrower or
any of its Subsidiaries) on, or the making of any payment or distribution on
account of, or setting apart assets for a sinking or other analogous fund for,
the purchase, redemption, defeasance, retirement or other acquisition of any
class of Equity Interests of the U.S. Borrower or any of its Subsidiaries or any
warrants or options to purchase any such Equity Interests, whether now or
hereafter outstanding, or the making of any other distribution in respect
thereof, either directly or indirectly, whether in cash or property, obligations
of the U.S. Borrower or any its Subsidiaries or otherwise.

      "Retiring Lender" is a Lender that ceases to be a Lender hereunder
pursuant to Section 2.15.

      "Revolving Commitments" means, collectively, the U.S. Revolving Loan
Commitments and the Canadian Revolving Loan Commitments.

      "Revolving Lender" means any Lender with a Revolving Commitment.

      "Revolving Loans" means, collectively, the U.S. Revolving Loans and the
Canadian Revolving Loans.

      "Revolving Loan Outstandings" means the aggregate of the U.S. Revolving
Loan Outstandings and the Canadian Revolving Loan Outstandings.

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

      "Sanctioned Country" means a country that is subject to a sanctions
program identified on the list maintained by OFAC and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise
published from time to time as such program may be applicable to such agency,
organization or person.

      "Sanctioned Entity" means (i) an agency of the government of, (ii) an
organization directly or indirectly controlled by, or (iii) a person resident
in, a Sanctioned Country.

                                       36
<PAGE>

      "Sanctioned Person" means a person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwise
published from time to time.

      "SEC" means the Securities and Exchange Commission.

      "Secured Hedge Agreement" means any Hedge Agreement that is entered into
by and between any Loan Party and any Hedge Bank and that is secured by the
Security Documents.

      "Secured Parties" means, collectively, the U.S. Secured Parties and the
Canadian Secured Parties.

      "Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

      "Security Documents" means the U.S. Borrower Pledge and Security
Agreement, the U.S. Subsidiary Pledge and Security Agreement, the U.S.
Subsidiary Guaranty, the Canadian Borrower Pledge and Security Agreement, the
Canadian Subsidiary Pledge and Security Agreement, the Canadian Subsidiary
Guaranty, the provisions of Article XI of this Agreement, the Mortgages, the
Aircraft Security Agreement, each IP Security Agreement, each Control Agreement,
any other agreement or instrument providing collateral for the Obligations (or
perfection and/or control over such collateral) whether now or hereafter in
existence, and any filings, instruments, agreements, and documents related to
the foregoing or to this Agreement, and providing each Administrative Agent, for
itself and for the ratable benefit of the relevant Secured Parties, with
Collateral for the Obligations.

      "Security Interest" means all Liens in favor of each Administrative Agent,
for itself and for the ratable benefit of the relevant Secured Parties, created
hereunder or under any of the Security Documents to secure the Obligations.

      "Senior Notes" is defined in the recital of the parties to this Agreement.

      "Senior Notes Offering" is defined in the recital of the parties to this
Agreement.

      "Seller Notes" means any unsecured notes issued by either Borrower or any
of its Subsidiaries to the seller (or any Affiliate thereof), and any earn-out
obligations incurred by either Borrower or any of its Subsidiaries (whether or
not evidenced by a note), in connection with a Permitted Acquisition, which
Indebtedness is subject to subordination provisions and other non-pricing terms
reasonably acceptable to the relevant Administrative Agent.

      "Solvent" and "Solvency" means, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair saleable 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, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay such debts
and liabilities as they mature and (d) such Person is not

                                       37
<PAGE>

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 capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the 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.

      "Subordinated Debt" means any Indebtedness (including, without limitation,
the Seller Notes) incurred by any Credit Party which by its terms is expressly
subordinated in right of payment to the prior payment of the Obligations and
contains subordination and other terms reasonably acceptable to the U.S.
Administrative Agent.

      "Subordination Provisions" is defined in clause (r) of Section 8.1.

      "Subsidiary" means, as applied to any Person, (a) any corporation of which
more than fifty percent (50%) of the outstanding stock (other than directors'
qualifying shares) having ordinary voting power to elect its board of directors,
regardless of the existence at the time of a right of the holders of any class
or classes of securities of such corporation to exercise such voting power by
reason of the happening of any contingency, or any partnership of which more
than fifty percent (50%) of the outstanding partnership interests, is at the
time owned directly or indirectly by such Person, or by one or more Subsidiaries
of such Person, or by such Person and one or more Subsidiaries of such Person,
or (b) any other entity which is directly or indirectly controlled or capable of
being controlled by such Person, or by one or more Subsidiaries of such Person,
or by such Person and one or more Subsidiaries of such Person. "Subsidiaries" as
used herein, unless otherwise indicated, means all Subsidiaries of the U.S.
Borrower (including without limitation, the Canadian Borrower and its
Subsidiaries). Upon and following the time of the Target Acquisition and for
purposes of the representations and warranties set forth in Article IV as of the
Closing Date, Target and its Subsidiaries shall be deemed to be Subsidiaries of
the U.S. Borrower for purposes of this Agreement.

      "Subsidiary Guaranties" means, collectively, the U.S. Subsidiary Guaranty
and the Canadian Subsidiary Guaranty.

      "Subsidiary Guarantors" means, collectively, the U.S. Subsidiary
Guarantors and the Canadian Subsidiary Guarantors.

      "Swing Line Commitments" means, collectively, the U.S. Swing Line
Commitments and the Canadian Swing Line Commitments.

      "Swing Line Lenders" means, collectively, the U.S. Swing Line Lenders and
the Canadian Swing Line Lenders.

      "Swing Line Loans" means, collectively, the U.S. Swing Line Loans and the
Canadian Swing Line Loans.

      "Swing Line Notes" means, collectively, the Canadian Swing Line Notes and
the U.S. Swing Line Notes.

      "Syndication Agent" is defined in the recital of parties to this
Agreement.

                                       38
<PAGE>

      "Synthetic Lease" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (a) that is not a capital lease in accordance
with GAAP and (b) in respect of which the lessee retains or obtains ownership of
the property so leased for federal income Tax purposes, other than any such
lease under which that Person is the lessor.

      "Target" is defined in the recital of the parties to this Agreement.

      "Target Acquisition" is defined in the recital of the parties to this
Agreement.

      "Target EBITDA" means, for any period of determination, for Target and its
Subsidiaries on a consolidated basis, Net Income (exclusive of any non-cash
gains or losses, gains and losses from Disposition and gains and losses from
Hedge Agreements) for such period, plus, to the extent deducted or accrued (and
not reversed) in determining Net Income, the sum of each of the following for
such period (without duplication): (a) depreciation, amortization, and other
non-cash charges, (b) income tax expense, (c) Interest Expense and (d) cash
merger expenses in an amount not to exceed $9,400,000 for the term of this
Agreement.

      "Target Refinancing" is defined in the recital of the parties to this
Agreement.

      "Tax Act" shall mean the Income Tax Act (Canada), as amended, and any
successor thereto, and any regulations promulgated thereunder.

      "Taxes" is defined in Section 2.14(a).

      "Tender Offer" is defined in the recital of the parties to this Agreement.

      "Tender Offer Closing Date" is defined in the recital of the parties to
this Agreement.

      "Term A Commitment" means, with respect to any Term A Lender at any time,
the amount set forth opposite such Lender's name on Schedule III hereto under
the caption "Term A Commitment" or, if such Lender has entered into one or more
Assignment and Acceptances, set forth for such Lender in the Register maintained
by the U.S. Administrative Agent pursuant to Section 12.5(c).

      "Term A Facility" means, at any time, the aggregate amount of the Term A
Loans at such time.

      "Term A Lender" means any Lender that has a Term A Commitment.

      "Term A Loans" means, collectively, the amounts advanced by the Term A
Lenders to the U.S. Borrower in an aggregate amount of $95,000,000, as set forth
on Schedule III attached hereto.

      "Term A Notes" means those certain term promissory notes in the aggregate
original principal amount of $95,000,000, one issued to each of the Term A
Lenders listed on Schedule III hereto that requests a promissory note, by the
U.S. Borrower in the amount of each of such Lender's Term A Loan to the U.S.
Borrower, each one substantially in the form of

                                       39
<PAGE>

Exhibit A-3 attached hereto, and any extensions, modifications, renewals,
endorsements or replacements of or amendments to any of the foregoing.

      "Term B Commitment" means, with respect to any Term B Lender at any time,
the amount set forth opposite such Lender's name on Schedule III hereto under
the caption "Term B Commitment" or, if such Lender has entered into one or more
Assignment and Acceptances, set forth for such Lender in the Register maintained
by the U.S. Administrative Agent pursuant to Section 12.5(c).

      "Term B Facility" means, at any time, the aggregate amount of the Term B
Loans at such time.

      "Term B Lender" means any Lender that has a Term B Commitment.

      "Term B Loans" means, collectively, the amounts advanced by the Term B
Lenders to the U.S. Borrower in an aggregate amount of up to $700,000,000, as
set forth on Schedule III attached hereto.

      "Term B Notes" means those certain term promissory notes in the aggregate
original principal amount of $700,000,000, one issued to each of the Term B
Lenders listed on Schedule III hereto that requests a promissory note, by the
U.S. Borrower in the amount of each of such Lender's Term B Loan to the U.S.
Borrower, each one substantially in the form of Exhibit A-4 attached hereto, and
any extensions, modifications, renewals, endorsements or replacements of or
amendments to any of the foregoing.

      "Term Facility" means the Term A Facility or the Term B Facility.

      "Term Loans" means, collectively, the Term A Loans and the Term B Loans.

      "Term Notes" means, collectively, the Term A Notes and the Term B Notes.

      "Termination Date" means the date on which all Obligations have been paid
in full in cash, all Letters of Credit have been terminated or expired (or been
cash collateralized), all Secured Hedge Agreements have been terminated and all
Commitments shall have terminated.

      "Total Debt" means, on any date, the outstanding principal amount of all
Indebtedness of the U.S. Borrower and its Subsidiaries of the type referred to
in (a) clause (a) of the definition of "Indebtedness" (which, in the case of the
Loans, shall be deemed to equal the Loans outstanding on or immediately
preceding the date of determination), (b) clause (b) of the definition of
"Indebtedness" (which, in the case of Letter of Credit outstandings shall be
deemed to equal the Letter of Credit outstandings on or immediately preceding
the date of determination), other than (x) trade letters of credit and banker's
acceptances in respect of trade accounts payable of the type described in clause
(f) of the definition of Indebtedness and (y) letters of credit for the account
of the U.S. Borrower or any Subsidiary, as the case may be, that provide
security for workers' compensation claims, payment obligations in connection
with self-insurance or similar requirements in the ordinary course of business,
(c) clause (c) of the definition of "Indebtedness" (d) clause (g) of the
definition of "Indebtedness", and (e) clause (h) of the definition of
"Indebtedness" in each case (in the case of the foregoing clauses (a) through
(e)), exclusive of

                                       40
<PAGE>

intercompany Indebtedness between the U.S. Borrower and its Subsidiaries and
including, but without duplication, any Contingent Liability in respect of any
of the foregoing.

      "Transactions" is defined in the recital of the parties to this Agreement.

      "Type" refers to the distinction (a) among Advances bearing interest at
the Base Rate, the Eurodollar Rate and the Canadian Prime Rate, (b) among the
Revolving Loans, the Swing Line Loans, Canadian BA, the Letter of Credit Loans,
the Term A Loans and the Term B Loans, (c) among the U.S. Loans and the Canadian
Loans or (d) among the Revolving Commitment, the Swing Line Commitment and the
Letter of Credit Commitment.

      "Uniform Commercial Code" or "UCC" means the Uniform Commercial Code as
the same may from time to time be in effect in the State of New York or the
Uniform Commercial Code (or similar code or statute) of another jurisdiction, to
the extent it may be required to apply to any item or items of Collateral.

      "Unused Canadian Revolving Commitment" means, with respect to any Canadian
Lender at any time, an amount equal to (a) such Canadian Lender's Canadian
Revolving Commitment at such time minus (b) such Canadian Lender's Canadian
Revolving Loan Outstandings.

      "Unused Revolving Commitment" means, (a) with respect to any Canadian
Lender at any time, the Unused Canadian Revolving Commitment, (b) with respect
to any U.S. Lender at any time, the Unused U.S. Revolving Commitment and (c) for
all other purposes, the aggregate of the Unused U.S. Revolving Commitment minus
the aggregate of the Canadian Revolving Loan Outstandings.

      "Unused U.S. Revolving Commitment" means, with respect to any U.S. Lender
at any time, an amount equal to (a) such U.S. Lender's U.S. Revolving Commitment
at such time, plus such U.S. Lender's U.S. Commitment issued under the
Incremental Facility (if any) minus (b) such U.S. Lender's U.S. Revolving Loan
Outstandings.

      "U.S. Administrative Agent" is defined in the recital of the parties to
this Agreement.

      "U.S. Administrative Agent's Account" means the account of the U.S.
Administrative Agent maintained by the U.S. Administrative Agent at its office
at 201 South College Street, Charlotte, North Carolina 28288, Account No.
5000000064203, Attention: Agency Services, or such other account as the U.S.
Administrative Agent shall specify in writing to the Lender Parties.

      "U.S. Advance" means the aggregate amount advanced by the Lenders to the
U.S. Borrower under any Type of U.S. Commitment pursuant to Article 2 hereof on
the occasion of any borrowing.

      "U.S. Borrower" is defined in the recital of parties to this Agreement.

      "U.S. Borrower Guarantor" is defined in Section 11.1.

                                       41
<PAGE>

      "U.S. Borrower Pledge and Security Agreement" means that certain U.S.
Borrower Pledge and Security Agreement of even date herewith between the U.S.
Borrower and the U.S. Administrative Agent, substantially in the form of Exhibit
G-1 attached hereto.

      "U.S. Borrower Refinancing" is defined in the recital of the parties to
this Agreement.

      "U.S. Closing Date Certificate" means the closing date certificate
executed and delivered by the U.S. Borrower and Target pursuant to the terms of
this Agreement, substantially in the form of Exhibit C-1 hereto.

      "U.S. Commitment" means the Term A Commitment, the Term B Commitment, the
U.S. Revolving Commitment, the U.S. Swing Line Commitment, U.S. the Letter of
Credit Commitment and any other commitment issued after the Closing Date
pursuant to Section 2.1(f) hereof.

      "U.S. Dollars" or "$" means the basic unit of the lawful currency of the
United States of America.

      "U.S. $ Equivalent" means the Exchange Equivalent in U.S. Dollars of any
amount of Canadian Dollars.

      "U.S. Issuing Bank" means the Initial U.S. Issuing Bank and any assignee
to which a U.S. Letter of Credit Commitment hereunder has been assigned pursuant
to Section 12.5 so long as each such assignee expressly agrees to perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as the U.S. Issuing Bank and
notifies the U.S. Administrative Agent of the amount of its U.S. Letter of
Credit Commitment (which information shall be recorded by the U.S.
Administrative Agent in the Register), for so long as the U.S. Initial Issuing
Bank or assignee, as the case may be, shall have a U.S. Letter of Credit
Commitment.

      "U.S. L/C Collateral Account" means an interest bearing cash collateral
account to be established and maintained by the U.S. Administrative Agent, over
which the U.S. Administrative Agent shall have sole dominion and First Priority
control, upon terms as may be satisfactory to the U.S. Administrative Agent.

      "U.S. L/C Disbursement" means a payment or disbursement made by the U.S.
Issuing Bank pursuant to a U.S. Letter of Credit.

      "U.S. Lender Parties" means, collectively, any U.S. Lender and the U.S.
Issuing Bank.

      "U.S. Lenders" means each Lender with a U.S. Commitment or a U.S. Loan.

      "U.S. Letter of Credit" is defined in Section 2.1(e)(i).

      "U.S. Letter of Credit Commitment" means, with respect to the U.S. Issuing
Bank, an initial amount equal to $30,000,000 or, if the U.S. Issuing Bank has
entered into one or more Assignment and Acceptances, set forth for the U.S.
Issuing Bank in the Register maintained by the U.S. Administrative Agent
pursuant to Section 12.5(c) as the U.S. Issuing Bank's "U.S.

                                       42
<PAGE>

Letter of Credit Commitment", as such amount may be reduced from time to time
pursuant to Sections 2.7 and 2.8.

      "U.S. Letter of Credit Loan" means a funding made by the U.S. Issuing Bank
or any U.S. Revolving Lender pursuant to Section 2.2(j)(ii).

      "U.S. Loan Parties" means, collectively, the U.S. Borrower, the U.S.
Borrower Guarantor and each U.S. Subsidiary Guarantor.

      "U.S. Loans" means, collectively, the U.S. Revolving Loans and the Term
Loans.

      "U.S. Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA.

      "U.S. Notice of Renewal" is defined in Section 2.1(e)(i).

      "U.S. Notice of Termination" is defined in Section 2.1(e)(i).

      "U.S. Obligations" means (a) all payment and performance obligations of
every kind, nature and description of the U.S. Loan Parties, and any other
obligors to the Lender Parties, Affiliates of the Lender Parties under or in
connection with Secured Hedge Agreements, the Administrative Agents, or any of
them, under this Agreement and the other Loan Documents (including any Letter of
Credit commissions, interest, fees and other charges on the Loans or otherwise
under the Loan Documents that would accrue but for the filing of a bankruptcy
action with respect to any such U.S. Loan Party, or any such other obligor,
whether or not such claim is allowed in such bankruptcy action), as they may be
amended from time to time, or as a result of making the Loans, whether such
obligations are direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, arising by operation of law
or otherwise, now existing or hereafter arising, including the Incremental
Facility Loans, if any, and (b) the obligation to pay an amount equal to the
amount of any and all damages which the Lender Parties, the Administrative
Agents, or any of them, may suffer by reason of a breach by any U.S. Loan Party,
or any other obligor, of any obligation, covenant or undertaking with respect to
this Agreement or any other Loan Document.

      "U.S. Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a U.S.
Multiemployer Plan), and to which the U.S. Borrower or any corporation, trade or
business that is, along with the U.S. Borrower, a member of a Controlled Group,
has liability (actual or contingent), including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under Section 4069 of ERISA.

      "U.S. Pledge and Security Agreements" means, collectively, the U.S.
Borrower Pledge and Security Agreement and the U.S. Subsidiary Pledge and
Security Agreement.

      "U.S. Revolving Commitment" means, with respect to any U.S. Revolving
Lender at any time, the amount set forth opposite such Lender's name on Schedule
III hereto under the caption "U.S. Revolving Commitment" or, if such U.S. Lender
has entered into one or more Assignment

                                       43
<PAGE>

and Acceptances, set forth for such U.S. Lender in the Register maintained by
the U.S. Administrative Agent pursuant to Section 12.5(c) as such U.S. Lender's
"Revolving Commitment", as such amount may be reduced from time to time pursuant
to Sections 2.7 and 2.8.

      "U.S. Revolving Lender" means a U.S. Lender that has a U.S. Revolving
Commitment.

      "U.S. Revolving Loans" means, collectively, the amount advanced by the
U.S. Revolving Lenders to the U.S. Borrower under the U.S. Revolving Commitment,
not to exceed the aggregate amount of the U.S. Revolving Commitments.

      "U.S. Revolving Loan Outstandings" means the sum (without double-counting)
of (a) the aggregate principal amount of all U.S. Revolving Loans and U.S.
Letter of Credit Loans made by such U.S. Lender (in its capacity as a U.S.
Lender) and outstanding at such time, (b) the aggregate principal amount of all
Incremental Loans made by such U.S. Lender (in its capacity as a U.S. Lender)
and outstanding at such time and (c) such U.S. Lender's Pro Rata Share of (i)
the aggregate principal amount of all U.S. Swing Line Loans then outstanding,
(ii) the aggregate Available Amount of all U.S. Letters of Credit outstanding at
such time and (iii) the aggregate principal amount of all U.S. Letter of Credit
Loans made by the U.S. Issuing Bank pursuant to Section 2.2(j)(ii) and
outstanding at such time.

      "U.S. Revolving Notes" means those certain revolving promissory notes in
the aggregate original principal amount of $75,000,000, one issued by the U.S.
Borrower to each of the U.S. Lenders issuing a U.S. Revolving Commitment that
requests a promissory note, in accordance with each such U.S. Lender's U.S.
Revolving Commitment, each one substantially in the form of Exhibit A-1 attached
hereto, and any extensions, modifications, renewals, endorsements or
replacements of or amendments to any of the foregoing.

      "U.S. Secured Parties" means the Agents, the U.S. Lender Parties and the
Hedge Banks that enter into Hedge Agreements with the U.S. Borrower.

      "U.S. Subsidiary" means a Subsidiary that is not a Foreign Subsidiary.

      "U.S. Subsidiary Guarantor" means each Subsidiary of the U.S. Borrower
(other than any Joint Venture Entity) that has executed and delivered to the
U.S. Administrative Agent a U.S. Subsidiary Guaranty.

      "U.S. Subsidiary Guaranty" shall mean, collectively, that certain U.S.
Subsidiary Guaranty of even date herewith in favor of the U.S. Administrative
Agent, for itself and for the ratable benefit of the U.S. Secured Parties, given
by each of the U.S. Borrower (other than (x) any Joint Venture Entity and (y)
each Canadian Subsidiary and each other Foreign Subsidiary of the U.S. Borrower
if such Foreign Subsidiary's guaranty of the U.S. Obligations would result in
material adverse tax effect to the U.S. Borrower), substantially in the form of
Exhibit F-1 attached hereto, and any similar guaranty delivered pursuant to
Section 5.13 hereof.

      "U.S. Subsidiary Pledge and Security Agreement" means, collectively, that
certain U.S. Subsidiary Pledge and Security Agreement of even date herewith
between each of the U.S. Borrower's Subsidiaries (other than (x) any Joint
Venture Entity and (y) each Canadian

                                       44
<PAGE>

Subsidiary and each other Foreign Subsidiary of the U.S. Borrower if such
Foreign Subsidiary's pledge of its assets to secure the U.S. Obligations would
result in material adverse tax effect to the U.S. Borrower), on the one hand,
and the U.S. Administrative Agent, on the other hand, substantially in the form
of Exhibit G-2 attached hereto, and any similar security agreement delivered
pursuant to Section 5.13 hereof.

      "U.S. Swing Line Commitment" means an amount equal to the lesser of (a)
$20,000,000 and (b) the aggregate Unused Revolving Commitments.

      "U.S. Swing Line Lender" means Wachovia in its capacity as provider of
U.S. Swing Line Loans, or any successor swing line lender hereunder.

      "U.S. Swing Line Loans" means, collectively, the amount advanced by the
U.S. Swing Line Lender to the U.S. Borrower under the U.S. Swing Line
Commitment, not to exceed the aggregate amount of the U.S. Swing Line
Commitment.

      "U.S. Swing Line Note" means that certain swing line promissory note in
the aggregate original principal amount of $20,000,000, issued by the U.S.
Borrower to the U.S. Swing Line Lender issuing the U.S. Swing Line Commitment,
substantially in the form of Exhibit A-2 attached hereto, and any extensions,
modifications, renewals, endorsements or replacements of or amendments to any of
the foregoing.

      "U.S. Welfare Plan" means a "welfare plan", as such term is defined in
Section 3(l) of ERISA.

      "Wachovia" is defined in the recital of parties to this Agreement.

      "Welfare Plan" means, collectively, the U.S. Welfare Plans and the
Canadian Welfare Plans.

      "Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding capital stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiary of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.

      "Working Capital" means, on any date, without duplication, the difference
of (a) all assets (other than cash and Cash Equivalents) which, in accordance
with GAAP, would be included as current assets on a consolidated balance sheet
of U.S. Borrower and its Subsidiaries at such date as current assets, excluding
all changes in deferred taxes and changes in taxes payable minus (b) all amounts
which, in accordance with GAAP, would be included as current liabilities (other
than the current portion of long term debt) on a consolidated balance sheet of
U.S. Borrower and its Subsidiaries at such date, excluding current maturities of
Indebtedness and all changes in deferred taxes and income taxes payable.

      Section 1.2 Computation of Time Periods; Other Definitional Provisions. In
this Agreement and the other Loan Documents in the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to but
excluding". References in the Loan Documents to any agreement

                                       45
<PAGE>

or contract "as amended" means and be a reference to such agreement or contract
as amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with its terms. All notices shall be required to be in
writing. Reference to any Person herein shall also be reference to its
successors and assigns.

      Section 1.3 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted United
States accounting principles consistent with those applied in the preparation of
the financial statements referred to in Section 4.1(j) ("GAAP").

      Section 1.4 Pro Forma Calculations. Notwithstanding anything to the
contrary contained herein, with respect to any pro forma calculation of the
Leverage Ratio, the Interest Coverage Ratio and the Fixed Charge Coverage Ratio
required hereunder, each such calculation shall be made on a pro forma basis as
if the Transactions, any Permitted Acquisition, Disposition, incurrence of
Indebtedness or any other event necessitating such calculation occurred on the
first day of the applicable reporting period (unless otherwise expressly
specified herein) and, in the case of the Transactions and any Permitted
Acquisition, taking into account any Permitted Pro Forma Adjustments; provided
that, with respect to each such calculation, the U.S. Borrower may elect not to
include the pro forma EBITDA for any Permitted Acquisition, the consideration
for which is less than $5,000,000, so long as the aggregate pro forma EBITDA of
such Permitted Acquisition would be positive.

                                   ARTICLE II

                           LOANS AND LETTERS OF CREDIT

      Section 2.1 The Loans and the Letters of Credit. (a) The Revolving Loans.
(i) The U.S. Revolving Lenders agree, severally in accordance with their
respective U.S. Revolving Commitments and not jointly, upon the terms and
subject to the conditions of this Agreement, to lend and re-lend to the U.S.
Borrower, on and after the Closing Date and prior to the Initial Maturity Date,
amounts in U.S. Dollars requested by the U.S. Borrower which, in the aggregate,
do not exceed at any time the aggregate U.S. Revolving Commitments; provided
that no Advance may be made at any time under this Section 2.1(a)(i) in an
amount that shall exceed the aggregate Unused Revolving Commitments at such
time; provided, further, that on the Closing Date, the aggregate Unused
Revolving Commitments shall not be less than $40,000,000. Advances under the
U.S. Revolving Commitment may be repaid and reborrowed as provided in Section
2.2 hereof in order to reborrow Eurodollar Advances for new Interest Periods or
to otherwise effect changes in the Interest Rate Basis applicable to the
Advances hereunder, or otherwise.

            (ii) The Canadian Revolving Lenders agree, severally in accordance
      with their respective Canadian Revolving Commitments and not jointly, upon
      the terms and subject to the conditions of this Agreement, to (x) lend and
      re-lend to the Canadian Borrower and/or (y) accept Canadian BA, on and
      after the Closing Date and prior to the Initial Maturity Date, in amounts
      in Canadian Dollars requested by the Canadian Borrower which, in the
      aggregate, do not exceed at any time the aggregate Canadian Revolving
      Commitments (calculated at the U.S. $ Equivalent thereof); provided that
      no Advance

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<PAGE>

      may be made at any time under this Section 2.1(a)(ii) in an amount that
      shall exceed the aggregate Unused Revolving Commitments at such time
      (calculated at the U.S. $ Equivalent thereof); provided, further, that on
      the Closing Date, the aggregate Unused Revolving Commitments shall not be
      less than $40,000,000 (calculated at the U.S. $ Equivalent thereof).
      Advances under the Canadian Revolving Commitment may be repaid and
      reborrowed as provided in Section 2.2 hereof in order to reborrow
      Eurodollar Advances for new Interest Periods or to otherwise effect
      changes in the Interest Rate Basis applicable to the Canadian Advances
      hereunder, or otherwise.

      (b) The Term A Loans. The Lenders who have Term A Loan Commitments agree,
severally in accordance with their respective Term A Loan percentages as set
forth on Schedule III hereof and not jointly, upon the terms and subject to the
conditions of this Agreement, to lend to the U.S. Borrower, on the Closing Date,
an aggregate amount in U.S. Dollars equal to $95,000,000. After the Closing
Date, the Term A Loans will bear interest at the Eurodollar Basis or the Base
Rate Basis as provided in Section 2.2 hereof. Amounts borrowed under this
Section 2.1(b) and repaid or prepaid may not be reborrowed.

      (c) The Term B Loans. The Lenders who have Term B Loan Commitments agree,
severally in accordance with their respective Term B Loan percentages as set
forth on Schedule III hereof and not jointly, upon the terms and subject to the
conditions of this Agreement, to lend to the U.S. Borrower, on the Closing Date,
an aggregate amount in U.S. Dollars equal to $700,000,000. After the Closing
Date, the Term B Loans will bear interest at the Eurodollar Basis or the Base
Rate Basis as provided in Section 2.2 hereof. Amounts borrowed under this
Section 2.1(c) and repaid or prepaid may not be reborrowed.

      (d) The Swing Line Loans. (i) The U.S. Swing Line Lender agrees, upon the
terms and subject to the conditions of this Agreement, to lend and re-lend to
the U.S. Borrower, on and after the Closing Date and prior to the Initial
Maturity Date, amounts in U.S. Dollars requested by the U.S. Borrower, which in
the aggregate do not exceed at any time the U.S. Swing Line Commitment; provided
that no Advance may be made at any time under this Section 2.1(d)(i) in an
amount that shall exceed the aggregate Unused Revolving Commitments at such
time; provided, further, that no Advance may be made under this Section
2.1(d)(i) for the purpose of funding the payment of principal of any other
Advance made under the U.S. Swing Line Commitment. Advances under the U.S. Swing
Line Commitment may be repaid and reborrowed as provided in Section 2.2 hereof.

            (ii) The Canadian Swing Line Lender agrees, upon the terms and
      subject to the conditions of this Agreement, to lend and re-lend to the
      Canadian Borrower, on and after the Closing Date and prior to the Initial
      Maturity Date, amounts in Canadian Dollars requested by the Canadian
      Borrower, which in the aggregate do not exceed at any time the Canadian
      Swing Line Commitment; provided that no Advance may be made at any time
      under this Section 2.1(d)(ii) in an amount that shall exceed the aggregate
      Unused Revolving Commitments at such time; provided, further, that no
      Advance may be made under this Section 2.1(d)(ii) for the purpose of
      funding the payment of principal of any other Advance made under the
      Canadian Swing Line Commitment. Advances under the Canadian Swing Line
      Commitment may be repaid and reborrowed as provided in Section 2.2 hereof.

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<PAGE>

      (e) Letters of Credit. (i) The U.S. Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue (or cause any Affiliate that is a
commercial bank to issue on its behalf) standby letters of credit (the "U.S.
Letters of Credit") in U.S. Dollars for the account of the U.S. Borrower or any
of its U.S. Subsidiaries from time to time on any Business Day during the period
from the Closing Date until 30 days before the Initial Maturity Date in an
aggregate Available Amount (A) for all U.S. Letters of Credit not to exceed at
any time the U.S. Letter of Credit Commitment at such time and (B) for each such
U.S. Letter of Credit not to exceed the aggregate Unused Revolving Commitments
at such time. No U.S. Letter of Credit shall have an expiration date (including
all rights of the U.S. Borrower or the beneficiary to require renewal) later
than 30 days before the Initial Maturity Date, but may by its terms be renewable
annually upon written notice (a "U.S. Notice of Renewal") given to the U.S.
Issuing Bank that issued such U.S. Letter of Credit and the U.S. Administrative
Agent on or prior to any date for notice of renewal set forth in such U.S.
Letter of Credit but in any event at least ten Business Days prior to the date
of the proposed renewal of such U.S. Letter of Credit and upon fulfillment of
the applicable conditions set forth in Article 3 unless the U.S. Issuing Bank
has notified the U.S. Borrower (with a copy to the U.S. Administrative Agent) on
or prior to the date for notice of termination set forth in such U.S. Letter of
Credit but in any event at least 30 Business Days prior to the date of automatic
renewal of its election not to renew such U.S. Letter of Credit (a "U.S. Notice
of Termination"); provided that the terms of each U.S. Letter of Credit that is
automatically renewable annually shall (x) require the U.S. Issuing Bank that
issued such U.S. Letter of Credit to give the beneficiary named in such U.S.
Letter of Credit notice of any U.S. Notice of Termination, (y) permit such
beneficiary, upon receipt of such notice, to draw under such U.S. Letter of
Credit prior to the date such U.S. Letter of Credit otherwise would have been
automatically renewed and (z) not permit the expiration date (after giving
effect to any renewal) of such U.S. Letter of Credit in any event to be extended
to a date later than 30 days before the Initial Maturity Date. If either a U.S.
Notice of Renewal is not given by the U.S. Borrower or a U.S. Notice of
Termination is given by the U.S. Issuing Bank pursuant to the immediately
preceding sentence, such U.S. Letter of Credit shall expire on the date on which
it otherwise would have been automatically renewed. Within the limits of the
U.S. Letter of Credit Commitment, and subject to the limits referred to above,
the U.S. Borrower may request the issuance of U.S. Letters of Credit under this
Section 2.1(e)(i), repay any U.S. Letter of Credit Loans resulting from drawings
thereunder pursuant to Section 2.2(j) and request the issuance of additional
U.S. Letters of Credit under this Section 2.1(e)(i). The U.S. Borrower shall be
liable for all obligations in respect of each Letter of Credit issued for the
account of any of its Subsidiaries, including, without limitation, the
obligations to repay any Letter of Credit Loan in respect thereof under Section
2.4(e).

            (ii) The Canadian Issuing Bank agrees, on the terms and conditions
      hereinafter set forth, to issue (or cause any Affiliate that is a
      commercial bank to issue on its behalf) standby letters of credit (the
      "Canadian Letters of Credit") in Canadian Dollars for the account of the
      Canadian Borrower or any of its Canadian Subsidiaries from time to time on
      any Business Day during the period from the Closing Date until 30 days
      before the Initial Maturity Date in an aggregate Available Amount (A) for
      all Canadian Letters of Credit not to exceed at any time the Canadian
      Letter of Credit Commitment at such time and (B) for each such Canadian
      Letter of Credit not to exceed the aggregate Unused Revolving Commitments
      at such time. No Canadian Letter of Credit shall have an expiration date
      (including all rights of the Canadian Borrower or the beneficiary to

                                       48
<PAGE>

      require renewal) later than 30 days before the Initial Maturity Date, but
      may by its terms be renewable annually upon written notice (a "Canadian
      Notice of Renewal") given to the Canadian Issuing Bank that issued such
      Canadian Letter of Credit and the Canadian Administrative Agent on or
      prior to any date for notice of renewal set forth in such Canadian Letter
      of Credit but in any event at least ten Business Days prior to the date of
      the proposed renewal of such Canadian Letter of Credit and upon
      fulfillment of the applicable conditions set forth in Article 3 unless the
      Canadian Issuing Bank has notified the Canadian Borrower (with a copy to
      the Canadian Administrative Agent) on or prior to the date for notice of
      termination set forth in such Canadian Letter of Credit but in any event
      at least 30 Business Days prior to the date of automatic renewal of its
      election not to renew such Canadian Letter of Credit (a "Canadian Notice
      of Termination"); provided that the terms of each Canadian Letter of
      Credit that is automatically renewable annually shall (x) require the
      Canadian Issuing Bank that issued such Canadian Letter of Credit to give
      the beneficiary named in such Canadian Letter of Credit notice of any
      Canadian Notice of Termination, (y) permit such beneficiary, upon receipt
      of such notice, to draw under such Canadian Letter of Credit prior to the
      date such Canadian Letter of Credit otherwise would have been
      automatically renewed and (z) not permit the expiration date (after giving
      effect to any renewal) of such Canadian Letter of Credit in any event to
      be extended to a date later than 30 days before the Initial Maturity Date.
      If either a Canadian Notice of Renewal is not given by the Canadian
      Borrower or a Canadian Notice of Termination is given by the Canadian
      Issuing Bank pursuant to the immediately preceding sentence, such Canadian
      Letter of Credit shall expire on the date on which it otherwise would have
      been automatically renewed. Within the limits of the Canadian Letter of
      Credit Commitment, and subject to the limits referred to above, the
      Canadian Borrower may request the issuance of Canadian Letters of Credit
      under this Section 2.1(e)(ii), repay any Canadian Letter of Credit Loans
      resulting from drawings thereunder pursuant to Section 2.2(j) and request
      the issuance of additional Canadian Letters of Credit under this Section
      2.1(e)(ii). The Canadian Borrower shall be liable for all obligations in
      respect of each Canadian Letter of Credit issued for the account of any of
      its Canadian Subsidiaries, including, without limitation, the obligations
      to repay any Canadian Letter of Credit Loan in respect thereof under
      Section 2.4(e).

      (f) Incremental Facility. Subject to all the terms of this Agreement,
provided that (x) no Default exists and is then continuing and (y) the U.S.
Borrower shall be in pro forma compliance (giving effect to the incurrence of
such Indebtedness for Money Borrowed) with Section 7.13, from time to time on
and after the Closing Date, the U.S. Borrower may incur additional Indebtedness
hereunder in the form of a revolving credit (an "Incremental Facility") in an
aggregate principal amount that does not exceed $25,000,000. The Incremental
Facility shall (i) share in the Collateral to the same extent as the other U.S.
Loans, (ii) be entitled to prepayments pursuant to Section 2.8 to the same
extent as the other U.S. Revolving Loans, (iii) not be secured by any collateral
other than the Collateral that secures the U.S. Loans or guaranteed by any
Person other than pursuant to the Loan Documents with respect to the U.S. Loans,
and (iv) be documented on other terms and conditions that are reasonably
satisfactory to the U.S. Administrative Agent. All loans under the Incremental
Facility shall be issued at par. The interest rate, commitment fee rate,
amortization schedule and maturity date for the Incremental Facility shall be as
agreed upon between any Lenders agreeing to provide the Incremental Facility and
the U.S. Borrower; provided that the final maturity date of the

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<PAGE>

Incremental Facility shall not be earlier than the Initial Maturity Date. The
lenders and the loans under the Incremental Facility will be "U.S. Revolving
Lenders" and "U.S. Revolving Loans" for all purposes of this Agreement and the
other Loan Documents, and shall be treated as such, in terms of sharing of
payments and other appropriate provisions. The Incremental Facility will be
documented pursuant to an amendment to this Agreement and, as appropriate, the
other Loan Documents, executed by the U.S. Borrower, each Person providing a
commitment to the Incremental Facility and the U.S. Administrative Agent. Such
amendment may, without the consent of any other Lenders, effect such amendments
to this Agreement and the other Loan Documents as may be necessary, in the
opinion of the U.S. Administrative Agent, to effect the provisions of this
Section 2.1(f). An Incremental Facility may be established at any time at the
request of the U.S. Borrower, upon notice to the U.S. Administrative Agent and
the Lenders, and subject only to the agreement of Persons who, in their sole
discretion, choose to participate in the Incremental Facility. No Lender shall
have any obligation to participate in the Incremental Facility unless and until
it commits to do so. The U.S. Administrative Agent and the U.S. Borrower shall
provide all then existing Lenders with an opportunity to commit to the
Incremental Facility on an up to a ratable basis (the period in which any Lender
shall be required to make a decision on its participation in the Incremental
Facility being in any event no less than ten (10) Business Days from the date of
delivery by the U.S. Borrower of a notice inviting such participation), and if
sufficient commitments cannot be obtained in such manner, shall provide other
lenders with such opportunity (and for existing Lenders with the ability to
commit for more than their ratable portion), and such other lenders shall become
U.S. Lenders hereunder pursuant to a joinder agreement reasonably satisfactory
to the U.S. Administrative Agent and the U.S. Borrower.

      Section 2.2 Manner of Borrowing and Disbursement. (a) Choice of Interest
Rate, Etc. (i) Any Advance under any Revolving Commitment or made as a Term Loan
shall, at the option of the relevant Borrower, be made as a Base Rate Advance or
Canadian Prime Rate Advance, as applicable, or, subject to Section 2.2(a)(ii)
and Article 10 hereof and, except for the first three (3) days (or such shorter
period as determined by the U.S. Administrative Agent in its sole discretion to
be necessary for the completion of the primary syndication of the liabilities
contemplated in this Credit Agreement) after the Closing Date, a Eurodollar
Advance. Any Advance under any U.S. Swing Line Commitment shall be made as a
Base Rate Advance and any Advance under the Canadian Swing Line Commitment shall
be made as a Canadian Prime Rate Advance. Any notice given to the relevant
Administrative Agent in connection with a requested Advance hereunder shall be
given to such Administrative Agent prior to 12:30 p.m. (Charlotte, North
Carolina time) in order for such Business Day to count toward the minimum number
of Business Days required.

            (ii) (A) On the date on which the aggregate unpaid principal amount
      of any Eurodollar Advance shall be reduced, by payment or prepayment or
      otherwise, to less than $5,000,000, such Advance shall automatically, on
      the last day of the then existing Interest Period therefor, be reborrowed
      as a Base Rate Advance.

                  (B) If a Borrower shall fail to select the duration of any
            Interest Period for any Eurodollar Advance in accordance with the
            provisions contained in the definitions of "Eurodollar Basis" and
            "Interest Period" in Section 1.1, the relevant Administrative Agent
            will forthwith so notify such Borrower and the Lenders

                                       50
<PAGE>

            which have made such Advance, whereupon each such Eurodollar Advance
            shall automatically, on the last day of the then existing Interest
            Period therefor, be reborrowed as a Base Rate Advance.

                  (C) Upon the occurrence and during the continuance of any
            Default, (1) each Eurodollar Advance will automatically (unless
            otherwise agreed to by the relevant Administrative Agent and the
            relevant Borrower), on the last day of the then existing Interest
            Period therefor, be reborrowed as a Base Rate Advance and (2) the
            obligation of the Lenders to make Eurodollar Advances shall be
            suspended.

      (b) Base Rate Advances. (i) Initial Advances. The U.S. Borrower shall give
the U.S. Administrative Agent in the case of Base Rate Advances at least one (1)
Business Day's irrevocable prior written notice in the form of a Request for
Advance, or telephonic notice followed immediately by a Request for Advance.

            (ii) Repayments and Reborrowings. Upon at least one (1), with
      respect to items (A) and (C) of this sentence, or three (3), with respect
      to item (B) of this sentence, Business Days' irrevocable prior written
      notice to the relevant Administrative Agent, a Borrower may repay or
      prepay a Base Rate Advance without regard to its Payment Date and (A)
      reborrow all or a portion of the principal amount thereof as one or more
      Base Rate Advances, (B) reborrow all or a portion of the principal thereof
      as one or more Eurodollar Advances, or (C) not reborrow all or any portion
      of such Base Rate Advance at that time. On the date indicated by such
      Borrower, such Base Rate Advance shall be so repaid and, as applicable,
      reborrowed.

      (c) Eurodollar Advances. (i) Initial Advances. Each Borrower shall give
the relevant Administrative Agent in the case of Eurodollar Advances at least
three (3) Business Days' irrevocable prior written notice in the form of a
Request for Advance, or telephonic notice followed immediately by a Request for
Advance. Each Administrative Agent, whose determination shall be conclusive
absent manifest error, shall determine the available Eurodollar Basis and shall
notify the relevant Borrower of such Eurodollar Basis. Each Borrower shall
promptly notify the relevant Administrative Agent by telephone or telecopy, and
shall immediately confirm any such telephonic notice in writing, of its
selection of a Eurodollar Basis and Interest Period for such Advance.

            (ii) Repayments and Reborrowings. At least three (3) Business Days
      prior to the Payment Date for a Eurodollar Advance, each Borrower shall
      give the relevant Administrative Agent written notice specifying whether
      all or a portion of such Eurodollar Advance outstanding on the Payment
      Date (A) is to be repaid and then reborrowed in whole or in part as a
      Eurodollar Advance, and the Interest Period selected, (B) is to be repaid
      and then reborrowed in whole or in part as a Base Rate Advance, or (C) is
      to be repaid and not reborrowed at that time. Upon such Payment Date such
      Eurodollar Advance will, subject to the provisions hereof, be so repaid
      and, as applicable, reborrowed.

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<PAGE>

      (d) Canadian Prime Rate Advances. (i) Initial Advances. The Canadian
Borrower shall give the Canadian Administrative Agent, in the case of Canadian
Prime Rate Advances, at least one (1) Business Day's irrevocable prior written
notice in the form of a Request for Advance, or telephonic notice followed
immediately by a Request for Advance.

            (ii) Repayments and Reborrowings. Upon at least one (1), with
      respect to items (A) and (C) of this sentence, or three (3), with respect
      to item (B) of this sentence, Business Days' irrevocable prior written
      notice to the Canadian Administrative Agent, the Canadian Borrower may
      repay or prepay a Canadian Prime Rate Advance without regard to its
      Payment Date and (A) reborrow all or a portion of the principal amount
      thereof as one or more Canadian Prime Rate Advances, (B) reborrow all or a
      portion of the principal thereof as one or more Canadian BA Advances, or
      (C) not reborrow all or any portion of such Canadian Prime Rate Advance at
      that time. On the date indicated by such Borrower, such Canadian Prime
      Rate Advance shall be so repaid and, as applicable, reborrowed.

      (e) Canadian BA. (i) Converting Canadian Prime Rate Loans to, or
Continuing Canadian BA as, Canadian BA. Provided that the Canadian Borrower has,
by giving notice to the Canadian BA Administrative Agent, requested the Canadian
Lenders to accept its drafts to replace all or a portion of an outstanding
Canadian Loan, then each Canadian Lender shall, on the date of conversion or
continuation, as applicable, and concurrent with the payment by the Canadian
Borrower to the Canadian Administrative Agent on behalf of the Canadian Lenders
of an amount equal to the difference between the principal or face amount of
such outstanding Canadian Loan or the portion thereof which is being converted
or continued and the aggregate Notional BA Proceeds with respect to the drafts
to be accepted by the Canadian Lenders, accept the Canadian Borrower's draft or
drafts having an aggregate face amount equal to its Percentage of the aggregate
principal or face amount of such Canadian Loan or the portion thereof which is
being converted or continued, such acceptance to be in accordance with Section
2.2(f).

            (ii) Converting Canadian BA to Canadian Prime Rate Loans. Each
      Canadian Lender shall, at the end of an Interest Period with respect to
      Canadian BA which such Canadian Lender has accepted, pay to the holder
      thereof the face amount of such Canadian BA. Provided that the Canadian
      Borrower has, by giving notice to the Canadian Administrative Agent,
      requested a Canadian Lender to convert all or a portion of outstanding
      maturing Canadian BA into a Canadian Prime Rate Loan, such Canadian Lender
      shall, upon the end of the current Interest Period with respect to such
      Canadian BA and the payment by such Canadian Lender to the holders of such
      Canadian BA of the aggregate face amount thereof, be deemed to have made
      to the Canadian Borrower the Canadian Prime Rate Loan into which the
      matured Canadian BA or a portion thereof are converted in the aggregate
      principal amount equal to its Canadian Pro Rata Share of the aggregate
      face amount of the matured Canadian BA or the portion thereof which are
      being converted.

      (f) Funding and Execution of, and Special Provisions, Relating to Canadian
BA. Not in limitation of any other provision of this Agreement, but in
furtherance thereof, the provisions of this Section 2.2(f) shall further apply
to the acceptance, rolling over and conversion of Canadian BA.

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<PAGE>

            (i) Funding of Canadian BA. If the Canadian Administrative Agent
      receives a Request for Canadian Advance from the Canadian Borrower
      requesting a Borrowing or a rollover of or a conversion into a Canadian
      Loan by way of Canadian BA, the Canadian Administrative Agent shall notify
      each of the applicable Canadian Lenders, prior to 11:00 a.m., Toronto
      time, on the third Business Day prior to the date of such Advance, of such
      request and of each such Canadian Lender's Pro Rata Share of such Canadian
      Revolving Loan. Each applicable Canadian Lender shall, not later than
      11:00 a.m., Toronto time, on the date of each Canadian Revolving Loan by
      way of Canadian BA (whether in respect of the Credit Extension or pursuant
      to a rollover or conversion), accept drafts of the Canadian Borrower which
      are presented to it for acceptance and which have an aggregate face amount
      equal to such Canadian Lender's Pro Rata Share of the total Advance being
      made available by way of Canadian BA on such date. With respect to each
      drawdown of, rollover of or conversion into Canadian BA, each such
      Canadian Lender shall not be required to accept any draft which has a face
      amount which is not in an integral multiple of Cdn $100,000. Concurrent
      with the acceptance of drafts of the Canadian Borrower as aforesaid, each
      applicable Canadian Lender shall make available to the Canadian
      Administrative Agent the aggregate Notional BA Proceeds with respect to
      the Canadian BA being purchased by such Canadian Lender (net of the
      aggregate amount required to repay such Canadian Lender's outstanding
      Canadian BA that are maturing on such date and/or Canadian Prime Rate
      Loans of such Canadian Lender that are being converted on such date). The
      Canadian Administrative Agent shall, upon fulfillment by the Canadian
      Borrower of the terms and conditions set forth in Sections 3.2 and 3.3,
      make such amount, if any, received from the applicable Canadian Lenders
      available to the Canadian Borrower on the date of such Advance by
      crediting the designated account of the Canadian Borrower. Each Canadian
      BA to be accepted by any Canadian Lender shall be accepted by such
      Canadian Lender at its domestic office located in Canada.

            (ii) Execution of Canadian BA. To facilitate the acceptance of
      Canadian BA hereunder, the Canadian Borrower hereby appoints each Canadian
      Lender as its attorney to sign and endorse on its behalf, as and when
      considered necessary by the Canadian Lender, an appropriate number of
      drafts in the form prescribed by that Canadian Lender. Each Canadian
      Lender may, at its option, execute any draft in handwriting or by the
      facsimile or mechanical signature of any of its Authorized Signatories,
      and the Canadian Lenders are hereby authorized to accept or pay, as the
      case may be, any draft of the Canadian Borrower which purports to bear
      such a signature notwithstanding that any such individual has ceased to be
      an Authorized Signatory of the Canadian Lender, in which case any such
      draft or Canadian BA shall be as valid as if he or she were an Authorized
      Signatory at the date of issue of the draft or Canadian BA. Any drafts or
      Canadian BA signed by a Canadian Lender as attorney for the Canadian
      Borrower, whether signed in handwriting or by the facsimile or mechanical
      signature of an Authorized Signatory of a Canadian Lender, may be dealt
      with by the Canadian Administrative Agent or any Canadian Lender to all
      intents and purposes and shall bind the Canadian Borrower as if duly
      signed and issued by the Canadian Borrower. The receipt by the Canadian
      Administrative Agent of a request for a Borrowing by way of Canadian BA
      shall be each applicable Canadian Lender's sufficient authority to
      execute, and each applicable Canadian Lender shall, subject to the terms
      and conditions of this Agreement, execute drafts in accordance with such
      request and the advice of the

                                       53
<PAGE>

      Canadian Administrative Agent given pursuant to this Section 2.2(f)(ii),
      and the drafts so executed shall thereupon be deemed to have been
      presented for acceptance.

            (iii) Special Provisions Relating to Acceptance Notes. (A) The
      Canadian Borrower and each applicable Canadian Lender hereby acknowledge
      and agree that from time to time certain Canadian Lenders may not be
      authorized to or may, as a matter of general corporate policy, elect not
      to accept Canadian BA drafts, and the Canadian Borrower and each
      applicable Canadian Lender agrees that any such Canadian Lender may
      purchase Acceptance Notes of the Canadian Borrower in accordance with the
      provisions of Section 2.2(f)(iii)(B) in lieu of accepting Canadian BA for
      its account.

                  (B) In the event that any Canadian Lender described in Section
            2.2(f)(i) above is unable to, or elects as a matter of general
            corporate policy not to, accept Canadian BA hereunder, such Canadian
            Lender shall not accept Canadian BA hereunder, but rather, if the
            Canadian Borrower requests the acceptance of such Canadian BA, the
            Canadian Borrower shall deliver to such Canadian Lender non-interest
            bearing promissory notes (each, an "Acceptance Note") of the
            Canadian Borrower, substantially in the form of Exhibit A-7 hereto,
            having the same maturity as the Canadian BA that would otherwise be
            accepted by such Canadian Lender and in an aggregate principal
            amount equal to the undiscounted face amount of such Canadian BA.
            Each such Canadian Lender hereby agrees to purchase each Acceptance
            Note from the Canadian Borrower at a purchase price equal to the
            Notional BA Proceeds for a Lender which would have been applicable
            if a Canadian BA draft had been accepted by such Lender and such
            Acceptance Notes shall be governed by the provisions of this Article
            II as if they were Canadian BA.

      (g) Notification of Lenders. Upon receipt of a Request for Advance, or a
notice from any Borrower with respect to a selection of an Interest Period, or a
notice from any Borrower with respect to any outstanding Advance prior to the
Payment Date for such Advance, the relevant Administrative Agent shall promptly
notify each relevant Lender by telephone or telecopy of the contents thereof and
the amount of such Lender's portion of the Advance. Each Lender shall, not later
than 2:30 p.m. (Charlotte, North Carolina time) on the date of borrowing
specified in such notice, make available to the relevant Administrative Agent at
such Administrative Agent's Account, or at such account as such applicable
Administrative Agent shall designate, the amount of its portion of any Advance
which represents an additional borrowing hereunder in immediately available
funds.

      (h) Disbursement. (i) Prior to 3:00 p.m. (Charlotte, North Carolina time)
on the date of an Advance hereunder, each Administrative Agent shall, subject to
the satisfaction of any applicable conditions set forth in Article 3 hereof,
disburse the amounts made available to it by the relevant Lenders in like funds
by (A) transferring the amounts so made available by wire transfer pursuant to
the relevant Borrower's instructions, or (B) in the absence of such
instructions, crediting the amounts so made available to the account of the
relevant Borrower maintained with such Administrative Agent; provided that, in
the case of any Advance made under the Revolving Commitments, such
Administrative Agent shall first make the applicable portion of such funds equal
to the aggregate principal amount of (x) any relevant Letter of Credit

                                       54
<PAGE>

Loans made by the relevant Issuing Bank and by any other relevant Revolving
Lender and outstanding on the date of such Advance, plus interest accrued and
unpaid thereon to and as of such date, available to such Issuing Bank and such
other Revolving Lender for repayment of such Letter of Credit Loans and (y) any
relevant Swing Line Loans made by any relevant Lenders and outstanding on the
date of such Advance, plus interest accrued and unpaid thereon to and as of such
date, available to such Lenders for repayment of such Swing Line Loans, with the
balance of such funds so disbursed to the relevant Borrower.

            (ii) Unless the relevant Administrative Agent shall have received
      notice from a Lender prior to 2:30 p.m. (Charlotte, North Carolina time)
      on the date of any Advance that such Lender will not make available to
      such Administrative Agent such Lender's ratable portion of such Advance,
      such Administrative Agent may assume that such Lender has made or will
      make such portion available to such Administrative Agent on the date of
      such Advance and such Administrative Agent may in its sole discretion and
      in reliance upon such assumption, make available to the relevant Borrower
      on such date a corresponding amount. If and to the extent such Lender does
      not make such ratable portion available to such Administrative Agent, such
      Lender agrees to repay to such Administrative Agent on demand such
      corresponding amount together with interest thereon, for each day from the
      date such amount is made available to the relevant Borrower until the date
      such amount is repaid to such Administrative Agent, at the Federal Funds
      Rate for the first three (3) days and thereafter at the Federal Funds Rate
      plus one percent (1%).

            (iii) If such Lender shall repay to such Administrative Agent such
      corresponding amount, such amount so repaid shall constitute such Lender's
      portion of the applicable Advance for purposes of this Agreement. If such
      Lender does not repay such corresponding amount immediately upon such
      Administrative Agent's demand therefor, such Administrative Agent shall
      notify the relevant Borrower and such Borrower shall immediately pay such
      corresponding amount to such Administrative Agent, together with interest
      thereon. The failure of any Lender to fund its portion of any Advance
      shall not relieve any other Lender of its obligation hereunder to fund its
      respective portion of the Advance on the date of such borrowing, but no
      Lender shall be responsible for any such failure of any other Lender.

            (iv) In the event that, at any time when no Default exists and all
      applicable conditions set forth in Article 3 hereof have been satisfied, a
      Lender for any reason fails, refuses, or has given notice to the relevant
      Administrative Agent and/or the relevant Borrower that it refuses, to fund
      its portion of an Advance or, in accordance with clause (j)(ii) below, a
      disbursed amount (a "Defaulting Lender"), then, until such time as such
      Defaulting Lender has funded its portion of such Advance, or all other
      Lenders have received payment in full (whether by repayment or prepayment)
      of the principal and interest due in respect of such Advance, such
      Defaulting Lender shall not have the right (i) to vote regarding any issue
      on which voting is required or advisable under this Agreement or any other
      Loan Document, and such Lender's Unused Revolving Commitment and interest
      in any Loans, Letters of Credit or Canadian BA shall not be counted as
      outstanding for purposes of determining "Majority Lenders" hereunder or
      (ii) to receive payments of (A) principal, interest or fees from any
      Borrower in respect of

                                       55
<PAGE>

      its unfunded portion of Advances, (B) any commitment fee in respect of its
      Revolving Commitment or (C) any portion of Letter of Credit fees or
      interests or amounts in respect of any Letter of Credit Loans or Canadian
      BA. In addition to the foregoing, and notwithstanding Section 2.1(e), if
      any Lender shall become a Defaulting Lender, the Letter of Credit
      Commitment shall be reduced by an amount equal to such Defaulting Lender's
      Pro Rata Share of the Letter of Credit Commitment unless and until
      arrangements reasonably satisfactory to the relevant Issuing Bank have
      been entered into (such Issuing Bank having made a good faith effort to
      enter into such arrangements) to eliminate such Issuing Bank's risk with
      respect to the Defaulting Lender's Pro Rata Share of the Letters of Credit
      Commitment or ratable share of the aggregate face amount of outstanding
      Canadian BA, including cash collateralizing such Issuing Bank's Letter of
      Credit Commitment with respect to such Defaulting Lender's Pro Rata Share
      such Defaulting Lender's ratable share of the aggregate face amount of
      outstanding Canadian BA. The provisions of this Section 2.2(h)(iv) are not
      in lieu of any other claim the relevant Borrower may have against such
      Defaulting Lender.

      (i) Participation in Swing Line Loans. Upon written demand by a Swing Line
Lender that has made an Advance under its Swing Line Commitment, with a copy of
such demand to the relevant Administrative Agent, each other relevant Revolving
Lender will purchase from such Swing Line Lender, and such Swing Line Lender
shall sell and assign to each such other Revolving Lender, such other Revolving
Lender's Pro Rata Share of such outstanding Advance, by making available to the
relevant Administrative Agent for the account of the Swing Line Lender, by
deposit to such Administrative Agent's Account, in same day funds, an amount
equal to the portion of the outstanding principal amount of such Advance to be
purchased by such Revolving Lender. Each Borrower hereby agrees to each such
sale and assignment. Each Revolving Lender agrees to purchase its Pro Rata Share
of such outstanding Advance on (i) the Business Day on which demand therefor is
made by the Swing Line Lender which made such Advance, provided that notice of
such demand is given not later than 11:00 p.m. (Charlotte, North Carolina time)
on such Business Day or (ii) the first Business Day next succeeding such demand
if notice of such demand is given after such time. Upon any such assignment by a
Swing Line Lender to any other Revolving Lender of the Pro Rata Share of an
Advance under this Section 2.2(i), such Swing Line Lender represents and
warrants to such other Revolving Lender that such Swing Line Lender is the legal
and beneficial owner of such interest being assigned by it, but makes no other
representation or warranty and assumes no responsibility with respect to such
Advance, this Agreement, the Notes or any Lender Party and such assignment shall
be made without recourse. If and to the extent that any Revolving Lender shall
not have so made the amount of such Pro Rata Share of such Advance available to
the relevant Administrative Agent, such Revolving Lender agrees to pay to such
Administrative Agent forthwith on demand such Pro Rata Share together with
interest thereon, for each day from the date such Revolving Lender is required
to have made such amount available to such Administrative Agent until the date
such amount is paid to such Administrative Agent, at the Federal Funds Rate. If
such Revolving Lender shall pay to such Administrative Agent such Pro Rata Share
for the account of the relevant Swing Line Lender on any Business Day, such
amount so paid in respect of principal shall constitute an advance of a Swing
Line Loan made by such Revolving Lender on such Business Day for purposes of
this Agreement, and the outstanding principal amount of the Swing Line Loans
owed to such Swing Line Lender shall be reduced by such Pro Rata Share on such
Business Day. Each Revolving Lender acknowledges and agrees

                                       56
<PAGE>

that its obligation to acquire participations pursuant to this Section 2.2(i) in
respect of each Advance made under the Swing Line Commitments is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default or
the termination of the Commitments, and that each such payment shall be made
without any off-set, abatement, withholding or reduction whatsoever.

      (j) Issuance of and Drawings and Reimbursement under Letters of Credit.
(i) Request for Issuance. Each Letter of Credit shall be issued upon notice,
given not later than 12:30 p.m. (Charlotte, North Carolina time) on the fifth
Business Day prior to the date of the proposed issuance of such Letter of
Credit, by a Borrower to the relevant Issuing Bank, which shall give to the
relevant Administrative Agent and each relevant Revolving Lender prompt notice
thereof by telecopier or electronic communication. Each such notice of issuance
of a Letter of Credit (a "Notice of Issuance") shall be by telephone, confirmed
immediately in writing, or telecopier or electronic communication, specifying
therein the requested (A) date of such issuance (which shall be a Business Day),
(B) Available Amount of such Letter of Credit (which amount shall not be less
than $100,000), (C) expiration date of such Letter of Credit, (D) name and
address of the beneficiary of such Letter of Credit and (E) form of such Letter
of Credit, and shall be accompanied by such application and agreement for letter
of credit as the relevant Issuing Bank may specify to such Borrower for use in
connection with such requested Letter of Credit (a "Letter of Credit
Agreement"). If (x) the requested form of such Letter of Credit is acceptable to
the relevant Issuing Bank in its sole discretion and (y) such Issuing Bank has
not received notice of objection to such issuance from the Majority Lenders,
such Issuing Bank will, upon fulfillment of the applicable conditions set forth
in Article 3, make such Letter of Credit available to the relevant Borrower at
its office referred to in Section 12.1 or as otherwise agreed with such Borrower
in connection with such issuance. In the event and to the extent that the
provisions of any Letter of Credit Agreement shall conflict with this Agreement,
the provisions of this Agreement shall govern.

            (ii) Participations. Upon the issuance of a Letter of Credit by an
      Issuing Bank, such Issuing Bank shall be deemed, without further action by
      any party hereto, to have sold to each relevant Revolving Lender, and each
      such Revolving Lender shall be deemed, without further action by any party
      hereto, to have purchased from such Issuing Bank, a participation in such
      Letter of Credit in an amount for each such Revolving Lender equal to such
      Lender's Pro Rata Share of the Available Amount of such Letter of Credit,
      effective upon the issuance of such Letter of Credit. In consideration and
      in furtherance of the foregoing, each Revolving Lender hereby absolutely
      and unconditionally agrees to pay such Lender's Pro Rata Share of each L/C
      Disbursement made by the relevant Issuing Bank and not reimbursed by the
      relevant Borrower forthwith on the date due as provided in Section 2.4(e)
      (or which has been so reimbursed but must be returned or restored by such
      Issuing Bank because of the occurrence of an event specified in Section
      8.1(f), (g), (h), (i), or (j) or otherwise) by making available to the
      relevant Administrative Agent for the account of such Issuing Bank by
      deposit to the applicable Administrative Agent's Account, in same day
      funds, an amount equal to such Lender's Pro Rata Share of such L/C
      Disbursement. Each Revolving Lender acknowledges and agrees that its
      obligation to acquire participations pursuant to this Section 2.2(j)(ii)
      in respect of Letters of Credit is absolute and unconditional and shall
      not be affected by any circumstance whatsoever, including the occurrence
      and

                                       57
<PAGE>

      continuance of a Default or an Event of Default or the termination of the
      Commitments, and that each such payment shall be made without any off-set,
      abatement, withholding or reduction whatsoever. If and to the extent that
      any Revolving Lender shall not have so made the amount of such L/C
      Disbursement available to such Administrative Agent, such Revolving Lender
      agrees to pay to such Administrative Agent forthwith on demand such amount
      together with interest thereon, for each day from the date such L/C
      Disbursement is due pursuant to Section 2.4(d) until the date such amount
      is paid to such Administrative Agent, at the Federal Funds Rate for its
      account or the account of the relevant Issuing Bank, as applicable. If
      such Lender shall pay to such Administrative Agent such amount for the
      account of such Issuing Bank on any Business Day, such amount so paid in
      respect of principal shall constitute a Letter of Credit Loan made by such
      Lender on such Business Day for purposes of this Agreement, and the
      outstanding principal amount of the Letter of Credit Loan made by such
      Issuing Bank shall be reduced by such amount on such Business Day.

            (iii) Drawing and Reimbursement. The payment by an Issuing Bank of a
      draft drawn under any Letter of Credit shall constitute for all purposes
      of this Agreement the making by such Issuing Bank of a Letter of Credit
      Loan, which shall be a Base Rate Advance or Canadian Prime Rate Advance,
      as applicable, in the amount of such draft.

            (iv) Failure to Make Letter of Credit Loans. The failure of any
      Lender to make the Letter of Credit Loan to be made by it on the date
      specified in Section 2.4(e) shall not relieve any other Lender of its
      obligation hereunder to make its Letter of Credit Loan on such date, but
      no Lender shall be responsible for the failure of any other Lender to make
      the Letter of Credit Loan to be made by such other Lender on such date.

            (iv) Applicability of ISP98. Unless otherwise expressly agreed by
      each Issuing Bank and each Borrower when a Letter of Credit is issued, the
      rules of 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) shall apply to each
      Letter of Credit.

      Section 2.3 Interest. (a) On Base Rate Advances and Canadian Prime Rate
Advances. Interest on each Base Rate Advance and each Canadian Prime Rate
Advance shall be computed on the basis of a year of 365/366 days for the actual
number of days elapsed and shall be payable at the Base Rate Basis or the
Canadian Prime Rate Basis, as the case may be, for such Advance, in arrears on
the applicable Payment Date for the period through the date immediately
preceding such Payment Date. Interest on Base Rate Advances or the Canadian
Prime Rate Basis, as the case may be, then outstanding shall also be due and
payable on (i) with respect to Swing Line Loans, the earlier of (A) the date of
repayment thereof, (B) the maturity date specified in the applicable Request for
Advance (which maturity date shall be no later than the fifth Business Day after
the requested date of such Advance) and (C) the Initial Maturity Date and (ii)
the earlier of (A) the date of repayment or prepayment thereof to the extent of
the amounts repaid or prepaid and (B) Initial Maturity Date, in each case, with
respect to Revolving Loans and Term A Loans and (iii) the earlier of (A) the
date of repayment or prepayment thereof to the extent of the amounts repaid or
prepaid and (B) Maturity Date, in each case, with respect to the Term B Loans.

                                       58
<PAGE>

      (b) On Eurodollar Advances. Interest on each Eurodollar Advance shall be
computed on the basis of a 360-day year for the actual number of days elapsed
and shall be payable at the Eurodollar Basis for such Advance, in arrears on the
applicable Payment Date for the period through the day immediately preceding
such Payment Date, and, in addition, if the Interest Period for a Eurodollar
Advance exceeds three (3) months, interest on such Eurodollar Advance shall also
be due and payable in arrears on every three-month anniversary of the beginning
of such Interest Period. Interest on Eurodollar Advances then outstanding shall
also be due and payable on (i) the earlier of (A) the date of repayment or
prepayment thereof to the extent of the amounts repaid or prepaid and (B)
Initial Maturity Date, in each case, with respect to Revolving Loans and Term A
Loans and (ii) the earlier of (A) the date of repayment or prepayment thereof to
the extent of the amounts repaid or prepaid and (B) Maturity Date, in each case,
with respect to the Term B Loans.

      (c) Interest if No Notice of Selection of Interest Rate Basis. With
respect to any Advance, if the U.S. Borrower fails to give the U.S.
Administrative Agent timely notice of its selection of a Eurodollar Basis, or if
for any reason a determination of a Eurodollar Basis for any Advance is not
timely concluded, the Base Rate Basis shall apply to such Advance.

      (d) Tax Act. (a) Whenever any interest under this Agreement is calculated
using a rate based on a calendar year of 365 days (or 366 days, as applicable),
the rate determined pursuant to such calculation, when expressed as an annual
rate, is equivalent to the quotient of (i) the product of (A) the applicable
rate based on a calendar year of 365 days (or 366 days, as applicable),
multiplied by (B) the actual number of days in the calendar year in which the
period for which such interest is payable (or compounded) ends, divided by (ii)
365 (or 366, as applicable), as the case may be, (b) the principle of deemed
reinvestment of interest does not apply to any interest calculation under this
Agreement, and (c) the rates of interest stipulated in this Agreement are
intended to be nominal rates and not effective rates or yields.

      (e) Interest Upon Default. Immediately upon the occurrence of a Default
hereunder, the outstanding principal balance of the Loans, together with accrued
and unpaid interest and other unpaid sums, shall bear interest at the Default
Rate. Such interest shall be payable on demand and shall accrue until the
earliest of (a) waiver or cure (to the satisfaction of the Lenders required
under Section 12.12 hereof to waive or cure) of the applicable Default, or (b)
agreement by the Majority Lenders to rescind the charging of interest at the
Default Rate, or (c) payment in full of the Obligations.

      (f) Eurodollar Advances. At no time may the number of outstanding
Eurodollar Advances exceed eight (8).

      (g) Applicable Margin; Applicable Canadian BA Stamping Fee. (i) Subject to
the remainder of this clause (i), with respect to (A) any Advance under the
Revolving Commitments and Term A Loans, the Applicable Margin shall be as of any
calculation date the interest rate margin set forth below under the heading
"Base Rate Advance Applicable Margin" or "Eurodollar Advance Applicable Margin",
as applicable, determined by the U.S. Administrative Agent and (B) any Canadian
BA, the Applicable Stamping Fee shall be as of any calculation date the interest
rate margin set forth below under the heading "Applicable Canadian BA Stamping
Fee" determined by the Canadian Administrative Agent, in each case based upon
the Leverage

                                       59
<PAGE>

Ratio determined for the most recent Fiscal Quarter end, to be adjusted from
time to time effective as of the second Business Day after the Performance
Certificate referred to in Section 6.3 hereof is required to be furnished by the
U.S. Borrower to the Administrative Agents and each Lender for the Fiscal
Quarter most recently ended, expressed as a per annum rate of interest as
follows:

<TABLE>
<CAPTION>
                                               Base Rate   Eurodollar
                                                 Advance     Advance    Applicable
                                               Applicable  Applicable   Canadian BA
                         Leverage Ratio          Margin      Margin    Stamping Fee
                  ---------------------------  ----------  ----------  ------------
<S>               <C>                          <C>         <C>         <C>
Pricing Level 1   Greater than or equal to        1.75%       2.75%        2.75%
                  2.75 to 1.00

Pricing Level 2   Greater than or equal to        1.50%       2.50%        2.50%
                  2.25 to 1.00, but less than
                  2.75 to 1.00

Pricing Level 3   Greater than or equal to        1.25%       2.25%        2.25%
                  1.75 to 1.00, but less
                  than 2.25 to 1.00

Pricing Level 4   Less than 1.75 to 1.00          1.00%       2.00%        2.00%
</TABLE>

      In the event that the U.S. Borrower fails to timely provide the
Performance Certificate referred to in Section 6.3 hereof, and without prejudice
to any additional rights under Section 8.2 hereof, Pricing Level 1 shall apply
as of the first day after the date on which such statements or certificate were
required to have been delivered until the actual delivery of such statements or
certificate. Subject to the immediately preceding sentence, from the Closing
Date until the second Business Day after the first Fiscal Quarter following the
Closing Date on which the Performance Certificate referred to in Section 6.3
hereof is required to be furnished, Pricing Level 1 shall apply.

            (i) With respect to the Term B Loans, the Applicable Margin for
      Eurodollar Advances shall be 3.00% per annum and the Applicable Margin for
      Base Rate Advances shall be 2.00% per annum.

      Section 2.4 Repayment. (a) Any unpaid principal and interest of the
Revolving Loans and any other outstanding Obligations under the Revolving
Commitment shall be due and payable in full to the relevant Administrative Agent
on the Initial Maturity Date.

      (b) Each Borrower shall repay to the relevant Administrative Agent, for
the account of the relevant Lenders which have made an Advance under the
relevant Swing Line Commitment, the outstanding principal amount of such Advance
on the earlier of the maturity date specified in the applicable Request for
Advance (which maturity date shall be no later than the fifth Business Day after
the requested date of such Advance) and the Initial Maturity Date.

      (c) Commencing September 30, 2005 and at the end of each Fiscal Quarter
thereafter, the outstanding Term A Loans, if any, shall be repaid in an amount
equal to the product of the outstanding Term A Loans as of the close of business
on the Closing Date multiplied by the

                                       60
<PAGE>

percentage set forth in the table below as of the applicable Fiscal Quarter end
(except for the last installment, which shall be payable on the Initial Maturity
Date as set forth below):

<TABLE>
<CAPTION>
                                Percentage of Term A
                               Loans Outstanding as of     Annual Percentage of Term A
                              the close of business on   Loans Outstanding as of the close
                               the Closing Date to be   of business on the Closing Date to
                                    Reduced Each            be Reduced Each Such Fiscal
   Fiscal Quarter Ending           Fiscal Quarter                 Quarter Period
----------------------------  ------------------------  ----------------------------------
<S>                           <C>                       <C>
Third Fiscal Quarter of 2005
through and including Second            5.00%                         20.00%
Fiscal Quarter of 2006

Third Fiscal Quarter of 2006            5.00%                         20.00%
through and including Second
Fiscal Quarter of 2007

Third Fiscal Quarter of 2007            5.00%                         20.00%
through and including Second
Fiscal Quarter of 2008

Third Fiscal Quarter of 2008            5.00%                         20.00%
through and including Second
Fiscal Quarter of 2009

Third Fiscal Quarter of 2009            5.00%                         15.00%
through and including First
Fiscal Quarter of 2010

The Initial Maturity Date               5.00%                          5.00%
</TABLE>

      Any unpaid principal and interest of the Term A Loans shall be due and
payable in full on the Initial Maturity Date.

                                       61
<PAGE>

      (d) Commencing September 30, 2005 and at the end of each Fiscal Quarter
thereafter, the outstanding principal balance of the Term B Loans shall be
repaid in an amount equal to the outstanding principal balance of the Term B
Loan as of the close of business on the Closing Date multiplied by the
percentage set forth below as of the applicable Fiscal Quarter end (except for
the last installment, which shall be payable on the Maturity Date as set forth
below):

<TABLE>
<CAPTION>
                                 Percentage of Term B
                                Loans Outstanding as of      Annual Percentage of Term B
                               the close of business on   Loans Outstanding as of the close
                               the Closing Date to be    of business on the Closing Date to
                                     Reduced each            be Reduced Each Such Fiscal
    Fiscal Quarter Ending           Fiscal Quarter                 Quarter Period
-----------------------------  ------------------------  ----------------------------------
<S>                            <C>                       <C>
Third Fiscal Quarter of 2005             0.25%                          1.00%
through and including Second
Fiscal Quarter of 2006

Third Fiscal Quarter of 2006             0.25%                          1.00%
through and including Second
Fiscal Quarter of 2007

Third Fiscal Quarter of 2007             0.25%                          1.00%
through and including Second
Fiscal Quarter of 2008

Third Fiscal Quarter of 2008             0.25%                          1.00%
through and including Second
Fiscal Quarter of 2009

Third Fiscal Quarter of 2009             0.25%                          1.00%
through and including Second
Fiscal Quarter of 2010

Third Fiscal Quarter of 2010             23.75%                         71.25%
through and including First
Fiscal Quarter of 2011

The Maturity Date                        23.75%                         23.75%
</TABLE>

      Any unpaid principal and interest of the Term B Loans and any other
Obligations shall be due and payable in full on the Maturity Date.

      (e) Letter of Credit Loans. (i) Each Borrower shall repay to the relevant
Administrative Agent for the account of the relevant Issuing Bank and each other
relevant Revolving Lender that has made a Letter of Credit Loan on the earlier
of one Business Day after demand and the Initial Maturity Date the outstanding
principal amount of each Letter of Credit Loan made by each of them.

                                       62
<PAGE>

      (ii) The Obligations of the Borrowers and the Revolving Lenders with
respect to Letters of Credit under this Agreement, any Letter of Credit
Agreement and any other agreement or instrument relating to any Letter of Credit
shall be unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of this Agreement, such Letter of Credit Agreement and such other
agreement or instrument under all circumstances, including, without limitation,
the following circumstances:

            (A) any lack of validity or enforceability of any Loan Document, any
      Letter of Credit Agreement, any Letter of Credit or any other agreement or
      instrument relating thereto (all of the foregoing being, collectively, the
      "L/C Related Documents");

            (B) any change in the time, manner or place of payment of, or in any
      other term of, all or any of the Obligations of any Borrower in respect of
      any L/C Related Document or any other amendment or waiver of or any
      consent to departure from all or any of the L/C Related Documents;

            (C) the existence of any claim, set-off, defense or other right that
      any Borrower may have at any time against any beneficiary or any
      transferee of a Letter of Credit (or any Persons for which any such
      beneficiary or any such transferee may be acting), any Issuing Bank or any
      other Person, whether in connection with the transactions contemplated by
      the L/C Related Documents or any unrelated transaction;

            (D) any statement or any other document presented under a 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;

            (E) payment by any Issuing Bank under a Letter of Credit against
      presentation of a draft, certificate or other document that does not
      strictly comply with the terms of such Letter of Credit;

            (F) any exchange, release or non-perfection of any Collateral or
      other collateral, or any release or amendment or waiver of or consent to
      departure from any Subsidiary Guaranty or any other guarantee, for all or
      any of the Obligations in respect of the L/C Related Documents; or

            (G) any other circumstance or happening whatsoever, whether or not
      similar to any of the foregoing, including, without limitation, any other
      circumstance that might otherwise constitute a defense available to, or a
      discharge of, any Borrower or any guarantor (including, without
      limitation, any Guarantor).

      Section 2.5 Fees. (a) Fees Payable Under the Fee Letter. The Borrowers
agree to pay such fees as are described in the Fee Letter.

      (b) Commitment Fee. In addition (i) the U.S. Borrower agrees to pay to the
U.S. Administrative Agent, for the benefit of each of the U.S. Revolving Lenders
in accordance with their respective U.S. Revolving Commitments, a commitment fee
on the aggregate Unused U.S.

                                       63
<PAGE>

Revolving Commitments and (ii) the Canadian Borrower agrees to pay to the
Canadian Administrative Agent, for the benefit of each of the Canadian Revolving
Lenders in accordance with their respective Canadian Revolving Commitments, a
commitment fee on the aggregate Unused Canadian Revolving Commitments, in each
case, for each day from the Closing Date until the Initial Maturity Date, which
shall be equal to 0.50% per annum.

      The aggregate Available Amount of all Letters of Credit outstanding shall
count as usage for purposes of computing the foregoing commitment fees. Such
commitment fee shall be computed on the basis of a year of 360 days for the
actual number of days elapsed, shall be payable quarterly in arrears on the last
Business Day of each calendar quarter and on the Initial Maturity Date, shall be
fully earned when due, and shall be non-refundable when paid.

      (c) Letter of Credit Fees. (i) Each Borrower shall pay to the relevant
Administrative Agent for the account of each relevant Revolving Lender a
commission on such Revolving Lender's Pro Rata Share of the average daily
aggregate Available Amount of all relevant Letters of Credit outstanding from
time to time at a rate per annum equal to the Applicable Margin for Eurodollar
Advances under the relevant Revolving Commitments in effect from time to time,
if any, payable in arrears quarterly on the last Business Day of each calendar
quarter, and on the Initial Maturity Date and thereafter from time to time on
demand, shall be fully earned when due, and shall be non-refundable when paid.

            (ii) Each Borrower shall pay to the relevant Issuing Bank, for its
      own account, a letter of credit facing fee in respect of each relevant
      Letter of Credit, payable in full on the date of issuance as well as on
      any date of extension or renewal, of such Letter of Credit, computed at
      0.125% per annum of the face amount of such Letter or Credit, and shall
      also pay such commissions, issuance fees, fronting fees, transfer fees and
      other fees and charges in connection with the issuance or administration
      of each relevant Letter of Credit as such Borrower and the relevant
      Issuing Bank shall agree. Letter of Credit commissions shall be computed
      on the basis of a year of 360 days for the actual number of days elapsed.

      Section 2.6 Optional Prepayments. (a) Optional Prepayment of Advances. The
principal amount of any Base Rate Advance or Canadian Prime Rate Advance may be
prepaid in full or in part at any time, without penalty or premium and without
regard to the Payment Date for such Advance, upon not less than one (1) Business
Days' prior written notice to the relevant Administrative Agent of such
prepayment. Eurodollar Advances may be prepaid prior to the applicable Payment
Date, upon not less than three (3) Business Days' prior written notice to the
relevant Administrative Agent. Partial prepayments shall be in a principal
amount of not less than $1,000,000, and in an integral multiple of $500,000.
Each notice of prepayment shall be irrevocable and shall specify the date and
amount of such prepayment and the Type(s) of Loans and Advances to be prepaid.
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. For the avoidance of doubt, Canadian BA may not be
prepaid.

      (b) Application of Prepayment. Each prepayment of the Term Loans pursuant
to this Section 2.6 shall be applied to the Term Facilities on a pro rata basis
and, as to each Term Facility, in inverse order of maturities, to any principal
repayment installments of such Term

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Facility on a pro rata basis. Any repayment or prepayment of Revolving Loans
pursuant to this Section 2.6 shall not reduce the Revolving Commitment unless
such prepayment is made concurrently with a cancellation of all or a portion of
the unused portions of the Revolving Commitment pursuant to Section 2.7.

      (c) Prepayment in General. The prepayment of any principal amount of
Advances shall be made with accrued interest to the date of such prepayment on
the aggregate principal amount prepaid and each Borrower shall reimburse the
relevant Lenders and the relevant Administrative Agent, on demand, for any
actual loss or out-of-pocket expense incurred by any relevant Lender Party or
the relevant Administrative Agent in connection with such prepayment, as set
forth in Section 2.11 hereof. Any prepayment under this Agreement shall not
affect any Borrower's obligation to continue making payments under any Secured
Hedge Agreements, which shall remain in full force and effect notwithstanding
such prepayment, subject to the terms of such Secured Hedge Agreements.

      Section 2.7 Borrower's Optional Cancellation of the Commitments. Each
Borrower shall have the right, on three (3) Business Days' irrevocable notice to
the relevant Administrative Agent, to cancel all or a portion of the relevant
Commitments of any Type, on a pro rata basis among the Lenders issuing such Type
of Commitments; provided that (a) any such cancellation shall be made in a
principal amount of not less than $5,000,000 for U.S. Commitments and Cdn
$5,000,000 for Canadian Commitments, and in an integral multiple of $1,000,000
for U.S. Commitments and Cdn $1,000,000 for Canadian Commitments; (b) as of the
effective date of such notice, the aggregate Commitments of such Type shall be
permanently reduced to the amount stated in such Borrower's notice for all
purposes herein; and (c) in the case of a reduction of the Revolving
Commitments, payment shall be made on or prior to the effective date of such
notice of any amount necessary to reduce the amount of the Revolving Loans
outstanding under the Revolving Commitment to not more than the amount of the
Revolving Commitments as reduced, together with any amount required to be paid
by such Borrower under Section 2.11 hereof.

      Section 2.8 Mandatory Prepayments. (a)(i) In addition to the scheduled
repayments provided for in Section 2.4 hereof, following the receipt by any
Borrower or any of its Subsidiaries of any Net Proceeds received in connection
with Casualty Events in excess of $10,000,000 (individually or in the aggregate
when taken together with all other Net Proceeds received in connection with
Casualty Events and all Net Proceeds received in connection with Dispositions)
over the course of a Measuring Period, the relevant Borrowers shall deliver to
the U.S. Administrative Agent a calculation of the amount of such Net Proceeds
and make a mandatory prepayment of the Loans in an amount equal to 100% of such
Net Proceeds within 45 days of the receipt thereof to be applied as set forth in
Section 2.8(f); provided that no mandatory prepayment on account of Net Proceeds
shall be required under this clause if relevant Borrower informs the U.S.
Administrative Agent in writing no later than 45 days following receipt of such
Net Proceeds of its or such Subsidiary's good faith intention to apply such Net
Proceeds to the rebuilding or replacement of the damaged, destroyed or condemned
assets or property or reinvest such Net Proceeds in substantially similar assets
or property that will be used or useful in its business or other assets or
property that will be used or useful in its business, and the relevant Borrower
or such Subsidiary in fact so uses or reinvests or notifies the U.S.
Administrative Agent in writing that it is contractually obligated to use or
reinvest (and does, in fact, so use or

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<PAGE>

reinvest within 180 days of entering into such contractual obligation) such Net
Proceeds within 360 days following the receipt of such Net Proceeds, with the
amount of such Net Proceeds unused after such 360-day period being applied to
the repayment of Loans pursuant to Section 2.8(f); provided, further, that at
any time when any Default or Event of Default shall have occurred and be
continuing, all such Net Proceeds (together with Net Proceeds received in
connection with Dispositions not applied as provided in clause (ii) below) shall
be deposited in an account maintained with the U.S. Administrative Agent to pay
for such rebuilding, replacement, use or reinvestment whenever no Default or
Event of Default is then continuing or except as otherwise agreed to by the U.S.
Administrative Agent for disbursement at the request of the U.S. Borrower or
such Subsidiary, as the case may be.

            (i)   In addition to the scheduled repayments provided for in
      Section 2.4 hereof, following the receipt by any Borrower or any of its
      Subsidiaries of any Net Proceeds received in connection with Dispositions
      in excess of $10,000,000 (individually or in the aggregate when taken
      together with all other Net Proceeds received in connection with
      Dispositions (other than Excluded Dispositions) and all Net Proceeds
      received in connection with Casualty Events) over the course of a
      Measuring Period, the relevant Borrower shall deliver to the U.S.
      Administrative Agent a calculation of the amount of such Net Proceeds and
      make a mandatory prepayment of the Loans in an amount equal to 100% of
      such Net Proceeds within one Business Day of the receipt thereof to be
      applied as set forth in Section 2.8(f); provided that no mandatory
      prepayment on account of Net Proceeds shall be required under this clause
      (ii) if each Borrower informs the U.S. Administrative Agent in writing
      promptly following receipt of such Net Proceeds of its or such
      Subsidiary's good faith intention to reinvest such Net Proceeds in
      substantially similar assets or property that will be used or useful in
      its business or other assets or property that will be used or useful in
      its business, and the relevant Borrower or such Subsidiary in fact so
      reinvests or notifies the U.S. Administrative Agent in writing that it is
      contractually obligated to reinvest (and does, in fact, so reinvest within
      180 days of entering into such contractual obligation) such Net Proceeds
      within 360 days following the receipt of such Net Proceeds, with the
      amount of such Net Proceeds not so reinvested after such 360-day period
      being applied to the repayment of Loans pursuant to Section 2.8(f);
      provided, further, that at any time when any Default or Event of Default
      shall have occurred and be continuing, all Net Proceeds (together with Net
      Proceeds received in connection with Casualty Events not applied as
      provided in clause (i) below) shall be deposited in an account maintained
      with the U.S. Administrative Agent to be so used whenever no Default or
      Event of Default is then continuing or except as otherwise agreed to by
      the U.S. Administrative Agent for disbursement at the request of the
      relevant Borrower.

      (b)   In addition to the scheduled repayments provided for in Section 2.4
hereof, the relevant Borrower shall prepay the Loans in an amount equal to the
Net Proceeds received after the Closing Date from any Indebtedness for Money
Borrowed incurred by the relevant Borrower or any of its Subsidiaries, except
for Indebtedness for Money Borrowed permitted by Section 7.1. Such Net Proceeds
shall be applied by the Borrowers on the Business Day of receipt thereof by the
relevant Borrower or the affected Subsidiary to such prepayment in accordance
with Section 2.8(f).

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<PAGE>

      (c)   In addition to the scheduled repayments provided for in Section 2.4
hereof, the U.S. Borrower shall prepay the Loans in an amount equal to fifty
percent (50%) of the Net Proceeds received after the Closing Date from the sale
or issuance of any Equity Interests in the U.S. Borrower if the Leverage Ratio
after giving pro forma effect to such issuance shall be greater than 2.0 to 1.0;
provided that no mandatory prepayment on account of Net Proceeds will be
required under this clause (c) if the proceeds of any Equity Interests are used
to redeem Subordinated Debt in whole or in part, as permitted by Section 7.8.
Such Net Proceeds shall be applied by the U.S. Borrower on the Business Day of
receipt thereof to such prepayment in accordance with Section 2.8(f).

      (d)   In addition to the scheduled repayments provided for in Section 2.4
hereof, so long as the Leverage Ratio as of the end of the most recently
completed Fiscal Year is (i) greater than 2.5 to 1.0, the U.S. Borrower shall
prepay the Loans in an amount equal to seventy-five percent (75%) of Excess Cash
Flow for the most recently completed Measuring Period, (ii) greater than 2.0 to
1.0 and less than or equal to 2.5 to 1.0, the U.S. Borrower shall prepay the
Loans in an amount equal to fifty percent (50%) of Excess Cash Flow for the most
recently completed Measuring Period and (iii) equal to or less than 2.0 to 1.0,
the U.S. Borrower shall not be required to make any prepayment in respect of
Excess Cash Flow. Such Excess Cash Flow shall be applied on the Business Day on
which the Performance Certificate referred to in Section 6.3 is due for the
applicable Fiscal Year to such prepayment in accordance with Section 2.8(f).

      (e)   In addition to the scheduled repayments provided for in Section 2.4
hereof, the U.S. Borrower shall prepay the Loans in an amount equal to the Net
Proceeds from Merger Agreement Events in excess of $10,000,000 in the aggregate
during the term of this Agreement. Such excess Net Proceeds shall be applied by
the U.S. Borrower on the Business Day of receipt thereof by the U.S. Borrower or
the affected Subsidiary to such prepayment in accordance with Section 2.8(f).

      (f)   Any prepayment pursuant to this Section 2.8 (other than clause (g)
below) shall be made in the manner set forth in Section 2.6(c) and shall be
applied (i) initially to the Term Facilities on a pro rata basis and, (A) as to
the Term A Facility, in direct order of maturity and (B) as to the Term B
Facility, in inverse order of maturities, to any principal repayment
installments of such Term Facility on a pro rata basis and (ii) thereafter, (A)
first, to prepayment of the Letter of Credit Loans on a pro rata basis then
outstanding until such Loans are paid in full, (B) second, to prepayment of
Swing Line Loans on a pro rata basis then outstanding until such Loans are paid
in full, (C) third, to prepayment of Revolving Loans on a pro rata basis then
outstanding until such Loans are paid in full and (D) fourth, to be deposited in
the L/C Collateral Account to cash collateralize the aggregate Available Amount
of the Letters of Credit then outstanding and the aggregate face amount of all
Canadian BA then outstanding. Notwithstanding the foregoing, so long as any of
the Term A Loans are outstanding, any holder of the Term B Loans shall have the
right to decline any mandatory partial prepayment of the Term B Loans pursuant
to this Section 2.8, in which case the amount that would be used to prepay the
Term B Loans held by any such declining Term B Lender pursuant to this Section
2.8 shall be used to, first, prepay the Term A Loans and the Term B Loans held
by other Term B Lenders to the extent necessary to prepay all the Term A Loans
and all the Term B Loans held by such other Term B Lenders, second, prepay the
Term B Loans held by any such

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<PAGE>

declining Term B Lender to the extent necessary to prepay all the Term B Loans
held by each such declining Term B Lenders, and any amount remaining thereafter
shall be used to prepay the other Loans in the manner set forth in Section
2.8(f)(ii).

      (g)   On each date when (i) the aggregate of the Revolving Loan
Outstandings for all U.S. Revolving Lenders exceeds the aggregate of the
Revolving Commitments of all U.S. Revolving Lenders (as such may be reduced from
time to time, including pursuant to Section 2.7), either the U.S. Borrower shall
make a mandatory prepayment of all U.S. Revolving Loans or all U.S. Swing Line
Loans (or both) in an aggregate amount equal to such excess, (ii) the aggregate
of the Revolving Loan Outstandings for all Canadian Revolving Lenders exceeds
the aggregate of the Revolving Commitments of all Canadian Revolving Lenders (as
such may be reduced from time to time, including pursuant to Section 2.7),
either the Canadian Borrower shall make a mandatory prepayment of all Canadian
Revolving Loans or all Canadian Swing Line Loans (or both) in an aggregate
amount equal to such excess and (iii) the aggregate of the Revolving Loan
Outstandings for all Revolving Lenders exceeds the aggregate of the Revolving
Commitments of all Revolving Lenders (as such may be reduced from time to time,
including pursuant to Section 2.7), either (x) the U.S. Borrower shall make a
mandatory prepayment of all U.S. Revolving Loans or all U.S. Swing Line Loans
(or both) and/or (y) the Canadian Borrower shall make a mandatory prepayment of
all Canadian Revolving Loans or all Canadian Swing Line Loans (or both), in an
aggregate amount equal to such excess; provided that in determining the
aggregate Revolving Loan Commitments for the Canadian Lenders for purposes of
this clause (g), a Relevant Percentage of the then Cdn $ Equivalent of the
aggregate of the then Canadian Revolving Commitments shall be used.

      Section 2.9 Evidence of Debt. (a) The Loans shall be repayable in
accordance with the terms and provisions set forth herein. Upon the request of
any Lender, Notes shall be issued by the relevant Borrower and payable to the
order of such Lender reflecting such Lender's relevant Revolving Commitment and
Term Loans. The Notes issued by a Borrower to the Lenders shall be duly executed
and delivered by one or more Authorized Signatories of such Borrower.

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

      (c)   The Register maintained by each Administrative Agent pursuant to
Section 12.5(c) shall include a control account, and a subsidiary account for
each relevant Lender Party, in which accounts (taken together) shall be recorded
(i) the date and amount of each Advance made hereunder, the Type of such Advance
and, if appropriate, the Interest Period applicable thereto, (ii) the terms of
each Assignment and Acceptance delivered to and accepted by it, (iii) the amount
of any principal or interest due and payable or to become due and payable from
the relevant Borrower to each Lender Party hereunder, and (iv) the amount of any
sum received by such Administrative Agent from the relevant Borrower hereunder
and each Lender Party's share thereof.

      (d)   Entries made in good faith by each Administrative Agent in its
Register pursuant to clause (c) above, and by each Lender Party in its account
or accounts pursuant to clause (b) above, shall be prima facie evidence of the
amount of principal and interest due and payable or to

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become due and payable from the Borrowers to, in the case of the Register, each
Lender Party and, in the case of such account or accounts, such Lender Party,
under this Agreement, absent manifest error; provided that the failure of any
Administrative Agent or such Lender Party to make an entry, or any finding that
an entry is incorrect, in the Register or such account or accounts shall not
limit or otherwise affect the obligations of the Borrowers under this Agreement.

      Section 2.10 Manner of Payment. (a) Each payment (including any
prepayment) by each Borrower on account of the principal of or interest on the
Loans, commitment fees and any other amount owed to the Lender Parties, the
Administrative Agents or any of them under this Agreement shall be made not
later than 2:00 p.m. (Charlotte, North Carolina time) on the date specified for
payment under this Agreement to the relevant Administrative Agent at such
Administrative Agent's Account, for the account of the relevant Lender Parties,
or such Administrative Agent, as the case may be, U.S. Dollars (with respect to
U.S. Loans) or Canadian Dollars (with respect to Canadian Loans) in immediately
available funds without set-off or counterclaim. Any payment received by any
Administrative Agent after 2:00 p.m. (Charlotte, North Carolina time) shall be
deemed received on the next Business Day. Receipt by any Administrative Agent of
any payment hereunder at or prior to 2:00 p.m. (Charlotte, North Carolina time)
on any Business Day shall be deemed to constitute receipt on such Business Day.
In the case of a payment for the account of a Lender Party, the relevant
Administrative Agent will promptly thereafter (and, if such amount is received
before 2:00 p.m. (Charlotte, North Carolina time), on the same day) distribute
the amount so received in like funds to such Lender Party. If any Administrative
Agent shall not have received any payment from a Borrower as and when due, such
Administrative Agent will promptly notify the relevant Lender Parties
accordingly. Upon its acceptance of an Assignment and Acceptance and recording
of the information contained therein in the Register pursuant to Section
12.5(c), from and after the effective date of such Assignment and Acceptance,
the relevant Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.

      (b) Each Borrower agrees to pay principal, interest, fees and all other
Obligations due hereunder, under the Fee Letter, under any Notes, or under the
other Loan Documents without set-off or counterclaim or any deduction
whatsoever.

      (c) Prior to the acceleration of the U.S. Loans under Section 8.2 hereof,
if some but less than all amounts due from the U.S. Borrower are received by the
U.S. Administrative Agent with respect to the U.S. Obligations, the U.S.
Administrative Agent shall distribute such amounts in the following order of
priority:

            (i) first, to the payment of all of the fees, indemnification
      payments, costs and expenses that are due and payable to the U.S.
      Administrative Agent (solely in its capacity as the U.S. Administrative
      Agent) under or in respect of this Agreement and the other U.S. Loan
      Documents on such date, ratably based upon the respective aggregate
      amounts of all such fees, indemnification payments, costs and expenses
      owing to the U.S. Administrative Agent on such date;

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<PAGE>

            (ii) second, to the payment of all of the fees, indemnification
      payments, costs and expenses that are due and payable to the U.S. Issuing
      Bank (solely in its capacity as such) under or in respect of this
      Agreement and the other U.S. Loan Documents on such date, ratably based
      upon the respective aggregate amounts of all such fees, indemnification
      payments, costs and expenses owing to the U.S. Issuing Bank on such date;

            (iii) third, to the payment of all of the indemnification payments,
      costs and expenses that are due and payable to the U.S. Lenders under or
      in respect of this Agreement and the other U.S. Loan Documents on such
      date, ratably based upon the respective aggregate amounts of all such
      indemnification payments, costs and expenses owing to the U.S. Lenders on
      such date;

            (iv) fourth, to the payment of all of the accrued and unpaid
      interest on the U.S. Obligations of the U.S. Borrower under or in respect
      of the U.S. Loan Documents that is due and payable to the U.S.
      Administrative Agent and the U.S. Lender Parties, ratably based upon the
      respective aggregate amounts of all such interest owing to the U.S.
      Administrative Agent and the U.S. Lender Parties on such date;

            (v) fifth, ratably to the payment of the principal amount of all of
      the outstanding U.S. Loans that is due and payable to the U.S.
      Administrative Agent and the U.S. Lender Parties on such date, ratably
      based upon the respective aggregate amounts of all such principal owing to
      the U.S. Administrative Agent and the U.S. Lender Parties on such date and
      amounts payable under Secured Hedge Agreements with U.S. Lenders and/or
      their Affiliates (or Persons that were U.S. Lenders or Affiliates of U.S.
      Lenders at the time any such Secured Hedge Agreement was entered into);
      and

            (vi) sixth, to the payment of all other U.S. Obligations of the U.S.
      Loan Parties owing under or in respect of the U.S. Loan Documents that are
      due and payable to the U.S. Administrative Agent and the other Secured
      Parties on such date, ratably based upon the respective aggregate amounts
      of all such U.S. Obligations owing to the U.S. Administrative Agent and
      the other Secured Parties on such date.

      (d) Prior to the acceleration of the Canadian Loans under Section 8.2
hereof, if some but less than all amounts due from the Canadian Borrower are
received by the Canadian Administrative Agent with respect to the Canadian
Obligations, the Canadian Administrative Agent shall distribute such amounts in
the following order of priority:

            (i) first, to the payment of all of the fees, indemnification
      payments, costs and expenses that are due and payable to the Canadian
      Administrative Agent (solely in its capacity as the Canadian
      Administrative Agent) under or in respect of this Agreement and the other
      Canadian Loan Documents on such date, ratably based upon the respective
      aggregate amounts of all such fees, indemnification payments, costs and
      expenses owing to the Canadian Administrative Agent on such date;

            (ii) second, to the payment of all of the fees, indemnification
      payments, costs and expenses that are due and payable to the Canadian
      Issuing Bank (solely in its

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<PAGE>

      capacity as such) under or in respect of this Agreement and the other
      Canadian Loan Documents on such date, ratably based upon the respective
      aggregate amounts of all such fees, indemnification payments, costs and
      expenses owing to the Canadian Issuing Bank on such date;

            (iii) third, to the payment of all of the indemnification payments,
      costs and expenses that are due and payable to the Canadian Lenders under
      or in respect of this Agreement and the other Canadian Loan Documents on
      such date, ratably based upon the respective aggregate amounts of all such
      indemnification payments, costs and expenses owing to the Canadian Lenders
      on such date;

            (iv) fourth, to the payment of all of the accrued and unpaid
      interest on the Canadian Obligations of the Canadian Borrower under or in
      respect of the Canadian Loan Documents that is due and payable to the
      Canadian Administrative Agent and the Canadian Lender Parties, ratably
      based upon the respective aggregate amounts of all such interest owing to
      the Canadian Administrative Agent and the Canadian Lender Parties on such
      date;

            (v) fifth, ratably to the payment of the principal amount of all of
      the outstanding Canadian Loans that is due and payable to the Canadian
      Administrative Agent and the Canadian Lender Parties on such date, ratably
      based upon the respective aggregate amounts of all such principal owing to
      the Canadian Administrative Agent and the Canadian Lender Parties on such
      date and amounts payable under Secured Hedge Agreements with Canadian
      Lenders and/or their Affiliates (or Persons that were Canadian Lenders or
      Affiliates of Canadian Lenders at the time any such Secured Hedge
      Agreement was entered into); and

            (vi) sixth, to the payment of all other Canadian Obligations of the
      Canadian Loan Parties owing under or in respect of the Canadian Loan
      Documents that are due and payable to the Canadian Administrative Agent
      and the other Secured Parties on such date, ratably based upon the
      respective aggregate amounts of all such Canadian Obligations owing to the
      Canadian Administrative Agent and the other Secured Parties on such date.

      (e) If any Administrative Agent receives funds for application to the
Obligations of the relevant Loan Parties under or in respect of the Loan
Documents under circumstances for which the Loan Documents do not specify the
relevant Loans to which, or the manner in which, such funds are to be applied,
such Administrative Agent may elect to distribute such funds to each of the
relevant Lender Parties in accordance with such Lender Party's pro rata share of
the sum of (i) the aggregate principal amount of the relevant Loans outstanding
at such time and (ii) the aggregate Available Amount of all relevant Letters of
Credit outstanding at such time, in repayment or prepayment of such of the
outstanding relevant Loans or other relevant Obligations then owing to such
Lender Party.

      (f) Subject to any contrary provisions in the definition of Interest
Period, if any payment under this Agreement or any of the other Loan Documents
is specified to be made on a day which is not a Business Day, it shall be made
on the next Business Day, and such extension of time shall in such case be
included in computing interest and fees, if any, in connection with

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such payment; provided that, if such extension would cause payment of interest
on or principal of Eurodollar Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.

      (g) Unless any Administrative Agent shall have received notice from the
relevant Borrower prior to the date on which any payment is due to any Lender
Party hereunder that such Borrower will not make such payment in full, such
Administrative Agent may assume that such Borrower has made such payment in full
to such Administrative Agent on such date and such Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent such Borrower shall not have so made such payment in full to
such Administrative Agent, each such relevant Lender Party shall repay to such
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to such Administrative Agent, at the Federal Funds Rate.

      Section 2.11 Reimbursement. (a) Whenever any Lender shall sustain or incur
any losses or out-of-pocket expenses in connection with (i) failure by a
Borrower to borrow any Eurodollar Advance after having given notice of its
intention to borrow in accordance with Section 2.2 hereof (whether by reason of
such Borrower's election not to proceed or the non-fulfillment of any of the
conditions set forth in Article 3), or (ii) payment of any Eurodollar Advance in
whole or in part pursuant to Section 2.2(a)(ii), 2.6, 2.8 or 10.2, acceleration
of the maturity of the Loans pursuant to Section 8.2 or for any other reason,
such Borrower agrees to pay to such Lender, upon demand, an amount sufficient to
compensate such Lender for all such losses and reasonable out-of-pocket
expenses. Such Lender's good faith determination of the amount of such losses or
out-of-pocket expenses, as set forth in writing pursuant to Section 2.11(b)
hereof, and accompanied by calculations in reasonable detail demonstrating the
basis for its demand, shall be presumptively correct.

      (b) Losses subject to reimbursement hereunder shall be (i) any loss
incurred by any Lender in connection with the re-employment of funds prepaid,
repaid, not borrowed, or paid, as the case may be, and the amount of such loss
shall be the excess, if any, of (1) the interest or other cost to such Lender of
the deposit or other source of funding used to make any such Eurodollar Advance
for the remainder of its Interest Period, over (2) the interest earned (or to be
earned) by such Lender upon the re-lending or other redeployment of the amount
of such Eurodollar Advance for the remainder of its putative Interest Period or
(ii) any other expenses incurred by any Lender or any participant of such Lender
permitted hereunder in connection with the re-employment of funds prepaid,
repaid, not borrowed, or paid, as the case may be. For purposes of calculating
amounts payable to a Lender under this Section 2.11(b), each Lender shall be
deemed to have actually funded the applicable Eurodollar Advance through the
purchase of a deposit bearing interest at the Eurodollar Rate for such
Eurodollar Advance in an amount equal to the amount of such Eurodollar Advance
and having a maturity and repricing characteristics comparable to the relevant
Eurodollar Advance; provided that each Lender may fund each of its Eurodollar
Advances in any manner it sees fit, and the foregoing assumption shall be
utilized only for the calculation of amounts payable under this Section.

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<PAGE>

      Section 2.12 Pro Rata Treatment. (a) Advances. Each Advance from (i) the
U.S. Lenders shall be made pro rata (A) on the basis of the respective U.S.
Revolving Commitments of such Lenders as set forth on Schedule III with respect
to Advances made under the U.S. Revolving Commitment, (B) on the basis of each
Term A Loan percentage as set forth on Schedule III hereof with respect to Term
A Loans and (C) on the basis of each Term B Loan percentage as set forth on
Schedule III hereof with respect to Term B Loans (ii) the Canadian Lenders shall
be made pro rata on the basis of the respective Canadian Revolving Commitments
of such Lenders as set forth on Schedule III with respect to Advances made under
the Canadian Revolving Commitment.

      (b) Payments. Except as specifically provided in Section 2.2(h)(iv) or
Article 10 hereof or elsewhere in this Agreement, each payment and prepayment of
principal of the Loans, and each payment of interest on the Loans, shall be made
to the relevant Lenders pro rata on the basis of their respective unpaid
principal amounts outstanding immediately prior to such payment or prepayment.
If any Lender shall obtain any payment (whether involuntary, through the
exercise of any right of set-off, or otherwise) on account of any Loans made by
it in excess of its ratable share of such Loans, such Lender shall forthwith
purchase from the other Lenders such interests (whether by purchasing a
participation or by assignment) in the applicable Loans made by them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and each such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery; provided, further, that, so long
as the Obligations under the Loan Documents shall not have been accelerated, any
excess payment received by any Lender in respect of any Type of Loans shall be
shared on a pro rata basis only with other Lenders to which Loans of such Type
are owing. Each Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.12(b) may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the relevant Borrower in the amount of such participation.

      Section 2.13 Capital Adequacy. If, after the date hereof, the adoption or
effectiveness of any Applicable Law regarding the capital adequacy of banks or
bank holding companies, or any change or effectiveness in Applicable Law
(whether adopted before or after the Closing Date) or any change in the
interpretation or administration or effectiveness thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender Party with any directive
issued or adopted after the date hereof regarding capital adequacy (whether or
not having the force of law) of any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on any Lender Party's capital, as a consequence of its obligations hereunder
with respect to the Loans, such Lender Party's Revolving Commitment or its
obligations to issue or participate in any Letter of Credit hereunder, to a
level below that which it could have achieved but for such adoption, change or
compliance (taking into consideration such Lender Party's policies with respect
to capital adequacy immediately before such adoption, change or compliance and
assuming that such Lender Party's capital was fully utilized prior to such
adoption, change or compliance) by an amount reasonably deemed by such Lender
Party to be material, then such Lender Party shall promptly notify the relevant
Borrower of such

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adoption, compliance, or change. Upon demand by such Lender Party, the relevant
Borrower shall promptly pay to such Lender Party such additional amounts as
shall be sufficient to compensate such Lender Party for such reduced return,
together with interest on such amount from the fourth (4th) day after the date
of demand until payment in full thereof at the Default Rate. A certificate of
such Lender Party setting forth the amount to be paid to such Lender Party by
the relevant Borrower as a result of any event referred to in this paragraph and
supporting calculations in reasonable detail shall be conclusive, absent
manifest error.

      Section 2.14 Taxes. (a) Any and all payments by any Loan Party to or for
the account of any Lender Party or any Agent hereunder or under the Notes or any
other Loan Document shall be made, in accordance with Section 2.10 or the
applicable provisions of such other Loan Document, if any, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, (i) in the case of each Lender Party and each Agent, taxes that are
imposed on its overall net income by the United States or Canada, as applicable,
and taxes that are imposed on its overall net income or its overall gross
receipts (and franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction under the laws of which such Lender Party or such Agent, as the
case may be, is organized or any political subdivision thereof and, in the case
of each Lender Party, taxes that are imposed on its overall net income or its
overall gross receipts (and franchise taxes imposed in lieu thereof) by the
state or foreign jurisdiction of such Lender Party's applicable lending office
or any political subdivision thereof and (ii) unless a Default or an Event of
Default has occurred and is continuing, any Canadian withholding tax imposed on
amounts payable to a Lender who was as assignee of a Note or other Loan Document
unless the assignor of such Note or Loan Document was entitled to receive
additional amounts under this Section 2.14(a) at the time of the assignment of
such Note or Loan Document (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder or under the Notes being hereinafter referred to as "Taxes"). If any
Loan Party shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under any Note or any other Loan Document to any
Lender Party or any Agent, (i) the sum payable by such Loan Party shall be
increased as may be necessary so that after such Loan Party and the appropriate
Administrative Agent have made all required deductions (including deductions
applicable to additional sums payable under this Section 2.14) such Lender Party
or such Agent, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Loan Party shall make
all such deductions and (iii) such Loan Party shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
Applicable Law.

      (b) In addition, a Loan Party shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made by such Loan Party hereunder or under any Notes or any
other Loan Documents or from the execution, delivery or registration of,
performance under, or otherwise with respect to, this Agreement, the Notes or
the other Loan Documents (hereinafter referred to as "Other Taxes").

      (c) The Loan Parties shall indemnify each Lender Party and each Agent for
and hold them harmless against the full amount of Taxes and Other Taxes, and for
the full amount of taxes of any kind imposed or asserted by any jurisdiction on
amounts payable under this Section 2.14, imposed on or paid by such Lender Party
or such Agent (as the case may be) and any liability

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(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Lender Party or such Agent (as the case may be) makes written
demand therefor.

      (d) Within 30 days after the date of any payment of Taxes, the appropriate
Loan Party shall furnish to the appropriate Administrative Agent, at its address
referred to in Section 12.1, the original or a certified copy of a receipt
evidencing such payment, to the extent such a receipt is issued therefor, or
other written proof of payment thereof that is reasonably satisfactory to such
Administrative Agent. In the case of any payment hereunder or under the Notes or
the other Loan Documents by or on behalf of a Loan Party through an account or
branch outside the United States or by or on behalf of a Loan Party by a payor
that is not a United States person, if such Loan Party determines that no Taxes
are payable in respect thereof, such Loan Party shall furnish, or shall cause
such payor to furnish, to the appropriate Administrative Agent, at such address,
an opinion of counsel acceptable to such Administrative Agent stating that such
payment is exempt from Taxes. For purposes of clauses (d) and (e) of this
Section 2.14, the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Code.

      (e) Each U.S. Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each U.S. Initial Lender Party and on
the date of the Assignment and Acceptance pursuant to which it becomes a U.S.
Lender Party in the case of each other U.S. Lender Party, and from time to time
thereafter as reasonably requested in writing by the U.S. Borrower (but only so
long thereafter as such U.S. Lender Party remains lawfully able to do so),
provide each of the U.S. Administrative Agent and the U.S. Borrower with two
original Internal Revenue Service Forms W-8BEN or W-8ECI or (in the case of a
U.S. Lender Party that has certified in writing to the U.S. Administrative Agent
that it is not (i) a "bank" as defined in Section 881(c)(3)(A) of the Code),
(ii) a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of the U.S. Borrower or (iii) a controlled foreign corporation related to
the U.S. Borrower (within the meaning of Section 864(d)(4) of the Code))
Internal Revenue Service Form W-8BEN, as appropriate, or any successor or other
form prescribed by the Internal Revenue Service, certifying that such U.S.
Lender Party is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement or the Notes or any other
Loan Document or, in the case of a U.S. Lender Party that has certified that it
is not a "bank" as described above, certifying that such U.S. Lender Party is a
foreign corporation, partnership, estate or trust. If the forms provided by a
U.S. Lender Party at the time such U.S. Lender Party first becomes a party to
this Agreement indicate a United States interest withholding tax rate in excess
of zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such U.S. Lender Party provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; provided that if, at the effective date of the Assignment and Acceptance
pursuant to which a U.S. Lender Party becomes a party to this Agreement, the
U.S. Lender Party assignor was entitled to payments under clause (a) of this
Section 2.14 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the U.S. Lender Party assignee on such date. If any
form or

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document referred to in this clause (e) requires the disclosure of information,
other than information necessary to compute the tax payable and information
required on the date hereof by Internal Revenue Service Form W-8BEN or W-8ECI or
the related certificate described above, that the applicable Lender Party
reasonably considers to be confidential, such U.S. Lender Party shall give
notice thereof to the U.S. Borrower and shall not be obligated to include in
such form or document such confidential information.

      (f) For any period with respect to which a U.S. Lender Party has failed to
provide the U.S. Borrower with the appropriate form, certificate or other
document described in clause (e) above (other than if such failure is due to a
change in law, or in the interpretation or application thereof, occurring after
the date on which a form, certificate or other document originally was required
to be provided or if such form, certificate or other document otherwise is not
required under clause (e) above), such U.S. Lender Party shall not be entitled
to indemnification under clause (a) or (c) of this Section 2.14 with respect to
Taxes imposed by the United States by reason of such failure; provided that
should a U.S. Lender Party become subject to Taxes because of its failure to
deliver a form, certificate or other document required hereunder, the Loan
Parties shall take such steps as such U.S. Lender Party shall reasonably request
to assist such U.S. Lender Party to recover such Taxes.

      (g) Any Lender Party claiming any additional amounts payable pursuant to
this Section 2.14 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
applicable lending office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender Party, be
otherwise disadvantageous to such Lender Party.

      Section 2.15 Replacement Lenders. If (i) any Lender has demanded
compensation or indemnification pursuant to Section 2.14 or Section 10.3, (ii)
the obligation of any Lender to make Eurodollar Advances has been suspended
pursuant to Section 10.2, (iii) any Lender is a Defaulting Lender or (iv) any
Lender has failed to consent to a proposed amendment, waiver, discharge or
termination which pursuant to the terms of Section 12.11 or any other provision
of any Loan Document requires the consent of all of the Lenders and with respect
to which the Majority Lenders shall have granted their consent, the U.S.
Borrower shall have the right, if no Default or Event of Default then exists, to
replace such Lender with one or more Lenders (which may be one or more of the
Lenders) (each a "Replacement Lender" and, collectively, the "Replacement
Lenders") reasonably acceptable to the U.S. Administrative Agent. The
replacement of a Retiring Lender pursuant to this Section 2.15 shall be
effective on the tenth Business Day (the "Replacement Date") following the date
of notice of such replacement to the Retiring Lender through the U.S.
Administrative Agent, subject to the satisfaction of the following conditions:

            (i) the Retiring Lender and the Replacement Lender shall have
      satisfied the conditions to assignment and assumption set forth in Section
      12.5(b) (with all fees payable pursuant to Section 12.5(c) to be paid by
      the U.S. Borrower) and, in connection therewith, the Replacement Lender(s)
      shall pay:

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                  (A) to the Retiring Lender an amount equal in the aggregate to
            the sum of (x) the principal of, and all accrued but unpaid interest
            on, all outstanding Loans of the Retiring Lender, (y) all unpaid
            drawings that have been funded by (and not reimbursed to) the
            Retiring Lender under Section 2.2(g), together with all accrued but
            unpaid interest with respect thereto and (z) all accrued but unpaid
            fees owing to the Retiring Lender pursuant to Section 2.5;

                  (B) to the Issuing Lenders an amount equal to the aggregate
            amount owing by the Retiring Lender to the Issuing Lenders as
            reimbursement pursuant to Section 2.2(g)(ii), to the extent such
            amount was not theretofore funded by such Retiring Lender; and

            (ii) the U.S. Borrower shall have paid to the U.S. Administrative
      Agent for the account of the Retiring Lender an amount equal to all
      obligations owing to the Retiring Lender by any Borrower pursuant to this
      Agreement and the other Loan Documents (other than those obligations of
      such Borrower referred to in clause (i)(A) above).

            (iii) On the Replacement Date, each Replacement Lender that is not
      currently a Lender shall become a Lender hereunder, and the Retiring
      Lender shall cease to constitute a Lender hereunder; provided that the
      provisions of this Agreement (including, without limitation, the
      provisions of Sections 2.11, 2.14, 10.3 and 12.2) shall continue to govern
      the rights and obligations of a Retiring Lender with respect to any Loans
      made, any Letters of Credit issued or any other actions taken by such
      Retiring Lender while it was a Lender.

      In lieu of the foregoing, upon express written consent of the Majority
Lenders (other than the Retiring Lender), the U.S. Borrower shall have the right
to terminate the Commitment of a Retiring Lender in full. Upon payment by the
relevant Borrower to the U.S. Administrative Agent for the account of the
Retiring Lender of an amount equal to the sum of (i) the aggregate principal
amount of all Loans and Letter of Credit Loans held by the Retiring Lender and
(ii) all accrued interest, fees and other amounts owing to the Retiring Lender
hereunder, including, without limitation, all amounts payable by the Borrower to
the Retiring Lender under Sections 2.11, 10.2, 2.14 or 12.2, such Retiring
Lender shall cease to constitute a Lender hereunder; provided that the
provisions of this Agreement (including, without limitation, the provisions of
Sections 2.11, 2.14, 10.2 and 12.2) shall continue to govern the rights and
obligations of a Retiring Lender with respect to any Loans made, any Letters of
Credit issued or any other actions taken by such Retiring Lender while it was a
Lender.

                                   ARTICLE III

                              CONDITIONS PRECEDENT

      Section 3.1 Conditions Precedent to Initial U.S. Advance. The obligation
of the U.S. Lenders to make the initial U.S. Advance or of the U.S. Issuing Bank
to issue a U.S. Letter of Credit is subject to the prior fulfillment of each of
the following conditions (provided that each condition precedent set forth in
this Article III that can only be satisfied upon the making of the initial
Advances hereunder shall be deemed to be satisfied immediately prior to such
funding,

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provided that all other actions or events required to have been taken or to have
occurred in order for such condition to be satisfied shall have been taken or
have occurred at or prior to such time and that all other actions and events
required not to have occurred in order for such condition to be satisfied shall
not have occurred at or prior to such time):

            (a) Loan Documents; Etc. The U.S. Administrative Agent shall have
      received the following, each dated such day (unless otherwise specified),
      in form and substance satisfactory to the Approval Lenders (unless
      otherwise specified):

                  (i)   a secretary's certificate from each U.S. Loan Party
            (including, without limitation, Holdings), including a certificate
            of incumbency with respect to each Authorized Signatory authorized
            to execute Loan Documents on behalf of such U.S. Loan Party,
            together with appropriate attachments which shall include, without
            limitation, the following items: (A) a copy of its certificate of
            incorporation, certificate of partnership, partnership agreement,
            certificate of formation or limited liability agreement, as the case
            may be, of such U.S. Loan Party, certified to be true, complete and
            correct by the Secretary of State from the jurisdiction of
            organization of such U.S. Loan Party, and its by laws or operating
            agreement, as the case may be, certified to be true, complete and
            correct by an Authorized Signatory, (B) certificates of good
            standing for such Loan Party issued by the Secretary of State or
            similar state official for each state in which such U.S. Loan Party
            is incorporated or required to qualify to do business, and (C) a
            true, complete and correct copy of the resolutions of such U.S. Loan
            Party authorizing the Transactions and authorizing it to execute,
            deliver and perform the Loan Documents to which it is a party;

                  (ii)  duly executed U.S. Notes (to the extent requested by any
            U.S. Lenders) and duly executed counterparts of this Agreement;

                  (iii) duly executed U.S. Borrower Pledge and Security
            Agreement, together with appropriate stock certificates and undated
            stock powers executed in blank and appropriate acknowledgements by
            the pledged limited liability companies and pledged partnerships;

                  (iv)  duly executed U.S. Subsidiary Pledge and Security
            Agreement, together with appropriate stock certificates and undated
            stock powers executed in blank and appropriate acknowledgements by
            the pledged limited liability companies and pledged partnerships;

                  (v)   duly executed U.S. Subsidiary Guaranty, U.S. Borrower
            Copyright Security Agreement, U.S. Borrower Trademark Security
            Agreement, U.S. Subsidiary Copyright Security Agreement, U.S.
            Subsidiary Trademark Security Agreement, Aircraft Security Agreement
            and Control Agreements;

                  (vi)  Mortgages covering each parcel of real estate owned by
            the U.S. Borrower, Target or any of their respective U.S.
            Subsidiaries having a fair market value in excess of $250,000,
            together with:

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                        (A) evidence of the completion (or satisfactory
                  arrangements for the completion) of all recordings and filings
                  of each such Mortgage as may be necessary or, in the
                  reasonable opinion of the U.S. Administrative Agent, desirable
                  to create a valid, First Priority perfected Lien (subject only
                  to Liens permitted hereunder) against the properties purported
                  to be covered thereby;

                        (B) mortgagee's title insurance policies in favor of the
                  U.S. Administrative Agent for the benefit of the U.S. Secured
                  Parties in amounts and in form and substance and issued by
                  insurers, reasonably satisfactory to the U.S. Administrative
                  Agent, with respect to the property purported to be covered by
                  each Mortgage; and

                        (C) such other approvals, opinions or documents as the
                  U.S. Administrative Agent may reasonably request with respect
                  to such real property.

                  (vii) results of a recent lien, tax and judgment search in
            such jurisdictions and offices as reasonably determined by the
            Approval Lenders (including without limitation where assets of each
            of the U.S. Borrower, Target and their respective U.S. Subsidiaries
            are located or recorded), and such search shall reveal no liens on
            any of assets of the U.S. Borrower or Target or their respective
            U.S. Subsidiaries except for Permitted Liens or liens to be
            discharged in connection with the Transactions;

                 (viii) duly executed Perfection Certificates, dated the
            Closing Date, executed and delivered by an Authorized Signatory of
            each Loan Party that is a party to a Security Document;

                  (ix)  evidence that all UCC financing statements (Form UCC-1)
            or other similar financing statements and UCC termination statements
            (Form UCC-3) (collectively, the "Filing Statements") required to be
            delivered on the Closing Date pursuant to the Loan Documents shall
            have been delivered to CT Corporation System or another similar
            filing service company acceptable to the U.S. Administrative Agent
            (the "Filing Agent");

                  (x)   evidence that the Filing Agent has acknowledged in a
            writing satisfactory to the U.S. Administrative Agent (i) the Filing
            Agent's receipt of all Filing Statements, (ii) that the Filing
            Statements have either been submitted for filing in the appropriate
            filing offices or will be submitted for filing in the appropriate
            offices within ten days following the Closing Date and (iii) that
            the Filing Agent will notify the U.S. Administrative Agent of the
            results of such submissions within 30 days following the Closing
            Date;

                  (xi)  copies of reasonably satisfactory insurance brokers'
            letters, binders or certificates covering the assets of the Loan
            Parties, and otherwise meeting and covering the requirements of
            Section 5.5 hereof;

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                  (xii) legal opinions of (A) Alston & Bird LLP, counsel to the
            U.S. Loan Parties; (B) (1) Maynard, Cooper & Gale, P.C., Alabama
            local counsel to the Loan Parties on Alabama real estate matters,
            (2) Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P.,
            Louisiana local counsel to the Loan Parties on Louisiana real estate
            matters, (3) Maslon Edelman Borman & Brand, LLP, Minnesota local
            counsel to the Loan Parties on Minnesota real estate matters, (4)
            Butler, Snow, O'Mara, Stevens & Cannada, PLLC, Mississippi local
            counsel to the Loan Parties on Mississippi real estate matters and
            (5) Squire, Sanders & Dempsey L.L.P., Ohio local counsel to the Loan
            Parties on Ohio real estate matters; and (C) Crowe & Dunlevy,
            Oklahoma local counsel to the Loan Parties on aircraft security
            matters, in each case, addressed to each U.S. Lender Party and the
            U.S. Administrative Agent, in form and substance reasonably
            satisfactory to the Approval Lenders and their counsel, and dated as
            of the Closing Date;

                 (xiii) duly executed Request for Advance and (if applicable)
            Notice of Issuance, which Request for Advance shall include
            calculations demonstrating, as of the Closing Date after giving
            effect to the borrowings hereunder on the Closing Date, the
            Borrowers' compliance with Section 2.1 and Section 7.13 hereof;

                  (xiv) duly executed Financial Condition and Solvency
            Certificate executed and delivered by the chief financial officer of
            the U.S. Borrower certifying as to the Solvency of the U.S. Borrower
            and each of its Subsidiaries, taken as a whole, immediately after
            the consummation of the Transactions that are to be consummated on
            the Closing Date and which shall include reasonably satisfactory
            evidence (including satisfactory supporting schedules and other
            data) that (A) the pro forma ratio of Total Debt to EBITDA for the
            12-month period ending on the last day of the month which occurred
            more than 20 days prior to the Closing Date (calculated on a pro
            forma combined basis after giving effect to the Transactions,
            together with such adjustments as would be permitted to be reflected
            on pro forma financial statements pursuant to Regulation S-X,
            including and together with giving pro forma effect to the sale,
            disposition or divestiture of all stores that would be required in
            connection with obtaining requisite approvals under the HSR Act to
            the extent such sale, disposition or divestiture shall have been
            consummated on or prior to the Closing Date or (in the reasonable
            judgment of the Approval Lenders) subjected to a binding definitive
            purchase and sale agreement executed and delivered on or prior to
            the Closing Date (including the application of the Net Proceeds (or,
            in the case of such purchase and sale agreement, the expected Net
            Proceeds) of such sale, disposition or divestiture to the reduction
            of, as determined by the U.S. Administrative Agent, the Commitments
            and/or the commitments with respect to the Bridge Loan)), was not
            greater than 3.30 to 1.00; and (B) Target EBITDA (calculated on a
            stand-alone basis, prior to giving effect to the Transactions) for
            the four-Fiscal Quarter period ending on the last date set forth
            below which occurred more than 20 days prior to the Closing Date
            shall not be less than (x) with respect to the four consecutive
            Fiscal Quarters ending on December 31, 2004, $229,000,000 and (y)
            with respect to the four consecutive Fiscal Quarters ending on March
            31, 2005, $220,000,000;

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<PAGE>

                  (xv)  a duly executed U.S. Closing Date Certificate, dated the
            Closing Date and executed and delivered by an Authorized Signatory
            of each of the U.S. Borrower and Target, in which certificate the
            U.S. Borrower and Target shall agree and acknowledge that the
            statements made therein shall be deemed to be true and correct
            representations and warranties of such Person as of such date and,
            at the time such certificate is delivered such statements shall in
            fact be true and correct. All material documents and agreements
            required to be appended to the U.S. Closing Date Certificate shall
            be in form and substance reasonably satisfactory to the Approval
            Lenders; and

                  (xvi) all such other documents as either the U.S.
            Administrative Agent or any Lender may reasonably request, certified
            by an appropriate governmental official or an Authorized Signatory
            of the U.S. Borrower if so requested.

      (b) Material Transaction Documents. The Merger Agreement shall not have
been amended, supplemented, waived or otherwise modified in any material respect
after the date of the Commitment Letter without the prior written consent of the
Approval Lenders (which consent shall not be unreasonably withheld). The U.S.
Administrative Agent shall have received (with copies for each Lender that has
expressly requested copies thereof) fully executed copies of each of the
Material Transaction Documents, certified to be true and complete copies thereof
by an Authorized Signatory of the U.S. Borrower and in form and substance
reasonably satisfactory to the Approval Lenders. The Material Transaction
Documents shall be in full force and effect as of the Closing Date and the
parties thereto shall be in full compliance therewith in all material respects.

      (c) Existing Notes. The Tender Offer shall have been consummated in
accordance with the Offer to Purchase, dated as of March 24, 2005 (as amended or
otherwise modified with the prior written approval of the Approval Lenders) and
filed with the SEC in connection with the Tender Offer. There shall be no
default under the Existing Notes Indenture both before and after giving effect
to the Transactions.

      (d) Pari Passu Debt. On or prior to the Closing Date, (i) the Senior Notes
Offering shall have been consummated and the U.S. Borrower shall have received
gross proceeds therefrom of not less than $321,119,500 minus the aggregate
principal amount of Existing Notes not purchased in the Tender Offer, or (ii)
the U.S. Borrower shall have received gross proceeds from the drawdown of Bridge
Loans of not less than $321,119,500 minus (A) any gross proceeds from the Senior
Note Offering and (B) the aggregate principal amount of Existing Notes not
purchased in the Tender Offer, in each case pursuant to agreements in form and
substance reasonably satisfactory to the Approval Lenders.

      (e) Consummation of Target Acquisition, Etc. The Target Acquisition shall
have been consummated in all material respects in accordance with the terms of
the Merger Agreement and in accordance with the terms described in, and as
contemplated by, the Commitment Letter (other than such changes therefrom which
could not reasonably be expected to be materially adverse to the Lenders).

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      (f) Payment of Outstanding Indebtedness, etc. All Indebtedness identified
in Items 7.2(b)(i) and 7.2(b)(ii) of the Disclosure Schedule, together with all
interest, all prepayment premiums and other amounts due and payable with respect
thereto, shall have been paid in full and the commitments in respect of such
Indebtedness shall have been terminated, and all Liens securing payment of any
such Indebtedness have been released; provided that nothing herein shall limit
the requirements of the condition precedent set forth above in Section 3.1(c).
The U.S. Administrative Agent shall have received such releases of all Liens
(except Permitted Liens) securing payment of any such Indebtedness as may have
been reasonably requested by the U.S. Administrative Agent, which releases shall
be in form and substance reasonably satisfactory to the Approval Lenders.
Without limiting the foregoing, there shall have been delivered (i) properly
executed termination statements (Form UCC-3 or such other termination statements
as shall be required by local law) for filing under the UCC of each jurisdiction
where a financing statement (Form UCC-1 or the appropriate equivalent) was filed
with respect to the U.S. Borrower, Target and any of their respective
Subsidiaries, or its predecessors in interest, in connection with any security
interests created with respect to any Indebtedness listed in Items 7.2(b)(i) and
7.2(b)(ii) of the Disclosure Schedule and the documentation related thereto,
(ii) properly executed payoff letters with respect to any Indebtedness listed in
Items 7.2(b)(i) and 7.2(b)(ii) of the Disclosure Schedule, (iii) terminations of
assignments of any security interest in, or Lien on, any patents, trademarks,
copyrights or similar interests of the U.S. Borrower, Target and any of their
respective Subsidiaries, on which filings have been made to secure any
Indebtedness listed in Items 7.2(b)(i) and 7.2(b)(ii) of the Disclosure
Schedule, (iv) terminations of all mortgages, leasehold mortgages and deeds of
trust created with respect to property of the U.S. Borrower, Target and any of
their respective Subsidiaries, or their respective predecessors in interest, in
each case to secure the obligations under any Indebtedness listed in Items
7.2(b)(i) and 7.2(b)(ii) of the Disclosure Schedule, all of which shall be in
form and substance reasonably satisfactory to the Approval Lenders and (v) all
collateral owned by the U.S. Borrower, Target and any of their respective
Subsidiaries in the possession of any agent, collateral agent or trustee for the
creditors under any Indebtedness listed in Items 7.2(b)(i) and 7.2(b)(ii) of the
Disclosure Schedule or any financial institution party to any agreement in
respect of any such Indebtedness or any related agreement.

      (g) Capital and Tax Structure. The capitalization and tax structure of the
U.S. Borrower, the Target and their respective Subsidiaries (after giving pro
forma effect to the Transactions) shall be as set forth in Schedule IV hereto,
and in the written information provided to the Approval Lenders on or prior to
the date hereof, with any material changes to such capitalization and tax
structure subject to the approval of the Approval Lenders.

      (h) Material Adverse Change. There shall not have occurred any Material
Adverse Change since (i) in the case of clause (i) of the definition thereof,
October 3, 2004, and (ii) in the case of clause (ii) of the definition thereof,
September 30, 2004.

      (i) Conduct of Business. The U.S. Administrative Agent shall have received
reasonably satisfactory evidence on the Closing Date that since December 1,
2004, other than to the extent necessary to effect the Transactions or comply
with the terms of the Commitment Letter or Fee Letter, the U.S. Borrower and its
Subsidiaries have conducted their respective businesses in the ordinary and
usual course consistent with past practice and with the projections

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delivered to the Approval Lenders and, without limiting the generality of the
foregoing, have not made or declared any stock dividends or stock repurchases.

      (j) Target's Cash. On the Closing Date, prior to giving effect to the
Transactions, Target shall have no less than $165,000,000 in cash that would be
reflected on its balance sheet, and the U.S. Administrative Agent shall have
received a certificate from the U.S. Borrower's chief financial officer showing
that Target has no less than $165,000,000 in cash that would be reflected on its
balance sheet on the Closing Date prior to giving effect to the Transactions.

      (k) Cash to Fund Transactions. On the Closing Date, the U.S. Borrower and
Target shall have utilized, and shall have caused their respective Subsidiaries
to have utilized, all available cash (other than $50,000,000 in cash that would
be reflected on their collective balance sheets), prior to giving effect to any
extensions of credit under this Agreement or receipt of proceeds from the
issuance of any Pari Passu Debt, to consummate the Transactions, and the
Approval Lenders shall have received a certificate from the U.S. Borrower's
chief financial officer showing that the U.S. Borrower, Target and their
respective subsidiaries have no more than $50,000,000 in cash that would be
reflected on such balance sheets.

      (l) Sources and Uses. The respective amounts of the sources and uses for
the Transactions shall be consistent with the recitals of the parties to this
Agreement.

      (m) Governmental Authorities; Compliance with Applicable Law. All
requisite Governmental Authorities shall have approved or consented to the
Transactions to the extent required (without the imposition of any materially
burdensome condition or qualification in the reasonable judgment of the Approval
Lenders), all applicable appeal periods shall have expired and there shall be no
action by a Governmental Authority, actual or threatened, that, in the judgment
of the Approval Lenders, has or could have a reasonable likelihood of
restraining, preventing or imposing materially burdensome conditions on any of
the Transactions or the other transactions contemplated hereby; it being
understood that with respect to actions taken in connection with discussions or
negotiations with the United States Federal Trade Commission and the Antitrust
Division of the United States Department of Justice relating to antitrust
matters in respect of obtaining requisite approvals under the HSR Act for the
Target Acquisition, an action in connection with, or agreement to, any hold
separate order, sale, divesture or disposition of stores of the U.S. Borrower or
Target or any of their respective subsidiaries that, individually or in the
aggregate, could not reasonably be expected to have a Company Material Adverse
Effect (as defined in the Merger Agreement) or a Company Material Adverse Effect
(as defined in the Merger Agreement, assuming the reference therein to "Target"
or "Target and its Subsidiaries" is a reference to the U.S. Borrower, Target and
their subsidiaries taken together as a whole (after giving effect to the
Transactions)) shall not be deemed to be a "materially burdensome condition" for
purposes of this sentence or for purposes of clause (n) below. The consummation
of Transactions shall be in material compliance with all Applicable Law. All
Governmental Authorizations and third party approvals necessary in connection
with the Target Acquisition, Merger and the other elements of the Transactions
and the continuing operations of the Loan Parties shall have been obtained and
be in full force and effect, and all material waiting periods shall have expired
without any action being taken by any competent authority which restrains,
prevents, or imposes materially adverse conditions upon, the consummation of the
transactions contemplated herein, except to the extent the failure to obtain
such approvals and

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consents could not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect (before and after giving effect to the
Transactions).

      (n) No Proceedings. There shall not be pending (i) any action or
proceeding by any Governmental Authority or (ii) any action or proceeding by any
other Person, in any case referred to in the foregoing clauses (i) and (ii),
before any court or other Governmental Authority that has a reasonable
possibility of success (w) seeking to make illegal or to restrain or prohibit
the consummation of, or to impose materially burdensome conditions upon, the
Merger, any of the other Transactions or any other transaction contemplated
hereunder or under the Commitment Letter or seeking to obtain material damages,
(x) seeking (1) to restrain or prohibit the U.S. Borrower's, Target's or any of
their respective Subsidiaries' ownership or operation of all or any material
portion of the businesses or assets of the U.S. Borrower and Target and their
Subsidiaries taken together as a whole (after giving pro forma effect to the
Transactions), on the one hand, or Target and its Subsidiaries taken together as
a whole (before and after giving effect to the Transactions), on the other hand,
or (2) to compel the U.S. Borrower, Target or any of their respective
Subsidiaries to dispose of or hold separate all or any material portion of the
businesses or assets of the U.S. Borrower and Target and their subsidiaries
taken together as a whole (after giving pro forma effect to the Transactions),
on the one hand, or Target and its subsidiaries taken together as a whole
(before and after giving effect to the Transactions) on the other hand, (y)
seeking to impose or confirm material limitations on the ability of the U.S.
Borrower, Target or any of their respective Subsidiaries to effectively control
their respective businesses or operations (including the ability of the U.S.
Borrower to effectively exercise full rights of ownership over the capital stock
of the Target) or (z) which could reasonably be expected to adversely affect the
legality, validity or enforceability of the Loan Documents or which could
reasonably be expected to have a Material Adverse Effect (other than, for
purposes of this subclause (z), those actions or proceedings outstanding as of
the date of the Commitment Letter and disclosed in writing to the Approval
Lenders on or prior to such date); provided that any such action or proceeding
brought by or on behalf of beneficial holders of Target's common stock shall not
be the basis for the failure of the condition set forth in this clause (n) if:
(a) the parties to such action or proceeding have entered into a memorandum of
understanding or other agreement with respect to the settlement of such action
or proceeding reasonably acceptable to the Approval Lenders, (b) the final date
by which the court requires that the members of the class or putative class of
shareholders that is covered by the memorandum of understanding or other
agreement (the "Class Shareholders") complete their election to opt out of any
settlement of such action or proceeding that is the subject of the memorandum of
understanding has passed, (c) the number of shares of Target's common stock
beneficially owned by the Class Shareholders who have been permitted by the
court to opt out of any settlement of such action or proceeding that is the
subject of the memorandum of understanding does not exceed the number equal to
10% of the number of such shares outstanding on the date of the Merger Agreement
and (d) final approval by the relevant court under Rule 23 of the Federal Rules
of Civil Procedure (or, in the case of a state court, equivalent state rule) has
been received.

      (o) Financial Information. The U.S. Administrative Agent (with copies for
the Lenders) shall have received projected cash flows, balance sheets and income
statements for the U.S. Borrower and its Subsidiaries on a consolidated basis
for the period of seven years following the Closing Date, which projections
shall be (i) based upon reasonable assumptions made in good faith and (ii)
substantially in conformity with those projections delivered to the

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Lenders during syndication. The U.S. Administrative Agent (with copies for the
Lenders) shall have received (A) unaudited balance sheets of the U.S. Borrower
on a consolidated basis with its Subsidiaries as at the end of each Fiscal
Quarter since January 2, 2005 and Target on a consolidated basis with its
Subsidiaries as at the end of each Fiscal Quarter since December 31, 2004, and,
in each case, the related statements of operations and the related statements of
cash flows of each such Person on a consolidated basis with its Subsidiaries for
each such Fiscal Quarter, which shall set forth in comparative form such figures
as at the end of and for such Fiscal Quarter and the appropriate prior period,
to the extent such quarterly financial statements have been or are required to
have been filed with the U.S. Securities and Exchange Commission, reviewed in
accordance with SAS 100 by an independent accounting firm of national standing,
(B) monthly consolidated financial statements for the each of the U.S. Borrower
and its consolidated Subsidiaries and Target and its Consolidated Subsidiaries
for the months subsequent to the latest annual or quarterly financial statements
and ended not less than 30 days prior to the Closing Date, and (C) appropriate
pro forma consolidated financial statements on a consolidated basis for the U.S.
Borrower and its Subsidiaries prepared in accordance with Regulation S-X.

      (p) Patriot Act. The Administrative Agents and the Initial Lenders shall
have received all documentation and other information required by bank
regulatory authorities under applicable "know your customer" and anti-money
laundering rules and regulations, including without limitation the Patriot Act.

      (q) Ratings. The U.S. Borrower shall have received credit ratings from S&P
and Moody's.

      (r) Closing Fees, Expenses, etc. Each Administrative Agent shall have
received for its account, or for the account of each relevant Lender, as the
case may be, all fees, costs and expenses due and payable on or prior to the
Closing Date in accordance with the Fee Letter and pursuant to Section 2.5 and
Section 12.2.

      Section 3.2 Conditions Precedent to Initial Canadian Advance. The
obligation of the Canadian Lenders to make the initial Canadian Advance or of
the Canadian Issuing Bank to issue a Canadian Letter of Credit is subject to the
prior fulfillment of each of the conditions set forth in Section 3.1 and each of
the following conditions (provided that each condition precedent set forth in
this Article III that can only be satisfied upon the making of the initial
Advances hereunder shall be deemed to be satisfied immediately prior to such
funding, provided that all other actions or events required to have been taken
or to have occurred in order for such condition to be satisfied shall have been
taken or have occurred at or prior to such time and that all other actions and
events required not to have occurred in order for such condition to be satisfied
shall not have occurred at or prior to such time):

            (a) Loan Documents; Etc. The Administrative Agents shall have
      received the following, each dated such day (unless otherwise specified),
      in form and substance satisfactory to the Approval Lenders (unless
      otherwise specified):

                  (i) a secretary's certificate from each Canadian Loan Party,
            including a certificate of incumbency with respect to each
            Authorized Signatory authorized

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            to execute Loan Documents on behalf of such Canadian Loan Party,
            together with appropriate attachments which shall include, without
            limitation, the following items: (A) a copy of its certificate of
            incorporation, certificate of partnership, partnership agreement,
            certificate of formation or limited liability agreement, as the case
            may be, of such Canadian Loan Party, certified to be true, complete
            and correct by the Secretary of the Province or similar state or
            provincial official from the jurisdiction of organization of such
            Canadian Loan Party, and its by laws or operating agreement, as the
            case may be, certified to be true, complete and correct by an
            Authorized Signatory, (B) certificates of status or similar
            documents for such Canadian Loan Party issued by the Secretary of
            the Province or similar state or provincial official for each
            Province in which such Canadian Loan Party is incorporated or
            required to qualify to do business, and (C) a true, complete and
            correct copy of the resolutions of such Canadian Loan Party
            authorizing to execute, deliver and perform the Loan Documents to
            which it is a party;

                  (ii) duly executed Canadian Notes (to the extent requested by
            any Canadian Lenders) and duly executed counterparts of this
            Agreement;

                  (iii) duly executed Canadian Borrower Pledge and Security
            Agreement, together with appropriate stock certificates and undated
            stock powers executed in blank and appropriate acknowledgements by
            the pledged limited liability companies and pledged partnerships;

                  (iv) duly executed Canadian Subsidiary Pledge and Security
            Agreement, together with appropriate stock certificates and undated
            stock powers executed in blank and appropriate acknowledgements by
            the pledged limited liability companies and pledged partnerships;

                  (v) duly executed Canadian Subsidiary Guaranty;

                  (vi) Mortgages covering each parcel of real estate of the
            Canadian Borrower or any Canadian Subsidiary having a fair market
            value in excess of Cdn $ Equivalent of $250,000, together with:

                        (A) evidence of the completion (or satisfactory
                  arrangements for the completion) of all recordings and filings
                  of each such Mortgage as may be necessary or, in the
                  reasonable opinion of the Administrative Agents, desirable to
                  create a valid, First Priority perfected Lien (subject only to
                  Liens permitted hereunder) against the properties purported to
                  be covered thereby;

                        (B) mortgagee's title insurance policies in favor of the
                  Administrative Agents for the benefit of the Secured Parties
                  in amounts and in form and substance and issued by insurers,
                  reasonably satisfactory to the Administrative Agents, with
                  respect to the property purported to be covered by each
                  Mortgage; and

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<PAGE>

                        (C) such other approvals, opinions or documents as the
                  Administrative Agents may request with respect to such real
                  property.

                  (vii) results of a recent lien, tax and judgment search in
            such jurisdictions and offices as reasonably determined by the
            Approval Lenders (including without limitation where assets of each
            of the Canadian Borrower and the Canadian Subsidiaries are located
            or recorded), and such search shall reveal no liens on any of assets
            of the Canadian Borrower or the Canadian Subsidiaries except for
            Permitted Liens;

                  (viii) evidence that all PPSA financing statements naming each
            Loan Party as a debtor and the Canadian Administrative Agent as the
            secured party, or other similar instruments or documents to be filed
            under the PPSA of all jurisdictions as may be necessary to perfect
            the security interests of the Canadian Administrative Agent for the
            benefit of the Secured Parties have been filed;

                  (ix) legal opinions of (A) Goodmans LLP, counsel to the
            Canadian Loan Parties for the Provinces of Ontario and British
            Columbia and (B) Stewart McKelvey Stirling Scales, New Brunswick
            local counsel to the Canadian Loan Parties on New Brunswick
            corporate, security and registration matters and (C) Bennett Jones
            LLP, counsel to the Canadian Administrative Agent on Alberta
            security registration matters, in each case, addressed to each
            Canadian Lender Party and the Canadian Administrative Agent, in form
            and substance reasonably satisfactory to the Administrative Agents
            and their counsel, and dated as of the Closing Date;

                  (x) duly executed Request for Advance and (if applicable)
            Notice of Issuance, which Request for Advance shall include
            calculations demonstrating, as of the Closing Date after giving
            effect to the borrowings hereunder on the Closing Date, the
            Borrowers' compliance with Section 2.1 and Section 7.13 hereof;

                  (xi) a duly executed Canadian Closing Date Certificate, dated
            the Closing Date and executed and delivered by an Authorized
            Signatory of the Canadian Borrower, in which certificate the
            Canadian Borrower shall agree and acknowledge that the statements
            made therein shall be deemed to be true and correct representations
            and warranties of such Person as of such date and, at the time such
            certificate is delivered such statements shall in fact be true and
            correct. All material documents and agreements required to be
            appended to the Canadian Closing Date Certificate shall be in form
            and substance reasonably satisfactory to the Approval Lenders; and

                  (xii) all such other documents as either the Administrative
            Agents or any Canadian Lender Party may reasonably request,
            certified by an appropriate governmental official or an Authorized
            Signatory of the Canadian Borrower if so requested.

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      Section 3.3 Conditions Precedent to Each Advance. The obligation of the
Lenders to make each Advance (including, without limitation, the initial Advance
hereunder but excluding (w) a purchase of participation of a Swing Line Loan
pursuant to Section 2.2(f), (x) a Letter of Credit Loan made by an Issuing Bank
or a Revolving Lender pursuant to Section 2.2(g), (y) a conversion of all or a
portion of an Advance from one Type to the other pursuant to Section
2.2(b)(ii)(B) or Section 2.2(c)(ii)(B) and (z) a rollover of all or a portion of
an Advance of the same Type pursuant to Section 2.2(b)(ii)(A) or Section
2.2(c)(ii)(A)), and the obligation of an Issuing Bank to issue a Letter of
Credit (including the initial issuance) or renew or extend a Letter of Credit,
is subject to the further conditions precedent that on the date of such Advance
or issuance or renewal, (a) the following statements shall be true (and each of
the giving of the applicable Request for Advance, or Notice of Issuance or
Notice of Renewal and the acceptance by the Borrowers of the proceeds of such
Advance or of such Letter of Credit or the renewal of such Letter of Credit
shall constitute a representation and warranty by each Borrower that both on the
date of such notice and on the date of such Advance or issuance or renewal such
statements are true):

            (i) All of the representations and warranties of the U.S. Borrower,
      Target and their respective Subsidiaries under this Agreement and the
      other Loan Documents, which, pursuant to Section 4.2 hereof, are made at
      and as of the time of such Advance, shall be true and correct at such time
      in all material respects as if made at such time, both before and
      immediately after giving effect to the application of the proceeds of such
      Advance, and after giving effect to any updates to information provided to
      the Lenders in accordance with the terms of such representations and
      warranties; and

            (ii) No Default has occurred and is continuing, or would result from
      such Advance or issuance or renewal or from the application of the
      proceeds therefrom;

(b) the relevant Administrative Agent shall have received a duly executed
Request for Advance or Notice of Issuance in accordance with the requirements
hereof; and (c) each of each Administrative Agent and the Lenders shall have
received all such other certificates, reports, statements, opinions of counsel
or other documents as such Administrative Agent may reasonably request.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

      Section 4.1 Representations and Warranties. Each Borrower hereby agrees,
represents and warrants in favor of the Administrative Agents and each Lender
that:

            (a) Organization; Power Qualification. Each Loan Party (i) is a
      corporation or limited liability company or limited partnership, as the
      case may be, duly organized, validly existing and in good standing under
      the laws of the jurisdiction of its formation, (ii) is duly qualified and
      in good standing as a foreign corporation in each other jurisdiction in
      which it owns or leases property or in which the conduct of its business
      requires it to so qualify or be licensed (except for any such
      non-compliance which, individually or in the aggregate, could not
      reasonably be expected to have a Material

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<PAGE>

      Adverse Effect), (iii) has all requisite corporate power and authority
      (including, without limitation, all Governmental Authorizations) to own or
      lease and operate its properties and to carry on its business as now
      conducted and as proposed to be conducted and (iv) is in compliance with
      all Applicable Laws.

            (b) Enforceability. This Agreement and each other Loan Document has
      been duly executed and delivered by each Loan Party thereto. This
      Agreement and each other Loan Document is the legal, valid and binding
      obligation of each Loan Party thereto, enforceable against such Loan Party
      in accordance with its terms, except as such enforceability may be limited
      by bankruptcy, insolvency, reorganization, moratorium or similar state or
      federal debtor relief laws from time to time in effect which affect the
      enforcement of creditors' rights generally and the availability of
      equitable remedies.

            (c) Subsidiaries. Set forth in Item 4.1(c)(i) of the Disclosure
      Schedule is a complete and accurate list of all Subsidiaries of the U.S.
      Borrower (other than Target and its Subsidiaries) and set forth in Item
      4.1(c)(ii) of the Disclosure Schedule is a complete and accurate list of
      all Subsidiaries of Target, in each case showing as of the date hereof the
      jurisdiction of its formation, the address of its principal place of
      business and its U.S. taxpayer identification number or, in the case of
      any non-U.S. Loan Party that does not have a U.S. taxpayer identification
      number, its unique identification number issued to it by the jurisdiction
      of its formation, if any, the number of shares of each class of its Equity
      Interests authorized, and the number outstanding, on the date hereof and
      the percentage of each such class of its Equity Interests owned (directly
      or indirectly) by such Loan Party and the number of shares covered by all
      outstanding options, warrants, rights of conversion or purchase and
      similar rights at the date hereof. All of the outstanding Equity Interests
      in each Subsidiary has been validly issued, are fully paid and
      non-assessable and are owned by the U.S. Borrower or one or more of its
      Subsidiaries (with respect to the Subsidiaries of the U.S. Borrower other
      than Target and its Subsidiaries) and Target or one or more of its
      Subsidiaries (with respect to Subsidiaries of Target) free and clear of
      all Liens, except those created under the Security Documents.

            (d) No Conflict, Etc. The execution, delivery and performance by
      each Loan Party of each Loan Document to which it is a party, and the
      consummation of the Transactions by each applicable Loan Party, are within
      such Loan Party's corporate powers, have been duly authorized by all
      necessary corporate action, and do not and will not (i) conflict with,
      result in a breach of, or constitute a default under the Organic Documents
      of any such Loan Party, (ii) violate any Applicable Law (including,
      without limitation, Regulation X of the Board of Governors of the Federal
      Reserve System), which would reasonably be expected to have a Material
      Adverse Effect, (iii) conflict with or result in the breach of, or
      constitute a default or require any payment to be made under, any
      contract, loan agreement, indenture, mortgage, deed of trust, lease or
      other instrument binding on or affecting any such Loan Party or any of
      their properties, which would reasonably be expected to have a Material
      Adverse Effect or (iv) except for the Liens created under the Loan
      Documents, result in or require the creation or imposition of any Lien
      upon or with respect to any of the properties of any such Loan Party. None
      of the Loan Parties is in violation of any such Applicable Law. None of
      the Loan Parties is in breach of any such contract, loan agreement,
      indenture, mortgage, deed of trust,

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<PAGE>

      lease or other instrument, which individually or in the aggregate would
      reasonably be expected to have a Material Adverse Effect. None of the Loan
      Parties is in breach of any lease with respect to a warehouse or
      distribution center where Collateral with an average monthly fair market
      value in excess of $250,000 is located.

            (e) Governmental Authorizations. No Governmental Authorizations
      (other than those (x) that have been duly obtained or made and which are
      in full force and effect and (y) that are contemplated or required to be
      made after the Closing Date in accordance with the terms of the Loan
      Documents and the Material Transaction Documents) is required for (i) the
      due execution, delivery or performance by any Loan Party of any Loan
      Document to which it is a party or (ii) the due execution, delivery and/or
      performance by any Loan Party of the Material Transaction Documents to
      which each is a party, or (iii) the conduct of the business of the U.S.
      Borrower and its Subsidiaries as currently conducted following the Closing
      Date.

            (f) Title to Assets. Each Loan Party has good, legal and marketable
      title to all of the property and assets purported to be owned or leased by
      them (other than property and assets that, both individually and in the
      aggregate, are not material to the business, financial condition or
      operations of the Loan Party that owns or leases them), in each case free
      and clear of all Liens other than Permitted Liens. All of the material
      leases including, without limitation, leases with respect to each
      warehouse and distribution center where collateral with an average monthly
      fair market value in excess of $250,000 is located, under which any Loan
      Party is a lessor or a lessee are valid and subsisting and are in full
      force and effect. Except for financing statements evidencing Permitted
      Liens, no financing statement under the UCC or the PPSA, as applicable, is
      in effect in any jurisdiction and no other filing which names any Loan
      Party as debtor or which covers or purports to cover any of the assets of
      such Loan Party is currently effective and on file in any state, province
      or other jurisdiction, and no Loan Party has signed any such financing
      statement or filing or any security agreement authorizing any secured
      party thereunder to file any such financing statement or filing.

            (g) Real Property. (i) Set forth in Item 4.1(g)(i) of the Disclosure
      Schedule is a complete and accurate list of all real property owned by the
      U.S. Borrower and any of its Subsidiaries, showing as of the date hereof
      the applicable Person, the street address, county or other relevant
      jurisdiction, state, record owner and book and fair value thereof. Each of
      the U.S. Borrower and its Subsidiaries has good, marketable and insurable
      fee simple title to its real property, free and clear of all Liens, other
      than Liens created or permitted by the Loan Documents. Each of the U.S.
      Borrower and its Subsidiaries has sufficient title to all of its tangible
      and intangible property to conduct its current business.

                  (ii) Set forth in Item 4.1(g)(ii) of the Disclosure Schedule
            is a complete and accurate list of all leases of real property under
            which any of the U.S. Borrower or any of its Subsidiaries is the
            lessee, showing as of the date hereof the applicable Person, the
            street address, county or other relevant jurisdiction, state,
            lessor, lessee, expiration date and annual rental cost thereof. Each
            such lease is in full force and effect and no party thereto is in
            default with respect to any

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<PAGE>

            obligations under such lease to the extent that any or all such
            defaults would reasonably be expected to have a Material Adverse
            Effect.

            (h) Litigation. There is no pending or, to the knowledge of the U.S.
      Borrower, threatened litigation, action, proceeding, arbitration or
      governmental investigation affecting any Loan Party, or any of their
      respective properties, businesses, assets or revenues, which would
      reasonably be expected to result in a Material Adverse Effect except as
      disclosed in Item 4.1(h) of the Disclosure Schedule. No development has
      occurred in any litigation, action or governmental investigation or other
      proceeding disclosed in Item 4.1(h) of the Disclosure Schedule which would
      reasonably be expected to have a Material Adverse Effect.

            (i) Taxes. All federal, material state, material provincial and
      other material tax returns (including information returns) of the U.S.
      Borrower and each of its Subsidiaries required by law to be filed have
      been duly filed and all federal, state, provincial and other taxes,
      including, without limitation, withholding taxes, assessments and other
      governmental charges or levies required to be paid by the U.S. Borrower
      and each of its Subsidiaries or imposed upon the U.S. Borrower or any of
      its Subsidiaries or any of its respective properties, income, profits or
      assets, which are due and payable, have been paid, except any such taxes
      (i) the payment of which any such Person is diligently contesting in good
      faith by appropriate proceedings, (ii) for which adequate reserves have
      been provided on the books of any such Person involved, and (iii) as to
      which no Lien other than a Permitted Lien has attached and no foreclosure,
      distraint, sale or similar proceedings have been commenced. The charges,
      accruals and reserves on the books of the U.S. Borrower and each of its
      Subsidiaries in respect of taxes are, in the judgment of the Borrowers,
      adequate.

            (j) Financial Information. The financial statements of the U.S.
      Borrower and its Subsidiaries furnished to the Administrative Agents, and
      each Lender pursuant to Section 3.1(o) have been prepared in accordance
      with GAAP consistently applied, and present fairly the consolidated
      financial condition of the Persons covered thereby as at the dates thereof
      and the results of their operations for the periods then ended. All
      balance sheets, all statements of operations, shareholders' equity and
      cash flow and all other financial information of each of the U.S. Borrower
      and its Subsidiaries furnished pursuant to Sections 6.1 and 6.2 have been
      and will for periods following the Closing Date be prepared in accordance
      with GAAP consistently applied, and do or will present fairly the
      consolidated financial condition of the Persons covered thereby as at the
      dates thereof and the results of their operations for the periods then
      ended.

            (k) No Adverse Effect/Adverse Change. Since January 2, 2005, there
      has been no event which has had or which could reasonably be expected to
      have a Materially Adverse Effect. As of the Closing Date, no Material
      Adverse Change has occurred since, with respect to clause (a) of such
      definition, October 3, 2004 and, with respect to clause (b) of such
      definition, September 30, 2004.

            (l) Pension and Welfare Plans. (i) During the
      twelve-consecutive-month period prior to the date of the execution and
      delivery of this Agreement and prior to the

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      date of any Advance or issuance hereunder, (A) no steps have been taken to
      terminate any U.S. Pension Plan, (B) no contribution failure has occurred
      with respect to any U.S. Pension Plan sufficient to give rise to a Lien
      under Section 302(f) of ERISA and (C) no steps have been taken to effect a
      partial or complete withdrawal from any U.S. Multiemployer Plan, in each
      case which could (individually or in the aggregate) reasonably be expected
      to result in liabilities of the U.S. Borrower or any of its Subsidiaries
      in excess of $25,000,000 or a Material Adverse Effect. No condition exists
      or event or transaction has occurred with respect to any U.S. Pension Plan
      which could reasonably be expected to result in the incurrence by the U.S.
      Borrower or any member of the Controlled Group of any material liability,
      fine or penalty, that could (individually or in the aggregate) reasonably
      be expected to result in liabilities in excess of $25,000,000 or a
      Material Adverse Effect. None of the U.S. Borrower nor any member of the
      Controlled Group has any contingent liability with respect to any
      post-retirement benefit under a U.S. Welfare Plan, other than liability
      for continuation coverage described in Part 6 of Subtitle B of Title I of
      ERISA, which could reasonably be expected to result in a Material Adverse
      Effect.

                  (ii) During the twelve consecutive month period before the
            date of the execution and delivery of this Agreement and before the
            date of any Advance or issuance hereunder, (A) no steps have been
            taken to terminate any Canadian Pension Plan and (B) no contribution
            failure has occurred with respect to any Canadian Pension Plan that,
            individually or in the aggregate could reasonably be expected to
            result in a Material Adverse Effect. No condition exists and no
            event or transaction has occurred with respect to any Canadian
            Pension Plan which could reasonably be expected to result in the
            incurrence by the U.S. Borrower or any of its Subsidiaries of any
            liability, fine or penalty that could (individually or in the
            aggregate) reasonably be expected to result in liabilities in excess
            of $5,000,000 or a Material Adverse Effect. Except as disclosed in
            the financial statements required to be provided pursuant to this
            Agreement or as otherwise disclosed in writing from time to time to
            the Administrative Agents, neither the U.S. Borrower nor any of its
            Subsidiaries has any liability, including without limitation a
            Contingent Liability, with respect to any benefit under a Canadian
            Pension Plan or Canadian Welfare Plan which could reasonably be
            expected to result in a Material Adverse Effect.

                  (iii) Each Canadian Pension Plan is in compliance in all
            material respects with all pension benefits Applicable Laws
            including, without limitation, the Tax Act. The Canadian Pension
            Plans are duly registered under all applicable province pension
            benefits legislation. All contributions (including employee
            contributions made by authorized payroll deductions or other
            withholdings) required to be made to the appropriate funding agency
            in accordance with all Applicable Laws and the terms of each
            Canadian Pension Plan have been made in accordance with all
            Applicable Laws and the terms of each Canadian Pension Plan. All
            liabilities under each Canadian Pension Plan are being funded, on a
            going concern and solvency basis, in accordance with the terms of
            the respective Canadian Pension Plan, the requirements of pension
            benefits Applicable Laws and of applicable Governmental Authorities
            and the most recent actuarial report

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            filed with respect to such Canadian Pension Plan. All reports and
            disclosures relating to the Canadian Pension Plans required by any
            Applicable Laws or regulations have been filed or distributed in a
            timely manner. No amount is owing by any of the Canadian Pension
            Plans under the Tax Act or any provincial taxation statute. No event
            has occurred and no conditions exist with respect to any Canadian
            Pension Plan that has resulted or could reasonably be expected to
            result in any Canadian Pension Plan having its registration revoked
            or refused for the purposes of any pension benefits Applicable Laws
            or tax Applicable Laws or being placed under the administration of
            any relevant pension benefits regulatory authority or being required
            to pay any taxes or penalties under any pension benefits Applicable
            Laws or tax Applicable Laws, except for any exceptions to the
            provisions of this clause (iii) that, individually or in the
            aggregate, could not reasonably be expected to result in a Material
            Adverse Effect.

            (m) Compliance with Regulations T, U, and X. Neither the U.S.
      Borrower, nor any of its Subsidiaries is engaged principally in or has as
      one of its important activities the business of purchasing or carrying, or
      extending credit for the purpose of purchasing or carrying, any margin
      stock within the meaning of Regulations T, U, and X of the Board of
      Governors of the Federal Reserve System; nor will any proceeds of the
      Loans be used for such purpose.

            (n) Investment Company Act. Neither the U.S. Borrower nor any of its
      Subsidiaries is required to register under the provisions of the
      Investment Company Act of 1940, as amended, and neither the entering into
      or performance by the U.S. Borrower or the Canadian Borrower of this
      Agreement nor the issuance of any Notes violates any provision of such Act
      or requires any consent, approval or authorization of, or registration
      with, the Securities and Exchange Commission or any other governmental or
      public body or authority pursuant to any provisions of such Act.

            (o) Accuracy and Completeness of Information. All information,
      reports, prospectuses and other papers and data relating to the U.S.
      Borrower or any of its Subsidiaries and furnished by or on behalf of the
      U.S. Borrower or any of its Subsidiaries to the Administrative Agents or
      the Lenders (including, without limitation, the Confidential Information
      Memorandum and information delivered on or before the Closing Date
      pursuant to Article III) were, at the time furnished and as of the Closing
      Date, true, complete and correct in all material respects to the extent
      necessary to give the Administrative Agents and the Lenders true and
      accurate knowledge of the subject matter. No such information, report,
      prospectus or other paper or data contains any untrue statement of a
      material fact or omits to state a material fact necessary in order to make
      the statements contained therein not misleading in light of the
      circumstances under which such statements were or are made. No fact or
      situation is currently known to the U.S. Borrower or the Canadian Borrower
      which has had or would reasonably be expected to have a Materially Adverse
      Effect.

            (p) Agreements with Affiliates and Management Agreements. Except as
      set forth in Item 4.1(p) of the Disclosure Schedule, neither the U.S.
      Borrower nor any of its Subsidiaries has (i) to the knowledge of the U.S.
      Borrower or the Canadian Borrower,

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      any written agreements or binding arrangements of any kind with any
      Affiliate or (ii) any material management or consulting agreements of any
      kind, not entered into in the ordinary course of business.

            (q) Indebtedness. Set forth in (i) Item 4.1(q)(i) of the Disclosure
      Schedule is a complete and accurate list of all Indebtedness of U.S.
      Borrower and its Subsidiaries as of the Closing Date (other than the
      Obligations and the Pari Passu Debt) and (ii) Item 4.1(q)(ii) of the
      Disclosure Schedule is a complete and accurate list of all Indebtedness
      Target and its Subsidiaries as of the Closing Date (other than the
      Obligations and the Pari Passu Debt), in each case showing as of the date
      hereof the obligor and the principal amount outstanding thereunder. Except
      as permitted pursuant to Section 7.1 hereof, neither the U.S. Borrower nor
      any of its Subsidiaries has outstanding and after giving effect to the
      initial Advance hereunder on the Closing Date, any Indebtedness.

            (r) Investments. Except as permitted pursuant to Section 7.5 hereof,
      neither the U.S. Borrower nor any of its Subsidiaries has any Investments.

            (s) Intellectual Property. The U.S. Borrower and each of its
      Subsidiaries own, possess or have the right to use all material licenses
      and rights to all patents, trademarks, trademark rights, trade names,
      trade name rights, service marks and copyrights necessary to conduct their
      business in all material respects as now conducted, without known conflict
      with any patent, trademark, trade name, service mark, license or copyright
      of any other Person, and no intellectual property of any such Person is
      subject to any Lien, other than any Permitted Liens, except to the extent
      such non-compliance with this sentence (individually or in the aggregate)
      could not reasonably be expected to have a Material Adverse Effect. All
      such material licenses and rights with respect to patents, trademarks,
      trademark rights, trade names, trade name rights, service marks and
      copyrights are in full force and effect in all material respects, and are
      not subject to any pending or, to the best knowledge of the U.S. Borrower
      or the Canadian Borrower, threatened attack or revocation, except to the
      extent such non-compliance with this sentence (individually or in the
      aggregate) could not reasonably be expected to have a Material Adverse
      Effect.

            (t) Patriot Act. Neither the U.S. Borrower nor any of its
      Subsidiaries is in material violation of any laws relating to terrorism or
      money laundering, including, without limitation, the Patriot Act.

            (u) OFAC. None of the U.S. Borrower, the Canadian Borrower, any
      Subsidiary or any Affiliate of the U.S. Borrower or the Canadian Borrower
      or any Subsidiary (i) is a Sanctioned Person or Sanctioned Entity, (ii)
      has more than 10% of its assets in Sanctioned Entities, or (iii) derives
      more than 10% of its operating income from investments in, or transactions
      with Sanctioned Persons, Sanctioned Entities or Sanctioned Countries. The
      proceeds of any Advance or Loan will not be used and have not been used to
      fund any operations in, finance any investments or activities in or make
      any payments to, a Sanctioned Person, a Sanctioned Entity or a Sanctioned
      Country.

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            (v) Solvency. (i) Both before as after giving effect to the Loans,
      the issuance of any Letters of Credit and the incurrence of the
      obligations incurred in connection therewith and the other Transactions
      the U.S. Borrower and its Subsidiaries (taken as a whole) is Solvent and
      before giving effect to the Loans, the issuance of any Letters of Credit
      and the incurrence of the obligations incurred in connection therewith and
      the other Transactions, Target and its Subsidiaries (taken as a whole) is
      Solvent.

            (w) Labor Practices. There is (i) no unfair labor practice complaint
      pending or, to the knowledge of the U.S. Borrower or the Canadian
      Borrower, threatened against the U.S. Borrower or any of its Subsidiaries
      by or before any Governmental Authority, and no grievance or arbitration
      proceeding pending or, to the best knowledge of the U.S. Borrower or the
      Canadian Borrower, threatened against the U.S. Borrower or any of its
      Subsidiaries which arises out of or under any collective bargaining
      agreement which would (individually or in the aggregate) reasonably be
      expected to have a Material Adverse Effect, (ii) no strike, labor dispute,
      slowdown, stoppage or similar action or grievance pending or, to the
      knowledge of the U.S. Borrower or the Canadian Borrower, threatened
      against the U.S. Borrower or any of its Subsidiaries and (iii) to the
      knowledge of the U.S. Borrower or the Canadian Borrower, no union
      representation question existing with respect to the employees of the U.S.
      Borrower or any of its Subsidiaries and no union organizing activity
      taking place with respect to any of the employees of any of them.

            (x) Material Contracts. Set forth on Schedule 4.1(x) hereto is a
      complete and accurate list of all "Material Contracts" (as such term is
      used in Regulation S-K) of the U.S. Borrower and its Subsidiaries, showing
      as of the date hereof the parties, subject matter and term thereof. Each
      such "Material Contract" has been duly authorized, executed and delivered
      by all parties thereto, has not been amended or otherwise modified, is in
      full force and effect and is binding upon and enforceable against all
      parties thereto in accordance with its terms, and there exists no default
      under any "Material Contract" by any party thereto, in each case, which
      individually or in the aggregate would reasonably be expected to have a
      Material Adverse Effect.

            (y) Insurance. The Loan Parties have insurance in full force and
      effect that satisfies the requirements of Section 5.5.

            (z) Issuance of Pari Passu Debt. The U.S. Borrower has the power and
      authority to incur the Pari Passu Debt as provided for under the Other
      Debt Documents applicable thereto and has duly authorized, executed and
      delivered the Other Debt Documents applicable to such Pari Passu Debt. The
      U.S. Borrower has issued, pursuant to due authorization, the Pari Passu
      Debt under the applicable Other Debt Documents, and such Other Debt
      Documents constitute the legal, valid and binding obligations of the U.S.
      Borrower enforceable against the U.S. Borrower in accordance with its
      terms (except as such enforceability may be limited by applicable
      bankruptcy, insolvency, reorganization or similar laws affecting
      creditors' rights generally and by principles of equity).

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            (aa) Environmental Warranties. Except as disclosed in Item 4.1(aa)
      of the Disclosure Schedule:

                  (i) all facilities and property (including underlying
            groundwater) owned or leased by the U.S. Borrower or any of its
            Subsidiaries and its operations are in compliance with all
            Environmental Laws, except for any such noncompliance that could not
            (individually or in the aggregate) reasonably be expected to have a
            Material Adverse Effect;

                  (ii) there are no pending or, to the knowledge of the U.S.
            Borrower or the Canadian Borrower, any threatened (A) claims,
            complaints, notices, requests for information, proceedings, or
            investigation against or involving the U.S. Borrower or any of its
            Subsidiaries with respect to any alleged violation of any
            Environmental Law, or (B) complaints, notices or inquiries to the
            U.S. Borrower or any of its Subsidiaries regarding actual or
            potential liability under any Environmental Law, that, with respect
            to clauses (A) and (B) of this paragraph, could (individually or in
            the aggregate) reasonably be expected to have a Material Adverse
            Effect;

                  (iii) there have been no Releases of Hazardous Materials at,
            on or under any property now or previously owned or leased by the
            U.S. Borrower or any of its Subsidiaries that have, or could
            reasonably be expected to have, a Material Adverse Effect;

                  (iv) the U.S. Borrower and its Subsidiaries have been issued
            and are in compliance with all permits, certificates, approvals,
            licenses and other authorizations relating to environmental matters
            that have, or could reasonably be expected to have, a Material
            Adverse Effect;

                  (v) no property now or previously owned or leased by the U.S.
            Borrower or any of its Subsidiaries is listed or proposed for
            listing (with respect to owned property only) on the National
            Priorities List pursuant to CERCLA, on the CERCLIS or on any similar
            state list of sites requiring investigation or clean-up that have,
            or could reasonably be expected to have, a Material Adverse Effect;

                  (vi) there are no underground storage tanks, active or
            abandoned, including petroleum storage tanks, on or under any
            property now or previously owned or leased by the U.S. Borrower or
            any of its Subsidiaries that, singly or in the aggregate, have, or
            would reasonably be expected to have, a Material Adverse Effect;

                  (vii) neither the U.S. Borrower nor any Subsidiary has
            directly transported or directly arranged for the transportation of
            any Hazardous Material to any location which is listed or proposed
            for listing on the National Priorities List pursuant to CERCLA, on
            the CERCLIS or on any similar state list or which is the subject of
            federal, state or local enforcement actions or other investigations
            which may lead to material claims against the U.S. Borrower or such
            Subsidiary

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            for any remedial work, damage to natural resources or personal
            injury, including claims under CERCLA that have, or would reasonably
            be expected to have, a Material Adverse Effect;

                  (viii) there are no polychlorinated biphenyls or friable
            asbestos present at any property now or previously owned or leased
            by the U.S. Borrower or any Subsidiary that, singly or in the
            aggregate, have, or would reasonably be expected to have, a Material
            Adverse Effect; and

                  (ix) no conditions exist at, on or under any property now or
            previously owned or leased by the U.S. Borrower or any of its
            Subsidiaries, or to the knowledge of the U.S. Borrower, at any
            property previously owned or leased by the U.S. Borrower or any of
            its Subsidiaries, that would, with the passage of time, or the
            giving of notice or both, reasonably be expected (individually or in
            the aggregate) to have a Material Adverse Effect under any
            Environmental Law.

            (bb) Applications under the Companies' Creditors Arrangement Act.
      The Canadian Borrower acknowledges that its business and financial
      relationships with the Canadian Lenders and the Canadian Administration
      Agent are unique from its relationship with any other of its creditors.
      The Canadian Borrower agrees that it shall not file any plan of
      arrangement under the CCAA ("CCAA Plan") which provides for, or would
      permit directly or indirectly, the Canadian Lenders to be classified with
      any other creditor of the Canadian Borrower for purposes of such CCAA Plan
      or otherwise.

      Section 4.2 Survival of Representations and Warranties, Etc. All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made, and shall be true and correct, at and as
of the Closing Date (both before and after giving effect to the credit
extensions made on such date and the other Transactions consummated on such
date) and on the date of each Advance (both before and after giving effect to
the credit extensions made on such date and after giving effect to any
modifications of the Disclosure Schedule) except to the extent expressly
applicable only to the Closing Date or previously fulfilled in accordance with
the terms hereof. All representations and warranties made under this Agreement
shall survive, and not be waived by, the execution hereof by the Lenders and the
Administrative Agents, any investigation or inquiry by any Lender or any
Administrative Agents, or the making of any Advance under this Agreement.

                                    ARTICLE V

                                GENERAL COVENANTS

      Until the occurrence of the Termination Date, (whether or not the
conditions to borrowing have been or can be fulfilled), and unless the Majority
Lenders, or such greater number of Lenders as may be expressly provided herein,
shall otherwise consent in writing:

      Section 5.1 Preservation of Existence and Similar Matters. Each of the
U.S. Borrower and the Canadian Borrower will, and will cause each of its
Subsidiaries to:

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            (a) except as permitted by Section 7.4(b), preserve and maintain its
      existence, legal structure, legal name, rights (charter and statutory),
      permits, licenses, approvals, privileges and franchises necessary to the
      conduct of its business (except for such any non-compliance which,
      individually or in the aggregate, could not reasonably be expected to have
      a Material Adverse Effect); and

            (b) qualify and remain qualified and authorized to do business in
      each jurisdiction in which the character of its properties or the nature
      of its business makes such qualification or authorization prudent (except
      for such any non-compliance which, individually or in the aggregate, could
      not reasonably be expected to have a Material Adverse Effect).

      Section 5.2 Business; Compliance with Applicable Law and Material
Contracts. Each of the U.S. Borrower and the Canadian Borrower will, and will
cause each of its Subsidiaries to, (a) engage in the business of owning and
operating video and game rental and sales retail stores and other business
engaged in as of the Closing Date and in such other businesses and activities
(including the sale or delivery of various products and services, including
delivery of media and entertainment content) that are reasonably related or
reasonably similar, ancillary or complimentary thereto or any other reasonable
extensions of such businesses (in each case, as determined in good faith by the
board of directors of the U.S. Borrower), and (b) substantially comply with the
requirements of all material Applicable Law and material contractual
obligations, except for contractual obligations the non-compliance with which
have not had and could not reasonably be expected to have a Materially Adverse
Effect.

      Section 5.3 Maintenance of Properties. Each of the U.S. Borrower and the
Canadian Borrower will, and will cause each of its Subsidiaries to, maintain or
cause to be maintained in the ordinary course of business in good repair,
working order and condition (reasonable wear and tear excepted and except for
surplus and obsolete properties) all properties used in their respective
businesses (whether owned or held under lease), and from time to time make or
cause to be made all needed and appropriate repairs, renewals, replacements,
additions, betterments and improvements thereto (except for such any
non-compliance which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect).

      Section 5.4 Accounting Methods and Financial Records. Each of the U.S.
Borrower and the Canadian Borrower will, and will cause each of its Subsidiaries
to, maintain a system of accounting established and administered in accordance
with GAAP, keep adequate records and books of account in which complete entries
will be made in accordance with GAAP and reflecting all transactions required to
be reflected by GAAP and keep accurate and complete records in all material
respects of their respective properties and assets.

      Section 5.5 Insurance. Each of the U.S. Borrower and the Canadian Borrower
will, and will cause each of its Subsidiaries to:

            (a) Maintain insurance including, but not limited to, business
      interruption coverage and public liability coverage insurance from
      responsible companies in such amounts and against such risks in respect of
      the U.S. Borrower and each of its Subsidiaries as is prudent and
      consistent with past practices, and reasonably satisfactory

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      (taking into account such past practices) to the Administrative Agents
      (including, without limitation, larceny, embezzlement, employee fidelity,
      and other criminal misappropriation insurance).

            (b) Keep its respective assets insured by responsible companies on
      terms and in a manner consistent with past practices, reasonably
      acceptable (taking into account such past practices) to the Administrative
      Agents against loss or damage by fire, theft, burglary, pilferage, loss in
      transit, explosions and hazards insured against by extended coverage, in
      amounts which are prudent for businesses that are similarly situated, in
      accordance with industry standards and consistent with past practices, and
      reasonably satisfactory (taking into account such past practices) to the
      Administrative Agents, all premiums thereon to be paid by the U.S.
      Borrower and each of its Subsidiaries.

            (c) Require that each insurance policy for (i) each U.S. Loan Party
      and its U.S. Subsidiaries provide for at least thirty (30) days' prior
      written notice to the U.S. Administrative Agent of any termination of or
      proposed cancellation or nonrenewal of such policy, or material reduction
      in coverage, and name the U.S. Administrative Agent (for itself and for
      the ratable benefit of the Secured Parties) as additional named loss payee
      to the extent of the Obligations and additional named insured and (ii)
      each Canadian Loan Party and its Canadian Subsidiaries provide for at
      least thirty (30) days' prior written notice to the Canadian
      Administrative Agent of any termination of or proposed cancellation or
      nonrenewal of such policy, or material reduction in coverage, and name the
      Canadian Administrative Agent (for itself and for the ratable benefit of
      the Secured Parties) as additional named loss payee to the extent of the
      Obligations and additional named insured.

            (d) Proceeds of insurance for each Loan Party and its Subsidiaries
      paid to the Administrative Agents shall be applied to the payment or
      prepayment of the Obligations as provided under Section 2.10(c) or Section
      8.3 hereof, as applicable. Any balance thereof remaining after payment in
      full of the Obligations shall be paid to the Borrowers or as otherwise
      required by law.

      Section 5.6 Payment of Taxes and Claims. Each of the U.S. Borrower and the
Canadian Borrower will, and will cause each of its Subsidiaries to, pay and
discharge all taxes, including, without limitation, withholding taxes,
assessments and governmental charges or levies required to be paid by them or
imposed upon them or their income or profits or upon any properties belonging to
them, prior to the date on which penalties attach thereto, and all lawful claims
for labor, materials and supplies which, if in excess of $10,000 (singularly or
in the aggregate), if unpaid, might reasonably be expected to become a Lien or
charge upon any of their properties; except that no such tax, assessment,
charge, levy or claim need be paid which is being diligently contested in good
faith by appropriate proceedings and for which adequate reserves shall have been
set aside on the appropriate books, but only so long as such tax, assessment,
charge, levy or claim does not become a Lien or charge other than a Permitted
Lien and no foreclosure, distraint, sale or similar proceedings shall have been
commenced. Each of the U.S. Borrower and the Canadian Borrower will, and will
cause each of its Subsidiaries to, timely file all material information returns
required by federal, state or local tax authorities.

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      Section 5.7 Visits and Inspections. Each of the U.S. Borrower and the
Canadian Borrower will, and will cause each of its Subsidiaries to, permit
representatives of the Administrative Agents and any of the Lenders, upon
reasonable written notice (such notice requirement to be waived if any Event of
Default has occurred and is continuing) to such Loan Party or such Subsidiary
and during normal business hours (a) visit and inspect the properties of such
Loan Party or such Subsidiary, (b) inspect and make extracts from and copies of
their respective books and records, and (c) discuss with their respective
principal officers their respective businesses, assets, liabilities, financial
positions, results of operations and business prospects, all at the expense of
such Loan Party or any other Loan Party in the case of actions described in the
foregoing clauses (a) through (c); provided, however that the Borrowers shall
not be obligated to pay the expenses of such Lender so long as no Event of
Default has occurred and is continuing. Each of the U.S. Borrower and the
Canadian Borrower will, and will cause each of its Subsidiaries to, permit
representatives of the Administrative Agents and any of the Lenders to discuss
with their respective auditors their respective businesses, assets, liabilities,
financial positions, results of operations and business prospects, at the
expense of such Loan Party or any other Loan Party.

      Section 5.8 Payment of Indebtedness; Loans. Subject to any provisions
regarding subordination herein or as set forth in any other Loan Document, each
of the U.S. Borrower and the Canadian Borrower will, and will cause each of its
Subsidiaries to, pay any and all of their respective Indebtedness when and as it
becomes due, other than amounts diligently disputed in good faith and for which
adequate reserves have been set aside in accordance with GAAP.

      Section 5.9 Use of Proceeds. (a) The U.S. Borrower will use the aggregate
proceeds of all U.S. Advances (i) in the case of the Term Loans, to finance the
Target Acquisition and the Refinancing and pay fees and expenses attributable to
this Agreement, the Target Acquisition and the Refinancing, (ii) in the case of
U.S. Letters of Credit, to support existing letters of credit (in an aggregate
amount not to exceed $20,600,000) of the U.S. Borrower and its U.S.
Subsidiaries, and (iii) in the case of U.S. Swing Line Loans and U.S. Letters of
Credit, for purposes of supporting working capital and general corporate
purposes of the U.S. Borrower and its U.S. Subsidiaries and replacing certain
existing letters of credit of the U.S. Borrower and Target.

      (b) The Canadian Borrower will use the aggregate proceeds of all Canadian
Advances (i) in the case of Canadian Revolving Loans to finance the Canadian
Acquisition and for working capital and general corporate purposes of the
Canadian Borrower and its Canadian Subsidiaries, and (ii) in the case of
Canadian Swing Line Loans and Canadian Letters of Credit, for purposes of
supporting working capital and general corporate purposes of the Canadian
Borrower and its Canadian Subsidiaries.

      No proceeds of Advances hereunder shall be used for the purchase or
carrying or the extension of credit for the purpose of purchasing or carrying
any margin stock within the meaning of Regulations T, U, and X of the Board of
Governors of the Federal Reserve System.

      Section 5.10 Real Estate. Each of the U.S. Borrower and the Canadian
Borrower will, and will cause each of its Subsidiaries to, grant a First
Priority mortgage securing the relevant Obligations to the relevant
Administrative Agent, for itself and for the ratable benefit of the

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relevant Secured Parties, in form and substance reasonably satisfactory to the
relevant Administrative Agent (each such First Priority mortgage being a
"Mortgage"), covering each parcel of owned real estate having a fair market
value in excess of $250,000 acquired by such Loan Party or any of its
Subsidiaries after the Closing Date, promptly (but in no event more than 60
days) after any such acquisition; provided that, in each case, with respect to
Mortgages granted on real property in States where recording a Mortgage results
in a mortgage recording tax being imposed in an amount based upon the
Obligations secured by such Mortgage, such Mortgage will be limited to secure
Obligations in an amount equal to the fair market value of the relevant real
property on the date such Mortgage is delivered; provided, further that, with
respect to any real property subject to a Mortgage in the State of Alabama, the
U.S. Borrower or such Subsidiary will (i) grant a First Priority (or the local
equivalent thereof) security interest in such real property and such First
Priority (or the local equivalent thereof) security interest will be perfected
by Filing Statements in all jurisdictions necessary to perfect such First
Priority Lien, (ii) ensure that such real property is, and remains, subject only
to the Liens permitted under this Agreement and (iii) within 60 days of being
permitted under the laws of the State of Alabama to grant Mortgages that secure
Obligations in an amount equal to the fair market value of the real property,
and paying mortgage recording tax based only on such amount (or an amount within
twenty five percent of such fair market value, or based on a formula which takes
into account the value of the Alabama properties as compared to the value of
other properties secured in the transaction) and not on the full amount of the
Obligations, grant a Mortgage covering each parcel of real property which would
otherwise be required to be subject to a Mortgage under this Section 5.10 and,
as promptly as practicable, comply with all other requirements set forth below.
Should any Mortgage be required under the immediately preceding sentence, the
applicable Loan Party shall, as promptly as practicable:

            (a) provide evidence of the completion or satisfactory arrangements,
      for the completion of all recordings and filings of each such Mortgage as
      may be necessary or, in the reasonable opinion of the U.S. Administrative
      Agent, desirable to create a valid, First Priority perfected Lien (subject
      only to Liens permitted hereunder) against the properties purported to be
      covered thereby;

            (b) obtain mortgagee's title insurance policies in favor of the
      relevant Administrative Agent for the benefit of the relevant Secured
      Parties in amounts and in form and substance and issued by insurers,
      reasonably satisfactory to the U.S. Administrative Agent, with respect to
      the property purported to be covered by each Mortgage, and

            (c) provide such other approvals, opinions, or documents as the U.S.
      Administrative Agent may reasonably request with respect to such real
      property, including a reasonably current survey of each property purported
      to be covered by a Mortgage and including any Phase I environmental audit,
      in each case in form and substance reasonably satisfactory to the U.S.
      Administrative Agent and the title insurer.

      Section 5.11 Indemnity. (a) Each Borrower, for itself and on behalf of
each of its Subsidiaries, jointly and severally, agrees to indemnify and hold
harmless each Lender, the Agents, each other Secured Party, the Lead Arranger
and each of their respective affiliates, employees, representatives, officers,
trustees, agents (in the case of Approved Funds), investment

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advisors and directors (any of the foregoing shall be an "Indemnitee") from and
against any and all claims, liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, attorneys', experts', agents',
consultants' fees and expenses (as such fees and expenses are incurred) and
demands by any party, whether or not the transactions contemplated hereby are
consummated (including, without limitation, (x) any civil penalty or fine
assessed by OFAC against, and all reasonable costs and expenses (including
counsel fees and disbursements) incurred in connection with defense thereof, by
any Administrative Agent or any Lender as a result conduct of any Loan Party
that violates a sanction enforced by OFAC and (y) the costs in connection with
any investigation, litigation or proceeding ("Proceeding") or preparation of a
defense in connection therewith, whether or not the Loan Party, any Subsidiary
thereof, or the Person seeking indemnification is the prevailing party, whether
or not such investigation, litigation or proceeding is brought by any Loan
Party, its directors, shareholders or creditors or an Indemnitee or any other
Person, whether or not any Indemnitee is otherwise a party thereto), (a)
resulting from any breach or alleged breach by any Loan Party or any Subsidiary
thereof of any representation, warranty, or covenant made hereunder or under any
other Loan Document; (b) arising out of or in connection with (i) any
Commitment, any Loans, any Letter of Credit or otherwise in respect of this
Agreement or any other Loan Document (including the taking of Collateral for the
Obligations), including the use of the proceeds of Loans or any Letter of Credit
hereunder in any fashion by any Loan Party or any of its Subsidiaries or the
performance of their respective obligations under the Loan Documents by any Loan
Party or any of its Subsidiaries, (ii) allegations of any participation by the
Indemnitees, or any of them, in the affairs of any Loan Party or any of its
Subsidiaries, or allegations that any of them has any joint liability with any
Loan Party or any of its Subsidiaries for any reason, or (iii) any claims
against any Indemnitee by any shareholder, partner, or other investor in or
lender to any Loan Party or any Subsidiary, by any brokers or finders or
investment advisers or investment bankers retained by any Loan Party or by any
other third party, arising out of any Commitment, any Loans, any Letter of
Credit or otherwise under this Agreement or any other Loan Document; or (c) in
connection with fees and other charges payable in connection with the Loans, or
the execution, delivery, and enforcement of this Agreement, the Security
Documents, the other Loan Documents, and any amendments thereto or waivers of
any of the provisions thereof; unless the Person seeking indemnification
hereunder is determined in such case to have acted with gross negligence, bad
faith or willful misconduct, in any case by a final, non-appealable judicial
order.

      (b) Notice of Proceedings; Right to Participate. Promptly after receipt by
an Indemnitee of notice of the commencement of any Proceeding, such Indemnitee
will, if a claim is to be made hereunder against a Borrower in respect thereof,
notify such Borrower in writing of the commencement thereof; provided that the
failure to provide such notice shall not release any Borrower from any of its
obligations hereunder. In case any such Proceedings (other than with respect to
taxes) are brought against any Indemnitee and it notifies the relevant Borrower
of the commencement thereof, such Borrower will be entitled to participate
therein at its sole cost and expense and, to the extent that it may elect by
written notice delivered to the Indemnitee, to assume the defense thereof with
counsel reasonably satisfactory to such Indemnitee. Upon receipt of notice from
such Borrower to such Indemnitee of its election so to assume the defense of
such Proceedings and approval by the Indemnitee of counsel, such Borrower will
not be liable to such Indemnitee for expenses incurred by the Indemnitee in
connection with the defense thereof, other than reasonable costs of
investigation and except as set forth below.

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      (c) No Right to Participate. Notwithstanding anything in the foregoing to
the contrary, no Borrower shall be entitled to assume responsibility for and
control of any such judicial or administrative proceedings: (i) if the use of
counsel chosen by such Borrower to represent such Indemnitee would present such
counsel with a conflict of interest, (ii) if such Borrower shall not have
employed counsel reasonably satisfactory to such Indemnitee to represent it
within a reasonable time after notice of the institution of such action, (iii)
if such Proceedings will involve any risk of criminal liability, (iv) if the
interests of any Loan Party or any affiliate thereof or any director, member,
co-op member, officer or employee of the foregoing are adverse to such
Indemnitee or (v) if the actual or potential defendants in, or targets of, any
such action include both such Borrower and such Indemnitee and such Indemnitee
shall have reasonably concluded that there may be legal defenses available to it
that are different from or additional to those available to such Borrower (in
which case such Borrower shall not have the right to assume the defense of such
action on behalf of such Indemnitee).

      (d) Borrower Consent to Settlement. No Borrower shall be liable for any
settlement of any Proceedings effected without its written consent (which
consent shall not be unreasonably withheld or delayed), but if settled with its
written consent or if there be a final judgment for the plaintiff in any such
Proceedings, each Borrower, jointly and severally, agrees to indemnify and hold
harmless each Indemnitee from and against any and all losses, claims, damages,
liabilities and expenses by reason of such settlement or judgment in accordance
with the provisions of this Agreement.

      (e) Indemnitee Consent to Settlement. No Borrower shall enter into any
settlement on behalf of any Indemnitee without the prior written consent of such
Indemnitee (which consent shall not be unreasonably withheld or delayed;
provided that each Borrower acknowledges and agrees that it shall be reasonable
for any Indemnitee to withhold its consent to the entry of any settlement
against such Indemnitee that (i) by its terms or effect is contrary to such
Indemnitee's internal policies and procedures, or (ii) includes an admission or
acknowledgment of any liability or responsibility whatsoever on the part of such
Indemnitee, or any of its directors, trustees, officers, employees, agents,
affiliates and controlling persons).

      (f) Indemnity Obligations. The obligations of each Loan Party under this
Section 5.11 are in addition to, and shall not otherwise limit, any liabilities
which might otherwise have in connection with any warranties or similar
obligations of such Loan Party or such Subsidiary in any other agreement or
instrument or for any other reason.

      (g) Single Counsel. Notwithstanding anything to the contrary contained in
this Section 5.11, each Borrower's obligation to reimburse the Indemnitees for
the fees and expenses for counsel in respect of Proceedings in which any of the
Indemnitees are party shall be limited to the fees and expenses of one counsel
(and one counsel for each applicable local jurisdiction) for all such
Indemnitees; provided that the foregoing shall not to apply (i) if such
Proceedings will involve any risk of criminal liability, (ii) if the interests
of any such Indemnitee or any Affiliate thereof or any director, member, co-op
member, officer or employee of the foregoing are adverse to any other such
Indemnitee, (iii) if any such Indemnitee shall have reasonably concluded that
there may be legal defenses available to it that are different from or
additional to those available to any other Indemnitee, and (iv) if any such
Indemnitee shall have reasonably concluded that there may be any conflicts of
interest between it and any other Indemnitee,

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including, without limitation, any conflict of interest between and Lender and
an Agent in connection with enforcement actions against any Loan Party.

      Section 5.12 Interest Rate Hedging. Within 60 days following the Closing
Date, each Borrower will provide the Administrative Agents with evidence that
the U.S. Borrower has entered into Hedge Agreements for the purpose of
protecting it against fluctuations in interest rates to the extent necessary to
provide that at least 35% of the aggregate principal amount of the relevant
Loans is subject to a fixed interest rate, on terms and with a counterparty that
is a Hedge Bank reasonably acceptable to the relevant Administrative Agent, and
shall maintain such arrangement until the second anniversary of the Closing
Date.

      Section 5.13 Future Subsidiaries. Without limiting the effect of any
provision contained herein, within 30 Business Days after any Person becomes
either a direct or indirect Subsidiary of a Loan Party,

            (a) if such Person is (or will be) a (i) U.S. Subsidiary (other than
      a Joint Venture Entity) and if not theretofore a party to the U.S.
      Subsidiary Guaranty and the U.S. Subsidiary Pledge and Security Agreement,
      such Person shall execute and deliver to the U.S. Administrative Agent a
      supplement to each of the U.S. Subsidiary Guaranty and the U.S. Subsidiary
      Pledge and Security Agreement for the benefit of the U.S. Secured Parties
      and duly execution deliver to the U.S. Administrative Agent a complete and
      accurate Perfection Certificate or (ii) Canadian Subsidiary (other than a
      Joint Venture Entity) and if not theretofore a party to the Canadian
      Subsidiary Guaranty and the Canadian Subsidiary Pledge and Security
      Agreement, such Person shall execute and deliver to the Canadian
      Administrative Agent a supplement to each of the Canadian Subsidiary
      Guaranty and the Canadian Subsidiary Pledge and Security Agreement for the
      benefit of the Canadian Secured Parties and duly execution deliver to the
      Canadian Administrative Agent a complete and accurate Perfection
      Certificate;

            (b) such Loan Party that will own shares of the Equity Interests of
      such Person (other than a Joint Venture Entity) shall, pursuant to the
      applicable Security Document, deliver the following to the relevant
      Administrative Agent:

                  (i) certificates evidencing all of the issued and outstanding
            Equity Interests pledged pursuant to the applicable Security
            Document, which certificates in each case shall be accompanied by
            undated instruments of transfer duly executed in blank, or, if any
            such shares of Equity Interests pledged pursuant to such Security
            Document are uncertificated securities, the relevant Administrative
            Agent shall have obtained "control" (as defined in the UCC) over
            such shares of Equity Interests and such other instruments and
            documents as may be necessary under Applicable Law, in the
            reasonable opinion of the relevant Administrative Agent, to perfect
            the First Priority security interest of the relevant Administrative
            Agent in such shares of Equity Interests; provided that, if the
            pledge of Equity Interests of any Foreign Subsidiary would result in
            material adverse tax consequences for the pledgor thereof, no more
            than 66-2/3% of the shares of Equity Interests of such Foreign
            Subsidiary may be required to be pledged to the relevant
            Administrative Agent hereunder; provided, further, that, in the
            event of any

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            change in, or the introduction, adoption, effectiveness,
            interpretation, reinterpretation or phase-in of, any law or
            regulation, directive or guideline of any Governmental Authority
            that eliminates the increase in income tax attributable to a Loan
            Party as a result of the pledge of more than 66-2/3% of such shares
            of Equity Interests of any such Foreign Subsidiary (including with
            respect to the operation of Section 956 (or any successor provision
            thereto) of the Code), the relevant Administrative Agent or the
            Majority Lenders may require the pledge of more than 66-2/3% of such
            shares of Equity Interests;

                  (ii) all intercompany notes, if any, pledged pursuant to the
            applicable Security Document;

                  (iii) a secretary's certificate for such new Subsidiary,
            substantially in the form of the certificates delivered under, with
            respect to a new U.S. Subsidiary, Section 3.1(a)(i) or with respect
            to a new Foreign Subsidiary, Section 3.2(a)(i), in each case, on the
            Closing Date, together with appropriate attachments;

                  (iv) executed copies of all Filing Statements, or other
            similar instruments or documents to be filed under the Uniform
            Commercial Code or the PPSA of all jurisdictions as may be
            necessary, in the reasonable opinion of the relevant Administrative
            Agent, to perfect the security interests of the relevant
            Administrative Agent pursuant to the applicable Security Document;

                  (v) results of a recent lien, tax and judgment search in such
            jurisdictions and offices as reasonably determined by the relevant
            Administrative Agent (including without limitation where assets of
            each such Person are located or recorded), and such search shall
            reveal no liens on any of assets of such Person except for Permitted
            Liens or liens that have been discharged;

      together, in each case, with such opinions of legal counsel as the U.S.
      Administrative Agent may reasonably request, which legal opinions shall be
      in form and substance reasonably satisfactory to the U.S. Administrative
      Agent and, with respect to Canadian Persons becoming either a direct or
      indirect Subsidiary of the Canadian Borrower, such opinion of legal
      counsel as the Canadian Administrative Agent may reasonably request which
      opinions shall be in form and substance reasonable satisfactory to the
      Canadian Administrative Agent; and

            (c) such Loan Party shall have delivered to the U.S. Administrative
      Agent and/or the Canadian Administrative Agent in the event such Loan
      Party is a Canadian Loan Party, as the case may be an updated Item
      4.1(c)(i) of the Disclosure Schedule, which shall be true, accurate and
      correct in all material respects as of the date of delivery thereof.

      The Agents, as applicable shall be satisfied that the Lien granted to the
U.S. Administrative Agents, as applicable, for the benefit of the Secured
Parties in the collateral described above is a First Priority (or local
equivalent thereof) security interest, subject only to Liens permitted hereunder
and no Lien exists on any of the collateral described above other than

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the Lien created in favor of the Administrative Agents, for the benefit of the
Secured Parties, pursuant to a Loan Document, and the other Liens permitted
hereunder.

      In the event that all or a portion of the Equity Interests of a Subsidiary
that is a party to either a U.S. Subsidiary Guaranty or a Canadian Subsidiary
Guaranty are sold in a transaction permitted by Section 7.4, and the relevant
Administrative Agent has received sufficient evidence that such transaction has
been completed in compliance with Section 7.4, such that such Person is no
longer a Subsidiary, such Person shall be automatically released from its
obligations under the U.S. Subsidiary Guaranty or Canadian Subsidiary Guaranty,
as applicable and the relevant Administrative Agent shall, at the request of the
relevant Borrower, acknowledge such release in writing in a manner reasonably
satisfactory to such Borrower and such Administrative Agent.

      Section 5.14 Payment of Wages. Each of the U.S. Borrower and the Canadian
Borrower will, and will cause each of its Subsidiaries to at all times comply,
in all material respects, with the requirements of the Fair Labor Standards Act
and the Employment Standards Act (Ontario) and such other applicable
legislation, as amended, including, without limitation, the provisions of such
Acts relating to the payment of minimum and overtime wages as the same may
become due from time to time.

      Section 5.15 Environmental Law. Each of the U.S. Borrower and the Canadian
Borrower will, and will cause each of its Subsidiaries to,

            (a) use and operate all of its and their facilities and properties
      in compliance with all Environmental Laws, keep all necessary permits,
      approvals, certificates, licenses and other authorizations relating to
      environmental matters in effect and remain in compliance therewith, and
      handle all Hazardous Materials in material compliance with all applicable
      Environmental Laws (except, in each case, such non-compliance which,
      individually or in the aggregate, could not reasonably be expected to have
      a Material Adverse Effect); and

            (b) promptly notify the Administrative Agents and provide copies
      upon receipt of all written claims, complaints, notices or inquiries
      relating to the condition of its facilities and properties in respect of,
      or as to compliance with, Environmental Laws, and shall promptly resolve
      any non-compliance with Environmental Laws and keep its property free of
      any Lien imposed by any Environmental Law (except, in each case, such
      non-compliance which, individually or in the aggregate, could not
      reasonably be expected to have a Material Adverse Effect).

      Section 5.16 Further Assurances. Promptly upon request by an
Administrative Agent, or any Lender through an Administrative Agent, each
Borrower will, and will cause its Subsidiaries, as appropriate, to (a) correct
any material defect or error that may be discovered in any Loan Document or in
the execution, acknowledgment, filing or recordation thereof, and (b) do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, certificates, assurances and
other instruments as an Administrative Agent, or any Lender through an
Administrative Agent, may reasonably require from time to time in order to carry
out more effectively the purposes of the Loan Documents.

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                                   ARTICLE VI

                              INFORMATION COVENANTS

      Until the occurrence of the Termination Date (whether or not the
conditions to borrowing have been or can be fulfilled), and unless the Majority
Lenders, or such greater number of Lenders as may be expressly provided herein,
shall otherwise consent in writing, the Borrowers will furnish or cause to be
furnished to each Lender and each Administrative Agent, at their respective
offices:

      Section 6.1 Quarterly Financial Statements and Information. Within
forty-five (45) days after the last day of each of the first three Fiscal
Quarters of each Fiscal Year of the U.S. Borrower, unaudited balance sheets of
the U.S. Borrower on a consolidated basis with its Subsidiaries, as at the end
of such Fiscal Quarter and as of the end of the preceding Fiscal Year, and the
related statements of operations and the related statements of cash flows of the
U.S. Borrower on a consolidated basis with its Subsidiaries for such Fiscal
Quarter and for the elapsed portion of the year ended with the last day of such
Fiscal Quarter, which shall set forth in comparative form such figures as at the
end of and for such Fiscal Quarter and the appropriate prior period (but only
for such Fiscal Quarter and other periods for which such comparative figures are
available) and shall be certified by the chief financial officer of the U.S.
Borrower, to be, in his or her opinion, complete and correct in all material
respects and to present fairly, in accordance with GAAP, the financial position
of the U.S. Borrower on a consolidated basis with its Subsidiaries as at the end
of such period and the results of operations for such period, and for the
elapsed portion of the year ended with the last day of such period, subject only
to normal year-end adjustments.

      Section 6.2 Annual Financial Statements and Information. Within ninety
(90) days after the end of each Fiscal Year of the U.S. Borrower, the
consolidated balance sheets of the U.S. Borrower on a consolidated basis with
its Subsidiaries as of the end of such Fiscal Year and the related consolidated
statements of operations for such Fiscal Year and, to the extent available, for
the previous two (2) Fiscal Years, the related consolidated statements of
changes in shareholders' equity for such Fiscal Year and, to the extent
available, for the previous two (2) Fiscal Years, and related consolidated
statements of cash flows of such Fiscal Year and, to the extent available, for
the previous two (2) Fiscal Years, in each case audited (without any
Impermissible Qualification) by an independent certified public accountants of
recognized national standing reasonably acceptable to the U.S. Administrative
Agent, together with an opinion of such independent certified public accountants
and a statement of such accountants that in connection with their audit, nothing
came to their attention that caused them to believe that the U.S. Borrower was
not in compliance with the terms, covenants, provisions or conditions of Article
7 hereof.

      Section 6.3 Performance Certificates. At the time the financial statements
are furnished pursuant to Sections 6.1 and 6.2 hereof, a Performance
Certificate:

            (a) setting forth as at the end of such Fiscal Quarter or Fiscal
      Year, as the case may be, the arithmetical calculations required to
      establish (i) any interest rate adjustment, as provided for in Section
      2.3(g) hereof, and (ii) compliance with the requirements of Section 7.13
      hereof; and

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<PAGE>

            (b) stating that, to the best of his or her knowledge, no Default or
      Event of Default has occurred as at the end of such Fiscal Quarter or
      Fiscal Year, as the case may be, or, if a Default or an Event of Default
      has occurred, disclosing each such Default or Event of Default and its
      nature, when it occurred, whether it is continuing and the steps being
      taken by the Borrowers with respect to such Default or Event of Default.

      Section 6.4 Copies of Other Reports. (a) Promptly upon receipt thereof,
copies of all material reports, if any, submitted to the U.S. Borrower by the
U.S. Borrower's independent public accountants regarding the U.S. Borrower or
any Subsidiary thereof, including, without limitation, any management report
prepared in connection with the annual audit referred to in Section 6.2.

      (b) Annually, a certificate of insurance indicating that the requirements
of Section 5.5 hereof remain satisfied for such Fiscal Year.

      (c) Annually, and in no event later than February 15 of any year, a copy
of the U.S. Borrower's annual financial forecasts for itself and its
Subsidiaries for such Fiscal Year.

      (d) Promptly after the sending or filing thereof, copies of all reports,
notices, prospectuses and registration statements which any Loan Party files
with the SEC or any national securities exchange.

      (e) Promptly following the mailing or receipt of any notice or report
delivered under the terms of any Other Debt Documents, copies of such notice or
report.

      (f) Promptly after request therefor, such other financial and other
information as any Lender Party through any Administrative Agent may from time
to time reasonably request (including information and reports in such detail as
any Administrative Agent may request with respect to the terms of and
information provided pursuant to the Performance Certificate).

      Documents required to be delivered pursuant to Section 6.1 or Section 6.2
(to the extent any such documents are included in materials otherwise filed with
the SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the U.S. Borrower posts such
documents; or (ii) on which such documents are posted on the U.S. Borrower's
behalf on an Internet or intranet website, if any, to which each Lender and each
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the U.S. Administrative Agent); provided that: (i) the U.S.
Borrower shall deliver paper copies of such documents to either Administrative
Agent or any Lender that requests the U.S. Borrower to deliver such paper copies
until a written request to cease delivering paper copies is given by such
Administrative Agent or such Lender and (ii) the U.S. Borrower shall notify each
Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the U.S. Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the U.S. Borrower
shall be required to provide paper copies of the Performance Certificates
required by Section 6.3 to the U.S. Administrative Agent. Except for such
Performance Certificates, the U.S. 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

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no responsibility to monitor compliance by the U.S. Borrower 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.

      Section 6.5 Notice of Litigation and Other Matters. Notice specifying the
nature and status of any of the following events, and the steps being taken by
the Borrowers with respect to each of such events promptly, but in any event not
later than ten (10) days after any Authorized Officer of a Borrower becomes
aware of the occurrence of any of the following events:

            (a) the commencement of all material proceedings and investigations
      by or before any Governmental Authority and all material actions and
      proceedings in any court or before any arbitrator against, or to the
      extent known to a Borrower, in any other way relating materially adversely
      to any Borrower or any Subsidiary of any Borrower, or any of their
      respective properties, assets or businesses, taken as a whole;

            (b) any Material Adverse Change;

            (c) any Default or the occurrence or non-occurrence of any event (i)
      which constitutes, or which with the passage of time or giving of notice
      or both would constitute a material default by any Borrower or any
      Subsidiary of any Borrower under any material agreement (including,
      without limitation, any Material Transaction Document and any Other Debt
      Document) other than this Agreement to which any Borrower or any
      Subsidiary of any Borrower is a party or by which any of their respective
      properties may be bound, or (ii) which could reasonably be expected to
      have a Materially Adverse Effect, giving in each case the details thereof
      and specifying the action proposed to be taken with respect thereto;

            (d) any of the following which, individually or in the aggregate,
      could reasonably be expected to result in liabilities to any Borrower or
      any of its Subsidiaries in excess of $25,000,000 or a Material Adverse
      Effect: (i) the institution of any steps by any Person to terminate any
      Pension Plan, (ii) the failure to make a required contribution to any
      Pension Plan if such failure is sufficient to give rise to a Lien under
      Section 302(f) of ERISA, (iii) the taking of any action with respect to a
      Pension Plan which could result in the requirement that any Loan Party
      furnish a bond or other security to the PBGC or such Pension Plan, (iv)
      the complete or partial withdrawal of any of the U.S. Borrower or any
      member of the Controlled Group from a Multiemployer Plan or notification
      that a Multiemployer Plan is in reorganization, or (v) the occurrence of
      any event with respect to any Pension Plan which could result in the
      incurrence by any Loan Party of any liability, fine or penalty, notice
      thereof and copies of all documentation relating thereto;

            (e) the occurrence of any event subsequent to the Closing Date
      which, if such event had occurred prior to the Closing Date, would have
      constituted an exception to the representation and warranty in Section
      4.1(l); and

            (f) the occurrence of any breach of any lease with respect to a
      warehouse or distribution center where Collateral with an average monthly
      fair market value in excess of $250,000 is located.

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                                   ARTICLE VII

                               NEGATIVE COVENANTS

      Until the occurrence of the Termination Date (whether or not the
conditions to borrowing have been or can be fulfilled), and unless the Majority
Lenders, or such greater number of Lenders as may be expressly provided herein,
shall otherwise consent in writing:

      Section 7.1 Indebtedness of the U.S. Borrower, the Canadian Borrower and
Subsidiaries. None of the U.S. Borrower and the Canadian Borrower will, and will
not permit any of its Subsidiaries to, create, assume, incur or otherwise become
or remain obligated in respect of, or permit to be outstanding, any Indebtedness
except:

            (a) Indebtedness in respect of the Obligations;

            (b) until the Closing Date, Indebtedness that is to be repaid in
      full as further identified in Item 7.1(b)(i) (with respect to the U.S.
      Borrower and its Subsidiaries) and Item 7.1(b)(ii) (with respect to
      Target) of the Disclosure Schedule;

            (c) Indebtedness existing as of the Closing Date which is identified
      in Item 7.1(c) of the Disclosure Schedule;

            (d) Indebtedness of the U.S. Borrower constituting Pari Passu Debt
      in an aggregate principal amount with all other Pari Passu Debt not to
      exceed $325,000,000, incurred pursuant to Other Debt Documents governing
      such Pari Passu Debt;

            (e) unsecured Indebtedness (i) incurred in the ordinary course of
      business of the U.S. Borrower and its Subsidiaries (including open
      accounts extended by suppliers on normal trade terms in connection with
      purchases of goods and services which are not overdue for a period of more
      than 90 days or, if overdue for more than 90 days, as to which a dispute
      exists and adequate reserves in conformity with GAAP have been established
      on the books of the U.S. Borrower or such Subsidiary) and, (ii) in respect
      of performance, surety or appeal bonds provided in the ordinary course of
      business, but excluding (in each case), Indebtedness incurred through the
      borrowing of money;

            (f) Indebtedness (i) in respect of industrial revenue bonds or other
      similar governmental or municipal bonds, (ii) evidencing the deferred
      purchase price of newly acquired property or incurred to finance the
      acquisition of assets of the U.S. Borrower and its Subsidiaries (pursuant
      to purchase money mortgages or otherwise, whether owed to the seller or a
      third party) used in the ordinary course of business of the U.S. Borrower
      and its Subsidiaries (provided that, such Indebtedness is incurred within
      60 days of the acquisition of such property) and (iii) in respect of
      Capitalized Lease Obligations; provided that, the aggregate amount of all
      Indebtedness outstanding pursuant to this clause shall not at any time
      exceed $10,000,000;

            (g) Indebtedness of any Subsidiary owing to the U.S. Borrower or any
      other Subsidiary, which Indebtedness (i) shall, if payable to the U.S.
      Borrower or a U.S. Subsidiary Guarantor, be evidenced by one or more
      promissory notes in form and

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      substance satisfactory to the U.S. Administrative Agent, duly executed and
      delivered in pledge to the U.S. Administrative Agent pursuant to a Loan
      Document, and shall not be forgiven or otherwise discharged for any
      consideration other than payment in full or in part in cash (provided
      that, only the amount repaid in part shall be discharged); and (ii) if
      incurred by a Subsidiary that is not a U.S. Subsidiary Guarantor owing to
      the U.S. Borrower or a U.S. Subsidiary Guarantor, shall not, when
      aggregated with (x) the amount of Indebtedness incurred under clause (k)
      below with respect to Indebtedness of Foreign Subsidiaries under clause
      (i) below and (y) Investments made by the U.S. Borrower and the U.S.
      Subsidiary Guarantors in Subsidiaries which are not U.S. Subsidiary
      Guarantors under Sections 7.5(e), (i) and (l), exceed $25,000,000; and
      (iii) in addition to the foregoing clause (ii), if incurred by a Canadian
      Subsidiary owing to the U.S. Borrower or a U.S. Subsidiary Guarantor shall
      not exceed the amount permitted under Section 7.5(q);

            (h) unsecured Indebtedness (not evidenced by a note or other
      instrument) of the U.S. Borrower owing to a Subsidiary Guarantor that has
      previously executed and delivered to the U.S. Administrative Agent an
      Interco Subordination Agreement, or a supplement thereto;

            (i) Indebtedness of one or more Foreign Subsidiaries in an amount
      when aggregated with (x) the amount of Indebtedness incurred under clause
      (k) below with respect to Indebtedness of Foreign Subsidiaries under
      clause (g) above and (y) Investments made by the U.S. Borrower and the
      U.S. Subsidiary Guarantors in Subsidiaries which are not U.S. Subsidiary
      Guarantors under Sections 7.5(e), (i) and (l) not to exceed $25,000,000 at
      any one time outstanding;

            (j) Permitted Acquisition Indebtedness in an aggregate amount not to
      exceed $10,000,000 at any one time outstanding;

            (k) unsecured Contingent Obligations by (i) the U.S. Borrower or any
      of its U.S. Subsidiaries of Indebtedness of the U.S. Borrower and its U.S.
      Subsidiaries (and Indebtedness of Foreign Subsidiaries to the extent
      permitted under clause (i) above) and (ii) the Canadian Borrower or any
      Canadian Subsidiary of Indebtedness of the Canadian Borrower and Canadian
      Subsidiaries (and Indebtedness of Foreign Subsidiaries to the extent
      permitted under clause (i) above), in each case, to the extent that such
      Indebtedness is permitted to be incurred under this Section 7.1; provided
      that the aggregate amount of Indebtedness incurred under this clause (k)
      in respect of unsecured Contingent Obligations of Indebtedness of Foreign
      Subsidiaries permitted under clause (i) above when aggregated with the
      aggregate amount of (x) Investments made by the U.S. Borrower and the U.S.
      Subsidiary Guarantors in Subsidiaries which are not U.S. Subsidiary
      Guarantors under Sections 7.5(e), (i), and (l) and (y) intercompany loans
      made pursuant to Section 7.1(g)(ii), shall not exceed the amount set forth
      in Section 7.1(g)(ii);

            (l) Indebtedness representing replacement, renewal, extension,
      refinancing or refunding of the Indebtedness permitted by clauses (a),
      (c), (d), (f) or (j) above; provided that such Indebtedness (plus accrued
      interest or premiums, if any) does not exceed the principal amount of
      outstanding or committed Indebtedness so replaced, renewed, extended,
      refinanced or refunded plus financing fees and other expenses associated

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      therewith; provided further, that (A) such replacing, renewing, extending,
      refinancing or refunding Indebtedness shall have no mandatory repayments
      or redemptions prior to the Indebtedness being replaced, renewed,
      extended, refinanced or refunded and (B) in the case of any replacing,
      renewing, extending, refinancing or refunding of Indebtedness pari passu
      to the Obligations hereunder, the replacing, renewing, extending,
      refinancing or refunding Indebtedness is made pari passu or subordinated
      to the Obligations hereunder and, in the case of any replacing, renewing,
      extending, refinancing or refunding of Indebtedness subordinated to the
      Obligations hereunder, the replacing, extending, refinancing or refunding
      Indebtedness is made subordinate to the Obligations hereunder to
      substantially the same or a greater extent as the Indebtedness replaced,
      renewed, extended, refinanced or refunded;

            (m) other Indebtedness of the U.S. Borrower and its Subsidiaries
      (other than Indebtedness of Foreign Subsidiaries owing to the U.S.
      Borrower or Subsidiary Guarantors) in an aggregate amount at any time
      outstanding not to exceed $40,000,000;

provided that, no Indebtedness otherwise permitted by clauses (f), (g)(ii), (i),
(j), (k), (l) or (m) shall be assumed, created or otherwise incurred if a
Default has occurred and is then continuing or would result therefrom.

      Section 7.2 Limitation on Liens. None of the U.S. Borrower and the
Canadian Borrower will, and will not permit any of its Subsidiaries to, create,
incur, assume or permit to exist any Lien upon any of their property (including
Equity Interests of any Person), revenues or assets, whether now owned or
hereafter acquired, except:

            (a) Permitted Liens;

            (b) until the Closing Date, Liens securing payment of Indebtedness
      of the type described in clause (b) of Section 7.1;

            (c) Liens existing as of the Closing Date and disclosed in Item
      7.2(d) of the Disclosure Schedule securing Indebtedness described in
      Section 7.1(c), and refinancings of such Indebtedness pursuant to Section
      7.1(l); provided, that no such Lien shall encumber any additional property
      and the amount of Indebtedness secured by such Lien is not increased from
      that existing on the Closing Date (as such Indebtedness may have been
      permanently reduced subsequent to the Closing Date);

            (d) Liens securing Indebtedness of the type permitted under Section
      7.1(f) or a refinancing thereof as permitted under Section 7.1(l);
      provided, that (i) such Lien is granted within 90 days after such
      Indebtedness is incurred, (ii) the Indebtedness secured thereby does not
      exceed 80% of the lesser of the cost or the fair market value of the
      applicable property, improvements or equipment at the time of such
      acquisition (or construction) and (iii) such Lien secures only the assets
      that are the subject of the Indebtedness referred to in such clause;

            (e) Liens securing Indebtedness permitted by Section 7.1(j);
      provided, that such Liens existed prior to such Person becoming a
      Subsidiary, were not created in

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      anticipation thereof and attach only to specific tangible assets of such
      Person (and not assets of such Person generally);

            (f) Liens securing Indebtedness of Foreign Subsidiaries up to an
      aggregate amount not to exceed $25,000,000; provided, however, that such
      Liens do not create a security interest in (i) any assets owned by the
      Canadian Borrower or any of its Subsidiaries or (ii) any Collateral;

            (g) Liens securing purchase money indebtedness or floorplan
      financing obligations that are incurred, in each case, in the ordinary
      course of business, in connection with the acquisition of Rental Items and
      game products for resale, as long as Liens are limited to the Rental Items
      and game products so acquired and do not extend to or cover other property
      of Borrower or its Subsidiaries; and

            (h) Liens consisting of rights of set-off of a customary nature or
      bankers' liens on amount of deposit, whether arising by contract or
      operation of law, incurred in the ordinary course of business so long as
      such deposits are not intended as collateral for any obligation.

      Section 7.3 Modification of Certain Agreements. None of the U.S. Borrower
and the Canadian Borrower will, and will not permit any of its Subsidiaries to,
consent to any amendment, supplement, waiver or other modification of, or enter
into any forbearance from exercising any rights with respect to the terms or
provisions (a) of any of the Other Debt Documents, other than any amendment,
supplement, waiver or modification for which no fee that is unreasonable in
amount is payable to the holders of such Indebtedness and which (x) extends the
date or reduces the amount of any required repayment, prepayment or redemption
of the principal of the Indebtedness evidence thereby, (y) extends the date for
payment of the interest, premium (if any) or fees payable on the Indebtedness
evidenced thereby or (z) makes the covenants, events of default or remedies in
respect of the Indebtedness evidence thereby less restrictive on the obligors
thereunder, taken as a whole, as determined by the reasonable judgment of the
applicable Administrative Agent, (b) any of the other Material Transaction
Documents, other than any amendment, supplement, waiver or modification which
would not materially impair, or in any manner be materially adverse to, the
right, interests or obligations of any Secured Party under any Loan Document or
(c) any Organic Document of any Loan Party, other than any amendment,
supplement, waiver or modification which would not materially impair, or in any
manner be materially adverse to, the rights, interests or obligations of any
Secured Party under any Loan Document.

      Section 7.4 Disposition of Assets; Liquidation, Amalgamation or Merger.
(a) Disposition of Assets. None of the U.S. Borrower and the Canadian Borrower
will, and will not permit any of its Subsidiaries to, Dispose of any of such
Borrower's or such Subsidiaries' assets (including accounts receivable and
Equity Interests of Subsidiaries) to any Person in one transaction or series of
transactions unless such Disposition is one of the following:

            (i) an Excluded Disposition;

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            (ii) an Other Permitted Disposition (A) for fair market value (as
      reasonably determined by the board of directors of the U.S. Borrower) and,
      except for any Other Permitted Disposition of the type described in clause
      (a) of the definition thereof, the consideration received consists of no
      less than 75% in cash and (B) the Net Proceeds of which are applied as set
      forth in Section 2.8(a)(ii); or

            (iii) a Disposition (A) for fair market value, (B) the Net Proceeds
      received from such Disposition, together with the Net Proceeds of all
      other assets Disposed of pursuant to this clause since the Closing Date,
      does not exceed (individually or in the aggregate) $150,000,000 (excluding
      any Dispositions of property that such Borrower or such Subsidiary
      acquired pursuant to a Permitted Acquisition so long as such Disposition
      was consummated within 180 days of such Permitted Acquisition or for which
      a definitive contract has been entered into for the Disposition of such
      property within 180 day of such Permitted Acquisition) and (C) the Net
      Proceeds of which are applied as set forth in Section 2.8(a)(ii).

For purposes of this Section 7.4, any Indebtedness or other liabilities (other
than Contingent Liabilities and trade payables) associated with the assets
subject to a Disposition that are irrevocably assumed by the transferee of such
assets shall be deemed to constitute cash.

      (b) Liquidation, Amalgamation or Merger. None of the U.S. Borrower and the
Canadian Borrower will, and will not permit any of its Subsidiaries to,
liquidate or dissolve, consolidate with, amalgamate, or merge into or with, any
other Person; provided that (i) any Person (other than the U.S. Borrower, the
Canadian Borrower or any Subsidiary) may liquidate or dissolve voluntarily into,
and may merge with and into, the U.S. Borrower, the Canadian Borrower or any
Subsidiary, so long as the U.S. Borrower, the Canadian Borrower or such
Subsidiary, as the case may be, is the surviving entity, (ii) any U.S.
Subsidiary may liquidate or dissolve voluntarily into, and may merge with and
into, the U.S. Borrower or any other U.S. Subsidiary (except that a U.S.
Subsidiary Guarantor may only liquidate or dissolve into, or merge with and
into, the U.S. Borrower or another U.S. Subsidiary Guarantor), and the assets or
Equity Interests of any U.S. Subsidiary Guarantor may be purchased or otherwise
acquired by the U.S. Borrower or any other U.S. Subsidiary (except that, the
assets or Equity Interest of any U.S. Subsidiary Guarantor may only be purchased
or otherwise acquired by the U.S. Borrower or another U.S. Subsidiary Guarantor)
and (iii) any Foreign Subsidiary may liquidate or dissolve voluntarily into, and
may merge and/or amalgamate with and into, the U.S. Borrower, the Canadian
Borrower, any U.S. Subsidiary or any other Foreign Subsidiary (except that a
Foreign Subsidiary Guarantor may only liquidate or dissolve into, or merge
and/or amalgamate with and into, the U.S. Borrower, the Canadian Borrower, a
U.S. Subsidiary Guarantor or another Foreign Subsidiary Guarantor), and the
assets or Equity Interests of any Foreign Subsidiary Guarantor may be purchased
or otherwise acquired by the U.S. Borrower, the Canadian Borrower, any U.S.
Subsidiary or any other Foreign Subsidiary (except that, the assets or Equity
Interest of any Foreign Subsidiary Guarantor may only be purchased or otherwise
acquired by the U.S. Borrower, the Canadian Borrower any U.S. Subsidiary
Guarantor or any other Foreign Subsidiary Guarantor); provided, further, that in
no event shall any Subsidiary consolidate with or merge with or amalgamate with
and into any other Subsidiary unless after giving effect thereto, the U.S.
Administrative Agent shall have within 30 days a perfected pledge of, and
security interest in and to, at least the same percentage of the issued and
outstanding interests of

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Equity Interests (on a fully diluted basis) and other assets of the surviving
Person as such Administrative Agent had immediately prior to such merger,
amalgamation or consolidation in form and substance reasonably satisfactory to
the U.S. Administrative Agent and their respective counsel, pursuant to such
documentation and opinions as shall be necessary in the opinion of the
Administrative Agent to create, perfect or maintain the collateral position of
the Secured Parties therein.

      Section 7.5 Investments. None of the U.S. Borrower and the Canadian
Borrower will, and will not permit any of its Subsidiaries to, purchase, make,
incur, assume or permit to exist any Investment in any other Person, except:

            (a) Investments existing on the Closing Date and identified in Item
      7.5(a) of the Disclosure Schedule and Contingent Obligations in respect of
      the Obligations;

            (b) Cash Equivalent Investments;

            (c) Investments received in connection with the bankruptcy or
      reorganization of, or settlement of delinquent accounts and disputes with,
      customers and suppliers, in each case in the ordinary course of business;

            (d) Investments consisting of any deferred portion of the sales
      price received by the U.S. Borrower or any of its Subsidiary in connection
      with any Disposition permitted under Section 7.4(a);

            (e) Investments by way of contributions to capital or purchases of
      Equity Interests (i) by the U.S. Borrower in any Subsidiaries or by any
      Subsidiary in other Subsidiaries; provided that, the aggregate of the
      amount of intercompany loans made pursuant to Section 7.1(g)(ii), the
      amount of Indebtedness incurred under Section 7.1(k) with respect to
      Indebtedness of Foreign Subsidiaries under Section 7.1(i) and Investments
      under this clause made by the U.S. Borrower and U.S. Subsidiary Guarantors
      in Subsidiaries that are not U.S. Subsidiary Guarantors shall not exceed
      the amount set forth in Section 7.1(g)(ii) at any time, or (ii) by any
      Subsidiary in the U.S. Borrower;

            (f) Investments constituting (i) accounts receivable arising, (ii)
      trade debt granted, or (iii) deposits made in connection with the purchase
      price of goods or services, in each case in the ordinary course of
      business;

            (g) Permitted Acquisitions for which the total consideration paid in
      connection with such Permitted Acquisition is less than $5,000,000, so
      long as, before and after giving effect to such Permitted Acquisition the
      U.S. Borrower and its Subsidiaries are in compliance with Section 5.13;

            (h) Permitted Acquisitions for which the total consideration paid in
      connection with such Permitted Acquisition is greater than $5,000,000, so
      long as (i) the aggregate amount of cash consideration paid for all such
      Permitted Acquisitions does not exceed $50,000,000 over the term of this
      Agreement, and (ii) both before and after giving effect to such Permitted
      Acquisition the U.S. Borrower and its Subsidiaries are in compliance with
      Section 5.13 and pro forma compliance with Section 7.13;

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            (i) Investments in the form of unsecured Contingent Obligations to
      the extent permitted under Section 7.1(k);

            (j) the U.S. Borrower and its Subsidiaries may acquire and hold
      receivables or notes owing to it, if created or acquired in the ordinary
      course of business and payable or dischargeable in accordance with
      customary trade terms or acquired as consideration for any asset sale
      permitted under Section 7.4; provided nothing in this clause (j) shall
      prevent the U.S. Borrower or any such Subsidiary from offering such
      concessionary trade terms, or from receiving such Investments, in
      connection with the bankruptcy or reorganization of their respective
      suppliers or customers or the settlement of disputes with such customers
      or suppliers arising in the ordinary course of business, as management
      deems reasonable in the circumstances;

            (k) the U.S. Borrower or any of its Subsidiaries may make travel and
      entertainment advances and relocation and other loans to officers and
      employees of the U.S. Borrower or any of its Subsidiaries; provided that
      the aggregate principal amount of all such loans and advances outstanding
      at any one time shall not exceed $5,000,000 at any one time outstanding;

            (l) Investments in Foreign Subsidiaries (other than those organized
      under any of the laws of Canada and/or Province or Territory thereof) not
      to exceed $25,000,000; provided that the aggregate amount of Investments
      made under this clause (m) when aggregated with (w) the amount of
      Investments in Foreign Subsidiaries under clauses (e) and (i) of this
      Section 7.4(b), (x) Indebtedness of one or more Foreign Subsidiaries
      incurred under Section 7.1(i), (y) intercompany loans made pursuant to
      Section 7.1(g)(ii) and (z) unsecured Contingent Obligations of
      Indebtedness of Foreign Subsidiaries granted under Section 7.1(k), shall
      not exceed the amount set forth in Section 7.1(g)(ii);

            (m) Investments by the U.S. Borrower and its Subsidiaries in any
      Subsidiary or any Person in connection with joint ventures, partnerships
      or similar agreements or arrangements involving the sharing of profits or
      joint or coordinated purchasing or distribution (each a "Joint Venture
      Entity" and, collectively "Joint Venture Entities")) if, and only to the
      extent that, (i) the consideration comprising such Investment is
      contributed to a Joint Venture Entity in exchange for Equity Interests of
      the Joint Venture Entity to which such assets are contributed, (ii) the
      U.S. Borrower and its Subsidiaries shall comply with the provisions of
      Section 5.13 to the extent applicable to Joint Ventures (without giving
      effect to any grace periods provided for therein), (iii) in the case of
      Investments made in the form of cash or Cash Equivalents, the aggregate
      amount of such Investments (determined (x) based on the original cost of
      such Investments and without adjustment to the basis of such Investments
      to recognize earnings or losses after the date of an Investment and (y)
      solely for purposes of this clause (iii) without including the value
      attributable to contributed services) does not exceed $3,000,000, and (iv)
      in the case of Investments made in the form of one or more contributions
      of assets (other than assets constituting cash or Cash Equivalents), at
      the time of such contribution, the assets contributed to such Joint
      Venture Entity, together with the fair market value of all other
      contributions of assets (other than assets constituting cash or Cash
      Equivalents) made

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      pursuant to this clause (iv) (measured as of the respective dates of such
      contributions), shall have a fair market value not exceeding $5,000,000;

            (n) the Canadian Acquisition, so long as, before and after giving
      effect to such Permitted Acquisition (i) no Event of Default has occurred
      and is continuing, (ii) the Administrative Agents have received the
      Canadian Acquisition Transaction Documents (ii) the U.S. Borrower and its
      Subsidiaries are in compliance with Section 5.13 and pro forma compliance
      with Section 7.13;

            (o) other Investments in an amount not to exceed $25,000,000 at any
      time outstanding;

            (p) Investments in respect of the Boards Transaction; and

            (q) Investments in one or more Canadian Subsidiaries in an aggregate
      amount not to exceed $10,000,000 at any one time outstanding;

provided that,

            (r) any Investment which when made complies with the requirements of
      the definition of the term "Cash Equivalent Investment" may continue to be
      held notwithstanding that such Investment if made thereafter would not
      comply with such requirements; and

            (s) no Investment otherwise permitted by clauses (e)(i), (h), (i),
      (k), (l), (m), (n), (o), (p) (unless the Board Transaction occurs pursuant
      to the exercise by Boards, Inc. of its right to require Target to purchase
      certain Hollywoood Video stores pursuant to the terms and conditions of
      the License Agreement) or (q) shall be permitted to be made if any Default
      has occurred and is continuing or would result therefrom.

      Section 7.6 Restricted Payments, etc. None of the U.S. Borrower and the
Canadian Borrower will, and will not permit any of its Subsidiaries to, declare
or make a Restricted Payment, or make any deposit for any Restricted Payment,
other than (a) Restricted Payments made by Subsidiaries to the U.S. Borrower or
Subsidiary Guarantors; (b) Restricted Payments made by Foreign Subsidiaries of
the Canadian Borrower to the Canadian Borrower; (c) so long as no Default then
exists or would result therefrom, Restricted Payments in the form of dividends
made by the U.S. Borrower in respect of common stock in a manner reasonably
consistent with past practice yet in no event shall such dividends exceed
$6,000,000 in the aggregate for any Fiscal Year (provided that, to the extent
that the aggregate of such Restricted Payments made by the U.S. Borrower during
any Fiscal Year (or portion thereof) is less than the maximum amount permitted
to be made for such Fiscal Year, 100% of such unused amount (each such amount
for purposes of this Section, a "carry-forward amount") may be carried forward
to the immediately succeeding Fiscal Year and utilized to make such Restricted
Payments in such succeeding Fiscal Year (it being understood and agreed that no
carry forward amount may be carried beyond the Fiscal Year immediately
succeeding the Fiscal Year in which it arose)); and (d) Restricted Payments in
the form of repurchases of Equity Interests by the U.S. Borrower permitted under
Section 7.9.

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      Section 7.7 Capital Expenditures. Subject (in the case of Capitalized
Lease Obligations) to Section 7.1(f), none of the U.S. Borrower and the Canadian
Borrower will, and will not permit any of its Subsidiaries to make or commit to
make Capital Expenditures (other than Capital Expenditures to the extent funded
from the Net Proceeds of a Disposition or a Casualty Event) in any Fiscal Year
which aggregate in excess of $125,000,000; provided, that such aggregate amount
shall be reduced, dollar for dollar, by any amount paid in connection with
Permitted Acquisitions in excess of $20,000,000 during such Fiscal Year;
provided, however, that, to the extent that Capital Expenditures made by the
U.S. Borrowers and its Subsidiaries during any Fiscal Year (or portion thereof)
are less than the maximum amount permitted to be made for such Fiscal Year, 100%
of such unused amount (each such amount for purposes of this Section 7.7, a
"carry-forward amount") may be carried forward to the immediately succeeding
Fiscal Year and utilized to make Capital Expenditures in such succeeding Fiscal
Year (it being understood and agreed that no carry forward amount may be carried
beyond the Fiscal Year immediately succeeding the Fiscal Year in which it
arose); provided, further, that no Capital Expenditures shall be made or shall
be committed to be made if any Default then exists or would result therefrom.

      Section 7.8 No Prepayment of Subordinated Debt or Pari Passu Debt. None of
the U.S. Borrower and the Canadian Borrower will, and will not permit any of its
Subsidiaries to,

            (a) make any payment or prepayment of principal of, or premium or
      interest on, any Subordinated Debt or Pari Passu Debt other than the
      stated, scheduled date for payment of interest set forth in the applicable
      Other Debt Documents,

            (b) redeem, retire, purchase, defease or otherwise acquire any
      Subordinated Debt or Pari Passu Debt, or

            (c) make any deposit (including the payment of amounts into a
      sinking fund or other similar fund) for any of the foregoing purposes,

in each case, which would otherwise violate the terms of this Agreement or the
applicable Other Debt Documents.

      Section 7.9 Equity Interest. The U.S. Borrower will not permit any
Subsidiary Guarantor (other than a Joint Venture Entity or a Subsidiary not
constituting a Wholly Owned Subsidiary, the investment in which was made
pursuant to Section 7.5(o)) to issue any Equity Interests (whether for value or
otherwise) to any Person other than in the case of Subsidiaries to the U.S.
Borrower or a Subsidiary Guarantor. Neither the U.S. Borrower nor the Canadian
Borrower will, and will not permit any of its Subsidiaries, to become liable in
respect of any obligation (contingent or otherwise) to purchase, redeem, retire,
acquire or make any other payment in respect of any Equity Interests of the U.S.
Borrower or any Subsidiary or any option, warrant or other right to acquire any
such Equity Interests, except that, so long as no Default then exists or would
result therefrom, the U.S. Borrower may repurchase its Equity Interests in an
amount not to exceed $20,000,000 in any Fiscal Year (provided that, to the
extent that the aggregate of such repurchases made by the U.S. Borrower during
any Fiscal Year (or portion thereof) is less than the maximum amount permitted
to be made for such Fiscal Year, 100% of such unused amount (each such amount
for purposes of this Section, a "carry-forward amount")

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<PAGE>

may be carried forward to the immediately succeeding Fiscal Year and utilized to
make such repurchases in such succeeding Fiscal Year (it being understood and
agreed that no carry forward amounts may be carried beyond the Fiscal Year
immediately succeeding the Fiscal Year in which it arose).

      Section 7.10 Transactions with Affiliates. None of the U.S. Borrower and
the Canadian Borrower will, and will not permit any of its Subsidiaries to,
enter into or cause or permit to exist any arrangement, transaction or contract
(including for the purchase, lease or exchange of property or the rendering of
services) with any of its other Affiliates, unless such arrangement, transaction
or contract (i) is on fair and reasonable terms no less favorable to such
Borrower or such Subsidiary than it could obtain in an arm's-length transaction
with a Person that is not an Affiliate, (ii) is of the kind which would be
entered into by a prudent Person in the position of such Borrower or such
Subsidiary with a Person that is not one of its Affiliates.

      Section 7.11 Restrictive Agreements, etc. None of the U.S. Borrower and
the Canadian Borrower will, and will not permit any of its Subsidiaries to,
enter into any agreement prohibiting

            (a) the creation or assumption of any Lien permitted by Section 7.2;

            (b) the ability of any Loan Party to amend or otherwise modify any
      Loan Document; or

            (c) the ability of any Subsidiary to make any payments, directly or
      indirectly, to the relevant Borrower, including by way of dividends,
      advances, repayments of loans, reimbursements of management and other
      intercompany charges, expenses and accruals or other returns on
      investments.

The foregoing prohibitions shall not apply to restrictions: (i) contained in (A)
any Loan Document, (B) in the case of clause (a) above, any agreement governing
any Indebtedness permitted by Sections 7.1(c),(f), or (j) as to the assets
financed with the proceeds of such Indebtedness, (C) in the case of clause (c)
above, any binding agreement imposing restrictions which has been entered into
for the Disposition of Equity Interests permitted by Section 7.4; provided that
such restrictions apply solely to the Equity Interests or assets of such
Subsidiary subject to such Disposition, (D) in the case of clause (c) above, any
Other Debt Document relating to any Pari Passu Debt and (E) in the case of
clauses (a) and (c), any of the following: (w) any agreement of a Foreign
Subsidiary governing the Indebtedness permitted by Section 7.1(g)(ii) or 7.1(i),
(x) any agreement subordinating right of payment of any intercompany obligations
between the U.S. Borrowers and its Subsidiaries to any unsubordinated
Indebtedness permitted by Section 7.1(g), provided that any such intercompany
obligations are subordinated to the Obligations to at least the same extent as
such intercompany obligations are subordinated to other unsubordinated
Indebtedness, (y) customary non-assignment provisions of any contract and
customary provisions restricting assignment of subletting in any lease governing
a leasehold interest of the relevant Borrower or such Subsidiary, and (z)
customary restrictions imposed on the transfer of copyrighted or patented
materials as to the assets financed with the proceeds of such Indebtedness; and
(ii) that exist under or by reason of, in each case, Applicable Law.

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<PAGE>

      Section 7.12 Sale and Leaseback. None of the U.S. Borrower and the
Canadian Borrower will, and will not permit any of its Subsidiaries to, directly
or indirectly enter into any agreement or arrangement providing for the sale or
transfer by it of any property (now owned or hereafter acquired) to a Person and
the subsequent lease or rental of such property or other similar property from
such Person, except (i) the sale-leaseback of the Dothan Headquarters and each
Dothan Distribution Center; provided, that before and after giving effect to
such sale-leaseback transaction no Default has have occurred and be continuing.

      Section 7.13 Financial Covenants. The U.S. Borrower will not permit:

            (a) the Leverage Ratio as of the last day of any Fiscal Quarter
      occurring during any period set forth below to be greater than the ratio
      set forth opposite such period:

<TABLE>
<CAPTION>
                                                  Leverage
          Measuring Period                          Ratio
-----------------------------------             ------------
<S>                                             <C>
 The Third Quarter of 2005 through              3.40 to 1.00
and including the Fourth Quarter of
                2005

 The First Quarter of 2006 through              3.00 to 1.00
 and including the Third Quarter of
                2006

     The Fourth Quarter of 2006                 2.50 to 1.00

 The First Quarter of 2007 through              2.25 to 1.00
 and including the Third Quarter of
                2007

   The Fourth Quarter of 2007 and               2.00 to 1.00
             thereafter
</TABLE>

            (b) the Fixed Charge Coverage Ratio as of the last day of any Fiscal
      Quarter to be less than 1.10 to 1.00.

            (c) the Interest Coverage Ratio as of the last day of any Fiscal
      Quarter to be less 3.00 to 1.00.

      Section 7.14 Pension Plan. None of the U.S. Borrower and the Canadian
Borrower will, and will not permit any of its Subsidiaries to, (a) permit the
assets of any of its respective Plans to be less than the amount necessary to
provide all accrued benefits under such Plans on an ongoing basis, or (b) enter
into any Multiemployer Plan.

      Section 7.15 Speculative Transactions. None of the U.S. Borrower and the
Canadian Borrower will, and will not permit any of its Subsidiaries to, engage
in any transaction involving commodity options or futures contracts or any
similar speculative transactions.

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<PAGE>

      Section 7.16 Change to Fiscal Year. The U.S. Borrower will not change its
Fiscal Year.

                                  ARTICLE VIII

                                     DEFAULT

      Section 8.1 Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:

            (a) Any Borrower (i) shall default in the payment of any principal
      amount of the Loans, or (ii) shall default in the payment of any interest,
      fees or other amounts payable to the Lender Parties, the Administrative
      Agents, or any of them, when due, and such Default, in the case of this
      clause (ii), shall not be cured by payment in full within three (3)
      Business Days;

            (b) Any Borrower shall default in the performance or observance of
      any agreement or covenant contained in (i) Section 5.1(a), 5.5, 5.6, 5.9,
      5.11, 6.5 or Article 7 hereof or (ii) Section 6.1, 6.2, 6.3 or 6.4 hereof
      and, with respect to this clause (ii), such default shall not be cured
      within a period of ten (10) days from the date of occurrence of such
      default;

            (c) Any Borrower shall default in the performance or observance of
      any other agreement or covenant contained in this Agreement not
      specifically referred to in clauses (a) through (c) of this Section 8.1,
      and such default shall not be cured within a period of thirty (30) days
      from the date of occurrence of such default;

            (d) There shall occur any default in the performance or observance
      of any agreement or covenant contained in any of the Loan Documents (other
      than this Agreement or as otherwise provided in this Section 8.1) by any
      Loan Party, or any other obligor thereunder, which shall not be cured
      within a period of thirty (30) days from the occurrence of such default;

            (e) Any representation or warranty made by any Loan Party under this
      Agreement or any other Loan Document shall prove to be incorrect or
      misleading in any material respect when made, or when deemed to be made
      pursuant to Section 4.2 hereof;

            (f) There shall be entered and remain unstayed a decree or order for
      relief in respect of the U.S. Borrower or any of its Material Subsidiaries
      under Title 11 of the United States Code as now constituted or hereafter
      amended, or any other applicable Federal or state bankruptcy law or other
      similar law, or appointing a receiver, liquidator, assignee, trustee,
      custodian, sequestrator or similar official of the U.S. Borrower or any of
      its Material Subsidiaries, or of any substantial part of their respective
      properties, or ordering the winding-up or liquidation of the affairs of
      the U.S. Borrower or any of its Material Subsidiaries; or an involuntary
      petition shall be filed or case commenced against the U.S. Borrower or any
      of its Material Subsidiaries and a temporary stay entered, and

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<PAGE>

      (i) such petition and stay shall not be diligently contested, or (ii) such
      petition and stay shall continue undismissed for a period of sixty (60)
      consecutive days;

            (g) The U.S. Borrower or any of its Material Subsidiaries shall file
      a petition, answer or consent seeking relief under Title 11 of the United
      States Code, as now constituted or hereafter amended, or any other
      applicable Federal or state bankruptcy law or other similar law, or the
      U.S. Borrower or any of its Material Subsidiaries shall consent to the
      institution of proceedings thereunder or to the filing of any such
      petition or shall seek or consent to the appointment or taking of
      possession of a receiver, liquidator, assignee, trustee, custodian,
      sequestrator or other similar official of the U.S. Borrower or any of its
      Material Subsidiaries, or of any substantial part of their respective
      properties, or the U.S. Borrower or any of its Material Subsidiaries shall
      fail generally to pay their respective debts as they become due, or the
      U.S. Borrower or any of its Material Subsidiaries shall take any action in
      furtherance of any such action;

            (h) A final, non-appealable judgment (not insured under a policy
      which covers in full the payment of such judgment (subject to a customary
      deductible) by insurance maintained with responsible insurance companies)
      shall be entered by any court against the U.S. Borrower or any of its
      Material Subsidiaries for the payment of money which exceeds singly or in
      the aggregate with other such judgments, $25,000,000, or a warrant of
      attachment or execution or similar process shall be issued or levied
      against property of the U.S. Borrower or any of its Subsidiaries which,
      together with all other such property of the U.S. Borrower or any of its
      Subsidiaries subject to other such process, exceeds in value $25,000,000
      in the aggregate, and if, within thirty (30) days after the entry, issue
      or levy thereof, such judgment, warrant or process shall not have been
      paid or discharged, bonded or stayed pending appeal, or if, after the
      expiration of any such stay, such judgment, warrant or process shall not
      have been paid, discharged, bonded or reduced to an amount less than
      $10,000,000;

            (i) a petition, case or proceeding under the bankruptcy laws of
      Canada or similar laws of any foreign jurisdiction now or hereafter in
      effect or under any insolvency, arrangement, reorganization, moratorium,
      receivership, readjustment of debt, dissolution or liquidation law or
      statute of any jurisdiction now or hereafter in effect (whether at law or
      in equity) is filed or commenced against the Canadian Borrower, or any
      Canadian Subsidiary of the US Borrower, or all or any part of their
      properties, as applicable, and such petition or application is not
      dismissed within thirty (30) days after the date of its filing or the
      Canadian Borrower or any Canadian Subsidiary of the US Borrower, as
      applicable shall file any answer admitting or not contesting such petition
      or application or indicates its consent to, acquiescence in or approval
      of, any such action or proceeding or the relief requested is granted
      sooner;

            (j) a petition, case or proceeding under the bankruptcy laws of
      Canada or similar laws of any foreign jurisdiction now or hereafter in
      effect or under any insolvency, arrangement, reorganization, moratorium,
      receivership, readjustment of debt, dissolution or liquidation law or
      statute of any jurisdiction now or hereafter in effect (whether at a law
      or equity) is filed or commenced by the Canadian Borrower or any Canadian
      Subsidiary of the U.S. Borrower, for all or any part of their property, as

                                      122
<PAGE>

      applicable, including, without limitation, if the Canadian Borrower or any
      Canadian Subsidiary of the US Borrower shall:

                  (i) apply for or consent to the appointment of a receiver,
            trustee or liquidator of it or of all or a substantial part of its
            property and assets;

                  (ii) be unable, or admit in writing its inability, to pay its
            debts as they mature, or commit any other act of bankruptcy;

                  (iii) make a general assignment for the benefit of creditors;

                  (iv) file a voluntary petition or assignment in bankruptcy or
            a proposal seeking a reorganization, compromise, moratorium or
            arrangement with its creditors;

                  (v) take advantage of any insolvency or other similar law
            pertaining to arrangements, moratoriums, compromises or
            reorganizations, or admit the material allegations of a petition or
            application filed in respect of it in any bankruptcy, reorganization
            or insolvency proceeding; or

                  (vi) take any corporate action for the purpose of effecting
            any of the foregoing;

            (k) a requirement from the Minister of National Revenue for payment
      pursuant to Section 224 or any successor section of the Tax Act or Section
      317, or any successor section or any other Person in respect of the
      Canadian Borrower or any Canadian Subsidiary of the US Borrower, of the
      Excise Tax Act (Canada) or any comparable provision of similar legislation
      shall have been received by Canadian Administration Agent or any other
      Person in respect of the Canadian Borrower or any Canadian Subsidiary of
      the US Borrower, or otherwise issued in respect of the Canadian Borrower
      or any Canadian Subsidiary of the US Borrower;

            (l) Any of the following events shall occur with respect to any U.S.
      Pension Plan or U.S. Multiemployer Plan: (A) the institution of any steps
      by the U.S. Borrower, any member of the Controlled Group or any other
      Person to terminate a U.S. Pension Plan if, as a result of such
      termination, the U.S. Borrower or any such member is required to make a
      contribution to such U.S. Pension Plan, or could reasonably be expected to
      incur a liability or obligation to such U.S. Pension Plan, in an amount in
      excess of $25,000,000, (B) a contribution failure occurs with respect to
      any U.S. Pension Plan sufficient to give rise to a Lien under Section
      302(f) of ERISA in an amount in excess of $25,000,000 or (C) the complete
      or partial withdrawal of any of the U.S. Borrower or any member of the
      Controlled Group from a U.S. Multiemployer Plan that results in or could
      reasonably be likely to result in withdrawal liability of the U.S.
      Borrower or any of its Subsidiaries in an amount in excess of $25,000,000
      or a Material Adverse Effect;

            (m) Any of the following events shall occur with respect to any
      Canadian Pension Plan or Canadian Welfare Plan: (A) the institution of any
      steps by the U.S. Borrower, a Subsidiary or any other Person to terminate
      any Canadian Pension Plan if, as

                                      123
<PAGE>

      a result of such termination, the U.S. Borrower or any of its Subsidiary
      is required to make an additional contribution to such Canadian Pension
      Plan, or could reasonably be expected to incur a liability or obligation
      to such Canadian Pension Plan, in an amount in excess of $25,000,000; (B)
      a contribution failure occurs with respect to any Canadian Pension Plan in
      an amount in excess of $25,000,000; (C) the taking of any action with
      respect to a Canadian Pension Plan which could reasonably be likely to
      result in the requirement that the U.S. Borrower or any of its
      Subsidiaries furnish a bond or other security to such Canadian Pension
      Plan or any applicable regulatory authority that, individually or in the
      aggregate could reasonably be expected to result in a Material Adverse
      Effect, or (D) the occurrence of any event with respect to any Canadian
      Pension Plan that results in or could reasonably be likely to result in
      the incurrence by the U.S. Borrower or any of its Subsidiaries of any
      liability, fine or penalty, or any increase in a liability, including
      without limitation a contingent liability, of the U.S. Borrower or any of
      its Subsidiaries in an amount in excess of $5,000,000 with respect to any
      Canadian Pension Plan or Canadian Welfare Plan benefit;

            (n) There shall occur (i) any default under any Pari Passu Debt, or
      any other Indebtedness (other than the Loans) of the U.S. Borrower or any
      of its Subsidiaries in an aggregate principal amount exceeding $25,000,000
      at maturity and which default shall continue unremedied for any applicable
      period of time sufficient to allow the holder of such Indebtedness to
      accelerate the maturity of such Indebtedness; or (ii) any default under
      any Hedge Agreement having a notional principal amount $10,000,000 or
      more;

            (o) Any Security Document or any Note or any other Loan Document or
      any material provision thereof shall at any time and for any reason be
      declared by a court of competent jurisdiction to be null and void, or a
      proceeding shall be commenced by the U.S. Borrower or any of its
      Subsidiaries, or by any governmental authority having jurisdiction over
      the U.S. Borrower or any of its Subsidiaries, seeking to establish the
      invalidity or unenforceability thereof (exclusive of questions of
      interpretation of any provision thereof), or the U.S. Borrower or any of
      its Subsidiaries shall deny that it has any liability or obligation for
      the payment of principal or interest or other obligations purported to be
      created under any Loan Document;

            (p) Any Security Document shall for any reason fail or cease to
      create, or the U.S. Borrower or any of its Subsidiaries shall contest in
      any manner that any Security Document creates, a valid and first-priority
      Lien on or Security Interest in any material portion of the Collateral
      purported to be covered thereby, subject to any Permitted Lien, or any
      such Lien or Security Interest shall cease to be perfected (except if such
      failure results from the U.S. Administrative Agent's failure to file any
      UCC-3 continuation statement in the appropriate jurisdiction or to
      maintain possession or control of such portion of the Collateral as a
      result of a sale or assignment of such Collateral by any Administrative
      Agent), or the U.S. Borrower or any of its Subsidiaries shall contest in
      any manner the perfection of such Lien or Security Interest;

            (q) There shall be a Change of Control; or

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<PAGE>

            (r) Unless otherwise waived or consented to by the Majority Lenders,
      the subordination provisions relating to any Subordinated Debt (the
      "Subordination Provisions") shall fail to be enforceable by the Secured
      Parties or any of them in material accordance with the terms thereof or
      the monetary Obligations shall fail to constitute "Senior Indebtedness"
      (or a similar term) referring to the Obligations; or any Credit Party
      shall disavow or contest in any manner, or shall support or fail to
      contest any holder of Subordinated Debt which disavows or contests in any
      manner, (i) the effectiveness, validity or enforceability of any of the
      material Subordination Provisions, (ii) that the Subordination Provisions
      exist for the benefit of the Secured Parties or (iii) that all payments of
      principal of or premium and interest on the Subordinated Debt, or realized
      from the liquidation of any property of any Credit Party, shall be subject
      to any of such Subordination Provisions.

      Section 8.2 Remedies. (a) If an Event of Default specified in Section 8.1
(other than an Event of Default under Section 8.1(f), (g), (h), (i), or (j))
shall have occurred and shall be continuing, the U.S. Administrative Agent, at
the request of the Majority Lenders, may formally declare that an Event of
Default has occurred and, at the request of the Majority Lenders, may (i)
terminate all or any portion of the Commitments of each Lender Party and the
obligation of each Lender Party to make Advances (other than in respect of
purchases of participations in Swing Line Loans pursuant to Section 2.2(f) or
Letter of Credit Loans by Issuing Banks or a Revolving Lender pursuant to
Section 2.2(g)(ii)) and of the Issuing Banks to issue Letters of Credit and (ii)
declare the principal of and interest on the Loans and any Notes and all other
amounts owed to the Lender Parties and the U.S. Administrative Agent under this
Agreement and any Notes and any other Obligations to be forthwith due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived, anything in this Agreement or in the Notes or any
other Loan Document to the contrary notwithstanding, and the Commitments shall
thereupon forthwith terminate and all such amounts shall be immediately due and
payable.

      (b) Upon the occurrence and continuance of an Event of Default specified
in Section 8.1(f), (g), (h), (i), or (j), all principal, interest and other
amounts due hereunder and under any Notes, and all other Obligations, shall
thereupon and concurrently therewith become due and payable, the Commitments of
each Lender Party and the obligation of each Lender Party to make Advances
(other than in respect of purchases of participations in Swing Line Loans
pursuant to Section 2.2(f) or Letter of Credit Loans by the Issuing Banks or a
Revolving Lender pursuant to Section 2.2(g)(ii)) and of the Issuing Banks to
issue Letters of Credit shall forthwith terminate and the principal amount of
the Loans outstanding hereunder shall bear interest at the Default Rate, all
without any action by any Administrative Agent, the Lender Parties or the
Majority Lenders or any of them and without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in this
Agreement or in the other Loan Documents to the contrary notwithstanding.

      (c) Upon acceleration of the Obligations, as provided in clause (a) or (b)
of this Section 8.2, the Administrative Agents and the Lender Parties shall have
all of the post-default rights granted to them, or any of them, under the Loan
Documents and under Applicable Law.

                                      125
<PAGE>

      (d) Upon acceleration of the Obligations, as provided in clause (a) or (b)
of this Section 8.2, the U.S. Administrative Agent, upon request of the Majority
Lenders, shall have the right to the appointment of a receiver for the
properties and assets of the Loan Parties, both to operate and to sell such
properties and assets, and the U.S. Borrower, for itself and on behalf of its
Subsidiaries, hereby consents to such right and such appointment and hereby
waives any objection any Loan Party may have thereto or the right to have a bond
or other security posted by the U.S. Administrative Agent on behalf of the
Secured Parties, in connection therewith.

      (e) The rights and remedies of the Administrative Agents and the Lender
Parties hereunder shall be cumulative and not exclusive.

      Section 8.3 Payments Subsequent to Declaration of Event of Default.
Subsequent to the acceleration of the Loans under Section 8.2 hereof, payments
and prepayments under this Agreement made to any of any Administrative Agent,
the Lender Parties or otherwise received by any of such Persons (from
realization on Collateral for the Obligations or otherwise) shall be paid over
to relevant Administrative Agent (if necessary) and distributed by such
Administrative Agent as follows: first, to reimburse the reasonable costs and
expenses, if any, incurred in connection with the collection of such payment or
prepayment including, without limitation, any reasonable costs incurred by any
of them in connection with the sale or disposition of any Collateral for the
Obligations; second, to make distributions in accordance with Section 2.10(c)
and (d); and third, upon satisfaction in full of all Obligations, to the U.S.
Borrower or as otherwise required by law.

      Section 8.4 Actions in Respect of the Letters of Credit and Canadian BA
upon Default. If any Event of Default shall have occurred and be continuing, the
U.S. Administrative Agent may, or shall at the request of the Majority Lenders,
irrespective of whether it is taking any of the actions described in Section 8.2
or otherwise, make demand upon each of the Borrowers to, and forthwith upon such
demand such Borrower will, pay to the relevant Administrative Agent on behalf of
the Lender Parties in same day funds at the relevant Administrative Agent's
office designated in such demand, for deposit in the relevant L/C Collateral
Account, an amount equal to the aggregate Available Amount of all relevant
Letters of Credit then outstanding. If at any time the U.S. Administrative Agent
determines that any funds held in any L/C Collateral Account are subject to any
right or claim of any Person other than the relevant Agents and the relevant
Lender Parties or that the total amount of such funds is less than the aggregate
Available Amount of all relevant Letters of Credit, the relevant Borrower will,
forthwith upon demand by the relevant Administrative Agent, pay to the relevant
Administrative Agent, as additional funds to be deposited and held in the
relevant L/C Collateral Account, an amount equal to the excess of (a) such
aggregate Available Amount over (b) the total amount of funds, if any, then held
in the relevant L/C Collateral Account that the U.S. Administrative Agent
determines to be free and clear of any such right and claim. Upon the drawing of
any Letter of Credit for which funds are on deposit in the relevant L/C
Collateral Account, such funds shall be applied to reimburse the relevant
Issuing Bank or relevant Revolving Lenders, as applicable, to the extent
permitted by applicable law.

                                      126
<PAGE>

                                   ARTICLE IX

                                   THE AGENTS

      Section 9.1 Appointment and Authorization. Each Lender (in its capacities
as a Lender and an Issuing Bank (if applicable)) hereby irrevocably appoints and
authorizes, and hereby agrees that it will require any transferee of any of its
interest in its Loans irrevocably to appoint and authorize, the relevant
Administrative Agent to take such actions as its agent on its behalf and to
exercise such powers hereunder and under the Security Documents as are delegated
by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. Neither Administrative Agent nor any of their respective
directors, officers, employees or agents shall be liable for any action taken or
omitted to be taken by it or them hereunder or in connection herewith, except
for its or their own gross negligence or willful misconduct.

      Section 9.2 Interest Holders. Each Administrative Agent may treat each
relevant Lender Party, or the Person designated in the last notice filed with
such Administrative Agent, whether under Section 12.1, Section 12.5, or
otherwise hereunder, as the holder of all of the interests of such Lender Party
in its Loans and Commitments until written notice of transfer, signed by such
Lender Party (or the Person designated in the last notice filed with such
Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to such Administrative Agent, shall
have been filed with such Administrative Agent.

      Section 9.3 Consultation with Counsel. Each Administrative Agent may
consult with legal counsel selected by it with due care (which may include
counsel to the Borrowers) and shall not be liable for any action taken or
suffered by it in good faith in consultation with the Majority Lenders and in
reasonable reliance on such consultations.

      Section 9.4 Documents. No Administrative Agent shall be under any duty to
examine, inquire into, or pass upon the validity, effectiveness or genuineness
of this Agreement, any Note, any other Loan Document, or any other instrument,
document or communication furnished pursuant hereto or in connection herewith,
and each Administrative Agent shall be entitled to assume (absent knowledge to
the contrary) that they are valid, effective and genuine, have been signed or
sent by the proper parties and are what they purport to be.

      Section 9.5 Administrative Agents and Affiliates. With respect to its
Commitments, the Loans made by it and the Notes issued to it, if any, each
Administrative Agent in its individual capacity shall have the same rights and
powers under the Loan Documents as any other Lender Party and may exercise the
same as though it were not an agent; and the term "Lender Party" or "Lender
Parties" shall, unless otherwise expressly indicated, include each such Person
in its individual capacity. Each Administrative Agent and its Affiliates may
accept deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person that may do
business with or own securities of any Loan Party or any such Subsidiary, all as
if such Person was not an agent and without any duty to account therefor to the
Lender Parties. No Agent shall have any duty to disclose any information
obtained or received by it or any of its Affiliates relating to any Loan Party
or any of its Subsidiaries to the extent such information was obtained or
received in any capacity other than as such Agent.

                                      127
<PAGE>

      Section 9.6 Responsibility of the Administrative Agents. The duties and
obligations of each Administrative Agent under this Agreement and the Security
Documents are only those expressly set forth in this Agreement and the Security
Documents. Each Administrative Agent shall be entitled to assume that no Default
has occurred and is continuing unless it has actual knowledge, or has been
notified by a Borrower, of such fact, or has been notified by a Lender Party in
writing that such Lender Party considers that a Default has occurred and is
continuing, and such Lender Party shall specify in detail the nature thereof in
writing. No Administrative Agent shall be liable hereunder for any action taken
or omitted to be taken except for its own gross negligence or willful
misconduct. Each Administrative Agent shall provide promptly each Lender Party
with copies of such documents received from any Borrower in connection with this
Agreement as such Lender Party may reasonably request.

      Section 9.7 Collateral and Guaranty Matters. (a) Each Administrative
Agent, as collateral agent hereunder and under its Security Documents, is hereby
authorized to act on behalf of the relevant Secured Parties, in its own capacity
and through other agents and sub-agents appointed by it with due care, under
such Security Documents. In connection with its role as secured party with
respect to the Collateral hereunder, each Administrative Agent shall act as
collateral agent, for itself and for the ratable benefit of the relevant Secured
Parties, and such role as administrative agent shall be disclosed on all
appropriate accounts, certificates, filings, mortgages, and other Collateral
documentation.

      (b) The Lender Parties irrevocably authorize each Administrative Agent,
and each Administrative Agent hereby agrees it will take such reasonable actions
as may be reasonably required:

            (i) to release any Lien on any property granted to or held by such
      Administrative Agent under any Loan Document (A) upon termination of the
      Commitments and payment in full of all Obligations (other than contingent
      indemnification obligations) and the expiration or termination of all
      Letters of Credit, (B) that is sold or to be sold as part of or in
      connection with any sale consummated as permitted hereunder or under any
      other Loan Document, or (C) subject to Section 12.12, if approved,
      authorized or ratified in writing by the Majority Lenders (or, if required
      under Section 12.12(b)(iii) hereof, all Lender Parties); and

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

      Upon request by an Administrative Agent at any time, the Majority Lenders
(or where required under Section 12.12, all Lender Parties) will confirm in
writing such Administrative Agent's authority to release or subordinate its
interest in particular types or items of property, or to release any Subsidiary
Guarantor from its obligations under the Subsidiary Guaranty pursuant to this
Section 9.7.

      Section 9.8 Action by the Administrative Agents. (a) Each Administrative
Agent shall be entitled to use its discretion with respect to exercising or
refraining from exercising any rights which may be vested in it by, and with
respect to taking or refraining from taking any action or

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actions which it may be able to take under or in respect of, this Agreement,
unless the applicable Administrative Agent shall have been instructed by the
Majority Lenders to exercise or refrain from exercising such rights or to take
or refrain from taking such action. No Administrative Agent shall incur any
liability under or in respect of this Agreement with respect to anything which
it may do or refrain from doing in the reasonable exercise of its judgment or
which may seem to it to be necessary or desirable in the circumstances for the
protection of the interests of the Lender Parties, except for its gross
negligence or willful misconduct as determined by a final, non-appealable order
of a court having jurisdiction over the subject matter.

      (b) In any event, no Administrative Agent shall be liable to the Lenders
or to any Lender in acting or refraining from acting under this Agreement or any
other Loan Document in accordance with the instructions of the Majority Lenders
or of all the Lenders, where expressly required by this Agreement, and any
action taken or failure to act pursuant to such instructions shall be binding on
all Lenders.

      Section 9.9 Notice of Default or Event of Default. In the event that any
Administrative Agent or any Lender Party shall acquire actual knowledge, or
shall have been notified, of any Default (other than through a notice by one
party hereto to all other parties), such Administrative Agent shall promptly
notify each Lender Party and the other Administrative Agent or such Lender Party
shall promptly notify each Administrative Agent, as applicable, and each
Administrative Agent shall take such action and assert such rights under this
Agreement as the Majority Lenders or of all the Lenders, where expressly
required by this Agreement, shall request in writing, and no Administrative
Agent shall be subject to any liability by reason of its acting pursuant to any
such request. If the Majority Lenders shall fail to request any Administrative
Agent to take action or to assert rights under this Agreement in respect of any
Default within ten (10) days after their receipt of the notice of any Default
from any Administrative Agent or any Lender Party, or shall request inconsistent
action with respect to such Default, each Administrative Agent may, but shall
not be required to, take such action and assert such rights as it deems in its
discretion to be advisable for the protection of the Lender Parties.

      Section 9.10 Responsibility Disclaimed. No Administrative Agent shall be
under any liability or responsibility whatsoever as Administrative Agent:

            (a) To any Loan Party or any other Person as a consequence of any
      failure or delay in performance by or any breach by, any Lender Party or
      Lender Parties of any of its or their obligations under this Agreement;

            (b) To any Lender Party or Lender Parties, as a consequence of any
      failure or delay in performance by, or any breach by, any Loan Party or
      any other Obligor of any of its obligations under this Agreement or any
      Notes or any other Loan Document; or

            (c) To any Lender Party or Lender Parties, for any statements,
      representations or warranties in this Agreement, or any other document
      contemplated by this Agreement or any other Loan Document, or any
      information provided pursuant to this Agreement, any other Loan Document,
      or any other document contemplated by this Agreement, or

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      for the validity, effectiveness, enforceability or sufficiency of this
      Agreement, any Notes, any other Loan Document, or any other document
      contemplated by this Agreement.

            (d) To any Lender Party for the due execution, legality, validity,
      enforceability, genuineness, sufficiency or value of, or the perfection or
      priority of any lien or security interest created or purported to be
      created under or in connection with, any Loan Document or any other
      instrument or document furnished pursuant thereto.

            (e) Under or in respect of any Loan Document by acting upon any
      notice, consent, certificate or other instrument or writing (which may be
      by telegram, telecopy or telex) believed by it to be genuine and signed or
      sent by the proper party or parties.

      Section 9.11 Indemnification. (a) Each Lender Party severally agrees to
indemnify each Agent (to the extent not promptly reimbursed by the Borrowers and
without limiting the Borrowers' obligation to do so) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Agent in any way relating to
or arising out of the Loan Documents or any action taken or omitted by such
Agent under the Loan Documents (collectively, the "Indemnified Costs"); provided
that no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction. Without limitation of the foregoing, each Lender Party
agrees to reimburse each Agent promptly upon demand for its ratable share of any
costs and expenses (including, without limitation, reasonable fees and expenses
of counsel) payable by the Borrowers under Section 12.2, to the extent that such
Agent is not promptly reimbursed for such costs and expenses by the Borrowers.
In the case of any investigation, litigation or proceeding giving rise to any
Indemnified Costs, this Section 9.11 applies whether any such investigation,
litigation or proceeding is brought by any Lender Party or any other Person.

      (b) Each Revolving Lender severally agrees to indemnify the relevant
Issuing Bank (to the extent not promptly reimbursed by the Borrowers) from and
against such Revolving Lender's ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the relevant
Issuing Bank in any way relating to or arising out of the Loan Documents or any
action taken or omitted by the relevant Issuing Bank under the Loan Documents;
provided that no Revolving Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the relevant Issuing Bank's
gross negligence or willful misconduct as found in a final, non-appealable
judgment by a court of competent jurisdiction. Without limitation of the
foregoing, each Revolving Lender agrees to reimburse the relevant Issuing Bank
promptly upon demand for its ratable share of any costs and expenses (including,
without limitation, fees and expenses of counsel) payable by the Borrowers under
Section 12.2, to the extent that the relevant Issuing Bank is not promptly
reimbursed for such costs and expenses by the Borrowers.

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      (c) For purposes of this Section 9.11, the Lender Parties' respective
ratable shares of any amount shall be determined, with respect to any time
deemed appropriate by such Agent, according to the sum of (i) the aggregate
principal amount of the Loans outstanding at such time and owing to the
respective Lender Parties, (ii) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time and
(iii) the aggregate unused portions of their respective Revolving Commitments at
such time; provided that the aggregate principal amount of Swing Line Loans,
Letter of Credit Loans owing to the relevant Issuing Bank shall be deemed "owed
to" the Revolving Lenders ratably in accordance with their respective Revolving
Commitments. The failure of any Lender Party to reimburse any Agent or any
Issuing Bank, as the case may be, promptly upon demand for its ratable share of
any amount required to be paid by the Lender Parties to such Agent or such
Issuing Bank, as the case may be, as provided herein shall not relieve any other
Lender Party of its obligation hereunder to reimburse such Agent or such Issuing
Bank, as the case may be, for its ratable share of such amount, but no Lender
Party shall be responsible for the failure of any other Lender Party to
reimburse such Agent or such Issuing Bank, as the case may be, for such other
Lender Party's ratable share of such amount. Without prejudice to the survival
of any other agreement of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 9.11 shall survive
the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.

      Section 9.12 Credit Decision. Each Lender Party represents and warrants to
each other Lender Party and to each Agent that:

            (a) In making its decision to enter into this Agreement and to make
      its Advances it has independently taken whatever steps it considers
      necessary to evaluate the financial condition and affairs of the Loan
      Parties and that it has made an independent credit judgment, and that it
      has not relied upon any Agent, or any other Lender Party, or information
      provided by any Agent (other than information provided to the Agents by
      the Loan Parties and forwarded by the Agents to the Lender Parties); and

            (b) So long as any portion of the Obligations remains outstanding,
      it will continue to make its own independent evaluation of the financial
      condition and affairs of the Loan Parties.

      Section 9.13 Successor Administrative Agents. (a) Resignation. Subject to
the appointment and acceptance of a successor Administrative Agent as provided
below, any Administrative Agent may resign at any time by giving written notice
thereof to the Lender Parties, the Borrowers and the other Administrative Agent.
Upon any such resignation, the Majority Lenders shall have the right, with the
approval of the applicable Borrower if no Default has occurred and is
continuing, such approval not to unreasonably withheld, to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Majority Lenders and the applicable Borrower if no Default has
occurred and is continuing, and shall have accepted such appointment within
thirty (30) days after the retiring Administrative Agent gives notice of
resignation, then the retiring Administrative Agent may, on behalf of the Lender
Parties, appoint a successor Administrative Agent which shall be any Lender
Party or a commercial bank organized under the laws of the United States of
America or any political subdivision thereof which has combined capital and
reserves in excess of

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$250,000,000. Upon the acceptance of any appointment as an Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges, duties and obligations of the retiring Administrative Agent and the
retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Article
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as an Administrative Agent.

      (a) General. If within 45 days after written notice is given of the
retiring Administrative Agent's resignation under this Section 9.13 no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative Agent's
resignation shall become effective, (ii) the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Majority Lenders shall thereafter perform all duties of the
retiring Administrative Agent under the Loan Documents until such time, if any,
as the Majority Lenders appoint a successor Administrative Agent as provided
above. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent shall have become effective, the provisions of this Article
9 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Agreement.

      Section 9.14 Delegation of Duties. Each Administrative Agent may execute
any of its respective duties under the Loan Documents by or through agents or
attorneys selected by it using reasonable care, and shall be entitled to advice
of counsel concerning all matters pertaining to such duties.

      Section 9.15 Additional Agents. None of the Lender Parties or other
entities identified on the facing page of, signature pages of or elsewhere in
this Agreement as a "syndication agent," "co-documentation agents," "sole
bookrunning manager" or "sole lead arranger" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement or any other
Loan Document other than those applicable to all Lender Parties as such. Without
limiting the foregoing, none of the Lender Parties so identified shall have or
be deemed to have any fiduciary relationship with any other Lender Party. Each
Lender Party acknowledges that it has not relied, and will not rely, on any of
the Lender Parties or other entities so identified in deciding to enter into
this Agreement or any other Loan Document or in taking or not taking action
hereunder or thereunder.

      Section 9.16 Administrative Agents May File Proofs of Claim. (a) In case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, each Administrative Agent (irrespective
of whether the principal of any Advance or Letter of Credit shall then be due
and payable as herein expressed or by declaration or otherwise and irrespective
of whether such Administrative Agent shall have made any demand on any Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:

            (i) to file and prove a claim for the whole amount of the principal
      and interest owing and unpaid in respect of the Advances, Letters of
      Credit Agreement and all other

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      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 Lender
      Parties and the Administrative Agents (including any claim for the
      reasonable compensation, expenses, disbursements and advances of the
      Lender Parties and the Administrative Agents and their respective agents
      and counsel and all other amounts due the Lender Parties and the
      Administrative Agents under Sections 2.3, 2.5 and 12.2) allowed in such
      judicial proceeding; and

            (ii) 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 Party to make such payments to such Administrative Agent and, in the
event that such Administrative Agent shall consent to the making of such
payments directly to the Lender Parties, to pay to such Administrative Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of such Administrative Agent and its agents and counsel, and any other amounts
due such Administrative Agent under Sections 2.5 and 12.2.

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

                                   ARTICLE X

                             CHANGE IN CIRCUMSTANCES
                          AFFECTING FIXED RATE ADVANCES

      Section 10.1 Eurodollar Basis Determination Inadequate or Unfair;
Circumstances Making Canadian BA Unavailable. (a) If with respect to any
proposed Eurodollar Advance for any Interest Period, any Administrative Agent
determines after consultation with the relevant Lenders that deposits in the
relevant Currency (in the applicable amount) are not being offered to each of
such Lenders in the relevant market for such Interest Period, such
Administrative Agent shall forthwith give notice thereof to the relevant
Borrower and such Lenders, whereupon until such Administrative Agent notifies
such Borrower that the circumstances giving rise to such situation no longer
exist, the obligations of any affected Lender to make Eurodollar Advances shall
be suspended.

      (b) If the Canadian Administrative Agent shall have determined in good
faith that by reason of circumstances affecting the Canadian money market, there
is no market for Canadian BA, then the right of the Canadian Borrower to request
the acceptance of Canadian BA and the acceptance thereof shall be suspended
until the Canadian Administrative Agent determines that the circumstances
causing such suspension no longer exist and the Canadian Administrative Agent so
notifies the Canadian Borrower.

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      Section 10.2 Illegality. If after the date hereof, the adoption of any
Applicable Law, or any change in any Applicable Law (whether adopted before or
after the Closing Date), or any change in interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
with any directive (whether or not having the force of law) of any such
authority, central bank or comparable agency, shall make it unlawful or
impossible, or any such governmental authority, central bank or comparable
agency shall assert that it is unlawful, for any Lender to make, maintain or
fund Eurodollar Advances, such Lender shall so notify the relevant
Administrative Agent, and such Administrative Agent shall forthwith give notice
thereof to the other Lenders and the Borrowers. Before giving any notice to the
relevant Administrative Agent pursuant to this Section 10.2, such Lender shall
designate a different lending office if such designation will avoid the need for
giving such notice and will not, in the sole judgment of such Lender, be
otherwise materially disadvantageous to such Lender. Upon receipt of such
notice, notwithstanding anything contained in Article 2 hereof, (a) the
obligation of such Lenders to make Eurodollar Advances shall be suspended until
the relevant Administrative Agent shall notify the affected Borrower and the
affected Lenders that the circumstances causing such suspension no longer exist
and (b) the affected Borrower shall repay in full the then outstanding principal
amount of each affected Eurodollar Advance of such Lender, together with accrued
interest thereon and any reimbursement required under Section 2.11 hereof, on
either (i) the last day of the then current Interest Period applicable to such
affected Eurodollar Advances if such Lender may lawfully continue to maintain
and fund such Eurodollar Advances to such day or (ii) immediately if such Lender
may not lawfully continue to fund and maintain such affected Eurodollar Advances
to such day. Concurrently with repaying each affected Eurodollar Advance of such
Lender, notwithstanding anything contained in Article 2 or Article 3 hereof, the
affected Borrower may borrow a Base Rate Advance from such Lender, and such
Lender shall make such Advance, if so requested, in an amount such that the
outstanding principal amount held by such Lender shall equal the outstanding
principal amount immediately prior to such repayment.

      Section 10.3 Increased Costs. (a) If after the date hereof, the adoption
or effectiveness of any Applicable Law, or any change or effectiveness in any
Applicable Law (whether adopted before or after the Closing Date), or any
interpretation or change in interpretation or administration or effectiveness
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof or compliance by any Lender
Party with any directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:

            (i) shall subject any Lender Party to any tax, duty or other charge
      with respect to its obligation to make Eurodollar Advances, or its
      Eurodollar Advances, or shall change the basis of taxation of payments to
      any Lender Party of the principal of or interest on its Eurodollar
      Advances or in respect of any other amounts due under this Agreement, in
      respect of its Eurodollar Advances or its obligation to make Eurodollar
      Advances (except for changes in the rate or method of calculation of tax
      on the overall net income of such Lender Party); or

            (ii) shall impose, modify or deem applicable any reserve (including,
      without limitation, any imposed by the Board of Governors of the Federal
      Reserve System, but excluding any included in an applicable Eurodollar
      Reserve Percentage), special deposit,

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      capital adequacy, assessment or other requirement or condition against
      assets of, deposits with or for the account of, or commitments or credit
      extended by, any Lender Party or shall impose on any Lender Party or the
      London interbank borrowing market or the New York certificate of deposit
      market any other condition affecting its obligation to make Eurodollar
      Advances or its Eurodollar Advances;

and the result of any of the foregoing is to increase the cost to such Lender
Party of making or maintaining any such Eurodollar Advances, or of agreeing to
issue or of issuing or maintaining or participating in Letters of Credit or of
agreeing to make or of making or maintaining Letter of Credit Loans, or to
reduce the amount of any sum received or receivable by such Lender Party under
this Agreement with respect thereto, then, within five (5) days after demand by
such Lender Party, each Borrower agrees to pay to such Lender Party such
additional amount or amounts as will compensate such Lender Party for such
increased costs. Each Lender Party will promptly notify the affected Borrower
and the relevant Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender Party to
compensation pursuant to this Section 10.3 and will designate a different
lending office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole judgment of such Lender Party,
be otherwise disadvantageous to such Lender Party.

      (b) Any Lender Party claiming compensation under this Section 10.3 shall
provide the affected Borrower with a written certificate setting forth the
additional amount or amounts to be paid to it hereunder and calculations
therefor in reasonable detail. Such certificate shall be presumptively correct,
absent manifest error. In determining such amount, such Lender Party may use any
reasonable averaging and attribution methods. If any Lender Party demands
compensation under this Section 10.3, the affected Borrower may at any time,
upon at least five (5) Business Days' prior notice to such Lender Party, prepay
in full the then outstanding affected Eurodollar Advances of such Lender Party,
together with accrued interest thereon to the date of prepayment, along with any
reimbursement required under Section 2.11 hereof. Concurrently with prepaying
such Eurodollar Advances, the affected Borrower may borrow a Base Rate Advance
from such Lender Party, and such Lender Party shall, if so requested, make such
Advance in an amount such that the outstanding principal amount held by such
Lender Party shall equal the outstanding principal amount immediately prior to
such prepayment.

      Section 10.4 Effect On Other Advances. (a) If notice has been given
pursuant to Section 10.1, 10.2 or 10.3 suspending the obligation of any Lender
to make Eurodollar Advances, or requiring Eurodollar Advances of any Lender to
be repaid or prepaid, then, unless and until such Lender notifies the affected
Borrower that the circumstances giving rise to such repayment no longer apply,
all Advances which would otherwise be made as Eurodollar Advances shall, at the
option of the affected Borrower, be made instead as Base Rate Advances.

      (b) If, with respect to any Eurodollar Advance, Lenders owed at least 51%
of the then aggregate unpaid principal amount thereof notify the relevant
Administrative Agent that the Eurodollar Rate for any Interest Period for such
Advance will not adequately reflect the cost to such Lenders of making, funding
or maintaining their Eurodollar Advances for such Interest Period, such
Administrative Agent shall forthwith so notify the relevant Borrower and the
Lenders which have made such Advance, whereupon (i) such Eurodollar Advance will
automatically, on the last day of the then existing Interest Period therefor, be
reborrowed as a

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Base Rate Advance and (ii) the obligation of the Lenders which have made such
Advance to make further Eurodollar Advances shall be suspended until such
Administrative Agent shall notify such Borrower that such Lenders have
determined that the circumstances causing such suspension no longer exist.

                                   ARTICLE XI

                                    GUARANTY

      Section 11.1 Guaranty. (a) The U.S. Borrower (the "U.S. Borrower
Guarantor") hereby absolutely, unconditionally and irrevocably

            (i) guarantees the full and punctual payment when due, whether at
      stated maturity, by required prepayment, declaration, acceleration, demand
      or otherwise, of all Canadian Obligations under this Agreement or any
      other Loan Document now or hereafter existing, whether for principal,
      interest, fees, expenses or otherwise (including all such amounts which
      would become due but for the operation of the automatic stay under Section
      362(a) of the United States Bankruptcy Code, 11 U.S.C. Section 362(a), or
      similar provisions under the Applicable Law of Canada, and the operation
      of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11
      U.S.C. Section 502(b) and Section 506(b), or similar provisions under the
      Applicable Law of Canada), and

            (ii) indemnifies and holds harmless each Secured Party and each
      other holder of a Note for any and all costs and expenses (including
      reasonable and documented attorney's fees and expenses) incurred by such
      Secured Party or such holder, as the case may be, in enforcing any rights
      under the guaranty set forth in this Section 11.

      The guaranty set forth in this Section 11 constitutes a guaranty of
payment when due and not of collection, and the U.S. Borrower Guarantor agrees
that it shall not be necessary or required that any Secured Party or any holder
of any Note exercise any right, assert any claim or demand or enforce any remedy
whatsoever against any Canadian Loan Party (or any other Person), as the case
may be, before or as a condition to the obligations of the U.S. Borrower
Guarantor under the guaranty set forth in this Section 11.

      (b) Acceleration. The U.S. Borrower Guarantor agrees that, in the event of
the dissolution or insolvency of the Canadian Borrower, any other Canadian Loan
Party or the U.S. Borrower Guarantor, or the inability or failure of the
Canadian Borrower, any other Canadian Loan Party or the U.S. Borrower Guarantor
to pay debts as they become due, or an assignment by the Canadian Borrower, any
other Canadian Loan Party or the U.S. Borrower Guarantor for the benefit of
creditors, or the commencement of any case or proceeding in respect of the
Canadian Borrower, any other Canadian Loan Party or the U.S. Borrower Guarantor
under any bankruptcy, insolvency or similar laws, and if such event shall occur
at a time when any of the monetary obligations of the Canadian Borrower or any
other Canadian Loan Party under this Agreement or any other Loan Document may
not then be due and payable, the U.S. Borrower Guarantor agrees to pay to the
Canadian Administrative Agent for the account of the Secured Parties forthwith
the full amount which would be payable under the guaranty set forth in this

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Section 11 by the U.S. Borrower Guarantor if all such monetary obligations were
then due and payable.

      (c) Guaranty Absolute, etc. The guaranty set forth in this Section 11
shall in all respects be a continuing, absolute, unconditional and irrevocable
guaranty of payment and performance, and shall remain in full force and effect
until all Canadian Obligations under this Agreement and each other Loan Document
have been paid in full in cash and all obligations of the U.S. Borrower
Guarantor under the guaranty set forth in this Section 11 shall have been paid
in full in cash. The U.S. Borrower Guarantor guarantees that the monetary
obligations of the Canadian Borrower and each other Canadian Loan Party under
this Agreement and each other Loan Document, as the case may be, will be paid
strictly in accordance with the terms of this Agreement and each other Loan
Document under which they arise, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Secured Party or any holder of any Note with respect thereto. The
liability of the U.S. Borrower Guarantor under the guaranty set forth in this
Section 11 shall be absolute, unconditional and irrevocable irrespective of:

            (i) any lack of validity, legality or enforceability of this
      Agreement, any Note or any other Loan Document;

            (ii) the failure of any Secured Party or any holder of any Note (A)
      to assert any claim or demand or to enforce any right or remedy against
      the Canadian Borrower, any other Canadian Loan Party or any other Person
      (including any other guarantor (including the U.S. Borrower Guarantor))
      under the provisions of this Agreement, any Note, any other Loan Document
      or otherwise, or (B) to exercise any right or remedy against any other
      guarantor (including the U.S. Borrower Guarantor) of, or collateral
      securing, any obligations of the Canadian Borrower or any other Canadian
      Loan Party under this Agreement or any other Loan Document;

            (iii) any change in the time, manner or place of payment of, or in
      any other term of, all or any of the obligations of the Canadian Borrower
      or any other Canadian Loan Party (other than the U.S. Borrower Guarantor)
      under this Agreement or any other Loan Document, or any other extension,
      compromise or renewal of any such obligation of the Canadian Borrower or
      any other Canadian Loan Party (other than the U.S. Borrower Guarantor);

            (iv) any reduction, limitation, impairment or termination of any
      obligations of the Canadian Borrower under this Agreement or any other
      Loan Document for any reason, including any claim of waiver, release,
      surrender, alteration or compromise, and shall not be subject to (and the
      U.S. Borrower Guarantor hereby waives any right to or claim of) any
      defense or setoff, counterclaim, recoupment or termination whatsoever by
      reason of the invalidity, illegality, nongenuineness, irregularity,
      compromise, unenforceability of, or any other event or occurrence
      affecting, any such obligations of the Canadian Borrower or otherwise;

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            (v) any amendment to, rescission, waiver, or other modification of,
      or any consent to departure from, any of the terms of this Agreement, any
      Note or any other Loan Document;

            (vi) any addition, exchange, release, surrender or non perfection of
      any collateral, or any amendment to or waiver or release or addition of,
      or consent to departure from, any other guaranty, held by any Secured
      Party or any holder of any Note securing any of the obligations of the
      Canadian Borrower under this Agreement or any other Loan Document; or

            (vii) any other circumstance which might otherwise constitute a
      defense available to, or a legal or equitable discharge of, the Canadian
      Borrower, any surety or any guarantor.

      (d) Reinstatement, etc. The U.S. Borrower Guarantor agrees that the
guaranty set forth in this Section 11 shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the obligations of the Canadian Borrower or any other Canadian Loan
Party under this Agreement or any other Canadian Loan Document is rescinded or
must otherwise be restored by any Secured Party or any other holder of any Note,
upon the insolvency, bankruptcy or reorganization of the Canadian Borrower or
otherwise, all as though such payment had not been made.

      (e) Waiver, etc. The U.S. Borrower Guarantor hereby waive promptness,
diligence, notice of acceptance and any other notice with respect to any of the
obligations of the Canadian Borrower and each other Canadian Loan Party under
this Agreement and each other Loan Document and the guaranty set forth in this
Section 11 and any requirement that any Agent, any other Secured Party or any
other holder of any Note protect, secure, perfect or insure any security
interest or Lien, or any property subject thereto, or exhaust any right or take
any action against the Canadian Borrower, any other Canadian Loan Party or any
other Person (including any other guarantor (including the U.S. Borrower
Guarantor)) or entity or any collateral securing the obligations of the Canadian
Borrower and each other Canadian Loan Party under this Agreement and each other
Loan Document.

      (f) Postponement of Subrogation, etc. The U.S. Borrower Guarantor agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under the guaranty set forth in this Section 11, by any payment made
under the guaranty set forth in this Section 11 or otherwise, until the prior
payment in full in cash of all monetary obligations of the Canadian Borrower and
each other Canadian Loan Party under this Agreement and each other Loan
Document. Any amount paid to the U.S. Borrower Guarantor on account of any such
subrogation rights prior to the payment in full in cash of all such monetary
obligations shall be held in trust for the benefit of the Secured Party and each
other holder of a Note and shall immediately be paid to the Canadian
Administrative Agent for the benefit of the Secured Parties and each other
holder of a Note and credited and applied against the monetary obligations of
the Canadian Borrower and each other Canadian Loan Party hereunder and under any
other Loan Document, whether matured or unmatured, in accordance with the terms
of this Agreement; provided that if (i) the U.S. Borrower Guarantor has made
payment to the Secured Parties and each other holder of a Note of all or any
part of the monetary obligations of the Canadian

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Borrower under this Agreement and each other Loan Document, and (ii) all
monetary obligations of the Canadian Borrower and each other Canadian Loan Party
under this Agreement and each other Loan Document have been paid in full in
cash, each Secured Party and each other holder of a Note agrees that, at the
request of the U.S. Borrower Guarantor, the Canadian Administrative Agent, on
behalf of the Secured Parties and the other holders of the Notes, will execute
and deliver to the U.S. Borrower Guarantor appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to the U.S. Borrower Guarantor of an interest in such
monetary obligations resulting from such payment by the U.S. Borrower Guarantor.
In furtherance of the foregoing, for so long as any obligations under the Loan
Documents remain outstanding, the U.S. Borrower Guarantor shall refrain from
taking any action or commencing any proceeding against the Canadian Borrower (or
its successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under the
guaranty set forth in this Section 11 to any Secured Party or any other holder
of a Note.

      (g) Successors, Transferees and Assigns; Transfers of Notes, etc. The
guaranty set forth in this Section 11 shall (i) be binding upon the U.S.
Borrower Guarantor and its permitted successors, transferees and assigns; (ii)
inure to the benefit of and be enforceable by the Arranger, the Agents and each
other Secured Party; and (iii) shall not constitute a novation. Without limiting
the generality of the foregoing clause (ii), following any assignment or
transfer (in whole or in part) of any Note or Loan to any other Person or
entity, such other Person or entity shall thereupon become vested with all
rights and benefits in respect thereof granted to the assigning or transferring
Lender under any Loan Document (including the guaranty set forth in this Section
11) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Article IX and Section 12.11.

                                  ARTICLE XII

                                  MISCELLANEOUS

      Section 12.1 Notices. (a) All notices and other communications provided
for hereunder shall be in writing (including fax or e-mail communication) and
mailed, telecopied or delivered. All such notices and other communications
shall, when mailed, faxed or E-mailed, be effective when deposited in the mails,
transmitted by fax or E-mail, except that notices and communications to any
Agent pursuant to Article 2, 3 or 9 shall not be effective until received by
such Agent. All notices and other communications under this Agreement shall be
given to the parties hereto at the following addresses:

                           (i) If to the U.S. Borrower or the Canadian Borrower,
to it at:

                                    Movie Gallery, Inc.
                                    900 West Main Street
                                    Dothan, Alabama  36301
                                    Attn: Senior Vice President - Treasurer
                                    Facsimile No.: (334) 836-3128
                                    E-mail: mlewis@movgal.com

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<PAGE>

                           with a copy to:

                                    Movie Gallery, Inc.
                                    900 West Main Street
                                    Dothan, Alabama  36301
                                    Attn:  S. Page Todd
                                    Executive Vice President, Secretary and
                                    General Counsel
                                    Facsimile No.: (334) 836-3626
                                    E-mail:  ptodd@movgal.com

                                    and to:

                                    Alston & Bird
                                    Attn:  Richard Grice, Esq.
                                    Facsimile No.:  (404) 881-4777
                                    E-mail:  rgrice@alston.com

                           If to the U.S. Administrative Agent, to it at:

                                    Wachovia Bank, National Association
                                    301 South College Street
                                    Charlotte, North Carolina  28288-0767
                                    Attn:  Laura Douglas
                                    Administrative Agent Account Number:
                                    Facsimile No.:  (704) 383-7611
                                    E-mail:  laura.douglas@wachovia.com

                           with a copy to:

                                    Mayer, Brown, Rowe & Maw LLP
                                    1675 Broadway
                                    New York, NY  10019-5820
                                    Attn: Benjamin Lau
                                    Facsimile No.: (212) 262-1910
                                    E-mail: blau@mayerbrownrowe.com

                           If to the Canadian Administrative Agent, to it at:

                                    Congress Financial Corporation (Canada)
                                    141 Adelaide Street West
                                    Suite 1400
                                    Toronto, Ontario  M5H 3L5
                                    Attn:  Enza Agosta
                                    Facsimile No.:  (416) 364-6068
                                    E-mail:  eagosta@congressfinancial.com

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<PAGE>
                           with a copy to:

                                    Bennett Jones LLP
                                    Suite 3400
                                    One First Canadian Place
                                    Toronto, Ontario  M5X 1A4
                                    Attn:  Daniel A. Ford
                                    Facsimile No.:  (416) 863-1716
                                    E-mail:  fordd@bennetjones.ca

                                    and to:

                                    Mayer, Brown, Rowe & Maw LLP
                                    1675 Broadway
                                    New York, NY  10019-5820
                                    Attn: Benjamin Lau
                                    Facsimile No.:  (212) 262-1910
                                    E-mail: blau@mayerbrownrowe.com

                           (ii)     If to the Lender Parties, to them at the
                                    addresses set forth beside their names on
                                    Schedule III.

      Copies shall be provided to Persons other than parties hereto only in the
case of notices under Article 8 hereof.

      (b) Any party hereto may change the address to which notices shall be
directed under this Section 12.1 by giving ten (10) days' written notice of such
change to the other parties.

      (c) Delivery by fax of an executed counterpart of a signature page to any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of an original executed counterpart thereof. Electronic mail and
Internet and intranet websites may be used by the Administrative Agents and/or
the Agents to distribute communications, such as financial statements and other
information as provided in Article 6, and to distribute Loan Documents for
execution by the parties thereto, and the Administrative Agents and the Agents
shall not be responsible for any losses, costs, expenses and liabilities that
may arise by reason of the use thereof, except for their own gross negligence or
willful misconduct. The Administrative Agents and the Lender Parties shall be
entitled to rely and act upon any notices (including telephonic notices)
purportedly given by or on behalf of 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 form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. No Agent and
no Lender Party shall be liable or responsible for any loss, cost, expense or
liability resulting from the reliance by such Person on each notice purportedly
given by or on behalf of any Borrower in accordance with this Agreement, other
than, with respect to any Agent or Lender Party, the losses, costs, expenses and
liabilities that result from the gross negligence or willful misconduct of such
Agent or Lender Party. All

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<PAGE>

telephonic notices to and other communications with any Administrative Agent may
be recorded by such Administrative Agent, and each of the parties hereto hereby
consents to such recording.

      Section 12.2 Costs and Expenses. (a) Each Borrower will, jointly and
severally, promptly pay, or reimburse:

            (i) all reasonable out-of-pocket expenses of the Agents, the
      Approval Lenders and the Lead Arranger in connection with the preparation,
      negotiation, execution, delivery and syndication of this Agreement and the
      other Loan Documents, and the transactions related hereto, contemplated
      hereunder and thereunder and the making of the initial Advance hereunder
      (whether or not such Advance is made), including, but not limited to, the
      reasonable fees, disbursements and other charges of Mayer, Brown, Rowe &
      Maw LLP, special counsel for the U.S. Administrative Agent and its
      Affiliates;

            (ii) all reasonable out-of-pocket expenses of the Agents in
      connection with the administration of the transactions contemplated in
      this Agreement or the other Loan Documents, and all reasonable
      out-of-pocket expenses in connection with the preparation, negotiation,
      execution and delivery of any waiver, amendment or consent, whether or not
      such waiver, amendment or consent shall become effective, by the
      Administrative Agents and the Lender Parties relating to this Agreement or
      the other Loan Documents, including, but not limited to, the reasonable
      fees, disbursements and other charges of any experts, agents or
      consultants and of special counsel for each Administrative Agent, but
      excluding any assignment fee pursuant to Section 12.5(b) hereof; and

            (iii) all out-of-pocket costs and expenses of the Lender Parties of
      obtaining performance under this Agreement or the other Loan Documents and
      all out-of-pocket costs and expenses of the Lender Parties of collection
      if an Event of Default occurs in the payment of the Loans or the other
      Obligations, whether in any action, suit or litigation, or any bankruptcy,
      insolvency or other similar proceeding affecting creditors' rights
      generally, or the restructuring and "work out" of such transactions, which
      in each case shall include reasonable fees and out-of-pocket expenses of
      special counsel for each Administrative Agent.

      (b) Each Borrower also agrees not to assert any claim against any Agent,
any Lender Party or any of their Affiliates, or any of their respective
officers, directors, employees, agents and advisors, on any theory of liability,
for special, indirect, consequential or punitive damages arising out of or
otherwise relating to the Commitments, the actual or proposed use of the
proceeds of any Advance or Letter of Credit, the Loan Documents or any of the
transactions contemplated by the Loan Documents.

      (c) If any Loan Party fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Loan Party by any Administrative Agent.

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<PAGE>

      Section 12.3 Waivers. The rights and remedies of the Administrative Agents
and the Lender Parties under this Agreement and the other Loan Documents shall
be cumulative and not exclusive of any rights or remedies which they would
otherwise have. No failure or delay by the Administrative Agents or the Lender
Parties, or any of them, in exercising any right, shall operate as a waiver of
such right. The Administrative Agents and the Lender Parties expressly reserve
the right to require strict compliance with the terms of this Agreement in
connection with any future funding of a request for an Advance. In the event the
Lender Parties decide to fund an Advance or issue a Letter of Credit at a time
when any Borrower is not in strict compliance with the terms of this Agreement,
such decision by the Lender Parties shall not be deemed to constitute an
undertaking by the Lender Parties to fund any further Advances, to issue any
further Letter of Credit or to preclude the Lender Parties and the
Administrative Agents from exercising any rights available under the Loan
Documents or at law or equity. Any waiver or indulgence granted by the
Administrative Agents, the Lender Parties or the Majority Lenders shall not
constitute a modification of this Agreement, except to the extent expressly
provided in such waiver or indulgence, or constitute a course of dealing at
variance with the terms of this Agreement such as to require further notice of
their intent to require strict adherence to the terms of this Agreement in the
future.

      Section 12.4 Set-Off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and during the continuation thereof, the
Administrative Agents and the Lender Parties are hereby authorized by the
Borrowers at any time or from time to time, without notice to any Borrower or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, time or
demand, including, but not limited to, Indebtedness evidenced by certificates of
deposit, in each case whether matured or unmatured) and any other Indebtedness
at any time held or owing by any Lender Party or any Administrative Agent to or
for the credit or the account of any Borrower or any of its Subsidiaries against
and on account of the Obligations irrespective of whether (a) any Lender Party
or any Administrative Agent shall have made any demand hereunder or (b) any
Administrative Agent shall have declared the principal of and interest on the
Loans and other amounts due hereunder to be due and payable as permitted by
Section 8.2 and although such Obligations or any of them, shall be contingent or
unmatured. Upon direction by any Administrative Agent with the consent of the
Majority Lenders, each Lender Party holding deposits of the U.S. Borrower or any
of its Subsidiaries shall exercise its set-off rights as so directed.

      Section 12.5 Binding Effect and Assignment. (a) This Agreement shall
become effective when it shall have been executed by each Borrower and each
Agent and the U.S. Administrative Agent shall have been notified by each Initial
Lender Party, and each Borrower shall have been notified by the U.S.
Administrative Agent, that each such Initial Lender Party has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, each
Agent and each Lender Party and their respective successors and assigns, except
that no Borrower shall have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lender Parties.

      (b) Each Lender may enter freely into participation agreements with
respect to or otherwise grant participations in its Loans to one or more banks
or other lenders or financial

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institutions; provided, that (i) such Lender's obligations hereunder shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participant
shall not be entitled by the benefit of its participation to vote or otherwise
take action under this Agreement or any other Loan Document, except with respect
to the matters referred to in items (i), (ii), (iii), (iv), (v), and (vii) of
clause (b) of Section 12.11 hereof, (iv) the Borrowers shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations hereunder, and (v) so long as no Default or Event of Default has
occurred and is continuing, Canadian Borrower consent shall be required for any
such grant of participation in any Canadian Loan to a Lender that is not a
Canadian Resident. In addition, each Lender may (x) sell, assign or create a
security interest in all or any portion of its rights hereunder and under the
other Loan Documents to any Federal Reserve Bank without limitation; and (y)
sell or assign up to one hundred percent (100%) of its rights hereunder and
under the other Loan Documents to any other Person on an assignment basis;
provided that (A) (I) such assignment is to an Affiliate of the assignor, an
Approved Fund, or another Lender, or, in the case of any Term A Lender or Term B
Lender, any Conduit Lender, or (II) the U.S. Borrower (unless there exists at
the time of such assignment a Default hereunder) and the applicable
Administrative Agent have given their prior written consent to the proposed
assignee of a Lender hereunder, which consents shall not be unreasonably
delayed, conditioned or withheld, provided that such consents may be reasonably
withheld if the proposed assignee is subject to withholding tax of the sort
referred to in Section 2.14 hereof, (B) in the case of assignments of the
Revolving Commitment and the Revolving Loans, the assignee assumes a pro rata
share of the assignor Lender's obligations thereunder determined by the
percentage of the Revolving Commitment assigned for the period from the date of
the assignment through the Initial Maturity Date, but any such assignor Lender
need not assign its Term A Loans or Term B Loans on a pro rata basis with its
Revolving Commitment and the Revolving Loans, (C) each such assignment shall be
in a principal amount of not less than the lesser of (I) the entire amount of
such Lender's interest hereunder or (II) $1,000,000 unless an assignment is from
one Lender to another or to an Approved Fund, or an Affiliate of a Lender, in
which case there shall be no minimum assignment amount and, (D) in the case of
assignments of a Canadian Commitment or Canadian Loans, notwithstanding anything
to the contrary in this Agreement or in any other part of this Section 12.5, no
portion of a Canadian Commitment or Canadian Loans can be assigned to a Person
that is not a Canadian Resident unless the Canadian Borrower consents or a
Default or Event of Default has occurred and is continuing. Each Lender who
sells or assigns a portion of its Loans pursuant hereto shall pay to the
relevant Administrative Agent an assignment fee of $3,500 with respect to each
assignment (for purposes of such fee, simultaneous assignments by or to Approved
Funds with respect to a single Lender Party shall be deemed as a single
assignment), such fee to be paid to the relevant Administrative Agent not later
than the Closing Date of the assignment of the Loan relating thereto. All
assignments by any of the Lenders of any interests hereunder shall be made
pursuant to an Assignment and Acceptance. Each Lender may provide any proposed
participant or assignee with confidential information provided to such Lender
regarding the U.S. Borrower and its Subsidiaries on a confidential basis, and
such participant or assignee shall agree in writing to maintain such
confidentiality in accordance with the provisions of Section 12.19 hereof.
Further, each permitted assignee of any portion of the Loans shall be entitled
to the benefits of Sections 2.11, 2.13, 2.14 and Article 10 hereof and all other
provisions hereof and of the other Loan Documents as a `Lender' hereunder.

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      (c) Each Administrative Agent, acting for this purpose as an agent of the
relevant Borrower, shall maintain a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the relevant Lenders, and the Commitments of, and the principal amount of the
Loans owing to, each such Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive, absent
manifest error, and the Borrowers, the Administrative Agents 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 at the
offices of each Administrative Agent by the Borrowers or any Lender, at any
reasonable time during normal business hours and from time to time upon
reasonable prior notice. Each Lender agrees to provide the relevant
Administrative Agent and the U.S. Borrower with written notice of the assignment
of all or part of its rights hereunder. Upon the relevant Administrative Agent's
receipt of a duly completed Assignment and Acceptance executed by an assigning
Lender and an assignee Lender, the assignee's completed administrative
questionnaire (unless the assignee is already a Lender), the fee referred to in
Section 12.5(b) above, and any written consent to such assignment required by
such clause, such Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effected for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

      (d) Notwithstanding anything to the contrary contained in this Section
12.5, any Lender that is a fund that invests in bank loans may (without the
consent of any Borrower or any Administrative Agent) pledge all or a portion of
its rights in connection with this Agreement to the trustee or any holder of
obligations or agents therefor owed, or securities issued, by such fund as
security for such obligations or securities; provided that, until such time as
such trustee has complied with the provisions of this Section 12.5 regarding
assignments, such trustee shall not be entitled to exercise any of the rights of
a Lender Party under the Loan Documents even though such trustee may have
acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise. No pledge described in the immediately preceding
sentence shall release any such Lender from its obligations hereunder.

      (e) Each Issuing Bank may assign to an assignee all of its rights and
obligations under the undrawn portion of its Letter of Credit Commitment at any
time; provided, that (i) each such assignment shall be made in accordance with
clause (A) of the second proviso in Section 12.5(b) and (ii) the parties to each
such assignment shall execute and deliver to the relevant Administrative Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance,
together with a processing and recordation fee of $3,500. Such Issuing Bank
shall promptly notify the relevant Borrower of such Assignment.

      (f) Except as specifically set forth in Section 12.5(b) hereof, nothing in
this Agreement or any Notes, expressed or implied, is intended to or shall
confer on any Person other than the respective parties hereto and thereto and
their successors and assignees permitted hereunder and thereunder any benefit or
any legal or equitable right, remedy or other claim under this Agreement or any
Notes.

      (g) The provisions of this Section 12.5 shall not apply to any purchase of
participations among the Lenders pursuant to Section 2.12 hereof.

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<PAGE>

      (h) Notwithstanding anything to the contrary contained herein, any Lender
Party (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
relevant Administrative Agent and the U.S. Borrower (a "Conduit Lender") the
option to provide all or any part of any advance 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 Conduit Lender to fund any
advance, and (ii) if a Conduit Lender elects not to exercise such option or
otherwise fails to make all or any part of such Advance, the Granting Lender
shall be obligated to make such advance pursuant to the terms hereof. The making
of an advance by a Conduit Lender hereunder shall utilize the applicable
Commitment of the Granting Lender to the same extent, and as if, such advance
were made by such Granting Lender. Each party hereto hereby agrees that (i) no
Conduit Lender shall be liable for any indemnity or similar payment obligation
under this Agreement for which a Lender Party would be liable, (ii) no Conduit
Lender shall be entitled to the benefits of Sections 2.13, 2.14 and 10.3 (or any
other increased costs protection provision) and (iii) the Granting Lender shall
for all purposes, including, without limitation, the approval of any amendment
or waiver of any provision of any Loan Document, remain the Lender Party of
record hereunder. In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior Indebtedness of any Conduit Lender,
it will not institute against, or join any other person in instituting against,
such Conduit Lender 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 in this Agreement, any
Conduit Lender may (i) with notice to, but without prior consent of, the
relevant Borrower and the relevant Administrative Agent and without paying any
processing fee therefor, assign all or any portion of its interest in any
advance to the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of advances to any rating agency,
commercial paper dealer or provider of any surety or guarantee or credit or
liquidity enhancement to such Conduit Lender. This clause (h) may not be amended
without the prior written consent of each Granting Lender, all or any part of
whose advances are being funded by the Conduit Lender at the time of such
amendment.

      Section 12.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.

      Section 12.7 Governing Law and Jurisdiction. (a) THIS AGREEMENT, THE NOTES
AND EACH OTHER LOAN DOCUMENT (UNLESS OTHERWISE SPECIFIED THEREIN) SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK.

      (b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER

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LOAN DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY JURISDICTION.

      (c) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

      Section 12.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.

      Section 12.9 Interest. (a) In no event shall the amount of interest due or
payable hereunder or under any Notes exceed the maximum rate of interest allowed
by Applicable Law, and in the event any such payment is inadvertently made by
any Borrower or inadvertently received by any Lender, then such excess sum shall
be credited as a payment of principal, unless such Borrower shall notify the
relevant Administrative Agent or such Lender in writing that it elects to have
such excess returned forthwith. It is the express intent hereof that no Borrower
pay and no Lender receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by such Borrower under
Applicable Law.

      (b) Notwithstanding the use by the Lenders of the Base Rate, the Federal
Funds Rate, the Canadian Prime Rate and the Eurodollar Rate as reference rates
for the determination of interest on the Loans, the Lenders shall be under no
obligation to obtain funds from any particular source in order to charge
interest to any Borrower at interest rates related to such reference rates.

      Section 12.10 Table of Contents and Headings. The Table of Contents and
the headings of the various subdivisions used in this Agreement are for
convenience only and shall not in any

                                      147
<PAGE>

way modify or amend any of the terms or provisions hereof, nor be used in
connection with the interpretation of any provision hereof.

      Section 12.11 Amendment and Waiver. Neither this Agreement nor any other
Loan Document nor any term hereof or thereof may be amended orally, nor may any
provision hereof or thereof be waived orally but only by an instrument in
writing signed by (or, in the case of Security Documents executed by the
appropriate Administrative Agent for itself and on behalf of the relevant
Secured Parties, signed by such Administrative Agent and approved by) the
Majority Lenders and, in the case of an amendment, by the relevant Borrower,
except that (a) any amendment to this Agreement or the other Loan Documents
solely to effectuate the Incremental Facility as contemplated by (and subject to
the provisions set forth in) Section 2.1(f) shall only require the consent of
the U.S. Borrower, the U.S. Administrative Agent (to the extent required to
assure that the amendments contemplated by Section 2.1(f) are property effected)
and the Lenders, if any, providing the Incremental Facility; (b) any amendment
or waiver or consent relating to (i) any delay or extension in the terms of
repayment or prepayment or change in the order of application of repayment or
prepayment or application in the reduction of any Commitment of the Loans
provided in Section 2.4, Section 2.7 or Section 2.8 hereof, or any change
adverse to the Lenders in the events (and any definitions related thereto)
required for a mandatory prepayment, as set forth in Section 2.8, shall be made
only with the written consent by each Lender Party affected thereby, (ii) any
forgiveness of or reduction in principal, interest or fees due hereunder or
postponement of the payment thereof, shall be made only with the written consent
by each Lender Party affected thereby, (iii) the release of all or substantially
all of the Collateral for the Loans, shall be made only with the written consent
by each Lender Party, (iv) any waiver of any Default due to the failure by
either Borrower to pay any sum due to any of the Lenders hereunder, shall be
made only with the written consent by each Lender Party affected thereby, (v)
any release of any material Subsidiary Guarantor under any Subsidiary Guaranty
of all or any portion of the Obligations, except in connection with a merger,
amalgamation, sale or other disposition otherwise permitted hereunder, shall be
made only with the written consent by each Lender Party, and (vi) any amendment
of this Section 12.11, or of the definition of Majority Lenders, or of any
portion of Section 2.6, 2.8, 2.10, 2.12 or 8.3, as it relates to the pro rata
sharing or the relative priority of payment among the Obligations, or any other
provision of this Agreement or any of the other Loan Documents specifically
requiring the consent or approval of each of the Lender Parties, shall be made
only with the written consent by each Lender Party; (c) any amendment relating
to any increase in any Commitment of any Lender shall be made only by an
instrument in writing signed by such Lender, the relevant Administrative Agent
and the relevant Borrower, (d) no amendment, waiver or consent shall, unless in
writing and signed by an Swing Line Lender, affect the rights or duties of such
Lender under this Agreement in respect of its Swing Line Loans or the Swing Line
Commitment, (e) no amendment, waiver or consent shall, unless in writing and
signed by an Issuing Bank, in addition to the Lenders required above, affect the
rights or duties of such Issuing Bank under this Agreement or any Letter of
Credit Agreement, (f) the Fee Letter may be amended or otherwise modified by the
parties thereto without the consent of, or notice to, any other Person, (g) no
amendment, modification or waiver that would adversely affect the rights of the
Term A Lenders to an extent greater than any of the other Lenders shall be
effective without the prior written consent of the Majority Term A Lenders, (h)
no amendment, modification or waiver that would adversely affect the rights of
the Term B Lenders to an extent greater than any of the other Lenders shall be
effective without the prior written consent of the Majority Term B Lenders,

                                      148
<PAGE>

(i) no amendment or modification that would adversely affect the rights of the
Canadian Lenders to an extent greater than any of the other Lenders shall be
effective without the prior written consent of the Majority Canadian Lenders and
(j) no amendment, modification or waiver that would adversely affect the rights
of the Revolving Lenders to an extent greater than any of the other Lenders
shall be effective without the prior written consent of the Majority Revolving
Lenders. Any amendment to any provision hereunder governing the rights,
obligations, or liabilities of any Administrative Agent in its capacity as such,
may be made only by an instrument in writing signed by such Administrative Agent
and by each of the Lender Parties.

      Section 12.12 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement and the other documents described or contemplated herein
embody the entire agreement and understanding among the parties hereto and
thereto and supersede all prior agreements and understandings relating to the
subject matter hereof and thereof.

      Section 12.13 Other Relationships. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of either
Administrative Agent or any of their respective Affiliates and each Lender Party
or its respective Affiliates to enter into or maintain business relationships
with the relative Borrower or any of its Affiliates beyond the relationships
specifically contemplated by this Agreement and the other Loan Documents.

      Section 12.14 Directly or Indirectly. If any provision in this Agreement
refers to any action taken or to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person, whether or not expressly
specified in such provision.

      Section 12.15 Reliance on and Survival of Various Provisions. All
covenants, agreements, statements, representations and warranties made herein or
in any certificate delivered pursuant hereto (a) shall be deemed to have been
relied upon by each Administrative Agent and each of the Lender Parties
notwithstanding any investigation heretofore or hereafter made by them, and (b)
shall survive the execution and delivery of this Agreement and shall continue in
full force and effect so long as any Obligation is outstanding and unpaid. Any
right to indemnification hereunder, including, without limitation, rights
pursuant to Sections 2.11, 2.13, 2.14, 5.11, 9.11, 10.3 and 12.2 hereof, shall
survive the termination of this Agreement and the payment and performance of all
other Obligations.

      Section 12.16 Senior Debt. The Indebtedness of the Borrowers evidenced by
this Agreement is secured by the Security Documents and is intended by the
parties hereto to be in parity with the Secured Hedge Agreements in effect from
time to time between the Borrowers and any Hedge Bank (with respect to
Obligations under Secured Hedge Agreements).

      Section 12.17 Obligations Several. The obligations of each Administrative
Agent and each of the Lender Parties hereunder are several, not joint.

      Section 12.18 Confidentiality. The Lender Parties shall hold all
non-public, proprietary or confidential information (which has been identified
as such by the U.S. Borrower or any of its Subsidiaries) obtained pursuant to
the requirements of this Agreement in accordance with their customary procedures
for handling confidential information of this nature and in accordance with

                                      149
<PAGE>

safe and sound financial service industry practices; provided, that the Lender
Parties may make disclosure of any such information (a) to their examiners,
Affiliates, outside auditors, counsel, consultants, appraisers and other
professional advisors in connection with this Agreement; (b) to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by the
provisions of this Section 12.19); (c) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender Party's investment
portfolio in connection with ratings issued with respect to such Lender Party;
(d) as reasonably required by any proposed syndicate member or any proposed
transferee or participant in connection with the contemplated transfer of any
Loans or participation therein; (e) as required or requested by any governmental
authority or representative thereof; (f) in connection with the exercise of any
right or remedy under this Agreement, the Secured Hedge Agreements, any other
Loan Document or related document; (g) as required by any law, rule, regulation
or judicial process; (h) with respect to any litigation to which any Loan Party,
any Agent, any Lender Party, or any of their Affiliates is a party or (i) to
governmental regulatory authorities in connection with any regulatory
examination of a Lender Party or in accordance with a Lender Party's regulatory
compliance policy. In no event shall any Lender Party be obligated or required
to return any materials furnished to it by either Borrower. The foregoing
provisions shall not apply to a Lender Party with respect to information that
(i) is or becomes generally available to the public (other than through a breach
of this Section 12.19 by such Lender Party), (ii) is already in the possession
of such Lender Party on a nonconfidential basis, or (iii) comes into the
possession of such Lender Party in a manner not known to such Lender Party to
involve a breach of a duty of confidentiality owing to each Borrower.

      Section 12.19 No Liability of the Issuing Banks. Each Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither Issuing Bank
nor any of its officers or directors shall be liable or responsible for: (a) the
use that may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or genuineness of documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by any Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that a Borrower shall have a
claim against an Issuing Bank, and such Issuing Bank shall be liable to such
Borrower, to the extent of any direct, but not consequential, damages suffered
by such Borrower that such Borrower proves were caused by (i) such Issuing
Bank's willful misconduct or gross negligence as determined in a final,
non-appealable judgment by a court of competent jurisdiction in determining
whether documents presented under any Letter of Credit comply with the terms of
the Letter of Credit or (ii) such Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of such Letter of
Credit. In furtherance and not in limitation of the foregoing, each Issuing Bank
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.

                                      150
<PAGE>

      Section 12.20 Patriot Act Notice. Each Lender Party and each
Administrative Agent (for itself and not on behalf of any Lender Party) hereby
notifies the Loan Parties that pursuant to the requirements of the Patriot Act,
it is required to obtain, verify and record information that identifies each
Loan Party, which information includes the name and address of such Loan Party
and other information that will allow such Lender Party or such Administrative
Agent, as applicable, to identify such Loan Party in accordance with the Patriot
Act. Each Borrower shall, and shall cause each of its Subsidiaries to, provide,
to the extent commercially reasonable, such information and take such actions as
are reasonably requested by any Administrative Agent or any Lender Parties in
order to assist the Administrative Agents and the Lenders in maintaining
compliance with the Patriot Act.

      Section 12.21 Waiver of Jury Trial. EACH OF EACH BORROWER, THE GUARANTORS,
THE AGENTS AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER THE LOAN DOCUMENTS, THE
ADVANCES, THE LETTERS OF CREDIT OR THE ACTIONS OF ANY AGENT OR ANY LENDER PARTY
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

      Section 12.22 Service of Process, Appointment of Process Agent. EACH
BORROWER THAT IS NOT ORGANIZED IN THE UNITED STATES (OR A STATE THEREOF) HEREBY
IRREVOCABLY APPOINTS CT CORPORATION SYSTEM (THE "PROCESS AGENT"), WITH AN OFFICE
ON THE DATE HEREOF AT 111 EIGHTH AVENUE, NEW YORK, NEW YORK 10016, UNITED
STATES, AS ITS AGENT TO RECEIVE, ON ITS BEHALF AND ON BEHALF OF ITS PROPERTY,
SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY
BE SERVED IN ANY ACTION OR PROCEEDING DESCRIBED IN SECTION 12.13. SUCH SERVICE
MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO SUCH BORROWER IN
CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND SUCH
BORROWER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT
SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF SERVICE, EACH BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE
ADDRESS FOR NOTICES SPECIFIED IN SECTION 12.1

      Section 12.23 Judgment Currency. If, for the purpose of obtaining judgment
in any court, it is necessary to convert a sum due hereunder, under any Note or
under any other Loan Document in another currency into U.S. Dollars or into
Canadian Dollars, as the case may be, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be
that at which, in accordance with normal banking procedures, the applicable
Secured Party could purchase such other currency with U.S. Dollars in New York
City or Canadian Dollars in Montreal, at the close of business on the Business
Day immediately preceding the day on which final judgment is given, together
with any premiums and costs of exchange payable in connection with such
purchase.

                                      151
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first appearing above.

                            MOVIE GALLERY, INC.,
                            a Delaware corporation

                            By: /s/ S. Page Todd
                                -----------------------------------------------
                                Name:   S. Page Todd
                                Title:  Executive Vice President and Secretary

                            MOVIE GALLERY CANADA, INC.,
                            a Canadian corporation organized under the laws
                            of the Province of New Brunswick

                            By: /s/ S. Page Todd
                                -----------------------------------------------
                                Name:  S. Page Todd
                                Title: Executive Vice President and Secretary

                                                              [Credit Agreement]

<PAGE>

                            WACHOVIA BANK, NATIONAL ASSOCIATION,
                            as U.S. Administrative Agent

                            By: /s/ Ronald F. Bentien, Jr.
                                ------------------------------------------------
                                Name:  Ronald F. Bentien, Jr.
                                Title: Vice President

                            CONGRESS FINANCIAL CORPORATION (CANADA),
                            as Canadian Administrative Agent

                            By: /s/ Enza Agosta
                                ------------------------------------------------
                                Name:  Enza Agosta
                                Title: Vice President

                            MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
                            as Syndication Agent

                            By: /s/ Chantal Simon
                                ------------------------------------------------
                                Name:  Chantal Simon
                                Title:

                            BANK OF AMERICA, N.A.,
                            as a Co-Documentation Agent

                            By: /s/ David B. Jackson
                                ------------------------------------------------
                                Name:  David B. Jackson
                                Title: Senior Vice President

                            CALYON NEW YORK BRANCH,
                            as a Co-Documentation Agent

                            By: /s/ Scott Chappelka
                                ------------------------------------------------
                                Name:  Scott R. Chappelka
                                Title: Director

                                                              [Credit Agreement]

<PAGE>

                            CANADIAN IMPERIAL BANK OF COMMERCE,
                            as a Co-Documentation Agent

                            By: /s/ Steven Reiner
                                -------------------------------
                                Name: Steven Reiner
                                Title: Managing Director, CIBC World
                                        Markets Corp., As agent

                                                              [Credit Agreement]

<PAGE>

                            WACHOVIA BANK, NATIONAL ASSOCIATION,
                            as a Lender

                            By: /s/ Ronald F. Bentien, Jr.
                                ----------------------------------
                                Name: Ronald F. Bentien, Jr.
                                Title: Vice President

                                                              [Credit Agreement]

<PAGE>

                            BANK OF AMERICA, N.A.,
                            as a Lender

                            By: /s/ David B. Jackson
                                ----------------------------
                                Name: David B. Jackson
                                Title: Senior Vice President

                                                              [Credit Agreement]

<PAGE>

                            CALYON NEW YORK BRANCH,
                            as a Lender

                            By: /s/ Scott Chappelka
                                -------------------------
                                Name: Scott Chappelka
                                Title: Director

                                                              [Credit Agreement]

<PAGE>

                            CIBC, Inc.
                            as a Lender

                            By: /s/ Steven Reiner
                                ---------------------------
                                Name: Steven Reiner
                                Title: Managing Director, CIBC World
                                        Markets Corp. as Agent

                                                              [Credit Agreement]

<PAGE>

                            MERRILL LYNCH CAPITAL CANADA, INC.,
                            as a Lender

                            By: /s/ Marcelo Cosma
                                ------------------------------------------
                                Name: Marcelo Cosma
                                Title: Vice President

                                                              [Credit Agreement]

<PAGE>

                            MERRILL LYNCH CAPITAL CORPORATION,
                            as a Lender

                            By: /s/ Chantal Simon
                                ----------------------------------------
                                Name: Chantal Simon
                                Title:

                                                              [Credit Agreement]

<PAGE>
                                BRANCH BANKING AND TRUST COMPANY,
                                as a Lender

                                By: /s/ Roberts A. Bass
                                   -----------------------------------
                                   Name:  Roberts A. Bass
                                   Title: Senior Vice President

                                FIRST TENNESSEE BANK NATIONAL
                                ASSOCIATION
                                as a Lender

                                By: /s/ James H. Moore, Jr.
                                   -----------------------------------
                                   Name:  James H. Moore, Jr.
                                   Title: Senior Vice President

                                DRESDNER BANK AG, NEW YORK AND
                                GRAND CAYMAN BRANCHES,
                                as a Lender

                                By: /s/ Janet Wolff          /s/ Jeannine Amodeo
                                  ----------------------------------------------
                                  Name: Janet Wolff            Jeannine Amodeo
                                  Title: Vice President         Vice President

                                ERSTE BANK, NEW YORK,
                                as a Lender

                                By: /s/ John Fay
                                   -----------------------------------
                                   Name:  John Fay
                                   Title: Director

                                By: /s/ Patrick Kunkel
                                    -----------------------------------
                                    Name: Patrick Kunkel
                                    Title: Director

                                                              [Credit Agreement]EX-10.1

 

Exhibit 10.1

April 18, 2005

Theresa A. Flanagan

152 Fairview Road

Skillman, N.J. 08558

Dear Ms. Flanagan:

This letter confirms our mutual understanding regarding termination of your employment relationship
with Harris Interactive Inc. (the “Company”), the successor by merger to Total Research Corporation
(“TRC”). TRC and you entered into an Employment Agreement dated January 1, 1999. The Employment
Agreement no longer reflects, in detail, either our relationship or the agreement we have reached
regarding termination of your employment with the Company. This letter agreement, therefore, is
intended by each of us to supersede and replace the 1999 Employment Agreement as of the date of
this letter. We have agreed:

	 	 	 
	1.

	 	Your last day of active employment with the Company will be June 30, 2005 (the “Termination
Date”). You will receive your current salary and benefits through that date.
	 
	2.

	 	In lieu of any severance or benefits under the Employment Agreement or any other Company
benefits, you are entitled to the severance benefits outlined below. This Agreement does not
affect the amount of your vested benefits under any other employee benefit plan in which you
were a participant.

	 	 	 	 	 
	

	 	a.
	 	After the Termination Date the Company will continue to pay you
your current bi-weekly salary, less standard deductions, up to and including
September 29, 2006, in the same manner and frequency as you received salary
immediately prior to the Termination Date.
	 
	

	 	b.
	 	You will also be eligible to receive fiscal year 2005 bonus due
the Group President, Customer Loyalty Management based on 1st half
and 2nd half actual performances against established targets. You
must be actively employed as of June 30, 2005 to be eligible to receive the
bonus. You will also be eligible for the bonus, should you and the Company
mutually agree on a separation date prior to June 30, 2005. The bonus will be
paid as cash at the same time as other executive bonuses are paid by the
Company.
	 
	

	 	c.
	 	The Company will continue to provide to you, at Company expense,
less the standard employee contribution applicable to employees of status
similar to your current position, the health and dental insurance benefits
provided to current employees of similar status for the time you are unemployed
or without work for which you are compensated, up to and including September 29,
2006. In the event you become employed or begin to perform work for which you
are eligible to receive health insurance benefits, the Company will no longer be
obligated to provide you with the above-mentioned health and dental benefits.
Should you become eligible under COBRA for continuation of your health insurance
coverage after September 29, 2006, you will be notified of such right. Short
term and long term disability, life insurance

 

 

	 	 	 	 	 
	

	 	 	 	and 401K contributions will cease as of the Termination Date. You can continue
your Flexible Spending Account contributions during your severance period,
through September 29, 2006.
	 
	

	 	d.
	 	You will be eligible to exercise all vested Company stock options
at any time prior to and including September 29, 2006. Your vested stock
options amount to 20,625 shares, at an exercise price of $2.42 per share.
Failure to exercise vested options on or before September 29, 2006 will result
in forfeiture of all or any portion of stock options not exercised. You also
have 2,560 at the exercise price of $6.27. These are fully vested options and
will have a 10 year expiration date for purposes of exercising, irrespective of
continued employment. Prior to the Termination Date you remain subject to the
Company’s Insider Trading Policy as it relates to executive officers.
Thereafter you are no longer subject to those policies but you may not trade at
any time that you remain in possession of material non-public information.
	 
	

	 	e.
	 	You will be paid for all unused vacation accrued for the current
year, prorated through the Termination Date. You will also receive payment for
all unused “carry over” vacation time up to a maximum of 5 days.
	 
	

	 	f.
	 	Use of your laptop computer, if applicable, and cellular phone
will continue through the Termination Date, at which time they must be returned
to the Company.
	 
	

	 	g.
	 	Your spouse, if living, or heirs will receive the severance
benefits in Section 2 (a), (b), (c) and (e), above in the event of your death.
Eligibility to exercise vested stock options will be in accordance with Section
4(b) of the Stock Option Agreement.

	 	 	 
	3.

	 	If you are a participant in the Company’s 401K plan, you will not be eligible
to continue your contributions beyond your termination date. Should you have a loan
with the 401K plan, you may either: (a) pay off the loan balance, immediately, or (b)
pay off the loan within 90 days of your Termination Date. Should you not pay off the
loan, the plan will clear the loan amount and this will be recognized as a distribution
from the plan and may be subject to income taxes.
	 
	4.

	 	You acknowledge and agree that your receipt of the severance benefits described
in this Agreement is contingent upon you immediately notifying Dennis K. Bhame at 60
Corporate Woods, Rochester, New York, 14623, (585) 214-7506, that you have become
employed or have begun to perform work for which you are eligible to receive health
insurance benefits.
	 
	5.

	 	For purposes of accruing 401K benefits, vacation, or other employee benefits,
your last day of work shall be deemed as the Termination Date. You will not accrue
seniority or other benefits during any period of salary continuation.
	 
	6.

	 	You acknowledge and agree that during your employment you were bound by, and
following the Termination Date, will continue to be bound by, the Non-Competitive
Agreement between you and the Company, signed as a part of your Incentive Stock Option
Agreements as well as the Non-Competitive Agreement signed by you dated April 11, 2003.
You also agree to continue to be bound by Sections 5.1(a), (b),and (c), 5.2, 5.3, 5.4,
6.2, and 6.3 of your Employment Agreement for the duration and to the extent provided
therein and in consideration of the obligations undertaken by the Company pursuant to
this Agreement. All references to the “Company” in those sections shall be deemed to
be references to Harris Interactive Inc., and for purposes of avoidance of doubt,
notwithstanding anything to the contrary in the Employment Agreement the
“Non-Competition Period” shall end on June 30, 2006.

 

 

	 	 	 
	7.

	 	You agree that you will not make to any person or entity any statement, whether
oral or written, that directly or indirectly denigrates or disparages the Company or
any of its officers, directors, employees, or agents. The Company also agrees it will
not make to any person or entity any statement, whether oral or written, that directly
or indirectly denigrates or disparages you.
	 
	8.

	 	You agree that the contents of this Agreement and the consideration therefore
shall be kept confidential and shall not be disclosed to any person or entity except
your spouse, attorney, and accountant or tax advisor, who in turn shall be advised of
this confidentiality provision and their responsibilities under it. The Company may
disclose the terms of this Agreement and the consideration therefore to any federal,
state, and/or local taxing authority in connection with an audit of tax returns
involving the consideration provided for in this settlement or as otherwise required by
law.
	 
	9.

	 	This Agreement may not be modified, amended, supplemented or canceled except by
a written agreement signed by each of us. This Agreement (including without limitation
the provisions set forth in Section 6) shall be governed, construed, and enforced in
accordance with the laws of the State of New York notwithstanding the fact that venue
for any arbitration or proceeding is placed in New Jersey.
	 
	10.

	 	The invalidity of any provision of this Agreement shall not affect the validity
of any other provision hereof. If any provision of this Agreement is determined by a
court of competent jurisdiction to be unenforceable, it is the intent of the parties
that the Agreement be enforced to the greatest extent possible to protect the interests
set forth herein.
	 
	11.

	 	Any “Change of Control” in the Company’s Executive Management, Board of
Directors, ownership, or the like, will not result in a discontinuance of severance
benefits as outlined in this agreement. Successors(s) will be bound by this agreement.

Please sign and return the enclosed copy of this Agreement to evidence your agreement to all terms
and conditions.

Very truly yours,

/s/ Dennis K. Bhame

Dennis K. Bhame

Executive Vice President, Human Resources

Accepted and agreed:

	 	 	 	 	 	 	 
	/s/ Theresa A. Flanagan
	 	Dated: April 26, 2005
	 	 		 
	 

	 	 	 	 	 	 
	Theresa A. Flanagan

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