Document:

ex10_1.htm

    
      

    

    
      Ex
        10.1

      

      Final
        Execution Copy

      9/27/07

      

      

      LOAN
        AND SECURITY AGREEMENT

      

      among

      SILVERLEAF
        RESORTS, INC.

      (as
        Borrower)

      

      and

      THE
        PARTIES WHICH HEREAFTER EXECUTE THIS AGREEMENT

      OR
        A
        JOINDER AGREEMENT

      (as
        Lenders)

      

      and

      LIBERTY
        BANK

      (as
        Lender and as Facility and Collateral Agent)

      

      As
        of
        September 28, 2007

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      LOAN
        AND SECURITY AGREEMENT

       

      THIS
        LOAN AND SECURITY AGREEMENT, dated as of September 28, 2007, entered
        into by and among SILVERLEAF RESORTS, INC., a Texas
        corporation, having an address of 1221 River Bend Drive, Suite 120, Dallas,
        Texas 75247 (as “Borrower”), the parties, including  LIBERTY
        BANK, a Connecticut nonstock mutual savings bank, having an office and
        place of business at 315 Main Street, Middletown, Connecticut 06457 which
        execute and deliver this Agreement or a joinder agreement to this Agreement
        in
        their respective capacities as Lenders hereunder (collectively, the “Lenders”
and each individually a “Lender”) and LIBERTY BANK as facility
        agent and collateral agent (“Agent”).

       

      
        WITNESSETH:

         

      

      WHEREAS,
        Borrower is engaged in the business of acquiring, constructing, developing,
        owning, managing, selling and otherwise dealing with Intervals at the Resorts
        (as each such term is hereafter defined); and

      

      WHEREAS,
        in connection with the Loans to be made by Lenders pursuant to this Agreement,
        Agent has agreed to act as facility agent and collateral agent for the other
        Lenders and to perform such duties with respect to the Loans as are expressly
        set forth herein;

      

      WHEREAS,
        Lenders, subject to the terms and conditions of this Loan and Security
        Agreement, have agreed to provide to Borrower, for the purpose of providing
        liquidity in connection with Borrower’s ownership and sale of Intervals, a loan
        in the amount of the Commitment.

      

      NOW,
        THEREFORE, in consideration of the mutual covenants and agreements contained
        in
        this Agreement, and for other good and valuable consideration, the receipt
        and
        adequacy of which are acknowledged, the parties to this Agreement, intending
        to
        be legally bound, agree as follows:

       

      Section
        1-Definition Of Terms

       

      
        1.1           Definitions.  Capitalized
          terms used in this Agreement are defined in this
Section  1. The definitions include the singular and
          plural forms of the terms defined.

        
Account
          means an “account,” as that term is defined in the Code, and any and all
          supporting obligations in respect thereof.

      

       

      Additional
        Eligible Resorts or Additional Eligible Resort have the meanings
        given to such terms in Section 3.5 hereof.

       

      Advance
        means a portion of the proceeds of the Loan advanced from time to time by
        Lenders to Borrower in accordance with the terms of this Agreement.

       

      Affiliate
        means, with respect to Borrower or any other Person, any Person who, directly
        or
        indirectly through one or more intermediaries, controls, is controlled by,
        or is
        under common control with, such Person.  For purposes of this
        definition, “control” means the possession, directly or indirectly, of the power
        to direct the management and policies of a Person, whether through the ownership
        of stock, by contract, or otherwise; provided, however, that, in any
        event: (a) any Person which owns directly or indirectly 10% or more of the
        securities having ordinary voting power for the election of directors or
        other
        members of the governing body of a Person or 10% or more of the partnership
        or
        other ownership interests of a Person (other than as a limited partner of
        such
        Person) shall be deemed to control such Person, (b) each director (or comparable
        manager) of a Person shall be deemed to be an Affiliate of such Person, and
        (c)
        each partnership or joint venture in which a Person is a partner or joint
        venturer shall be deemed to be an Affiliate of such Person.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Agreement
        means this Loan and Security Agreement by and among Borrower, Agent and each
        Lender which executes this Agreement (including the Exhibits and Schedules
        to
        it) or a joinder agreement hereto, as it may be amended from time to
        time.

       

      Annual
        Operating Plan means Borrower’s financial and business projections
        for its operations for the upcoming fiscal twelve (12) month period inclusive
        of
        a budget and which shall represent Borrower’s good faith best estimate of its
        future performance for the period covered thereby.

       

      Applicable
        Laws means all applicable laws, rules, regulations and orders of
        any Governmental Authority.

       

      Assignment
        of Notes Receivable and Mortgages means a recordable Assignment of
        Notes Receivable and Interval Mortgages, in the form attached hereto as
Exhibit A, made by Borrower in favor of Agent evidencing the assignment
        to Agent, as collateral agent for each Lender, of all of the Pledged Notes
        Receivable and Mortgages.

       

      Availability
        means, as of any date of determination, if such date is a Business Day, and
        determined at the close of business on the immediately preceding Business
        Day,
        if such date of determination is not a Business Day, the amount that Borrower
        is
        entitled to borrow as Advances under Section 2.1 hereof (after giving
        effect to all then outstanding Obligations).

       

      Borrower
        means Silverleaf Resorts, Inc., a Texas corporation.

       

      Borrowing
        Base means, with respect to each Eligible Note Receivable pledged
        to Agent hereunder in connection with each Advance from and after the Closing
        Date, an amount equal to seventy-five percent (75%) of the remaining principal
        balance of each such Eligible Note Receivable.

       

      Borrowing
        Base Report means the form attached as Exhibit B hereof,
        which report, from time to time shall be signed by the Chief Operating Officer,
        Chief Financial Officer or Senior Vice President/Capital Markets or such
        other
        Person designated in writing by Borrower to Agent.

       

      Business
        Day means each day that is not a Saturday, a Sunday or a legal
        holiday under the laws of the States of Texas or Connecticut.

       

      Capital
        Lease means a lease that is required to be capitalized for
        financial reporting purposes in accordance with GAAP.

       

      Closing
        Date means the date of this Agreement.

       

      Code
        means the Uniform Commercial Code (or any successor statute), as in effect
        from
        time to time, of the State of Connecticut or of any other state the laws
        of
        which are required as a result thereof to be applied in connection with the
        issue of perfection or the effect of perfection of security interests;
provided that to the extent that the Code is used to define any term
        herein or in any other Loan Documents and such term is defined differently
        in
        different Articles or divisions of the Code, the definition of such term
        contained in Article 9 of the Connecticut Uniform Commercial Code shall
        govern.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Collateral
        means, collectively, all now owned or hereafter acquired right, title and
        interest of Borrower, in all of the following:

       

      (a)           Pledged
        Notes Receivable and all proceeds of or from them;

       

      (b)           Mortgages
        and all proceeds of or from them;

       

      (c)           Documents,
        instruments, accounts, chattel paper, and general intangibles relating to
        the
        Pledged Notes Receivable and the related Mortgages;

       

      (d)           All
        books, records, reports, computer tapes, disks and software relating to the
        Collateral; and

       

      (e)           Extensions,
        additions, improvements, betterments, renewals, substitutions and replacements
        of, for or to any of the Collateral, wherever located, together with the
        products, proceeds, issues, rents and profits thereof, and any replacements,
        additions or accessions thereto or substitutions thereof.

       

      Commitment
        means, singly, the obligation of each Lender to make a Loan or Loans to Borrower
        in an aggregate amount not to exceed the Pro Rata Percentage for each Lender
        of
        each Advance and collectively, to all Loans to be made by all Lenders as
        provided herein.  The Commitment as of the Closing Date is the Maximum
        Amount in the aggregate outstanding at any time during the Term of this
        Agreement, and may from time to time be increased or decreased by Agent and
        Lenders upon written a written agreement setting forth the terms and conditions
        of any increase or decrease by and between Agent, Lenders and
        Borrower.  

       

      Common
        Elements means all common elements, including but not limited to
        any limited common elements, as each such common element is defined or provided
        for in the Declaration or other Timeshare Documents.

       

      CSF
        means CapitalSource Finance, LLC.

       

      CSF
        Facility means that certain credit facility provided by CSF to
        Borrower pursuant to the CSF Documents.

       

      CSF
        Documents means the loan agreement, the promissory notes and all
        other agreements or documents executed in connection with the CSF Facility,
        as
        each may be amended, restated or otherwise modified from time to
        time.

       

      
        Custodian
          means Wells Fargo Bank, National Association or Wells Fargo Corporate Trust
          Services having an address of 751 Kasota Ave, MAC# N9328-011, Minneapolis,
          MN  55414, or such other custodial Agent as may be approved by Agent
          in writing from time to time.  Custodian shall be Lender's Agent for
          the purpose of maintaining possession of all present and future Collateral
          documents described in Section 3.4 hereof.

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Custodial
        Agreement means the Custodial and Collateral Agency Agreement of
        even date herewith, by and among Agent, as Agent for each Lender, Borrower
        and
        Custodian, pursuant to which the Custodian is to maintain possession of all
        present and future Collateral documents described in Section 3.4
        hereof, or any custodial agreement entered into as a replacement of such
        agreement.

       

      Daily
        Balance means, with respect to each day during the term of this
        Agreement, the amount of an Obligation owed at the end of such day.

       

      Debtor
        Relief Laws means any applicable liquidation, conservatorship,
        bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
        law, proceeding or device providing for the relief of debtors from time to
        time
        in effect and generally affecting the rights of creditors.

       

      Declaration
        or Declarations means, with respect to each Resort, the applicable
        Declaration or Declarations described on Schedule 1.1(a)
        hereto.

       

      Declarant
        Rights means the rights of the declarant in the Declaration for
        each Resort.

       

      Default
        means an event or condition the occurrence of which immediately is or, with
        a
        lapse of time or the giving or notice or both, becomes an Event of
        Default.

       

      Default
        Rate means the Interest Rate plus four hundred (400) basis points
        per annum; provided, however, that the Default Rate shall in no event
        exceed the highest interest rate permitted to be charged under applicable
        usury
        laws.

       

      Designated
        Account means account number 753813286 of Borrower maintained with
        Borrower’s Designated Account Bank, or such other deposit account of Borrower
        (located within the United States) that has been designated as such, in writing,
        by Borrower to Agent.

       

      Designated
        Account Bank means JP Morgan Chase Bank, ABA Number
        113000609.

       

      Division
        means the governmental authority of each state in which a Resort is located,
        having jurisdiction over the establishment and operation of the Resorts in
        question and the sale of Intervals at such Resort.

       

      EBITDA
        means, with respect to any Person for any period: (a) the sum of (i) net
        income
        (but excluding any extraordinary gains or losses or any gains or losses from
        the
        sale or disposition of assets other than in the ordinary course of business,
        it
        being agreed however that gains from the sale of Notes Receivable in connection
        with securitization or conduit transactions shall be included in net income,
        but
        losses from such sales shall be deducted from ordinary income), (ii) interest
        expense, (iii) depreciation and amortization and other non-cash items properly
        deducted in determining net income, and (iv) federal, state and local income
        taxes, in each case for such Person for such period, computed and calculated
        in
        accordance with GAAP minus (b) non-cash items properly added in determining
        net
        income, in each case for the corresponding period.

       

      Eligible
        Notes Receivable means those Pledged Notes Receivable which satisfy
        each of the following criteria:

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      (a)           Borrower
        shall be the sole payee;

       

      (b)           it
        arises from a bona fide sale by Borrower of one or more Intervals;

       

      (c)           the
        Interval sale from which it arises shall not have been cancelled by Purchaser,
        and any statutory or other applicable cancellation or rescission period shall
        have expired and the Interval sale is otherwise in compliance with this
        Agreement;

       

      (d)           it
        is secured by a Mortgage on the purchased Interval;

       

      (e)           principal
        and interest payments on it are payable to Borrower in legal tender of the
        United States;

       

      (f)           
        payments of principal and interest on it are payable in equal monthly
        installments;

       

      (g)           it
        shall have an original term of no more than one hundred twenty (120) months,
        and
        the weighted average term on all Eligible Notes Receivable in respect of
        which
        Advances are outstanding shall not be more than one hundred and eight (108)
        months;

       

      (h)           a
        cash down payment has been received from Purchaser or the maker in an amount
        equal to at least ten percent (10%) of the actual purchase price of a one
        week
        Interval (at least fifteen percent (15%) in the case of a Purchaser with
        a FICO
        Score indicator of less than 615), and Purchaser shall have received no cash
        or
        other rebates of any kind;

       

      (i)          
         the first payment under each Note Receivable must be due and payable to
        Borrower within 45 days of the closing date of the purchase of the Interval,
        no
        monthly installment is more than thirty (30) days contractually past due
        at the
        time of an Advance in respect of such Note Receivable, nor more than sixty
        (60)
        days contractually past due at any time;

       

      (j)           
        the rate of interest payable on the unpaid balance is at least ten percent
        (10%), and the rate of interest on all Eligible Notes Receivable in respect
        of
        which Advances are outstanding shall not be less than fifteen percent (15%)
        per
        annum at any time, excluding from each minimum any Note Receivable under
        which
        the applicable Purchaser is paying a lower rate pursuant to the
        SCRA;

       

      (k)          
        the Purchaser of the related Interval has immediate access to the timeshare
        “unit week” related to such purchase, and the related unit has been completed,
        developed, and furnished in accordance with the specifications provided in
        the
        Purchaser’s purchase contract, public offering statement and other Timeshare
        Documents; and Purchaser has, subject to the terms of the Declaration, purchase
        contract, public offering statement and other Timeshare Documents, complete
        and
        unrestricted access to the related Interval and the Resort;

       

      (l)            neither
        Purchaser of the related Interval or any other maker of the Note is an Affiliate
        of, or related to, or employed by Borrower;

       

      (m)          Purchaser
        or other maker has no claim against Borrower and no defense, set-off or
        counterclaim with respect to the Note Receivable;

       

      (n)           the
        maximum remaining principal balance of any such Note Receivable, whether
        from an
        individual Purchaser or a related group of Purchasers, shall not exceed $50,000
        (or such greater amount as may be approved in writing in advance by Agent),
        provided, that up to 5% of Eligible Receivables may have a maximum
        balance not to exceed $75,000 per Note Receivable and/or $100,000 in the
        aggregate for a related group of Purchasers;

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      (o)           it
        is executed by a U.S. citizen or legal resident; provided, however, that
        up to
        five percent (5%) of the outstanding principal balance of all Eligible Notes
        Receivable may at any time be comprised of Notes Receivable executed by a
        non-U.S. citizen or legal resident, provided that any such non-U.S.
        citizen or legal resident Purchaser makes payments on the applicable Note
        Receivable via Payment Authorization Agreement;

       

      (p)           the
        original of such Note Receivable has been endorsed to Agent and delivered
        to the
        Custodian as provided in this Agreement, and the terms thereof and all
        instruments related thereto shall comply in all respects with all applicable
        federal and state laws and the regulations promulgated thereunder;

       

      (q)           the
        Unit in which the timeshare Interval being financed or evidenced by such
        Note
        Receivable is located, shall not be subject to any Lien which is not previously
        consented to in writing by Agent;

       

      (r)           
        the Note Receivable is in full compliance with all Applicable Laws;

       

      (s)           no
        modifications or extensions of the Note Receivable have been agreed to other
        than as permitted under Section 3.6 hereof, nor is the Note Receivable
        the result of a downgrade to cure a Purchaser default under another Note
        Receivable;

       

      (t)           
        the Note Receivable conforms to Borrower’s underwriting guidelines and criteria
        as set forth on Schedule 1.1(b) hereof;

       

      (u)           the
        Note Receivable is evidenced by standard legal documentation and on a form
        reviewed by and acceptable to Agent;

       

      (v)           the
        applicable Purchaser’s FICO Score is not less than 600, provided that 5%
        of the outstanding principal balance of all Eligible Notes Receivable may
        at any
        time be comprised of Notes Receivable where the applicable Purchaser has
        no FICO
        Score, and 25% may at any time be comprised of Notes Receivable where the
        applicable Purchaser has no FICO Score or a FICO Score below 600, and the
        weighted average FICO Score (measured once at the time of funding) of Eligible
        Notes Receivable in a funding may not be less than 650;

       

      (w)           if
        the loan is a newly originated Note Receivable which is replacing an existing
        Eligible Note Receivable pledged as Collateral under the Agreement and the
        proceeds have been used to finance the purchase of an Interval which is being
        upgraded by the Purchaser to a more expensive Interval:

       

      (1)           the
        principal balance of the existing Eligible Note Receivable which is being
        upgraded may still be included for purposes of calculating the Borrowing
        Base
        for a period of time expiring on the earlier to occur of (i) the 31st day
        after
        the consumer documents effecting the upgrade have been executed or (ii) the
        date
        on which any payment on such Eligible Note Receivable becomes thirty (30)
        or
        more days past due;

       

       

      (2)           on
        or before the second Business Day after the expiration of the statutory
        rescission period in connection with any consumer documents executed effecting
        any upgrade involving an Eligible Note Receivable and in any event within
        ten
        (10) days of such upgrade, the Borrower shall deliver to the Agent or its
        designee the original of the new promissory note, comparable instrument or
        installment sale contract executed in connection with such upgrade duly endorsed
        in blank by the Borrower and the Borrower will cause all payments made with
        respect to such new promissory note, comparable instrument or installment
        sale
        contract to be forwarded to the lockbox;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (3)           any
        new upgraded Note Receivable involving a prior Eligible Note Receivable shall
        only be included as part of the Borrowing Base if (i) the prior Eligible
        Note
        Receivable has been removed from the Borrowing Base and the new upgraded
        Note
        Receivable satisfies all conditions for an Eligible Note Receivable, and
        (ii)
        the subject Purchaser’s FICO Score is not less than 600 (unless the prior
        Eligible Note Receivable had been paid in full or the subject Purchaser has
        made
        a cash downpayment of at least 20% of the difference between the sales price
        of
        the prior Eligible Note Receivable and the sales price of the new Eligible
        Note
        Receivable).

       

      Encumbered
        Intervals means the Intervals subject to the
        Mortgages.

       

      Environmental
        Laws means the Comprehensive Environmental Response, Compensation
        and Liability Act of 1980, as amended from time to time, the Resource
        Conservation and Recovery Act of 1976, as amended from time to time, the
        Superfund Amendments and Reauthorization Act of 1986, as amended, the federal
        Clean Air Act, the federal Clean Water Act, the federal Safe Drinking Water
        Act,
        the federal Toxic Substances Control Act, the federal Hazardous Materials
        Transportation Act, the federal Emergency Planning and Community Right to
        Know
        Act of 1986, the federal Endangered Species Act, the federal Occupational
        Safety
        and Health Act of 1970, the federal Water Pollution Control Act, all state
        and
        local environmental laws, rules and regulations of each state in which a
        Resort
        is located, as all of the foregoing legislation may be amended from time
        to
        time, and any regulations promulgated pursuant to the foregoing; together
        with
        any similar local, state or federal laws, rules, ordinances or regulations
        either in existence as of the date hereof, or enacted or promulgated after
        the
        date of this Agreement, that concern the management, control, storage,
        discharge, treatment, containment, removal and/or transport of Hazardous
        Materials or other substances that are or may become a threat to public health
        or the environment; together with any common law theory involving Hazardous
        Materials or substances which are (or alleged to be) hazardous to human health
        or the environment, based on nuisance, trespass, negligence, strict liability
        or
        other tortious conduct, or any other federal, state or local statute,
        regulation, rule, policy, or determination pertaining to health, hygiene,
        the
        environment or environmental conditions.

       

      Environmental
        Indemnification Agreement means the Environmental Indemnification
        Agreement made by Borrower to Agent pursuant to this Loan Agreement, as the
        same
        may be amended from time to time.

       

      Event
        of Default has the meaning given to it in Section 8.1
        hereof.

       

      Exchange
        Company means Resort Condominiums International, Inc. (“RCI”) or
        Interval International, Inc. (“II”).

       

      FICO
        Score means the credit score attributed to a Purchaser by the Fair
        Isaac Company or such similar credit score reporting company acceptable to
        Lender.  Where a Purchaser consists of more than one individual, then
        the applicable FICO Score shall be deemed to mean that of the primary
        obligor.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Final
        Maturity Date means September 28, 2012 or such date as is thirty
        six (36) months following the extension of any Revolving Loan
        Period.

       

      Financial
        Statements means the balance sheets and statements of income and
        expense of the Borrower, and the related notes and schedules delivered by
        Borrower to Agent prior to the Closing Date and provided for in Section
        4.4 (c) hereof; and the quarterly, annual and other periodic
        financial statements and reports required to be provided to Agent pursuant
        to
Section 7.1 (h) hereof.

       

      GAAP
        means generally accepted accounting principles, applied on a consistent basis,
        as described in Opinions of the Accounting Principles Board of the American
        Institute of Certified Public Accountants and/or in statements of the Financial
        Accounting Standards Board which are applicable in the circumstances as of
        the
        date in question.

       

      Governmental
        Authority means any federal, state, local, or other governmental or
        administrative body, instrumentality, department, or agency or any court,
        tribunal, administrative hearing body, arbitration panel, commission, or
        other
        similar dispute-resolving panel or body.

       

      Hazardous
        Materials means each of “hazardous substances,” “hazardous waste”
or “hazardous constituents,” “toxic substances”, and “solid waste”, as defined
        in the Environmental Laws, and any other contaminant or any material, waste
        or
        substance which is petroleum or petroleum based, asbestos, polychlorinated
        biphenyls, flammable explosives, or radioactive materials.

       

      IRC
        means the Internal Revenue Code of 1986, as in effect from time to
        time.

       

      IRS
        means the Internal Revenue Service of the United States of America.

       

      Indebtedness
        means (a) all obligations for borrowed money, (b) all obligations evidenced
        by
        bonds, debentures, notes, or other similar instruments and all reimbursement
        or
        other obligations in respect of letters of credit, bankers acceptances, interest
        rate swaps, or other financial products, (c) all obligations under Capital
        Leases, (d) all obligations or liabilities of others secured by a Lien on
        any
        asset a Person or its Subsidiaries, irrespective of whether such obligation
        or
        liability is assumed, (e) all obligations for the deferred purchase price
        of
        assets (other than trade debt incurred in the ordinary course of business
        and
        repayable in accordance with customary trade practices), and (f) any obligation
        of Borrower or its Subsidiaries guaranteeing or intended to guarantee (whether
        directly or indirectly guaranteed, endorsed, co-made, discounted, or sold
        with
        recourse) any obligation of any other Person that constitutes Indebtedness
        under
        any of clauses (a) through (e) above.

       

      Interest
        Rate means a variable rate, adjusted as of each LIBO Rate
        Determination Date, equal to the LIBO Rate, determined as of each LIBO Rate
        Determination Date, plus two hundred and forty (240) basis points per
        annum.

       

      Interval
        means, with respect to each Resort the undivided fractional fee interval
        ownership interest as a tenant-in-common (sometimes referred to in the Timeshare
        Documents as a vacation ownership interest, condoshare interest, or condoshare
        week) in a Unit sold to a Purchaser by delivery of a deed for a time-share
        period per calendar year (or, in the case of a biennial use period, per
        alternate calendar year) of one week (as defined in the Declaration), together
        with all appurtenant rights and interests, including, without limitation,
        appurtenant rights to use Common Elements, and easement, license, access
        and use
        rights in and to all Resort facilities and amenities (as described in the
        Declaration), all as more particularly described in the Declaration or other
        Timeshare Documents.  Notwithstanding the foregoing, the term
“Interval” shall also include, with respect to the Oak N’  Spruce
        Resort only, the beneficial interest in the entity which owns each of the
        Units
        at the Oak N’  Spruce Resort, as evidenced by the delivery to the
        Purchaser of any such beneficial interest of a certificate of beneficial
        interest for a timeshare period per calendar year (or, in the case of biennial
        use period, per alternate calendar year) of one week (as defined in the Oak
        N’  Spruce Resort Declaration), together with all pertinent rights and
        interests, including, without limitation, a pertinent right to use Common
        Elements, and easements, license, access and use rights in and to all Oak
        N’  Spruce Resort facilities and amenities, all as more particularly
        described in the Declaration or other Timeshare Documents for the Oak
        N’  Spruce Resort.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Lender
        has meaning given to it in the preamble hereof, and shall include any other
        Person made a party to this Agreement in accordance with the provisions of
        Section 10.9 hereof.

       

      Lender
        Expenses means all (a) costs or expenses (including taxes, and
        insurance premiums) required to be paid by Borrower or its Subsidiaries under
        any of the Loan Documents that are paid or incurred by Agent or
        any  Lender, (b) fees or charges paid or incurred by Agent or
        any  Lender in connection with the Borrower and its Subsidiaries,
        including, fees or charges for photocopying, notarization, couriers and
        messengers, telecommunication, public record searches (including tax lien,
        litigation, bankruptcy and UCC searches), filing, recording, publication,
        appraisal (including periodic Collateral appraisals or business valuations
        to
        the extent of the fees and charges (and up to the amount of any limitation)
        contained in this Agreement), (c) costs and expenses incurred by Agent or
        any  Lender in the disbursement of funds to Borrower (by wire transfer
        or otherwise), (d) charges paid or incurred by Agent or any  Lender
        resulting from the dishonor of checks relating to the Borrower or associated
        with the Collateral, (e) reasonable costs and expenses paid or incurred by
        the
        Agent or any Lender to correct any default or enforce any provision of the
        Loan
        Documents, or in gaining possession of, maintaining, handling, preserving,
        storing, shipping, selling, preparing for sale, or advertising to sell the
        Collateral, or any portion thereof, irrespective of whether a sale is
        consummated, (f) audit fees and expenses of Agent or any  Lender
        related to audit examinations of the Books to the extent of the fees and
        charges
        (and up to the amount of any limitation) contained in this Agreement, (g)
        reasonable costs and expenses of third party claims or any other suit paid
        or
        incurred by the Agent or any  Lender in enforcing or defending the
        Loan Documents or in connection with the transactions contemplated by the
        Loan
        Documents or the Agent or any  Lender’s relationship with Borrower,
        (h) Agent and each Lender’s and Participant’s reasonable fees and expenses
        (including attorneys fees) incurred in advising, structuring, drafting,
        reviewing, administering, or amending the Loan Documents, and (i) Agent and
        each
        Lender’s and Participant’s reasonable fees and expenses (including attorneys
        fees) incurred in terminating, enforcing (including attorneys fees and expenses
        incurred in connection with a “workout,” a “restructuring,” or an Insolvency
        Proceeding concerning Borrower or its Subsidiaries or in exercising rights
        or
        remedies under the Loan Documents), or defending the Loan Documents,
        irrespective of whether suit is brought, or in taking any Remedial Action
        concerning the Collateral.

       

      Liberty
        Bank means Liberty Bank, a Connecticut nonstock mutual savings
        bank.

       

      LIBO
        Rate Determination Date means the first Business Day of each
        month.  Notwithstanding the foregoing, the initial LIBO Rate
        Determination Date shall be the Closing Date.

       

      LIBO
        Rate means the London Interbank Offered Rate for one-month United
        States dollar-denominated deposits as published under the designation “Money
        Rates” in the “Money and Investing” section of The Wall Street Journal
(Eastern Edition) (the “WSJ”).  In the event
        that the LIBO Rate established by the WSJ shall no longer be available, due
        to
        either the nonexistence of the WSJ or the WSJ’s failure to publish such a rate,
        then Lender shall choose a substitute rate based upon a national index, selected
        by Lender in its sole discretion.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Lien
        means any interest in property securing an obligation owed to, or claim by,
        a
        Person other than the owner of such property, whether such interest arises
        in
        equity or is based on the common law, statute, or contract.

       

      Loan  means,
        as the context requires, singly each Advance and collectively all Advances
        made
        by Lenders to Borrower under or pursuant to this Agreement.

       

      Loan
        Documents means, collectively, this Agreement and the following
        documents and instruments listed below as such agreements, documents,
        instruments or certificates may be amended, renewed, extended, restated or
        supplemented from time to time.

       

      
        	
                 

              	
                (a)

              	
                This
                  Agreement;

              

      

       

      
        	
                 

              	
                (b)

              	
                The
                  Note;

              

      

       

      
        	
                 

              	
                (c)

              	
                The
                  Environmental Indemnification
                  Agreement;

              

      

       

      
        	
                 

              	
                (d)

              	
                The
                  Assignment of Notes Receivable and
                  Mortgages;

              

      

       

      
        	
                 

              	
                (e)

              	
                Borrower’s
                  Certificate and Request for
                  Advance;

              

      

       

      
        	
                 

              	
                (f)

              	
                The
                  Lockbox Agreement;

              

      

       

      
        	
                 

              	
                (g)

              	
                The
                  Custodial Agreement;

              

      

       

      
        	
                 

              	
                (h)

              	
                The
                  Standby Servicing Agreement
                  Assignment;

              

      

       

      
        (i)           
          UCC financing statements covering the Collateral, to be filed with the
          Texas
          Secretary of State and the Secretary of State and/or such other office
          where UCC
          financing statements are required to be filed pursuant to the Code;
          and

         

      

      (j)           
        Such other agreements, documents, instruments, certificates and materials
        as
        Agent may request to evidence the Obligations; to evidence and perfect the
        rights and Liens and security interests of Agent, as agent for Lenders,
        contemplated by the Loan Documents, and to effectuate the transactions
        contemplated herein, as such agreements, documents, instruments or certificates
        may be hereafter amended, renewed, extended, restated or supplemented from
        time
        to time.

       

      Loan
        Year means the period from the Closing Date through the last day
        of
        the next full twelve (12) calendar month period and each twelve (12) calendar
        month period thereafter.

       

      Lockbox
        Agent means JP Morgan Chase Bank, a New York banking association
        having a place of business at 2200 Ross Avenue, Dallas, Texas 75201,
        or such other financial institution as may be approved by Agent in writing
        from
        time to time.

       

      Lockbox
        Agreement means the Lockbox Agreement of even date herewith, by and
        among Borrower, Lenders, Agent, Servicing Agent and Lockbox Agent, pursuant
        to
        which the Lockbox Agent is to provide lockbox, reporting and related services
        and is to provide for the receipt of payments on the Notes Receivable and
        the
        disbursement of such payments to Agent.

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      
        Mandatory
          Prepayment means any prepayment required by Section 2.4 (b)
          hereof.

      

       

      Marketing
        and Sales Expenses means all promotion, lead generation, sales
        commissions and all other marketing expenses incurred or paid by Borrower
        pursuant to any marketing agreements or otherwise.

       

      Material
        Adverse Change means (a) a material adverse change in the
        business, prospects, operations, results of operations, assets, liabilities
        or
        condition (financial or otherwise) of Borrower, taken as a whole, (b) a
        material impairment of the ability of Borrower to perform its obligations
        under
        the Loan Documents or of the Lender’s ability to enforce the Obligations or
        realize upon the Collateral, or (c) any impairment of the enforceability or
        priority of the Lender’s Liens with respect to the Collateral.

       

      Maximum
        Amount means an aggregate amount not to exceed at any time
        $37,500,000.00. provided that such maximum amount is subject to the restrictions
        set forth in Section 2.1(a) hereof.

       

      Mortgage
        means a properly recorded, first priority mortgage, deed of trust, deed to
        secure debt, assignment of beneficial interest or other security instrument,
        as
        applicable, executed and delivered by each Purchaser to Borrower, securing
        a
        Pledged Note Receivable and encumbering all of the right, title and interest
        of
        such Purchaser in the related Encumbered Interval and related or appurtenant
        easement, access and use rights and benefits.  Agent acknowledges that
        assignments of beneficial interest executed by Purchasers of Intervals at
        Oak
        N’  Spruce Resort will not be recorded and that Borrower will not be
        required to provide Agent or Lenders with any title insurance with respect
        to
        Intervals at Oak N’ Spruce Resort.

       

      Note
        means the  Promissory Note of even date herewith in the amount of the
        Maximum Amount, as amended, increased or extended from time to time, or any
        new
        promissory note issued in replacement (but not in repayment)
        thereof.

       

      Note
        Receivable means a promissory note executed in favor of Borrower in
        connection with a Purchaser’s acquisition of an Interval.

       

      Obligations
        means all Indebtedness due Agent, any Lender or any Affiliate of a Lender,
        all
        amounts due or becoming due to Agent or any Lender in respect of the Loan
        under
        any of the Loan Documents, including principal, interest, prepayment premiums,
        contributions, taxes, insurance, loan charges, custodial fees, attorneys’ and
        paralegals’ fees and expenses and other fees or expenses incurred by Agent or
        any Lender or advanced to or on behalf of Borrower by Agent or any Lender
        pursuant to any of the Loan Documents, and the prompt and complete payment
        and
        performance by the Borrower of all obligations, indebtedness and liabilities
        pursuant to this Agreement or any of the Loan Documents or
        otherwise.

       

      
        Operating
          Contract or Operating Contracts has the meaning given to it in
Section 6.20 hereof.

         

      

      Origination
        Fee has the meaning given to it in Section 4.2
        hereof.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Participant
        means, singly and collectively, any bank or other entity, which is indirectly
        or
        directly funding to or through Liberty Bank with respect to the Loan, in
        whole
        or in part, including, without limitation, any direct or indirect assignee
        of
        Liberty Bank in the Loan.

       

      Payment
        Authorization Agreement means a pre-authorized electronic debit
        agreement by a Purchaser for payment of a Note Receivable.

       

      Permitted
        Discretion means a determination made in the exercise of reasonable
        (from the perspective of a secured asset-based lender in the same or similar
        circumstances) business judgment.

       

      Person
        means an individual, partnership, corporation, limited liability company,
        trust,
        unincorporated organization, other entity, or a government or agency or
        political subdivision thereof.

       

      Pledged
        Notes Receivable means any Note Receivable which at any time has
        been pledged to Agent on behalf of Lenders by Borrower pursuant to this
        Agreement or any of the Loan Documents  (and all replacements of such
        Notes Receivable pursuant to Section 2.4(b) hereof.).

       

      Prescribed
        Laws means, collectively, (a) the Uniting and Strengthening America
        by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
        Act
        of 2001 (Public Law 107 56) (the USA PATRIOT Act), (b) Executive Order No.
        13224
        on Terrorist Financing, effective September 24, 2001, and relating to Blocking
        Property and Prohibiting Transactions With Persons Who Commit, Threaten to
        Commit, or Support Terrorism, (c) the International Emergency Economic Power
        Act, 50 U.S.C. § 1701 et seq., (d) the Trading with the Enemy Act, 50 U.S.C.
        App. 1 et seq., and (d) all other Legal Requirements relating to money
        laundering or terrorism, and, in each case, any Executive Orders or regulations
        promulgated under any such laws.

       

      Property
        or Properties means any interest in any kind of property or asset,
        whether real, personal or mixed, tangible or intangible.

       

      Pro
        Rata Percentage means the applicable percentage of the Loan that
        each Lender has agreed to make to Borrower pursuant to this Agreement as
        set
        forth in Schedule 1.0 hereof, as such percentage may from time to time be
        amended by Agent and the applicable Lender.

       

      Purchase
        Price means the total purchase price of a timeshare Interval, as
        set forth in the Timeshare Documents and Note Receivable relating to the
        purchase of such Interval.

       

      Purchaser
        means any Person who purchases one or more Intervals.

      
         

        Quarterly
          Financial Report means, individually and collectively, as
          applicable, the financial reports delivered in accordance with Section 7.1
          (h)(i) hereof.

         

      

      Renewal
        Fee has the meaning given to it in Section 2.3(c)
        hereof.

       

      Resort
        or Resorts (also “Eligible Resort” or “Eligible Resorts”) means,
        individually and collectively, as applicable, each or all of the interval
        ownership and time-share projects consisting of: (i) (A) Holly Lake Ranch,
        Hawkins, Texas; (B) Piney Shores Resort, Conroe, Texas; (C) Lake O’ The Woods,
        Flint, Texas; (D) Hill Country Resort, Canyon Lake, Texas; (E) Ozark Mountain
        Resort, Kimberling City, Missouri; (F) Holiday Hills Resort, Branson, Missouri;
        (G) Fox River Resort, LaSalle County, Illinois; (H) Timber Creek Resort,
        Jefferson County, Missouri (I) Oak N’ Spruce Resort, South Lee, Massachusetts;
        (J) Apple Mountain Resort, Habersham County, Georgia; (K) The Villages, Flint,
        Texas and (L) Silverleaf’s Seaside Resort, Galveston County, Texas; (M) Orlando
        Breeze Resort, Davenport, Polk County, Florida (also sometimes individually
        and
        collectively referred to herein as the “Existing Resorts”) and (ii) subject to
        Agent’s prior written approval and satisfaction by the Borrower of the
        conditions precedent set forth in Sections 3.5 and 4.4
        hereof, the Additional Eligible Resorts.  The term “Resort” or
“Resorts” includes, among other things, the undivided annual or (biennial)
        timeshare ownership interests (Intervals) in the respective Resorts, and
        the
        appurtenant exclusive rights to use Units in one or more buildings or phases
        and
        all appurtenant or related properties, amenities, facilities, equipment,
        appliances, fixtures, easements, licenses, rights and interests, including
        without limitation, the Common Elements, as established by and more fully
        defined and described in the respective Declarations, and the other Timeshare
        Documents.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Revolving
        Loan Period means the period during the Term in which the Borrower
        may borrow, repay and re-borrow Advances, commencing on the Closing Date
        and
        terminating on September 28, 2009 or such later date pursuant to Section
        2.3(c).

       

      Servicing
        Agent means Lender’s exclusive Agent, which shall be such Person or
        Persons designated by Borrower and approved by Agent in its sole discretion,
        for
        the purposes of billing and collecting amounts due on account of the Pledged
        Notes Receivable, providing reports pursuant to the Lockbox Agreement and
        performing other servicing functions not performed by the Lockbox
        Agent.  Borrower shall be the Servicing Agent until an Event of
        Default shall have occurred and Agent replaces Borrower as Servicing Agent
        as
        provided in Section 9.1(i) hereof.

       

      Silverleaf
        Club means Silverleaf Club, a Texas non-profit
        corporation.

       

      Silverleaf
        Finance II Documents means the loan agreement, the developer
        transfer agreement, the demand notes and all other agreements or documents
        executed in connection with the TFC Conduit Loan, as each may be amended,
        restated or otherwise modified from time to time.

       

      SCRA
        means The Servicemembers Civil Relief Act, 50 United States Code Appendix
        Sections 501-593, which in relevant part limits to 6% per annum the interest
        charged on credit obligations of active duty military members, reservists
        who
        are in active federal service, and National Guardsmen who are in active federal
        service, applicable to all obligations entered into before beginning active
        duty
        if the military service materially affects his or her ability to meet such
        obligations.

       

      SPV
        means any special purpose entity created for the purpose of effecting a
        securitization of certain of the assets of Borrower.

       

      SPV
        Assets means those assets sold or conveyed by Borrower to the SPV
        pursuant to the documents created for the securitization
        transaction.

       

      Standby
        Servicer means the Person selected by Agent to act as standby
        servicer in accordance with this Agreement.  The Standby Servicer
        shall be Concord Servicing Corporation.

       

      Standby
        Servicing Agreement means the agreement of even date herewith among
        Borrower, Standby Servicer and Agent, as amended from time to time, pursuant
        to
        which the Standby Servicer shall provide servicing functions with respect
        to the
        Pledged Notes Receivable in accordance with Section 9.1(i)
        hereof.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      Subsidiary
        means, with respect to a Person, a corporation, partnership, limited liability
        company, or other entity in which that Person directly or indirectly owns
        or
        controls the shares of Stock having ordinary voting power to elect a majority
        of
        the board of directors (or appoint other comparable managers) of such
        corporation, partnership, limited liability company, or other
        entity.

       

      Survey
        means a plat or survey of the Resorts prepared by a licensed surveyor acceptable
        to Agent.

       

      Tangible
        Net Worth means, with respect to any Person, the amount calculated
        in accordance with GAAP as: (i) the consolidated net worth of such Person
        and
        its consolidated subsidiaries, minus (ii) the consolidated intangibles of
        such
        Person and its consolidated subsidiaries, including, without limitation,
        goodwill, trademarks, tradenames, copyrights, patents, patent allocations,
        licenses and rights in any of the foregoing and other items treated as
        intangible in accordance with GAAP.  Notwithstanding the foregoing, if
        subsequent to the Closing Date deferred sales are no longer considered an
        asset
        under GAAP, Agent agrees, at the request of Borrower, to determine, in its
        reasonable discretion, whether deferred sales should continue to be considered
        an asset for purposes of determining Borrower’s Tangible Net Worth.

       

      Term
        means the period beginning on the Closing Date and ending on the Final Maturity
        Date.

       

      TFC
        means Textron Financial Corporation.

       

      TFC
        Facility means that certain credit facility provided by TFC to
        Borrower pursuant to the TFC Documents.

       

      TFC
        Documents means the loan agreement, the promissory notes and all
        other agreements or documents executed in connection with the TFC Facility,
        as
        each may be amended, restated or otherwise modified from time to
        time.

       

      TFC
        Conduit Loan means that certain loan facility provided by TFC in
        accordance with the terms of the Silverleaf Finance II Documents.

       

      Timeshare
        Act means any statute, act, regulation, ordinance, rule or law
        applicable to the establishment and operation of the Resorts and the sales
        of
        the Intervals.

       

      Timeshare
        Documents means any registration statement required under any
        Timeshare Act approving the establishment and operation of the Resorts and
        the
        sales of Intervals.

       

      Timeshare
        Owners’ Association means, with respect to each Resort, the
        applicable not-for-profit corporations described on Schedule 1.1(c)
        hereof.

       

      Total
        Interest Expense means, for any period, the aggregate amount of
        interest required to be paid or accrued by Borrower and its Subsidiaries
        during
        such period on all indebtedness of Borrower and its consolidated Subsidiaries
        outstanding during all or any part of such period, whether such interest
        was or
        is required to be reflected as an item of expense or capitalized, including
        payments consisting of interest in respect of any capitalized lease, or any
        synthetic lease and including commitment fees, agency fees, facility fees,
        balance deficiency fees and similar fees or expenses in connection with the
        borrowing of money.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Transfer
        Account means the account established by Agent to which all Loans
        by Lenders will be made.

       

      UBS
        means UBS Real Estate Securities, Inc.

       

      UBS
        Facility means that certain credit facility provided by UBS
        pursuant to the UBS Documents.

       

      UBS
        Documents means the loan agreement, the promissory notes and all
        other agreements or documents executed in connection with the UBS Facility,
        as
        each may be amended, restated or otherwise modified from time to
        time.

       

      UCC
        Financing Statements means the UCC-1 Financing Statements, naming
        the Borrower as debtor and the Agent as secured party on behalf of Lenders,
        heretofore or hereafter filed in connection with the Loan and all amendments
        thereto.

       

      Unit
        means, with respect to each Resort, one living unit in a building incorporated
        into the Resort pursuant to the Declaration, together with all related or
        appurtenant interests in services, easements and other rights or benefits,
        as
        described and provided for in the Declaration, including but not limited
        to the
        right to use the Resort amenities and facilities in accordance with the
        Timeshare Documents.

       

      Unused
        Line Fee has the meaning given to it in Section 2.3(c)
        hereof.

       

      Wellington
        means New Wellington Financial, L.L.C., located in Charlottesville,
        Virginia.

       

      WFF means
        Wells Fargo Foothill, LLC.

       

      WFF
        Facility means that certain credit facility provided by WFF to
        Borrower pursuant to the WFF Documents.

       

      WFF
        Documents means the loan agreement, the promissory notes and all
        other agreements or documents executed in connection with the WFF Facility,
        as
        each may be amended, restated or otherwise modified from time to
        time.

       

      1.2           Construction.  Unless
        the context of this Agreement clearly requires otherwise, references to the
        plural include the singular, references to the singular include the plural,
        the
        term “including” is not limiting, and the term “or” has, except where otherwise
        indicated, the inclusive meaning represented by the phrase
“and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and
        similar terms in this Agreement refer to this Agreement as a whole and not
        to
        any particular provision of this Agreement.  An Event of Default shall
“continue” or be “continuing” until such Event of Default has been waived in
        writing by Lender.  Section, subsection, clause, schedule, and exhibit
        references are to sections, subsections, clauses, schedules and exhibits
        in this
        Agreement unless otherwise specified.  Any reference in this Agreement
        or in the Loan Documents to this Agreement, any of the Loan Documents or
        any
        other document or agreement shall include all alterations, amendments, changes,
        extensions, modifications, renewals, replacements, substitutions, supplements,
        and restatements thereto and thereof, as applicable.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.3           Schedules
        and Exhibits.  All of the schedules and exhibits attached
        to or referred to within this Agreement, as they may from time to time be
        amended or restated, shall be deemed incorporated herein by
        reference.

       

      Section
        2-The Loan

       

      2.1           Revolving
        Loan and Lending Limits.

       

      (a)        Revolving
        Loan; Lending Limits; Making of Loans.  Upon the terms
        and subject to the conditions set forth herein (including without limitation
        Sections 2.1(c) and 2.6 hereof), each Lender agrees severally, at
        any time and from time to time during the Revolving Loan Period to make Advances
        to Borrower and Borrower may borrow, repay and re-borrow during the Revolving
        Loan Period, in an aggregate amount not to exceed at any time the lesser
        of each
        Lender’s Pro Rata Percentage of: (i) the Borrowing Base, (ii) the Availability
        or (iii) the Commitment.  The Revolving Loan Period shall be the
        period during the Term in which the Borrower may borrow, repay and re-borrow
        Advances.

       

      Borrower
        acknowledges, agrees and confirms that the obligations of all Lenders to
        make
        Loans under this Agreement to Borrower is limited to the lesser of: (i) the
        Borrowing Base, (ii) the Availability or (iii) the
        Commitment.  Borrower further acknowledges, agrees and confirms that
        the obligation of each Lender to make loans hereunder to Borrower is limited
        to:
        (i) with respect to each Advance hereunder, each Lender’s Pro Rata Percentage of
        any such Advance hereunder and (ii) with respect to all Advances made hereunder,
        such Lender’s obligation hereunder shall be limited to its commitment as set
        forth on Schedule 1.0.

       

      Each
        Loan
        by a Lender shall be made ratably in accordance with each Lender’s respective
        Pro Rata Percentage, provided, however, that the failure of any Lender to
        make
        any required Loan shall not in itself relieve any other Lender of its obligation
        to make any required Loan hereunder.  Likewise, no Lender shall be
        responsible or liable for the failure of any other Lender to make any Loan
        required to be made by such other Lender, nor shall any Lender be obligated
        to
        make any Loan or Loans in excess of its respective Pro Rata Percentage, but
        not
        in excess of its Commitment, in the event that any other Lender fails or
        refuses
        to make a Loan or Loans as provided hereunder.  As and when additional
        Lenders execute and deliver this Agreement, then (A) such additional Lenders
        shall be deemed to have simultaneously purchased from each of the other Lenders
        who have previously executed and delivered this Agreement, a share in such
        other
        Lenders’ Loans so that the amount of the Loans of all Lenders shall be pro rata
        as otherwise set forth above and (B) such other adjustments shall be made
        from
        time to time as shall be equitable to insure that the Advances to Borrower
        are
        made ratably by each Lender in accordance with its respective Pro Rata
        Percentage.

      

      (b)            Advances
        for Certain Fees.  Borrower has advised Lender that Custodian
        will bill on a monthly basis for its services.  Borrower agrees that
        upon receipt of a monthly billing from Custodian, it will, unless Custodian
        shall have delivered such billing to Agent directly, review and approve such
        billing or discuss and resolve with Custodian any discrepancies in such billing,
        within five (5) days of receipt of such billing and advise Agent of Borrower’s
        approval of such billing.  Agent is authorized by Borrower to pay
        directly to Custodian the amount of such billing as an Advance, to the extent
        of
        Availability, or as a deduction from the next requested Advance by
        Borrower.

       

      (c)            Maximum
        Amount of Advances.  Notwithstanding anything to the
        contrary contained herein, no Lender shall have an obligation to make an
        Advance
        of its Pro Rata Percentage thereof hereunder to the extent that (i) the
        aggregate of Advances outstanding would cause the Loan to exceed the lesser
        of
        (A) Borrowing Base, (B) the Availability or (C) the Commitment, or (ii) in
        an
        amount which would cause the aggregate outstanding principal balance of Liberty
        Bank’s Commitment retained by Liberty Bank and not participated to other lenders
        to exceed Twenty-Five Million Dollars ($25,000,000); or (C) such an Advance
        would cause such Lender or any Participant in such loans to violate any legal
        lending limit under Section 2.5 hereof or otherwise.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (d)            Note
        Evidencing Borrower’s Obligations.  Borrower’s
        obligations to pay the principal of and interest on the Loan or Loans made
        by
        each Lender shall be evidenced by the Note to the Agent, as Agent for each
        Lender, which Note shall be dated as of the date hereof and be in the principal
        amount of the Maximum Amount.  The Note will mature on the Final
        Maturity Date, bear interest as provided in Section 2.2 hereof and
        be otherwise entitled to the benefits of this
        Agreement.  Notwithstanding the stated principal amount of the Note,
        the aggregate outstanding principal amount of the Loan at any time shall
        be the
        aggregate principal amount owing on the Note at such time.  Agent
        shall and is hereby authorized to record in its internal books and records
        the
        date and amount of each Advance made by Lenders, the Interest Rate and interest
        period applicable thereto and each repayment thereof; and such books and
        records
        shall, as between Borrower and each Lender, absent manifest error, constitute
        prima facie evidence of the accuracy of the information contained
        therein.  Failure by Agent to so record any Advance made by Lenders
        (or any error in such recordation) or any payment thereon shall not affect
        the
        Obligations of Borrower under this Agreement or under the Note and shall
        not
        adversely affect Lender’s rights under this Agreement with respect to the
        repayment thereof.  At the election of any Lender, Borrower shall
        execute and deliver to such Lender a note in a stated principal amount equal
        to
        such Lender’s Pro Rata Percentage of the Loan, which such note or notes shall be
        on the same terms and conditions as provided above and which note or notes
        shall
        be included within the definition of “Note” as such term is used
        herein.

       

      (e)            Notice
        of Advances.  

       

      (i)          
         Upon receipt by Agent from Borrower of a written request for Advance in
        accordance with Section 5 hereof and Borrower’s satisfaction of the
        requirements set forth in Section 5 hereof, Agent shall give a written
        notice (a “Notice of Borrowing”) to each Lender, (which
        Notice of Borrowing shall be given to each Lender not less than two (2) Business
        Days prior to the date of the proposed Advance), setting forth: (i) the
        total amount of the Advance requested by Borrower; (ii) the Borrowing Base
        received from Borrower supporting such requested Advance; (iii) the amount
        of
        all Loans remaining outstanding by each respective Lender; (iv) the outstanding
        principal balance of the Loan; (v) each such Lender’s Pro Rata Percentage of the
        requested Advance and (vi) the date on which such Advance is to be made;
        or

       

      (ii)           at
        its option, the Agent shall provide to each Lender: (A) each month by the
        close
        of business on the fifth (5th) Business Day following receipt by Agent from
        Borrower, but in no event later than the 30th day of the month: (i) a reconciled
        Borrowing Base Report in the form attached as Exhibit B hereof; and (ii)
        an updated trial balance and aging report for the Pledged Notes Receivable
        (a
“Collateral Data Report”); and (B) by the close of
        business on the tenth (10th) Business Day following receipt by Agent from
        Borrower of the Borrowing Base Report and the Collateral Data Report: (i)
        a
        summary of all Advances made by Agent during the immediately preceding month
        (a
“Summary of Weekly Advances”); and (ii) a summary report
        of Advances and repayments or collections for the immediately preceding month
        and a calculation of the net Lender’s Advance required of such Lender with
        respect to all Advances made during the immediately preceding month (a
“Lender Advance Report”).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (f)    Disbursement
        of Funds.

       

      (i)           If
        Notice of Borrowing is provided in accordance with Section 2.1(e) above,
        then after receiving a Notice of Borrowing from Agent, each Lender shall,
        not
        later than 11:00 a.m., Eastern Standard Time, on the date specified in such
        Notice of Borrowing on which the proposed Advance is to be made, wire transfer
        to Agent at the Transfer Account, in immediately available funds, an amount
        equal to each such Lender’s Pro Rata Percentage of the proposed Advance as set
        forth in the Notice of Borrowing.  Upon Agent’s receipt of funds from
        each Lender equal to the amount of the requested Advance, and subject to
        Borrower’s compliance with the terms and conditions of this Agreement, Agent
        shall disburse the Advance to Borrower by wire transfer of funds as directed
        in
        writing by Borrower.  If Agent shall not receive funds from any Lender
        as set forth above, then the amount of the Advance in question shall be
        automatically reduced by an amount equal to the missing Lender’s Pro Rata
        Percentage of the Advance in question, and Agent shall, subject to Borrower’s
        compliance with the terms and conditions of this Agreement, disburse the
        Advance
        in the reduced amount to Borrower by wire transfer of funds as directed in
        writing by Borrower.  Agent, in its sole and absolute discretion, may
        (but shall not be obligated to) make the full amount of the requested Advance
        available to Borrower prior to the receipt by Agent from one or more Lenders
        of
        funds representing such Lender’s or Lenders’ Pro Rata Percentage of the Advance
        in question.  If the funds representing such Lender’s or Lenders’ Pro
        Rata Percentage of the Advance in question are not received by Agent within
        two
        (2) Business Days of the date of such Advance, Borrower shall immediately,
        upon
        demand of Agent, repay such amount to Agent.  Nothing herein shall be
        deemed to relieve Agent or any Lender from its obligations hereunder or to
        prejudice any rights Agent may have against any Lender as a result of any
        Lender’s failure to make any Loan or Loans as provided herein; or

       

      (ii)           If
        notice of Advances is provided in accordance with Section 2.1(e)
        above, then by the close of business on the third (3rd) Business Day following
        such Lender’s receipt of the Lender Advance Report, such Lender shall wire
        transfer to Agent at the Transfer Account, in immediately available funds,
        the
        net amount due from such Lender as set forth in the Lender Advance
        Report.  If the funds representing such Lender’s amount of the Advance
        or Advances in question are not received by Agent within five (5) Business
        Days
        of the date of such Lender’s receipt of the Lender Advance Report, Borrower
        shall immediately, upon demand of Agent, repay such amount to
        Agent.  Nothing herein shall be deemed to relieve Agent or any Lender
        from its obligations hereunder or to prejudice any rights Agent may have
        against
        any Lender as a result of any Lender’s failure to make any Loan or Loans as
        provided herein.

       

      (g)
                  Monthly
        Collateral and
        Borrowing Base Reporting.  Within ten (10) days following
        the end of any calendar month, Borrower shall provide to Agent: (i) an updated
        Borrowing Base Report in the form attached as Exhibit B hereof; and (ii)
        an updated trial balance and aging report for the Pledged Notes Receivable
        (a
“Collateral Data Report”); and (iii) by the close of
        business on the tenth (10th) Business Day following receipt by Agent from
        Borrower of the Borrowing Base Report and the Collateral Data Report: (a)
        a
        summary of all Advances made by Agent during the immediately preceding month
        (a
“Summary of Weekly Advances”); and (b) a summary report
        of Advances and repayments or collections for the immediately preceding
        month.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      2.2           Interest
        Rates.  

       

      (a)            Interest
        Rates.  Except as provided in clause (b) below, all
        Obligations that have been charged to the Loan pursuant to the terms hereof
        shall bear interest on the Daily Balance thereof at a per annum rate equal
        to
        the Interest Rate from the date of Agent’s wiring of funds to Borrower through
        the date of Agent’s receipt of repayment of the Loan (if received by Agent later
        than noon, Eastern Standard Time, then interest accrual shall be through
        the
        next Business Day following such receipt).

       

      (b)            Default
        Rate.  Upon the occurrence and during the continuation of an
        Event of Default (and at the election of Agent), all Obligations that have
        been
        charged to the Loan pursuant to the terms hereof shall bear interest on the
        Daily Balance thereof at a per annum rate equal to the Default
        Rate.  Each Lender’s Loan shall bear interest at the Interest Rate or
        the Default Rate as applicable as of the date funds are received by Agent
        as
        provided in Section 2.1(f) hereof through the date of Agent’s
        wiring of repayment funds to each Lender in accordance with
Sections 2.1(f) and 2.3(d) hereof.

       

      2.3           Payments.  From
        and after the Closing Date, Borrower agrees punctually to pay or cause to
        be
        paid to Agent, as Agent for each Lender, all principal and interest due under
        the Note in respect of the Loans.  Interest and all other fees payable
        hereunder shall be due and payable, in arrears, on the first day of each
        month
        at any time that Obligations are outstanding.  Borrower shall make the
        following payments on the Loan:

       

      (a)            Monthly
        Payments.  Borrower shall direct or otherwise cause all
        makers of all Pledged Notes Receivable to pay all monies due thereunder to
        the
        lockbox established pursuant to the Lockbox Agreement, or as otherwise required
        by Agent.  One hundred percent (100%) of the cleared funds collected
        from the Pledged Notes Receivable each week will be paid to Agent by the
        Lockbox
        Agent pursuant to the Lockbox Agreement, and will be applied by Agent twice
        monthly as follows: first to the payment of costs or expenses incurred by
        Agent pursuant to this Agreement in creating, maintaining, protecting or
        enforcing the Liens in and to the Collateral and in collecting any amounts
        due
        any Lender in connection with the Loan (“Collection Costs”) and
        the balance to each Lender in accordance with the applicable percentage of
        the
        outstanding principal balance of the Loan that each Lender has made (the
        “Pro Rata Payment Percentage”).  Each Lender shall
        apply each such payment in the following order: (i) to any interest accrued
        at the Default Rate; (ii) then to interest accrued and payable at the
        Interest Rate; and (iii) then to outstanding principal.  In the event
        that the cleared funds received by Agent are insufficient to pay the amounts
        described in aforementioned clauses (i)-(ii), then Borrower shall pay the
        difference to Agent on or before the fifth (5th) day of the following
        month.  In the event Borrower receives any payments on any of the
        Pledged Notes Receivable directly from or on behalf of the maker or makers
        thereof, Borrower shall receive all such payments in trust for the sole and
        exclusive benefit of Lenders; and Borrower shall deliver to the Lockbox Agent
        all such payments (in the form so received by Borrower) as and when received
        by
        Borrower, unless Agent shall have notified Borrower to deliver directly to
        Agent
        all payments in respect of the Pledged Notes Receivable which may be received
        by
        Borrower, in which event all such payments (in the form received) shall be
        endorsed by Borrower to Agent, as agent for Lenders and delivered to Agent
        promptly upon Borrower’s receipt thereof.

       

      (b)            Final
        Payment.  The entire outstanding principal amount of the
        Loan, together with all other Obligations hereunder, shall be due and payable
        on
        the Final Maturity Date.

       

      (c)            Origination
        Fee; Renewal Fee(s); Unused Line Fee(s).  Borrower shall
        pay the Origination Fee as prescribed in Section 4.2
        hereof.  In addition, annually for each twelve-month extension to the
        Revolving Loan Period agreed to in writing by Agent, Lenders and Borrower
        (and
        without binding any of the foregoing parties in advance to enter into such
        an
        extension), Borrower shall pay a fee of 0.25% (each, a “Renewal Fee”) of the
        Commitment on or before the effective date of such extension.  In
        addition, the Borrower shall pay an unused line fee (the “Unused Line Fee”)
        calculated as of the last day of each calendar month equal to one quarter
        of one
        percent (0.250%) per annum of the difference between (i) the Maximum Amount,
        and
        (ii) the average outstanding principal balance of the Loan during such month,
        due and payable by the fifteenth (15th) day
        of the
        following calendar month; provided, that the Unused Line Fee would be
        waived: (A) through the last day of the sixth (6th) full
        calendar
        month after the Closing Date, and (B) for any calendar month where the average
        outstanding principal balance of the Loan during such month exceeded
        $15,000,000.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      (d)            Payments
        to Lender.  Agent may at its sole and absolute discretion
        either: (i) promptly upon receipt wire transfer to any Lender its Pro Rata
        Percentage of any payment received from Borrower in accordance with this
        Section 2.3 or Section 2.4 hereof; or (ii) include any
        Lender’s Pro Rata Percentage of any payment received from Borrower in accordance
        with this Section 2.3 or Section 2.4 hereof in the Lender
        Advance Report pursuant to Section 2.1(g), for transfer to Lender
        pursuant to Section 2.1(f) hereof.

       

      2.4           Prepayments.

       

      (a)            Voluntary
        Prepayments.  Except for regular payments of interest and
        principal as provided hereunder, prepayments, (i) shall not be permitted
        during
        the Revolving Loan Period, and (ii) may be made in whole, but not in part,
        upon
        five (5) days prior written notice to the Agent at any time after the end
        of the
        Revolving Loan Period upon payment of the applicable Prepayment Premium (whether
        such prepayment results from voluntary payments by Borrower, acceleration,
        or
        otherwise); provided, however, that (A) payments or prepayments of Pledged
        Notes
        Receivable made by Purchasers who are not directly or indirectly solicited
        by
        Borrower to make such prepayment shall not violate this Section 2.4(a),
        and no Prepayment Premium shall be payable as a result of any such payment
        by
        Purchasers; and (B) if at any time the Borrower wishes to release any Pledged
        Notes Receivable for the purpose of including those Pledged Notes Receivable
        in
        a securitization pooling or similar conduit transaction, after 30 days’ prior
        written notice to Agent, Borrower may prepay the principal balance of the
        Loan
        in whole (but not in part), and no Prepayment Premium will be due where such
        prepayment is the result of a securitization or similar conduit transaction
        closing, as certified by Borrower to Agent.  

       

      (b)            Mandatory
        Prepayments.

       

      (i)       Overadvances.  If
        at any time the outstanding principal balance of the Loan exceeds the Borrowing
        Base or the Commitment, Borrower shall immediately either (A) prepay the
        Loan in
        an amount necessary to reduce the outstanding principal balance of the Loan
        to
        an amount within the lending limits set forth in Section 2.1 hereof, or
        (B) pledge and deliver to Agent such additional or replacement Eligible Notes
        Receivable such that the remaining outstanding principal balance of the Loan
        is
        within the lending limits set forth in Section 2.1 hereof.

       

      (ii)      Ineligible
        Pledged Notes Receivable.  If at any time after the expiration of the
        Revolving Loan Period, Agent determines that any Pledged Notes Receivable
        which
        are included in the Borrowing Base, do not qualify as Eligible Notes Receivable
        (“Ineligible Notes Receivable”), then Borrower shall, within five (5) Business
        Days after notice, either (A) prepay the Loan in an amount equal to the balance
        due under such Pledged Note Receivable, or (B) replace the Ineligible Note
        Receivable with an Eligible Note Receivable having an outstanding aggregate
        principal balance equal to or in excess of the outstanding principal balance
        of
        such Ineligible Note Receivable.  The pledge and delivery to Agent as
        agent for Lenders of additional Eligible Notes Receivable shall comply with
        the
        document delivery and recordation requirements set forth in
Section 5.1 hereof.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (iii)     No
        Prepayment Premium.  No Prepayment Premium shall be due in connection
        with any mandatory prepayment made in accordance with
Sections 2.4(b)(i) or 2.4(b)(ii)
        hereof.

       

      (c)            Prepayment
        Premium.  Except as specifically set forth in
Section 2.4(a) and 2.4(b) hereof, any prepayment of the Loan
        pursuant to Section 2.4(a) hereof, whether prior to or after
        acceleration based upon an Event of Default, hereof must be accompanied by
        a
        prepayment premium (the “Prepayment Premium”) calculated, as of immediately
        prior to such prepayment, as follows:

       

      
        	
                Date
                  of Prepayment

              	 	
                Premium

              
	 	 	 
	
                During
                  the first Loan Year after expiration of the Revolving Loan
                  Period;

              	 	
                three
                  percent (3%) of the then outstanding balance of the
                  Loan;

              
	 	 	 
	 	 	 
	
                During
                  the second Loan Year after expiration of the Revolving Loan
                  Period;

              	 	
                two
                  percent (2%) of the then outstanding balance of the
                  Loan;

              
	 	 	 
	
                During
                  the third Loan Year after expiration of the Revolving Loan
                  Period;

              	 	
                one
                  percent (1%) of the then outstanding balance of the Loan;
                  and

              
	 	 	 
	
                Thereafter;

              	 	
                none.

              

      

       

      (d)           Prepayment
        Premium upon Acceleration.  If the Loan is accelerated
        based on an Event of Default prior to or after the expiration of the Revolving
        Loan Period, or if Borrower undertakes a voluntary prepayment prior to
        expiration of the Revolving Loan Period, at Agent’s sole discretion, payments on
        the Loan must include the Prepayment Premium that would be applicable if
        prepayment occurred in the first Loan Year after expiration of the Revolving
        Loan Period.

       

      2.5           Capital
        Adequacy Event.  If, after the date hereof, a Lender or
        Participant determines that (i) the adoption of or change in any law, rule,
        regulation or guideline regarding capital requirements for banks or bank
        holding
        companies, or any change in the interpretation or application thereof by
        any
        Governmental Authority charged with the administration thereof, or (ii)
        compliance by Lender or Participant or its respective parent bank holding
        company with any guideline, request, or directive of any such entity regarding
        capital adequacy (whether or not having the force of law), has the effect
        of
        reducing the return on Lender’s or Participant’s or their respective holding
        company’s capital as a consequence of such Lender’s or Participant’s agreements
        hereunder to a level below that which such Lender or Participant or respective
        holding company could have achieved but for such adoption, change, or compliance
        (taking into consideration Lender’s or Participant’s or respective holding
        company’s then existing policies with respect to capital adequacy and assuming
        the full utilization of such entity’s capital) by any amount deemed by Lender or
        Participant to be material, then Agent may notify Borrower
        thereof.  Following receipt of such notice, Borrower agrees to pay
        Agent on demand the amount of such reduction of return of capital as and
        when
        such reduction is determined, payable within 90 days after presentation by
        Lender or Participant of a statement in the amount and setting forth in
        reasonable detail Lender’s or Participant calculation thereof and the
        assumptions upon which such calculation was based (which statement shall
        be
        deemed true and correct absent manifest error).  In determining such
        amount, Lender or Participant may use any reasonable averaging and attribution
        methods.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      2.6           Suspension
        of Advances.

       

      (a)            Suspension
        of Sales.  If any stay, order, cease and desist order,
        injunction, temporary restraining order or similar judicial or non-judicial
        sanction shall be issued limiting or otherwise materially adversely affecting
        any Interval sales activities, other business operations in respect of the
        Resorts, or the enforcement of the remedies of Agent and Lenders hereunder,
        then, in such event, Agent and Lenders shall have no obligation to make any
        Advances hereunder: (i) in respect of Pledged Notes Receivable from the sale
        of
        Intervals which are the subject of any stay, order, cease and desist order,
        injunction, temporary restraining order or similar judicial or non-judicial
        sanction that has been issued until the stay, order, cease and desist order,
        injunction, temporary restraining order or similar judicial or non-judicial
        sanction has been lifted or released to the satisfaction of Agent and (ii)
        in
        respect of Pledged Notes Receivable from the sale of Intervals at any Resort
        if:
        (x) the stay, order, cease and desist order, injunction, temporary restraining
        order or similar judicial or non-judicial sanction in question has not been
        lifted or released to the satisfaction of Agent within sixty (60) days of
        its
        issuance and (y) there is a reduction in the total number of sales of Intervals
        by Borrower in any Loan Year of more than twenty percent (20%) from the total
        number of sales of Intervals in the immediately preceding Loan
        Year.

       

      (b)            Change
        in Control.  If there shall occur a change, singly or in
        the aggregate, of more than fifty percent (50%) of the executive management
        of
        Borrower as described in Schedule 2.6 hereto, Agent shall have no
        obligation to make any Advances hereunder, unless within thirty (30) days
        prior
        thereto Borrower provides Agent with written information setting forth the
        replacement executive management personnel of Borrower together with a
        description of those Persons’ experience, ability and reputation, and Agent,
        acting in good faith, determines that the replacement management personnel’s
        experience, ability and reputation is equal to or greater than that of
        Borrower’s executive management as set forth on Schedule
        2.6.  Agent shall have no obligation to make any Advances
        hereunder if more than two (2) of the five (5) Board of Directors’ positions are
        controlled by the Borrower’s bond holders.

       

      (c)            Change
        in Underwriting Standards.  No Lender shall be obligated
        to fund any Advance hereunder if there shall occur a change in the underwriting
        standards, or the adherence thereto in the sole discretion of the Agent,
        of
        Borrower with respect to the qualification or eligibility of Purchaser’s which
        in the Permitted Discretion of Agent causes or would most likely result in
        a
        Material Adverse Change in the Borrower’s business or if there shall occur a
        change in the business of Borrower, which in the Permitted Discretion of
        Agent
        causes or would most likely result in a Material Adverse Change in the
        Borrower’s business.

       

      (d)            Default
        or Event of Default.  No Lender shall be obligated to
        fund any Advance hereunder if a Default or Event of Default shall have occurred
        and be continuing.

       

      2.7           Pro
        Rata Treatment.  Each repayment of principal and interest
        shall be allocated among Lenders in accordance with their respective Pro
        Rata
        Payment Percentage.  Each Lender agrees that in computing such
        Lender’s portion of any Advance to be made hereunder, Agent may, in its
        discretion, round each Lender’s such Advance to the next higher or lower whole
        dollar amount.  If any Lender shall, through the exercise of a right
        of banker’s lien, set-off, counterclaim or otherwise, obtain payment with
        respect to its Loans which results in its receiving more than its Pro Rata
        Payment Percentage of any payments described above, then (A) such Lender
        shall
        be deemed to have simultaneously purchased from each of the other Lenders
        a
        share in such other Lender’s Loans so that the amount of the Loans of all
        Lenders shall be pro rata as otherwise set forth above, (B) such Lender shall
        immediately pay to the other Lenders their Pro Rata Payment Percentage of
        the
        payments otherwise received as consideration for such purchase and (C) such
        other adjustments shall be made from time to time as shall be equitable to
        insure that all Lenders share such payments ratably.  If all or any
        portion of any such excess payment is thereafter recovered from Lender which
        received the same, the purchase provided in this Section 2.7 shall be
        deemed to have been rescinded to the extent of such recovery, without
        interest.  Borrower expressly consents to the foregoing arrangements
        and agrees that each Lender so purchasing a portion of another Lender’s loans
        may exercise all rights of payment (including all rights of set-off, banker’s
        lien or counterclaim) with respect to such portion as fully as if such Lender
        were the direct holder of such portion.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      Section
        3-Collateral

       

      3.1           Grant
        of Security Interest.  To secure the payment and
        performance of the Obligations, for value received, Borrower unconditionally
        and
        irrevocably assigns, pledges and grants to Agent, as Agent for each
        Lender:

       

      (a)           a
        first priority security interest in the Eligible Notes Receivable pledged
        to
        Agent on behalf of Lenders as provided herein, the Mortgages with respect
        thereto and that portion of the other Collateral related thereto;

       

      (b)           a
        security interest in all books, records, reports, computer tapes, disks and
        software relating to the Collateral and all extensions, additions, improvements,
        betterments, renewals, substitutions and replacements of, for or to any of
        the
        Collateral, wherever located, together with the products, proceeds, issues,
        rents and profits thereof, and any replacements, additions or accessions
        thereto
        or substitutions thereof.

       

      For
        convenience of administration, Agent is acting as agent for Lenders under
        the
        Agreement.  Agent, as such agent, may execute any of its duties
        hereunder by or through its agents, officers or employees and shall be entitled
        to rely upon the advice of counsel as to its duties.  Agent, as such
        agent, shall not be liable to any Lender for any action taken or omitted
        to be
        taken by it in good faith and shall neither be responsible to Lenders for
        the
        consequences of any oversight or error of judgment nor be answerable to Lenders
        for any loss unless the same shall happen through Agent’s gross negligence or
        willful misconduct.  To the extent that Agent, as such agent, shall
        not be reimbursed by Borrower for any costs, liabilities or expenses incurred
        in
        such capacity, Lenders shall reimburse Agent therefor pro rata in accordance
        with their respective Pro Rata Percentages (including Agent as a Lender for
        this
        purpose).  Each Lender agrees that Agent shall be entitled to take and
        shall only be required to take, any action which it is permitted to take
        under
        this Agreement.

       

      3.2           Financing
        Statements; Priority of Liens.  Borrower agrees, at its
        own expense, to authorize the filing of financing statements, continuation
        statements and amendments provided for by the Code and to execute and deliver
        any and all other instruments or documents and take such other action as
        may be
        required to perfect and to continue the perfection of Agent’s security interest
        in the Collateral. Borrower hereby authorizes Agent to execute and/or file
        on
        Borrower’s behalf any such financing statements, continuation statements and
        amendments.  Each Lender shall have an equal security interest in the
        Collateral based upon its Pro Rata Percentage and no Lender’s security interest
        in the Collateral shall have priority over any other Lender’s security interest
        in the Collateral.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      3.3           Insurance.  Insurance
        coverage with respect to the Resort(s) is provided by the Silverleaf
        Club.  Borrower shall furnish Agent, upon request, with satisfactory
        evidence that the Units, Buildings and Resorts are adequately
        insured.  Such insurance coverage shall insure against such risks, be
        in such amounts, with such companies and on such other terms as Agent may
        reasonably require.  Each such policy shall name Agent as an
        additional insured and loss payee as agent for Lenders, as their respective
        interests may appear.

       

      3.4           Protection
        of Collateral; Reimbursement.  The portion of the
        Collateral consisting of: (i) the original Pledged Notes Receivable,
        (ii) the original Mortgages, (iii) the original purchase contracts
        (including addendum) related to such Pledged Notes Receivable and Mortgages,
        (iv) originals or true copies of the related truth-in-lending disclosure,
        loan application, warranty deed, and if required by Agent, the related
        Purchaser’s acknowledgement receipt and the Exchange Company application and
        disclosures and (v) such other items as Agent may determine from time to
        time in
        its Permitted Discretion, shall be delivered at Borrower’s expense to the
        Custodian, and held in Custodian’s possession and control pursuant to the
        Custodial Agreement.  All fees and costs arising under the Custodial
        Agreement shall be borne and paid by Borrower; and if Borrower fails to promptly
        pay any portion thereof when due, Agent may, at its option, but shall not
        be
        required to, pay the same and charge Borrower’s account therefor, and Borrower
        agrees promptly to reimburse Agent therefor with interest accruing thereon
        daily
        at the Default Rate.  All sums so paid or incurred by Agent for any of
        the foregoing and any and all other sums for which Borrower may become liable
        hereunder and all costs and expenses (including attorneys’ and paralegals’ fees,
        legal expenses and court costs) which Agent may incur in enforcing or protecting
        its Lien on, or rights and interest in, the Collateral or any of its rights
        or
        remedies under this Agreement or any other Loan Document or with respect
        to any
        of the transactions hereunder or thereunder, until paid by Borrower to Agent
        with interest at the Default Rate, shall be included among the Obligations,
        and,
        as such, shall be secured by all of the Collateral.  Agent shall not
        be liable or responsible in any way for the safekeeping of any of the Collateral
        or for any loss or damage thereto or for any diminution in the value thereof,
        or
        for any act or default of the Custodian, Lockbox Agent, or Servicing Agent
        or
        any warehouseman, carrier, forwarding agency, or other Person
        whomsoever.

       

      3.5           Additional
        Eligible Resorts.  From time to time during the Term,
        Borrower may propose to Agent that one or more additional time-share plans
        and
        projects owned and operated by Borrower be included among the Eligible Resorts
        in respect of which Advances may be made.  Any such proposal will be
        in writing, and will be accompanied or supported by the due diligence and
        supporting Borrower, Affiliate, project, financial and related information
        identified in Section 4.4 hereof, and such other information as
        Agent may require.  Borrower will reasonably cooperate with Agent’s
        underwriting and due diligence, and Borrower will be responsible for payment
        upon billing for Agent’s and each Lender’s out-of-pocket expenses in connection
        therewith.  Subject to Agent’s satisfactory underwriting and due
        diligence review, including satisfaction of the conditions in Sections
        4.4 and 5 hereof as they relate to such additional time-share
        resorts, Agent may, but shall not be required to, approve one or more such
        additional time-share resorts, including future phases or condominiums in
        an
        Existing Eligible Resort, as an Eligible Resort qualifying for Advances under
        and subject to the terms of this Agreement and the other Loan
        Documents.

       

      Subject
        in each instance to Agent’s underwriting and due diligence review, and Agent’s
        prior written approval, any project as may be approved by Agent and Lenders
        after the Closing Date, if any, is hereinafter referred to as an “Additional
        Eligible Resort”.  Any Advances hereunder with respect to any
        Additional Eligible Resort will be subject to all terms and conditions of
        this
        Agreement and the other Loan Documents.

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      3.6           Modification
        of Eligible Notes Receivable.  Notwithstanding anything
        herein to the contrary, Borrower shall have the right to modify the interest
        rate and term only of the Eligible Notes Receivable without Agent’s prior
        consent, provided that: (i) any such change in the rate of interest on any
        one
        or more Eligible Notes Receivable shall not reduce the average interest rate
        on
        all Eligible Notes Receivable to less than ten percent (10%) per annum at
        any
        time (excluding Eligible Notes Receivable with a lower interest rate pursuant
        to
        the SCRA); (ii) the term of no Eligible Notes Receivable shall be increased
        to a
        term longer than one hundred twenty (120) months from the date of the first
        required monthly payment of such Eligible Note Receivable, except that with
        respect to any Eligible Note Receivable in respect of which one or more monthly
        payments have been deferred, the term of such Eligible Note Receivable may
        be
        extended one month for each such deferred payment provided, however, that
        in no
        event shall the term of such Eligible Note Receivable be increased to a term
        longer than one hundred twenty eight (128) months from the date of the first
        required monthly payment of such Eligible Note Receivable; (iii) no Eligible
        Note Receivable is so modified more than once in any twelve (12) month period
        or
        more than twice during the term of such Eligible Note Receivable, and (iv)
        at no
        time may Borrower so modify the terms of Eligible Notes Receivable constituting
        more than ten percent (10%) of the outstanding principal balance of all Eligible
        Notes Receivable at any time.

       

      3.7           Assumption
        of Obligations under Eligible Notes
        Receivable.  Notwithstanding anything herein to the
        contrary, upon the sale by a Purchaser of an Interval, the new Purchaser
        of the
        Interval may be substituted as obligor under the Eligible Note Receivable
        in
        question, provided that: (i) said new Purchaser assumes in writing all of
        the
        obligations of the original obligor under the Eligible Note Receivable in
        question; (ii) the Eligible Note Receivable continues to meet all of the
        criteria for an Eligible Note Receivable as set forth herein and (iii) the
        new
        Purchaser has made a cash down payment equal to at least 10% of the original
        sales price of the Interval in question, which down payment shall be in addition
        to the cash down payment made by the original obligor.

       

      3.8           Purchaser/Criteria.  All
        Eligible Notes Receivable pledged as Collateral to Agent subsequent to the
        Closing Date will be underwritten in a manner consistent with the Borrower’s
        general underwriting guidelines and criteria as set forth on
Schedule 1.1(b) hereof.  Borrower shall not materially
        alter its general underwriting criteria without the prior written approval
        of
        Agent, which approval Agent may withhold in its sole discretion.  On a
        semi-annual basis, Borrower shall provide Agent with written certification
        that
        the underwriting criteria as approved by Agent remain in full force and effect
        and have not been revised or altered without Agent’s consent.

       

      Section
        4-Conditions Precedent To The Closing

       

      4.1           Conditions
        Precedent.  The obligation of Agent and Lenders under
        this Agreement and the obligation to fund any Advance, including the initial
        Advance, hereunder shall be subject to the satisfaction of each of the following
        conditions precedent, in addition to all of the conditions precedent set
        forth
        elsewhere in the Loan Documents:

       

      (a)            Representations,
        Warranties, Covenants and Agreements.  The
        representations and warranties contained in the Loan Documents are and shall
        be
        true and correct in all respects, and all covenants and agreements have been
        complied with and are correct in all respects, and all covenants and agreements
        to have been complied with and performed by Borrower shall have been fully
        complied with and performed to the satisfaction of Agent.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)           No
        Prohibited Acts.  Borrower shall not have taken any
        action or permitted any condition to exist which would have been prohibited
        by
        any provision of this Agreement or the Loan Documents.

       

      (c)            No
        Changes.  That all information and documents heretofore
        delivered by Borrower to Agent with respect to Borrower or the Resorts remain
        true and correct in all respects.

       

      (d)            Approval
        of Documents Prior to Closing Date.  Borrower has
        delivered to Agent (with copies to Agent’s counsel), and Agent has reviewed and
        approved the form and content of all of the items specified in
Subsection 4.1(d)(i) through 4.1(d)(v) hereof
        (the “Submissions”).  Agent shall have the right to review and approve
        any changes to the form of any of the Submissions.  If Agent
        disapproves of any changes to any of the Submissions, Agent shall have the
        right
        to require Borrower either to cure or correct the defect objected to by Agent
        or
        to elect not to fund the Loan or any Advance.  Under no circumstances
        shall Agent’s failure to approve or disapprove a change to any of the
        Submissions be deemed to be an approval of such Submissions.  All of
        the Submissions were and shall be prepared at Borrower’s sole cost and expense,
        unless expressly stated to be an obligation and expense of Agent. Agent shall
        have the right of prior approval of any Person responsible for preparing
        a
        Submission (“Preparer”) and may disapprove any Preparer in its sole discretion,
        for any reason, including without limitation, that Agent believes that the
        experience, skill, reputation or other aspect of the Preparer is unsatisfactory
        in any respect.  All Submissions required pursuant to this Agreement
        shall be addressed to Agent and include the following language: “THE UNDERSIGNED
        ACKNOWLEDGES THAT LIBERTY BANK, AS AGENT FOR EACH LENDER IS RELYING ON THE
        WITHIN INFORMATION IN CONNECTION WITH ITS DETERMINATION TO MAKE A LOAN TO
        SILVERLEAF RESORTS, INC. IN CONNECTION WITH THE SUBJECT
        COLLATERAL.”

       

      (i)            A
        certificate to be dated as of the Closing Date and signed by the president,
        vice
        president, or secretary of Borrower, certifying that the conditions specified
        in
Sections 4.1(a), 4.1(b) and 4.1(c) hereof are
        true;

       

      (ii)           Copies
        of the articles of incorporation and any amendments thereto of Borrower not
        previously delivered to Agent, certified to be true and complete by Borrower
        and
        the Secretary of State of the State of Texas and a current certificate of
        good
        standing for Borrower, and copies of any by-laws of Borrower and any amendments
        thereto not previously delivered to Agent, certified to be true, correct
        and
        complete by the secretary or assistant secretary of Borrower;

       

      (iii)          A
        certificate of the Secretary of Borrower certifying the adoption by the Board
        of
        Directors of Borrower of a resolution authorizing Borrower to enter into
        and
        execute this Agreement, the Note, and the other Loan Documents, to borrow
        the
        Loan from the Lenders, and to grant to Agent for the benefit of the Lenders
        a
        first priority security interest in and to the Collateral;

       

      (iv)          A
        certificate of the secretary or assistant secretary of Borrower certifying
        the
        incumbency, and verifying the authenticity of the signatures, of the specified
        officers of Borrower authorized to sign the Agreement, the Note and the other
        Loan Documents; and

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (v)           Copies
        or other evidence of all loans to Borrower from any officers, shareholders,
        or
        Affiliates of Borrower not previously delivered to Agent.

       

      (e)           Execution
        and Delivery of Loan Documents.  Borrower shall have
        delivered to Agent, on or before the Closing Date, the following Loan Documents,
        each of which when required, shall be in recordable form:

       

      (i)           
        This Agreement;

       

      (ii)           Closing
        Opinions for Borrower;

       

      (iii)          Note;

       

      (iv)          Environmental
        Indemnification Agreement;

       

      (v)           Intercreditor
        Agreement.  Borrower, Agent, TFC, CSF and WFF shall have
        executed and delivered to Agent, on or before the Closing Date, a modification
        of the in-force intercreditor agreement for the purpose of adding Agent as
        a
        party thereto;

       

      (vi)          Pro
        Forma Title Insurance Policies For Each Resort.  Borrower
        shall have provided Agent with a pro forma title insurance policy for each
        Resort which shall be the form which will be issued to and obtained by Borrower
        in connection with the pledge to Lender of an Eligible Note Receivable, subject
        however to the provisions of Section 5.1(f); (it is acknowledged that the
        condition in this subsection may not be satisfied by the Closing Date but
        satisfaction shall be a condition of funding); and

       

      (vii)         Other
        Items.  Such other agreements, documents, instruments,
        certificates and materials as Agent may request to evidence the Obligations;
        to
        evidence and perfect the rights and Liens and security interests of Agent
        as
        agent for Lenders contemplated by the Loan Documents, and to effectuate the
        transactions contemplated herein.

       

      (f)            Closing  Date
        Conditions.  On or before the Closing Date, the following
        conditions shall be satisfied:

       

      (i)           
        UCC Search.  Agent shall have obtained, at
        Borrower’s cost, such searches of the applicable public records as it deems
        necessary under Texas, and other applicable law to verify that it will have
        a
        first and prior perfected Lien and security interest covering all of the
        Collateral.  Agent shall not be obligated to fund any Advance if Agent
        determines that Lenders do not have a first and prior perfected lien and
        security interest covering any portion of the Collateral, except as expressly
        provided herein.

       

      (ii)           Litigation
        Search.  Agent shall have obtained, at Borrower’s cost,
        an independent search to verify that there are no bankruptcy, foreclosure
        actions or other material litigation or judgments pending or outstanding
        against
        the Resorts, any portion of the Collateral, Borrower, or any Affiliates of
        Borrower (each a “Material Party”).  The term “other material
        litigation” as used herein shall not include matters in which (i) a
        Material Party is plaintiff and no counterclaim is pending or (ii) which
        Agent determines in its sole discretion exercised in good faith, are immaterial
        due to settlement, insurance coverage, frivolity, or amount or nature of
        claim.  Lenders shall not be obligated to fund any Advance if Agent
        determines that any such litigation is pending.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (iii)      Insurance.  Evidence
        that Borrower is maintaining all policies of insurance required by and in
        accordance with Section 7.1(d) hereof, including copies of
        the most current paid insurance premium invoices;

       

      (iv)     Governmental
        Permits.  To the extent not previously delivered to
        Agent, copies of all applicable government permits, approvals, consents,
        licenses and certificates with respect to the use and operation of the
        Resorts;

       

      (g)            Taxes.  Evidence
        satisfactory to Agent that all taxes and assessments owed by or for which
        Borrower is responsible for collection have been paid with respect to the
        Resorts and the Collateral, including but not limited to sales taxes, room
        occupancy taxes, payroll taxes, personal property taxes, excise taxes,
        intangible taxes, real property taxes and any assessments related to the
        resorts
        or the Collateral.  Copies of the most current tax bills for the
        Resorts shall be provided to Agent.

       

      4.2           Origination
        Fee; Expenses.  Borrower shall have paid to Agent an
        origination fee of $375,000 (the “Origination Fee”) together with all Lender
        Expenses required to be paid pursuant to this Agreement.  Lenders
        shall have no obligation to fund the Loan or make the initial Advance or
        any
        subsequent Advance unless the amount of the Loan together with any moneys
        paid
        by Borrower is sufficient to satisfy all fees and expenses required to be
        paid
        pursuant to this Agreement.

       

      4.3           Proceedings
        Satisfactory.  Borrower shall execute all of the Loan
        Documents approved by Agent on the Closing Date, and all actions taken in
        connection with the execution or delivery of the Loan Documents, and all
        documents and papers relating thereto, shall be satisfactory to Agent and
        its
        counsel.  Agent and its counsel shall have received copies of such
        documents and papers as Agent or such counsel may reasonably request in
        connection therewith, all in form and substance satisfactory to Agent and
        its
        counsel.

       

      4.4           Conditions
        Precedent to Funding of Advances with Respect to Additional Eligible
        Resorts.  As provided in Section 3.5
        hereof, Borrower may propose to Agent that Agent approve one or more additional
        timeshare plans for inclusion hereunder as an Additional Eligible Resort
        in
        respect of which Advances may be made.  The obligation of Lenders to
        fund any Advances with respect to an Additional Eligible Resort shall be
        subject
        to the satisfaction of each of the following conditions precedent, in addition
        to all of the conditions precedent set forth elsewhere in the Loan
        Documents:

       

      (a)            Representations,
        Warranties, Covenants and Agreements.  The
        representations and warranties contained in the Loan Documents are and shall
        be
        true and correct in all respects, and all covenants and agreements have been
        complied with and shall be correct in all respects, and all covenants and
        agreements to have been complied with and performed by Borrower shall have
        been
        fully complied with and performed to the satisfaction of Agent.

       

      (b)            No
        Prohibited Acts or Changes.  Borrower shall not have
        taken any action or permitted any condition to exist which would have been
        prohibited by any provision of the Loan Documents and all information and
        documents heretofore delivered by Borrower to Agent with respect to Borrower
        or
        the Resorts remain true and correct in all respects.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (c)            Approval
        of Documents Prior to Advance.  Borrower has delivered or
        caused to be delivered to Agent (with copies to Agent’s counsel), at least
        fifteen (15) Business Days prior to the date of such Advance, and Agent has
        reviewed and approved, at least five (5) Business Days prior to such date,
        the
        form and content of all of the items specified in each of the Submissions
        required pursuant to this Section 4.4.  Agent shall have
        the right to review and approve any changes to the form of any of the
        Submissions.  If Agent disapproves of any changes to any of the
        Submissions, Agent shall have the right to require Borrower either to cure
        or
        correct the defect objected to by Agent or to elect not to fund the Loan
        or any
        Advance.  Under no circumstances shall Agent’s failure to approve or
        disapprove a change to any of the Submissions be deemed to be an approval
        of
        such Submissions.  All of the Submissions were and shall be prepared
        at Borrower’s sole cost and expense, unless expressly stated to be an obligation
        and expense of Agent.  Agent shall have the right of prior approval of
        any Preparer and may disapprove any Preparer in its sole discretion, for
        any
        reason, including without limitation, that Agent believes that the experience,
        skill, reputation or other aspect of the Preparer is unsatisfactory in any
        respect.  All Submissions required pursuant to this Agreement shall be
        addressed to Agent and include the following language: “THE UNDERSIGNED
        ACKNOWLEDGES THAT LIBERTY BANK, AS AGENT FOR EACH LENDER IS RELYING ON THE
        WITHIN INFORMATION IN CONNECTION WITH ITS DETERMINATION TO MAKE A LOAN TO
        SILVERLEAF RESORTS, INC. IN CONNECTION WITH THE SUBJECT
        COLLATERAL.”

       

      (i)           a
        certificate in the form attached as Exhibit C, to be dated as of the date
        of each such Advance and signed by the president, vice president, or secretary
        of Borrower, certifying that the conditions specified in
Sections 4.4(a) and 4.4(b) hereof are true;

       

      (ii)           copies
        of the articles of incorporation of Borrower, together with any amendments
        thereto certified to be true and complete by Borrower and the Secretary of
        State
        of the State of Texas, a current certificate of good standing for Borrower
        issued by the Secretary of State of the State of Texas, a current certificate
        of
        authority to conduct business issued by the secretary of state in each state
        in
        which the Borrower conducts business, and copies of the by-laws of Borrower
        certified to be true, correct and complete by the secretary or assistant
        secretary of Borrower;

       

      (iii)          a
        Survey for each Additional Eligible Resort for which Eligible Notes Receivable
        are being pledged to Agent in connection with the Advance in
        question;

       

      (iv)          a
        certificate of the secretary or assistant secretary of Borrower certifying
        the
        adoption by the board of directors thereof, respectively, of a resolution
        authorizing the addition of the Resort in question as an Additional Eligible
        Resort and to authorize Borrower to enter into, execute and deliver any
        Documents in connection therewith;

       

      (v)           a
        certificate of the secretary or assistant secretary of Borrower certifying
        the
        incumbency, and verifying the authenticity of the signatures, of the specified
        officers of Borrower authorized to sign all documents required in connection
        with such Additional Eligible Resort as required pursuant to this Section
4.4;

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (vi)           an
        inspection report or reports covering each Additional Eligible Resort for
        which
        Eligible Notes Receivable are being pledged to Agent in connection with the
        Advance in question, including without limitation all real property and personal
        property subject to the Declaration and all adjacent property,
        confirming:

       

      (1)           the
        absence of Hazardous Materials on the personal property and real property
        comprising each such Additional Eligible Resort;

       

      (2)           that
        the inspection firm has obtained, reviewed and included within its report
        a
        CERCLIS printout from the Environmental Protection Agency (the “EPA”),
        statements from the EPA and other applicable state and local authorities
        and a
        Phase I Environmental Audit, all of which information shall confirm that
        there
        are no known or suspected Hazardous Materials located at, used or stored
        on, or
        transported to or from each such Additional Eligible Resort or in such proximity
        thereto as to create a material risk of contamination of each such Additional
        Eligible Resort;

       

      (vii)         evidence
        that Borrower is maintaining all policies of insurance required by and in
        accordance with Section 7.1(d) hereof, including copies of
        the most current paid insurance premium invoices;

       

      (viii)        evidence
        that Borrower and the Timeshare Documents for each Additional Eligible Resort
        for which Eligible Notes Receivable are being pledged to Agent as agent for
        Lenders in connection with the Advance in question are in compliance with
        all
        Applicable Laws in connection with its sales of Intervals, including without
        limitation, the Timeshare Acts;

       

      (ix)           a
        current preliminary title report or certificate of title for each Additional
        Eligible Resort for which Eligible Notes Receivable are being pledged to
        Agent
        in connection with the Advance in question, with copies of all title
        exceptions;

       

      (x)           copies
        of all applicable governmental permits, approvals, consents, licenses, and
        certificates for the establishment of each Additional Eligible Resort for
        which
        Eligible Notes Receivable are being pledged to in connection with the Advance
        in
        question as timeshare projects in accordance with the applicable Timeshare
        Act,
        and for the occupancy and intended use and operation of each such Additional
        Eligible Resort, including the Units, including a letter certification from
        Borrower regarding zoning classification and compliance, letters or other
        satisfactory evidence from utility companies, governmental entities or other
        persons confirming that water, sewer (sanitary and storm), electricity, solid
        waste disposal, telephone, police, fire and rescue services are being provided
        to each Resort, and any business licenses necessary for operation of each
        such
        Additional Eligible Resort;

       

      (xi)           certified
        true, correct and complete copies of all of the Timeshare Documents for each
        Additional Eligible Resort for which Eligible Notes Receivable are being
        pledged
        to Agent as agent for Lenders in connection with the Advance in
        question;

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (xii)          evidence
        satisfactory to Agent that all taxes and assessments owed by or for which
        Borrower is responsible for collection have been paid, including but not
        limited
        to sales taxes, room occupancy taxes, payroll taxes, personal property taxes,
        excise taxes, intangibles taxes, real property taxes, and income taxes, and
        any
        assessments related to each Additional Eligible Resort for which Eligible
        Notes
        Receivable are being pledged to Agent as agent for Lenders in connection
        with
        the Advance in question and copies of the most current paid tax bills for
        each
        such Additional Eligible Resort evidencing that each such Additional Eligible
        Resort have been segregated from all other property on the applicable municipal
        taxrolls;

       

      (xiii)         written
        confirmation from an architect covering each Additional Eligible Resort,
        for
        which Eligible Notes Receivable are being pledged to Agent as agent for Lenders
        in connection with the Advance in question as to the physical condition of
        the
        improvements at each such Additional Eligible Resort, including that soil
        conditions are sufficient to support all existing and any contemplated
        improvements to the real property; which written confirmation shall be in
        form
        and substance reasonably acceptable to Agent;

       

      (xiv)         such
        credit references on Borrower as Agent deems necessary in its sole
        discretion;

       

      (xv)          copies
        or other evidence of all loans to Borrower from any officers, shareholders,
        or
        Affiliates of Borrower, if any;

       

      (xvi)         a
        commitment to issue Mortgagee Title Policies from Title Company for each
        such
        Additional Eligible Resort.  Notwithstanding anything heretofore to
        the contrary, if any claim, lien, encumbrance, charge or other matter arises
        with respect to any Interval or Intervals for which an Eligible Note Receivable
        has been pledged to Agent as agent for Lenders pursuant to this Agreement,
        then,
        in such event:

       

      
        	
                 

              	
                a.

              	
                The
                  Note Receivable with respect to the Interval in question shall
                  cease to be
                  an Eligible Note Receivable and Borrower immediately shall either
                  replace
                  the Note Receivable in question or make a Mandatory Prepayment,
                  if
                  necessary, as provided in Section 2.4(b) hereof;
                  and

              

      

       

      
        	
                 

              	
                b.

              	
                The
                  Resort at which the Interval in question is located shall cease
                  to be an
                  Additional Eligible Resort, unless and until Borrower shall cure
                  any such
                  claim, lien, encumbrance, charge or other matter to the satisfaction
                  of
                  Agent.  Furthermore, any and all further requests for Advances
                  in respect of such Resort must be accompanied by satisfactory Mortgagee
                  Title Policies for all Intervals with respect to which such Advances
                  are
                  requested.

              

      

       

      (d)            Financial
        Statements To Be Delivered Prior to Advance.  A current
        set of the Financial Statements;

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (e)            Additional
        Documents To Be Delivered Prior to Advance.To the extent not
        previously delivered hereunder, Borrower will execute, or cause to be executed
        with respect to each Additional Eligible Resort, an Assignment of Notes
        Receivable and Mortgages, Borrower’s Affidavit with Respect to the Additional
        Eligible Resorts and an Environmental Indemnification Agreement; and with
        respect to any improvements, including any Units, constructed at a Resort
        within
        the twenty-four month period prior to any Advance with respect to an Additional
        Eligible Resort, Borrower shall also deliver to Agent, for its approval,
        such
        documents and instruments as Agent may reasonably request in connection with
        such newly constructed improvements, including, without limitation, copies
        of
        building permits, plans and specifications, construction and architectural
        contracts, title insurance insuring over, among other things, mechanics liens,
        certificates of occupancy and satisfactory evidence of the completion of
        such
        improvements and such other documents, instruments, agreements, tests, reports
        and inspections as Agent may require with respect to Borrower or any applicable
        Affiliate, the Loan or any Resort, including any Additional Eligible Resort;
        and
        upon request of Agent, Borrower shall deliver evidence, satisfactory to Agent,
        that there is no material litigation, written complaint, suit, action, written
        claim or written charge pending against Borrower or any Affiliate with any
        court
        or with any governmental authority with respect to the Resorts, the Timeshare
        Documents, any Eligible Notes Receivable, any Interval, or any marketing,
        offer
        or sale of any Interval.

       

      (f)             Physical
        Inspection.  Agent shall be satisfied with its physical
        inspection of the Additional Eligible Resorts.

       

      (g)            UCC
        Search.  Agent shall have obtained, at Borrower’s cost,
        such searches of the applicable public records as it deems necessary under
        all
        applicable law to verify that it has a first and prior perfected Lien and
        security interest covering all of the Collateral.  Agent shall not be
        obligated to fund any Advance if Agent determines that Lenders do not have
        a
        first and prior perfected lien and security interest covering any portion
        of the
        Collateral, except as expressly provided herein.

       

      (h)            Litigation
        Search.  Agent shall have obtained, at Borrower’s cost,
        an independent search to verify that there are no bankruptcy, foreclosure
        actions or other material litigation or judgments pending or outstanding
        against
        the Additional Eligible Resorts, any portion of the Collateral, Borrower,
        or any
        Affiliate, (each a “Material Party”).  The term “other material
        litigation” as used herein shall not include matters in which (i) a Material
        Party is plaintiff and no counterclaim is pending or (ii) which Agent
        determines, in its sole discretion, exercised in good faith, are immaterial
        due
        to settlement, insurance coverage, frivolity, or amount or nature of
        claim.  Agent shall not be obligated to fund any Advance if it
        determines that any such litigation is pending.

       

      (i)             Opinions
        of Borrower’s Counsel.  Borrower shall deliver to Agent
        for the benefit of Agent and each Lender, at Borrower’s sole cost and expense,
        such opinions of counsel, including counsel admitted in each state in which
        each
        Additional Eligible Resort is located, as to such matters with respect to
        Borrower and each Additional Eligible Resort as Agent may request, and in
        form
        and substance acceptable to Agent in its sole discretion.

       

      (j)             Funding
        Procedure.  Borrower shall have complied to Agent’s
        satisfaction with each of the conditions precedent to funding of an Advance
        set
        forth in Section 5 hereof.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (k)            Management
        of Resort.  Borrower shall provide evidence satisfactory
        to Agent that Borrower, or an Affiliate, is the manager or operator of each
        Resort, pursuant to a written management or operating agreement, in form
        and
        substance satisfactory to Agent, which with respect to all Resorts shall
        have a
        term of at least three years.

       

      (l)             Other
        Items.  Such other agreements, documents, instruments,
        certificates and materials as Agent may request to determine the acceptability
        of any such Additional Eligible Resort, to evidence the Obligations, to evidence
        and perfect the rights and Liens and security interests of Agent contemplated
        by
        the Loan Documents, and to effectuate the transactions contemplated herein,
        including, without limitation, true copies of all Resort Documents for each
        such
        Additional Eligible Resort, all Timeshare Documents and operating and management
        contracts and agreements, evidence of compliance with the applicable Timeshare
        Act and other Applicable Laws, evidence of all required governmental licenses
        and permits; title searches; title commitments or policies, including complete
        and legible copies of each title exception, engineering, environmental and
        soil
        reports and evidence of compliance with all applicable zoning and building
        codes; each of which shall be satisfactory to Agent in its Permitted
        Discretion.

       

       

      Section
        5-Funding Procedure

       

      5.1           The
        obligation of any Lender to make any Advance shall be subject to the
        satisfaction of all of the following conditions precedent:

       

      (a)           Requests
        for Advances.  Each request for an Advance
        shall:

       

      (i)            
        be in writing in form attached hereto as Exhibit D, certify the amount of
        the then-current Borrowing Base and specify the principal amount of the Advance
        requested and designate the account to which the proceeds of such Advance
        are to
        be transferred;

       

      (ii)           
        state that the representations and warranties of Borrower contained in the
        Agreement and any closing or funding related certifications are true and
        correct
        as of the date of the request and, after giving effect to the making of such
        requested Advance, will be true and correct as of the date on which the
        requested Advance is to be made;

       

      (iii)           state
        that no Default or Event of Default exists as of the date of the request
        and,
        after giving effect to the making of such requested Advance, no Default or
        Event
        of Default would exist as of the date on which the requested Advance is to
        be
        made;

       

      (iv)          be
        delivered to the office of Agent at least five (5) Business Days prior to
        the
        date of the requested Advance;

       

      (v)           be
        signed by a principal financial officer of Borrower;

       

      (vi)           certify
        that Borrower has no knowledge of any asserted or threatened defense, offset,
        counterclaim, discount or allowance in respect of each Note Receivable to
        be
        pledged in connection with such requested Advance, or in respect of any of
        the
        Pledged Notes Receivable;

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (vii)          contain
        an aging report of the Pledged Notes Receivable; identifying, among other
        things, which among them are Eligible Notes Receivable; and

       

      (viii)         contain
        a delinquency report which shall be in form and substance satisfactory to
        Agent
        and shall show which of such Notes Receivable is delinquent and the duration
        of
        such delinquency, and which of such Pledged Notes Receivable is not an Eligible
        Note Receivable;

       

      (b)           Loan
        Documents/Collateral.  Not less than five (5) Business
        Days prior to the date of any Advance, Borrower shall have:

       

      (i)           
        delivered to Agent a list of all Eligible Notes Receivable and related Mortgages
        which are to be the subject of such requested Advance, indicating the unpaid
        principal balance owing on each of the Pledged Notes Receivable deemed to
        be an
        Eligible Note Receivable, together with such additional information as Agent
        may
        require;

       

      (ii)           delivered
        to Agent (or, if Agent shall so instruct, a designee appointed by Agent in
        writing) (A) the original of each Pledged Note Receivable (duly endorsed
        with the words “Pay to the order of Liberty Bank, as Agent, with recourse”),
        (B) the original of each Mortgage securing such Pledged Notes Receivable,
        (C) the original of each purchase contract (including addenda) relating to
        the Pledged Notes Receivable and Mortgages, (D) originals or true copies of
        the related truth-in-lending disclosures, loan application, warranty deed,
        Payment Authorization Agreement and, if required by Agent, the related
        Purchaser’s acknowledgement, receipt and exchange company application,
        disclosures and materials, and (E) with respect to each Eligible Note Receivable
        from the sale of Intervals at Oak N’  Spruce evidence satisfactory to
        Agent of the filing in the appropriate recorder’s office of the original UCC-1
        Financing Statement, naming the Purchaser of the Interval giving rise to
        the
        Eligible Note Receivable as debtor and Borrower as secured party (the “Purchaser
        Financing Statement”), perfecting Borrower’s security interest in the applicable
        Interval to secure the Purchaser’s obligations under the Eligible Note
        Receivable and naming Borrower as assignor and Agent as assignee, assigning
        to
        Agent, all of Borrower’s right, title and interest under each Purchaser
        Financing Statement.

       

      (iii)           delivered
        to Agent a duly executed Assignment of Notes Receivable and Mortgages assigning
        to Agent all of Borrower’s right, title and interest in and to each such Pledged
        Note Receivable and the related Mortgage; and

       

      (iv)           subject
        to Section 4.4(c)(xvi) hereof and the partial waiver set
        forth in Section 5.1(f) hereof, delivered to Agent, with respect to
        each Encumbered Interval, a commitment for a Mortgagee’s Title Policy showing
        that the Mortgage in respect of such Interval has been assigned to Agent
        and
        insuring in favor of Agent the first priority Lien of such Mortgage in the
        amount of the Advance to be made in respect of such Pledged Note Receivable,
        with a satisfactory title insurance policy to be issued within forty five
        (45)
        days from the date of the Advance.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        Mortgages and the assignments thereof to Agent shall each be duly recorded
        in
        the applicable land records.  The Mortgagee’s Title Policies shall be
        in form and substance satisfactory to Agent and shall be issued by a title
        insurance company satisfactory to Agent (the “Title Company”), and name Borrower
        as the insured party therein.  The funding of the requested Advance,
        delivery of the Collateral and issuance of the title insurance policy, and
        recording of the assignments or any releases may, in Agent’s discretion, be
        effected by way of an escrow arrangement with the Title Company or other
        fiduciary, the form and substance of which shall be satisfactory to
        Agent.

       

      (c)           Other
        Conditions.  In addition to the other conditions set
        forth in this Agreement, the making of the initial or any subsequent Advance
        shall be subject to the satisfaction of the following conditions:

       

      (i)          
         no Default or Event of Default shall exist immediately prior to the making
        of such requested Advance or, after giving effect thereto, immediately after
        the
        making of such requested Advance;

       

      (ii)           each
        agreement required to have been executed and delivered in connection with
        any
        prior Advance shall be consistent with the terms of this Agreement and shall
        be
        in full force and effect;

       

      (iii)          the
        date on which such requested Advance is to be made shall be a Business
        Day;

       

      (iv)          Borrower
        shall have delivered to Agent a certification showing the dollar amount of
        the
        requested Advance based on the Eligible Notes Receivable pledged to Agent,
        and
        the Notes Receivable being pledged contemporaneously with each requested
        Advance
        in the form attached hereto as Exhibit D;

       

      (v)           not
        more than one Advance shall have previously been made in the same calendar
        month
        in which such requested Advance is to be made, unless Agent, in its sole
        discretion, agrees to make an additional Advance during such calendar
        month;

       

      (vi)          such
        requested Advance shall be in a principal amount of not less than $50,000,
        unless Agent, in its sole discretion, agrees to make an Advance in an amount
        less than $50,000;

       

      (vii)         Agent
        shall have determined that the requested Advance, when added to the aggregate
        outstanding principal amount of all previous Advances, if any, does not,
        based
        on the Eligible Notes Receivable that have been duly pledged in favor of
        Agent
        exceed the lesser of: (i) total amount of the Borrowing Base, (ii) the
        Availability or (iii) the Commitment;

       

      (viii)        if
        Agent shall so require, Agent shall have received an executed closing protection
        letter issued by the Title Company, which shall be reasonably acceptable
        to
        Agent; and

       

      (ix)          each
        Lender shall have agreed to make and does make an Advance in an amount equal
        to
        its respective Pro Rata Percentage.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (d)           Renewal
        Fees; Unused Line Fee; Expenses.  The Borrower shall have
        paid any Renewal Fee and/or Unused Line Fee then due together with all Lender
        Expenses required to be paid by Borrower pursuant to this Agreement in
        connection with such requested Advance or any conditions related
        thereto.

       

      (e)           Proceedings
        Satisfactory.  All actions taken in connection with such
        requested Advance and all documents and papers relating thereto shall be
        satisfactory to Agent and its counsel.  Agent and its counsel shall
        have received copies of such documents and papers as Agent or such counsel
        may
        reasonably request in connection with such requested Advance, all in form
        and
        substance reasonably satisfactory to Agent and its counsel.

       

      (f)           Partial
        Waiver of Requirement for Title Insurance Policies Upon Satisfactory Maintenance
        of Inventory Control Procedures.  Anything in
Section 5.1(b)(iv) hereof to the contrary notwithstanding,
        the delivery of a commitment for a Mortgagee Title Policy and a Mortgagee
        Title
        Policy shall be required only with respect to twenty-five percent (25%) of
        the
        Eligible Notes Receivable delivered to Agent in respect of each advance,
        subject
        to the following requirements and limitations:

       

      (i)           
        Borrower shall be in full compliance with the Inventory Control Procedures
        (as
        defined in Section 6.23 hereof); and

       

      (ii)           Agent
        shall have the right in its sole discretion to determine those Eligible Notes
        Receivable in respect of which commitments for Mortgagee Title Policies and
        also
        the Mortgagee Title Policies themselves shall be required.

       

      In
        the
        event that Borrower fails to satisfy the requirements of Subsection
5.1(f)(i)or should Agent discover unpermitted Liens or other
        encumbrances on the Mortgagee Title Policies obtained randomly, then,
        immediately upon such event, the partial waiver provided under this Section
        5.1(f) shall no longer be effective and 100% compliance shall be
        required.

       

      Section
        6-General Representations And Warranties

       

      Borrower
        hereby represents and warrants to Agent and each Lender as follows:

       

      6.1           Organization,
        Standing, Qualification.  Borrower: (a) is a duly
        organized and validly existing Texas corporation duly organized, validly
        existing and in good standing under the laws of the State of Texas, and (b)
        has
        all requisite power, corporate or otherwise, to conduct its business and
        to
        execute and deliver, and to perform its obligations under, the Loan
        Documents.

       

      6.2           Authorization,
        Enforceability, Etc.

       

      (a)           The
        execution, delivery and performance by Borrower of the Loan Documents has
        been
        duly authorized by all necessary corporate action by Borrower and does not
        and
        will not: (i) violate any provision of the certificate or articles of
        incorporation of Borrower, bylaws of Borrower, or any agreement, law, rule,
        regulation, order, writ, judgment, injunction, decree, determination or award
        presently in effect to which Borrower is a party or is subject; (ii) result
        in,
        or require the creation or imposition of, any Lien upon or with respect to
        any
        asset of Borrower other than Liens in favor of Agent and Lenders; or (iii)
        result in a breach of, or constitute a default by Borrower under, any indenture,
        loan or credit agreement or any other agreement, document, instrument or
        certificate to which Borrower is a party or by which it or any of its assets
        are
        bound or affected.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)           No
        approval, authorization, order, license, permit, franchise or consent of,
        or
        registration, declaration, qualification or filing with, any governmental
        authority or other Person, including without limitation, the Division or
        the
        Timeshare Owners’ Association is required in connection with the execution,
        delivery and performance by Borrower of any of the Loan Documents.

       

      (c)           The
        Loan Documents constitute legal, valid and binding obligations of Borrower,
        enforceable against Borrower in accordance with their respective
        terms.

       

      (d)           Borrower
        has, or will have, good and marketable title to the Collateral, free and
        clear
        of any lien, security interest, charge or encumbrance except for the security
        interests created by this Agreement or any Loan Document or otherwise created
        in
        favor of Agent or those specifically consented to in writing by Agent or
        permitted hereunder.  No financing statement or other instrument
        similar in effect covering all or any part of the Collateral is on file in
        any
        recording office, except such as may have been filed in favor of Lenders
        hereunder or Agent as permitted hereunder.

       

      (e)           The
        execution and delivery of the Loan Documents, the delivery and endorsement
        to
        Agent as agent for Lenders of the Pledged Notes Receivable, the filing of
        the
        UCC-1’s with the office of the secretary of state of the state in which Borrower
        is organized and the Assignment of Notes Receivable and Mortgages in the
        official records of the county in which the applicable Resort is located,
        create
        in favor of Agent as agent for Lenders a valid and perfected continuing first,
        as applicable, priority security interest in the Collateral.  The
        Collateral shall secure the full payment and performance of the
        Obligations.

       

      (f)           None
        of the Pledged Notes Receivable is forged or has affixed thereto any
        unauthorized signatures or has been entered into by any Person without the
        required legal capacity; and during the term of the Agreement, none will
        be
        forged, or will have affixed thereto, any unauthorized signatures.

       

      (g)           Except
        as permitted in Sections 3.6 and 3.7 hereof,
        there have been no modifications or amendments to the Pledged Notes Receivable
        or Mortgages.

       

      (h)           The
        makers of the Eligible Notes Receivable have no defenses, offsets, counterclaims
        or claims relating to the Eligible Notes Receivable or the
        Mortgages.

       

      (i)          
         The Pledged Notes Receivable and the Mortgages were executed and delivered
        by Purchasers in favor of Borrower in connection with the purchase of the
        related Encumbered Intervals.

       

      (j)           
        The Mortgages constitute and will constitute valid and enforceable first
        and
        prior liens and security interests on the Encumbered Intervals.

       

      (k)           The
        Pledged Notes Receivable and the Mortgages are and shall remain in full force
        and effect, are and will be valid and binding obligations of the respective
        makers in favor of Agent as holder on behalf of Lenders; and Borrower further
        warrants and guarantees the value, quantity, sound condition, grade and quality
        of the Encumbered Intervals and rights, properties, easements and interests
        appurtenant or related thereto.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (l)           
        The grant of the security interests described herein has not affected and
        will
        not affect the validity or enforceability of the obligations of the respective
        makers of the Pledged Notes Receivable under such Notes Receivable or the
        respective Mortgages.

       

      (m)           Neither
        Agent nor any Lender shall be required to take, and Borrower has taken any
        and
        all required steps to protect Agent and each Lender’s security interest in the
        Collateral (other than maintaining possession of the portion of the Collateral
        constituting instruments); and neither Agent nor any Lender is or shall be
        required to collect or realize upon the Collateral or any distribution of
        interest or principal, nor shall loss of, or damage to, the Collateral release
        Borrower from any of the Obligations.

       

      6.3           Financial
        Statements and Business Condition.  The Financial
        Statements for the first six (6) months of the calendar year 2007, are, to
        the
        best of Borrower’s knowledge, accurate and fairly represent the financial
        condition of the Borrower for the periods in question, subject to the written
        qualifications set forth therein.  To the best of Borrower’s
        knowledge, there are no material liabilities, direct or indirect, fixed or
        contingent, of Borrower, except as disclosed to Agent in writing.

       

      6.4           Taxes. 
        In
        accordance with the requirements set forth in the Declaration, Borrower
        represents and warrants that Borrower, Silverleaf Club, or the applicable
        Timeshare Owners’ Association, as required, has paid or will have paid in full,
        prior to delinquency, all ad valorem taxes and other taxes and assessments
        against the Resorts and the Collateral; and Borrower knows of no basis for
        any
        additional taxes or assessments against the Resorts or the
        Collateral.  Borrower, Silverleaf Club, or the applicable Timeshare
        Owners’ Association, as the case may be, has filed all tax returns required to
        have been filed by it and has paid or will pay prior to delinquency, all
        taxes
        shown to be due and payable on such returns, including interest and penalties
        thereon, and all other taxes which are payable by it to the extent the same
        have
        become due and payable.

       

      6.5           Title
        to Properties: Prior Liens.  Borrower has good and
        marketable title to all of the Collateral and to all unsold Units and Intervals
        at each Resort, and all rights, properties and benefits appurtenant to or
        benefiting them.  Borrower is not in default under any of the
        documents evidencing or securing any indebtedness which is secured, wholly
        or in
        part, by any portion of any Resort or any portion or all the Collateral and
        no
        event has occurred which with the giving of notice, the passage of time or
        both,
        would constitute a default under any of the documents evidencing or securing
        any
        such indebtedness.  Other than the Liens granted in favor of Agent and
        the liens described in Schedule 6.5 attached hereto, there are no liens
        or encumbrances against the Collateral, or against any Resort.

       

      6.6           Subsidiaries,
        Affiliates and Capital Structure.  Borrower has no
        Subsidiaries or Affiliates which have any involvement or interest in any
        Resort
        in any way.  None of the Affiliates of Borrower are parties to any
        proxies, voting trusts, shareholders agreements or similar arrangements pursuant
        to which voting authority, rights or discretion with respect to Borrower
        is
        vested in any other Person.

       

      6.7           Litigation,
        Proceedings, Etc.  Except for those matters identified in
Schedule 6.7 hereto, there are no actions, suits, proceedings, orders
        or
        injunctions pending or threatened against or affecting Borrower, the Resorts
        or
        the Timeshare Owners’ Association at law or in equity, or before or by any
        governmental authority or other tribunal, which (a) could have a material
        adverse effect on Borrower or (b) relate to the Loan or which could have a
        material effect on the Collateral or the Resorts.  Borrower has
        received no notice from any court, governmental authority or other tribunal
        alleging that Borrower or the Resorts have violated the Timeshare Act, any
        of
        the rules or regulations thereunder, the Declaration or any other Applicable
        Laws, agreements or arrangements that could have any material effect on the
        Loan, the Collateral or the Resorts.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      6.8           Licenses,
        Permits, Etc.  Borrower, the Resorts, the Timeshare
        Owners’ Associations or Borrower’s Affiliates involved in the operations of the
        Resorts, and, to the best of Borrower’s knowledge after diligent inquiry, other
        Persons involved in the operations of the Resorts, possess all requisite
        franchises, certificates of convenience and necessity, operating rights,
        approvals, licenses, permits, consents, authorizations, exemptions and orders
        as
        are necessary to carry on its or their business as now being conducted, without
        any known conflict with the rights of others and, with respect to Borrower,
        the
        Resorts and the Timeshare Owners’ Associations, in each case subject to no
        mortgage, pledge, Lien, lease, encumbrance, charge, security interest, title
        retention agreement or option other than as provided for by this
        Agreement.

       

      6.9           Environmental
        Matters.  Except as otherwise noted on
Schedule 6.9: (a) no Resort contains any Hazardous Materials,
        (b) no Hazardous Materials are used or stored at or transported to or from
        the Resorts, (c) neither Borrower nor the Resorts nor any manager thereof
        nor to Borrower’s knowledge, the Timeshare Owners’ Associations, have received
        notice from any governmental agency, entity or other Person with regard to
        Hazardous Materials on, under or affecting any Resort, and (d) neither
        Borrower, the Resorts, nor any portion thereof, nor to Borrower’s knowledge
        after diligent inquiry, the Timeshare Owners’ Associations, are in violation of
        any Environmental Laws.

       

      6.10          Full
        Disclosure.  No information, exhibit or written report or
        the content of any schedule furnished by or on behalf of Borrower to Agent
        or
        any Lender in connection with the Loan or the Resorts contains any material
        misstatement of fact or omits the statement of a material fact necessary
        to make
        the statement contained herein or therein not misleading.  Borrower
        knows of no fact or condition which will prevent the sale of Intervals to
        Purchasers or prevent the operation of the Resorts in accordance with the
        Declarations and related public offering statements, and in accordance with
        applicable law, or prevent Borrower from performing its Obligations pursuant
        to
        the Loan Documents.

       

      6.11          Use
        of Proceeds/Margin Stock.  None of the proceeds of the
        Loan will be used to purchase or carry any margin stock (as defined under
        Regulation G, T, S, X or U of the Board of Governors of the Federal Reserve
        System, as in effect from time to time), and no portion of the proceeds of
        the
        Loan will be extended to others for the purpose of purchasing or carrying
        margin
        stock.  None of the transactions contemplated in the Agreement
        (including, without limitation, the use of the proceeds from the Loan) will
        violate or result in the violation of Section 7 of the Securities Exchange
        Act
        of 1934, as amended, or any regulations issued pursuant thereto, including,
        without limitation, Regulations G, T, S, U and X of the Board of Governors
        of
        the Federal Reserve System, 12 C.F.R., Chapter 11.

       

      6.12          Defaults.  Borrower
        has no knowledge of any Default or Event of Default not disclosed to Agent
        in
        writing.  Borrower has no knowledge of any default or event of default
        under any loan facility or with any Lender.  Borrower has no knowledge
        of any condition or event, which, with the passage of time, notice or both,
        would constitute an Event of Default or an event of default under any loan
        facility or with any Lender.

       

      6.13          Compliance
        with Law.  Borrower

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (a)           
        is not in violation, nor are any of its Resorts, or the business operations
        in
        respect of any of the Resorts, or to Borrower’s knowledge after diligent
        inquiry, the Timeshare Owners’ Association, in violation, of the Timeshare Act,
        or any laws, ordinances, governmental rules or regulations of any state in
        which
        a Resort is located, any political subdivision of said states or any other
        jurisdiction to which Borrower or the Resorts, or the business operations
        conducted in respect of the Resorts, or the Timeshare Owners’ Association, are
        subject;

       

      (b)          
         has not failed, nor have the Resorts or, to Borrower’s knowledge, the
        Timeshare Owners’ Associations failed, to obtain any consents or joinders, or
        any approvals, licenses, permits, franchises or other governmental
        authorizations, or to make or cause to be made any filings, submissions,
        registrations or declarations with any government or agency or department
        thereof, necessary to the establishment, ownership or operation of the Resorts
        or any of Borrower’s Properties, or to the conduct of Borrower’s business,
        including, without limitation, the operation of the Resorts and the sale,
        or
        offering for sale, of Intervals therein; which violation or failure to obtain
        or
        register materially adversely affects Borrower, the Resorts or the business,
        prospects, profits, properties or condition (financial or otherwise) of Borrower
        or the Resorts.  Borrower has, to the extent required by its
        activities and businesses, and the operations of the Resorts, fully complied
        with: (1) all of the applicable provisions of (a) the Consumer Credit
        Protection Act; (b) Regulation Z of the Federal Reserve Board;
        (c) the Equal Credit Opportunity Act; (d) Regulation B of the
        Federal Reserve Board; (e) the Federal Trade Commission’s 3-day cooling-off
        Rule for Door-to-Door Sales; (f) Section 5 of the Federal Trade
        Commission Act; (g) the Interstate Land Sales Full Disclosure Act (“ILSA”);
        (h) federal postal laws; (i) applicable state and federal securities
        laws; (j) applicable usury laws; (k) applicable trade practices, home
        and telephone solicitation, sweepstakes, anti-lottery and consumer credit
        and
        protection laws; (l) applicable real estate sales licensing, disclosure,
        reporting and escrow laws; (m) the Americans With Disabilities Act and
        related accessibility guidelines (“ADA”); (n) the Real Estate Settlement
        Procedures Act (“RESPA”); (o) all amendments to and rules and regulations
        promulgated under the foregoing acts or laws; (p) the Federal Trade
        Commission’s Privacy of Consumer Financial Information Rule and (q) other
        applicable federal statutes and the rules and regulations promulgated
        thereunder; and (2) all of the applicable provisions of the Timeshare Acts,
        any law or laws of any state (and the rules and regulations promulgated
        thereunder) relating to ownership, establishment or operation of the Resorts,
        or
        the sale, offering for sale, or financing of Intervals;

       

      (c)         
          has made diligent inquiry, and to the best of Borrower’s knowledge,
        all persons or entities owning an interest in Borrower: (i) are not currently
        identified on any United States Office of Foreign Assets Control (“OFAC”) List;
        and (ii) are not persons or entities with whom a citizen of the United States
        is
        prohibited to engage in transactions by any trade embargo, economic sanction,
        or
        other prohibition of Untied States law, regulation, or Executive Order of
        the
        President of the United States.  The OFAC List currently is accessible
        through the internet website www.treas.gov/ofac/t11sdn.pdf.

       

      (d)          
         represents and warrants that at all times throughout the term of the Loan,
        (i) none of the funds or other assets of Borrower shall constitute property
        of,
        or shall be beneficially owned, directly or indirectly, by, any Person subject
        to trade restrictions under the Prescribed Laws (each such Person, an “Embargoed
        Person”), with the result that the investment in Borrower (whether directly or
        indirectly), is or would be prohibited by law or the Loan made by Lender
        is or
        would be in violation of law; (ii) no Embargoed Person shall have any interest
        of any nature whatsoever in Borrower with the result that the investment
        in
        Borrower (whether directly or indirectly), is or would be prohibited by law
        or
        the Loan is or would be in violation of law; and (iii) none of the funds
        of
        Borrower shall be derived from any unlawful activity with the result that
        the
        investment in Borrower (whether directly or indirectly), is or would be
        prohibited by law or the Loan is or would be in violation of
        law.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      6.14          Restrictions
        of Borrower.  Borrower will not be, on or after the date
        hereof, a party to any contract or agreement which prohibits Borrower’s
        execution of or compliance with the terms of this Agreement or the other
        Loan
        Documents.  Borrower has not agreed or consented to cause or permit in
        the future (upon the happening of a contingency or otherwise) any of the
        Collateral, whether now owned or hereafter acquired, to be subject to a Lien
        except in favor of Agent as provided herein.

       

      6.15          Broker’s
        Fees.  Borrower represents to Agent and each Lender that
        it has not made any commitment or taken any action which will result in a
        claim
        for any brokers’, finders’ or other similar fees or commitments with respect to
        the transactions described in the Agreement.  Borrower agrees to
        indemnify Agent and each Lender and save and hold Agent and each Lender harmless
        from all claims of any Person for any broker’s or finder’s fee or commission
        claimed by any party claiming to represent Borrower, and this indemnity shall
        include reasonable attorneys’ fees and legal expenses.  Borrower
        acknowledges that Wellington has acted as a
        broker/finder/intermediary on behalf of Agent, each Lender and Liberty Bank
        in
        connection with the transactions contemplated hereunder.  Agent and
        any successor agent, each Lender and Liberty Bank reserve the right to pay
        Wellington such broker, finder or intermediary fee in connection with the
        transactions contemplated hereunder, as Agent or such successor agent or
        each
        Lender or Liberty Bank may elect.  Agent and any successor agent, each
        Lender and Liberty Bank agrees to indemnify Borrower and save and hold Borrower
        harmless from all claims of any Person for any broker’s or finder’s fee or
        commission claimed by any party claiming to represent Agent and any successor
        agent, each Lender and Liberty Bank, and this indemnity shall include reasonable
        attorneys’ fees and legal expenses.

       

      6.16          Deferred
        Compensation Plans.  Borrower has no pension, profit
        sharing or other compensatory or similar plan (herein called a “Plan”) providing
        for a program of deferred compensation for any employee or
        officer.  No fact or situation, including but not limited to, any
“Reportable Event,” as that term is defined in Section 4043 of the Employee
        Retirement Income Security Act of 1974 as the same may be amended from time
        to
        time (“Pension Reform Act”), exists or will exist in connection with any Plan of
        Borrower which might constitute grounds for termination of any Plan by the
        Pension Benefit Guaranty Corporation or cause the appointment by the appropriate
        United States District Court of a Trustee to administer any such
        Plan.  No “Prohibited Transaction” within the meaning of
        Section 406 of the Pension Reform Act exists or will exist upon the
        execution and delivery of the Agreement or the performance by the parties
        hereto
        of their respective duties and obligations hereunder.  Borrower will
        (1) at all times make prompt payment of contributions required to meet the
        minimum funding standards set forth in Sections 302 through 305 of the Pension
        Reform Act with respect to each of its Plans; (2) promptly, after the
        filing thereof, furnish to Agent copies of each annual report required to
        be
        filed pursuant to Section 103 of the Pension Reform Act in connection with
        each Plan for each Plan Year, including any certified financial statements
        or
        actuarial statements required pursuant to said Section 103; (3) notify
        Agent immediately of any fact, including, but not limited to, any Reportable
        Event arising in connection with any Plan which might constitute grounds
        for
        termination thereof by the Pension Benefit Guaranty Corporation or for the
        appointment by the appropriate United States District Court of a Trustee
        to
        administer the Plan; and (4) notify Agent of any “Prohibited Transaction”
as that term is defined in Section 406 of the Pension Reform
        Act.  Borrower will not (a) engage in any Prohibited Transaction
        or (b) terminate any such Plan in a manner which could result in the
        imposition of a Lien on the Property of Borrower pursuant to Section 4068
        of the Pension Reform Act.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      6.17          Labor
        Relations.  The employees of Borrower are not a party to
        any collective bargaining agreement with Borrower, and, to the best knowledge
        of
        Borrower and its officers, there are no material grievances, disputes or
        controversies with any union or any other organization of Borrower’s employees,
        or threats of strikes, work stoppages or any asserted pending demands for
        collective bargaining by any union or organization.

       

      6.18          Resort.

       

      (a)           Timeshare
        Plan.  Each Resort has been established and dedicated,
        and is and will remain, a time-share plan and project in full compliance
        with
        all Applicable Laws and regulations, including without limitation, the Timeshare
        Act.

       

      (b)           Access.  Each
        Resort has direct access to a publicly dedicated road and all roadways inside
        each Resort are subject to an access and use easement or other dedication
        or
        provision that benefits and will continue to benefit all
        Purchasers.

       

      (c)           Utilities.  Electric,
        sanitary and stormwater sewer, telephone, water facilities and other necessary
        utilities are available in sufficient capacity to service each Resort and
        any
        easements necessary to the furnishing of such utility services have been
        obtained and duly recorded, and inure to the benefit of each Resort and each
        Timeshare Owners’ Association.

       

      (d)           Amenities.  Each
        Purchaser of an Interval has and will have access to and the full use and
        enjoyment of all of the Common Elements and public utilities of the Resort
        in
        which such interval is located, all in accordance with the Declaration and
        Timeshare Documents.

       

      (e)           Construction.  All
        costs arising from the construction or acquisition of any Units and any other
        improvements and the purchase of any fixtures or equipment, inventory,
        furnishings or other personalty located in, at, or on the Resorts have been
        paid
        or will be paid when due.

       

      (f)           
        Sale of Intervals.  The marketing, sale,
        offering of sale, rental, solicitation of Purchasers or, if applicable, lessees,
        and financing of Intervals in the Resort: (1) do not constitute the sale,
        or the offering of sale, of Securities subject to the registration requirements
        of the Securities Act of 1933, as amended, or any state securities law;
        (2) do not violate the Timeshare Act or any land sales or consumer
        protection law, statute or regulation of the state where the Resort is located
        or any other state or jurisdiction in which a Purchaser resides or in which
        sales or solicitation activities occur; and (3) do not violate any consumer
        credit or usury statute of state where the Resort is located or any other
        state
        or jurisdiction in which a Purchaser resides or in which sales or solicitation
        activities occur.  All marketing and sales activities are performed by
        employees of Borrower, all of whom are and shall be properly licensed in
        accordance with Applicable Laws.

       

      (g)           Tangible
        Property.  Except for specific items which may be owned
        by independent contractors, the machinery, equipment, fixtures, tools and
        supplies used in connection with the Resort, including without limitation,
        with
        respect to the operations and maintenance of the Common Elements, are owned
        either by Borrower, Silverleaf Club, or the applicable Timeshare Owners’
Association.

       

      (h)           Operating
        Contracts.  Borrower, Silverleaf Club, or the applicable
        Timeshare Owners’ Association has entered into the contracts, agreements, and
        arrangements necessary for the operation of the Resorts, including but not
        limited to those with respect to utilities, maintenance, management, services,
        marketing and sales.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      6.19         Timeshare
        Regimen Reports.  Borrower has furnished to Agent true
        and correct copies of the Timeshare Documents listed on Schedule 6.19,
        which consist of all those placed on file by Borrower with the Divisions
        or any
        federal, state or local regulatory or recording agencies, offices or
        departments.  All such filings and/or recordations, and all joinders
        and consents, necessary in order to establish the plan in respect of the
        Resorts, including without limitation, the Units, Intervals, and all appurtenant
        Common Elements, and all related use and access rights, have been done or
        obtained and all laws, regulations and statutes, and all agreements or
        arrangements, in connection therewith have been complied with.

       

      6.20         Operating
        Contracts.  The contracts, agreements and arrangements
        comprising those agreements or arrangements relating to the operation of
        the
        Resorts, including without limitation, with respect to utilities, maintenance,
        management, services, marketing and sales under which the fees to be paid
        equal
        or exceed $50,000.00 (collectively, all such agreements and arrangements
        are
        referred to herein as the “Operating Contracts”) are unmodified and in full
        force and effect and shall remain free and clear of any lien.

       

      6.21         Architectural
        and Environmental Control.  All Units, Common Elements
        and other improvements at, upon or appurtenant to the Resort are and will
        be in
        compliance with the design, use, architectural and environmental control
        provisions, if any, set forth in the Declaration.

       

      6.22         Tax
        Identification.  Borrower’s federal taxpayer’s
        identification number is: 75-2259890.

       

      6.23         Inventory
        Control Procedures.  Borrower has provided to Agent a
        true and complete copy of Borrower's Inventory, Sales and Assignments procedures
        (the "Inventory Control Procedures"), a copy of which is attached hereto
        as
Exhibit E.  Borrower is and shall at all times be in full
        compliance with the Inventory Control Procedures from the date hereof until
        the
        Loan is repaid in full.  Borrower shall permit Agent, its officers,
        employees, auditors, and other agents or designees to review the books and
        records of Borrower and make such other examinations and inspections as Agent
        in
        its sole discretion deems necessary to determine that Borrower is in full
        compliance with such Inventory Control Procedures.

       

      6.24         Additional
        Representations and Warranties.  This Agreement, the Note
        and the other Loan Documents constitute the legal, valid and binding obligation
        of Borrower, enforceable against Borrower in accordance with their respective
        terms.

       

      Section
        7-Covenants

       

      7.1           Affirmative
        Covenants.  So long as any portion of the Obligations
        remains unsatisfied, Borrower hereby covenants and agrees with Agent and
        each
        Lender as follows:

       

      (a)          
         Payment and Performance of
        Obligations.  Borrower shall pay all of the Loan and
        related expenses when and as the same become due and payable, and Borrower
        shall
        strictly observe and perform all of the Obligations, including without
        limitation, all covenants, agreements, terms, conditions and limitations
        contained in the Loan Documents, and will do all things necessary which are
        not
        prohibited by law to prevent the occurrence of any Event of Default hereunder;
        and Borrower will maintain an office or agency in the State of Texas where
        notices, presentations and demands in respect of the Loan Documents may be
        made
        upon Borrower.  Such office or agency and the books and records of
        Borrower shall be maintained at 1221 Riverbend Drive, Suite 120, Dallas,
        Texas
        75221 until such time as Borrower shall so notify Agent, in writing, of any
        change of location of such office or agency.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)           Maintenance
        of Existence, Qualification and Assets.  Borrower shall
        at all times (i) maintain its legal existence, (ii) maintain its
        qualification to transact business and good standing in any state and in
        any
        jurisdiction where it conducts business in connection with the Resorts, and
        (iii) comply or cause compliance with all governmental laws, rules,
        regulations and ordinances applicable to the Resorts, Borrower or its business,
        including, without limitation, the Timeshare Act.

       

      (c)           Consolidation
        and Merger.  Borrower will not consolidate with or merge
        into any other Person or permit any other Person to consolidate with or merge
        into it, unless: (i) Borrower is the continuing or surviving corporation
        in any
        such consolidation or merger and (ii) prior to and immediately after such
        consolidation or merger, Borrower shall not be in default
        hereunder.

       

      (d)           Maintenance
        of Insurance.  Borrower, or if required pursuant to the
        Declaration, the Timeshare Owners’ Association, shall maintain (or Borrower
        shall cause to be maintained) at all times during the term of this Agreement,
        policies of insurance with premiums being paid when due, and shall deliver
        to
        Agent originals of insurance policies issued by insurance companies, in amounts,
        in form and in substance, and with expiration dates, all acceptable to Agent
        and
        containing a waiver of subrogation rights by the insuring company, a
        non-contributory standard mortgagee benefit clause, or their equivalents,
        and a
        mortgagee loss payable endorsement in favor of and satisfactory to Agent
        on
        behalf of each Lender, and breach of warranty coverage, providing the following
        types of insurance on and with respect to Borrower (or, as appropriate, the
        respective Associations) and the Resort:

       

      (i)        Fire
        and extended coverage insurance (including lightning, hurricane, tornado,
        wind
        and water damage, vandalism and malicious mischief coverage) covering the
        improvements and any personal property located in or on the Resorts in an
        amount
        not less than the full replacement value of such improvements and personal
        property, and said policy of insurance shall provide for a deductible acceptable
        to Agent, breach of warranty coverage, replacement cost endorsements
        satisfactory to Agent, and shall not permit co-insurance;

       

      (ii)       Public
        liability and property damage insurance covering the Units and the Resorts
        in
        amounts and on terms satisfactory to Agent; and

       

      (iii)      Such
        other insurance on the Resorts or any replacements or substitutions therefor
        including, without limitation, flood insurance (if the Property is or becomes
        located in an area which is considered a flood risk by the U.S. Emergency
        Management Agency or pursuant to the National Flood Insurance program), in
        such
        amounts and upon terms as may from time to time be reasonably required by
        Agent.

       

      To
        the
        extent any other timeshare receivable lender has any rights to approve the
        form
        of insurance policies with respect to the Resorts, the amounts of coverage
        thereunder, the insurers under such policies, or the designation of an
        attorney-in-fact for purposes of dealing with damage to any part of the Resorts
        or insurance claims or matters related thereto, or any successor to such
        attorney-in-fact, or any changes with respect to any of the foregoing, Borrower
        shall take all steps as may be necessary (and, after turnover, if any, of
        control of the Resort to the Timeshare Owners’ Association, Borrower shall use
        its best efforts) to ensure that Agent on behalf of each Lender shall at
        all
        times have a co-equal right, with such other lender (including, without
        limitation, Borrower or any third-party lender), to approve all such matters
        and
        any proposed changes in respect thereof; and Borrower shall not cause or
        permit
        any changes with respect to any insurance policies, insurers, coverage,
        attorney-in-fact, or insurance trustee, if any, without Agent’s prior written
        approval.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      In
        the
        event of any insured loss or claim in respect of the Resorts or the Units,
        Borrower shall apply (or cause to be applied), and Borrower covenants that
        the
        Timeshare Owners’ Association shall apply (or cause to be applied), all proceeds
        of such insurance policies in a manner consistent with the Timeshare Documents
        and the Timeshare Act.

       

      All
        insurance policies required pursuant to this Agreement (or the Timeshare
        Documents or Timeshare Act) shall provide that the coverage afforded thereby
        shall not expire or be amended, canceled, modified or terminated without
        at
        least thirty (30) days prior written notice to Agent.  At least thirty
        (30) days prior to the expiration date of each policy maintained pursuant
        to
        this Section 7.1(d), a renewal or replacement thereof satisfactory
        to Agent shall be delivered to Agent.  Borrower shall deliver or cause
        to be delivered to Agent receipts evidencing the payment for all such insurance
        policies and renewals or replacements.

       

      In
        the
        event of any fire or other casualty to or with respect to the improvements
        on or
        at the Resorts, Borrower covenants that Borrower or the Timeshare Owners’
Association, as the case may be, will promptly restore or repair (or cause
        to be
        restored, repaired or replaced) the damaged improvements and repair or replace
        any other personal property to the same condition as immediately prior to
        such
        fire or other casualty and, with respect to the improvements and personal
        property on the Resorts, in accordance with the terms of the Timeshare Documents
        or Timeshare Act.  The insufficiency of any net insurance proceeds
        shall in no way relieve Borrower or, as applicable, Borrower and Timeshare
        Owners’ Association, of its obligation to restore, repair or replace such
        improvements and other personal property in accordance with the terms hereof,
        of
        the Declaration or other Timeshare Documents or of the Timeshare Act, and
        Borrower covenants that Borrower or, as the case may be, the Timeshare Owners’
Association, shall promptly comply and cause compliance with the provisions
        of
        the Declaration and other Timeshare Documents, or of the Timeshare Act relating
        to such restoration, repair or replacement. Borrower shall, unless an Event
        of
        Default has occurred, apply all insurance proceeds payable to or received
        by it,
        in accordance with the applicable Declaration.  If an Event of Default
        has occurred, Agent may, in its sole discretion, apply all insurance proceeds
        in
        accordance with the applicable Declaration or to the repayment of the
        Loan.

       

      (e)           Maintenance
        of Security.  Borrower shall execute and deliver (or
        cause to be executed and delivered) to Agent all security agreements, financing
        statement filing authorizations, assignments and such other agreements,
        documents, instruments and certificates, and supplements and amendments thereto,
        and take such other actions, as Agent deems necessary or appropriate in order
        to
        maintain as valid, enforceable and perfected first priority lien and security
        interest, as applicable, all Liens and security interests in the Collateral
        granted to Agent as agent for Lenders to secure the
        Obligations.  Except as permitted under Section 3.6, Borrower
        shall not grant extensions of time for the payment of, compromise for less
        than
        the full face value or release in whole or in part, any Purchaser or other
        Person liable for the payment of, or allow any credit whatsoever except for
        the
        amount of cash to be paid upon, any Collateral or any instrument, chattel
        paper
        or document representing the Collateral.

       

      (f)          
         Payment of Taxes and Claims.  Borrower
        will pay, and, as applicable pursuant to the Declaration, Borrower covenants
        that the Timeshare Owners’ Association will pay, when due, all taxes imposed
        upon the Resorts, the Collateral, Borrower, the Timeshare Owners’ Association,
        or any of its or their property, or with respect to any of its or their
        franchises, businesses, income or profits, real and personal property, or
        with
        respect to the Loan or any of the Loan Documents; and Borrower and the Timeshare
        Owners’ Association, as the case may be, shall pay all other charges and
        assessments against Borrower, the Collateral and the Resorts before any claim
        (including, without limitation, claims for labor, services, materials and
        supplies) arises for sums which have become due and payable.  Except
        for Liens set forth on Schedule 6.5 and the Liens in favor of Agent on
        behalf of Lenders granted pursuant to the Loan Documents, and except as
        otherwise specifically provided for herein, Borrower covenants that no statutory
        or other Liens whatsoever (including, without limitation, mechanics’,
        materialmens’, judgment or tax liens) shall attach to any of the Collateral or
        the Resorts except for such Liens as are expressly provided for pursuant
        to the
        Declaration.  In the event any such Lien attaches to any of the
        Collateral or the Resorts Borrower shall, within thirty (30) days after any
        such
        Lien attaches, either (i) cause such Lien to be released of record or
        (ii) provide Agent with a bond in accordance with the Applicable Laws of
        the State, issued by a corporate surety acceptable to Agent, in an amount
        and
        form acceptable to Agent.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (g)           Inspections.  Borrower
        shall, at any time and from time to time and at the expense of Borrower,
        permit
        Agent or any Lender or its respective agents or representatives (provided
        such
        Lender has coordinated such inspection with Agent) to inspect the Resorts,
        the
        Collateral and if necessary, in Agent’s opinion, to ascertain or assure
        Borrower’s compliance with the terms of this Agreement, any of Borrower’s other
        assets or Property, and to examine and make copies of and abstracts from
        its
        and, to the extent it has access thereto or possession thereof, the Timeshare
        Owners’ Association’s, books, accounts, records, original correspondence,
        computer tapes, disks, software, and other papers as it may desire; and to
        discuss its affairs, finances and accounts with any of its officers, employees,
        Affiliates, contractors or independent public accountants (and by this provision
        Borrower authorizes said accountants to discuss with Agent, its Agents or
        representatives, the affairs, finances and accounts of
        Borrower).  Agent and each Lender agree to use reasonable efforts not
        to unreasonably interfere with Borrower’s business operations in connection with
        any such inspections.  Without limiting the foregoing, Agent shall
        have the right to make such credit investigations as Agent may deem appropriate
        in connection with its review of Notes Receivable, and Borrower shall make
        available to Agent all credit information in Borrower’s possession or under its
        control or to which it may have access, with respect to Purchasers or other
        obligors under Notes Receivable as Agent may request.

       

      (h)           Reporting
        Requirements.  So long as any portion of the Obligations
        remains unsatisfied, Borrower shall furnish (or cause to be furnished, as
        the
        case may be) to Agent the following:

       

      (i)            The
        Following Collateral Reports.  

       

      
        	
                Within
                  1 Business Day of occurrence or receipt

              	
                (a)          Upon
                  becoming aware of the existence of any condition or event which
                  constitutes a Default or an Event of Default, Borrower shall deliver
                  to
                  Agent a written notice specifying the nature and period of existence
                  thereof and what action Borrower is taking or proposes to take
                  with
                  respect thereto.

                (b)          Upon
                  becoming aware that the holder of any material obligation or of
                  any
                  evidence of material indebtedness of the Borrower has given notice
                  or
                  taken any other action with respect to a claimed default or event
                  of
                  default thereunder, a written notice specifying the notice given
                  or action
                  taken by such holder and the nature of the claimed default or event
                  of
                  default and what action the Borrower is taking or proposes to take
                  with
                  respect thereto;

                (c)          Promptly
                  upon receipt thereof, one (1) copy of each other report submitted
                  to
                  Borrower by independent public accountants or other Persons in
                  connection
                  with any annual, interim or special audit made by them of the books
                  of
                  Borrower;

                 

              
	
                Weekly

              	
                (d)          None
                  at this time.

                 

              
	
                Monthly
                  (not later than the 10th Business Day of each month)

              	
                (e)          
                  a Borrowing Base Report and all supporting reports and documentation
                  which
                  includes a detailed calculation of the Availability as of the end
                  of the
                  month,

                (f)          
                   a reconciliation to the detailed calculation of the Availability
                  previously provided to Agent,

                (g)          
                  a confirmation of payment or reimbursement of all funds received
                  during
                  the prior month from Purchasers for homeowner fees and expenses
                  to each of
                  the Timeshare Owners’ Associations,

                (h)         
                   monthly aging Reports on all Notes Receivable

                 

              
	
                Quarterly

              	
                (i)           
                  a sales report, detailing the sales of all Intervals at the Resorts
                  for
                  the period covered thereby, certified by Borrower to be true, correct
                  and
                  complete and otherwise in a form approved by Agent, provided however,
                  upon
                  30 days prior written notice Lender may require this report to
                  be
                  furnished on a monthly basis,

                (j)          
                   such additional information as Agent may request with respect to
                  the
                  Collateral, or the financial condition of Borrower,

                 

              
	
                Annually

                 

              	
                (k)          
                  a sales report, detailing the sales of all Intervals at the Resorts
                  for
                  the period covered thereby, certified by Borrower to be true, correct
                  and
                  complete and otherwise in a form approved by Agent, and

                 

              
	
                Upon
                  request by Agent

                 

              	
                (l)           
                  such other reports as to the Collateral, or the financial condition
                  of
                  Borrower, as Agent may request.

                 

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      In
        addition, to the extent required by Agent, (i) in Agent’s Permitted Discretion,
        Borrower agrees to facilitate the establishment of electronic collateral
        reporting systems, which will be administered and maintained by Agent, and
        to
        cooperate with Agent to facilitate and implement a system of electronic
        collateral reporting in order to provide electronic reporting of each of
        the
        items set forth above, provided however the cost to Borrower for such set
        up of
        the electronic collateral reporting systems shall not exceed $5,000, and
        (ii) a
        senior member of the management of Borrower or other representative acceptable
        to Agent will meet with Agent, telephonically at least once in each calendar
        quarter and in person once each six (6) months, to review and discuss matters
        relating to Borrower’s business, prospects, projections and affairs as is
        determined to be reasonable and appropriate by Agent.

       

      (ii)      Quarterly
        and Annual Financial Reports.  Within ninety (90) days of
        each fiscal year end and within forty five (45) days of each fiscal or calendar
        quarter end (in the event such the financial reports are not filed by such
        dates, Borrower shall provide a copy of each application for extension
        transmitted to each applicable taxing authority) or as soon as available,
        but in
        any event upon Borrower’s filing of its Securities and Exchange Commission Form
        10-Q, a statement of income and expense and a balance sheet of Borrower for
        the
        calendar or fiscal period then ended, and in the case of the second, and
        third
        calendar or fiscal quarters ended a statement showing the period then ended
        and
        cumulative numbers for the portion of the year then ended, all in such detail
        and scope as may be reasonably required by Agent and prepared by management
        on a
        basis consistent with prior accounting periods and accompanied by an Officer’s
        Certificate in the form of Exhibit F.  In addition to the
        above, as soon as available, but in any event upon Borrower’s filing of its
        Securities and Exchange Commission Form 10-K reflecting Borrowers financial
        results for each calendar year or other fiscal year as may be applicable
        (a
“Fiscal Year”), an audited statement of income and
        expense of Borrower for the annual period ended as of the end of such Fiscal
        Year, and a balance sheet of Borrower as of the end of such Fiscal Year,
        all in
        such detail and scope as may be reasonably required by Agent and prepared
        in
        accordance with GAAP and on a basis consistent with prior accounting
        periods.  Each annual financial statement of Borrower shall be
        prepared by an independent certified public accountant, acceptable to Agent,
        in
        its sole discretion.  Such audited annual statements shall also be in
        form and content satisfactory to Agent.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (iii)     Maintenance
        of Inventory Control.  Borrower shall maintain and at all
        times fully comply with the Inventory Control Procedures from the date hereof
        until the Loan is repaid in full.  Borrower shall permit Agent, its
        officers, employees, auditors, and other agents or designees to review the
        books
        and records of Borrower and make such other examinations and inspections
        as
        Agent in its sole discretion deems necessary to determine that Borrower is
        in
        full compliance with such Inventory Control Procedures.

       

      (iv)     Material
        Adverse Developments.  Immediately upon becoming aware of
        any claim, action, proceeding, development or other information which may
        materially and adversely affect Borrower, the Collateral, the Resorts, the
        business, prospects, profits or condition (financial or otherwise) of Borrower,
        or the ability of Borrower to perform its Obligations under the Agreement,
        Borrower shall provide Agent with telephonic or telegraphic notice, followed
        by
        telefaxed and mailed written confirmation, specifying the nature of such
        development or information and such anticipated effect;

       

      (v)      Other
        Information.  Borrower shall deliver to Agent: (i) within
        five (5) days of the filing thereof with the United States Securities and
        Exchange Commission, copies of each Form 8-K, 10-Q and 10-K filed by Borrower;
        (ii) at least semi-annually during the Term (or more frequently upon request
        of
        Agent), current addresses and telephone numbers for each obligor under an
        Eligible Note Receivable pledged to Agent on behalf of Lenders hereunder
        and
        (iii) any other information related to the Loan, the Collateral, the Resorts
        or
        Borrower as Agent may in good faith request including, without limitation,
        annually, federal call reports relating to Lockbox Agent.

       

      (vi)     Annual
        Operating Plan.  On or before December 31 of each
        calendar year, Borrower shall deliver to Agent its Annual Operating
        Plan.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (i)           
        Records.  Borrower shall keep adequate records
        and books of account reflecting all financial transactions of Borrower and
        with
        respect to the Resorts in which complete entries will be made in accordance
        with
        GAAP.  In addition, Borrower shall keep, and shall promptly deliver to
        Agent upon Agent’s request therefor, complete, timely and accurate records of
        all sales of Intervals and all payments in respect of Pledged Notes
        Receivable.

       

      (j)           
        Management.  Borrower shall: (i) remain
        engaged in the active management of the Resorts, (ii) unless Borrower notifies
        Agent in writing at least thirty (30) days in advance of its new location,
        retain its executive offices at 1221 Riverbend Drive, Suite 120, Dallas,
        Texas
        75221, and (iii) continue to perform duties substantially similar to those
        presently performed as provided in the management agreement relating to each
        Resort.  No management agreement for any Resort shall be modified,
        assigned, extended, terminated or entered into nor shall the current method
        of
        operation and management of the Resorts be changed in any material manner,
        without the prior written approval of Agent.

       

      (k)            Operating
        Contracts.  Subject to the rights of the Timeshare
        Owners’ Association as set forth in the Timeshare Documents, no Operating
        Contract shall be modified, extended, terminated or entered into, without
        the
        prior written approval of Agent, if any such modification, extension,
        termination or new agreement could have a material adverse impact on the
        operation of the Resorts or the Collateral.

       

      (l)           
        Notices.  Borrower shall notify Agent within
        five (5) Business Days of the occurrence of any event (i) as a result of
        which any representation or warranty of Borrower contained in any Loan Documents
        would be incorrect or materially misleading if made at that time, or
        (ii) as a result of which Borrower is not in full compliance with all of
        its covenants and agreements contained in this Agreement or any Loan Document,
        or (iii) which constitutes or, with the passage of time, notice or a
        determination by Agent would constitute, an Event of Default.

       

      (m)           Maintenance.  Borrower
        shall maintain, or shall cause to be maintained, or to the extent provided
        for
        pursuant to the Declaration, shall use its best efforts to cause the Timeshare
        Owners’ Association to maintain, the Resorts in good repair, working order and
        condition and shall make all necessary replacements and improvements to the
        Resorts consisting of real property so that the value and operating efficiency
        of the Resorts will be maintained at all times and so that the Resorts remain
        in
        compliance in all respects with the Timeshare Act, the Timeshare Documents
        and
        other applicable law.

       

      (n)           Claims.  Borrower
        shall promptly notify Agent of any claim, action or proceeding affecting
        the
        Resorts or Collateral, or any part thereof, or Agent or any Lender or any
        of the
        security interests or rights granted in favor of Agent hereunder or under
        any of
        the Loan Documents.  At the request of Agent, Borrower shall appear in
        and defend in favor of each Lender, at Borrower’s sole expense, any such claim,
        action or proceeding.

       

      (o)           Registration
        and Regulations.

       

      (i)        Local
        Legal Compliance.  Borrower will comply, and will cause
        the Resorts to comply, with all applicable servitudes, restrictive covenants,
        applicable planning, zoning or land use ordinances and building codes, all
        applicable health and Environmental Laws and regulations, and all other
        Applicable Laws, rules, regulations, agreements or
        arrangements.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (ii)       Registration
        Compliance.  Borrower will maintain, or cause to be
        maintained, all necessary registrations, current filings, consents, franchises,
        approvals, and exemption certificates, and Borrower will make or pay, or
        cause
        to be made or paid, all registrations, declarations or fees with the Division
        and any other government or any agency or department thereof, whether in
        the
        state or another jurisdiction, required in connection with the Resorts and
        the
        occupancy, use and operation thereof, the incorporation of Units into the
        time-share plan established pursuant to the Declaration and the other Timeshare
        Documents, and the sale, advertising, marketing, and offering for sale of
        Intervals.  All such registrations, filings and reports will be
        truthfully completed; and true and complete copies of such registrations,
        applications, consents, licenses, permits, franchises, approvals, exemption
        certificates, filings and reports will be delivered to
        Agent.  Borrower shall advise Agent of any changes with respect to its
        marketing or sales programs in any jurisdiction, including jurisdictions
        other
        than the state, and at Agent’s request from time to time, Borrower shall deliver
        to Agent: (A) written statements by the applicable state authorities, in
        form acceptable to Agent, stating that no registration is necessary for the
        sale
        of Intervals in the particular state, (B) an opinion of counsel in form
        acceptable to Agent and rendered by counsel acceptable to Agent, stating
        that no
        such registration is necessary, or (C) such other evidence of compliance
        with Applicable Laws as Agent may require; and

       

      (iii)      Other
        Compliance.  Borrower has, in all material respects,
        complied with and will comply with all laws and regulations of the United
        States, the State of Texas, each state in which an applicable Resort or
        Collateral is located, any political subdivision of either such state and
        any
        other governmental, quasi-governmental or administrative jurisdiction in
        which
        Intervals have been sold or offered for sale, or in which sales, offers of
        sale
        or solicitations with respect to the Resorts have been or will be conducted,
        including to the extent applicable, but not limited to: (1) the Timeshare
        Act; (2) the Consumer Credit Protection Act; (3) Regulation Z of
        the Federal Reserve Board; (4) the Equal Credit Opportunity Act;
        (5) Regulation B of the Federal Reserve Board; (6) the Federal
        Trade Commission’s 3-day cooling-off Rule for Door-to-Door Sales;
        (7) Section 5 of the Federal Trade Commission Act; (8) ILSA;
        (9) federal postal laws; (10) applicable state and federal securities
        laws; (11) applicable usury laws; (12) applicable trade practices,
        home and telephone solicitation, sweepstakes, anti-lottery and consumer credit
        and protection laws; (13) applicable real estate sales licensing,
        disclosure, reporting and escrow laws; (14) the ADA; (15) RESPA;
        (16) all amendments to and rules and regulations promulgated under the
        foregoing acts or laws; (17) the Federal Trade Commission’s Privacy of Consumer
        Financial Information Rule; (18) other applicable federal statutes and the
        rules and regulations promulgated thereunder; and (19) any state law or law
        of any state (and the rules and regulations promulgated thereunder) relating
        to
        ownership, establishment or operation of the Resort, or the sale, offering
        for
        sale, or financing of Intervals.

       

      (p)           Other
        Documents.  Borrower will maintain to the satisfaction of
        Agent and make available to Agent and other Lenders, accurate and complete
        files
        relating to the Resorts, the Pledged Notes Receivable and other Collateral,
        and
        such files will contain true copies of each Pledged Note Receivable, as amended
        from time to time, copies of all relevant credit memoranda relating to such
        Notes Receivable and all collection information and correspondence relating
        thereto.  Without limiting the foregoing, Borrower shall maintain
        evidence of its compliance with the requirements of Section 3.8
        hereof.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (q)           Further
        Assurances.  Borrower will execute and deliver, or cause
        to be executed and delivered, such other and further agreements, documents,
        instruments, certificates and assurances as, in the judgment of Agent exercised
        in good faith may be necessary or appropriate to more effectively evidence
        or
        secure, and to ensure the performance of, the Obligations.  In
        addition, Borrower shall deliver to Agent from time to time upon each request
        by
        Agent such documents, instruments or other matters or items as Agent may
        require
        to evidence Borrower’s compliance with the covenants set forth in this
Section 7.1 and Section 3.8 hereof.

       

      (r)           
        Utilities.  Borrower will cause, or to the
        extent provided for pursuant to the Declaration, covenants to use its best
        efforts to ensure that the Timeshare Owners’ Association, or the manager of the
        Resorts, as applicable, will cause, electric, sanitary and stormwater sewer,
        water facilities, drainage facilities, solid waste disposal, telephone and
        other
        necessary utilities to be available to the Resorts in sufficient capacity
        to
        service the Resorts.

       

      (s)           Amenities.  Borrower
        will cause, or to the extent provided for pursuant to the Declarations, will
        use
        its best efforts to ensure that the Timeshare Owners’ Association, or the
        manager of the Resort, as applicable, will cause, the Resorts to be maintained
        in good condition and repair, and in accordance with the provisions of the
        applicable Timeshare Documents, and Borrower will cause each Purchaser of
        an
        Interval at the Resorts to have continuing access to, and the use of, to
        the
        extent of such Purchaser’s time-share periods, all of the Common Elements and
        related or appurtenant services, rights and benefits, all as provided in
        the
        Declaration and the Timeshare Documents.

       

      (t)           Transaction
        Costs, Expenses and Fees.  Whether or not the
        transactions contemplated hereunder are completed, Borrower shall pay all
        expenses of Agent, each Lender and any Participant, whether at the Closing
        Date
        or subsequent thereto relating to negotiating, preparing, documenting, closing
        and enforcing this Agreement, including, but not limited to:

       

      (i)        the
        cost of preparing, reproducing and binding this Agreement, the other Loan
        Documents and all Exhibits and Schedules thereto;

       

      (ii)      
        the reasonable fees and disbursements of Agent’s, each Lender’s and each
        Participants’ counsel;

       

      (iii)      Agent’s,
        each Lender’s and each Participants’ reasonable out-of-pocket
        expenses;

       

      (iv)     all
        reasonable fees and expenses (including fees and expenses of Agent’s, each
        Lender’s and each Participants’ counsel) relating to any amendments, waivers,
        consents or subsequent closings pursuant to the provisions hereof;

       

      (v)      all
        costs, outlays, legal fees and expenses of every kind and character had or
        incurred in (1) the interpretation or enforcement of any of the provisions
        of,
        or the creation, preservation or exercise of rights and remedies under, any
        of
        the Loan Documents including the costs of appeal (2) the preparation for,
        negotiations regarding, consultations concerning, or the defense or prosecution
        of legal proceedings involving any claim or claims made or threatened against
        Agent arising out of this transaction or the protection of the Collateral
        securing the Loan or Advances made hereunder, expressly including, without
        limitation, the defense by Agent, each Lender and each Participant of any
        legal
        proceedings instituted or threatened by any Person to seek to recover or
        set
        aside any payment or setoff theretofore received or applied by Agent, each
        Lender and each Participant with respect to the Obligations, and any and
        all
        appeals thereof; and (3) the advancement of any expenses provided for under
        any
        of the Loan Documents;

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (vi)     all
        expenses relating to the maintenance and administration of the Lockbox and
        Lockbox Account by the Lockbox Agent and Servicing and any escrow by the
        Title
        Company or any other escrow agent;

       

      (vii)    all
        costs and expenses incurred by Agent under the Note, and all late charges
        under
        the Note;

       

      (viii)   all
        real and personal property taxes and assessments, documentary stamp and
        intangible taxes, sales taxes, recording fees, title insurance premiums and
        other title charges, document copying, transmittal and binding costs, appraisal
        fees, lien and judgment search costs, fees of architects, engineers,
        environmental consultants, surveyors and any special consultants, construction
        inspection fees, brokers fees, escrow fees, wire transfer fees, and all travel
        and out-of-pocket expenses of Agent, each Lender and each Participant to
        conduct
        inspections or audits. Without limitation of the foregoing, Borrower shall
        pay
        the costs of UCC and other searches, UCC and other Loan Document recording
        fees
        and applicable taxes, and premiums on each Mortgagee Title Policy delivered
        to
        Agent pursuant to this Agreement; and

       

      (ix)     
        audit, appraisal, and valuation fees and charges as follows: (i) a fee of
        $950
        per day, per auditor, plus out-of-pocket expenses for each financial audit
        of
        Borrower performed by personnel employed or contracted by Agent, which audits
        shall be conducted at Borrower’s expense as frequently as Agent shall determine
        and (ii) if implemented, a fee of $950 per day, per applicable individual,
        plus out-of-pocket expenses for the establishment of electronic collateral
        reporting systems, provided the aggregate fee to be paid by Borrower for
        this
        service shall not exceed $5,000.

       

      With
        respect to the fees payable by Borrower under clauses (ii), (iii), and (iv)
        above, provided that no Event of Default or condition, omission or act which,
        with the passage of time, notice or both, would constitute an Event of Default,
        has occurred, Agent, each Lender and/or each Participant shall provide Borrower
        in advance, as applicable, with good faith estimates of: (1) the reasonable
        fees
        and disbursements of such party’s counsel; (2) such party’s reasonable
        out-of-pocket expenses; and (3) the reasonable fees and expenses of such
        party
        and its counsel relating to any amendments, waivers, consents or subsequent
        closings pursuant to the provisions hereof, respectively; and such fees,
        disbursements and expenses shall be in accordance with such good faith
        estimates.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (u)           Indemnification
        of Agent and Lender.  In addition to (and not in lieu of)
        any other provisions of any Loan Document providing for indemnification in
        favor
        of Agent or Lenders, Borrower shall defend, indemnify and hold harmless Agent,
        each Lender, each Participant, their respective subsidiaries, affiliates,
        officers, directors, agents, employees, representatives, consultants,
        contractors, servants, and attorneys, as well as the respective heirs, personal
        representatives, successors or assigns of any or all of them (hereafter
        collectively the “Indemnified Lender Parties”), from and against, and promptly
        pay on demand or reimburse each of them with respect to, any and all
        liabilities, claims, demands, losses, damages, costs and expenses (including
        without limitation, reasonable attorneys’ and paralegals’ fees and costs),
        actions or causes of action of any and every kind or nature whatsoever asserted
        against or incurred by any of them by reason of or arising out of or in any
        way
        related or attributable to (i) this Agreement, the Loan Documents, or the
        Collateral; (ii) the transactions contemplated under any of the Loan Documents
        or any of the Timeshare Documents, including without limitation, those in
        any
        way relating to or arising out of the violation of any federal or state laws,
        including the Timeshare Act; (iii) any breach of any covenant or agreement
        or
        the incorrectness or inaccuracy of any representation and warranty of Borrower
        contained in this Agreement or any of the Loan Documents (including without
        limitation any certification of Borrower delivered to Lender or Agent); (iv)
        any
        and all taxes, including real estate, personal property, sales, mortgage,
        excise, intangible or transfer taxes, and any and all fees or charges,
        including, without limitation under the Timeshare Act, which may at any time
        arise or become due prior to the payment, performance and discharge in full
        of
        the Obligations; (v) the breach of any representation or warranty as set
        forth
        herein regarding any Environmental Laws; (vi) the failure of Borrower to
        perform
        any obligation or covenant herein required to be performed pursuant to any
        Environmental Laws; (vii) the use, generation, storage, release, threatened
        release, discharge, disposal or presence on, under or about the Resorts of
        any
        Hazardous Materials; (viii) the removal or remediation of any Hazardous
        Materials from the Resorts required to be performed pursuant to any
        Environmental Laws or as a result of recommendations of any environmental
        consultant or as required by Agent; (ix) claims asserted by any Person
        (including without limitation any governmental or quasi-governmental agency,
        commission, department, instrumentality or body, court, arbitrator or
        administrative board (collectively, a “Governmental Agency”), in connection with
        or any in any way arising out of the presence, use, storage, disposal,
        generation, transportation, release, or treatment of any Hazardous Materials
        on,
        in, under or affecting the Resorts; (x) the violation or claimed violation
        of
        any Environmental Laws in regard to the Resorts; or (xi) the preparation
        of an
        environmental audit or report on the Resorts, whether conducted by a Lender,
        Agent, Borrower or a third-party, or the implementation of environmental
        audit
        recommendations.  Such indemnification shall not give Borrower any
        right to participate in the selection of counsel for Agent or any Lender
        or the
        conduct or settlement of any dispute or proceeding for which indemnification
        may
        be claimed.  Agent and each Lender agree to give Borrower written
        notice of the assertion of any claim or the commencement of any action or
        lawsuit described in this Section 7.1(v).  It is the express
        intention of the parties hereto that the indemnity provided for in this
Section 7.1(v), as well as the disclaimers of liability referred to in
        this Agreement, are intended to and shall protect and indemnify Agent and
        each
        Lender from the consequences of Agent’s and each Lender’s and each Participant’s
        own negligence, whether or not that negligence is the sole or concurring
        cause
        of any liability, obligation, loss, damage, penalty, action, judgment, suit,
        claim, cost, expense or disbursement provided, however, that Borrower shall
        not
        be required to protect and indemnify Agent or any Lender or any Participant
        from
        the consequences of Agent’s or any such Lender’s or any such Participant’s gross
        negligence, where that gross negligence is the sole cause of the liability,
        obligation, loss, damage, penalty, action, judgment, suit, claim, cost, expense
        or disbursement for which indemnification or protection would otherwise be
        required.  The provisions of this Section 7.1(v) shall survive
        the full payment, performance and discharge of the Obligations and the
        termination of this Agreement, and shall continue thereafter in full force
        and
        effect.  In addition to the above, Borrower has advised Agent that
        payments from Purchasers will include reimbursements from such Purchasers
        of
        Time Share Owners’ Association fees and expenses and Borrower hereby authorizes
        Agent to apply such payments and reimbursements to the outstanding Obligations
        due from Borrower to Agent and Lenders and Borrower will pay not less frequently
        than monthly all sums due to such Time Share Owners’
Associations.  Borrower hereby indemnifies and holds Agent and each
        Lender and each Participant harmless from the application of such payments
        and
        agrees that it is its sole responsibility to remit funds to each Time Share
        Owners’ Association to reimburse such Time Share Owners’ Association for the
        payments made by Purchasers.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (v)           Standby
        Servicer.  Borrower will maintain the agreement for the
        Standby Servicer in full force and effect. Borrower agrees that upon the
        occurrence of a Default or Event of Default hereunder, the Standby Servicer
        will
        assume full control over the servicing of all Pledged Notes Receivable,
        reporting solely to Agent, as provided in Section 9.1(i)
        hereof.

       

      (w)           Additional
        Loan Facility Documents.  Borrower will comply with the
        terms and conditions of the CSF Facility, the UBS Facility, the WFF Facility,
        the TFC Facility and the TFC Conduit Loan.  Nothing contained herein
        shall prohibit or limit Borrower’s ability to amend or modify any of the CSF
        Documents or any of the UBS Documents or any of the WFF Documents or any
        of the
        TFC Documents or any of the Silverleaf Finance II Documents or documents
        evidencing any other indebtedness of Borrower, provided Borrower provides
        Agent
        with a copy of the fully executed loan documents promptly within ten (10)
        days
        after execution.

       

      (x)          
         Financial Covenants.

       

      (i)        Tangible
        Net Worth.  Borrower shall, on and after the Closing
        Date, at all times have and maintain a Tangible Net Worth of not less than
        $100,000M plus 50% of aggregate amount of proceeds received by Borrower
        after December 31, 2004 in connection with each issuance by Borrower of any
        class or classes of capital stock after December 31, 2004, except for stock
        issued to retire existing unsecured subordinated debt, plus
        50% of the aggregate amount of net income (calculated in accordance with
        GAAP)
        of Borrower after December 31, 2004.

       

      (ii)       Marketing
        and Sales Expenses.  As of the last day of each fiscal
        quarter, commencing with the fiscal quarter ending September 30, 2007, Borrower
        will not permit the four quarter cumulative ratio of Marketing and Sales
        Expenses to the Borrower’s vacation interval sales as recorded on the Borrower’s
        financial statements for the immediately preceding four (4) consecutive fiscal
        quarters of the Borrower to equal or exceed a ratio of .570 to 1.

       

      (iii)      Maximum
        Loan Delinquency.  Borrower will not permit as of the
        last day of each calendar quarter its over 30-day delinquency rate on its
        entire
        Notes Receivable portfolio to be greater than ten percent (10%).

       

      (iv)      Interest
        Coverage.  For the calendar quarter of Borrower ending
        September 30, 2007 and for each calendar quarter thereafter, the average
        of the
        Interest Coverage Ratio for Borrower for such calendar quarter and the Interest
        Coverage Ratios for each of the three immediately preceding calendar quarters
        shall be at least 1.25:1.  The term Interest Coverage Ratio means with
        respect to any Person for any calendar quarter, the ratio of (a) EBITDA for
        such
        period less capital expenditures as determined in accordance with GAAP, for
        such
        period to (b) the Total Interest Expense minus all non-cash items constituting
        interest expense for such period.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (v)           Profitable
        Operations.  Borrower will not permit consolidated net
        income (a) for any fiscal year, commencing with the fiscal year ending December
        31, 2005, to be less than $1.00 and (b) for any two consecutive fiscal quarters
        (reviewed on an individual rather than on an aggregate basis) to be less
        than
        $1.00.

       

      (vi)           Maximum
        Debt to Tangible Net Worth.  Borrower shall maintain a
        ratio of (i) the outstanding amount of Indebtedness of Borrower (excluding
        Subordinated Debt), to (ii) Tangible Net Worth, each as measured on a fiscal
        quarter-end basis commencing the calendar quarter ending September 30, 2007
        and
        for each fiscal quarter thereafter, which is less than or equal to 6.00 to
        1.00
        (non-recourse off balance sheet financing would not be included as Indebtedness
        for the purposes of this covenant).

       

      (vii)          Minimum
        FICO Scores.  Borrower shall not permit, for any calendar
        quarter, the weighted average FICO Credit Bureau Scores of all of Borrower’s
        sales, not limited to those resulting in pledged Notes Receivable to Agent,
        with
        respect to which a FICO score can be obtained to be less than 640.

       

      7.2           Negative
        Covenants.  So long as any portion of the Obligations
        remain unsatisfied, Borrower hereby covenants and agrees with Agent and each
        Lender as follows:

       

      (a)           
        Limitation on Other Debt, Further
        Encumbrances.  Borrower will not obtain financing and
        grant liens with respect to the Collateral.  Notwithstanding anything
        herein to the contrary, Borrower may, without first obtaining the written
        consent of Agent obtain financing and grant liens with respect to any of
        its
        assets or other property except for the Collateral and those assets or property
        restricted by a negative pledge provided: (i) Borrower provides ten days
        prior
        written notice to Agent setting forth the terms and conditions of such
        financing; (ii) no Event of Default or condition, omission or act which,
        with
        the passage of time, notice or both, would constitute an Event of Default,
        has
        occurred; (iii) such financing does not result in an Event of Default hereunder
        or under any documents evidencing any other indebtedness of Borrower; and
        (iv)
        Agent is promptly provided a copy of the fully executed loan documents relating
        thereto.

       

      (b)           Restrictions
        on Transfers.  Except as hereinafter specifically
        provided, Borrower shall not, whether voluntarily or involuntarily, by operation
        of law or otherwise, (i) without obtaining the prior written consent of Agent
        (which consent may be given, withheld or conditioned by Agent in Agent’s sole
        discretion), transfer, sell, pledge, convey, hypothecate, factor or assign
        all
        or any portion of the Collateral, the Encumbered Intervals, the Common Elements
        relating to the Encumbered Intervals or any Resort facilities or amenities,
        or
        contract to do any of the foregoing, including, without limitation, pursuant
        to
        options to purchase, and so-called installment sales contracts, land contracts,
        or contracts for deed, provided that the foregoing restriction on transfers
        shall not apply to the conveyance of SPV Assets to the SPV, (ii) without
        obtaining the prior written consent of Agent (which consent may be given,
        withheld or conditioned by Agent in Agent’s sole discretion), lease or license
        all or any portion of the Collateral, the Encumbered Intervals, the Common
        Elements relating to the Encumbered Intervals or any Resort facilities or
        amenities (except for the license created in favor of SPV under any license
        agreement with Borrower, Silverleaf Club or any timeshare owners association,
        to
        use or access the reservation system or related computer hardware or software
        for any Resort), or change the legal or actual possession or use thereof,
        (iii)
        permit the assignment, transfer, delegation, change, modification or diminution
        of the duties or responsibilities of Borrower, of any manager of the Resorts
        approved by Agent as manager of the Resorts (except for an assignment of
        such
        duties to a professional management company or companies reasonably acceptable
        to Agent in advance) without obtaining the prior written consent of Agent
        (which
        consent shall not be unreasonably withheld), or (iv) without obtaining the
        prior
        written consent of Agent (which consent may be given, withheld or conditioned
        by
        Agent in Agent’s sole discretion), cause or permit the assignment, pledge or
        other encumbrance of any of the Operating Contracts or all or any portion
        of
        Borrower’s right, title or interest in the Declaration.  Without
        limiting the generality of the preceding sentence, and subject to the terms
        of
        this Agreement, the prior written consent of Agent (as specified above) shall
        be
        required for (A) any transfer of the Encumbered Intervals, the Common Elements
        relating to the Encumbered Intervals or any Resort facilities or amenities
        or
        any part thereof made to a subsidiary or Affiliate or otherwise, (B) any
        transfer of all or any part of the Encumbered Intervals, the Common Elements
        relating to the Encumbered Intervals or any Resort facilities or amenities
        by
        Borrower to its stockholders or Affiliates or vice versa, and (C) any corporate
        merger or consolidation, disposition or other reorganization, except as
        permitted in Section 7.1(c) hereof.  In the event
        that Agent is willing to consent to a transfer which would otherwise be
        prohibited by this Section 7.2(b) Agent may condition its
        consent on such terms as it desires, including, without limitation, an increase
        in the Interest Rate and the requirement that Borrower pay a transfer fee,
        together with any expenses incurred by Agent in connection with the granting
        of
        such consent (including, without limitation, attorneys’ fees and
        expenses).  If Borrower violates the terms of this Section
7.2(b), in addition to any other rights or remedies which Agent
        may
        have herein, in any other Loan Document, or at law or in equity, Agent may
        by
        written notice to Borrower increase, effective immediately as of the date
        of
        such violation, the Interest Rate to the Default Rate.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (c)            Use
        of Lender or Agent’s Name.  Borrower will not, and will
        not permit any Affiliate to, without the prior written consent of Agent,
        such
        Lender or a Participant, use the name of Agent, any Lender or any Participant
        or
        the name of any affiliate of Agent, any Lender or any Participant in connection
        with any of their respective businesses or activities, except in connection
        with
        internal business matters and as required in dealings with governmental
        agencies.

       

      (d)           
        Transactions with Affiliates.  Except as
        provided in the SPV Documents, without the prior written consent of Agent,
        which
        shall not unreasonably be withheld, Borrower will not enter into any transaction
        with any Affiliate in connection with the Resorts, including, without
        limitation, relating to the purchase, sale or exchange of any assets or
        properties or the rendering of any service, except in the ordinary course
        of,
        and pursuant to the reasonable requirements of, the operations of the Resorts
        and upon fair and reasonable terms.

       

      (e)           
        Restrictive Covenants.  Borrower will not
        without Agent’s prior written consent seek, consent to, or otherwise acquiesce
        in, any change in any private restrictive covenant, planning or zoning law
        or
        other public or private restriction, which would limit or alter the use of
        the
        Resorts.

       

      (f)           
        Subordinated Obligations.  Borrower will not,
        directly or indirectly, (i) permit any payment to be made in respect of any
        indebtedness, liabilities or obligations, direct or contingent (the
“Subordinated Debt”) to any of its shareholders or their affiliates or which are
        subordinated by the terms thereof or by separate instrument to the payment
        of
        principal of, and interest on, the Note; (ii) permit the amendment,
        rescission or other modification of any such subordination provisions of
        any of
        Borrower’s subordinated obligations in such a manner as to affect adversely the
        Lien in and to the Collateral or Agent’ senior priority position and entitlement
        as to payment and rights with respect to the Note and the Obligations, or
        (iii) permit the prepayment or redemption, except for mandatory
        prepayments, of all or any part of Borrower’s obligations to its shareholders,
        or of any subordinated obligations of Borrower except in accordance with
        the
        terms of such subordination.  Notwithstanding anything to the contrary
        in this Section 7.2(f), so long as Borrower’s Tangible Net Worth
        remains in compliance with Section 7.1(y)(i) hereof, Borrower may:
        (i) retire unsecured subordinated debt, and/or (ii) declare dividends, buy
        back
        stock, and perform other equity transactions.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (g)           Timeshare
        Regime.  Without Agent’s prior written consent, Borrower
        shall not amend, modify or terminate the Declarations or other Timeshare
        Documents, or any other restrictive covenants, agreements or easements regarding
        the Resorts (except for routine non-substantive modifications which have
        no
        impact on the Collateral).  Except as otherwise provided herein,
        Borrower shall not assign its rights as developer under the Declarations
        without
        Agent’s prior written consent, or file or permit to be filed any additional
        covenants, conditions, easements or restrictions against or affecting the
        Resorts (or any portion thereof) without Agent’s prior written consent, which
        consent shall not be unreasonably withheld.

       

      (h)           Name
        Change.  Borrower will not change its name or state of
        organization.

       

      (i)           
        Collateral.  Borrower shall not take any
        action (nor permit or consent to the taking of any action) which might impair
        the value of the Collateral or any of the rights of Agent or any Lender in
        the
        Collateral, nor shall Borrower cause or permit any amendment to or modification
        of the form or terms of any of the Pledged Notes Receivable, Mortgages or,
        except as specifically provided herein above, the other Timeshare
        Documents.

       

      (j)           
        Marketing/Sales.  Borrower shall not market,
        attempt to sell or sell or permit or justify any sales or attempted sales
        of any
        Intervals except in compliance with the Timeshare Act and Applicable Laws
        in
        state and other jurisdictions where marketing, sales or solicitation activities
        occur.

       

      (k)           
        Modification of Other Documents.  Borrower
        shall not amend or modify the Standby Servicing Agreement, without the prior
        written consent of Agent, which consent shall not be unreasonably
        withheld.

       

      (l)           
        Declarant’s Rights and Management
        Agreements.  Borrower covenants, pledges and agrees that
        until the Loan and all other amounts due and owing under the this Agreement
        and
        the other Loan Documents are paid in full Borrower will not, voluntarily
        or
        involuntarily, directly or indirectly, mortgage, pledge, assign, sell, transfer,
        hypothecate, encumber, convey or grant a security interest in  any:
        (i) contract or agreement, whether written, oral or otherwise, whether now
        or
        hereafter existing, including any management or operating contract and
        agreement, between Borrower or any Affiliate of the Borrower and the governing
        body of any Resort, with respect to the management and operation of the Resort;
        or (ii) any rights of the Declarant (the “Declarant Rights”) arising under the
        Declaration creating any Resort, or under the Bylaws for the Resort, whether
        now
        or hereafter existing.

       

      (m)           Modifications
        of Documents, Additional Loan Facility Documents, Silverleaf Finance II
        Documents and Other Debt Instruments.  Nothing contained
        herein shall prohibit or limit Borrower’s ability to amend or modify any of the
        CSF Documents or any of the WFF Documents or any of the TFC Documents or
        any of
        the Silverleaf Finance II Documents or any of the UBS Documents or documents
        evidencing any other indebtedness of Borrower, provided Borrower provides
        Agent
        with a copy of the fully executed loan documents promptly within ten (10)
        days
        after execution.

       

      (n)           Change
        in Certain Accounting Practices.  Borrower covenants,
        pledges and agrees that until the Loan and all other amounts due and owing
        under
        the this Agreement and the other Loan Documents are paid in full Borrower
        will
        not, voluntarily or involuntarily, directly or indirectly, without the prior
        written consent of Agent and each Lender, make any change to the existing
        policies of Borrower in connection with its accounting for delinquent
        accounts.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
        8-Events Of Default

       

      8.1           Nature
        of Events.  An “Event of Default” shall exist if any of
        the following shall occur:

       

      (a)           Payments.  If
        Borrower shall fail to make, as and when due, any payment or mandatory
        prepayment of principal, interest, fees or other amounts with respect to
        the
        Loan and such failure shall continue for five (5) days after notice of such
        failure is provided by Agent.

       

      (b)           Covenant
        Defaults.  If Borrower shall fail to perform or observe
        any covenant, agreement or warranty contained in this Agreement or in any
        of the
        Loan Documents, (other than with respect to: (i) the failure to make timely
        payments in respect of the Loan as provided in Section 8.1(a)
        hereof; (ii) the failure to deliver payments made under the Pledged Notes
        Receivable directly to Agent as required pursuant to Section 2.3 hereof
        as provided in Section 8.1(h) hereof; or (iii) violation of:
        (y) the financial covenants in Section 7.1(y) hereof; or (z) any negative
        covenants in Section 7.2 hereof) and, such failure shall continue for
        fifteen (15) days after notice of such failure is provided by Agent, provided
        however, that if Borrower commences to cure such failure within such 15 day
        period, but, because of the nature of such failure, cure cannot be completed
        within 15 days notwithstanding diligent effort to do so, then, provided Borrower
        diligently seeks to complete such cure, an Event of Default shall not result
        unless such failure continues for a total of thirty (30) days and provided
        further that it shall not be a Default or an Event of Default, if during
        the
        initial sixty (60) days after the Closing Date Borrower is not able to achieve
        compliance with all covenants relating to the Collateral.

       

      (c)           Warranties
        or Representations.  If any representation or other
        statement made by or on behalf of Borrower in this Agreement, in any of the
        Loan
        Documents or in any instrument furnished in compliance with or in reference
        to
        the Loan Documents, is false, misleading or incorrect in any material respect
        as
        of the date made or reaffirmed.

       

      (d)           Enforceability
        of Liens.  If any lien or security interest granted by
        Borrower to Agent in connection with the Loan is or becomes invalid or
        unenforceable or is not, or ceases to be, a perfected first priority lien
        or
        security interest, as applicable, in favor of Agent, encumbering the asset
        which
        it is intended to encumber, and Borrower fails to cause such lien or security
        interest to become a valid, enforceable, first and prior lien or security
        interest in a manner satisfactory to Agent within ten (10) days after Agent
        delivers written notice thereof to Borrower.

       

      (e)           Involuntary
        Proceedings.  If a case is commenced or a petition is
        filed against Borrower under any Debtor Relief Law; a receiver, liquidator
        or
        trustee of Borrower or of any material asset of Borrower is appointed by
        court
        order and such order remains in effect for more than forty-five (45) days;
        or if
        any material asset of Borrower is sequestered by court order and such order
        remains in effect for more than forty-five (45) days.

       

      (f)           Proceedings.  If
        Borrower voluntarily seeks, consents to or acquiesces in the benefit of any
        provision of any Debtor Relief Law, whether now or hereafter in effect; consents
        to the filing of any petition against it under such law; makes an assignment
        for
        the benefit of its creditors; admits in writing its inability to pay its
        debts
        generally as they become due; or consents or suffers to the appointment of
        a
        receiver, trustee, liquidator or conservator for it, or any part of its,
        assets.

       

      (g)           Attachment,
        Judgment, Tax Liens.  The issuance, filing, levy or
        seizure against the Collateral, or, with respect to the Resorts or the
        Obligations, against Borrower of one or more attachments, injunctions,
        executions, tax liens or judgments for the payment of money cumulatively
        in
        excess of $100,000.00, which is not discharged in full or stayed within thirty
        (30) days after issuance or filing.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (h)           Failure
        to Deposit Proceeds.  If Borrower shall fail to deliver
        payments made under the Pledged Notes Receivable directly to Agent as required
        pursuant to Section 2.3 hereof, or if Borrower shall take any other act
        which Agent or any Lender shall deem to be a conversion of the Collateral
        or
        fraudulent with respect to Agent or any Lender.

       

      (i)           
        Timeshare Documents.  If the Declaration, any
        of the other documents creating or governing the Resorts, its timeshare regime,
        or the Timeshare Owners’ Association, or the restrictive covenants with respect
        to the Resorts, shall be terminated, amended or modified without Agent’s prior
        written consent (except for routine non-substantive modifications which have
        no
        impact on the Collateral).

       

      (j)           
        Removal of Collateral.  If Borrower conceals,
        removes, transfers, conveys, assigns or permits to be concealed, removed,
        transferred, conveyed or assigned, any of the Collateral in violation of
        the
        terms of the Loan Documents or with the intent to hinder, delay or defraud
        its
        creditors or any of them including, without limitation, Agent or any
        Lender.

       

      (k)           
        Other Defaults.  If a material default shall
        occur in any of the covenants or Obligations set forth in any of the Loan
        Documents.

       

      (l)        
           Material Adverse
        Change.  Any material adverse change in the financial
        condition of Borrower or in the condition of the Collateral.  For
        purposes of this provision, a decline in the net worth of Borrower of
        $500,000.00 or less shall not be considered a material adverse
        change.

       

      (m)           Default
        by Borrower in Other Agreements.  Any default as defined
        in the applicable loan agreement, by Borrower (i) in the payment of any
        indebtedness to any lender, including any indebtedness owed under the CSF
        Facility, the UBS Facility, the TFC Facility, the TFC Conduit Loan or the
        WFF
        Facility; (ii) in the payment or performance of other indebtedness for borrowed
        money or obligations secured by any part of the Resort; (iii) in the payment
        or
        performance of other material indebtedness or obligations (material indebtedness
        or obligations being defined for purposes of this provision as any indebtedness
        or obligation in excess of $200,000) where such default accelerates or permits
        the acceleration (after the giving of notice or passage of time or both)
        of the
        maturity of such indebtedness, or permits the holders of such indebtedness
        to
        elect a majority of the board of directors of Borrower (whether or not such
        default[s] have been waived by such holder) or (iv) the acceleration by CSF
        under the CSF Documents, UBS under the UBS Documents, TFC under the TFC
        Documents or the Silverleaf Finance II Documents, or WFF under the WFF
        Documents, or the bondholders of their respective credit
        facilities.

       

      (n)           Use
        of Resorts.  Any act or failure to act by Borrower which
        materially and adversely limits the rights of Purchasers to use Common Elements,
        and related or appurtenant easement, access and use rights and benefits of
        any
        of the Resorts, including but not limited to a default by Borrower or any
        Affiliate under any loan document or Declaration to which Borrower or any
        Affiliate is a party.

       

      (o)           Violation
        of Negative Covenants.  Borrower violates any negative
        covenants set forth in Section 7.2 hereof.

       

      (p)           Violation
        of Financial Covenants.  Borrower violates any financial
        covenants set forth in Section 7.1(y) hereof.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (q)           Use
        of Loan Proceeds.  If the proceeds of any Advance are
        used in contravention of Section 6.11
        hereof.

      Section
        9-Remedies

       

      9.1           Remedies
        Upon Default.  Should an Event of Default occur, Agent on
        behalf of each Lender, may, take any one or more of the actions described
        in
        this Section 9, all without notice to Borrower:

       

      (a)           Acceleration.  Without
        demand or notice of any nature whatsoever, declare the unpaid balance of
        the
        Loans, or any part thereof, immediately due and payable, whereupon the same
        shall be due and payable.

       

      (b)           Termination
        of Obligation to Advance.  Terminate any obligation of
        Lenders to lend under this Agreement in its entirety, or any portion of any
        such
        commitment, to the extent Agent shall deem appropriate, all without notice
        to
        Borrower.

       

      (c)           Judgment.  Reduce
        each Lender’s claim to judgment, foreclose or otherwise enforce each Lender’s
        security interest in all or any part of the Collateral by any available judicial
        or other procedure under law.

       

      (d)           Sale
        of Collateral.  After notification, if any, provided for
        in Section 9.2 hereof, Agent may sell or otherwise dispose
        of, at the office of Agent, or elsewhere, as chosen by Agent, all or any
        part of
        the Collateral, and any such sale or other disposition may be as a unit or
        in
        parcels, by public or private proceedings, and by way of one or more contracts
        (it being agreed that the sale of any part of the Collateral shall not exhaust
        Agent’s power of sale, but sales may be made from time to time until all of the
        Collateral has been sold or until the Obligations have been paid in full
        and
        fully performed), and at any such sale it shall not be necessary to exhibit
        the
        Collateral.  Borrower hereby acknowledges and agrees that a private
        sale or sales of the Collateral, after notification as provided for in
Section 9.2 hereof, shall constitute a commercially
        reasonable disposition of the Collateral sold at any such sale or sales,
        and
        otherwise, commercially reasonable action on the part of Agent.

       

      (e)           Retention
        of Collateral.  At its discretion, retain such portion of
        the Collateral as shall aggregate in value to an amount equal to the aggregate
        amount of the Loans, in satisfaction of the Obligations, whenever the
        circumstances are such that Agent is entitled on behalf of Lenders and elects
        to
        do so under applicable law.

       

      (f)          
         Receiver.  Apply by appropriate judicial
        proceedings for appointment of a receiver for the Collateral, or any part
        thereof, and Borrower hereby consents to any such appointment.

       

      (g)           Purchase
        of Collateral.  Buy the Collateral at any public or
        private sale.

       

      (h)           Exercise
        of Other Rights.  Agent on behalf of each Lender, shall
        have all the rights and remedies of a secured party under the Code and other
        legal and equitable rights to which it may be entitled, including, without
        limitation, and without notice to Borrower, the right to continue to collect
        all
        payments made on the Pledged Notes Receivable, and to apply such payments
        to the
        Obligations, and to sue in its own name the maker of any defaulted Pledged
        Notes
        Receivable.  Agent may also exercise any and all other rights or
        remedies afforded by any other Applicable Laws or by the Loan Documents as Agent
        shall deem appropriate, at law, in equity or otherwise, including, but not
        limited to, the right to bring suit or other proceeding, either for specific
        performance of any covenant or condition contained in the Loan Documents
        or in
        aid of the exercise of any right or remedy granted to Agent in the Loan
        Documents.  Agent shall also have the right to require Borrower to
        assemble any of the Collateral not in Agent’s possession, at Borrower’s expense,
        and make it available to Agent at a place to be determined by Agent which
        is
        reasonably convenient to both parties, and Agent shall, on behalf of the
        Lenders, have the right to take immediate possession of all of the Collateral,
        and may enter the Resorts or any of the premises of Borrower or wherever
        the
        Collateral shall be located, with or without process of law wherever the
        Collateral may be, and, to the extent such premises are not the property
        of
        Agent, to keep and store the same on said premises until sold (and if said
        premises be the property of Borrower, Borrower agrees not to charge Agent
        or any
        Lender for use and occupancy, rent, or storage of the Collateral, for a period
        of at least ninety (90) days after sale or disposition of the
        Collateral).

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (i)        Replacement
        of Servicer.  Without demand or notice of any nature
        whatsoever, upon an Event of Default, Agent may terminate any then existing
        servicing agreement and replace any then existing Servicer with the Standby
        Servicer, pursuant to the terms of the Standby Servicing Agreement of even
        date
        herewith, or such other servicer as Agent may select in its Permitted
        Discretion.  

       

      9.2           Notice
        of Sale.  Reasonable notification of time and place of
        any public sale of the Collateral or reasonable notification of the time
        after
        which any private sale or other intended disposition of the Collateral is
        to be
        made shall be sent to Borrower and to any other person entitled under the
        Code
        to notice; provided, however, that if the Collateral threatens to decline
        speedily in value or is of a type customarily sold on a recognized market,
        Agent
        may sell or otherwise dispose of the Collateral without notification,
        advertisement or other notice of any kind.  It is agreed that notice
        sent not less than five (5) calendar days prior to the taking of the action
        to
        which such notice relates is reasonable notification and notice for the purposes
        of this Section 9.2.  Agent shall have the right to bid
        at any public or private sale on behalf of Lenders.  Out of money
        arising from any such sale, Agent shall retain an amount equal to all of
        its
        costs and charges, including attorneys’ fees for advice, counsel or other legal
        services or for pursuing, reclaiming, seeking to reclaim, taking, keeping,
        removing, storing and advertising such Collateral for sale, selling same
        and any
        and all other charges and expenses in connection therewith and in satisfying
        any
        prior Liens thereon.  Any balance shall be applied upon the
        Obligations, and in the event of deficiency, Borrower shall remain liable
        to
        Lenders.  In the event of any surplus, such surplus shall be paid to
        Borrower or to such other Persons as may be legally entitled to such
        surplus.  If, by reason of any suit or proceeding of any kind, nature
        or description against Borrower, or by Borrower or any other party against
        Agent
        or any Lender, which in Agent’s sole discretion makes it advisable for Agent to
        seek counsel for the protection and preservation of Lenders’ security interest,
        or to defend the interest of Lenders, such expenses and counsel fees shall
        be
        allowed to Agent and the same shall be made a further charge and Lien upon
        the
        Collateral.

       

      In
        view
        of the fact that federal and state securities laws may impose certain
        restrictions on the methods by which a sale of Collateral comprised of
        Securities may be effected after an Event of Default, Borrower agrees that
        upon
        the occurrence or existence of an Event of Default, Agent may, on behalf
        of
        Lenders, from time to time, attempt to sell all or any part of such Collateral
        by means of a private placement restricting the bidding and prospective
        purchasers to whose who will represent and agree that they are purchasing
        for
        investment only and not for, or with a view to, distribution.  In so
        doing, Agent may solicit offers to buy such Collateral, or any part of it
        for
        cash, from a limited number of investors deemed by Agent, in its reasonable
        judgment, to be responsible parties who might be interested in purchasing
        the
        Collateral, and if Agent solicits such offers from not less than two (2)
        such
        investors, then the acceptance by Agent of the highest offer obtained therefrom
        shall be deemed to be a commercially reasonable method of disposition of
        such
        Collateral.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      9.3           Application
        of Collateral; Termination of Agreements.  Upon the
        occurrence of any Event of Default: (i) each Lender may, with or without
        proceeding with such sale or foreclosure or demanding payment or performance
        of
        the Obligations, without notice, terminate each Lender’s further performance
        under this Agreement or any other agreement or agreements between Lender
        and
        Borrower, without further liability or obligation by Agent or any Lender;
        (ii)
        Agent may, on behalf of Lenders, at any time, appropriate and apply on any
        Obligations any and all Collateral in its, the Custodian’s, or the Lockbox
        Agent’s possession and (iii) each Lender may apply any and all balances,
        credits, deposits, accounts, reserves, indebtedness or other moneys due or
        owing
        to Borrower held by Lender hereunder or under any other financing agreement
        or
        otherwise, whether accrued or not.  Neither such termination, nor the
        termination of this Agreement by lapse of time, the giving of notice or
        otherwise, shall absolve, release or otherwise affect the liability of Borrower
        in respect of transactions prior to such termination, or affect any of the
        Liens, security interests, rights, powers and remedies of Agent or Lenders,
        but
        they shall, in all events, continue until all of the Obligations are
        satisfied.

       

      9.4           Rights
        of Agent Regarding Collateral.  In addition to all other
        rights possessed by Agent or Lenders, Agent, at its option, may on behalf
        of
        each Lender from time to time after there shall have occurred an Event of
        Default, and so long as such Event of Default remains uncured, at its sole
        discretion, take the following actions:

       

      (a)           Transfer
        all or any part of the Collateral into the name of Agent or its
        nominee;

       

      (b)           Take
        control of any proceeds of any of the Collateral;

       

      (c)           Extend
        or renew the Loan and grant releases, compromises or indulgences with respect
        to
        the Obligations, any portion thereof, any extension or renewal thereof, or
        any
        security therefor, to any obligor hereunder or thereunder; and

       

      (d)           Exchange
        certificates or instruments representing or evidencing the Collateral for
        certificates or instruments of smaller or larger denominations for any purpose
        consistent with the terms of this Agreement.

       

      9.5           Delegation
        of Duties and Rights.  Agent may execute any of its
        duties and/or exercise any of its rights or remedies under the Loan Documents
        by
        or through its officers, directors, employees, attorneys, agents or other
        representatives.  Agent or any Lender or Liberty Bank may use
        Wellington to perform certain services in connection with the transactions
        contemplated under the Loan Documents.  Agent or any Lender or Liberty
        Bank may pay Wellington or any other Persons performing services for Agent
        such
        compensation as Agent or any Lender or Liberty Bank may elect.

       

      9.6           Agent
        and/or Lenders not in Control.  Except as expressly
        provided herein or in any Loan Document, none of the covenants or other
        provisions contained in this Agreement or in any Loan Document shall give
        Agent
        or any Lender the right or power to exercise control over the affairs and/or
        management of Borrower.

       

      9.7           Waivers.  The
        acceptance by Agent or any Lender at any time and from time to time of partial
        payments of the Loan or performance of the Obligations shall not be deemed
        to be
        a waiver of any Event of Default then existing.  No waiver by Agent or
        any Lender of any Event of Default shall be deemed to be a waiver of any
        other
        or subsequent Event of Default.  No delay or omission by Agent or any
        Lender in exercising any right or remedy under the Loan Documents shall impair
        such right or remedy or be construed as a waiver thereof or an acquiescence
        therein, nor shall any single or partial exercise of any such right or remedy
        preclude other or further exercise thereof, or the exercise of any other
        right
        or remedy under the Loan Documents or otherwise.  Further, except as
        otherwise expressly provided in this Agreement or by applicable law, Borrower
        and each and every surety, endorser, guarantor and other party liable for
        the
        payment or performance of all or any portion of the Obligations, severally
        waive
        notice of the occurrence of any Event of Default, presentment and demand
        for
        payment, protest, and notice of protest, notice of intention to accelerate,
        acceleration and nonpayment, and agree that their liability shall not be
        affected by any renewal or extension in the time of payment of the Loan,
        or by
        any release or change in any security for the payment or performance of the
        Loan, regardless of the number of such renewals, extensions, releases or
        changes.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      9.8           Cumulative
        Rights.  All rights and remedies available to any Lender
        or Agent under the Loan Documents shall be cumulative of and in addition
        to all
        other rights and remedies granted under any of the Loan Document, at law
        or in
        equity, whether or not the Loan is due and payable and whether or not Agent
        shall have instituted any suit for collection or other action in connection
        with
        the Loan Documents.

       

      9.9           Expenditures
        by Agent or Lender.  Any sums expended by or on behalf of
        Agent or by Lenders pursuant to the exercise of any right or remedy provided
        herein shall become part of the Obligations and shall bear interest at the
        Default Rate, from the date of such expenditure until the date
        repaid.

       

      9.10         Diminution
        in Value of Collateral.  Neither Agent nor any Lender
        shall have any liability or responsibility whatsoever for any diminution
        or loss
        in value of any of the Collateral, specifically including that which may
        arise
        from Agent or any Lender’s negligence or inadvertence, whether such negligence
        or inadvertence is the sole or concurring cause of any damage.

       

      9.11         Agent’s
        Knowledge.  Agent shall not be deemed to have knowledge
        or notice of the occurrence of any Event of Default unless Agent has actual
        knowledge of the Event of Default or has received a notice from a Lender
        or
        Borrower referring to this Agreement and describing such Event of
        Default.  Each Lender agrees that upon learning of the existence of an
        Event of Default, it will promptly notify Agent thereof in
        writing.  Any such notice by a Lender, shall be in writing sufficient
        to identify the nature of the Event of Default.

       

      9.12         Lender’s
        Enforcement Rights.  Each Lender has assigned to Agent
        its absolute and unconditional right to enforce the payment of its
        Note.  No Lender may unilaterally enforce any Lien or security
        interest in the Collateral, or bring suit against Borrower to enforce such
        Lender’s rights hereunder or under its Note.

       

      Section
        10-Certain Rights Of Lender

       

      10.1         Protection
        of Collateral.  Agent on behalf of each
        Lender may at any time and from time to time take such actions as Agent deems
        necessary or appropriate to protect the Lender’s Liens and security interests in
        and to preserve the Collateral, and to establish, maintain and protect the
        enforceability of Lender’s rights with respect thereto, all at the expense of
        Borrower.  Borrower agrees to cooperate fully with all of Agent’s
        efforts to preserve the Collateral and Lender’s Liens, security interests and
        rights and will take such actions to preserve the Collateral and Lender’s Liens,
        security interests and rights as Agent may direct, including, without
        limitation, by promptly paying upon Lender’s demand therefor, all documentary
        stamp taxes or other taxes that may be or may become due in respect of any
        of
        the Collateral.  All of Agent’s expenses of preserving the Collateral
        and each Lender’s liens and security interests and rights therein shall be added
        to the Loan.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      10.2         Performance
        by Agent.  If Borrower fails to perform any agreement
        contained herein, Agent may itself perform, or cause the performance of,
        such
        agreement, and the expenses of Agent or Liberty Bank incurred in connection
        therewith shall be payable by Borrower under Section 10.5
        hereof.  In no event, however, shall Agent or any Lender have any
        obligation or duties whatsoever to perform any covenant or agreement of Borrower
        contained herein or in any of the Loan Documents, Timeshare Documents or
        Operating Contracts, and any such performance by Agent shall be wholly
        discretionary with Agent.  The performance by Agent, of any agreement
        or covenant of Borrower on any occasion shall not give rise to any duty on
        the
        part of Agent to perform any such agreements or covenants on any other occasion
        or at any time.  In addition, Borrower acknowledges that neither Agent
        nor any Lender shall at any time or under any circumstances whatsoever have
        any
        duty to Borrower or to any third party to exercise any of Lender’s rights or
        remedies hereunder.

       

      10.3         No
        Liability of Agent or Lender.  Neither
        the acceptance of this Agreement by Agent and each Lender, nor the exercise
        of
        any rights hereunder by Lender or Agent on its behalf, shall be construed
        in any
        way as an assumption by Agent or any Lender of any obligations, responsibilities
        or duties of Borrower arising in connection with any Resort or under the
        Timeshare Documents or Timeshare Acts, or under any of the Operating Contracts,
        or in connection with any other business of Borrower, or the Collateral,
        or
        otherwise bind Agent or any Lender to the performance of any obligations
        with
        respect to any Resort or the Collateral; it being expressly understood that
        neither Agent nor Lender shall be obligated to perform, observe or discharge
        any
        obligation, responsibility, duty, or liability of Borrower with respect to
        any
        Resort or any of the Collateral, or under any of the Timeshare Documents,
        the
        Timeshare Acts or under any of the Operating Contracts, including, but not
        limited to, appearing in or defending any action, expending any money or
        incurring any expense in connection therewith.  Without limitation of
        the foregoing, neither this Agreement, any action or actions on the part
        of
        Agent taken hereunder, prior to or following the occurrence of an Event of
        Default shall constitute an assumption by Agent of any obligations of Borrower
        with respect to any Resort or any documents or instruments executed in
        connection therewith, and Borrower shall continue to be liable for all of
        its
        obligations thereunder or with respect thereto.  Borrower agrees to
        indemnify, protect, defend and hold Agent and each Lender harmless from and
        against any and all claims, demands, causes of action, losses, damages,
        liabilities, suits, costs and expenses, including, without limitation,
        attorneys’ fees and court costs, asserted against or incurred by Agent and each
        Lender by reason of, arising out of, or connected in any way with
(i) any failure or alleged failure of Borrower to perform
        any of its covenants or obligations with respect to each Resort or to the
        Purchasers of any of the Intervals, (ii) a breach of any
        certification, representation, warranty or covenant of Borrower set forth
        in any
        of the Loan Documents, (iii) the ownership of the Pledged
        Notes Receivable and the rights, titles and interests assigned hereby, or
        intended so to be, (iv) the debtor-creditor relationships
        between Borrower on the one hand, and the Agent or Lender, on the other,
        or
(v) the operation of the Resorts or sale of
        Intervals.  The obligations of Borrower to indemnify, protect, defend
        and hold Agent and each Lender harmless as provided in this Agreement are
        absolute, unconditional, present and continuing, and shall not be dependent
        upon
        or affected by the genuineness, validity, regularity or enforceability of
        any
        claim, demand or suit from which Agent or any Lender is
        indemnified.  The indemnity provisions in this
Section 10.3 shall survive the satisfaction of the
        Obligations and termination of this Agreement, and remain binding and
        enforceable against the Borrower, or its successors or
        assigns.  Borrower hereby waives all notices with respect to any
        losses, damages, liabilities, suits, costs and expenses, and all other demands
        whatsoever hereby indemnified, and agrees that its obligations under this
        Agreement shall not be affected by any circumstances, whether or not referred
        to
        above, which might otherwise constitute legal or equitable discharges of
        its
        obligations hereunder.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      10.4          Right
        to Defend Action Affecting Security.  Agent may, at
        Borrower’s expense, appear in and defend any action or proceeding at law or in
        equity which Agent in good faith believes may affect the security interests
        granted under this Agreement, including without limitation, with respect
        to the
        Collateral or the value of thereof or each Lender’s rights under any of the Loan
        Documents.

       

      10.5          Expenses.  All
        expenses payable by Borrower, under any provision of this Agreement shall
        be an
        Obligation of the Borrower and shall be paid by Borrower to Agent, upon demand,
        and shall bear interest at the Default Rate from the date of expense until
        repaid by Borrower.

       

      10.6          Lender’s
        Right of Set-Off.  Each Lender shall have the right to
        set-off against any Collateral any Obligations then due and unpaid by Borrower
        provided that Lender remits to Agent all such sums received as a result of
        such
        set-off so that Agent may insure the distribution thereof in accordance with
        each Lenders Pro Rata Payment Percentage.

       

      10.7          No
        Waiver.  No failure or delay on the part of Agent in
        exercising any right, remedy or power under this Agreement or in giving or
        insisting upon strict performance by Borrower hereunder or in giving notice
        hereunder shall operate as a waiver of the same or any other power or right,
        and
        no single or partial exercise of any such power or right shall preclude any
        other or further exercise thereof or the exercise of any other such power
        or
        right.  Agent, notwithstanding any such failure, shall have the right
        thereafter to insist upon the strict performance by Borrower of any and all
        of
        the terms and provisions of this Agreement to be performed by
        Borrower.  The collection and application of proceeds, the entering
        and taking possession of the Collateral, and the exercise by Agent of the
        rights
        of Lenders contained in the Loan Documents and this Agreement shall not cure
        or
        waive any default, or affect any notice of default, or invalidate any acts
        done
        pursuant to such notice.  No waiver by Agent or any Lender of any
        breach or default of or by any party hereunder shall be deemed to alter or
        affect Lender’s rights hereunder with respect to any prior or subsequent
        default.

       

      10.8          Right
        of Agent to Extend Time of Payment, Substitute, Release Security,
        Etc.  Without affecting the liability of any Person or
        entity including without limitation, for the payment of any of the Obligations
        or without affecting or impairing Lender’s Lien on the Collateral, or the
        remainder thereof, as security for the full amount of the Loan unpaid and
        the
        Obligations, Agent may from time to time, without notice:
(a) release any Person liable for the payment of the Loan,
        (b) extend the time or otherwise alter the terms of
        payment of the Loan, (c) accept additional security for
        the Obligations of any kind, including deeds of trust or mortgages and security
        agreements, (d) alter, substitute or release any property
        securing the Obligations, (e) realize upon any collateral
        for the payment of all or any portion of the Loan in such order and manner
        as it
        may deem fit, or (f) join in any subordination or other
        agreement affecting this Agreement or the lien or charge thereof.

       

      10.9        
         Additional Lender, Assignments and
        Participations

       

      (a)           Any
        Lender may assign and participate and delegate to one or more assignees or
        participants (each an “Assignee”) all, or any ratable part of all, of the
        Obligations and the other rights and obligations of Lender hereunder and
        under
        the other Loan Documents; provided, however, that each Lender so
        doing shall give Agent concurrent written notice of each such assignment
        and
        provided further that Agent shall continue to deal solely and directly only
        with
        each Lender in connection with the interest so assigned to an
        Assignee.  In the event that a Lender participates or sells its
        interest in the Loan to any other Person, Lender shall have no further
        responsibilities or liabilities in connection with the sold or participated
        portion of the  Loan, including without limitation the obligation to
        fund Advances related to such sold or participated portions, after the date
        of
        such sale or participation.  All of such responsibilities and
        liabilities after the date of such sale shall be those of the Participant
        or the
        purchaser of Lender’s interest.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b)           In
        connection with any such assignment or participation or proposed assignment
        or
        participation, any Lender may disclose all documents and information which
        it
        now or hereafter may have relating to Borrower and its businesses.

       

      (c)           Any
        other provision in this Agreement notwithstanding, any Lender which is a
        banking
        institution may at any time create a security interest in, or pledge, all
        or any
        portion of its rights under and interest in this Agreement in favor of any
        Federal Reserve Bank in accordance with Regulation A of the Federal Reserve
        Bank
        or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may
        enforce sole through Agent such pledge or security interest in any manner
        permitted under Applicable Laws but at all times subject to the rights and
        limitations contained herein.

       

      (d)           Agent
        and Borrower acknowledge that as of the date hereof, each Lender and each
        Participant is identified on Schedule 1.0 hereof.  Subsequent
        to the date hereof, in the event that Agent desires to allow another party
        to
        executed a joinder agreement or become a Lender under the provisions of this
        Agreement, or to become a Participant of a Lender, Borrower shall
        have  a right of prior approval of such action, provided that Borrower
        shall not unreasonably withhold its approval of any additional Lender or
        Participant and provided further that Borrower’s non response for a period of
        ten (10) Business Days after being notified by Agent of such action shall
        be
        deemed to be approval of Borrower to such action of Agent and/or
        Lender.

       

      (e)           Each
        Lender is severally bound by this Agreement.  There shall be no joint
        obligations of Lenders under this Agreement.  No Lender shall be
        responsible for the failure by any other Lender to perform its obligations
        under
        this Agreement or any of the Loan Documents.  The Commitment of any
        Lender shall not be increased or decreased as a result of the failure of
        any
        other Lender to perform its obligations under this Agreement or any of the
        Loan
        Documents.  The failure of any Lender to fund its Commitment under
        this Agreement shall not excuse any other Lender from its obligations to
        fund
        its Commitment.

       

      10.10        Notice
        to Purchaser.  Borrower authorizes any of Agent, Lockbox
        Agent or Servicing Agent (but none of Agent, Lockbox Agent nor Servicing
        Agent
        shall be obligated) to communicate at any time and from time to time with
        any
        Purchaser or any other Person primarily or secondarily liable under a Pledged
        Note Receivable with regard to the Lien of Agent thereon and any other matter
        relating thereto, and by no later than the Closing Date, Borrower shall deliver
        to Agent a notification to the Purchasers executed in blank by Borrower and
        in
        form acceptable to Agent, pursuant to which the Purchasers (or other obligors)
        may be directed to remit all payments in respect of the Collateral as Agent
        may
        require.

       

      10.11        Collection
        of the Notes.  Borrower hereby directs and authorizes
        each party liable for the payment of the Pledged Notes Receivable, and by
        no
        later than the Closing Date shall direct in writing each such party, to pay
        each
        installment thereon to Lockbox Agent pursuant to the Lockbox Agreement, unless
        and until directed otherwise by written notice from Agent or, at Agent’s
        direction, from Borrower, after which such parties are and shall be directed
        to
        make all further payments on the Pledged Notes Receivable in accordance with
        the
        directions of Agent.

       

      Following
        the occurrence of an Event of Default, Agent shall have the right to require
        that all payments becoming due under the Pledged Notes Receivable be paid
        directly to Agent, as agent for Lenders, and Agent is hereby authorized to
        receive, collect, hold and apply the same in accordance with the provisions
        of
        this Agreement.  In the event that following the occurrence of an
        Event of Default, Agent or Lockbox Agent does not receive any installment
        of
        principal or interest due and payable under any of the Pledged Notes Receivable
        on or prior to the date upon which such installment becomes due, Agent may,
        at
        its election (but without any obligation to do so), give or cause Lockbox
        Agent
        to give notice of such default to the defaulting party or parties, and Agent
        shall have the right (but not the obligation), subject to the terms of such
        Notes, to accelerate payment of the unpaid balance of any of the Pledged
        Notes
        Receivable in default and to foreclose each of the Mortgages securing the
        payment thereof, and to enforce any other remedies available to the holder
        of
        such Pledged Notes Receivable with respect to such default.  Borrower
        hereby further authorizes, directs and empowers Agent (and Lockbox Agent
        or any
        other Person as may be designated by Agent in writing) to collect and receive
        all checks and drafts evidencing such payments and to endorse such checks
        or
        drafts in the name of Borrower and upon such endorsements, to collect and
        receive the money therefor.  The right to endorse checks and drafts
        granted pursuant to the preceding sentence is irrevocable by Borrower, and
        the
        banks or banks paying such checks or drafts upon such endorsements, as well
        as
        the signers of the same, shall be as fully protected as though the checks
        or
        drafts have been endorsed by Borrower.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      10.12        Power
        of Attorney.  Borrower does hereby irrevocably constitute
        and appoint Agent as Borrower’s true and lawful Agent and attorney-in-fact, with
        full power of substitution, for Borrower and in Borrower’s name, place and
        stead, or otherwise, to (a) endorse any checks or drafts
        payable to Borrower in the name of Borrower and in favor of Agent on behalf
        of
        each Lender, (b) to demand and receive from time to time
        any and all property, rights, titles, interests and liens hereby sold, assigned
        and transferred, or intended so to be, and to give receipts for same,
(c) from time to time to institute and prosecute in
        Agent’s own name any and all proceedings at law, in equity, or otherwise, that
        Agent may deem proper in order to collect, assert or enforce any claim, right
        or
        title, of any kind, in and to the property, rights, titles, interests and
        liens
        hereby sold, assigned or transferred, or intended so to be, and to defend
        and
        compromise any and all actions, suits or proceedings in respect of any of
        the
        said property, rights, titles, interests and liens,
(d) upon an Event of Default to change the Borrower’s post
        office mailing address, and (e) generally to do all and
        any such acts and things in relation to the Collateral as Agent shall in
        good
        faith deem advisable.  Borrower hereby declares that the appointment
        made and the powers granted pursuant to this Section 10.12 are coupled
        with an interest and are and shall be irrevocable by Borrower in any manner,
        or
        for any reason, unless and until a release of the same is executed by Agent
        and
        duly recorded in the appropriate public records of Dallas County,
        Texas.

       

      10.13        Relief
        from Automatic Stay, Etc.  To the fullest extent
        permitted by law, in the event the Borrower shall make application for or
        seek
        relief or protection under the federal bankruptcy code (“Bankruptcy Code”) or
        other Debtor Relief Laws, or in the event that any involuntary petition is
        filed
        against the Borrower under such Code or other Debtor Relief Laws, and not
        dismissed with prejudice within 45 days, the automatic stay provisions of
        Section 362 of the Bankruptcy Code are hereby modified as to Agent and each
        Lender to the extent necessary to implement the provisions hereof permitting
        set-off and the filing of UCC Financing Statements or other instruments or
        documents; and Agent and each Lender shall automatically and without demand
        or
        notice (each of which is hereby waived) be entitled to immediate relief from
        any
        automatic stay imposed by Section 362 of the Bankruptcy Code or otherwise,
        on or
        against the exercise of the rights and remedies otherwise available to Lenders
        as provided in the Loan Documents.

       

      Section
        11-Term Of Agreement

       

      This
        Agreement shall continue in full force and effect and the security interests
        granted hereby and the duties, covenants and liabilities of Borrower hereunder
        and all the terms, conditions and provisions hereof relating thereto shall
        continue to be fully operative until all of the Obligations have been satisfied
        in full.  Borrower expressly agrees that if Borrower makes a payment
        to Agent on behalf of any Lender, which payment or any part thereof is
        subsequently invalidated, declared to be fraudulent or preferential, or
        otherwise required to be repaid to a trustee, receiver or any other party
        under
        any Debtor Relief Laws, state or federal law, common law or equitable cause,
        then to the extent of such repayment, the Obligations or any part thereof
        intended to be satisfied and the Liens provided for hereunder securing the
        same
        shall be revived and continued in full force and effect as if said payment
        had
        not been made.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
        12-Miscellaneous

       

      12.1           Notices.  All
        notices, requests and other communications to any party hereunder shall be
        in
        writing and shall be given to such party at its address set forth below or
        at
        such other address as such party may hereafter specify for the purpose of
        notice
        to Agent, any Lender or Borrower.  Each such notice, request or other
        communication shall be effective (a) if given by mail,
        when such notice is deposited in the United States Mail with first class
        postage
        prepaid, addressed as aforesaid, provided that such mailing is by registered
        or
        certified mail, return receipt requested, (b) if given by
        overnight delivery, when deposited with a nationally recognized overnight
        delivery service such as Federal Express or Airborne with all fees and charges
        prepaid, addressed as provided below, or (c) if given by
        any other means, when delivered at the address specified in this Section
        12.1.

       

      
        	
                If
                  to Borrower:

              	
                 

              	
                Silverleaf
                  Resorts, Inc.

              
	 	 	
                1221
                  Riverbend Drive, Suite 120

              
	 	 	
                Dallas,
                  TX 75221

              
	 	 	
                Attn:
                  Mr. Robert Mead, CEO

              
	 	 	 
	 	 	 
	
                With
                  a Copy to:

              	 	
                Meadows,
                  Owens, Collier, Reed, Cousins and Blau

              
	 	 	
                3700
                  Nations Bank Plaza

              
	 	 	
                901
                  Main St.

              
	 	 	
                Dallas,
                  TX 75202

              
	 	 	
                Attn:
                  George R. Bedell, Esq.

              
	 	 	 
	
                If
                  to Lender:

              	 	
                Liberty
                  Bank

              
	 	 	
                315
                  Main Street

              
	 	 	
                Middletown,
                  Connecticut 06457

              
	 	 	
                Attn:
                  Steven J. Zarrella, Vice President

              
	 	 	
                Fax
                  No. (860) 344-9217

              
	 	 	 
	
                With
                  a Copy to:

              	 	
                Polivy
                  & Taschner, LLC

              
	 	 	
                Six
                  Central Row, 2nd Floor

              
	 	 	
                P.O.
                  Box 230294

              
	 	 	
                Hartford,
                  CT  06123-0294

              
	 	 	
                Richard
                  B. Polivy, Esq.

              
	 	 	
                Dale
                  M. Clayton, Esq.

              
	 	 	
                Phone:
                  (860) 560-1180

              
	 	 	
                Fax:  (860)
                  560-1354

              
	 	 	
                RPolivy@aol.com

              
	 	 	
                dmclaytonesq@sbcglobal.net

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      12.2          Survival.  All
        representations, warranties, covenants and agreements made by Borrower herein,
        in the other Loan Documents or in any other agreement, document, instrument
        or
        certificate delivered by or on behalf of Borrower under or pursuant to the
        Loan
        Documents shall be considered to have been relied upon by Lenders and shall
        survive the delivery to Lenders of such Loan Documents (and each part thereof),
        regardless of any investigation made by or on behalf of Lenders.

       

      12.3          Governing
        Law and Venue.

       

      (a)           THE
        VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY
        PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER
        LOAN
        DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF,
        AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS
        ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED
        UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
        OF
        CONNECTICUT, EXCLUSIVE OF ITS CHOICE OF LAWS PRINCIPLES.

       

      (b)           THE
        PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
        THIS
        AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE TRIED AND LITIGATED IN THE
        UNITED
        STATES FEDERAL COURTS LOCATED IN THE DISTRICT OF CONNECTICUT OR IN THE
        CONNECTICUT SUPERIOR COURT LOCATED IN MIDDLESEX COUNTY, CONNECTICUT,
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
        COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THE COURTS
        OF ANY JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH
        COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  BORROWER AND LENDER WAIVE,
        TO THE EXTENT PERMITTED UNDER APPLICABLE LAWS, ANY RIGHT EACH MAY HAVE TO
        ASSERT
        THE DOCTRINE OF FORUMNONCONVENIENS OR TO OBJECT TO VENUE TO
        THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
        12.3(b).

       

      12.4           Limitation
        on Interest.  Agent and each Lender and Borrower intend
        to comply at all times with applicable usury laws.  All agreements
        between Agent, each Lender and Borrower, whether now existing or hereafter
        arising and whether written or oral, are hereby limited so that in no
        contingency, whether by reason of demand or acceleration of the maturity
        of the
        Note or otherwise, shall the interest contracted for, charged, received,
        paid or
        agreed to be paid to Agent or any Lender exceed the highest lawful rate
        permissible under applicable usury laws.  If, from any circumstance
        whatsoever fulfillment of any provision hereof, of the Note or of any other
        Loan
        Documents shall involve transcending the limit of such validity prescribed
        by
        any law which a court of competent jurisdiction may deem applicable hereto,
        then
        ipso facto, the obligation to be fulfilled shall be reduced to the limit
        of such
        validity; and if from any circumstance Agent or any Lender shall ever receive
        anything of value deemed interest by applicable law which would exceed the
        highest lawful rate, such amount which would be excessive interest shall
        be
        applied to the reduction of the principal of the Loan and not to the payment
        of
        interest, or if such excessive interest exceeds the unpaid balance of principal
        of the Loan, such excess shall be refunded to Borrower.  All interest
        paid or agreed to be paid to Lenders shall, to the extent permitted by
        applicable law, be amortized, prorated, allocated and spread throughout the
        full
        period until payment in full of the principal so that the interest on the
        Loan
        for such full period shall not exceed the highest lawful
        rate.  Borrower agrees that in determining whether or not any interest
        payment under the Loan Documents exceeds the highest lawful rate, any
        non-principal payment (except payments specifically described in the Loan
        Documents as “interest”) including without limitation, prepayment fees and late
        charges, shall to the maximum extent not prohibited by law, be an expense,
        fee,
        premium or penalty rather than interest.  Agent and each Lender hereby
        expressly disclaim any intent to contract for, charge or receive interest
        in an
        amount which exceeds the highest lawful rate.  The provisions of the
        Note, this Agreement, and all other Loan Documents are hereby modified to
        the
        extent necessary to conform with the limitations and provisions of this
Section 12.4, and this Section 12.4 shall govern over all other
        provisions in any document or agreement now or hereafter
        existing.  This Section 12.4 shall never be superseded or
        waived unless there is a written document executed by Agent, each Lender
        and the
        Borrower, expressly declaring the usury limitation of this Agreement to be
        null
        and void, and no other method or language shall be effective to supersede
        or
        waive this paragraph.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      12.5          Invalid
        Provisions.  If any provision of this Agreement or any of
        the other Loan Documents is held to be illegal, invalid or unenforceable
        under
        present or future laws effective during the term thereof, such provision
        shall
        be fully severable, this Agreement and the other Loan Documents shall be
        construed and enforced as if such illegal, invalid or unenforceable provision
        had never comprised a part hereof or thereof, and the remaining provisions
        hereof or thereof shall remain in full force and effect and shall not be
        affected by the illegal, invalid or unenforceable provision or by its severance
        therefrom.  Furthermore, in lieu of such illegal, invalid or
        unenforceable provision there shall be added automatically as a part of this
        Agreement and/or the Loan Documents (as the case may be) a provision as similar
        in terms to such illegal, invalid or unenforceable provision as may be possible
        and be legal, valid and enforceable.

       

      12.6          Successors
        and Assigns.  This Agreement and the other Loan Documents
        shall be binding upon and inure to the benefit of Borrower, Agent and each
        Lender and their respective successors and assigns; provided that Borrower
        may
        not transfer or assign any of its rights or obligations under this Agreement,
        or
        the other Loan Documents without the prior written consent of
        Agent.  This Agreement and the transactions provided for or
        contemplated hereunder or under any of the Loan Documents are intended solely
        for the benefit of the parties hereto.  No third party shall have any
        rights or derive any benefits under or with respect to this Agreement, or
        the
        other Loan Documents except as provided in advance in a writing signed on
        behalf
        of Agent and each Lender.

       

      12.7          Amendment.  This
        Agreement may not be amended or modified, and no term or provision hereof
        may be
        waived, except by written instrument signed by the Borrower and Agent on
        behalf
        of itself and Lenders.

       

      12.8          Counterparts;
        Effectiveness.  This Agreement may be signed in any
        number of counterparts, each of which shall be an original, with the same
        effect
        as if the signature thereto and hereto were on the same
        instrument.  This Agreement shall become effective upon Agent’s
        receipt of one or more counterparts hereof signed by Borrower.

       

      12.9          Lender
        and Agent Not Fiduciaries.  The relationship between
        Borrower, Agent and each Lender is solely that of debtor and creditor, and
        Agent
        and Lenders have no fiduciary or other special relationship with Borrower,
        and
        no term or provision of any of the Loan Documents shall be construed so as
        to
        deem the relationship between Borrower, Agent and Lenders to be other than
        that
        of debtor and creditor.

       

      12.10        Return
        of Notes Receivable.

       

      (a)           In
        the event Borrower complies with its Obligations under
Section 2.4(b) of this Agreement with respect to Pledged
        Notes Receivable pursuant to which a default by the Purchaser thereof has
        occurred, and Borrower thereafter desires to enforce such Note Receivable
        against the Purchaser thereof, then provided that no Event of Default has
        occurred which has not been cured to Agent’s satisfaction (as evidenced by a
        written acceptance of such cure executed by Agent), and no event has occurred
        which with notice, the passage of time or both, would constitute an Event
        of
        Default, then within thirty (30) days after its receipt of a written request
        from Borrower, Agent shall deliver such ineligible Note Receivable to Borrower,
        provided that such delivery shall be for the sole purpose of enforcing Agent’s
        rights thereunder and Agent, notwithstanding such delivery, shall continue
        to
        have, on behalf of Lenders, a first priority security interest in any such
        note.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)           In
        the event that all Obligations hereunder are fully satisfied, then within
        a
        reasonable time thereafter, Agent shall endorse the Pledged Notes Receivable
        “Pay to the order of Silverleaf Resorts, Inc. without recourse”, and deliver
        such Pledged Notes Receivable, together with any other nonrecourse Collateral
        reassignment documents requested and prepared by Borrower, at Borrower’s sole
        cost and expense.

       

      12.11        Accounting
        Principles.  Where the character or amount of any asset
        or liability or item of income or expense is required to be determined or
        any
        consolidation or other accounting computation is required to be made for
        the
        purposes of this Agreement, the same shall be determined or made in accordance
        with GAAP consistently applied at the time in effect, to the extent applicable,
        except where such principles are inconsistent with the requirements of this
        Agreement.

       

      12.12       
        Total Agreement.  This Agreement and the other
        Loan Documents, including the Exhibits and Schedules to them, is the entire
        agreement between the parties relating to the subject matter hereof,
        incorporates or rescinds all prior agreements and understandings between
        the
        parties hereto relating to the subject matter hereof, cannot be changed or
        terminated orally or by course of conduct, and shall be deemed effective
        as of
        the date it is accepted by Agent at the offices set forth above.  The
        documents evidencing the Additional Credit Facility shall remain in full
        force
        and effect.

       

      12.13        Waiver
        of Jury Trial.  TO THE FULLEST EXTENT NOT PROHIBITED
        BY APPLICABLE LAW WHICH CANNOT BE WAIVED, BORROWER, AGENT AND EACH LENDER
        HEREBY
        KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVE ANY AND ALL RIGHT
        TO
        A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND OR CLARIFY
        ANY
        RIGHT, POWER, REMEDY OR DEFENSE ARISING OUT OF OR RELATED TO THIS AGREEMENT,
        THE
        OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN,
        WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE, OR WITH RESPECT TO ANY
        COURSE
        OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
        ACTIONS
        OF ANY PARTY; AND EACH AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
        TRIED
        BEFORE A JUDGE AND NOT BEFORE A JURY, AND THAT ANY PARTY TO THIS AGREEMENT
        MAY
        FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
        WRITTEN
        EVIDENCE OF THE CONSENT OF BORROWER, AGENT AND LENDER TO THE WAIVER OF THEIR
        RIGHT TO TRIAL BY JURY.  EACH OF BORROWER, AGENT AND ANY LENDER
        FURTHER WAIVES ANY RIGHT TO SEEK TO CONSOLIDATE ANY SUCH LITIGATION IN WHICH
        A
        JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER LITIGATION IN WHICH A JURY TRIAL
        CANNOT OR HAS NOT BEEN WAIVED.  FURTHER, BORROWER HEREBY CERTIFIES
        THAT NO REPRESENTATIVE OF AGENT OR ANY LENDER NOR ANY AGENT’S OR LENDER’S
        COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT AGENT OR LENDER WOULD
        NOT,
        IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
        JURY
        TRIAL PROVISION.  BORROWER ACKNOWLEDGES THAT THE PROVISIONS OF THIS
SECTION 12.13 ARE A MATERIAL INDUCEMENT
        TO LENDER’S ACCEPTANCE OF THIS AGREEMENT AND THE OTHER LOAN
        DOCUMENTS.  BORROWER ACKNOWLEDGES THAT  IT
        HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS SECTION, THAT
        IT
        FULLY UNDERSTANDS ITS TERMS, CONTENT AND EFFECT, AND THAT IT VOLUNTARILY
        AND
        KNOWINGLY AGREES TO THE TERMS OF THIS SECTION.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        waiver and stipulations of Borrower, Agent and each Lender in this
Section 12.13 shall survive the final payment or performance
        of all of the Obligations of Borrower and the resulting termination of this
        Agreement.

       

      12.14        Incorporation
        of Exhibits.  This Agreement, together with all Exhibits
        and Schedules hereto, constitute one document and agreement which is referred
        to
        herein by the use of the defined term “Agreement.” Such Exhibits and Schedules
        are incorporated herein as to fully set out in this Agreement.  The
        definitions contained in any part of this Agreement shall apply to all parts
        of
        this Agreement.

       

      12.15        Consent
        to Advertising and Publicity.  Borrower hereby consents
        that Agent and each Lender may issue and disseminate to the public information
        describing the credit accommodation entered into pursuant to this Agreement,
        including the names and addresses of Borrower and any subsidiaries and
        Affiliates, the amount and a general description of Borrower’s
        business.

       

      12.16        Directly
        or Indirectly.  Where any provision in the Agreement
        refers to action to be taken by any Person, or which such Person is prohibited
        from taking, such provisions shall be applicable whether such action is taken
        directly or indirectly by such Person.

       

      12.17        Headings.  Section
        headings have been inserted in the Agreement as a matter of convenience of
        reference only; such section headings are not a part of the Agreement and
        shall
        not be used in the interpretation of this Agreement.

       

      12.18        Gender
        and Number.  Words of any gender in this Agreement shall
        include each other gender and the singular shall mean the plural and vice
        versa
        where appropriate.

       

      12.19        Revival
        and Reinstatement of Obligations.  If the incurrence or
        payment of the Obligations by Borrower or the transfer to Agent or any Lender
        of
        any property should for any reason subsequently be declared to be void or
        voidable under any state or federal law relating to creditors’ rights, including
        provisions of the Bankruptcy Code relating to fraudulent conveyances,
        preferences, or other voidable or recoverable payments of money or transfers
        of
        property (collectively, a “Voidable Transfer”), and if any Lender is
        required to repay or restore, in whole or in part, any such Voidable Transfer,
        or elects to do so upon the reasonable advice of its counsel, then, as to
        any
        such Voidable Transfer, or the amount thereof that any Lender is required
        or
        elects to repay or restore, and as to all reasonable costs, expenses, and
        attorneys fees of such Lender related thereto, the liability of Borrower
        automatically shall be revived, reinstated, and restored and shall exist
        as
        though such Voidable Transfer had never been made.

       

      12.20        Confidentiality.  Agent
        and each Lender for itself and an Assignee of such lender, agrees that material,
        non-public information regarding Borrower, its operations, assets, and existing
        and contemplated Annual Operating Plans shall be treated by Agent and each
        Lender in a confidential manner, and shall not be disclosed by Agent or any
        Lender to Persons who are not parties to this Agreement, except:  (a)
        to attorneys for and other advisors, accountants, auditors, and consultants
        to
        any Lender, (b) to Subsidiaries of Agent or any Lender and Agent or Lender
        affiliated entities, provided that any such Subsidiary or affiliated entity
        shall have agreed to receive such information hereunder subject to the terms
        of
        this Section 12.20, (c) as may be required by statute, decision, or
        judicial or administrative order, rule, or regulation, (d) as may be agreed
        to
        in advance by Borrower or as requested or required by any Governmental Authority
        pursuant to any subpoena or other legal process, (e) as to any such information
        that is or becomes generally available to the public (other than as a result
        of
        prohibited disclosure by Agent or any Lender), (f) in connection with any
        assignment, prospective assignment, sale, prospective sale, participation
        or
        prospective participations, or pledge or prospective pledge of any Lender’s
        interest under this Agreement, provided that any such assignee, prospective
        assignee, purchaser, prospective purchaser, Participant, prospective
        participant, pledgee, or prospective pledgee shall have agreed in writing
        to
        receive such information hereunder subject to the terms of this Section
        12.20, and (g) in connection with any litigation or other adversary
        proceeding involving parties hereto which such litigation or adversary
        proceeding involves claims related to the rights or duties of such parties
        under
        this Agreement or the other Loan Documents.  The provisions of this
Section 12.20 shall survive for 2 years after the payment in full of the
        Obligations.  Anything contained herein or in any other Loan Document
        to the contrary notwithstanding, the obligations of confidentiality contained
        herein and therein, as they relate to the transactions contemplated hereby,
        shall not apply to the federal tax structure or federal tax treatment of
        such
        transactions, and each party hereto (and any employee, representative, of
        Agent
        or of any Lender or of any other party hereto) may disclose to any and all
        Persons, without limitation of any kind, the federal tax structure and federal
        tax treatment of such transactions (including all written materials related
        to
        such tax structure and tax treatment).  The preceding sentence is
        intended to cause the transactions contemplated hereby to not be treated
        as
        having been offered under conditions of confidentiality for purposes of Section
        1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
        promulgated under Section 6011 of the IRC, and shall be construed in a manner
        consistent with such purpose.  In addition, each party hereto
        acknowledges that it has no proprietary or exclusive rights to the tax structure
        of the transactions contemplated hereby or any tax matter or tax idea related
        thereto.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      12.21        Commercial
        Transaction Waiver. BORROWER ACKNOWLEDGES
        THAT THIS IS A “COMMERCIAL TRANSACTION” AS SUCH IS DEFINED IN CHAPTER 903a OF
        THE CONNECTICUT GENERAL STATUTES, AS AMENDED. BORROWER FURTHER ACKNOWLEDGES
        THAT, PURSUANT TO SUCH SECTION, IT HAS A RIGHT TO NOTICE OF AND HEARING PRIOR
        TO
        THE ISSUANCE OF ANY “PREJUDGMENT REMEDY”. NOTWITHSTANDING THE FOREGOING,
        BORROWER HEREBY WAIVES ALL RIGHTS TO SUCH NOTICE, JUDICIAL HEARING OR PRIOR
        COURT ORDER IN CONNECTION WITH ANY SUIT ON THIS AGREEMENT, THE NOTE, THE
        GUARANTY, ANY OF THE LOAN DOCUMENTS OR ANY EXTENSIONS OR RENEWALS OF THE
        SAME.

       

      12.22        Foreign
        Assets Control Regulations, Patriot Act, Etc.

       

      (a)           Borrower
        acknowledges and agrees that neither the requesting or borrowing of Advances
        or
        the use of the proceeds of the Loan will be (i) in contravention of any
        Prescribed Law, or (ii) in contravention of Executive Order No. 13,224, of
        September 23, 2001 issued by the President of the United States (Executive
        Order
        Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
        to Commit, or Support Terrorism), as may be amended or supplemented from
        time to
        time (the "Anti-Terrorism Order"), or (iii) on behalf of
        terrorists or terrorist organizations, including those persons or entities
        that
        are included on any relevant lists maintained by the United Nations, North
        Atlantic Treaty Organization, Organization of Economic Cooperation and
        Development, Financial Action Task Force, U.S. Office of Foreign Assets Control,
        U.S. Securities & Exchange Commission, U.S. Federal Bureau of Investigation,
        U.S. Central Intelligence Agency, U.S. Internal Revenue Service, or any country
        or organization, all as may be amended from time to time.  No
        Affiliate of Borrower is or will be a person described in section 1 of the
        Anti-Terrorism Order and no Affiliate of Borrower will engage in any dealings
        or
        transactions, or otherwise be associated with any such person.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)           Borrower
        further acknowledges and agrees that the making of the Loan to Borrower does
        not
        violate any Prescribed Law, or the Trading with the Enemy Act (50 U.S.C.
§1 et
        seq., as amended), or any foreign asset control regulations of the United
        States
        Treasury Department (31 CFR, Subtitle B, Chapter V, as amended), or any enabling
        legislation or executive order relating thereto.

       

      (c)           Borrower
        warrants that none of the cash or property that any Affiliate has paid or
        contributed, or will pay or contribute to Borrower has been or shall be such
        as
        is described in Section 12.22(a)(i), (ii) or (iii)
        hereof or derived from, or related to, any activity that is deemed criminal
        under United States laws.

       

      (d)           Borrower
        agrees to provide to the Lender any additional information regarding all
        Affiliates of Borrower that Lender deems necessary or convenient to ensure
        compliance with all applicable laws concerning money laundering and similar
        activities and Borrower understands and agrees that if, at any time, it is
        discovered that any of the representations contained in this Section
        12.22 are incorrect, or, if otherwise required by Applicable Law or
        regulation related to money laundering and similar activities, Lender may
        undertake appropriate actions to ensure compliance with Applicable Laws and
        regulations.

       

      Section
        13-Agent

       

      13.1          Authorization
        and Action.  Each Lender hereby accepts the appointment
        of and irrevocably (but subject to Section 13.8 hereof)
        authorizes Agent to take such action as Agent on its behalf and to exercise
        such
        powers as are expressly delegated to Agent by the terms hereof, together
        with
        such powers as are reasonably incidental thereto.  Agent shall not be
        required to take any action which exposes Agent to personal liability or
        which
        is contrary to this Agreement or applicable law.  Agent agrees to give
        to each Lender prompt notice of each notice given to it by Borrower pursuant
        to
        the terms of this Agreement.  The appointment and authority of Agent
        hereunder shall terminate upon the payment of the Obligations in
        full.

       

      13.2          Nature
        of Agent’s Duties.  Agent shall have no duties or
        responsibilities except those expressly set forth in this Agreement or in
        the
        other Loan Documents.  The duties of Agent shall be mechanical and
        administrative in nature.  Agent shall not have by reason of this
        Agreement a fiduciary relationship in respect of any Lender.  Nothing
        in this Agreement or any of the Loan Documents, express or implied, is intended
        to or shall be construed to impose upon Agent any obligations in respect
        of this
        Agreement or any of the Loan Documents except as expressly set forth herein
        or
        therein.  Agent shall not have any duty or responsibility, either
        initially or on a continuing basis, to provide any Lender with any credit
        or
        other information with respect to Borrower, whether coming into its possession
        before the date hereof or at any time or times thereafter (except as expressly
        set forth in this Agreement).  If Agent seeks the consent or approval
        of Lenders, to the taking or refraining from taking any action hereunder,
        Agent
        shall send notice thereof to each Lender.

       

      13.3          UCC
        Filings.  Each of Borrower, Agent and Lender expressly
        recognizes and agrees that Agent shall be listed as the assignee or secured
        party of record on the various UCC filings required to be made hereunder
        in
        order to perfect the grant of a security interest in the Collateral herein
        for
        the benefit of Lenders, that such listing shall be for administrative
        convenience only in creating a single secured party to take certain actions
        hereunder on behalf of the holders of the Obligations, and that such listing
        will not affect in any way the status of such holders as the beneficial holders
        of such security interest.  In addition, such listing shall impose no
        duties on Agent other than those expressly and specifically undertaken in
        accordance with this Section 13.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      13.4          Agent’s
        Reliance, Etc.  Neither Agent nor any of its directors,
        officers, agents or employees shall be liable for any action taken or omitted
        to
        be taken by it or them as Agent under or in connection with this Agreement
        (including Agent’s servicing, administering or collecting Receivables) except
        for its or their own gross negligence or willful misconduct.  Without
        limiting the foregoing, Agent: (i) may consult with legal counsel (including
        counsel for Borrower), independent public accountants and other experts selected
        by it and shall not be liable for any action taken or omitted to be taken
        in
        good faith by it in accordance with the advice of such counsel, accountants
        or
        experts; (ii) makes no warranty or representation to Lender and shall not
        be
        responsible to any Lender for any statements, warranties or representations
        made
        in or in connection with this Agreement; (iii) shall not have any duty to
        ascertain or to inquire as to the performance or observance of any of the
        terms,
        covenants or conditions of this Agreement on the part of Borrower or to inspect
        the property (including the books and records) of Borrower (except as otherwise
        expressly set forth in this Agreement); (iv) shall not be responsible to
        any
        Lender for the due execution, legality, validity, enforceability, genuineness,
        sufficiency, or value of this Agreement, or any other instrument or document
        furnished pursuant hereto, or any certificate, report, statement or other
        document referred to or provided for in, or received by Agent under or in
        connection with, the Loan Documents, or for any failure of Borrower or any
        of
        its Affiliates to perform its obligation under the Loan Documents; and (v)
        shall
        incur no liability under or in respect of this Agreement by acting upon any
        notice (including notice by telephone), consent, certificate or other instrument
        or writing (which may be by telex or telecopier) believed by it to be genuine
        and to be or to have been signed or sent by the proper party or
        parties.  Agent may, but shall not be required to, at any time request
        instructions from Lenders with respect to any actions or approvals which
        by the
        terms of this Agreement or of any of the other Loan Documents Agent is permitted
        or required to take or to grant, and Agent shall be absolutely entitled to
        refrain from taking any action or to withhold any approval and shall not
        be
        under any liability whatsoever to any Person for refraining from any action
        or
        withholding any approval under any of the Loan Documents until it shall have
        received such instructions from the requisite Lender, as applicable in
        accordance with this Agreement.  Without limiting the foregoing,
        Lender shall not have any right of action whatsoever against Agent as a result
        of Agent acting or refraining from acting under this Agreement or any of
        the
        other Loan Documents in accordance with the instructions of the requisite
        Lender
        as applicable in accordance with this Agreement.  Agent shall be
        entitled to rely, and shall be fully protected in relying, upon any note,
        writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
        telegram, telecopy, telex or teletype message, statement, order or other
        document or conversation reasonably believed by it or them to be genuine
        and
        correct and to have been signed, sent or made by the proper Person or Persons
        and upon advice and statements of legal counsel (including counsel to Borrower),
        independent accountants and other experts selected by Agent.

       

      13.5           Agent
        and Affiliates.  To the extent that Agent or any of its
        Affiliates are or shall become Lenders hereunder, Agent or such Affiliate,
        in
        such capacity, shall have each and every right and power under this Agreement
        as
        would any other Lender hereunder (including the right to vote upon any matter
        upon which any of Lenders are entitled to vote) and, without exception, may
        exercise the same as though it were not an Agent.  Agent and its
        Affiliates may engage in any kind of business with Borrower, any of its
        Affiliates and any Person who may do business with or own securities of Borrower
        or any of its Affiliates, all as if it were not an Agent hereunder and without
        any duty to account therefor to Lenders.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      13.6          Credit
        Decision.  Independently, and without reliance upon
        Agent, each Lender has, to the extent it deems appropriate, made and shall
        continue to make (a) its own independent investigation of the financial affairs
        and business affairs of Borrower in connection with any action or inaction
        with
        respect to the transactions contemplated herein, and (b) its own evaluation
        of
        the creditworthiness of Borrower and of the value of the Collateral, and,
        except
        as expressly provided in this Agreement, Agent has had and shall have no
        duty or
        responsibility to provide any Lender with any credit or other information
        with
        respect thereto.  Agent shall not be responsible to any Lender for any
        recitals, statements, representation or warranties herein or in any document,
        certificate or other writing delivered in connection herewith (unless made
        by
        Agent) or for the execution, effectiveness, genuineness, validity,
        enforceability, collectibility, priority or sufficiency of this Agreement
        (except with respect to Agent’s obligations hereunder) or the Loan Documents or
        the financial condition of Borrower or the value of the
        Collateral.  Except as expressly herein provided with respect to its
        duties as agent, Agent shall not be required to make any inquiry concerning
        either the performance or observance of any of the terms, provisions or
        conditions of this Agreement or the Loan Documents, the financial condition
        of
        Borrower, or the existence or possible existence of any Event of
        Default.

       

      13.7          Indemnification.  Each
        Lender agrees to indemnify Agent (to the extent not reimbursed by Borrower),
        ratably in accordance with each Lender’s Pro Rata Payment Percentage, from and
        against any and all liabilities, obligations, losses, damages, penalties,
        actions, judgments, suits, costs, expenses, or disbursements of any kind
        or
        nature whatsoever which may be imposed on, incurred by, or asserted against
        Agent in any way relating to or arising out of this Agreement or any action
        taken or omitted by Agent under this Agreement; provided, however, that no
        Lender shall be liable for any portion of such liabilities, obligations,
        losses,
        damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
        resulting from Agent’s gross negligence or willful
        misconduct.  Without limiting the generality of the foregoing, each
        Lender agrees to reimburse Agent (to the extent not reimbursed by Borrower)
        ratably in accordance with Lender’s Pro Rata Payment Percentage, promptly upon
        demand, for any out-of-pocket expenses (including reasonable counsel fees)
        incurred by Agent in connection with the administration, modification, amendment
        or enforcement (whether through negotiations, legal proceedings or otherwise)
        of, or legal advice in respect of its rights or responsibilities under, this
        Agreement.  The rights of Agent under this
Section 13.7 shall survive the termination of this
        Agreement.  For purposes of this paragraph, the term “Agent” shall
        include Agent, its agents (including without limitation Wellington), its
        affiliates and their respective officers, directors, employees and
        agents.

       

      13.8          Successor
        Agent.  Agent may resign at any time by giving thirty
        days notice thereof to Lenders and Borrower.  Upon any such
        resignation, Lenders, including Liberty Bank, shall have the right to appoint
        a
        successor Agent, and such resignation shall not be effective until such
        successor Agent is appointed and has accepted such appointment.  If no
        successor Agent shall have been so appointed and accepted such appointment
        within seventy-five (75) days after Agent’s giving of notice of resignation,
        then Agent may, on behalf of Lenders, appoint a successor Agent, which successor
        Agent shall be experienced in the types of transactions contemplated by this
        Agreement.  Upon the acceptance of any appointment as Agent hereunder
        by a successor Agent, such successor Agent shall thereupon succeed to and
        become
        vested with all of the rights, powers, privileges and duties of the retiring
        Agent, and the retiring Agent shall be discharged from all further duties
        and
        obligations under this Agreement.  After any retiring Agent’s
        resignation hereunder as Agent, the provisions of this Section 13.8 shall
        inure to its benefit as to any actions taken or omitted to be taken by it
        while
        it was Agent under this Agreement.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      13.9          Duty
        of Care.  Agent shall endeavor to exercise the same care
        in its administration of the Loan Documents as it exercises with respect
        to
        similar transactions in which it is involved and where no other co-lenders
        are
        involved; provided that the liability of Agent for failing to do so shall
        be
        limited as provided in the preceding paragraphs of this Section
        13.9.

       

      13.10        Delegation
        of Agency.

       

      (a)           If
        at any time or times it shall be necessary or prudent in connection with
        the
        exercise or protection of Agent’s rights hereunder in order to conform to any
        law of any jurisdiction in which any of the Collateral shall be located,
        or
        Agent shall be advised by counsel that it is so necessary or prudent in the
        interest of Lenders, or Agent shall deem it necessary for its own protection
        in
        the performance of its duties hereunder Agent and, to the extent required
        by
        Agent, Borrower shall execute and deliver all instruments and agreements
        reasonably necessary or proper to constitute another bank or trust company,
        or
        one or more individuals approved by Agent (each an “Approved Delegate”), either
        to act as co-agent or co-agents or trustee of all or any of the Collateral,
        jointly with Agent originally named herein or any successor, or to act as
        separate agent or agents or trustee of any such Collateral.  Every
        separate agent and every co-agent and every trustee, other than any agent
        which
        may be appointed as successor to Agent, shall, to the extent permitted by
        applicable law, be appointed to act and be such, subject to the following
        provisions and conditions, namely:

       

      (i)        except
        as otherwise provided herein, all rights, remedies, powers, duties and
        obligations conferred upon, reserved or imposed upon Agent in respect of
        the
        custody, control and management of moneys, paper or securities shall be
        exercised solely by Agent hereunder;

       

      (ii)       all
        rights, remedies, powers, duties and obligations conferred upon, reserved
        to or
        imposed upon Agent hereunder shall be conferred, reserved or imposed and
        exercised or performed by Agent except to the extent that the instrument
        appointing such separate agent or separate agents or co-agent or co-agents
        or
        trustee shall otherwise provide, and except to the extent that under any
        law of
        any jurisdiction in which any particular act or acts are to be performed,
        Agent
        shall be incompetent or unqualified to perform such act or acts, in which
        event
        such rights, remedies, powers, duties and obligations shall be exercised
        and
        performed by such separate agents or co-agent or co-agents to the extent
        specifically directed in writing by Agent;

       

      (iii)      no
        power given thereby to, or which it is provided hereby may be exercised by,
        any
        such separate agent or separate agents or co-agent or co-agents or trustee
        shall
        be exercised hereunder by such separate agent or separate agents or co-agent
        or
        co-agents or trustee except jointly with, or with the consent in writing
        of,
        anything herein contained to the contrary notwithstanding;

       

      (iv)     no
        separate agent or co-agent or trustee constituted under this
Section 13.10 shall be personally liable by reason of any act
        or omission of any other agent, separate agent, co-agent or trustee hereunder;
        and

       

      (v)      Agent,
        at any time by an instrument in writing, executed by it, may accept the
        resignation of or remove any such separate agent or co-agent or trustee of
        Agent, and in that case, by an instrument in writing executed by Agent and
        Borrower (to the extent necessary or requested by Agent) jointly may appoint
        a
        successor to such separate agent or co-agent or trustee, as the case may
        be,
        anything therein contained to the contrary notwithstanding.  In the
        event that Borrower shall not have joined in the execution of any such
        instrument with a Person or entity within ten (10) days after the receipt
        of a
        written request from Agent to do so, Agent, acting alone, may appoint a
        successor and may execute any instrument in connection therewith, and Borrower
        hereby irrevocably appoints Agent its agent and attorney to act for it in
        such
        connection in either of such contingencies.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      In
        the
        event that Borrower shall not have joined in the execution of such instruments
        or agreements with any Approved Delegate within thirty (30) Business Days
        after
        the receipt of a written request from Agent to do so, Borrower hereby
        irrevocably appoints Agent as its agent and attorney to act for it under
        the
        foregoing provisions of this Section 7.2(m) in such
        contingency, it being understood that the power of attorney granted hereunder
        is
        coupled with an interest.

       

      (b)           
        Agent may execute any of its duties under the Loan Documents by or through
        agents or attorneys-in-fact and shall be entitled to advice of counsel, and
        other specialists and advisors (including affiliates of such Agent) selected
        by
        it, concerning all matters pertaining to such duties.  Agent shall not
        be responsible for the negligence or misconduct of any such agents,
        attorneys-in-fact, counsel and other specialists and advisors selected by
        it
        with reasonable care.

       

      13.11        Agent’s
        Responsibilities.

       

      (a)            Each
        subsequent holder of any Note by its acceptance thereof irrevocably joins
        in the
        designation of Liberty Bank as agent for Lenders as provided herein with
        the
        same force and effect as if it were an original Lender hereunder and signatory
        hereto.  Liberty Bank hereby accepts such designation and appointment
        as agent.  Agent, acting as such under the provisions of this
        Agreement, or under any other instrument or document delivered pursuant hereto,
        shall not be liable or responsible, directly or indirectly, for any action
        taken, or omitted to be taken, by it in good faith, nor shall Agent be liable
        or
        responsible for the consequences of any oversight or error of judgment on
        its
        part, but Agent shall only be liable or responsible for any loss suffered
        by any
        of Lenders hereunder provided such loss was caused by Agent’s gross negligence
        or willful misconduct.  Agent shall not, by any action or inaction
        hereunder, be deemed to make any representation or warranty regarding the
        legality, legal effect or sufficiency of any act of Borrower in connection
        with,
        or under any of the provisions of, this Agreement, or any instrument or document
        delivered pursuant thereto, or the validity or enforceability of any instrument
        or document furnished to Agent pursuant to this Agreement.  Agent
        shall have no liability or responsibility in connection with the collection
        or
        payment of any sums due to Lenders by Borrower, the sole responsibility of
        Agent
        being to account to Lenders only for monies actually received by
        it.  Agent shall have no obligation to make any application of any
        funds received by it until such funds are immediately available at Agent’s
        office.  Any monies received by Agent need not be segregated from
        other funds except to the extent required by law, and Agent shall not be
        liable
        for interest on any funds received by it.  Agent shall not be charged
        with knowledge of any facts which would prohibit the making of any payment
        of
        monies in accordance with the provisions of this Agreement unless and until
        Agent shall have received written notice thereof at its office from Borrower
        or
        any Lender.  The duties of Agent shall be mechanical and
        administrative in nature, Agent shall not, by reason of this Agreement, be
        deemed a fiduciary in respect of Lenders, and nothing in this Agreement shall
        impose upon Agent any obligations in respect of this Agreement except as
        expressly herein set forth.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)            Agent
        shall have the right to exercise all the rights granted to, and exercisable
        by,
        it under this Agreement and any instrument or document delivered pursuant
        to
        this Agreement, in such manner from time to time, as Agent in its sole
        discretion, shall deem proper.

       

      (c)            Agent
        agrees to provide each Lender with notice (and copies of documents, as
        appropriate) of the any amendment, waiver or modification of the terms of
        this
        Agreement entered in accordance with Section 7.2(m) hereof;

       

      (d)            Except
        as otherwise provided in this Agreement, Agent shall be entitled, at its
        option,
        from time to time and at any time, to enter into any amendment of, or waive
        compliance with the terms of this Agreement without obtaining prior approval
        from any Lender.

       

      13.12        Power
        of Attorney.  Each Lender does hereby irrevocably
        constitute and appoint Agent as its true and lawful agent and attorney-in-fact,
        with full power of substitution, for and in its name, place and stead, or
        otherwise, to (a) demand and receive from time to time any and all property,
        rights, titles, interests and liens hereby sold, assigned and transferred,
        or
        intended so to be, and to give receipts for same, (b) from time to time to
        institute and prosecute in Agent’s own name any and all proceedings at law, in
        equity, or otherwise, that Agent may deem proper in order to collect, assert
        or
        enforce any claim, right or title, of any kind, in and to the property, rights,
        titles, interests and liens hereby sold, assigned or transferred, or intended
        so
        to be, and to defend and compromise any and all actions, suits or proceedings
        in
        respect of any of the said property, rights, titles, interests and liens,
        and
        (c) generally to do all and any such acts and things in relation to the
        Loans, the Collateral and this Agreement as Agent shall in good faith deem
        advisable.  Each Lender hereby declares that the appointment made and
        the powers granted pursuant to this Section 13.12 are coupled
        with an interest and are and shall be irrevocable by it in any manner, or
        for
        any reason, unless and until the repayment in full of the
        Obligation.

       

      13.13        Ratification
        and Confirmation.  Borrower hereby ratifies, confirms,
        assumes and agrees to be bound by all statements, covenants and agreements
        set
        forth in the this Agreement and the other Loan Documents.  Borrower
        reaffirms, restates and incorporates by reference all of the covenants and
        agreements made in the Loan Documents as if the same were made as of this
        date.  Borrower agrees to pay the Loan and all related expenses, as
        and when due and payable in accordance with this Agreement and the other
        Loan
        Documents, and to observe and perform the Obligations, and do all things
        necessary which are not prohibited by law to prevent the occurrence of any
        Event
        of Default.  In addition, to further secure, and to evidence and
        confirm the securing of, the prompt and complete payment and performance
        by
        Borrower of the Loan and all of the Obligations, for value received, Borrower
        unconditionally and irrevocably assigns, pledges and grants to Agent, and
        hereby
        confirms or reaffirm the prior granting to Agent of, a continuing first priority
        Lien, mortgage and security interest in and to all of the Collateral, whether
        now existing or hereafter acquired.  Also, as provided in the Loan
        Documents, the Loan is and shall be further secured by the Liens and security
        interests in favor of Agent in the properties and interests relating to
        Additional Eligible Resorts, which now or hereafter serve as collateral security
        for any Obligations.  On the date hereof and thereafter upon
        satisfaction of the requirements for approval by Agent of Additional Eligible
        Resorts, Borrower shall record, or cause to be recorded, such mortgages,
        deeds
        of trust, deeds to secure debt, assignments, pledges, security agreements
        and
        UCC Financing Statements in the appropriate public records of the state in
        which
        each Resort is located to further evidence and perfect Agent’s Lien on the
        Collateral.  Borrower agrees to deliver or cause to be delivered by
        its Affiliates, such mortgages, deeds of trust, deeds to secure debt,
        assignments, pledges, security agreements and UCC Financing Statements as
        Agent
        may deem necessary to further evidence and perfect Agent’s Lien on the
        Collateral.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      13.14        Estoppel.  The
        Loan constitutes valuable consideration to Borrower.  This Agreement
        and the other Loan Documents and the Loan modifications and transactions
        provided for or contemplated hereunder or thereunder, shall in no way adversely
        affect the Lien or perfection or priority of any Lien of Agent as of the
        date
        hereof in and to any Collateral, and are not intended to constitute, and
        do not
        constitute or give rise to, any novation, cancellation or extinguishment
        of any
        of Borrower’s Obligations existing as of the Closing Date to Agent, or of any
        interests owned or held by Agent (and not previously released) in and to
        any of
        the Collateral; it being the intention of the parties that the transactions
        provided for or contemplated herein shall be effectuated without any
        interruption in the continuity of the value and consideration received by
        Borrower, and of the attachment, perfection, priority and continuation in
        favor
        of Agent in and to all Collateral and proceeds.

       

      13.15        Participation
        Agreement.  Nothing in this Section 13 shall affect
        or limit any Participant’s rights or any of the Agent’s obligations under each
        Participant’s respective participation agreement with the
        Agent.  

       

      13.16        Withholding
        Taxes.

       

      (a)            If
        any Lender is a “foreign person” within the meaning of the IRC and such Lender
        claims exemption from, or a reduction of, U.S. withholding tax under Sections
        1441 or 1442 of the IRC, such Lender agrees with and in favor of Agent and
        Borrower, to deliver to Agent and Borrower:

       

      (i)       if
        such Lender claims an exemption from withholding tax pursuant to its portfolio
        interest exception, (A) a statement of the Lender, signed under penalty of
        perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of
        the IRC, (II) a 10% shareholder of Borrower (within the meaning of
        Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation
        related to Borrower within the meaning of Section 864(d)(4) of the IRC, and
        (B)
        a properly completed and executed IRS Form W-8BEN, before the first payment
        of
        any interest under this Agreement and at any other time reasonably requested
        by
        Agent or Borrower;

       

      (ii)       if
        such Lender claims an exemption from, or a reduction of, withholding tax
        under a
        United States tax treaty, properly completed and executed IRS Form W-8BEN
        before
        the first payment of any interest under this Agreement and at any other time
        reasonably requested by Agent or Borrower;

       

      (iii)      if
        such Lender claims that interest paid under this Agreement is exempt from
        United
        States withholding tax because it is effectively connected with a United
        States
        trade or business of such Lender, two properly completed and executed copies
        of
        IRS Form W-8ECI before the first payment of any interest is due under this
        Agreement and at any other time reasonably requested by Agent or Borrower;
        and

       

      (iv)     such
        other form or forms as may be required under the IRC or other laws of the
        United
        States as a condition to exemption from, or reduction of, United States
        withholding tax.

       

      Such
        Lender agrees promptly to notify Agent and Borrower of any change in
        circumstances which would modify or render invalid any claimed exemption
        or
        reduction.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)            If
        any Lender claims exemption from, or reduction of, withholding tax under
        a
        United States tax treaty by providing IRS Form W-8BEN and such Lender sells,
        assigns, grants a participation in, or otherwise transfers all or part of
        the
        Obligations of Borrower to such Lender, such Lender agrees to notify Agent
        of
        the percentage amount in which it is no longer the beneficial owner of
        Obligations of Borrower to such Lender.  To the extent of such
        percentage amount, Agent will treat such Lender’s IRS Form W-8BEN as no longer
        valid.

       

      (c)            If
        any Lender is entitled to a reduction in the applicable withholding tax,
        Agent
        may withhold from any interest payment to such Lender an amount equivalent
        to
        the applicable withholding tax after taking into account such
        reduction.  If the forms or other documentation required by subsection
        (a) of this Section 13.16 are not delivered to Agent, then Agent may
        withhold from any interest payment to such Lender not providing such forms
        or
        other documentation an amount equivalent to the applicable withholding
        tax.

       

      (d)           
        If the IRS or any other Governmental Authority of the United States or other
        jurisdiction asserts a claim that Agent did not properly withhold tax from
        amounts paid to or for the account of any Lender (because the appropriate
        form
        was not delivered, was not properly executed, or because such Lender failed
        to
        notify Agent of a change in circumstances which rendered the exemption from,
        or
        reduction of, withholding tax ineffective, or for any other reason) such
        Lender
        shall indemnify and hold Agent harmless for all amounts paid, directly or
        indirectly, by Agent as tax or otherwise, including penalties and interest,
        and
        including any taxes imposed by any jurisdiction on the amounts payable to
        Agent
        under this Section 13.16, together with all costs and expenses (including
        attorneys fees and expenses).  The obligation of the Lenders under
        this subsection shall survive the payment of all Obligations and the resignation
        or replacement of Agent.

       

      (e)            All
        payments made by Borrower hereunder or under any note will be made without
        setoff, counterclaim, or other defense, except as required by Applicable
        Laws
        other than for Taxes (as defined below).  All such payments will be
        made free and clear of, and without deduction or withholding for, any present
        or
        future taxes, levies, imposts, duties, fees, assessments or other charges
        of
        whatever nature now or hereafter imposed by any jurisdiction (other than
        the
        United States) or by any political subdivision or taxing authority thereof
        or
        therein (other than of the United States) with respect to such payments (but
        excluding, any tax imposed by any jurisdiction or by any political subdivision
        or taxing authority thereof or therein (i) measured by or based on the net
        income or net profits of a Lender, or (ii) to the extent that such tax results
        from a change in the circumstances of the Lender, including a change in the
        residence, place of organization, or principal place of business of the Lender,
        or a change in the branch or lending office of the Lender participating in
        the
        transactions set forth herein) and all interest, penalties or similar
        liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
        duties, fees, assessments or other charges being referred to collectively
        as
“Taxes”).  If any Taxes are so levied or imposed, Borrower
        agrees to pay the full amount of such Taxes, and such additional amounts
        as may
        be necessary so that every pay­ment of all amounts due under this Agreement
        or under any note, including any amount paid pursuant to this
Section 13.16(e) after withholding or deduction for or on account of
        any Taxes, will not be less than the amount provided for herein;
provided, however, that Borrower shall not be required to increase
        any such amounts payable to Agent or any Lender (i) that is not organized
        under
        the laws of the United States, if such Person fails to comply with the other
        requirements of this Section 13.16, or (ii) if the increase in such
        amount payable results from Agent’s or such Lender’s own willful mis­conduct
        or gross negligence.  Borrower will furnish to Agent as promptly as
        possible after the date the payment of any Taxes is due pursuant to Applicable
        Laws certified copies of tax receipts evidencing such payment by
        Borrower.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      13.17        Agent
        in Individual Capacity.  Liberty Bank and its Affiliates
        may make loans to, issue letters of credit for the account of, accept deposits
        from, acquire equity interests in, and generally engage in any kind of banking,
        trust, financial advisory, underwriting, or other business with Borrower
        and its
        Subsidiaries and Affiliates and any other Person party to any Loan Documents
        as
        though Liberty Bank were not Agent hereunder, and, in each case, without
        notice
        to or consent of the other Lenders.  The other Lenders acknowledge
        that, pursuant to such activities, Liberty Bank or its Affiliates may receive
        information regarding Borrower or its Affiliates and any other Person party
        to
        any Loan Documents that is subject to confidentiality obligations in favor
        of
        Borrower or such other Person and that prohibit the disclosure of such
        information to the Lenders, and the Lenders acknowledge that, in such
        circumstances (and in the absence of a waiver of such confidentiality
        obligations, which waiver Agent will use its reasonable best efforts to obtain),
        Agent shall not be under any obligation to provide such information to
        them.  The terms “Lender” and “Lenders” include Liberty Bank in its
        individual capacity.

       

       

      [THE
        REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be
        duly executed and delivered effective as of the date first above
        written.

      

      
        	  	 	
                BORROWER:

              
	  	 	  
	  	 	
                SILVERLEAF
                  RESORTS, INC., a Texas

              
	  	 	
                corporation

              
	  	 	  
	  	 	  
	
                /S/
                  PATRICIA K. DOREY 

              	 	
                By:

              	
                /S/
                  HARRY J. WHITE, JR.

              
	  	 	
                Name:

              	
                Harry
                  J. White, Jr.

              
	  	 	
                Title:

              	
                Chief
                  Financial Officer

              

      

      

      
        	
                STATE
                  OF TEXAS

              	
                )

              	  
	 	
                )

              	
                ss: 

              
	
                COUNTY
                  OF DALLAS

              	
                )

              	  

      

      

      The
        foregoing instrument was acknowledged before me this 28th day of
        September, 2007 by Harry J. White, Jr., Chief Financial Officer of
        Silverleaf Resorts, Inc., a Texas corporation, on behalf of the
        Corporation.

      

      
        	 	
                /S/
                  KIM W. MURDOCK

              
	 	
                Commissioner
                  of the Superior Court

              
	 	
                Notary
                  Public

              
	 	
                My
                  Commission Expires:  July 1,
                  2009

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          	 	 	
                  LENDER:  

                
	 	 	    
	 	 	
                  LIBERTY
                    BANK,  

                
	 	 	
                  a
                    Connecticut nonstock mutual savings bank  

                
	 	 	    
	 	 	    
	
                  /S/
                    RICHARD POLIVY

                	 	
                  By:

                	
                  /S/
                    STEVEN J. ZARRELLA  

                
	 	 	 	
                  Steven
                    J. Zarrella, Vice President  

                

        

        

        
          	
                  STATE
                    OF CONNECTICUT

                	
                  )

                	 
	 	
                  )

                	
                  ss:

                
	
                  COUNTY
                    OF MIDDLESEX

                	
                  )

                	 

        

         

      

      The
        foregoing instrument was acknowledged before me this 1st day of
        October, 2007 by STEVEN J. ZARRELLA, a Vice President of Liberty Bank, a
        Connecticut nonstock mutual savings bank, on behalf of the bank.

      

      
        	 	 	/S/
                RICHARD POLIVY
	 	 	Notary
                Public
	 	 	My
                Commission Expires:
	 	 	  
	 	 	 
	 	 	 
	 	 	AGENT:
	 	 	  
	 	 	LIBERTY
                BANK,
	 	 	a
                Connecticut nonstock mutual savings bank
	 	 	  
	
                /S/
                  RICHARD POLIVY

              	 	
                By:

              	
                /S/
                  STEVEN J. ZARRELLA

              
	 	 	 	
                Steven
                  J. Zarrella, Vice President

              

      

      

      
        	
                STATE
                  OF CONNECTIUT

              	
                )

              	 
	 	
                )

              	
                ss:

              
	
                COUNTY
                  OF MIDDLESEX

              	
                )

              	 

      

      

      The
        foregoing instrument was acknowledged before me this 1ST day of
        October, 2007 by STEVEN J. ZARRELLA, a Vice President of Liberty Bank, a
        Connecticut nonstock mutual savings bank, on behalf of the bank.

      

      
        	 	
                /S/
                  RICHARD POLIVY

              
	 	
                Notary
                  Public

              
	 	
                My
                  Commission Expires:

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      LIST
        OF
        SCHEDULES AND EXHIBITS

       

      SCHEDULES:

      Schedule
        1.0-Identification of Lenders and Their Respective Pro Rata
        Percentage

      Schedule
        1.1(a)-List of Resort Declarations

      Schedule
        1.1(b)-Underwriting Guidelines and Criteria

      Schedule
        1.1(c)-List of Timeshare Owner Associations

      Schedule
        2.6-List of Borrower’s Executive Management

      Schedule
        6.5-Permitted Liens

      Schedule
        6.7-Pending Material Litigation

      Schedule
        6.9-List of Environmental Matters

      Schedule
        6.19-List of Time Share Reports and Documents

      

      EXHIBITS

      Exhibit
        A- Assignment of Notes and Mortgages

      Exhibit
        B- Borrowing Base Report

      Exhibit
        C-Closing Certificate

      Exhibit
        D-Certificate and Request for Advance

      Exhibit
        E-Inventory Control Procedures

      Exhibit
        F-Officer’s Certificate For Financial Statementsex10_28.htm

    
      
        

      

    

    Exhibit
      10.28

     

     

    
       [Published
        CUSIP Number: ________________]

       

       

    

    CREDIT
      AGREEMENT

    

    

    Dated
      as
      of September 28, 2007

    

    among

    

    SYMYX
      TECHNOLOGIES, INC.,

    as
      the
      Borrower,

    

    BANK
      OF AMERICA, N.A.,

    as
      Administrative Agent,

    and

    L/C
      Issuer,

    

    and

    

    The
      Other Lenders Party Hereto

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    TABLE
      OF CONTENTS

     

    
      
        	 	 	
                 

              	
                Page

              
	
                 

              	 	
                 

              	
                 

              
	
                ARTICLE
                  I.

              	 	
                DEFINITIONS
                  AND ACCOUNTING TERMS

              	
                1

              
	
                 

              	 	
                 

              	
                 

              
	
                1.01

              	 	
                Defined
                  Terms

              	
                1

              
	
                1.02

              	 	
                Other
                  Interpretive Provisions

              	
                20

              
	
                1.03

              	 	
                Accounting
                  Terms.

              	
                21

              
	
                1.04

              	 	
                Rounding

              	
                21

              
	
                1.05

              	 	
                Times
                  of Day

              	
                21

              
	
                1.06

              	 	
                Letter
                  of Credit Amounts

              	
                22

              
	
                 

              	 	
                 

              	
                 

              
	
                ARTICLE
                  II.

              	 	
                THE
                  COMMITMENTS AND CREDIT EXTENSIONS

              	
                22

              
	
                 

              	 	
                 

              	
                 

              
	
                2.01

              	 	
                Loans

              	
                22

              
	
                2.02

              	 	
                Borrowings,
                  Conversions and Continuations of Loans.

              	
                22

              
	
                2.03

              	 	
                Letters
                  of Credit.

              	
                23

              
	
                2.04

              	 	
                Prepayments.

              	
                31

              
	
                2.05

              	 	
                Termination
                  or Reduction of Commitments

              	
                32

              
	
                2.06

              	 	
                Repayment
                  of Loans

              	
                32

              
	
                2.07

              	 	
                Interest.

              	
                32

              
	
                2.08

              	 	
                Fees

              	
                33

              
	
                2.09

              	 	
                Computation
                  of Interest and Fees

              	
                33

              
	
                2.10

              	 	
                Evidence
                  of Debt.

              	
                34

              
	
                2.11

              	 	
                Payments
                  Generally; Administrative Agent’s Clawback.

              	
                34

              
	
                2.12

              	 	
                Sharing
                  of Payments by Lenders

              	
                36

              
	
                2.13

              	 	
                Increase
                  in Commitments.

              	
                37

              
	
                 

              	 	
                 

              	
                 

              
	
                ARTICLE
                  III.

              	 	
                TAXES,
                  YIELD PROTECTION AND ILLEGALITY

              	
                38

              
	
                 

              	 	
                 

              	
                 

              
	
                3.01

              	 	
                Taxes.

              	
                38

              
	
                3.02

              	 	
                Illegality

              	
                40

              
	
                3.03

              	 	
                Inability
                  to Determine Rates

              	
                40

              
	
                3.04

              	 	
                Increased
                  Costs; Reserves on Eurodollar Rate Loans.

              	
                41

              
	
                3.05

              	 	
                Compensation
                  for Losses

              	
                42

              
	
                3.06

              	 	
                Mitigation
                  Obligations; Replacement of Lenders.

              	
                43

              
	
                3.07

              	 	
                Survival

              	
                43

              
	
                 

              	 	
                 

              	
                 

              
	
                ARTICLE
                  IV.

              	 	
                CONDITIONS
                  PRECEDENT TO CREDIT EXTENSIONS

              	
                43

              
	
                 

              	 	
                 

              	
                 

              
	
                4.01

              	 	
                Conditions
                  of Initial Credit Extension

              	
                43

              
	
                4.02

              	 	
                Conditions
                  to all Credit Extensions

              	
                46

              
	
                 

              	 	
                 

              	
                 

              
	
                ARTICLE
                  V.

              	 	
                REPRESENTATIONS
                  AND WARRANTIES

              	
                47

              
	
                 

              	 	
                 

              	
                 

              
	
                5.01

              	 	
                Existence,
                  Qualification and Power

              	
                47

              
	
                5.02

              	 	
                Authorization;
                  No Contravention

              	
                47

              
	
                5.03

              	 	
                Governmental
                  Authorization; Other Consents

              	
                47

              
	
                5.04

              	 	
                Binding
                  Effect

              	
                47

              
	
                5.05

              	 	
                Financial
                  Statements.

              	
                47

              

      

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

      

    
      
        
          	
                  5.06

                	 	
                  Litigation

                	
                  48

                
	
                  5.07

                	 	
                  No
                    Default

                	
                  48

                
	
                  5.08

                	 	
                  Ownership
                    of Property; Liens

                	
                  49

                
	
                  5.09

                	 	
                  Environmental
                    Compliance

                	
                  49

                
	
                  5.10

                	 	
                  Insurance

                	
                  49

                
	
                  5.11

                	 	
                  Taxes

                	
                  49

                
	
                  5.12

                	 	
                  ERISA
                    Compliance.

                	
                  49

                
	
                  5.13

                	 	
                  Subsidiaries;
                    Equity Interests

                	
                  50

                
	
                  5.14

                	 	
                  Margin
                    Regulations; Investment Company Act.

                	
                  50

                
	
                  5.15

                	 	
                  Disclosure

                	
                  50

                
	
                  5.16

                	 	
                  Compliance
                    with Laws

                	
                  51

                
	
                  5.17

                	 	
                  Identification
                    Number; Fiscal Periods

                	
                  51

                
	
                  5.18

                	 	
                  Intellectual
                    Property; Licenses, Etc

                	
                  51

                
	
                  5.19

                	 	
                  Security
                    Documents

                	
                  51

                
	
                  5.20

                	 	
                  MDL
                    Documents

                	
                  51

                
	
                  5.21

                	 	
                  Solvency

                	
                  51

                
	
                  5.22

                	 	
                  No
                    Real Property Owned

                	
                  51

                
	
                   

                	 	
                   

                	
                   

                
	
                  ARTICLE
                    VI.

                	 	
                  AFFIRMATIVE
                    COVENANTS

                	
                  52

                
	
                   

                	 	
                   

                	
                   

                
	
                  6.01

                	 	
                  Financial
                    Statements

                	
                  52

                
	
                  6.02

                	 	
                  Certificates;
                    Other Information

                	
                  53

                
	
                  6.03

                	 	
                  Notices

                	
                  54

                
	
                  6.04

                	 	
                  Payment
                    of Obligations

                	
                  55

                
	
                  6.05

                	 	
                  Preservation
                    of Existence, Etc

                	
                  55

                
	
                  6.06

                	 	
                  Maintenance
                    of Properties

                	
                  55

                
	
                  6.07

                	 	
                  Maintenance
                    of Insurance

                	
                  55

                
	
                  6.08

                	 	
                  Compliance
                    with Laws

                	
                  56

                
	
                  6.09

                	 	
                  Books
                    and Records

                	
                  56

                
	
                  6.10

                	 	
                  Inspection
                    Rights

                	
                  56

                
	
                  6.11

                	 	
                  Use
                    of Proceeds

                	
                  56

                
	
                  6.12

                	 	
                  Additional
                    Guarantors; Security

                	
                  56

                
	
                  6.13

                	 	
                  Additional
                    Collateral

                	
                  57

                
	
                  6.14

                	 	
                  Further
                    Assurances

                	
                  57

                
	
                  6.15

                	 	
                  Depository
                    Bank

                	
                  57

                
	
                   

                	 	
                   

                	
                   

                
	
                  ARTICLE
                    VII.

                	 	
                  NEGATIVE
                    COVENANTS

                	
                  57

                
	
                   

                	 	
                   

                	
                   

                
	
                  7.01

                	 	
                  Liens

                	
                  58

                
	
                  7.02

                	 	
                  Investments

                	
                  60

                
	
                  7.03

                	 	
                  Indebtedness

                	
                  61

                
	
                  7.04

                	 	
                  Fundamental
                    Changes

                	
                  61

                
	
                  7.05

                	 	
                  Dispositions

                	
                  62

                
	
                  7.06

                	 	
                  Restricted
                    Payments

                	
                  63

                
	
                  7.07

                	 	
                  Change
                    in Nature of Business

                	
                  63

                
	
                  7.08

                	 	
                  Transactions
                    with Affiliates

                	
                  63

                
	
                  7.09

                	 	
                  Burdensome
                    Agreements

                	
                  63

                
	
                  7.10

                	 	
                  Use
                    of Proceeds

                	
                  64

                
	
                  7.11

                	 	
                  Financial
                    Covenants.

                	
                  65

                
	
                  7.12

                	 	
                  Domestic
                    Assets

                	
                  65

                

        

      

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    
       

      
        
          	
                  ARTICLE
                    VIII.

                	 	
                  EVENTS
                    OF DEFAULT AND REMEDIES

                	
                  65

                
	
                   

                	 	
                   

                	
                   

                
	
                  8.01

                	 	
                  Events
                    of Default

                	
                  65

                
	
                  8.02

                	 	
                  Remedies
                    Upon Event of Default

                	
                  67

                
	
                  8.03

                	 	
                  Application
                    of Funds

                	
                  68

                
	
                   

                	 	
                   

                	
                   

                
	
                  ARTICLE
                    IX.

                	 	
                  ADMINISTRATIVE
                    AGENT

                	
                  69

                
	
                   

                	 	
                   

                	
                   

                
	
                  9.01

                	 	
                  Appointment
                    and Authority

                	
                  69

                
	
                  9.02

                	 	
                  Rights
                    as a Lender

                	
                  69

                
	
                  9.03

                	 	
                  Exculpatory
                    Provisions

                	
                  69

                
	
                  9.04

                	 	
                  Reliance
                    by Administrative Agent

                	
                  70

                
	
                  9.05

                	 	
                  Delegation
                    of Duties

                	
                  70

                
	
                  9.06

                	 	
                  Resignation
                    of Administrative Agent

                	
                  71

                
	
                  9.07

                	 	
                  Non-Reliance
                    on Administrative Agent and Other Lenders

                	
                  72

                
	
                  9.08

                	 	
                  Administrative
                    Agent May File Proofs of Claim

                	
                  72

                
	
                  9.09

                	 	
                  Collateral
                    and Guaranty Matters

                	
                  72

                
	
                   

                	 	
                   

                	
                   

                
	
                  ARTICLE
                    X.

                	 	
                  MISCELLANEOUS

                	
                  73

                
	
                   

                	 	
                   

                	
                   

                
	
                  10.01

                	 	
                  Amendments,
                    Etc

                	
                  73

                
	
                  10.02

                	 	
                  Notices;
                    Effectiveness; Electronic Communication.

                	
                  74

                
	
                  10.03

                	 	
                  No
                    Waiver; Cumulative Remedies

                	
                  76

                
	
                  10.04

                	 	
                  Expenses;
                    Indemnity; Damage Waiver.

                	
                  76

                
	
                  10.05

                	 	
                  Payments
                    Set Aside

                	
                  78

                
	
                  10.06

                	 	
                  Successors
                    and Assigns.

                	
                  78

                
	
                  10.07

                	 	
                  Treatment
                    of Certain Information; Confidentiality

                	
                  82

                
	
                  10.08

                	 	
                  Right
                    of Setoff

                	
                  83

                
	
                  10.09

                	 	
                  Interest
                    Rate Limitation

                	
                  83

                
	
                  10.10

                	 	
                  Counterparts;
                    Integration; Effectiveness

                	
                  83

                
	
                  10.11

                	 	
                  Survival
                    of Representations and Warranties

                	
                  84

                
	
                  10.12

                	 	
                  Severability

                	
                  84

                
	
                  10.13

                	 	
                  Replacement
                    of Lenders

                	
                  84

                
	
                  10.14

                	 	
                  Governing
                    Law; Jurisdiction; Etc.

                	
                  85

                
	
                  10.15

                	 	
                  Waiver
                    of Jury Trial

                	
                  86

                
	
                  10.16

                	 	
                  No
                    Advisory or Fiduciary Responsibility

                	
                  86

                
	
                  10.17

                	 	
                  USA
                    PATRIOT Act Notice

                	
                  87

                
	
                  10.18

                	 	
                  ENTIRE
                    AGREEMENT

                	
                  87

                

        

      

    

     

    
      *    ALL
        SCHEDULES AND ATTACHMENTS TO THE CREDIT AGREEMENT HAVE BEEN OMITTED. COPIES
        OF
        SUCH SCHEDULES AND ATTACHMENTS WILL BE FURNISHED SUPPLEMENTALLY TO THE SEC
        UPON
        REQUEST.

       

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

       

      SCHEDULES

    

     

    1.01(g)        Initial
      Guarantors

    2.01             Commitments
      and Applicable Percentages

    5.05             Supplement
      to Interim Financial Statements

    5.06             Litigation

    5.09             Environmental
      Matters

    5.13             Subsidiaries;
      Other Equity Investments

    5.18             Intellectual
      Property Matters

    7.01             Existing
      Liens

    7.03             Existing
      Indebtedness

    7.09             Restrictive
      Arrangements

    10.02           Administrative
      Agent’s Office; Certain Addresses for Notices

     

    EXHIBITS

     

    Form
      of

     

    A           Loan
      Notice

    B           Note

    C           Compliance
      Certificate

    D           Assignment
      and Assumption

    E           Guaranty

    F           Opinion
      Matters

    G           Borrower
      Security Agreement

    H           Subsidiary
      Security Agreement

     

    *    ALL
      SCHEDULES
      AND ATTACHMENTS TO THE CREDIT AGREEMENT HAVE BEEN OMITTED. COPIES OF SUCH
      SCHEDULES AND ATTACHMENTS
WILL BE FURNISHED SUPPLEMENTALLY
      TO THE SEC UPON
      REQUEST.

    
      
        
          
          

        

        
          iv

          
            

          

        

        
          
          

        

      

    

    

     

    CREDIT
      AGREEMENT

     

    THIS
      CREDIT AGREEMENT (“Agreement”) is entered into as of September 28, 2007,
      among SYMYX TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”),
      each lender from time to time party hereto (collectively, the “Lenders”
and individually, a “Lender”), and BANK OF AMERICA, N.A., as
      Administrative Agent and L/C Issuer.

     

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

     

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

     

    ARTICLE
      I.

    DEFINITIONS
      AND ACCOUNTING TERMS

     

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

     

    “Acquired
      Entity” means (a) any Person that becomes a Subsidiary of the Borrower as a
      result of an Acquisition or (b) any business entity or division thereof, all
      or
      substantially all of the assets and business of which are acquired by the
      Borrower or a Subsidiary of the Borrower pursuant to an
      Acquisition.

     

    “Acquisition”
      means any transaction or series of related transactions for the purpose of
      or
      resulting, directly or indirectly, in (a) the acquisition of all or
      substantially all of the assets of a Person, or of any business or division
      of a
      Person (other than a Person that is a Subsidiary), (b) the acquisition of
      in excess of 50% of the capital stock, partnership interests, membership
      interests or equity of any Person (other than a Person that is a Subsidiary),
      or
      otherwise causing any Person to become a Subsidiary, or (c) a merger or
      consolidation or any other combination with another Person (other than a Person
      that is a Subsidiary).

     

    “Administrative
      Agent” means Bank of America in its capacity as administrative agent and
      collateral agent under any of the Loan Documents, or any successor
      administrative agent or collateral agent.

     

    “Administrative
      Agent’s Office” means the Administrative Agent’s address and, as
      appropriate, account as set forth on Schedule 10.02, or such other
      address or account as the Administrative Agent may from time to time notify
      to
      the Borrower and the Lenders.

     

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

     

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

     

    

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    

    “Aggregate
      Commitments” means the Commitments of all the Lenders.

     

    “Agreement”
      means this Credit Agreement.

     

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

     

    “Applicable
      Rate” means the following percentages per annum, based upon the Consolidated
      Leverage Ratio as set forth in the most recent Compliance Certificate received
      by the Administrative Agent pursuant to
Section 6.02(a):

     

    
      	
              Applicable
                Rate

            
	
              Pricing

              Level

            	
              Consolidated

              Leverage
                Ratio

            	
              Commitment
                Fee

            	
              Eurodollar

              Rate
                +/

              Letters
                of

              Credit

            	
              Base
                Rate

              +

            
	
              1

            	
              <1.00

            	
              0.25%

            	
              1.50%

            	
              0.00%

            
	
              2

            	
              ≥1.00:1.00
                but < 1.50:1.00

            	
              0.25%

            	
              1.75%

            	
              0.25%

            
	
              3

            	
              ≥1.50:1.00

            	
              0.25%

            	
              2.00%

            	
              0.50%

            

    

    

    Any
      increase or decrease in the Applicable Rate resulting from a change in the
      Consolidated Leverage Ratio shall become effective as of the first Business
      Day
      immediately following the date a Compliance Certificate is delivered pursuant
      to
Section 6.02(a); provided, however, that if a
      Compliance Certificate is not delivered when due in accordance with such
      Section, then Pricing Level 3 shall apply as of the first Business Day after
      the
      date on which such Compliance Certificate was required to have been delivered.
      The Applicable Rate in effect from the Closing Date through the date of receipt
      of the Borrower’s Compliance Certificate for the fiscal quarter ended September
      30, 2007 shall be determined based upon Pricing Level 2.

     

    “Approved
      Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
      Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
      administers or manages a Lender.

     

    “Assignee
      Group” means two or more Eligible Assignees that are Affiliates of one
      another or two or more Approved Funds managed by the same investment
      advisor.

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    “Assignment
      and Assumption” means an assignment and assumption entered into by a Lender
      and an assignee (with the consent of any party whose consent is required by
      Section 10.06(b), and accepted by the Administrative Agent), in
      substantially the form of Exhibit D or any other form approved by
      the Administrative Agent.

     

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

     

    “Audited
      Financial Statements” means the audited consolidated balance sheet of the
      Borrower and its Subsidiaries for the fiscal year ended December 31, 2006,
      and
      the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
      including the notes thereto.

     

    “Availability
      Period” means the period from and including the Closing Date to the earliest
      of (a) the Maturity Date, (b) the date of termination of the Aggregate
      Commitments pursuant to Section 2.05, and (c) the date of
      termination of the commitment of each Lender to make Loans and of the obligation
      of the L/C Issuer to make L/C Credit Extensions pursuant to
Section 8.02.

     

    “Bank
      of America” means Bank of America, N.A. and its successors.

     

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

     

    “Base
      Rate Loan” means a Loan that bears interest based on the Base
      Rate.

     

    “Borrower”
      has the meaning specified in the introductory paragraph hereto.

     

    “Borrower
      Materials” has the meaning specified in
Section 6.02.

     

    “Borrower
      Security Agreement” means a security agreement, substantially in the form of
Exhibit G or otherwise in form satisfactory to the Administrative Agent,
      executed and delivered by the Borrower pursuant to Section
      4.01.

     

    “Borrower
      Security Agreement Collateral” means all “Collateral” as defined in the
      Borrower Security Agreement.

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    “Borrowing”
      means a borrowing consisting of simultaneous Loans of the same Type and, in
      the
      case of Eurodollar Rate Loans, having the same Interest Period made by each
      of
      the Lenders pursuant to Section 2.01.

     

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

     

    “Cash
      Collateralize” has the meaning specified in
Section 2.03(g).

     

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

     

    “Change
      of Control” means an event or series of events by which:

     

    (a)           any
      “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
      Securities Exchange Act of 1934, but excluding any employee benefit plan of
      such
      person or its subsidiaries, and any person or entity acting in its capacity
      as
      trustee, agent or other fiduciary or administrator of any such plan) becomes
      the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
      Exchange Act of 1934, except that a person or group shall be deemed to have
      “beneficial ownership” of all securities that such person or group has the right
      to acquire, whether such right is exercisable immediately or only after the
      passage of time (such right, an “option right”)), directly or indirectly,
      of 25% or more of the equity securities of the Borrower entitled to vote for
      members of the board of directors or equivalent governing body of the Borrower
      on a fully-diluted basis (and taking into account all such securities that
      such
      person or group has the right to acquire pursuant to any option
      right);

     

    (b)           during
      any period of 12 consecutive months, a majority of the members of the board
      of
      directors or other equivalent governing body of the Borrower cease to be
      composed of individuals (i) who were members of that board or equivalent
      governing body on the first day of such period, (ii) whose election or
      nomination to that board or equivalent governing body was approved by
      individuals referred to in clause (i) above constituting at the time of such
      election or nomination at least a majority of that board or equivalent governing
      body or (iii) whose election or nomination to that board or other equivalent
      governing body was approved by individuals referred to in clauses (i) and (ii)
      above constituting at the time of such election or nomination at least a
      majority of that board or equivalent governing body (excluding, in the case
      of
      both clause (ii) and clause (iii), any individual whose initial nomination
      for,
      or assumption of office as, a member of that board or equivalent governing
      body
      occurs as a result of an actual or threatened solicitation of proxies or
      consents for the election or removal of one or more directors by any person
      or
      group other than a solicitation for the election of one or more directors by
      or
      on behalf of the board of directors); or

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

    (c)           any
      Person or two or more Persons acting in concert shall have acquired by contract
      or otherwise, or shall have entered into a contract or arrangement that, upon
      consummation thereof, will result in its or their acquisition of the power
      to
      exercise, directly or indirectly, a controlling influence over the management
      or
      policies of Borrower, or control over the equity securities of Borrower entitled
      to vote for members of the board of directors or equivalent governing body
      of
      Borrower on a fully-diluted basis (and taking into account all such securities
      that such Person or group has the right to acquire pursuant to any option right)
      representing 25% or more of the combined voting power of such
      securities.  [Discuss]

     

    “Closing
      Date” means the first date all the conditions precedent in
      Section 4.01 are satisfied or waived in accordance with
Section 10.01.

     

    “CNW
      Ratchet Amount” means, (i) in respect of the last day of the fiscal quarter
      ending September 30, 2007, zero ($0), (ii) in respect of the last day of the
      fiscal quarters ending December 31, 2007, March 31, 2008, June 30, 2008 and
      September 30, 2008, an amount equal to 50% of Consolidated Net Income earned
      in
      the fiscal year ending December 31, 2007, if positive, or zero ($0), if negative
      (the “Initial Ratchet Amount”) and (iii) in respect of the last day of
      the fiscal quarters ending December 31, 2008 and thereafter, an amount equal
      to
      the sum of (x) the Initial Ratchet Amount, plus (y) an amount equal to 50%
      of
      Consolidated Net Income earned in the fiscal year ending December 31, 2008,
      if
      positive, or zero ($0) if negative.

     

    “Code”
      means the Internal Revenue Code of 1986.

     

    “Collateral”
      means any property with respect to which any Liens or security interests have
      been granted (or purported to be granted) pursuant to any Security Document,
      including all Borrower Security Agreement Collateral, all Subsidiary Security
      Agreement Collateral, and all cash and cash equivalents or other property
      delivered as collateral pursuant to this Agreement or any other Loan
      Document.

     

    “Commitment”
      means, as to each Lender, its obligation to (a) make Loans to the Borrower
      pursuant to Section 2.01, and (b) purchase participations in L/C
      Obligations, in an aggregate principal amount at any one time outstanding not
      to
      exceed the amount set forth opposite such Lender’s name on
Schedule 2.01 or in the Assignment and Assumption pursuant to which
      such Lender becomes a party hereto, as applicable, as such amount may be
      adjusted from time to time in accordance with this Agreement.

     

    “Compliance
      Certificate” means a certificate substantially in the form of
Exhibit C.

     

     “Consolidated
      EBITDA” means, for any period, for the Borrower and its Subsidiaries on a
      consolidated basis, an amount equal to Consolidated Net Income for such period
      plus (a) the following to the extent deducted in calculating such
      Consolidated Net Income: (i) Consolidated Interest Charges for such period,
      (ii)
      the provision for Federal, state, local and foreign income taxes payable by
      the
      Borrower and its Subsidiaries for such period, (iii) depreciation and
      amortization expense, (iv) without duplication, expenses in
      respect of such period reducing Consolidated Net Income
      that do not represent a cash item in such period or in any future period, and
      minus (b) the following to the extent included in calculating such
      Consolidated Net Income: (i) Federal, state, local and foreign income tax
      credits of the Borrower and its Subsidiaries for such period, and (ii) without
      duplication, all non-cash items increasing Consolidated Net Income for such
      period, provided, however, that if there has occurred an
      Acquisition during the relevant period, Consolidated EBITDA shall be calculated,
      at the option of the Borrower on a pro forma basis in accordance with the SEC
      pro forma reporting rules under the Exchange act, as if such Acquisition
      occurred on the first day of the applicable period; provided that once
      elected in respect of an Acquisition, such election shall remain in effect
      at
      all times thereafter for such Acquisition.

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

    “Consolidated
      Funded Indebtedness” means, as of any date of determination, for the
      Borrower and its Subsidiaries on a consolidated basis, the sum of (a) the
      outstanding principal amount of all obligations, whether current or long-term,
      for borrowed money (including Obligations hereunder) and all obligations
      evidenced by bonds, debentures, notes, loan agreements or other similar
      instruments, (b) all purchase money Indebtedness, (c) all direct obligations
      arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments, (d) all
      obligations in respect of the deferred purchase price of property or services
      (other than trade accounts payable in the ordinary course of business), (e)
      Attributable Indebtedness in respect of capital leases and Synthetic Lease
      Obligations, (f) without duplication, all Guarantees with respect to outstanding
      Indebtedness of the types specified in clauses (a) through (e) above of Persons
      other than the Borrower or any Subsidiary, and (g) all Indebtedness of the
      types
      referred to in clauses (a) through (f) above of any partnership or joint venture
      (other than a joint venture that is itself a corporation or limited liability
      company) in which the Borrower or a Subsidiary is a general partner or joint
      venturer, unless such Indebtedness is expressly made non-recourse to the
      Borrower or such Subsidiary.

     

    “Consolidated
      Interest Charges” means, for any period, for the Borrower and its
      Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
      payments, debt discount, fees, charges and related expenses of the Borrower
      and
      its Subsidiaries in connection with borrowed money (including capitalized
      interest) or in connection with the deferred purchase price of assets, in each
      case to the extent treated as interest in accordance with GAAP, and (b) the
      portion of rent expense of the Borrower and its Subsidiaries with respect to
      such period under capital leases that is treated as interest in accordance
      with
      GAAP.

     

    “Consolidated
      Interest Coverage Ratio” means, as of any date of determination, the ratio
      of (a) Consolidated EBITDA for the period of the four prior fiscal quarters
      ending on such date to (b) Consolidated Interest Charges for such
      period.

     

    “Consolidated
      Leverage Ratio” means, as of any date of determination, the ratio of (a)
      Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA
      for
      the period of the four fiscal quarters most recently ended.

     

    “Consolidated
      Net Income” means, for any period, for the Borrower and its Subsidiaries on
      a consolidated basis, the net income of the Borrower and its Subsidiaries
      (excluding extraordinary gains and extraordinary losses) for that
      period.

     

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    

    “Consolidated
      Net Worth” means, as of any date of determination, for the Borrower and its
      Subsidiaries on a consolidated basis, Shareholders’ Equity of the Borrower and
      its Subsidiaries on that date.

     

    “Contractual
      Obligation” means, as to any Person, any provision of any security issued by
      such Person or of any agreement, instrument or other undertaking to which such
      Person is a party or by which it or any of its property is bound.

     

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

     

    “Credit
      Extension” means each of the following: (a) a Borrowing and (b) an L/C
      Credit Extension.

     

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

     

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

     

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

     

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

     

    “Disposition”
      or “Dispose” means the sale, transfer, license, lease or other
      disposition (including any sale and leaseback transaction) of any property
      by
      any Person, including any sale, assignment, transfer or other disposal, with
      or
      without recourse, of any notes or accounts receivable or any rights and claims
      associated therewith.

     

    “Dollar”
      and “$” mean lawful money of the United States.

    

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    

    “Domestic
      Subsidiary” means any Subsidiary that is organized under the laws of any
      political subdivision of the United States.

     

    “Eligible
      Assignee” means any Person that meets the requirements to be an assignee
      under Section 10.06(b)(iii), (v) and (vi) (subject to
      such consents, if any, as may be required under
Section 10.06(b)(iii)).

     

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

     

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

     

    “Equity
      Interests” means, with respect to any Person, all of the shares of capital
      stock of (or other ownership or profit interests in) such Person, all of the
      warrants, options or other rights for the purchase or acquisition from such
      Person of shares of capital stock of (or other ownership or profit interests
      in)
      such Person, all of the securities convertible into or exchangeable for shares
      of capital stock of (or other ownership or profit interests in) such Person
      or
      warrants, rights or options for the purchase or acquisition from such Person
      of
      such shares (or such other interests), and all of the other ownership or profit
      interests in such Person (including partnership, member or trust interests
      therein), whether voting or nonvoting, and whether or not such shares, warrants,
      options, rights or other interests are outstanding on any date of
      determination.

     

    “ERISA”
      means the Employee Retirement Income Security Act of 1974.

     

    “ERISA
      Affiliate” means any trade or business (whether or not incorporated) under
      common control with the Borrower within the meaning of Section 414(b) or
      (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
      provisions relating to Section 412 of the Code).

     

    “ERISA
      Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
      withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject
      to
      Section 4063 of ERISA during a plan year in which it was a substantial
      employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
      operations that is treated as such a withdrawal under Section 4062(e) of
      ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
      Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
      is
      in reorganization; (d) the filing of a notice of intent to terminate, the
      treatment of a Plan amendment as a termination under Section 4041 or 4041A
      of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
      Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
      under Section 4042 of ERISA for the termination of, or the appointment of a
      trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
      imposition of any liability under Title IV of ERISA, other than for PBGC
      premiums due but not delinquent under Section 4007 of ERISA, upon the
      Borrower or any ERISA Affiliate.

    

    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    

    “Eurodollar
      Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan,
      the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
      LIBOR”), as published by Reuters (or other commercially available source
      providing quotations of BBA LIBOR as designated by the Administrative Agent
      from
      time to time) at approximately 11:00 a.m., London time, two Business Days prior
      to the commencement of such Interest Period, for Dollar deposits (for delivery
      on the first day of such Interest Period) with a term equivalent to such
      Interest Period. If such rate is not available at such time for any reason,
      then
      the “Eurodollar Rate” for such Interest Period shall be the rate per
      annum determined by the Administrative Agent to be the rate at which deposits
      in
      Dollars for delivery on the first day of such Interest Period in same day funds
      in the approximate amount of the Eurodollar Rate Loan being made, continued
      or
      converted by Bank of America and with a term equivalent to such Interest Period
      would be offered by Bank of America’s London Branch to major banks in the London
      interbank eurodollar market at their request at approximately 11:00 a.m. (London
      time) two Business Days prior to the commencement of such Interest
      Period.

     

    “Eurodollar
      Rate Loan” means a Loan that bears interest at a rate based on the
      Eurodollar Rate.

     

    “Event
      of Default” has the meaning specified in
Section 8.01.

     

    “Exchange
      Act” means the Securities Exchange Act of 1934.

     

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

    

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    

    “Federal
      Funds Rate” means, for any day, the rate per annum equal to the weighted
      average of the rates on overnight Federal funds transactions with members of
      the
      Federal Reserve System arranged by Federal funds brokers on such day, as
      published by the Federal Reserve Bank of New York on the Business Day next
      succeeding such day; provided that (a) if such day is not a Business Day,
      the Federal Funds Rate for such day shall be such rate on such transactions
      on
      the next preceding Business Day as so published on the next succeeding Business
      Day, and (b) if no such rate is so published on such next succeeding Business
      Day, the Federal Funds Rate for such day shall be the average rate (rounded
      upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
      America on such day on such transactions as determined by the Administrative
      Agent.

     

    “Fee
      Letter” has the meaning specified in Section 2.14(c).

     

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

     

    “Foreign
      Subsidiary” means any Subsidiary other than a Domestic
      Subsidiary.

     

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

     

    “Fund”
      means any Person (other than a natural person) that is (or will be) engaged
      in
      making, purchasing, holding or otherwise investing in commercial loans and
      similar extensions of credit in the ordinary course of its
      business.

     

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

     

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

     

    “Guarantee”
      means, as to any Person, any (a) any obligation, contingent or otherwise, of
      such Person guaranteeing or having the economic effect of guaranteeing any
      Indebtedness or other obligation payable or performable by another Person (the
      “primary obligor”) in any manner, whether directly or indirectly, and including
      any obligation of such Person, direct or indirect, (i) to purchase or pay (or
      advance or supply funds for the purchase or payment of) such Indebtedness or
      other obligation, (ii) to purchase or lease property, securities or services
      for
      the purpose of assuring the obligee in respect of such Indebtedness or other
      obligation of the payment or performance of such Indebtedness or other
      obligation, (iii) to maintain working capital, equity capital or any other
      financial statement condition or liquidity or level of income or cash flow
      of
      the primary obligor so as to enable the primary obligor to pay such Indebtedness
      or other obligation, or (iv) entered into for the purpose of assuring in any
      other manner the obligee in respect of such Indebtedness or other obligation
      of
      the payment or performance thereof or to protect such obligee against loss
      in
      respect thereof (in whole or in part), or (b) any Lien on any assets of such
      Person securing any Indebtedness or other obligation of any other Person,
      whether or not such Indebtedness or other obligation is assumed by such Person
      (or any right, contingent or otherwise, of any holder of such Indebtedness
      to
      obtain any such Lien). The amount of any Guarantee shall be deemed to be an
      amount equal to the stated or determinable amount of the related primary
      obligation, or portion thereof, in respect of which such Guarantee is made
      or,
      if not stated or determinable, the maximum reasonably anticipated liability
      in
      respect thereof as determined by the guaranteeing Person in good faith. The
      term
“Guarantee” as a verb has a corresponding meaning.

    

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

    

    “Guarantors”
      means, collectively, each Person that has delivered or is required to deliver
      a
      counterpart of the Guaranty hereunder.  The initial Guarantors are
      listed on Schedule 1.01(g).

     

    “Guaranty”
      means the Guaranty made by the Guarantors in favor of the Administrative Agent
      and the Lenders, substantially in the form of
Exhibit E.

     

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

     

    “Indebtedness”
      means, as to any Person at a particular time, without duplication, all of the
      following, whether or not included as indebtedness or liabilities in accordance
      with GAAP:

     

    (d)           all
      obligations of such Person for borrowed money and all obligations of such Person
      evidenced by bonds, debentures, notes, loan agreements or other similar
      instruments;

     

    (e)           all
      direct or contingent obligations of such Person arising under letters of credit
      (including standby and commercial), bankers’ acceptances, bank guaranties,
      surety bonds and similar instruments;

     

    (f)           
      net obligations of such Person under any Swap Contract;

     

    (g)           all
      obligations of such Person to pay the deferred purchase price of property or
      services (other than trade accounts payable in the ordinary course of business
      and, in each case, not past due for more than 60 days after the date on which
      such trade account payable was created);

    

    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

    

    (h)           indebtedness
      (excluding prepaid interest thereon) secured by a Lien on property owned or
      being purchased by such Person (including indebtedness arising under conditional
      sales or other title retention agreements), whether or not such indebtedness
      shall have been assumed by such Person or is limited in recourse;

     

    (i)           
      capital leases and Synthetic Lease Obligations;

     

    (j)           
      all obligations of such Person to purchase, redeem, retire, defease or otherwise
      make any payment in respect of any Equity Interest in such Person or any other
      Person, valued, in the case of a redeemable preferred interest, at the greater
      of its voluntary or involuntary liquidation preference plus accrued and
      unpaid dividends; and

     

    (k)           all
      Guarantees of such Person in respect of any of the foregoing.

     

    For
      all
      purposes hereof, the Indebtedness of any Person shall include the Indebtedness
      of any partnership or joint venture (other than a joint venture that is itself
      a
      corporation or limited liability company) in which such Person is a general
      partner or a joint venturer, unless such Indebtedness is expressly made
      non-recourse to such Person. The amount of any net obligation under any Swap
      Contract on any date shall be deemed to be the Swap Termination Value thereof
      as
      of such date. The amount of any capital lease or Synthetic Lease Obligation
      as
      of any date shall be deemed to be the amount of Attributable Indebtedness in
      respect thereof as of such date.

     

    “Indemnified
      Taxes” means Taxes other than Excluded Taxes.

     

    “Indemnitee”
      has the meaning specified in Section 10.04(b).

     

    “Information”
      has the meaning specified in Section 10.07.

     

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

     

    “Interest
      Period” means, as to each Eurodollar Rate Loan, the period commencing on the
      date such Eurodollar Rate Loan is disbursed or converted to or continued as
      a
      Eurodollar Rate Loan and ending on the date one, two, three or six months
      thereafter, as selected by the Borrower in its Loan Notice or such other period
      that is twelve months or less requested by the Borrower and consented to by
      all
      the Lenders; provided that:

     

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

     

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

    

    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

    

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

     

    “Investment”
      means, as to any Person, any direct or indirect acquisition or investment by
      such Person, whether by means of (a) the purchase or other acquisition of
      capital stock or other securities of another Person, (b) a loan, advance or
      capital contribution to, Guarantee or assumption of debt of, or purchase or
      other acquisition of any other debt or equity participation or interest in,
      another Person, including any partnership or joint venture interest in such
      other Person and any arrangement pursuant to which the investor Guarantees
      Indebtedness of such other Person, or (c) the purchase or other acquisition
      (in
      one transaction or a series of transactions) of assets of another Person that
      constitute a business unit. For purposes of covenant compliance, the amount
      of
      any Investment shall be the amount actually invested, without adjustment for
      subsequent increases or decreases in the value of such Investment.

     

    “IP
      Rights” has the meaning specified in Section 5.18.

     

    “IRS”
      means the United States Internal Revenue Service.

     

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

     

    “Issuer
      Documents” means with respect to any Letter of Credit, the Letter of Credit
      Application, and any other document, agreement and instrument entered into
      by
      the L/C Issuer and the Borrower with or in favor the L/C Issuer and relating
      to
      such Letter of Credit.

     

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

     

    “L/C
      Advance” means, with respect to each Lender, such Lender’s funding of its
      participation in any L/C Borrowing in accordance with its Applicable
      Percentage.

     

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

     

    “L/C
      Credit Extension” means, with respect to any Letter of Credit, the issuance
      thereof or extension of the expiry date thereof, or the increase of the amount
      thereof.

     

    “L/C
      Issuer” means Bank of America in its capacity as issuer of Letters of Credit
      hereunder, or any successor issuer of Letters of Credit hereunder.

    

    
      
        
          
          

        

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

     

    “Lender”
      has the meaning specified in the introductory paragraph hereto.

     

    “Lending
      Office” means, as to any Lender, the office or offices of such Lender
      described as such in such Lender’s Administrative Questionnaire, or such other
      office or offices as a Lender may from time to time notify the Borrower and
      the
      Administrative Agent.

     

    “Letter
      of Credit” means any standby letter of credit issued hereunder.

     

    “Letter
      of Credit Application” means an application and agreement for the issuance
      or amendment of a Letter of Credit in the form from time to time in use by
      the
      L/C Issuer.

     

    “Letter
      of Credit Expiration Date” means the day that is seven days prior to the
      Maturity Date then in effect (or, if such day is not a Business Day, the next
      preceding Business Day).

     

    “Letter
      of Credit Fee” has the meaning specified in
Section 2.03(i).

     

    “Letter
      of Credit Sublimit” means an amount equal to $20,000,000.  The
      Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
      Commitments.

     

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

     

     “Loan”
      has the meaning specified in Section 2.01.

     

    “Loan
      Documents” means this Agreement, each Note, each Issuer Document, the
      Guaranty and each Security Document.

     

    “Loan
      Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from
      one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant
      to Section 2.02(a), which, if in writing, shall be substantially in
      the form of Exhibit A.

     

    “Loan
      Parties” means, collectively, the Borrower, each Guarantor and each grantor
      under a Security Document.

    

    
      
        
          
          

        

        
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    “Material
      Adverse Effect” means (a) a material adverse change in, or a material
      adverse effect upon, the operations, business, properties, liabilities (actual
      or contingent), or condition (financial or otherwise) of the Borrower or the
      Borrower and its Subsidiaries taken as a whole; (b) a material impairment of
      the
      ability of any Loan Party to perform its obligations under any Loan Document
      to
      which it is a party; or (c) a material adverse effect upon the legality,
      validity, binding effect or enforceability against any Loan Party of any Loan
      Document to which it is a party, or on the perfection, priority or
      enforceability of the Liens under the Security Documents taken as a
      whole.

     

    “Maturity
      Date” means September 28, 2009.

     

    “MDL
      Acquisition” means the acquisition by the Borrower, or one or more
      wholly-owned Subsidiaries, of 100% of the outstanding shares of stock of each
      MDL Group Company and certain related assets pursuant to the MDL Acquisition
      Agreement.

     

    “MDL
      Acquisition Agreement” means that Sale Agreement dated as of August 9, 2007,
      among the Borrower, Elsevier Inc., a New York corporation, Elsevier Swiss
      Holdings S.A., a company organized under the laws of Switzerland, Elsevier
      Japan
      KK, a company organized under the laws of Japan, Elsevier Limited, a company
      organized under the laws of England and Wales, and MDL Information Systems
      (UK)
      Limited, a company organized under the laws of England and Wales.

     

    “MDL
      Closing Date” means the date the MDL Acquisition closes.

     

    “MDL
      Group Company” has the meaning specified in the MDL Acquisition
      Agreement.

     

    “Multiemployer
      Plan” means any employee benefit plan of the type described in
      Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
      makes or is obligated to make contributions, or during the preceding five plan
      years, has made or been obligated to make contributions.

     

    “Note”
      means a promissory note made by the Borrower in favor of a Lender evidencing
      Loans made by such Lender, substantially in the form of
Exhibit B.

     

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

     

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

    

    
      
        
          
          

        

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

     

    “Outstanding
      Amount” means (i) with respect to Loans on any date, the aggregate
      outstanding principal amount thereof after giving effect to any borrowings
      and
      prepayments or repayments of Loans, occurring on such date; and (ii) with
      respect to any L/C Obligations on any date, the amount of such L/C Obligations
      on such date after giving effect to any L/C Credit Extension occurring on such
      date and any other changes in the aggregate amount of the L/C Obligations as
      of
      such date, including as a result of any reimbursements by the Borrower of
      Unreimbursed Amounts.

     

    “Participant”
      has the meaning specified in Section 10.06(d).

     

    “PBGC”
      means the Pension Benefit Guaranty Corporation.

     

    “Pension
      Plan” means any “employee pension benefit plan” (as such term is defined in
      Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
      Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA
      Affiliate or to which the Borrower or any ERISA Affiliate contributes or has
      an
      obligation to contribute, or in the case of a multiple employer or other plan
      described in Section 4064(a) of ERISA, has made contributions at any time
      during the immediately preceding five plan years.

     

    “Perfection
      Documents” means any and all UCC financing statements, patent and trademark
      mortgage assignments, copyright mortgages and assignments, lien filings and
      other similar documents and instruments filed or recorded with any Governmental
      Authority in order to perfect or give notice of a Lien, together with any
      control agreement or other similar document necessary in order to perfect as
      against certain property under the terms of the UCC.

     

    “Permitted
      MDL Acquisition” means the MDL Acquisition, provided each of the following
      conditions is satisfied in connection therewith:  (A) all conditions
      precedent to the consummation of the MDL Acquisition, as set forth in the MDL
      Acquisition Agreement (other than immaterial conditions and conditions the
      non-satisfaction of which could not reasonably be expected to adversely affect
      the rights or interests of the Lenders), shall have been satisfied (and not
      waived, unless consented to by the Administrative Agent) to the reasonable
      satisfaction of the Administrative Agent, (B) the MDL Acquisition shall be
      consummated (x) in accordance with the terms and conditions of the MDL
      Acquisition Agreement which shall be in form and substance satisfactory to
      the
      Administrative Agent and shall provide for an aggregate purchase price not
      in
      excess of $125,000,000 payable at closing and all other documents and agreements
      relating thereto shall be satisfactory to the Administrative Agent, and (y)
      in
      accordance with all applicable Laws, and (C) all other corporate organization
      and legal aspects relating to the Borrower, its Subsidiaries and the Acquisition
      shall be satisfactory to the Administrative Agent.

    

    
      
        
          
          

        

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

     

    “Plan”
      means any “employee benefit plan” (as such term is defined in Section 3(3)
      of ERISA) established by the Borrower or, with respect to any such plan that
      is
      subject to Section 412 of the Code or Title IV of ERISA, any ERISA
      Affiliate.

     

    “Platform”
      has the meaning specified in Section 6.02.

     

    “Register”
      has the meaning specified in Section 10.06(c).

     

    “Registered
      Public Accounting Firm” has the meaning specified in the Securities Laws and
      shall be independent of the Borrower as prescribed by the Securities
      Laws.

     

    “Related
      Parties” means, with respect to any Person, such Person’s Affiliates and the
      partners, directors, officers, employees, agents and advisors of such Person
      and
      of such Person’s Affiliates.

     

    “Reportable
      Event” means any of the events set forth in Section 4043(c) of ERISA,
      other than events for which the 30 day notice period has been
      waived.

     

    “Request
      for Credit Extension” means (a) with respect to a Borrowing, conversion or
      continuation of Loans, a Loan Notice, and (b) with respect to an L/C Credit
      Extension, a Letter of Credit Application.

     

    “Required
      Lenders” means, as of any date of determination, at least two Lenders having
      more than 50% of the Aggregate Commitments or, if the commitment of each Lender
      to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
      have been terminated pursuant to Section 8.02, at least two Lenders
      holding in the aggregate more than 50% of the Total Outstandings (with the
      aggregate amount of each Lender’s risk participation and funded participation in
      L/C Obligations being deemed “held” by such Lender for purposes of this
      definition); provided that (i) the Commitment of, and the portion of the
      Total Outstandings held or deemed held by, any Defaulting Lender shall be
      excluded for purposes of making a determination of Required Lenders, and (ii)
      if
      there exists at such date only one Lender, the Required Lenders shall be such
      Lender.

     

    “Responsible
      Officer” the chief executive officer, president, chief financial officer,
      treasurer, assistant treasurer or controller of a Loan Party of the applicable
      Loan Party so designated by any of the foregoing officers in a notice to the
      Administrative Agent. Any document delivered hereunder that is signed by a
      Responsible Officer of a Loan Party shall be conclusively presumed to have
      been
      authorized by all necessary corporate, partnership and/or other action on the
      part of such Loan Party and such Responsible Officer shall be conclusively
      presumed to have acted on behalf of such Loan Party.

    

    
      
        
          
          

        

        
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    “Restricted
      Payment” means any dividend or other distribution (whether in cash,
      securities or other property) with respect to any capital stock or other Equity
      Interest of the Borrower 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, cancellation
      or
      termination of any such capital stock or other Equity Interest, or on account
      of
      any return of capital to the Borrower’s stockholders, partners or members (or
      the equivalent Person thereof).

     

    “Sarbanes-Oxley”
      means the Sarbanes-Oxley Act of 2002.

     

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

     

    “Security
      Documents” means and includes each of the Borrower Security Agreement, each
      Subsidiary Security Agreement, all Perfection Documents (including any such
      Perfection Documents delivered pursuant to Section 2.03(g)), any
      mortgages and deeds of trust delivered under Section 6.13, and any other
      Perfection Documents delivered after the Closing Date pursuant to any provision
      of this Agreement or any other Security Document.

     

    “Securities
      Laws” means the Securities Act of 1933, the Exchange Act, Sarbanes-Oxley and
      the applicable accounting and auditing principles, rules, standards and
      practices promulgated, approved or incorporated by the SEC.

     

    “Sellers”
      has the meaning specified in the MDL Acquisition Agreement.

     

    “Shareholders’
      Equity” means, as of any date of determination, consolidated shareholders’
equity of the Borrower and its Subsidiaries as of that date determined
      in
      accordance with GAAP.

     

    “Significant
      Subsidiary” means any Subsidiary that satisfies the criteria for a
“significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,
      promulgated pursuant to the Securities Laws, whether or not
      applicable.

     

    “Solvent”
      means, with respect to any Person as of a particular date, that on such date
      (a) such Person is able to pay its debts and other liabilities, contingent
      obligations and other commitments as they mature in the normal course of
      business, (b) such Person does not intend to, and does not believe that it
      will, incur debts or liabilities beyond such Person’s ability to pay as such
      debts and liabilities mature in their ordinary course, (c) such Person is
      not engaged in a business or transaction, and is not about to engage in a
      business or a transaction, for which such Person’s assets would constitute
      unreasonably small capital after giving due consideration to the prevailing
      practice in the industry in which such Person is engaged or is to engage,
      (d) the fair value of the assets of such Person is greater than the total
      amount of liabilities, including contingent liabilities, of such Person, and
      (e) the aggregate fair saleable value (i.e., the amount that may be
      realized within a reasonable time, considered to be six months to one year,
      either through collection or sale at the regular market value, conceiving the
      latter as the amount that could be obtained for the assets in question within
      such period by a capable and diligent businessman from an interested buyer
      who
      is willing to purchase under ordinary selling conditions) of the assets of
      such
      Person will exceed its debts and other liabilities (including contingent,
      subordinated, unmatured and unliquidated debts and liabilities).  For
      purposes of this definition, “debt” means any liability on a claim, and “claim”
means (i) a right to payment, whether or not such a right is reduced to
      judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
      disputed, undisputed, legal, equitable, secured or unsecured, or (ii) a
      right to an equitable remedy for breach of performance if such breach gives
      rise
      to a payment, whether or not such right is an equitable remedy, is reduced
      judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
      disputed, undisputed, secured or unsecured.

    

    
      
        
          
          

        

        
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    “Subsidiary”
      of a Person means a corporation, partnership, joint venture, limited liability
      company or other business entity of which a majority of the shares of securities
      or other interests having ordinary voting power for the election of directors
      or
      other governing body (other than securities or interests having such power
      only
      by reason of the happening of a contingency) are at the time beneficially owned,
      or the management of which is otherwise controlled, directly, or indirectly
      through one or more intermediaries, or both, by such Person. Unless otherwise
      specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall
      refer to a Subsidiary or Subsidiaries of the Borrower.

     

    “Subsidiary
      Security Agreement” means a security agreement substantially in the form of
Exhibit H or otherwise, in form satisfactory to the Administrative Agent,
      executed and delivered by each or any of the Borrower’s Domestic Subsidiaries
      pursuant to Section 4.01 or Section 6.12.

     

    “Subsidiary
      Security Agreement Collateral” means all “Collateral” as defined in the
      Subsidiary Security Agreement.

     

    “Swap
      Contract” means (a) any and all rate swap transactions, basis swaps, credit
      derivative transactions, forward rate transactions, commodity swaps, commodity
      options, forward commodity contracts, equity or equity index swaps or options,
      bond or bond price or bond index swaps or options or forward bond or forward
      bond price or forward bond index transactions, interest rate options, forward
      foreign exchange transactions, cap transactions, floor transactions, collar
      transactions, currency swap transactions, cross-currency rate swap transactions,
      currency options, spot contracts, or any other similar transactions or any
      combination of any of the foregoing (including any options to enter into any
      of
      the foregoing), whether or not any such transaction is governed by or subject
      to
      any master agreement, and (b) any and all transactions of any kind, and the
      related confirmations, which are subject to the terms and conditions of, or
      governed by, any form of master agreement published by the International Swaps
      and Derivatives Association, Inc., any International Foreign Exchange Master
      Agreement, or any other master agreement (any such master agreement, together
      with any related schedules, a “Master Agreement”), including any such
      obligations or liabilities under any Master Agreement.

     

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

    

    
      
        
          
          

        

        
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    “Synthetic
      Lease Obligation” means the monetary obligation of a Person under (a) a
      so-called synthetic, off-balance sheet or tax retention lease, or (b) an
      agreement for the use or possession of property creating obligations that do
      not
      appear on the balance sheet of such Person but which, upon the insolvency or
      bankruptcy of such Person, would be characterized as the indebtedness of such
      Person (without regard to accounting treatment).

     

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

     

    “Threshold
      Amount” means $10,000,000.

     

    “Total
      Outstandings” means the aggregate Outstanding Amount of all Loans and all
      L/C Obligations.

     

    “Type”
      means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar
      Rate Loan.

     

    “UCC”
      means the Uniform Commercial Code of the State of New York.

     

    “Unfunded
      Pension Liability” means the excess of a Pension Plan’s benefit liabilities
      under Section 4001(a)(16) of ERISA, over the current value of that Pension
      Plan’s assets, determined in accordance with the assumptions used for funding
      the Pension Plan pursuant to Section 412 of the Code for the applicable
      plan year.

     

    “United
      States” and “U.S.” mean the United States of America.

     

    “Unreimbursed
      Amount” has the meaning specified in
Section 2.03(c)(i).

     

    1.02           Other
      Interpretive Provisions.  With reference to this Agreement
      and each other Loan Document, unless otherwise specified herein or in such
      other
      Loan Document:

     

    (a)           The
      definitions of terms herein shall apply equally to the singular and plural
      forms
      of the terms defined. Whenever the context may require, any pronoun shall
      include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be
      followed by the phrase “without limitation.” The word “will” shall
      be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise, (i) any definition of or reference
      to any
      agreement, instrument or other document (including any Organization Document)
      shall be construed as referring to such agreement, instrument or other document
      as from time to time amended, supplemented or otherwise modified (subject to
      any
      restrictions on such amendments, supplements or modifications set forth herein
      or in any other Loan Document), (ii) any reference herein to any Person shall
      be
      construed to include such Person’s successors and assigns, (iii) the words
“herein,” “hereof” and “hereunder,” and words of similar
      import when used in any Loan Document, shall be construed to refer to such
      Loan
      Document in its entirety and not to any particular provision thereof, (iv)
      all
      references in a Loan Document to Articles, Sections, Exhibits and Schedules
      shall be construed to refer to Articles and Sections of, and Exhibits and
      Schedules to, the Loan Document in which such references appear, (v) any
      reference to any law shall include all statutory and regulatory provisions
      consolidating, amending, replacing or interpreting such law and any reference
      to
      any law or regulation shall, unless otherwise specified, refer to such law
      or
      regulation as amended, modified or supplemented from time to time, and (vi)
      the
      words “asset” and “property” shall be construed to have the same
      meaning and effect and to refer to any and all tangible and intangible assets
      and properties, including cash, securities, accounts and contract
      rights.

    

    
      
        
          
          

        

        
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    (b)           In
      the computation of periods of time from a specified date to a later specified
      date, the word “from” means “from and including;” the words
“to” and “until” each mean “to but excluding;” and the word
“through” means “to and including.”

     

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

     

    1.03           Accounting
      Terms.

     

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

     

    (b)           Changes
      in GAAP. If at any time any change in GAAP would affect the computation of
      any financial ratio or requirement set forth in any Loan Document, and either
      the Borrower or the Required Lenders shall so request, the Administrative Agent,
      the Lenders and the Borrower shall negotiate in good faith to amend such ratio
      or requirement to preserve the original intent thereof in light of such change
      in GAAP (subject to the approval of the Required Lenders); provided that,
      until so amended, (i) such ratio or requirement shall continue to be computed
      in
      accordance with GAAP prior to such change therein and (ii) the Borrower shall
      provide to the Administrative Agent and the Lenders financial statements and
      other documents required under this Agreement or as reasonably requested
      hereunder setting forth a reconciliation between calculations of such ratio
      or
      requirement made before and after giving effect to such change in
      GAAP.

     

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

     

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

    

    
      
        
          
          

        

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

     

    ARTICLE
      II.

    THE
      COMMITMENTS AND CREDIT EXTENSIONS

     

    2.01           Loans.  Subject
      to the terms and conditions set forth herein, each Lender severally agrees
      to
      make loans (each such loan, a “Loan”) to the Borrower from time to time,
      on any Business Day during the Availability Period, in an aggregate amount
      not
      to exceed at any time outstanding the amount of such Lender’s Commitment;
provided, however, that after giving effect to any Borrowing, (i)
      the Total Outstandings shall not exceed the Aggregate Commitments, and (ii)
      the
      aggregate Outstanding Amount of the Loans of any Lender, plus such
      Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations,
      shall not exceed such Lender’s Commitment. Within the limits of each Lender’s
      Commitment, and subject to the other terms and conditions hereof, the Borrower
      may borrow under this Section 2.01, prepay under
Section 2.04, and reborrow under this
Section 2.01.  Loans may be Base Rate Loans or Eurodollar
      Rate Loans, as further provided herein.

     

    2.02           Borrowings,
      Conversions and Continuations of Loans.

     

    (a)           Each
      Borrowing, each conversion of Loans from one Type to the other, and each
      continuation of Eurodollar Rate Loans shall be made upon the Borrower’s
      irrevocable notice to the Administrative Agent, which may be given by telephone.
      Each such notice must be received by the Administrative Agent not later than
      11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing
      of, conversion to or continuation of Eurodollar Rate Loans or of any conversion
      of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date
      of
      any Borrowing of Base Rate Loans.  Each telephonic notice by the
      Borrower pursuant to this Section 2.02(a) must be confirmed promptly
      by delivery to the Administrative Agent of a written Loan Notice, appropriately
      completed and signed by a Responsible Officer of the Borrower. Each Borrowing
      of, conversion to or continuation of Eurodollar Rate Loans shall be in a
      principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
      thereof. Except as provided in Sections 2.03(c) and 2.04(b), each
      Borrowing of or conversion to Base Rate Loans shall be in a principal amount
      of
      $500,000 or a whole multiple of $100,000 in excess thereof. Each Loan Notice
      (whether telephonic or written) shall specify (A) whether the Borrower is
      requesting a Borrowing, a conversion of Loans from one Type to the other, or
      a
      continuation of Eurodollar Rate Loans, (B) the requested date of the Borrowing,
      conversion or continuation, as the case may be (which shall be a Business Day),
      (C) the principal amount of Loans to be borrowed, converted or continued,
      (D) the Type of Loans to be borrowed or to which existing Loans are to be
      converted, and (E) if applicable, the duration of the Interest Period with
      respect thereto. If the Borrower fails to specify a Type of Loan in a Loan
      Notice or if the Borrower fails to give a timely notice requesting a conversion
      or continuation, then the applicable Loans shall be made as, or converted to,
      Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be
      effective as of the last day of the Interest Period then in effect with respect
      to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing
      of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan
      Notice, but fails to specify an Interest Period, it will be deemed to have
      specified an Interest Period of one month.

    

    
      
        
          
          

        

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

     

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

     

    (d)           The
      Administrative Agent shall promptly notify the Borrower and the Lenders of
      the
      interest rate applicable to any Interest Period for Eurodollar Rate Loans upon
      determination of such interest rate. At any time that Base Rate Loans are
      outstanding, the Administrative Agent shall notify the Borrower and the Lenders
      of any change in Bank of America’s prime rate used in determining the Base Rate
      promptly following the public announcement of such change.

     

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

     

    2.03           Letters
      of Credit.

     

    (a)           The
      Letter of Credit Commitment.

     

    (i)           Subject
      to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in
      reliance upon the agreements of the Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the
      period from the Closing Date until the Letter of Credit Expiration Date, to
      issue Letters of Credit for the account of the Borrower, and to amend or extend
      Letters of Credit previously issued by it, in accordance with
      subsection (b) below, and (2) to honor drawings under the Letters of
      Credit; and (B) the Lenders severally agree to participate in Letters of Credit
      issued for the account of the Borrower and any drawings thereunder;
provided that after giving effect to any L/C Credit Extension with
      respect to any Letter of Credit, (x) the Total Outstandings shall not exceed
      the
      Aggregate Commitments, (y) the aggregate Outstanding Amount of the Loans of
      any
      Lender, plus such Lender’s Applicable Percentage of the Outstanding
      Amount of all L/C Obligations, shall not exceed such Lender’s Commitment, and
      (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter
      of
      Credit Sublimit. Each request by the Borrower for the issuance or amendment
      of a
      Letter of Credit shall be deemed to be a representation by the Borrower that
      the
      L/C Credit Extension so requested complies with the conditions set forth in
      the
      proviso to the preceding sentence. Within the foregoing limits, and subject
      to
      the terms and conditions hereof, the Borrower’s ability to obtain Letters of
      Credit shall be fully revolving, and accordingly the Borrower may, during the
      foregoing period, obtain Letters of Credit to replace Letters of Credit that
      have expired or that have been drawn upon and reimbursed.

    

    
      
        
          
          

        

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

     

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

     

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

     

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

     

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

     

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

    

    
      
        
          
          

        

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

     

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

     

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

     

    (F)           a
      default of any Lender’s obligations to fund under Section 2.03(c)
      exists or any Lender is at such time a Defaulting Lender hereunder, unless
      the
      L/C Issuer has entered into satisfactory arrangements with the Borrower or
      such
      Lender to eliminate the L/C Issuer’s risk with respect to such
      Lender.

     

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

     

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

     

    (vi)           The
      L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
      Credit issued by it and the documents associated therewith, and the L/C Issuer
      shall have all of the benefits and immunities (A) provided to the Administrative
      Agent in Article IX with respect to any acts taken or omissions
      suffered by the L/C Issuer in connection with Letters of Credit issued by it
      or
      proposed to be issued by it and Issuer Documents pertaining to such Letters
      of
      Credit as fully as if the term “Administrative Agent” as used in
Article IX included the L/C Issuer with respect to such acts or
      omissions, and (B) as additionally provided herein with respect to the L/C
      Issuer.

     

    (b)           Procedures
      for Issuance and Amendment of Letters of Credit.

     

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

    

    
      
        
          
          

        

        
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    (ii)           Promptly
      after receipt of any Letter of Credit Application, the L/C Issuer will confirm
      with the Administrative Agent (by telephone or in writing) that the
      Administrative Agent has received a copy of such Letter of Credit Application
      from the Borrower and, if not, the L/C Issuer will provide the Administrative
      Agent with a copy thereof. Unless the L/C Issuer has received written notice
      from any Lender, the Administrative Agent or any Loan Party, at least one
      Business Day prior to the requested date of issuance or amendment of the
      applicable Letter of Credit, that one or more applicable conditions contained
      in
Article IV shall not then be satisfied, then, subject to the terms
      and conditions hereof, the L/C Issuer shall, on the requested date, issue a
      Letter of Credit for the account of the Borrower or enter into the applicable
      amendment, as the case may be, in each case in accordance with the L/C Issuer’s
      usual and customary business practices. Immediately upon the issuance of each
      Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and
      unconditionally agrees to, purchase from the L/C Issuer a risk participation
      in
      such Letter of Credit in an amount equal to the product of such Lender’s
      Applicable Percentage times the amount of such Letter of Credit.

     

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

     

    (c)           Drawings
      and Reimbursements; Funding of Participations.

     

    (i)           Upon
      receipt from the beneficiary of any Letter of Credit of any notice of a drawing
      under such Letter of Credit, the L/C Issuer shall notify the Borrower and the
      Administrative Agent thereof. Not later than 11:00 a.m. on the date of any
      payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor
      Date”), the Borrower shall reimburse the L/C Issuer through the
      Administrative Agent in an amount equal to the amount of such drawing. If the
      Borrower fails to so reimburse the L/C Issuer by such time, the Administrative
      Agent shall promptly notify each Lender of the Honor Date, the amount of the
      unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
      Lender’s Applicable Percentage thereof. In such event, the Borrower shall be
      deemed to have requested a Borrowing of Base Rate Loans to be disbursed on
      the
      Honor Date in an amount equal to the Unreimbursed Amount, without regard to
      the
      minimum and multiples specified in Section 2.02 for the principal
      amount of Base Rate Loans, but subject to the amount of the unutilized portion
      of the Aggregate Commitments and the conditions set forth in
Section 4.02 (other than the delivery of a Loan Notice). Any notice
      given by the L/C Issuer or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately
      confirmed in writing; provided that the lack of such an immediate
      confirmation shall not affect the conclusiveness or binding effect of such
      notice.

    

    
      
        
          
          

        

        
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    (ii)           Each
      Lender shall upon any notice pursuant to Section 2.03(c)(i) make
      funds available to the Administrative Agent for the account of the L/C Issuer
      at
      the Administrative Agent’s Office in an amount equal to its Applicable
      Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business
      Day specified in such notice by the Administrative Agent, whereupon, subject
      to
      the provisions of Section 2.03(c)(iii), each Lender that so makes
      funds available shall be deemed to have made a Base Rate Loan to the Borrower
      in
      such amount. The Administrative Agent shall remit the funds so received to
      the
      L/C Issuer.

     

    (iii)           With
      respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing
      of Base Rate Loans because the conditions set forth in Section 4.02
      cannot be satisfied or for any other reason, the Borrower shall be deemed to
      have incurred from the L/C Issuer an L/C Borrowing in the amount of the
      Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be
      due
      and payable on demand (together with interest) and shall bear interest at the
      Default Rate. In such event, each Lender’s payment to the Administrative Agent
      for the account of the L/C Issuer pursuant to Section 2.03(c)(ii)
      shall be deemed payment in respect of its participation in such L/C Borrowing
      and shall constitute an L/C Advance from such Lender in satisfaction of its
      participation obligation under this Section 2.03.

     

    (iv)           Until
      each Lender funds its Loan or L/C Advance pursuant to this
Section 2.03(c) to reimburse the L/C Issuer for any amount drawn
      under any Letter of Credit, interest in respect of such Lender’s Applicable
      Percentage of such amount shall be solely for the account of the L/C
      Issuer.

     

    (v)           Each
      Lender’s obligation to make Loans or L/C Advances to reimburse the L/C Issuer
      for amounts drawn under Letters of Credit, as contemplated by this
Section 2.03(c), shall be absolute and unconditional and shall not
      be affected by any circumstance, including (A) any setoff, counterclaim,
      recoupment, defense or other right which such Lender may have against the L/C
      Issuer, the Borrower or any other Person for any reason whatsoever; (B) the
      occurrence or continuance of a Default, or (C) any other occurrence, event
      or
      condition, whether or not similar to any of the foregoing; provided,
however, that each Lender’s obligation to make Loans pursuant to this
Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a
      Loan Notice).
      No such making of an L/C Advance shall relieve or otherwise impair the
      obligation of the Borrower to reimburse the L/C Issuer for the amount of any
      payment made by the L/C Issuer under any Letter of Credit, together with
      interest as provided herein.

    

    
      
        
          
          

        

        
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    (vi)           If
      any Lender fails to make available to the Administrative Agent for the account
      of the L/C Issuer any amount required to be paid by such Lender pursuant to
      the
      foregoing provisions of this Section 2.03(c) by the time specified
      in Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover
      from such Lender (acting through the Administrative Agent), on demand, such
      amount with interest thereon for the period from the date such payment is
      required to the date on which such payment is immediately available to the
      L/C
      Issuer at a rate per annum equal to the greater of the Federal Funds Rate and
      a
      rate determined by the L/C Issuer in accordance with banking industry rules
      on
      interbank compensation, plus any administrative, processing or similar
      fees customarily charged by the L/C Issuer in connection with the foregoing.
      If
      such Lender pays such amount (with interest and fees as aforesaid), the amount
      so paid shall constitute such Lender’s Loan included in the relevant Borrowing
      or L/C Advance in respect of the relevant L/C Borrowing, as the case may be.
      A
      certificate of the L/C Issuer submitted to any Lender (through the
      Administrative Agent) with respect to any amounts owing under this clause (vi)
      shall be conclusive absent manifest error.

     

    (d)           Repayment
      of Participations.

     

    (i)           At
      any time after the L/C Issuer has made a payment under any Letter of Credit
      and
      has received from any Lender such Lender’s L/C Advance in respect of such
      payment in accordance with Section 2.03(c), if the Administrative
      Agent receives for the account of the L/C Issuer any payment in respect of
      the
      related Unreimbursed Amount or interest thereon (whether directly from the
      Borrower or otherwise, including proceeds of Cash Collateral applied thereto
      by
      the Administrative Agent), the Administrative Agent will distribute to such
      Lender its Applicable Percentage thereof in the same funds as those received
      by
      the Administrative Agent.

     

    (ii)           If
      any payment received by the Administrative Agent for the account of the L/C
      Issuer pursuant to Section 2.03(c)(i) is required to be returned
      under any of the circumstances described in Section 10.05 (including
      pursuant to any settlement entered into by the L/C Issuer in its discretion),
      each Lender shall pay to the Administrative Agent for the account of the L/C
      Issuer its Applicable Percentage thereof on demand of the Administrative Agent,
      plus interest thereon from the date of such demand to the date such
      amount is returned by such Lender, at a rate per annum equal to the Federal
      Funds Rate from time to time in effect. The obligations of the Lenders under
      this clause shall survive the payment in full of the Obligations and the
      termination of this Agreement.

     

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

    

    
      
        
          
          

        

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

     

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

     

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

     

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

     

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

     

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

     

    (f)           Role
      of L/C Issuer. Each Lender and the Borrower agree that, in paying any
      drawing under a Letter of Credit, the L/C Issuer shall not have any
      responsibility to obtain any document (other than any sight draft, certificates
      and documents expressly required by the Letter of Credit) or to ascertain or
      inquire as to the validity or accuracy of any such document or the authority
      of
      the Person executing or delivering any such document. None of the L/C Issuer,
      the Administrative Agent, any of their respective Related Parties nor any
      correspondent, participant or assignee of the L/C Issuer shall be liable to
      any
      Lender for (i) any action taken or omitted in connection herewith at the request
      or with the approval of the Lenders or the Required Lenders, as applicable;
      (ii)
      any action taken or omitted in the absence of gross negligence or willful
      misconduct; or (iii) the due execution, effectiveness, validity or
      enforceability of any document or instrument related to any Letter of Credit
      or
      Issuer Document. The Borrower hereby assumes all risks of the acts or omissions
      of any beneficiary or transferee with respect to its use of any Letter of
      Credit; provided, however, that this assumption is not intended
      to, and shall not, preclude the Borrower’s pursuing such rights and remedies as
      it may have against the beneficiary or transferee at law or under any other
      agreement. None of the L/C Issuer, the Administrative Agent, any of their
      respective Related Parties nor any correspondent, participant or assignee of
      the
      L/C Issuer shall be liable or responsible for any of the matters described in
      clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding,
      the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may
      be
      liable to the Borrower, to the extent, but only to the extent, of any direct,
      as
      opposed to consequential or exemplary, damages suffered by the Borrower which
      the Borrower proves were caused by the L/C Issuer’s willful misconduct or gross
      negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit
      after the presentation to it by the beneficiary of a sight draft and
      certificate(s) strictly complying with the terms and conditions of a Letter
      of
      Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer
      may accept documents that appear on their face to be in order, without
      responsibility for further investigation, regardless of any notice or
      information to the contrary, and the L/C Issuer shall not be responsible for
      the
      validity or sufficiency of any instrument transferring or assigning or
      purporting to transfer or assign a Letter of Credit or the rights or benefits
      thereunder or proceeds thereof, in whole or in part, which may prove to be
      invalid or ineffective for any reason.

    

    
      
        
          
          

        

        
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    (g)           Cash
      Collateral. Upon the request of the Administrative Agent, (i) if the L/C
      Issuer has honored any full or partial drawing request under any Letter of
      Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of
      the
      Letter of Credit Expiration Date, any L/C Obligation for any reason remains
      outstanding, the Borrower shall, in each case, immediately Cash Collateralize
      the then Outstanding Amount of all L/C Obligations. Sections 2.05 and
8.02(c) set forth certain additional requirements to deliver Cash
      Collateral hereunder. For purposes of this Section 2.03,
Section 2.05 and Section 8.02(c), “Cash
      Collateralize” means to pledge and deposit with or deliver to the
      Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
      collateral for the L/C Obligations, cash or deposit account balances pursuant
      to
      documentation in form and substance satisfactory to the Administrative Agent
      and
      the L/C Issuer (which documents are hereby consented to by the Lenders).
      Derivatives of such term have corresponding meanings. The Borrower hereby grants
      to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders,
      a security interest in all such cash, deposit accounts and all balances therein
      and all proceeds of the foregoing. Cash Collateral shall be maintained in
      blocked, non-interest bearing deposit accounts at Bank of America.

     

    (h)           Applicability
      of ISP. Unless otherwise expressly agreed by the L/C Issuer and the Borrower
      when a Letter of Credit is issued, the rules of the ISP shall apply to each
      Letter of Credit.

     

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

    

    
      
        
          
          

        

        
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      (j)           Fronting
        Fee and Documentary and Processing Charges Payable to L/C Issuer. The
        Borrower shall pay directly to the L/C Issuer for its own account a fronting
        fee
        with respect to each Letter of Credit, at the rate per annum specified from
        time
        to time by the L/C Issuer, computed on the daily amount available to be drawn
        under such Letter of Credit on a quarterly basis in arrears. Such fronting
        fee
        shall be due and payable on the tenth Business Day after the end of each
        March,
        June, September and December in respect of the most recently-ended quarterly
        period (or portion thereof, in the case of the first payment), commencing
        with
        the first such date to occur after the issuance of such Letter of Credit,
        on the
        Letter of Credit Expiration Date and thereafter on demand. For purposes of
        computing the daily amount available to be drawn under any Letter of Credit,
        the
        amount of such Letter of Credit shall be determined in accordance with
Section 1.06. In addition, the Borrower shall pay directly to the
        L/C Issuer for its own account the customary issuance, presentation, amendment
        and other processing fees, and other standard costs and charges, of the L/C
        Issuer relating to letters of credit as from time to time in effect. Such
        customary fees and standard costs and charges are due and payable on demand
        and
        are nonrefundable.

    (k)           Conflict
      with Issuer Documents. In the event of any conflict between the terms hereof
      and the terms of any Issuer Document, the terms hereof shall
      control.

     

    2.04           Prepayments.

     

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

    

    
      
        
          
          

        

        
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    (b)           If
      for any reason the Total Outstandings at any time exceed the Aggregate
      Commitments then in effect, the Borrower shall immediately prepay Loans and/or
      Cash Collateralize the L/C Obligations in an aggregate amount equal to such
      excess; provided, however, that the Borrower shall not be required
      to Cash Collateralize the L/C Obligations pursuant to this
Section 2.04(b) unless after the prepayment in full of the Loans the
      Total Outstandings exceed the Aggregate Commitments then in effect.

     

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

     

    2.06           Repayment
      of Loans.  The Borrower shall repay to the Lenders on the
      Maturity Date the aggregate principal amount of Loans outstanding on such
      date.

     

    2.07           Interest.

     

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

     

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

     

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

    

    
      
        
          
          

        

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

     

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

     

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

     

    2.08           Fees.
      In addition to certain fees described in subsections (i) and
(j) of Section 2.03:

     

    (a)           Commitment
      Fee. The Borrower shall pay to the Administrative Agent for the account of
      each Lender in accordance with its Applicable Percentage, a commitment fee
      equal
      to the Applicable Rate times the actual daily amount by which the Aggregate
      Commitments exceed the sum of (i) the Outstanding Amount of Loans and (ii)
      the
      Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all
      times during the Availability Period, including at any time during which one
      or
      more of the conditions in Article IV is not met, and shall be due
      and payable quarterly in arrears on the last Business Day of each March, June,
      September and December, commencing with the first such date to occur after
      the
      Closing Date, and on the last day of the Availability Period. The commitment
      fee
      shall be calculated quarterly in arrears, and if there is any change in the
      Applicable Rate during any quarter, the actual daily amount shall be computed
      and multiplied by the Applicable Rate separately for each period during such
      quarter that such Applicable Rate was in effect.

     

    (b)           Other
      Fees.

     

    (i)           The
      Borrower shall pay to the Administrative Agent for its own account fees in
      the
      amounts and at the times specified in the Fee Letter, if any. Such fees shall
      be
      fully earned when paid and shall not be refundable for any reason
      whatsoever.

     

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

     

    2.09           Computation
      of Interest and Fees.  All computations of interest for Base
      Rate Loans when the Base Rate is determined by Bank of America’s “prime rate”
shall be made on the basis of a year of 365 or 366 days, as the case may be,
      and
      actual days elapsed. All other computations of fees and interest shall be made
      on the basis of a 360-day year and actual days elapsed (which results in more
      fees or interest, as applicable, being paid than if computed on the basis of
      a
      365-day year). Interest shall accrue on each Loan for the day on which the
      Loan
      is made, and shall not accrue on a Loan, or any portion thereof, for the day
      on
      which the Loan or such portion is paid, provided that any Loan that is
      repaid on the same day on which it is made shall, subject to
Section 2.11(a), bear interest for one day. Each determination by
      the Administrative Agent of an interest rate or fee hereunder shall be
      conclusive and binding for all purposes, absent manifest error.

    

    
      
        
          
          

        

        
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    2.10           Evidence
      of Debt.

     

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

     

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

     

    2.11           Payments
      Generally; Administrative Agent’s Clawback.

     

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

    

    
      
        
          
          

        

        
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    (b)           (i)           Funding
      by Lenders; Presumption by Administrative Agent. Unless the Administrative
      Agent shall have received notice from a Lender prior to the proposed date of
      any
      Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base
      Rate Loans, prior to 12:00 noon on the date of such 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 Section 2.02 (or, in
      the case of a Borrowing of Base Rate Loans, that such Lender has made such
      share
      available in accordance with and at the time required by
Section 2.02) and may, in reliance upon such assumption, make
      available to the 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 Borrower severally
      agree to pay to the Administrative Agent forthwith on demand such corresponding
      amount in immediately available funds with interest thereon, for each day from
      and including the date such amount is made available to the Borrower to but
      excluding the date of payment to the Administrative Agent, at (A) in the case
      of
      a payment to be made by such Lender, the greater of the Federal Funds Rate
      and a
      rate determined by the Administrative Agent in accordance with banking industry
      rules on interbank compensation, plus any administrative, processing or
      similar fees customarily charged by the Administrative Agent in connection
      with
      the foregoing, and (B) in the case of a payment to be made by the Borrower,
      the
      interest rate applicable to Base Rate Loans. If the Borrower and such Lender
      shall pay such interest to the Administrative Agent for the same or an
      overlapping period, the Administrative Agent shall promptly remit to the
      Borrower the amount of such interest paid by the Borrower for such period.
      If
      such Lender pays its share of the applicable Borrowing to the Administrative
      Agent, then the amount so paid shall constitute such Lender’s Loan included in
      such Borrowing. Any payment by the Borrower shall be without prejudice to any
      claim the Borrower may have against a Lender that shall have failed to make
      such
      payment to the Administrative Agent.

     

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

     

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

     

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

    

    
      
        
          
          

        

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

     

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

     

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

     

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

     

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

     

    The
      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 the Borrower rights of setoff
      and counterclaim with respect to such participation as fully as if such Lender
      were a direct creditor of the Borrower in the amount of such
      participation.

    

    
      
        
          
          

        

        
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    2.13           Increase
      in Commitments.

     

    (a)           Request
      for Increase. Provided there exists no Default, upon notice to the
      Administrative Agent (which shall promptly notify the Lenders), the Borrower
      may
      on no more than three occasions, request an increase in the Aggregate
      Commitments by an aggregate amount for all such increases together not exceeding
      $50,000,000; provided that any such request for an increase shall be in a
      minimum amount of $10,000,000.  At the time of sending such notice,
      the Borrower (in consultation with the Administrative Agent) shall specify
      the
      time period within which each Lender is requested to respond (which shall in
      no
      event be less than ten Business Days from the date of delivery of such notice
      to
      the Lenders).

     

    (b)           Lender
      Elections to Increase. Each Lender shall notify the Administrative Agent
      within such time period whether or not it agrees to increase its Commitment
      and,
      if so, whether by an amount equal to, greater than, or less than its Applicable
      Percentage of such requested increase. Any Lender not responding within such
      time period shall be deemed to have declined to increase its
      Commitment.

     

    (c)           Notification
      by Administrative Agent; Additional Lenders. The Administrative Agent shall
      notify the Borrower and each Lender of the Lenders’ responses to each request
      made hereunder.  To achieve the full amount of a requested increase
      and subject to the approval of the Administrative Agent, and the L/C Issuer
      (which approvals shall not be unreasonably withheld), the Borrower may also
      invite additional Eligible Assignees to become Lenders pursuant to a joinder
      agreement in form and substance satisfactory to the Administrative Agent and
      its
      counsel.  Upon the addition of the first Lender other than Bank of
      America, the Borrower shall enter into a letter fee agreement (“Fee
      Letter”) with the Administrative Agent, in form and substance reasonably
      satisfactory to the Administrative Agent pursuant to which the Borrower shall
      agree to pay the Administrative Agent an agency fee and pay an arrangement
      fee
      to an Affiliate of Bank of America.

     

    (d)           Effective
      Date and Allocations. If the Aggregate Commitments are increased in
      accordance with this Section, the Administrative Agent and the Borrower shall
      determine the effective date (the “Increase Effective Date”) and the
      final allocation of such increase. The Administrative Agent shall promptly
      notify the Borrower and the Lenders of the final allocation of such increase
      and
      the Increase Effective Date.

     

    (e)           Conditions
      to Effectiveness of Increase. As a condition precedent to such increase, the
      Borrower shall deliver to the Administrative Agent a certificate of each Loan
      Party dated as of the Increase Effective Date (in sufficient copies for each
      Lender) signed by a Responsible Officer of such Loan Party (i) certifying and
      attaching the resolutions adopted by such Loan Party approving or consenting
      to
      such increase, and (ii) in the case of the Borrower, certifying that, before
      and
      after giving effect to such increase, (A) the representations and warranties
      contained in Article V and the other Loan Documents are true and
      correct on and as of the Increase Effective Date, except to the extent that
      such
      representations and warranties specifically refer to an earlier date, in which
      case they are true and correct as of such earlier date, and except that for
      purposes of this Section 2.13, the representations and warranties
      contained in subsections (a) and (b) of Section 5.05 shall be deemed
      to refer to the most recent statements furnished pursuant to clauses (a) and
      (b), respectively, of Section 6.01, and (B) no Default exists. The
      Borrower shall prepay any Loans outstanding on the Increase Effective Date
      (and
      pay any additional amounts required pursuant to Section 3.05) to the
      extent necessary to keep the outstanding Loans ratable with any revised
      Applicable Percentages arising from any nonratable increase in the Commitments
      under this Section.

    

    
      
        
          
          

        

        
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    (f)           Conflicting
      Provisions. This Section shall supersede any provisions in
Section 2.12 or 10.01 to the contrary.

     

    ARTICLE
      III.

    TAXES,
      YIELD PROTECTION AND ILLEGALITY

     

    3.01           Taxes.

     

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

     

    (b)           Payment
      of Other Taxes by the Borrower. Without limiting the provisions of
      subsection (a) above, the Borrower shall timely pay any Other Taxes to the
      relevant Governmental Authority in accordance with applicable law.

     

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

     

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

    

    
      
        
          
          

        

        
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    (e)           Status
      of Lenders. Any Foreign Lender that is entitled to an exemption from or
      reduction of withholding tax under the law of the jurisdiction in which the
      Borrower is resident for tax purposes, or any treaty to which such jurisdiction
      is a party, with respect to payments hereunder or under any other Loan Document
      shall deliver to the Borrower (with a copy to the Administrative Agent), at
      the
      time or times prescribed by applicable law or reasonably requested by the
      Borrower or the Administrative Agent, such properly completed and executed
      documentation prescribed by applicable law as will permit such payments to
      be
      made without withholding or at a reduced rate of withholding. In addition,
      any
      Lender, if requested by the Borrower or the Administrative Agent, shall deliver
      such other documentation prescribed by applicable law or reasonably requested
      by
      the Borrower or the Administrative Agent as will enable the Borrower or the
      Administrative Agent to determine whether or not such Lender is subject to
      backup withholding or information reporting requirements.

     

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

     

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

     

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

     

    (iii)         in
      the case of a Foreign Lender claiming the benefits of the exemption for
      portfolio interest under Section 881(c) of the Code, (x) a certificate to
      the effect that such Foreign Lender is not (A) a “bank” within the meaning of
      Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the
      Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the
      Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN,
      or

     

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

     

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

    

    
      
        
          
          

        

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

     

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

    

    
      
        
          
          

        

        
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    3.04           Increased
      Costs; Reserves on Eurodollar Rate Loans.

     

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

     

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

     

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

     

    (iii)         impose
      on any Lender or the L/C Issuer or the London interbank market any other
      condition, cost or expense affecting this Agreement or Eurodollar Rate 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 Rate Loan (or of maintaining its obligation
      to make any such Loan), or to increase the cost to such Lender or the L/C Issuer
      of participating in, issuing or maintaining any Letter of Credit (or of
      maintaining its obligation to participate in or to issue any Letter of Credit),
      or to reduce the amount of any sum received or receivable by such Lender or
      the
      L/C Issuer hereunder (whether of principal, interest or any other amount) then,
      upon request of such Lender or the L/C Issuer, the Borrower will pay to such
      Lender or the L/C Issuer, as the case may be, such additional amount or amounts
      as will compensate such Lender or the L/C Issuer, as the case may be, for such
      additional costs incurred or reduction suffered.

     

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

     

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

     

    
      
        
        

      

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

     

    (e)           Reserves
      on Eurodollar Rate Loans. The Borrower shall pay to each Lender, as long as
      such Lender shall be required to maintain reserves with respect to liabilities
      or assets consisting of or including Eurocurrency funds or deposits (currently
      known as “Eurocurrency liabilities”), additional interest on the unpaid
      principal amount of each Eurodollar Rate Loan equal to the actual costs of
      such
      reserves allocated to such Loan by such Lender (as determined by such Lender
      in
      good faith, which determination shall be conclusive), which shall be due and
      payable on each date on which interest is payable on such Loan, provided the
      Borrower shall have received at least 10 days’ prior notice (with a copy to the
      Administrative Agent) of such additional interest from such Lender. If a Lender
      fails to give notice 10 days prior to the relevant Interest Payment Date, such
      additional interest shall be due and payable 10 days from receipt of such
      notice.

     

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

     

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

     

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

     

    (c)           any
      assignment of a Eurodollar Rate Loan on a day other than the last day of the
      Interest Period therefor as a result of a request by the Borrower pursuant
      to
Section 10.13; including any loss of anticipated profits and any
      loss or expense arising from the liquidation or reemployment of funds obtained
      by it to maintain such Loan or from fees payable to terminate the deposits
      from
      which such funds were obtained. The Borrower shall also pay any customary
      administrative fees charged by such Lender in connection with the
      foregoing.

     

    
      
        
        

      

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

     

    3.06           Mitigation
      Obligations; Replacement of Lenders.

     

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

     

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

     

    3.07           Survival.  All
      of the Borrower’s obligations under this Article III shall survive
      termination of the Aggregate Commitments and repayment of all other Obligations
      hereunder.

     

    ARTICLE
      IV.

    CONDITIONS
      PRECEDENT TO CREDIT EXTENSIONS

     

    4.01           Conditions
      of Initial Credit Extension.  The obligation of the L/C
      Issuer and each Lender to make its initial Credit Extension hereunder is subject
      to satisfaction of the following conditions precedent:

     

    (a)           The
      Administrative Agent’s receipt of the following, each of which shall be
      originals or telecopies (followed promptly by originals) unless otherwise
      specified, each properly executed by a Responsible Officer of the signing Loan
      Party, each dated the Closing Date (or, in the case of certificates of
      governmental officials, a recent date before the Closing Date) and each in
      form
      and substance satisfactory to the Administrative Agent and each of the
      Lenders:

     

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

     

    
      
        
        

      

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

     

    (iii)         executed
      counterparts of the Guaranty, executed by each Domestic Subsidiary;

     

    (iv)        
      executed counterparts of the Borrower Security Agreement and Subsidiary Security
      Agreement, together with:

     

    (A)           proper
      financing statements (Form UCC-1 or the equivalent) or other Perfection
      Documents fully executed (as appropriate) for filing under the Uniform
      Commercial Code or other appropriate filing offices of each jurisdiction as
      may
      be necessary or, in the reasonable opinion of the Administrative Agent,
      desirable, to perfect the security interests purported to be created by the
      Borrower Security Agreement and the Subsidiary Security Agreement, as
      applicable, in each case to the extent such perfection is required thereby
      (including control agreements in respect of deposit accounts);

     

    (B)           copies
      of requests for information or copies, or equivalent reports as of a recent
      date, listing all effective financing statements that name the Borrower or
      any
      of its Subsidiaries as debtor and that are filed in the jurisdictions referred
      to in clause (A) above and in such other jurisdictions in which the Collateral
      is located on the date of the initial Credit Extension or as otherwise deemed
      appropriate by the Administrative Agent, together with copies of such other
      financing statements that name the Borrower or any of its Subsidiaries as debtor
      (none of which shall cover the Collateral except (x) to the extent evidencing
      Permitted Liens or (y) those in respect of which the Administrative Agent shall
      have received termination statements (Form UCC-3) or such other termination
      statements as shall be required by local law fully authorized or executed for
      filing);

     

    (C)           evidence
      of the completion of all other recordings and filings of, or with respect to,
      the Borrower Security Agreement and the Subsidiary Security Agreement as may
      be
      necessary or, in the reasonable opinion of the Administrative Agent, desirable
      to perfect and protect the security interests intended to be created by the
      Borrower Security Agreement and the Subsidiary Security Agreement, as
      applicable; and

     

    (D)           subject
      to the last sentence of Section 6.14, evidence that all other actions
      necessary or, in the reasonable opinion of the Administrative Agent, desirable
      to perfect and protect the security interests purported to be created by the
      Borrower Security Agreement and, if applicable, the Subsidiary Security
      Agreement (to the extent such perfection is required thereby) have been, or
      will
      be, substantially contemporaneously with the initial Credit Extension, taken,
      and the Borrower Security Agreement and the Subsidiary Security Agreement shall
      be in full force and effect;

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

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

     

    (vi)           such
      documents and certifications as the Administrative Agent may reasonably require
      to evidence that each Loan Party is duly organized or formed, and that the
      Borrower is validly existing, in good standing and qualified to engage in
      business in each jurisdiction where its ownership, lease or operation of
      properties or the conduct of its business requires such qualification, except
      to
      the extent that failure to do so could not reasonably be expected to have a
      Material Adverse Effect;

     

    (vii)           a
      favorable opinion of counsel to the Loan Parties satisfactory to the
      Administrative Agent, addressed to the Administrative Agent, as to the matters
      set forth in Exhibit E and such other matters concerning the Loan
      Parties and the Loan Documents as the Administrative Agent may reasonably
      request;

     

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

     

    (ix)           a
      certificate signed by a Responsible Officer of the Borrower certifying (A)
      that
      the conditions specified in Sections 4.02(a) and (b) have been
      satisfied, (B) that there has been no event or circumstance since the date
      of
      the Audited Financial Statements that has had or could be reasonably expected
      to
      have, either individually or in the aggregate, a Material Adverse Effect; and
      (C) a calculation of the Consolidated Leverage Ratio as of the last day of
      the
      fiscal quarter of the Borrower most recently ended prior to the Closing
      Date;

     

    (x)           
      a duly completed Compliance Certificate as of the last day of the fiscal quarter
      of the Borrower ended on June 30, 2007, signed by a Responsible Officer of
      the
      Borrower;

     

    (xi)           consolidating
      balance sheets of the Borrower and its Subsidiaries as of June 30, 2007 and
      the
      related consolidating statements of income or operations, shareholders’ equity
      and cash flows for the 12 month period ending on such date, in reasonable detail
      and prepared in accordance with GAAP; and;

     

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

     

    
      
        
        

      

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

     

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

     

    (d)           The
      Closing Date shall have occurred on or before September 30, 2007.

     

    Without
      limiting the generality of the provisions of Section 9.04, for
      purposes of determining compliance with the conditions specified in this
Section 4.01, each Lender that has signed this Agreement shall be
      deemed to have consented to, approved or accepted or to be satisfied with,
      each
      document or other matter required thereunder to be consented to or approved
      by
      or acceptable or satisfactory to a Lender unless the Administrative Agent shall
      have received notice from such Lender prior to the proposed Closing Date
      specifying its objection thereto.

     

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

     

    (a)           The
      representations and warranties of the Borrower and each other Loan Party
      contained in Article V or any other Loan Document, or which are
      contained in any document furnished at any time under or in connection herewith
      or therewith, shall be true and correct on and as of the date of such Credit
      Extension, except to the extent that such representations and warranties
      specifically refer to an earlier date, in which case they shall be true and
      correct as of such earlier date, and except that for purposes of this
Section 4.02, the representations and warranties contained in
      subsections (a) and (b) of Section 5.05 shall be deemed to refer to
      the most recent statements furnished pursuant to clauses (a) and (b),
      respectively, of Section 6.01.

     

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

     

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

     

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

    

    
      
        
          
          

        

        
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    ARTICLE
      V.

    REPRESENTATIONS
      AND WARRANTIES

     

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

     

    5.01           Existence,
      Qualification and Power.  Each Loan Party and each
      Significant Subsidiary thereof (a) is duly organized or formed, validly existing
      and, as applicable, in good standing under the Laws of the jurisdiction of
      its
      incorporation or organization, (b) has all requisite power and authority and
      all
      requisite governmental licenses, authorizations, consents and approvals to
      (i)
      own or lease its assets and carry on its business and (ii) execute, deliver
      and
      perform its obligations under the Loan Documents to which it is a party, and
      (c)
      is duly qualified and is licensed and, as applicable, in good standing under
      the
      Laws of each jurisdiction where its ownership, lease or operation of properties
      or the conduct of its business requires such qualification or license; except
      in
      each case referred to in clause (b)(i), or (c), to the extent that failure
      to do
      so could not reasonably be expected to have a Material Adverse
      Effect.

     

    5.02           Authorization;
      No Contravention. The execution, delivery and performance by each Loan
      Party of each Loan Document to which such Person is party, have been duly
      authorized by all necessary corporate or other organizational action, and do
      not
      and will not (a) contravene the terms of any of such Person’s Organization
      Documents; (b) conflict with or result in any breach or contravention of, or
      the
      creation of any Lien under, or require any payment to be made under (i) any
      Contractual Obligation to which such Person is a party or affecting such Person
      or the properties of such Person or any of its Subsidiaries or (ii) any order,
      injunction, writ or decree of any Governmental Authority or any arbitral award
      to which such Person or its property is subject; or (c) violate any
      Law.

     

    5.03           Governmental
      Authorization; Other Consents. No approval, consent, exemption,
      authorization, or other action by, or notice to, or filing with, any
      Governmental Authority or any other Person is necessary or required in
      connection with the execution, delivery or performance by, or enforcement
      against, any Loan Party of this Agreement or any other Loan
      Document.

     

    5.04           Binding
      Effect. This Agreement has been, and each other Loan Document, when
      delivered hereunder, will have been, duly executed and delivered by each Loan
      Party that is party thereto. This Agreement constitutes, and each other Loan
      Document when so delivered will constitute, a legal, valid and binding
      obligation of such Loan Party, enforceable against each Loan Party that is
      party
      thereto in accordance with its terms.

     

    5.05           Financial
      Statements.

     

    (a)           The
      Audited Financial Statements (i) were prepared in accordance with GAAP
      consistently applied throughout the period covered thereby, except as otherwise
      expressly noted therein; (ii) fairly present the financial condition of the
      Borrower and its Subsidiaries as of the date thereof and their results of
      operations for the period covered thereby in accordance with GAAP consistently
      applied throughout the period covered thereby, except as otherwise expressly
      noted therein; and (iii) show all material indebtedness and other liabilities,
      direct or contingent, of the Borrower and its Subsidiaries as of the date
      thereof, including liabilities for taxes, material commitments and
      Indebtedness.

    

    
      
        
          
          

        

        
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    (b)           The
      unaudited consolidated and consolidating balance sheets of the Borrower and
      its
      Subsidiaries dated June 30, 2007, and the related consolidated and consolidating
      statements of income or operations, shareholders’ equity and cash flows for the
      fiscal quarter ended on that date (i) were prepared in accordance with GAAP
      consistently applied throughout the period covered thereby, except as otherwise
      expressly noted therein, and (ii) fairly present the financial condition of
      the
      Borrower and its Subsidiaries as of the date thereof and their results of
      operations for the period covered thereby, subject, in the case of clauses
      (i)
      and (ii), to the absence of footnotes and to normal year-end audit
      adjustments.  Schedule 5.05 sets forth all material
      indebtedness and other liabilities, direct or contingent, of the Borrower and
      its consolidated Subsidiaries as of the date of such financial statements,
      including liabilities for taxes, material commitments and
      Indebtedness.

     

    (c)           Since
      the date of the Audited Financial Statements, there has been no event or
      circumstance, either individually or in the aggregate, that has had or could
      reasonably be expected to have a Material Adverse Effect.

     

    (d)           The
      consolidating balance sheets of the Borrower and its Subsidiaries, as at August
      31, 2007, and the related consolidating statements of income and cash flows
      of
      the Borrower and its Subsidiaries for the 12 months then ended, copies of which
      have been furnished to the Lenders, fairly present the consolidating pro forma
      financial condition of the Borrower and its Subsidiaries as at such date and
      the
      consolidating results of operations of the Borrower and its Subsidiaries for
      the
      period ended on such date all in accordance with GAAP.

     

    (e)           The
      consolidated and consolidating forecasted balance sheet and statements of income
      and cash flows of the Borrower and its Subsidiaries delivered pursuant to
Section 6.01(c) were prepared in good faith on the basis of the
      assumptions stated therein, which assumptions were fair in light of the
      conditions existing at the time of delivery of such forecasts, and represented,
      at the time of delivery, the Borrower’s best estimate of its future financial
      condition and performance.

     

    5.06           Litigation.
      There are no actions, suits, proceedings, claims or disputes pending
      or, to the knowledge of the Borrower, threatened or contemplated, at law, in
      equity, in arbitration or before any Governmental Authority, by or against
      the
      Borrower or any of its Subsidiaries or against any of their properties or
      revenues that (a) purport to affect or pertain to this Agreement or any other
      Loan Document, or any of the transactions contemplated hereby, or (b) except
      as
      specifically disclosed in Schedule 5.06, either individually or in
      the aggregate, if determined adversely, could reasonably be expected to have
      a
      Material Adverse Effect, and there has been no material adverse change in the
      status, or financial effect on any Loan Party or any Subsidiary thereof, of
      the
      matters described on Schedule 5.06.

     

    5.07           No
      Default. Neither any Loan Party nor any Subsidiary thereof is in
      default under or with respect to any Contractual Obligation that could, either
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect. No Default has occurred and is continuing or would result from
      the consummation of the transactions contemplated by this Agreement or any
      other
      Loan Document.

    

    
      
        
          
          

        

        
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    5.08           Ownership
      of Property; Liens. Each of the Borrower and its Subsidiaries has good
      record and marketable title in fee simple to, or valid leasehold interests
      in,
      all real property necessary or used in the ordinary conduct of its business,
      except for such defects in title as could not, individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect. The property of the
      Borrower and its Subsidiaries is subject to no Liens, other than Liens permitted
      by Section 7.01.

     

    5.09           Environmental
      Compliance. The Borrower and its Subsidiaries conduct in the ordinary
      course of business a review of the effect of existing Environmental Laws and
      claims alleging potential liability or responsibility for violation of any
      Environmental Law on their respective businesses, operations and properties,
      and
      as a result thereof the Borrower has reasonably concluded that, except as
      specifically disclosed in Schedule 5.09, such Environmental Laws and
      claims could not, individually or in the aggregate, reasonably be expected
      to
      have a Material Adverse Effect.

     

    5.10           Insurance.
      The properties of the Borrower and its Subsidiaries are insured with
      financially sound and reputable insurance companies not Affiliates of the
      Borrower, in such amounts (after giving effect to any self-insurance compatible
      with the following standards)] with such deductibles and covering such risks
      as
      are customarily carried by companies engaged in similar businesses and owning
      similar properties in localities where the Borrower or the applicable Subsidiary
      operates.

     

    5.11           Taxes.
      The Borrower and its Subsidiaries have filed all Federal, state and
      other material tax returns and reports required to be filed, and have paid
      all
      Federal, state and other material taxes, assessments, fees and other
      governmental charges levied or imposed upon them or their properties, income
      or
      assets otherwise due and payable, except those which are being contested in
      good
      faith by appropriate proceedings diligently conducted and for which adequate
      reserves have been provided in accordance with GAAP. There is no proposed tax
      assessment against the Borrower or any Subsidiary that would, if made, have
      a
      Material Adverse Effect.

     

    5.12           ERISA
      Compliance.

     

    (a)           Each
      Plan is in compliance in all material respects with the applicable provisions
      of
      ERISA, the Code and other Federal or state Laws. Each Plan that is intended
      to
      qualify under Section 401(a) of the Code has received a favorable
      determination letter from the IRS or an application for such a letter is
      currently being processed by the IRS with respect thereto and, to the best
      knowledge of the Borrower, nothing has occurred which would prevent, or cause
      the loss of, such qualification. The Borrower and each ERISA Affiliate have
      made
      all required contributions to each Plan subject to Section 412 of the Code,
      and no application for a funding waiver or an extension of any amortization
      period pursuant to Section 412 of the Code has been made with respect to
      any Plan, except to the extent that any such contributions, applications for
      funding, waivers or extensions that have been made could not reasonably be
      expected to have a Material Adverse Effect.

    

    
      
        
          
          

        

        
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    (b)           There
      are no pending or, to the best knowledge of the Borrower, threatened claims,
      actions or lawsuits, or action by any Governmental Authority, with respect
      to
      any Plan that could reasonably be expected to have a Material Adverse Effect.
      There has been no prohibited transaction or violation of the fiduciary
      responsibility rules with respect to any Plan that has resulted or could
      reasonably be expected to result in a Material Adverse Effect.

     

    (c)           (i)
      No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension
      Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any
      ERISA Affiliate has incurred, or reasonably expects to incur, any liability
      under Title IV of ERISA with respect to any Pension Plan (other than premiums
      due and not delinquent under Section 4007 of ERISA); (iv) neither the
      Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
      any liability (and no event has occurred which, with the giving of notice under
      Section 4219 of ERISA, would result in such liability) under
      Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
      neither the Borrower nor any ERISA Affiliate has engaged in a transaction that
      could be subject to Section 4069 or 4212(c) of ERISA.

     

    5.13           Subsidiaries;
      Equity Interests. As of the Closing Date, the Borrower has no
      Subsidiaries other than those specifically disclosed in Part (a) of
Schedule 5.13, and all of the outstanding Equity Interests in such
      Subsidiaries are owned by a Loan Party in the amounts specified on Part (a)
      of
Schedule 5.13 free and clear of all Liens. The Borrower has no
      equity investments in any other corporation or entity other than those
      specifically disclosed in Part (b) of Schedule 5.13.

     

    5.14           Margin
      Regulations; Investment Company Act.

     

    (a)           The
      Borrower is not engaged and will not engage, principally or as one of its
      important activities, in the business of purchasing or carrying margin stock
      (within the meaning of Regulation U issued by the FRB), or extending credit
      for
      the purpose of purchasing or carrying margin stock.  Following the
      application of the proceeds of each Borrowing or drawing under each Letter
      of
      Credit, not more than 25% of the value of the assets (either of the Borrower
      only or of the Borrower and its Subsidiaries on a consolidated basis) will
      be
      margin stock.

     

    (b)           None
      of the Borrower, any Person Controlling the Borrower, or any Subsidiary is
      or is
      required to be registered as an “investment company” under the Investment
      Company Act of 1940.

     

    5.15           Disclosure.  The
      Borrower has disclosed to the Administrative Agent and the Lenders all
      agreements, instruments and corporate or other restrictions to which it or
      any
      of its Subsidiaries is subject, and all other matters known to it (other than
      general economic and market conditions), that, individually or in the aggregate,
      could reasonably be expected to result in a Material Adverse
      Effect.  No report, financial statement, certificate or other
      information furnished (whether in writing or orally) by or on behalf of any
      Loan
      Party to the Administrative Agent or any Lender in connection with the
      transactions contemplated hereby and the negotiation of this Agreement or
      delivered hereunder or under any other Loan Document (in each case, as modified
      or supplemented by other information so furnished) 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 Borrower represents only that such information was prepared
      in
      good faith based upon assumptions believed to be reasonable at the
      time.

    

    
      
        
          
          

        

        
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    5.16           Compliance
      with Laws. Each Loan Party and each Subsidiary thereof is in compliance
      in all material respects with the requirements of all Laws and all orders,
      writs, injunctions and decrees applicable to it or to its properties, except
      in
      such instances in which (a) such requirement of Law or order, writ, injunction
      or decree is being contested in good faith by appropriate proceedings diligently
      conducted or (b) the failure to comply therewith, either individually or in
      the
      aggregate, could not reasonably be expected to have a Material Adverse
      Effect.

     

    5.17           Identification
      Number; Fiscal Periods. The Borrower’s true and correct U.S. taxpayer
      identification number is set forth on Schedule 10.02.  The
      Borrower’s fiscal quarters end on the last day of March, June, September and
      December of each year.

     

    5.18           Intellectual
      Property; Licenses, Etc. The Borrower and its Subsidiaries own, or
      possess the right to use, all of the trademarks, service marks, trade names,
      copyrights, patents, patent rights, franchises, licenses and other intellectual
      property rights (collectively, “IP Rights”) that are reasonably necessary
      for the operation of their respective businesses, without conflict with the
      rights of any other Person. To the best knowledge of the Borrower, no slogan
      or
      other advertising device, product, process, method, substance, part or other
      material now employed by the Borrower or any Subsidiary infringes upon any
      rights held by any other Person except where such infringement could not
      reasonably be expected to have a Material Adverse Effect.  Except as
      specifically disclosed in Schedule 5.18, no claim or litigation
      regarding any of the foregoing is pending or, to the best knowledge of the
      Borrower, threatened, which, either individually or in the aggregate, could
      reasonably be expected to have a Material Adverse Effect.

     

    5.19           Security
      Documents.  The Administrative Agent has a perfected security
      interest in all Collateral, of first priority, subject only to such Liens as
      expressly permitted as prior Liens under the Security Documents.  All
      representations and warranties contained in the Security Documents are true
      and
      correct.

     

    5.20           MDL
      Documents.  All representations and warranties of the
      Borrower or its Subsidiaries, and, to the actual knowledge of Borrower’s
      Responsible Officers, of the Seller, contained in the MDL Acquisition Agreement,
      are true and correct.

     

    5.21           Solvency.  After
      giving effect to the Loans and transactions contemplated hereby, each Loan
      Party
      is Solvent.

     

    5.22           No
      Real Property Owned.  As of the Closing Date, neither the
      Borrower nor any of its Subsidiaries holds fee title in any real property,
      other
      than the real estate located at 3100 Oakmead Parkway, Sunnyvale,
      California.

     

    
      
        
          
          

        

        
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    ARTICLE
      VI.

    AFFIRMATIVE
      COVENANTS

     

    So
      long
      as any Lender shall have any Commitment hereunder, any Loan or other Obligation
      hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall
      remain outstanding, the Borrower shall, and shall (except in the case of the
      covenants set forth in Sections 6.01, 6.02, and 6.03) cause
      each Subsidiary (or, in the case of Sections 6.04, 6.05(a) and
6.06, cause each Loan Party and each Significant Subsidiary)
      to:

     

    6.01           Financial
      Statements. Deliver to the Administrative Agent and each Lender, in
      form and detail satisfactory to the Administrative Agent and the Required
      Lenders:

     

    (a)           as
      soon as available, but in any event within 90 days after the end of each fiscal
      year of the Borrower, a consolidated and consolidating balance sheet of the
      Borrower and its Subsidiaries as at the end of such fiscal year, and the related
      consolidated and consolidating statements of income or operations, shareholders’
equity and cash flows for such fiscal year, setting forth in each case in
      comparative form the figures for the previous fiscal year, all in reasonable
      detail and prepared in accordance with GAAP, such consolidated statements to
      be
      audited and accompanied by a report and opinion of a Registered Public
      Accounting Firm of nationally recognized standing reasonably acceptable to
      the
      Required Lenders, which report and opinion shall be prepared in accordance
      with
      generally accepted auditing standards and applicable Securities Laws and shall
      not be subject to any “going concern” or like qualification or exception or any
      qualification or exception as to the scope of such audit or with respect to
      the
      absence of any material misstatement;

     

    (b)           as
      soon as available, but in any event within 45 days after the end of each of
      the
      first three fiscal quarters of each fiscal year of the Borrower (commencing
      with
      the fiscal quarter ended September 30, 2007), a consolidated and consolidating
      balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
      quarter, and the related consolidated and consolidating statements of income
      or
      operations, shareholders’ equity and cash flows for such fiscal quarter and for
      the portion of the Borrower’s fiscal year then ended, setting forth in each case
      in comparative form the figures for the corresponding fiscal quarter of the
      previous fiscal year and the corresponding portion of the previous fiscal year,
      all in reasonable detail, such consolidated statements to be certified by the
      chief executive officer, chief financial officer, treasurer or controller of
      the
      Borrower as fairly presenting the financial condition, results of operations,
      shareholders’ equity and cash flows of the Borrower and its Subsidiaries in
      accordance with GAAP, subject only to normal year-end audit adjustments and
      the
      absence of footnotes and such consolidating statements to be certified by the
      chief executive officer, chief financial officer, treasurer or controller of
      the
      Borrower to the effect that such statements are fairly stated in all material
      respects when considered in relation to the consolidated financial statements
      of
      the Borrower and its Subsidiaries; and

     

    (c)           as
      soon as available, but in any event at least 15 days before the end of each
      fiscal year of the Borrower, forecasts prepared by management of the Borrower,
      in form and detail satisfactory to the Administrative Agent, of consolidated
      balance sheets and statements of income or operations and cash flows of the
      Borrower and its Subsidiaries on a consolidated and consolidating basis for
      the
      immediately following fiscal year.

    

    
      
        
          
          

        

        
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    As
      to any
      information contained in materials furnished pursuant to
Section 6.02(d), the Borrower shall not be separately required to
      furnish such information under clause (a) or (b) above, but the foregoing shall
      not be in derogation of the obligation of the Borrower to furnish the
      information and materials described in clauses (a) and (b) above at the times
      specified therein.

     

    6.02           Certificates;
      Other Information. Deliver to the Administrative Agent and each Lender,
      in form and detail satisfactory to the Administrative Agent and the Required
      Lenders:

     

    (a)           concurrently
      with the delivery of the financial statements referred to in Sections
      6.01(a) and (b) (commencing with the delivery of the financial
      statements for the fiscal quarter ended September 30, 2007), a duly completed
      Compliance Certificate signed by the chief executive officer, chief financial
      officer, treasurer or controller of the Borrower;

     

    (b)           promptly
      after any request by the Administrative Agent or any Lender, copies of any
      detailed audit reports, management letters or recommendations submitted to
      the
      board of directors (or the audit committee of the board of directors) of the
      Borrower by independent accountants in connection with the accounts or books
      of
      the Borrower or any Subsidiary, or any audit of any of them;

     

    (c)           promptly
      after the same are available, copies of each annual report, proxy or financial
      statement or other report or communication sent to the stockholders of the
      Borrower, and copies of all annual, regular, periodic and special reports and
      registration statements which the Borrower may file or be required to file
      with
      the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934,
      and not otherwise required to be delivered to the Administrative Agent pursuant
      hereto;

     

    (d)           promptly,
      and in any event within five Business Days after receipt thereof by any Loan
      Party or any Subsidiary thereof, copies of each notice or other correspondence
      received from the SEC (or comparable agency in any applicable non-U.S.
      jurisdiction) concerning any investigation or possible investigation or other
      inquiry by such agency regarding financial or other operational results of
      any
      Loan Party or any Subsidiary thereof; and

     

    (e)           promptly,
      such additional information regarding the business, financial or corporate
      affairs of the Borrower, any Subsidiary or any MDL Group Company, or compliance
      with the terms of the Loan Documents, as the Administrative Agent or any Lender
      may from time to time reasonably request.

     

    Documents
      required to be delivered pursuant to Section 6.01(a) or (b)
      or Section 6.02(d) (to the extent any such documents are included in
      materials otherwise filed with the SEC) may be delivered electronically and
      if
      so delivered, shall be deemed to have been delivered on the date (i) on which
      the Borrower posts such documents, or provides a link thereto on the Borrower’s
      website on the Internet at the website address listed on
Schedule 10.02; or (ii) on which such documents are posted on the
      Borrower’s behalf on an Internet or intranet website, if any, to which each
      Lender and the Administrative Agent have access (whether a commercial,
      third-party website or whether sponsored by the Administrative Agent);
provided that: (i) the Borrower shall deliver paper copies of such
      documents to the Administrative Agent or any Lender that requests the Borrower
      to deliver such paper copies until a written request to cease delivering paper
      copies is given by the Administrative Agent or such Lender and (ii) the Borrower
      shall notify the Administrative Agent and each Lender (by telecopier or
      electronic mail) of the posting of any such documents and provide to the
      Administrative Agent by electronic mail electronic versions (i.e., soft
      copies) of such documents. Notwithstanding anything contained herein, in every
      instance the Borrower shall be required to provide paper copies of the
      Compliance Certificates required by Section 6.02(a) to the
      Administrative Agent. Except for such Compliance Certificates, the
      Administrative Agent shall have no obligation to request the delivery or to
      maintain copies of the documents referred to above, and in any event shall
      have
      no responsibility to monitor compliance by the Borrower with any such request
      for delivery, and each Lender shall be solely responsible for requesting
      delivery to it or maintaining its copies of such documents.

    

    
      
        
          
          

        

        
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    The
      Borrower hereby acknowledges that (a) the Administrative Agent will make
      available to the Lenders and the L/C Issuer materials and/or information
      provided by or on behalf of the Borrower hereunder (collectively, “Borrower
      Materials”) by posting the Borrower Materials on IntraLinks or another
      similar electronic system (the “Platform”) and (b) certain of the Lenders
      may be “public-side” Lenders (i.e., Lenders that do not wish to receive
      material non-public information with respect to the Borrower or its securities)
      (each, a “Public Lender”). The Borrower hereby agrees that so long as the
      Borrower is the issuer of any outstanding debt or equity securities that are
      registered or issued pursuant to a private offering or is actively contemplating
      issuing any such securities (w) all Borrower Materials that are to be made
      available to Public Lenders shall be clearly and conspicuously marked “PUBLIC”
which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently
      on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the
      Borrower shall be deemed to have authorized the Administrative Agent, the L/C
      Issuer and the Lenders to treat such Borrower Materials as not containing any
      material non-public information with respect to the Borrower or its securities
      for purposes of United States Federal and state securities laws
      (provided, however, that to the extent such Borrower Materials
      constitute Information, they shall be treated as set forth in
Section 10.07); (y) all Borrower Materials marked “PUBLIC” are
      permitted to be made available through a portion of the Platform designated
      “Public Investor;” and (z) the Administrative Agent shall be entitled to
      treat any Borrower Materials that are not marked “PUBLIC” as being suitable only
      for posting on a portion of the Platform not designated “Public
      Investor.”

     

    6.03           Notices.
      Promptly notify the Administrative Agent and each Lender:

     

    (a)           of
      the occurrence of any Default;

     

    (b)           of
      any matter that has resulted or could reasonably be expected to result in a
      Material Adverse Effect, including (i) breach or non-performance of, or any
      default under, a Contractual Obligation of the Borrower or any Subsidiary;
      (ii)
      any dispute, litigation, investigation, proceeding or suspension between the
      Borrower or any Subsidiary and any Governmental Authority; or (iii) the
      commencement of, or any material development in, any litigation or proceeding
      affecting the Borrower or any Subsidiary, including pursuant to any applicable
      Environmental Laws;

     

    (c)           of
      the occurrence of any ERISA Event;

    

    
      
        
          
          

        

        
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    (d)           of
      any material change in accounting policies or financial reporting practices
      by
      the Borrower or any Subsidiary;

     

    (e)           of
      any amendment, modification or other change in respect of any material provision
      set forth in the MDL Acquisition Agreement; provided that the Borrower
      shall notify the Administrative Agent at least five Business Days prior to
      the
      consummation of any such amendment, modification or change which is material
      or
      could reasonably be expected to adversely affect the rights and interests of
      the
      Lenders.

     

    Each
      notice pursuant to this Section 6.03 shall be accompanied by a
      statement of a Responsible Officer of the Borrower setting forth details of
      the
      occurrence referred to therein and stating what action the Borrower has taken
      and proposes to take with respect thereto. Each notice pursuant to
Section 6.03(a) shall describe with particularity any and all
      provisions of this Agreement and any other Loan Document that have been
      breached.

     

    6.04           Payment
      of Obligations. Pay and discharge as the same shall become due and
      payable, all its obligations and liabilities, including (a) all tax liabilities,
      assessments and governmental charges or levies upon it or its properties or
      assets, unless the same are being contested in good faith by appropriate
      proceedings diligently conducted and adequate reserves in accordance with GAAP
      are being maintained by the Borrower or such Subsidiary; (b) all lawful claims
      which, if unpaid, would by law become a Lien upon its property; and (c) all
      Indebtedness, as and when due and payable, but subject to any subordination
      provisions contained in any instrument or agreement evidencing such
      Indebtedness.

     

    6.05           Preservation
      of Existence, Etc. (a) Preserve, renew and maintain in full force and
      effect its legal existence and good standing under the Laws of the jurisdiction
      of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to
      maintain all rights, privileges, permits, licenses and franchises necessary
      or
      desirable in the normal conduct of its business, except to the extent that
      failure to do so could not reasonably be expected to have a Material Adverse
      Effect; and (c) preserve or renew all of its registered patents, trademarks,
      trade names and service marks, the non-preservation of which could reasonably
      be
      expected to have a Material Adverse Effect.

     

    6.06           Maintenance
      of Properties. (a) Maintain, preserve and protect all of its material
      properties and equipment necessary in the operation of its business in good
      working order and condition, ordinary wear and tear excepted; (b) make all
      necessary repairs thereto and renewals and replacements thereof except where
      the
      failure to do so could not reasonably be expected to have a Material Adverse
      Effect; and (c) use the standard of care typical in the industry in the
      operation and maintenance of its facilities.

     

    6.07           Maintenance
      of Insurance. Maintain with financially sound and reputable insurance
      companies not Affiliates of the Borrower, insurance with respect to its
      properties and business against loss or damage of the kinds customarily insured
      against by Persons engaged in the same or similar business, of such types and
      in
      such amounts as are customarily carried under similar circumstances by such
      other Persons.

     

    
      
        
          
          

        

        
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    6.08           Compliance
      with Laws. Comply in all material respects with the requirements of all
      Laws and all orders, writs, injunctions and decrees applicable to it or to
      its
      business or property, except in such instances in which (a) such requirement
      of
      Law or order, writ, injunction or decree is being contested in good faith by
      appropriate proceedings diligently conducted; or (b) the failure to comply
      therewith could not reasonably be expected to have a Material Adverse
      Effect.

     

    6.09           Books
      and Records. (a) Maintain proper books of record and account, in which
      full, true and correct entries in conformity with GAAP consistently applied
      shall be made of all financial transactions and matters involving the assets
      and
      business of the Borrower or such Subsidiary, as the case may be; and (b)
      maintain such books of record and account in material conformity with all
      applicable requirements of any Governmental Authority having regulatory
      jurisdiction over the Borrower or such Subsidiary, as the case may
      be.

     

    6.10           Inspection
      Rights. Permit representatives and independent contractors of the
      Administrative Agent and each Lender to visit and inspect any of its properties,
      to examine its corporate, financial and operating records, and make copies
      thereof or abstracts therefrom, and to discuss its affairs, finances and
      accounts with its directors, officers, and independent public accountants,
      all
      at the expense of the Borrower and at such reasonable times during normal
      business hours and as often as may be reasonably desired, upon reasonable
      advance notice to the Borrower; provided, however, that when an
      Event of Default exists the Administrative Agent or any Lender (or any of their
      respective representatives or independent contractors) may do any of the
      foregoing at the expense of the Borrower at any time during normal business
      hours and without advance notice.

     

    6.11           Use
      of Proceeds.  Use the proceeds of the Credit Extensions for
      the consummation of the Permitted MDL Acquisition and for general corporate
      purposes not in contravention of any Law or of any Loan Document.

     

    6.12           Additional
      Guarantors; Security.  Notify the Administrative Agent at the
      time that any Person becomes a Domestic Subsidiary, and promptly thereafter
      (and
      in any event within 30 days after the date such Person becomes a Domestic
      Subsidiary), cause such Person to:

     

    (a)           become
      a Guarantor by executing and delivering to the Administrative Agent a
      counterpart of the Guaranty or such other document as the Administrative Agent
      shall deem appropriate for such purpose;

     

    (b)           execute
      and deliver to the Administrative Agent a Subsidiary Security Agreement and
      such
      Perfection Documents as the Administrative Agent shall reasonably require in
      order to subject all of the personal property of such Guarantor to perfected
      Liens in favor of the Administrative Agent, each of which Subsidiary Security
      Agreement and other Perfection Documents shall be in form and substance
      reasonably satisfactory to the Administrative Agent; and

     

    (c)           deliver
      to the Administrative Agent documents of the types referred to in
      clauses (iv), (v) and (vi) of Section 4.01(a), which
      documents shall be in form and substance satisfactory to the Administrative
      Agent.

     

    
      
        
          
          

        

        
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    6.13           Additional
      Collateral.  Notify the Administrative Agent at the time that
      the Borrower or any Domestic Subsidiary acquires any interest in owned real
      property having a fair market value in excess of $5,000,000 and, if requested
      by
      the Administrative Agent, promptly and in any event within 30 days of such
      acquisition, execute and deliver to the Administrative Agent such mortgage
      or
      deed of trust as the Administrative Agent may reasonably request to create
      a
      perfected Lien on such property in favor of the Administrative Agent, securing
      the Obligations, together with such certificates, opinions and title insurance
      documents as the Administrative Agent may reasonably request relating
      thereto.

     

    6.14           Further
      Assurances.  Defend, and cause each other Loan Party to
      defend, the Collateral against all claims and demands of all Persons at any
      time
      claiming the same or any interest therein.  The Borrower shall, and
      shall cause each other Loan Party to, comply with the requirements of all state
      and Federal laws in order to grant to the Lender valid and perfected first
      priority security interests in the Collateral, with perfection, in the case
      of
      any investment property or deposit account, being effected by giving the
      Administrative Agent control of such investment property or deposit account,
      rather than or in addition to by the filing of a UCC financing statement with
      respect to such investment property.  The Administrative Agent is
      hereby authorized by the Borrower to file any UCC financing statements covering
      the Collateral whether or not the Borrower’s signatures appear
      thereon.  The Borrower shall, and shall cause each other Loan Party
      to, do whatever the Administrative Agent may reasonably request, from time
      to
      time, to effect the purposes of this Agreement and the other Loan Documents,
      including filing notices of liens, UCC financing statements, fixture filings
      and
      amendments, renewals and continuations thereof; cooperating with the
      Administrative Agent’s representatives; keeping stock records; obtaining waivers
      from landlords and mortgagees and from warehousemen and their landlords and
      mortgages; and, paying claims which might, if unpaid, become a Lien on the
      Collateral.  Without limitation of the foregoing, the Borrower shall
      deliver, (x) no later than 60 days after the Closing Date, a fully-executed
      landlord consent and waiver in form reasonably satisfactory to the
      Administrative Agent, relating to the Borrower’s leased premises located in
      Sunnyvale, Santa Clara and San Ramon, California, and (y) no later than 30
      days
      after the Closing Date, a fully-executed control agreement relating to
      investment property maintained with State Street Bank satisfactory to the
      Administrative Agent.

     

    6.15           Depository
      Bank.  At all times from and after the Closing Date, cause
      Bank of America and its affiliates to be the primary depository bank for both
      U.S. and foreign (non-U.S.) deposit accounts maintained by the Borrower and
      its
      Subsidiaries.  To the extent Bank of America does not operate a branch
      or have an Affiliate accepting deposits in any foreign jurisdiction in which
      a
      Subsidiary is located, such Subsidiary shall maintain its accounts at a
      correspondent bank of Bank of America.

     

    ARTICLE
      VII.

    NEGATIVE
      COVENANTS

     

    So
      long
      as any Lender shall have any Commitment hereunder, any Loan or other Obligation
      hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall
      remain outstanding, the Borrower shall not, nor shall it permit any Subsidiary
      to, directly or indirectly:

    

    
      
        
          
          

        

        
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    7.01           Liens.
      Create, incur, assume or suffer to exist any Lien upon any of its
      property, assets or revenues, whether now owned or hereafter acquired, other
      than the following:

     

    (a)           Liens
      pursuant to any Loan Document;

     

    (b)           Liens
      existing on the date hereof and listed on Schedule 7.01 and any
      renewals or extensions thereof, provided that (i) the property covered
      thereby is not changed, (ii) the amount secured or benefited thereby is not
      increased except as contemplated by Section 7.03(b), (iii) the
      direct or any contingent obligor with respect thereto is not changed, and (iv)
      any renewal or extension of the obligations secured or benefited thereby is
      permitted by Section 7.03(b);

     

    (c)           Liens
      for taxes not yet due or which are being contested in good faith and by
      appropriate proceedings diligently conducted, if adequate reserves with respect
      thereto are maintained on the books of the applicable Person in accordance
      with
      GAAP;

     

    (d)           carriers’,
      warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
      arising in the ordinary course of business which are not overdue for a period
      of
      more than 30 days or which are being contested in good faith and by appropriate
      proceedings diligently conducted, if adequate reserves with respect thereto
      are
      maintained on the books of the applicable Person;

     

    (e)           pledges
      or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation,
      other than any Lien imposed by ERISA;

     

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

     

    (g)           easements,
      rights-of-way, restrictions and other similar encumbrances affecting real
      property which, in the aggregate, are not substantial in amount, and which
      do
      not in any case materially detract from the value of the property subject
      thereto or materially interfere with the ordinary conduct of the business of
      the
      applicable Person;

     

    (h)           Liens
      securing judgments for the payment of money not constituting an Event of Default
      under Section 8.01(h);

     

    (i)           
      Liens securing Indebtedness permitted under Section 7.03(e);
provided that (i) such Liens do not at any time encumber any property
      other than the property financed by such Indebtedness and (ii) the Indebtedness
      secured thereby does not exceed the cost or fair market value, whichever is
      lower, of the property being acquired on the date of acquisition;

     

    (j)           
      licenses or sublicenses granted in the ordinary course of Borrower’s business
      and any interest or title of a licensor or under any license or
      sublicense;

     

    (k)           Liens
      existing on any real property or other specific tangible assets prior to the
      acquisition thereof by the Borrower or existing on any such property or asset
      of
      any Acquired Entity at the time such Person becomes a Subsidiary pursuant to
      an
      Acquisition, provided that (i) such Lien is not created in
      contemplation of such acquisition or Acquisition, as the case may be; (ii)
      such
      Lien shall not apply to any other property or assets of the Borrower or any
      other Subsidiary; and (iii) any such Lien does not by its terms secure any
      Indebtedness other than Indebtedness existing immediately prior to the time
      of
      such acquisition or Acquisition, as the case may be; and any replacements,
      renewals or extensions thereof, provided that (A), the property covered
      thereby is not changed, (B) the amount secured or benefited thereby is not
      increased except as contemplated by Section 7.02(c), (C) the direct or
      any contingent obligor with respect thereto is not changed,

    

    
      
        
          
          

        

        
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    (l)            
      Liens arising by virtue of any contractual, statutory or common law provision
      relating to banker's liens, rights of set-off or similar rights and remedies
      as
      to deposit accounts, other funds maintained with a creditor depository
      institution, or investment or securities accounts; provided that (i) such
      account is not a dedicated cash collateral account and is not subject to
      restrictions against access by the Borrower or the relevant Subsidiary in excess
      of those set forth by the regulations promulgated by the FRB, and (ii) such
      account is not intended by the Borrower or any of its Subsidiaries to provide
      collateral to the depository institution with respect to otherwise unrelated
      obligations of the Borrower or any such Subsidiary to such depositor
      institution;

     

    (m)           Liens
      on investment property (as defined in the UCC) arising under repurchase
      agreements, reverse repurchase agreements or securities lending entered into
      in
      the ordinary course of business;

     

    (n)           
      Liens arising from leases or subleases granted to others in the ordinary course
      of business which do not (i) interfere in any material respect with the business
      of any Loan Party or Significant Subsidiary or (ii) secure any
      Indebtedness;

     

    (o)           
      any interest or title of a lessor in the property (and the proceeds, accession
      or products thereof) subject to any operating lease, and Liens arising from
      UCC
      financing statements (or equivalent filings, registrations or agreements in
      foreign jurisdictions) relating to operating leases;

     

    (p)           
      Liens of sellers of goods arising under Article 2 of the Uniform Commercial
      Code
      or similar provisions of applicable law in the ordinary course of business,
      covering only the goods sold and securing only the unpaid purchase price for
      such goods and related expenses;

     

    (q)           
      Liens in favor of customs and revenue authorities arising as a matter of law
      to
      secure payment of customs duties in connection with the importation of
      goods;

     

    (r)            
      Liens solely on deposits, advances, contractual payments, including
      implementation allowances or escrows to or with landlords, customers or clients
      or in connection with insurance arrangement in the ordinary course of business;
      and

    

    
      
        
          
          

        

        
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    (s)           Liens
      encumbering property or assets under construction (and proceeds or products
      thereof) arising from progress or partial payments by a customer of the Borrower
      or its Subsidiaries relating to such property or assets.

     

    7.02           Investments.
      Make any Investments, except:

     

    (a)           Investments
      held by the Borrower or such Subsidiary in the form of cash equivalents or
      short-term marketable debt securities;

     

    (b)           advances
      to officers, directors and employees of the Borrower and Subsidiaries in an
      aggregate amount not to exceed $500,000 at any time outstanding, for travel,
      entertainment, relocation and analogous ordinary business purposes;

     

    (c)           Investments,
      other than for purposes of consummating an Acquisition, (i) of the Borrower
      in any wholly-owned Domestic Subsidiary and (ii) of any wholly-owned
      Subsidiary in the Borrower or in a wholly-owned Domestic
      Subsidiary;

     

    (d)           Investments
      consisting of extensions of credit in the nature of accounts receivable or
      notes
      receivable arising from the grant of trade credit in the ordinary course of
      business, and Investments received in satisfaction or partial satisfaction
      thereof from financially troubled account debtors to the extent reasonably
      necessary in order to prevent or limit loss;

     

    (e)           Guarantees
      permitted by Section 7.03;

     

    (f)           the
      Permitted MDL Acquisition;

     

    (g)           Acquisitions
      (other than the MDL Acquisition) by the Borrower or any of its wholly-owned
      Subsidiaries, provided that (A) the Acquired Entity related to any such
      Acquisition is not engaged in any material lines of business substantially
      different from those lines of business conducted by the Borrower and its
      Subsidiaries on the date such Acquisition is consummated; (B) the Borrower
      shall
      cause all Acquired Entities to comply with Section 6.12 and
6.13 (if applicable); (C) no Default would result from the consummation
      of such Acquisition; (D) prior to the commencement of any such Acquisition,
      or
      attempted Acquisition, the board of directors or other governing body of the
      Person being acquired shall have approved the terms of the Acquisition; (E)
      on
      or before 15 days prior to the consummation of any such Acquisition, the
      Borrower shall have delivered to the Administrative Agent and the Lenders a
      completed Compliance Certificate (in form and substance satisfactory to the
      Administrative Agent) giving effect to such Acquisition and showing compliance
      with Section 7.11 on a pro forma basis; and (F) the
      Borrower has provided to the Administrative Agent and the Lenders such financial
      and other information regarding the prospective Acquired Entity, including
      historical financial statements and a description of such Person, as the
      Administrative Agent or the Required Lenders shall reasonably
      request;

     

    (h)           Investments
      in Foreign Subsidiaries to the extent permitted under
Section 7.12;

    

    
      
        
          
          

        

        
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    (i)            
      joint ventures or strategic alliances, in either case not constituting
      Acquisitions and entered into in the ordinary course of Borrower’s business;
      and

     

    (j)            
      other Investments, other than for purposes of consummating an Acquisition,
      not
      exceeding $15,000,000 in the aggregate in any fiscal year of the
      Borrower.

     

    7.03           Indebtedness.
      Create, incur, assume or suffer to exist any Indebtedness,
      except:

     

    (a)           Indebtedness
      under the Loan Documents;

     

    (b)           Indebtedness
      outstanding on the date hereof and listed on Schedule 7.03 and any
      refinancings, refundings, renewals or extensions thereof; provided that
      (i) the amount of such Indebtedness is not increased at the time of such
      refinancing, refunding, renewal or extension except by an amount equal to a
      reasonable premium or other reasonable amount paid, and fees and expenses
      reasonably incurred, in connection with such refinancing and by an amount equal
      to any existing commitments unutilized thereunder and (ii) the terms relating
      to
      principal amount, amortization, maturity, collateral (if any) and subordination
      (if any), and other material terms taken as a whole, of any such refinancing,
      refunding, renewing or extending Indebtedness, and of any agreement entered
      into
      and of any instrument issued in connection therewith, are no less favorable
      in
      any material respect to the Loan Parties or the Lenders than the terms of any
      agreement or instrument governing the Indebtedness being refinanced, refunded,
      renewed or extended and the interest rate applicable to any such refinancing,
      refunding, renewing or extending Indebtedness does not exceed the then
      applicable market interest rate;

     

    (c)           Guarantees
      of the Borrower in respect of Indebtedness otherwise permitted hereunder of
      the
      Borrower or any wholly-owned Subsidiary;

     

    (d)           obligations
      (contingent or otherwise) of the Borrower or any Subsidiary existing or arising
      under any Swap Contract, provided that (i) such obligations are (or were)
      entered into by such Person in the ordinary course of business for the purpose
      of directly mitigating risks associated with liabilities, commitments,
      investments, assets, or property held or reasonably anticipated by such Person,
      or changes in the value of securities issued by such Person, and not for
      purposes of speculation or taking a “market view;” and (ii) such Swap Contract
      does not contain any provision exonerating the non-defaulting party from its
      obligation to make payments on outstanding transactions to the defaulting
      party;

     

    (e)           Indebtedness
      in respect of capital leases, Synthetic Lease Obligations and purchase money
      obligations for fixed or capital assets within the limitations set forth in
      Section 7.01(i); provided,
however, that the aggregate amount
      of all such Indebtedness at any one
      time outstanding shall not exceed $15,000,000; and

     

    (f)           
      unsecured Indebtedness in an aggregate principal amount not to exceed
      $10,000,000 at any time outstanding.

     

    7.04           Fundamental
      Changes. Merge, dissolve, liquidate, consolidate with or into another
      Person, or Dispose of (whether in one transaction or in a series of
      transactions) all or substantially all of its assets (whether now owned or
      hereafter acquired) to or in favor of any Person, except that, so long as no
      Default exists or would result therefrom:

    

    
      
        
          
          

        

        
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    (a)           the
      Borrower may merge with any other Person pursuant to a transaction otherwise
      permitted hereunder, provided the Borrower is the continuing or surviving
      Person;

     

    (b)           any
      Subsidiary may merge with (i) the Borrower, provided that the Borrower
      shall be the continuing or surviving Person, or (ii) any other Person pursuant
      to a transaction otherwise permitted hereunder, provided if such Subsidiary
      is a
      Guarantor, such Subsidiary shall be the continuing or surviving
      Person;

     

    (c)           any
      Subsidiary may Dispose of all or substantially all of its assets (upon voluntary
      liquidation or otherwise) to the Borrower or to another Subsidiary, to the
      extent otherwise permitted hereunder; and

     

    (d)           any
      Subsidiary that is not a Loan Party or a Significant Subsidiary may dissolve
      or
      dispose of all or substantially all of its assets as long as such disposition
      or
      dissolution would not have a Material Adverse Effect.

     

    7.05           Dispositions.
      Make any Disposition or enter into any agreement to make any
      Disposition, except:

     

    (a)           Dispositions
      of obsolete or worn out property, whether now owned or hereafter acquired,
      in
      the ordinary course of business;

     

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

     

    (c)           Dispositions
      of equipment or real property to the extent that (i) such property is exchanged
      for credit against the purchase price of similar replacement property,
      (ii) the proceeds of such Disposition are reasonably promptly applied to
      the purchase price of such replacement property, and (iii) the Borrower
      reasonably determines that neither such equipment or real property nor any
      replacement is necessary or useful for the operation of the business of the
      disposing party;

     

    (d)           Dispositions
      of property by any Subsidiary to the Borrower or to a wholly-owned Subsidiary;
      provided that if the transferor of such property is a Guarantor, the
      transferee thereof must either be the Borrower or a Guarantor;

     

    (e)           Dispositions
      permitted by Section 7.04;

     

    (f)           non-exclusive
      licenses or exclusive licenses as to field of use, of IP Rights in the ordinary
      course of business and substantially consistent with past practice;
      and

     

    (g)           Dispositions
      by the Borrower and its Subsidiaries not otherwise permitted under this
Section 7.05; provided that (i) at the time of such
      Disposition, no Default shall exist or would result from such Disposition and
      (ii) the aggregate book value of all property Disposed of in reliance on this
      clause (h) in any fiscal year shall not exceed $10,000,000; provided,
however, that any Disposition pursuant to clauses (a)
      through (g) shall be for fair market value.

    

    
      
        
          
          

        

        
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    7.06           Restricted
      Payments. Declare or make, directly or indirectly, any Restricted
      Payment, or incur any obligation (contingent or otherwise) to do so, except
      that, so long as no Default shall have occurred and be continuing at the time
      of
      any action described below or would result therefrom:

     

    (a)           each
      Subsidiary may make Restricted Payments to the Borrower, the Guarantors and
      any
      other Person that owns an Equity Interest in such Subsidiary, ratably according
      to their respective holdings of the type of Equity Interest in respect of which
      such Restricted Payment is being made;

     

    (b)           the
      Borrower and each Subsidiary may declare and make dividend payments or other
      distributions payable solely in the common stock or other common Equity
      Interests of such Person;

     

    (c)           the
      Borrower and each Subsidiary may purchase, redeem or otherwise acquire Equity
      Interests issued by it with the proceeds received from the substantially
      concurrent issue of new shares of its common stock or other common Equity
      Interests; and

     

    (d)           the
      Borrower may purchase, redeem or otherwise acquire for cash Equity Interests
      issued by it, provided (i) the aggregate amount of consideration for
      all such items together paid after the Closing Date does not exceed $10,000,000
      and (ii) both before and after giving effect to each such transaction, the
      Borrower shall be in compliance with Section 7.11 on a
proforma basis.

     

    7.07           Change
      in Nature of Business. Engage in any material line of business
      substantially different from those lines of business conducted by the Borrower
      and its Subsidiaries on the date hereof or any business substantially related
      or
      incidental thereto.

     

    7.08           Transactions
      with Affiliates. Enter into any transaction of any kind with any
      Affiliate of the Borrower, whether or not in the ordinary course of business,
      other than on fair and reasonable terms substantially as favorable to the
      Borrower or such Subsidiary as would be obtainable by the Borrower or such
      Subsidiary at the time in a comparable arm’s length transaction with a Person
      other than an Affiliate.

     

    7.09           Burdensome
      Agreements. Enter into any Contractual Obligation (other than this
      Agreement or any other Loan Document) that

     

    (a)           limits
      the ability (i) of any Subsidiary to make Restricted Payments to the Borrower
      or
      any Guarantor or to otherwise transfer property to the Borrower or any
      Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower
      or (iii) of the Borrower or any Subsidiary to create, incur, assume or suffer
      to
      exist Liens on property of such Person;

     

    provided,
      however, that this clause (iii) shall not prohibit any negative pledge
      incurred or provided in favor of any holder of Indebtedness permitted under
      Section 7.03(e) solely to the extent any such negative pledge relates
      to the property financed by or the subject of such Indebtedness; or

    

    
      
        
          
          

        

        
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    (b)           requires
      the grant of a Lien to secure an obligation of such Person if a Lien is granted
      to secure another obligation of such Person.

     

    provided
      that the foregoing
      clauses (a) and (b) shall not apply to Contractual Obligations
      which:

    

    (i)           are
      binding on a Subsidiary at the time such Subsidiary first becomes a Subsidiary
      pursuant to an Acquisition, so long as such Contractual Obligations were not
      entered into in contemplation of such Person becoming a Subsidiary;

     

    (ii)          are
      customary provisions in joint venture agreements and other similar agreements
      applicable to joint ventures and applicable solely to the property and
      distributions of such joint venture;

     

    (iii)         are
      customary restrictions and conditions contained in agreements relating to the
      sale of a Subsidiary otherwise permitted hereunder or any assets pending such
      sale to the extent that such restrictions and conditions apply only to the
      Subsidiary or assets that is or are to be sold;

     

    (iv)         are
      restrictions existing on the date of this Agreement contained in agreements
      and
      arrangements set forth on Schedule 7.09, (including any amendments or
      replacements of such agreements or arrangements that are not more restrictive
      as
      to the Borrower or its Subsidiaries);

     

    (v)         
      are customary restrictions on leases, subleases, licenses or asset sale
      agreements otherwise permitted hereby so long as such restrictions relate solely
      to the assets subject thereto;

     

    (vi)         are
      restrictions contained in customary arrangements or agreements with Governmental
      Authorities or adopted to comply with any rule, directive or interpretation
      of
      any Governmental Authority, including restrictions imposed under a license
      or
      authorization issued or granted by regulatory, statutory or governmental bodies
      relating to capital compliance or net worth plus a reasonable margin above
      such
      minimum;

     

    (vii)        are
      customary provisions restricting subletting or assignment of any lease governing
      a leasehold interest of the Borrower or any Subsidiary; or

     

    (viii)       are
      customary restrictions imposed on the transfer of copyrighted or patented
      materials or other intellectual property and customary provisions in agreements
      that restrict the assignment of such agreements or any rights
      thereunder.

     

    7.10           Use
      of Proceeds. Use the proceeds of any Credit Extension, whether directly
      or indirectly, and whether immediately, incidentally or ultimately, to purchase
      or carry margin stock (within the meaning of Regulation U of the FRB) or to
      extend credit to others for the purpose of purchasing or carrying margin stock
      or to refund indebtedness originally incurred for such purpose.

    

    
      
        
          
          

        

        
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    7.11           Financial
      Covenants.

     

    (a)           Consolidated
      Net Worth.  Permit Consolidated Net Worth as of the end of any
      fiscal quarter of the Borrower to be less than the sum of (i) $200,000,000,
      plus (ii) an amount equal to the CNW Ratchet Amount minus (iii) an
      amount equal to 100% of non-recurring expenses relating to the MDL Acquisition,
      including restructuring, severance, intangibles and in-process research and
      development writedowns, in an aggregate amount not to exceed
      $60,000,000.

     

    (b)           Consolidated
      Interest Coverage Ratio.  Permit the Consolidated Interest
      Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less
      than 3.00 to 1.00.

     

    (c)           Consolidated
      Leverage Ratio.  Permit the Consolidated Leverage Ratio at any
      time during any period of four fiscal quarters of the Borrower set forth below
      to be greater than the ratio set forth below opposite such period:

     

    
      	
              
                Four
                  Fiscal Quarters Ending

              

            	 	
              
                Maximum

                Consolidated
                  Leverage Ratio

              

            
	
              September
                30, 2007 through September 30, 2008

            	 	
              2.50

            
	 	 	 
	
              Thereafter

            	 	
              2.25

            

    

    

    7.12           Domestic
      Assets.  Permit at any time the aggregate book value of the
      assets of the Borrower together with its Domestic Subsidiaries (other than
      in
      each case Equity Interests issued by Subsidiaries and inter-company debt) to
      be
      less than 80% of total consolidated assets of the Borrower and its
      Subsidiaries.

     

    ARTICLE
      VIII.

    EVENTS
      OF DEFAULT AND REMEDIES

     

    8.01           Events
      of Default. Any of the following shall constitute an Event of
      Default:

     

    (a)           Non-Payment.
      The Borrower or any other Loan Party fails to pay (i) when and as required
      to be
      paid herein, any amount of principal of any Loan or any L/C Obligation, or
      (ii)
      within three days after the same becomes due, any interest on any Loan or on
      any
      L/C Obligation, or any fee due hereunder, or (iii) within five days after the
      same becomes due, any other amount payable hereunder or under any other Loan
      Document; or

     

    (b)           Specific
      Covenants. The Borrower fails to perform or observe any term, covenant or
      agreement contained in any of Section 6.01, 6.02(a),
6.03(a), 6.05, 6.10, 6.11, 6.12, or
6.13 or Article VII; or

    

    
      
        
          
          

        

        
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    (c)           Other
      Defaults. Any Loan Party fails to perform or observe any other covenant or
      agreement (not specified in subsection (a) or (b) above) contained in any
      Loan Document on its part to be performed or observed and such failure continues
      for 30 days; or

     

    (d)           Representations
      and Warranties. Any representation, warranty, certification or statement of
      fact made or deemed made by or on behalf of the Borrower or any other Loan
      Party
      herein, in any other Loan Document, or in any document delivered in connection
      herewith or therewith shall be incorrect or misleading in any material respect
      when made or deemed made; or

     

    (e)           Cross-Default.
      (i) The Borrower or any Subsidiary (A) fails to make any payment when due
      (whether by scheduled maturity, required prepayment, acceleration, demand,
      or
      otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness
      hereunder and Indebtedness under Swap Contracts) having an aggregate principal
      amount (including undrawn committed or available amounts and including amounts
      owing to all creditors under any combined or syndicated credit arrangement)
      of
      more than the Threshold Amount, or (B) fails to observe or perform any other
      agreement or condition relating to any such Indebtedness or Guarantee or
      contained in any instrument or agreement evidencing, securing or relating
      thereto, or any other event occurs, the effect of which default or other event
      is to cause, or to permit the holder or holders of such Indebtedness or the
      beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
      of such holder or holders or beneficiary or beneficiaries) to cause, with the
      giving of notice if required, such Indebtedness to be demanded or to become
      due
      or to be repurchased, prepaid, defeased or redeemed (automatically or
      otherwise), or an offer to repurchase, prepay, defease or redeem such
      Indebtedness to be made, prior to its stated maturity, or such Guarantee to
      become payable or cash collateral in respect thereof to be demanded; or (ii)
      there occurs under any Swap Contract an Early Termination Date (as defined
      in
      such Swap Contract) resulting from (A) any event of default under such Swap
      Contract as to which the Borrower or any Subsidiary is the Defaulting Party
      (as
      defined in such Swap Contract) or (B) any Termination Event (as so defined)
      under such Swap Contract as to which the Borrower or any Subsidiary is an
      Affected Party (as so defined) and, in either event, the Swap Termination Value
      owed by the Borrower or such Subsidiary as a result thereof is greater than
      the
      Threshold Amount; or

     

    (f)           Insolvency
      Proceedings, Etc. Any Loan Party or any of its Subsidiaries institutes or
      consents to the institution of any proceeding under any Debtor Relief Law,
      or
      makes an assignment for the benefit of creditors; or applies for or consents
      to
      the appointment of any receiver, trustee, custodian, conservator, liquidator,
      rehabilitator or similar officer for it or for all or any material part of
      its
      property; or any receiver, trustee, custodian, conservator, liquidator,
      rehabilitator or similar officer is appointed without the application or consent
      of such Person and the appointment continues undischarged or unstayed for 60
      calendar days; or any proceeding under any Debtor Relief Law relating to any
      such Person or to all or any material part of its property is instituted without
      the consent of such Person and continues undismissed or unstayed for 60 calendar
      days, or an order for relief is entered in any such proceeding; or

     

    (g)           Inability
      to Pay Debts; Attachment. (i) The Borrower or any Subsidiary becomes unable
      or admits in writing its inability or fails generally to pay its debts as they
      become due, or (ii) any writ or warrant of attachment or execution or similar
      process is issued or levied against all or any material part of the property
      of
      any such Person and is not released, vacated or fully bonded within 20 days
      after its issue or levy; or

    

    
      
        
          
          

        

        
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    (h)           Judgments.
      There is entered against the Borrower or any Subsidiary (i) one or more final
      judgments or orders for the payment of money in an aggregate amount (as to
      all
      such judgments or orders) exceeding the Threshold Amount (to the extent not
      covered by independent third-party insurance as to which the insurer does not
      dispute coverage), or (ii) any one or more non-monetary final judgments that
      have, or could reasonably be expected to have, individually or in the aggregate,
      a Material Adverse Effect and, in either case, (A) enforcement proceedings
      are
      commenced by any creditor upon such judgment or order, or (B) there is a period
      of 10 consecutive days during which a stay of enforcement of such judgment,
      by
      reason of a pending appeal or otherwise, is not in effect; or

     

    (i)           ERISA.
      (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan
      which has resulted or could reasonably be expected to result in liability of
      the
      Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or
      the
      PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the
      Borrower or any ERISA Affiliate fails to pay when due, after the expiration
      of
      any applicable grace period, any installment payment with respect to its
      withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan
      in an aggregate amount in excess of the Threshold Amount; or

     

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

     

    (k)           Change
      of Control. There occurs any Change of Control; or

     

    (l)           Material
      Adverse Effect.  There occurs any Material Adverse
      Effect.

     

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

     

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

     

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

     

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

    

    
      
        
          
          

        

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

     

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

     

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

     

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

     

    Second,
      to payment of that portion of the Obligations constituting fees, indemnities
      and
      other amounts (other than principal, interest and Letter of Credit Fees) payable
      to the Lenders and the L/C Issuer (including fees, charges and disbursements
      of
      counsel to the respective Lenders and the L/C Issuer (including fees and time
      charges for attorneys who may be employees of any Lender or the L/C Issuer)
      and
      amounts payable under Article III), ratably among them in proportion
      to the respective amounts described in this clause Second payable to
      them;

     

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

     

    Fourth,
      to payment of that portion of the Obligations constituting unpaid principal
      of the Loans and L/C Borrowings, ratably among the Lenders and the L/C Issuer
      in
      proportion to the respective amounts described in this clause Fourth held
      by them;

     

    Fifth,
      to the Administrative Agent for the account of the L/C Issuer, to Cash
      Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
      amount of Letters of Credit; and

     

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

    

    
      
        
          
          

        

        
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    Subject
      to Section 2.03(c), amounts used to Cash Collateralize the aggregate
      undrawn amount of Letters of Credit pursuant to clause Fifth above shall
      be applied to satisfy drawings under such Letters of Credit as they occur.
      If
      any amount remains on deposit as Cash Collateral after all Letters of Credit
      have either been fully drawn or expired, such remaining amount shall be applied
      to the other Obligations, if any, in the order set forth above.

     

    ARTICLE
      IX.

    ADMINISTRATIVE
      AGENT

     

    9.01           Appointment
      and Authority. Each of the Lenders and the L/C Issuer hereby
      irrevocably appoints Bank of America to act on its behalf as the Administrative
      Agent hereunder and under the other Loan Documents and authorizes the
      Administrative Agent to take such actions on its behalf and to exercise such
      powers as are delegated to the Administrative Agent by the terms hereof or
      thereof, together with such actions and powers as are reasonably incidental
      thereto. The provisions of this Article are solely for the benefit of the
      Administrative Agent, the Lenders and the L/C Issuer, and the Borrower shall
      not
      have rights as a third party beneficiary of any of such provisions.

     

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

     

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

     

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

     

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

     

    (c)           shall
      not, except as expressly set forth herein and in the other Loan Documents,
      have
      any duty to disclose, and shall not be liable for the failure to disclose,
      any
      information relating to the Borrower or any of its Affiliates that is
      communicated to or obtained by the Person serving as the Administrative Agent
      or
      any of its Affiliates in any capacity.

    

    
      
        
          
          

        

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

     

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

     

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

     

    9.05           Delegation
      of Duties. The Administrative Agent may perform any and all of its
      duties and exercise its rights and powers hereunder or under any other Loan
      Document by or through any one or more sub agents appointed by the
      Administrative Agent. The Administrative Agent and any such sub agent may
      perform any and all of its duties and exercise its rights and powers by or
      through their respective Related Parties. The exculpatory provisions of this
      Article shall apply to any such sub agent and to the Related Parties of the
      Administrative Agent and any such sub agent, and shall apply to their respective
      activities in connection with the syndication of the credit facilities provided
      for herein as well as activities as Administrative Agent.

    

    
      
        
          
          

        

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

     

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

    

    
      
        
          
          

        

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

     

    9.08           Administrative
      Agent May File Proofs of Claim. In case of the pendency of any
      proceeding under any Debtor Relief Law or any other judicial proceeding relative
      to any Loan Party, the Administrative Agent (irrespective of whether the
      principal of any Loan or L/C Obligation shall then be due and payable as herein
      expressed or by declaration or otherwise and irrespective of whether the
      Administrative Agent shall have made any demand on the Borrower) shall be
      entitled and empowered, by intervention in such proceeding or
      otherwise

     

    (a)           to
      file and prove a claim for the whole amount of the principal and interest owing
      and unpaid in respect of the Loans, L/C Obligations and all other Obligations
      that are owing and unpaid and to file such other documents as may be necessary
      or advisable in order to have the claims of the Lenders, the L/C Issuer and
      the
      Administrative Agent (including any claim for the reasonable compensation,
      expenses, disbursements and advances of the Lenders, the L/C Issuer and the
      Administrative Agent and their respective agents and counsel and all other
      amounts due the Lenders, the L/C Issuer and the Administrative Agent under
      Sections 2.03(i) and (j), 2.09 and 10.04) allowed in
      such judicial proceeding; and

     

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

     

    and
      any
      custodian, receiver, assignee, trustee, liquidator, sequestrator or other
      similar official in any such judicial proceeding is hereby authorized by each
      Lender and the L/C Issuer to make such payments to the Administrative Agent
      and,
      in the event that the Administrative Agent shall consent to the making of such
      payments directly to the Lenders and the L/C Issuer, to pay to the
      Administrative Agent any amount due for the reasonable compensation, expenses,
      disbursements and advances of the Administrative Agent and its agents and
      counsel, and any other amounts due the Administrative Agent under Sections
      2.09 and 10.04.

     

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

     

    9.09           Collateral
      and Guaranty Matters. The Lenders and the L/C Issuer irrevocably
      authorize the Administrative Agent, at its option and in its
      discretion,

    

    
      
        
          
          

        

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

     

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

     

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

     

    Upon
      request by the Administrative Agent at any time, the Required Lenders will
      confirm in writing the Administrative Agent’s authority to release or
      subordinate its interest in particular types or items of property, or to release
      any Guarantor from its obligations under the Guaranty pursuant to this
Section 9.09.

     

    ARTICLE
      X.

    MISCELLANEOUS

     

    10.01         Amendments,
      Etc. No amendment or waiver of any provision of this Agreement or any
      other Loan Document, and no consent to any departure by the Borrower or any
      other Loan Party therefrom, shall be effective unless in writing signed by
      the
      Required Lenders and the Borrower or the applicable Loan Party, as the case
      may
      be, and acknowledged by the Administrative Agent, and each such waiver or
      consent shall be effective only in the specific instance and for the specific
      purpose for which given; provided, however, that no such
      amendment, waiver or consent shall:

     

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

     

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

     

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

     

    (d)           reduce
      the principal of, or the rate of interest specified herein on, any Loan or
      L/C
      Borrowing, or any fees or other amounts payable hereunder or under any other
      Loan Document, or change the manner of computation of any financial ratio
      (including any change in any applicable defined term) used in determining the
      Applicable Rate that would result in a reduction of any interest rate on any
      Loan or any fee payable hereunder without the written consent of each Lender
      directly affected thereby; provided, however, that only the
      consent of the Required Lenders shall be necessary to amend the definition
      of
“Default Rate” or to waive any obligation of the Borrower to pay interest or
      Letter of Credit Fees at the Default Rate;

    

    
      
        
          
          

        

        
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    (e)           change
      Section 2.12 or Section 8.03 in a manner that would
      alter the pro rata sharing of payments required thereby without the written
      consent of each Lender;

     

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

     

    (g)           release
      all or substantially all of the value of the Guaranty without the written
      consent of each Lender; or

     

    (h)           release
      the Liens of the Administrative Agent on all or substantially all of the
      Collateral, without the written consent of each Lender.

     

    and,
      provided further, that (i) no amendment, waiver or consent shall, unless
      in writing and signed by the L/C Issuer in addition to the Lenders required
      above, affect the rights or duties of the L/C Issuer under this Agreement or
      any
      Issuer Document relating to any Letter of Credit issued or to be issued by
      it;
      and (ii) no amendment, waiver or consent shall, unless in writing and signed
      by
      the Administrative Agent in addition to the Lenders required above, affect
      the
      rights or duties of the Administrative Agent under this Agreement or any other
      Loan Document.  Notwithstanding anything to the contrary herein, no
      Defaulting Lender shall have any right to approve or disapprove any amendment,
      waiver or consent hereunder, except that the Commitment of such Lender may
      not
      be increased or extended without the consent of such Lender.

     

    10.02         Notices;
      Effectiveness; Electronic Communication.

     

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

     

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

     

    (ii)           if
      to any other Lender, to the address, telecopier number, electronic mail address
      or telephone number specified in its Administrative Questionnaire, if any,
      or as
      notified to the Borrower and the Administrative Agent.

    

    
      
        
          
          

        

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

     

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

     

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

     

    (c)           The
      Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
      PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
      BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
      LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY
      OF
      ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
      MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
      PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY
      AGENT
      PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
      shall the Administrative Agent or any of its Related Parties (collectively,
      the
“Agent Parties”) have any liability to the Borrower, any Lender, the L/C
      Issuer or any other Person for losses, claims, damages, liabilities or expenses
      of any kind (whether in tort, contract or otherwise) arising out of the
      Borrower’s or the Administrative Agent’s transmission of Borrower Materials
      through the Internet, except to the extent that such losses, claims, damages,
      liabilities or expenses are determined by a court of competent jurisdiction
      by a
      final and nonappealable judgment to have resulted from the gross negligence
      or
      willful misconduct of such Agent Party; provided, however, that in
      no event shall any Agent Party have any liability to the Borrower, any Lender,
      the L/C Issuer or any other Person for indirect, special, incidental,
      consequential or punitive damages (as opposed to direct or actual
      damages).

    

    
      
        
          
          

        

        
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    (d)           Change
      of Address, Etc. Each of the Borrower, the Administrative Agent, and the L/C
      Issuer may change its address, telecopier or telephone number for notices and
      other communications hereunder by notice to the other parties hereto. Each
      other
      Lender may change its address, telecopier or telephone number for notices and
      other communications hereunder by notice to the Borrower, the Administrative
      Agent, and the L/C Issuer.  In addition, each Lender agrees to notify
      the Administrative Agent from time to time to ensure that the Administrative
      Agent has on record (i) an effective address, contact name, telephone number,
      telecopier number and electronic mail address to which notices and other
      communications may be sent and (ii) accurate wire instructions for such
      Lender.

     

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

     

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

     

    10.04         Expenses;
      Indemnity; Damage Waiver.

     

    (a)           Costs
      and Expenses. The Borrower shall pay (i) all reasonable out of pocket
      expenses incurred by the Administrative Agent and its Affiliates (including
      the
      reasonable fees, charges and disbursements of counsel for the Administrative
      Agent), in connection with the syndication of the credit facilities provided
      for
      herein, the preparation, negotiation, execution, delivery and administration
      of
      this Agreement and the other Loan Documents or any amendments, modifications
      or
      waivers of the provisions hereof or thereof (whether or not the transactions
      contemplated hereby or thereby shall be consummated), (ii) all reasonable out
      of
      pocket expenses incurred by the L/C Issuer in connection with the issuance,
      amendment, renewal or extension of any Letter of Credit or any demand for
      payment thereunder and (iii) all out of pocket expenses incurred by the
      Administrative Agent, any Lender or the L/C Issuer (including the fees, charges
      and disbursements of any counsel for the Administrative Agent, any Lender or
      the
      L/C Issuer), and shall pay all fees and time charges for attorneys who may
      be
      employees of the Administrative Agent, any Lender or the L/C Issuer, in
      connection with the enforcement or protection of its rights (A) in connection
      with this Agreement and the other Loan Documents, including its rights under
      this Section, or (B) in connection with the Loans made or Letters of Credit
      issued hereunder, including all such out of pocket expenses incurred during
      any
      workout, restructuring or negotiations in respect of such Loans or Letters
      of
      Credit.

     

    
      
        
          
          

        

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

     

    (c)           Reimbursement
      by Lenders. To the extent that the Borrower for any reason fails to
      indefeasibly pay any amount required under subsection (a) or (b) of this
      Section to be paid by it to the Administrative Agent (or any sub-agent
      thereof), the L/C Issuer or any Related Party of any of the foregoing, each
      Lender severally agrees to pay to the Administrative Agent (or any such
      sub-agent), the L/C Issuer or such Related Party, as the case may be, such
      Lender’s Applicable Percentage (determined as of the time that the applicable
      unreimbursed expense or indemnity payment is sought) of such unpaid amount,
      provided that the unreimbursed expense or indemnified loss, claim,
      damage, liability or related expense, as the case may be, was incurred by or
      asserted against the Administrative Agent (or any such sub-agent) or the L/C
      Issuer in its capacity as such, or against any Related Party of any of the
      foregoing acting for the Administrative Agent (or any such sub-agent) or L/C
      Issuer in connection with such capacity. The obligations of the Lenders under
      this subsection (c) are subject to the provisions of
Section 2.11(d).

    

    
      
        
          
          

        

        
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    (d)           Waiver
      of Consequential Damages, Etc. To the fullest extent permitted by applicable
      law, the Borrower shall not assert, and hereby waives, any claim against any
      Indemnitee, on any theory of liability, for special, indirect, consequential
      or
      punitive damages (as opposed to direct or actual damages) arising out of, in
      connection with, or as a result of, this Agreement, any other Loan Document
      or
      any agreement or instrument contemplated hereby, the transactions contemplated
      hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
      thereof.  No Indemnitee referred to in subsection (b) above shall
      be liable for any damages arising from the use by unintended recipients of
      any
      information or other materials distributed to such unintended recipients by
      such
      Indemnitee through telecommunications, electronic or other information
      transmission systems in connection with this Agreement or the other Loan
      Documents or the transactions contemplated hereby or thereby other than for
      direct or actual damages resulting from the gross negligence or willful
      misconduct of such Indemnitee as determined by a final and nonappealable
      judgment of a court of competent jurisdiction.

     

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

     

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

     

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

     

    10.06         Successors
      and Assigns.

     

    
      
        
          
          

        

        
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      (a)           Successors
        and Assigns Generally. The provisions of this Agreement shall be binding
        upon and inure to the benefit of the parties hereto and their respective
        successors and assigns permitted hereby, except that the Borrower may not
        assign
        or otherwise transfer any of its rights or obligations hereunder without
        the
        prior written consent of the Administrative Agent and each Lender and no
        Lender
        may assign or otherwise transfer any of its rights or obligations hereunder
        except (i) to an assignee in accordance with the provisions of
        subsection (b) of this Section, (ii) by way of participation in accordance
        with the provisions of subsection (d) of this Section, or (iii) by way of
        pledge or assignment of a security interest subject to the restrictions of
        subsection (f) of this Section (and any other attempted assignment or
        transfer by any party hereto shall be null and void). Nothing in this Agreement,
        expressed or implied, shall be construed to confer upon any Person (other
        than
        the parties hereto, their respective successors and assigns permitted hereby,

        Participants to the extent provided in subsection (d) of this
        Section and, to the extent expressly contemplated hereby, the Related
        Parties of each of the Administrative Agent, the L/C Issuer and the Lenders)
        any
        legal or equitable right, remedy or claim under or by reason of this
        Agreement.

    (b)           Assignments
      by Lenders. Any Lender may at any time assign to one or more assignees all
      or a portion of its rights and obligations under this Agreement (including
      all
      or a portion of its Commitment and the Loans (including for purposes of this
      subsection (b), participations in L/C Obligations) at the time owing to
      it); provided that any such assignment shall be subject to the following
      conditions:

     

    (i)           Minimum
      Amounts.

     

    (A)           in
      the case of an assignment of the entire remaining amount of the assigning
      Lender’s Commitment and the Loans at the time owing to it or in the case of an
      assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
      amount need be assigned; and

     

    (B)           in
      any case not described in subsection (b)(i)(A) of this Section, the
      aggregate amount of the Commitment (which for this purpose includes Loans
      outstanding thereunder) or, if the Commitment is not then in effect, the
      principal outstanding balance of the Loans of the assigning Lender subject
      to
      each such assignment, determined as of the date the Assignment and Assumption
      with respect to such assignment is delivered to the Administrative Agent or,
      if
“Trade Date” is specified in the Assignment and Assumption, as of the
      Trade Date, shall not be less than $5,000,000 unless each of the Administrative
      Agent and, so long as no Event of Default has occurred and is continuing, the
      Borrower otherwise consents (each such consent not to be unreasonably withheld
      or delayed); provided, however, that concurrent assignments to
      members of an Assignee Group and concurrent assignments from members of an
      Assignee Group to a single assignee (or to an assignee and members of its
      Assignee Group) will be treated as a single assignment for purposes of
      determining whether such minimum amount has been met;

    

    
      
        
          
          

        

        
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    (ii)           Proportionate
      Amounts. Each partial assignment shall be made as an assignment of a
      proportionate part of all the assigning Lender’s rights and obligations under
      this Agreement with respect to the Loans or the Commitment
      assigned;

     

    (iii)           Required
      Consents. No consent shall be required for any assignment except to the
      extent required by subsection (b)(i)(B) of this Section and, in
      addition:

     

    (A)           the
      consent of the Borrower (such consent not to be unreasonably withheld or
      delayed) shall be required unless (1) an Event of Default has occurred and
      is
      continuing at the time of such assignment or (2) such assignment is to a Lender,
      an Affiliate of a Lender or an Approved Fund;

     

    (B)           the
      consent of the Administrative Agent (such consent not to be unreasonably
      withheld or delayed) shall be required if such assignment is to a Person that
      is
      not a Lender, an Affiliate of such Lender or an Approved Fund with respect
      to
      such Lender; and

     

    (C)           the
      consent of the L/C Issuer (such consent not to be unreasonably withheld or
      delayed) shall be required for any assignment that increases the obligation
      of
      the assignee to participate in exposure under one or more Letters of Credit
      (whether or not then outstanding).

     

    (iv)           Assignment
      and Assumption. The parties to each assignment shall execute and deliver to
      the Administrative Agent an Assignment and Assumption, together with a
      processing and recordation fee of $3,500; provided, however, that
      the Administrative Agent may, in its sole discretion, elect to waive such
      processing and recordation fee in the case of any assignment. The assignee,
      if
      it is not a Lender, shall deliver to the Administrative Agent an Administrative
      Questionnaire.

     

    (v)           No
      Assignment to Borrower. No such assignment shall be made to the Borrower or
      any of the Borrower’s Affiliates or Subsidiaries.

     

    (vi)           No
      Assignment to Natural Persons. No such assignment shall be made to a natural
      person.

     

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

    

    
      
        
          
          

        

        
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    (c)           Register.
      The Administrative Agent, acting solely for this purpose as an agent of the
      Borrower, shall maintain at the Administrative Agent’s Office a copy of each
      Assignment and Assumption delivered to it and a register for the recordation
      of
      the names and addresses of the Lenders, and the Commitments of, and principal
      amounts of the Loans and L/C Obligations owing to, each Lender pursuant to
      the
      terms hereof from time to time (the “Register”). The entries in the
      Register shall be conclusive, and the Borrower, the Administrative Agent and
      the
      Lenders may treat each Person whose name is recorded in the Register pursuant
      to
      the terms hereof as a Lender hereunder for all purposes of this Agreement,
      notwithstanding notice to the contrary. The Register shall be available for
      inspection by the Borrower and any Lender, at any reasonable time and from
      time
      to time upon reasonable prior notice.

     

    (d)           Participations.
      Any Lender may at any time, without the consent of, or notice to, the Borrower
      or the Administrative Agent, sell participations to any Person (other than
      a
      natural person or the Borrower or any of the Borrower’s Affiliates or
      Subsidiaries) (each, a “Participant”) in all or a portion of such
      Lender’s rights and/or obligations under this Agreement (including all or a
      portion of its Commitment and/or the Loans (including such Lender’s
      participations in L/C Obligations) 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 Borrower, the Administrative
      Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly
      with such Lender in connection with such Lender’s rights and obligations under
      this Agreement.

     

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

     

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

    

    
      
        
          
          

        

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

     

    (g)           Electronic
      Execution of Assignments. The words “execution,”
“signed,” “signature,” and words of like import in any
      Assignment and Assumption shall be deemed to include electronic signatures
      or
      the keeping of records in electronic form, each of which shall be of the same
      legal effect, validity or enforceability as a manually executed signature or
      the
      use of a paper-based recordkeeping system, as the case may be, to the extent
      and
      as provided for in any applicable law, including the Federal Electronic
      Signatures in Global and National Commerce Act, the New York State Electronic
      Signatures and Records Act, or any other similar state laws based on the Uniform
      Electronic Transactions Act.

     

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

     

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

    

    
      
        
          
          

        

        
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    Each
      of
      the Administrative Agent, the Lenders and the L/C Issuer acknowledges that
      (a)
      the Information may include material non-public information concerning the
      Borrower or a Subsidiary, as the case may be, (b) it has developed compliance
      procedures regarding the use of material non-public information and (c) it
      will
      handle such material non-public information in accordance with applicable Law,
      including Federal and state securities Laws.

     

    10.08         Right
      of Setoff. If an Event of Default shall have occurred and be
      continuing, each Lender, the L/C Issuer and each of their respective Affiliates
      is hereby authorized at any time and from time to time, to the fullest extent
      permitted by applicable law, to set off and apply any and all deposits (general
      or special, time or demand, provisional or final, in whatever currency) at
      any
      time held and other obligations (in whatever currency) at any time owing by
      such
      Lender, the L/C Issuer or any such Affiliate to or for the credit or the account
      of the Borrower or any other Loan Party against any and all of the obligations
      of the Borrower or such Loan Party now or hereafter existing under this
      Agreement or any other Loan Document to such Lender or the L/C Issuer,
      irrespective of whether or not such Lender or the L/C Issuer shall have made
      any
      demand under this Agreement or any other Loan Document and although such
      obligations of the Borrower or such Loan Party may be contingent or unmatured
      or
      are owed to a branch or office of such Lender or the L/C Issuer different from
      the branch or office holding such deposit or obligated on such indebtedness.
      The
      rights of each Lender, the L/C Issuer and their respective Affiliates under
      this
      Section are in addition to other rights and remedies (including other
      rights of setoff) that such Lender, the L/C Issuer or their respective
      Affiliates may have. Each Lender and the L/C Issuer agrees to notify the
      Borrower and the Administrative Agent promptly after any such setoff and
      application, provided that the failure to give such notice shall not
      affect the validity of such setoff and application.

     

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

     

    10.10         Counterparts;
      Integration; Effectiveness. This Agreement may be executed in
      counterparts (and by different parties hereto in different counterparts), each
      of which shall constitute an original, but all of which when taken together
      shall constitute a single contract. This Agreement and the other Loan Documents
      constitute the entire contract among the parties relating to the subject matter
      hereof and supersede any and all previous agreements and understandings, oral
      or
      written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall
      have been executed by the Administrative Agent and when the Administrative
      Agent
      shall have received counterparts hereof that, when taken together, bear the
      signatures of each of the other parties hereto. Delivery of an executed
      counterpart of a signature page of this Agreement by telecopy shall be effective
      as delivery of a manually executed counterpart of this Agreement.

     

    
      
        
          
          

        

        
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    10.11         Survival
      of Representations and Warranties. All representations and warranties
      made hereunder and in any other Loan Document or other document delivered
      pursuant hereto or thereto or in connection herewith or therewith shall survive
      the execution and delivery hereof and thereof. Such representations and
      warranties have been or will be relied upon by the Administrative Agent and
      each
      Lender, regardless of any investigation made by the Administrative Agent or
      any
      Lender or on their behalf and notwithstanding that the Administrative Agent
      or
      any Lender may have had notice or knowledge of any Default at the time of any
      Credit Extension, and shall continue in full force and effect as long as any
      Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or
      any
      Letter of Credit shall remain outstanding.

     

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

     

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

     

    (a)           the
      Borrower shall have paid to the Administrative Agent the assignment fee
      specified in Section 10.06(b);

     

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

     

    
      
        
          
          

        

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

     

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

     

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

     

    10.14                      Governing
      Law; Jurisdiction; Etc.

     

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

     

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

     

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

    

    
      
        
          
          

        

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

     

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

     

    10.16         No
      Advisory or Fiduciary Responsibility. In connection with all aspects of
      each transaction contemplated hereby, the Borrower acknowledges and agrees
      that:
      (i) the credit facility provided for hereunder and any related arranging or
      other services in connection therewith (including in connection with any
      amendment, waiver or other modification hereof or of any other Loan Document)
      are an arm’s-length commercial transaction between the Borrower  and
      the other Loan Parties, on the one hand, and the Administrative Agent and
      Lenders, on the other hand, and the Borrower and each other Loan Party is
      capable of evaluating and understanding and understands and accepts the terms,
      risks and conditions of the transactions contemplated hereby and by the other
      Loan Documents (including any amendment, waiver or other modification hereof
      or
      thereof); (ii) in connection with the process leading to such transaction,
      the
      Administrative Agent is and has been acting solely as a principal and is not
      the
      financial advisor, agent or fiduciary, for the Borrower or any of its
      Affiliates, stockholders, creditors or employees or any other Person; (iii)
      the
      Administrative Agent has not assumed nor will it assume an advisory, agency
      or
      fiduciary responsibility in favor of the Borrower or any other Loan Party with
      respect to any of the transactions contemplated hereby or the process leading
      thereto, including with respect to any amendment, waiver or other modification
      hereof or of any other Loan Document (irrespective of whether the Administrative
      Agent has advised or is currently advising the Borrower or any of its Affiliates
      on other matters) and the Administrative Agent has no obligation to the Borrower
      or any of its Affiliates with respect to the transactions contemplated hereby
      except those obligations expressly set forth herein and in the other Loan
      Documents; (iv) the Administrative Agent and its Affiliates may be engaged
      in a
      broad range of transactions that involve interests that differ from those of
      the
      Borrower and its Affiliates, and the Administrative Agent has no obligation
      to
      disclose any of such interests by virtue of any advisory, agency or fiduciary
      relationship; and (v) the Administrative Agent has not provided and will not
      provide any legal, accounting, regulatory or tax advice with respect to any
      of
      the transactions contemplated hereby (including any amendment, waiver or other
      modification hereof or of any other Loan Document) and the Borrower has
      consulted its own legal, accounting, regulatory and tax advisors to the extent
      it has deemed appropriate.  The Borrower hereby waives and releases,
      to the fullest extent permitted by law, any claims that it may have against
      the
      Administrative Agent with respect to any breach or alleged breach of agency
      or
      fiduciary duty.

    

    
      
        
          
          

        

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

     

    10.18         ENTIRE
      AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
      FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
      PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
      ARE
      NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

     

    

    

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    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed as of the date first above written.

     

    
      	 	
              SYMYX
                TECHNOLOGIES, INC.

            
	 	 
	 	
              By:

            	
              /s/
                Rex S. Jackson

            
	 	 	 
	 	
              Name:

            	
              Rex
                S. Jackson

            
	 	 	 
	 	
              Title:

            	
              EVP,
                GC & Acting CFO

            

    

     

    
      
        
          
          

        

        
          S-1

          
            

          

        

        
          
          

        

      

    

     

    
      	 	
              BANK
                OF AMERICA, N.A., as

            
	 	
              Administrative
                Agent

            
	 	 
	 	
              By:

            	
              /s/
                John C. Plecque

            
	 	 	 
	 	
              Name:

            	
              John
                C. Plecque

            
	 	 	 
	 	
              Title:

            	
              Senior
                Vice President

            

    

     

    
      
        
          
          

        

        
          S-2

          
            

          

        

        
          
          

        

      

    

     

    
      	 	
              BANK
                OF AMERICA, N.A.,

            
	 	
              as
                a Lender, and L/C Issuer

            
	 	 
	 	
              By:

            	
              
                /s/
                  John C. Plecque

              

            
	 	 	 
	 	
              Name:

            	
              
                John
                  C. Plecque

              

            
	 	 	 
	 	
              Title:

            	
              
                Senior
                  Vice President

              

            

    

     

     

     S-3

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