Document:

EXHIBIT 10(b)

                                      NASD
                           SUBORDINATED LOAN AGREEMENT
                               FOR EQUITY CAPITAL

                                      SL-5

                               AGREEMENT BETWEEN:

                             Lender: SunAmerica Inc.
                                     (Name)
                              1 SunAmerica Center,
           1999 Avenue of the Stars, 38th Floor      (Street Address)
             Los Angeles            California           90067-6022
                (City)               (State)               (Zip)

                                       AND

                      Broker-Dealer: Capital Services Inc.
                                     (Name)
                                733 Third Avenue
                                (Street Address)
                            New York  New York 10017
                            (City)    (State)  (Zip)

NASD  ID  NO:  13158
Date  Filed:  February  4,  2000

     NASD  ________________
     Received  February  8,  2000
     NASD  Regulation,  Inc.
     District  10

                           SUBORDINATED LOAN AGREEMENT
                               FOR EQUITY CAPITAL

     AGREEMENT  DATED  February 4,2000 to be effective February 21, 2000 between
SunAmerica,  Inc.  (the  "Lender")  and  SunAmerica  Capital Services, Inc. (the
"Broker-Dealer").

     In  consideration  of  the  sum  of $6,000,000 and subject to the terms and
conditions  hereinafter  set  forth,  the  Broker-Dealer  promises to pay to the
Lender  or  assigns  on March 31, 2003 (the "Scheduled Maturity Date") (the last
day of the month at least three years from the effective date of this Agreement)
at  the  principal  office  of  the  Broker-Dealer  the  afore described sum and
interest  thereon  payable at the rate of 8.5% per annum from the effective date
of this Agreement, which date shall be the date so agreed upon by the Lender and
the  Broker-Dealer  unless  otherwise  determined by the National Association of
Securities  Dealers, Inc. (the "NASD")*.  This agreement shall not be considered
a  satisfactory  subordination  agreement  pursuant  to the provisions of 17 CFR
240.15c3-d unless and until the NASD has found the Agreement acceptable and such
Agreement  has  become  effective  in  the  form  found  acceptable.

     The cash proceeds covered by this Agreement shall be used and dealt with by
the  Broker-Dealer  as  part of its capital and shall be subject to the risks of
the  business.  The  Broker-Dealer  shall  have  the  right  to deposit any cash
proceeds of the Subordinated Loan Agreement in an account or accounts in its own
name  in  any  bank  or  trust  company.

     The  Lender  irrevocably  agrees  that the obligations of the Broker-Dealer
under this Agreement with respect to the payment of principal and interest shall
be  and are subordinate in right of payment and subject to the prior payments or
provision  for  payment  in  full  of all claims of all other present and future
creditors  of the Broker-Dealer arising out of any matter occurring prior to the
date  on  which  the  related  Payment  Obligation  (as  defined herein) matures
consistent  with the provisions of 17 CFR 240.15c3-1 and 240.15c3-1d, except for
claims  which are the subject of subordination agreements which rank on the same
priority  as  or  are junior to the claim of the Lender under such subordination
agreements.

I.     PERMISSIVE  PREPAYMENTS  (OPTIONAL)

     At  the  option  of the Broker-Dealer, but not at the option of the Lender,
payment  of  all  or any part of the "Payment Obligation" amount hereof prior to
the  maturity  date  may  be  made by the Broker-Dealer only upon receipt of the
prior  written  approval of the NASD, but in no event may any prepayment be made
before the expiration of one year from the date this Agreement Became effective.
No prepayment shall be made if, after giving effect thereto (and to all payments
for  Payment  Obligations  under  any  other  subordination  agreements  then
outstanding,  the  maturity of which are scheduled to fall due either within six
months  after the date such prepayment is to occur or on or prior to the date on
which  the  Payment  Obligation hereof is scheduled to mature, whichever date is
earlier),  without  reference  to  any  projected  profit  or  loss  of  the
Broker-Dealer,  either  aggregate indebtedness of the Broker-Dealer would exceed
1000 percent of its net capital or such lesser percent as may be made applicable
to  the Broker-Dealer   from   time   to   time   by   a   governmental   agency
or

                                        2
<PAGE>
self-regulatory  body  having  appropriate authority, or if the Broker-Dealer is
operating pursuant to paragraph (a)(1)(ii) of 17 CFR 240.15c3-1, its net capital
would  be less than five percent of aggregate debit items computed in accordance
with  17  CFR  240.15c3-3a, or if registered as a futures commission merchant, 7
percent  of  the  funds  required  to  be  segregated  pursuant to the Commodity
Exchange  Act and the regulations thereunder (less the market value of commodity
options  purchased  by option customers on or subject to the rules of a contract
market,  provided,  however,  the  deduction  for  each option customer shall be
limited  to  the amount of customer funds in such option customer's account), if
greater, or its net capital would be less than 120 percent of the minimum dollar
amount  required  by  17  CFR  240.15c3-1  including  paragraph  (a)(1)(ii),  if
applicable,  or  such  greater  dollar  amount  as may be made applicable to the
Broker-Dealer by the NASD, or governmental agency or self-regulatory body having
appropriate  authority.

*  Interest  to  be  paid  quarterly  from the effective date of this Agreement.

II.     SUSPENDED  REPAYMENTS

     (a)     The  Payment Obligation of the Broker-Dealer shall be suspended and
shall  not  mature  if  after  giving  effect to such payment (together with the
payment  of  any  Payment  Obligation,  of  the  Broker-Dealer  under  any other
subordination  agreement  scheduled  to  mature  on  or  before  such  Payment
Obligation)  the  aggregate  indebtedness of the Broker-Dealer would exceed 1200
percent  of  its net capital or such lesser percent as may be made applicable to
the  Broker-Dealer  from  time  to time by the NASD, or a governmental agency or
self-regulatory  body  having  appropriate authority, or if the Broker-Dealer is
operating  pursuant to paragraph (f) of 17 CFR 240.15c3-1, its net capital would
be  less  than 5 percent of aggregate debit items computed in accordance with 17
CFR 240.15c3-3a, or if registered as a futures commission merchant, 6 percent of
the  funds  required to be segregated pursuant to the Commodity Exchange Act and
the  regulations  thereunder,  (less  the  market  value  of  commodity  options
purchased  by  option customers on or subject to the rules of a contract market,
provided,  however,  the  deduction for each option customer shall be limited to
the  amount of customer funds in such option customer's account), if greater, or
its  net  capital  would  be  less than 120 percent of the minimum dollar amount
required  by 17 CFR 240.15c3-1 including paragraph (a)(1)(ii), if applicable, or
such greater dollar amount as may be made applicable to the Broker-Dealer by the
NASD,  or  a  governmental  agency  or  self-regulatory  body having appropriate
authority.

III.     NOTICE  OF  MATURITY

     The Broker-Dealer shall immediately notify the NASD if, after giving effect
to  all  payments  of  Payment  Obligations  under subordination agreements then
outstanding  which are then due or mature within six months without reference to
any  projected  profit  or  loss  of  the  Broker-Dealer,  either  the aggregate
indebtedness  of the Broker-Dealer would exceed 1200 percent of its net capital,
or  in the case of a Broker-Dealer operating pursuant to paragraph (a)(1)(ii) of
17  CFR  240.15c3-1,  its  net capital would be less than 5 percent of aggregate
debit  items computed in accordance with 17 CFR 240.15c3-3a, or if registered as
a  futures  commission merchant 6 percent of the funds required to be segregated
pursuant  to  the  Commodity Exchange Act and  the regulations thereunder, (less
the  market  value  of  commodity  options

                                        3
<PAGE>
purchased  by  option customers on or subject to the rules of a contract market,
provided,  however,  the  deduction for each option customer shall be limited to
the amount of customer funds in such option customer's account,) if greater, and
in either case, if its net capital would be less than 120 percent of the minimum
dollar  amount  required by 17 CFR 240.15c3-1 including paragraph (a)(1)(ii), if
applicable,  or  such  greater  dollar  amount  as may be made applicable to the
Broker-Dealer  by  the  NASD,  or  a governmental agency or self-regulatory body
having  appropriate  authority.

IV.   BROKER-DEALERS  CARRYING  THE  ACCOUNTS  OF
      SPECIALISTS  AND  MARKET  MAKERS  IN  LISTED  OPTIONS

     A  Broker-Dealer  who guarantees, endorses, carries or clears specialist or
market-maker transactions in options listed on a national securities exchange or
facility  of  a  national  securities  association shall not permit a reduction,
prepayment,  or  repayment  of  the  unpaid principal amount if the effect would
cause  the equity required in such specialist or market-maker accounts to exceed
1000  percent  of the Broker-Dealer's net capital or such percent as may be made
applicable to the Broker-Dealer from time to time by the NASD, or a governmental
agency  or  self-regulatory  body  having  appropriate  authority.

V.   LIMITATION  ON  WITHDRAWAL  OF  EQUITY  CAPITAL

     The  proceeds covered by this Agreement shall in all respects be subject to
the provisions of paragraph (e) of 17 CFR 240.15c3-1. Pursuant thereto no equity
capital  of the Broker-Dealer or a subsidiary or affiliate consolidated pursuant
to 17 CFR 240.15c3-1c, whether in the form of capital contributions by partners,
par or stated value of capital stock, paid-in capital in excess of par, retained
earnings  or other capital accounts, may be withdrawn by action of a stockholder
or  partner,  or  by  redemption  or repurchase of shares of stock by any of the
consolidated  entities  or  through  the  payment  of  dividends  or any similar
distribution,  nor  may  any unsecured advance or loan be made to a stockholder,
partner, sole proprietor, or employee if, after giving effect thereto and to any
other  such  withdrawals,  advances  or  loans  and  any  payments  of  Payment
Obligations  under  satisfactory subordination agreements which are scheduled to
occur  within  six  months following such withdrawals, advances or loans, either
aggregate  indebtedness of any of the consolidated entities exceeds 1000 percent
of  its  net  capital,  or  in the case of a Broker-Dealer operating pursuant to
paragraph  (a)(1)(ii) of 17 CFR 240.15c3-1, its net capital would be less than 5
percent of aggregate debit items computed in accordance with 17 CFR 240.15c3-3a,
or  if  registered  as  a  futures  commission  merchant, 7 percent of the funds
required  to  be  segregated  pursuant  to  the  Commodity Exchange Act, and the
regulations  thereunder (less the market value of commodity options purchased by
option  customers  on  or  subject  to the rules of a contract market, provided,
however,  the  deduction for each option customer shall be limited to the amount
of  customer funds in such option customer's account), if greater, and in either
case,  if  its  net capital would be less than 120 percent of the minimum dollar
amount  required  by  17  CFR  240.15c3-1  including  paragraph  (a)(1)(ii),  if
applicable,  or  such  greater  dollar  amount  as may be made applicable to the
Broker-Dealer  by  the  NASD,  or  a governmental agency or self-regulatory body
having  appropriate  authority;  or  should the Broker-Dealer be included within
such  consolidation,  if  the  total  outstanding  principal  amounts  of
satisfactory  subordination  agreements  of  the  Broker-

                                        4
<PAGE>
Dealer  (other  than such agreements which qualify as equity under paragraph (d)
of  17 CFR 240.15c3-1) would exceed 70 percent of its debt/equity total, as this
term is defined in paragraph (d) of 17 CFR 240.15c3-1, for a period in excess of
90  days, or for such longer period which the Commission may upon application of
the  Broker-Dealer  grant  in  the  public  interest  or  for  the protection of
investors.

VI.   BROKER-DEALERS  REGISTERED  WITH  CFTC

     If  the  Broker-Dealer  is  a  futures  commission merchant or introductory
broker  as  that term is defined in the Commodity Exchange Act, the Organization
agrees,  consistent  with the requirements of Section 1.17(h) of the regulations
of  the  CFTC  (17  CFR  1.17(h)),  that:

     (a)  Whenever  prior  written  notice  by  the Broker-Dealer to the NASD is
required  pursuant  to  the provisions of this Agreement, the same prior written
notice  shall  be  given  by  the Broker-Dealer to (i) the CFTC at its principal
office  in  Washington, D.C., attention Chief Account of Division of Trading and
Markets,  and/or  (ii)  the  commodity  exchange  of which the Organization is a
member and which is then designated by the CFTC as the Organization's designated
self-regulatory  organization  (the  "DSRO");

     (b)  Whenever  prior written consent, permission or approval of the NASD is
required  pursuant  to the provisions of this Agreement, the Broker-Dealer shall
also obtain the prior written consent, permission or approval of the CFTC and/or
of  the  DSRO.

     (c)  Whenever  the Broker-Dealer receives written notice of acceleration of
maturity  pursuant  to the provisions of this Agreement, the Broker-Dealer shall
promptly  give  written  notice  thereof to the CFTC at the address above stated
and/or  to  the  DSRO.

VII.   GENERAL

     In  the  event  of  the  appointment  of  a  receiver  or  trustee  of  the
Broker-Dealer  or  in  the  event of its insolvency, liquidation pursuant to the
Securities  Investor Protection Act of 1970 or otherwise, bankruptcy, assignment
for  the  benefit  of  creditors,  reorganizations  whether  or  not pursuant to
bankruptcy  laws,  or  any other marshaling of the assets and liabilities of the
Broker-Dealer, the Payment Obligation of the Broker-Dealer shall mature, and the
holder  hereof  shall  not  be  entitled  to  participate  or  share, ratably or
otherwise,  in  the  distribution  of  the assets of the Broker-Dealer until all
claims  of  all  other  present and future creditors of the Broker-Dealer, whose
claims  are  senior  hereto,  have  been  fully  satisfied.

     This Agreement shall not be subject to cancellation by either the Lender or
the  Broker-Dealer,  and no payment shall be made, nor the Agreement terminated,
rescinded or modified by mutual consent or otherwise if the effect thereof would
be  inconsistent  with  the  requirements  of  17 CFR 240.15c3-1 and 240.15c3-d.

     The Agreement may not be transferred, sold, assigned, pledged, or otherwise
encumbered  or  otherwise disposed of, and no lien, charge, or other encumbrance
may  be  created  or  permitted  to  be  created  thereof  without  the

                                        5
<PAGE>
prior  written  consent  of  the  NASD.

     The  Lender  irrevocably agrees that the loan evidenced hereby is not being
made in reliance upon the standing of the Broker-Dealer as a member organization
of  the  NASD  or  upon  the  NASD surveillance of the Broker-Dealer's financial
position  or  its  compliance  with the By-laws, rule and practices of the NASD.
The  Lender  has  made such investigation of the Broker-Dealer and its partners,
officers,  directors,  and  stockholders  as  the  Lender  deems  necessary  and
appropriate  under  the  circumstances.

     The  Lender  is  not  relying  upon  the  NASD  to  provide any information
concerning  or  relating  to  the  Broker-Dealer and agrees that the NASD has no
responsibility  to disclose to the Lender any information concerning or relating
to  the  Broker-Dealer  which  it  may  now,  or  at  any  future  time,  have.

     The  term  "Broker-Dealer,"  as  used  in this Agreement, shall include the
Broker-Dealer,  its  heirs,  executors,  administrators, successors and assigns.

     The  term "Payment Obligation" shall mean the obligation of the Borrower to
repay  cash  loaned  to  it  pursuant  to  this  Subordinated  Loan  Agreement.

     The  provisions  of  this Agreement shall be binding upon the Broker-Dealer
and  the  Lender,  and  their  respective  heirs,  executors,  administrators,
successors,  and  assigns.

     Any  controversy  arising  out  of  or  relating  to  this Agreement may be
submitted to and settled by arbitration pursuant to the By-Laws and rules of the
NASD.  The  Broker-Dealer  and  the  Lender  shall be conclusively bound by such
arbitration.

     This instrument embodies the entire agreement between the Broker-Dealer and
the  Lender and no other evidence of such agreement has been or will be executed
without  prior  written  consent  of  the  NASD.

     This  Agreement  shall  be  deemed  to  have  been made under, and shall be
governed  by,  the  laws  of  the  State  of  California  in  all  respects.

                                        6

<PAGE>
     IN  WITNESS  WHEREOF the parties have set their hands and seal this 4th day
of  February,  2000.

SunAmerica  Capital  Services,  Inc.
Broker-Dealer
(SEAL)

By:  /s/  Debbi  Potash-Turner
Title:    Chief  Financial  Officer

SunAmerica  Inc.
Lender
(SEAL)

By:  /s/  James  R.  Belardi
Title     Executive  Vice  President

FOR  NASD  USE  ONLY

ACCEPTED  BY:  /s/  Gerald  Dougherty
Name
Assistant  Director
Title

EFFECTIVE  DATE:  February  21,  2000
LOAN  NUMBER:  10-E-SLA-11151

                                        7

<PAGE>
                           SUBORDINATED LOAN AGREEMENT
                                LOAN ATTESTATION

     It  is  recommended  that you discuss the merits of this investment with an
attorney,  accountant  or  some other person who has knowledge and experience in
financial  and  business  matters  prior  to  executing  this  Agreement.

     1.     I have received and reviewed NASD Form SLD, which is a reprint of 17
CFR  240.15c3-1,  and  am  familiar  with  its  provisions.

     2.     I  am  aware  that the funds or securities subject to this Agreement
are  not  covered  by  the  Securities  Investor  Protection  Act  of  1970.

     3.     I  understand that I will be furnished financial statements pursuant
to  SEC  Rule  17a-5(c).

     4.     On  the  date  this  Agreement  was  entered into, the Broker-Dealer
carried  funds  or  securities  for  my  account.  (State  Yes  or  No)  No.

     5.     Lender's  business  relationship to the Broker-Dealer is:  Lender is
an intermediate holding company of Broker-Dealer and continuously to monitor the
fiscal  status  and  reports  of  the  Broker-Dealer.

     6.     If  the  a  partner  or  stockholder  is not actively engaged in the
business  of  the  Broker-Dealer,  acknowledge  receipt  of  the  following:

     (a)     Certified  audit and accountant's certificate dated ______________.

     (b)     Disclosure  of financial and/or operational problems since the last
certified  audit  which  required  reporting pursuant to SEC Rule 17a-11. (If no
such  reporting  was  required,  state  "none")  ________________________.

     (c)     Balance  sheet  and  statement  of  ownership  equity  dated
_________________________________________.

     (d)     Most  recent  computation of net capital and aggregate indebtedness
or  aggregate  debit  items dated _________________, reflecting a net capital of
$________________  and  a  ratio  of  _______________.

     (e)     Debt/equity  ratio  as  of  ______________  of  ________________.

     (f)     Other  disclosures:  __________________________

Dated:  February  4,  1999

                                    SunAmerica  Inc.
                                    Lender

                                    By:  /s/  James  R.  Belardi
                                    Title:    Executive  Vice  President

                                        8

<PAGE>
                            CERTIFICATE OF SECRETARY

     I,  Susan  L. Harris, the duly appointed, qualified and acting Secretary of
SunAmerica  Inc.,  a Delaware corporation (the "Corporation"), do hereby certify
that the following is a true and correct copy of the resolutions duly adopted by
the  Executive Committee of the Board of Directors of the Corporation, effective
March 10, 1999, and that such resolutions are in full force and effect as of the
date  hereof:

     WHEREAS,  this  Corporation,  from  time  to  time, reviews the net capital
infusion  needs  of  its  wholly-owned  subsidiaries  which  are  broker-dealers
registered  with  the  Securities  and  Exchange  Commission  and members of the
National  Association  of Securities Dealers, Inc., including SunAmerica Capital
Services,  Inc.,  Advantage Capital Corporation, SunAmerica Securities, Inc. and
Royal  Alliance  Associates,  Inc.,  and  in  conjunction  with such review, has
provided  subordinated  loans to such subsidiaries pursuant to Subordinated Loan
Agreements  for  Equity  Capital;

     WHEREAS, it is in the best interests of this Corporation to provide blanket
authorization  for  such  subordinated  loan  transactions;

     NOW,  THEREFORE,  BE  IT RESOLVED that the Chairman, any Vice Chairman, any
Executive  Vice  President, or the Treasurer (the "Designated Officers"), acting
alone,  be,  and  each  hereby is authorized to effect subordinated loans to the
wholly-owned  broker-dealer  subsidiaries  of  the  Corporation, in an aggregate
principal amount not to exceed Fifty Million Dollars ($50,000,000), and to make,
execute  and  deliver  such  loan agreements and other documents evidencing such
loans,  including  any Subordinated Loan Agreement for Equity Capital, as deemed
necessary  or  appropriate;

     RESOLVED FURTHER that each of the Designated Officers are hereby authorized
to  make  such  changes  in  the  terms and conditions of such Subordinated Loan
Agreements  as  may  be necessary to conform to the requirements of Title 17 CFR
Section  240.15c  3-1d  and  the rules of the National Association of Securities
Dealers;  and

     RESOLVED  FURTHER  that the Executive Committee hereby ratifies any and all
action  that  may  have  been  taken  by  the  officers  of  this Corporation in
connection  with  the  foregoing resolutions and authorizes the officers of this
Corporation  to  take  any  and  all  such  further  actions  as  may  be deemed
appropriate  to  reflect  these resolutions and to carry out their tenor, effect
and  intent.

IN  WITNESS  WHEREOF,  the undersigned has executed this Certificate and affixed
the  seal  of  this  corporation  this  4th  day  of  February,  2000.

                                    /s/  Susan  L.  Harris

                                    SUSAN  L.  HARRIS
[SEAL]

                                        9

<PAGE>
                              OFFICER'S CERTIFICATE

     I,  James  R.  Belardi,  Executive  Vice  President  of  SunAmerica Inc., a
Delaware corporation (this "Corporation"), do hereby certify that the $6,000,000
subordinated loan made by this Corporation to SunAmerica Capital Services, Inc.,
effective February 21, 2000 does not cause the aggregate principal amount of all
outstanding  loans made by this Corporation to its broker-dealer subsidiaries to
exceed  $50  million.

Dated:  February  4,  2000

                                    /s/James  R.  Belardi

                                    JAMES  R.  BELARDI
                                    Executive  Vice  President

                                       10EXHIBIT 10(a) CREDIT AGREEMENT

 

 

Exhibit 10(a)

CREDIT AGREEMENT

dated as of

 

April 20, 2000

 

among

BERGEN BRUNSWIG CORPORATION

BERGEN BRUNSWIG DRUG COMPANY

PHARMERICA, INC.

The Other Borrowing Subsidiaries Party Hereto

 

The Lenders Party Hereto

WACHOVIA BANK, N.A.,

as Syndication Agent

FIRST UNION NATIONAL BANK and

FLEET NATIONAL BANK, 

as Co-Documentation Agents

CIT FINANCIAL GROUP, 

as Collateral Agent

and

THE CHASE MANHATTAN BANK,

as Administrative Agent

and Collateral Agent

___________________________

 

CHASE SECURITIES INC.,         
         
         
         
         
         
         
WACHOVIA SECURITIES, INC.

     as Lead Arranger and
         
         
         
         
         
         
         
         
      
as Lead Arranger and

     Joint Book Manager
         
         
         
         
         
         
         
         
      
Joint Book Manager

 

 

 

 

 

[CS&M # 6701-037]

	
TABLE OF CONTENTS

	 	 	 
	 	 	
Page

	 	 	 
	
ARTICLE I

Definitions

	 	 	 
	
SECTION 1.01.1
	
Defined Terms
 .........................................................................................
	
1

	
SECTION 1.02.  
	
Classification of Loans and Borrowings
 ............................................
	
24

	
SECTION 1.03.  
	
Terms Generally
 .....................................................................................
	
24

	
SECTION 1.04.  
	
Accounting Terms; GAAP
 .....................................................................
	
25

	 	 	 
	 	 	 
	
ARTICLE II

The Credits

	 	 	 
	
SECTION 2.01.  
	
Commitments
 .........................................................................................
	
25

	
SECTION 2.02.  
	
Loans and Borrowings
 ........................................................................
	
25

	
SECTION 2.03.  
	
Requests for Borrowings
 ....................................................................
	
26

	
SECTION 2.04.  
	
Swingline Loans
 ..................................................................................
	
27

	
SECTION 2.05.  
	
Letters of Credit
 ...................................................................................
	
28

	
SECTION 2.06.  
	
Funding of Borrowings
 .....................................................................
	
31

	
SECTION 2.07.  
	
Interest Elections
 .................................................................................
	
31

	
SECTION 2.08.  
	
Termination and Reduction of Commitments
 ..................................
	
32

	
SECTION 2.09.33
	
Repayment of Loans; Evidence of Debt
 ...........................................
	
33

	
SECTION 2.10.34
	
Amortization of Term Loans
 ...............................................................
	
34

	
SECTION 2.11.  
	
Prepayment of Loans.
 ..........................................................................
	
36

	
SECTION 2.12. 
	
Fees
 ............................................................................
 ............................
	
37

	
SECTION 2.13.  
	
Interest
 ............................................................................
 ......................
	
38

	
SECTION 2.14.  
	
Alternate Rate of Interest
 ....................................................................
	
38

	
SECTION 2.15.39
	
Increased Costs
 ...................................................................................
	
39

	
SECTION 2.16. 
	
Break Funding Payments
 ..................................................................
	
39

	
SECTION 2.17.
	
Taxes
 .........................................................................
 ............................
	
40

	
SECTION 2.18.  
	
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
 ...
	
41

	
SECTION 2.19.  
	
Mitigation Obligations; Replacement of Lenders
 .........................
	
42

	
SECTION 2.20.  
	
Borrowing Subsidiaries
 .......................................................................
	
42

	 	 	 
	 	 	 
	
ARTICLE III

Representations and Warranties

	 	 	 
	
SECTION 3.01. 
	
Organization; Powers
 .........................................................................
	
43

	
SECTION 3.02.  
	
Authorization; Enforceability
 ...........................................................
	
43

	
SECTION 3.03. 
	
Governmental Approvals; No Conflicts
 ...........................................
	
43

	
SECTION 3.04. 
	
Financial Condition; No Material Adverse Change
 ...................
	
43

	
SECTION 3.05.  
	
Properties
 ........................................................................
 ....................
	
44

	
SECTION 3.06.  
	
Litigation and Environmental Matters
 ............................................
	
44

	
SECTION 3.07.  
	
Compliance with Laws and Agreements
 .........................................
	
45

	
SECTION 3.08. 
	
Investment and Holding Company Status
 .......................................
	
45

	
SECTION 3.09.
	
Taxes
 .......................................................................
 ...............................
	
45

	
SECTION 3.10. 
	
ERISA.............................................
 ........................................................
	
45

	
SECTION 3.11.  
	
Disclosure
 ..................................................................
 ............................
	
45

	
SECTION 3.12.
	
Subsidiaries
 ..................................................................
 .........................
	
45

	
SECTION 3.13.  
	
Insurance
 ...................................................................
 ............................
	
45

	
SECTION 3.14.  
	
Labor Matters
 ...................................................................
 ....................
	
46

	
SECTION 3.15.  
	
Solvency
 .....................................................................
 .............................
	
46

	
SECTION 3.16.  
	
Senior Indebtedness
 .............................................................................
	
46

	
SECTION 3.17.  
	
Year 2000
 ..........................................................................
 ....................
	
46

	 	 	 
	 	 	 
	
ARTICLE IV

Conditions

	
SECTION 4.01.  
	
Effective Date
 .................................................................
 .......................
	
46

	
SECTION 4.02.  
	
Each Credit Event
 .................................................................................
	
48

	
SECTION 4.03.  
	
Initial Credit Event for each Borrowing Subsidiary
 ......................
	
49

	 	 	 
	 	 	 
	
ARTICLE V

Affirmative Covenants

	 	 	 
	
SECTION 5.01.  
	
Financial Statements and Other Information
 ...................................
	
49

	
SECTION 5.02.  
	
Notices of Material Events
 ..................................................................
	
51

	
SECTION 5.03.  
	
Information Regarding Collateral
 .....................................................
	
51

	
SECTION 5.04.  
	
Existence; Conduct of Business
 ..........................................................
	
52

	
SECTION 5.05.  
	
Payment of Obligations
 .......................................................................
	
52

	
SECTION 5.06.  
	
Maintenance of Properties
 .................................................................
	
52

	
SECTION 5.07.  
	
Insurance
 ..........................................................................
 .....................
	
52

	
SECTION 5.08.  
	
Casualty and Condemnation
 ..............................................................
	
53

	
SECTION 5.09.  
	
Books and Records; Inspection and Audit Rights
 ..........................
	
52

	
SECTION 5.10.  
	
Compliance with Laws
 .........................................................................
	
53

	
SECTION 5.11.
	
Use of Proceeds and Letters of Credit
 ................................................
	
53

	
SECTION 5.12.
	
Additional Subsidiaries
 .......................................................................
	
54

	
SECTION 5.13.  
	
Further Assurances
 ..............................................................................
	
54

	 	 	 
	 	 	 
	
ARTICLE VI

Negative Covenants

	 	 	 
	
SECTION 6.01.  
	
Indebtedness; Certain Equity Securities
 ..........................................
	
54

	
SECTION 6.02.  
	
Liens
 .................................................................
 .......................................
	
56

	
SECTION 6.03.  
	
Fundamental Changes
 ..........................................................................
	
56

	
SECTION 6.04.  
	
Investments, Loans, Advances, Guarantees and Acquisitions
 .......
	
57

	
SECTION 6.05.  
	
Asset Sales
 ..........................................................................
 ....................
	
58

	
SECTION 6.06.  
	
Sale and Leaseback Transactions
 ......................................................
	
58

	
SECTION 6.07.  
	
Hedging Agreements
 ..............................................................................
	
59

	
SECTION 6.08.  
	
Restricted Payments; Certain Payments of Indebtedness
 ..............
	
59

	
SECTION 6.09.  
	
Transactions with Affiliates
 ..................................................................
	
59

	
SECTION 6.10.  
	
Restrictive Agreements
 ..........................................................................
	
59

	
SECTION 6.11.  
	
Material Documents
 ..............................................................................
	
60

	
SECTION 6.12.  
	
Fixed Charge Coverage Ratio
 .............................................................
	
60

	
SECTION 6.13.  
	
Leverage Ratio
 .......................................................................................
	
61

	
SECTION 6.14.  
	
Minimum Net Worth
 ...............................................................................
	
61

	
SECTION 6.15. 
	
Capital Expenditures
 .............................................................................
	
61

	
SECTION 6.16.  
	
Restricted Properties
 .............................................................................
	
61

	
SECTION 6.17.  
	
Fiscal Quarters
 .......................................................................................
	
62

	 	 	 
	 	 	 
	
ARTICLE VII

Events of Default

	 	 	 
	 	 	 
	
ARTICLE VIII

The Administrative Agent

	 	 	 
	 	 	 
	 	 	 
	
ARTICLE IX

Guarantee

	 	 	 
	 	 	 
	 	 	 
	
ARTICLE X

Miscellaneous

	 	 	 
	
SECTION 10.01.  
	
Notices
 ........................................................................
 .............................
	
66

	
SECTION 10.02.  
	
Waivers; Amendments
 ............................................................................
	
67

	
SECTION 10.03.  
	
Expenses; Indemnity; Damage Waiver
 ...............................................
	
68

	
SECTION 10.04.  
	
Successors and Assigns
 .........................................................................
	
69

	
SECTION 10.05. 
	
Survival
 ..............................................................................
 .....................
	
72

	
SECTION 10.06.  
	
Counterparts; Integration; Effectiveness
 ...........................................
	
72

	
SECTION 10.07.  
	
Severability
 .....................................................................
 ........................
	
72

	
SECTION 10.08.  
	
Right of Setoff
 ....................................................................
 .....................
	
72

	
SECTION 10.09.  
	
Governing Law; Jurisdiction; Consent to Service of Process
 .........
	
73

	
SECTION 10.10.  
	
WAIVER OF JURY TRIAL
 ......................................................................
	
73

	
SECTION 10.11.  
	
Headings
 .............................................................................
 .....................
	
73

	
SECTION 10.12.  
	
Confidentiality
 .........................................................................
 ................
	
73

	
SECTION 10.13.
	
Interest Rate Limitation
 ............................................................................
	
74

 

 

 

 

	
SCHEDULES:
	 
	
Schedule 1.01
	
Pro Forma Amounts

	
Schedule 2.01
	
Commitments

	
Schedule 3.05
	
Properties

	
Schedule 3.12
	
Subsidiaries

	
Schedule 3.13
	
Insurance

	
Schedule 6.01
	
Existing Indebtedness and Preferred Stock

	
Schedule 6.02
	
Existing Liens

	
Schedule 6.04
	
Existing Investments

	
Schedule 6.10
	
Existing Restrictions

	 	 
	 	 
	
EXHIBITS:
	 
	
Exhibit A
	
Form of Assignment and Acceptance

	
Exhibit B
	
Form of Borrowing Base Certificate

	
Exhibit C-1
	
Form of Borrowing Subsidiary Agreement

	
Exhibit C-2
	
Form of Borrowing Subsidiary Termination

	
Exhibit D
	
Form of Guarantee Agreement

	
Exhibit E
	
Form of Indemnity, Subrogation and Contribution Agreement

	
Exhibit F
	
Form of Intercreditor Agreement

	
Exhibit G
	
Form of Perfection Certificate

	
Exhibit H
	
Form of Pledge Agreement

	
Exhibit I
	
Form of Security Agreement

	
Exhibit J-1
	
Form of Opinion of Lowenstein Sandler PC, Counsel for the
Company

	
Exhibit J-2
	
Form of Opinion of Paul, Weiss, Rifkind, Wharton &
Garrison, Counsel for the Company

	
Exhibit J-3
	
Form of Opinion of Milan A. Sawdei, Executive Vice President
and Chief Legal Officer of the Company

	
Exhibit J-4
	
Form of Borrowing Subsidiary Opinion

 

 

 

CREDIT AGREEMENT dated as of April 20, 2000, among BERGEN
BRUNSWIG CORPORATION, BERGEN BRUNSWIG DRUG COMPANY, PHARMERICA, INC., THE OTHER
BORROWING SUBSIDIARIES party hereto, the LENDERS party hereto, and THE CHASE
MANHATTAN BANK, as Administrative Agent.

           
The Company and the initial Borrowing Subsidiaries have requested the Lenders to
establish the credit facilities provided for herein.  Such credit facilities will
replace the Existing Credit Agreements and will refinance the loans outstanding
thereunder to the Company, Bergen Drug and PharMerica.  The Lenders are willing to
establish such credit facilities upon the terms and subject to the conditions set
forth herein.

           
The parties hereto agree as follows:

 

ARTICLE I

Definitions

           
SECTION 1.01.  Defined Terms.  As used in this Agreement, the following terms
have the meanings specified below:

           
"ABR", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Alternate Base Rate.

           
"Account" shall mean any right to payment for goods sold or leased or for
services rendered, whether or not earned by performance. 

           
"Account Debtor" shall mean, with respect to any Account, the obligor with
respect to such Account.

           
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied
by (b) the Statutory Reserve Rate.

           
"Administrative Agent" means The Chase Manhattan Bank, in its capacity as
administrative agent for the Lenders hereunder.  

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

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

           
"Agents" means the Administrative Agent and the Collateral Agent.

           
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD
Rate in effect on such day plus 1% and (c) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%.  Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.  

           
"Applicable Percentage" means, with respect to any Revolving Lender, the
percentage of the total Revolving Commitments represented by such Lender's Revolving
Commitment.  If the Revolving Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the Revolving Commitments most recently in
effect, giving effect to any assignments.

           
"Applicable Rate" means, for any day (a) with respect to any Tranche B
Term Loan, (i) 2.50% per annum, in the case of an ABR Loan, or (ii) 3.50%
per annum, in the case of a Eurodollar Loan, and (b) with respect to any ABR
Loan or Eurodollar Loan that is a Revolving Loan, a Tranche A Term Loan or an Interim
Term Loan, or with respect to the commitment fees payable hereunder, as the case may
be, the applicable rate per annum set forth below under the caption "ABR Spread",
"Eurodollar Spread" or "Commitment Fee Rate", as the case may be, based upon the
ratings established by S&P and Moody's for the Index Debt as of  the most
recent determination date; provided that until the first anniversary of
the Effective Date the "Applicable Rate" for purposes of clause (b) shall be
the applicable rate per annum set forth below in Level IV, unless Level V
or Level VI applies:

	
 

 
	

LEVEL I
	

LEVEL II
	

LEVEL III
	

LEVEL IV
	

LEVEL V
	

LEVEL VI

	

 
	
 

If the Index Debt is rated at least BBB by S&P and Baa2 by
Moody=
s.
	

If the Index Debt is rated at least BBB- by S&P and Baa3
by Moody=
s.
	

If the Index Debt is rated at least BB+ by S&P and Ba1 by
Moody=
s.
	

If the Index Debt is rated at least BB by S&P and Ba2 by
Moody=
s.
	

If the Index Debt is rated at least BB- by S&P and Ba3 by Moody
=
s.
	

If no other Level is applicable.

	

Commitment Fee Rate
	

.375%
	

.375%
	

.500%
	

.500%
	

.500%
	

.500%

	

Eurodollar Spread
	

1.750
	

2.000
	

2.250
	

2.500
	

2.750
	

3.000

	

ABR Spread
	

0.750
	

1.000
	

1.250
	

1.500
	

1.750
	

2.000

           
For purposes of the foregoing, the applicable pricing Level shall change on the date
of any relevant change in the rating by S&P or Moody=s of Index Debt.
In the case of split ratings from S&P and Moody
=
s, the rating to be used to determine the applicable pricing
level is the lower of the two (e.g., BBB-/Ba1 results in Level III pricing).
If neither Moody's nor S&P shall have established ratings for the Index Debt, or
if an Event of Default shall have occurred and be continuing, the ratings shall be
deemed to be in Level VI.  If the rating system of Moody's or S&P shall
change, or if either of them shall cease rating the Index Debt (other than by reason
of any action or nonaction by the Company following or in anticipation of a ratings
downgrade), the parties hereto shall negotiate in good faith to amend the references
to specific ratings in this definition to reflect such changed rating system or the
nonavailability of ratings from such rating agency, and pending agreement on such
amendment, the rating in effect immediately prior to such change or cessation will
apply.  If either rating agency shall not have a rating in effect by reason of any
action or nonaction by the Company following or in anticipation of a ratings
downgrade, then such rating agency shall be deemed to have established a rating
in Level VI.

           
"ASD" means ASD Specialty Healthcare Inc., its subsidiaries and Medical
Initiatives, Inc.

           
"Assessment Rate" means, for any day, the annual assessment rate in effect on
such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable successor
risk classification) within the meaning of 12 C.F.R. Part 327 (or any successor
provision) to the Federal Deposit Insurance Corporation for insurance by such
Corporation of time deposits made in dollars at the offices of such member in the
United States; provided that if, as a result of any change in any law,
rule or regulation, it is no longer possible to determine the Assessment Rate as
aforesaid, then the Assessment Rate shall be such annual rate as shall be determined
by the Administrative Agent to be representative of the cost of such insurance to
the Lenders.

           
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is required
by Section 10.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

           
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.  

           
"BBMC" means the Operating Unit consisting of Bergen Brunswig Medical
Corporation, its subsidiaries, Ransdell Surgical, Inc., and such additional Persons
as the Administrative Agent may from time to time agree to include therein based upon
its review of a request by the Company for such inclusion and an audit of the relevant
Accounts and inventory.

           
"Bergen Drug" means Bergen Brunswig Drug Company, a California corporation,
and an indirect wholly owned Subsidiary.

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

           
"Borrower" means the Company or any Borrowing Subsidiary.

           
"Borrowing" means (a) Loans of the same Class and Type, made, converted
or continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, or (b) a Swingline Loan.

           
"Borrowing Base" means, at any time (subject to adjustment as provided in
Section 5.09(c)), an amount equal to the sum, without duplication, of
(a) the amount by which (i) the Receivables Advance Rate Percentage of
the Receivables Amount exceeds (ii) the Securitization Reserve and (b) the
sum for all the Operating Units of the amounts for each Operating Unit obtained by
multiplying (1) the Inventory Advance Rate Percentage for such Operating Unit
by (2) the amount by which (x) the Eligible Inventory Value of Eligible
Inventory of such Operating Unit exceeds (y) the Inventory Valuation Reserve
for such Operating Unit.  In the event that the portion of the Borrowing Base
attributable to PharMerica and its Subsidiaries is at any time in excess of
$325,000,000, the Borrowing Base shall be reduced by the amount of such excess.
The Borrowing Base at any time shall also be reduced by an amount equal to the
maximum amount of Cash Management Obligations (as defined in the Security Agreement)
secured at such time by the Security Documents.  The Borrowing Base at any time shall
be determined by reference to the most recent Borrowing Base Certificate delivered
to the Administrative Agent in accordance with Section 5.01(f), absent any error
in such Borrowing Base Certificate and provided that within 5 Business
Days after the disposition of any Subsidiary or Subsidiaries or line or lines of
business involving in the aggregate assets in excess of 2% of the total
consolidated assets of the Company and the Subsidiaries following the delivery
of any Borrowing Base Certificate, the Company shall deliver to the Administrative
Agent a good faith estimate of the reduction to the Borrowing Base resulting from
such disposition or dispositions and the Borrowing Base shall be reduced by such
amount until the delivery of a new Borrowing Base Certificate in accordance with
Section 5.01(f).

           
"Borrowing Base Certificate" means a certificate in the form of Exhibit B
or any other form approved by the Administrative Agent, together with all attachments
contemplated thereby.

           
"Borrowing Request" means a request by the Borrower for a Borrowing in accordance
with Section 2.03.

           
"Borrowing Subsidiary" means, at any time, Bergen Drug, PharMerica and each
other wholly owned Subsidiary that has been designated as a Borrowing Subsidiary
by the Company pursuant to Section 2.20 and that has not ceased to be a
Borrowing Subsidiary as provided in such Section or Article VII.

           
"Borrowing Subsidiary Agreement" means a Borrowing Subsidiary Agreement
substantially in the form of Exhibit C-1.

           
"Borrowing Subsidiary Termination" means a Borrowing Subsidiary Termination
substantially in the form of Exhibit C-2.

           
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan, the
term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

           
"Capital Expenditures" means, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Company and
its consolidated Subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of the Company for such period prepared in accordance with
GAAP and (b) Capital Lease Obligations incurred by the Company and its
consolidated Subsidiaries during such period.

           
"Capital Lease Obligations" of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which obligations
are required to be classified and accounted for as capital leases on a balance sheet
of such Person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.

           
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the meaning of
the Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) other than Robert E.
Martini (or his estate or heirs) or the estate of Emil P. Martini, Jr., of
Equity Interests representing more than 20% of either the aggregate ordinary
voting power or the aggregate equity value represented by the issued and
outstanding Equity Interests in the Company; (b) occupation of a majority
of the seats (other than vacant seats) on the board of directors of the Company
by Persons who were neither (i) nominated by the board of directors of the
Company nor (ii) appointed by directors so nominated; (c) the acquisition
of direct or indirect Control of the Company by any Person or group other than
Robert E. Martini (or his estate or heirs); or (d) the occurrence of a
"Change of Control" (or other similar event or condition however denominated)
under any Material Indebtedness.

           
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender or any Issuing Bank
(or, for purposes of Section 2.15(b), by any lending office of such Lender or
by such Lender's or such Issuing Bank's holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

           
"Class", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Tranche A
Term Loans, Tranche B Term Loans, Interim Term Loans or Swingline Loans and, when
used in reference to any Commitment, refers to whether such Commitment is a Revolving
Commitment, Tranche A Commitment, Tranche B Commitment or Interim Commitment.

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

           
"Collateral" means any and all "Collateral", as defined in any applicable
Security Document.

           
"Collateral Agent" means The Chase Manhattan Bank, in its capacity as collateral
agent for the Lenders hereunder and under the Security Documents, except that
"Collateral Agent" means CIT Financing Group when used to refer to the Collateral
Agent's duties to conduct monthly collateral services in monitoring and evaluating
Borrowing Base compliance and Borrowing Base items as contemplated by Section
 5.09(b).

           
"Collateral and Guarantee Requirement" means, at any time, the requirement
that:

           
(a) the Administrative Agent shall have received from each Loan Party either (i) 
a counterpart of each of the Security Agreement, the Pledge Agreement, the Guarantee
Agreement and the Indemnity, Subrogation and Contribution Agreement duly executed and
delivered on behalf of such Loan Party or (ii) in the case of any Person that
becomes a Loan Party after the Effective Date, a supplement to each of the Security
Agreement, the Pledge Agreement, the Guarantee Agreement and the Indemnity, Subrogation
and Contribution Agreement in the form specified therein, duly executed and delivered
on behalf of such Loan Party;

           
(b) all outstanding Equity Interests of each Subsidiary or other Person directly owned
by or on behalf of any Loan Party shall have been pledged pursuant to the Pledge
Agreement (except that the Loan Parties shall not be required to pledge more than
65% of the outstanding voting Equity Interests of any Foreign Subsidiary) and the
Administrative Agent shall have received all certificates or other instruments, if
any, representing such Equity Interests, together with stock powers or other
instruments of transfer with respect thereto endorsed in blank;

           
(c) all Indebtedness of the Company and each Subsidiary that is owing to any Loan
Party shall be evidenced by a promissory note and shall have been pledged pursuant
to the Pledge Agreement and the Administrative Agent shall have received all such
promissory notes, together with instruments of transfer with respect thereto endorsed
in blank;

           
(d) all documents and instruments, including Uniform Commercial Code financing
statements, required by law or reasonably requested by the Administrative Agent
to be filed, registered or recorded to create the Liens intended to be created by
the Security Agreement, the Pledge Agreement, and the Mortgages and to perfect such
Liens to the extent required by, and with the priority required by, the Security
Agreement, the Pledge Agreement, and the Mortgages shall have been filed, registered
or recorded or delivered to the Administrative Agent for filing, registration or
recording, and an Intercreditor Agreement shall be in full force and effect with
respect to each outstanding Securitization;

           
(e) the Administrative Agent (i) shall have received counterparts of a Mortgage
with respect to each Mortgaged Property duly executed and delivered by the record
owner of such Mortgaged Property, (ii) shall have received, or shall be satisfied
with the arrangements for a subsequent delivery of, a policy or policies of title
insurance issued by a nationally recognized title insurance company insuring the Lien
of each such Mortgage as a valid first Lien on the Mortgaged Property described
therein, free of any other Liens except as expressly permitted by Section 6.02,
together with such surveys, endorsements, coinsurance and reinsurance as the
Administrative Agent or the Required Lenders may reasonably request, and (iii)
 shall have received such abstracts, appraisals, legal opinions and other
documents as the Administrative Agent or the Required Lenders may reasonably request
with respect to any such Mortgage or Mortgaged Property;

           
(f) the Administrative Agent shall have received, or shall be satisfied with
arrangements for the subsequent delivery of, lockbox or depositary agreements from
such providers of cash management services to the Company and the Subsidiaries as the
Administrative Agent may reasonably request; and

           
(g) each Loan Party shall have obtained all consents and approvals required to be
obtained by it in connection with the execution and delivery of all Security Documents
to which it is a party, the performance of its obligations thereunder and the granting
by it of the Liens thereunder.

Notwithstanding the foregoing, a Subsidiary shall not be required
to become a Guarantor under the Guarantee Agreement or pledge or grant any security
interest in or Lien on any Collateral under the Pledge Agreement or Security Agreement
or any Mortgage if the Company shall have advised the Administrative Agent that it
would be a violation of applicable law for such Subsidiary to take such action or
if, in the judgment of the Administrative Agent, in consultation with the Company,
the expense, tax or regulatory consequences or difficulty of taking such action would
not, in light of the benefits to accrue to the Lenders, justify taking such action.
The Collateral Agent is expressly authorized upon the request of the Company to release
any Collateral or Guarantee previously delivered that at the time of such request is
not required in order for the Collateral and Guarantee Requirement to be satisfied.

           
"Commitment" means a Revolving Commitment, Tranche A Commitment, Tranche B
Commitment or Interim Commitment, or any combination thereof (as the context requires).

           
"Company" means Bergen Brunswig Corporation, a New Jersey corporation.

           
"Consolidated Cash Interest Expense" means, for any period, the excess of
(a) the sum of (i) the interest expense (including imputed interest expense
in respect of Capital Lease Obligations and including all distributions in respect of
the Trust Preferred) of the Company and the Subsidiaries for such period, determined
on a consolidated basis in accordance with GAAP, (ii) any interest accrued during
such period in respect of Indebtedness of the Company or any Subsidiary that is
required to be capitalized rather than included in consolidated interest expense
for such period in accordance with GAAP, (iii) all discount, interest, fees,
premiums and other charges in respect of all Securitizations for such period, plus
(iv) any cash payments made during such period in respect of obligations referred
to in clause (b)(B) below that were amortized or accrued in a previous period,
minus (b) the sum, to the extent included in such consolidated interest
expense for such period, of (A) non-cash amounts attributable to amortization
of financing costs paid in a previous period, (B) non-cash amounts attributable
to amortization of debt discounts or accrued interest payable in kind for such period,
and (C) all fees incurred on or prior to the Effective Date in respect of the
financing hereunder and all expenses incurred in connection with the closing hereunder
on the Effective Date.  For periods including fiscal quarters ending prior to the
Effective Date, Consolidated Cash Interest Expense for such periods shall be deemed
to be the amounts set forth on Schedule 1.01.

           
"Consolidated EBITDA" means, for any period, Consolidated Net Income for such
period plus (a) without duplication and to the extent deducted in determining
such Consolidated Net Income, the sum of (i) consolidated interest expense for
such period, (ii) consolidated income tax expense for such period, (iii) all
amounts attributable to depreciation and amortization for such period, (iv) any special
one-time or extraordinary non-cash charges for such period (except that such add back
for charges against the receivables of PharMerica and Stadtlander Operating Company,
L.L.C., and their subsidiaries for the quarter ended September 30, 1999, shall be
limited to $40,596,000), and (v) any LIFO adjustment (if negative) or charge for
such period, and minus (b) without duplication and to the extent included in
determining such Consolidated Net Income, any extraordinary gains for such period and
any LIFO adjustment (if positive) or credit, all determined on a consolidated basis in
accordance with GAAP.  In the event that the Company or any Subsidiary shall have
completed an acquisition or disposition of any material Person, division or business
unit since the beginning of the relevant period, Consolidated EBITDA shall be
determined for such period on a pro forma basis as if such acquisition or disposition,
and any related incurrence or repayment of Indebtedness, had occurred at the beginning
of such period.  For periods including fiscal quarters ending prior to the Effective
Date, Consolidated EBITDA for such periods shall be deemed to be the amounts set forth
on Schedule 1.01.

           
"Consolidated EBITDAR" means, for any period, Consolidated EBITDA for such
period plus rental payments in respect of real property, delivery equipment and
pharmacy equipment of the Company and the Subsidiaries for such period (other than
under capital leases), determined on a consolidated basis in accordance with GAAP.
For periods including fiscal quarters ending prior to the Effective Date, Consolidated
EBITDAR shall be deemed to be the amounts set forth on Schedule 1.01.

           
"Consolidated Net Income" means, for any period, the net income or loss of
the Company and the Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the
income or loss of any Person (other than the Company) that is not a Subsidiary, except
to the extent of the amount of dividends or other distributions actually paid to the
Company or any of the Subsidiaries during such period, and (b) the income or loss
of any Person accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Company or any Subsidiary or the date that such Person's assets
are acquired by the Company or any Subsidiary. 

           
"Consolidated Net Worth" means, on any date, consolidated shareholders' equity
of the Company and the Subsidiaries shown on the consolidated balance sheet of the
Company and the Subsidiaries as of such date in accordance with GAAP.

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

           
"Default" means any event or condition which constitutes an Event of Default
or which upon notice, lapse of time or both would, unless cured or waived, become an
Event of Default.

           
"Dilution Factor" means, for each Operating Unit with respect to any period,
the excess, if any, of (a) the fraction (expressed as a percentage) obtained by
dividing (i) the aggregate amount of all deductions, negative contractual
adjustments and other negative adjustments, credit memoranda, rebates, write-offs
and other adjustments with respect to Accounts of such Operating Units during such
period by (ii) the aggregate amount of gross sales attributable to Accounts of such
Operating Unit during such period over (b) 3.00%.

           
"Dilution Reserve" means, at the time of any determination of the Borrowing
Base, the sum for all the Operating Units of the amounts for each Operating Unit
obtained by multiplying (a) the Dilution Factor for such Operating Unit for
the three-month period ending as of the last day of the calendar month in respect
of which the Borrowing Base is then being calculated (which last day shall be set
forth on the applicable Borrowing Base Certificate) and (b) the amount of the
Eligible Accounts Receivable of such Operating Unit at such time.

           
"dollars" or "$" refers to lawful money of the United States of
America.

           
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 10.02).

           
"Eligible Accounts Receivable" shall mean, at the time of any determination
thereof, all Accounts that satisfy the criteria set forth below at the time of such
determination. In determining the amount of any Eligible Account Receivable, the face
amount thereof shall be reduced by the aggregate amount of all cash received and credits
posted in respect of such Account but not yet applied:

           
(a) such Account has been invoiced and not more than 90 days (or (i)
 120 days in the case of Accounts of PharMerica and its Subsidiaries or (ii)
 180 days in the case of Accounts created under dating programs in the ordinary
course of business and consistent with past practice) has elapsed from the invoice
date and not more than 60 days have elapsed from the due date;

           
(b) such Account arose in the ordinary course of business of the Company or a
wholly owned Subsidiary Loan Party that is included in an Operating Unit and, to the
best knowledge of the Company and the Subsidiaries, no event of death, bankruptcy,
insolvency or inability to pay creditors generally of the Account Debtor thereunder
has occurred, and no notice thereof has been received by the Company or such
Subsidiary;

           
(c) in the case of Accounts other than those of PharMerica and its Subsidiaries,
not more than 50% of the aggregate amount of Accounts owed by the Account Debtor with
respect to such Account and any Affiliates thereof are, at the time of determination,
Accounts that remain unpaid for more than 90 days from the invoice date (or 180 
days from the invoice date in the case of Accounts created under dating programs in
the ordinary course of business and consistent with past practice) or 60 days from
the due date ("Over Due Accounts"), provided that, in determining the
aggregate amount of Over Due Accounts of such Account Debtor, there shall be deducted
the amount of any credit balances that relate to the Accounts of such Account Debtor;

           
(d) such Account does not arise out of a sale made by the Borrower or any wholly
owned Subsidiary Loan Party to an employee, officer, agent, director, or Affiliate of
the Company or any Subsidiary;

           
(e) such Account is denominated in dollars;

           
(f) such Account arose from a completed, outright and lawful sale of goods or
from the completed performance and acceptance of services by the Company or a wholly
owned Subsidiary Loan Party;

           
(g) such Account is owned solely by the Company or a wholly owned Subsidiary
Loan Party, is subject to a valid perfected first priority security interest in favor
of the Collateral Agent for the benefit of the Secured Parties pursuant to the
Security Documents (or, in the case of Accounts originated by Bergen Drug, either
is (i) subject to a valid perfected second priority security interest in favor
of the Collateral Agent for the benefit of the Secured Parties pursuant to the
Security Documents or (ii) owned by the Securitization Entity and all the
Equity Interests in the Securitization Entity are subject to a valid perfected
first priority security interest in favor of the Collateral Agent for the benefit
of the Secured Parties pursuant to the Security Documents) and is not subject to
any other Lien (other than pursuant to the Securitization, in the case of Accounts
originated by Bergen Drug);

           
(h) such Account complies in all material respects with the requirements of all
applicable laws and regulations, whether Federal, State or local;

           
(i) with respect to such Account, the Account Debtor (i) is a United 
States person (excluding any person organized or domiciled in Puerto Rico), (ii)
 is not an Affiliate of the Company or any of the Subsidiaries and (iii) 
other than in the case of Accounts under the Medicare program and Medicaid program,
is not the United States of America or any department, agency or instrumentality
thereof;

           
(j) such Account constitutes an "account" or "chattel paper" within the meaning
of the Uniform Commercial Code of the State in which the Account is located;

           
(k) such Account is in full force and effect and constitutes a legal, valid and
binding obligation of the applicable Account Debtor enforceable in accordance with
its terms;

           
(l) the Account Debtor with respect to such Account (i) is not a creditor (other
than the United States of America with respect to taxes) of the owner of such Account
and (ii) has not asserted that such Account is, and neither the Company nor any
of the Subsidiaries is aware of any reasonable basis upon which such Account could be,
subject to any defense or dispute;

           
(m) the goods sold in the sale giving rise to such Account have been shipped and
title thereto has transferred to the Account Debtor with respect to such Account and
such Account does not (except in the normal course of business consistent with past
practice) represent a sale on a bill-and-hold, guaranteed sale, sale and return, ship
and return, sale on approval or consignment (it being understood that this clause shall
not exclude from Eligible Accounts Receivable any Account that arises from an inventory
consignment arrangement in which Accounts are created only in respect of reductions in
inventory) or a progress billing or otherwise fail for any reason to be a completed sale
(for purposes hereof, the term "progress billing" means any invoice for goods sold or
leased or services rendered under a contract or agreement pursuant to which the Account
Debtor's obligation to pay such invoice is conditioned upon the Company's or any
applicable wholly owned Subsidiary Loan Party's completion of any further performance
under such contract or agreement); and

           
(n) in the case of Accounts of PharMerica and its subsidiaries, if the Account
Debtor is the Medicare program or the Medicaid program, PharMerica reasonably believes
the invoice in respect of such Account shall have been issued to such program for a
patient who has been accepted by such program.

Notwithstanding the foregoing, all Accounts of any Operating Unit
attributable to any single Account Debtor (unless otherwise agreed to by the Required
Lenders) and its Affiliates that, in the aggregate (after deducting from the otherwise
Eligible Accounts Receivable of such Account Debtor and its Affiliates all credit
balances, offsets, deductions and other credits to which such Accounts are subject),
exceed 15% of the total amount of all Eligible Accounts Receivable of such Operating
Unit at the time of any determination, shall be deemed not to be Eligible Accounts
Receivable to the extent of such excess.  The percentage limitation set forth in the
preceding sentence must be satisfied when applied to the amount of Eligible Accounts
Receivable of an Operating Unit after excluding all Accounts required to be excluded
by such percentage limitation.

           
"Eligible Inventory" means, at the time of any determination thereof, without
duplication, all inventory, other than raw materials or work-in-process (exclusive of
bulk inventory) owned by the Company or a wholly owned Subsidiary Loan Party that is
included in an Operating Unit or inventory consisting of packaging materials or
supplies owned for use by the Company or such a Subsidiary, to the extent that
(a) the Company or a wholly owned Subsidiary Loan Party has good and
unencumbered title thereto (subject to the Lien of the Security Documents),
(b) the Collateral Agent on behalf of the Secured Parties possesses a valid
perfected first priority security interest therein pursuant to the Security
Documents and (c) such inventory is located at a facility owned or leased
by the Company or a Subsidiary that is in a State of the United States of
America or the District of Columbia, provided that inventory that is damaged
or defective in any way shall not constitute Eligible Inventory.

           
"Eligible Inventory Value" means, at the time of any determination thereof
with respect to any item of Eligible Inventory, the lower of cost based on FIFO
accounting (less any profits accrued in connection with inter-company transfers,
determined in accordance with GAAP and in a manner consistent with past accounting
practices of the Company and the Subsidiaries) and the fair market value of such
Eligible Inventory.

           
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way to
the environment, preservation or reclamation of natural resources, the management,
release or threatened release of any Hazardous Material or to health and safety
matters.

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

           
"Equity Interests" means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a trust
or other equity ownership interests in a Person, and any warrants, options or other
rights entitling the holder thereof to purchase or acquire any such equity interest.

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

           
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section 
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA
and Section 412 of the Code, is treated as a single employer under Section 
414 of the Code.

           
"ERISA Event" means (a) any "reportable event", as defined in Section 
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in Section 
412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of
an application for a waiver of the minimum funding standard with respect to any Plan;
(d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of any Plan; (e) the
receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator
of any notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA.

           
"Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest at
a rate determined by reference to the Adjusted LIBO Rate.

           
"Event of Default" has the meaning assigned to such term in Article VII.

           
"Excluded Subsidiary" means (a) inactive Subsidiaries that do not directly
or indirectly own any active Subsidiary, (b) Foreign Subsidiaries, (c) 
Securitization Entities and (d) other Subsidiaries in respect of which the
Administrative Agent shall have determined, in consultation with the Company, that
the cost or difficulty or tax or regulatory consequences of obtaining Guarantees or
security interests from such Subsidiaries would be excessive in relation to their
value to the Secured Parties.

           
"Excluded Taxes" means, with respect to the Administrative Agent, any Lender,
any Issuing Bank or any other recipient of any payment to be made by or on account of
any obligation of a Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its applicable
lending office is located, (b) any branch profits taxes imposed by the United 
States of America or any similar tax imposed by any other jurisdiction described in
clause (a) above and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Company under Section 2.19(b)), any
withholding tax imposed by the United States of America that (i) is in effect
and would apply to amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office), except
to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive additional
amounts from the Borrowers with respect to any such withholding tax pursuant to
Section 2.17(a), or (ii) is attributable to such Foreign Lender's failure
to comply with Section 2.17(e).

           
"Existing Credit Agreements" means the $400,000,000 Amended and Restated Credit
Agreement dated as of September 30, 1994, as amended, among the Company, Bergen
Drug, the lenders thereunder and Bank of America National Trust and Savings Association,
as  agent, and the $600,000,000 Credit Agreement dated as of April 23, 1999, among
the Company, Bergen Drug, the lenders party thereto and Bank of America National Trust
and Savings Association, as administrative agent.

           
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.  

           
"Financed Portion" means, at any time, with respect to a Securitization,
the greatest amount of the claims of the parties providing financing, however evidenced,
including debt or equity interests or securities (other than any seller's interests
retained by Bergen Drug) of a purchasing entity, permitted to be outstanding at such
time under such Securitization (assuming the satisfaction of all conditions to issuance)
or, if greater, the maximum purchase limit, however denominated, under such
Securitization.

           
"Financial Officer" means the chief financial officer, principal accounting
officer, treasurer or controller of the Company or the applicable Borrower.

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

           
"Foreign Subsidiary" means any Subsidiary that is organized under the laws of
a jurisdiction other than the United States of America or any State thereof or
the District of Columbia.

           
"GAAP" means generally accepted accounting principles in the United States
of America.

           
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

           
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect
of guaranteeing any Indebtedness or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such Indebtedness
or other obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness
or other obligation of the payment thereof, (c) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation; provided,
that the term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

           
"Guarantee Agreement" means the Guarantee Agreement among the Subsidiary Loan
Parties and the Administrative Agent, substantially in the form of Exhibit D.

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

           
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other interest
or currency exchange rate or commodity price hedging arrangement.

           
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits (other
than customer deposits in respect of Accounts maintained in the ordinary course of
business consistent with past practices) or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest charges
are customarily paid (excluding obligations to pay salary or benefits under deferred
compensation, executive compensation or other benefit programs), (d) all
obligations of such Person under conditional sale or other title retention agreements
relating to property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g) all
Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations and Synthetic Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of letters
of credit and letters of guaranty and (j) all obligations, contingent or otherwise,
of such Person in respect of bankers' acceptances.  The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable therefor
as a result 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
is not liable therefor.

           
"Indemnified Taxes" means Taxes other than Excluded Taxes.

           
"Indemnity, Subrogation and Contribution Agreement" means the Indemnity,
Subrogation and Contribution Agreement among the Subsidiary Loan Parties and the
Administrative Agent, substantially in the form of Exhibit E.

           
"Index Debt" means Loans under this Agreement.

           
"Information Memorandum" means the Confidential Information Memorandum dated
March 2000 relating to the Company and the Transactions.

           
"Intercreditor Agreement" means each Intercreditor Agreement among the Company,
Bergen Drug, the Administrative Agent and each other party required under each
Securitization for the effectiveness of such Intercreditor Agreement, substantially
in the form of Exhibit F, or such other form as the Administrative Agent may
approve.  Each Lender authorizes and directs each of the Administrative Agent and
the Collateral Agent to enter into an Intercreditor Agreement in respect of each
Securitization from time to time in effect and to take all actions it deems
appropriate or necessary in connection with such Intercreditor Agreements.

           
"Interest Election Request" means a request by a Borrower to convert or
continue a Revolving Borrowing or Term Borrowing in accordance with Section 
2.07.

           
"Interest Payment Date" means (a) with respect to any ABR Loan (other
than a Swingline Loan), the last day of each March, June, September and December,
(b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months' duration,
each day prior to the last day of such Interest Period that occurs at intervals of
three months' duration after the first day of such Interest Period, and (c) with
respect to any Swingline Loan, the day that such Loan is required to be repaid.

           
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Company or the applicable Borrower may elect; provided,
that (a) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and (b) 
any Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period.  For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing. 

           
"Interim Commitment" means, with respect to each Lender, the commitment,
if any, of such Lender to make Interim Term Loans hereunder on the Effective
Date, expressed as an amount representing the maximum principal amount of the
Interim Term Loans to be made by such Lender hereunder, as such commitment may
be (a) reduced from time to time pursuant to Section 2.08 and (b)
 reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 10.04.  The initial amount of each Lender's
Interim Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Interim
Commitment, as applicable.  The initial aggregate amount of the Lenders'
Interim Commitments is $200,000,000.  

           
"Interim Maturity Date" means October 22, 2001.

           
"Interim Term Lender" means a Lender with an Interim Commitment or an outstanding
Interim Term Loan.

           
"Interim Term Loan" means a Loan made pursuant to clause (c) of Section
 2.01.

           
"Issuing Bank" means The Chase Manhattan Bank and each other Person executing
this Agreement as Issuing Bank, in its capacity as issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.05(i).
An Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to
be issued by Affiliates of such Issuing Bank, in which case the term "Issuing Bank"
shall include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.

           
"Inventory Advance Rate Percentage" means (a) 50% with respect to Eligible
Inventory of BBMC and (b) 65% with respect to Eligible Inventory of each other
Operating Unit, unless a different percentage shall have been approved as provided in
the following clauses (i) and (ii), in consultation with the Company based upon
a change in circumstances, upon at least 5 Business Days' notice to the Company, in
which case "Inventory Advance Rate Percentage" for any Operating Unit shall mean (i)
 any percentage lower than 50% or 65%, as the case may be, that may from time to
time be approved by the Administrative Agent or the Required Lenders or (ii) any
percentage greater than 50% or 65%, as the case may be, that may from time to time be
approved by the Supermajority Lenders.  Each change in the Inventory Advance Rate
Percentage shall become effective for the applicable Operating Unit on the date
approved by the Administrative Agent or the requisite Lenders and shall remain in
effect until the next date on which such a change is approved by the Administrative
Agent or the requisite Lenders.

           
"Inventory Valuation Reserve" means, at the time of any determination of the
Borrowing Base, for each Operating Unit an amount equal to the sum for such Operating
Unit of (a) the Shrink Reserve, (b) the Lease Reserve and (c) any
additional amount, without duplication, determined (with such determination to be
made at any time at the Company's request or otherwise from time to time in the
reasonable discretion of the Administrative Agent), and notified to the Company
prior to the date of determination, by the Administrative Agent in its reasonable
discretion, to take account of aged, excess, obsolete and dated inventory and other
inventory valuation and reconciliation issues, provided that, in making such
determination, the Administrative Agent shall take into account such reasonable
information as has been requested by the Administrative Agent or provided by the
Collateral Agent or the Company.

           
"LC Disbursement" means a payment made by any Issuing Bank pursuant to a
Letter of Credit.

           
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf of
the Borrowers at such time.  The LC Exposure of any Revolving Lender at any time shall
be its Applicable Percentage of the total LC Exposure at such time.

           
"Lease Reserve" means, at the time of any determination of the Borrowing Base,
for each Operating Unit an amount equal to the aggregate of the monthly rental payments
for the six months immediately preceding the time of such determination for all leases
of facilities (a) at which Eligible Inventory of such Operating Unit is stored and
(b) in respect of which the Company has not obtained a waiver, in form and substance
reasonably satisfactory to the Collateral Agent, from the lessor of such leased property
of any statutory or common law landlord's lien with respect to such leased property.

           
"Lenders" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance, other
than any such Person that ceases to be a party hereto pursuant to an Assignment and
Acceptance.  Unless the context otherwise requires, the term "Lenders" includes the
Swingline Lender.

           
"Letter of Credit" means any letter of credit issued pursuant to this Agreement.

           
"Leverage Ratio" means, on any date, the ratio of (a) Total Indebtedness
as of such date to (b) Consolidated EBITDA for the period of four consecutive
fiscal quarters of the Company ended on such date (or, if such date is not the last
day of a fiscal quarter, ended on the last day of the fiscal quarter of the Company
most recently ended prior to such date).

           
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on any
successor or substitute page of such Service, or any successor to or substitute for
such Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time to
time for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest Period.  In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such Eurodollar Borrowing for such Interest Period shall be the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately 11:00
 a.m., London time, two Business Days prior to the commencement of such Interest
Period.

           
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such asset
and (c) in the case of securities, any purchase option, call or similar right of
a third party with respect to such securities.

           
"Loan Documents" means this Agreement,  each note issued hereunder, each
Borrowing Subsidiary Agreement, each Borrowing Subsidiary Termination, the Guarantee
Agreement, the Indemnity, Subrogation and Contribution Agreement, the Security
Agreement, the Pledge Agreement, the Intercreditor Agreement and the other Security
Documents.

           
"Loan Parties" means the Company and the Subsidiary Loan Parties.

           
"Loans" means the loans made by the Lenders to the Borrowers pursuant to this
Agreement.  

           
"Long-Term Indebtedness" means any Indebtedness that, in accordance with GAAP,
constitutes (or, when incurred, constituted) a long-term liability.

           
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of the
Company and the Subsidiaries taken as a whole, (b) the ability of any Loan Party
(other than any Subsidiaries that are not Significant Subsidiaries) to perform any
of its obligations under any Loan Document or (c) the rights of or benefits
available to the Lenders under any Loan Document.

           
"Material Indebtedness" means Indebtedness (other than the Loans and Letters
of Credit), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Company and its Subsidiaries in an aggregate principal amount exceeding
$10,000,000.  For purposes of determining Material Indebtedness, the "principal amount"
of the obligations of the Company or any Subsidiary in respect of any Hedging Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Company or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.

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

           
"Mortgage" means a mortgage, deed of trust, assignment of leases and rents,
leasehold mortgage or other security document granting a Lien on any Mortgaged Property
to secure the Obligations.  Each Mortgage shall be satisfactory in form and substance
to the Collateral Agent.

           
"Mortgaged Property" means each parcel of real property and the improvements thereto
owned by a Loan Party, other than any such real property with respect to which a
Mortgage is not required to be delivered under the last paragraph of the definition of
Collateral and Guarantee Requirement.  The Mortgaged Properties on the date hereof are
identified on Schedule 3.05.

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

           
"Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event, including (i) any cash received in respect
of any non-cash proceeds, but only as and when received (except to the extent any
prepayment was made in respect of such non-cash proceeds at the time received pursuant
to Section 2.11(c)), (ii) in the case of a casualty, insurance proceeds, and
(iii) in the case of a condemnation or similar event, condemnation awards and
similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid by the Company and the Subsidiaries to third parties
(other than Affiliates) in connection with such event, (ii) in the case of a
sale, transfer or other disposition of an asset (including pursuant to a sale and
leaseback transaction or a casualty or a condemnation or similar proceeding), the
amount of all payments required to be made by the Company and the Subsidiaries as
a result of such event to repay Indebtedness (other than Loans) secured by such asset
or otherwise subject to mandatory prepayment as a result of such event, and (iii)
 the amount of all taxes paid (or reasonably estimated to be payable) by the
Company and the Subsidiaries, and the amount of any reserves established by the
Company and the Subsidiaries to fund contingent liabilities reasonably estimated
to be payable, in each case during the year that such event occurred or the next
succeeding year and that are directly attributable to such event (as determined
reasonably and in good faith by the chief financial officer of the Company).

           
"Obligations" has the meaning assigned to such term in the Security Agreement.

           
"Operating Unit" means each of (a) Bergen Drug and its subsidiaries, (b)
 PharMerica and its subsidiaries, (c) Bergen Brunswig Specialty Company
and its subsidiaries (other than Stadtlander), The Lash Group, Inc., and Medical
Initiatives, Inc., and (d) BBMC, in each case taken as a group and including
such additional Persons as the Administrative Agent may from time to time agree to
include therein based upon its review of a request by the Company for such inclusion
and an audit of the relevant Accounts and inventory.

           
"Other Taxes" means any and all present or future recording, stamp, documentary,
excise, transfer, sales, property or similar taxes, charges or levies arising from any
payment made under any Loan Document or from the execution, delivery or enforcement of,
or otherwise with respect to, any Loan Document.

           
"PBGC" means the Pension Benefit Guaranty Corporation referred to and defined
in ERISA and any successor entity performing similar functions.

           
"Perfection Certificate" means a certificate in the form of Exhibit G or any
other form approved by the Collateral Agent.

           
"Permitted Acquisition" means any acquisition by the Company or any wholly
owned Subsidiary of all or substantially all the assets of, or all the Equity Interests
(other than Equity Interests to be owned by management of such Person that does not
constitute more than 5% of the Equity Interests in such Person) in, a Person or division
or line of business of a Person (including any such acquisition effected by a merger of
a Person into the Company or a Subsidiary in which the Company or a wholly owned
Subsidiary is the surviving Person) if, immediately after giving effect thereto,
(a) no Default has occurred and is continuing or would result therefrom,
(b) the principal business of such Person shall be reasonably related, ancillary
or complementary to a business in which the Company and its Subsidiaries were engaged
on the Effective Date, (c) each Subsidiary formed for the purpose of or resulting
from such acquisition shall be a Subsidiary organized and existing under the laws of
the United States and all the Equity Interests of each such Subsidiary shall be
owned directly by the Company and/or a wholly owned Subsidiary organized and existing
under the laws of the United States (other than Equity Interests permitted to be
owned by management) and all actions required to be taken with respect to such acquired
or newly formed Subsidiary under Sections 5.12 and 5.13 shall have been taken,
(d) the Company and the Subsidiaries shall be in compliance, on a pro forma basis
after giving effect to such acquisition (without giving effect to operating expense
reductions other than cost savings permitted to be included under Regulation S-X),
with the covenants contained in Sections 6.12 and 6.13 recomputed as at the last
day of the most recently ended fiscal quarter of the Company for which financial
statements are available, as if such acquisition had occurred on the first day of each
relevant period for testing such compliance, and (e) if the consideration to be
paid in respect of such acquisition is greater than $5,000,000, the Company shall have
delivered to the Administrative Agent an officers' certificate to the effect set forth
in clauses (a), (b), (c) and (d) above, together with all relevant
financial information for the Person or assets to be acquired and reasonably detailed
calculations demonstrating satisfaction of the requirement set forth in clause 
(d) above.

           
"Permitted Encumbrances" means:

           
(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.05;

           
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and other
like Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 60 days or are being contested in
compliance with Section 5.05;

           
(c) pledges and deposits made in the ordinary course of business in compliance
with workers' compensation, unemployment insurance and other social security laws or
regulations;

           
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature, in each case in the ordinary course of business; 

           
(e) judgment liens in respect of judgments that do not constitute an Event of Default
under clause (k) of Article VII; and

           
(f) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that do
not secure any monetary obligations and do not materially detract from the value of
the affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;

provided that the term "Permitted Encumbrances" shall not
include any Lien securing Indebtedness.

           
"Permitted Investments" means:

           
(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit of the
United States of America), in each case maturing within one year from the date of
acquisition thereof;

           
(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody's, and investments in master notes representing
solely interests in such commercial paper;

           
(c) investments in certificates of deposit, banker's acceptances and time deposits
maturing within 180 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus and undivided
profits of not less than $500,000,000;

           
(d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above; and

           
(e) money market funds investing solely in investments described under clauses
(a) through (d).

           
"Permitted Other Acquisition" means any acquisition or investment (other than
a Permitted Acquisition) by the Company or any Subsidiary of or in a Person or
division or line of business of a Person (including any such acquisition or investment
resulting from a merger of a Person into a Subsidiary) if, immediately after giving
effect thereto, (a) no Default has occurred and is continuing or would result
therefrom, (b) the principal business of such Person shall be reasonably related,
ancillary or complementary to a business in which the Company and its Subsidiaries were
engaged on the Effective Date, (c) the Company and the Subsidiaries shall be in
compliance, on a pro forma basis after giving effect to such acquisition or investment
(without giving effect to operating expense reductions other than cost savings
permitted to be included under Regulation S-X), with the covenants contained
in Sections 6.12 and 6.13 recomputed as at the last day of the most recently
ended fiscal quarter of the Company for which financial statements are available,
as if such acquisition or investment had occurred on the first day of each relevant
period for testing such compliance, and (d) if the consideration to be paid in
respect of such acquisition or investment is greater than $5,000,000, the Company shall
have delivered to the Administrative Agent an officers' certificate to the effect set
forth in clauses (a), (b) and (c) above, together with all relevant financial
information for the Person or assets to be acquired and reasonably detailed calculations
demonstrating satisfaction of the requirement set forth in clause (c) above.

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

           
"PharMerica" means PharMerica, Inc., a Delaware corporation and an indirect
wholly owned Subsidiary of the Company.

           
"Plan"  means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA
be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

           
"Pledge Agreement" means, collectively, the Pledge Agreement among the Loan
Parties and the Administrative Agent, substantially in the form of Exhibit H,
and in connection with the pledge of Equity Interests in non-U.S. Persons, other
pledge agreements or similar agreements giving effect to the Collateral and Guarantee
Requirement and in form and substance satisfactory to the Administrative Agent.

           
"Prepayment Event" means:

           
(a) any sale, transfer or other disposition (including pursuant to a sale and leaseback
transaction) of any property or asset of the Company or any Subsidiary, other than
(i) dispositions described in clauses (a), (b) and (c) of Section 
6.05,  (ii) dispositions resulting (taken together with related dispositions) in
aggregate Net Proceeds not exceeding $1,000,000 and (iii) other dispositions until
each such time as the aggregate Net Proceeds of all such dispositions not resulting in
a Prepayment Event shall not exceed $10,000,000, at which time a Prepayment Event shall
exist with respect to all such other dispositions; or

           
(b) any casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of, any property or asset of the
Borrower or any Subsidiary, but only to the extent that the Net Proceeds therefrom
have not been applied or committed to repair, restore or replace such property or
asset within 180 days after such event; or

           
(c) any increase in the aggregate amount of the Financed Portions of the outstanding
Securitizations to an amount in excess of $358,000,000; or

           
(d) the incurrence by the Company or any Subsidiary of any Indebtedness, other than
Indebtedness permitted under any of clauses (i) through (ix) of Section 
6.01; or

           
(e) the issuance or sale by the Company or any Subsidiary (other than to the
Company or another Subsidiary) of any preferred stock or other preferred Equity
Interest.

           
"Prime Rate" means the rate of interest per annum publicly announced from time
to time by The Chase Manhattan Bank as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.

           
"Purchased Property" has the meaning assigned to such term in the form of
Intercreditor Agreement attached as Exhibit F.

           
"Receivables Advance Rate Percentage" means 80%, unless a different percentage
may have been approved as provided in the following clauses (a) and (b), in
consultation with the Company based upon a change in circumstances, upon at least
5 Business Days' notice to the Company, in which case "Receivables Advance Rate
Percentage" shall mean (a) any percentage lower than 80% that may from time
to time be approved by the Administrative Agent or the Required Lenders or (b) 
any percentage greater than 80% that may from time to time be approved by the
Supermajority Lenders.  Each change in the Receivables Advance Rate Percentage shall
become effective on the date approved by the Administrative Agent or the requisite
Lenders and shall remain in effect until the next date on which such a change is
approved by the Administrative Agent of the requisite Lenders.

           
"Receivables Amount" means, at the time of any determination of the Borrowing
Base, Eligible Accounts Receivable, minus (a) the aggregate amount of credit
balances, offsets, deductions and other credits outstanding for the benefit of the
Account Debtors (net of any portion of such credit balances, offsets, deductions and
other credits attributable to any Account Debtor that at the time of determination
has any otherwise Eligible Account Receivable deemed not to be an Eligible Account
Receivable because in excess of the applicable concentration limit), (b) the
Dilution Reserve, (c) a reserve in respect of Eligible Accounts Receivable of
PharMerica with respect to which the Account Debtor is not a commercial insurance
provider, the Medicare program or the Medicaid program in an amount from time to time
deemed appropriate by the Administrative Agent based upon a review of information
obtained by the Administrative Agent or provided to it by the Company (which amount
shall initially be 50% of such Accounts) and (d) such other adjustments or
reconciling items as may from time to time be established in accordance with
Section 5.09(c).

           
"Register" has the meaning set forth in Section 10.04.

           
"Related Fund" means, with respect to any Lender that is a fund or trust that
makes, buys or invests in commercial loans, any other fund or trust that makes, buys
or invests in commercial loans and is managed by the same investment advisor as such
Lender.

           
"Related Parties" means, with respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and advisors of
such Person and such Person's Affiliates.

           
"Required Lenders" means, at any time, Lenders having Revolving Exposures, Term
Loans and unused Commitments representing more than 50% of the sum of the total
Revolving Exposures, outstanding Term Loans and unused Commitments at such time,
voting together as a single class.

           
"Restricted Payment" means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the Company or
any Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Equity Interests in the
Company or any Subsidiary or any option, warrant or other right to acquire any such
Equity Interests in the Company or any Subsidiary; provided that no such
dividend, distribution or payment shall constitute a "Restricted Payment" to
the extent made solely with common stock of the Company.

           
"Revolving Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and the
date of termination of the Revolving Commitments.

           
"Revolving Commitment" means, with respect to each Lender, the commitment, if
any, of such Lender to make Revolving Loans and to acquire participations in Letters
of Credit and Swingline Loans hereunder,  expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08
and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 10.04.  The initial amount of each Lender's
Revolving Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Revolving Commitment, as
applicable.  The initial aggregate amount of the Lenders' Revolving Commitments is
$800,000,000.

           
"Revolving Exposure" means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender's Revolving Loans and its LC Exposure
and Swingline Exposure at such time.

           
"Revolving Lender" means a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

           
"Revolving Loan" means a Loan made pursuant to clause (d) of Section 
2.01.

           
"Revolving Maturity Date" means  April 21, 2003.

           
"S&P" means Standard & Poor's.

           
"Secured Parties" has the meaning assigned to such term in the Security
Agreement.

           
"Securitization" means (a) the receivables sale facility of Bergen Drug in
effect on the Effective Date, as such facility may be amended from time to time in
accordance with Section 6.11, or (b) any other securitization of Purchased
Property of Bergen Drug on terms taken as a whole no less favorable to Bergen Drug
and the Lenders than those of the receivables sale facility described in clause 
(a).

           
"Securitization Entity" means Blue Hill, Inc., a Delaware corporation, or any
other wholly owned Subsidiary of Bergen Drug that purchases Purchased Property of
Bergen Drug pursuant to a Securitization; provided that such Subsidiary is
organized under the laws of the United States, any State thereof or the District of
Columbia and all the Equity Interests in such subsidiary shall be subject to a valid
perfected first priority security interest in favor of the Collateral Agent for the
benefit of the Secured Parties pursuant to the Security Documents.

           
"Securitization Reserve" means, at any time, (a) the aggregate amount of
the Financed Portions of all outstanding Securitizations at such time plus (b) 
the greater of (x) 1% of the aggregate amount of such Financed Portions at such
time and (y) the aggregate amount under all outstanding Securitizations at such
time of discounts in respect of outstanding investments in Accounts and accrued and
unpaid, interest, fees, premiums and other charges.

           
"Security Agreement" means the Security Agreement among the Company, the
Subsidiary Loan Parties and the Collateral Agent, substantially in the form of
Exhibit I.

           
"Security Documents" means the Security Agreement, the Pledge Agreement, the
Intercreditor Agreement, the Mortgages and each other security agreement or other
instrument or document executed and delivered pursuant to Section 5.12 or 5.13
to secure any of the Obligations.

           
"Shrink Reserve" means, at the time of any determination of the Borrowing Base,
for each Operating Unit, the amount for such Operating Unit obtained by multiplying
(a) the highest percentage excess for such Operating Unit of book inventory over
actual inventory determined as a result of any physical inventory during the 12 month
period preceding such time and (b) total book inventory of such Operating Unit at
such time.

           
"Significant Subsidiary" means (a) each Borrowing Subsidiary and (b)
 each other Subsidiary other than any Subsidiary or Subsidiaries (x) in
respect of which an Event of Default under clause (h), (i) or (j) of Article 
VII or a Material Adverse Effect under clause (b) of the definition thereof
would exist if such Subsidiary or Subsidiaries were Significant Subsidiaries and
(y) that individually or in the aggregate did not account for more than 1% of
the revenues of the Company and the Subsidiaries on a consolidated basis for the most
recent four fiscal quarter period for which financial statements have most recently
been delivered under Sections 5.01(a) or (b).

           
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number one
minus the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established by
the Board to which the Administrative Agent is subject (a) with respect to the
Base CD Rate, for new negotiable nonpersonal time deposits in dollars of over $100,000
with maturities approximately equal to three months, and (b) with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board).  Such reserve percentages shall
include those imposed pursuant to such Regulation D.  Eurodollar Loans shall
be deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets that
may be available from time to time to any Lender under such Regulation D or any
comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in any reserve percentage.

           
"Stadtlander" means BBC Operating Sub, Inc., BBC Licensing Sub, Inc. and
each of their subsidiaries

           
"subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other entity the
accounts of which would be consolidated with those of the parent in the parent's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned, controlled
or held, or (b) that is, as of such date, otherwise Controlled, by the parent or
one or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.

           
"Subsidiary" means any subsidiary of the Company. 

           
"Subsidiary Loan Party" means each Borrowing Subsidiary and each other
Subsidiary that is not an Excluded Subsidiary.

           
"Supermajority Lenders" means, at any time, Lenders having Revolving Exposures,
Term Loans and unused Commitments representing more than 75% of the sum of the total
Revolving Exposures, outstanding Term Loans and unused Commitments at such time,
voting together as a single class.

           
"Swingline Exposure" means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any
time shall be its Applicable Percentage of the total  Swingline Exposure at such time.

           
"Swingline Lender" means The Chase Manhattan Bank, in its capacity as lender
of Swingline Loans hereunder.

           
"Swingline Loan" means a Loan made pursuant to Section 2.04.

           
"Synthetic Lease" means a lease of property or assets designed to permit the
lessees (i) to claim depreciation on such property or assets under U. S.
tax law and (ii) to treat such lease as an operating lease or not to reflect the
leased property or assets on the lessee's balance sheet under GAAP.

           
"Synthetic Lease Obligations" shall mean, with respect to any Synthetic Lease,
at any time, an amount equal to the higher of (x) the aggregate termination value
or purchase price or similar payments in the nature of principal payable thereunder and
(y) the then aggregate outstanding principal amount of the notes or other
instruments issued by, and the amount of the equity investment, if any, in the lessor
under such Syntectic Lease.

           
"Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

           
"Term Loans" means Tranche A Term Loans, Tranche B Term Loans and Interim Term
Loans.

           
"Three-Month Secondary CD Rate" means, for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect on such day (or,
if such day is not a Business Day, the next preceding Business Day) by the Board through
the public information telephone line of the Federal Reserve Bank of New York
(which rate will, under the current practices of the Board, be published in Federal
Reserve Statistical Release H.15(519) during the week following such day) or, if
such rate is not so reported on such day or such next preceding Business Day, the
average of the secondary market quotations for three-month certificates of deposit
of major money center banks in New York City received at approximately 10:00
 a.m., New York City time, on such day (or, if such day is not a Business
Day, on the next preceding Business Day) by the Administrative Agent from three
negotiable certificate of deposit dealers of recognized standing selected by it.

           
"Total Indebtedness" means, as of any date, the sum, without duplication of
(a) the aggregate principal amount of Indebtedness of the Company and the
Subsidiaries outstanding as of such date, in the amount that would be reflected
on a balance sheet prepared as of such date on a consolidated basis in accordance
with GAAP, (b) the aggregate outstanding amount of the Trust Preferred, (c)
 the aggregate amount of the Financed Portions of the outstanding
Securitizations in excess of $358,000,000, plus (d) the aggregate principal
amount of Indebtedness of the Company and the Subsidiaries outstanding as of such
date that is not required to be reflected on a balance sheet in accordance with GAAP,
determined on a consolidated basis, less, to the extent included in (a) or (d), the
aggregate amount of the Financed Portions of the outstanding Securitizations to the
extent less than or equal to $358,000,000.

           
"Tranche A Commitment" means, with respect to each Lender, the commitment, if
any, of such Lender to make Tranche A Term Loans hereunder on the Effective Date,
expressed as an amount representing the maximum principal amount of the Tranche A
Term Loans to be made by such Lender hereunder, as such commitment may be (a) 
reduced from time to time pursuant to Section 2.08 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender pursuant
to Section 10.04.  The initial amount of each Lender's Tranche A Commitment is
set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Tranche A Commitment, as applicable.  The
initial aggregate amount of the Lenders' Tranche A Commitments is $300,000,000.  

           
"Tranche A Lender" means a Lender with a Tranche A Commitment or an outstanding
Tranche A Term Loan.

           
"Tranche A Maturity Date" means March 31, 2005

           
"Tranche A Term Loan" means a Loan made pursuant to clause (a) of
Section 2.01.

           
"Tranche B Commitment" means, with respect to each Lender, the commitment, if
any, of such Lender to make Tranche B Term Loans hereunder on the Effective Date,
expressed as an amount representing the maximum principal amount of the Tranche B
Term Loans to be made by such Lender hereunder, as such commitment may be (a) 
reduced from time to time pursuant to Section 2.08 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender pursuant
to Section 10.04.  The initial amount of each Lender's Tranche B Commitment is
set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Tranche B Commitment, as applicable.  The
initial aggregate amount of the Lenders' Tranche B Commitments is $200,000,000.  

           
"Tranche B Lender" means a Lender with a Tranche B Commitment or an outstanding
Tranche B Term Loan.

           
"Tranche B Maturity Date" means March 31, 2006.

           
"Tranche B Term Loan" means a Loan made pursuant to clause (b) of Section
 2.01.

           
"Transactions" means the execution, delivery and performance by each Loan Party
of the Loan Documents to which it is to be a party, the borrowing of Loans, the use of
the proceeds thereof and the issuance of Letters of Credit hereunder.

           
"Trust Preferred" means the 12,000,000 shares of the 7.80% Trust Originated Preferred
Securities issued by a trust that is a wholly owned Subsidiary on May 26, 1999.

           
"Type", when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

           
"wholly owned" means, as to any Subsidiary, that all the Equity Interests in
such Subsidiary (other than directors' qualifying shares) are owned, directly or
indirectly, by the Company.

           
"Withdrawal Liability" means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined
in Part I of Subtitle E of Title IV of ERISA.

           
SECTION 1.02.  Classification of Loans and Borrowings.  For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g.,
a "Eurodollar Revolving Loan").  Borrowings also may be classified and referred to by
Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurodollar
Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving Borrowing").

           
SECTION 1.03.  Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and neuter
forms.  The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation".  The word "will" shall be construed to have the same
meaning and effect as the word "shall".  Unless the context requires otherwise (a) 
any definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any restrictions
on such amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person's successors
and assigns, (c) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety and
not to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections
of, and Exhibits and Schedules to, this Agreement and (e) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.  References herein to the taking of any action hereunder
of an administrative nature by any Borrower shall be deemed to include references to
the Company taking such action on such Borrower's behalf and the Agents are expressly
authorized to accept any such action taken by the Company as having the same effect as
if taken by such Borrower.  References to obligations to the "Borrowers" shall mean that
such obligations are joint and several obligations of the Borrowers.

           
SECTION 1.04.  Accounting Terms; GAAP.  (a)  Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Administrative Agent that the Company requests an
amendment to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such provision
(or if the Administrative Agent notifies the Company that the Required Lenders request
an amendment to any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and applied
immediately before such change shall have become effective until  such notice shall
have been withdrawn or such provision amended in accordance herewith.

           
(b)  All pro forma computations required to be made hereunder giving effect
to any acquisition, investment, sale, disposition, merger or similar event shall
reflect on a pro forma basis such event as if it occurred on the first day of the
relevant period and, to the extent applicable, the historical earnings and cash flows
associated with the assets acquired or disposed of for such relevant period and any
related incurrence or reduction of Indebtedness for such relevant period, but shall
not take into account any projected synergies or similar benefits expected to be
realized as a result of such event other than cost savings permitted to be included
under Regulation S-X.

 

 

ARTICLE II

 

The Credits

           
SECTION 2.01.  Commitments.  Subject to the terms and conditions set forth
herein, each Lender agrees (a) to make Tranche A Term Loans to the Company and
Bergen Drug on the Effective Date in an aggregate principal amount not exceeding its
Tranche A Commitment and in an amount for each of the Company and Bergen Drug equal
to such Lender's ratable percentage, based on its Tranche A Commitment, of the
respective Tranche A Term Borrowings specified in the Borrowing Requests therefor,
(b) to make Tranche B Term Loans to the Company and Bergen Drug on the Effective
Date in an aggregate principal amount not exceeding its Tranche B Commitment and
in an amount for each of the Company and Bergen Drug equal to such Lender's ratable
percentage of the respective Tranche B Term Borrowings specified in the Borrowing
Requests therefor, (c) to make Interim Term Loans to the Company and Bergen Drug
on the Effective Date in an aggregate principal amount not exceeding its Interim
Commitment and in an amount for each of the Company and Bergen Drug equal to such
Lender's ratable percentage, based on its Interim Commitment, of the respective
Interim Term Borrowings specified in the Borrowing Requests therefor, and (d) 
to make Revolving Loans to the Borrowers from time to time during the Revolving
Availability Period in an aggregate principal amount that will not result in (i)
 such Lender's Revolving Exposure exceeding such Lender's Revolving Commitment,
(ii) the sum of the Revolving Exposures and the aggregate principal amount of the
outstanding Term Loans exceeding the Borrowing Base then in effect or (iii) the
aggregate principal amount of the Borrowings of PharMerica exceeding $325,000,000.
 If the aggregate amount of Revolving Loans made on the Effective Date is less than
the aggregate amount of Loans to be borrowed by PharMerica on the Effective Date,
PharMerica may borrow such excess amount as Term Loans (allocated among the Classes
thereof at the Company's discretion) and may maintain such Loans as any combination
of Term Loans and Revolving Loans as the Company shall determine in its discretion,
provided that no amortization of Term Loans may in any circumstances be allocated
to Term Loans of PharMerica.  Within the foregoing limits and subject to
the terms and conditions set forth herein, the Borrowers may borrow, prepay and
reborrow Revolving Loans.  Amounts repaid in respect of Term Loans may not be
reborrowed. 

           
SECTION 2.02.  Loans and Borrowings.  (a)  Each  Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same
Class and Type made by the Lenders ratably in accordance with their respective
Commitments of the applicable Class.  The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as required.

           
(b)  Subject to Section 2.14, each Revolving Borrowing and Term Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith.  Each Swingline Loan shall be an ABR Loan.  Each Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of
such option shall not affect the obligation of the applicable Borrower to repay
such Loan in accordance with the terms of this Agreement.  

           
(c)  At the commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $5,000,000
and not less than $10,000,000.  At the time that each ABR Revolving Borrowing is made,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$5,000,000 and not less than $10,000,000; provided that an ABR Revolving
Borrowing may be in an aggregate amount that is equal to the entire unused balance
of the total Revolving Commitments or that is required to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.05(e).  Each Swingline Loan
shall be in an amount that is an integral multiple of $100,000 and not less than
$1,000,000.  Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than a total of
12 Eurodollar Borrowings outstanding.  

           
(d)  Notwithstanding any other provision of this Agreement, no Borrower
shall be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Revolving
Maturity Date, Tranche A Maturity Date, Tranche B Maturity Date or Interim Maturity
Date, as applicable.

           
SECTION 2.03.  Requests for Borrowings.  To request a Revolving Borrowing
or Term Borrowing, the Company or the applicable Borrower shall notify the
Administrative Agent of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 12:00 noon, New York City time, three Business Days
before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing,
not later than 11:00 a.m., New York City time, on the date of the proposed
Borrowing; provided that any such notice of an ABR Revolving Borrowing to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be
given not later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Borrowing Request in a form approved by the Administrative Agent and signed
by the Company or the Borrower.  Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:  

           
(i) whether the requested Borrowing is to be a Revolving Borrowing, Tranche A Term
Borrowing, Tranche B Term Borrowing or Interim Term Borrowing;

           
(ii) the aggregate amount of such Borrowing;

           
(iii) the date of such Borrowing, which shall be a Business Day;

           
(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

           
(v) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the
term "Interest Period"; and

           
(vi) the identity of the applicable Borrower and the location and number of the
account to which funds are to be disbursed, which shall comply with the requirements
of Section 2.06.

If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration.  Promptly following
receipt of a  Borrowing Request in accordance with this Section, the Administrative
Agent shall advise each Lender of the details thereof and of the amount of such Lender's
Loan to be made as part of the requested Borrowing.

           
SECTION 2.04.  Swingline Loans.  (a)  Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to
the Borrowers from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i) 
the aggregate principal amount of outstanding Swingline Loans exceeding $100,000,000,
(ii) the sum of the Revolving Exposures exceeding the total Revolving Commitments
or (iii) the sum of the Revolving Exposures and the aggregate principal amount of
the outstanding Term Loans exceeding the Borrowing Base then in effect; provided
that the Swingline Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrowers may borrow, prepay and reborrow Swingline
Loans.

           
(b)  To request a Swingline Loan, the applicable Borrower shall notify the Administrative
Agent of such request by telephone (confirmed by telecopy), not later than 12:00 noon,
New York City time, on the day of a proposed Swingline Loan.  Each such notice shall
be irrevocable and shall specify the requested date (which shall be a Business Day) and
amount of the requested Swingline Loan.  The Administrative Agent will promptly advise
the Swingline Lender of any such notice received from a Borrower.  The Swingline Lender
shall make each Swingline Loan available to a Borrower by means of a credit to the
general deposit account of such Borrower with the Swingline Lender (or, in the case
of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided
in Section 2.06(e), by remittance to the applicable Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan. 

           
(c)  The Swingline Lender may by written notice given to the Administrative Agent not
later than 12:00 noon, New York City time, on any Business Day require the
Revolving Lenders to acquire participations on such Business Day in all or a portion of
the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of
Swingline Loans in which Revolving Lenders will participate.  Promptly upon receipt
of such notice, the Administrative Agent will give notice thereof to each Revolving
Lender, specifying in such notice such Lender's Applicable Percentage of such
Swingline Loan or Loans.  Each Revolving Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, to pay to the Administrative Agent,
for the account of the Swingline Lender, such Lender's Applicable Percentage of such
Swingline Loan or Loans.  Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this paragraph
is absolute and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.  Each Revolving Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available funds, in
the same manner as provided in Section 2.06 with respect to Loans made by such
Lender (and Section 2.06 shall apply, mutatis mutandis, to the
payment obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the Revolving
Lenders.  The Administrative Agent shall notify the Company of any participations in
any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not to
the Swingline Lender.  Any amounts received by the Swingline Lender from a Borrower
(or other party on behalf of a Borrower) in respect of a Swingline Loan after receipt
by the Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to the
Revolving Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear.  The purchase of participations
in a Swingline Loan pursuant to this paragraph shall not relieve the applicable Borrower
of any default in the payment thereof. 

           
SECTION 2.05.  Letters of Credit.  (a) General.  Subject to the
terms and conditions set forth herein, each Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the applicable Issuing Bank, at any time and from time to
time during the Revolving Availability Period.  In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions of
any form of letter of credit application or other agreement submitted by a Borrower
to, or entered into by a Borrower with, an Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.

           
(b)  Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or extension
of an outstanding Letter of Credit), a Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been approved
by the applicable Issuing Bank) to an Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or identifying
the Letter of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the date
on which such Letter of Credit is to expire (which shall comply with paragraph 
(c) of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit.  If requested by an Issuing Bank, such
Borrower also shall submit a letter of credit application on such Issuing Bank's
standard form in connection with any request for a Letter of Credit.  A Letter of
Credit shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the applicable Borrower
shall be deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed $100,000,000,
(ii) the Revolving Exposures shall not exceed the total Revolving Commitments and
(iii) the sum of the Revolving Exposures and the aggregate principal amount of the
outstanding Term Loans shall not exceed the Borrowing Base then in effect.

           
(c)  Expiration Date.  Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension thereof,
one year after such renewal or extension) and (ii) the date that is five Business
Days prior to the Revolving Maturity Date.

           
(d)  Participations.  By the issuance of a Letter of Credit (or an amendment to
a Letter of Credit increasing the amount thereof) and without any further action on the
part of the applicable Issuing Bank or the Lenders, each Issuing Bank hereby grants to
each Revolving Lender, and each Revolving Lender hereby acquires from the applicable
Issuing Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of Credit.
In consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for the
account of such Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by such Issuing Bank and not reimbursed by the applicable Borrower
on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the applicable Borrower for any
reason.  Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the occurrence
and continuance of a Default or reduction or termination of the Commitments, and that
each such payment shall be made without any offset, abatement, withholding or reduction
whatsoever.

           
(e)  Reimbursement.  If an Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the Company or the applicable Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 2:00 p.m., New York City time, on the date that
such LC Disbursement is made, if the Company shall have received notice of such LC
Disbursement prior to 11:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Company prior to such time on such date, then not
later than 2:00 p.m., New York City time, on (i) the Business Day that the
Company receives such notice, if such notice is received prior to 11:00 a.m., New 
York City time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Company receives such notice, if such notice is not received
prior to such time on the day of receipt; provided that ,if such LC Disbursement
is not less than $1,000,000, the Company or the applicable Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section 2.03 or
2.04 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in
an equivalent amount and, to the extent so financed, the obligation to make such payment
shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan.  If the Company or the applicable Borrower fails to make such payment when due,
the Administrative Agent shall notify each Revolving Lender of the applicable LC
Disbursement, the payment then due from the applicable Borrower in respect thereof
and such Lender's Applicable Percentage thereof.  Promptly following receipt of such
notice, each Revolving Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Company or the applicable Borrower, in
the same manner as provided in Section 2.06 with respect to Loans made by such
Lender (and Section 2.06 shall apply, mutatis mutandis, to the
payment obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the applicable Issuing Bank the amounts so received by it from the
Revolving Lenders.  Promptly following receipt by the Administrative Agent of any
payment from the Company or the applicable Borrower pursuant to this paragraph, the
Administrative Agent shall distribute such payment to the applicable Issuing Bank or,
to the extent that Revolving Lenders have made payments pursuant to this paragraph to
reimburse an Issuing Bank, then to such Lenders and such Issuing Bank as their interests
may appear.  Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse an Issuing Bank for any LC Disbursement (other than the funding of ABR
Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a
Loan and shall not relieve the applicable Borrower of its obligation to reimburse
such LC Disbursement.

           
(f)  Obligations Absolute.  The Borrowers' obligations to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance with the
terms of this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid in
any respect or any statement therein being untrue or inaccurate in any respect,
(iii) payment by an Issuing Bank under a Letter of Credit against presentation
of a draft or other document that does not comply with the terms of such Letter of
Credit, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right of setoff against,
any Borrower's obligations hereunder.  Neither the Administrative Agent, the Lenders,
the Issuing Banks, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of any
Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding sentence), or
any error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the applicable Issuing Bank; provided that the foregoing shall
not be construed to excuse the applicable Issuing Bank from liability to a Borrower
to the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrowers to the extent permitted by
applicable law) suffered by such Borrower that are caused by an Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.  The parties
hereto expressly agree that, in the absence of gross negligence or wilful misconduct
on the part of an Issuing Bank (as finally determined by a court of competent
jurisdiction), an Issuing Bank shall be deemed to have exercised care in each such
determination.  In furtherance of the foregoing and without limiting the generality
thereof, the parties agree that, with respect to documents presented which appear on
their face to be in substantial compliance with the terms of a Letter of Credit, an
Issuing Bank may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of any notice
or information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.  

           
(g)  Disbursement Procedures.  An Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit.  Such Issuing Bank shall promptly notify the Administrative
Agent and the Company by telephone (confirmed by telecopy) of such demand for payment
and whether such Issuing Bank has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Company or any Borrower of its obligation to reimburse such Issuing Bank
and the Revolving Lenders with respect to any such LC Disbursement.  

           
(h)  Interim Interest.  If an Issuing Bank shall make any LC
Disbursement, then, unless the Company or the applicable Borrower shall reimburse
such LC Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date such
LC Disbursement is made to but excluding the date that the Company or the applicable
Borrower reimburses such LC Disbursement, at the rate per annum then applicable to
ABR Revolving Loans; provided that, if the Company or the applicable Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section, then Section 2.13(c) shall apply.  Interest accrued pursuant to
this paragraph shall be for the account of the applicable Issuing Bank, except that
interest accrued on and after the date of payment by any Revolving Lender pursuant to
paragraph (e) of this Section to reimburse an Issuing Bank shall be for the
account of such Lender to the extent of such payment.

           
(i)  Replacement of an Issuing Bank.  An Issuing Bank may be replaced at any
time by written agreement among the Company, the Administrative Agent, the replaced
Issuing Bank and the successor Issuing Bank, if any.  The Administrative Agent shall
notify the Lenders of any such replacement of an Issuing Bank.  At the time any such
replacement shall become effective, the Borrower shall pay all unpaid fees accrued for
the account of the replaced Issuing Bank pursuant to Section 2.12(b).  From and
after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit to be issued by such Issuing Bank thereafter and (ii)
 references herein to the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require.  After the replacement of an Issuing
Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such replacement,
but shall not be required to issue additional Letters of Credit.

           
(j)  Cash Collateralization.  If any Event of Default shall occur and be
continuing, on the Business Day that the Company receives notice from the Administrative
Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated,
Revolving Lenders with LC Exposures representing greater than 50% of the total LC
Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the
Borrowers shall deposit in an account with the Administrative Agent, in the name of
the Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to the LC Exposure as of such date plus any accrued and unpaid interest thereon;
provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and payable,
without demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Company described in clause (h) or (i) of Article 
VII.  The Borrowers also shall deposit cash collateral pursuant to this paragraph as
and to the extent required by Section 2.11(b), and any such cash collateral so
deposited and held by the Administrative Agent hereunder shall constitute part of the
Borrowing Base for purposes of determining compliance with Section 2.11(b).  Each
such deposit shall be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Borrowers under this Agreement.  The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account.  Other than any interest earned
on the investment of such deposits, which investments shall be made at the option
and sole discretion of the Administrative Agent (which will use reasonable efforts
to obtain a return at market rates for such cash deposits) and at the Company's risk
and expense, such deposits shall not bear interest.  Interest or profits, if any, on
such investments shall accumulate in such account.  Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Banks for LC Disbursements
for which they have not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrowers for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated (but subject
to the consent of Revolving Lenders with LC Exposure  representing greater than 50% of
the total LC Exposure), be applied to satisfy other obligations of the Borrowers under
this Agreement.  If the Borrowers are required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to the
extent not applied as aforesaid) shall be returned to the Borrowers within three
Business Days after all Events of Default have been cured or waived.  If the Borrowers
are required to provide an amount of cash collateral hereunder pursuant to Section 
2.11(b), such amount (to the extent not applied as aforesaid) shall be returned to the
Borrowers as and to the extent that, after giving effect to such return, the Borrowers
would remain in compliance with Section 2.11(b) and no Default shall have occurred
and be continuing.

           
SECTION 2.06.  Funding of Borrowings.  (a)  Each Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., New York City time, to the account
of the Administrative Agent most recently designated by it for such purpose by notice
to the Lenders; provided that Swingline Loans shall be made as provided in
Section 2.04.  The Administrative Agent will make such Loans available to the
applicable Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Company or the applicable Borrower maintained with the Administrative
Agent in New York City and designated by the Borrower in the applicable Borrowing
Request; provided that ABR Revolving Loans made to finance the reimbursement of
an LC Disbursement as provided in Section 2.05(e) shall be remitted by the
Administrative Agent to the applicable Issuing Bank.

           
(b)  Unless the Administrative Agent shall have received notice from a Lender prior
to the proposed date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender's share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the applicable Borrower a corresponding amount.  In
such event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the applicable
Borrower severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the date
such amount is made available to the applicable Borrower to but excluding the date of
payment to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation or (ii) 
in the case of the applicable Borrower, the interest rate applicable to ABR Loans.  If
such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.

           
SECTION 2.07.  Interest Elections.  (a)  Each Revolving Borrowing and
Term Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request.  Thereafter, the Company or the applicable
Borrower may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section.  The applicable Borrower may elect different
options with respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans comprising
such Borrowing, and the Loans comprising each such portion shall be considered a separate
Borrowing.  This Section shall not apply to Swingline Borrowings, which may not be
converted or continued.

           
(b)  To make an election pursuant to this Section, the Company or the applicable
Borrower shall notify the Administrative Agent of such election by telephone by the
time that a Borrowing Request would be required under Section 2.03 if the Company
or the applicable Borrower were requesting a Revolving Borrowing of the Type resulting
from such election to be made on the effective date of such election.  Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by the
Borrower.

           
(c)  Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02 and paragraph (e) of this Section:

           
(i) the Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in which case the information to
be specified pursuant to clauses (iii) and (iv) below shall be specified for
each resulting Borrowing);

           
(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

           
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

           
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to
be applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term "Interest Period".

If any such Interest Election Request requests a Eurodollar Borrowing
but does not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.

           
(d)  Promptly following receipt of an Interest Election Request, the Administrative
Agent shall advise each Lender of the details thereof and of such Lender's portion of
each resulting Borrowing.

           
(e)  If the Company or the applicable Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default has occurred and
is continuing and the Administrative Agent, at the request of the Required Lenders, so
notifies the Company, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and
(ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.

           
SECTION 2.08.  Termination and Reduction of Commitments.  (a)  Unless
previously terminated, (i) the Tranche A Commitments, Tranche B Commitments and
Interim Commitments shall terminate at 5:00 p.m., New York City time, on the
Effective Date and (ii) the Revolving Commitments shall terminate at 5:00 p.m.,
New York City time, on the Revolving Maturity Date.  

           
(b)  The Company may at any time terminate, or from time to time reduce, the
Commitments of any Class; provided that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$5,000,000 and not less than $10,000,000 and (ii) the Company shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 
2.11, the sum of the Revolving Exposures would exceed the total Revolving
Commitments.

           
(c)  If any prepayment of Term Borrowings is required pursuant to Section 2.11
but cannot be made because there are no Term Borrowings outstanding, or because the
amount of the required prepayment exceeds the outstanding amount of Term Borrowings,
then, on the date that such prepayment is required, the Revolving Commitments shall be
reduced by an aggregate amount equal to the amount of the required prepayment, or the
excess of such amount over the outstanding amount of Term Borrowings, as the case may
be.

           
(d)  The Company shall notify the Administrative Agent of any election to terminate or
reduce the Commitments under paragraph (b) of this Section, or any required
reduction of the Revolving Commitments under paragraph (c) of this Section, at
least two Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Promptly following receipt
of any notice, the Administrative Agent shall advise the Lenders of the contents
thereof.  Each notice delivered by the Company pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Revolving Commitments
delivered by the Company may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be revoked
or extended by the Company (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied or the effectiveness of
such other credit facilities is delayed.  Any termination or reduction of the
Commitments of any Class shall be permanent.  Each reduction of the Commitments
of any Class shall be made ratably among the Lenders in accordance with their
respective Commitments of such Class.

           
SECTION 2.09.  Repayment of Loans; Evidence of Debt.  (a) The Company
and each applicable Borrower hereby unconditionally promise to pay (i) to the
Administrative Agent for the account of each Lender the then unpaid principal amount
of each Revolving Loan of such Lender on the Revolving Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal amount of
each Term Loan of such Lender as provided in Section 2.10 and (iii) to the
Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier
of the Revolving Maturity Date and the seventh day after such Swingline Loan is made;
provided that on each date that a Revolving Borrowing is made, the Borrowers
shall repay all Swingline Loans that were outstanding on the date such Borrowing was
requested.

           
(b)  Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

           
(c)  The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.

           
(d)  The entries made in the accounts maintained pursuant to paragraph 
(b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligation of the Borrowers to repay
the Loans in accordance with the terms of this Agreement.

           
(e)  Any Lender may request that Loans of any Class made by it be evidenced by a
promissory note.  In such event, the Borrowers shall prepare, execute and deliver
to such Lender one or more promissory notes payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by
such promissory notes and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).  

           
SECTION 2.10.  Amortization of Term Loans.  (a)  Subject to adjustment
pursuant to paragraph (d) of this Section, the Borrowers shall repay Tranche A
Term Borrowings on each date set forth below in the aggregate principal amount set
forth opposite such date:

	

Date
	

Amount

	

June 30, 2001

	

$11,250,000

	

September 30, 2001

	

$11,250,000

	

December 31, 2001

	

$11,250,000

	

March 31, 2002

	

$11,250,000

	

June 30, 2002

	

$15,000,000

	

September 30, 2002

	

$15,000,000

	

December 31, 2002

	

$15,000,000

	

March 31, 2003

	

$15,000,000

	

June 30, 2003

	

$22,500,000

	

September 30, 2003

	

$22,500,000

	

December 31, 2003

	

$22,500,000

	

March 31, 2004

	

$22,500,000

	

June 30, 2004

	

$26,250,000

	

September 30, 2004

	

$26,250,000

	

December 31, 2004

	

$26,250,000

	

March 31, 2005

	

$26,250,000

 

            
(b)  Subject to adjustment pursuant to paragraph (d) of this Section, the
Borrowers shall repay Tranche B Term Borrowings on each date set forth below in
the aggregate principal amount set forth opposite such date:

	

Date
	

Amount

	

June 30, 2000

	

$500,000

	

September 30, 2000

	

$500,000

	

December 31, 2000

	

$500,000

	

March 31, 2001

	

$500,000

	

June 30, 2001

	

$500,000

	

September 30, 2001

	

$500,000

	

December 31, 2001

	

$500,000

	

March 31, 2002

	

$500,000

	

June 30, 2002

	

$500,000

	

September 30, 2002

	

$500,000

	

December 31, 2002

	

$500,000

	

March 31, 2003

	

$500,000

	

June 30, 2003

	

$500,000

	

September 30, 2003

	

$500,000

	

December 31, 2003

	

$500,000

	

March 31, 2004

	

$500,000

	

June 30, 2004

	

$500,000

	

September 30, 2004

	

$500,000

	

December 31, 2004

	

$500,000

	

March 31, 2005

	

$500,000

	

June 30, 2005

	

$47,500,000

	

September 30, 2005

	

$47,500,000

	

December 31, 2005

	

$47,500,000

	

March 31, 2006

	

$47,500,000

           
(c)  To the extent not previously paid, (i) all Tranche A Term Loans shall be
due and payable on the Tranche A Maturity Date, (ii) all Tranche B Term
Loans shall be due and payable on the Tranche B Maturity Date and (iii) all
Interim Term Loans shall be due and payable on the Interim Maturity Date.

           
(d)  Any prepayment of a Tranche A Term Borrowing or a Tranche B Term
Borrowing shall be applied to reduce the subsequent scheduled repayments of the Term
Borrowings of such Class to be made pursuant to this Section ratably.

           
(e)  Prior to any repayment of any Term Borrowings of any Class hereunder, the
Company shall select the Borrowing or Borrowings of the applicable Class to be
repaid and shall notify the Administrative Agent by telephone (confirmed by telecopy)
of such selection not later than 11:00 a.m., New York City time, three Business
Days before the scheduled date of such repayment.  Each repayment of a Borrowing shall
be applied ratably to the Loans included in the repaid Borrowing.  Repayments of Term
Borrowings shall be accompanied by accrued interest on the amount repaid.

           
SECTION 2.11.  Prepayment of Loans.  (a)  The Borrowers shall have
the right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section.

           
(b)  In the event and on such occasion that the sum of the Revolving Exposures
exceeds the total Revolving Commitments or, when taken together with the aggregate
outstanding principal amount of the Term Loans, exceeds the Borrowing Base then in
effect, the Borrowers shall prepay Revolving Borrowings or Swingline Borrowings (or,
if no such Borrowings are outstanding, deposit cash collateral in an account with the
Administrative Agent pursuant to Section 2.05(j)) in an aggregate amount equal to
such excess.

           
(c)  In the event and on each occasion that any Net Proceeds are received by or on
behalf of the Company or any Subsidiary in respect of any Prepayment Event, the
Borrowers shall, within three Business Days after such Net Proceeds are received,
prepay Term Borrowings in an aggregate amount equal to such Net Proceeds; provided
that at any time after the aggregate amount of Term Borrowings prepaid based upon events
described under paragraph (a) or (b) of the definition of "Prepayment Event"
is $200,000,000 or more, only 50% of the Net Proceeds received in respect of any
event described under paragraph (a) or (b) of the definition of "Prepayment Event
" shall be required to be applied to prepay Term Borrowings, except in the case of
such a Prepayment Event in which greater than 10% of the aggregate consideration is
received by the Company or any Subsidiary in a form other than cash, in which case the
amount of Loans required to be prepaid in respect of such Prepayment Event shall be
increased by the present value (based on reasonable assumptions) of the portion of such
non-cash consideration in excess of 10% of the total value of all the consideration
received in respect of such Prepayment Event, up to an amount not to exceed 50% of such
total value.

           
(d)  Prior to any optional or mandatory prepayment of Borrowings hereunder, the Company
shall select the Borrowing or Borrowings to be prepaid and shall specify such selection
in the notice of such prepayment pursuant to paragraph (e) of this Section.  In the
event of any optional or mandatory prepayment of Term Borrowings made at a time when Term
Borrowings of more than one Class remain outstanding, the Borrowers shall first apply all
such prepayments to Interim Term Borrowings until all Interim Term Borrowings have been
paid in full and shall then select Term Borrowings to be prepaid so that the aggregate
amount of such prepayment is allocated between the Tranche A Term Borrowings and Tranche
 B Term Borrowings pro rata based on the aggregate principal amount of outstanding
Borrowings of each such Class; provided that, so long as Tranche A Term Loans
are outstanding, any Tranche B Lender may elect, by notice to the Administrative Agent by
telephone (confirmed by telecopy) at least one Business Day prior to the prepayment date,
to decline all or any portion of any prepayment of its Tranche B Term Loans pursuant to
this Section (other than an optional prepayment pursuant to paragraph (a) of this
Section, which may not be declined), in which case the aggregate amount of the prepayment
that would have been applied to prepay Tranche B Term Loans but was so declined shall be
applied to prepay Tranche A Term Borrowings (and if the aggregate amount of declined
payments is greater than the aggregate remaining amount of Tranche A Term Loans,
declinations shall be allocated among the Tranche B Lenders on a pro rata basis
based upon the respective amounts of their outstanding Tranche B Term Loans).
Each voluntary prepayment of the Tranche B Term Loans of any Lender under paragraph
(a) above, and each mandatory prepayment of the Tranche B Term Loans of any
Lender under paragraph (c) above shall be accompanied by a premium payment in cash
of (i) 2.00% of the aggregate principal amount of the Tranche B Term Borrowings
being prepaid, if such payment is made on or prior to the first anniversary of the
Effective Date and (ii) 1.00% of the aggregate principal amount of the Tranche
 B Term Borrowings being prepaid, if such payment is made thereafter but on or
prior to the second anniversary of the Effective Date.

           
(e)  The Company shall notify the Administrative  Agent (and, in the case of
prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by
telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business Days before
the date of prepayment, (ii) in the case of prepayment of an ABR  Borrowing, not
later than 11:00 a.m., New York City time, one Business Day before the date of
prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than
12:00 noon, New York City time, on the date of prepayment.  Each such notice shall
be irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid, the premiums to be paid on any Tranche 
B Term Borrowings to be prepaid  and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that, if a notice
of optional prepayment is given in connection with a conditional notice of termination of
the Revolving Commitments as contemplated by Section 2.08, then such notice of
prepayment may be revoked or extended if such notice of termination is revoked or
extended in accordance with Section 2.08.  Promptly following receipt of any
such notice (other than a notice relating solely to Swingline Loans), the Administrative
Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an advance of a
Borrowing of the same Type as provided in Section 2.02, except as necessary to apply
fully the required amount of a mandatory prepayment.  Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.13.

           
SECTION 2.12.  Fees.  (a)  The Borrowers agree to pay to the
Administrative Agent for the account of each Lender a commitment fee, which shall accrue
at the Applicable Rate on the average daily unused amount of each Commitment of such
Lender during the period from and including the date of this Agreement to but excluding
the date on which such Commitment terminates.  Accrued commitment fees shall be payable
in arrears (i) in the case of commitment fees in respect of the Revolving
Commitments, on the last day of March, June, September and December of each year and on
the date on which the Revolving Commitments terminate, commencing on the first such date
to occur after the date hereof, and (ii) in the case of commitment fees in respect
of the Tranche A Term Commitments, Tranche B Term Commitments and Interim Commitments, on
the Effective Date or any earlier date on which such Commitments terminate.  All
commitment fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but excluding the
last day).  For purposes of computing commitment fees with respect to Revolving
Commitments, a Revolving Commitment of a Lender shall be deemed to be used to the extent
of the outstanding Revolving Loans and LC Exposure of such Lender (and the Swingline
Exposure of such Lender shall be disregarded for such purpose).

           
(b)  The Borrowers agree to pay (i) to the Administrative Agent for the account of
each Revolving Lender a participation fee with respect to its participations in Letters
of Credit, which shall accrue at the Applicable Rate used to determine the interest rate
applicable to Eurodollar Revolving Loans on the average daily amount of such Lender's LC
Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the later of the
date on which such Lender's Revolving Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank a fronting fee,
which shall accrue at the rate of 0.25 % per annum on the average daily amount of the LC
Exposure attributable to Letters of Credit issued by such Issuing Bank (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date of termination
of the Revolving Commitments and the date on which there ceases to be any LC Exposure,
as well as each Issuing Bank's standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrued through and including the last day of March,
June, September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the Effective
Date; provided that all such fees shall be payable on the date on which the
Revolving Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand.  Any other fees payable to
the Issuing Banks pursuant to this paragraph shall be payable within 10 days after
demand.  All participation fees and fronting fees shall be computed on the basis of
a year of 360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).

           
(c)  The Borrowers agree to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon between
any Borrower and the Administrative Agent.

           
(d)  All fees payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent (or to an Issuing Bank, in the case of fees payable
to it) for distribution, in the case of commitment fees and participation fees, to the
Lenders entitled thereto.  Fees paid shall not be refundable under any circumstances.

           
SECTION 2.13.  Interest.  (a)  The Loans comprising each ABR 
Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base
Rate plus the Applicable Rate.

           
(b)  The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted
LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

           
(c)  Notwithstanding the foregoing, if any principal of or interest on any Loan or any
fee or other amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest,
after as well as before judgment, at a rate per annum equal to (i) in the case of
overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section or (ii) in the case of any
other amount, 2% plus the rate applicable to ABR Revolving Loans as provided in
paragraph (a) of this Section.

           
(d)  Accrued interest on each Loan shall be payable in arrears on each Interest Payment
Date for such Loan and, in the case of Revolving Loans, upon termination of the Revolving
Commitments; provided that (i) interest accrued pursuant to paragraph 
(c) of this Section shall be payable on demand, (ii) in the event of any repayment
or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the
end of the Revolving Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of
the current Interest Period therefor, accrued interest on such Loan shall be payable on
the effective date of such conversion.

           
(e)  All interest hereunder shall be computed on the basis of a year of 360 days, except
that interest computed by reference to the Alternate Base Rate at times when the
Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and in each case shall be payable for
the actual number of days elapsed (including the first day but excluding the last day).
The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest error.

           
SECTION 2.14.  Alternate Rate of Interest.  If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

           
(a) the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining the
Adjusted LIBO Rate for such Interest Period; or

           
(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate for such Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Loans included in such Borrowing for such Interest
Period;

then the Administrative Agent shall give notice thereof to the
Company and the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing
Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

           
SECTION 2.15.  Increased Costs.  (a)  If any Change in Law shall:

           
(i) impose, modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by, any Lender
(except any such reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing
Bank; or

           
(ii) impose on any Lender or any Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter
of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost
to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such Issuing
Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender or such Issuing Bank hereunder
(whether of principal, interest or otherwise), then the Borrowers will pay to such Lender
or such Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or such Issuing Bank, as the case may be, for such additional
costs incurred or reduction suffered.

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

           
(c)  A certificate of a Lender or an Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or such Issuing Bank or its holding company,
as the case may be, and the manner in which such amount or amounts have been calculated,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Company and shall be conclusive absent manifest error.  The Borrowers shall pay such
Lender or such Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.  

           
(d)  Failure or delay on the part of any Lender or any Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such Lender's or
such Issuing Bank's right to demand such compensation; provided that no Borrower
shall be required to compensate a Lender or an Issuing Bank pursuant to this Section for
any increased costs or reductions incurred more than six months prior to the date that
such Lender or such Issuing Bank, as the case may be, notifies the Company of the Change
in Law giving rise to such increased costs or reductions and of such Lender's or such
Issuing Bank's intention to claim compensation therefor; provided further that,
if the Change in Law giving rise to such increased costs or reductions is retroactive,
then the six month period referred to above shall be extended to include the period of
retroactive effect thereof.

           
SECTION 2.16.  Break Funding Payments.  In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b) 
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or prepay
any Revolving Loan or Term Loan on the date specified in any notice delivered pursuant
hereto (regardless of whether such notice may be revoked or extended under Section 
2.11(e) and is revoked or extended in accordance therewith), or (d) the assignment
of any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Company pursuant to Section 2.19, then,
in any such event, the Borrowers shall compensate each Lender for the loss, cost and
expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost
or expense to any Lender shall be deemed to include an amount determined by such Lender
to be the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate
that would have been applicable to such Loan, for the period from the date of such event
to the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would bid were
it to bid, at the commencement of such period, for dollar deposits of a comparable amount
and period from other banks in the eurodollar market.  A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive pursuant
to this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error.  The Borrowers shall pay such Lender the amount shown as due on any
such certificate within 10 days after receipt thereof.

           
SECTION 2.17.  Taxes.  (a)  Any and all payments by or on account
of any obligation of any Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if a Borrower shall be required to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable
to additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make such
deductions and (iii) such Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.  

           
(b)  In addition, the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

           
(c)  The Borrowers shall indemnify the Administrative Agent, each Lender and
each Issuing Bank, within 10 days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or
such Issuing Bank, as the case may be, on or with respect to any payment by or on
account of any obligation of any Borrower hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or liability delivered to
the Company by a Lender or an Issuing Bank, or by the Administrative Agent on its own
behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive absent manifest
error. 

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

           
(e)  Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is located, or
any treaty to which such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to the Company  (with a copy to the Administrative Agent), at
the time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the Company as
will permit such payments to be made without withholding or at a reduced rate, provided
that such Foreign Lender has received written notice from the Company advising it of
the availability of such exemption or reduction and supplying all applicable
documentation.

           
SECTION 2.18.  Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a)  Each Borrower shall make each payment required to be made by it hereunder
or under any other Loan Document (whether of principal, interest, fees or reimbursement
of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to the time expressly required hereunder or under such other Loan
Document for such payment (or, if no such time is expressly required, prior to 1:00
p.m., New York City time), on the date when due, in immediately available funds,
without set-off or counterclaim.  Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon.  All such
payments shall be made to the Administrative Agent at its offices at 270 Park Avenue,
New York, New York, except payments to be made directly to the Issuing Banks
or Swingline Lender as expressly provided herein and except that payments pursuant to
Sections 2.15, 2.16, 2.17 and 10.03 shall be made directly to the Persons entitled
thereto and payments pursuant to other Loan Documents shall be made to the Persons
specified therein.  The Administrative Agent shall distribute any such payments received
by it for the account of any other Person to the appropriate recipient promptly following
receipt thereof.  If any payment under any Loan Document shall be due on a day that is
not a Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest thereon shall
be payable for the period of such extension.  All payments under each Loan Document shall
be made in dollars.

           
(b)  If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest and
fees then due to such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal and unreimbursed LC Disbursements
then due to such parties.

           
(c)  If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of its
Revolving Loans, Term Loans or participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the aggregate
amount of its Revolving Loans, Term Loans and participations in LC Disbursements and
Swingline Loans and accrued interest thereon than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective Revolving
Loans, Term Loans and participations in LC Disbursements and Swingline Loans;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered,  such participations shall be
rescinded and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed to
apply to any payment made by any Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations in LC
Disbursements to any assignee or participant, other than to any Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall
apply).  Each Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against such Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of such Borrower in the amount of such participation.

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

           
(e)  If any Lender shall fail to make any payment required to be made by it pursuant
to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or 10.03(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary provision
hereof), apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender's obligations under such Sections until
all such unsatisfied obligations are fully paid.

           
SECTION 2.19.  Mitigation Obligations; Replacement of Lenders.  (a)  
If any Lender requests compensation under Section 2.15, or if any Borrower
is required to pay any additional amount to any Lender or any Governmental Authority
for the account of any Lender pursuant to Section 2.17, then such Lender shall
use reasonable efforts to designate a different lending office for funding or booking
its Loans hereunder or to assign its rights and obligations hereunder to another of
its offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.15 or 2.17, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender.  Each Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such designation or
assignment.

           
(b)  If any Lender requests compensation under Section 2.15, or if a Borrower
is required to pay any additional amount to any Lender or any Governmental Authority
for the account of any Lender pursuant to Section 2.17, or if any Lender defaults
in its obligation to fund Loans hereunder, then the Company may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject to
the restrictions contained in Section 10.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment);
provided that (i) the Company shall have received the prior written
consent of the Administrative Agent (and, if a Revolving Commitment is being
assigned, the Issuing Banks and Swingline Lender), which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations
in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the case
of all other amounts) and (iii) in the case of any such assignment resulting
from a claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a material reduction in
such compensation or payments.  A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such Lender
or otherwise, the circumstances entitling the Borrower to require such  assignment
and delegation cease to apply. 

           
SECTION 2.20.  Borrowing Subsidiaries.  On or after the Effective Date, the
Company may designate any wholly owned Subsidiary as a Borrowing Subsidiary by
delivery to the Administrative Agent of a Borrowing Subsidiary Agreement executed
by such Subsidiary and the Company, and upon such delivery such Subsidiary shall for
all purposes of this Agreement be a Borrowing Subsidiary and a party to this Agreement
until the Company shall have executed and delivered to the Administrative Agent a
Borrowing Subsidiary Termination with respect to such Subsidiary, whereupon such
Subsidiary shall cease to be a Borrowing Subsidiary and a party to this Agreement.
Notwithstanding the preceding sentence, no Borrowing Subsidiary Termination will
become effective as to any Borrowing Subsidiary at a time when any principal of or
interest on any Loan to such Borrowing Subsidiary shall be outstanding hereunder;
provided that such Borrowing Subsidiary Termination shall be effective to
terminate such Borrowing Subsidiary's right to make further Borrowings or to request
Letters of Credit under this Agreement.  As soon as practicable upon receipt of a
Borrowing Subsidiary Agreement, the Administrative Agent shall send a copy thereof
to each Lender.

 

 

ARTICLE III

Representations and Warranties

           
Each of the Company and the Borrowing Subsidiaries represents and warrants to the
Lenders that: 

           
SECTION 3.01.  Organization; Powers.  Each of the Company and its Subsidiaries
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.  

           
SECTION 3.02.  Authorization; Enforceability.  The Transactions to be entered
into by each Loan Party are within such Loan Party's corporate powers and have been
duly authorized by all necessary corporate and, if required, stockholder action.  This
Agreement has been duly executed and delivered by each of the Company and the Borrowing
Subsidiaries and constitutes, and each other Loan Document to which any Loan Party is
to be a party, when executed and delivered by such Loan Party, will constitute, a legal,
valid and binding obligation of the Company, such Borrowing Subsidiary or such Loan
Party (as the case may be), enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

           
SECTION 3.03.  Governmental Approvals; No Conflicts.  The Transactions (a) 
do not require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made and
are in full force and effect and except filings necessary to perfect Liens created
under the Loan Documents, (b) will not violate any applicable law or regulation
or the charter, by-laws or other organizational documents of the Company, the Borrowing
Subsidiaries or any of the Subsidiaries or any order of any Governmental Authority,
(c) will not violate or result in a default under any indenture, material agreement
or other material instrument binding upon the Company, any Borrowing Subsidiary or any
of the Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by the Company, any Borrowing Subsidiary or any of the Subsidiaries,
and (d) will not result in the creation or imposition of any Lien on any asset of
the Company, any Borrowing Subsidiary or any of the Subsidiaries, except Liens created
under the Loan Documents.

           
SECTION 3.04.  Financial Condition; No Material Adverse Change.  (a)  
The Company has heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders equity and cash flows (i) as of and for the
fiscal year ended September 30, 1999, reported on by Deloitte & Touche,
independent public accountants, and (ii) as of and for the fiscal quarter and the
portion of the fiscal year ended December 31, 1999, certified by its chief
financial officer.  Such financial statements present fairly, in all material respects,
the financial position and results of operations and cash flows of the Company and its
consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case of the
statements referred to in clause (ii) above.

           
(b)  Except as disclosed in the financial statements referred to above or the notes
thereto or in the Information Memorandum (including the Company's annual report on
Form 10-K for its fiscal year ended September 30, 1999, and quarterly report
on Form 10-Q for the quarter ended December 31, 1999 (the "December 
10-Q"), each provided as part of the Information Memorandum) after giving effect to
the Transactions, none of the Company or its Subsidiaries has, as of the Effective Date,
any material contingent liabilities, unusual long-term commitments or unrealized losses.

           
(c)  Since September 30, 1999, there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise, of the
Company and its Subsidiaries, taken as a whole.  It is understood and agreed that the
developments disclosed in the December 10-Q and the Information Memorandum do not,
and will not without further development, constitute such a material adverse change.

           
SECTION 3.05.  Properties.  (a)  Each of the Company and its
Subsidiaries has good title to, or valid leasehold interests in, all its real and
personal property material to its business (including its Mortgaged Properties),
except for minor defects in title that do not interfere with its ability to conduct
its business as currently conducted or to utilize such properties for their intended
purposes.  

           
(b)  Each of the Company and its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property material
to its business, and the use thereof by the Company and its Subsidiaries does not
infringe upon the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.

           
(c)  Schedule 3.05 sets forth the address of each real property that is owned or leased
by the Company or any of its Subsidiaries as of the Effective Date after giving effect
to the Transactions.

           
(d)  As of the Effective Date, neither the Company nor any of its Subsidiaries has
received notice of, or has knowledge of, any pending or contemplated condemnation
proceeding affecting any material portion of any Mortgaged Property or any sale or
disposition thereof in lieu of condemnation.  Neither any Mortgaged Property nor any
interest therein is subject to any right of first refusal, option or other contractual
right to purchase such Mortgaged Property or interest therein.

           
SECTION 3.06.  Litigation and Environmental Matters.  (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of the Company or any Borrower, threatened
against or affecting the Company or any of its Subsidiaries (i) as to which
there is a reasonable likelihood of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to result
in a Material Adverse Effect or (ii) that involve any of the Loan Documents or
the Transactions.

           
(b)  Except with respect to any matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, neither the
Company nor any of its Subsidiaries (i) has failed to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental Liability
or (iv) knows of any basis for any Environmental Liability.

           
SECTION 3.07.  Compliance with Laws and Agreements.  Each of the Company and its
Subsidiaries is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.  No Default has occurred and is continuing.

           
SECTION 3.08.  Investment and Holding Company Status.  Neither the Company nor
any of its Subsidiaries is (a) an "investment company" as defined in, or subject
to regulation under, the Investment Company Act of 1940 or (b) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding Company Act
of 1935.

           
SECTION 3.09.  Taxes.  Each of the Company and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been filed
and has paid or caused to be paid all Taxes required to have been paid by it, except
(a) any Taxes that are being contested in good faith by appropriate proceedings
and for which the Company or such Subsidiary, as applicable, has set aside on its
books adequate reserves or (b) to the extent that the failure to do so could
not reasonably be expected to result in a Material Adverse Effect.

           
SECTION 3.10.  ERISA.  No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which liability
is reasonably expected to occur, could reasonably be expected to result in a Material
Adverse Effect.  The present value of all accumulated benefit obligations under each
Plan (based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $10,000,000 the fair market value of the
assets of such Plan, and the present value of all accumulated benefit obligations of
all underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $10,000,000 the fair
market value of the assets of all such underfunded Plans.

           
SECTION 3.11.  Disclosure.  The Company has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which the Company
or any of its Subsidiaries is subject, and all other matters known to any of them,
that, individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.  Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by or on
behalf of any Loan Party to the Administrative Agent or any Lender in connection with
the negotiation of this Agreement or any other Loan Document or delivered hereunder or
thereunder (as modified or supplemented by other information so furnished), taken as a
whole, contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that, with respect to projected financial
information, the Company and the Borrowing Subsidiaries represent only that such
information was prepared in good faith based upon assumptions believed to be reasonable
at the time.

           
SECTION 3.12.  Subsidiaries.  Schedule 3.12 sets forth the name of, and
the ownership interest of the Company in, each Subsidiary of the Company and identifies
each Subsidiary that is a Subsidiary Loan Party, in each case as of the Effective Date.

           
SECTION 3.13.  Insurance.  Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of the Company and its Subsidiaries as of the
Effective Date.  As of the Effective Date, all premiums in respect of such insurance
have been paid to the extent due.  The company and the Borrowing Subsidiaries believe
that the insurance maintained by or on behalf of the Company and its Subsidiaries is
adequate.

           
SECTION 3.14.  Labor Matters.  As of the Effective Date, there are no strikes,
lockouts or slowdowns against the Company or any Subsidiary pending or, to the knowledge
of the Company or any Borrower, threatened.  The hours worked by and payments made to
employees of the Company and the Subsidiaries have not been in violation in any material
respect of the Fair Labor Standards Act or any other applicable Federal, state, local or
foreign law dealing with such matters.  All payments due from the Company or any
Subsidiary, or for which any claim may be made against the Company or any Subsidiary,
on account of wages and employee health and welfare insurance and other benefits, have
been paid or accrued as a liability on the books of the Company or such Subsidiary.  The
consummation of the Transactions will not give rise to any right of termination or right
of renegotiation on the part of any union under any collective bargaining agreement to
which the Company or any Subsidiary is bound.

           
SECTION 3.15.  Solvency.  Immediately after the consummation of the Transactions
to occur on the Effective Date and immediately following the making of each Loan made on
the Effective Date and after giving effect to the application of the proceeds of such
Loans, (a) the fair value of the assets of each Borrower, and of the Loan Parties
taken as a whole, at a fair valuation, will exceed its and their respective debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair saleable
value of the property of each Borrower, and of the Loan Parties taken as a whole, will
be greater than the amount that will be required to pay the probable liability of its
and their respective debts and other liabilities, subordinated, contingent or otherwise,
as such debts and other liabilities become absolute and matured; (c) each Borrower,
and the Loan Parties taken as a whole, will be able to pay its and their respective debts
and liabilities, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured; and (d) each Borrower, and the Loan Parties taken as
a whole, will not have unreasonably small capital with which to conduct the business in
which it is or they are engaged as such business is now conducted and is proposed to be
conducted following the Effective Date.

           
SECTION 3.16.  Senior Indebtedness.  The Obligations constitute "Senior
Indebtedness" however denominated, under and as defined in each document or instrument
governing subordinated Indebtedness of the Company or any Subsidiary (including the
intercompany subordinated Indebtedness related to the Trust Preferred).

           
SECTION 3.17.  Year 2000.  There has not occurred, and neither the Company nor
any Borrower expects that there will occur, any material disruption in the operations
or business systems of the Company and the Subsidiaries resulting from the inability of
computer systems of the Company or the Subsidiaries or equipment of the Company or the
Subsidiaries containing embedded microchips to recognize or properly process dates in or
following the year 2000.

 

 

ARTICLE IV

Conditions

           
SECTION 4.01.  Effective Date.  The obligations of the Lenders to make Loans and
of the Issuing Banks to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived in
accordance with Section 10.02):

           
(a)  The Administrative Agent (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such party
or (ii) written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.

           
(b)  The Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of each of
(i)  Lowenstein Sandler PC, counsel for the Company, substantially in the form of
Exhibit J-1, (ii) Paul, Weiss, Rifkind, Wharton & Garrison, counsel for
the Company, substantially in the form of Exhibit J-2, (iii) Milan A.
Sawdei, Executive Vice President and Chief Legal Officer for the Company, in
substantially the form of Exhibit J-3, and (iv) local counsel in each
jurisdiction where a Mortgaged Property is located, in each case in a form reasonably
satisfactory to the Administrative Agent, and, in the case of each such opinion
required by this paragraph, covering such other matters relating to the Loan Parties,
the Loan Documents or the Transactions as the Required Lenders shall reasonably request.
 Each of the Company and the Borrowers hereby requests such counsel to deliver such
opinions.

           
(c)  The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization,
existence and good standing of each Loan Party, the authorization of the Transactions and
any other legal matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance satisfactory to the Administrative Agent
and its counsel.

           
(d)  The Administrative Agent shall have received a certificate, dated the Effective
Date and signed by the President, a Vice President or a Financial Officer of the Company,
confirming compliance with the conditions set forth in paragraphs (a), (b), (c) and
(d) of Section 4.02.  Such certificate shall include all relevant calculations
in detail satisfactory to the Administrative Agent and shall specify the maximum amount
of Indebtedness under the Loan Documents that may be incurred by PharMerica.  A true and
complete certified copy of the approval by the disinterested directors of the Board of
Directors of PharMerica of the Transactions involving PharMerica and its subsidiaries,
including the satisfaction by PharMerica and its subsidiaries of the Collateral and
Guarantee Requirement, or the opinion of an investment banking firm as to the fairness
of such Transactions to PharMerica, as applicable shall be attached to such certificate.

           
(e)  The Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses (including fees, charges
and disbursements of counsel) required to be reimbursed or paid by any Loan Party
hereunder or under any other Loan Document.

           
(f)  The Collateral and Guarantee Requirement shall have been satisfied and the
Administrative Agent shall have received a completed Perfection Certificate dated
the Effective Date and signed by an executive officer or Financial Officer of the
Company, together with all attachments contemplated thereby, including the results
of a search of the Uniform Commercial Code (or equivalent) filings made with respect
to the Loan Parties in the jurisdictions contemplated by the Perfection Certificate
and copies of the financing statements (or similar documents) disclosed by such search
and evidence reasonably satisfactory to the Administrative Agent that the Liens indicated
by such financing statements (or similar documents) are permitted by Section 6.02
or have been released.

           
(g)  The Administrative Agent shall have received evidence that the Intercreditor
Agreement shall have been executed and delivered by each required party and shall have
become effective.  Each Lender authorizes and directs the Administrative Agent to enter
into the Intercreditor Agreement.

           
(h)  The Administrative Agent shall be reasonably satisfied as to the amount
and nature of any environmental and employee health and safety exposures to which the
Company and the Subsidiaries may be subject after giving effect to the Transactions,
and with their plans with respect thereto.  

           
(i)  There shall be no litigation or administrative action (including any
investigation, proceeding or other action by the FDA) that could reasonably be expected
to have a material adverse effect on the business, operations, properties, assets,
liabilities or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, after giving effect to the Transactions. 

           
(j)  All consents and approvals required to be obtained from any Governmental Authority
or other Person in connection with the Transactions shall have been obtained.

           
(k)  The Existing Credit Agreements shall have been or shall be simultaneously
repaid in full, and all agreements and instruments evidencing or governing Indebtedness
thereunder and all lending or other commitments thereunder shall have been terminated
and all liens securing such Indebtedness shall have been released and the Administrative
Agent shall have received a payoff letter agreement or such other evidence as it shall
have reasonably requested as to the satisfaction of such conditions.  After giving effect
to the Transactions, neither the Company nor any of its Subsidiaries shall have
outstanding any shares of preferred stock or any Indebtedness, other than (i)
Indebtedness incurred under the Loan Documents and (ii) the Indebtedness and preferred
stock set forth on Schedule 6.01.

           
(l)  The Administrative Agent shall have received a completed Borrowing Base Certificate
for the month ended February 29, 2000, dated the Effective Date and signed by a
Financial Officer of the Borrower.

           
(m)  The Administrative Agent shall have received evidence that the insurance
required by Section 5.07 and the Security Documents is in effect.

           
(n)  The Administrative Agent shall have received and be satisfied with
copies of each amendment of the documents relating to the Securitization outstanding
on the Effective Date.

The Administrative Agent shall notify the Company and the Lenders
of the Effective Date, and such notice shall be conclusive and binding.  Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing Banks to
issue Letters of Credit hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 10.02) at or prior to 5:00
p.m., New York City time, on April 22, 2000 (and, in the event such conditions
are not so satisfied or waived, the Commitments shall terminate at such time).  

           
SECTION 4.02.  Each Credit Event.  The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of the Issuing Banks to issue, amend,
renew or extend any Letter of Credit, is subject to receipt of the request therefor
in accordance herewith and to the satisfaction of the following conditions:

           
(a)  The representations and warranties of each Loan Party set forth in the
Loan Documents shall be true and correct in all material respects on and as of the date
of such Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable.

           
(b)  At the time of and immediately after giving effect to such Borrowing
or the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

           
(c)  After giving effect to such Borrowing or the issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, the sum of the
Revolving Exposures and the aggregate principal amount of the outstanding Term
Loans shall not exceed the Borrowing Base then in effect.

           
(d)  Such Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, shall be permitted under the debt incurrence test
specified under each indenture or other governing document then outstanding in respect
of any Material Indebtedness, or there shall be another provision in such indenture or
document expressly permitting such Borrowing or Letter of Credit.

Each Borrowing and each issuance, amendment, renewal or extension
of a Letter of Credit shall be deemed to constitute a representation and warranty by
the Company on the date thereof as to the matters specified in paragraphs (a),
(b), (c) and (d) of this Section.

           
SECTION 4.03.  Initial Credit Event for each Borrowing Subsidiary.  The
obligation of each Lender to make Loans to or issue Letters of Credit for the account
of any Borrowing Subsidiary is subject to the satisfaction of the following conditions:

           
(a)  The Administrative Agent (or its counsel) shall have received such Borrowing
Subsidiary's Borrowing Subsidiary Agreement duly executed by all parties thereto (or,
in the case of Bergen Drug and PharMerica, counterparts of this Agreement duly executed
by each of them).

           
(b)  The Administrative Agent shall have received a favorable written opinion of
counsel for such Borrowing Subsidiary, substantially in the form of Exhibit J-4
and covering such other matters relating to such Borrowing Subsidiary or its Borrowing
Subsidiary Agreement as the Administrative Agent shall reasonably request.

           
(c)  The Administrative Agent shall have received such documents and certificates as
the Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of such Borrowing Subsidiary, the
authorization of the Transactions insofar as they relate to such Borrowing Subsidiary
and any other legal matters relating to such Borrowing Subsidiary, its Borrowing
Subsidiary Agreement or such Transactions, all in form and substance satisfactory
to the Administrative Agent and its counsel.

 

 

ARTICLE V

Affirmative Covenants

           
Until the Commitments have expired or been terminated and the principal of and interest
on each Loan and all fees payable hereunder shall have been paid in full and all Letters
of Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, each of the Company and the Borrowing Subsidiaries covenants and agrees with
the Lenders that:

           
SECTION 5.01.  Financial Statements and Other Information.  The Company will
furnish to the Administrative Agent and each Lender:

           
(a) within 90 days after the end of each fiscal year of the Company, its audited
consolidated balance sheet and related statements of operations, stockholders' equity
and cash flows as of the end of and for such year, and (if at such time PharMerica's
8-3/8% Senior Subordinated Notes due 2008 remain outstanding and the reporting
obligations in respect thereof remain in effect ) within 120 days after the end of
each fiscal year of the Company, such financial statements for PharMerica and its
subsidiaries, in each case setting forth in comparative form the figures for the
previous fiscal year, and presenting the results of each significant operating
business segment in accordance with FASB Statement No. 131, all reported on
by Deloitte & Touche or other independent public accountants of recognized
national standing (without a "going concern" or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Company or PharMerica, as
applicable, and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, and in the case of financial statements for the
Company and its Subsidiaries, together with statements for the applicable period
of Consolidated EBITDA and consolidated revenues (determined in each case on a basis
consistent with the presentation of Consolidated EBITDA and consolidated revenues for
such groups in the Information Memorandum) for each of Bergen Drug and its subsidiaries,
PharMerica and its subsidiaries, BBMC, ASD and its subsidiaries, Stadtlander and the
remaining Subsidiaries taken as a group;

           
(b) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Company, its consolidated balance sheet and related statements
of operations, stockholders' equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, and (if at such time
PharMerica's 8-3/8% Senior Subordinated Notes due 2008 remain outstanding and the
reporting obligations in respect thereof remain in effect) within 60 days after the end
of each of the first three fiscal quarters of each fiscal year of the Company, such
financial statements for PharMerica and its subsidiaries, in each case setting forth
in comparative form the figures for the corresponding period or periods of (or, in the
case of the balance sheet, as of the end of) the previous fiscal year, and presenting
the results of each significant operating business segment in accordance with FASB
Statement No. 131, all certified by a Financial Officer as presenting fairly in
all material respects the financial condition and results of operations of the Company
or PharMerica, as applicable, and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes, and in the case of financial statements
for the Company and its Subsidiaries, together with statements for the applicable
period of Consolidated EBITDA and consolidated revenues for each of Bergen Drug and
its subsidiaries, PharMerica and its subsidiaries, BBMC, ASD and its subsidiaries,
Stadtlander and the remaining Subsidiaries taken as a group;

           
(c) within 30 days after the end of each of the first two fiscal months of each fiscal
quarter of the Company, its consolidated balance sheet and related statements of
operations as of the end of and for such fiscal month and the then elapsed portion
of the fiscal year, all certified by one of its Financial Officers as presenting in
all material respects the financial condition and results of operations of the Company
and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the absence
of footnotes;

           
(d) concurrently with any delivery of financial statements under clause (a) 
or (b) above, a certificate of a Financial Officer of the Company (i) 
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.12, 6.13, 6.14 and 6.15 and (iii) stating whether
any change in GAAP or in the application thereof has occurred since the date of the
Company's audited financial statements referred to in Section 3.04 and, if any
such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;

           
(e) concurrently with any delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial statements
stating whether they obtained knowledge during the course of their examination of such
financial statements of any Default (which certificate may be limited to the extent
required by accounting rules or guidelines);

           
(f) within 30 days after the end of each calendar month, a completed Borrowing Base
Certificate calculating and certifying the Borrowing Base as of the last day of such
calendar month, signed on behalf of the Company by a Financial Officer;

           
(g) not more than 45 days after the commencement of each fiscal year of the Company,
a detailed consolidated budget for such fiscal year presented on a quarterly basis
(including a projected consolidated balance sheet and related statements of projected
operations and cash flow as of the end of and for such fiscal year and setting forth
the assumptions used for purposes of preparing such budget) and, promptly when available,
any significant revisions of such budget; 

           
(h) promptly after the same become publicly available, the Company will provide each
Lender with electronic notice of the availability of copies of all periodic and other
reports, proxy statements and other materials filed by the Company or any Subsidiary
with the Securities and Exchange Commission, or any Governmental Authority succeeding
to any or all of the functions of said Commission, or with any national securities
exchange, or distributed by the Company to its shareholders generally, as the case may
be; 

           
(i) promptly following receipt thereof, any communication from the Food and Drug
Administration regarding any circumstance or development that could reasonably be
expected to result in a Material Adverse Effect; and

           
(j) promptly following any request therefor, such other information regarding the
operations, business affairs, Collateral and financial condition of the Company or
any Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request, it being understood
that the Company may require any Lender receiving such information to confirm in
writing its confidentiality obligations under Section 10.12.

           
SECTION 5.02.  Notices of Material Events.  The Company and the Borrowing
Subsidiaries will furnish to the Administrative Agent and each Lender prompt
written notice of the following:

           
(a) the occurrence of any Default;

           
(b) the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Company or any Affiliate
thereof that, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect; 

           
(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in liability
of the Company and its Subsidiaries in an aggregate amount exceeding $15,000,000; and

           
(d) the failure by the Company or any Subsidiary to make any rental or other
required payment (which has not been cured) in respect of any facility at which
Eligible Inventory is stored; and

           
(e) any other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the Company setting
forth the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.

           
SECTION 5.03.  Information Regarding Collateral.  (a)  The Company
will furnish to the Administrative Agent prompt written notice of any change (i) 
in any Loan Party's corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of any Loan Party's chief executive office, its principal place of business,
any office in which it maintains books or records relating to Collateral owned by it or
any office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure or (iv) in any Loan Party's Federal Taxpayer
Identification Number.  The Company agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under the
Uniform Commercial Code or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral.  The Company
also agrees promptly to notify the Administrative Agent if any material portion of
the Collateral is damaged or destroyed.

           
(b)  Each year, at the time of delivery of annual financial statements with respect
to the preceding fiscal year pursuant to clause (a) of Section 5.01, the
Company shall deliver to the Administrative Agent a certificate of a Financial Officer
and the chief legal officer of the Borrower (i) setting forth the information
required pursuant to the Perfection Certificate or confirming that there has been no
change in such information since the date of the Perfection Certificate delivered on
the Effective Date or the date of the most recent certificate delivered pursuant to
this Section and (ii) certifying that all Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate filings,
recordings or registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction identified
pursuant to clause (i) above to the extent necessary to protect and perfect
the security interests under the Security Agreement, the Pledge Agreement and the
Mortgages for a period of not less than 18 months after the date of such certificate
(except as noted therein with respect to any continuation statements to be filed
within such period).  For purposes of the foregoing certificate, the Company may
assume that all filings, recordings and registrations that it has delivered to
the Collateral Agent have been properly filed with the proper Persons.

           
SECTION 5.04.  Existence; Conduct of Business.  Each of the Borrowers will,
and will cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade
names material to the conduct of its business; provided that the foregoing shall
not prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.03.

           
SECTION 5.05.  Payment of Obligations.  Each of the Borrowers will, and will
cause each of its Subsidiaries to, pay its Indebtedness and other obligations, including
Tax liabilities, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Company or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, (c) such contest effectively
suspends collection of the contested obligation and the enforcement of any Lien securing
such obligation and (d) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.

           
SECTION 5.06.  Maintenance of Properties.  Each of the Borrowers will,
and will cause each of its Subsidiaries to, keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary wear and
tear excepted.

           
SECTION 5.07.  Insurance.  Each of the Borrowers will, and will cause each of
its Subsidiaries to, maintain, with financially sound and reputable insurance companies
(a) insurance in such amounts (with no greater risk retention) and against such
risks as are customarily maintained by companies of established repute engaged in the
same or similar businesses operating in the same or similar locations, (b) flood
insurance on any Mortgaged Property located in an area designated as a "special flood
hazard area" in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), in such amount as is required to comply
with the National Flood Insurance Program as set forth in the Flood Disaster Protection
Act of 1973, as amended from time to time, and (c) all insurance required to be
maintained pursuant to the Security Documents.  Each Borrower will, upon the request
of the Administrative Agent (which will forward to the Company any such requests
received from Lenders), provide information in reasonable detail as to the insurance
so maintained.

           
SECTION 5.08.  Casualty and Condemnation.  The Company (a) will furnish
to the Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of any Collateral or the commencement of
any action or proceeding for the taking of any Collateral or any part thereof or
interest therein under power of eminent domain or by condemnation or similar proceeding
and (b) will ensure that the Net Proceeds of any such event (whether in the form
of insurance proceeds, condemnation awards or otherwise) are collected and applied in
accordance with Section 2.11(c).

           
SECTION 5.09.  Books and Records; Inspection and Audit Rights.  (a)  
Each of the Borrowers will, and will cause each of its Subsidiaries to, keep proper
books of record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities.  Each of the
Borrowers will, and will cause each of its Subsidiaries to, permit any representatives
designated by the Administrative Agent or any Lender, upon reasonable prior notice, to
visit and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested, provided that the Company may use reasonable efforts to coordinate
visits by Lenders.

           
(b)  The Company will, and will cause each of its Subsidiaries to, cooperate
in the conduct of the monthly collateral services performed by the Collateral Agent
and from time to time, upon the request of the Administrative Agent or the Required
Lenders, permit the Administrative Agent or professionals retained by the Administrative
Agent (including consultants, accountants, lawyers and appraisers) to conduct
evaluations and appraisals of the Company's practices in the computation of the
Borrowing Base and the assets included in the Borrowing Base at such times as the
Administrative Agent may elect or the Required Lenders may specify; provided,
that such Persons shall not be entitled to conduct such evaluations and appraisals of
assets more frequently than twice per year unless (i) a Default or Event of
Default has occurred and is continuing or (ii) the Administrative Agent or the
Required Lenders determine that any material event or material change has occurred
with respect to the Loan Parties, their inventory or receivables practices or the
performance of the Collateral and that as a result of such event or change more frequent
evaluations or appraisals are required to effectively monitor the Borrowing Base, in
which case the Company will, and will cause each of its Subsidiaries to, permit such
persons to conduct such evaluations and appraisals at such reasonable times and as
often as may be reasonably requested.  The Administrative Agent will provide the
Lenders with reports of the evaluations and appraisals it completes under this
Section 5.09(b).

           
(c)  From time to time at the direction of the Administrative Agent or the Required
Lenders the computation of the Borrowing Base will be modified or adjusted to revise
or establish eligibility criteria and reserves in respect of Eligible Accounts
Receivable and Eligible Inventory and to make such other adjustments and
reconciliations as the Administrative Agent or the Required Lenders may, in its or
their reasonable discretion (it being understood that the Administrative Agent will
not take any action inconsistent with any determination of the Required Lenders absent
a subsequent change in the relevant facts or circumstances), from time to time deem
appropriate, in consultation with the Company, based on the creditworthiness of
Borrowing Base items or on the results of Collateral or Borrowing Base evaluations
conducted by the Collateral Agent or professionals retained by the Collateral Agent,
as contemplated by Section 5.09(b), provided that any such change shall
be effective upon not less than 5 Business Days' notice.

           
SECTION 5.10.  Compliance with Laws.  Each of the Borrowers will, and
will cause each of its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

           
SECTION 5.11.  Use of Proceeds and Letters of Credit.  The proceeds of the
Term Loans and of Revolving Loans made on the Effective Date will be used only for
the repayment in full of the Indebtedness outstanding under the Existing Credit
Agreements and the payment of fees and expenses payable in connection with the
Transactions.  The proceeds of the Revolving Loans and Swingline Loans made after
the Effective Date will be used only for general corporate purposes, provided
that such proceeds may not be used to repay or prepay Interim Term Loans.  No part of
the proceeds of any Loan will be used, whether directly or indirectly, for any purpose
that entails a violation of any of the Regulations of the Board, including Regulations
 U and X.  Letters of Credit will be issued only for general corporate purposes.

           
SECTION 5.12.  Additional Subsidiaries.  If any additional Subsidiary is formed
or acquired after the Effective Date, the Company will, within ten Business Days after
such Subsidiary is formed or acquired, notify the Administrative Agent and the Lenders
thereof and cause the Collateral and Guarantee Requirement to be satisfied with respect
to such Subsidiary (if it is not an Excluded Subsidiary) and with respect to any Equity
Interest in or Indebtedness of such Subsidiary owned by or on behalf of any Loan Party.

           
SECTION 5.13.  Further Assurances.  (a)  Each of the Borrowers will,
and will cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings, mortgages,
deeds of trust and other documents), which may be required under any applicable law, or
which the Administrative Agent or the Required Lenders may reasonably request, to cause
the Collateral and Guarantee Requirement to be and remain satisfied at all times, all at
the expense of the Loan Parties.  Each of the Borrowers also agrees to provide to the
Administrative Agent, from time to time upon request, evidence reasonably satisfactory
to the Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.

           
(b)  If any material assets (including any real property or improvements thereto or any
interest therein) are acquired by the Company or any Subsidiary Loan Party after the
Effective Date (other than assets constituting Collateral under the Security Documents
that become subject to the Lien of the Security Documents upon acquisition thereof), the
Company will notify the Administrative Agent and the Lenders thereof, and, if requested
by the Administrative Agent or the Required Lenders, the Company will cause such assets
to be subjected to a Lien securing the Obligations and will take, and cause the Subsidiary
Loan Parties to take, such actions as shall be necessary or reasonably requested by the
Administrative Agent to grant and perfect such Liens, including actions described in
paragraph (a) of this Section, all at the expense of the Loan Parties.

 

 

ARTICLE VI

Negative Covenants

           
Until the Commitments have expired or terminated and the principal of and interest on
each Loan and all fees payable hereunder have been paid in full and all Letters of Credit
have expired or terminated and all LC Disbursements shall have been reimbursed, each of
the Company and the Borrowing Subsidiaries covenants and agrees with the Lenders that:

           
SECTION 6.01.  Indebtedness; Certain Equity Securities.  (a)  The
Borrowers will not, and will not permit any Subsidiary to, create, incur, assume or
permit to exist any Indebtedness, except:

           
(i) Indebtedness created under the Loan Documents; 

           
(ii) (A) Indebtedness of the Company under Hedging Agreements entered into in
accordance with Section 6.07, or (B) Indebtedness arising from the honoring
by a bank or other financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business; provided that
such Indebtedness incurred under this clause (B) is extinguished within two
Business Days of its incurrence;

           
(iii) Indebtedness existing on the date hereof and set forth in Schedule 6.01
and extensions, renewals and replacements of any such Indebtedness on terms taken as
a whole no less favorable to the Company and the Subsidiaries or the Lenders than the
terms of such Indebtedness in effect on the date hereof (other than interest rates,
which shall be at market rates) and that do not increase the outstanding principal
amount thereof or result in an earlier maturity date or decreased weighted average
life thereof or add any new obligor in respect thereof, provided that such
existing Indebtedness of the Company's Puerto Rico Subsidiary in an aggregate
principal amount not to exceed $55,000,000 may be refinanced in a transaction
supported by a Letter of Credit and benefitting from a Guarantee by the Company;

           
(iv) Indebtedness of the Company to any Subsidiary and of any Subsidiary to the
Company or any other Subsidiary; provided that Indebtedness of PharMerica or
any of its subsidiaries or of any Subsidiary that is not a Loan Party to the Company
or any Subsidiary Loan Party (other than Indebtedness among PharMerica and
subsidiaries of PharMerica that are Subsidiary Loan Parties) shall be subject
to Section 6.04;

           
(v) Guarantees by the Company of Indebtedness of any Subsidiary; provided
that Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness of any
Subsidiary that is not a Loan Party shall be subject to Section 6.04;

           
(vi) Indebtedness of the Company or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets, including
any Capital Lease Obligations or other Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof or
result in an earlier maturity date or decreased weighted average life thereof;
provided that (A) such Indebtedness is incurred prior to or within 90
days after such acquisition or the completion of such construction or improvement
and (B) the aggregate principal amount of Indebtedness permitted by this
clause (vi) shall not exceed $35,000,000 at any time outstanding;

           
(vii) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (A) such Indebtedness exists at the time such Person becomes
a Subsidiary and is not created in contemplation of or in connection with such Person
becoming a Subsidiary and (B) the aggregate principal amount of Indebtedness
permitted by this clause (vii) shall not exceed $15,000,000 at any time
outstanding; 

           
(viii) Indebtedness of Bergen Drug or the Securitization Entity under any
Securitization; provided that the aggregate amount of the Financed Portions of
all outstanding Securitizations shall not at any time exceed the sum of (a) the
Financed Portion as of the Effective Date, which as of the Effective Date is
$358,000,000, and (b) $100,000,000;

           
(ix) other unsecured Indebtedness of the Company in an aggregate principal amount
not exceeding $50,000,000 at any time outstanding; and

           
(x) Indebtedness of the Company that is subordinated to the Obligations;
provided that (A) the terms of such Indebtedness (other than interest
rates, which shall be at market rates) including subordination provisions, shall be
satisfactory to the Required Lenders, (B) such Indebtedness shall mature not
sooner than the date that is 90 days after the Tranche B Maturity Date, (C)
the aggregate principal amount of such Indebtedness, when taken with the outstanding
amount of all preferred stock issued under Section 6.01(b)(iii), is not at any
time in excess of $200,000,000 and (D) all the Net Proceeds of such Indebtedness
shall have been applied to prepay Loans in accordance with Section 2.11(c).

           
(b)  Neither the Company nor any Borrowing Subsidiary will, nor will they permit any
Subsidiary to, issue or permit to exist any preferred stock or other preferred Equity
Interests, other than (i) that existing on the date hereof and set forth on
Schedule 6.01, (ii) preferred stock that at all times prior to the date
that is one year after the Tranche B Maturity Date is not redeemable in whole
or part and pays distributions and dividends solely in kind or in common stock of the
Company and (iii) other preferred stock of the Company (A) having terms
(other than pricing, which shall be at market rates) satisfactory to the Required
Lenders, (B) in an aggregate amount that when taken together with the outstanding
principal amount of the Indebtedness outstanding under Section 6.01(a)(x) is not at
any time in excess of $200,000,000 and (C) all the Net Proceeds of which  have
been applied to prepay Loans in accordance with Section 2.11(c).

           
SECTION 6.02.  Liens.  The Borrowers will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof, except:

           
(a) Liens created under the Loan Documents;

           
(b) Permitted Encumbrances; 

           
(c) any Lien on any property or asset of the Borrower or any Subsidiary existing on the
date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of the Borrower or any Subsidiary and
(ii) such Lien shall secure only those obligations which it secures on the date
hereof and extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

           
(d) any Lien existing on any property or asset prior to the acquisition thereof by
the Borrower or any Subsidiary or existing on any property or asset of any Person
that becomes a Subsidiary after the date hereof prior to the time such Person becomes
a Subsidiary; provided that (i) such Lien is not created in contemplation
of or in connection with such acquisition or such Person becoming a Subsidiary, as the
case may be, (ii) such Lien shall not apply to any other property or assets of the
Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations
which it secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals and replacements thereof that
do not increase the outstanding principal amount thereof;

           
(e) Liens on fixed or capital assets acquired, constructed or improved by the Company
or any Subsidiary; provided that (i) such Liens secure Indebtedness
permitted by clause (vi) of Section 6.01(a), (ii) such security interests
and the Indebtedness secured thereby are incurred prior to or within 90 days after
such acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing
or improving such fixed or capital assets and (iv) such security interests shall
not apply to any other property or assets of the Company or any Subsidiary; and

           
(f) Liens under any Securitization on Purchased Property of Bergen Drug or any
Securitization Entity.

           
SECTION 6.03.  Fundamental Changes.  (a) No Borrower will, or will permit
any Subsidiary to, merge into or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or liquidate or dissolve, except that, if
at the time thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Subsidiary may merge into a Borrower in a
transaction in which such Borrower is the surviving corporation, (ii) any
Subsidiary may merge into  any Subsidiary in a transaction in which the surviving
entity is a Subsidiary and (if any party to such merger is a Subsidiary Loan Party)
is a Subsidiary Loan Party and (iii) any Subsidiary (other than a Subsidiary
Loan Party) may liquidate or dissolve if the Company determines in good faith that
such liquidation or dissolution is in the best interests of the Company and is not
materially disadvantageous to the Lenders; provided that any such merger
involving a Person that is not a wholly owned Subsidiary immediately prior to such
merger shall not be permitted unless also permitted by Section 6.04.

           
(b)  The Borrowers will not, and will not permit any of the Subsidiaries to, engage
to any material extent in any business other than businesses of the type conducted by
the Borrowers and the Subsidiaries on the date of execution of this Agreement and
businesses reasonably related thereto.

           
SECTION 6.04.  Investments, Loans, Advances, Guarantees and Acquisitions.
The Borrowers will not, and will not permit any of the Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any Equity Interests in or evidences
of indebtedness or other securities (including any option, warrant or other right to
acquire any of the foregoing) of, make or permit to exist any loans or advances to,
Guarantee any obligations of, or make or permit to exist any investment or any other
interest in, any other Person, or purchase or otherwise acquire (in one transaction
or a series of transactions) any assets of any other Person constituting a business
unit, except:

           
(a) investments of the Company under Hedging Agreements entered into in accordance
with Section 6.07;

           
(b) Permitted Investments;

           
(c) investments existing on the date hereof and set forth on Schedule 6.04;

           
(d) investments by the Company and its Subsidiaries in Equity Interests in their
respective Subsidiaries; provided that (i) any such Equity Interests
held by a Loan Party shall be pledged pursuant to the Pledge Agreement (subject to
the limitations applicable to common stock of a Foreign Subsidiary referred to in
paragraph (b) of the definition of Collateral and Guarantee Requirement) and
(ii) the aggregate amount of investments by Loan Parties in, and loans and
advances by Loan Parties to, and Guarantees by Loan Parties of Indebtedness of,
PharMerica or any of its subsidiaries or of Subsidiaries that are not Loan Parties
(other than such investments, loans, advances and Guarantees (i) to the extent
solely among PharMerica and subsidiaries of PharMerica that are Subsidiary Loan
Parties and (ii) in any Securitization Entity pursuant to a Securitization)
shall not exceed $5,000,000 at any time outstanding;

           
(e) loans or advances made by the Company to any Subsidiary and made by any
Subsidiary to the Company or any other Subsidiary; provided that (i) any
such loans and advances made by a Loan Party shall be evidenced by a promissory note
pledged pursuant to the Pledge Agreement and (ii) the amount of such loans and
advances made by Loan Parties to Subsidiaries that are not Loan Parties shall be
subject to the limitation set forth in clause (d) above;

           
(f) Guarantees constituting Indebtedness permitted by Section 6.01; provided
 that the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan
Parties that is Guaranteed by any Loan Party shall be subject to the limitation set
forth in clause (d) above;

           
(g) 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;

           
(h) (i) loans and advances to employees of the Company and the Subsidiaries in an
aggregate principal amount at any time outstanding not to exceed $10,000,000 and
(ii) advances of payroll payments and expenses to employees in the ordinary course
of business;

           
(i) loans and advances to customers of the Company and the Subsidiaries (other than
any created under paragraph (g) above) in an aggregate principal amount at any time
outstanding not to exceed $50,000,000 provided that no more than $10,000,000
in the aggregate of such loans and advances shall at any time be outstanding to a
single customer;

           
(j) discounts paid to customers in advance of sales in connection with the commencement
or renewal of distribution agreements in the ordinary course of business and consistent
with past practice or with the then current practices of suppliers in the applicable
market, in an aggregate unused amount for all such discounts at any time outstanding
not to exceed $30,000,000;

           
(k) Permitted Acquisitions in respect of which the aggregate amount of consideration
paid after the date hereof (whether cash or property, as valued at the time such
investment is made) does not exceed (net of any return representing return of capital
of (but not return on) any such Permitted Acquisition) at any time $75,000,000; and

           
(l) Permitted Other Acquisitions and Permitted Acquisitions in addition to those
made under paragraph (k) above in respect of which the aggregate amount of
consideration paid after the date hereof (whether cash or property, as valued at the
time such investment is made) does not exceed (net of any return representing return
of capital of (but not return on) any such Permitted Other Acquisition or Permitted
Acquisition) at any time $75,000,000.

           
SECTION 6.05.  Asset Sales.  The Borrowers will not, and will not permit any
of the Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will any Borrower permit any of its
Subsidiaries to issue any additional Equity Interest in such Subsidiary, except:

           
(a) sales of inventory, obsolete or surplus equipment and Permitted Investments in
the ordinary course of business;

           
(b) sales, transfers and dispositions to a Borrower or a Subsidiary; provided 
that any such sales, transfers or dispositions involving PharMerica or any of its
subsidiaries or a Subsidiary that is not a Loan Party (other than such transactions
to the extent solely involving PharMerica and subsidiaries of PharMerica that are
Subsidiary Loan Parties) shall be made in compliance with Section 6.09; 

           
(c) sales of Purchased Property of Bergen Drug or any Securitization Entity under any
Securitization; and

           
(d) the sale of all the Equity Interests in any Person included in Stadtlander,
and sales, transfers and other dispositions of assets that are not permitted by any
other clause of this Section; provided that the aggregate fair market value of
all assets sold, transferred or otherwise disposed of in reliance upon this clause
 (d) shall not exceed $500,000,000 during the term of this Agreement and that
any retained Equity Interests in any Subsidiary in which any Equity Interests have
been sold, transferred or otherwise disposed of shall be deemed to be noncash
consideration received in respect of such sale, transfer or other disposition.

provided that all sales, transfers, leases and other
dispositions permitted hereby (other than those permitted by clauses (b) and
(c) above) shall be made for fair value and (i) until such time as the
aggregate amount of Term Borrowings prepaid based upon events described under
paragraph (a) or (b) of the definition of "Prepayment Event" is
$200,000,000 or more, for at least 90% cash consideration, and (ii) thereafter,
for at least 80% cash consideration (it being understood that all noncash
consideration constituting investments, and the retention of minority interests
in sold Subsidiaries, shall be subject to Section 6.04(l), and that contingent
payouts, earnouts and similar consideration will be valued based upon the maximum
consideration permitted to be received on a present value basis based upon reasonable
assumptions).

           
SECTION 6.06.  Sale and Leaseback Transactions.  The Borrowers will not, and
will not permit any of the Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby any Borrower or Subsidiary shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property sold
or transferred, other than any such transaction (a) which involves a sale solely
for cash consideration on an arm's length basis in an amount that when taken together
with the aggregate amount of the consideration received in respect of all other such
transactions after the date hereof is less than $50,000,000 and (b) the Net
Proceeds of which are applied to prepay Term Borrowings in accordance with Section
 2.11(c).

           
SECTION 6.07.  Hedging Agreements.  The Borrowers will not, and will not permit
any of the Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate risks
to which the Borrower or any Subsidiary is exposed in the conduct of its business or
the management of its liabilities and not for any speculative purpose.

           
SECTION 6.08.  Restricted Payments; Certain Payments of Indebtedness.  (a) 
The Borrowers will not, and will not permit any of the Subsidiaries to, declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except (i) the Company may declare
and pay dividends with respect to its capital stock payable solely in additional shares
of its common stock, (ii) Subsidiaries may declare and pay dividends ratably with
respect to their capital stock (except that no dividends, distributions or other
Restricted Payments may be made in respect of the Trust Preferred other than interest
paid on the related intercompany subordinated Indebtedness in accordance with Section
 6.08(b)(ii)), (iii) the Company may make Restricted Payments, not exceeding
$5,000,000 during any fiscal year, pursuant to and in accordance with stock option plans
or other equity based benefit plans for management or employees of the Company and its
Subsidiaries, and (iv) so long as no Default or Event of Default shall have occurred
and be continuing at the time of such payment and no Default would occur as a result of
making such payment, (A) the Company may pay dividends with respect to its common
stock in cash (x) in an aggregate amount during each fiscal quarter not to exceed the
lesser of $4,000,000 and Adjusted Consolidated Net Income for the immediately preceding
fiscal quarter and (y) in any greater amount during any fiscal quarter ending on or after
September 30, 2000, provided that at the time each such dividend is paid
(1) if such dividend is paid in the fiscal quarter ended September 30, 2000,
the aggregate amount of cash dividends paid in such fiscal quarter is not in excess of
the lesser of $10,100,000 and 25% of Adjusted Consolidated Net Income for the  fiscal
quarter ended June 30, 2000, (2) if such dividend is paid in the fiscal quarter
ended December 31, 2000, the aggregate amount of cash dividends paid in such fiscal
quarter, taken together with the aggregate amount of cash dividends paid in the
immediately preceding fiscal quarter, is not in excess of the lesser of $20,200,000
and 25% of Adjusted Consolidated Net Income for the two fiscal quarter period ended
September 30, 2000, (3) if such dividend is paid in the fiscal quarter ended
March 31, 2001, the aggregate amount of cash dividends paid in such fiscal quarter,
taken together with the aggregate amount of cash dividends paid in the immediately
preceding two fiscal quarters, is not in excess of the lesser of $30,300,000 and 25%
of Adjusted Consolidated Net Income for the three fiscal quarter period ended December
 31, 2000, and (4) if such dividend is paid thereafter, the aggregate amount
of cash dividends paid in the fiscal quarter in which such dividend is paid, taken
together with the aggregate amount of cash dividends paid in the three fiscal quarters
immediately preceding such fiscal quarter, is not in excess of the lesser of (x) 25%
of Adjusted Consolidated Net Income for the four fiscal quarter period ending most
recently prior to the time such dividend is paid and (y) $40,400,000, and (B) 
the Company may pay regular dividends or distributions in respect of preferred stock
issued after the date hereof in compliance with Section 6.01(b)(iii).  For purposes
of clause (iv) above, "Adjusted Consolidated Net Income" for any period shall mean the
sum, without duplication, for such period of Consolidated Net Income plus any special
one-time or extraordinary non-cash charges deducted in calculating such Consolidated Net
Income plus the aggregate loss reflected in such period on the books of the Company and
the Subsidiaries in respect of any sale of all or part of Stadtlander and any
discontinuation of any part of Stadtlander.

           
(b)  The Borrowers will not, and will not permit any of the Subsidiaries to, make
or agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of or
interest on any Indebtedness, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit, on account
of the purchase, redemption, retirement, acquisition, cancelation or termination of any
Indebtedness, except:

           
(i) payment of Indebtedness created under the Loan Documents;

           
(ii) payment of regularly scheduled interest payments and scheduled or mandatory
principal payments as and when due in respect of any Indebtedness, other than payments
in respect of subordinated debt prohibited by the subordination provisions thereof, and
payments made to Bergen Drug by Securitization Entities in respect of subordinated
Indebtedness incurred pursuant to any Securitization;

           
(iii) refinancings of Indebtedness to the extent permitted by Section 6.01;
and

           
(iv) payment of secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness.

           
SECTION 6.09.  Transactions with Affiliates.  The Borrowers will not, and will
not permit any of the Subsidiaries to, sell, lease or otherwise transfer any property
or assets to, or purchase, lease or otherwise acquire any property or assets from, or
otherwise engage in any other transactions with, any Affiliate of a Borrower or
Subsidiary, except (a) transactions that are at prices and on terms and
conditions not less favorable to such Borrower or Subsidiary than could be obtained
on an arm's-length basis from unrelated third parties, (b) transactions between
or among the Borrowers and the Subsidiary Loan Parties (other than PharMerica and its
subsidiaries) not involving any other Affiliate, (c) transactions between or among
PharMerica and subsidiaries of PharMerica that are Subsidiary Loan Parties, (d) 
transactions between Bergen Drug and any Securitization Entity pursuant to any
Securitization and (e) any Restricted Payment permitted by Section 6.08.

           
SECTION 6.10.  Restrictive Agreements.  The Borrowers will not, and will not
permit any of the Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of any Borrower or any Subsidiary to create, incur
or permit to exist any Lien upon any of its property or assets, or (b) the ability
of any Subsidiary to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to any Borrower or any other
Subsidiary or to Guarantee Indebtedness of any Borrower or any other Subsidiary;
provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by any Loan Document or any Securitization or any
indenture, agreement or instrument evidencing or governing Indebtedness set forth
on Schedule 6.01 as in effect on the date hereof or as modified in accordance
herewith, (ii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Schedule 6.10 (but shall apply to any
amendment or modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that
is to be sold and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such restrictions
or conditions apply only to the property or assets securing such Indebtedness and
(v) clause (a) of the foregoing shall not apply to customary provisions
in leases and other contracts restricting the assignment thereof.

           
SECTION 6.11.  Material Documents.  Neither the Company nor any Borrower will,
nor will they permit any Subsidiary to, amend, modify or waive (a) in any manner
adverse to the Lenders any of its rights under (i) any indenture, material
agreement or material instrument evidencing or governing Indebtedness, the Trust
Preferred or any Indebtedness set forth on Schedule 6.01 or (ii) its
certificate of incorporation, by-laws or other organizational documents or (b) 
any provision of any agreement or instrument relating to any Securitization to (i)
 add any termination event or other similar event, however denominated, or to
make any existing such event more onerous to Bergen Drug or any Securitization Entity,
(ii) advance the stated date on which such Securitization terminates, (iii) 
reduce the Financed Portion of such Securitization or (iv) materially reduce the
advance rate of such Securitization.  The Company and the Borrowers will not permit the
Obligations to fail to be "senior debt" (however denominated) for purposes of the Trust
Preferred or any subordinated Indebtedness of the Company or any Subsidiary (other than
any Securitization Entity).

           
SECTION 6.12.  Fixed Charge Coverage Ratio.  The Company will not permit the
ratio of (a) Consolidated EBITDAR to (b) the sum, without duplication, of
(i) Consolidated Cash Interest Expense, (ii) dividends on Equity Interests
in the Company and (iii) rental payments of the Company and the Subsidiaries
(other than under capital leases), determined on a consolidated basis in accordance
with GAAP, in each case for any period of four consecutive fiscal quarters ending on
any date during any period set forth below, to be less than the ratio set forth below
opposite such period:

 

	

Period
	

Ratio

	

March 31, 2000 - March 30, 2001
	

1.25

	

March 31, 2001 - September 29, 2002
	

1.50

	

September 30, 2002 - September 29, 2003
	

1.75

	

September 30, 2003 - September 29, 2004
	

2.00

	

September 30, 2004 - September 29, 2005
	

2.25

	

thereafter
	

2.50

 

           
SECTION 6.13.  Leverage Ratio.  The Company will not permit the Leverage Ratio
as of any date during any period set forth below to exceed the ratio set forth opposite
such period:

	

Period
	

Ratio

	

March 31, 2000 - June 29, 2000
	

6.00

	

June 30, 2000 - December 30, 2000
	

5.75

	

December 31, 2000 - June 29, 2001
	

5.50

	

June 30, 2001 - September 29, 2001
	

4.50

	

September 30, 2001 - September 29, 2002
	

 4.25

	

September 30, 2002 - September 29, 2003
	

3.75

	

September 30, 2003 - September 29, 2004
	

3.50

	

September 30, 2004 - September 29, 2005
	

3.25

	

thereafter
	

3.00

 

           
SECTION 6.14.  Minimum Net Worth.  The Company will not permit Consolidated Net
Worth as of any date to be less than (a) $1,201,841,000 plus (b) the sum of
(i) the net proceeds of issuances of Equity Interests by the Company after the
Effective Date and (ii) 50% of cumulative (to the extent positive) Consolidated
Net Income for each fiscal quarter ended after the Effective Date and for which the
Company shall have delivered financial statements under Section 5.01(a) or (b),
minus (c) the aggregate loss reflected on the books of the Company and the
Subsidiaries in respect of any sale of all or part of Stadtlander and any discontinuation
of any part of Stadtlander.

           
SECTION 6.15.  Capital Expenditures.  The Company will not permit the aggregate
amount of Capital Expenditures (excluding Permitted Acquisitions) made by the Company
and the Subsidiaries during any period set forth below to exceed the aggregate amount
set forth below opposite such period:

 

	

Period
	

Amount

	

April 1, 2000 - September 30, 2000
	

$  60,000,000

	

October 1, 2000 - September 30, 2001
	

$115,000,000

	

October 1, 2001 - September 30, 2002
	

$115,000,000

	

each fiscal year thereafter
	

$125,000,000

 

provided that to the extent that the Capital Expenditures
made in any period set forth above are less than the amount set forth for such period,
then after the available amount for the next succeeding fiscal year has been fully used
the Borrower and the Subsidiaries may make, or commit to make, additional Capital
Expenditures during such next succeeding fiscal year in an aggregate amount that at
the time each such Capital Expenditure is made (or at the time a binding commitment
was entered into to make such Capital Expenditure) is not in excess of (i) if the
Leverage Ratio at such time is greater than 4.0 to 1.0, 25% of the unused amount from
the prior period or (ii) if the Leverage Ratio is 4.0 to 1.0 or less, 50% of such
unused amount.

           
SECTION 6.16.  Restricted Properties.  The Borrowers will not, and will not
permit any Subsidiary to permit any property that is a "Restricted Property" for
purposes of the Company's Senior Indenture dated as of December 1, 1992, to be
owned by any Person other than a Subsidiary that has no assets other than Restricted
Properties, no parent other than the Company and no activities other than the ownership
of Restricted Properties.

           
SECTION 6.17.  Fiscal Quarters.  The Borrowers will not change, and will
not permit any Subsidiary to change, the fiscal quarter ends of the Company or any
Subsidiary to any date other than March 31, June 30, September 30 or
December 31, respectively.

 

 

ARTICLE VII

Events of Default

           
If any of the following events ("Events of Default") shall occur:

           
(a) the Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become due
and payable, whether at the due date thereof or at a date fixed for prepayment thereof
or otherwise; 

           
(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or any other Loan Document, when and as the same shall
become due and payable, and such failure shall continue unremedied for a period of
three Business Days;

           
(c) any representation or warranty made or deemed made by or on behalf of the Company
or any Subsidiary in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with any Loan
Document or any amendment or modification thereof or waiver thereunder, shall prove
to have been incorrect in any material respect when made or deemed made;

           
(d) Any Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02, 5.04 (with respect to the existence of the
Borrowers) or 5.11 or in Article VI;

           
(e) any Loan Party shall fail to observe or perform any covenant, condition or agreement
contained in any Loan Document (other than those specified in clause (a), (b)
 or (d) of this Article), and such failure shall continue unremedied for
a period of 30 days after notice thereof from the Administrative Agent to the
Company (which notice will be given at the request of any Lender);

           
(f) the Company or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable prior to the expiration of any grace
period applicable to such payment;

           
(g) any event or condition occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity; provided
that this clause (g) shall not apply to secured Indebtedness that becomes due
as a result of the voluntary sale or transfer of the property or assets securing
such Indebtedness;

           
(h) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Company, any Borrower or any Significant Subsidiary or its debts, or of a substantial
part of its assets, under any  Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official for
the Company, any Borrower or any Significant Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of
the foregoing shall be entered;

           
(i) the Company, any Borrower or any Significant Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Company, any Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;

           
(j) the Company, any Borrower or any Significant Subsidiary shall become unable,
admit in writing its inability or fail generally to pay its debts as they become due;

           
(k) one or more judgments for the payment of money in an aggregate amount in excess
of $25,000,000 shall be rendered against the Company, any Borrower, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of 30 
consecutive days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon any assets of the
Company, any Borrower or any Subsidiary to enforce any such judgment;

           
(l) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Company and the Subsidiaries in
an aggregate amount exceeding $25,000,000; 

           
(m) any Lien purported to be created under any Security Document shall cease to be,
or shall be asserted by any Loan Party not to be, a valid and perfected Lien on any
Collateral, with the priority required by the applicable Security Document, except
(i) as a result of the sale or other disposition of the applicable Collateral
in a transaction permitted under the Loan Documents or (ii) as a result of the
Collateral Agent's failure to maintain possession of any stock certificates,
promissory notes or other instruments delivered to it under the Pledge Agreement; or

           
(n) a Change in Control shall occur;

then, and in every such event (other than an event with respect
to the Company described in clause (h) or (i) of this Article), and at any
time thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Company, take either
or both of the following actions, at the same or different times:  (i) 
terminate the Commitments, and thereupon the Commitments shall terminate immediately,
and (ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so declared
to be due and payable, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall become  due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower; and in case of any event with respect
to the Company described in clause (h) or (i) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then outstanding, together
with accrued interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall automatically become due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each Borrower.

 

 

ARTICLE VIII

The Administrative Agent

           
Each of the Lenders and the Issuing Banks hereby irrevocably appoints the Administrative
Agent and the Collateral Agent as its agent and authorizes each Agent to take such
actions on its behalf and to exercise such powers as are delegated to such Agent by
the terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto.

           
Any bank serving as Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it were
not an Agent, and such bank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Company or any Subsidiary or other
Affiliate thereof as if it were not an Agent hereunder.

           
The Agents shall not have any duties or obligations except those expressly set forth in
the Loan Documents.  Without limiting the generality of the foregoing, (a) the
Agents shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) the Agents shall not have
any duty to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents that the
Agents are required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02), and (c) except as expressly set forth in the
Loan Documents, the Agents shall not have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Company or any of its
Subsidiaries that is communicated to or obtained by any bank serving as Agent or any
of its Affiliates in any capacity.  The Agents shall not be liable for any action
taken or not taken by them with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.02) or in the absence of its own gross
negligence or wilful misconduct.  The Agents shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to the Agents, by the
Company or a Lender, and the Agents shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (iii) 
the performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement, instrument
or document, or (v) the satisfaction of any condition set forth in Article 
IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Agents.  

           
The Agents shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by them to be genuine and to have been signed
or sent by the proper Person.  The Agents also may rely upon any statement made to
them orally or by telephone and believed by them to be made by the proper Person, and
shall not incur any liability for relying thereon.  The Agents may consult with
legal counsel (who may be counsel for the Company), independent accountants and other
experts selected by them, and shall not be liable for any action taken or not taken by
them in accordance with the advice of any such counsel, accountants or experts.

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

           
Subject to the appointment and acceptance of a successor Agent as provided in this
paragraph, an Agent may resign at any time by notifying the Lenders, the Issuing Banks
and the Company.  Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Company, to appoint a successor.  If no successor shall have
been so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, on behalf of the Lenders and the Issuing Banks, appoint a
successor Agent which shall be a bank with an office in New York, New York,
or an Affiliate of any such bank.  Upon the acceptance of its appointment as Agent
hereunder by a successor, such successor shall succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder.  The fees
payable by the Company to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between the Company and such successor.
After an Agent's resignation hereunder, the provisions of this Article and Section
 10.03 shall continue in effect for the benefit of such retiring Agent, its
sub-agents and their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while it was acting as Agent.

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

           
The parties agree that the Co-Documentation Agents shall have no obligations or
liabilities whatsoever in their capacities as such.

 

 

ARTICLE IX

Guarantee

           
In order to induce the Lenders to extend credit hereunder, the Company hereby
irrevocably and unconditionally guarantees, as a primary obligor and not merely as
a surety, the Obligations.  The Company further agrees that the due and punctual
payment of the Obligations may be extended or renewed, in whole or in part, without
notice to or further assent from it, and that it will remain bound upon its Guarantee
hereunder notwithstanding any such extension or renewal of any Obligation.  Each and
every default in payment of the principal of and premium, if any, or interest on any
Obligation shall give rise to a separate cause of action hereunder, and separate suits
may be brought hereunder as each cause of action arises.

           
The Company waives presentment to, demand of payment from and protest to any Borrowing
Subsidiary of any of the Obligations, and also waives notice of acceptance of its
obligations and notice of protest for nonpayment.  The obligations of the Company
hereunder shall not be affected by (a) the failure of any Secured Party to
assert any claim or demand or to enforce any right or remedy against any Loan Party
under the provisions of this Agreement, any other Loan Document or otherwise; (b)
 any extension or renewal of any of the Obligations; (c) any rescission,
waiver, amendment or modification of, or release from, any of the terms or provisions
of this Agreement, any Borrowing Subsidiary Agreement or any other Loan Document or
agreement; (d) the release of (or the failure to perfect a security interest in)
any security held by any Secured Party for the performance of the Obligations or any
of them; (e) the failure or delay of any Secured Party to exercise any right or
remedy against any other guarantor of the Obligations; (f) the failure of any
Secured Party to assert any claim or demand or to enforce any remedy under any Loan
Document, any guarantee or any other agreement or instrument; (g) any default,
failure or delay, wilful or otherwise, in the performance of the Obligations; or (h)
 any other act, omission or delay to do any other act which may or might in any
manner or to any extent vary the risk of the Company or otherwise operate as a
discharge of the Company as a matter of law or equity or which would impair or
eliminate any right of the Company to subrogation.

           
The Company further agrees that its agreement hereunder constitutes a promise of
payment when due (whether or not any bankruptcy or similar proceeding shall have
stayed the accrual or collection of any of the Obligations or operated as a discharge
thereof) and not merely of collection, and waives any right to require that any resort
be had by any Secured Party to any balance of any deposit account or credit on the
books of any Secured Party in favor of any Borrower or any other Person.

           
The obligations of the Company hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, and shall not be subject to
any defense or setoff, counterclaim, recoupment or termination whatsoever, by reason
of the invalidity, illegality or unenforceability of the Obligations, any
impossibility in the performance of the Obligations or otherwise.

           
The Company further agrees that its obligations hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any Obligation is rescinded or must otherwise be restored by any Secured
Party upon the bankruptcy or reorganization of any Borrower or otherwise.

           
In furtherance of the foregoing and not in limitation of any other right which any
Secured Party may have at law or in equity against the Company by virtue hereof,
upon the failure of any Borrowing Subsidiary to pay any Obligation when and as the
same shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, the Company hereby promises to and will, upon receipt
of written demand by any Lender, forthwith pay, or cause to be paid, to the
Administrative Agent for distribution to the Secured Parties in cash an amount
equal to the sum of (i) the unpaid principal amount of such Obligations then
due, (ii) accrued and unpaid interest and fees on such Obligations and (iii)
 all other monetary Obligations then due. 

           
Upon payment in full by the Company of any Obligation, each Lender shall, in a
reasonable manner, assign the amount of such Obligation owed to it and so paid by
the Company, such assignment to be pro tanto to the extent to which the
Obligation in question was discharged by the Company, or make such disposition
thereof as the Company shall direct (all without recourse to any Secured Party
and without any representation or warranty by any Secured Party).

           
Upon payment by the Company of any sums as provided above, all rights of the Company
against any Borrowing Subsidiary arising as a result thereof by way of right of
subrogation or otherwise shall in all respects be subordinated and junior in right
of payment to the prior indefeasible payment in full of all the Obligations owed by
such Borrowing Subsidiary to the Secured Parties.

           
Nothing shall discharge or satisfy the liability of the Company hereunder except the
full performance and payment of the Obligations.

           
Each reference herein to any Secured Party shall be deemed to include their or its
successors and assigns, in whose favor the provisions of this Guarantee shall also
inure.

 

 

ARTICLE X

Miscellaneous

           
SECTION 10.01.  Notices.  Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy, as
follows:

           
(a) if to the Company or any Borrowing Subsidiary, to the Company at 4000
Metropolitan Drive, Orange, CA 92868, Attention of Chief Financial Officer 
(Telecopy No. (714) 978-7415);

           
(b) if to the Administrative Agent, the Swingline Lender or The Chase Manhattan Bank,
in its capacity as Collateral Agent, the Chase Manhattan Bank, Loan and Agency Services
Group, One Chase Manhattan Plaza, 8th Floor, New York, New York 10081,
Attention of  Anne Bowles  (Telecopy No. (212) 552-7500), with a copy to
The Chase Manhattan Bank,  270 Park Avenue, New York, New York 10017,
Attention of Dawn Lee Lum  (Telecopy No. (212) 270-3279); 

           
(c) if to The Chase Manhattan Bank (Delaware), in its capacity as Issuing Bank, to
it at The Chase Manhattan Bank (Delaware), 1201 Market Street, Wilmington, DE, 19801,
Attention of Michael Handago (Telecopy No. (302) 428-3390); 

           
(d) if CIT Financial Group, in its capacity as Collateral Agent,  to CIT
Financial Group,

[             
    ] (Telecopy No. (   )[  
       ]); and

           
(e) if to any other Issuing Bank or Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.

Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties hereto.
All notices and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of receipt.

           
SECTION 10.02.  Waivers; Amendments.  (a)  No failure or delay by any
Agent, any Issuing Bank or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or discontinuance
of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and remedies of the
Agents, the Issuing Banks and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would otherwise
have.  No waiver of any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Default, regardless of whether
any Agent, any Lender or any Issuing Bank may have had notice or knowledge of such
Default at the time.

           
(b)  Neither this Agreement nor any Borrowing Subsidiary Agreement nor any other Loan
Document nor any provision hereof or thereof may be waived, amended or modified except,
in the case of this Agreement, pursuant to an agreement or agreements in writing entered
into by the Company and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the Administrative
Agent and the Loan Party or Loan Parties that are parties thereto, in each case with
the consent of the Required Lenders; provided that no such agreement shall (i)
 increase the Commitment of any Lender without the written consent of such Lender,
(ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate
of interest thereon, or reduce any fees payable hereunder, without the written consent
of each Lender affected thereby, (iii) postpone the maturity of any Loan, or any
scheduled date of payment of the principal amount of any Term Loan under Section 
2.10, or the required date of reimbursement of any LC Disbursement, or any date for the
payment of any interest or fees payable hereunder, or reduce the amount of, waive or
excuse any such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby, (iv) change Section
 2.18(b) or (c) in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section or the percentage set forth in the definition of "Required
Lenders" or "Supermajority Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders (or Lenders of any Class) required
to waive, amend or modify any rights thereunder or make any determination or grant
any consent thereunder, without the written consent of each Lender (or each Lender of
such Class, as the case may be), (vi) release the Company or any Subsidiary Loan
Party from its Guarantee hereunder or under the Guarantee Agreement (except as expressly
provided in the Guarantee Agreement), or limit its liability in respect of such
Guarantee, without the written consent of each Lender, (vii) release all or substantially
all the Collateral from the Liens of the Security Documents, without the written consent
of each Lender, (viii) change any provisions of any Loan Document in a manner that
by its terms adversely affects the rights in respect of payments or prepayments due to
Lenders holding Loans of any Class differently than those holding Loans of any other
Class, without the written consent of Lenders holding a majority in interest of the
outstanding Loans and unused Commitments of each affected Class or (ix) change the
rights of the Tranche B Lenders to decline mandatory prepayments as provided in
Section 2.11 without the written consent of Tranche B Lenders holding a
majority of the outstanding Tranche B Loans; provided further that (A) 
no such agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent, the Issuing Banks or the Swingline Lender
without the prior written consent of the Administrative Agent, the Collateral Agent,
each Issuing Bank or the Swingline Lender, as the case may be, and (B) any waiver,
amendment or modification of this Agreement that by its terms affects the rights or
duties under this Agreement of the Revolving Lenders (but not the Tranche A Lenders,
Tranche B Lenders or Interim Term Lenders), the Tranche A Lenders (but not the Revolving
Lenders, Tranche B Lenders or Interim Term Lenders),  the Tranche B Lenders (but not the
Revolving Lenders, Tranche A Lenders or Interim Term Lenders) or the Interim Term Lenders
(but not the Revolving Lenders, the Tranche A Lenders or the Tranche B Lenders)
may be effected by an agreement or agreements in writing entered into by the Company and
the requisite percentage in interest of the affected Class of Lenders that would be
required to consent thereto under this Section if such Class of Lenders were the only
Class of Lenders hereunder at the time.  Notwithstanding the foregoing, any provision
of this Agreement may be amended by an agreement in writing entered into by the Company,
the Required Lenders and the Administrative Agent (and, if their rights or obligations
are affected thereby, the Collateral Agent, the Issuing Banks and the Swingline Lender)
if (i) by the terms of such agreement the Commitment of each Lender not consenting
to the amendment provided for therein shall terminate upon the effectiveness of such
amendment and (ii) at the time such amendment becomes effective, each Lender not
consenting thereto receives payment in full of the principal of and interest accrued
on each Loan made by it and all other amounts owing to it or accrued for its account
under this Agreement.

           
SECTION 10.03.  Expenses; Indemnity; Damage Waiver.  (a)  The Company
shall pay (i) all reasonable out-of-pocket expenses incurred by the Agents and their
Affiliates, including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit facilities
provided for herein, the monitoring and evaluation of the Borrowing Base and the
Borrowing Base items, the preparation and administration of the Loan Documents or
any amendments, modifications or waivers of the provisions thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Banks in connection with
the issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by any Agent,
any Issuing Bank or any Lender, including the fees, charges and disbursements of any
counsel for such Agent, any Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred
during  any workout, restructuring or negotiations in respect of such Loans or Letters
of Credit.

           
(b)  The Company shall indemnify each Agent, each Issuing Bank and each Lender, and
each Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the reasonable fees, charges
and disbursements of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the execution
or delivery of any Loan Document or any other agreement or instrument contemplated
hereby, the performance by the parties to the Loan Documents of their respective
obligations thereunder, the monitoring and evaluation of the Borrowing Base and
Borrowing Base items or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds
therefrom (including any refusal by an Issuing Bank to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do not
strictly comply with the terms of such Letter of Credit), (iii) any actual or
alleged presence or release of Hazardous Materials on or from any Mortgaged Property
or any other property currently or formerly owned or operated by the Company or any of
the Subsidiaries, or any Environmental Liability related in any way to the Company or
any of the Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on contract,
tort or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable judgment
to have resulted from the gross negligence or wilful misconduct of such Indemnitee
and provided further that the Company, in connection with any indemnified
matter, shall only be required to pay the fees and expenses of joint counsel engaged
to represent all Indemnitees, except to the extent that the use of joint counsel
could reasonably be expected to give rise to any conflict of interest for any such
counsel or any Indemnitee shall have determined that it may have legal defenses
available to it that are different from, additional to or in conflict with those
available to any other Indemnitee.

           
(c)  To the extent that the Company fails to pay any amount required to be paid by it
to an Agent, an Issuing Bank or the Swingline Lender under paragraph (a) or (b)
 of this Section, each Lender severally agrees to pay to such Agent, such Issuing
Bank or the Swingline Lender, as the case may be, such Lender's pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as the
case may be, was incurred by or asserted against such Agent, such Issuing Bank or
the Swingline Lender in its capacity as such.  For purposes hereof, a Lender's "pro
rata share" shall be determined based upon its share of the sum of the total Revolving
Exposures, outstanding Term Loans and unused Commitments at the time.

           
(d)  To the extent permitted by applicable law, neither the Company nor any Borrowing
Subsidiary shall assert, and each hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.

           
(e)  All amounts due under this Section shall be payable promptly after written demand
therefor.

           
SECTION 10.04.  Successors and Assigns.  (a)  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns permitted hereby (including any Affiliate of
any Issuing Bank that issues any Letter of Credit), except that no Borrower may assign
or otherwise transfer any of its rights or obligations hereunder or under any Borrowing
Subsidiary Agreement without the prior written consent of each Lender (and any attempted
assignment or transfer by any Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter
of Credit) and, to the extent expressly contemplated hereby, the Related Parties of
each of the Agents, the Issuing Banks and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

           
(b)  Any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it); provided  that (i) except in the
case of an assignment to a Lender, an Affiliate of a Lender or Related Fund of a Lender,
each of the Company and the Administrative Agent (and, in the case of an assignment of
all or a portion of a Revolving Commitment or any Lender's obligations in respect of its
LC Exposure or Swingline Exposure, each Issuing Bank and the Swingline Lender) must give
their prior written consent to such assignment (which consent shall not be unreasonably
withheld), (ii) except in the case of an assignment to a Lender, an Affiliate of a
Lender, or a Related Fund of a Lender, or an assignment of the entire remaining amount
of the assigning Lender's Commitment or Loans, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $1,000,000 in the case of an assignment
of Tranche B Loans or $5,000,000 in the case of an assignment of other Loans or
Commitments, unless each of the Company and the Administrative Agent otherwise consent,
(iii) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender's rights and obligations under this Agreement, except
that this clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in respect of
one Class of Commitments or Loans, (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500, and (v) the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and provided further that any consent of the Company otherwise
required under this paragraph shall not be required if an Event of Default under
clause (h) or (i) of Article VII has occurred and is continuing.  Subject
to acceptance and recording thereof pursuant to paragraph (d) of this Section,
from and after the effective date specified in each Assignment and Acceptance the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 10.03).  Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and obligations
in accordance with paragraph (e) of this Section.

           
(c)  The Administrative Agent, acting for this purpose as an agent of the Company,
shall maintain at one of its offices in The City of New York a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitment of, and principal amount of
the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the "Register").  The entries in the Register shall be
conclusive, and the Company, the Agents, the Issuing Banks and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof as
a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by any Borrower, any Issuing
Bank and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

           
(d)  Upon its receipt of a duly completed Assignment and Acceptance executed by an
assigning Lender and an assignee, the assignee's completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) of this Section and any written
consent to such assignment required by paragraph (b) of this Section, the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register.  No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.

           
(e)  Any Lender may, without the consent of the Company, the Administrative Agent,
the Issuing Banks or the Swingline Lender, sell participations to one or more banks
or other entities (a "Participant") in all or a portion of such Lender's rights
and obligations under this Agreement (including all or a portion of its Commitment and
the Loans owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations and
(iii) the Company, the Agents, the Issuing Banks and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement.  Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment, modification
or waiver of any provision of the Loan Documents; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the first
proviso to Section 10.02(b) that affects such Participant.  Subject to
paragraph (f) of this Section, the Company agrees that each Participant
shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section.  To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 10.08 as
though it were a Lender, provided such Participant agrees to be subject to Section
 2.18(c) as though it were a Lender.

           
(f)  A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the sale
of the participation to such Participant is made with the Company's prior written
consent.  A Participant that would be a Foreign Lender if it were a Lender shall not
be entitled to the benefits of Section 2.17 unless the Company is notified of
the participation sold to such Participant and such Participant agrees, for the
benefit of the Company, to comply with Section 2.17(e) as though it were a
Lender.  

           
(g)  Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.  

           
(h)   Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Bank") may grant to a special purpose funding vehicle (an
"SPC") of such Granting Bank, identified as such in writing from time to
time by the Granting Bank to the Administrative Agent and the Borrowers, the option
to provide to the Borrowers all or any part of any Loan that such Granting Bank
would otherwise be obligated to make to the Borrowers pursuant to Section 2.01,
provided that (i) nothing herein shall constitute a commitment to make any Loan
by any SPC,  (ii) if an SPC elects not to exercise such option or otherwise fails
to provide all or any part of such Loan, the Granting Bank shall be obligated to make
such Loan pursuant to the terms hereof, (iii) all amounts payable by the Borrowers
to any SPC hereunder in respect of any Loan and the applicability of the cost
protection provisions contained in Section 2.15, 2.16 and 2.17 shall be determined
as if the Granting Lender had made such Loan and (iv) any notices given by the
Agents, the Borrowers and the other Lenders with respect to any Loan provided by an SPC
may be given to the Granting Lender and the Granting Lender shall have the authority to
act on behalf of the SPC with respect to such Loans and/or notices.  The making of a
Loan by an SPC hereunder shall be deemed to utilize the Commitment of the, Granting
Bank to the same extent, and as if, such Loan were made by the Granting Bank.  Each
party hereto hereby agrees that no SPC shall be liable for any payment under this
Agreement for which a Lender would otherwise be liable, for so long as, and to the
extent, the related Granting Bank makes such payment.  In furtherance of the foregoing,
each party hereto hereby agrees that, prior to the date that is one year and one day
after the payment in full of all outstanding senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or
similar proceedings under the laws of the United States or any State thereof.  In
addition, notwithstanding anything to the contrary contained in this Section 
10.04, any SPC may assign all or a portion of its interests in any Loans to its
Granting Bank or to any financial institutions providing liquidity and/or credit
facilities to or for the account of such SPC to fund the Loans made by such SPC or
to support the securities (if any) issued by such SPC to fund such Loans.

           
SECTION 10.05.  Survival.  All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the certificates
or other instruments  delivered in connection with or pursuant to this Agreement or
any other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan Documents
and the making of any Loans and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and notwithstanding
that any Agent, any Issuing Bank or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal of or
any accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so
long as the Commitments have not expired or terminated.  The provisions of Sections
 2.15, 2.16, 2.17 and 10.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any provision
hereof.  

           
SECTION 10.06.  Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original, but all of which when taken together shall
constitute a single contract.  This Agreement, the other Loan Documents and any
separate letter agreements with respect to fees payable to the Administrative Agent
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof.  Except as provided in Section 
4.01, this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of the
other parties hereto, and thereafter shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.  Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

           
SECTION 10.07.  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.  

           
SECTION 10.08.  Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other obligations at any time owing by such Lender or
Affiliate to or for the credit or the account of any Borrower against any of and
all the obligations of the Borrowers now or hereafter existing under this Agreement
held by such Lender, irrespective of whether or not such Lender shall have made
any demand under this Agreement and although such obligations may be unmatured.
The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.

           
SECTION 10.09.  Governing Law; Jurisdiction; Consent to Service of Process.
(a)  This Agreement shall be construed in accordance with and governed by
the law of the State of New York.

           
(b)  Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court of
the State of New York sitting in New York County and of the United 
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating to
any Loan Document, 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 such
New York State or, to the 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
or any other Loan Document shall affect any right that the Administrative Agent,
any Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against any Borrower or its
properties in the courts of any jurisdiction.

           
(c)  Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which 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 other Loan Document in any court referred
to in paragraph (b) of this Section.  Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

           
(d)  Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01.  Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

           
SECTION 10.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN  ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) 
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

           
SECTION 10.11.  Headings.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into consideration
in interpreting, this Agreement.

           
SECTION 10.12.  Confidentiality.  Each of the Agents, the Issuing Banks and
the Lenders agrees to maintain the confidentiality of the Information (as defined
below), and will not use such confidential Information for any purpose or in any
matter except in connection with this Agreement, except that Information may be
disclosed (a) to its and its Affiliates' directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority (it
being understood that it will to the extent reasonably practicable provide the
Company with an opportunity to request confidential treatment from such regulatory
authority), (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent
of the Company or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or any other
confidentiality agreement to which it is party with the Company or any Subsidiary
or (ii) becomes available to any Agent, any Issuing Bank or any Lender on a
nonconfidential basis from a source other than a Borrower.  For the purposes of
this Section, "Information" means all information received from the Borrowers
relating to the Borrowers or their businesses, other than any such information that
is available to any Agent, any Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by any Borrower; provided that, in the case of information
received from a Borrower after the date hereof, such information is clearly identified
at the time of delivery as confidential.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

           
SECTION 10.13.  Interest Rate Limitation.  Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with applicable
law, the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and,
to the extent lawful, the interest and Charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges payable to such Lender
in respect of other Loans or periods shall be increased (but not above the Maximum
Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by
such Lender.

 

 

 

 

           
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and year
first above written.

 

	
BERGEN BRUNSWIG CORPORATION,

	 	 	 
	 	
by
	 
	 	 	
Name:

	 	 	
Title:

	 	 	 
	 	 	 
	 	 	 
	
BERGEN BRUNSWIG DRUG COMPANY,

	 	 	 
	 	
by
	 
	 	 	
Name:

	 	 	
Title:

	 	 	 
	 	 	 
	 	 	 
	
PHARMERICA, INC.,

	 	 	 
	 	
by
	 
	 	 	
Name:

	 	 	
Title:

	 	 	 
	 	 	 
	
THE CHASE MANHATTAN BANK, individually and as
Administrative Agent, Collateral Agent, Issuing Bank and Swingline Lender,

	 	 	 
	 	
by
	 
	 	 	
Name:

	 	 	
Title:

	 	 	 
	 	 	 
	
[OTHER BANKS],

	 	 	 
	 	
by
	 
	 	 	
Name:

	 	 	
Title:

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