Document:

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                                                                    EXHIBIT 4(5)

                                 LOAN AGREEMENT

                                      AMONG

                        LASALLE BANK NATIONAL ASSOCIATION

                             AS ADMINISTRATIVE AGENT

                                       AND

                        LASALLE BANK NATIONAL ASSOCIATION

                                       AND

                      THE OTHER LENDERS LISTED ON EXHIBIT 3

                                   AS LENDERS

                                       AND

                            LAYNE CHRISTENSEN COMPANY

                                   AS BORROWER

                                  JULY 31, 2003

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                                 LOAN AGREEMENT

         In consideration of the mutual agreements herein and other sufficient
consideration, the receipt of which is hereby acknowledged, Layne Christensen
Company, a Delaware corporation (Borrower) and LaSalle Bank National Association
(LaSalle), as Administrative Agent, and LaSalle and the other lenders listed on
Exhibit 3 to this Agreement, as Lenders, agree as follows:

1. EFFECTIVE DATE. This Agreement is effective July 31, 2003.

2. DEFINITIONS AND RULES OF CONSTRUCTION.

         2.1. LISTED DEFINITIONS. Capitalized words defined in the Glossary
         attached hereto as Exhibit 2.1 shall have such defined meanings
         wherever used in this Agreement and the other Loan Documents. The
         inclusion of a defined term in the Glossary that is not used elsewhere
         in this Agreement or in the other Loan Documents shall not affect the
         interpretation or construction of this Agreement or the other Loan
         Documents.

         2.2. OTHER DEFINITIONS. If a capitalized word in this Agreement is not
         defined in the Glossary, it shall have such meaning as defined
         elsewhere herein, or if not defined elsewhere herein, the meaning
         defined in the UCC. Terms are italicized in this Agreement where they
         are defined.

         2.3. REFERENCES TO COVERED PERSON. The words Covered Person, a Covered
         Person, any Covered Person, each Covered Person and every Covered
         Person refer to Borrower, each Guarantor and each of their now existing
         or later acquired, created or organized Subsidiaries (including,
         without limitation, all direct and indirect Subsidiaries of Borrower
         and all Guarantors) separately. The words Covered Persons refers to
         Borrower, Guarantors, and their now existing or later acquired, created
         or organized Subsidiaries collectively.

         2.4. REFERENCES TO REQUIRED LENDERS. The words Required Lenders means
         any one or more Lenders whose shares of Lenders' Exposure at the
         relevant time aggregate at least 66.666666667%.

         2.5. ACCOUNTING TERMS. Unless the context otherwise requires,
         accounting terms herein that are not defined herein shall be determined
         under GAAP. All financial measurements contemplated hereunder
         respecting Borrower shall be made and calculated for Borrower and all
         of its now existing or later acquired, created or organized
         Subsidiaries, if any, on a consolidated and consolidating basis in
         accordance with GAAP unless expressly provided otherwise herein.

         2.6. MEANING OF SATISFACTORY. Whenever herein a document or matter is
         required to be satisfactory to Administrative Agent or satisfactory to
         Lenders or satisfactory to Required Lenders, unless expressly stated
         otherwise such document must be satisfactory to Administrative Agent,
         Lenders or Required Lenders (as applicable) in both form and substance,
         and unless expressly stated otherwise Administrative Agent, Lenders or
         Required Lenders (as applicable) shall have the commercially reasonable
         discretion to determine whether the document or matter is satisfactory.

         2.7. COMPUTATION OF TIME PERIODS. In computing or defining periods of
         time from a specified date to a later specified date, and in computing
         the accrual of interest or fees, the word from shall mean from and
         including and the words to and until shall each mean to but excluding.
         Periods of days referred to in this Agreement shall be counted in
         calendar days unless Business Days are

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         expressly prescribed, and references in this Agreement to months and
         years are to calendar months and calendar years unless otherwise
         specified.

         2.8. GENERAL. Unless the context of this Agreement clearly requires
         otherwise: (i) references to the plural include the singular and vice
         versa; (ii) references to any Person include such Person's successors
         and assigns but, if applicable, only if such successors and assigns are
         permitted by this Agreement; (iii) references to one gender include all
         genders; (iv) including is not limiting; (v) or has the inclusive
         meaning represented by the phrase and/or; (vi) the words hereof,
         herein, hereby, hereunder and similar terms in this Agreement refer to
         this Agreement as a whole, including its Exhibits, and not to any
         particular provision of this Agreement; (vii) the word Section or
         section and Page or page refer to a section or page, respectively, of,
         and the word Exhibit refers to an Exhibit to, this Agreement unless it
         expressly refers to something else; (viii) reference to any agreement,
         document, or instrument (including this Agreement and any other Loan
         Document or other agreement, document or instrument defined herein),
         means such agreement, document, or instrument as amended, modified,
         restated or replaced and in effect from time to time in accordance with
         the terms thereof and, if applicable, the terms hereof, and includes
         all attachments thereto and documents incorporated therein, if any; and
         (ix) general and specific references to any Law means such Law as
         amended, modified, codified or reenacted, in whole or in part, and in
         effect from time to time. Section captions and the Table of Contents
         are for convenience only and shall not affect the interpretation or
         construction of this Agreement or the other Loan Documents.

3. LENDERS' COMMITMENTS. Subject to the terms and conditions hereof, and in
reliance upon the Representations and Warranties, Lenders make the following
commitments to Borrower:

         3.1. REVOLVING LOAN COMMITMENTS.

                  3.1.1.   AGGREGATE AMOUNT; REDUCTIONS. Subject to the
                  limitations in Section 3.1.2 and elsewhere herein, each Lender
                  commits to make available to Borrower, from the Effective Date
                  to the Revolving Loan Maturity Date, such Lender's pro-rata
                  share (as listed on Exhibit 3 hereto) of an Aggregate
                  Revolving Loan Commitment of $30,000,000, by funding such
                  Lender's pro-rata share of Revolving Loan Advances made from
                  time to time by Administrative Agent as provided herein.
                  Subject to the limitations in Section 3.1.2 and elsewhere
                  herein, payments and prepayments that are applied to reduce
                  the Aggregate Revolving Loan may be re-borrowed through
                  Revolving Loan Advances. Borrower may reduce the amount of the
                  Aggregate Revolving Loan Commitment in whole multiples of
                  $500,000 at any time and from time to time, but only if (i)
                  Borrower gives Administrative Agent written notice of
                  Borrower's intention to make such reduction at least three (3)
                  Business Days prior to the effective date of the reduction,
                  and (ii) Borrower makes on the effective date of the reduction
                  any payment on the Aggregate Revolving Loan required hereunder
                  as a consequence of the reduction, including, principal,
                  interest and Eurodollar breakage fees (if any). Any such
                  reduction of the amount of the Aggregate Revolving Loan
                  Commitment, whether scheduled or voluntary, shall be
                  permanent. Each Lender's initial Revolving Loan Commitment is
                  its pro-rata share of the Aggregate Revolving Loan Commitment.
                  Upon any reduction of the Aggregate Revolving Loan Commitment,
                  each Lender's Revolving Loan Commitment will automatically
                  reduce by such Lender's pro-rata share of the reduction of the
                  Aggregate Revolving Loan Commitment.

                  3.1.2.   LIMITATION ON REVOLVING LOAN ADVANCES. No Revolving
                  Loan Advance will be made which would result in the Aggregate
                  Revolving Loan exceeding the Maximum

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                  Available Amount and no Revolving Loan Advance will be made on
                  or after the Revolving Loan Maturity Date. Lenders may,
                  however, in their absolute discretion make such Revolving Loan
                  Advances, but shall not be deemed by doing so to have
                  increased the Maximum Available Amount and shall not be
                  obligated to make any such Revolving Loan Advances thereafter.
                  At any time that there is an Existing Default, the Aggregate
                  Revolving Loan Commitment may be canceled as provided in
                  Section 15.3. The Maximum Available Amount on any date shall
                  be a Dollar amount equal to (i) the Aggregate Revolving Loan
                  Commitment, minus (ii) the sum of (a) the Letter of Credit
                  Exposure on such date (except to the extent that a Revolving
                  Loan Advance will be used immediately to reimburse Letter of
                  Credit Issuer (including, without limitation with respect to
                  the Existing LCs) for unreimbursed draws on a Letter of
                  Credit), and (b) the Swingline Loan.

                  3.1.3.   REVOLVING NOTES. The obligation of Borrower to repay
                  each Lender's Revolving Loan shall be evidenced by a
                  promissory note payable to the order of such Lender in a
                  maximum principal amount equal to the amount of its Revolving
                  Loan Commitment and otherwise in substantially the form of
                  Exhibit 3.1.3 attached hereto.

         3.2. SWINGLINE COMMITMENT.

                  3.2.1.   SWINGLINE ADVANCES. In order to reduce the frequency
                  of fundings of Revolving Loan Advances by Lenders, but subject
                  to the limitations in Section 3.2.2 and elsewhere herein,
                  Administrative Agent may in its absolute discretion make
                  Swingline Advances to Borrower from time to time from the
                  Effective Date to the Revolving Loan Maturity Date. Subject to
                  the limitations in Section 3.2.2 and elsewhere herein,
                  payments and prepayments that are applied to reduce the
                  Swingline Loan may be re-borrowed through Swingline Advances.
                  Administrative Agent may terminate the foregoing Swingline
                  Commitment at any time in its absolute discretion.

                  3.2.2.   LIMITATIONS ON SWINGLINE ADVANCES. Administrative
                  Agent shall not be obligated to make any particular Swingline
                  Advance, the making of any particular Swingline Advance at any
                  particular time being absolutely discretionary. At anytime
                  Administrative Agent may choose to suspend Swingline Advances
                  and treat all subsequent requests for an Advance as Revolving
                  Loan Advances. In any event, no Swingline Advance will be made
                  on or after the Revolving Loan Maturity Date, and no Swingline
                  Advance will be made which would result in the Swingline Loan
                  exceeding the Maximum Swingline Amount. No Swingline Advance
                  will be made which would result in the Swingline Loan plus the
                  Lender acting as Administrative Agent's Revolving Loans and
                  such Lender's pro-rata share of the Letter of Credit Exposure
                  to exceed such Lender's Revolving Loan Commitment.
                  Administrative Agent may, however, in its absolute discretion
                  make such Swingline Advances, but shall not be deemed by doing
                  so to have increased the Maximum Swingline Amount and shall
                  not be obligated to make any such Swingline Advance
                  thereafter. The Maximum Swingline Amount on any date shall be
                  a Dollar amount equal to the lesser of (i) $5,000,000 or (ii)
                  an amount equal to (a) the Aggregate Revolving Loan
                  Commitment, minus (b) the sum of (i) the Letter of Credit
                  Exposure and (ii) the Aggregate Revolving Loan immediately
                  prior to the making of such Swingline Advance.

                  3.2.3.   SWINGLINE NOTE. The obligation of Borrower to repay
                  the Swingline Loan shall be evidenced by a promissory note
                  payable to the order of Administrative Agent in a maximum
                  principal amount of $5,000,000 and otherwise in substantially
                  the form of

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                  Exhibit 3.2.3 attached hereto. Until such time as there is
                  more than one Lender a party hereto, Borrower shall not
                  execute a Swingline Note.

                  3.2.4.   SPECIAL PROVISION REGARDING SWINGLINE. Until such
                  time as there is more than one Lender a party hereto, no
                  Advances shall be considered a Swingline Advance, and the
                  Swingline Commitment shall not be effective until such time as
                  there is more than one Lender a party hereto.

         3.3. LETTER OF CREDIT COMMITMENT. Letter of Credit Issuer commits to
         issue standby letters of credit and commercial (documentary) letters of
         credit for the account of Borrower from time to time from the Effective
         Date to the Revolving Loan Maturity Date, but only if the Letter of
         Credit Exposure will not as a result of such issuance exceed the lesser
         of (i) $15,000,000 and (ii) an amount equal to the difference between
         (a) the Aggregate Revolving Loan Commitment, and (b) the Aggregate
         Revolving Loan plus the Swingline Loan. The expiration date of any
         Letter of Credit will be a Business Day that will be no more than one
         (1) year from the date of issuance but in no event shall such date be
         later than the date which is twenty-five days prior to the Revolving
         Loan Maturity Date; provided, however, that the expiration date for a
         Letter of Credit may be later than the date that is twenty-five (25)
         days prior to the Revolving Loan Maturity Date if Letter of Credit
         Issuer consents to such issuance and Borrower provides to Letter of
         Credit Issuer cash collateral satisfactory to Letter of Credit Issuer
         as security for Borrower's obligation to reimburse Letter of Credit
         Issuer for all draws thereunder. Immediately upon the issuance by
         Letter of Credit Issuer of a Letter of Credit in accordance with the
         terms and conditions of this Agreement, Letter of Credit Issuer shall
         be deemed to have sold and transferred to each other Lender, and such
         other Lender shall be deemed to have purchased and received from Letter
         of Credit Issuer, a pro-rata undivided interest and participation in
         such Letter of Credit, the reimbursement obligation of Borrower with
         respect thereto, and any guaranty thereof or collateral therefor. Such
         other Lender's pro-rata undivided interest shall be the same as its
         pro-rata share of the Aggregate Revolving Loan Commitment. In the event
         of a direct and irreconcilable conflict between the terms of this
         Agreement and the terms of the documents executed by Borrower in
         connection with the issuance of any Letter of Credit (including any
         Existing LC) including, without limitation, any letter of credit
         application, master letter of credit agreement or reimbursement
         agreement, the terms of this Agreement will control.

         3.4. EXISTING LETTERS OF CREDIT. Borrower, Lenders and Administrative
         Agent acknowledge that under the Existing Indebtedness Documents
         LaSalle is the letter of credit issuer and pursuant thereto LaSalle has
         issued certain letters of credit which remain outstanding as of the
         Effective Date as set forth on Exhibit 3.4 (collectively, the "Existing
         LCs"). With respect to the Existing LCs, LaSalle shall be entitled to
         all of the benefits and rights that the Letter of Credit Issuer is
         entitled to hereunder, and the Existing LCs shall be deemed to be
         "Letters of Credit" hereunder and subject to all of the terms
         hereunder, including, without limitation, interest on drawings and all
         fees owing or payable in connection therewith as set forth in this
         Agreement (including, without limitation, the Letter of Credit Fee).
         LaSalle shall on the date of the initial Revolving Loan Advance
         distribute, without setoff, to each other Lender its pro-rata share of
         the Letter of Credit Fee (based on the Eurodollar Margin in effect on
         the Effective Date) for each Existing LC for the remainder of the
         current calendar quarter and thereafter quarterly in advance in
         accordance with this Agreement. On the date of the initial Revolving
         Loan Advance, LaSalle shall be deemed to have sold and transferred to
         each other Lender, and each such other Lender shall be deemed to have
         purchased and received from LaSalle, a pro-rata undivided interest and
         participation in each Existing LC, the reimbursement obligation of
         Borrower with respect thereto, and any guaranty thereof or collateral
         therefor. Such other Lender's pro-rata undivided interest shall be the
         same as its pro-rata share of the Aggregate Revolving Loan Commitment.
         Borrower

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         agrees to pay to LaSalle the Letter of Credit Fee and other fees
         applicable to Letters of Credit on each Existing LC in the amounts set
         forth in this Agreement, provided, however, in no event shall a
         Fronting Fee be payable by Borrower with respect to the Existing LCs.

4. INTEREST.

         4.1. INTEREST ON DRAWS ON LETTERS OF CREDIT. The unreimbursed amount of
         each draw on a Letter of Credit shall bear interest at a rate per annum
         equal to the Adjusted Base Rate applicable to Revolving Loans.

         4.2. INTEREST ON THE SWINGLINE LOAN. The entire Swingline Loan shall be
         a Base Rate Loan and shall bear interest at the Adjusted Base Rate.

         4.3. INTEREST ON AGGREGATE LOANS. Borrower may, as provided in Section
         7, designate the whole of an Advance or any part of an Advance (other
         than, in either case, a Swingline Advance) to be either a Base Rate
         Advance or a Eurodollar Advance; provided, however, during the
         existence of an Existing Default, Borrower may not designate an Advance
         or part of an Advance as a Eurodollar Advance. Each Base Rate Advance
         when made will become a Base Rate Loan, which shall bear interest at
         the Adjusted Base Rate. Each Eurodollar Advance when made will become a
         Eurodollar Loan, which shall bear interest at the Adjusted Eurodollar
         Rate. Borrower may also, as provided herein, convert some or all of a
         Base Rate Loan into a Eurodollar Loan and some or all of a Eurodollar
         Loan into a Base Rate Loan. For each Eurodollar Loan, Borrower shall
         select an Interest Period as provided in Section 4.7. A Eurodollar Loan
         shall bear interest at the Adjusted Eurodollar Rate throughout the
         applicable Interest Period designated by Borrower.

         4.4. ADJUSTED BASE RATE. The Adjusted Base Rate for any Base Rate Loan
         which is a Revolving Loan or a Swingline Loan shall be the Base Rate
         plus the applicable Base Rate Margin determined from the table in
         Section 4.6.

         4.5. ADJUSTED EURODOLLAR RATE. The Adjusted Eurodollar Rate for any
         Eurodollar Loan which is a Revolving Loan shall be the Eurodollar Rate
         plus the applicable Eurodollar Margin determined from the table in
         Section 4.6.

         4.6. BASE RATE MARGINS AND EURODOLLAR MARGINS.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
  IF THE RATIO OF
 BORROWER'S TOTAL
      FUNDED
 INDEBTEDNESS TO
 EBITDA (FOR THE
FOUR FISCAL QUARTER
     PERIOD OF
  BORROWER MOST            EURODOLLAR       BASE RATE                           REFERENCE
RECENTLY ENDED) IS           MARGIN          MARGIN       UNUSED FEE RATE         LEVEL
-----------------------------------------------------------------------------------------
<S>                        <C>              <C>           <C>                   <C>
  greater than or
 equal to 2.75 to
       1.00                   2.75%            .50%             0.500%              I
-----------------------------------------------------------------------------------------
 greater than or
 equal to 2.50 to
1.00 but less than
   2.75 to 1.00               2.50%           0.25%             0.500%             II
-----------------------------------------------------------------------------------------
</TABLE>

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<TABLE>
-----------------------------------------------------------------------------------------
<S>                        <C>              <C>           <C>                   <C>
  greater than or
 equal to 2.00 to
1.00 but less than
   2.50 to 1.00               2.25%           0.00%            0.375%             III
-----------------------------------------------------------------------------------------
  greater than or
 equal to 1.50 to
1.00 but less than
    2.00 to 1.00              2.00%           0.00%            0.250%              IV
-----------------------------------------------------------------------------------------
 less than 1.50 to
       1.00                   1.75%           0.00%            0.250%              V
-----------------------------------------------------------------------------------------
</TABLE>

         The Increments applicable on the Effective Date shall be those of Level
         IV through the computation date (as set forth in the next sentence) for
         the January 31, 2004 Financial Statements and Compliance Certificate.
         Thereafter, the applicable Increments shall be re-determined by
         Administrative Agent based on the ratio of Borrower's Total Funded
         Indebtedness to EBITDA for the four fiscal quarter period of Borrower
         most recently ended, promptly after each delivery by Borrower to
         Administrative Agent of Borrower's Financial Statements (and
         accompanying Compliance Certificate) as required in Section 12.11 and
         will become applicable on the third Business Day following the day when
         Borrower delivers such Financial Statements (and accompanying
         Compliance Certificate) to Administrative Agent.

         4.7. INTEREST PERIODS FOR EURODOLLAR LOANS. For each Eurodollar Loan
         Borrower shall select an Interest Period that is either 14, 30, 60, or
         90 days; provided that:

                  (i) every such Interest Period for a Eurodollar Advance shall
                  commence on the date of the Advance or on the date of the
                  conversion or continuation of any Loan as a Eurodollar Loan;

                  (ii) if any Interest Period would otherwise expire on a day of
                  a calendar month which is not a Business Day, then such
                  Interest Period shall expire on the next succeeding Business
                  Day in that calendar month; provided, however, that if the
                  next succeeding Business Day would be in the following
                  calendar month, it shall expire on the first preceding
                  Business Day;

                  (iii) 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

                  (iv) no Interest Period for a Eurodollar Loan that is part of
                  the Aggregate Revolving Loan shall extend beyond the Revolving
                  Loan Maturity Date.

         4.8. TIME OF ACCRUAL. Interest shall accrue on all principal amounts
         outstanding from the date when first outstanding to the date when no
         longer outstanding. Amounts shall be deemed outstanding until payments
         are applied thereto as provided herein.

         4.9. COMPUTATION. Interest shall be computed for the actual days
         elapsed over a year deemed to consist of 360 days. Interest rates that
         are based on the Base Rate shall change simultaneously with any change
         in the Base Rate and shall be effective for the entire day on which
         such change becomes effective. The Base Rate will be determined by
         Administrative Agent before the initial

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         Advances on the Effective Date and on each Business Day thereafter when
         the Base Rate changes.

         4.10. RATE AFTER MATURITY. Borrower shall pay interest on the Aggregate
         Loans, the Swingline Loan and any Obligations with respect to Letters
         of Credit after their Maturity, and, at the option of Administrative
         Agent or at the direction of the Required Lenders, on the Aggregate
         Loans, the Swingline Loan and on the other Loan Obligations after the
         occurrence of an Event of Default, at a rate per annum of two percent
         (2%) plus the then-applicable rates. Past due fees and other amounts
         past due and owing hereunder shall bear interest at two percent (2%)
         above the then-current Adjusted Base Rate.

5. FEES.

         5.1. REVOLVING LOAN UNUSED FEE. Borrower shall pay to Administrative
         Agent for the account of Lenders a non-refundable, recurring Revolving
         Loan Unused Fee calculated by applying the daily equivalent of an
         annual Unused Fee Rate determined pursuant to the table set forth in
         Section 4.6 to the Unused Revolving Loan Commitment on each day during
         the period from the Effective Date to the Revolving Loan Maturity Date.
         The Unused Revolving Loan Commitment on any day shall be the difference
         between (i) the amount of the Aggregate Revolving Loan Commitment and
         (ii) the sum of (a) the Aggregate Revolving Loan, and (b) the face
         amount of all outstanding Letters of Credit and (c) without duplication
         of clause (b), the total of all amounts drawn on the outstanding
         Letters of Credit but not reimbursed to the Letter of Credit Issuer by
         Borrower as of the close of business on such day. The Revolving Loan
         Unused Fee shall be payable quarterly in arrears commencing on the last
         day of the first calendar quarter ending after the Effective Date and
         continuing on the last day of each calendar quarter thereafter and on
         the Revolving Loan Maturity Date. The Unused Fee Rate shall be
         determined from the chart in Section 4.6 of this Agreement under the
         heading "Unused Fee Rate." The Unused Fee Rate applicable on the
         Effective Date shall be Level IV through the computation date (as set
         forth in the next sentence) for the January 31, 2004 Financial
         Statements and Compliance Certificate. Thereafter, the Borrower's ratio
         of Total Funded Indebtedness to EBITDA for the four fiscal quarter
         period of Borrower most recently ended will be calculated and applied
         to determine the applicable Unused Fee Rate in the same manner used for
         determination of the applicable Base Rate Margin, and Eurodollar Margin
         as described in Section 4.6.

         5.2. LETTER OF CREDIT FEE. Borrower shall pay to Administrative Agent
         (or LaSalle in the case of the Existing LCs) for the account of Letter
         of Credit Issuer (or LaSalle in the case of the Existing LCs) and each
         other Lender with a Revolving Loan Commitment, a non-refundable
         recurring Letter of Credit Fee for each Letter of Credit issued by
         Letter of Credit Issuer (or LaSalle in the case of the Existing LCs).
         The Letter of Credit Fee for any Letter of Credit shall be an amount
         equal to the aggregate undrawn amount of such Letter of Credit
         multiplied by the Eurodollar Margin in effect on the date such Letter
         of Credit is issued. The Letter of Credit Fee for each Letter of Credit
         shall be payable in advance for the remaining portion of the quarter
         when issued and quarterly thereafter on the last day of each full
         calendar quarter thereafter while such Letter of Credit is outstanding
         and upon maturity or termination thereof pro-rata for the remaining
         portion of the quarter in which such maturity or termination occurs.
         All Letter of Credit Fees are to be paid to the Lenders pro-rata in
         accordance with their respective pro-rata shares as set forth on
         Exhibit 3.

         5.3. LETTER OF CREDIT FRONTING FEE. Borrower shall pay to Letter of
         Credit Issuer (for its own account) a non-refundable, one-time Fronting
         Fee equal to .125% of the face amount of each Letter of Credit issued
         by Letter of Credit Issuer. The Fronting Fee due for any Letter of
         Credit

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         shall be payable in advance, commencing on the issuance date of such
         Letter of Credit. The fronting fee shall be due and payable only if
         there are two or more Lenders.

         5.4. OTHER LETTER OF CREDIT FEES. Borrower shall pay to Letter of
         Credit Issuer (or LaSalle in the case of the Existing LCs) such Letter
         of Credit Issuer's (or LaSalle's, in the case of the Existing LCs)
         other customary fees for issuance, amendment, or renewal of a Letter of
         Credit and, as Letter of Credit Issuer and Borrower may agree with
         respect to each Letter of Credit, and for each negotiation of a draft
         drawn under such Letter of Credit.

         5.5. CALCULATION OF FEES. All of the foregoing fees and all other fees
         payable to Administrative Agent or any Lender that are based on an
         annual percentage shall be calculated on the basis of a year deemed to
         consist of 360 days and for the actual number of days elapsed.

6. PAYMENTS.

         6.1. SCHEDULED PAYMENTS ON AGGREGATE REVOLVING LOAN AND SWINGLINE LOAN.

                  6.1.1.   INTEREST. Borrower shall pay interest accrued on each
                  Base Rate Loan included in the Aggregate Revolving Loan and on
                  the Swingline Loan monthly in arrears beginning on the last
                  day of the first month ending after the Effective Date and
                  continuing on the last day of each calendar month thereafter,
                  and on the Revolving Loan Maturity Date. Borrower shall pay
                  interest accrued on each Eurodollar Loan included in the
                  Aggregate Revolving Loan at the end of its Interest Period
                  and, in addition, for each such Eurodollar Loan with an
                  Interest Period longer than 90 days (if permitted hereunder),
                  Borrower shall pay interest accrued thereon quarterly on the
                  same date of each quarter as the date such Eurodollar Loan was
                  made. Borrower shall pay interest accrued thereon on each day
                  that would have been the end of an Interest Period with
                  respect to such Eurodollar Loan had successive Interest
                  Periods of 90 days' duration been applicable to such
                  Eurodollar Loan. Borrower shall pay interest accrued on each
                  Revolving Loan and the Swingline Loan after the Revolving Loan
                  Maturity Date on demand.

                  6.1.2.   PRINCIPAL. Subject to Section 6.1.3, Borrower shall
                  repay the entire amount of the Aggregate Revolving Loan as
                  then outstanding on July 31 2006 (the Revolving Loan Maturity
                  Date), and Borrower shall repay the entire amount of the
                  Swingline Loan on demand, or if no demand is made, on the
                  Revolving Loan Maturity Date.

         6.2. APPLICATION.

                  6.2.1.   Payments shall be paid or applied by the
                  Administrative Agent (in each case up to the outstanding
                  principal amount of the applicable Loan) (i) first, to reduce
                  the Swingline Loan to zero, and then (ii) second, as set forth
                  in Section 16.10.

         6.3. PREPAYMENTS.

                  6.3.1.   VOLUNTARY PREPAYMENT. Subject to the limitations in
                  the following sentences, Borrower may wholly prepay any Base
                  Rate Loan, or Eurodollar Loan that is included in the
                  Aggregate Revolving Loan at any time and may make a partial
                  prepayment thereon from time to time, without penalty or
                  premium, but only if (i) Borrower gives Administrative Agent
                  written notice (which may be mailed, personally delivered or
                  telecopied as provided in Section 19.1) or telephonic notice
                  (promptly confirmed in

                                       8
<PAGE>

                  writing in the manner provided in Section 19.1) of Borrower's
                  intention to make such prepayment by 12:00 p.m. Local Time on
                  the day of such prepayment, (ii) the total amount of such
                  prepayment is a whole multiple of $100,000, and (iii) Borrower
                  pays any amount that is due under Section 17.1 as a
                  consequence of the prepayment. Unless there is an Existing
                  Default, all payments on the Revolving Loan shall be made
                  first to the outstanding balance of the Swingline Loan, if
                  any, and then to the remaining amount of the Aggregate
                  Revolving Loan.

                  6.3.2.   MANDATORY PREPAYMENTS WHEN OVER-ADVANCES EXIST. If at
                  any time the Aggregate Revolving Loan exceeds the Maximum
                  Available Amount, whether as a result of optional Revolving
                  Loan Advances by Lenders as contemplated by Section 3.1.2 or
                  otherwise, Borrower shall on demand make a payment in the
                  amount of the excess to Administrative Agent for the account
                  of Administrative Agent on the Swingline Loan and Lenders on
                  the Aggregate Revolving Loan. Each such prepayment will be
                  applied by Administrative Agent and Lenders first to reduce
                  the Swingline Loan (and consequently each Lender's risk
                  participation in such Swingline Loan) until it is reduced to
                  zero, then to reduce the Base Rate Loans that are included in
                  the Aggregate Revolving Loan (and consequently a ratable
                  portion of each Lender's Revolving Loan) until they are
                  reduced to zero and then to reduce the Eurodollar Loans that
                  are included in the Aggregate Revolving Loan (and consequently
                  a ratable portion of each Lender's Revolving Loan). In the
                  case of such a prepayment, Borrower will pay any accrued
                  interest on the amount prepaid at the time of such prepayment,
                  and Borrower will pay any amount that is due under Section
                  17.4 as a consequence of the prepayment.

         6.4. REIMBURSEMENT OBLIGATIONS OF BORROWER. Borrower hereby
         unconditionally agrees to immediately pay to Letter of Credit Issuer on
         demand at the Letter of Credit Issuer's Applicable Lending Office all
         amounts required to pay all drafts drawn under Letters of Credit issued
         for the account of such Borrower, all fees associated with the Letters
         of Credit, and all reasonable expenses incurred by Letter of Credit
         Issuer in connection with such Letters of Credit and in any event and
         without demand to remit to Letter of Credit Issuer (which may be
         through obtaining Advances if permitted under Section 3.1.2) sufficient
         funds to pay all debts and liabilities arising under any Letter of
         Credit issued for the account of such Borrower. Borrower hereby
         unconditionally agrees to immediately pay to LaSalle on demand at
         LaSalle's Applicable Lending Office all amounts required to pay all
         drafts drawn under the Existing LCs, all fees associated with the
         Existing LCs, and all reasonable expenses incurred by LaSalle in
         connection with such Existing LCs and in any event and without demand
         to remit to LaSalle (which may be through obtaining Advances)
         sufficient funds to pay all debts and liabilities arising under any
         Existing LC.

         6.5. MANNER OF PAYMENTS AND TIMING OF APPLICATION OF PAYMENTS.

                  6.5.1.   PAYMENT REQUIREMENT. Unless expressly provided to the
                  contrary elsewhere herein, Borrower shall make each payment on
                  the Loan Obligations to Administrative Agent for the account
                  of Lenders as required under the Loan Documents at the
                  Applicable Lending Office of the Administrative Agent on the
                  date when due, without deduction, setoff or counterclaim. All
                  such payments will be distributed by Administrative Agent to
                  Lenders as provided in Section 16.10 for application to the
                  Loan Obligations as provided herein.

                  6.5.2.   APPLICATION OF PAYMENTS AND PROCEEDS. All payments
                  received by Administrative Agent in immediately available
                  funds at or before 12:00 noon (Local

                                       9
<PAGE>

                  Time) on a Business Day will be distributed by Administrative
                  Agent to Lenders as provided in Section 16.10 on the same
                  Business Day. Such payments received on a day that is not a
                  Business Day or after 12:00 noon (Local Time) on a Business
                  Day will be distributed by Administrative Agent to Lenders as
                  provided in Section 16.10 on the next Business Day. The amount
                  so distributed to a Lender will be applied by such Lender to
                  the relevant Loan Obligation on the Business Day when
                  received.

                  6.5.3.   INTEREST CALCULATION. Section 6.5.2 notwithstanding,
                  for purposes of interest calculation only, (i) a payment in
                  cash or by wire transfer or direct debit to an account of
                  Borrower received at or before 12:00 noon (Local Time) on a
                  Business Day shall be deemed to have been applied to the
                  relevant Loan Obligation on the Business Day when it is
                  received, and (ii) a payment in cash or by wire transfer or
                  direct debit to an account of Borrower received on a day that
                  is not a Business Day or after 12:00 noon (Local Time) on a
                  Business Day shall be deemed to have been applied to the
                  relevant Loan Obligation on the next Business Day. A payment
                  made by check, draft or other instrument will be applied for
                  interest purposes in Administrative Agent's commercially
                  reasonable discretion in a manner consistent with its
                  customary collection policies.

         6.6. RETURNED INSTRUMENTS. If a payment is made by check, draft or
         other instrument and the check, draft or other instrument is returned
         unpaid, any application of the payment to the Loan Obligations will be
         reversed and will be treated as never having been made.

         6.7. COMPELLED RETURN OF PAYMENTS OR PROCEEDS. If Administrative Agent
         or any Lender is for any reason compelled to surrender any payment
         because such payment is for any reason invalidated, declared
         fraudulent, set aside, or determined to be void or voidable as a
         preference, an impermissible setoff, or a diversion of trust funds,
         then this Agreement and the Loan Obligations to which such payment or
         proceeds was applied or intended to be applied shall be revived as if
         such application was never made; and Borrower shall be liable to pay to
         Administrative Agent or such Lender, and shall indemnify Administrative
         Agent or such Lender for and hold Administrative Agent or such Lender
         harmless from any loss with respect to, the amount of such payment or
         proceeds surrendered. This Section shall be effective notwithstanding
         any contrary action that Administrative Agent or such Lender may take
         in reliance upon its receipt of any such payment or proceeds. Any such
         contrary action so taken by Administrative Agent or such Lender shall
         be without prejudice to Administrative Agent's or such Lender's rights
         under this Agreement and shall be deemed to have been conditioned upon
         the application of such payment or proceeds having become final and
         indefeasible. The provisions of this Section shall survive termination
         of the Commitments, the expiration of the Letters of Credit and the
         indefeasible full payment and satisfaction of all of the Loan
         Obligations.

         6.8. DUE DATES NOT ON BUSINESS DAYS. Subject to Section 4.7(ii), if any
         payment required hereunder becomes due on a date that is not a Business
         Day, then such due date shall be deemed automatically extended to the
         next Business Day (including any interest accruing during any such
         extension period).

7. PROCEDURE FOR OBTAINING ADVANCES AND LETTERS OF CREDIT.

         7.1. INITIAL ADVANCES. Provided that all conditions thereto hereunder
         are satisfied and subject to the limitations contained herein, Lenders
         will fund and Administrative Agent will make the initial Revolving Loan
         Advance on the Effective Date as directed by Borrower in a written
         direction delivered to Administrative Agent. The manner of disbursement
         shall be subject to Administrative Agent's approval.

                                       10
<PAGE>

         7.2. SUBSEQUENT REVOLVING LOAN ADVANCES.

                  7.2.1.   BORROWER REQUESTS. Borrower may request subsequent
                  Revolving Loan Advances at any time, but not more often than
                  once each Business Day, by submitting a request therefor to
                  Administrative Agent as provided in Section 7.10.
                  Administrative Agent may treat every request for a Revolving
                  Loan Advance that is a Base Rate Advance as a request for a
                  Swingline Advance to the extent the requested amount does not
                  exceed the Maximum Swingline Amount and as a request for a
                  Revolving Loan Advance in the amount of the excess.
                  Administrative Agent may treat every request for an Advance as
                  a request for a Base Rate Advance if Borrower does not specify
                  that such Advance is to be a Eurodollar Advance in Borrower's
                  request for an Advance. Every request for a Revolving Loan
                  Advance shall be irrevocable. A request for a Revolving Loan
                  Advance received by Administrative Agent on a day that is not
                  a Business Day or that is received by Administrative Agent
                  after 12:00 noon (Local Time) (or 2:00 p.m. (Local Time) in
                  the case of a request for a Revolving Loan Advance which will,
                  subject to the terms of this Agreement, be treated by
                  Administrative Agent as a request for a Swingline Advance) on
                  a Business Day shall be treated as having been received by
                  Administrative Agent prior to 12:00 noon (Local Time) (or 2:00
                  p.m. (Local Time) in the case of a request for a Revolving
                  Loan Advance which will, subject to the terms of this
                  Agreement, be treated by Administrative Agent as a request for
                  a Swingline Advance) on the next Business Day.

                  7.2.2.   REVOLVING LOAN ADVANCES TO REPAY THE SWINGLINE LOAN.

                           7.2.2.1. Administrative Agent may in its sole and
                           absolute discretion on any Business Day give notice
                           to Lenders of the amount of the Swingline Loan after
                           application of all payments to be applied thereto as
                           provided elsewhere herein. Such notice shall be given
                           no later than 1:00 p.m. (Local Time) and may include
                           a demand that the Swingline Loan be fully paid. If
                           Administrative Agent demands that the Swingline Loan
                           be fully paid, then prior to 3:00 p.m. (Local Time)
                           on such date, Lenders shall remit funds to
                           Administrative Agent sufficient to reduce the
                           Swingline Loan to zero. The aggregate of such
                           remittances shall be treated as a Revolving Loan
                           Advance and the Aggregate Revolving Loan increased
                           accordingly. Each such remittance by a Lender shall
                           be made in accordance with its pro-rata share of the
                           Aggregate Revolving Loan Commitment and shall be made
                           notwithstanding that (i) the amount of the aggregate
                           of such remittances by Lenders may not be in the
                           minimum amount for Revolving Loan Advances otherwise
                           required hereunder, (ii) any conditions to Advances
                           in Section 8 may not be then satisfied, (iii) there
                           is an Existing Default, (iv) the aggregate amount of
                           such remittances by Lenders would result in the
                           Aggregate Revolving Loan exceeding the Maximum
                           Available Amount, or (v) such remittances by Lenders
                           may be made after the Revolving Loan Maturity Date;
                           provided, however, that in no event shall any Lender
                           be required to make any such remittance that would
                           result in the sum of (a) the Revolving Loan of such
                           Lender, plus (b) such Lender's pro-rata share of the
                           Letter of Credit Exposure exceeding such Lender's
                           Revolving Loan Commitment.

                           7.2.2.2. If for any reason, including the
                           commencement of a proceeding in bankruptcy with
                           respect to Borrower, remittances by Lenders as
                           provided above cannot be made on the date otherwise
                           required above, then each Lender shall be

                                       11
<PAGE>

                           deemed automatically to have purchased from
                           Administrative Agent as of such date a pro-rata
                           undivided interest and participation in the Swingline
                           Loan so as to cause such Lender to share in the
                           Swingline Loan in accordance with its pro-rata share
                           of the Aggregate Revolving Loan Commitment. Each
                           Lender shall remit its pro-rata share of the
                           Swingline Loan to Administrative Agent promptly on
                           demand. All interest payable with respect to such
                           Lender's pro-rata share of the Swingline Loan shall
                           be for the account of Administrative Agent to the
                           date such remittance is made, and shall be for the
                           account of and remitted by Administrative Agent to
                           such Lender as a participant from and after such
                           date. Further, until such remittance is made, such
                           Lender shall pay to Administrative Agent, on demand,
                           interest on such Lender's pro-rata share of the
                           Swingline Loan at the Federal Funds Rate.

                  7.2.3.   ADMINISTRATIVE AGENT'S RIGHT TO MAKE OTHER REVOLVING
                  LOAN ADVANCES.

                           7.2.3.1. PAYMENT OF LOAN OBLIGATIONS. Administrative
                           Agent shall have the right to make Revolving Loan
                           Advances at any time and from time to time to cause
                           timely payment of any of the Loan Obligations, and
                           Administrative Agent shall have the right to make
                           withdrawals from or debits against any accounts of
                           any Covered Person at Administrative Agent at any
                           time and from time to time to cause timely payment of
                           any of the Loan Obligations; provided, however,
                           except during an Existing Default, Administrative
                           Agent shall use its reasonable efforts to provide no
                           less than one (1) Business Day prior notice of any
                           such Advances, withdrawals or debits. Administrative
                           Agent may select the Advance Date for any such
                           Revolving Loan Advance, but such Advance Date may
                           only be a Business Day. Administrative Agent will
                           give notice to Borrower after any such Revolving Loan
                           Advance is made. Any such Revolving Loan Advance will
                           be a Base Rate Advance.

         7.3. LETTERS OF CREDIT. Borrower may request the issuance of a Letter
         of Credit by submitting an issuance request to Letter of Credit Issuer
         and executing the reimbursement agreement required under Section 9.1 no
         less than five (5) Business Days prior to the requested issue date for
         such Letter of Credit.

         7.4. FUNDINGS.

                  7.4.1.   REVOLVING ADVANCES. Not later than 1:00 p.m. (Local
                  Time) on each Advance Date for an Advance other than a
                  Swingline Advance, Administrative Agent shall promptly notify
                  each Lender of the amount of the Advance to be made on that
                  Advance Date. Each Lender shall make immediately available to
                  Administrative Agent by 3:00 p.m. (Local Time) on the Advance
                  Date funds consisting solely of Dollars in the amount of its
                  pro-rata share of such Advance, rounded to the nearest penny,
                  in accordance with such remittance instructions as may be
                  given by Administrative Agent to Lenders from time to time.

                  7.4.2.   DRAWS ON LETTERS OF CREDIT. In the event that a draw
                  is made on a Letter of Credit and Borrower does not reimburse
                  the amount of such draw in full to Letter of Credit Issuer
                  immediately on demand, Letter of Credit Issuer shall promptly
                  notify Administrative Agent of such failure. Upon
                  Administrative Agent's receipt of such notice from Letter of
                  Credit Issuer, Administrative Agent may notify each Lender
                  thereof and shall have the right to cause a Revolving Loan
                  Advance to be made, regardless whether

                                       12
<PAGE>

                  such Revolving Loan Advance would result in the Aggregate
                  Revolving Loan exceeding the Maximum Available Amount, by
                  notifying each Lender of the draw, the amount of the Revolving
                  Loan Advance required to fund reimbursement of such draw, and
                  the amount of such Lender's ratable share of such Revolving
                  Loan Advance. The Advance Date and time for such Revolving
                  Loan Advance shall not be later than 3:00 p.m. (Local Time) on
                  the first Business Day following Administrative Agent's
                  delivery of such notice to Lenders. By no later than such
                  Advance Date and time, each Lender shall make immediately
                  available to Administrative Agent funds consisting solely of
                  Dollars in the amount of its pro-rata share of such Revolving
                  Loan Advance, rounded to the nearest penny, in accordance with
                  such remittance instructions as may be given by Administrative
                  Agent to each Lender from time to time. Each Revolving Loan
                  Advance made by Administrative Agent pursuant to this Section
                  7.4.2 shall be deemed to be a Base Rate Advance.

                  In the event that a draw is made on an Existing LC and
                  Borrower does not reimburse the amount of such draw in full to
                  LaSalle immediately on demand, LaSalle shall promptly notify
                  each other Lender and Administrative Agent of such failure.
                  Upon each other Lender's and Administrative Agent's receipt of
                  such notice from LaSalle, Administrative Agent shall have the
                  right to cause a Revolving Loan Advance to be made, regardless
                  whether such Revolving Loan Advance would result in the
                  Aggregate Revolving Loan exceeding the Maximum Available
                  Amount, by notifying each Lender of the amount of the
                  Revolving Loan Advance required to fund reimbursement of such
                  draw, and the amount of such Lender's ratable share of such
                  Revolving Loan Advance. The Advance Date and time for such
                  Revolving Loan Advance shall not be later than 3:00 p.m.
                  (Local Time) on the first Business Day following
                  Administrative Agent's delivery of such notice to Lenders. By
                  no later than such Advance Date and time, each Lender
                  (including LaSalle) shall make immediately available to
                  Administrative Agent funds consisting solely of Dollars in the
                  amount of its pro-rata share of such Revolving Loan Advance,
                  rounded to the nearest penny, in accordance with such
                  remittance instructions as may be given by Administrative
                  Agent to each Lender from time to time. Each Revolving Loan
                  Advance made by Administrative Agent pursuant to this Section
                  7.4.2 shall be deemed to be a Base Rate Advance.

                  7.4.3.   ALL FUNDINGS RATABLE. All fundings of Advances (other
                  than Swingline Advances) shall be made by Lenders as provided
                  herein in accordance with their pro-rata shares of the
                  respective Aggregate Commitments, as applicable. Except as
                  otherwise expressly provided herein, a Lender shall not be
                  obligated to fund Revolving Loan Advances that would result in
                  the sum of (a) such Lender's Revolving Loan, plus (b) such
                  Lender's pro-rata share of the Letter of Credit Exposure
                  exceeding its Revolving Loan Commitment, or make available any
                  more than its pro-rata share of any Advance.

         7.5. ADMINISTRATIVE AGENT'S AVAILABILITY ASSUMPTION. 7.5.1. Unless
         Administrative Agent has been given written notice by a Lender prior to
         an Advance Date that such Lender does not intend to make immediately
         available to Administrative Agent such Lender's pro-rata share of the
         Advance which Administrative Agent will be obligated to make on the
         Advance Date, Administrative Agent may assume that such Lender has made
         the required amount available to Administrative Agent on the Advance
         Date and Administrative Agent may, in reliance upon such assumption,
         make available to Borrower a corresponding amount. If such
         corresponding amount is not in fact made immediately available to
         Administrative Agent by such Lender on the Advance Date, Administrative
         Agent shall be entitled to recover such corresponding amount on demand
         from such Lender. If such Lender does not pay such corresponding amount
         (or an amount demanded

                                       13
<PAGE>

         by Administrative Agent pursuant to Section 7.2.2.1) immediately upon
         Administrative Agent's demand therefor, then Administrative Agent shall
         promptly notify Borrower and the other Lenders and Borrower shall
         immediately pay such corresponding amount to Administrative Agent.
         Administrative Agent shall also be entitled to recover, either from
         such defaulting Lender (a Defaulting Lender) or Borrower, interest on
         such corresponding amount for each day from the date such corresponding
         amount was made available by Administrative Agent to Borrower to the
         date such corresponding amount is recovered by Administrative Agent, at
         a rate per annum equal to (i) if paid by such Lender, the cost to
         Administrative Agent of funding such amount at the Federal Funds Rate,
         or (ii) if paid by Borrower, the applicable rate for the Advance in
         question determined from the request therefor. Each Lender shall be
         obligated only to fund its pro-rata share of an Advance subject to the
         terms and conditions hereof, regardless of the failure of another
         Lender to fund its pro-rata share thereof. In addition, the failure of
         any Lender to pay its pro-rata share of any such Advance shall cause
         such Lender to be a Defaulting Lender and such Defaulting Lender shall,
         until such amount is paid to Administrative Agent (with interest at the
         Federal Funds Rate), (a) permit Administrative Agent the unconditional
         and irrevocable right of setoff against any amounts (including, without
         limitation, payments of principal, interest, and fees, as well as
         indemnity payments) received by Administrative Agent hereunder for the
         benefit of any such Defaulting Lender, and (b) if such failure to pay
         shall continue for a period of two Business Days, result in any such
         Defaulting Lender forfeiting any right to vote on any matter that the
         Required Lenders or all Lenders are permitted to vote for hereunder
         (and the calculation of Required Lenders shall exclude such Defaulting
         Lender's interest in the Lenders' Exposure); provided, however, once
         such a failure is cured, then such Lender shall, subsequent thereto,
         have all rights hereunder; provided, further, however, if any Lender
         shall fail to make such a payment within the two Business Day period
         specified in clause (b) above (other than by reason of events beyond
         the reasonable control of such Lender) two or more times during the
         term hereof, such Lender shall permanently forfeit its right to vote
         hereunder (and the calculation of Required Lenders shall exclude such
         Defaulting Lender's interest in the Lenders' Exposure).

                  7.5.2.   Unless Administrative Agent has been given written
                  notice by Borrower prior to the date any payment to be made by
                  it is due, that it does not intend to remit such payment,
                  Administrative Agent may assume that the Borrower has timely
                  remitted such payment and Administrative Agent may, in
                  reliance upon such assumption, make available a corresponding
                  amount or pro-rata portion thereof to the Persons entitled
                  thereto. If such payment was not in fact remitted to the
                  Administrative Agent in immediately available funds, then,
                  each Lender shall immediately on demand repay to
                  Administrative Agent the corresponding amount or pro-rata
                  portion thereof made available to such Lender, together with
                  interest thereon in respect of each day from the date such
                  amount was made available by Administrative Agent to such
                  Lender to the date such amount is repaid to Administrative
                  Agent, at the Federal Funds Rate.

         7.6. DISBURSEMENT. Provided that all conditions precedent herein to a
         requested Advance or, if applicable, a Swingline Advance, have been
         satisfied, Administrative Agent will make the amount of such requested
         Advance available to Borrower on the applicable Advance Date in
         immediately available funds in Dollars at Administrative Agent's
         Applicable Lending Office.

         7.7. RESTRICTIONS ON ADVANCES. No Advance will be made unless it is a
         whole multiple of $500,000 and not less than $1,000,000, in the case of
         a Eurodollar Advance, or a whole multiple of $10,000 and not less than
         $100,000, in the case of a Base Rate Advance. No more than one
         Revolving Loan Advance and no more than one Swingline Advance will be
         made on any one day pursuant to a request for a Revolving Loan Advance.
         Advances will only be made for the

                                       14
<PAGE>

         purposes permitted in Section 12.1. No Eurodollar Advance will be made
         so long as there is any Existing Default.

         7.8. RESTRICTION ON NUMBER OF EURODOLLAR LOANS. No more than five (5)
         Eurodollar Loans with different Interest Periods may be outstanding at
         any one time.

         7.9. EACH ADVANCE REQUEST AND LETTER OF CREDIT REQUEST A CERTIFICATION.
         Each submittal of a request for an Advance and each submittal of a
         request for the issuance of a Letter of Credit by a Borrowing Officer
         shall constitute a certification by Borrower that (i) there is no
         Existing Default, (ii) all conditions precedent hereunder to the making
         of the requested Advance or issuance of the requested Letter of Credit
         have been satisfied, and (iii) the Representations and Warranties are
         then true, with such exceptions as have been disclosed to Lenders in
         writing by Borrower or a Guarantor from time to time and are
         satisfactory to Lenders, and will be true on the Advance Date or
         issuance date, as applicable, as if then made with such exceptions.

         7.10. REQUIREMENTS FOR EVERY ADVANCE REQUEST. Only a request (which
         shall be in writing, or oral and confirmed in writing within one
         Business Day, in the form attached hereto as Exhibit 7.10 and mailed,
         personally delivered or telecopied as provided in Section 19.1) from a
         Borrowing Officer to Administrative Agent that specifies the amount of
         the Advance to be made, the Advance Date for the requested Advance, the
         portion of the Advance which is requested to be a Eurodollar Advance
         and the portion of the Advance which is requested to be a Base Rate
         Advance, and the Interest Period to be applicable to the Eurodollar
         Loan that will result from a requested Eurodollar Advance, shall be
         treated as a request for an Advance. No Advance Date for any requested
         Advance may be other than a Business Day. A request for a Eurodollar
         Advance must be given prior to 12:00 noon, Local Time, at least three
         (3) Business Days prior to the Advance Date for such Eurodollar
         Advance. A request for a Base Rate Advance must be given prior to 12:00
         noon, Local Time, on the Advance Date for such Base Rate Advance.

         7.11. REQUIREMENTS FOR EVERY LETTER OF CREDIT REQUEST. Only a written
         request (which may be mailed, personally delivered or telecopied as
         provided in Section 19.1) from a Borrowing Officer to Administrative
         Agent or an electronic initiation over an online service provided by
         Letter of Credit Issuer that specifies the amount, requested expiry
         date (which shall be a Business Day and in no event later than
         twenty-five (25) days before the Revolving Loan Maturity Date) and
         beneficiary of the requested Letter of Credit and other information
         necessary for its issuance shall be treated as a request for issuance
         of a Letter of Credit.

         7.12. EXONERATION OF ADMINISTRATIVE AGENT AND LENDERS. Neither
         Administrative Agent nor any Lender shall incur any liability to
         Borrower for treating a request that meets the express requirements of
         Section 7.10 or Section 7.11 as a request for an Advance or issuance of
         a Letter of Credit, as applicable, if Administrative Agent believes in
         good faith that the Person making the request is a Borrowing Officer or
         if, in the case of a request for a Letter of Credit, it is
         electronically initiated. Neither Administrative Agent nor any Lender
         shall incur any liability to Borrower for failing to treat any such
         request as a request for an Advance or issuance of a Letter of Credit,
         as applicable, if Administrative Agent believes in good faith that the
         Person making the request is not a Borrowing Officer.

8. CONDITIONS OF LENDING.

         8.1. CONDITIONS TO INITIAL ADVANCE. Lenders will have no obligation to
         fund the initial Revolving Loan Advance or any subsequent Revolving
         Loan Advance unless:

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<PAGE>

                  8.1.1.   LISTED DOCUMENTS AND OTHER ITEMS. Administrative
                  Agent shall have received on or before the Effective Date all
                  of the documents and other items listed or described in
                  Exhibit 8.1.1 hereto as being conditions to the initial
                  Revolving Loan Advances as being delivered or executed on or
                  before the Execution Date, with each being satisfactory to
                  Lenders and (as applicable) duly executed and (also as
                  applicable), attested, acknowledged, certified, or
                  authenticated.

                  8.1.2.   FINANCIAL CONDITION. Lenders shall (A) have received
                  (i) unqualified, audited consolidated financial statements for
                  the Borrower for the fiscal years ending in 2001, 2002 and
                  2003 in a form acceptable to Administrative Agent, and (ii)
                  unaudited interim consolidated financial statements for the
                  Borrower for each monthly period ended after the latest fiscal
                  year referred to in clause (i) above, and such financial
                  statements shall not, in the judgment of the Lenders, disclose
                  any material adverse change in the consolidated financial
                  position of the Borrower from what was reflected in the
                  financial statements previously furnished to the Lenders, and
                  (B) have determined to their satisfaction that the proforma
                  financial statements for the remainder of fiscal year 2004 and
                  all of fiscal years 2005, 2006 and 2007, as furnished to
                  Administrative Agent and Lenders, and other information
                  furnished to Administrative Agent and Lenders by Borrower (i)
                  for the periods ended on or before the Effective Date, fairly
                  and accurately reflect the business and financial condition of
                  Borrower and the results of its operations for such periods,
                  and (ii) for the periods that will end after the Effective
                  Date, fairly and accurately forecast the business and
                  financial condition of Borrower and the results of its
                  operations for such periods.

                  8.1.3.   NO DEFAULT. There shall be no Existing Default and no
                  Default or Event of Default will occur as a result of such
                  Advance being requested or made or the application of the
                  proceeds thereof.

                  8.1.4.   REPRESENTATIONS AND WARRANTIES. The Representations
                  and Warranties shall be true and correct.

                  8.1.5.   NO MATERIAL ADVERSE CHANGE. Since the date of the
                  Initial Financial Statements delivered to Administrative
                  Agent, there shall not have been any change which has or is
                  reasonably likely to have a Material Adverse Effect on any
                  Covered Person.

                  8.1.6.   PENDING MATERIAL PROCEEDINGS. There shall be no
                  pending Material Proceedings.

                  8.1.7.   PAYMENT OF FEES AND EXPENSES. Borrower shall have
                  paid and reimbursed to Lenders all fees, costs and expenses
                  that are payable or reimbursable to Lenders hereunder on or
                  before the Effective Date.

                  8.1.8.   INSURANCE. Borrower shall have the insurance required
                  by Section 12.4.

                  8.1.9.   EXISTING INDEBTEDNESS. Administrative Agent shall
                  have received satisfactory evidence that either prior to the
                  Effective Date or simultaneously with the funding of the
                  Initial Advance, that, all of the Existing Indebtedness shall
                  be fully repaid and all commitments of the lenders thereunder
                  and obligations of Borrower and each Covered Person thereunder
                  shall be terminated.

                                       16
<PAGE>

                  8.1.10.  CLOSING CERTIFICATE. A closing certificate (on the
                  Effective Date and on the date of the initial Revolving
                  Advance) certifying as to the completion of the conditions to
                  closing, including without limitation, the matters in Sections
                  8.1.3 and 8.1.4.

                  8.1.11.  TERM INDEBTEDNESS. Administrative Agent shall have
                  received evidence satisfactory to it that no less than
                  $40,000,000 of the Term Indebtedness will be funded
                  simultaneously with the initial Revolving Loan Advance and
                  shall be subject to the Intercreditor Agreement. The Term
                  Indebtedness Documents shall be in form and substance
                  satisfactory to Administrative Agent and shall be in full
                  force and effect.

                  8.1.12.  MINIMUM EBITDA. Borrower shall have had at least
                  $18,000,000 in EBITDA for the twelve-month period ending June
                  30, 2003.

                  8.1.13.  LEVERAGE. The ratio of Total Funded Indebtedness to
                  EBITDA shall be less than or equal to 2.50 to 1.00 as of June
                  30, 2003.

                  8.1.14.  OTHER ITEMS. Administrative Agent shall have received
                  such other consents, approvals, opinions (but not with respect
                  to any foreign Subsidiaries, if any, executing a Guaranty),
                  certificates, documents or information as it reasonably deems
                  necessary. The Lenders shall be satisfied with the
                  capitalization and corporate structure of Borrower and its
                  Subsidiaries.

                  8.1.15.  FEES AND EXPENSES. Administrative Agent and the
                  Lenders shall have received all fees required to be paid, and
                  all expenses for which invoices have been presented, on or
                  before the Effective Date.

         8.2. CONDITIONS TO SUBSEQUENT ADVANCES. Lenders will have no obligation
         to fund any Advance after the initial Revolving Loan Advance unless:

                  8.2.1.   GENERAL CONDITIONS. All of the conditions to the
                  initial Advances in Section 8.1 (except the condition in
                  Section 8.1.2(B) with respect to proforma Financial Statements
                  delivered on or before the Effective Date, Section 8.1.4 and
                  Section 8.1.8) shall have been and shall remain satisfied.

                  8.2.2.   REPRESENTATIONS AND WARRANTIES. The Representations
                  and Warranties are then true, with such exceptions as have
                  been disclosed to Lenders in writing by Borrower or any
                  Guarantor from time to time and are satisfactory to Lenders,
                  and will be true as of the time of such Advance, as if then
                  made with such exceptions.

                  8.2.3.   NO PROHIBITIONS. No order, judgment or decree of any
                  Governmental Authority shall exist which purports by its terms
                  to enjoin or restrain Administrative Agent or any Lender from
                  making the requested Advance, and no Law or request or
                  directive (whether or not having the force of law) from any
                  Governmental Authority with jurisdiction over Administrative
                  Agent or any Lender shall exist which prohibits, or requests
                  that Administrative Agent or any Lender refrain from, the
                  making of loans generally or Administrative Agent or any
                  Lender in particular, or imposes upon Administrative Agent or
                  any Lender with respect to such Advance any restriction or
                  reserve or capital requirement (for which Administrative Agent
                  or any Lender is not otherwise compensable by Borrower
                  hereunder).

                                       17
<PAGE>

                  8.2.4.   NO DEFAULT. There shall be no Existing Default and no
                  Default or Event of Default will occur as a result of such
                  Advance being requested or made or the application of the
                  proceeds thereof.

9. CONDITIONS TO ISSUANCE OF LETTERS OF CREDIT. As conditions precedent to the
issuance of any Letter of Credit:

         9.1. LETTER OF CREDIT APPLICATION/REIMBURSEMENT AGREEMENT. Borrower
         shall have executed and delivered to Letter of Credit Issuer one or
         more letter of credit applications and reimbursement agreements each in
         form and substance satisfactory to Letter of Credit Issuer under which
         Borrower further evidences its obligation to reimburse to Letter of
         Credit Issuer on demand the amount of each draw on such Letter of
         Credit as provided in Section 6.4, together with interest from the date
         of the draw at the rate provided in Section 4.1 and (without
         duplication) all reasonable expenses incurred by Letter of Credit
         Issuer in connection with such Letter of Credit.

         9.2. NO PROHIBITIONS. No order, judgment or decree of any Governmental
         Authority shall exist which purports by its terms to enjoin or restrain
         Letter of Credit Issuer or any other Lender from issuing such Letter of
         Credit, and no Law or request or directive (whether or not having the
         force of law) from any Governmental Authority with jurisdiction over
         Letter of Credit Issuer or any other Lender shall exist which
         prohibits, or requests that Letter of Credit Issuer or any other Lender
         refrain from, the issuance of letters of credit generally or such
         Letter of Credit in particular, or imposes upon Letter of Credit Issuer
         or any other Lender with respect to such Letter of Credit any
         restriction or reserve or capital requirement (for which Letter of
         Credit Issuer or any other Lender is not otherwise compensable by
         Borrower hereunder).

         9.3. REPRESENTATIONS AND WARRANTIES. The Representations and Warranties
         are then true, with such exceptions as have been disclosed to Lenders
         in writing by Borrower or such Guarantor from time to time and are
         satisfactory to Lenders, and will be true as of the time of the
         issuance of such Letter of Credit, as if then made with no exceptions.

         9.4. NO DEFAULT. There shall be no Existing Default and no Default or
         Event of Default is reasonably likely to occur as a result of such
         Letter of Credit being issued or a draw thereon being made or paid.

         9.5. OTHER CONDITIONS. All of the conditions to the initial Advances in
         Section 8.1 (except the condition in Section 8.1.4 and 8.1.8) shall
         have been and shall remain satisfied.

10. REPRESENTATIONS AND WARRANTIES. Except as otherwise described in the
Disclosure Schedule attached hereto as Exhibit 10, Borrower represents and
warrants to Administrative Agent, Lenders, and Letter of Credit Issuer, on its
behalf and on behalf of each Covered Person, as follows:

         10.1.    ORGANIZATION AND EXISTENCE. Each Covered Person is duly
         organized and existing in good standing under the Laws of the state of
         its organization, is duly qualified to do business and is in good
         standing in every state where the nature or extent of its business or
         properties require it to be qualified to do business, except where the
         failure to so qualify could not reasonably be expected to have a
         Material Adverse Effect on any Covered Person. Each Covered Person has
         the power and authority to own its properties and carry on its business
         as now being conducted. With respect to each Covered Person, the
         following information is fully, accurately and completely set forth on
         section 10.1 of the Disclosure Schedule: (i) the full and exact legal
         name of each Covered Person, (ii) state of organization/formation of
         such Covered Person, (iii) the tax

                                       18
<PAGE>

         identification number (FEIN or social security number, as appropriate)
         of each Covered Person, and (iv) the charter number (if available) of
         each Covered Person.

         10.2.    AUTHORIZATION. Each Covered Person is duly authorized to
         execute and perform every Loan Document to which such Covered Person is
         a party, and Borrower is duly authorized to borrow hereunder, and this
         Agreement and the other Loan Documents have been duly authorized by all
         requisite corporate or membership action (in the case of limited
         liability companies) of each Covered Person. No consent, approval or
         authorization of, or declaration or filing with, any Governmental
         Authority, and no consent of any other Person, is required in
         connection with Borrower's execution, delivery or performance of this
         Agreement and the other Loan Documents, except for those already duly
         obtained.

         10.3.    DUE EXECUTION. Every Loan Document to which a Covered Person
         is a party has been executed on behalf of such Covered Person by a
         Person duly authorized to do so.

         10.4.    ENFORCEABILITY OF OBLIGATIONS. Each of the Loan Documents to
         which a Covered Person is a party constitutes the legal, valid and
         binding obligation of such Covered Person, enforceable against such
         Covered Person in accordance with its terms, except to the extent that
         the enforceability thereof against such Covered Person may be limited
         by bankruptcy, insolvency, reorganization, moratorium or similar Laws
         affecting creditors' rights generally or by equitable principles of
         general application.

         10.5.    BURDENSOME OBLIGATIONS; DEFAULTS. Except as set forth in this
         Agreement and the Term Indebtedness Documents, no Covered Person is a
         party to or bound by any Contract, including, without limitation, any
         Contract that would prohibit the granting of a Security Interest on its
         assets or require that if a Security Interest is granted that it be
         pari passu with any other Person's Security Interest in such assets, or
         is subject to any provision in the Charter Documents of such Covered
         Person which would, if performed by such Covered Person, result in a
         Default or Event of Default either immediately or upon the elapsing of
         time. There are no Defaults or Events of Default which have occurred
         and are continuing. There is no breach or default with respect to any
         of the Term Indebtedness.

         10.6.    LEGAL RESTRAINTS. The execution and performance of any Loan
         Document by a Covered Person will not violate or constitute a default
         under the Charter Documents of such Covered Person, any Material
         Agreement of such Covered Person, or any Material Law, and will not,
         except as expressly contemplated or permitted in this Agreement, result
         in any Security Interest being imposed on any of such Covered Person's
         property.

         10.7.    LABOR CONTRACTS AND DISPUTES. There is no pending or, to
         Borrower's knowledge, threatened, strike, work stoppage, unfair labor
         practice claim or other labor dispute against or affecting any Covered
         Person or its employees which has or is reasonably likely to have a
         Material Adverse Effect on any Covered Person.

         10.8.    NO MATERIAL PROCEEDINGS. There are no Material Proceedings
         pending or, to the best knowledge of Borrower, threatened, against any
         Covered Person.

         10.9.    MATERIAL LICENSES. All Material Licenses have been obtained or
         exist for each Covered Person.

         10.10.   COMPLIANCE WITH MATERIAL LAWS. The operations and employee
         compensation practices of every Covered Person comply in all material
         respects with, and are not subject to any

                                       19
<PAGE>

         judicial or administrative complaint, investigation, order or
         proceeding alleging the violation of, any and all applicable
         Environmental Laws which are Material Laws and Employment Laws which
         are Material Laws.

         10.11.   PRIOR TRANSACTIONS. From and after the Effective Date, and
         except for Permitted Acquisitions, no Covered Person has been a party
         to any merger or consolidation, or acquired all or substantially all of
         the assets of any Person, or acquired any of its property outside of
         the ordinary course of business.

         10.12.   SOLVENCY.

         Borrower is Solvent prior to and after giving effect to, the
         transactions contemplated by the initial Revolving Loan Advance on the
         Effective Date. Borrower is Solvent at the time of each request for an
         Advance and immediately after the funding of each such Advance.

         10.13.   PROJECTIONS; PRO FORMA BALANCE SHEET. The projections of
         Borrower's periodic financial condition, and results of operations, for
         the periods ending January 31, 2007, a copy of which have been
         delivered to Administrative Agent and each Lender, represent Borrower's
         good faith best estimate of Borrower's future financial performance for
         the periods set forth therein. Such projections have been prepared
         consistent with GAAP on the basis of the assumptions set forth therein,
         which Borrower believes are fair and reasonable in light of current and
         reasonably foreseeable business conditions. The pro forma balance sheet
         of Borrower as of the Effective Date, a copy of which has been provided
         by Borrower to Administrative Agent and each Lender, has been prepared
         consistent with GAAP (except the non year-end Financial Statements do
         not contain footnotes and remain subject to normal year-end
         adjustments) and presents fairly and accurately Borrower's financial
         condition as of the Effective Date as if the transactions contemplated
         by the initial advance had occurred on the Effective Date.

         10.14.   FINANCIAL STATEMENTS. The Financial Statements are complete
         and correct in all material respects, have been prepared in accordance
         with GAAP (except the non year-end Financial Statements do not contain
         footnotes and remain subject to normal year end adjustments), and
         fairly reflect the financial condition, results of operations and cash
         flows of the Persons covered thereby as of the dates and for the
         periods stated therein, subject in the case of interim Financial
         Statements to normal year-end adjustments made in accordance with GAAP.

         10.15.   NO CHANGE IN CONDITION. Since the date of the Financial
         Statements delivered to Administrative Agent and Lenders as required
         herein, there has been no change which has or is reasonably likely to
         have a Material Adverse Effect on any Covered Person.

         10.16.   NO DEFAULTS. No Covered Person has breached or violated or has
         defaulted under any Material Agreement, or has defaulted with respect
         to any Material Obligation of such Covered Person. No Default has
         occurred which is continuing and no Event of Default has occurred.

         10.17.   INVESTMENTS. No Covered Person has any Investments in other
         Persons except existing Permitted Investments.

         10.18.   INDEBTEDNESS. No Covered Person has any Indebtedness except
         existing Permitted Indebtedness.

         10.19.   INDIRECT OBLIGATIONS. No Covered Person has any Indirect
         Obligations except existing Permitted Indirect Obligations.

                                       20
<PAGE>

         10.20.   SECURITY INTERESTS. No Covered Person has granted or allowed
         to exist any Security Interests on any of its assets except existing
         Permitted Security Interests.

         10.21.   TAX LIABILITIES; GOVERNMENTAL CHARGES. Each Covered Person has
         filed or caused to be filed all tax reports and returns required to be
         filed by it with any Governmental Authority, except where extensions
         have been properly obtained. Each Covered Person has paid or made
         adequate provision for payment of all Taxes of such Covered Person,
         except Taxes which are being diligently contested in good faith by
         appropriate proceedings and as to which such Covered Person has
         established adequate reserves in conformity with GAAP. No Security
         Interest for any such Taxes has been filed and no claims are being
         asserted with respect to any such Taxes which, if adversely determined,
         has or is reasonably likely to have a Material Adverse Effect on such
         Covered Person. There are no material unresolved issues concerning any
         liability of a Covered Person for any Taxes which, if adversely
         determined, will have or is reasonably likely to have a Material
         Adverse Effect on such Covered Person.

         10.22.   PENSION BENEFIT PLANS. All Pension Benefit Plans maintained by
         each Covered Person or an ERISA Affiliate of such Covered Person
         qualify under Section 401 of the Code and are in compliance with the
         provisions of ERISA to the extent ERISA is applicable and all other
         Material Laws. Except with respect to events or occurrences which do
         not have and are not reasonably likely to have a Material Adverse
         Effect on any Covered Person, and to the extent ERISA is applicable to
         any such Pension Benefit Plans:

                  10.22.1. PROHIBITED TRANSACTIONS. None of such Pension Benefit
                  Plans has participated in, engaged in or been a party to any
                  non-exempt PROHIBITED TRANSACTION as defined in ERISA or the
                  Code, and no officer, director or employee of such Covered
                  Person or of an ERISA Affiliate of such Covered Person has
                  committed a breach of any of the responsibilities or
                  obligations imposed upon fiduciaries by Title I of ERISA.

                  10.22.2. CLAIMS. There are no claims, pending or threatened,
                  involving any such Pension Benefit Plan by a current or former
                  employee (or beneficiary thereof) of such Covered Person or
                  ERISA Affiliate of such Covered Person, nor is there any
                  reasonable basis to anticipate any claims involving any such
                  Pension Benefit Plan which would likely be successfully
                  maintained against such Covered Person or such ERISA
                  Affiliate.

                  10.22.3. REPORTING AND DISCLOSURE REQUIREMENTS. There are no
                  violations of any reporting or disclosure requirements with
                  respect to any such Pension Benefit Plan and none of such
                  Pension Benefit Plans has violated any applicable Law,
                  including ERISA and the Code.

                  10.22.4. ACCUMULATED FUNDING DEFICIENCY. No such Pension
                  Benefit Plan has (i) incurred an accumulated funding
                  deficiency (within the meaning of Section 412(a) of the Code),
                  whether or not waived; (ii) been a Pension Benefit Plan with
                  respect to which a Reportable Event (to the extent that the
                  reporting of such events to the PBGC within thirty days of the
                  occurrence has not been waived) has occurred and is
                  continuing; or (iii) been a Pension Benefit Plan with respect
                  to which there exist conditions or events which have occurred
                  that present a significant risk of termination of such Pension
                  Benefit Plan by the PBGC.

                  10.22.5. MULTI-EMPLOYER PLAN. No Covered Person or ERISA
                  Affiliate of such Covered Person has received notice that any
                  such Multi-employer Plan is in reorganization or has been
                  terminated within the meaning of Title IV of ERISA, and no
                  such Multi-employer

                                       21
<PAGE>

                  Plan is reasonably expected to be in reorganization or to be
                  terminated within the meaning of Title IV of ERISA.

         10.23.   WELFARE BENEFIT PLANS. No Covered Person or ERISA Affiliate of
         any Covered Person maintains a Welfare Benefit Plan that has a
         liability which, if enforced or collected, has or is reasonably likely
         to have a Material Adverse Effect on any Covered Person. Each Covered
         Person and each ERISA Affiliate of any Covered Person has complied in
         all material respects with the applicable requirements of Section 4980B
         of the Code pertaining to continuation coverage as mandated by COBRA.

         10.24.   RETIREE BENEFITS. No Covered Person or ERISA Affiliate of such
         Covered Person has an obligation to provide any Person with any
         medical, life insurance, or similar benefit following such Person's
         retirement or termination of employment (or to such Person's
         beneficiary subsequent to such Person's death) which has or is
         reasonably likely to have a Material Adverse Effect on any Covered
         Person.

         10.25.   STATE OF PROPERTY. Each Covered Person has good and marketable
         or merchantable title to all real and personal property (tangible and
         intangible) purported to be owned by it or reflected in the Initial
         Financial Statements, except for personal property sold in the ordinary
         course of business after the date of the Initial Financial Statements,
         and all such real and personal property is in good working order and
         condition, except for normal wear and tear. Borrower owns all
         intellectual property (including, without limitation, patents,
         trademarks, and copyrights) reasonably necessary for the operation of
         its business.

         10.26.   NEGATIVE PLEDGES. Except as set forth in this Agreement and as
         set forth in the Term Indebtedness Documents, no Covered Person is a
         party to or bound by any Contract which prohibits the creation or
         existence of any Security Interest upon or assignment or conveyance of
         any of its assets.

         10.27.   AFFILIATES; SUBSIDIARIES. Borrower has no Subsidiaries, except
         for those Subsidiaries listed in section 10.27 of the Disclosure
         Schedule, which may be updated by Borrower from time to time without
         the consent of Required Lenders so long as any such new Subsidiaries
         executes a joinder agreement to the Guaranty if required by the
         Administrative Agent in its reasonable discretion or as otherwise
         required by this Agreement. Section 10.27 of the Disclosure Schedule
         sets forth for each Subsidiary, its authorized capital stock,
         membership interests or other equity interests and its issued and
         outstanding capital stock, membership interests or other equity
         interests; all issued and outstanding shares, membership interests or
         other equity interests of such Subsidiaries are validly issued and
         outstanding, fully paid and non-assessable, and are owned beneficially
         and of record by the Persons listed.

         10.28.   MARGIN STOCK. No Covered Person is engaged or will engage,
         principally or as one of its important activities, in the business of
         extending credit for the purpose of PURCHASING or CARRYING MARGIN STOCK
         (within the meaning of Regulation U), and no part of the proceeds of
         any Advance will be used to purchase or carry any such margin stock or
         to extend credit to others for the purpose of purchasing or carrying
         any such margin stock or for any purpose which violates, or which would
         be inconsistent with, the provisions of Regulation U. None of the
         transactions contemplated by this Agreement, any of the other Loan
         Documents, or any of the Acquisition Documents will violate Regulations
         T, U or X of the FRB.

                                       22
<PAGE>

         10.29.   TAX MATTERS. Borrower does not intend to treat the Loans
         and/or Letters of Credit and related transactions as being a
         "reportable transaction" (within the meaning of Treasury Regulation
         Section 1.6011-4).

         10.30.   SECURITIES MATTERS. No proceeds of any Advance will be used to
         acquire any security in any transaction which is subject to Sections 13
         and 14 of the Securities Exchange Act of 1934.

         10.31.   INVESTMENT COMPANY ACT, ETC. No Covered Person is an
         INVESTMENT COMPANY registered or required to be registered under the
         Investment Company Act of 1940, or a company CONTROLLED (within the
         meaning of such Investment Company Act) by such an INVESTMENT COMPANY
         or an AFFILIATED PERSON of, or PROMOTER or PRINCIPAL UNDERWRITER for,
         an INVESTMENT COMPANY, as such terms are defined in the Investment
         Company Act of 1940. No Covered Person is subject to regulation under
         the Public Utility Holding Company Act of 1935, the Federal Power Act,
         the Interstate Commerce Act or any other Law limiting or regulating its
         ability to incur Indebtedness for money borrowed.

         10.32.   NO IMPROPER PAYMENT OR INFLUENCE. Neither Borrower nor any
         other Covered Person has directly or indirectly paid or delivered any
         fee, commission or other money or property, or engaged in any lobbying,
         influencing or other behavior, however characterized, to any agent,
         government official, regulatory body, governmental agency or other
         Person, in the United States or any other country, related to the
         business or operations of the Borrower or any other Covered Person,
         that the Borrower and each other Covered Person knows or has reason to
         believe to have been illegal under any federal, state, or local law of
         the United States or any other country having jurisdiction, or to have
         been for the purpose of, and to have had the effect of, inducing or
         encouraging the breach by the recipient thereof of any legal duties,
         whether as an employee or otherwise to another Person.

         10.33.   FOREIGN ENEMIES AND REGULATIONS. The use of the proceeds of
         the Loans as contemplated by this Agreement will not violate (A) any
         regulations promulgated or administered by the Office of Foreign Assets
         Control, United States Department of the Treasury, including without
         limitation, the Foreign Assets Control Regulations, the Transaction
         Control Regulations, the Cuban Assets Control Regulations, the Foreign
         Funds Control Regulations, the Iranian Assets Control Regulations, the
         Nicaraguan Trade Control Regulations, the South African Transaction
         Regulations, the Iranian Transactions Regulations, the Iraqi Sanctions
         Regulations, the Soviet Gold Coin Regulations, the Panamanian
         Transaction Regulations or the Libyan Sanctions Regulations of the
         United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as
         amended, (B) the Trading with the Enemy Act, as amended, (C) Executive
         Orders 8389, 9095, 9193, 12543 (Libya), 12544 (Libya), 12722 or 12724
         (Iraq), 12775 or 12779 (Haiti), or 12959 (Iran), as amended, of the
         President of the United States or (D) any rule, regulation or executive
         order issued or promulgated pursuant to the laws or regulations
         described in the foregoing clauses (A) -(C).

         10.34.   NO MATERIAL MISSTATEMENTS OR OMISSIONS. Neither the Loan
         Documents, any of the Financial Statements nor any statement, list,
         certificate or other information furnished or to be furnished by
         Borrower or any other Covered Person to Administrative Agent or Lenders
         in connection with the Loan Documents or any of the transactions
         contemplated thereby contains any untrue statement of a material fact,
         or omits to state a material fact necessary to make the statements
         therein not misleading. Borrower has disclosed to Administrative Agent
         and Lenders everything regarding the business, operations, property,
         financial condition, or business prospects or itself and every Covered
         Person that has or is reasonably likely to have a Material Adverse
         Effect on any Covered Person.

                                       23
<PAGE>

         10.35.   FILINGS. All registration statements, reports, proxy
         statements and other documents, if any, required to be filed by any
         Covered Person with the Securities and Exchange Commission pursuant to
         the Securities Act of 1933, and the Securities Exchange Act of 1934,
         have been filed, and such filings are complete and accurate in all
         material respects and contain no untrue statements of material fact or
         omit to state any material facts required to be stated therein or
         necessary in order to make the statements therein not misleading.

11. MODIFICATION AND SURVIVAL OF REPRESENTATIONS. Except as specifically noted
herein, Borrower may at any time after the initial Advances are made propose to
Lenders in writing to modify the representations and warranties in Section 10,
the representations and warranties in any other Loan Document and any other
representation or warranty made in any certificate, report, opinion or other
document delivered by Borrower pursuant to the Loan Documents. If the proposed
modifications are satisfactory to Required Lenders as evidenced by their written
assent thereto, then such representations and warranties shall be deemed and
treated as so modified, but only as of the date of Borrower's written
modification proposal. If such proposed modifications are not satisfactory to
Required Lenders, then such proposed modifications shall not be deemed or
treated as modifying such representations and warranties. All such
representations and warranties, as made or deemed made as of a particular time,
shall survive execution of each of the Loan Documents and the making of every
Advance, and may be relied upon by Administrative Agent and Lenders as being
true and correct as of the date when made or deemed made until all of the Loan
Obligations are fully and indefeasibly paid, no Letters of Credit are
outstanding and the Letter of Credit Exposure is irreversibly zero.

12. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, while any of the
Commitments remains in effect and until all of the Loan Obligations are fully
and indefeasibly paid, no Letters of Credit are outstanding and the Letter of
Credit Exposure is irreversibly zero, Borrower shall do, or cause to be done by
each of the other Covered Persons, as applicable, the following:

         12.1.    USE OF PROCEEDS. The proceeds of Revolving Loan Advances and
         Swingline Advances shall be used solely to (i) pay and retire the
         Existing Indebtedness, (ii) provide for the working capital
         requirements and general corporate purposes of the Borrower, and (iii)
         to finance Permitted Acquisitions.

         12.2.    CORPORATE EXISTENCE. Each Covered Person shall maintain its
         existence in good standing and shall maintain in good standing its
         right to transact business in those states in which it is now or
         hereafter doing business, except where the failure to so qualify will
         not have and will not be reasonably likely to have a Material Adverse
         Effect on any Covered Person. Each Covered Person shall obtain and
         maintain all Material Licenses for such Covered Person.

         12.3.    MAINTENANCE OF PROPERTY AND LEASES. Each Covered Person shall
         maintain in good condition and working order, and repair and replace as
         required, all buildings, equipment, machinery, fixtures and other real
         and personal property owned or leased by it whose useful economic life
         has not elapsed and which is reasonably necessary for the ordinary
         conduct of the business of such Covered Person. To the extent
         applicable, all of each Covered Person's operations are operated in
         accordance with the Federal Fair Labor Standards Act of 1938 and all
         rules, regulations, and orders thereunder.

         12.4.    INSURANCE. Each Covered Person shall at all times keep insured
         or cause to be kept insured, in insurance companies having a rating of
         at least "A-" by Best's Rating Service, all property owned by it of a
         character usually insured by others carrying on businesses similar to
         that of such Covered Person in such manner and to such extent and
         covering such risks as such

                                       24
<PAGE>

         properties are usually insured subject to deductibles and self-insured
         retention levels consistent with past practices. Each Covered Person
         also shall carry business interruption insurance in such amounts, in
         such manner and to such extent and covering such risks as such
         businesses are usually insured subject to deductibles and self-insured
         retention levels consistent with past practices. Each Covered Person
         shall at all times carry insurance, in insurance companies having a
         rating of at least "A-" by Best's Rating Service, against liability on
         account of damage to persons or property (including product liability
         insurance and insurance required under all Laws pertaining to workers'
         compensation) and covering all other liabilities common to such Covered
         Person's business, in such manner and to such extent as such coverage
         is usually carried by others conducting businesses similar to that of
         such Covered Person subject to deductibles and self-insured retention
         levels consistent with past practices. All liability policies of
         liability insurance maintained hereunder shall name Administrative
         Agent as an additional insured for the benefit of Lenders, and such
         policies of insurance maintained hereunder shall contain a clause
         providing that such policies may not be canceled, without 30 days prior
         written notice to Administrative Agent. Borrower shall upon request of
         Administrative Agent at any time furnish to Administrative Agent
         updated evidence of insurance (in the form required as a condition to
         Administrative Agent's lending hereunder) for such insurance.
         Notwithstanding the foregoing, if the Best's Rating Service rating of
         any insurance carrier(s) of the Borrower or any other Covered Person
         falls below "A-," then such event shall not be an Event of Default if,
         within 90 days of such downgrading, Borrower shall put in place
         insurance meeting the requirements of this Section with replacement
         insurance carrier(s) with a Best's Rating Service rating of at least
         "A-."

         12.5.    PAYMENT OF TAXES AND OTHER OBLIGATIONS. Each Covered Person
         shall promptly pay and discharge or cause to be paid and discharged, as
         and when due, any and all income taxes, federal or otherwise, lawfully
         assessed and imposed upon it, and any and all lawful taxes, rates,
         levies, and assessments whatsoever upon its properties and every part
         thereof, or upon the income or profits therefrom and all claims of
         materialmen, mechanics, carriers, warehousemen, landlords and other
         like Persons for labor, materials, supplies, storage or other items or
         services which if unpaid might be or become a Security Interest or
         charge upon any of its property; provided, however, that a Covered
         Person may diligently contest in good faith by appropriate proceedings
         the validity of any such taxes, rates, levies, assessments or tax
         claims, provided such Covered Person has established adequate reserves
         therefor in conformity with GAAP on the books of such Covered Person,
         and no Security Interest, other than a Permitted Security Interest,
         results from such non-payment.

         12.6.    COMPLIANCE WITH LAWS. Each Covered Person shall comply with
         all Material Laws.

         12.7.    TERMINATION OF PENSION BENEFIT PLAN. No Covered Person or
         ERISA Affiliate of such Covered Person shall terminate or amend any
         Pension Benefit Plan maintained by such Covered Person or such ERISA
         Affiliate if such termination or amendment would result in any
         liability to such Covered Person or such ERISA Affiliate under ERISA or
         any increase in current liability for the plan year for which such
         Covered Person or such ERISA Affiliate is required to provide security
         to such Pension Benefit Plan under the Code, which such liability could
         reasonably be expected to have a Material Adverse Effect on such
         Covered Person.

         12.8.    NOTICE TO ADMINISTRATIVE AGENT OF MATERIAL EVENTS. Borrower
         shall, promptly upon any Responsible Officer of Borrower obtaining
         knowledge or notice thereof, give notice to Administrative Agent of (i)
         any breach of any of the covenants in Section 12, 13, or 14; (ii) any
         Default or Event of Default; (iii) the commencement of any Material
         Proceeding; and (iv) any loss of or damage to any assets of a Covered
         Person or the commencement of any proceeding for the condemnation or
         other taking of any of the assets of a Covered Person, if insurance
         and/or

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<PAGE>

         condemnation proceeds in excess of $500,000 are likely to be payable as
         a consequence of such loss, damage or proceeding, or if such loss,
         damage or proceeding has or is reasonably likely to have a Material
         Adverse Effect on such Covered Person. In addition,

                  12.8.1.  Borrower shall furnish to Administrative Agent from
                  time to time all information which Administrative Agent
                  reasonably requests with respect to the status of any Material
                  Proceeding.

                  12.8.2.  Borrower shall furnish to Administrative Agent from
                  time to time all information which Administrative Agent
                  requests with respect to any Pension Benefit Plan established
                  by a Covered Person or an ERISA Affiliate of any Covered
                  Person.

                  12.8.3.  Borrower shall promptly deliver to Administrative
                  Agent notice of any default or event of default, or the
                  occurrence of any event which would with the passage of time,
                  giving of notice or otherwise, constitute a default or event
                  of default with respect to any of the Permitted Indebtedness
                  which is in an amount which exceeds $1,000,000.

                  12.8.4.  Borrower shall promptly deliver notice to
                  Administrative Agent of the assertion by the holder of any
                  capital stock, membership interest, or any other equity
                  interest in a Covered Person or any Indebtedness of a Covered
                  Person in the outstanding principal amount in excess of
                  $1,000,000 that a default exists with respect thereto or that
                  such Covered Person is not in compliance with the terms
                  thereof, or of the threat or commencement by such holder of
                  any enforcement action because of such asserted default or
                  noncompliance (including, without limitation, any shareholder
                  suits, derivative actions, suits against the officers and/or
                  directors, or similar proceedings).

                  12.8.5.  Borrower shall, promptly after becoming aware
                  thereof, deliver notice to Administrative Agent of any pending
                  or threatened strike, work stoppage, unfair labor practice
                  claim or other labor dispute affecting a Covered Person which
                  has or is reasonably likely to have a Material Adverse Effect
                  on any Covered Person.

                  12.8.6.  Borrower shall promptly deliver notice to
                  Administrative Agent of any change in the name, state of
                  organization, or form of organization of any Covered Person.

                  12.8.7.  Borrower shall, promptly after becoming aware
                  thereof, deliver notice to Administrative Agent of any event
                  that has or is reasonably likely to have a Material Adverse
                  Effect on any Covered Person.

                  12.8.8.  Borrower shall, promptly after becoming aware
                  thereof, deliver notice to Administrative Agent of an actual
                  or alleged violation of any Material Law applicable to a
                  Covered Person or the property of a Covered Person.

                  12.8.9.  Borrower shall notify Administrative Agent promptly
                  in writing of any fact or condition of which Borrower is aware
                  which materially and adversely affects the value of its assets
                  taken as a whole.

         12.9.    BORROWING OFFICER. Borrower shall keep on file with
         Administrative Agent at all times an appropriate instrument naming each
         Borrowing Officer.

         12.10.   ACCOUNTING SYSTEM; TRACING OF PROCEEDS. Each Covered Person
         shall maintain a system of accounting established and administered in
         accordance with GAAP. Each Covered

                                       26
<PAGE>

         Person shall maintain detailed and accurate records of all transfers of
         any proceeds of the Loans from Borrower to such Covered Person.
         Borrower shall maintain detailed and accurate records of proceeds of
         the Loans and transfers of proceeds of the Loans (i) received by it
         from the Lenders, (ii) transferred from it to any other Covered Person,
         and (iii) received by it from another Covered Person. Borrower agrees
         that (a) the business operations of Borrower and each Covered Person
         are interrelated and complement one another, and such entities have a
         common business purpose and common management, and (b) the proceeds of
         Advances hereunder will benefit Borrower and each Covered Person,
         severally and jointly, regardless of which Borrower requests or
         receives part or all of any Advance.

         12.11.   FINANCIAL STATEMENTS. Borrower shall deliver to Administrative
         Agent for each Lender:

                  12.11.1. ANNUAL FINANCIAL STATEMENTS. Within 90 days after the
                  close of each fiscal year of Borrower (or, if earlier, such
                  date as the Borrower is required to file an annual report on
                  form 10-K with the SEC), year-end consolidated and, unless
                  otherwise noted, consolidating financial statements of
                  Borrower and its Subsidiaries, containing a balance sheet,
                  income statement, statement of cash flows (consolidated only)
                  and an audit report without qualification by an independent
                  certified public accounting firm selected by Borrower and
                  satisfactory to Administrative Agent, and accompanied by (i) a
                  Compliance Certificate of any of the Chief Financial Officer,
                  Vice President, Finance or Treasurer of Borrower, and (ii) the
                  management letter and report on internal controls delivered by
                  such independent certified public accounting firm in
                  connection with their audit, if any.

                  12.11.2. MONTHLY FINANCIAL STATEMENTS; QUARTERLY COMPLIANCE
                  CERTIFICATE. Within 30 days after the end of each fiscal
                  month, unaudited consolidated financial statements and, unless
                  otherwise noted, consolidating summary financial statements of
                  Borrower for each of the fiscal months not covered by the
                  latest year-end financial statements, in each case containing
                  a balance sheet, income statement, and statement of cash flows
                  (only quarterly and only consolidated); and in connection with
                  the delivery of such Financial Statements at the end of each
                  fiscal quarter, a Compliance Certificate of any of the Chief
                  Financial Officer, Vice President, Finance or Treasurer of
                  Borrower.

         Each Compliance Certificate shall be in the form of Exhibit 12.11,
         shall contain detailed calculations of the financial measurements
         referred to in Section 14 for the relevant periods, and shall contain
         statements by the signing officer to the effect that, except as
         explained in reasonable detail in such Compliance Certificate, (i) the
         attached Financial Statements are complete and correct in all material
         respects (subject, in the case of Financial Statements other than
         annual, to normal year-end audit adjustments) and have been prepared in
         accordance with GAAP applied consistently throughout the periods
         covered thereby and with prior periods (except as disclosed therein)
         (ii) all of the Representations and Warranties are true and correct as
         of the date such certification is given as if made on such date, and
         (iii) there is no Existing Default. If any Compliance Certificate
         delivered to Administrative Agent discloses that a representation or
         warranty is not true and correct, or that there is an Existing Default
         that has not been waived in writing by Required Lenders, such
         Compliance Certificate shall state what action Borrower has taken or
         proposes to take with respect thereto.

         12.12.   OTHER FINANCIAL INFORMATION; TAX INFORMATION. Borrower shall
         also deliver the following to Administrative Agent:

                                       27
<PAGE>

                  12.12.1. STOCKHOLDER REPORTS. Promptly upon being available,
                  copies of any proxy statements, financial statements and
                  reports which Borrower makes available to its stockholders,
                  members or partners.

                  12.12.2. PENSION BENEFIT PLAN REPORTS. Promptly upon the
                  reasonable request of Administrative Agent at any time or from
                  time to time, a copy of each annual report or other filing or
                  notice filed with respect to each Pension Benefit Plan of a
                  Covered Person or an ERISA Affiliate of a Covered Person.

                  12.12.3. TAX RETURNS. Promptly upon the reasonable request of
                  Administrative Agent at any time or from time to time, a copy
                  of each federal, state, or local tax return or report filed by
                  Borrower.

                  12.12.4. TAX MATTERS. In the event Borrower determines to take
                  any action inconsistent with its intention set forth in
                  Section 10.29, it will promptly notify the Administrative
                  Agent thereof. If Borrower so notifies the Administrative
                  Agent, Borrower acknowledges that one or more of the
                  Administrative Agent and the Lenders may treat its Loans
                  and/or its interest in Swingline Loans and/or Letters of
                  Credit as part of a transaction that is subject to Treasury
                  Regulation Section 301.6112-1, and the Administrative Agent
                  and such Lender or Lenders, as applicable, will maintain the
                  lists and other records required by such Treasury Regulation.
                  Promptly after Borrower has notified the Administrative Agent
                  of any intention by Borrower to treat Loans and/or Letters of
                  Credit and related transactions as being a "reportable
                  transaction" (within the meaning of Treasury Regulation
                  Section 1.6011-4), a duly completed copy of IRS Form 8886 or
                  any successor form.

         12.13.   ANNUAL PROJECTIONS. Within 60 days after the first day of each
         fiscal year of Borrower, projected balance sheets, statements of income
         and expense, and statements of cash flows for Borrower and every other
         Covered Person as of the end of and for each fiscal month of such
         fiscal year and on an annual basis for the next three succeeding fiscal
         years, in such detail as Administrative Agent may reasonably require.

         12.14.   OTHER INFORMATION. Promptly upon the reasonable request of
         Administrative Agent, Borrower shall promptly deliver to Administrative
         Agent such other information about the business, operations, revenues,
         financial condition, property, or business prospects of Borrower and
         every other Covered Person as Administrative Agent may, from time to
         time, reasonably request.

         12.15.   ACCESS TO OFFICERS AND AUDITORS. Each Covered Person shall,
         within three Business Days of a request from a Lender or Administrative
         Agent, permit any Lender and Administrative Agent and each of their
         representatives and agents to discuss the business, operations,
         revenues, financial condition, property, or business prospects of such
         Covered Person with its officers, employees, accountants and
         independent auditors as often as Administrative Agent may request in
         its reasonable discretion, and such Covered Person shall direct such
         officers, employees, and accountants, and request its independent
         auditors, to cooperate with Administrative Agent, Lenders, and their
         representatives and agents, and make full disclosure to Administrative
         Agent, Lenders, and their representatives and agents, of those matters
         that they may deem relevant to the continuing ability of Borrower
         timely to pay and perform the Loan Obligations.

         12.16.   ACQUISITION DOCUMENTS. Borrower shall fully perform all of its
         material obligations under all Acquisition Documents, and shall enforce
         all of its rights and remedies thereunder as it

                                       28
<PAGE>

         deems appropriate in its reasonable business judgment; provided,
         however, that Borrower shall not take any action or fail to take any
         action which would result in a waiver or other loss of any right or
         remedy of Borrower thereunder which could reasonably likely have a
         Material Adverse Effect.

         12.17.   EXISTING LCs. Borrower has executed, an enforceable,
         unconditional reimbursement agreement with LaSalle for each of the
         Existing LCs and each other Letter of Credit and Borrower has an
         unconditional obligation to reimburse LaSalle for any drawings
         thereunder.

         12.18.   FURTHER ASSURANCES. Borrower shall execute and deliver, or
         cause to be executed and delivered, to Administrative Agent such
         documents and agreements, and shall take or cause to be taken such
         actions, as Administrative Agent may from time to time reasonably
         request to carry out the terms and conditions of this Agreement and the
         other Loan Documents.

         12.19.   EXISTING UCC FILINGS. Borrower shall on or before October 15,
         2003 (or such later date as Administrative Agent may approve in its
         reasonable discretion), cause the amendment of all UCC filings of
         record against Borrower and each Covered Person in a manner reasonably
         acceptable to Administrative Agent that Administrative Agent reasonably
         believes to be necessary so that such UCC financing statements no
         longer include assets that should not be subject to any such Security
         Interest.

         12.20.   COVERED PERSONS. Borrower shall cause each other Borrower and
         each Covered Person to comply with each of the terms and provisions of
         this Agreement and the other Loan Documents, and Borrower acknowledges
         and agrees that failure of Borrower or any Covered Persons to comply
         with the terms of this Agreement and the other Loan Documents, shall be
         a Default hereunder and thereunder.

         12.21.   PARITY WITH OTHER INDEBTEDNESS. Other than with respect to
         Priority Indebtedness if and to the extent permitted under this
         Agreement, Borrower will, and will cause each other Covered Person to,
         execute all such documents and take all such actions as the
         Administrative Agent may reasonably request in order to assure that at
         all times (i) the Loan Obligations shall rank in right of payment
         senior to or pari passu with all other Indebtedness of the Borrower and
         each other Covered Person, and (ii) each Guarantor's obligations under
         its Guaranty shall rank in right of payment senior to or pari passu
         with all other Indebtedness of such Guarantor.

         12.22.   GUARANTEES. Upon the request of the Administrative Agent,
         Borrower shall cause any Subsidiaries of Borrower to execute a Guaranty
         of all of the Loan Obligations in form and substance reasonably
         satisfactory to Administrative Agent and to provide such authorizing
         resolutions, certificates of incumbency and other corporate documents
         as may be reasonably requested by Administrative Agent in connection
         therewith; provided, however, if, at any time after the date of this
         Agreement, any Subsidiary shall enter into a guaranty in respect of the
         Term Indebtedness (or any refinancing thereof), or otherwise become
         directly or indirectly liable for, all or any part of the Term
         Indebtedness (or any refinancing thereof), the Borrower shall promptly
         notify Administrative Agent and Borrower shall promptly cause each such
         Subsidiary contemporaneously with entering into any such guaranty or
         becoming directly or indirectly liable in respect of such Term
         Indebtedness, to guaranty the Loan Obligations by executing a Guaranty
         (such Guaranty to be in form and substance satisfactory to
         Administrative Agent).

13. NEGATIVE COVENANTS. Borrower covenants and agrees that, while any of the
Commitments remain in effect and until all of the Loan Obligations are fully and
indefeasibly paid, no Letters of Credit are

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<PAGE>

outstanding and the Letter of Credit Exposure is zero, Borrower shall not,
directly or indirectly, do any of the following, or permit any Covered Person to
do any of the following:

         13.1.    INVESTMENTS. Make any Investments in any other Person except
         the following:

                  13.1.1.  Investments in (i) interest-bearing United States
                  government obligations; (ii) certificates of deposit issued by
                  any Lender; (iii) prime commercial paper rated A1 or better by
                  Standard and Poor's Corporation or Prime P1 or better by
                  Moody's Investor Service, Inc.; (iv) agreements involving the
                  sale to a Covered Person of United States government
                  securities and their guarantied repurchase the next Business
                  Day by a commercial bank chartered under the Laws of the
                  United States or any state thereof which has capital and
                  surplus of not less than $250,000,000, or (v) certificates of
                  deposit issued by and time deposits which do not extend more
                  than 364 days or money market accounts, with any commercial
                  bank chartered under the Laws of the United States or any
                  state thereof which has capital and surplus of not less than
                  $250,000,000.

                  13.1.2.  Accounts arising in the ordinary course of business
                  and payable in accordance with Borrower's or such other
                  Covered Person's customary trade terms.

                  13.1.3.  Any Investments that are Permitted Acquisitions.

                  13.1.4.  Investments existing on the Execution Date and
                  disclosed in section 10.17 of the Disclosure Schedule.

                  13.1.5.  Notes received by a Covered Person in settlement of
                  Indebtedness of other Persons to such Covered Person that was
                  incurred in the ordinary course of such Covered Person's
                  business.

                  13.1.6.  Investments by any Covered Person in any other
                  Covered Person if such Covered Person in which the Investment
                  is made is also a Guarantor, provided, however, Investments in
                  Layne Energy must be by the Borrower and must be in the form
                  of Indebtedness.

                  13.1.7.  Investments in the form of a loan to a Person to
                  finance the purchase of real property, personal property,
                  services or equipment from the Borrower or any Covered Person
                  provided that (a) if such loan exceeds $200,000, the Borrower
                  or such Covered Person shall retain a Security Interest on any
                  property or equipment sold to the extent permitted under
                  applicable law, (b) the aggregate principal amount of all such
                  loans to any Person or its Affiliates outstanding at any time
                  shall not exceed $2,500,000 in the aggregate at any time, and
                  (c) the aggregate principal amount of all such loans
                  outstanding at any time shall not exceed $5,000,000 in the
                  aggregate;

                  13.1.8.  Investments in water wells drilled by the Borrower or
                  any Covered Person for local municipalities in connection with
                  which such municipality has entered into a contract with the
                  Borrower or such Covered Person to purchase water from the
                  well and to purchase the well from the Borrower or such other
                  Covered Person at a future date; provided the aggregate amount
                  invested by the Borrower and all other Covered Persons in all
                  such investments shall not exceed $2,500,000 in the aggregate
                  outstanding at any time; and

                                       30
<PAGE>

                  13.1.9.  So long as no Default has occurred and is continuing
                  or would be caused thereby, making Investments (excluding
                  interest on intercompany indebtedness and royalties) in (i)
                  Persons that are not Subsidiaries and (ii) Subsidiaries that
                  are not Guarantors; provided that the aggregate amount of all
                  such Investments in clauses (i) and (ii) made after the date
                  of this Agreement shall not at any time exceed 15% of Tangible
                  Net Worth plus up to $5,000,000 in the aggregate outstanding
                  at any time with respect to Layne Water Development of Texas,
                  LLC, in each case, as calculated as of any date.

                  13.1.10. Loans or advances to employees not in excess of
                  $750,000 in the aggregate outstanding at any time.

         13.2.    INDEBTEDNESS. Create, incur, assume, or allow to exist any
         Indebtedness of any kind or description, except the following:

                  13.2.1.  Indebtedness to trade creditors incurred in the
                  ordinary course of business, to the extent that it is not
                  overdue past the original due date by more than 90 days
                  (unless such Indebtedness is being contested in good faith by
                  such Covered Person and adequate reserves under GAAP have been
                  made).

                  13.2.2.  The Loan Obligations.

                  13.2.3.  The Term Indebtedness up to $60,000,000 in principal
                  outstanding in the aggregate at any one time if the
                  Intercreditor Agreement remains in effect and if at the time
                  of funding the Term Indebtedness there is no Existing Default
                  and the funding of any Term Indebtedness would not reasonably
                  likely give rise to a Default or Event of Default.

                  13.2.4.  Priority Indebtedness up to 10% of Tangible Net Worth
                  as calculated as of any date.

                  13.2.5.  Indebtedness to finance the premiums for Borrower's
                  insurance policies, which Indebtedness shall not exceed
                  $2,000,000.00 in the aggregate at any one time outstanding for
                  Borrower and all Covered Persons on a consolidated basis.

                  13.2.6.  Indebtedness disclosed on section 10.18 of the
                  Disclosure Schedule, provided, however, the Indebtedness
                  disclosed thereon may not be increased above the amounts
                  existing on the Effective Date (except if such Indebtedness
                  would be subject to the terms of and permitted by the terms of
                  Section 13.1.6).

         13.3.    INDIRECT OBLIGATIONS. Create, incur, assume or allow to exist
         any Indirect Obligations in an amount not to exceed $2,000,000 in the
         aggregate outstanding at any time, except Indirect Obligations existing
         on the Execution Date and disclosed on section 10.19 of the Disclosure
         Schedule and Indirect Obligations of a Covered Person with respect to
         the Permitted Indebtedness of any other Covered Person.

         13.4.    PREPAYMENT. Make any nonscheduled prepayment on any
         Indebtedness if there is an Existing Default or a Default or Event of
         Default is reasonably likely to occur as a result of any such payment.

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<PAGE>

         13.5.    SECURITY INTERESTS. Create, incur, assume or allow to exist
         any Security Interest upon all or any part of its property, real or
         personal, now owned or hereafter acquired, except the following:

                  13.5.1.  Security Interests for taxes, assessments or
                  governmental charges not delinquent or being diligently
                  contested in good faith and by appropriate proceedings and for
                  which adequate book reserves in accordance with GAAP are
                  maintained.

                  13.5.2.  Security Interests arising out of deposits in
                  connection with workers' compensation insurance, unemployment
                  insurance, old age pensions, or other social security or
                  retirement benefits legislation.

                  13.5.3.  Deposits or pledges to secure bids, tenders,
                  contracts (other than contracts for the payment of money),
                  leases, statutory obligations, surety and appeal bonds, and
                  other obligations of like nature arising in the ordinary
                  course of business.

                  13.5.4.  Security Interests imposed by any Law, such as
                  mechanics', workmen's, materialmen's, landlords', carriers',
                  or other like Security Interests arising in the ordinary
                  course of business which secure payment of obligations which
                  are not past due or which are being diligently contested in
                  good faith by appropriate proceedings and for which adequate
                  reserves in accordance with GAAP are maintained on Borrower's
                  books.

                  13.5.5.  Minor survey exceptions or minor encumbrances,
                  easements or reservations, or rights of others for
                  rights-of-way, utilities and other similar purposes, or zoning
                  or other restrictions as to use of real property, that are
                  necessary for the conduct of the operations of the Borrower
                  and each Covered Person that customarily exist on properties
                  of corporations engaged in similar businesses and are
                  similarly situated and that do not in any event materially
                  impair their value or their use in the operations of the
                  Borrower and each other Covered Person;

                  13.5.6.  Security Interests existing on the Effective Date and
                  disclosed on section 10.20 to the Disclosure Schedule.

                  13.5.7.  Any attachment or judgment Lien if and only if (A)
                  the judgment it secures shall, within 30 days after the entry
                  thereof, have been discharged or execution thereof stayed
                  pending appeal or (B) the Borrower or the such other Covered
                  Person shall fail to actively contest such attachment or
                  judgment Lien within thirty (30) days after the entry thereof
                  and post within such time period a bond therefor in the full
                  amount of the judgment plus applicable statutory costs and
                  attorneys' fees or such other amount as may be ordered by the
                  applicable court; provided the aggregate amount of such
                  attachment or judgment Liens shall not secure obligations in
                  excess of $1,000,000 at any time;

                  13.5.8.  Security Interests granted to joint venture partners
                  (including other Persons who Borrower or any other Covered
                  Person is in a business relationship with respect to coalbed
                  methane gas projects) on equity interests owned by the
                  Borrower or any Covered Person in connection with the
                  formation of a Person (other than an individual) in which the
                  ownership interests are held in part by the Borrower or a
                  Covered Person and a non-Affiliated Person; provided that such
                  Security Interests is limited solely to the equity in the
                  joint venture with no recourse to the Borrower or such Covered
                  Person except to the

                                       32
<PAGE>

                  extent disclosed on section 10.20(2) of the Disclosure
                  Schedule for such projects existing on the Effective Date.

                  13.5.9.  A Security Interest in favor of the holder of the
                  Indebtedness permitted under Section 13.2.5 on Borrower's
                  insurance policies and any unearned premiums refundable with
                  respect thereto, which Security Interests may only secure the
                  Indebtedness of Borrower incurred pursuant to Section 13.2.5
                  herein to finance the annual premiums due with respect to such
                  insurance policies.

                  13.5.10. To the extent constituting Permitted Indebtedness,
                  Security Interests securing Priority Indebtedness.

         Notwithstanding anything contained herein to the contrary, except to
         the extent disclosed on section 10.20(2) of the Disclosure Schedule for
         projects existing on the Effective Date, in no event shall the Borrower
         or any other Covered Person permit any Security Interest at any time on
         any of their respective current assets, which include without
         limitation inventory, accounts, notes receivable and similar items. At
         no time shall Borrower or any Covered Person allow to exist on or
         against its assets any financing statements, mortgages or similar
         documents, except as permitted in Section 13.5.6.

         13.6.    ACQUISITIONS. Acquire stock, membership interests, or any
         other equity interest in a Person, or acquire all or substantially all
         of the assets of a Person (including without limitation assets
         comprising all or substantially all of an unincorporated business unit
         or division of any Person), except for Permitted Acquisitions.
         Permitted Acquisition means an acquisition of the stock, membership
         interests, or any other equity interest in a Person, or the acquisition
         of all or substantially all of the assets of a Person (including
         without limitation assets comprising all or substantially all of an
         unincorporated business unit or division of any Person), which
         satisfies each of the following conditions: (i) the Borrower or the
         Guarantor is the Acquiring Company (and if the Covered Person making
         the acquisition is not a party to the Guaranty, it will execute a
         joinder to the Guaranty or execute a new Guaranty, in each case in form
         and substance reasonably acceptable to Administrative Agent), (ii) the
         Borrower or a Guarantor is the Surviving Company, (iii) the Target
         Company is in a substantially similar line of business as a Borrower
         except as otherwise permitted in Section 13.13; (iv) Target Company has
         an EBITDA (provided, however, that with respect to the purchase of
         assets of less than an entire Target Company, EBITDA will be calculated
         on a proforma basis prepared in good faith based on reasonable
         assumptions) in excess of zero Dollars for the twelve month period
         ended on the last day of the calendar month most recently ended prior
         to the date such acquisition is consummated, (v) there is no Existing
         Default, no Default or Event of Default has occurred and is continuing,
         and no Default or Event of Default will occur or is reasonably likely
         to occur as a result of or due to such acquisition (vi) the Maximum
         Available Amount exceeds the Aggregate Revolving Loan by at least
         $10,000,000 after giving effect to such acquisition, (vii) the purchase
         price (including without limitation any deferred purchase price, seller
         notes, assumed Indebtedness, or similar items) together with all
         expenses incurred in connection with such acquisition does not exceed
         $7,500,000 in the aggregate for all Acquisition since the Effective
         Date, (viii) simultaneously with the closing of such acquisition, the
         Target Company or the Surviving Company, as the case may be, executes
         and delivers to Administrative Agent, if requested by the
         Administrative Agent, a joinder agreement satisfactory to
         Administrative Agent in which such Target Company or Surviving Company
         becomes a Guarantor under the Guaranty executed by all other
         Subsidiaries; (ix) prior to the closing of such acquisition, a
         Responsible Officer of Borrower delivers to Administrative Agent a
         certificate on behalf of Borrower certifying that such acquisition is a
         Permitted Acquisition; (x) such acquisition is friendly, rather than
         hostile, in nature; and (xi) Borrower has,

                                       33

<PAGE>

         no less than 20 days prior to making such acquisition, prepared and
         furnished to Administrative Agent the proforma financial statements
         described below for the Target Company (if such acquisition is
         structured as a purchase of equity) or the Surviving Company (if such
         acquisition is structured as a purchase of assets or a merger),
         demonstrating to the satisfaction of Administrative Agent that the
         Target Company, all Surviving Companies, and Borrower, as the case may
         be, will be Solvent upon consummation of such acquisition and upon the
         passage of time thereafter, and that none of the covenants in Section
         14 will be violated as a consequence of such acquisition or with the
         passage of time thereafter, and Borrower has also provided to
         Administrative Agent, no less than 20 days prior to making such
         acquisition, copies of the audited financial statements (if available,
         or unaudited financial statements if no audited financial statements
         exist) for the Target Company for the three fiscal years (if available)
         most recently ended and for each of the completed fiscal quarters in
         the then current fiscal year. The proforma financial statements
         referred to in clause (xi) shall contain consolidated and consolidating
         balance sheets, income statements, statements of cash flows and such
         other reports and disclosures of Borrower as well as the Target Company
         (if such Permitted Acquisition is structured as a purchase of equity)
         or the Surviving Company (if such Permitted Acquisition is structured
         as a purchase of assets or a merger) and shall cover such forecast
         periods, as Administrative Agent may in its reasonable discretion
         require.

         13.7.    DISPOSAL OF PROPERTY. Transfer any of its assets except (i)
         sales of inventory in the ordinary course of business; (ii) the sale of
         obsolete or unused assets that are obsolete or are no longer necessary
         or productive in the ordinary course of the Borrower's or such Covered
         Person's business; (iii) any Transfer of assets from a Covered Person
         to another Covered Person who is also a Guarantor; and (iv) Transfer of
         assets not included in the foregoing clauses (i), (ii) and (iii), not
         to exceed $2,000,000 in the aggregate during any fiscal year and not to
         exceed $5,000,000 in the aggregate during the term of this Agreement.
         At no time shall Borrower or any Covered Person sell any of its notes
         receivables or accounts receivable.

         13.8.    GUARANTIES. Permit or allow any Covered Person to deliver a
         guaranty in respect of the Term Indebtedness (or any refinancing
         thereof) or otherwise become directly or indirectly liable for, all or
         any part of the Term Indebtedness (or any refinancing thereof) unless
         the parties to the Term Indebtedness have signed an Intercreditor
         Agreement and such Covered Person has provided a Guaranty.

         13.9.    DISTRIBUTIONS; REDEMPTIONS. Permit or allow, or permit or
         allow any Covered Person to, (a) declare or pay any dividends on any of
         its capital stock (other than stock dividends), (b) purchase or redeem
         any such stock or any warrants, options or other rights in respect of
         such stock, (c) make any other distribution to shareholders (other than
         the issuance of stock, or stock options in respect thereof, to
         directors, officers and employees pursuant to written incentive
         compensation plans), (d) prepay, purchase or redeem any subordinated
         Indebtedness or (e) set aside funds for any of the foregoing; provided,
         however, that (i) any Subsidiary may declare and pay dividends to
         Borrower or to a wholly-owned Subsidiary, and (ii) so long as there is
         no Existing Default and no Default or Event of Default is reasonably
         likely to occur from such payment, Borrower may purchase stock of the
         Borrower on the open market and re-issue such stock to officers and
         employees of the Borrower in connection with written incentive
         compensation plans or other agreements with officers, directors or
         employees of the Borrower approved by the Board of Directors of the
         Borrower or any compensation committee thereof and the Borrower may pay
         dividends to its shareholders and/or repurchase stock of the Borrower,
         provided that the aggregate amount of all such dividends and
         repurchases described in this clause (ii) shall not exceed 50% of
         Borrower's annual consolidated Net Income in any fiscal year if
         declared and paid within ninety days follow such fiscal year end.

                                       34

<PAGE>

         13.10.   CHANGE OF CONTROL. (A) With respect to (i) Borrower, merge or
         consolidate with or into another Person, except in connection with a
         Permitted Acquisition, the Borrower may merge with a Target Company so
         long as it is the Surviving Company and the core managers of the
         Borrower prior to the merger or consolidation shall be the core
         managers of the continuing or surviving entity, (ii) with respect to
         any other Covered Person (other than Borrower, which is addressed in
         clause (i)), merge or consolidate with or into another Person except
         another Covered Person and except in connection with a Permitted
         Acquisition, a Covered Person (other than Borrower, which is addressed
         in clause (i)) may merge with a Target Company so long as it is the
         Surviving Company and either is or becomes a Guarantor; or (B) (i) with
         respect to Borrower, permit any Person or Group to become the record or
         beneficial owner, directly or indirectly, on a fully diluted basis, of
         securities representing 30% or more of the voting power of Borrower's
         then outstanding securities having the power to vote or 30% or more of
         Borrower's then outstanding capital stock, or to acquire the power to
         elect a majority of the Board of Directors of Borrower, or (ii) with
         respect to any Covered Person other than Borrower, permit any Person or
         Group other than Borrower or another Covered Person to own, directly or
         indirectly, any capital stock of such Covered Person (except, with
         regards to Covered Persons incorporated or formed under the laws of a
         jurisdiction outside the United States, director/officer qualifying
         shares owned by such directors or officers).

         13.11.   AMENDMENT TO CHARTER DOCUMENTS; AMENDMENTS TO TERM
         INDEBTEDNESS DOCUMENTS. Change its state of incorporation or formation;
         otherwise amend, modify, supplement, restate, replace, or change any of
         its Charter Documents, except to the extent such change could not
         reasonably be expected to adversely effect Administrative Agent or any
         Lender. Amend, modify, supplement, restate, replace, or change any of
         the Term Indebtedness Documents, except to the extent such change could
         not reasonably be expected to materially adversely effect
         Administrative Agent or any Lender.

         13.12.   CAPITAL STRUCTURE; EQUITY SECURITIES. Make any change in the
         capital structure of any Covered Person which has or is reasonably
         likely to have a Material Adverse Effect on any Covered Person; or
         issue or create any stock, membership interest, or other equity
         interest (or class or series thereof, or non-equity interest that is
         convertible into stock, membership interests or other equity interest
         (or class or series thereof), in any Covered Person, except stock,
         membership interests, or other equity interests (or class or series
         thereof) that are subordinated in right of payment to all the Loan
         Obligations in a manner satisfactory to Administrative Agent.

         13.13.   CHANGE OF BUSINESS. Engage in any business other than
         substantially as conducted on the Effective Date; provided that the
         Borrower or any Covered Person may engage in other businesses so long
         as the aggregate amount invested (whether via acquisition of assets or
         stock, loans or advances, or otherwise) by the Borrower and all other
         Covered Persons in all such businesses after the Effective Date shall
         not exceed $3,000,000 in the aggregate.

         13.14.   CONFLICTING AGREEMENTS. Enter into any agreement, that would,
         if fully complied with by it, result in a Default or Event of Default
         either immediately or upon the elapsing of time.

         13.15.   SALE AND LEASEBACK TRANSACTIONS. Enter into any arrangement
         with any lender or investor or to which such lender or investor is a
         party providing for the leasing by the Borrower or any Subsidiary of
         real or personal property which has been or is to be Transferred by the
         Borrower or any Subsidiary to such lender or investor or to any Person
         to whom funds have been or are to be advanced by such lender or
         investor on the security of such property or rental obligations of the
         Borrower or any Subsidiary unless (i) such property is newly acquired
         or newly

                                       35

<PAGE>

         constructed property and the Borrower or a Subsidiary shall enter into
         a lease, as lessee, within 90 days following the acquisition or
         construction of such property, (ii) the aggregate value of property
         acquired and sold pursuant to clause (i) hereof shall be less than
         $2,500,000 in the aggregate in any fiscal year, and (iii) no Default or
         Event of Default has occurred and is continuing and no Default or Event
         of Default is reasonably likely to occur as a result of such
         transaction.

         13.16.   FISCAL YEAR. Change its fiscal year from one ending on January
         31.

         13.17.   TRANSACTIONS HAVING A MATERIAL ADVERSE EFFECT ON COVERED
         PERSON. Enter into any transaction which has or is reasonably likely to
         have a Material Adverse Effect on any Covered Person; or enter into any
         transaction, or take or contemplate taking any other action, or omit or
         contemplate omitting to take any action, which any Responsible Officer
         knows, or reasonably should know is likely to cause a Default or Event
         of Default hereunder.

         13.18.   TRANSACTIONS WITH AFFILIATES. Enter into or be a party to any
         transaction or arrangement, including the purchase, sale or exchange of
         property of any kind or the rendering of any service, with any
         Affiliate (other than a Covered Person), or make any loans or advances
         to any Affiliate (other than to a Covered Person and otherwise
         permitted hereunder), except that each Covered Person may engage in
         such transactions in the ordinary course of business and pursuant to
         the reasonable requirements of its business and on fair and reasonable
         terms substantially as favorable to it as those which it could obtain
         in a comparable arm's-length transaction with a non-Affiliate. No
         Covered Person may pay any management or other similar fees to any
         Affiliate that is not a Covered Person. Notwithstanding the foregoing,
         investments in Affiliates shall be permitted subject to the limitations
         set forth in Section 13.1.9.

         13.19.   SUBSIDIARIES.

                  13.19.1. Sell or otherwise dispose of, or part with control
                  of, any shares of stock or Indebtedness of any Covered Person
                  (other than Borrower), except, unless there is an Existing
                  Default or a Default or Event of Default is reasonably likely
                  to occur as a result of the subject transaction and subject to
                  the other terms of this Agreement including, without
                  limitation, Section 13.7, (i) to the Borrower or another
                  Covered Person or (ii) that all shares of stock and
                  Indebtedness of any Subsidiary at the time owned by or owed to
                  the Borrower and all other Covered Persons may be sold as an
                  entirety for a cash consideration which represents the fair
                  value (as determined in good faith by the Board of Directors
                  of the Borrower) at the time of sale of the shares of stock
                  and Indebtedness so sold; provided that (A) such sale or other
                  disposition is treated as a Transfer of assets of such
                  Subsidiary and is otherwise permitted by this Agreement, and
                  (B) at the time of such sale, such Subsidiary shall not own,
                  directly or indirectly, any shares of stock or Indebtedness of
                  any other Subsidiary (unless all of the shares of stock and
                  Indebtedness of such other Subsidiary owned, directly or
                  indirectly, by the Borrower and all other Covered Persons are
                  simultaneously being sold as permitted by this Section).

                  13.19.2. Subject to the other terms of this Agreement
                  (although Section 13.7 shall not be applicable to the
                  transactions contemplated by this Section 13.19.2), sell up to
                  forty percent (40%) in the aggregate of the equity in Layne
                  Energy in one or more series of public offerings if: (i) no
                  Default or Event of Default has occurred and is continuing at
                  the time of such sale and no Default or Event of Default
                  occurs or is reasonably likely to occur from such sale, (ii)
                  for each of the two fiscal quarters prior to such sale, the
                  ratio in Section 14.3 is less than 2.25:1.00 with such
                  calculation being made as if Layne Energy

                                       36

<PAGE>

                  was not a Subsidiary for such periods and therefore excluded
                  from such calculation; (iii) Layne Energy promptly following
                  formation is a Guarantor and remains a Guarantor, but,
                  following any such initial public offering, only to the extent
                  of Layne Energy's Indebtedness to all Covered Persons taken as
                  a whole; and (iv) if Borrower chooses to repay Indebtedness
                  (such choice to be in Borrower's discretion) with the net
                  proceeds of any such initial public offering, then Borrower
                  shall repay the Loan Obligations and the Term Indebtedness on
                  a pro rata basis (unless the holders of the Term Indebtedness
                  decline such offer as set forth in the Term Indebtedness
                  Documents, in which case such proceeds shall be used solely to
                  repay the Loan Obligations), provided, however, the first
                  $5,000,000 of any such net proceeds of an initial public
                  offering may be used solely to repay the Loan Obligations.

         13.20.   MOST FAVORED LENDER. Enter into, assume or otherwise be bound
         or obligated under any agreement creating or evidencing Indebtedness in
         excess of $500,000 containing one or more Additional Covenants or
         Additional Defaults, without the prior written consent of the Required
         Lenders; provided, however, in the event the Borrower or any other
         Covered Person shall enter into, assume or otherwise become bound by or
         obligated under any such agreement without the prior written consent of
         the Required Lenders, the terms of this Agreement shall, without any
         further action on the part of the Borrower and each other Covered
         Person or any Lender or the Administrative Agent, be deemed to be
         amended automatically to include each Additional Covenant and each
         Additional Default contained in such agreement. The Company further
         covenants to promptly execute and deliver at its expense (including,
         without limitation, the reasonable fees and expenses of counsel for the
         Administrative Agent) an amendment to this Agreement in form and
         substance satisfactory to the Required Lenders evidencing the amendment
         of this Agreement to include such Additional Covenants and Additional
         Defaults, provided that the execution and delivery of such amendment
         shall not be a precondition to the effectiveness of such amendment as
         provided for in this Section, but shall merely be for the convenience
         of the parties hereto. Notwithstanding the foregoing, the Term
         Indebtedness Documents as they exist on the Effective Date are not
         implicated by this Section.

14. FINANCIAL COVENANTS.

         14.1.    SPECIAL DEFINITIONS. As used in this Section 14 and elsewhere
         herein, the following capitalized terms have the following meanings:

         EBITDA shall mean, with respect to any Person for any fiscal period,
         without duplication, an amount equal to (a) consolidated Net Income of
         such Person for such period determined in accordance with GAAP, minus
         (b) the sum of (i) income tax benefits, (ii) interest income, (iii)
         gain from extraordinary items for such period, (iv) any aggregate net
         gain (but not any aggregate net loss) during such period arising from
         the sale, exchange or other disposition of capital assets by such
         Person (including any fixed assets, whether tangible or intangible, all
         inventory sold in conjunction with the disposition of fixed assets and
         all securities), and (v) any other non-cash gains that have been added
         in determining consolidated Net Income, in each case to the extent
         included in the calculation of consolidated Net Income of such Person
         for such period in accordance with GAAP, but without duplication, plus
         (c) the sum of (i) any provision for income taxes, (ii) Interest
         Expense, (iii) loss from extraordinary items for such period, (iv) the
         amount of non-cash charges (including depreciation and amortization but
         excluding insurance expense) for such period, (v) amortized debt
         discount for such period, (vi) any aggregate net loss (but not any
         aggregate net gains) during such period arising from the sale, exchange
         or other disposition of capital assets by such Person, and (vii) the
         amount of any deduction to consolidated Net Income as the result of any
         grant to any members of the management of such Person of any stock, in
         each

                                       37

<PAGE>

         case to the extent included in the calculation of consolidated Net
         Income of such Person for such period in accordance with GAAP, but
         without duplication. For purposes of this definition, the following
         items shall be excluded in determining consolidated Net Income of a
         Person: (1) the income (or deficit) of any other Person accrued prior
         to the date it became a Covered Person of, or was merged or
         consolidated into, such Person or any of such Person's Covered Persons;
         (2) equity earnings of other Persons accounted for on an equity basis,
         except to the extent received, on a consolidated basis, as cash
         dividends or distributions; (3) equity losses of other Persons
         accounted for on an equity basis, except to the extent such losses
         represent, on a consolidated basis, cash losses; (4) the undistributed
         earnings of any Subsidiary of such Person to the extent that the
         declaration or payment of dividends or similar distributions by such
         Subsidiary is not at the time permitted by the terms of any contractual
         obligation or requirement of law applicable to such Subsidiary; (5) any
         restoration to income of any contingency reserve, except to the extent
         that provision for such reserve was made out of income accrued during
         such period; (6) any write-up of any asset; (7) any net gain from the
         collection of the proceeds of life insurance policies; (8) any net gain
         arising from the acquisition of any securities, or the extinguishment,
         under GAAP, of any Indebtedness, of such Person, (9) in the case of a
         successor to such Person by consolidation or merger or as a transferee
         of its assets, any earnings of such successor prior to such
         consolidation, merger or transfer of assets, (10) any deferred credit
         representing the excess of equity in any Subsidiary of such Person at
         the date of acquisition of such Subsidiary over the cost to such Person
         of the investment in such Subsidiary, and (11) any income, gain or loss
         during such period from any discontinued operations or the disposition
         thereof.

         EBITDAR shall mean, for any Person, for any period, EBITDA plus Rental
         Expense.

         Fixed Charges means, for any period of calculation, the sum of (i)
         Rental Expense, (ii) Interest Expense, and (iii) all dividends,
         distributions and redemptions with respect to any equity interests in
         Borrower made in such period.

         Intangibles means and includes, but is not limited to, at any date,
         general intangibles; software developed in-house or purchased, licensed
         or leased; accounts receivable and advances due from officers,
         directors, employees, stockholders, members, and owners; licenses; good
         will; prepaid expenses; escrow deposits; covenants not to compete; the
         excess of cost over book value of acquired assets; franchise fees;
         organizational costs; finance reserves held for recourse obligations;
         capitalized research and development costs; the capitalized cost of
         patents, trademarks, service marks and copyrights net of amortization;
         and other intangible assets.

         Interest Expense means for any period of calculation, the sum of any
         interest and prepayment charges (except (i) any prepayment fees and
         deferred charges associated with the Term Indebtedness Documents, and
         (ii) the prepayment fees and deferred charges of the Existing
         Indebtedness), if any, including without limitation, all net amounts
         payable (or receivable) under Hedge Obligations and all imputed
         interest in respect of Capitalized Lease Obligations paid or payable by
         the Borrower and all other Covered Persons, during such period
         consolidated or combined in accordance with GAAP.

         Margined Assets means for any period of calculation, with respect to
         the Borrower and all other Covered Persons on a consolidated basis the
         sum of (i) 100% of cash and cash equivalents, plus (ii) 80% of customer
         accounts receivable and costs and estimated earnings in excess of
         billings on uncompleted contracts after deducting all reserves for bad
         debts and other reserves applicable thereto, plus (iii) 50% of
         inventories after deducting all reserves for obsolete inventory,
         out-of-specification inventory and other reserves applicable thereto,
         plus (iv) 50% of the book value of

                                       38

<PAGE>

         property, plant and equipment after deducting all depreciation,
         amortization and reserves applicable thereto.

         Net Income means, for any computation period, with respect to the
         Borrower and all other Covered Persons on a consolidated basis (other
         than any Subsidiary which is restricted from declaring or paying
         dividends or otherwise advancing funds to its parent whether by
         contract or otherwise), cumulative net income earned during such period
         as determined in accordance with GAAP.

         Net Worth means, as at any time of determination thereof, an amount
         equal to consolidated stockholders' equity of the Borrower and its
         Subsidiaries determined in accordance with GAAP (less amounts
         attributable to redeemable preferred stock and common stock).

         Rental Expense means with reference to any period, the aggregate amount
         of all payments for rent or additional rent (including all payments for
         taxes and insurance made directly to the lessor, but excluding payments
         for maintenance, repairs, alterations, construction, demolition and the
         like) for which the Borrower and all other Covered Persons are directly
         or indirectly liable (as lessee or as guarantor or other surety) under
         all Operating Leases (as defined under GAAP) in effect at any time
         during such period.

         Senior Indebtedness means Total Funded Indebtedness plus the Letter of
         Credit Exposure.

         Tangible Net Worth means Net Worth less Intangibles.

         Total Funded Indebtedness means the outstanding principal balance of
         the Loan Obligations (excluding the Letter of Credit Exposure), other
         Indebtedness for borrowed money including without limitation the Term
         Indebtedness, and the initial capitalized cost of assets subject to
         Capital Leases at the time of calculation; provided, however for
         clarification the foregoing, for purposes of this definition only does
         include: (i) Indebtedness secured by any Security Interest (other than
         Security Interests permitted by Section 13.5.8) existing on property
         owned subject to such Security Interest, whether or not the
         Indebtedness secured thereby shall have been assumed; (ii) Indirect
         Obligations (other than endorsement of negotiable instruments for
         collection in the ordinary course of business) and other contractual
         commitments (whether direct or indirect in connection with obligations,
         stock or dividends of any person) including, without limitation,
         liabilities in respect of letters of credit or instruments serving a
         similar function issued or accepted for such Person's account by banks
         or other financial institutions, but only in respect of and to the
         extent of payments made under such letters of credit or instruments by
         the issuers thereof; (iii) mandatory redeemable preferred stock; (iv)
         Hedge Obligations, (v) unfunded pension liabilities; (vi) preferred
         stock of Subsidiaries held by third parties; and (vii) the outstanding
         balance of the purchase price of uncollected Accounts subject at such
         time to a sale of receivables or other similar transaction, regardless
         of whether such transaction is effected without recourse or in a manner
         which would not be reflected on the balance sheet in accordance with
         GAAP; and provided further, however for clarification, the foregoing,
         for purposes of this definition only, does not include: items of
         contingency reserves, accrued insurance expense, minority interest,
         pension liabilities (other than unfunded pension liabilities), reserves
         for deferred income taxes, ordinary course trade accounts payable and
         accrued expenses shown as current liabilities on the Financial
         Statements; and.

         Upon completion of a Permitted Acquisition, the Target shall be
         included in each of these covenants contained in this Section 14 only
         for periods after the completion of any such Permitted Acquisition.

                                       39

<PAGE>

         All other capitalized terms used in this Section 14 shall have their
         meanings and shall be determined under GAAP.

         Whether or not expressly stated, all of the financial covenants
         contained in this Section 14 shall be calculated on a consolidated
         basis for the Borrower and all of its Subsidiaries.

         14.2.    MINIMUM FIXED CHARGE COVERAGE. Borrower shall cause the ratio
         of EBITDAR (plus, for the fiscal quarters ending July 31, 2003, October
         31, 2003, January 31, 2004 and April 30, 2004, up to $1,000,000 in
         prepayment fees and deferred charges paid on the Existing
         Indebtedness), for the most recently ended four fiscal quarters to
         Fixed Charges for the most recent ended four fiscal quarters, for the
         fiscal quarters ended on the dates specified below, calculated as of
         the last day of each such fiscal quarter, to not be less than the ratio
         specified for such period:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
 FOUR FISCAL QUARTER PERIOD ENDED ON OR
MOST RECENTLY BEFORE THE FOLLOWING DATES:    MINIMUM FIXED CHARGE COVERAGE RATIO
--------------------------------------------------------------------------------
<S>                                          <C>
the last day of each fiscal quarter (each                 2.00:1.00
January 31, April 30, July 31, and
October 31) beginning with July 31, 2003
--------------------------------------------------------------------------------
</TABLE>

         14.3.    MAXIMUM RATIO OF TOTAL FUNDED INDEBTEDNESS TO EBITDA. Borrower
         shall cause the ratio of Total Funded Indebtedness to EBITDA for the
         most recently ended four fiscal quarters, for the fiscal quarters ended
         on the dates specified below, calculated as of the last day of each
         such fiscal quarter, to not be greater than the ratio specified for
         such period:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
 FOUR FISCAL QUARTER PERIOD ENDED ON OR         MAXIMUM RATIO OF TOTAL FUNDED
MOST RECENTLY BEFORE THE FOLLOWING DATES:          INDEBTEDNESS TO EBITDA
-----------------------------------------------------------------------------
<S>                                             <C>
July 31, 2003, October 31, 2003, January 31,             3.00:1.00
2004, April 30, 2004, July 31, 2004, October
31, 2004 and January 31, 2005
-----------------------------------------------------------------------------
April 30, 2005 and the last day of each                  2.75:1.00
fiscal quarter thereafter
-----------------------------------------------------------------------------
</TABLE>

         14.4.    MINIMUM TANGIBLE NET WORTH. Borrower will not permit Tangible
         Net Worth at any time to be less than $64,158,000 plus the sum of (i)
         50% of positive Net Income (without reduction for losses in any period)
         for the fiscal year ended January 31, 2004 and thereafter semi-annually
         (on a fiscal year basis) on each July 31 and January 31 thereafter, and
         (ii) 100% of the net proceeds (meaning the net cash proceeds from the
         sale or issuance of any equity securities, net of all underwriters'
         discounts and commissions, other marketing and selling expenses) from
         the issuance and sale of equity securities after the date hereof.

         14.5.    MINIMUM ASSET COVERAGE. This Section 14.5 shall be applicable
         for each fiscal quarter in which the calculation in Section 14.3 is
         reported on the applicable Compliance Certificate to be greater than or
         equal to 2.00 to 1.00. Subject to the preceding sentence, Borrower
         shall cause the ratio of Margined Assets for the most recently ended
         four fiscal quarters to Senior Indebtedness for the most recent ended
         four fiscal quarters, for the fiscal quarters ended on the dates
         specified below, calculated as of the last day of each such fiscal
         quarter, to not be less than the ratio specified for such period:

                                       40

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
 FOUR FISCAL QUARTER PERIOD ENDED ON OR
MOST RECENTLY BEFORE THE FOLLOWING DATES:    MINIMUM ASSET COVERAGE RATIO
-------------------------------------------------------------------------
<S>                                          <C>
the last day of each fiscal quarter                  1.00:1.00
(each January 31, April 30, July 31 and
October 31) beginning with July 31, 2003
-------------------------------------------------------------------------
</TABLE>

15. DEFAULT.

         15.1.    EVENTS OF DEFAULT. Any one or more of the following shall
         constitute an event of default (an Event of Default) under this
         Agreement:

                  15.1.1.  FAILURE TO PAY PRINCIPAL OR INTEREST. Failure of
                  Borrower to pay any principal of the Loans or interest accrued
                  thereon when due, or failure of Borrower to pay any of the
                  other Loan Obligations on or within three (3) days of becoming
                  due.

                  15.1.2.  FAILURE TO PAY AMOUNTS OWED TO OTHER PERSONS. Failure
                  of any Covered Person (i) to make any payment due on
                  Indebtedness for borrowed money of such Covered Person over
                  $1,000,000 to Persons (other than Lenders under the Loan
                  Documents), which in either case continues unwaived beyond any
                  applicable grace period specified in the documents evidencing
                  such Indebtedness, or (ii) to pay any other Indebtedness
                  (other than Indebtedness described in clause (i)) over
                  $1,000,000 in the aggregate if the holder of such Indebtedness
                  commences any legal action against such Covered Person;
                  provided, however, that the foregoing Events of Default alone
                  described in clauses (i) and (ii) shall not constitute an
                  Event of Default to the extent such Indebtedness is being
                  contested in good faith by such Covered Person and such
                  Covered Person makes adequate reserves therefor under GAAP.

                  15.1.3.  REPRESENTATIONS OR WARRANTIES. Any of the
                  Representations and Warranties is discovered to have been
                  false in any material respect when made.

                  15.1.4.  CERTAIN COVENANTS. Failure of any Covered Person to
                  comply with the covenants in Sections 12.1, 12.11, 12.15, 13,
                  or 14.

                  15.1.5.  OTHER COVENANTS. Failure of any Covered Person to
                  comply with of any of the terms or provisions of the Agreement
                  or any of the other Loan Documents applicable to it (other
                  than a failure which constitutes an immediate Event of Default
                  hereunder, or for which some other grace period is specified
                  in any other Section of this 15.1) which is not remedied or
                  waived in writing by Administrative Agent within 30 days after
                  the initial occurrence of such failure.

                  15.1.6.  ACCELERATION AND DEFAULT OF OTHER INDEBTEDNESS. Any
                  Obligation (other than a Loan Obligation) of a Covered Person
                  for the repayment of $1,000,000 or more of borrowed money
                  becomes or is declared to be due and payable or required to be
                  prepaid (other than by an originally scheduled prepayment)
                  prior to the original maturity thereof or is in default after
                  the expiration of any cure periods. Any "Default" or "Event of
                  Default" (as such terms are defined in the Term Indebtedness
                  Documents) has occurred and is continuing. Any breach or
                  default by the holder of the Term Indebtedness of the
                  Intercreditor Agreement.

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<PAGE>

                  15.1.7.  DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any
                  default or event of default under any agreement to which a
                  Covered Person is a party (other than the Loan Documents),
                  which default or event of default continues unwaived beyond
                  any applicable grace period provided therein and has or is
                  reasonably likely to have a Material Adverse Effect.

                  15.1.8.  BANKRUPTCY; INSOLVENCY; ETC. A Covered Person (i)
                  fails to pay, or admits in writing its inability to pay, its
                  debts generally as they become due, or otherwise becomes
                  insolvent (however evidenced); (ii) makes an assignment for
                  the benefit of creditors; (iii) files a petition in
                  bankruptcy, is adjudicated insolvent or bankrupt, petitions or
                  applies to any tribunal for any receiver or any trustee of
                  such Covered Person or any substantial part of its property;
                  (iv) commences any proceeding relating to such Covered Person
                  under any reorganization, arrangement, readjustment of debt,
                  dissolution or liquidation Law of any jurisdiction, whether
                  now or hereafter in effect; (v) has commenced against it any
                  such proceeding which remains undismissed for a period of 60
                  days, or by any act indicates its consent to, approval of, or
                  acquiescence in any such proceeding or the appointment of any
                  receiver of or any trustee for it or of any substantial part
                  of its property, or allows any such receivership or
                  trusteeship to continue undischarged for a period of 60 days;
                  or (vi) takes any action to authorize any of the foregoing.

                  15.1.9.  JUDGMENTS; ATTACHMENT; SETTLEMENT; ETC. A final
                  judgment or judgments for the payment of money in excess of
                  $1,000,000 in the aggregate at any time are outstanding
                  against one or more of the Covered Persons and the same are
                  not, within 30 days after the entry thereof, discharged or
                  execution thereof stayed or bonded pending appeal, or such
                  judgments are not discharged prior to the expiration of any
                  such stay.

                  15.1.10. PENSION BENEFIT PLAN TERMINATION, ETC. Any Pension
                  Benefit Plan termination by the PBGC or the appointment by the
                  appropriate United States District Court of a trustee to
                  administer any Pension Benefit Plan or to liquidate any
                  Pension Benefit Plan; or any event which constitutes grounds
                  either for the termination of any Pension Benefit Plan by PBGC
                  or for the appointment by the appropriate United States
                  District Court of a trustee to administer or liquidate any
                  Pension Benefit Plan shall have occurred and be continuing for
                  thirty (30) days after Borrower has notice of any such event;
                  or any voluntary termination of any Pension Benefit Plan which
                  is a DEFINED BENEFIT PENSION PLAN as defined in Section 3(35)
                  of ERISA while such defined benefit pension plan has an
                  ACCUMULATED FUNDING DEFICIENCY, unless Administrative Agent
                  has been notified of such intent to voluntarily terminate such
                  plan and Required Lenders have given their consent and agreed
                  that such event shall not constitute a Default; or the plan
                  administrator of any Pension Benefit Plan applies under
                  Section 412(d) of the Code for a waiver of the minimum funding
                  standards of Section 412(1) of the Code and Required Lenders
                  determine that the substantial business hardship upon which
                  the application for such waiver is based could subject any
                  Covered Person or ERISA Affiliate of any Covered Person to a
                  liability in excess of $500,000 which is not reserved for in
                  accordance with GAAP.

                  15.1.11. LIQUIDATION OR DISSOLUTION. A Covered Person files a
                  certificate of dissolution under applicable state Law or is
                  liquidated or dissolved or suspends or terminates the
                  operation of its business, or has commenced against it any
                  action or proceeding for its liquidation or dissolution or the
                  winding up of its business, or takes any corporate action in
                  furtherance thereof, except in connection with the
                  consolidation of such a Covered Person and its assets with
                  another Covered Person and its assets.

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<PAGE>

                  15.1.12. SEIZURE OF ASSETS. The property of any Covered Person
                  is nationalized, expropriated, seized or otherwise
                  appropriated, or custody or control of such property or of any
                  Covered Person shall be assumed by any Governmental Authority
                  or any court of competent jurisdiction at the instance of any
                  Governmental Authority, unless the same is being contested in
                  good faith by proper proceedings diligently pursued and a stay
                  of enforcement is in effect, and is reasonably likely to have
                  a Material Adverse Effect.

                  15.1.13. RACKETEERING PROCEEDING. There is filed against any
                  Covered Person any civil or criminal action, suit or
                  proceeding under any federal or state racketeering statute
                  (including, without limitation, the Racketeer Influenced and
                  Corrupt Organization Act of 1970), which action, suit or
                  proceeding is not dismissed within 60 days and could result in
                  the confiscation or forfeiture of any material portion of its
                  assets.

                  15.1.14. LOSS TO ASSETS. Any loss, theft, damage or
                  destruction of any item or items of a Covered Person's assets
                  occurs which is reasonably likely to have a Material Adverse
                  Effect.

                  15.1.15. GUARANTY; GUARANTOR. Any Guaranty ceases to be in
                  full force and effect or any action is taken to discontinue or
                  assert the invalidity or unenforceability of any Guaranty or
                  any Guarantor fails to comply with any of the terms or
                  provisions of any Guaranty, or any representation or warranty
                  of any Guarantor therein is discovered to have been false in
                  any material respect when made, or any Guarantor denies that
                  it has any further liability under any Guaranty or gives
                  notice to Lender to such effect.

                  15.1.16. MATERIAL ADVERSE CHANGE. There occurs any action or
                  event or there is a nonoccurrence of any action or event,
                  which has or is reasonably likely to have a Material Adverse
                  Effect.

         15.2.    CROSS DEFAULT. An Event of Default under this Agreement will
         automatically and immediately constitute a default under all other Loan
         Documents without regard to any requirement therein for the giving of
         notice or the passing of time.

         15.3.    RIGHTS AND REMEDIES.

                  15.3.1.  TERMINATION OF COMMITMENTS. Upon an Event of Default
                  described in Section 15.1.8, the Commitments shall be deemed
                  canceled. Upon any other Event of Default, and at any time
                  thereafter, Required Lenders may cancel the Commitments. Such
                  cancellation may be, in either case, without presentment,
                  demand or notice of any kind, which Borrower expressly waives.

                  15.3.2.  ACCELERATION. Upon an Event of Default described in
                  Section 15.1.8, all of the outstanding Loan Obligations shall
                  automatically become immediately due and payable. Upon any
                  other Event of Default, and at any time thereafter, Required
                  Lenders may declare all of the outstanding Loan Obligations
                  immediately due and payable. Such acceleration may be, in
                  either case, without presentment, demand or notice of any
                  kind, which Borrower expressly waives.

                  15.3.3.  RIGHT OF SETOFF. Upon the occurrence and during the
                  continuation of an Event of Default, each Lender is hereby
                  authorized, without notice to Borrower (any such notice being
                  expressly waived by Borrower), to the fullest extent permitted
                  by law, to set off

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<PAGE>

                  and apply against the Loan Obligations any and all deposits
                  (general or special, time or demand, provisional or final) at
                  any time held, or any other Indebtedness at any time owing by
                  such Lender (or its Affiliate) to or for the credit or the
                  account of Borrower, irrespective of whether or not such
                  Lender shall have made any demand under this Agreement or the
                  Notes or any Guaranty and although such Loan Obligations may
                  be unmatured. The rights of each Lender under this Section are
                  in addition to other rights and remedies (including, without
                  limitation, other rights of setoff) which such Lender may
                  otherwise have. All amounts received by each Lender on account
                  of the Loan Obligations pursuant to this Section shall be paid
                  over promptly to Administrative Agent for distribution to
                  Lenders as provided in this Agreement and shall be applied as
                  provided in this Agreement.

                  15.3.4.  RIGHTS GENERALLY. Upon the occurrence and during the
                  continuation of an Event of Default and acceleration of the
                  Loan Obligations as provided herein, and at any time and from
                  time to time thereafter, Administrative Agent and Lenders may
                  exercise any or all of its rights they may have under the Loan
                  Documents or otherwise available in equity or under any other
                  applicable Law.

                  15.3.5.  JOINT AND SEVERAL. Each Obligation and liability to
                  the Letter of Credit Issuer, Administrative Agent and each
                  Lender of Borrower and Guarantors, including, without
                  limitation, the Loan Obligations, are the joint and several
                  obligations of Borrower and Guarantors, and Administrative
                  Agent may proceed directly against Borrower, any Guarantor,
                  all of the foregoing, or any one of the foregoing or any
                  combination of the foregoing, without first proceeding against
                  Borrower, or without joining all Persons liable or potentially
                  liable for any portion of the Loan Obligations in one action.

         15.4.    APPLICATION OF FUNDS. Any funds received by Lenders or
         Administrative Agent for the benefit of Lenders with respect to any
         Loan Obligation after its Maturity, shall be applied as follows: (i)
         first, to reimburse Lenders pro-rata for any amounts due to Lenders
         under Section 18.8; (ii) second, to reimburse to Administrative Agent
         all unreimbursed costs and expenses paid or incurred by Administrative
         Agent that are payable or reimbursable by Borrower hereunder; (iii)
         third, to reimburse to Lenders pro-rata all unreimbursed costs and
         expenses paid or incurred by Lenders (including costs and expenses
         incurred by Administrative Agent as a Lender that are not reimbursable
         as provided in the preceding clause) that are payable or reimbursable
         by Borrower hereunder; (iv) fourth, to the payment of accrued and
         unpaid fees due hereunder and all other amounts due hereunder (other
         than the Loans and interest accrued thereon); (v) fifth, to the payment
         of the Loans of each of the Lenders and interest accrued thereon (which
         payments shall be pro rata to each of the Lenders in accordance with
         the amount of the Loans outstanding) and to the payment (pari passu
         with the foregoing) of any Rate Hedging Obligations and cash collateral
         to the Letter of Credit Issuer as collateral for the Letter of Credit
         Exposure; and (vi) sixth, to the payment of the other Loan Obligations.
         Any remaining amounts shall be applied to payment of all the
         Obligations to Administrative Agent. Any further remaining amounts
         shall be paid to Borrower or such other Persons as shall be legally
         entitled thereto. Except as expressly provided otherwise herein,
         Lenders may apply and reverse and reapply, payments to the Loan
         Obligations in such order and manner as Lenders determine in their
         absolute discretion.

16. ADMINISTRATIVE AGENT AND LENDERS.

         16.1.    APPOINTMENT, POWERS, AND IMMUNITIES. LaSalle is hereby
         appointed Administrative Agent hereunder and under each of the other
         Loan Documents. Each Lender hereby irrevocably appoints and authorizes
         Administrative Agent to act as its agent under this Agreement and the

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<PAGE>

         other Loan Documents with such powers and discretion as are
         specifically delegated to Administrative Agent by the terms of this
         Agreement and the other Loan Documents, together with such other powers
         as are reasonably incidental thereto. Administrative Agent (which term
         as used in this sentence and in Section 16.5 and the first sentence of
         Section 16.6 hereof shall include its affiliates and its own and its
         affiliates' officers, directors, employees, and agents): (a) shall not
         have any duties or responsibilities except those expressly set forth in
         this Agreement and shall not be a trustee or fiduciary for any Lender;
         (b) shall not be responsible to the Lenders for any recital, statement,
         representation, or warranty (whether written or oral) made in or in
         connection with any Loan Document or any certificate or other document
         referred to or provided for in, or received by any of them under, any
         Loan Document, or for the value, validity, effectiveness, genuineness,
         enforceability, or sufficiency of any Loan Document, or any other
         document referred to or provided for therein or for any failure by any
         Covered Person or any other Person to perform any of its obligations
         thereunder or the validity; (c) shall not be responsible for or have
         any duty to ascertain, inquire into, or verify the performance or
         observance of any covenants or agreements by any Covered Person or the
         satisfaction of any condition or to inspect the property (including the
         books and records) of any Covered Person or any of its Subsidiaries or
         affiliates; (d) shall not be required to initiate or conduct any
         litigation or collection proceedings under any Loan Document; and (e)
         shall not be responsible for any action taken or omitted to be taken by
         it under or in connection with any Loan Document, except for its own
         gross negligence or willful misconduct. Administrative Agent may employ
         agents and attorneys-in-fact and shall not be responsible for the
         negligence or misconduct of any such agents or attorneys-in-fact
         selected by it with reasonable care.

         16.2.    RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent shall
         be entitled to rely upon any certification, notice, instrument,
         writing, or other communication (including, without limitation, any
         thereof by telephone or telecopy) believed by it to be genuine and
         correct and to have been signed, sent or made by or on behalf of the
         proper Person or Persons, and upon advice and statements of legal
         counsel (including counsel for any Covered Person), independent
         accountants, and other experts selected by Administrative Agent.
         Administrative Agent may deem and treat the payee of any Note as the
         holder thereof for all purposes hereof unless and until Administrative
         Agent receives and accepts an Assignment and Acceptance executed in
         accordance with Section 18.4 hereof. As to any matters not expressly
         provided for by this Agreement, Administrative Agent shall not be
         required to exercise any discretion or take any action, but shall be
         required to act or to refrain from acting (and shall be fully protected
         in so acting or refraining from acting) upon the instructions of the
         Required Lenders, and such instructions shall be binding on all of the
         Lenders; provided, however, that Administrative Agent shall not be
         required to take any action that exposes Administrative Agent to
         personal liability or that is contrary to any Loan Document or
         applicable law or unless it shall first be indemnified to its
         satisfaction by the Lenders against any and all liability and expense
         which may be incurred by it by reason of taking any such action.

         16.3.    EMPLOYMENT OF AGENTS AND COUNSEL. Administrative Agent may
         execute any of its duties hereunder by or through employees, agents,
         and attorneys-in-fact and shall not be liable to any Lender, except
         with respect to money or securities received by it or such agents or
         attorneys-in-fact, for the default or misconduct of any such agents or
         attorneys-in-fact selected by it with reasonable care. Administrative
         Agent shall be entitled to advice of counsel concerning all matters
         pertaining to the agency hereby created and its duties hereunder and
         shall not be liable to any Lender for acting or failing to act based as
         advised by such counsel, except where doing so violates an express
         obligation of Administrative Agent under the Loan Documents.

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<PAGE>

         16.4.    DEFAULTS. Administrative Agent shall not be deemed to have
         knowledge or notice of the occurrence of a Default or Event of Default
         unless Administrative Agent has received written notice from a Lender
         or the Borrower specifying such Default or Event of Default and stating
         that such notice is a Notice of Default. In the event that
         Administrative Agent receives such a notice of the occurrence of a
         Default or Event of Default, Administrative Agent shall give notice
         thereof to the Lenders. Administrative Agent shall (subject to Section
         16.2 hereof) take such action with respect to such Default or Event of
         Default as shall reasonably be directed by the Required Lenders,
         provided that, unless and until Administrative Agent shall have
         received such directions, Administrative Agent may (but shall not be
         obligated to) take such action, or refrain from taking such action,
         with respect to such Default or Event of Default as it shall deem
         advisable in the best interest of the Lenders.

         16.5.    RIGHTS AS LENDER. With respect to its Commitment and the Loans
         made by it, LaSalle (and any successor acting as Administrative Agent)
         in its capacity as a Lender hereunder shall have the same rights and
         powers hereunder as any other Lender and may exercise the same as
         though it were not acting as Administrative Agent, and the term Lender
         or Lenders shall, unless the context otherwise indicates, include
         Administrative Agent in its individual capacity. LaSalle (and any
         successor acting as Administrative Agent) and its affiliates may
         (without having to account therefor to any Lender) accept deposits
         from, lend money to, make investments in, provide services to, and
         generally engage in any kind of lending, trust, or other business with
         any Covered Person or any of its Subsidiaries or Affiliates as if it
         were not acting as Administrative Agent, and LaSalle (and any successor
         acting as Administrative Agent) and its Affiliates may accept fees and
         other consideration from any Covered Person or any of its Subsidiaries
         or Affiliates for services in connection with this Agreement or
         otherwise without having to account for the same to Lenders. The
         Lenders acknowledge that, pursuant to such activities, Administrative
         Agent or its Affiliates may receive information regarding Borrower or
         its Affiliates (including information that may be subject to
         confidentiality obligations in favor of Borrower or such Affiliates)
         and acknowledge that Administrative Agent shall be under no obligation
         to provide such information to the Lenders.

         16.6.    INDEMNIFICATION. Whether or not the transactions contemplated
         hereby are consummated, Lenders agree to reimburse and indemnify
         Administrative Agent upon demand (to the extent not reimbursed under
         Section 18.7, but without limiting the obligations of Borrower under
         Section 18.7) ratably in accordance with their respective Commitments,
         for any and all liabilities, obligations, losses, damages, penalties,
         actions, judgments, suits, costs, expenses (including reasonable
         attorneys' fees), or disbursements of any kind and nature whatsoever
         that may be imposed on, incurred by or asserted against Administrative
         Agent (including by any Lender) in any way relating to or arising out
         of any Loan Document or the transactions contemplated thereby or any
         action taken or omitted by Administrative Agent under any Loan
         Document; provided that no Lender shall be liable for any of the
         foregoing to the extent they arise from the gross negligence or willful
         misconduct of the Person to be indemnified. Without limitation of the
         foregoing, each Lender agrees to reimburse Administrative Agent
         promptly upon demand for its ratable share of any costs or expenses
         payable by Borrower under Section 18.7, to the extent that
         Administrative Agent is not promptly reimbursed for such costs and
         expenses by Borrower. The agreements contained in this Section shall
         survive payment in full of the Loans and all other amounts payable
         under this Agreement.

         16.7.    NOTIFICATION OF LENDERS. Each Lender agrees to use its good
         faith efforts, upon becoming aware of anything which has or is
         reasonably likely to have a Material Adverse Effect on any Covered
         Person, to promptly notify Administrative Agent thereof. Administrative
         Agent shall promptly deliver to each Lender copies of every written
         notice, demand, report (including

                                       46

<PAGE>

         any financial report), or other writing which Administrative Agent
         gives to or receives from Borrower and which itself (a) constitutes, or
         which contains information about, something that has or is reasonably
         likely to have a Material Adverse Effect on any Covered Person, or (b)
         is otherwise delivered to Administrative Agent by Borrower pursuant to
         the Loan Documents and is deemed material information by Administrative
         Agent in its sole discretion. Administrative Agent and its directors,
         officers, agents, and employees shall have no liability to any Lender
         for failure to deliver any such item to such Lender unless the failure
         constitutes gross negligence or willful misconduct.

         16.8.    NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
         acknowledges that Administrative Agent has not made any representation
         or warranty to it, and that no act by the Administrative Agent
         hereafter taken, including any review of the affairs of Borrower and
         its Affiliates, shall be deemed to constitute any representation or
         warranty by Administrative Agent to any Lender. Each Lender agrees that
         it has, independently and without reliance on Administrative Agent or
         any other Lender, and based on such documents and information as it has
         deemed appropriate, made its own credit analysis of the Covered Persons
         and their Subsidiaries and decision to enter into this Agreement and
         that it will, independently and without reliance upon Administrative
         Agent or any other Lender, and based on such documents and information
         as it shall deem appropriate at the time, continue to make its own
         analysis and decisions in taking or not taking action under the Loan
         Documents. Except for notices, reports, and other documents and
         information expressly required to be furnished to Lenders by
         Administrative Agent hereunder, Administrative Agent shall not have any
         duty or responsibility to provide any Lender with any credit or other
         information concerning the affairs, financial condition, or business of
         any Covered Person or any of its Subsidiaries or Affiliates that may
         come into the possession of Administrative Agent or any of its
         Affiliates.

         16.9.    RESIGNATION. Administrative Agent may resign at any time by
         giving notice thereof to the Lenders and Borrower. Upon any such
         resignation, the Required Lenders shall have the right to appoint a
         successor Administrative Agent which appointment shall be subject to
         the consent (which consent will not be unreasonably withheld or
         delayed) of Borrower so long as there is no Existing Default. If no
         successor Administrative Agent shall have been so appointed by the
         Required Lenders and shall have accepted such appointment within thirty
         (30) days after the retiring Administrative Agent's giving of notice of
         resignation, then the retiring Administrative Agent may, on behalf of
         the Lenders, appoint a successor Administrative Agent which shall be a
         commercial bank organized under the laws of the United States of
         America having combined capital and surplus of at least $100,000,000.
         Upon the acceptance of any appointment as Administrative Agent
         hereunder by a successor, such successor shall thereupon succeed to and
         become vested with all the rights, powers, discretion, privileges, and
         duties of the retiring Administrative Agent, and the retiring
         Administrative Agent shall be discharged from its duties and
         obligations hereunder. If no successor has accepted appointment as
         Administrative Agent within thirty (30) days after the date on which
         Administrative Agent first attempts to appoint a successor
         Administrative Agent, the resigning Administrative Agent's resignation
         shall nevertheless thereupon become effective and the Lenders shall
         perform all of the duties of the Administrative Agent hereunder until
         such time, if any, as the Required Lenders appoint a successor which
         accepts such appointment. After any retiring Administrative Agent's
         resignation hereunder as Administrative Agent, the provisions of this
         Section 16.9 shall continue in effect for its benefit in respect of any
         actions taken or omitted to be taken by it while it was acting as
         Administrative Agent.

         16.10.   COLLECTIONS AND DISTRIBUTIONS TO LENDERS BY ADMINISTRATIVE
         AGENT. Except as otherwise provided in this Agreement, including,
         without limitation, with respect to the Swingline

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<PAGE>

         Loan, all payments of interest, fees, principal and other amounts
         received by Administrative Agent for the account of Lenders shall be
         distributed by Administrative Agent to Lenders in accordance with their
         pro-rata shares of the outstanding Loan Obligations at the time of such
         distribution (or entirely to Administrative Agent in the case of
         payments of interest, fees or principal with respect to the Swingline
         Loan) on the same Business Day when received, unless received after
         12:00 noon (Local Time) in which case they shall be so distributed by
         12:00 noon (Local Time) on the next Business Day. All amounts received
         by any Lender on account of the Loan Obligations, including amounts
         received by way of setoff, shall be paid over promptly to
         Administrative Agent for distribution to Lenders as provided above in
         this Section. Such distributions shall be made according to
         instructions that each Lender may give to Administrative Agent from
         time to time. Unless there is an Existing Default (in which case the
         Lenders may apply payments as they determine in their discretion),
         payments received shall be applied (after application to the Swingline
         Loan to reduce it to zero), first to reduce any Base Rate Loans
         included in the Aggregate Revolving Loan owing to each Lender, and then
         to any Eurodollar Loans included in the Aggregate Revolving Loan owing
         to each Lender.

17. CHANGE IN CIRCUMSTANCES.

         17.1.    COMPENSATION FOR INCREASED COSTS AND REDUCED RETURNS.

                  17.1.1.  LAW CHANGES OR TAX IMPOSITIONS. If, after the
                  Effective Date, the adoption of any applicable Law or any
                  change in any applicable Law or any change in the
                  interpretation or administration thereof by any Governmental
                  Authority charged with the interpretation or administration
                  thereof, or compliance by any Lender (or its Applicable
                  Lending Office) with any request or directive (whether or not
                  having the force of law) of any such Governmental Authority,
                  central bank, or comparable agency:

                           (i)      subjects such Lender (or its Applicable
                           Lending Office) to any Tax with respect to any
                           Eurodollar Loans or its obligation to make Eurodollar
                           Loans, or change the basis of taxation of any amounts
                           payable to such Lender (or its Applicable Lending
                           Office) under this Agreement in respect of any
                           Eurodollar Loans (other than Taxes imposed on the
                           overall net income of such Lender by the jurisdiction
                           in which such Lender has its principal office or such
                           Applicable Lending Office);

                           (ii)     imposes, modifies, or deems applicable any
                           reserve, special deposit, assessment or similar
                           requirement (other than the reserve requirement
                           utilized in the determination of the Eurodollar Rate)
                           relating to any extensions of credit or other assets
                           of, or any deposits with or other liabilities or
                           commitments of, such Lender (or its Applicable
                           Lending Office), including the Commitment of such
                           Lender hereunder; or

                           (iii)    imposes on such Lender (or its Applicable
                           Lending Office) or on the United States market for
                           certificates of deposit or the London Interbank
                           market any other condition affecting this Agreement,
                           its Commitments or its Note or any of such extensions
                           of credit or liabilities or commitments;

                  and the result of any of the foregoing is to increase the cost
                  to such Lender (or its Applicable Lending Office) of making,
                  converting into, continuing, or maintaining any Loans or to
                  reduce any sum received or receivable by such Lender (or its
                  Applicable Lending Office) under this Agreement or any of its
                  Notes with respect to any Loans, then

                                       48

<PAGE>

                  Borrower shall pay to such Lender on demand such amount or
                  amounts as will compensate such Lender for such increased cost
                  or reduction. If any Lender requests compensation by Borrower
                  under this Section 17.1.1, Borrower may, by notice to such
                  Lender (with a copy to Administrative Agent), suspend the
                  obligation of such Lender to make or continue Loans of the
                  type with respect to which such compensation is requested, or
                  to convert Loans of any other type into Loans of such type,
                  until the event or condition giving rise to such request
                  ceases to be in effect (in which case the provisions of
                  Section 17.5 shall be applicable); provided, however, that
                  such suspension shall not affect the right of such Lender to
                  receive the compensation so requested.

                  17.1.2.  CAPITAL ADEQUACY. If, after the Effective Date, any
                  Lender shall have determined that the adoption of any
                  applicable Law regarding capital adequacy or any change
                  therein or in the interpretation or administration thereof by
                  any governmental authority, central bank, or comparable agency
                  charged with the interpretation or administration thereof, or
                  any request or directive regarding capital adequacy (whether
                  or not having the force of law) of any such governmental
                  authority, central bank, or comparable agency, has or would
                  have the effect of reducing the rate of return on the capital
                  of such Lender or any corporation controlling such Lender as a
                  consequence of such Lender's obligations hereunder to a level
                  below that which such Lender or such corporation could have
                  achieved but for such adoption, change, request, or directive
                  (taking into consideration its policies with respect to
                  capital adequacy), then from time to time upon demand Borrower
                  shall pay to such Lender such additional amount or amounts as
                  will compensate such Lender for such reduction.

                  17.1.3.  NOTICE TO BORROWER. Each Lender shall promptly notify
                  Borrower and Administrative Agent of any event of which it has
                  knowledge, occurring after the date hereof, which will entitle
                  such Lender to compensation pursuant to this Section 17.1 and
                  will designate a different Applicable Lending Office if such
                  designation will avoid the need for, or reduce the amount of,
                  such compensation and will not, in the judgment of such
                  Lender, be otherwise disadvantageous to it. Any Lender
                  claiming compensation under this Section 17.1 shall furnish to
                  Borrower and Administrative Agent a statement setting forth
                  the additional amount or amounts to be paid to it hereunder
                  which shall be conclusive in the absence of manifest error. In
                  determining such amount, such Lender may use any reasonable
                  averaging and attribution methods.

         17.2.    MARKET FAILURE. If on or prior to the first day of any
         Interest Period for any Eurodollar Loan:

                  (i)      Administrative Agent determines (which determination
                  shall be conclusive) that by reason of circumstances affecting
                  the relevant market, adequate and reasonable means do not
                  exist for ascertaining the Eurodollar Rate for such Interest
                  Period; or

                  (ii)     the Required Lenders determine (which determination
                  shall be conclusive) and notify Administrative Agent that the
                  Eurodollar Rate will not adequately and fairly reflect the
                  cost to the Lenders of funding Eurodollar Loans for such
                  Interest Period;

         then Administrative Agent shall give Borrower prompt notice thereof,
         and so long as such condition remains in effect, the Lenders shall be
         under no obligation to make additional Eurodollar Loans, continue
         Eurodollar Loans, or to convert Eurodollar Loans and Borrower shall, on
         the last day(s) of the then current Interest Period(s) for the
         outstanding Eurodollar Loans either

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         prepay such Loans or convert such Loans into Base Rate Loans in
         accordance with the terms of this Agreement.

         17.3.    ILLEGALITY. Notwithstanding any other provision of this
         Agreement, in the event that it becomes unlawful for any Lender or its
         Applicable Lending Office to make, maintain, or fund Eurodollar Loans
         hereunder, then such Lender shall promptly notify Borrower thereof and
         such Lender's obligation to make, continue Eurodollar Loans or convert
         Base Rate Loans into Eurodollar Loans shall be suspended until such
         time as such Lender may again make, maintain, and fund Eurodollar Loans
         (in which case the provisions of Section 17.5 shall be applicable).

         17.4.    COMPENSATION. Upon the request of any Lender, Borrower shall
         pay to such Lender such amount or amounts as shall be sufficient (in
         the reasonable opinion of such Lender) to compensate it for any loss,
         cost, or expense (including loss of anticipated profits) incurred by it
         as a result of:

                  (i)      any payment, prepayment, or conversion of a
                  Eurodollar Loan for any reason (including, without limitation,
                  the acceleration of the Loans pursuant to the terms hereof) on
                  a date other than the last day of the Interest Period for such
                  Eurodollar Loan; or

                  (ii)     any failure by Borrower for any reason to borrow,
                  convert, continue, or prepay a Eurodollar Loan on the date for
                  such borrowing, conversion, continuation, or prepayment
                  specified in the relevant notice of borrowing, prepayment,
                  continuation, or conversion under this Agreement.

         If a Lender claims compensation under this Section 17.4, such Lender
         shall furnish a certificate to Borrower that states the amount to be
         paid to it hereunder and includes a description of the method used by
         such Lender in calculating such amount. Borrower shall have the burden
         of proving that the amount of any such compensation calculated by a
         Lender is not correct. Any compensation payable by Borrower to a Lender
         under this Section 17.4 shall be payable without regard to whether such
         Lender has funded its pro-rata share of any Eurodollar Advance or
         Eurodollar Loan through the purchase of deposits in an amount or of a
         maturity corresponding to the deposits used as a reference in
         determining the Eurodollar Rate.

         17.5.    TREATMENT OF AFFECTED LOANS. If the obligation of any Lender
         to make a Eurodollar Loans or to continue any Eurodollar Loans, or to
         convert any Base Rate Loan into a Eurodollar Loan shall be suspended
         pursuant to Section 17.1, 17.2, or 17.3 (such Loans being herein called
         Affected Loans), such Lender's Affected Loans shall be automatically
         and immediately converted into Base Rate Loans on the last day(s) of
         the then current Interest Period(s) for Affected Loans (or, in the case
         of a conversion required by Section 17.3, on such earlier date as such
         Lender may specify to Borrower with a copy to Administrative Agent)
         and, unless and until such Lender gives notice as provided below that
         the circumstances specified in Section 17.1, 17.2, or 17.3 that gave
         rise to such conversion no longer exist:

                  (i)      to the extent that such Lender's Affected Loans have
                  been so converted, all payments and prepayments of principal
                  that would otherwise be applied to such Lender's Affected
                  Loans shall continue to be made and applied as provided for
                  herein; and

                  (ii)     all Loans that would otherwise be made or continued
                  by such Lender as Eurodollar Loans shall be made or continued
                  instead as Base Rate Loans, and all Loans of such Lender that
                  would otherwise be converted into Eurodollar Loans shall be
                  converted instead into (or shall remain as) Base Rate Loans.

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<PAGE>

         If such Lender gives notice to Borrower (with a copy to Administrative
         Agent) that the circumstances specified in Section 17.1, 17.2, or 17.3
         hereof that gave rise to the conversion of such Lender's Affected Loans
         pursuant to this Section 17.5 no longer exist (which such Lender agrees
         to do promptly upon such circumstances ceasing to exist) at a time when
         Loans of the type of the Affected Loans made by other Lenders are
         outstanding, such Lender's Base Rate Loans shall be automatically
         converted, on the first day(s) of the next succeeding Interest
         Period(s) for such outstanding Loans of the type of the Affected Loans,
         to the extent necessary so that, after giving effect thereto, all Loans
         held by the Lenders holding Loans of the type of the Affected Loans and
         by such Lender are held pro rata (as to principal amounts, type of
         interest, and Interest Periods) in accordance with their respective
         Commitments.

         17.6.    TAXES.

                  17.6.1.  GROSS-UP. Any and all payments by Borrower to or for
                  the account of any Lender or the Administrative Agent
                  hereunder or under any other Loan Document shall be made free
                  and clear of and without deduction for any and all Taxes,
                  whether imposed now or in the future, excluding, in the case
                  of each Lender and the Administrative Agent, Taxes imposed on
                  its income, and franchise Taxes imposed on it, by the
                  jurisdiction under the Laws of which such Lender (or its
                  Applicable Lending Office) or the Administrative Agent (as the
                  case may be) is organized or any political subdivision
                  thereof. If Borrower is required by Law to deduct any Taxes
                  from or in respect of any sum payable under this Agreement or
                  any other Loan Document to any Lender or the Administrative
                  Agent, (i) the sum payable will be increased as necessary so
                  that after making all required deductions (including
                  deductions applicable to additional sums payable under this
                  Section 17.6) such Lender or the Administrative Agent receives
                  an amount equal to the sum it would have received had no such
                  deductions been made, (ii) Borrower shall make such
                  deductions, (iii) Borrower shall pay the full amount deducted
                  to the relevant taxation authority or other authority in
                  accordance with applicable Law, and (iv) Borrower shall
                  furnish to Administrative Agent, at its address referred to
                  herein, the original or a certified copy of a receipt
                  evidencing payment thereof. In addition, Borrower agrees to
                  pay any and all present or future stamp or documentary taxes
                  and any other excise or property taxes or charges or similar
                  levies which arise from any payment made under this Agreement
                  or any other Loan Document or from the execution or delivery
                  of, or otherwise with respect to, this Agreement or any other
                  Loan Document (hereinafter referred to as Impositions).
                  Borrower agrees to indemnify each Lender and the
                  Administrative Agent for the full amount of Taxes and
                  Impositions (including, without limitation, any Taxes or
                  Impositions imposed or asserted by any jurisdiction on amounts
                  payable under this Section 17.6) paid by such Lender or the
                  Administrative Agent (as the case may be) and any liability
                  (including penalties, interest and expenses) arising therefrom
                  or with respect thereto. Within 30 days after the date of any
                  payment of Taxes, Borrower shall furnish to Administrative
                  Agent the original or a certified copy of the receipt
                  evidencing such payment.

                  17.6.2.  LENDERS' UNDERTAKINGS.

                           (i)      Each Lender organized under the Laws of a
                           jurisdiction outside the United States, on or prior
                           to the date of its execution and delivery of this
                           Agreement in the case of each Lender listed on the
                           signature pages hereof and on or prior to the date on
                           which it becomes a Lender in the case of each other
                           Lender, and from time to time thereafter if requested
                           in writing by Borrower or

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                           Administrative Agent (but only so long as such Lender
                           remains lawfully able to do so), shall provide
                           Borrower and Administrative Agent with (i) Internal
                           Revenue Service Form 1001 or 4224, as appropriate, or
                           any successor form prescribed by the Internal Revenue
                           Service, certifying that such Lender is entitled to
                           benefits under an income tax treaty to which the
                           United States is a party which reduces the rate of
                           withholding Tax on payments of interest or certifying
                           that the income receivable pursuant to this Agreement
                           is effectively connected with the conduct of a trade
                           or business in the United States, (ii) Internal
                           Revenue Service Form W-8 or W-9, as appropriate, or
                           any successor form prescribed by the Internal Revenue
                           Service, and (iii) any other form or certificate
                           required by any Governmental Authority (including any
                           certificate required by Sections 871(h) and 881(c) of
                           the Internal Revenue Code), certifying that such
                           Lender is entitled to an exemption from or a reduced
                           rate of Tax on payments pursuant to this Agreement or
                           any of the other Loan Documents. For any period with
                           respect to which a Lender has failed to provide
                           Borrower and Administrative Agent with the
                           appropriate form pursuant to this Section 17.6.2
                           (unless such failure is due to a change in treaty or
                           Law occurring subsequent to the date on which a form
                           originally was required to be provided), such Lender
                           shall not be entitled to indemnification under
                           Section 17.6.1 with respect to Taxes imposed by the
                           United States; provided, however, that should a
                           Lender, which is otherwise exempt from or subject to
                           a reduced rate of withholding tax, become subject to
                           Taxes because of its failure to deliver a form
                           required hereunder, Borrower shall take such steps as
                           such Lender shall reasonably request to assist such
                           Lender to recover such Taxes.

                           (ii)     If Borrower is required to pay additional
                           amounts to or for the account of any Lender or
                           Administrative Agent pursuant to this Section, then
                           such Lender or the Administrative Agent will agree to
                           use reasonable efforts to change the jurisdiction of
                           its Applicable Lending Office so as to eliminate or
                           reduce any such additional payment which may
                           thereafter accrue if such change, in the judgment of
                           such Lender or the Administrative Agent, as the case
                           may be, is not otherwise disadvantageous to such
                           Lender or the Administrative Agent, as the case may
                           be.

                  17.6.3.  SURVIVAL OF BORROWER'S OBLIGATIONS. Without prejudice
                  to the survival of any other agreement of Borrower hereunder,
                  the agreements and obligations of Borrower contained in this
                  Section 17.6 shall survive the termination of the Commitments,
                  the expiration of the Letters of Credit, the indefeasible full
                  payment and satisfaction of all of the Loan Obligations.

         17.7.    USURY. Notwithstanding any provisions to the contrary in
         Section 4 or elsewhere in any of the Loan Documents, Borrower shall not
         be obligated to pay interest at a rate which exceeds the maximum rate
         permitted by Law. If, but for this Section 17.7, Borrower would be
         deemed obligated to pay interest at a rate which exceeds the maximum
         rate permitted by Law, or if any of the Loan Obligations is paid or
         becomes payable before its originally scheduled Maturity and as a
         result Borrower has paid or would be obligated to pay interest at such
         an excessive rate, then (i) Borrower shall not be obligated to pay
         interest to the extent it exceeds the interest that would be payable at
         the maximum rate permitted by Law; (ii) if the outstanding Loan
         Obligations have not been accelerated as provided in Section 15.3.2,
         any such excess interest that has been paid by Borrower shall be
         refunded; (iii) if the outstanding Loan Obligations have been
         accelerated as provided in Section 15.3.2, any such excess that has
         been paid by Borrower shall be applied to the

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<PAGE>

         Loan Obligations as provided in Section 15.4; and (iv) the effective
         rate of interest shall be deemed automatically reduced to the maximum
         rate permitted by Law.

18. GENERAL.

         18.1.    LENDERS' RIGHT TO CURE. Required Lenders may from time to
         time, in their absolute discretion, for Borrower's account and at
         Borrower's expense, pay (or, with the consent of Required Lenders, make
         a Revolving Loan Advance to pay) any amount or do any act required of
         Borrower hereunder or requested by Administrative Agent or Required
         Lenders to preserve, protect, maintain or enforce the Loan Obligations,
         which Borrower is required to pay or do, but fails to pay or do,
         including payment of any judgment against Borrower, insurance premium,
         taxes or assessments, warehouse charge, finishing or processing charge,
         landlord's claim, and any other Security Interest upon or with respect
         to its assets. All payments that Lenders make pursuant to this Section
         and all out-of-pocket costs and expenses that Lenders pay or incur in
         connection with any action taken by them hereunder shall be a part of
         the Loan Obligations. Any payment made or other action taken by Lenders
         pursuant to this Section shall be without prejudice to any right to
         assert an Event of Default hereunder and to pursue Lender's other
         rights and remedies with respect thereto. Administrative Agent agrees
         that so long as there is no Existing Default, Administrative Agent will
         use its reasonable efforts to give notice to Borrower prior to taking
         any of the actions described in this Section 18.1; provided, however,
         that Administrative Agent shall have no liability for failure to give
         any such notice, unless such failure is intentional.

         18.2.    RIGHTS NOT EXCLUSIVE. Every right granted to Administrative
         Agent and Lenders hereunder or under any other Loan Document or allowed
         to it at law or in equity shall be deemed cumulative and may be
         exercised from time to time.

         18.3.    SURVIVAL OF AGREEMENTS. All covenants and agreements made
         herein and in the other Loan Documents shall survive the execution and
         delivery of this Agreement, the Notes and other Loan Documents and the
         making of every Advance. All agreements, obligations and liabilities of
         Borrower under this Agreement concerning the payment of money to
         Administrative Agent and Lenders, including Borrower's obligations
         under Sections 18.7 and 18.8, but excluding the obligation to repay the
         Loans and interest accrued thereon, shall survive the repayment in full
         of the Loans and interest accrued thereon, whether or not indefeasible,
         the return of the Notes to Borrower, the termination of the Commitments
         and the expiration of all Letters of Credit.

         18.4.    ASSIGNMENTS.

                  18.4.1.  PERMITTED ASSIGNMENTS. At any time after the
                  Execution Date, any Lender may assign to one or more Eligible
                  Assignees all or a portion of its rights and obligations under
                  this Agreement (including all or a portion of the Notes
                  payable to it, its Commitments and its Loans), provided that
                  the terms of assignment satisfy the following requirements:

                           18.4.1.1. Administrative Agent shall have accepted
                           the assignment, which acceptance shall not be
                           unreasonably withheld.

                           18.4.1.2. Each such assignment shall be of a
                           constant, and not a varying, percentage of all of the
                           assigning Lender's rights and obligations under this
                           Agreement.

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<PAGE>

                           18.4.1.3. For each assignment involving the issuance
                           and transfer of Notes, the assigning Lender shall
                           execute an Assignment and Acceptance in the form
                           attached hereto as Exhibit 18.4.1 together with any
                           Note subject to such assignment and a processing fee
                           of $3,500 payable by assigning Lender.

                           18.4.1.4. The minimum Commitment which shall be
                           assigned (which shall include the applicable portion
                           of the assigning Lender's Revolving Loan Commitment,
                           and Letter of Credit Commitment (and in the case of
                           Administrative Agent, the Swingline Commitment)) is
                           $4,000,000 or such lesser amount which constitutes
                           such Lender's entire Commitment; provided, however,
                           that no such minimum shall apply between a Lender and
                           its Affiliates, or between one Lender and another
                           Lender or an assignment of all of a Lender's rights
                           and obligations under this Agreement.

                           18.4.1.5. The assignee shall have an office located
                           in the United States and is otherwise an Eligible
                           Assignee.

                           18.4.1.6. If there is no Existing Default as of the
                           date of such assignment, Borrower shall have
                           consented to the assignment, which consent shall not
                           be unreasonably withheld or delayed.

                  18.4.2.  CONSEQUENCES AND EFFECT OF ASSIGNMENTS. From and
                  after the effective date specified in any Assignment and
                  Acceptance, the assignee shall be deemed and treated as a
                  party to this Agreement and, to the extent that rights and
                  obligations hereunder and under the Notes held by the assignor
                  have been assigned or negotiated to the assignee pursuant to
                  such Assignment and Acceptance, to have the rights and
                  obligations of a Lender hereunder as fully as if such assignee
                  had been named as a Lender in this Agreement and of a holder
                  of such Notes, and the assignor shall, to the extent that
                  rights and obligations hereunder or under such Notes have been
                  assigned or negotiated by it pursuant to such Assignment and
                  Acceptance, relinquish its rights and be released from its
                  future obligations under this Agreement. If the assignee is
                  not incorporated under the laws of the United States of
                  America or a state thereof, it shall deliver to Borrower and
                  Administrative Agent certification as to the exemption from
                  deduction or withholding of Taxes in accordance with Section
                  17.6.

                  18.4.3.  AGREEMENTS UPON ASSIGNMENT. By executing and
                  delivering an Assignment and Acceptance, the assignor
                  thereunder and the assignee confirm to and agree with each
                  other and the other parties hereto substantially as follows:
                  (i) the assignment made under such Assignment and Acceptance
                  is made under such Assignment and Acceptance without recourse;
                  (ii) such assignor makes no representation or warranty and
                  assumes no responsibility with respect to the financial
                  condition of any Covered Person or the performance or
                  observance by any Covered Person of any of its Loan
                  Obligations; (iii) such assignee confirms that it has received
                  a copy of this Agreement, together with copies of the
                  Financial Statements and such other Loan Documents and other
                  documents and information as it has deemed appropriate to make
                  its own credit analysis and decision to enter into such
                  Assignment and Acceptance; (iv) such assignee will,
                  independently and without reliance upon Administrative Agent,
                  such assignor, or any other Lender, and based on such
                  documents and information as it deems appropriate at the time,
                  continue to make its own credit decisions in taking or not
                  taking action under this Agreement; (v) such assignee appoints
                  and authorizes Administrative Agent to take such action as
                  agent on its behalf and to exercise such powers under this
                  Agreement and the other Loan

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<PAGE>

                  Documents as are delegated to Agent by the terms hereof and
                  thereof, together with such powers as are reasonably
                  incidental thereto; and (vi) such assignee agrees that it will
                  perform in accordance with their terms all of the obligations
                  which by the terms of this Agreement are required to be
                  performed by it as a Lender and a holder of a Note.

                  18.4.4.  REGISTER. Administrative Agent shall maintain at its
                  address referred to herein a copy of each Assignment and
                  Acceptance delivered to and accepted by it and a register for
                  the recordation of the names and addresses of the Lenders and
                  the Commitment of and principal amount of Loans owing to, each
                  Lender from time to time (the Register). The entries in the
                  Register shall be conclusive and binding for all purposes,
                  absent manifest error, and Borrower, Administrative Agent and
                  Lenders may treat each Person whose name is recorded in the
                  Register as a Lender hereunder for all purposes of this
                  Agreement. The Register shall be available for inspection by
                  Borrower or any Lender at any reasonable time and from time to
                  time upon reasonable prior notice. Upon its receipt of an
                  Assignment and Acceptance executed by the parties thereto,
                  together with any Note subject to such assignment and payment
                  of the processing fee, Administrative Agent shall, if such
                  Assignment and Acceptance has been completed and is in
                  substantially the form of Exhibit 18.4.1 hereto, (i) accept
                  such Assignment and Acceptance, (ii) record the information
                  contained therein in the Register and (iii) give prompt notice
                  thereof to the parties thereto.

                  18.4.5.  NOTICE TO BORROWER OF ASSIGNMENT. Upon its receipt of
                  an Assignment and Acceptance executed by an assigning Lender,
                  if Administrative Agent accepts the assignment contemplated
                  thereby, Administrative Agent shall give prompt notice thereof
                  to Borrower. Borrower shall execute and deliver replacement
                  Notes to the assignor and assignee as requested by
                  Administrative Agent and necessary to give effect to the
                  assignment. If Borrower fails or refuses to execute and
                  deliver such replacement Notes, Administrative Agent may, as
                  agent and attorney-in-fact for Borrower, execute and deliver
                  such replacement Notes on behalf of Borrower. Borrower hereby
                  appoints Administrative Agent as its agent and
                  attorney-in-fact for such purpose and acknowledges that such
                  power is coupled with an interest and therefore irrevocable.
                  Administrative Agent shall not have any liability to Borrower
                  or anyone else, including any Lender, as a consequence of
                  exercising such power in any instance.

                  18.4.6.  ASSIGNMENT TO FEDERAL RESERVE BANK. Notwithstanding
                  any other provision set forth in this Agreement, without
                  consent of Borrower or Administrative Agent, any Lender may at
                  any time assign and pledge all or any portion of its Loans and
                  its Note to any Federal Reserve Bank as collateral security
                  pursuant to Regulation A and any Operating Circular issued by
                  such Federal Reserve Bank. No such assignment shall release
                  the assigning Lender from its obligations hereunder.

         18.5.    SALE OF PARTICIPATIONS. Each Lender may sell participations to
         one or more Persons (other than Borrower or an Affiliate of Borrower)
         in all or a portion of its rights and obligations under this Agreement
         (including all or a portion of its Commitment and its Loans); provided,
         however, 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, (iii)
         the participant shall be entitled to the benefit of the yield
         protection provisions contained in Section 17 and the right of setoff
         contained in Section 15.3.3, (iv) the amount of the participation shall
         be in a minimum amount of $5,000,000 or such lesser amount which
         constitutes such Lender's entire Commitment, provided, however, that no
         such minimum amount shall apply to participations between any of
         Lenders or between any Lender and any of its

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<PAGE>

         Affiliates; and (v) Borrower, the other Lenders and Administrative
         Agent shall continue to deal solely and directly with such Lender in
         connection with such Lender's rights and obligations under this
         Agreement, and such Lender shall retain the sole right to enforce the
         obligations of Borrower relating to its Loans, its Notes and its
         funding of Advances and to approve any amendment, modification, or
         waiver of any provision of this Agreement, provided, however, that the
         approval of a participant of a Lender may be required only for
         amendments, modifications, or waivers that (a) forgive the amount of
         principal of the Loans, (b) reduce the Eurodollar Margin or the Base
         Rate Margin or reduce the Revolving Loan Unused Fee, or (c) extend the
         Revolving Loan Maturity Date. The Lender selling a participation shall,
         within two (2) Business Days of its effectiveness, provide written
         notice of such event to the Administrative Agent. Notwithstanding the
         foregoing provisions of this Section, the sale of any such
         participations which require Borrower to file a registration statement
         with the SEC or under the securities Laws of any state shall not be
         permitted.

         18.6.    INFORMATION; CONFIDENTIALITY. Administrative Agent and each
         Lender agrees that it will not disclose to third Persons any
         information that it obtains about Borrower or its operations or
         finances that are designated by Borrower in writing as confidential or
         that Borrower has advised Administrative Agent and Lenders in writing
         constitutes non-public information. Administrative Agent and Lenders
         may, however, disclose such information to each other, to assignees and
         participants (including prospective assignees and participants) and to
         all of their respective officers, attorneys, auditors, accountants,
         bank examiners, agents and representatives who have a need to know such
         information in connection with the administration, interpretation or
         enforcement of the Loan Documents or the lending and collection
         activity contemplated therein or to the extent required by Law or a
         Governmental Authority. Administrative Agent and Lenders shall advise
         such Persons that such information is to be treated as confidential.
         Administrative Agent and any Lender may also disclose such information
         in any documents that it files in any legal proceeding to pursue,
         enforce or preserve its rights under the Loan Documents to the extent
         that its counsel advises in writing that such disclosure is reasonably
         necessary. Administrative Agent's and Lenders' non-disclosure
         obligation shall not apply to any information that (i) is disclosed to
         Administrative Agent or any Lender by a third Person not affiliated
         with or employed by Borrower who does not have a commensurate duty of
         non-disclosure, or (ii) becomes publicly known other than as a result
         of disclosure by Administrative Agent or a Lender.

         Borrower agrees and shall cause each other Covered Person to agree that
         neither it nor its Affiliates will in the future issue any press
         releases or other public disclosure using the name of LaSalle Bank
         National Association or its affiliates or referring to this Agreement,
         the other Loan Documents without at least 2 Business Days' prior notice
         to Administrative Agent and without the prior written consent of
         LaSalle Bank National Association unless (and only to the extent that)
         Borrower or such other Covered Person or Affiliate is required to do so
         under law (including, without limitation, all rules and regulations
         promulgated by the Securities and Exchange Commission) and then, in any
         event, Borrower or such other Covered Person or Affiliate will consult
         with Administrative Agent before issuing such press release or other
         public disclosure. Borrower consents, and shall cause each other
         Covered Person to consent, to the publication by Administrative Agent
         or any Lender of a tombstone or similar advertising material relating
         to the financing transactions contemplated by this Agreement.
         Administrative Agent and each Lender reserves the right to provide to
         industry trade organizations information necessary and customary for
         inclusion in league table measurements.

         Notwithstanding anything herein to the contrary, "information" shall
         not include, and the Administrative Agent and each Lender may disclose
         to any and all Persons, without limitation of any kind, any information
         with respect to the "tax treatment" and "tax structure" (in each case,

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         within the meaning of Treasury Regulation Section 1.6011-4) of the
         transactions contemplated hereby and all materials of any kind
         (including opinions or other tax analyses) that are provided to the
         Administrative Agent or such Lender relating to such tax treatment and
         tax structure; provided that with respect to any document or similar
         item that in either case contains information concerning the tax
         treatment or tax structure of the transaction as well as other
         information, this sentence shall only apply to such portions of the
         document or similar item that relate to the tax treatment or tax
         structure of the Loans, Letters of Credit and transactions contemplated
         hereby.

         18.7.    PAYMENT OF EXPENSES. Borrower agrees to pay or reimburse to
         Administrative Agent all of Administrative Agent's out-of-pocket costs
         incurred in connection with Administrative Agent's due diligence review
         before execution of the Loan Documents; the negotiation and preparation
         of proposals, a commitment letter and the Loan Documents; the
         syndication of the Loans; the administration of this Agreement, the
         Loan Documents and the Loans; the interpretation of any of the Loan
         Documents; any amendment of or supplementation to any of the Loan
         Documents; and any waiver, consent, enforcement, or forbearance with
         respect to any Default or Event of Default. Borrower agrees to pay or
         reimburse to Administrative Agent and each Lender all of Administrative
         Agent's and such Lender's out-of-pocket costs incurred in connection
         with the enforcement of such Lender's rights and remedies under the
         Loan Documents after the occurrence and during the continuation of an
         Event of Default. Administrative Agent's out-of-pocket costs may
         include but are not limited to the following, to the extent they are
         actually paid or incurred by Administrative Agent: title insurance fees
         and premiums; the cost of searches for Security Interests existing
         against Covered Persons; recording and filing fees; appraisal fees;
         environmental consultant fees; litigation costs; and all attorneys' and
         paralegals' expenses and reasonable fees. Each Lender's out-of-pocket
         costs may include but are not limited to the following, to the extent
         they are actually paid or incurred by a Lender: litigation costs and
         all attorneys' and paralegals' expenses and reasonable fees. Attorneys'
         and paralegals' expenses may include but are not limited to filing
         charges; telephone, data transmission, facsimile and other
         communication costs; courier and other delivery charges; and
         photocopying charges. Litigation costs may include but are not limited
         to filing fees, deposition costs, expert witness fees, expenses of
         service of process, and other such costs paid or incurred in any
         administrative, arbitration, or court proceedings involving a Lender
         and any Covered Person, including proceedings under the Federal
         Bankruptcy Code. All costs which Borrower is obligated to pay or
         reimburse Administrative Agent or the Lenders are Loan Obligations
         payable to Administrative Agent or Lender, as applicable, and are
         payable on demand by Administrative Agent or such Lender.

         18.8.    GENERAL INDEMNITY.

                  18.8.1.  Borrower agrees to indemnify and hold harmless
                  Administrative Agent, the Letter of Credit Issuer, LaSalle (as
                  issuer of the Existing LCs) and each Lender and each of their
                  Affiliates and their respective officers, directors,
                  employees, agents, and advisors (each, an Indemnified Party)
                  from and against any and all claims, damages, losses,
                  liabilities, costs, and expenses (including, without
                  limitation, reasonable attorneys' fees) that may be incurred
                  by or asserted or awarded against any Indemnified Party, in
                  each case arising out of or in connection with or by reason of
                  (including, without limitation, in connection with any
                  investigation, litigation, or proceeding or preparation of
                  defense in connection therewith) the Loan Documents, the
                  Acquisition Documents, any of the transactions contemplated
                  herein or therein or the actual or proposed use of the
                  proceeds of the Loans, or the manufacture, storage,
                  transportation, release or disposal of any Hazardous Material
                  on, from, over or affecting any of its assets or any of the
                  assets,

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<PAGE>

                  properties, or operations of any Covered Person or any
                  predecessor in interest, directly or indirectly, except to the
                  extent such claim, damage, loss, liability, cost, or expense
                  is found in a final, non-appealable judgment by a court of
                  competent jurisdiction to have resulted from such Indemnified
                  Party's gross negligence or willful misconduct. In the case of
                  an investigation, litigation or other proceeding to which the
                  indemnity in this Section 18.8 applies, such indemnity shall
                  be effective whether or not such investigation, litigation or
                  proceeding is brought by Borrower, its directors, shareholders
                  or creditors or an Indemnified Party or any other Person or
                  any Indemnified Party is otherwise a party thereto and whether
                  or not the transactions contemplated hereby are consummated.
                  Borrower agrees not to assert any claim against Administrative
                  Agent, any Lender, any of their Affiliates, or any of their
                  respective directors, officers, employees, attorneys, agents,
                  and advisers, on any theory of liability, for special,
                  indirect, consequential, or punitive damages arising out of or
                  otherwise relating to the Loan Documents, the Acquisition
                  Documents, any of the transactions contemplated herein or
                  therein or the actual or proposed use of the proceeds of the
                  Loans. Borrower shall pay, indemnify and hold harmless the
                  Indemnified Parties for, from and against, and shall promptly
                  reimburse the Indemnified Parties for, any and all claims,
                  damages, liabilities, losses, costs and expenses (including
                  reasonable attorneys' fees and expenses and amounts paid in
                  settlement) incurred, paid or sustained by the Indemnified
                  Parties, arising out of or relating to the Acquisition
                  Documents.

                  18.8.2.  The obligations of Borrower under this Section 18.8
                  shall survive the termination of the Commitments, the
                  expiration of the Letters of Credit, and the indefeasible full
                  payment and satisfaction of all of the Loan Obligations.

                  18.8.3.  To the extent that any of the indemnities required
                  from Borrower under this Section are unenforceable because
                  they violate any Law or public policy, Borrower shall pay the
                  maximum amount which it is permitted to pay under applicable
                  Law.

         18.9.    LETTERS OF CREDIT. Borrower assumes all risks of the acts or
         omissions of any beneficiary of any of the Letters of Credit. Neither
         Administrative Agent nor any of its directors, officers, employees,
         agents, or representatives shall be liable or responsible for: (a) the
         use which may be made of any of the Letters of Credit or for any acts
         or omissions of beneficiary in connection therewith; (b) the validity,
         sufficiency or genuineness of documents, or of any endorsement(s)
         thereon, even if such documents should in fact prove to be in any or
         all respects invalid, insufficient, fraudulent or forged; (c) payment
         by Administrative Agent against presentation of documents which, on
         their face, appear to comply with the terms of any Letter of Credit,
         even though such documents may fail to bear any reference or adequate
         reference to any such Letter of Credit; or (d) any other circumstances
         whatsoever in making or failing to make payment under any Letter of
         Credit in connection with which Administrative Agent would, pursuant to
         the Uniform Customs and Practices for Documentary Credits (1993
         Revision), International Chamber of Commerce Publication No. 500 (as
         amended from time to time), be absolved from liability. In furtherance
         and not in limitation of the foregoing, Letter of Credit Issuer (or
         LaSalle in the case of Existing LCs)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.

         18.10.   CHANGES IN ACCOUNTING PRINCIPLES. If any Covered Person, at
         the end of its fiscal year and with the concurrence of its independent
         certified public accountants, changes the method of valuing the
         inventory of such Covered Person, or if any other changes in accounting
         principles from those used in the preparation of any of the Financial
         Statements are required by or result from the promulgation of
         principles, rules, regulations, guidelines, pronouncements or opinions

                                       58

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         by the Financial Accounting Standards Board or the American Institute
         of Certified Public Accountants (or successors thereto or bodies with
         similar functions), and any of such changes result in a change in the
         method of calculation of, or affect the results of such calculation of,
         any of the financial covenants, standards or terms found herein, then
         the parties hereto agree to enter into and diligently pursue
         negotiations in order to amend such financial covenants, standards or
         terms so as to equitably reflect such changes, with the desired result
         that the criteria for evaluating the financial condition and results of
         operations of such Covered Person shall be the same after such changes
         as if such changes had not been made; provided, however, that until
         such changes are made, all financial covenants herein and all the
         provisions hereof which contemplate financial calculation hereunder
         shall remain in full force and effect.

         18.11.   LOAN RECORDS. The date and amount of all Advances to Borrower
         and payments of amounts due from Borrower under the Loan Documents will
         be recorded in the records that Administrative Agent normally maintains
         for such types of transactions. The failure to record, or any error in
         recording, any of the foregoing shall not, however, affect the
         obligation of Borrower to repay the Loans and other amounts payable
         under the Loan Documents. Borrower shall have the burden of proving
         that such records are not correct. Borrower agrees that Administrative
         Agent's and any Lender's books and records showing the Loan Obligations
         and the transactions pursuant to this Agreement shall be admissible in
         any action or proceeding arising therefrom, and shall constitute prima
         facie proof thereof, irrespective of whether any Loan Obligation is
         also evidenced by a promissory note or other instrument. Administrative
         Agent will provide to Borrower a monthly statement of Advances,
         payments, and other transactions pursuant to this Agreement. Such
         statement shall be deemed correct, accurate and binding on Borrower and
         an account stated (except for reversals and reapplications of payments
         as provided in Section 6.7 and corrections of errors discovered by
         Administrative Agent or a Lender), unless Borrower notifies
         Administrative Agent in writing to the contrary within 45 days after
         such statement is rendered. In the event a timely written notice of
         objections is given by Borrower, only the items to which exception is
         expressly made will be considered to be disputed by Borrower.

         18.12.   OTHER SECURITY AND GUARANTIES. Administrative Agent or any
         Lender may, in each case, for the benefit of all other Lenders, without
         notice or demand and without affecting Borrower's obligations
         hereunder, from time to time: (a) take from any Person and hold
         collateral for the payment of all or any part of the Loan Obligations
         and exchange, enforce and release such collateral or any part thereof;
         and (b) accept and hold any endorsement or guaranty of payment of all
         or any part of the Loan Obligations and release or substitute any such
         endorser or guarantor, or any Person who has given any Security
         Interest in any other collateral as security for the payment of all or
         any part of the Loan Obligations, or any other Person in any way
         obligated to pay all or any part of the Loan Obligations.

         18.13.   LOAN OBLIGATIONS PAYABLE IN DOLLARS. All Loan Obligations that
         are payable in Dollars under the terms of the Loan Documents shall be
         payable only in Dollars. If, however, to obtain a judgment in any court
         it is necessary to convert a Loan Obligation payable in Dollars into
         another currency, the rate of exchange used shall be that at which
         Administrative Agent, using its customary procedures, could purchase
         Dollars with such other currency in New York, New York on the Business
         Day immediately preceding the day on which such judgment is rendered.
         If any sum in another currency is paid to a Lender or received by a
         Lender and applied to a Loan Obligation payable in Dollars, such Loan
         Obligation shall be deemed paid and discharged only to the extent of
         the amount of Dollars that Administrative Agent, using its customary
         procedures, is able to purchase in New York, New York with such sum on
         the Business Day immediately following receipt thereof. Borrower agrees
         to indemnify each Lender against any loss in Dollars

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<PAGE>

         that it may incur on such Loan Obligation as a result of such payment
         or receipt and application to such Loan Obligation.

19. MISCELLANEOUS.

         19.1.    NOTICES. All notices, consents, requests and demands to or
         upon the respective parties hereto shall be in writing, and shall be
         deemed to have been given or made when delivered in person to those
         Persons listed on the signature pages hereof or when deposited in the
         United States mail, postage prepaid, or the overnight courier services,
         when delivered to the overnight courier service, or in the case of
         telecopy notice, when sent, verification received, in each case
         addressed as set forth on the signature pages hereof, or such other
         address as either party may designate by notice to the other in
         accordance with the terms of this Section. No notice given to or demand
         made on Borrower by Administrative Agent or any Lender in any instance
         shall entitle Borrower to notice or demand in any other instance.

         19.2.    AMENDMENTS AND MODIFICATIONS; WAIVERS AND CONSENTS. Unless
         otherwise provided herein, no amendment to or modification of any
         provision of this Agreement, or of any of the other Loan Documents
         shall be effective unless it is in writing and signed by authorized
         officers of Borrower and Required Lenders. Unless otherwise provided
         herein, no waiver of, or consent to any departure by Borrower from, the
         requirements of any provision of this Agreement or any of the other
         Loan Documents shall be effective unless it is in writing and signed by
         authorized officers of Required Lenders. Any such amendment,
         modification, waiver or consent shall be effective only in the specific
         instance and for the purpose for which given. The foregoing provisions
         of this Section notwithstanding, no such amendment, modification or
         consent or waiver shall, unless signed by authorized officers of
         Administrative Agent, Borrower and of all Lenders: (i) reduce or
         forgive the repayment of principal of any Advance or the reimbursement
         of any draw on a Letter of Credit, (ii) reduce the Eurodollar Margin or
         the Base Rate Margin or reduce the Revolving Loan Unused Fee except as
         contemplated herein; (iii) extend the Revolving Loan Maturity Date,
         (iv) change the provisions of Section 16 to the detriment of any
         Lender, (v) change the definition of Required Lenders herein, (vi)
         change the provisions of this Section, (vii) change any provisions of
         this Agreement requiring ratable distributions to Lenders, and (viii)
         increase the Dollar Amount of the Letter of Credit Commitment. In
         addition, the Dollar amount of the Revolving Loan Commitment of any
         Lender may not be increased without the consent of such Lender and the
         Borrower and Administrative Agent. No failure by Administrative Agent
         or any Lender to exercise, and no delay by Administrative Agent or any
         Lender in exercising, any right, remedy, power or privilege hereunder
         shall operate as a waiver thereof, nor shall any single or partial
         exercise by Administrative Agent or any Lender of any right, remedy,
         power or privilege hereunder preclude any other exercise thereof, or
         the exercise of any other right, remedy, power or privilege existing
         under any Law or otherwise.

         19.3.    RIGHTS CUMULATIVE. Each of the rights and remedies of
         Administrative Agent and Lenders under this Agreement shall be in
         addition to all of its other rights and remedies under applicable Law,
         and nothing in this Agreement shall be construed as limiting any such
         rights or remedies.

         19.4.    SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
         and inure to the benefit of the parties hereto and all future holders
         of the Notes and their respective successors and assigns, except that
         Borrower may not assign, delegate or transfer any of its rights or
         obligations under this Agreement without the prior written consent of
         Administrative Agent and all Lenders. With respect to Borrower's
         successors and assigns, such successors and assigns shall include any
         receiver, trustee or debtor-in-possession of or for Borrower.

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<PAGE>

         19.5.    SEVERABILITY. Any provision of this Agreement which is
         prohibited, unenforceable or not authorized in any jurisdiction shall,
         as to such jurisdiction, be ineffective to the extent of such
         prohibition, unenforceability or lack of authorization without
         invalidating the remaining provisions hereof or affecting the validity,
         enforceability or legality of such provision in any other jurisdiction
         unless the ineffectiveness of such provision would result in such a
         material change as to cause completion of the transactions contemplated
         hereby to be unreasonable.

         19.6.    COUNTERPARTS. This Agreement may be executed by the parties
         hereto on any number of separate counterparts, and all such
         counterparts taken together shall constitute one and the same
         instrument. It shall not be necessary in making proof of this Agreement
         to produce or account for more than one counterpart signed by the party
         to be charged.

         19.7.    GOVERNING LAW; NO THIRD PARTY RIGHTS. This Agreement, the
         Notes and the other Loan Documents and the rights and obligations of
         the parties hereunder and thereunder shall be governed by and construed
         and interpreted in accordance with the internal Laws of the State of
         Illinois applicable to contracts made and to be performed wholly within
         such state, without regard to choice or conflicts of law principles.
         This Agreement is solely for the benefit of the parties hereto and
         their respective successors and assigns, and no other Person shall have
         any right, benefit, priority or interest under, or because of the
         existence of, this Agreement.

         19.8.    COUNTERPART FACSIMILE EXECUTION. For purposes of this
         Agreement, a document (or signature page thereto) signed and
         transmitted by facsimile machine or telecopier is to be treated as an
         original document. The signature of any Person thereon, for purposes
         hereof, is to be considered as an original signature, and the document
         transmitted is to be considered to have the same binding effect as an
         original signature on an original document. At the request of any party
         hereto, any facsimile or telecopy document is to be re-executed in
         original form by the Persons who executed the facsimile or telecopy
         document. No party hereto may raise the use of a facsimile machine or
         telecopier or the fact that any signature was transmitted through the
         use of a facsimile or telecopier machine as a defense to the
         enforcement of this Agreement or any amendment or other document
         executed in compliance with this Section.

         19.9.    EFFECT OF MERGER OF BANK. Effective immediately upon the
         merger of Administrative Agent or a Lender with or into another
         financial institution, all references to Administrative Agent or such
         Lender under every Loan Document shall be deemed to be references to
         the surviving institution. If the surviving institution does not have a
         "Prime Rate," references in the Loan Documents to Prime Rate shall be
         deemed to be references to the reference rate (however it is
         designated) established from time to time by the surviving institution
         that is most similar to the Prime Rate.

         19.10.   NEGOTIATED TRANSACTION. Borrower, Administrative Agent and
         each Lender represent each to the others that in the negotiation and
         drafting of this Agreement and the other Loan Documents they have been
         represented by and have relied upon the advice of counsel of their
         choice. Borrower and Administrative Agent affirm that their counsel
         have both had substantial roles in the drafting and negotiation of this
         Agreement and each Lender affirms that its counsel has participated in
         the drafting and negotiation of this Agreement; therefore, this
         Agreement will be deemed drafted by all of Borrower, Administrative
         Agent and Lenders, and the rule of construction to the effect that any
         ambiguities are to be resolved against the drafter will not be employed
         in the interpretation of this Agreement.

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<PAGE>

         19.11.   CHOICE OF FORUM. SUBJECT ONLY TO THE EXCEPTION IN THE NEXT
         SENTENCE, BORROWER, ADMINISTRATIVE AGENT, AND EACH LENDER HEREBY AGREES
         TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL COURT OF THE NORTHERN
         DISTRICT OF ILLINOIS AND THE STATE COURTS OF ILLINOIS LOCATED IN COOK
         COUNTY AND WAIVES ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS
         WITH RESPECT TO ANY ACTION INSTITUTED THEREIN, AND AGREES THAT ANY
         DISPUTE CONCERNING THE RELATIONSHIP BETWEEN ADMINISTRATIVE AGENT,
         LENDERS, AND BORROWER OR THE CONDUCT OF ANY OF THEM IN CONNECTION WITH
         THIS AGREEMENT OR OTHERWISE SHALL BE HEARD ONLY IN THE COURTS DESCRIBED
         ABOVE. NOTWITHSTANDING THE FOREGOING: EACH OF THE PARTIES HERETO
         ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE
         IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
         OUTSIDE THOSE JURISDICTIONS.

         19.12.   SERVICE OF PROCESS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF
         ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
         PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED)
         DIRECTED TO BORROWER AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES
         HEREOF, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5)
         DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS; OR
         AT ADMINISTRATIVE AGENT'S OR ANY LENDER'S OPTION, BY SERVICE UPON CT
         CORPORATION, WHICH BORROWER IRREVOCABLY APPOINTS AS BORROWER'S AGENT
         FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF
         ILLINOIS. ADMINISTRATIVE AGENT OR SUCH LENDER SHALL PROMPTLY FORWARD BY
         REGISTERED MAIL ANY PROCESS SO SERVED UPON SAID AGENT TO BORROWER AT
         ITS ADDRESS ON THE SIGNATURE PAGES HEREOF. NOTHING IN THIS SECTION
         SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE
         LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

         19.13.   WAIVER OF JURY TRIAL. BORROWER, ADMINISTRATIVE AGENT, AND EACH
         LENDER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
         ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER
         LOAN DOCUMENT, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR
         INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR EITHER OF THEM IN
         RESPECT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE
         TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW
         EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT
         OR OTHERWISE. BORROWER, ADMINISTRATIVE AGENT, AND EACH LENDER AGREES
         AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
         SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT EITHER MAY FILE
         AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
         WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
         THEIR RIGHT TO TRIAL BY JURY.

         19.14.   INCORPORATION BY REFERENCE. All of the terms of the other Loan
         Documents are incorporated in and made a part of this Agreement by this
         reference.

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<PAGE>

         19.15.   STATUTORY NOTICE - INSURANCE. The following notice is given
         pursuant to Section 10 of the Collateral Protection Act set forth in
         Chapter 815 Section 180/1 of the Illinois Compiled Statutes (1996);
         nothing contained in such notice shall be deemed to limit or modify the
         terms of the Loan Documents:

         UNLESS YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR
         AGREEMENT WITH US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT
         OUR INTERESTS IN YOUR COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT,
         PROTECT YOUR INTERESTS. THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY
         CLAIM THAT YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION
         WITH THE COLLATERAL. YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY
         US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE
         AS REQUIRED BY OUR AGREEMENT. IF WE PURCHASE INSURANCE FOR THE
         COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE,
         INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES WE MAY
         IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE
         EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE
         COSTS OF THE INSURANCE MAY BE ADDED TO YOUR TOTAL OUTSTANDING BALANCE
         OR OBLIGATION. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF
         INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.

         19.16.   STATUTORY NOTICE - ORAL COMMITMENTS. Nothing contained in the
         following notice shall be deemed to limit or modify the terms of the
         Loan Documents:

         ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
         FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND
         OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER) AND
         US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS
         WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS
         THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
         EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

         Borrower acknowledges that there are no other agreements between
         Administrative Agent, Lenders, and Borrower, oral or written,
         concerning the subject matter of the Loan Documents, and that all prior
         agreements concerning the same subject matter, including any proposal
         or commitment letter, are merged into the Loan Documents and thereby
         extinguished.

                            [SIGNATURE PAGES FOLLOW]

                                       63

<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by appropriate duly authorized officers as of the Execution Date.

LAYNE CHRISTENSEN COMPANY, A DELAWARE CORPORATION, AS BORROWER

By: /s/ Jerry W. Fanska
    --------------------------------
Name: Jerry W. Fanska
Title: Vice President - Finance

NOTICE ADDRESS:

Layne Christensen Company
1900 Shawnee Mission Parkway
Mission Woods, KS 66205
Attention: Vice President, Finance
Phone: 913-677-6858
Fax: 913-362-8823

With a copy to :

Layne Christensen Company
1900 Shawnee Mission Parkway
Mission Woods, KS 66205
Attention: Vice President and General Counsel
Phone: 913-677-6864
Fax: 913-362-8823

LASALLE BANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT AND A LENDER

By: /s/ James C. Binz
    --------------------------------
Name: James C. Binz
Title: First Vice President

NOTICE ADDRESS :

LaSalle Bank National Association
One Metropolitan Square
211 North Broadway, Suite 4050
St. Louis, MO 63102
Attention: James C. Binz, First Vice President
Phone: 314-613-1917
Fax: 314-621-1612

With a copy to:

Steven C. Drapekin, Esq.
Lewis, Rice & Fingersh, L.C.
500 N. Broadway, Suite 2000
St. Louis, MO 63102
Phone: 314-444-7600
Fax: 314-612-7692

                                       64

<PAGE>

APPLICABLE LENDING OFFICE:

LaSalle Bank National Association
135 South LaSalle St.
Chicago, Illinois 60606
Attention: James C. Binz, First Vice President
Phone: 314-613-1917
Fax: 314-621-1612

                                       65<PAGE>

                                                                    EXHIBIT 4(6)

                                                                [Execution Copy]

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

                            LAYNE CHRISTENSEN COMPANY

                                   $60,000,000

                                  SENIOR NOTES

                             MASTER SHELF AGREEMENT

                            DATED AS OF JULY 31, 2003

--------------------------------------------------------------------------------
<PAGE>

                            LAYNE CHRISTENSEN COMPANY
                          1900 SHAWNEE MISSION PARKWAY
                           MISSION WOODS, KANSAS 66205

                                                             As of July 31, 2003

To: Prudential Investment Management, Inc.
      ("PRUDENTIAL")
    The Prudential Insurance Company of America ("PICA")
    Pruco Life Insurance Company ("PRUCO")
    Security Life of Denver Insurance Company ("SECURITY")
    Each Prudential Affiliate (as hereinafter defined)
      which becomes bound by certain provisions of this
      Agreement as hereinafter provided (together with
      PICA, Pruco and Security, the "PURCHASERS")
    c/o Prudential Capital Group
    2200 Ross Avenue, Suite 4200E
    Dallas, TX 75201

Ladies and Gentlemen:

                  The undersigned, Layne Christensen Company (the "COMPANY"),
hereby agrees with you as follows:

                  1.       AUTHORIZATION OF ISSUE OF NOTES. The Company will
authorize the issue of its senior promissory notes (the "NOTES") in the
aggregate principal amount of $60,000,000, to be dated the date of issue
thereof; to mature, in the case of each Note so issued, no more than seven years
after the date of original issuance thereof; to have an average life, in the
case of each Note so issued, of no more than six years after the date of
original issuance thereof; to bear interest on the unpaid balance thereof from
the date thereof at the rate per annum, and to have such other particular terms,
as shall be set forth, in the case of each Note so issued, in the Confirmation
of Acceptance with respect to such Note delivered pursuant to paragraph 2F; and
to be substantially in the form of Exhibit A-1 attached hereto. The term "NOTES"
as used herein shall include each Note delivered pursuant to any provision of
this Agreement and each Note delivered in substitution or exchange for any such
Note pursuant to any such provision. Notes which have (i) the same final
maturity, (ii) the same principal prepayment dates, (iii) the same principal
prepayment amounts (as a percentage of the original principal amount of each
Note), (iv) the same interest rate, (v) the same interest payment periods, and
(vi) the same original date of issuance are herein called a "SERIES" of Notes.
Capitalized terms used herein have the meanings specified in paragraph 10.

<PAGE>

                  2.       PURCHASE AND SALE OF NOTES.

                  2A.      FACILITY. Prudential is willing to consider, in its
sole discretion and within limits which may be authorized for purchase by
Prudential Affiliates from time to time, the purchase by Prudential Affiliates
of Notes pursuant to this Agreement. The willingness of Prudential to consider
such purchase of Notes is herein called the "FACILITY". At any time, the
aggregate principal amount of Notes stated in paragraph 1, minus the aggregate
principal amount of Notes purchased and sold pursuant to this Agreement prior to
such time, minus the aggregate principal amount of Accepted Notes (as
hereinafter defined) which have not yet been purchased and sold hereunder prior
to such time is herein called the "AVAILABLE FACILITY AMOUNT" at such time.
NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF NOTES BY
PRUDENTIAL AFFILIATES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS
UNDERSTANDING THAT, EXCEPT AS PROVIDED IN PARAGRAPH 2H, NEITHER PRUDENTIAL NOR
ANY PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE
NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC
PURCHASES OF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A
COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.

                  2B.      ISSUANCE PERIOD. Notes may be issued and sold
pursuant to this Agreement until the earlier of (i) the second anniversary of
the date of this Agreement (or if any such anniversary is not a Business Day,
the Business Day next preceding such anniversary) and (ii) the thirtieth day
after Prudential shall have given to the Company, or the Company shall have
given to Prudential, written notice stating that it elects to terminate the
issuance and sale of Notes pursuant to this Agreement (or if such thirtieth day
is not a Business Day, the Business Day next preceding such thirtieth day). The
period during which Notes may be issued and sold pursuant to this Agreement is
herein called the "ISSUANCE PERIOD".

                  2C.      PERIODIC SPREAD INFORMATION. Provided no Default or
Event of Default exists, not later than 9:30 A.M. (New York City local time) on
a Business Day during the Issuance Period if there is an Available Facility
Amount on such Business Day, the Company may request by telecopier or telephone,
and Prudential will, to the extent reasonably practicable, provide to the
Company on such Business Day (or, if such request is received after 9:30 A.M.
(New York City local time) on such Business Day, on the following Business Day),
information (by telecopier or telephone) with respect to various spreads at
which Prudential Affiliates might be interested in purchasing Notes of different
average lives; provided, however, that the Company may not make such requests
more frequently than once in every five Business Days or such other period as
shall be mutually agreed to by the Company and Prudential. The amount and
content of information so provided shall be in the sole discretion of Prudential
but it is the intent of Prudential to provide information which will be of use
to the Company in determining whether to initiate procedures for use of the
Facility. Information so provided shall not constitute an offer to purchase
Notes, and neither Prudential nor any

                                       2
<PAGE>

Prudential Affiliate shall be obligated to purchase Notes at the spreads
specified. Information so provided shall be representative of potential interest
only for the period commencing on the day such information is provided and
ending on the earlier of the fifth Business Day after such day and the first day
after such day on which further spread information is provided. Prudential may
suspend or terminate providing information pursuant to this paragraph 2C for any
reason, including its determination that the credit quality of the Company has
declined since the date of this Agreement.

                  2D.      REQUEST FOR PURCHASE. The Company may from time to
time during the Issuance Period make requests for purchases of Notes (each such
request being a "REQUEST FOR PURCHASE"). Each Request for Purchase shall be made
to Prudential by telecopier or overnight delivery service, and shall (i) specify
the aggregate principal amount of Notes covered thereby, which shall not be less
than $5,000,000 and not be greater than the Available Facility Amount at the
time such Request for Purchase is made, (ii) specify the principal amounts,
final maturities, principal prepayment dates and amounts and interest payment
periods (which shall be quarterly in arrears) of the Notes covered thereby,
(iii) specify the use of proceeds of such Notes, (iv) specify the proposed day
for the closing of the purchase and sale of such Notes, which shall be a
Business Day during the Issuance Period not less than 7 days and not more than
15 days after the making of such Request for Purchase, (v) specify the number of
the account and the name and address of the depository institution to which the
purchase prices of such Notes are to be transferred on the Closing Day for such
purchase and sale, (vi) certify that the representations and warranties
contained in paragraph 8 are true on and as of the date of such Request for
Purchase and that there exists on the date of such Request for Purchase no Event
of Default or Default, and (vii) be substantially in the form of Exhibit B
attached hereto. Each Request for Purchase shall be in writing and shall be
deemed made when received by Prudential.

                  2E.      RATE QUOTES. Not later than five Business Days after
the Company shall have given Prudential a Request for Purchase pursuant to
paragraph 2D, Prudential may, but shall be under no obligation to, provide to
the Company by telephone or telecopier, in each case between 9:30 A.M. and 1:30
P.M. New York City local time (or such later time as Prudential may elect)
interest rate quotes for the several principal amounts, maturities, principal
prepayment schedules, and interest payment periods of Notes specified in such
Request for Purchase. Each quote shall represent the interest rate per annum
payable on the outstanding principal balance of such Notes, at which a
Prudential Affiliate would be willing to purchase such Notes at 100% of the
principal amount thereof.

                  2F.      ACCEPTANCE. Within 30 minutes after Prudential shall
have provided any interest rate quotes pursuant to paragraph 2E or such shorter
period as Prudential may specify to the Company (such period being the
"ACCEPTANCE WINDOW"), the Company may, subject to paragraph 2G, elect to accept
such interest rate quotes as to not less than $5,000,000 aggregate principal
amount of the Notes specified in the related Request for Purchase. Such election
shall be made by an Authorized Officer of the Company notifying Prudential by
telephone or telecopier within the Acceptance Window that the Company elects to
accept such interest rate

                                       3
<PAGE>

quotes, specifying the Notes (each such Note being an "ACCEPTED NOTE") as to
which such acceptance (an "ACCEPTANCE") relates. The day the Company notifies an
Acceptance with respect to any Accepted Notes is herein called the "ACCEPTANCE
DAY" for such Accepted Notes. Any interest rate quotes as to which Prudential
does not receive an Acceptance within the Acceptance Window shall expire, and no
purchase or sale of Notes hereunder shall be made based on such expired interest
rate quotes. Subject to paragraph 2G and the other terms and conditions hereof,
the Company agrees to sell to a Prudential Affiliate, and Prudential agrees to
cause the purchase by a Prudential Affiliate of, the Accepted Notes at 100% of
the principal amount of such Notes. As soon as practicable following the
Acceptance Day, the Company, Prudential and each Prudential Affiliate which is
to purchase any such Accepted Notes will execute a confirmation of such
Acceptance substantially in the form of Exhibit C attached hereto (a
"CONFIRMATION OF ACCEPTANCE"). If the Company should fail to execute and return
to Prudential within two Business Days following receipt thereof a Confirmation
of Acceptance with respect to any Accepted Notes, Prudential may at its election
at any time after such two day Business Day period and prior to its receipt
thereof cancel the closing with respect to such Accepted Notes by so notifying
the Company in writing.

                  2G.      MARKET DISRUPTION. Notwithstanding the provisions of
paragraph 2F, if Prudential shall have provided interest rate quotes pursuant to
paragraph 2E and thereafter prior to the time an Acceptance with respect to such
quotes shall have been notified to Prudential in accordance with paragraph 2F
the domestic market for U.S. Treasury securities or derivatives shall have
closed or there shall have occurred a general suspension, material limitation,
or significant disruption of trading in securities generally on the New York
Stock Exchange or in the domestic market for U.S. Treasury securities or
derivatives, then such interest rate quotes shall expire, and no purchase or
sale of Notes hereunder shall be made based on such expired interest rate
quotes. If the Company thereafter notifies Prudential of the Acceptance of any
such interest rate quotes, such Acceptance shall be ineffective for all purposes
of this Agreement, and Prudential shall promptly notify the Company that the
provisions of this paragraph 2G are applicable with respect to such Acceptance.

                  2H.      CLOSING.

                  2H(1).   SERIES A CLOSING. The Company hereby agrees to sell
to the Purchasers and, subject to the terms and conditions herein set forth,
each Purchaser agrees to purchase from the Company under the Facility
$40,000,000 of 6.05% Senior Notes, Series A, due 2010 (the "SERIES A NOTES") in
the aggregate principal amount set forth opposite its name on the Purchaser
Schedule attached hereto at 100% of such aggregate principal amount. The Series
A Notes shall be substantially in the form of Exhibit A-2 attached hereto. The
Company will deliver to Prudential, at the offices of Prudential Capital Group
at 2200 Ross Avenue, Suite 4200E, Dallas, Texas 75201, one or more Notes
registered in the name of the Purchasers, evidencing the aggregate principal
amount of Series A Notes to be purchased by the Purchasers and in the
denomination or denominations specified in the Purchaser Schedule attached
hereto against payment of the purchase price thereof by transfer of immediately
available funds to the credit of the account specified in the letter from the
Company required by paragraph 3A(xv) on

                                       4
<PAGE>

the date of closing, which shall be July 31, 2003, or any other date upon which
the Company and Prudential may mutually agree in writing (the "SERIES A
CLOSING").

                  2H(2).   SUBSEQUENT CLOSINGS. Not later than 11:30 A.M. (New
York City local time) on the Closing Day for any Accepted Notes, the Company
will deliver to each Purchaser listed in the Confirmation of Acceptance relating
thereto at the offices of Prudential Capital Group, 2200 Ross Avenue, Suite
4200E, Dallas, Texas 75201, the Accepted Notes to be purchased by such Purchaser
in the form of one or more Notes in authorized denominations as such Purchaser
may request for each Series of Accepted Notes to be purchased on the Closing
Day, dated the Closing Day and registered in such Purchaser's name (or in the
name of its nominee), against payment of the purchase price thereof by transfer
of immediately available funds for credit to the Company's account specified in
the Request for Purchase of such Notes.

                  2H(3).   RESCHEDULED CLOSINGS. If the Company fails to tender
to any Purchaser the Accepted Notes to be purchased by such Purchaser on the
scheduled Closing Day for such Accepted Notes as provided above in this
paragraph 2H, or any of the conditions specified in paragraph 3 shall not have
been fulfilled by the time required on such scheduled Closing Day, the Company
shall, prior to 1:00 P.M., New York City local time, on such scheduled Closing
Day notify Prudential (which notification shall be deemed received by each
Purchaser) in writing whether (x) such closing is to be rescheduled (such
rescheduled date to be a Business Day during the Issuance Period not less than
one Business Day and not more than 30 Business Days after such scheduled Closing
Day (the "RESCHEDULED CLOSING DAY") and certify to Prudential (which
certification shall be for the benefit of each Purchaser) that the Company
reasonably believes that it will be able to comply with the conditions set forth
in paragraph 3 on such Rescheduled Closing Day and that the Company will pay the
Delayed Delivery Fee in accordance with paragraph 2I(3) or (y) such closing is
to be canceled as provided in paragraph 2I(4). In the event that the Company
shall fail to give such notice referred to in the preceding sentence, Prudential
(on behalf of each Purchaser) may at its election, at any time after 1:00 P.M.,
New York City local time, on such scheduled Closing Day, notify the Company in
writing that such closing is to be canceled as provided in paragraph 2I(4).
Notwithstanding anything to the contrary appearing in this Agreement, the
Company may elect to reschedule a closing with respect to any given Accepted
Notes on not more than one occasion, unless Prudential shall have otherwise
consented in writing.

                  2I.      FEES.

                  2I(1).   STRUCTURING FEE/CLOSING LEGAL FEE. In consideration
for the time, effort and expense involved in the preparation, negotiation and
execution of this Agreement, at the time of the execution and delivery of this
Agreement by the Company and the other parties hereto, the Company will pay to
Prudential, in immediately available funds a fee in the amount of $50,000 (the
"STRUCTURING FEE"). In addition, at the time of the execution and delivery of
this Agreement by the Company and the other parties hereto, the Company shall
pay legal fees and expenses of Baker Botts L.L.P. incurred in connection with
the closing of the transaction.

                                       5
<PAGE>

                  2I(2).   ISSUANCE FEE. The Company will pay to each Purchaser
in immediately available funds a fee (the "ISSUANCE FEE") on each Closing Day
(other than in connection with the Series A Closing) in an amount equal to 0.15%
of the aggregate principal amount of Notes sold to such Purchaser on such
Closing Day.

                  2I(3).   DELAYED DELIVERY FEE. If the closing of the purchase
and sale of any Accepted Note is delayed for any reason beyond the original
Closing Day for such Accepted Note, the Company will pay to the Purchaser of
such Accepted Note on the Cancellation Date or actual closing date of such
purchase and sale a fee (the "DELAYED DELIVERY FEE") calculated as follows:

                           (BEY - MMY) X DTS/360 X PA

where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MMY" means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from and
including the original Closing Day with respect to such Accepted Note to but
excluding the date of such payment; and "PA" means Principal Amount, i.e., the
principal amount of the Accepted Note for which such calculation is being made.
In no case shall the Delayed Delivery Fee be less than zero. Nothing contained
herein shall obligate any Purchaser to purchase any Accepted Note on any day
other than the Closing Day for such Accepted Note, as the same may be
rescheduled from time to time in compliance with paragraph 2H.

                  2I(4).   CANCELLATION FEE. If the Company at any time notifies
Prudential in writing that the Company is canceling the closing of the purchase
and sale of any Accepted Note, or if Prudential notifies the Company in writing
under the circumstances set forth in the penultimate sentence of paragraph 2H(3)
that the closing of the purchase and sale of such Accepted Note is to be
canceled, or if the closing of the purchase and sale of such Accepted Note is
not consummated on or prior to the last day of the Issuance Period (the date of
any such notification, or the last day of the Issuance Period, as the case may
be, being the "CANCELLATION DATE"), the Company will pay the Purchasers in
immediately available funds an amount (the "CANCELLATION FEE") calculated as
follows:

                                    PI X PA

where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning specified in paragraph 2I(3). The foregoing bid and ask prices shall be

                                       6
<PAGE>

as reported by TradeWeb LLC (or, if such data for any reason ceases to be
available through TradeWeb LLC, any publicly available source of similar market
data). Each price shall be rounded to the second decimal place. In no case shall
the Cancellation Fee be less than zero.

                  3.       CONDITIONS OF CLOSING. The obligation of any
Purchaser to purchase and pay for any Notes is subject to the satisfaction, on
or before the Closing Day for such Notes, of the following conditions:

                  3A.      CERTAIN DOCUMENTS. Such Purchaser shall have received
the following, each dated the date of the applicable Closing Day:

                  (i)      The Note(s) to be purchased by such Purchaser.

                  (ii)     Certified copies of the resolutions of the Board of
         Directors of the Company authorizing the execution and delivery of this
         Agreement and the issuance of the Notes, and of all documents
         evidencing other necessary corporate action and governmental approvals,
         if any, with respect to this Agreement and the Accepted Notes
         (provided, that for any Closing Day occurring after the Series A
         Closing, the Company may certify that there has been no change to any
         applicable authorization or approval since the date on which it was
         most recently delivered to such Purchaser under this clause (ii) as an
         alternative to the further delivery thereof).

                  (iii)    A certificate of the Secretary or an Assistant
         Secretary and one other officer of the Company certifying the names and
         true signatures of the officers of the Company authorized to sign this
         Agreement and the Notes and the other documents to be delivered
         hereunder (provided, that for any Closing Day occurring after the
         Series A Closing, the Secretary or an Assistant Secretary and one other
         officer of the Company may certify that there has been no change to the
         officers of the Company authorized to sign Accepted Notes and other
         documents to be delivered therewith since the date on which a
         certificate setting forth the names and true signatures of such
         officers, as described above, was most recently delivered to such
         Purchaser under this paragraph 3A(iii), as an alternative to the
         further delivery thereof).

                  (iv)     Certified copies of the Certificate of Incorporation
         and By-laws of the Company (provided, that for any Closing Day
         occurring after the Series A Closing, the Company may certify that
         there has been no change to any applicable constitutive document since
         the date on which it was most recently delivered to such Purchaser
         under this paragraph 3A(iv), as an alternative to the further delivery
         thereof).

                  (v)      Favorable opinions of Steven F. Crooke, General
         Counsel of the Company, (or such other counsel designated by the
         Company and acceptable to the Purchaser(s)) reasonably satisfactory to
         such Purchaser and substantially in the form of Exhibit D attached
         hereto and as to such other matters as such Purchaser may reasonably
         request. The Company hereby directs each such counsel to deliver such

                                       7
<PAGE>

         opinion, agrees that the issuance and sale of any Accepted Notes will
         constitute a reconfirmation of such direction, and understands and
         agrees that each Purchaser receiving such an opinion will and is hereby
         authorized to rely on such opinion.

                  (vi)     A good standing certificate for the Company from the
         Secretary of State of Delaware dated as of a recent date and such other
         evidence of the status of the Company as such Purchaser may reasonably
         request.

                  (vii)    The Subsidiary Guaranty Agreement, duly executed and
         delivered by each of the Subsidiary Guarantors.

                  (viii)   Certified copies of the resolutions of the Board of
         Directors of each Subsidiary Guarantor authorizing the execution and
         delivery of the Subsidiary Guaranty Agreement, and of all documents
         evidencing other necessary corporate action and governmental approvals,
         if any, with respect to the Subsidiary Guaranty Agreement.

                  (ix)     A certificate of the Secretary or an Assistant
         Secretary and one other officer of each Subsidiary Guarantor certifying
         the names and true signatures of the officers of such Subsidiary
         Guarantor authorized to sign the Subsidiary Guaranty Agreement and the
         other documents to be delivered thereunder.

                  (x)      Certified copies of the Certificate of Incorporation
         and By-laws of each Subsidiary Guarantor.

                  (xi)     A good standing certificate for each Subsidiary
         Guarantor organized in the United States from its state of
         incorporation dated of a recent date and such other evidence of the
         status of such Subsidiary Guarantor as such Purchaser may reasonably
         request.

                  (xii)    The Sharing Agreement duly executed by each party
         thereto.

                  (xiii)   Solely with respect to the Series A Closing,
         certified copies of Requests for Information or Copies (Form UCC-11) or
         equivalent reports listing all effective financing statements which
         name the Company or any Subsidiary (under its present name and previous
         names) as debtor and which are filed in the offices of the Secretaries
         of State of Delaware, Kansas, Utah, Arizona and California together
         with copies of such financing statements.

                  (xiv)    Additional documents or certificates with respect to
         legal matters or corporate or other proceedings (including evidence of
         the appointment of CT Corporation System, Inc. as the Company's agent
         pursuant to paragraph 11Q(iii)) related to the transactions
         contemplated hereby as may be reasonably requested by such Purchaser.

                                       8
<PAGE>

                  (xv)     Written instructions of the Company in the form of
         Exhibit E attached hereto.

                  3B.      REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The
representations and warranties contained in paragraph 8 shall be true on and as
of such Closing Day, except to the extent of changes caused by the transactions
herein contemplated; there shall exist on such Closing Day no Event of Default
or Default and the funding of the Notes on such Closing Day would not reasonably
likely give rise to a Default or Event of Default; and the Company shall have
delivered to such Purchaser an Officer's Certificate, dated such Closing Day, to
both such effects.

                  3C.      PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase
of and payment for the Notes to be purchased by such Purchaser on the terms and
conditions herein provided (including the use of the proceeds of such Notes by
the Company) shall not violate any applicable law or governmental regulation
(including, without limitation, Section 5 of the Securities Act or Regulation T,
U or X of the Board of Governors of the Federal Reserve System) and shall not
subject such Purchaser to any tax, penalty or liability under or pursuant to any
applicable law or governmental regulation, and such Purchaser shall have
received such certificates or other evidence as it may request to establish
compliance with this condition.

                  3D.      LEGAL MATTERS. Counsel for such Purchaser, including
any special counsel for the Purchasers retained in connection with the purchase
and sale of such Accepted Notes, shall be satisfied as to all legal matters
relating to such purchase and sale, and such Purchaser shall have received from
such counsel favorable opinions as to such legal matters as it may request.

                  3E.      PAYMENT OF FEES. The Company shall have paid to the
Purchasers and Prudential any fees due them pursuant to this Agreement,
including the Structuring Fee and legal fees due pursuant to paragraph 2I(1),
any Issuance Fee due pursuant to paragraph 2I(2) and any Delayed Delivery Fee
due pursuant to paragraph 2I(3).

                  3F.      PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incident thereto shall be satisfactory in substance and form to
such Purchaser, and it shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.

                  3G.      PRIVATE PLACEMENT NUMBERS. Private Placement numbers
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.

                  3H.      RELATED PROCEEDINGS/BANK AGREEMENT. Solely with
respect to the Series A Closing, the Bank Agreement shall be satisfactory in
substance and form to such

                                       9
<PAGE>

Purchaser and shall be in full force and effect, and such Purchaser shall have
received a true, correct and complete copy thereof. In addition, such Purchaser
shall have received satisfactory evidence that (i) the transactions contemplated
by the Bank Agreement have been consummated prior to or concurrently with the
Series A Closing, pursuant to and in accordance with the terms and conditions of
the Bank Agreement and (ii) that the conditions precedent to the closing of the
Bank Agreement have been satisfied or waived.

                  3I.      PREPAYMENT OF NOTES ISSUED UNDER THE EXISTING CREDIT
AGREEMENT AND RELEASE OF LIENS. Such Purchaser shall have received the
following:

                  (i)      True and complete copies of the Existing Credit Loan
         Documents and any amendments to any such documents and any other
         documents related to the repayment of the notes issued under the
         Existing Credit Agreement as may be reasonably required by the
         Purchasers as a condition precedent to the effectiveness of this
         Agreement, in effect at the Series A Closing;

                  (ii)     A certificate of a Responsible Officer of the Company
         dated the date of the Series A Closing: (a) certifying that the Company
         has made arrangements to irrevocably pay to the holders of the notes
         issued under the Existing Credit Agreement on the date of the Series A
         Closing, a sum of cash sufficient to repay in full such notes and (b)
         attaching true and correct copies of payoff letters, designating the
         date of the Series A Closing as the payoff date, received from each
         holder of such notes; and

                  (iii)    Evidence satisfactory to the Purchasers that all
         Liens associated with the Existing Credit Agreement have been or are
         being released or terminated contemporaneously with the repayment of
         the notes issued under the Existing Credit Agreement; and releases of
         Liens associated with such notes.

                  4.       PREPAYMENTS. The Notes shall be subject to prepayment
with respect to any required prepayments set forth in such Notes as provided in
paragraph 4A and with respect to the optional prepayments permitted by paragraph
4B.

                  4A.      REQUIRED PREPAYMENTS. The Notes of each Series shall
be subject to required prepayments, if any, set forth in the Notes of such
Series.

                  4B.      OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT.
The Notes shall be subject to prepayment, in whole at any time or from time to
time in part (in integral multiples of $100,000 and in a minimum amount of
$1,000,000), at the option of the Company, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note. Any partial prepayment of any
such Note(s) pursuant to this paragraph 4B shall be applied in satisfaction of
required payments of principal of such Note(s) in inverse order of their
scheduled due dates.

                                       10
<PAGE>

                  4C.      NOTICE OF OPTIONAL PREPAYMENT. The Company shall give
the holder of each Note to be prepaid pursuant to paragraph 4B irrevocable
written notice of such prepayment not less than 10 Business Days prior to the
prepayment date, specifying such prepayment date, specifying the aggregate
principal amount of the Notes to be prepaid on such date, identifying each Note
held by such holder, and the principal amount of each such Note, to be prepaid
on such date and stating that such prepayment is to be made pursuant to
paragraph 4B. Notice of prepayment having been given as aforesaid, the principal
amount of the Notes specified in such notice, together with interest thereon to
the prepayment date and together with the Yield-Maintenance Amount, if any,
herein provided, shall become due and payable on such prepayment date. The
Company shall, on or before the day on which it gives written notice of any
prepayment pursuant to paragraph 4B, give telephonic notice of the principal
amount of the Notes to be prepaid and the prepayment date to each holder of
Notes which shall have designated a recipient for such notices in the Purchaser
Schedule attached hereto or by notice in writing to the Company.

                  4D.      APPLICATION OF PREPAYMENTS. Upon any partial
prepayment of the Notes pursuant to 4B, the amount to be prepaid shall be
applied pro rata to all outstanding Notes of all Series (including, for the
purpose of this paragraph 4D only, all Notes prepaid or otherwise retired or
purchased or otherwise acquired by the Company or any of its Subsidiaries or
Affiliates other than by prepayment pursuant to paragraph 4A or 4B) according to
the respective unpaid principal amounts thereof.

                  4E.      RETIREMENT OF NOTES. The Company shall not, and shall
not permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire
in whole or in part prior to their stated installment or final maturities (other
than by prepayment pursuant to paragraphs 4A or 4B or upon acceleration of such
final maturity pursuant to paragraph 7A), or purchase or otherwise acquire,
directly or indirectly, Notes held by any holder.

                  5.       AFFIRMATIVE COVENANTS. During the Issuance Period and
so long thereafter as any Note is outstanding and unpaid, the Company covenants
as follows:

                  5A.      FINANCIAL STATEMENTS; NOTICE OF DEFAULTS. The Company
will deliver to each holder of any Notes in duplicate:

                  (i)      as soon as practicable and in any event within 45
         days after the end of each quarterly period (other than the last
         quarterly period) in each fiscal year (or, if earlier, such date as the
         Company is required to file a Quarterly Report on Form 10-Q with the
         SEC), consolidating and consolidated statements of income and
         consolidated statements of cash flows of the Company and its
         Subsidiaries for the period from the beginning of the current fiscal
         year to the end of such quarterly period, and a consolidating and a
         consolidated balance sheet of the Company and its Subsidiaries as at
         the end of such quarterly period, setting forth in each case in
         comparative form figures for the corresponding period in the preceding
         fiscal year, all in reasonable detail and certified by an authorized
         financial officer of the Company, subject to changes resulting

                                       11
<PAGE>

         from year-end adjustments; provided, however, that delivery pursuant to
         clause (iii) below of copies of the Quarterly Report on Form l0-Q of
         the Company for such quarterly period filed with the SEC shall be
         deemed to satisfy the requirements of this clause (i) with respect to
         consolidated financial statements so long as such statements contained
         in such Quarterly Report on Form 10-Q are prepared in accordance with
         GAAP;

                  (ii)     as soon as practicable and in any event within 90
         days after the end of each fiscal year (or, if earlier, such date as
         the Company is required to file an Annual Report on Form 10-K with the
         SEC), consolidating and consolidated statements of income and
         consolidated statements of cash flows of the Company and its
         Subsidiaries for such year, and a consolidating and consolidated
         balance sheet of the Company and its Subsidiaries as at the end of such
         year, setting forth in each case in comparative form corresponding
         consolidated figures from the preceding annual audit, all in reasonable
         detail and satisfactory in form to the Required Holder(s) and, as to
         the consolidated statements, reported on by independent public
         accountants of recognized national standing selected by the Company
         whose report shall be without limitation as to scope of the audit and
         satisfactory in substance to the Required Holder(s) and, as to the
         consolidating statements, certified by an authorized financial officer
         of the Company; provided, however, that delivery pursuant to clause
         (iii) below of copies of the Annual Report on Form 10-K of the Company
         for such fiscal year filed with the SEC shall be deemed to satisfy the
         requirements of this clause (ii) with respect to consolidated financial
         statements so long as such statements contained in such Annual Report
         on Form 10-K are prepared in accordance with GAAP;

                  (iii)    promptly upon transmission thereof, copies of all
         such financial statements, proxy statements, notices and reports as it
         shall send to its public stockholders and copies of all registration
         statements (without exhibits) and all reports which it files with the
         SEC;

                  (iv)     promptly upon receipt thereof, a copy of each other
         report submitted to the Company or any Subsidiary by independent
         accountants in connection with any annual, interim or special audit
         made by them of the books of the Company or any Subsidiary;

                  (v)      promptly upon delivery thereof to the Administrative
         Agent or any Lender (as such terms are defined in the Bank Agreement)
         copies of all such notices, reports and other materials which the
         Company or any Subsidiary is required under the Bank Agreement to
         deliver to the Administrative Agent or any Lender, including, but not
         limited to monthly financial statements delivered pursuant to Section
         12.11.2 of the Bank Agreement and annual projections delivered pursuant
         to Section 12.13 of the Bank Agreement; and

                                       12
<PAGE>

                  (vi)     with reasonable promptness, such other information
         respecting the condition or operations, financial or otherwise, of the
         Company or any of its Subsidiaries as such holder may reasonably
         request.

Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to each holder of any Notes an Officer's
Certificate demonstrating (with computations in reasonable detail) compliance by
the Company and its Subsidiaries with the provisions of paragraphs 6A(1), 6A(2),
6A(3), 6A(4) and 6B(5)(iv) and stating that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company proposes to take
with respect thereto. Together with each delivery of financial statements
required by clause (ii) above, the Company will deliver to each holder of any
Notes a certificate of such accountants stating that, in making the audit
necessary for their report on such financial statements, they have obtained no
knowledge of any Event of Default or Default, or, if they have obtained
knowledge of any Event of Default or Default, specifying the nature and period
of existence thereof. Such accountants, however, shall not be liable to anyone
by reason of their failure to obtain knowledge of any Event of Default or
Default which would not be disclosed in the course of an audit conducted in
accordance with generally accepted auditing standards.

                  The Company also covenants that immediately after any
Responsible Officer obtains knowledge of an Event of Default or Default, it will
deliver to each holder of any Notes an Officer's Certificate specifying the
nature and period of existence thereof and what action the Company proposes to
take with respect thereto.

                  5B.      INFORMATION REQUIRED BY RULE 144A. The Company will,
upon the request of the holder of any Note, provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at such times
as the Company is subject to and in compliance with the reporting requirements
of section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph
5B, the term "QUALIFIED INSTITUTIONAL BUYER" shall have the meaning specified in
Rule 144A under the Securities Act.

                  5C.      INSPECTION OF PROPERTY. The Company will permit any
Person designated by any holder in writing, at such holder's expense if no
Default or Event of Default exists and at the Company's expense if a Default or
Event of Default does exist, to visit and inspect any of the properties of the
Company and its Subsidiaries, to examine the corporate books and financial
records of the Company and its Subsidiaries and make copies thereof or extracts
therefrom and to discuss the affairs, finances and accounts of any of such
corporations with the principal officers of the Company and its independent
public accountants, all at such reasonable times and as often as such holder may
reasonably request.

                                       13
<PAGE>

                  5D.      COVENANT TO SECURE NOTES EQUALLY. The Company will,
if it or any Subsidiary shall create or assume any Lien upon any of its property
or assets, whether now owned or hereafter acquired, other than Liens permitted
by the provisions of paragraph 6B(1) (unless prior written consent to the
creation or assumption thereof shall have been obtained pursuant to paragraph
11C), make or cause to be made effective provision whereby the Notes will be
secured by such Lien equally and ratably with any and all other Indebtedness
thereby secured so long as any such other Indebtedness shall be so secured.

                  5E.      COMPLIANCE WITH LAWS. The Company will, and will
cause each of its Subsidiaries to, comply with all laws, ordinances or
governmental rules or regulations to which each of them is subject, including,
without limitation, Environmental and Safety Laws, and will obtain and maintain
in effect all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations could
not reasonably be expected, individually or in the aggregate, to have a material
adverse effect on the business, condition (financial or otherwise), operations
or prospects of the Company and its Subsidiaries taken as a whole.

                  5F.      INSURANCE. The Company will, and will cause each of
its Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts as is customary in the case of entities of established reputations
engaged in the same or a similar business and similarly situated.

                  5G.      MAINTENANCE OF EXISTENCE. Subject to paragraph 6
hereof, the Company will, and will cause each of its Subsidiaries to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its corporate existence, material rights, licenses, permits and
franchises; provided that nothing in this paragraph shall prevent the
abandonment or termination of the existence of any Subsidiary, or the rights or
franchises of any Subsidiary or the Company if such abandonment or termination
would not have a material adverse effect upon the business, condition (financial
or otherwise) operations or prospects of the Company and its Subsidiaries taken
as a whole.

                  5H.      MAINTENANCE OF PROPERTY. The Company will, and will
cause each of its Subsidiaries to, at all times maintain and preserve all
property used or useful in its business in good working order and condition, and
from time to time make, or cause to be made, all needful and proper repairs,
renewals and replacements thereto, so that the business carried on in connection
therewith may be properly conducted at all times, except to the extent that the
failure to do so would not have a material adverse effect upon the business,
condition (financial or otherwise), operations or prospects of the Company and
its Subsidiaries taken as a whole.

                                       14
<PAGE>

                  5I.      PAYMENT OF TAXES. The Company will, and will cause
each of its Subsidiaries to, pay and discharge promptly all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits
or in respect of its property, prior to the time penalties would attach thereto,
as well as lawful claims for labor, materials and supplies or otherwise which,
if unpaid, might become a Lien or charge upon such properties or any part
thereof; provided, however, that (i) neither the Company nor any Subsidiary
shall be required to pay and discharge or to cause to be paid and discharged any
such tax, assessment, charge, levy or claim so long as the validity or amount
thereof shall be subject to an active challenge or contest initiated in good
faith for which adequate reserves have been established in accordance with GAAP
and (ii) no Default or Event of Default shall arise under this paragraph 5I if
the aggregate amount of such taxes, assessments, charges, levies or claims which
have not been paid when due (and which are not covered by clause (i)) do not
exceed $100,000.

                  5J.      PARITY WITH OTHER INDEBTEDNESS. The Company will, and
will cause its Subsidiaries to, execute all such documents and take all such
actions as the Required Holder(s) may reasonably request in order to assure that
at all times (i) the Notes shall rank in right of payment senior to or pari
passu with all other Indebtedness of the Company and (ii) each Subsidiary
Guarantor's guaranty obligations under the Subsidiary Guaranty Agreement in
respect of the Notes shall rank in right of payment senior to or pari passu with
all other Indebtedness of such Subsidiary Guarantor.

                  5K.      COVENANT REGARDING SUBSIDIARY GUARANTY.

                  (i)      The Company covenants that if, at any time after the
         date of this Agreement, any Subsidiary shall enter into a Guarantee in
         respect of the Bank Agreement (or any refinancing thereof), or
         otherwise becomes directly or indirectly liable for, all or any part of
         the Indebtedness under, or in respect of, the Bank Agreement (or any
         refinancing thereof), the Company will cause each such Subsidiary
         contemporaneously with entering into any such Guarantee or becoming
         directly or indirectly liable in respect of such Indebtedness, to
         guaranty the obligations of the Company under this Agreement and the
         Notes by executing a copy of the Guarantor Supplement attached as Annex
         A to the Subsidiary Guaranty Agreement promptly after the creation or
         acquisition of such Subsidiary.

                  (ii)     The Company shall not permit any Subsidiary to
         deliver a Guarantee in respect of the Bank Agreement (or any
         refinancing thereof) or to otherwise become directly or indirectly
         liable for, all or any part of the Indebtedness under, or in respect
         of, the Bank Agreement (or any refinancing thereof) unless the parties
         to the Bank Agreement have signed the Sharing Agreement.

                  5L.      COVENANT REGARDING EXISTING UNIFORM COMMERCIAL CODE
FILINGS. The Company shall on or before October 15, 2003 (or such later date as
the Required Holders may approve in their reasonable discretion), cause the
amendment of all uniform commercial code filings of record against the Company
or any Subsidiary that the Required Holders

                                       15
<PAGE>

reasonably believe to cover assets that should not be subject to a security
interest in a manner reasonably acceptable to the Required Holders.

                  6.       NEGATIVE COVENANTS. During the Issuance Period and so
long thereafter as any Note or other amount due hereunder is outstanding and
unpaid, the Company covenants as follows:

                  6A(1).   FIXED CHARGE COVERAGE. The Company will not permit,
on any date, the ratio of EBITDAR to Fixed Charges in each case for the period
of four consecutive quarters ended on or prior to such date, to be less than
2.00 to 1.00.

                  6A(2).   TOTAL INDEBTEDNESS TO EBITDA RATIO. The Company will
not permit, on any date, the ratio of (i) Total Indebtedness on such date to
(ii) EBITDA for the period of four consecutive fiscal quarters most recently
ended on or prior to such date, to be greater than 3.00 to 1.00 for any date
through January 31, 2005, and 2.75 to 1.00 on any date thereafter.

                  6A(3).   TANGIBLE NET WORTH. The Company will not permit
Tangible Net Worth at any time to be less than $64,158,000 plus the sum of (i)
(a) 50% of positive Net Income (without reduction for losses in any period) for
the fiscal year ended January 31, 2004 and thereafter (b) 50% of positive Net
Income (without reduction for losses in any period) for each period of two
fiscal quarters ending each July 31 and January 31 thereafter and (ii) 100% of
the Net Proceeds from the issuance and sale of equity securities after the date
hereof.

                  6A(4).   PRIORITY DEBT. The Company will not permit Priority
Debt at any time to exceed 10% of Tangible Net Worth.

                  6B.      LIENS AND OTHER RESTRICTIONS.

                  6B(1).   LIENS. The Company will not and will not permit any
Subsidiary to create, assume or suffer to exist any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, or any income,
participation, royalty or profits therefrom (whether or not provision is made
for the equal and ratable securing of the Notes in accordance with the
provisions of paragraph 5D), except

                  (i)      Liens for taxes, assessments or other governmental
         levies or charges not yet due or which are being contested in good
         faith by the Company or any Subsidiary for which adequate reserves have
         been taken in accordance with GAAP;

                  (ii)     statutory Liens of landlords and Liens of carriers,
         contractors, warehousemen, mechanics and materialmen incurred in the
         ordinary course of business for sums not yet due or are being contested
         in good faith by the Company or any Subsidiary for which adequate
         reserves have been taken in accordance with GAAP;

                                       16
<PAGE>

                  (iii)    Liens on property or assets of a Subsidiary to secure
         obligations of such Subsidiary to the Company or a Subsidiary
         Guarantor;

                  (iv)     Liens (other than any Lien imposed by ERISA)
         incurred, or deposits made, in the ordinary course of business (A) in
         connection with workers' compensation, unemployment insurance, old age
         benefit and other types of social security, (B) to secure (or to obtain
         letters of credit that secure) the performance of tenders, statutory
         obligations, surety and appeal bonds, bids, leases, performance bonds,
         purchase, construction, government, sales or insurance contracts and
         other similar obligations or (C) otherwise to satisfy statutory or
         legal obligations; provided that in each such case such Liens (1) were
         not incurred or made in connection with the incurrence or maintenance
         of Indebtedness, the borrowing of money, the obtaining of advances or
         credit (except as provided in clause (B) above), and (2) do not in the
         aggregate materially detract from the value of the property or assets
         so encumbered or materially impair the use thereof in the operation of
         its business;

                  (v)      Liens in existence on the date hereof as set forth on
         Schedule 6B(1) attached hereto;

                  (vi)     minor survey exceptions or minor encumbrances,
         easements or reservations, or rights of others for rights-of-way,
         utilities and other similar purposes, or zoning or other restrictions
         as to use of real property, that are necessary for the conduct of the
         operations of the Company and its Subsidiaries or that customarily
         exist on properties of corporations engaged in similar businesses and
         are similarly situated and that do not in any event materially impair
         their value or their use in the operations of the Company and its
         Subsidiaries;

                  (vii)    any attachment or judgment Lien, unless (A) the
         judgment it secures shall not, within 30 days after the entry thereof,
         have been discharged or execution thereof stayed pending appeal or (B)
         the Company shall fail to actively contest such attachment or judgment
         Lien within thirty (30) days after the entry thereof and post within
         such time period a bond therefor in the full amount of the judgment
         plus applicable statutory costs and attorneys' fees or such other
         amount as may be ordered by the applicable court; provided the
         aggregate amount of such attachment or judgment Liens shall not secure
         obligations in excess of $1,000,000 at any time;

                  (viii)   Liens granted to joint venture partners (including
         other Persons who the Company or a Subsidiary Guarantor or a Subsidiary
         of Layne Energy is in a business relationship with respect to coalbed
         methane gas projects) on equity interests owned by the Company or any
         Subsidiary in connection with the formation of a Person (other than an
         individual) in which the ownership interests are held in part by the
         Company or a Subsidiary and a non-affiliated Person; provided that such
         Lien is limited solely to the equity in the joint venture with no
         recourse to the Company or such Subsidiary except

                                       17
<PAGE>

         to the extent disclosed in Item 2 of Schedule 6B(1) for such projects
         existing on the date hereof; and

                  (ix)     Liens other than those described in clauses (i) -
         (viii) above that secure Indebtedness (other than Indebtedness under
         the Bank Agreement); provided that (A) after granting such Lien the
         Company is in compliance with paragraph 6A(4) and (B) except to the
         extent disclosed in Item 2 of Schedule 6B(1) for such projects existing
         on the date hereof, in no event shall the Company or any Subsidiary
         permit any Lien to exist at any time on any of their respective current
         assets.

                  6B(2).   LOANS, ADVANCES AND INVESTMENTS. The Company will not
and will not permit any Subsidiary to make or permit to remain outstanding any
loan or advance to, or extend credit other than credit extended in the normal
course of business to any Person who is not an Affiliate of the Company to, or
own, purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any Person, or commit to do
any of the foregoing, (all of the foregoing collectively being "INVESTMENTS"),
except

                  (i)      investments in, and loans or advances to, any
         Subsidiary that is a Subsidiary Guarantor; provided that Investments in
         Layne Energy must be by the Company and must be in the form of
         Indebtedness;

                  (ii)     stock, membership interests, obligations or other
         securities of, or capital contributions to, a corporation or other
         entity which immediately after the purchase or acquisition of such
         stock, membership interests, obligations or other securities will be a
         Subsidiary, provided that contemporaneously with such purchase or
         acquisition, such Person has become a Subsidiary Guarantor;

                  (iii)    obligations backed by the full faith and credit of
         the United States Government (whether issued by the United States
         Government or an agency thereof), and obligations guaranteed by the
         United States Government, in each case which mature within one year
         from the date acquired;

                  (iv)     demand and time deposits with, or certificates of
         deposit issued by, any commercial bank or trust company (A) organized
         under the laws of the United States or any of its states or having
         branch offices therein, (B) having equity capital in excess of
         $250,000,000 and (C) which issues either (1) senior debt securities
         rated A or better by S&P, or by Moody's or (2) commercial paper rated
         A-1 by S&P or Prime-1 by Moody's, in each case payable in the United
         States in United States dollars, in each case which mature within one
         year from the date acquired;

                  (v)      readily marketable commercial paper rated as A-1 or
         better by S&P or Prime-1 or better by Moody's (or, in either case, an
         equivalent rating from another

                                       18
<PAGE>

         nationally recognized credit rating agency) and maturing not more than
         270 days from the date acquired;

                  (vi)     bonds, debentures, notes or similar debt instruments
         issued by a state or municipality given a "AA" rating or better by S&P
         or an equivalent rating by another nationally recognized credit rating
         agency and maturing not more than one year from the date acquired;

                  (vii)    negotiable instruments endorsed for collection in the
         ordinary course of business;

                  (viii)   the loans, investments and advances existing as of
         the date hereof and listed on Schedule 6B(2) attached hereto;

                  (ix)     investments comprised of notes payable, or stock or
         other securities issued by account debtors to the Company or any
         Subsidiary pursuant to negotiated agreements with respect to settlement
         of such account debtor's account in the ordinary course of business;

                  (x)      loans or advances to employees not in excess of
         $750,000 in the aggregate outstanding at any time;

                  (xi)     any loan to a Person to finance the purchase of real
         property, personal property, services or equipment from the Company or
         any Subsidiary provided that (a) if such loan exceeds $200,000, the
         Company or such Subsidiary shall retain a Lien on any property or
         equipment sold to the extent permitted under applicable law, (b) the
         aggregate principal amount of all such loans to any Person or its
         affiliates outstanding at any time shall not exceed $2,500,000 and (c)
         the aggregate principal amount of all such loans outstanding at any
         time shall not exceed $5,000,000;

                  (xii)    investments in water wells drilled by the Company or
         any Subsidiary for local municipalities in connection with which such
         municipality has entered into a contract with the Company or such
         Subsidiary to purchase water from the well and to purchase the well
         from the Company or any Subsidiary at a future date; provided the
         aggregate amount invested by the Company and its Subsidiaries in all
         such investments shall not exceed $2,500,000 in the aggregate
         outstanding at any time; and

                  (xiii)   so long as no Default has occurred and is continuing
         or would be caused thereby, making investments (excluding interest on
         intercompany indebtedness and royalties) in (a) Persons that are not
         Subsidiaries and (b) Subsidiaries that are not Subsidiary Guarantors;
         provided that the aggregate amount of all such investments in clauses
         (a) and (b) made after the date of this Agreement shall not at any time
         exceed 15% of Tangible Net Worth plus up to $5,000,000 in the aggregate
         outstanding at any

                                       19
<PAGE>

         time with respect to Layne Water Development of Texas, LLC, in each
         case, as calculated as of any date.

                  6B(3).   SALE OF STOCK AND INDEBTEDNESS OF SUBSIDIARIES. The
Company will not and will not permit any Subsidiary to sell or otherwise dispose
of, or part with control of, any shares of stock or Indebtedness of any
Subsidiary, except (i) to the Company or a Subsidiary Guarantor or (ii) that all
shares of stock and Indebtedness of any Subsidiary at the time owned by or owed
to the Company and all Subsidiaries may be sold as an entirety for a cash
consideration which represents the fair value (as determined in good faith by
the Board of Directors of the Company) at the time of sale of the shares of
stock and Indebtedness so sold; provided that (A) such sale or other disposition
is treated as a Transfer of assets of such Subsidiary and is permitted by
paragraph 6B(5) and (B) at the time of such sale, such Subsidiary shall not own,
directly or indirectly, any shares of stock or Indebtedness of any other
Subsidiary (unless all of the shares of stock and Indebtedness of such other
Subsidiary owned, directly or indirectly, by the Company and all Subsidiaries
are simultaneously being sold as permitted by this paragraph 6B(3)).

                  6B(4).   MERGER AND CONSOLIDATION. The Company will not and
will not permit any Subsidiary to merge or consolidate with or into any other
Person, except that:

                  (i)      any Subsidiary may merge or consolidate with or into
         the Company provided that the Company is the continuing or surviving
         corporation;

                  (ii)     any Subsidiary may merge or consolidate with or into
         a Subsidiary Guarantor provided that such Subsidiary Guarantor is the
         continuing or surviving corporation;

                  (iii)    the Company may consolidate or merge with any other
         corporation if (A) the Company is the continuing or surviving
         corporation and is a solvent corporation with substantially all of its
         assets located and substantially all of its operations conducted within
         the United States of America, (B) no Default or Event of Default exists
         before or after such merger or consolidation, (C) the Tangible Net
         Worth of the surviving corporation is at least as great as the Tangible
         Net Worth of the Company immediately prior to such merger or
         consolidation and (D) the core managers of the Company prior to the
         merger or consolidation shall be the core managers of the continuing or
         surviving entity; and

                  (iv)     any Subsidiary may merge or consolidate with any
         other corporation, provided that, immediately after giving effect to
         such merger or consolidation (a) a Wholly Owned Subsidiary shall be the
         continuing or surviving corporation, (b) no Default or Event of Default
         exists before or after such merger or consolidation and (c) the
         Tangible Net Worth of the Company following the merger or consolidation
         is at least as great as the Tangible Net Worth of the Company
         immediately prior to such merger or consolidation.

                                       20
<PAGE>

                  6B(5).   TRANSFER OF ASSETS. The Company will not and will not
permit any Subsidiary to Transfer, or agree or otherwise commit to Transfer, any
of its assets except that

                  (i)      any Subsidiary may Transfer assets to the Company or
         a Subsidiary Guarantor;

                  (ii)     the Company or any Subsidiary may sell inventory in
         the ordinary course of business;

                  (iii)    the Company or any Subsidiary may Transfer assets
         that, in its good faith, reasonable judgment, have no further useful or
         productive capacity, are fully used or depreciated, are obsolete or are
         no longer necessary or productive in the ordinary course of the
         Company's business; and

                  (iv)     the Company or any Subsidiary may otherwise Transfer
         assets, provided that after giving effect thereto (A) the aggregate
         value of any assets Transferred in any fiscal year does not exceed
         $2,000,000 and (B) the aggregate value of assets Transferred from date
         hereof shall not exceed $5,000,000.

                  6B(6).   SALE AND LEASE-BACK. The Company will not and will
not permit any Subsidiary to enter into any arrangement with any lender or
investor or to which such lender or investor is a party providing for the
leasing by the Company or any Subsidiary of real or personal property which has
been or is to be Transferred by the Company or any Subsidiary to such lender or
investor or to any Person to whom funds have been or are to be advanced by such
lender or investor on the security of such property or rental obligations of the
Company or any Subsidiary unless (A) such property is newly acquired or
constructed property and the Company or a Subsidiary shall enter into a lease,
as lessee, within 90 days following the acquisition or construction of such
property, (B) the aggregate value of property acquired and sold pursuant to
clause (A) hereof shall be less than $2,500,000 in the aggregate in any fiscal
year and (C) no Default or Event of Default has occurred and is continuing and
no Default or Event of Default is reasonably likely to occur as a result of such
transaction.

                  6B(7).   SALE OR DISCOUNT OF RECEIVABLES. The Company will not
and will not permit any Subsidiary to sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or
accounts receivable.

                  6B(8).   RELATED PARTY TRANSACTIONS. The Company will not and
will not permit any Subsidiary to directly or indirectly, purchase, acquire or
lease any property from, or sell, transfer or lease any property to, or
otherwise deal with, in the ordinary course of business or otherwise any Related
Party except in the ordinary course of business and upon terms that are no less
favorable to the Company or such Subsidiary, as the case may be, than those that
could be obtained in an arm's-length transaction with an unrelated third party;
provided that the foregoing shall not apply to any transaction between (i) the
Company and any Wholly Owned

                                       21
<PAGE>

Subsidiary or between Wholly Owned Subsidiaries and (ii) sales to, or purchases
from, any such Related Party of shares of common stock for cash consideration
equal to the fair market value thereof (except pursuant to employee stock
option, stock appreciation and similar stock-based incentive plans applicable to
employees of the Company that have been approved by a majority of the Company's
outside directors).

                  6C.      ISSUANCE OF STOCK BY SUBSIDIARIES. The Company will
not permit any Subsidiary (either directly, or indirectly by the issuance of
rights or options for, or securities convertible into, such shares) to issue,
sell or dispose of any shares of its stock of any class except (i) for
directors' qualifying shares or other shares issued to comply with local
ownership legal requirements (but not in excess of the minimum number of shares
necessary to satisfy such requirement), and (ii) to the Company or a Subsidiary
Guarantor.

                  6D.      SUBSIDIARY RESTRICTIONS. The Company will not and
will not permit any Subsidiary to enter into, or be otherwise subject to, any
contract, agreement or other binding obligation that directly or indirectly
limits the amount of, or otherwise restricts (i) the payment to the Company of
dividends or other redemptions or distributions with respect to its capital
stock by any Subsidiary, (ii) the repayment to the Company by any Subsidiary of
intercompany loans or advances or (iii) other intercompany transfers to the
Company of property or other assets by Subsidiaries.

                  6E.      CHANGE OF BUSINESS. The Company will not change, and
will not permit any Subsidiary to change, in any material respect the nature of
its business or operations from the business conducted by the Company and its
Subsidiaries on the date hereof and will not engage, and will not permit any
Subsidiary to engage directly or indirectly in any material business activity,
or purchase or otherwise acquire any material property, in either case not
directly related to the conduct of its business or operations as presently
carried on; provided that the Company or any Subsidiary may engage in other
businesses so long as the aggregate amount invested (whether via acquisition of
assets or stock, loans or advances, or otherwise) by the Company and its
Subsidiaries in all such businesses after the date hereof shall not exceed
$3,000,000.

                  6F.      MOST FAVORED LENDER STATUS. The Company will not and
will not permit any Subsidiary to enter into, assume or otherwise be bound or
obligated under any agreement creating or evidencing Indebtedness in excess of
$500,000 containing one or more Additional Covenants or Additional Defaults,
unless prior written consent to such agreement shall have been obtained pursuant
to paragraph 11C; provided, however, in the event the Company or any Subsidiary
shall enter into, assume or otherwise become bound by or obligated under any
such agreement without the prior written consent of the holders of the Notes,
the terms of this Agreement shall, without any further action on the part of the
Company or any of the holders of the Notes, be deemed to be amended
automatically to include each Additional Covenant and each Additional Default
contained in such agreement. The Company further covenants to promptly execute
and deliver at its expense (including, without limitation, the fees and expenses
of counsel for the holders of the Notes) an

                                       22
<PAGE>

amendment to this Agreement in form and substance satisfactory to the Required
Holder(s) evidencing the amendment of this Agreement to include such Additional
Covenants and Additional Defaults, provided that the execution and delivery of
such amendment shall not be a precondition to the effectiveness of such
amendment as provided for in this paragraph 6F, but shall merely be for the
convenience of the parties hereto. Notwithstanding the foregoing, the Bank
Agreement and related documents as they exist on the date hereof are not
implicated by this paragraph 6F.

                  6G.      DISTRIBUTIONS; REDEMPTIONS. The Company shall not
permit or allow, or permit or allow any Subsidiary to, (i) declare or pay any
dividends on any of its capital stock (other than stock dividends), (ii)
purchase or redeem any such stock or any warrants, options or other rights in
respect of such stock, (iii) make any other distribution to shareholders (other
than the issuance of stock, or stock options in respect thereof, to directors,
officers and employees pursuant to written incentive compensation plans), (iv)
prepay, purchase or redeem any subordinated Indebtedness or (v) set aside funds
for any of the foregoing; provided, however, that (a) any Subsidiary may declare
and pay dividends to the Company or to a Wholly-Owned Subsidiary, and (b) so
long as there is no Event of Default and no Default or Event of Default is
reasonably likely to occur from such payment, the Company may purchase stock of
the Company on the open market and re-issue such stock to officers and employees
of the Company in connection with written incentive compensation plans or other
agreements with officers, directors or employees of the Company approved by the
Board of Directors of the Company or any compensation committee thereof and the
Company may pay dividends to its shareholders and/or repurchase stock of the
Company provided that the aggregate amount of all such dividends and repurchases
described in this clause (b) shall not exceed 50% of the Company's annual
consolidated Net Income in any fiscal year if declared and paid within 90 days
following such fiscal year end.

                  6H.      AMENDMENT TO BANK AGREEMENT. The Company will not and
will not permit any Subsidiary to amend, modify, supplement, restate, replace or
change the Bank Agreement or any related documents, except to the extent such
change could not reasonably be expected to materially adversely affect
Prudential or any holder of Notes.

                  6I.      LAYNE ENERGY. Notwithstanding the provisions of
paragraph 6B(3) and paragraph 6C, and acknowledging that the provisions of
paragraph 6B(5) shall not be applicable to the transaction contemplated by this
paragraph 6I, up to 40% in the aggregate of the equity of Layne Energy may be
sold in one or more public offerings if (i) no Default or Event of Default has
occurred and is continuing at the time of such sale and no Default or Event of
Default occurs or is reasonably likely to occur from such sale; (ii) for each of
the two fiscal quarters prior to such sale, the ratio calculated in paragraph
6A(2) is less than 2.25 to 1.00 with such calculation being made as if Layne
Energy was not a Subsidiary for such periods and therefore excluded from such
calculation; (iii) Layne Energy, promptly following formation, is a Subsidiary
Guarantor and remains a Subsidiary Guarantor, but following any such initial
public offering, only to the extent of Layne Energy's Indebtedness to the
Company or any of its Subsidiaries; and (iv) to the extent proceeds of such
offering in excess of

                                       23
<PAGE>

$5,000,000 are used to repay, prepay or otherwise retire Indebtedness of the
Company, the Company shall make an offer to prepay Indebtedness outstanding
under the Notes and under the Bank Agreement on a pro rata basis. The Required
Holders may accept such offer within 10 Business Days of receipt of such offer
by written notice to the Company. If the Required Holders fail to give such
notice, such failure will be deemed an acceptance of such offer. If such offer
is accepted, the Company shall prepay the Notes in accordance with paragraph 4B.
If the Required Holders reject such offer, the Company may use such excess
proceeds to repay the Indebtedness under the Bank Agreement.

                  7.       EVENTS OF DEFAULT.

                  7A.      ACCELERATION. If any of the following events shall
occur and be continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or otherwise):

                  (i)      the Company defaults in the payment of any principal
         of, or Yield-Maintenance Amount payable with respect to, any Note when
         the same shall become due, either by the terms thereof or otherwise as
         herein provided; or

                  (ii)     the Company defaults in the payment of any interest
         on any Note on any date due; or

                  (iii)    the Company or any Subsidiary defaults (whether as
         primary obligor or as guarantor or other surety) in any payment of
         principal of or interest on any other obligation for money borrowed (or
         any Capitalized Lease Obligation, any obligation under a conditional
         sale or other title retention agreement, any obligation issued or
         assumed as full or partial payment for property whether or not secured
         by a purchase money mortgage or any obligation under notes payable or
         drafts accepted representing extensions of credit) beyond any period of
         grace provided with respect thereto, or the Company or any Subsidiary
         fails to perform or observe any other agreement, term or condition
         contained in any agreement under which any such obligation is created
         (or if any other event thereunder or under any such agreement shall
         occur and be continuing) and the effect of such failure or other event
         is to cause, or to permit the holder or holders of such obligation (or
         a trustee on behalf of such holder or holders) to cause, such
         obligation to become due (or to be repurchased by the Company or any
         Subsidiary) prior to any stated maturity, provided that the aggregate
         amount of all obligations as to which such a payment default shall
         occur and be continuing or such a failure or other event causing or
         permitting acceleration (or resale to the Company or any Subsidiary)
         shall occur and be continuing exceeds $1,000,000; or

                  (iv)     any representation or warranty made by the Company
         herein or by the Company or any of its officers in any writing
         furnished in connection with or pursuant to this Agreement shall be
         false in any material respect on the date as of which made; or

                                       24
<PAGE>

                  (v)      the Company fails to perform or observe any term,
         covenant or agreement contained in paragraph 5K, paragraph 6 or the
         last sentence of paragraph 5A; or

                  (vi)     the Company fails to perform or observe any other
         term, covenant, agreement or condition contained herein and such
         failure shall not be remedied within 30 days after any Responsible
         Officer obtains actual knowledge thereof; or

                  (vii)    the Company or any Material Subsidiary makes an
         assignment for the benefit of creditors or is generally not paying its
         debts as such debts become due; or

                  (viii)   any decree or order for relief in respect of the
         Company or any Material Subsidiary is entered under any bankruptcy,
         reorganization, compromise, arrangement, insolvency, readjustment of
         debt, dissolution or liquidation or similar law, whether now or
         hereafter in effect (the "BANKRUPTCY LAW"), of any jurisdiction; or

                  (ix)     the Company or any Material Subsidiary petitions or
         applies to any tribunal for, or consents to, the appointment of, or
         taking possession by, a trustee, receiver, custodian, liquidator or
         similar official of the Company or any Material Subsidiary, or of any
         substantial part of the assets of the Company or any Material
         Subsidiary, or commences a voluntary case under the Bankruptcy Law of
         the United States or any proceedings (other than proceedings for the
         voluntary liquidation and dissolution of a Material Subsidiary)
         relating to the Company or any Material Subsidiary under the Bankruptcy
         Law of any other jurisdiction; or

                  (x)      any such petition or application is filed, or any
         such proceedings are commenced, against the Company or any Material
         Subsidiary and the Company or such Material Subsidiary by any act
         indicates its approval thereof, consent thereto or acquiescence
         therein, or an order, judgment or decree is entered appointing any such
         trustee, receiver, custodian, liquidator or similar official, or
         approving the petition in any such proceedings, and such order,
         judgment or decree remains unstayed and in effect for more than 30
         days; or

                  (xi)     any order, judgment or decree is entered in any
         proceedings against the Company decreeing the dissolution of the
         Company and such order, judgment or decree remains unstayed and in
         effect for more than 60 days; or

                  (xii)    any order, judgment or decree is entered in any
         proceedings against the Company or any Subsidiary decreeing a split-up
         of the Company or such Subsidiary which requires the divestiture of
         assets representing a substantial part, or the divestiture of the stock
         of a Subsidiary whose assets represent a substantial part, of the
         consolidated assets of the Company and its Subsidiaries (determined in
         accordance with GAAP) or which requires the divestiture of assets, or
         stock of a Subsidiary, which shall

                                       25
<PAGE>

         have contributed a substantial part of the consolidated net income of
         the Company and its Subsidiaries (determined in accordance with GAAP)
         for any of the three fiscal years then most recently ended, and such
         order, judgment or decree remains unstayed and in effect for more than
         60 days; or

                  (xiii)   one or more judgments or orders in an aggregate
         amount in excess of $1,000,000 is rendered against the Company or any
         Subsidiary and either (i) enforcement proceedings have been commenced
         by any creditor upon any such judgment or order or (ii) within 30 days
         after entry thereof, such judgment is not discharged or execution
         thereof stayed pending appeal, or within 30 days after the expiration
         of any such stay, such judgment is not discharged; or

                  (xiv)    (A) any Plan shall fail to satisfy the minimum
         funding standards of ERISA or the Code for any plan year or part
         thereof or a waiver of such standards or extension of any amortization
         period is sought or granted under Section 412 of the Code, (B) a notice
         of intent to terminate any Plan shall have been or is reasonably
         expected to be filed with the PBGC or the PBGC shall have instituted
         proceedings under ERISA Section 4042 to terminate or appoint a trustee
         to administer any Plan or the PBGC shall have notified the Company or
         any ERISA Affiliate that a Plan may become a subject of such
         proceedings, (C) the aggregate "amount of unfunded benefit liabilities"
         (within the meaning of Section 4001(a)(18) of ERISA) under all Plans,
         determined in accordance with Title IV of ERISA, shall exceed $500,000,
         (D) the Company or any ERISA Affiliate shall have incurred or is
         reasonably expected to incur any liability pursuant to Title I or IV of
         ERISA or the penalty or excise tax provisions of the Code relating to
         employee benefit plans, (E) the Company or any ERISA Affiliate
         withdraws from any Multiemployer Plan or (F) the Company or any
         Subsidiary establishes or amends any employee welfare benefit plan that
         provides post-employment welfare benefits in a manner that would
         materially increase the liability of the Company or any Subsidiary
         thereunder; or

                  (xv)     any provision of the Subsidiary Guaranty Agreement
         after delivery thereof under paragraph 3A(vii) shall for any reason
         cease to be valid and binding on a Subsidiary Guarantor, or a
         Subsidiary Guarantor shall so state in writing;

then (a) if such event is an Event of Default specified in clause (i) or (ii) of
this paragraph 7A, any holder of any Note may at its option, by notice in
writing to the Company, declare all of the Notes held by such holder to be, and
all of the Notes held by such holder shall thereupon be and become, immediately
due and payable at par together with interest accrued thereon, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company, (b) if such event is an Event of Default specified in
clause (viii), (ix) or (x) of this paragraph 7A with respect to the Company, all
of the Notes at the time outstanding shall automatically become immediately due
and payable at par together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by

                                       26
<PAGE>

the Company and (c) if such event is any Event of Default other than as
specified in preceding clause (b), the Required Holder(s) of the Notes may at
its or their option by notice in writing to the Company, declare all of the
Notes to be, and all of the Notes shall thereupon be and become, immediately due
and payable together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company.

                  The Company acknowledges, and the parties hereto agree, that
each holder of a Note has the right to maintain its investment in the Notes free
from repayment by the Company (except as herein specifically provided for) and
that the provision for payment of the Yield-Maintenance Amount by the Company in
the event that the Notes are prepaid or are accelerated as a result of an Event
of Default, is intended to provide compensation for the deprivation of such
right under such circumstances.

                  7B.      RESCISSION OF ACCELERATION. At any time after any or
all of the Notes shall have been declared immediately due and payable pursuant
to paragraph 7A, the Required Holder(s) may, by notice in writing to the
Company, rescind and annul such declaration and its consequences if (i) the
Company shall have paid all overdue interest on the Notes, the principal of and
Yield-Maintenance Amount, if any, payable with respect to any Notes which have
become due otherwise than by reason of such declaration, and interest on such
overdue interest and overdue principal and Yield-Maintenance Amount at the rate
specified in the Notes, (ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or waived pursuant
to paragraph 11C and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes or this Agreement. No such
rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.

                  7C.      NOTICE OF ACCELERATION OR RESCISSION. Whenever any
Note shall be declared immediately due and payable pursuant to paragraph 7A or
any such declaration shall be rescinded and annulled pursuant to paragraph 7B,
the Company shall forthwith give written notice thereof to the holder of each
Note at the time outstanding.

                  7D.      OTHER REMEDIES. If any Event of Default or Default
shall occur and be continuing, the holder of any Note may proceed to protect and
enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under applicable
law, either by suit in equity or by action at law, or both, whether for specific
performance of any covenant or other agreement contained in this Agreement or in
aid of the exercise of any power granted in this Agreement. No remedy conferred
in this Agreement upon the holder of any Note is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.

                                       27
<PAGE>

                  8.       REPRESENTATIONS, COVENANTS AND WARRANTIES. The
Company represents, covenants and warrants as follows:

                  8A.      ORGANIZATION. The Company is a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware, each Subsidiary is duly organized and validly existing in good
standing under the laws of the jurisdiction in which it is incorporated, and the
Company has and each Subsidiary has the corporate power to own its respective
property and to carry on its respective business as now being conducted. The
execution, delivery and performance by the Company of this Agreement and the
Notes are within the Company's corporate powers and have been duly authorized by
all necessary corporate action.

                  8B.      FINANCIAL STATEMENTS. The Company has furnished
Prudential and each Purchaser of the Series A Notes and any Accepted Notes with
the following financial statements, identified by a principal financial officer
of the Company: (i) consolidating and consolidated balance sheets of the Company
and its Subsidiaries as at January 31, in each of the three fiscal years of the
Company most recently completed prior to the date as of which this
representation is made or repeated to such Purchaser (other than fiscal years
completed within 90 days prior to such date for which audited financial
statements have not been released) and consolidating and consolidated statements
of income and consolidated statements of cash flows of the Company and its
Subsidiaries for each such year, all reported on, with respect to consolidated
statements, by an independent certified public accounting firm of national
standing; and (ii) a consolidating and consolidated balance sheet of the Company
and its Subsidiaries as at the end of the quarterly period (if any) most
recently completed prior to such date and after the end of such fiscal year
(other than quarterly periods completed within 45 days prior to such date for
which financial statements have not been released) and the comparable quarterly
period in the preceding fiscal year and consolidating and consolidated
statements of income and consolidated statements of cash flows for the periods
from the beginning of the fiscal years in which such quarterly periods are
included to the end of such quarterly periods, prepared by the Company. Such
financial statements (including any related schedules and/or notes) are true and
correct in all material respects (subject, as to interim statements, to changes
resulting from audits and year-end adjustments), have been prepared in
accordance with GAAP consistently followed throughout the periods involved and
show all liabilities, direct and contingent, of the Company and its Subsidiaries
required to be shown in accordance with such principles. The balance sheets
fairly present the condition of the Company and its Subsidiaries as at the dates
thereof, and the statements of income, cash flows and stockholders' equity
fairly present the results of the operations of the Company and its Subsidiaries
and their cash flows for the periods indicated. There has been no material
adverse change in the business, property or assets, condition (financial or
otherwise) operations or prospects of the Company and its Subsidiaries taken as
a whole since the end of the most recent fiscal year for which such audited
financial statements have been furnished.

                                       28
<PAGE>

                  8C.      ACTIONS PENDING. There is no action, suit,
investigation or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries, or any properties or
rights of the Company or any of its Subsidiaries, by or before any court,
arbitrator or administrative or governmental body which might result in any
material adverse change in the business, property or assets, condition
(financial or otherwise) or operations of the Company and its Subsidiaries taken
as a whole. There is no action, suit, investigation or proceeding pending or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries which purports to affect the validity or enforceability of this
Agreement or any Note.

                  8D.      OUTSTANDING INDEBTEDNESS. Neither the Company nor any
of its Subsidiaries has outstanding any Indebtedness except as permitted by
paragraph 6A(2). There exists no default under the provisions of any instrument
evidencing Indebtedness in an amount greater than $100,000 or of any agreement
relating thereto.

                  8E.      TITLE TO PROPERTIES. The Company has and each of its
Subsidiaries has good and indefeasible title to its respective real properties
(other than properties which it leases) and good title to all of its other
respective properties and assets, including the properties and assets reflected
in the most recent audited balance sheet referred to in paragraph 8B (other than
properties and assets disposed of in the ordinary course of business), subject
to no Lien of any kind except Liens permitted by paragraph 6B(1). All leases
necessary in any material respect for the conduct of the respective businesses
of the Company and its Subsidiaries are valid and subsisting and are in full
force and effect.

                  8F.      TAXES. The Company has and each of its Subsidiaries
has filed all federal, state and other income tax returns which, to the best
knowledge of the officers of the Company and its Subsidiaries, are required to
be filed, and each has paid all taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have become due, except
such taxes as are being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP.

                  8G.      CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the
Company nor any of its Subsidiaries is a party to any contract or agreement or
subject to any charter or other corporate restriction which materially and
adversely affects its business, property or assets, condition (financial or
otherwise) or operations. Neither the execution nor delivery of this Agreement
or the Notes, nor the offering, issuance and sale of the Notes, nor fulfillment
of nor compliance with the terms and provisions hereof and of the Notes will
conflict with, or result in a breach of the terms, conditions or provisions of,
or constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries pursuant to, the charter or by-laws of the Company or any of
its Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute, law,
rule or regulation to which the Company or any of its Subsidiaries is subject.
Neither the Company nor any of its Subsidiaries is a party to, or otherwise
subject to any provision contained in, any instrument

                                       29
<PAGE>

evidencing Indebtedness of the Company or such Subsidiary, any agreement
relating thereto or any other contract or agreement (including its charter)
which limits the amount of, or otherwise imposes restrictions on the incurring
of, Indebtedness of the Company of the type to be evidenced by the Notes except
as set forth in the agreements listed in Schedule 8G attached hereto.

                  8H.      OFFERING OF NOTES. Neither the Company nor any agent
acting on its behalf has, directly or indirectly, offered the Notes or any
similar security of the Company for sale to, or solicited any offers to buy the
Notes or any similar security of the Company from, or otherwise approached or
negotiated with respect thereto with, any Person other than institutional
investors, and neither the Company nor any agent acting on its behalf has taken
or will take any action which would subject the issuance or sale of the Notes to
the provisions of Section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.

                  8I.      USE OF PROCEEDS. The proceeds of the Series A Notes
will be used to refinance existing indebtedness and for general corporate
purposes. None of the proceeds of the sale of any Notes will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any "margin stock" as defined in Regulation U (12 CFR
Part 221) of the Board of Governors of the Federal Reserve System ("MARGIN
STOCK") or for the purpose of maintaining, reducing or retiring any Indebtedness
which was originally incurred to purchase or carry any stock that is then
currently a margin stock or for any other purpose which might constitute the
purchase of such Notes a "purpose credit" within the meaning of such Regulation
U, unless the Company shall have delivered to the Purchaser which is purchasing
such Notes, on the Closing Day for such Notes, an opinion of counsel
satisfactory to such Purchaser stating that the purchase of such Notes does not
constitute a violation of such Regulation U. Neither the Company nor any agent
acting on its behalf has taken or will take any action which might cause this
Agreement or the Notes to violate Regulation T, Regulation U or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act, in each case as in effect now or as the same may hereafter be
in effect.

                  8J.      ERISA. No accumulated funding deficiency (as defined
in section 302 of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No liability
to the PBGC has been or is expected by the Company or any ERISA Affiliate to be
incurred with respect to any Plan (other than a Multiemployer Plan) by the
Company, any Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the business, property or assets, condition (financial or otherwise)
or operations of the Company and its Subsidiaries taken as a whole. Neither the
Company, any Subsidiary nor any ERISA Affiliate has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan which is or would be materially adverse to the
business, property or assets, condition (financial or otherwise) or operations
of the Company and its Subsidiaries taken as a whole. The execution and delivery
of this Agreement and the issuance and sale of the Notes will be exempt

                                       30
<PAGE>

from or will not involve any transaction which is subject to the prohibitions of
section 406 of ERISA and will not involve any transaction in connection with
which a penalty could be imposed under section 502(i) of ERISA or a tax could be
imposed pursuant to section 4975 of the Code. The representation by the Company
in the next preceding sentence is made in reliance upon and subject to the
accuracy of the representation of each Purchaser in paragraph 9B as to the
source of funds to be used by it to purchase any Notes.

                  8K.      GOVERNMENTAL CONSENT. Neither the nature of the
Company or of any Subsidiary, nor any of their respective businesses or
properties, nor any relationship between the Company or any Subsidiary and any
other Person, nor any circumstance in connection with the offering, issuance,
sale or delivery of the Notes is such as to require any authorization, consent,
approval, exemption or any action by or notice to or filing with any court or
administrative or governmental or regulatory body (other than routine filings
after the Closing Day for any Notes with the SEC and/or state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or of the Notes.

                  8L.      ENVIRONMENTAL COMPLIANCE. The Company and its
Subsidiaries and all of their respective properties and facilities have complied
at all times and in all respects with all federal, state, local and regional
statutes, laws, ordinances and judicial or administrative orders, judgments,
rulings and regulations relating to protection of the environment except, in any
such case, where failure to comply could not result in a material adverse effect
on the business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries taken as a whole.

                  8M.      UTILITY COMPANY STATUS. Neither the Company nor any
Subsidiary is a (i) "holding company," a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended or (ii) public utility within the meaning of the
Federal Power Act, as amended.

                  8N.      INVESTMENT COMPANY STATUS. Neither the Company nor
any Subsidiary is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or an "investment adviser" within the meaning of the Investment
Advisers Act of 1940, as amended.

                  8O.      DISCLOSURE. Neither this Agreement nor any other
document, certificate or statement furnished to any Purchaser by or on behalf of
the Company in connection herewith contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to the
Company or any of its Subsidiaries which materially adversely affects or in the
future may (so far as the Company can now foresee) materially adversely affect
the business, property or assets, condition (financial or otherwise) or
operations of the Company or any of its Subsidiaries and which has not been set
forth in this Agreement.

                                       31
<PAGE>

                  8P.      RULE 144A. The Notes are not of the same class as
securities of the Company, if any, listed on a national securities exchange,
registered under Section 6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system.

                  8Q.      DELIVERY OF BANK AGREEMENT. The Company has delivered
to each Purchaser prior to the date hereof a true, correct and complete copy of
the Bank Agreement, including all amendments and waivers of any provision
thereof.

                  8R.      HOSTILE TENDER OFFERS. None of the proceeds of the
sale of any Notes will be used to finance a Hostile Tender Offer.

                  8S.      NO IMPROPER PAYMENT OR INFLUENCE. Neither the Company
nor any Subsidiary has directly or indirectly paid or delivered any fee,
commission or other money or property, or engaged in any lobbying, influencing
or other behavior, however characterized, to any agent, government official,
regulatory body, governmental agency or other Person, in the United States or
any other country, related to the business or operations of the Company or any
of its Subsidiaries, and that the Company or any Subsidiary knows or has reason
to believe to have been illegal under any federal, state, or local law of the
United States or any other country having jurisdiction, or to have been for the
purpose of, and to have had the effect of, inducing or encouraging the breach by
the recipient thereof of any legal duties, whether as an employee or otherwise
to another Person.

                  8T.      FOREIGN ENEMIES AND REGULATIONS. Neither the issue
and sale of the Notes by the Company nor its use of the proceeds thereof as
contemplated by this Agreement will violate (A) any regulations promulgated or
administered by the Office of Foreign Assets Control, United States Department
of the Treasury, including without limitation, the Foreign Assets Control
Regulations, the Transaction Control Regulations, the Cuban Assets Control
Regulations, the Foreign Funds Control Regulations, the Iranian Assets Control
Regulations, the Nicaraguan Trade Control Regulations, the South African
Transaction Regulations, the Iranian Transactions Regulations, the Iraqi
Sanctions Regulations, the Soviet Gold Coin Regulations, the Panamanian
Transaction Regulations or the Libyan Sanctions Regulations of the United States
Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, (B) the
Trading with the Enemy Act, as amended, (C) Executive Orders 8389, 9095, 9193,
12543 (Libya), 12544 (Libya), 12722 or 12724 (Iraq), 12775 or 12779 (Haiti), or
12959 (Iran), as amended, of the President of the United States or (D) any rule,
regulation or executive order issued or promulgated pursuant to the laws or
regulations described in the foregoing clauses (A) -(C).

                  9.       REPRESENTATIONS OF THE PURCHASERS.

         Each Purchaser represents as follows:

                                       32
<PAGE>

                  9A.      NATURE OF PURCHASE. Such Purchaser is not acquiring
the Notes purchased by it hereunder with a view to or for sale in connection
with any distribution thereof within the meaning of the Securities Act, provided
that the disposition of such Purchaser's property shall at all times be and
remain within its control.

                  9B.      SOURCE OF FUNDS. At least one of the following
statements is an accurate representation as to each source of funds (the
"SOURCE") to be used by such Purchaser to pay the purchase price of the Notes to
be purchased by such Purchaser hereunder:

                  (i)      the Source is an "insurance company general account"
         (as the term is defined in the United States Department of Labor's
         Prohibited Transaction Exemption ("PTE") 95-60) in respect of which the
         reserves and liabilities (as defined by the annual statement for life
         insurance companies approved by the National Association of Insurance
         Commissioners (the "NAIC ANNUAL STATEMENT")) for the general account
         contract(s) held by or on behalf of any employee benefit plan together
         with the amount of the reserves and liabilities for the general account
         contract(s) held by or on behalf of any other employee benefit plans
         maintained by the same employer (or affiliate thereof as defined in PTE
         95-60) or by the same employee organization in the general account do
         not exceed 10% of the total reserves and liabilities of the general
         account (exclusive of separate account liabilities) plus surplus as set
         forth in the NAIC Annual Statement filed with such Purchaser's state of
         domicile; or

                  (ii)     the Source is a separate account that is maintained
         solely in connection with such Purchaser's fixed contractual
         obligations under which the amounts payable, or credited, to any
         employee benefit plan (or its related trust) that has any interest in
         such separate account (or to any participant or beneficiary of such
         plan (including any annuitant)) are not affected in any manner by the
         investment performance of the separate account; or

                  (iii)    the Source is either (a) an insurance company pooled
         separate account, within the meaning of PTE 90-1 or (b) a bank
         collective investment fund, within the meaning of the PTE 91-38 and,
         except as disclosed by such Purchaser to the Company in writing
         pursuant to this clause (iii), no employee benefit plan or group of
         plans maintained by the same employer or employee organization
         beneficially owns more than 10% of all assets allocated to such pooled
         separate account or collective investment fund; or

                  (iv)     the Source constitutes assets of an "investment fund"
         (within the meaning of Part V of PTE 84-14 (the "QPAM EXEMPTION"))
         managed by a "qualified professional asset manager" or "QPAM" (within
         the meaning of Part V of the QPAM Exemption), no employee benefit
         plan's assets that are included in such investment fund, when combined
         with the assets of all other employee benefit plans established or
         maintained by the same employer or by an affiliate (within the meaning
         of Section V(c)(1) of the QPAM Exemption) of such employer or by the
         same employee

                                       33
<PAGE>

         organization and managed by such QPAM, exceed 20% of the total client
         assets managed by such QPAM, the conditions of Part I(c) and (g) of the
         QPAM Exemption are satisfied, neither the QPAM nor a person controlling
         or controlled by the QPAM (applying the definition of "control" in
         Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
         Company and (a) the identity of such QPAM and (b) the names of all
         employee benefit plans whose assets are included in such investment
         fund have been disclosed to the Company in writing pursuant to this
         clause (iv); or

                  (v)      the Source constitutes assets of a "plan(s)" (within
         the meaning of Section IV of PTE 96-23 (the "INHAM EXEMPTION")) managed
         by an "in-house asset manager" or "INHAM" (within the meaning of Part
         IV of the INHAM exemption), the conditions of Part I(a), (g) and (h) of
         the INHAM Exemption are satisfied, neither the INHAM nor a person
         controlling or controlled by the INHAM (applying the definition of
         "control" in Section IV(h) of the INHAM Exemption) owns a 5% or more
         interest in the Company and (a) the identity of such INHAM and (b) the
         name(s) of the employee benefit plan(s) whose assets constitute the
         Source have been disclosed to the Company in writing pursuant to this
         clause (v); or

                  (vi)     the Source is a governmental plan; or

                  (vii)    the Source is one or more employee benefit plans, or
         a separate account or trust fund comprised of one or more employee
         benefit plans, each of which has been identified to the Company in
         writing pursuant to this clause (vii); or

                  (viii)   the Source does not include assets of any employee
         benefit plan, other than a plan exempt from the coverage of ERISA.

As used in this paragraph 9B, the terms "employee benefit plan," "governmental
plan," and "separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.

                  10.      DEFINITIONS; ACCOUNTING MATTERS. For the purpose of
this Agreement, the terms defined in paragraphs 10A and 10B (or within the text
of any other paragraph) shall have the respective meanings specified therein and
all accounting matters shall be subject to determination as provided in
paragraph 10C.

                  10A.     YIELD-MAINTENANCE TERMS.

                  "CALLED PRINCIPAL" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4B or is
declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.

                  "DISCOUNTED VALUE" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to

                                       34
<PAGE>

such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if payable other
than on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.

                  "REINVESTMENT YIELD" shall mean, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (i) the
yields reported as of 10:00 a.m. (New York City local time) on the Business Day
next preceding the Settlement Date with respect to such Called Principal for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date on
the Treasury Yield Monitor page of Standard & Poor's MMS - Treasury Market
Insight (or, if Standard & Poor's shall cease to report such yields in MMS -
Treasury Market Insight or shall cease to be Prudential Capital Group's
customary source of information for calculating yield-maintenance amounts on
privately placed notes, then such source as is then Prudential Capital Group's
customary source of such information), or if such yields shall not be reported
as of such time or the yields reported as of such time shall not be
ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for
the latest day for which such yields shall have been so reported as of the
Business Day next preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15(519) (or any comparable
successor publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date. Such implied yield shall be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent
yields in accordance with accepted financial practice and (b) interpolating
linearly between yields reported for various maturities. The Reinvestment Yield
shall be rounded to that number of decimal places as appears in the coupon of
the applicable Note.

                  "REMAINING AVERAGE LIFE" shall mean, with respect to the
Called Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.

                  "REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.

                  "SETTLEMENT DATE" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be prepaid
pursuant to paragraph 4B or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.

                                       35
<PAGE>

                  "YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any
Note, an amount equal to the excess, if any, of the Discounted Value of the
Called Principal of such Note over the sum of (i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on) the Settlement
Date with respect to such Called Principal. The Yield-Maintenance Amount shall
in no event be less than zero.

                  10B.     OTHER TERMS.

                  "ACCEPTANCE" shall have the meaning specified in paragraph 2F.

                  "ACCEPTANCE DAY" shall have the meaning specified in paragraph
2F.

                  "ACCEPTANCE WINDOW" shall have the meaning specified in
paragraph 2F.

                  "ACCEPTED NOTE" shall have the meaning specified in paragraph
2F.

                  "ADDITIONAL COVENANT" shall mean any affirmative or negative
covenant or similar restriction applicable to the Company or any Subsidiary
(regardless of whether such provision is labeled or otherwise characterized as a
covenant) the subject matter of which either (i) is similar to that of the
covenants in paragraphs 5 and 6 of this Agreement, or related definitions in
paragraph 10 of this Agreement, but contains one or more percentages, amounts or
formulas that is more restrictive than those set forth herein or more beneficial
to the holder or holders of the Indebtedness created or evidenced by the
document in which such covenant or similar restriction is contained (and such
covenant or similar restriction shall be deemed an Additional Covenant only to
the extent that it is more restrictive or more beneficial) or (ii) is different
from the subject matter of the covenants in paragraph 5 and 6 of this Agreement,
or related definitions in paragraph 10 of this Agreement.

                  "ADDITIONAL DEFAULT" shall mean any provision contained in any
document or instrument creating or evidencing Indebtedness of the Company which
permits the holder or holders of Indebtedness to accelerate (with the passage of
time or giving of notice or both) the maturity thereof or otherwise requires the
Company or any Subsidiary to purchase such Indebtedness prior to the stated
maturity thereof and which either (i) is similar to the Defaults and Events of
Default contained in paragraph 7 of this Agreement, or related definitions in
paragraph 10 of this Agreement, but contains one or more percentages, amounts or
formulas that is more restrictive or has a shorter grace period than those set
forth herein or is more beneficial to the holders of such other Indebtedness
(and such provision shall be deemed an Additional Default only to the extent
that it is more restrictive, has a shorter grace period or is more beneficial)
or (ii) is different from the subject matter of the Defaults and Events of
Default contained in paragraph 7 of this Agreement, or related definitions in
paragraph 10 of this Agreement.

                                       36
<PAGE>

                  "AFFILIATE" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with, the
Company, except a Subsidiary. A Person shall be deemed to control a corporation
if such Person possesses, directly or indirectly, the power to direct or cause
the direction of the management and policies of such corporation, whether
through the ownership of voting securities, by contract or otherwise.

                  "AGREEMENT" shall have the meaning specified in paragraph 11C.

                  "AUTHORIZED OFFICER" shall mean (i) in the case of the
Company, its chief executive officer, its chief financial officer or any vice
president of the Company designated as an "Authorized Officer" of the Company
for the purpose of this Agreement in an Officer's Certificate executed by the
Company's chief executive officer or chief financial officer and delivered to
Prudential and (ii) in the case of Prudential, any officer of Prudential
designated as its "Authorized Officer" in the Purchaser Schedule or any officer
of Prudential designated as its "Authorized Officer" for the purpose of this
Agreement in a certificate executed by one of its Authorized Officers. Any
action taken under this Agreement on behalf of the Company by any individual who
on or after the date of this Agreement shall have been an Authorized Officer of
the Company and whom Prudential in good faith believes to be an Authorized
Officer of the Company at the time of such action shall be binding on the
Company even though such individual shall have ceased to be an Authorized
Officer of the Company, and any action taken under this Agreement on behalf of
Prudential by any individual who on or after the date of this Agreement shall
have been an Authorized Officer of Prudential and whom the Company in good faith
believes to be an Authorized Officer of Prudential at the time of such action
shall be binding on Prudential even though such individual shall have ceased to
be an Authorized Officer of Prudential.

                  "AVAILABLE FACILITY AMOUNT" shall have the meaning specified
in paragraph 2A.

                  "BANK AGREEMENT" shall mean the Loan Agreement dated as of
July 31, 2003 among the Company, LaSalle Bank National Association ("LASALLE"),
as Administrative Agent, and LaSalle and the other parties thereto, as
"LENDERS", as amended from time to time, and any replacement agreement that
serves as the Company's principal credit facility.

                  "BANKRUPTCY LAW" shall have the meaning specified in clause
(viii) of paragraph 7A.

                  "BUSINESS DAY" shall mean any day other than (i) a Saturday or
a Sunday, (ii) a day on which commercial banks in New York City are required or
authorized to be closed and (iii) for purposes of paragraph 2C hereof only, a
day on which Prudential is not open for business.

                  "CANCELLATION DATE" shall have the meaning specified in
paragraph 2I(4).

                  "CANCELLATION FEE" shall have the meaning specified in
paragraph 2I(4).

                                       37
<PAGE>

                  "CAPITALIZED LEASE OBLIGATION" shall mean any rental
obligation which, under GAAP, is or will be required to be capitalized on the
books of the Company or any Subsidiary, taken at the amount thereof accounted
for as indebtedness (net of interest expenses) in accordance with such
principles.

                  "CLOSING DAY" shall mean, with respect to the Series A Notes,
the Series A Closing and, with respect to any Accepted Note, the Business Day
specified for the closing of the purchase and sale of such Accepted Note in the
Request for Purchase of such Accepted Note, provided that (i) if the Company and
the Purchasers which are obligated to purchase such Note agree in writing on an
earlier Business Day for such closing, the "CLOSING DAY" for such Accepted Note
shall be such earlier Business Day and (ii) if the closing of the purchase and
sale of such Accepted Note is rescheduled pursuant to paragraph 2H, the Closing
Day for such Accepted Note, for all purposes of this Agreement except references
to "original Closing Day" in paragraph 2I(3), shall mean the Rescheduled Closing
Day with respect to such Accepted Note.

                  "CODE" shall mean the Internal Revenue Code of 1986, as
amended.

                  "COMPANY" shall mean Layne Christensen Company, a Delaware
corporation.

                  "CONFIRMATION OF ACCEPTANCE" shall have the meaning specified
in paragraph 2F.

                  "DEFAULT" shall have the meaning such term is given in the
definition of "Event of Default" below.

                  "DEFAULT RATE" shall mean, for any Note at any time upon the
occurrence of an Event of Default and until such Event of Default has been cured
or waived in writing, a rate of interest per annum from time to time equal to
the lesser of (i) the maximum rate permitted by applicable law and (ii) the
greater of (a) 2% over the coupon rate for such Note in effect immediately prior
to such Event of Default and (b) 2.0% over the rate of interest publicly
announced by The Bank of New York from time to time in New York City as its
Prime Rate.

                  "DELAYED DELIVERY FEE" shall have the meaning specified in
paragraph 2I(3).

                  "EBITDA" shall mean, with respect to any Person for any fiscal
period, without duplication, an amount equal to (a) consolidated Net Income of
such Person for such period determined in accordance with GAAP, minus (b) the
sum of (i) income tax benefits, (ii) interest income, (iii) gain from
extraordinary items for such period, (iv) any aggregate net gain (but not any
aggregate net loss) during such period arising from the sale, exchange or other
disposition of capital assets by such Person (including any fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities), and (v) any other non-cash
gains that have been added in determining consolidated

                                       38
<PAGE>

Net Income, in each case to the extent included in the calculation of
consolidated Net Income of such Person for such period in accordance with GAAP,
but without duplication, plus (c) the sum of (i) any provision for income taxes,
(ii) Interest Expense, (iii) loss from extraordinary items for such period, (iv)
the amount of non-cash charges (including depreciation and amortization but
excluding insurance expense) for such period, (v) amortized debt discount for
such period, (vi) any aggregate net loss (but not any aggregate net gains)
during such period arising from the sale, exchange or other disposition of
capital assets by such Person and (vii) the amount of any deduction to
consolidated Net Income as the result of any grant to any members of the
management of such Person of any Stock, in each case to the extent included in
the calculation of consolidated Net Income of such Person for such period in
accordance with GAAP, but without duplication. For purposes of this definition,
the following items shall be excluded in determining consolidated Net Income of
a Person: (1) the income (or deficit) of any other Person accrued prior to the
date it became a Subsidiary of, or was merged or consolidated into, such Person
or any of such Person's Subsidiaries; (2) equity earnings of other Persons
accounted for on an equity basis, except to the extent received, on a
consolidated basis, as cash dividends or distributions; (3) equity losses of
other Persons accounted for on an equity basis, except to the extent such losses
represent, on a consolidated basis, cash losses; (4) the undistributed earnings
of any Subsidiary of such Person to the extent that the declaration or payment
of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (5) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (6) any write-up of any asset; (7) any net
gain from the collection of the proceeds of life insurance policies; (8) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person; (9) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets; (10) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary; and (11) any income,
gain or loss during such period from any discontinued operations or the
disposition thereof.

                  "EBITDAR" shall mean, for any period, EBITDA plus Rental
Expense plus, for the period July 31, 2003 through April 30, 2004, up to
$1,000,000 of prepayment fees and deferred charges incurred in connection with
the prepayment of the Existing Credit Agreement.

                  "ENVIRONMENTAL AND SAFETY LAWS" shall mean all laws relating
to pollution, the release or other discharge, handling, disposition or treatment
of Hazardous Substance and other substances or the protection of the environment
or of employee health and safety, including without limitation, CERCLA, the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et. seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 7401 et. seq.), the
Clean Air Act (42 U.S.C. Section 401 et. seq.), the Toxic Substances Control Act
(15 U.S.C. Section 2601 et. seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et. seq.) and the Emergency Planning and Community
Right-To-

                                       39
<PAGE>

Know Act (42 U.S.C. Section 11001 et. seq.), each as the same may be amended and
supplemented.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.

                  "ERISA AFFILIATE" shall mean any corporation which is a member
of the same controlled group of corporations as the Company within the meaning
of section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.

                  "EVENT OF DEFAULT" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "DEFAULT" shall mean
any of such events, whether or not any such requirement has been satisfied.

                  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.

                  "EXISTING CREDIT AGREEMENT" shall mean the Credit Agreement
dated as of July 9, 2002 among the Company, Boyles Bros. Drilling Company,
Christensen Boyles Corporation, Layne Water Development and Storage, LLC, Layne
Texas, Incorporated, Mid-Continent Drilling Company, Shawnee Oil & Gas, L.L.C.,
Stamm-Scheele Incorporated, Toledo Oil & Gas Services, Inc., Vibration
Technology, Inc., the other credit parties signatory thereto, the lenders
signatory thereto from time to time, General Electric Capital Corporation, as
Agent and lender, and LaSalle Bank National Association, as Revolving Credit
Agent and Lender.

                  "EXISTING CREDIT LOAN DOCUMENTS" shall mean the "Loan
Documents", as defined in the Existing Credit Agreement.

                  "FACILITY" shall have the meaning specified in paragraph 2A.

                  "FIXED CHARGES" shall mean, for any period, for the Company
and its Subsidiaries on a consolidated basis, the sum of (i) Rental Expense,
(ii) Interest Expense, and (iii) all dividends, distributions and redemptions
with respect to any equity interests in the Company made in such period.

                  "GAAP" shall have the meaning specified in paragraph 10C.

                  "GUARANTEE" shall mean, with respect to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the

                                       40
<PAGE>

ordinary course of business) or discounted or sold with recourse by such Person,
or in respect of which such Person is otherwise directly or indirectly liable,
including, without limitation, any such obligation in effect guaranteed by such
Person through any agreement (contingent or otherwise) to purchase, repurchase
or otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain the solvency or any balance sheet or other financial condition of the
obligor of such obligation, or to make payment for any products, materials or
supplies or for any transportation or service, regardless of the non-delivery or
non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof. The amount of any Guarantee shall be equal to the outstanding principal
amount of the obligation guaranteed or such lesser amount to which the maximum
exposure of the guarantor shall have been specifically limited.

                  "HAZARDOUS SUBSTANCE" shall mean (i) any material or substance
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous material," "toxic substances" or any other formulations
intended to define, list or classify substances by reason of their deleterious
properties, (ii) any oil, petroleum or petroleum derived substance, (iii) any
flammable substances or explosives, (iv) any radioactive materials, (v) asbestos
in any form, (vi) electrical equipment that contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of 50 parts per
million, (vii) pesticides or (viii) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental agency
or authority or which may or could pose a hazard to the health and safety of
persons in the vicinity thereof.

                  "HEDGE TREASURY NOTE(S)" shall mean, with respect to any
Accepted Note, the United States Treasury Note or Notes whose duration (as
determined by Prudential) most closely matches the duration of such Accepted
Note.

                  "HOSTILE TENDER OFFER" shall mean, with respect to the use of
proceeds of any Note, any offer to purchase, or any purchase of, shares of
capital stock of any corporation or equity interests in any other entity, or
securities convertible into or representing the beneficial ownership of, or
rights to acquire, any such shares or equity interests, if such shares, equity
interests, securities or rights are of a class which is publicly traded on any
securities exchange or in any over-the-counter market, other than purchases of
such shares, equity interests, securities or rights representing less than 5% of
the equity interests or beneficial ownership of such corporation or other entity
for portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Company makes
the Request for Purchase of such Note.

                                       41
<PAGE>

                  "INCLUDING" shall mean, unless the context clearly requires
otherwise, "including without limitation".

                  "INDEBTEDNESS" shall mean, with respect to any Person and
without duplication, on a combined or consolidated basis:

                           (i)      all items (excluding items of contingency
                  reserves, accrued insurance expense, minority interest or of
                  reserves for deferred income taxes) which under GAAP are shown
                  on the balance sheet as a liability (including without
                  limitation Capitalized Lease Obligations excluding ordinary
                  course trade accounts payable and accrued expenses shown as
                  current liabilities);

                           (ii)     indebtedness secured by any lien existing on
                  property owned subject to such lien, whether or not the
                  indebtedness secured thereby shall have been assumed (other
                  than Liens permitted by paragraph 6B(1)(viii));

                           (iii)    guarantees, endorsements (other than
                  endorsement of negotiable instruments for collection in the
                  ordinary course of business) and other contractual commitments
                  (whether direct or indirect in connection with obligations,
                  stock or dividends of any person) including, without
                  limitation, liabilities in respect of letters of credit or
                  instruments serving a similar function issued or accepted for
                  such Person's account by banks or other financial
                  institutions, but only in respect of and to the extent of
                  payments made under such letters of credit or instruments by
                  the issuers thereof;

                           (iv)     mandatorily redeemable preferred stock;

                           (v)      swaps;

                           (vi)     Unfunded Pension Liabilities;

                           (vii)    preferred stock of Subsidiaries held by
                  third parties; and

                           (viii)   the outstanding balance of the purchase
                  price of uncollected accounts receivable subject at such time
                  to a sale of receivables or other similar transaction,
                  regardless of whether such transaction is effected without
                  recourse or in a manner which would not be reflected on the
                  balance sheet in accordance with GAAP.

                  "INHAM EXEMPTION" shall have the meaning specified in
paragraph 9B.

                  "INTANGIBLES" shall mean and include, but is not limited to,
at any date, general intangibles; software developed in-house or purchased,
licensed or leased; accounts receivable and advances due from officers,
directors, employees, stockholders, members, and owners;

                                       42
<PAGE>

licenses; good will; prepaid expenses; escrow deposits; covenants not compete;
the excess of cost over book value of acquired assets; franchise fees;
organizational costs; finance reserves held for recourse obligations;
capitalized research and development costs; the capitalized cost of patents,
trademarks, service marks and copyrights net of amortization; and other
intangible assets.

                  "INTEREST EXPENSE" shall mean as of the date of determination
thereof the sum of any interest and prepayment charges (except any prepayment
and related charges associated with (A) a prepayment made pursuant to paragraph
4 of this Agreement and (B) the prepayment of the Existing Credit Agreement), if
any, including without limitation, all net amounts payable (or receivable) under
interest rate protection agreements and all imputed interest in respect of
Capitalized Lease Obligations paid or payable by the Company, or any Subsidiary,
during such period consolidated or combined in accordance with GAAP.

                  "INVESTMENTS" shall have the meaning specified in paragraph
6B(2).

                  "ISSUANCE FEE" shall have the meaning specified in paragraph
2I(2).

                  "ISSUANCE PERIOD" shall have the meaning specified in
paragraph 2B.

                  "LAYNE ENERGY" shall mean a Wholly-Owned Subsidiary of the
Company to be formed solely for the purpose of holding or operating certain of
the Company's oil and gas business operations.

                  "LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, minimum or compensating deposit arrangement, lien (statutory or
otherwise) or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, any lease in
the nature thereof, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction) or any other
type of preferential arrangement for the purpose, or having the effect, of
protecting a creditor against loss or securing the payment or performance of an
obligation.

                  "MATERIAL SUBSIDIARY" shall mean any Subsidiary of the Company
that (i) contributed at least 5% of the Company's Net Income or (ii) owns at
least 5% of the Company's Tangible Assets, each as of the end of the prior
fiscal years.

                  "MOODY'S" shall mean Moody's Investors Service, Inc. and its
successors.

                  "MULTIEMPLOYER PLAN" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).

                  "NAIC ANNUAL STATEMENT" shall have the meaning specified in
paragraph 9B.

                                       43
<PAGE>

                  "NET INCOME" shall mean, for any computation period, with
respect to the Company on a consolidated basis with its Subsidiaries (other than
any Subsidiary which is restricted from declaring or paying dividends or
otherwise advancing funds to its parent whether by contract or otherwise),
cumulative net income earned during such period as determined in accordance with
GAAP.

                  "NET PROCEEDS" shall mean the net cash proceeds from the sale
or issuance of any equity securities, net of all underwriters' discounts and
commissions, other marketing and selling expenses.

                  "NET WORTH" shall mean, as at any time of determination
thereof, an amount equal to consolidated stockholders' equity of the Company and
its Subsidiaries determined in accordance with GAAP (less amounts attributable
to redeemable preferred stock and common stock).

                  "NOTE DOCUMENTS" shall mean this Agreement, the Notes, the
Subsidiary Guaranty Agreement, the Sharing Agreement, and all other instruments,
certificates, documents and other writings now or hereafter executed and
delivered by the Company, any Subsidiary of the Company or any other Person
pursuant to or in connection with any of the foregoing or any of the
transactions contemplated thereby, and any and all amendments, restatements
supplements and other modifications to any of the foregoing.

                  "NOTES" shall have the meaning specified in paragraph 1.

                  "OFFICER'S CERTIFICATE" shall mean a certificate signed in the
name of the Company by an Authorized Officer of the Company.

                  "OPERATING LEASE" shall mean any lease of any property
(whether real, personal or mixed) which is not a Capitalized Lease Obligation.

                  "PBGC" shall mean the Pension Benefit Guaranty Corporation.

                  "PERSON" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

                  "PICA" shall mean The Prudential Insurance Company of America,
a New Jersey corporation.

                  "PLAN" shall mean any employee pension benefit plan (as such
term is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any ERISA Affiliate.

                                       44
<PAGE>

                  "PRIORITY DEBT" shall mean, at any time, the sum (without
duplication) of (a) Indebtedness of the Company secured by Liens (except Liens
permitted by paragraph 6B(1)(viii)), plus (b) all Indebtedness (excluding trade
payables) or preferred stock of Subsidiaries owed to (or, in the case of
preferred stock, owned by) any Person (other than Indebtedness secured by Liens
permitted by paragraph 6B(1)(viii)) other than the Company or a Subsidiary
Guarantor; provided, that Priority Debt shall not include Indebtedness
represented by the Subsidiary Guarantees or guarantees of or other direct or
indirect obligations or liabilities of Subsidiaries under, or in respect of, the
Bank Agreement provided that the parties to the Bank Agreement are subject to
the Sharing Agreement, plus (c) all preferred stock of the Company or other
capital stock of the Company with any redemption rights.

                  "PRUDENTIAL" shall mean Prudential Investment Management, Inc.

                  "PRUDENTIAL AFFILIATE" shall mean (i) any corporation or other
entity controlling, controlled by, or under common control with, Prudential
either directly or through subsidiaries and (ii) any managed account or
investment fund which is managed by Prudential or a Prudential Affiliate
described in clause (i) of this definition. For purposes of this definition, the
terms "control", "controlling" and "controlled" shall mean the ownership,
directly or through subsidiaries, of a majority of a corporation's or other
entity's Voting Stock or equivalent voting securities or interests.

                  "PTE" shall have the meaning specified in paragraph 9B.

                  "PURCHASERS" shall mean PICA and the Series A Purchasers with
respect to the Series A Notes and, with respect to any Accepted Notes PICA
and/or the Prudential Affiliate(s), which are purchasing such Accepted Notes.

                  "QPAM EXEMPTION" shall have the meaning specified in paragraph
9B.

                  "RELATED PARTY" shall mean (i) any shareholder, (ii) any
executive officer, director, agent or employee of the Company, (iii) all persons
to whom such Persons are related by blood, adoption or marriage and (iv) all
Affiliates of the foregoing Persons.

                  "RENTAL EXPENSE" shall mean with reference to any period, the
aggregate amount of all payments for rent or additional rent (including all
payments for taxes and insurance made directly to the lessor, but excluding
payments for maintenance, repairs, alterations, construction, demolition and the
like) for which the Company or Subsidiaries are directly or indirectly liable
(as lessee or as guarantor or other surety) under all Operating Leases in effect
at any time during such period.

                  "REQUEST FOR PURCHASE" shall have the meaning specified in
paragraph 2D.

                  "REQUIRED HOLDER(S)" shall mean the holder or holders of at
least 51% of the aggregate principal amount of the Notes outstanding at such
time.

                                       45
<PAGE>

                  "RESCHEDULED CLOSING DAY" shall have the meaning specified in
paragraph 2H(3).

                  "RESPONSIBLE OFFICER" shall mean the chief executive officer,
chief operating officer, chief financial officer or chief accounting officer of
the Company or any other officer of the Company involved principally in its
financial administration or its controllership function.

                  "S & P" shall mean Standard & Poor's Ratings Group, a division
of the McGraw-Hill Companies, Inc., and its successors.

                  "SEC" shall mean the Securities and Exchange Commission (or
any governmental body or agency succeeding to the function of the Securities and
Exchange Commission.)

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

                  "SERIES" shall have the meaning specified in paragraph 1.

                  "SERIES A CLOSING" shall have the meaning specified in
paragraph 2H(1).

                  "SERIES A NOTE(S)" shall have the meaning specified in
paragraph 2H(1).

                  "SERIES A PURCHASERS" shall mean The Prudential Insurance
Company of America, Pruco Life Insurance Company and Security Life of Denver
Insurance Company.

                  "SHARING AGREEMENT" shall mean the Sharing Agreement in the
form of Exhibit G attached hereto, as amended from time to time.

                  "SIGNIFICANT HOLDER" shall mean (i) Prudential, so long as
Prudential or any Prudential Affiliate shall hold (or be committed under this
Agreement to purchase) any Note or (ii) any other holder of at least 5% of the
aggregate principal amount of the Notes from time to time outstanding.

                  "SOURCE" shall have the meaning specified in paragraph 9B.

                  "STRUCTURING FEE" shall have the meaning specified in
paragraph 2I(1).

                  "SUBSIDIARY" shall mean, with respect to any Person, (a) any
corporation of which an aggregate of more than 50% of the outstanding Voting
Stock is at the time, directly or indirectly, owned legally or beneficially by
such Person or one or more Subsidiaries of such Person, or with respect to which
any such Person has the right to vote or designate the vote of more than 50% of
such Voting Stock whether by proxy, agreement, operation of law or

                                       46
<PAGE>

otherwise, and (b) any partnership or limited liability company in which such
Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contribution) of more than 50% or of which any such Person is a general partner
or may exercise the powers of a general partner.

                  "SUBSIDIARY GUARANTOR" shall mean each party to the Subsidiary
Guaranty Agreement and any Subsidiary hereafter acquired or created, whether
directly or indirectly, by the Company that has executed and delivered the
Subsidiary Guaranty Agreement or any supplement thereto, pursuant to and as
required by paragraph 5K.

                  "SUBSIDIARY GUARANTY AGREEMENT" shall mean the Subsidiary
Guaranty Agreement in the form of Exhibit F hereto, as amended from time to
time.

                  "TANGIBLE ASSETS" shall mean the consolidated assets of the
Company and its Subsidiaries less, without duplication, (i) intangible assets
including, without limitation, goodwill, licenses, organizational expense,
unamortized debt discount and expense carried as an asset, all reserves and any
write-up in the book value of assets and (ii) all reserves for depreciation and
other asset valuation reserves (but excluding reserves for federal, state and
other income taxes).

                  "TANGIBLE NET WORTH" shall mean Net Worth less Intangibles.

                  "TOTAL INDEBTEDNESS" shall mean the total Indebtedness of the
Company and its Subsidiaries.

                  "TRANSFER" shall mean, with respect to any item, the sale,
exchange, conveyance, lease, transfer or other disposition of such item.

                  "TRANSFEREE" shall mean any direct or indirect transferee of
all or any part of any Note purchased by any Purchaser under this Agreement.

                  "UNFUNDED PENSION LIABILITIES" shall mean, (1) with respect to
each Plan maintained by such Person or any ERISA Affiliate of such Person, the
amount by which such Plan's projected benefit obligations exceed the fair market
value of its assets, as determined under Statement of Financial Accounting
Standards No. 87, and (2) all asserted withdrawal liabilities of such Person or
any ERISA Affiliate of such Person to a Multiemployer Plan.

                  "VOTING STOCK" shall mean, with respect to any corporation,
any shares of stock of such corporation whose holders are entitled under
ordinary circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).

                                       47
<PAGE>

                  "WHOLLY OWNED SUBSIDIARY" shall mean any corporation organized
under the laws of any state of the United States, Canada, or any province of
Canada, which conducts the major portion of its business in and makes the major
portion of its sales to Persons located in the United States or Canada, all of
the stock of every class of which is, at the time as of which any determination
is being made, owned by the Company either directly or through Wholly Owned
Subsidiaries, and which has outstanding no options, warrants, rights or other
securities entitling the holder thereof (other than the Company or a Wholly
Owned Subsidiary) to acquire shares of capital stock of such corporation.

                  10C.     ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All
references in this Agreement to "GAAP" shall be deemed to refer to generally
accepted accounting principles in effect in the United States at the time of
application thereof. Unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all unaudited financial statements and
certificates and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with GAAP applied on a basis
consistent with the most recent audited financial statements delivered pursuant
to clause (ii) of paragraph 5A or, if no such statements have been so delivered,
the most recent audited financial statements referred to in clause (i) of
paragraph 8B.

                  11.      MISCELLANEOUS.

                  11A.     NOTE PAYMENTS. The Company agrees that, so long as
any Purchaser shall hold any Note, it will make payments of principal of,
interest on, and any Yield-Maintenance Amount payable with respect to, such
Note, which comply with the terms of this Agreement, by wire transfer of
immediately available funds for credit (not later than 12:00 noon, New York City
local time, on the date due) to the account or accounts of such Purchaser, if
any, as are specified in the Purchaser Schedule attached hereto or to the
applicable Confirmation of Acceptance, or, in the case of any Purchaser not
named in such Purchaser Schedule or any Purchaser wishing to change the account
specified for it in the Purchaser Schedule, such account or accounts in the
United States as such Purchaser may from time to time designate in writing,
notwithstanding any contrary provision herein or in any Note with respect to the
place of payment. Each Purchaser agrees that, before disposing of any Note, it
will make a notation thereon (or on a schedule attached thereto) of all
principal payments previously made thereon and of the date to which interest
thereon has been paid. The Company agrees to afford the benefits of this
paragraph 11A to any Transferee which shall have made the same agreement as the
Purchasers have made in this paragraph 11A. No holder shall be required to
present or surrender any Note or make any notation thereon, except that upon
written request of the Company made concurrently with or promptly after payment
or prepayment in full of any Note, the applicable holder shall surrender such
Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office.

                                       48
<PAGE>

                  11B.     EXPENSES. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay, and save
Prudential, each Purchaser and any Transferee harmless against liability for the
payment of, all out-of-pocket expenses arising in connection with such
transactions, including:

                  (i)      (A) all stamp and documentary taxes and similar
         charges, (B) costs of obtaining a private placement number for the
         Notes and (C) fees and expenses of brokers, agents, dealers, investment
         banks or other intermediaries or placement agents, in each case as a
         result of the execution and delivery of this Agreement or the issuance
         of the Notes;

                  (ii)     document production and duplication charges and the
         fees and expenses of any special counsel engaged by Prudential or such
         Purchaser or such Transferee in connection with (A) this Agreement and
         the transactions contemplated hereby and (B) any subsequent proposed
         waiver, amendment or modification of, or proposed consent under, this
         Agreement, whether or not the proposed action shall be effected or
         granted;

                  (iii)    the costs and expenses, including attorneys' and
         financial advisory fees, incurred by Prudential or such Purchaser or
         such Transferee in enforcing (or determining whether or how to enforce)
         any rights under this Agreement or the Notes or in responding to any
         subpoena or other legal process or informal investigative demand issued
         in connection with this Agreement or the transactions contemplated
         hereby or by reason of Prudential or such Purchaser's or such
         Transferee's having acquired any Note, including without limitation
         costs and expenses incurred in any workout, restructuring or
         renegotiation proceeding or bankruptcy case; and

                  (iv)     any judgment, liability, claim, order, decree, cost,
         fee, expense, action or obligation resulting from the consummation of
         the transactions contemplated hereby, including the use of the proceeds
         of the Notes by the Company.

                  The obligations of the Company under this paragraph 11B shall
survive the transfer of any Note or portion thereof or interest therein by any
Purchaser or Transferee and the payment of any Note. The Company's obligations
under clause (ii)(A) of this paragraph 11B shall be deemed to have been fully
satisfied upon payment of the Structuring Fee.

                  11C.     CONSENT TO AMENDMENTS. This Agreement may be amended,
and the Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, if the Company shall obtain the
written consent to such amendment, action or omission to act, of the Required
Holder(s) except that, (i) with the written consent of the holders of all Notes
of a particular Series, and if an Event of Default shall have occurred and be
continuing, of the holders of all Notes of all Series, at the time outstanding
(and not without such written consents), the Notes of such Series may be amended
or the provisions thereof waived to change the maturity thereof, to change or
affect the principal thereof, or to change

                                       49
<PAGE>

or affect the time of payment of, or increase the rate of, interest on or any
Yield-Maintenance Amount payable with respect to the Notes of such Series, (ii)
without the written consent of the holder or holders of all Notes at the time
outstanding, no amendment to or waiver of the provisions of this Agreement shall
change or affect the provisions of paragraph 7A or this paragraph 11C insofar as
such provisions relate to proportions of the principal amount of the Notes of
any Series, or the rights of any individual holder of Notes, required with
respect to any declaration of Notes to be due and payable or with respect to any
consent, amendment, waiver or declaration, (iii) with the written consent of
Prudential (and not without the written consent of Prudential) the provisions of
paragraph 2 may be amended or waived (except insofar as any such amendment or
waiver would affect any rights or obligations with respect to the purchase and
sale of Notes which shall have become Accepted Notes prior to such amendment or
waiver) and (iv) with the written consent of all of the Purchasers which shall
have become obligated to purchase Accepted Notes of any Series (and not without
the written consent of all such Purchasers), any of the provisions of paragraphs
2 and 3 may be amended or waived insofar as such amendment or waiver would
affect only rights or obligations with respect to the purchase and sale of the
Accepted Notes of such Series or the terms and provisions of such Accepted
Notes. Each holder of any Note at the time or thereafter outstanding shall be
bound by any consent authorized by this paragraph 11C, whether or not such Note
shall have been marked to indicate such consent, but any Notes issued thereafter
may bear a notation referring to any such consent. No course of dealing between
the Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein and in the Notes, the term "THIS AGREEMENT"
and references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.

                  11D.     FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES;
LOST NOTES. The Notes are issuable as registered notes without coupons in
denominations of at least $100,000, except as may be necessary to reflect any
principal amount not evenly divisible by $100,000. The Company shall keep at its
principal office a register in which the Company shall provide for the
registration of Notes and of transfers of Notes. Upon surrender for registration
of transfer of any Note at the principal office of the Company, the Company
shall, at its expense, execute and deliver one or more new Notes of like tenor
and of a like aggregate principal amount, registered in the name of such
transferee or transferees. At the option of the holder of any Note, such Note
may be exchanged for other Notes of like tenor and of any authorized
denominations, of a like aggregate principal amount, upon surrender of the Note
to be exchanged at the principal office of the Company. Whenever any Notes are
so surrendered for exchange, the Company shall, at its expense, execute and
deliver the Notes which the holder making the exchange is entitled to receive.
Each installment of principal payable on each installment date upon each new
Note issued upon any such transfer or exchange shall be in the same proportion
to the unpaid principal amount of such new Note as the installment of principal
payable on such date on the Note surrendered for registration of transfer or
exchange bore to the unpaid principal amount of such Note. No reference need be
made in any such new Note to any installment or installments of principal
previously due and paid upon the Note surrendered for registration of transfer
or exchange. Every Note surrendered for registration

                                       50
<PAGE>

of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the holder of such Note or such
holder's attorney duly authorized in writing. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall carry the rights to unpaid
interest and interest to accrue which were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall result from any
such transfer or exchange. Upon receipt of written notice from the holder of any
Note of the loss, theft, destruction or mutilation of such Note and, in the case
of any such loss, theft or destruction, upon receipt of such holder's unsecured
indemnity agreement, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated Note.

                  11E.     PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due
presentment for registration of transfer, the Company may treat the Person in
whose name any Note is registered as the owner and holder of such Note for the
purpose of receiving payment of principal of and interest on, and any
Yield-Maintenance Amount payable with respect to, such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue, and the Company
shall not be affected by notice to the contrary. Subject to the preceding
sentence, the holder of any Note may from time to time grant participations in
all or any part of such Note to any Person on such terms and conditions as may
be determined by such holder in its sole and absolute discretion.

                  11F.     SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT. All representations and warranties contained herein or made in
writing by or on behalf of the Company in connection herewith shall survive the
execution and delivery of this Agreement and the Notes, the transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of any Purchaser or any
Transferee. Subject to the preceding sentence, this Agreement, the Notes, the
letter dated May 28, 2003 between the Company and Prudential and each
Confirmation of Acceptance embody the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings relating to such subject matter.

                  11G.     SUCCESSORS AND ASSIGNS. All covenants and other
agreements in this Agreement contained by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto (including, without limitation, any Transferee)
whether so expressed or not. Each Purchaser and each Transferee hereby agree
that upon becoming a holder of any Note it shall become, without any further
action on the part of such Person or the parties to the Sharing Agreement, a
party to the Sharing Agreement and the terms of the Sharing Agreement shall bind
and inure to the benefit of such Person.

                  11H.     NOTICES. All written communications provided for
hereunder (other than communications provided for under paragraph 2) shall be
sent by first class mail or nationwide overnight delivery service (with charges
prepaid) and (i) if to Prudential or any Purchaser,

                                       51
<PAGE>

addressed as specified for such communications in the Purchaser Schedule
attached hereto (in the case of the Series A Notes) or the Purchaser Schedule
attached to the applicable Confirmation of Acceptance (in the case of any Notes
issued after the date hereof) or at such other address as Prudential or any such
Purchaser shall have specified to the Company in writing, (ii) if to any other
holder of any Note, addressed to it at such address as it shall have specified
in writing to the Company, or, if any such holder shall not have so specified an
address, then addressed to such holder in care of the last holder of such Note
which shall have so specified an address to the Company and (iii) if to the
Company, addressed to it at 1900 Shawnee Mission Parkway, Mission Woods, Kansas
66205, Attention: Vice President -- Finance, provided, however, that any such
communication to the Company may also, at the option of the Person sending such
communication, be delivered by any other means either to the Company at its
address specified above or to any Authorized Officer of the Company. Any
communication pursuant to paragraph 2 shall be made by the method specified for
such communication in paragraph 2, and shall be effective to create any rights
or obligations under this Agreement only if, in the case of a telephone
communication, an Authorized Officer of the party conveying the information and
of the party receiving the information are parties to the telephone call, and in
the case of a telecopier communication, the communication is signed by an
Authorized Officer of the party conveying the information, addressed to the
attention of an Authorized Officer of the party receiving the information, and
in fact received at the telecopier terminal the number of which is listed for
the party receiving the communication in the Purchaser Schedule or at such other
telecopier terminal as the party receiving the information shall have specified
in writing to the party sending such information.

                  11I.     PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or interest on, or Yield-Maintenance Amount payable with respect to, any Note
that is due on a date other than a Business Day shall be made on the next
succeeding Business Day without including the additional days elapsed in the
computation of the interest payable on such next succeeding Business Day;
provided that if the maturity date of any series of the Notes is a date other
than a Business Day, then and in such event payment shall be made on the next
succeeding Business Day, but shall include the additional days elapsed in the
computation of interest payable on such next succeeding Business Day.

                  11J.     SEVERABILITY. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                  11K.     DESCRIPTIVE HEADINGS. The descriptive headings of the
several paragraphs of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.

                                       52
<PAGE>

                  11L.     SATISFACTION REQUIREMENT. If any agreement,
certificate or other writing, or any action taken or to be taken, is by the
terms of this Agreement required to be satisfactory to Prudential, any
Purchaser, to any holder of Notes or to the Required Holder(s), the
determination of such satisfaction shall be made by Prudential, such Purchaser,
such holder or the Required Holder(s), as the case may be, in the sole and
exclusive judgment (exercised in good faith) of the Person or Persons making
such determination.

                  11M.     GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK.

                  11N.     SEVERALTY OF OBLIGATIONS. The sales of Notes to the
Purchasers are to be several sales, and the obligations of Prudential and the
Purchasers under this Agreement are several obligations. No failure by
Prudential or any Purchaser to perform its obligations under this Agreement
shall relieve any other Purchaser or the Company of any of its obligations
hereunder, and neither Prudential nor any Purchaser shall be responsible for the
obligations of, or any action taken or omitted by, any other such Person
hereunder.

                  11O.     COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

                  11P.     BINDING AGREEMENT. When this Agreement is executed
and delivered by the Company, Prudential and the Purchasers of the Series A
Notes, it shall become a binding agreement between the Company, Prudential and
the Purchasers of the Series A Notes. This Agreement shall also inure to the
benefit of each Purchaser which shall have executed and delivered a Confirmation
of Acceptance, and each such Purchaser shall be bound by this Agreement to the
extent provided in such Confirmation of Acceptance.

                  11Q.     WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION.

                  (i)      THE COMPANY, PRUDENTIAL AND EACH HOLDER OF NOTES
         HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT
         MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION OF ANY CLAIM WHICH IS
         BASED HEREON, OR ARISES OUT OF, UNDER, OR IN CONNECTION WITH THIS
         AGREEMENT, THE NOTES OR THE OTHER NOTE DOCUMENTS, OR ANY TRANSACTIONS
         RELATING HERETO OR THERETO, OR ANY COURSE OF CONDUCT, COURSE OF
         DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE
         COMPANY, PRUDENTIAL OR THE HOLDERS OF THE NOTES. THE COMPANY
         ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR
         PRUDENTIAL AND EACH PURCHASER TO BECOME A PARTY TO THIS AGREEMENT AND
         TO PURCHASE NOTES HEREUNDER.

                                       53
<PAGE>

                  (ii)     ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
         AGREEMENT, THE NOTES, THE OTHER NOTE DOCUMENTS OR ANY TRANSACTIONS
         RELATING HERETO OR THERETO, OR ANY COURSE OF CONDUCT, COURSE OF
         DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE
         COMPANY, PRUDENTIAL OR THE HOLDERS OF NOTES MAY BE BROUGHT IN THE
         COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE
         SOUTHERN DISTRICT OF NEW YORK, AND THE COMPANY HEREBY ACCEPTS FOR
         ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
         THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY,
         PRUDENTIAL AND EACH HOLDER OF NOTES HEREBY IRREVOCABLY WAIVES ANY
         OBJECTIONS, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING
         OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
         NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING
         IN SUCH RESPECTIVE JURISDICTIONS.

                  (iii)    The Company hereby agrees that process may be served
         on it by certified mail, return receipt requested, to the addresses
         pertaining to it as specified in paragraph 11H or on CT Corporation
         System, Inc., located at 111 Eighth Avenue, New York, New York 10011,
         and hereby appoints CT Corporation System, Inc. as its agent to receive
         such service of process. Any and all service of process and any other
         notice in any such action, suit or proceeding shall be effective
         against the Company if given by registered or certified mail, return
         receipt requested, or by any other means or mail which requires a
         signed receipt, postage prepaid, mailed as provided above. In the event
         CT Corporation System, Inc. shall not be able to accept service of
         process as aforesaid and if the Company shall not maintain an office in
         New York City, the Company shall promptly appoint and maintain an agent
         qualified to act as an agent for service of process with respect to the
         courts specified in paragraph 11Q(ii), and acceptable to the Required
         Holder(s), as the Company's authorized agent to accept and acknowledge
         on the Company's behalf service of any and all process which may be
         served in any such action, suit or proceeding.

                  If you are in agreement with the foregoing, please sign the
form of acceptance on the enclosed counterpart of this letter and return the
same to the Company, whereupon this letter shall become a binding agreement
between the Company and you.

                                       Very truly yours,

                                       LAYNE CHRISTENSEN COMPANY

                                       By: /s/ Jerry W. Fanska
                                           -------------------------------------
                                           Name: Jerry W. Fanska
                                           Title: Vice President-Finance

                                       54
<PAGE>

The foregoing Agreement is hereby accepted
as of the date first above written.

PRUDENTIAL INVESTMENT MANAGEMENT, INC.

By: /s/ B. Lemons
    ---------------------------------------
    Vice President

THE PRUDENTIAL INSURANCE COMPANY
  OF AMERICA

By: /s/ B. Lemons
    ---------------------------------------
    Vice President

PRUCO LIFE INSURANCE COMPANY

By: /s/ B. Lemons
    ---------------------------------------
    Vice President

SECURITY LIFE OF DENVER INSURANCE COMPANY

By: Prudential Private Placement Investors,
    L.P. (as Investment Advisor)

By: Prudential Private Placement Investors, Inc.
    (as its General Partner)

    By: /s/ B. Lemons
        -----------------------------------
        Vice President

                                       55

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