Document:

EXHIBIT
B    

     

    NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

    

    COMMON
STOCK PURCHASE WARRANT

    

     INNOVATIVE
CARD TECHNOLOGIES, INC.

     

    
      
        	
                Warrant
      Shares: _______

              	
                Initial
      Exercise Date: October __,
2010

              

      

    

     

    THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, ___________.  (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after [the date hereof (the “Initial Exercise
Date”) and on or prior to the close of business on the four year
anniversary of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Innovative Card
Technologies, Inc., a Delaware corporation (the “Company”), up to
______ shares (the “Warrant Shares”) of
Common Stock.  The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).

     

    Section
1.            Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement (the “Purchase Agreement”),
and the Debenture Agreement (the “Debentures”) dated
October __ 2010, among the Company and the purchaser’s signatory
thereto.

    
      
         

      

      
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    Section
2.      
      Exercise.

     

    a)           Exercise of
Warrant.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Company) of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto; and, within 3 Trading Days of the date
said Notice of Exercise is delivered to the Company, the Company shall have
received  payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn on a United States
bank.  Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until
the Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within 3 Trading Days of the date
the final Notice of Exercise is delivered to the Company.  Partial
exercises of this Warrant resulting in purchases of a portion of the total
number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount
equal to the applicable number of Warrant Shares purchased.  The
Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases.  The Company shall
deliver any objection to any Notice of Exercise Form within 1 Business Day of
receipt of such notice.  In the event of any dispute or discrepancy,
the records of the Holder shall be controlling and determinative in the absence
of manifest error. The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.

     

    b)           Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $0.25, subject to adjustment
hereunder (the “Exercise
Price”).

     

    
      
        
        

      

      
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    c)           Exercise
Limitations.

    
      	
               
      

            	
              i.

            	
              Holder’s
      Restrictions.  The Company shall not effect any exercise
      of this Warrant, and a Holder shall not have the right to exercise any
      portion of this Warrant, pursuant to Section 2 or otherwise, to the extent
      that after giving effect to such issuance after exercise as set forth on
      the applicable Notice of Exercise, the Holder (together with the Holder’s
      Affiliates, and any other person or entity acting as a group together with
      the Holder or any of the Holder’s Affiliates), would beneficially own in
      excess of the Beneficial Ownership Limitation (as defined below). 
      For purposes of the foregoing sentence, the number of shares of Common
      Stock beneficially owned by the Holder and its Affiliates shall include
      the number of shares of Common Stock issuable upon exercise of this
      Warrant with respect to which such determination is being made, but shall
      exclude the number of shares of Common Stock which would be issuable upon
      (A) exercise of the remaining, nonexercised portion of this Warrant
      beneficially owned by the Holder or any of its Affiliates and (B) exercise
      or conversion of the unexercised or nonconverted portion of any other
      securities of the Company (including, without limitation, any
      other  Common Stock Equivalents) subject to a limitation on
      conversion or exercise analogous to the limitation contained herein
      beneficially owned by the Holder or any of its affiliates.  Except as
      set forth in the preceding sentence, for purposes of this Section 2(c)(i),
      beneficial ownership shall be calculated in accordance with Section 13(d)
      of the Exchange Act and the rules and regulations promulgated thereunder,
      it being acknowledged by the Holder that the Company is not representing
      to the Holder that such calculation is in compliance with Section 13(d) of
      the Exchange Act and the Holder is solely responsible for any schedules
      required to be filed in accordance therewith.   To the
      extent that the limitation contained in this Section 2(c)(i) applies, the
      determination of whether this Warrant is exercisable (in relation to other
      securities owned by the Holder together with any Affiliates) and of which
      portion of this Warrant is exercisable shall be in the sole discretion of
      the Holder, and the submission of a Notice of Exercise shall be deemed to
      be the Holder’s determination of whether this Warrant is exercisable (in
      relation to other securities owned by the Holder together with any
      Affiliates) and of which portion of this Warrant is exercisable, in each
      case subject to the Beneficial Ownership Limitation, and the Company shall
      have no obligation to verify or confirm the accuracy of such
      determination.   In addition, a determination as to any
      group status as contemplated above shall be determined in accordance with
      Section 13(d) of the Exchange Act and the rules and regulations
      promulgated thereunder.  For purposes of this Section 2(c)(i),
      in determining the number of outstanding shares of Common Stock, a Holder
      may rely on the number of outstanding shares of Common Stock as reflected
      in (A) the Company’s most recent periodic or annual report, as the case
      may be, (B) a more recent public announcement by the Company or (C) any
      other notice by the Company or the Transfer Agent setting forth the number
      of shares of Common Stock outstanding.  Upon the written or oral
      request of a Holder, the Company shall within two Trading Days confirm
      orally and in writing to the Holder the number of shares of Common Stock
      then outstanding.  In any case, the number of outstanding shares of
      Common Stock shall be determined after giving effect to the conversion or
      exercise of securities of the Company, including this Warrant, by the
      Holder or its Affiliates since the date as of which such number of
      outstanding shares of Common Stock was reported.  The “Beneficial Ownership
      Limitation” shall be 4.99% of the number of shares of the Common
      Stock outstanding immediately after giving effect to the issuance of
      shares of Common Stock issuable upon exercise of this
      Warrant.  The Holder, upon not less than 61 days’ prior notice
      to the Company, may increase or decrease the Beneficial Ownership
      Limitation provisions of this Section 2(c)(i), provided that the
      Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
      shares of the Common Stock outstanding immediately after giving effect to
      the issuance of shares of Common Stock upon exercise of this Warrant held
      by the Holder and the provisions of this Section 2(c)(i) shall continue to
      apply.  Any such increase or decrease will not be effective
      until the 61st
      day after such notice is delivered to the Company.  The
      provisions of this paragraph shall be construed and implemented in a
      manner otherwise than in strict conformity with the terms of this Section
      2(c)(i) to correct this paragraph (or any portion hereof) which may be
      defective or inconsistent with the intended Beneficial Ownership
      Limitation herein contained or to make changes or supplements necessary or
      desirable to properly give effect to such limitation. The limitations
      contained in this paragraph shall apply to a successor holder of this
      Warrant.

            

    

    
      
         

      

      
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    d)           Mechanics of
Exercise.

     

    i.      Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through
its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is then a participant in such system and either (A) there is an
effective registration statement permitting the resale of the Warrant Shares by
the Holder or (B) the shares are eligible for resale without volume or
manner-of-sale limitations pursuant to Rule 144, and otherwise by physical
delivery to the address specified by the Holder in the Notice of Exercise within
5 Trading Days from the delivery to the Company of the Notice of Exercise Form,
surrender of this Warrant (if required) and payment of the aggregate Exercise
Price as set forth above (the “Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company.  The Warrant
Shares shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the Warrant has been exercised
by payment to the Company of the Exercise Price and all taxes required to be
paid by the Holder, if any, pursuant to Section 2(e)(v) prior to the issuance of
such shares, have been paid

     

    ii.     Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

     

    iii.    Rescission
Rights.  If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates representing the
Warrant Shares pursuant to Section 2(e)(i) by the Warrant Share Delivery Date,
then, the Holder will have the right to rescind such exercise.

    
      
         

      

      
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    iv.    No Fractional Shares or
Scrip.  No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant.  As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall, at its election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.

     

    v.     Charges, Taxes and
Expenses.  Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.

     

    vi.    Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

     

    e)           Call
Provision.  Subject to the provisions of Section 2(d) and this
Section 2(e), if (i) the VWAP for each of 10 consecutive Trading Days (the
“Measurement
Period,” exceeds $0.35 (subject to the terms of
Section 3 herein, and (ii) the Holder is not in possession of any information
that constitutes, or might constitute, material non-public information which was
provided by the Company, then the Company may, within 30 Trading Days of the end
of such Measurement Period, call for cancellation of all or any portion of this
Warrant for which a Notice of Exercise has not yet been delivered (such right, a
“Call”) for
consideration equal to $0.001 per Share.  To exercise this right, the
Company must deliver to the Holder an irrevocable written notice (a “Call Notice”),
indicating therein the portion of unexercised portion of this Warrant to which
such notice applies.  If the conditions set forth below for such Call
are satisfied from the period from the date of the Call Notice through and
including the Call Date (as defined below), then any portion of this Warrant
subject to such Call Notice for which a Notice of Exercise shall not have been
received by the Call Date will be cancelled at 6:30 p.m. (New York City time) on
the fifth Trading Day after the date the Call Notice is received by the Holder
(such date and time, the “Call
Date”).  Any unexercised portion of this Warrant to which the
Call Notice does not pertain will be unaffected by such Call
Notice.  In furtherance thereof, the Company covenants and agrees that
it will honor all Notices of Exercise with respect to Warrant Shares subject to
a Call Notice that are tendered through 6:30 p.m. (New York City time) on the
Call Date.  The parties agree that any Notice of Exercise delivered
following a Call Notice which calls less than all the Warrants shall first
reduce to zero the number of Warrant Shares subject to such Call Notice prior to
reducing the remaining Warrant Shares available for purchase under this
Warrant.  For example, if (x) this Warrant then permits the Holder to
acquire 100 Warrant Shares, (y) a Call Notice pertains to 75 Warrant Shares, and
(z) prior to 6:30 p.m. (New York City time) on the Call Date the Holder tenders
a Notice of Exercise in respect of 50 Warrant Shares, then (1) on the Call Date
the right under this Warrant to acquire 25 Warrant Shares will be automatically
cancelled, (2) the Company, in the time and manner required under this Warrant,
will have issued and delivered to the Holder 50 Warrant Shares in respect of the
exercises following receipt of the Call Notice, and (3) the Holder may, until
the Termination Date, exercise this Warrant for 25 Warrant Shares (subject to
adjustment as herein provided and subject to subsequent Call
Notices).  Subject again to the provisions of this Section 2(e), the
Company may deliver subsequent Call Notices for any portion of this Warrant for
which the Holder shall not have delivered a Notice of
Exercise.  Notwithstanding anything to the contrary set forth in this
Warrant, the Company may not deliver a Call Notice or require the cancellation
of this Warrant (and any such Call Notice shall be void), unless, from the
beginning of the Measurement Period through the Call Date, (i) the Company shall
have honored in accordance with the terms of this Warrant all Notices of
Exercise delivered by  6:30 p.m. (New York City time) on the Call
Date, and (ii) there is a sufficient number of authorized shares of Common Stock
for issuance of all the Warrant Shares, and (iii) the issuance of the shares
shall not cause a breach of any provision of 2(d) herein.  The
Company’s right to call the Warrants under this Section 2(f) shall be exercised
ratably among the Holders based on each Holder’s initial purchase of
Warrants.

    
      
         

      

      
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    f)           Replacement
Warrants.  Upon each cash exercise of a Warrant and in the time
periods set forth for the delivery of the Warrant Shares pursuant to Section
2(d)(i) of the Warrant agreement, the Company shall issue to the holder thereof
a common stock purchase warrant (“Replacement Warrant”)
for every two Warrant shares subject to such exercise and in the form
substantially similar to this Warrant provided that such Replacement Warrant
shall (i) have an Initial Issuance Date of the date such Replacement Warrant is
issued and Termination Date which is 4 years from such Initial Issuance Date,
(ii) have an exercise price equal to the greater of (A) $0.25, subject to
adjustment for reverse and forward stock splits, recapitalizations, stock
dividends and the like or (B) the closing price on the date the original warrant
is exercised, (iii) will not provide for issuance of future Replacement
Warrants, and (iv) will not contain piggyback rights.

     

    Section
3.            Certain
Adjustments.

     

    a)           Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares or (iv)
issues by reclassification of shares of the Common Stock any shares of capital
stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged.  Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.

    
      
         

      

      
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    b)           Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

     

    c)           Notice to
Holder.

     

    i.      Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a notice
setting forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.  However, if the
information is publicly disclosed then  notice shall be deemed given
to each Holder.

     

    ii.     Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice.  The Holder is
entitled to exercise this Warrant during the period commencing on the date of
such notice to the effective date of the event triggering such
notice.

    
      
         

      

      
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    Section
4.            Transfer of
Warrant.

     

    a)           Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase
Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.  The Warrant, if properly
assigned, may be exercised by a new holder for the purchase of Warrant Shares
without having a new Warrant issued.

     

    b)           New Warrants. This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney.  Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated
the [original Issue] [Initial Exercise] Date and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

     

    c)           Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

    
      
         

      

      
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    d)           Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
either (i) registered pursuant to an effective
registration statement under the Securities
Act and under applicable state securities
or blue sky laws or (ii) eligible for
resale without volume or manner-of-sale restrictions pursuant to Rule
144, the Company may require, as a
condition of allowing such transfer, that
the Holder or transferee of this Warrant,
as the case may be, comply with the
provisions of Section [5.7 of the Purchase Agreement.

     

    Section
5.             Piggyback Registration
Rights. If, at any time while this Debenture is outstanding, there is not
an effective registration statement covering all of the Conversion Shares and
the Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with the Company’s stock option or other
employee benefit plans, then the Company shall deliver to each Holder a written
notice of such determination and, if within fifteen days after the date of the
delivery of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Conversion Shares such Holder requests to be registered; provided, however, that the
Company shall not be required to register any Conversion Shares pursuant to this
Section 5 that are eligible for resale pursuant to Rule 144 promulgated by the
Commission pursuant to the Securities Act or that are the subject of a then
effective registration statement.

     

    Section
6.            Miscellaneous.

     

    a)           No Rights as Stockholder
Until Exercise.  This Warrant does not entitle the Holder to
any voting rights or other rights as a stockholder of the Company prior to the
exercise hereof as set forth in Section 2(d)(i).

     

    b)           Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

     

    c)           Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then, such action may be taken or such right may be exercised
on the next succeeding Business Day.

    
      
         

      

      
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    d)           Authorized
Shares.

     

    The
Company covenants that, during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant.  The Company further covenants
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant.  The Company will
take all such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed.  The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

     

    Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment.  Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may be,
necessary to enable the Company to perform its obligations under this
Warrant.

     

    Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    e)           Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Purchase Agreement.

     

    f)  
         Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

     

    g)           Nonwaiver and
Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

     

    h)           Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.

     

    i)  
         Limitation of
Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

     

    j) 
          Remedies.  The
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant.  The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law
would be adequate.

     

    k)           Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder.  The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.

     

    l) 
          Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and [Holders holding Warrants at least equal to
67% of the Warrant Shares issuable upon exercise of all then outstanding
Warrants.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    m)           Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

     

    n)           Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

    

    ********************

    

    (Signature
Pages Follow)

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.

     

    
      
        
          	 
      	
                  [

                	 
      

        

      

    

    

    
      
        
          	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

                

        

      

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    NOTICE
OF EXERCISE

    

    TO:           [_______________________

    

    (1) 
The undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

     

    (2) 
Payment shall take the form of

     

    lawful
money of the United States

     

    (3) 
Please issue a certificate or certificates representing said Warrant Shares in
the name of the undersigned or in such other name as is specified
below:

     

    _______________________________

    

    The
Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

    

    _______________________________

    

    _______________________________

    

    _______________________________

    

    (4)  Accredited
Investor.  The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as amended
and as amended by the Dodd-Frank Wall Street Reform Act.

    

    [SIGNATURE
OF HOLDER]

    

    Name of
Investing Entity:
___________________________________________________________________________

    Signature of Authorized Signatory of
Investing Entity:
_____________________________________________________

    Name of
Authorized Signatory:
_______________________________________________________________________

    Title of
Authorized Signatory:
________________________________________________________________________

    Date:
____________________________________________________________________________________________

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    ASSIGNMENT
FORM

    

    (To
assign the foregoing warrant, execute

    this form
and supply required information.

    Do not
use this form to exercise the warrant.)

    

    FOR VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to

    

    _______________________________________________
whose address is

    

    _______________________________________________________________.

    

    

    

    _______________________________________________________________

    

    Dated:  ______________,
_______

    

    Holder’s
Signature:             _____________________________

    

    Holder’s
Address:               _____________________________

    

    _____________________________

    

    Signature
Guaranteed:  ___________________________________________

    

    NOTE:  The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.Exhibit
10.1

      
        
          
            
              	
                         

                    
	 
      
	
                      OIL-DRI
      CORPORATION OF AMERICA

                    

            

          

        

         

      

      $18,500,000

      

      3.96%
SENIOR NOTES DUE AUGUST 1, 2020

      

      
        
          

        

      

       

      NOTE
AGREEMENT

       

      
        

      

      
         

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      
                                        Dated
      as of November 12, 2010

                                      

                                    
	 

                            

                          

                        

                      

                    

                  

                

              

            

          

           

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

      (Not Part
of Agreement)

       

      
        
          
            	 
      	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      
	
                    1.

                  	
                    AUTHORIZATION
      OF ISSUE OF NOTES

                  	
                    1

                  
	 
      	 
      	 
      
	
                    2.

                  	
                    PURCHASE
      AND SALE OF NOTES

                  	
                    1

                  
	 
      	 
      	 
      
	
                    3.

                  	
                    CONDITIONS
      OF CLOSING

                  	
                    2

                  
	 
      	 
      	 
      	 
      
	 
      	
                    3A.

                  	
                    Documents

                  	
                    2

                  
	 
      	
                    3B.

                  	
                    Opinion
      of Purchasers’ Special Counsel

                  	
                    3

                  
	 
      	
                    3C.

                  	
                    Opinion
      of Company’s and Guarantors’ Counsel

                  	
                    3

                  
	 
      	
                    3D.

                  	
                    Representations
      and Warranties; No Default; Satisfaction of Conditions

                  	
                    3

                  
	 
      	
                    3E.

                  	
                    Purchase
      Permitted By Applicable Laws; Approvals

                  	
                    4

                  
	 
      	
                    3F.

                  	
                    Material
      Adverse Change

                  	
                    4

                  
	 
      	
                    3G.

                  	
                    Fees
      and Expenses

                  	
                    4

                  
	 
      	
                    3H.

                  	
                    Proceedings

                  	
                    4

                  
	 
      	 
      	 
      
	
                    4.

                  	
                    PREPAYMENTS

                  	
                    4

                  
	 
      	 
      	 
      	 
      
	 
      	
                    4A.

                  	
                    Required
      Prepayments

                  	
                    4

                  
	 
      	
                    4B.

                  	
                    Optional
      Prepayment With Yield-Maintenance Amount

                  	
                    5

                  
	 
      	
                    4C.

                  	
                    Notice
      of Optional Prepayment

                  	
                    5

                  
	 
      	
                    4D.

                  	
                    Partial
      Payments Pro Rata

                  	
                    5

                  
	 
      	
                    4E.

                  	
                    Acquisition
      of Notes

                  	
                    5

                  
	 
      	 
      	 
      	 
      
	
                    5.

                  	
                    AFFIRMATIVE
      COVENANTS

                  	
                    5

                  
	 
      	 
      	 
      	 
      
	 
      	
                    5A.

                  	
                    Financial
      Statements

                  	
                    5

                  
	 
      	
                    5B.

                  	
                    Officer's
      Certificate

                  	
                    8

                  
	 
      	
                    5C.

                  	
                    Inspection

                  	
                    9

                  
	 
      	
                    5D.

                  	
                    Restricted
      Subsidiaries

                  	
                    9

                  
	 
      	
                    5E.

                  	
                    Compliance
      with Law

                  	
                    9

                  
	 
      	
                    5F.

                  	
                    Insurance

                  	
                    9

                  
	 
      	
                    5G.

                  	
                    Maintenance
      of Properties

                  	
                    10

                  
	 
      	
                    5H.

                  	
                    Payment
      of Taxes and Claims

                  	
                    10

                  
	 
      	
                    5I.

                  	
                    Corporate
      Existence, etc

                  	
                    10

                  
	 
      	
                    5J.

                  	
                    Ranking

                  	
                    10

                  
	 
      	
                    5K.

                  	
                    Additional
      Guarantors

                  	
                    10

                  
	 
      	
                    5L.

                  	
                    Most
      Favored Lender

                  	
                    11

                  
	 
      	 
      	 
      	 
      
	
                    6.

                  	
                    NEGATIVE
      COVENANTS

                  	
                    11

                  
	 
      	 
      	 
      	 
      
	 
      	
                    6A.

                  	
                    Financial
      Covenants

                  	
                    11

                  
	 
      	
                    6A(1).

                  	
                    Fixed
      Charges Coverage Ratio

                  	
                    11

                  
	 
      	
                    6A(2).

                  	
                    Consolidated
      Debt

                  	
                    11

                  
	 
      	
                    6B.

                  	
                    Debt
      of Restricted Subsidiaries

                  	
                    11

                  
	 
      	
                    6C.

                  	
                    Liens

                  	
                    12

                  

          

        

      

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

      (continued)

       

      
        
          
            	 
      	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      	 
      
	 
      	
                    6D.

                  	
                    Mergers
      and Consolidations

                  	
                    14

                  
	 
      	
                    6E.

                  	
                    Sale
      of Assets; Sale of Stock

                  	
                    14

                  
	 
      	
                    6F.

                  	
                    Nature
      of Business

                  	
                    16

                  
	 
      	
                    6G.

                  	
                    Transactions
      with Affiliates

                  	
                    16

                  
	 
      	
                    6H.

                  	
                    Ownership
      of Restricted Subsidiaries

                  	
                    16

                  
	 
      	
                    6I.

                  	
                    Terrorism
      Sanctions Regulations

                  	
                    16

                  
	 
      	 
      	 
      
	
                    7.

                  	
                    EVENTS
      OF DEFAULT

                  	
                    16

                  
	 
      	 
      	 
      	 
      
	 
      	
                    7A.

                  	
                    Acceleration

                  	
                    16

                  
	 
      	
                    7B.

                  	
                    Rescission
      of Acceleration

                  	
                    19

                  
	 
      	
                    7C.

                  	
                    Notice
      of Acceleration or Rescission

                  	
                    19

                  
	 
      	
                    7D.

                  	
                    Other
      Remedies

                  	
                    20

                  
	 
      	 
      	 
      
	
                    8.

                  	
                    REPRESENTATIONS,
      COVENANTS AND WARRANTIES

                  	
                    20

                  
	 
      	 
      	 
      	 
      
	 
      	
                    8A(1).

                  	
                    Organization;
      Subsidiary Preferred Stock

                  	
                    20

                  
	 
      	
                    8A(2)

                  	
                    Power
      and Authority

                  	
                    21

                  
	 
      	
                    8A(3).

                  	
                    Execution
      and Delivery of Transaction Documents

                  	
                    21

                  
	 
      	
                    8B.

                  	
                    Financial
      Statements

                  	
                    21

                  
	 
      	
                    8C.

                  	
                    Actions
      Pending

                  	
                    21

                  
	 
      	
                    8D.

                  	
                    Outstanding
      Debt

                  	
                    21

                  
	 
      	
                    8E.

                  	
                    Title
      to Properties

                  	
                    22

                  
	 
      	
                    8F.

                  	
                    Taxes

                  	
                    22

                  
	 
      	
                    8G.

                  	
                    Conflicting
      Agreements and Other Matters

                  	
                    22

                  
	 
      	
                    8H.

                  	
                    Offering
      of Notes

                  	
                    23

                  
	 
      	
                    8I.

                  	
                    Use
      of Proceeds

                  	
                    23

                  
	 
      	
                    8J.

                  	
                    ERISA

                  	
                    23

                  
	 
      	
                    8K.

                  	
                    Governmental
      Consent

                  	
                    24

                  
	 
      	
                    8L.

                  	
                    Compliance
      with Environmental and Other Laws

                  	
                    24

                  
	 
      	
                    8M.

                  	
                    Regulatory
      Status

                  	
                    24

                  
	 
      	
                    8N.

                  	
                    Permits
      and Other Operating Rights

                  	
                    24

                  
	 
      	
                    8O.

                  	
                    Rule
      144A

                  	
                    24

                  
	 
      	
                    8P.

                  	
                    Absence
      of Financing Statements, etc.

                  	
                    25

                  
	 
      	
                    8Q.

                  	
                    Foreign
      Assets Control Regulations, Etc.

                  	
                    25

                  
	 
      	
                    8R.

                  	
                    Disclosure

                  	
                    25

                  
	 
      	
                    8S.

                  	
                    Existing
      Indebtedness and Investments; Future Liens

                  	
                    26

                  
	 
      	 
      	 
      
	
                    9.

                  	
                    REPRESENTATIONS
      OF EACH PURCHASER

                  	
                    26

                  
	 
      	 
      	 
      	 
      
	 
      	
                    9A.

                  	
                    Nature
      of Purchase

                  	
                    26

                  
	 
      	
                    9B.

                  	
                    Accredited
      Purchaser

                  	
                    26

                  
	 
      	
                    9C.

                  	
                    Source
      of Funds

                  	
                    26

                  

          

        

      

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

      (continued)

       

      
        
          
            	 
      	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      	 
      
	
                    10.

                  	
                    DEFINITIONS;
      ACCOUNTING MATTERS

                  	
                    28

                  
	 
      	 
      	 
      	 
      
	 
      	
                    10A.

                  	
                    Yield-Maintenance
      Terms

                  	
                    28

                  
	 
      	
                    10B.

                  	
                    Other
      Terms

                  	
                    29

                  
	 
      	
                    10C.

                  	
                    Accounting
      and Legal Principles, Terms and Determinations

                  	
                    40

                  
	 
      	 
      	 
      	 
      
	
                    11.

                  	
                    MISCELLANEOUS

                  	
                    41

                  
	 
      	 
      	 
      	 
      
	 
      	
                    11A.

                  	
                    Note
      Payments

                  	
                    41

                  
	 
      	
                    11B.

                  	
                    Expenses

                  	
                    41

                  
	 
      	
                    11C.

                  	
                    Consent
      to Amendments

                  	
                    42

                  
	 
      	
                    11D.

                  	
                    Form,
      Registration, Transfer and Exchange of Notes; Lost Notes

                  	
                    42

                  
	 
      	
                    11E.

                  	
                    Persons
      Deemed Owners; Participations

                  	
                    43

                  
	 
      	
                    11F.

                  	
                    Survival
      of Representations and Warranties; Entire Agreement

                  	
                    43

                  
	 
      	
                    11G.

                  	
                    Successors
      and Assigns

                  	
                    43

                  
	 
      	
                    11H.

                  	
                    Independence
      of Covenants

                  	
                    43

                  
	 
      	
                    11I.

                  	
                    Notices

                  	
                    44

                  
	 
      	
                    11J.

                  	
                    Payments
      Due on Non-Business Days

                  	
                    44

                  
	 
      	
                    11K.

                  	
                    Satisfaction
      Requirement

                  	
                    44

                  
	 
      	
                    11L.

                  	
                    GOVERNING
      LAW

                  	
                    44

                  
	 
      	
                    11M.

                  	
                    SUBMISSION
      TO JURISDICTION; WAIVER OF JURY TRIAL

                  	
                    45

                  
	 
      	
                    11N.

                  	
                    Severability

                  	
                    45

                  
	 
      	
                    11O.

                  	
                    Descriptive
      Headings; Advice of Counsel; Interpretation

                  	
                    45

                  
	 
      	
                    11P.

                  	
                    Counterparts;
      Facsimile Signatures

                  	
                    46

                  
	 
      	
                    11Q.

                  	
                    Severalty
      of Obligations

                  	
                    46

                  
	 
      	
                    11R.

                  	
                    Independent
      Investigation

                  	
                    46

                  
	 
      	
                    11S.

                  	
                    Directly
      or Indirectly

                  	
                    46

                  
	 
      	
                    11T.

                  	
                    Confidential
      Information

                  	
                    47

                  
	 
      	
                    11U.

                  	
                    Transaction
      References

                  	
                    47

                  
	 
      	
                    11V.

                  	
                    Binding
      Agreement

                  	
                    48

                  

          

        

      

       

      
        
           

        

        
          iii

          
            

          

        

        
           

        

      

      PURCHASER
SCHEDULE

       

      
        
          
            
              	
                      SCHEDULE
      8A(1)

                    	
                      —

                    	
                      SUBSIDIARIES

                    
	
                      SCHEDULE
      8G

                    	
                      —

                    	
                      LIST
      OF AGREEMENTS RESTRICTING INDEBTEDNESS

                    
	
                      SCHEDULE
      8S

                    	
                      —

                    	
                      EXISTING
      INDEBTEDNESS, INVESTMENTS AND LIENS

                    
	 	 	 
	
                      EXHIBIT
      A

                    	
                      —

                    	
                      FORM
      OF NOTE

                    
	
                      EXHIBIT
      B

                    	
                      —

                    	
                      FORM
      OF DISBURSEMENT DIRECTION LETTER

                    
	
                      EXHIBIT
      C

                    	
                      —

                    	
                      FORM
      OF GUARANTY AGREEMENT

                    
	
                      EXHIBIT
      D

                    	
                      —

                    	
                      FORM
      OF OPINION OF COMPANY’S AND GUARANTORS’
COUNSEL

                    

            

          

        

      

       

      
        
           

        

        
          iv

          
            

          

        

        
           

        

      

      OIL-DRI
CORPORATION OF AMERICA

      410
North Michigan Avenue

      Chicago,
Illinois  60611

       

                                     As
of November 12, 2010

       

      To Each
of the Purchasers Named in the

      Purchaser
Schedule Attached Hereto

       

      Ladies
and Gentlemen:

       

      The
undersigned, Oil-Dri Corporation of America, a Delaware corporation (herein
called the “Company”),
hereby agrees with the purchasers named in the Purchaser Schedule attached
hereto (herein called the “Purchasers”) as set forth
below.  Reference is made to paragraph 10 hereof for definitions of
capitalized terms used herein and not otherwise defined herein.

       

      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 $18,500,000, to be dated the date of issue thereof, to
mature August 1, 2020, to bear interest on the unpaid balance thereof from the
date thereof until the principal thereof shall have become due and payable at
the rate of 3.96% per annum (provided that, during any period when an Event of
Default shall be in existence, at the election of the Required Holder(s) the
outstanding principal balance of the Notes shall bear interest from and after
the date of such Event of Default and until the date such Event of Default
ceases to be in existence at the rate per annum from time to time equal to the
Default Rate) and on overdue payments at the rate per annum from time to time
equal to the Default Rate, and to be substantially in the form of Exhibit A
attached hereto.  The term “Notes” as used herein shall
include each such senior promissory note delivered pursuant to any provision of
this Agreement and each such senior promissory note delivered in substitution or
exchange for any other Note pursuant to any such provision.

       

      2.           PURCHASE AND SALE OF
NOTES.  The Company hereby agrees to sell to each Purchaser
and, subject to the terms and conditions herein set forth, each Purchaser agrees
to purchase from the Company the aggregate principal amount of Notes set forth
opposite such Purchaser’s name in the Purchaser Schedule attached hereto at 100%
of such aggregate principal amount.  The Company will deliver to each
Purchaser, at the offices of Schiff Hardin LLP at 233 S. Wacker Dr., Suite 6600,
Chicago, Illinois, 60606, one or more Notes registered in such Purchaser’s name
(or, if specified in the Purchaser Schedule, in the name of the nominee(s) for
such Purchaser specified in the Purchaser Schedule), evidencing the aggregate
principal amount of Notes to be purchased by such Purchaser and in the
denomination or denominations specified with respect to such Purchaser in the
Purchaser Schedule against payment of the purchase price thereof by transfer of
immediately available funds on the date of closing, which shall be November 12,
2010 (herein called the “closing” or the “date of closing”), for credit
to the account or accounts as shall be specified in a letter on the Company’s
letterhead, in substantially the form of Exhibit B attached hereto, from the
Company to the Purchasers delivered prior to the date of
closing.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      3.           CONDITIONS OF
CLOSING.  Each Purchaser’s obligation to purchase and pay for
the Notes to be purchased by such Purchaser hereunder is subject to the
satisfaction, on or before the date of closing, of the following
conditions:

       

      3A.        Documents.  Such
Purchaser shall have received original counterparts or, if satisfactory to such
Purchaser, certified or other copies of all of the following, each duly executed
and delivered by the party or parties thereto, in form and substance
satisfactory to such Purchaser, dated the date of closing unless otherwise
indicated, and, on the date of closing, in full force and effect with no event
having occurred and being then continuing that would constitute a default
thereunder or constitute or provide the basis for the termination
thereof:

       

      (i)           the
Note or Notes to be purchased by such Purchaser in the form of Exhibit A
attached hereto;

       

      (ii)          a
Guaranty Agreement made by each Subsidiary party to a Guarantee of any Debt of
the Company (other than the Notes) in favor of the holders of the Notes in the
form of Exhibit C attached hereto (together with any other guaranty pursuant to
which the Notes are guarantied and which is entered into as contemplated hereby,
as the same may be amended, modified or supplemented from time to time in
accordance with the provisions thereof, collectively called the “Guaranty Agreements” and
individually called a “Guaranty
Agreement”);

       

      (iii)         a
Secretary’s Certificate signed by the Secretary or an Assistant Secretary and
one other officer of the Company and each Guarantor certifying, among other
things, (a) as to the names, titles and true signatures of the officers of the
Company or such Guarantor, as the case may be, authorized to sign the
Transaction Documents to which the Company or such Guarantor, as the case may
be, is a party, (b) that attached thereto is a true, accurate and complete copy
of the certificate of incorporation or other formation document of the Company
or such Guarantor, as the case may be, certified by the Secretary of State (or
other appropriate official or agency) of the state of organization of the
Company or such Guarantor, as the case may be, as of a recent date, (c) that
attached thereto is a true, accurate and complete copy of the by-laws, operating
agreement or other organizational document of the Company or the Guarantor, as
the case may be, which were duly adopted and are in effect as of the date of
closing and have been in effect immediately prior to and at all times since the
adoption of the resolutions referred to in clause (d), below, (d) that attached
thereto is a true, accurate and complete copy of the resolutions of the board of
directors or other managing body of the Company or such Guarantor, as the case
may be, duly adopted at a meeting or by unanimous written consent of such board
of directors or other managing body, authorizing the execution, delivery and
performance of the Transaction Documents to which the Company or such Guarantor,
as the case may be, is a party, and that such resolutions have not been amended,
modified, revoked or rescinded, are in full force and effect and are the only
resolutions of the shareholders, partners or members of the Company or such
Guarantor, as the case may be, or of such board of directors or other managing
body or any committee thereof relating to the subject matter thereof, (e) that
the Transaction Documents executed and delivered to such Purchaser by the
Company or such Guarantor, as the case may be, are in the form approved by its
board of directors or other managing body in the resolutions referred to in
clause (d), above, and (f) that no dissolution or liquidation proceedings as to
the Company or any Subsidiary have been commenced or are
contemplated;

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      (iv)        a
certificate of corporate or other type of entity good standing for the Company
and each Guarantor from the Secretary of State (or other appropriate official or
agency) of the state of organization of the Company and each Guarantor, and of
each state in which the Company or any such Guarantor is qualified to transact
business as a foreign organization, in each case dated as of a recent
date;

       

      (v)         a
copy of the Credit Agreement and all amendments thereto, and all material
instruments, documents and agreements delivered in connection therewith,
certified by an Officer’s Certificate, dated the date of closing, as correct and
complete; and

       

      (vi)        such
other certificates, documents and agreements as such Purchaser may reasonably
request.

       

      3B.        Opinion of Purchasers’ Special
Counsel.  Such Purchaser shall have received from Schiff Hardin
LLP, who are acting as special counsel for the Purchasers in connection with
this transaction, a favorable opinion satisfactory to such Purchaser as to such
matters incident to the matters herein contemplated as it may reasonably
request.

       

      3C.        Opinion of Company’s and Guarantors’
Counsel.  Such Purchaser shall have received from SNR Denton US
LLP, special counsel for the Company and the Guarantors, a favorable opinion
satisfactory to such Purchaser and substantially in the form of Exhibit D
attached hereto, and the Company, by its execution hereof, hereby requests and
authorizes such special counsel to render such opinion, and understands and
agrees that each Purchaser receiving such an opinion will and is hereby
authorized to rely on such opinion..

       

      3D.        Representations and Warranties; No
Default; Satisfaction of Conditions.  The representations and
warranties contained in paragraph 8 hereof and in the other Transaction
Documents shall be true on and as of the date of closing (or if such
representation or warranty expressly states that it has been made as of a
specific date, as of such specific date), both before and immediately after
giving effect to the issuance of the Notes on the date of closing and the
consummation of any other transactions contemplated hereby and by the other
Transaction Documents; there shall exist on the date of closing no Event of
Default or Default, both before and immediately after giving effect to the
issuance of the Notes on the date of closing and the consummation of any other
transactions contemplated hereby and by the other Transaction Documents; the
Company and each Guarantor shall have performed all agreements and satisfied all
conditions required under this Agreement or the other Transaction Documents to
be performed or satisfied on or before the date of closing; and the Company and
each Guarantor shall have delivered to such Purchaser an Officer’s Certificate,
dated the date of closing, to each such effect.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      3E.        Purchase Permitted By Applicable
Laws; Approvals.  The purchase of and payment for the Notes to
be purchased by such Purchaser on the date of closing 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, liability or other onerous condition
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.  All necessary
authorizations, consents, approvals, exceptions or other actions by or notices
to or filings with any court or administrative or governmental body or other
Person required in connection with the execution, delivery and performance of
this Agreement, the Notes and the other Transaction Documents or the
consummation of the transactions contemplated hereby or thereby shall have been
issued or made, shall be final and in full force and effect and shall be in form
and substance satisfactory to such Purchaser.

       

      3F.        Material Adverse
Change.  No material adverse change in the business, condition
(financial or otherwise), operations or prospects of the Company and its
Subsidiaries, taken as a whole, since July 31, 2010 shall have occurred or be
threatened, as determined by such Purchaser in its sole judgment.  The
occurrence of the closing shall conclusively establish that such condition has
been satisfied or waived by each Purchaser.

       

      3G.        Fees and
Expenses.  Without limiting the provisions of paragraph 11B
hereof, the Company shall have paid or arranged to pay at closing the reasonable
fees, charges and disbursements of special counsel to the Purchasers referred to
in paragraph 3B hereof.

       

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

       

      4.           PREPAYMENTS.  The
Notes shall be subject to prepayment with respect to the required prepayments
specified in paragraph 4A and the optional prepayments permitted by paragraph
4B.

       

      4A.        Required
Prepayments.  Until the Notes shall be paid in full, the
Company shall apply to the prepayment of principal under the Notes, without
premium, the sum of $3,083,333.33 on August 1 in each of the years 2015 through
2019, and such principal amounts of the Notes, together with interest thereon to
the prepayment dates, shall become due on such prepayment dates (provided that
upon any purchase of the Notes pursuant to paragraph 4E the principal amount of
each required prepayment of the Notes becoming due under this paragraph 4A on
and after the date of such purchase shall be reduced in the same proportion as
the aggregate unpaid principal amount of the Notes is reduced as a result of
such purchase).  The remaining outstanding principal amount of the
Notes, together with any accrued and unpaid interest thereon, shall become due
on August 1, 2020, the maturity date of the Notes.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      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 a minimum of $500,000 on any one occurrence or, if
less, the aggregate total outstanding principal amount of the Notes), 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 Note.  Any partial prepayment of the Notes pursuant to
this paragraph 4B shall be applied in satisfaction of required payments of
principal thereof (including the required payment of principal due upon the
maturity thereof) in inverse order of their scheduled due dates.

       

      4C.        Notice of Optional
Prepayment.  The Company shall give the holder of each Note
irrevocable written notice of any prepayment pursuant to paragraph 4B not less
than 30 days prior to the prepayment date, specifying such prepayment date and
the aggregate principal amount of the Notes, and of the Notes held by such
holder, 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, with respect thereto, 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 the Notes that is an Institutional
Investor which shall have designated a recipient of such notices in the
Purchaser Schedule attached hereto or by notice in writing to the
Company.

       

      4D.        Partial Payments Pro
Rata.  In the case of each prepayment of less than the entire
outstanding principal amount of all Notes pursuant to paragraph 4A or 4B, the
principal amount so prepaid shall be allocated pro rata to all Notes at the time
outstanding in proportion to the respective outstanding principal amounts
thereof.

       

      4E.        Acquisition 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 final maturity (other than by prepayment pursuant to
paragraph 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 unless the Company or such Subsidiary or Affiliate shall have
offered to prepay or otherwise retire or purchase or otherwise acquire, as the
case may be, the same proportion of the aggregate principal amount of Notes held
by each other holder of Notes at the time outstanding upon the same terms and
conditions.  Any Notes so prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates shall
not be deemed to be outstanding for any purpose under this
Agreement.

       

      5.           AFFIRMATIVE COVENANTS.  The
Company covenants that so long as any of the Notes are outstanding:

       

      5A.        Financial
Statements.  The Company shall deliver to each holder of Notes
that is an Institutional Investor:

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (i)           Quarterly
Statements — within 45 days after the end of  each quarterly fiscal
period in each fiscal year of the Company (other than the last quarterly fiscal
period of each such fiscal year), duplicate copies of, (a) a
consolidated  balance sheet of the Company and its Subsidiaries as at
the end of such quarter, and (b) consolidated statements of income and cash
flows of the Company and its Subsidiaries, for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal year ending with
such quarter, setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with generally accepted accounting principles applicable
to quarterly financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial position
of the companies being reported on and their results of operations and cash
flows, subject to changes resulting from year-end adjustments, provided that
delivery within the time period specified above of copies of the Company's
Quarterly Report on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission shall be deemed
to satisfy the requirements of this paragraph 5A(i);

       

      (ii)          Annual  Statements  —
within 90 days after the end of each fiscal year of the  Company,
duplicate copies of, (a) a  consolidated  balance sheet of
the Company and its  Subsidiaries, as at the end of such year, and (b)
consolidated statements of income, changes in stockholders' equity and cash
flows of the Company and its Subsidiaries, for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail, prepared in accordance with generally accepted accounting
principles, and accompanied by an opinion thereon of PricewaterhouseCoopers LLP,
or of other independent certified public accountants of recognized national
standing, which opinion shall state that such financial statements present
fairly, in all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have been
prepared in conformity with generally accepted accounting principles, and that
the examination of such accountants in connection with such financial statements
has been made in accordance with generally accepted auditing standards, and that
such audit provides a reasonable basis for such opinion in the circumstances,
provided that the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year (together with the
Company's annual report to stockholders, if any, prepared pursuant to Rule 14a-3
under the Exchange Act) prepared in compliance with the requirements therefor
and filed with the Securities and Exchange Commission shall be deemed to satisfy
the requirements of this paragraph 5A(ii);

       

      (iii)         Additional
Financial Statements — if
as of the end of any quarterly fiscal period of the Company, the total assets of
the Unrestricted Subsidiaries exceed 10% of Consolidated Assets or the total
revenues of the Unrestricted Subsidiaries exceed 10% of Consolidated Revenues
for the four fiscal quarters then ending, the financial statements required to
be provided under paragraph 5A(i) or (ii), as the case may be, shall be
accompanied by:

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      (a)           a
consolidated balance sheet of the Unrestricted Subsidiaries as at the end of
such quarter or fiscal year, as the case may be, together with a consolidating
balance sheet for the Company and its Subsidiaries, and

       

      (b)           consolidated
statements of income, changes in stockholders' equity and cash flows of the
Unrestricted Subsidiaries, for such quarter (and (in the case of the second and
third quarters) for the portion of the fiscal year ending with such quarter) or
fiscal year, as the case may be, together with consolidating statements of
income, changes in stockholders' equity (annual only) and cash flows of the
Company and its Subsidiaries for such period, all in reasonable detail, prepared
in accordance with generally accepted accounting principles to quarterly or
annual financial statements, as the case may be, generally, and certified by a
Responsible Officer as fairly presenting, in all material respects, the
financial position of the companies being reported on and their results of
operations and cash flows, subject in the case of quarterly financial statements
to changes resulting from year-end adjustments.

       

      (iv)        SEC
and Other Reports — promptly
upon their becoming available, one copy of (a) each financial statement, report,
notice or proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (b) each regular or periodic report, each
registration statement that shall have become effective (without exhibits except
as expressly requested by such holder), and each final prospectus and all
amendments thereto filed by the Company or any Subsidiary with the Securities
and Exchange Commission (or any governmental body or agency succeeding to the
functions of the Securities and Exchange Commission) and of all press releases
and other statements made available generally by the Company or any Subsidiary
to the public concerning developments that are Material);

       

      (v)         Notice
of Default or Event of Default — promptly, and in any event within five days
after a Responsible Officer becoming aware of the existence of any Default or
Event of Default or that any Person has given any notice or taken any action
with respect to a claimed default hereunder or that any Person has given any
notice or taken any action with respect to a claimed default of the type
referred to in paragraph 7A(vi), a written notice specifying the nature and
period of existence thereof and what action the Company is taking or proposes to
take with respect thereto;

       

      (vi)        ERISA
Matters — promptly,
and in any event within five days after a Responsible Officer becoming aware of
any of the following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take with
respect thereto:

       

      (a)           with
respect to any Plan, any reportable event, as defined in Section 4043(b) of
ERISA and the regulations thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on the date hereof;
or

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      (b)           the
taking by the PBGC of steps to institute, or the threatening by the PBGC of the
institution of, proceedings under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer Plan;
or

       

      (c)           any
event, transaction or condition that could reasonably be expected to result in
the incurrence of any liability by the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the imposition of any Lien on any of
the rights, properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material Adverse Effect;
and

       

      (vi)        Notices
from Governmental Authority — promptly,
and in any event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any federal or state regulatory bodies or
administrative agencies or other governmental bodies relating to any order,
ruling, statute or other law or regulation that could reasonably be expected to
have a Material Adverse Effect; and

       

      (vii)       Requested
Information — with reasonable promptness, such other data and information
relating to the business, operations, affairs, financial condition, assets or
properties of the Company or any of its Subsidiaries or relating to the ability
of the Company to perform its obligations hereunder and under the Notes as from
time to time may be reasonably requested by any such holder of
Notes.

       

      5B.        Officer's
Certificate.  Each set of financial statements delivered to a
holder of Notes pursuant to paragraph 5A(i) or paragraph 5A(ii) hereof shall be
accompanied by a certificate of a Senior Financial Officer setting
forth:

       

      (a)         Covenant
Compliance — the information (including detailed calculations) required in order
to establish whether the Company was in compliance with the requirements of
paragraph 6A through 6C hereof, inclusive, and of paragraph 6E hereof, during
the quarterly or annual period covered by the statements then being furnished
(including with respect to each such paragraph, where applicable, the
calculations of the maximum or minimum amount, ratio or percentage, as the case
may be, permissible under the terms of such paragraphs, and the calculation of
the amount, ratio or percentage then in existence); and

       

      (b)         Event
of Default — a statement that such officer has reviewed the relevant terms
hereof and has made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Company and its Subsidiaries
from the beginning of the quarterly or annual period covered by the statements
then being furnished to the date of the certificate and that such review shall
not have disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default or, if any such condition or
event existed or exists (including, without limitation, any such event or
condition resulting from the failure of the Company or any Subsidiary to comply
with any Environmental Law), specifying the nature and period of existence
thereof and what action the Company shall have taken or proposes to take with
respect thereto.

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      5C.        Inspection.  The
Company shall permit the representatives of each holder of Notes that is an
Institutional Investor:

       

      (a)         No
Default — if no Default or Event of Default then exists, at the expense of such
holder and upon reasonable prior notice to the Company, to visit the principal
executive office of the Company, to discuss the affairs, finances and accounts
of the Company and its Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company, which
consent will not be unreasonably withheld) to visit the other offices and
properties of the Company and each Subsidiary, all at such reasonable times and
as often as may be reasonably requested in writing; and

       

      (b)         Default
— if a Default or Event of Default then exists, at the expense of the Company,
to visit and inspect any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company authorizes
said accountants to discuss the affairs, finances and accounts of the Company
and its Subsidiaries), all at such times and as often as may be
requested.

       

      5D.        Restricted
Subsidiaries.  So long as no Default or Event of Default shall
have occurred and be continuing, the Company may at any time and from time to
time, upon not less than 30 days' prior written notice given to each holder of
the Notes, designate a previously Restricted Subsidiary as an Unrestricted
Subsidiary or a previously Unrestricted Subsidiary as a Restricted Subsidiary,
provided that immediately after such designation and after giving effect thereto
no Default or Event of Default shall have occurred and be continuing, and
provided further that the status of such Subsidiary had not been changed more
than twice.

      

      5E.        Compliance with
Law.  The Company will and will cause each of its Restricted
Subsidiaries to comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
Environmental 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,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

       

      5F.        Insurance.  The
Company will and will cause each of its Restricted 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 (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly
situated.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      5G.        Maintenance of
Properties.  The Company will and will cause each of its
Restricted Subsidiaries to maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that this
paragraph 5G shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

       

      5H.        Payment of Taxes and
Claims.  The Company will and will cause each of its
Subsidiaries to file all tax returns required to be filed in any jurisdiction
and to pay and discharge all taxes shown to be due and payable on such returns
and all other taxes, assessments, governmental charges, or levies imposed on
them or any of their properties, assets, income or franchises, to the extent
such taxes and assessments have become due and payable and before they have
become delinquent and all claims for which sums have become due and payable that
have or might become a Lien on properties or assets of the Company or any
Subsidiary, provided that neither the Company nor any Subsidiary need pay any
such tax or assessment or claims if (i) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with generally accepted
accounting principles on the books of the Company or such Subsidiary or (ii) the
nonpayment of all such taxes, assessments and claims in the aggregate could not
reasonably be expected to have a Material Adverse Effect.

       

      5I.         Corporate Existence,
etc.  The Company will at all times preserve and keep in full
force and effect its corporate existence, except as otherwise permitted by
paragraph 6D. The Company will at all times preserve and keep in full force and
effect the corporate existence of each of its Restricted Subsidiaries (unless
merged into the Company or another Restricted Subsidiary) and all rights and
franchises of the Company and its Restricted Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse
Effect.

       

      5J.        Ranking.  The
Company will ensure that, at all times, all liabilities of the Company under the
Notes will rank in right of payment either pari passu or senior to all other
Debt of the Company except for Debt which is preferred as a result of being
secured as permitted by paragraph 6C (but then only to the extent of such
security).

       

      5K.        Additional
Guarantors.  The Company covenants that, if at any time any
Subsidiary becomes party to a Guarantee of any Debt of the Company, and such
Subsidiary is not a Guarantor at such time, the Company will, at the same time,
cause such Subsidiary to deliver to the holders of the Notes a Guaranty
Agreement or a joinder to a Guaranty Agreement in favor of the holders of the
Notes for the benefit of the holders of the Notes.

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      5L.        Most Favored
Lender.  If at any time after the date of closing, the Credit
Agreement includes one or more Net Worth Covenants, then the Company shall
notify the holders of the Notes within five (5) Business Days of the inclusion
of such Net Worth Covenant and shall enter into an amendment to this Agreement
to add such Net Worth Covenant(s) to this Agreement.

       

      6.           NEGATIVE COVENANTS.  The
Company covenants that so long as any of the Notes are outstanding:

       

      6A.        Financial
Covenants.

       

      6A(1).   Fixed Charges Coverage
Ratio.  The Company will not permit the Fixed Charges Coverage
Ratio ("Ratio") for any period of four consecutive fiscal quarters ending at any
time to be less than 1.50 to 1.

      

      6A(2).   Consolidated
Debt.  The Company will not permit Consolidated
Debt

      to exceed
55% of Consolidated Total Capitalization, as calculated on the last day of each
fiscal quarter of the Company.

      

      6B.        Debt of Restricted
Subsidiaries.  The Company will not at any time permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume,
guarantee, have outstanding, or otherwise become or remain directly or
indirectly liable with respect to, any Debt other than:

      

      (i)          Debt
of a Restricted Subsidiary outstanding as of the date hereof and disclosed in
Schedule 8S, provided that such Debt may not be extended, renewed or refunded
except as otherwise permitted by this Agreement;

      

      (ii)         Debt
of a Restricted Subsidiary owed to the Company or another Restricted
Subsidiary;

      

      (iii)        Debt
of a Restricted Subsidiary outstanding at the time such Restricted Subsidiary
becomes a Subsidiary, provided that, (a) such Debt shall not have been incurred
in contemplation of such Restricted Subsidiary becoming a Subsidiary, and (b)
immediately after such Restricted Subsidiary becomes a Subsidiary no Default or
Event of Default shall exist, and any extension, renewal or refunding of such
Debt, provided that the principal amount thereof outstanding immediately before
giving effect to such extension, renewal or refunding is not increased and no
Default or Event of Default exists at the time of such extension, renewal or
refunding; and

      

      (iv)        Debt
of a Restricted Subsidiary in addition to that otherwise permitted by the
foregoing provisions of this paragraph 6B, provided that on the date the
Restricted Subsidiary incurs or otherwise becomes liable with respect to any
such additional Debt and immediately after giving effect thereto and the
concurrent retirement of any other Debt, (a) no Default or Event of Default
exists, and (b) Priority Debt does not exceed 20% of Consolidated Total
Capitalization, provided that Debt of Restricted Subsidiaries in respect of
industrial revenue bonds, secured by Liens permitted by paragraph 6C(viii) and
guaranteed by the Company shall not be included in Priority Debt for purposes of
determining compliance with this paragraph 6B(iv).

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      Any
Person which becomes a Restricted Subsidiary after the date hereof shall for all
purposes of this paragraph 6B be deemed to have created, assumed or incurred at
the time it becomes a Restricted Subsidiary all Debt of such corporation
existing immediately after it becomes a Restricted Subsidiary.

      

      6C.        Liens.  The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly create, incur, assume or permit to exist (upon the happening of a
contingency or otherwise) any Lien on or with respect to any property or asset
(including, without limitation, any document or instrument in respect of goods
or accounts receivable) of the Company or any such Restricted Subsidiary,
whether now owned or held or hereafter acquired, or any income or profits
therefrom, or assign or otherwise convey any right to receive income or profits,
except:

      

      (i)          Liens
for taxes, assessments or other governmental charges which are not yet due and
payable or the payment of which is not at the time required by paragraph
5H;

      

      (ii)         statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
and other similar Liens, in each case, incurred in the ordinary course of
business for sums not yet due and payable other than those being contested in
good faith by appropriate proceeding being diligently pursued;

      

      (iii)        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 and other types of social security or retirement benefits, or (b) to
secure (or to obtain letters of credit that secure) the performance of tenders,
statutory obligations, surety bonds, appeal bonds, bids, leases (other than
Capitalized Leases), performance bonds, purchase, construction or sales
contracts and other similar obligations, in each case not incurred or made in
connection with the borrowing of money, the obtaining of advances or credit or
the payment of the deferred purchase price of property;

      

      (iv)        any
attachment or judgment Lien, unless the judgment it secures shall not, within 60
days after the entry thereof, have been discharged or execution thereof stayed
pending appeal, or shall not have been discharged within 60 days after the
expiration of any such stay;

      

      (v)         leases
or subleases granted to others, easements, rights-of-way, restrictions and other
similar charges or encumbrances, in each case incidental to, and not interfering
with, the ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries, provided that such Liens do not, in the aggregate,
materially detract from the value of such property;

      

      (vi)        Liens
on property or assets of the Company or any of its Restricted Subsidiaries
securing Debt owing to the Company or to another Restricted
Subsidiary;

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      (vii)       Liens
existing as of the date hereof and securing the Debt of the Company and its
Restricted Subsidiaries and described in Schedule 8S;

      

      (viii)      any
Lien created to secure all or any part of the purchase price, or to secure Debt
incurred or assumed to pay all or any part of the purchase price or cost of
construction, of property (or any improvement thereon) acquired or constructed
by the Company or a Restricted Subsidiary after the date of the closing,
provided that,

      

      (a)          any
such Lien shall extend solely to the item or items of such property (or
improvement thereon) so acquired or constructed and, if required by the terms of
the instrument originally creating such Lien, other property (or improvement
thereon) which is an improvement to or is acquired for specific use in
connection with such acquired or constructed property (or improvement thereon)
or which is real property being improved by such acquired or constructed
property (or improvement thereon),

      

      (b)         the
principal amount of the Debt secured by any such Lien shall at no time exceed an
amount equal to the lesser of (1) the cost to the Company or such Restricted
Subsidiary of the property (or improvement thereon) so acquired or constructed
and (2) the fair market value (as determined in good faith by the board of
directors of the Company) of such property (or improvement thereon) at the time
of such acquisition or construction, and

      

      (c)          any
such Lien shall be created contemporaneously with, or within 180 days after, the
acquisition or construction of such property;

      

      (ix)         any
Lien existing on property of a Person immediately prior to its being
consolidated with or merged into the Company or a Restricted Subsidiary or its
becoming a Restricted Subsidiary, or any Lien existing on any property acquired
by the Company or any Restricted Subsidiary at the time such property is so
acquired (whether or not the Debt secured thereby shall have been assumed),
provided that (1) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Person's becoming a
Restricted Subsidiary or such acquisition of property, and (2) each such Lien
shall extend solely to the item or items of property so acquired and, if
required by the terms of the instrument originally creating such Lien, other
property which is an improvement to or is acquired for specific use in
connection with such acquired property;

      

      (x)          any
Lien renewing, extending or refunding any Lien permitted by paragraphs (vii),
(viii) or (ix) of this paragraph 6C, provided that (1) the principal amount of
Debt secured by such Lien immediately prior to such extension, renewal or
refunding is not increased or the maturity thereof reduced, (2) such Lien is not
extended to any other property, and (3) immediately after such extension,
renewal or refunding no Default or Event of Default would exist;

      

        
          
             

          

          
            13

            
              

            

          

          
             

          

        

      

    

     

    (xi)           other
Liens securing the Debt of the Company or any Restricted Subsidiary not
otherwise permitted by paragraphs (i) through (x), provided that at the time the
Company or such Restricted Subsidiary incurs or otherwise becomes liable for
such Debt, Priority Debt does not exceed 20% of Consolidated Total
Capitalization, provided further that Debt of Restricted Subsidiaries in respect
of industrial revenue bonds secured by Liens permitted by paragraph 6C(viii) and
guaranteed by the Company shall not be included in Priority Debt for purposes of
determining compliance with this paragraph 6C(xi).  Notwithstanding
the foregoing, at no time shall any Lien otherwise permitted under this
paragraph 6C(xi) secure any obligations under the Credit Agreement or any other
working capital credit facility of the Company.  Further, Priority
Debt outstanding solely under the Canadian Credit Agreement in an aggregate
amount not to exceed 1,500,000 Canadian Dollars, which otherwise would be
permitted under this paragraph 6C(xi), may be secured by Liens solely in the
assets of the Canadian Borrower.

    

    6D.          Mergers and
Consolidations.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, consolidate with or be a party to a merger
with any other Person; provided, however, that:

    

    (i)         
  any Restricted Subsidiary may merge or consolidate with or into the
Company or any other Restricted Subsidiary so long as in any merger or
consolidation involving the Company, the Company shall be the surviving or
continuing corporation; and

    

    (ii)           the
Company may consolidate or merge with any other corporation if (a) the surviving
entity is a solvent corporation organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia, (b) the
surviving entity (if other than the Company) expressly assumes in writing the
Company's obligation under the Notes and this Agreement, (c) the surviving
entity delivers to the holders of the Notes an opinion of nationally recognized
independent counsel to the effect that all agreements or instruments effecting
such assumption are enforceable in accordance with their terms and comply with
the terms hereof, and (d) at the time of such consolidation or merger and after
giving effect thereto no Default or Event of Default shall have occurred and be
continuing.

    

    6E.          Sale of Assets; Sale of
Stock.  (i) The Company will not, and will not permit any
Restricted Subsidiary to, sell, lease, transfer, abandon or otherwise dispose of
assets (except assets sold for fair market value (x) in the
ordinary course of business or (y) in a Sale and Leaseback Transaction);
provided that the foregoing restrictions do not apply to:

    

    (a)           the
sale, lease, transfer or other disposition of assets of a Restricted Subsidiary
to the Company or a Wholly-Owned Restricted Subsidiary;

    

    (b)           the
sale of assets for cash or other property to a Person or Persons if all of the
following conditions are met:

    

    
       (1)           such
assets (valued at net book value at the time of such sale) do not, together with
all other assets of the Company and its Restricted Subsidiaries previously
disposed of (valued at net book value at the time of such disposition) (other
than in the ordinary course of business or in a Sale and Leaseback Transaction)
during the same fiscal year exceed 15% of Consolidated Assets (which
Consolidated Assets shall be determined as of the last day of the fiscal year
ending on, or most recently ended prior to, such sale);
and

    

    
      
         

      

      
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      (2)           in the
opinion of the Company's Board of Directors, the sale is for fair market value
and is in the best interests of the Company.

    

    

    provided,
however, that for purposes of the foregoing calculation, there shall not be
included any assets the proceeds of which were or are applied within 180 days of
the date of sale of such assets to either (A) the acquisition of fixed assets
useful and intended to be used in the operation of the business of the Company
and its Restricted Subsidiaries within the limitations of paragraph 6F and
having a fair market value (as determined in good faith by the Board of
Directors of the Company) at least equal to that of the assets so disposed of,
or (B) the prepayment at any applicable prepayment premium, of Debt of the
Company or its Restricted Subsidiaries selected by the Company (other than Debt
owing to the Company, any of its Subsidiaries or any Affiliate and Debt in
respect of any revolving credit or similar credit facility providing the Company
or any of its Restricted Subsidiaries with the right to obtain loans or other
extensions of credit from time to time, except to the extent that in connection
with such payment of Debt the availability of credit under such credit facility
is permanently reduced by an amount not less than the amount of such proceeds
applied to the payment of such Debt). It is understood and agreed by the Company
that any such proceeds paid and applied to the prepayment of the Notes as
hereinabove provided shall be prepaid as and to the extent provided in paragraph
4B.

    

    (ii)           The
Company will not permit any Restricted Subsidiary to issue or sell any shares of
stock of any class (including as "stock" for the purposes of this paragraph 6E,
any warrants, rights or options to purchase or otherwise acquire stock or other
Securities exchangeable for or convertible into stock) of such Restricted
Subsidiary to any Person other than the Company or a Wholly-Owned Restricted
Subsidiary, except for the purpose of qualifying directors, or except in
satisfaction of the validly pre-existing preemptive rights of minority
stockholders in connection with the simultaneous issuance of stock to the
Company and/or a Restricted Subsidiary whereby the
Company and/or such Restricted Subsidiary maintain their same proportionate
interest in such Restricted Subsidiary.

    

    (iii)           The
Company will not sell, transfer or otherwise dispose of any shares of stock of
any Restricted Subsidiary (except to qualify directors) or any Debt of any
Restricted Subsidiary, and will not permit any Restricted Subsidiary to sell,
transfer or otherwise dispose of (except to the Company or a Wholly-Owned
Restricted Subsidiary) any shares of stock or any Debt of any other Restricted
Subsidiary, unless:

    

      (a)           simultaneously
with such sale, transfer, or disposition, all shares of stock and all Debt of
such Restricted Subsidiary at the time owned by the Company and by every other
Restricted Subsidiary shall be sold, transferred or disposed of as an
entirety;

    

      (b)           said
shares of stock and Debt are sold, transferred or otherwise disposed of to a
Person, for a cash consideration and on terms reasonably deemed by the Board of
Directors of the Company to be adequate and satisfactory;

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

     (c)           the
Restricted Subsidiary being disposed of shall not have any continuing investment
in the Company or any other Restricted Subsidiary not being simultaneously
disposed of; and

    

     (d)           such
sale or other disposition is permitted by paragraph 6E(i), which shall be deemed
applicable hereunder to the sale of such shares of stock or Debt mutatis
mutandis.

    

    6F.           Nature of
Business.  Neither the Company nor any Restricted Subsidiary
will engage in any business if, as a result, the general nature of the business,
taken on a consolidated basis, which would then be engaged in by the Company and
its Restricted Subsidiaries would be substantially changed from the general
nature of the business engaged in by the Company and its Restricted Subsidiaries
on the date of closing.

    

    6G.          Transactions with
Affiliates.  The Company will not and will not permit any
Restricted Subsidiary to enter into directly or indirectly any transaction or
group of related transactions (including without limitation the purchase, lease,
sale or exchange of properties of any kind or the rendering of any service) with
any Affiliate, except in the ordinary course and pursuant to the reasonable
requirements of the Company's or such Restricted Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length transaction
with a Person not an Affiliate.

    

    6H.          Ownership of Restricted
Subsidiaries.  The Company will not permit any shares of
capital stock or similar equity interests of any Restricted Subsidiary to be
owned by an Unrestricted Subsidiary.

    

    6I.           Terrorism Sanctions
Regulations.  The Company covenants that it will not and will
not permit any Subsidiary to (a) become a Person described or designated in
the Specially Designated Nationals and Blocked Persons List of the Office of
Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or
(b) engage in any dealings or transactions with any such
Person.

     

    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 or Yield-Maintenance Amount, if
any, on any Note when the same becomes due and payable, whether at maturity or
at a date fixed for prepayment or by declaration or otherwise; or

    

     (ii)           the
Company defaults in the payment of any interest on any Note for more than five
Business Days after the same becomes due and payable; or

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    (iii)          the
Company defaults in the performance of or compliance with any term contained in
paragraph 6; or

    

    (iv)          the
Company defaults in the performance of or compliance with any term contained
herein (other than those referred to in paragraphs (i), (ii) and (iii) of this
paragraph 7A) or any Guarantor defaults in the performance of or compliance with
any term contained in any other Transaction Document and such failure shall not
be remedied within the grace period, if any, provided therefor in such
Transaction Document, and, in either case, such default is not remedied within
30 days after the earlier of (a) a Responsible Officer obtaining actual
knowledge of such default and (b) the Company receiving written notice of such
default from any holder of a Note (any such written notice to be identified as a
"notice of default" and to refer specifically to this paragraph 7A(iv));
or

    

    (v)           any
representation or warranty made in writing by or on behalf of the Company or any
Guarantor or by any officer of the Company in this Agreement, any other
Transaction Document or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect in any
Material respect on the date as of which made; or

    

    (vi)          (a)
the Company or any Significant Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness that is outstanding in an
aggregate principal amount of at least $5,000,000 beyond any period of grace
provided with respect thereto, or (b) the Company or any Significant Subsidiary
is in default in the performance of or compliance with any term of any evidence
of any Indebtedness in an aggregate outstanding principal amount of at least
$5,000,000 or of any mortgage, indenture or other agreement relating thereto or
any other condition exists, and as a consequence of such default or condition
such Indebtedness has become, or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and payable before its stated
maturity or before its regularly scheduled dates of payment; or

    

    (vii)         the
Company or any Significant Subsidiary (a) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (b) files, or
consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (c) makes an assignment for
the benefit of its creditors, (d) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (e) is adjudicated as
insolvent or to be liquidated, or (f) takes corporate action for the purpose of
any of the foregoing; or

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    (viii)        a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Significant Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company or any of its
Significant Subsidiaries, or any such petition shall be filed against the
Company or any of its Significant Subsidiaries and such petition shall not be
dismissed within 60 days; or

    

    (ix)          a
final judgment or judgments for the payment of money aggregating in excess of
$5,000,000 are rendered against one or more of the Company and its Significant
Subsidiaries and which judgments are not, within 60 days after entry thereof,
bonded, discharged or stayed pending appeal, or are not discharged within 60
days after the expiration of such stay; or

    

    (x)           If
(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 Section 4042 of ERISA 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 any 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 5% of Consolidated Net Worth, (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 increase the
liability of the Company or any Subsidiary thereunder; and any such event or
events described in clauses (a) through (f) above, either individually or
together with any other such event or events, could reasonably be expected to
have a Material Adverse Effect (as used in paragraph 7A(x), the terms "employee
benefit plan" and "employee welfare benefit plan" shall have the respective
meanings assigned to such terms in Section 3 of ERISA); or

    

    (xi)           (i)
the obligations of any Guarantor contained in any Guaranty Agreement shall cease
to be in full force and effect or shall be declared by a court or governmental
authority of competent jurisdiction to be void, voidable or unenforceable
against any such Guarantor; (ii) the Company or any Guarantor shall contest the
validity or enforceability of any Guaranty Agreement against any such Guarantor,
or (iii) the Company or any Guarantor shall deny that such Guarantor has any
further liability or obligation under any Guaranty Agreement unless in each case
the Guaranty Agreement is replaced by an equivalent new Guaranty Agreement
lacking the defect at issue;

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

    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 (other than the Company or any of its
Subsidiaries or Affiliates) may at its option, by notice in writing to the
Company, declare all the Notes held by such holder to be, and all 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
other 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 (vii) or (viii) (other
than an Event of Default described in clause (a) of paragraph 7A(vii) or
described in clause (f) of paragraph 7A(vii) by virtue of the fact that such
clause encompasses clause (a) of paragraph 7A(vii)) of this paragraph 7A with
respect to the Company, all of the Notes at the time outstanding shall
automatically 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, and (c) if such event is not an Event of
Default specified in clause (vii) or (viii) of this paragraph 7A with respect to
the Company or is an Event of Default described in clause (a) of paragraph
7A(vii) or described in clause (f) of paragraph 7A(vii) by virtue of the fact
that such clause encompasses clause (a) of paragraph 7A(vii) with respect to the
Company, the Required Holder(s) 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 other 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 without the occurrence of a
Default or an Event of Default and that the provision for payment of
Yield-Maintenance Amount by the Company in the event 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 Default Rate, (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.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    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, the
other Transaction Documents 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 the other Transaction
Documents or in aid of the exercise of any power granted in this Agreement or
any Transaction Document.  No remedy conferred in this Agreement or
the other Transaction Documents 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.

     

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

     

    8A(1).     Organization; Subsidiary Preferred
Stock.  (i) The Company is a corporation duly organized and
existing in good standing under the laws of the State of Delaware and each
Restricted Subsidiary is duly organized and existing in good standing under the
laws of the jurisdiction in which it is incorporated.  The Company and
each of its Restricted Subsidiaries have duly qualified or been duly licensed,
and are authorized to do business and are in good standing, in each jurisdiction
in which the ownership of their respective properties or the nature of their
respective businesses makes such qualification or licensing necessary and in
which the failure to be so qualified or licensed could be reasonably likely to
have a Material Adverse Effect.  No Restricted Subsidiary has any
outstanding shares of any class of capital stock which has priority over any
other class of capital stock of such Subsidiary as to dividends or in
liquidation except as may be owned beneficially and of record by the Company or
a Wholly-Owned Restricted Subsidiary.

     

    (ii)           Schedule
8A(1) contains (except as noted therein) a complete and correct list (a) of the
Company's Subsidiaries, showing, as to each Subsidiary, its status (whether (1)
a Restricted or Unrestricted Subsidiary and (2) a Significant Subsidiary or
not), the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (b) of the
Company's Affiliates, other than Subsidiaries, and (c) of the Company's
directors and senior officers.

     

    (iii)           All
of the outstanding shares of capital stock or similar equity interests of each
Restricted Subsidiary shown in Schedule 8A(1) as being owned by the Company and
its Subsidiaries have been validly issued, are fully paid and nonassessable and
are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 8A(1)).

     

    (iv)           No
Restricted Subsidiary is a party to, or otherwise subject to any legal
restriction or any Material agreement (other than this Agreement, the agreements
listed on Schedule 8A(1) and customary limitations imposed by corporate law
statutes) restricting the ability of such Restricted Subsidiary to pay dividends
out of profits or make any other similar distributions of profits to the Company
or any of its Restricted Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Restricted
Subsidiary.

    
      
         

      

      
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    8A(2)      Power and
Authority.  The Company and each Restricted Subsidiary has all
requisite corporate power to own or hold under lease and operate their
respective properties which it purports to own or hold under lease and to
conduct its business as currently conducted and as currently proposed to be
conducted.

     

    8A(3).     Execution and Delivery of Transaction
Documents.  The Company and each Subsidiary has all requisite
corporate, limited liability company or partnership, as the case may be, power
to execute, deliver and perform its obligations under this Agreement, the Notes
and the other Transaction Documents to which it is a party.  The
execution, delivery and performance of this Agreement, the Notes and the other
Transaction Documents have been duly authorized by all requisite corporate,
limited liability company or partnership, as the case may be, action, and this
Agreement, the Notes and the other Transaction Documents have been duly executed
and delivered by authorized officers of the Company and each Subsidiary which is
a party thereto and are valid obligations of the Company and each such
Subsidiary, legally binding upon and enforceable against the Company and each
such Subsidiary in accordance with their terms, except as such enforceability
may be limited by (i) bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

     

    8B.          Financial
Statements.  The Company has filed with the Securities and
Exchange Commission reports on Forms 10-K containing the following financial
statements: a consolidated balance sheet of the Company and its Subsidiaries as
at July 31 in each of the years 2006 to 2010, inclusive, and consolidated
statements of income, stockholders’ equity and cash flows of the Company and its
Subsidiaries for each such year.  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 generally
accepted accounting principles 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, stockholders’ equity and cash flows 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 July 31,
2010.

     

    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, individually or in the aggregate, could reasonably be
expected to result in any Material Adverse Effect.

     

    8D.         Outstanding
Debt.  Neither the Company nor any of its Restricted
Subsidiaries has outstanding any Debt except as permitted by paragraphs 6A(2)
and 6B.  There exists no default under the provisions of any
instrument evidencing such Debt or of any agreement relating
thereto.

    
      
         

      

      
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    8E.           Title to
Properties.  The Company has and each of its Restricted
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 balance sheet as at July 31, 2010 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 6C.  All
leases necessary in any material respect for the conduct of the respective
businesses of the Company and its Restricted Subsidiaries are valid and
subsisting and are in full force and effect.

     

    8F.           Taxes.  The Company
has and each of its Restricted Subsidiaries has filed all federal, state and
other income tax returns which, to the 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 (a) the amount of which is not
individually or in the aggregate Material or (b) as are being actively contested
in good faith by appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting
principles.  The Company knows of no basis for any other tax or
assessment that could reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Company and its
Restricted Subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate. The Federal income tax liabilities of the Company
and its Restricted Subsidiaries have been determined by the Internal Revenue
Service and paid for all fiscal years up to and including the fiscal year ended
July 31, 2007.

     

    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 can reasonably be expected to materially and adversely affects
its ability to conduct its business or its property or assets, condition
(financial or otherwise) or operations.  Neither the execution nor
delivery of this Agreement, the Notes or the other Transaction Documents, nor
the offering, issuance and sale of the Notes, nor fulfillment of nor compliance
with the terms and provisions hereof and of the Notes and the other Transaction
Documents 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 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 or Indebtedness of any Guarantor of the type to be evidenced by the
Guaranty Agreements except as set forth in the agreements listed in Schedule 8G
attached hereto.

    
      
         

      

      
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    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.  Neither the Company nor any Subsidiary owns or has
any present intention of acquiring any “margin stock” as defined in Regulation U
(12 CFR Part 221) of the Board of Governors of the Federal Reserve System
(herein called “margin stock”).  The proceeds of sale of the Notes
will be used to fund future principal payments of the Debt of the Company,
acquisitions (provided that none of the proceeds of the sale of the Notes will
be used to finance a Hostile Tender Offer), stock repurchases, capital
expenditures and working capital purposes.  None of such proceeds will
be used, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of purchasing or carrying any 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 currently a margin stock or for any other
purpose which might constitute the sale or purchase of any Notes a “purpose
credit” within the meaning of such Regulation U.  The Company is not
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin
stock.  Neither the Company nor any agent acting on its behalf has
taken or will take any action which might cause this Agreement, any of the other
Transaction Documents or any Note 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 could reasonably be expected to 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 could reasonably
be expected to be materially adverse to the business, 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 other
Transaction Documents and the issuance and sale of the Notes will be exempt
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 each Purchaser’s representation in paragraph
9B.

    
      
         

      

      
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    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
other action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the date of closing with the
Securities and Exchange Commission and/or state Blue Sky authorities) in
connection with the execution and delivery of this Agreement or the other
Transaction Documents, 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.           Compliance with Environmental and
Other Laws.  The Company and its Restricted Subsidiaries and
all of their respective properties and facilities have complied at all times and
in all respects with all federal, state, local, foreign and regional statutes,
laws, ordinances and judicial or administrative orders, judgments, rulings and
regulations, including, without limitation, those relating to protection of the
environment except, in any such case, where failure to comply, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

     

    8M.         Regulatory
Status.  Neither the Company nor any of its Restricted
Subsidiaries is (i) 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, (ii) a “holding company” or a “subsidiary
company” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company”, within the meaning of the Public Utility Holding Company
Act of 2005, or (iii) a “public utility” within the meaning of the Federal Power
Act, as amended.

     

    8N.          Permits and Other Operating
Rights.  The Company and each Restricted Subsidiary has all
such valid and sufficient certificates of convenience and necessity, franchises,
licenses, permits, operating rights and other authorizations from federal,
state, foreign, regional, municipal and other local regulatory bodies or
administrative agencies or other governmental bodies having jurisdiction over
the Company or any Restricted Subsidiary or any of its properties, as are
necessary for the ownership, operation and maintenance of its businesses and
properties, as presently conducted and as proposed to be conducted while the
Notes are outstanding, subject to exceptions and deficiencies which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, and such certificates of convenience and necessity,
franchises, licenses, permits, operating rights and other authorizations from
federal, state, foreign, regional, municipal and other local regulatory bodies
or administrative agencies or other governmental bodies having jurisdiction over
the Company, any Restricted Subsidiary or any of its properties are free from
restrictions or conditions which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, and neither the
Company nor any Restricted Subsidiary is in violation of any thereof in any
material respect.

     

    8O.          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.

    
      
         

      

      
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    8P.         Absence of Financing Statements,
etc.  Except with respect to Liens permitted by paragraph 6C
hereof, there is no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded with any filing
records, registry or other public office, that purports to cover, affect or give
notice of any present or possible future Lien on, or security interest in, any
assets or property of the Company or any of its Restricted Subsidiaries or any
rights relating thereto.

     

    8Q.        Foreign
Assets Control Regulations, Etc.

     

    (i)           Neither
the sale of the Notes by the Company hereunder nor its use of the proceeds
thereof will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.

     

    (ii)           Neither
the Company nor any Subsidiary (i) is a Person described or designated in
the Specially Designated Nationals and Blocked Persons List of the Office of
Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or
(ii) engages in any dealings or transactions with any such
Person.  The Company and its Subsidiaries are in compliance, in all
material respects, with the USA Patriot Act.

     

    (iii)           No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases
that such Act applies to the Company.

     

    8R.         Disclosure.  This
Agreement, any other Transaction Document and the other documents, certificates
and other writings delivered to any Purchaser by or on behalf of the Company or
any Guarantor in connection with the transactions contemplated hereby taken as a
whole do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements contained herein and
therein not misleading.  There is no fact or facts 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  reasonably foresee),
individually or in the aggregate, reasonably be expected to materially adversely
affect the business, property or assets, or financial condition of the Company
or any of its Restricted Subsidiaries and which has not been set forth in this
Agreement, the Company’s Annual Report of Form 10-K for the fiscal year ending
July 31, 2010, the Form 8-Ks filed by the Company with the Securities and
Exchange Commission on October 13, 2010 and October 14, 2010, or in the other
documents, certificates and statements furnished to each Purchaser by or on
behalf of the Company prior to the date hereof in connection with the
transactions contemplated hereby.  Any financial projections delivered
to any Purchaser on or prior to the date hereof are believed to be reasonable
and are based on the assumptions stated therein and the best information
available to the officers of the Company.

    
      
         

      

      
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    8S.           Existing Indebtedness and
Investments; Future Liens.  (i) Except as described therein,
Schedule 8S sets forth a complete and correct list of all outstanding Debt and
Investments of the Company and its Restricted Subsidiaries as of July 31, 2010,
since which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Debt or
Investments of the Company or its Restricted Subsidiaries, as the case may be.
Neither the Company nor any Restricted Subsidiary is in default and no waiver of
default is currently in effect, in the payment of any principal or interest on
any Debt of the Company or such Restricted Subsidiary and no event or condition
exists with respect to any Debt of the Company or any Restricted Subsidiary that
would permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Debt to become due and payable before its
stated maturity or before its regularly scheduled dates of payment.

     

    (ii)           Except
as disclosed in Schedule 8S, neither the Company nor any Restricted Subsidiary
has agreed or consented to cause or permit in the future (upon the happening of
a contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by paragraph 6C.

     

    9.       
    REPRESENTATIONS OF EACH
PURCHASER.  Each Purchaser represents as follows:

     

    9A.         Nature of
Purchase.  Such Purchaser is not acquiring the Notes to be
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.         Accredited
Purchaser.  Such Purchaser is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act and an experienced
and sophisticated investor with such knowledge and experience in financial and
business matters as is necessary to evaluate the merits and risks of an
investment in the Notes.

     

    9C.         Source of Funds.  At
least one of the following statements is an accurate representation as to each
source of funds (a “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 that 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

    
      
         

      

      
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    (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 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

    
      
         

      

      
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    (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 has become 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 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 interest is 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 the most recent actively traded on the run U.S.
Treasury securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date on the display designated as
“Page PX1” on Bloomberg Financial Markets (or such other display as may replace
Page PX1 on Bloomberg Financial Markets or, if Bloomberg Financial Markets shall
cease to report such yields 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 (ii) if such yields shall not be
reported as of such time or the yields reported as of such time shall not be
ascertainable (including by way of interpolation), 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 (or any comparable successor publication) for U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date.  In the case of each
determination under clause (i) or (ii) of the preceding sentence, 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 (1) the applicable U.S. Treasury
security with the maturity closest to and greater than such Remaining Average
Life and (2) the applicable U.S. Treasury security with the maturity closest to
and less than such Remaining Average Life.  The Reinvestment Yield
shall be rounded to that number of decimal places as appears in the coupon of
the applicable Note.

    
      
         

      

      
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    “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.

     

    “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.

     

    “Affiliate” shall mean (i)
with respect to any Person, any other Person (other than a Restricted
Subsidiary) (a) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the Company, (b)
which beneficially owns or holds 10% or more of any class of the Voting Stock of
the Company, (c) 10% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 10% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary or (d) any officer or
director of such Person, and (ii) with respect to Prudential, shall include
any managed account, investment fund or other vehicle for which Prudential or
any Affiliate of Prudential acts as investment advisor or portfolio
manager.  A Person shall be deemed to control a corporation or other
entity if such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such corporation or other
entity, whether through the ownership of voting securities, by contract or
otherwise.  Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the
Company.

     

    “Anti-Terrorism Order” means
Executive Order No. 13,224 of September 24, 2001, Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

    
      
         

      

      
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    “Business Day” shall mean any
day other than a Saturday, a Sunday or a day on which commercial banks in New
York City or Chicago are required or authorized to be closed.

     

    “Canadian Borrower” shall mean
Favorite Products Limited (La Compagnie de Produits Favorite Limitée), a company
organized under the laws of the Province of Québec.

     

    “Canadian Credit Agreement”
shall mean that certain Acknowledgement of Debt/Revolving Term Credit Agreement,
dated as of or about July 12, 2006, and related security agreements by and
between Canadian Borrower and National Bank of Canada.

     

    “Capitalized Lease” shall mean
any lease the obligations of the lessee under which constitute Capitalized Lease
Obligations.

     

    “Capitalized Lease Obligation”
shall mean any rental obligation of any Person which, under generally accepted
accounting principles, would be required to be capitalized on the books of such
Person, taken at the amount thereof accounted for as indebtedness (net of
interest expense) in accordance with such principles.

     

    “closing” or “date of closing” shall have
the meaning given in paragraph 2 hereof.

     

    “Code” shall mean the Internal
Revenue Code of 1986, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time.

    

    “Company” means Oil-Dri
Corporation of America, a Delaware corporation.

    

    “Confidential Information”
shall have the meaning given in paragraph 11T.

     

    “Consolidated Adjusted Net
Worth” shall mean, at any time, (a) Consolidated Net Worth, minus (b) the
excess, if any, of (i) the aggregate amount of all outstanding Restricted
Investments over (ii) 20% of Consolidated Net Worth.

     

    “Consolidated Assets” shall
mean, at any time, the total assets of the Company and its Restricted
Subsidiaries which would be shown as assets on a consolidated balance sheet of
the Company and its Restricted Subsidiaries as of such time prepared in
accordance with generally accepted accounting principles, after eliminating all
amounts properly attributable to minority interests, if any, in the stock and
surplus of Restricted Subsidiaries.

     

    “Consolidated Debt” shall
mean, as of any date of determination, the total of all Debt of the Company and
its Restricted Subsidiaries outstanding on such date, after eliminating all
offsetting debits and credits between the Company and its Restricted
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and its
Restricted Subsidiaries in accordance with generally accepted accounting
principles.

    
      
         

      

      
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    “Consolidated Income Available for
Fixed Charges” shall mean, with respect to any period, Consolidated Net
Income for such period plus all amounts deducted in the computation thereof on
account of (a) Fixed Charges and (b) taxes imposed on or measured by income or
excess profits.

     

    “Consolidated Net Income”
shall mean, with reference to any period, the net income (or loss) of the
Company and its Restricted Subsidiaries for such period (taken as a cumulative
whole), as determined in accordance with generally accepted accounting
principles, after eliminating all offsetting debits and credits between the
Company and its Restricted Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial statements
of the Company and its Restricted Subsidiaries in accordance with generally
accepted accounting principles, provided that there shall be
excluded:

     

    (a)           the
income (or loss) of any Person accrued prior to the date it becomes a Restricted
Subsidiary or is merged into or consolidated with the Company or a Restricted
Subsidiary, and the income (or loss) of any Person, substantially all of the
assets of which have been acquired in any manner, realized by such other Person
prior to the date of acquisition,

    

    (b)           the
income (or loss) of any Person (other than a Restricted Subsidiary) in which the
Company or any Restricted Subsidiary has an ownership interest, except to the
extent that any such income has been actually received by the Company or such
Restricted Subsidiary in the form of cash dividends or similar cash
distributions,

    

    (c)           the
undistributed earnings of any Subsidiary 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 its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
such Subsidiary,

    

    (d)           any
restoration to income of any contingency reserve (excluding a contingency
reserve established in the ordinary course of business, such as reserves for
uncollectable accounts), except to the extent that provision for such reserve
was made out of income accrued during such period,

    

    (e)           any
aggregate net gain (but not any aggregate net loss) during such period arising
from the sale, conversion, exchange or other disposition of capital assets (such
term to include, without limitation, (i) all non-current assets and, without
duplication, (ii) the following, whether or not current: all fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets, and all Securities),

    

    (f)           any
gains resulting from any write-up of any assets (but not any loss resulting from
any write-down of any assets),

    

    (g)           any
net gain from the collection of the proceeds of life insurance
policies,

    

    (h)           any
gain arising from the acquisition of any Security, or the extinguishment, under
generally accepted accounting principles, of any Debt, of the Company or any
Subsidiary,

    
      
         

      

      
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    (i)           any
net income or gain (but not any net loss) during such period from (i) any change
in accounting principles in accordance with generally accepted accounting
principles, (ii) any prior period adjustments resulting from any change in
accounting principles in accordance with generally accepted accounting
principles, (iii) any extraordinary items, or (iv) any discontinued operations
or the disposition thereof,

    

    (j)           any
deferred credit representing the excess of equity in any Restricted Subsidiary
at the date of acquisition over the cost of the investment in such Restricted
Subsidiary,

    

    (k)           in
the case of a successor to the Company by consolidation or merger or as a
transferee of its assets, any earnings of the successor corporation prior to
such consolidation, merger or  transfer of assets, and

    

    (l)           any
portion of such net income that cannot be freely converted into United States
Dollars.

    

    “Consolidated Net Worth” shall
mean, at any time, (a) the sum of (i) the par value (or value stated on the
books of the corporation) of the capital stock (but excluding treasury stock and
capital stock subscribed and unissued) of the Company and its Restricted
Subsidiaries plus (ii) the amount of the paid-in capital and retained earnings
of the Company and its Restricted Subsidiaries, in each case as such amounts
would be shown on a consolidated balance sheet of the Company and its Restricted
Subsidiaries as of such time prepared in accordance with generally accepted
accounting principles, minus (b) to the extent included in clause (a), all
amounts properly attributable to minority interests, if any, in the stock and
surplus of Restricted Subsidiaries.

    

    “Consolidated Revenues” shall
mean, for any period, the total revenues of the Company and its Restricted
Subsidiaries determined in accordance with generally accepted accounting
principles.

    

    “Consolidated Total
Capitalization” shall mean, at any time, the sum of Consolidated Adjusted
Net Worth and Consolidated Debt.

    

    “Credit Agreement” shall mean
that certain Credit Agreement, dated as of January 27, 2006, by and between
Harris Trust and Savings Bank and the Company, as amended, restated or otherwise
modified , refinanced or replaced from time to time.

     

    “Debt” shall mean, with
respect to any Person, without duplication, (a) its liabilities for borrowed
money; (b) its liabilities for the deferred purchase price of property acquired
by such Person (excluding accounts payable arising in the ordinary course of
business but including, without limitation, all liabilities created or arising
under any conditional sale or other title retention agreement with respect to
any such property); (c) its Capitalized Lease Obligations; (d) all liabilities
for borrowed money secured by any Lien with respect to any property owned by
such Person (whether or not it has assumed or otherwise become liable for such
liabilities); and (e) any Guarantee of such Person with respect to liabilities
of a type described in any of clauses (a) through (d) hereof.  Debt of
any Person shall include all obligations of such Person of the character
described in clauses (a) through (e) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under generally accepted accounting principles.

    
      
         

      

      
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    “Default” shall mean any of
the events specified in paragraph 7A, whether or not any requirement for such
event to become an Event of Default has been satisfied.

     

    “Default Rate” shall mean a
rate per annum from time to time equal to the greater of (i) 5.96%, or (ii) 2%
over the rate of interest publicly announced by JPMorgan Chase Bank from time to
time in New York City as its Prime Rate.

     

    “Environmental Laws” shall
mean any and all Federal, state, local, and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to
pollution and the protection of the environment or the release of any materials
into the environment, including but not limited to those related to hazardous
substances or wastes, air emissions and discharges to waste or public
systems.

     

    “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.

     

    “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.

     

    “Fixed Charges” shall mean,
with respect to any period, the sum of (a) Interest Charges for such period and
(b) Lease Rentals for such period.

     

    “Fixed Charges Coverage Ratio”
shall mean, at any time, the ratio of (a) Consolidated Income Available for
Fixed Charges for the period of four consecutive fiscal quarters ending on, or
most recently ended prior to, such time to (b) Fixed Charges for such period of
four consecutive fiscal quarters.

    
      
         

      

      
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    “Guarantee” shall mean, with
respect to any Person, any obligation (except the endorsement in the ordinary
course of business of negotiable instruments for deposit or collection) of such
Person guaranteeing or in effect guaranteeing any indebtedness, dividend or
other obligation of any other Person in any manner, whether directly or
indirectly, including (without limitation) obligations incurred through an
agreement, contingent or otherwise, by such Person: (a) to purchase such
indebtedness or obligation or any property constituting security therefor; (b)
to advance or supply funds (i) for the purchase or payment of such indebtedness
or obligation, or (ii) to maintain any working capital or other balance sheet
condition or any income statement condition of any other Person or otherwise to
advance or make available funds for the purchase or payment of such indebtedness
or obligation; (c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or (d) otherwise to assure the owner of such
indebtedness or obligation against loss in respect thereof.  In any
computation of the indebtedness or other liabilities of the obligor under any
Guarantee, the indebtedness or other obligations that are the subject of such
Guarantee shall be assumed to be direct obligations of such
obligor.

     

    “Guarantor” shall mean any
Subsidiary that is a party to a Guaranty Agreement as of the date of closing and
each other Person which delivers a Guaranty Agreement or a joinder to a Guaranty
Agreement pursuant to paragraph 5K hereof, together with the respective
successors and assignee of each of the foregoing entities.

     

    “Guaranty Agreement” and
“Guaranty Agreements”
shall have the same meaning given in paragraph 3A (ii) hereof.

     

    “Hostile Tender Offer” shall
mean 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.

     

    “including” shall mean, unless
the context clearly requires otherwise, “including without limitation”, whether
or not so stated.

     

    “Indebtedness” with respect to
any Person means, at any time, without  duplication, (a) its
liabilities for borrowed money and its redemption  obligations in
respect of mandatorily redeemable Preferred Stock; (b) its liabilities for the
deferred purchase price of property acquired by such Person (excluding accounts
payable arising in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention agreement
with respect to any such property); (c) all liabilities appearing on its balance
sheet in accordance with generally accepted accounting principles in respect of
Capitalized Leases; (d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities); (e) all its liabilities in
respect of letters of credit or instruments serving a similar function issued or
accepted for its account by banks and other financial institutions (whether or
not representing obligations for borrowed money); (f) Swaps of such Person; and
(g) any Guarantee of such Person with respect to liabilities of a type described
in any of clauses (a) through (f) hereof.  Indebtedness of any Person
shall include all obligations of such Person of the character described in
clauses (a) through (g) to the extent such Person remains legally liable in
respect thereof notwithstanding that any such obligation is deemed to be
extinguished under generally accepted accounting principles.

    
      
         

      

      
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    “Institutional Investor” shall
mean (i) any original purchaser of a Note, (ii) any holder of a Note holding
more than 5% of the aggregate principal amount of the Notes then outstanding,
and (iii) any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company, any insurance
company, any broker or dealer, or any other similar financial institution or
entity, regardless of legal form.

     

    “Interest Charges” shall mean,
with respect to any period, the sum (without duplication) of the following (in
each case, eliminating all offsetting debits and credits between the Company and
its Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and its Restricted Subsidiaries in accordance with generally accepted accounting
principles): (a) all interest in respect of Debt of the Company and its
Restricted Subsidiaries (including imputed interest on Capitalized Lease
Obligations) deducted in determining Consolidated Net Income for such period,
less interest income of the Company and its Restricted Subsidiaries included in
Consolidated Net Income for such period and (b) all debt discount and expense
amortized or required to be amortized in the determination of Consolidated Net
Income for such period.

     

    “Investment” shall mean any
investment, made in cash or by delivery of property, by the Company or any of
its Restricted Subsidiaries (i) in any Person, whether by acquisition of stock,
Debt or other obligation or Security, or by loan, Guarantee, advance, capital
contribution or otherwise, or (ii) in any property.

     

    “Lease Rentals” shall mean,
with respect to any period, the sum of the minimum amount of rental and other
obligations required to be paid during such period by the Company or any
Restricted Subsidiary as lessee under all leases of real or personal property
(other than Capitalized Leases), excluding any amounts required to be paid by
the lessee (whether or not therein designated as rental or additional rental)
(a) which are on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, or (b) which are based on profits,
revenues or sales realized by the lessee from the leased property or otherwise
based on the performance of the lessee.

     

    “Lien” shall mean, with
respect to any Person, any mortgage, lien, pledge, charge, security interest or
other encumbrance, or any interest or title of any vendor, lessor, lender or
other secured party to or of such Person under any conditional sale or other
title retention agreement or Capitalized Lease, upon or with respect to any
property or asset of such Person (including in the case of stock, stockholder
agreements, voting trust agreements and all similar arrangements).

     

    “Material” shall mean material
in relation to the business, operations, affairs, financial condition, assets,
properties or prospects of the Company and its Restricted Subsidiaries taken as
a whole.

    
      
         

      

      
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    “Material Adverse Effect”
shall mean a material adverse effect on (a) the business, operations, affairs,
financial condition, assets or properties of the Company and its Restricted
Subsidiaries taken as a whole, or (b) the ability of the Company to perform its
obligations under this Agreement and the Notes, or (c) the validity or
enforceability of this Agreement or the Notes.

     

    “Multiemployer Plan” shall
mean any Plan which is a “multiemployer plan” (as such term is defined in
section 4001(a)(3) of ERISA).

     

    “Net Worth Covenant” shall mean
any financial covenant or similar restriction applicable to the Company
(regardless of whether such provision is labeled or otherwise characterized as a
covenant) which requires the Company to maintain a minimum stockholders’ equity,
net worth or tangible net worth of the Company or any similar financial
condition, whether or not on a consolidated basis or otherwise and whether or
not with one or more adjustments.

     

    “Notes” shall have the meaning
given in paragraph 1 hereof.

     

    “Officer’s Certificate”
shall mean a certificate signed in the name of the Company by a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.

     

    “PBGC” shall mean the Pension
Benefit Guaranty Corporation, or any successor or replacement entity thereto
under ERISA.

     

    “Person” shall mean and
include an individual, a partnership, a joint venture, a corporation, a trust, a
limited liability company, an unincorporated organization and a government or
any department or agency thereof.

     

    “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.

     

    “Preferred Stock” shall mean
any class of capital stock of a corporation that is preferred over any other
class of capital stock of such corporation as to the payment of dividends or the
payment of any amount upon liquidation or dissolution of such
corporation.

     

    “Priority Debt” shall mean,
without duplication, the sum of (a) all Debt of the Company secured by any Lien
permitted under paragraph 6C(xi), and (b) all Debt of Restricted Subsidiaries
(except (i) Debt held by the Company or a Wholly-Owned Restricted Subsidiary and
(ii) any Guarantee by any Subsidiary of any Debt of the Company so long as such
Subsidiary is party to a Guaranty Agreement).

     

    “property” or “properties” shall mean,
unless otherwise specifically limited, real or personal property of any kind,
tangible or intangible, choate or inchoate.

     

    “Prudential” shall mean The
Prudential Insurance Company of America.

     

    “Purchasers” shall have the
meaning given in the introductory paragraph hereof.

    
      
         

      

      
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    “Required Holder(s)” shall
mean the holder or holders of more than 50% of the aggregate principal amount of
the Notes from time to time outstanding.

     

    “Responsible Officer” shall
mean any Senior Financial Officer and any other officer of the Company with
responsibility for the administration of the relevant portion of this
Agreement.

    

    “Restricted Investments” shall
mean all Investments except the following:

     

    (a)           property
to be used in the ordinary course of business of the Company and its Restricted
Subsidiaries;

     

    (b)           current
assets arising from the sale of goods and services in the ordinary course of
business of the Company and its Restricted Subsidiaries;

     

    (c)           Investments
in one or more Restricted Subsidiaries or any Person that concurrently with such
Investment becomes a Restricted Subsidiary;

     

    (d)           Investments
existing on the date of closing and disclosed in Schedule 8S;

     

    (e)           Investments
in direct obligations of the United States of America or any agency or
instrumentality of the United States of America, the payment or guarantee of
which constitutes a full faith and credit obligation of the United States of
America, in either case, maturing within three years from the date of
acquisition thereof;

     

    (f)           Investments
in tax-exempt obligations of any state of the United States of America, or any
municipality of any such state, in each case rated "AA" or better by S&P, or
"Aa2" or better by Moody's or an equivalent rating by any other credit rating
agency of recognized national standing, provided that such obligations mature
within 365 days from the date of acquisition thereof;

     

    (g)           Investments
in certificates of deposit and bankers' acceptances maturing within one year
from the date of issuance thereof, issued by a bank or trust company organized
under the laws of the United States of America or any State thereof having
capital, surplus and undivided profits aggregating at least $200,000,000;
provided that at the time of acquisition thereof by the Company or a Restricted
Subsidiary, the senior unsecured long-term debt of such bank or trust company or
of the holding company of such bank or trust company is rated "AA" or better by
S&P or "Aa2" or better by Moody's or an equivalent rating by any other
credit rating agency of  recognized national standing;

     

    (h)           Investments
in commercial paper of corporations organized under the laws of the United
States of America or any state thereof maturing in 270 days or less from the
date of issuance which, at the time of acquisition by the Company or any
Restricted Subsidiary, is accorded a rating of "A-1" or better by S&P or
"P-1" by Moody's or an equivalent rating by any other credit rating agency of
recognized national standing;

    
      
         

      

      
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    (i)           Investments
in publicly traded shares of any open-ended mutual fund, the aggregate asset
value of which "marked to market" is at least $225,000,000, which is managed by
a fund manager of recognized national standing, and which invests not less than
90% of its assets in obligations described in clauses (e) through (h) hereof;
provided that any such Investments will be classified as current assets in
accordance with generally accepted accounting principles; and

     

    (j)           treasury
stock of the Company.

     

    As of any
date of determination, each Restricted Investment shall be valued at the greater
of:

    

    (x)           the
amount at which such Restricted Investment is shown on the books of the Company
or any of its Restricted Subsidiaries (or zero if such Restricted Investment is
not shown on any such books); and

    

    (y)           either

    

    (i)           in
the case of any Guarantee of the obligation of any Person, the amount which the
Company or any of its Restricted Subsidiaries has paid on account of such
obligation less any recoupment by the Company or such Restricted Subsidiary of
any such payments, or

    

    (ii)           in
the case of any other Restricted Investment, the excess of (x) the greater of
(A) the amount originally entered on the books of the Company or any of its
Restricted Subsidiaries with respect thereto and (B) the cost thereof to the
Company or its Restricted Subsidiary over (y) any return of capital (after
income taxes applicable thereto) upon such Restricted Investment through the
sale or other liquidation thereof or part thereof or otherwise.

    

    As used
in this definition of “Restricted Investments”: “Moody's” means Moody's
Investors Service, Inc. and "S&P" means Standard & Poor's Ratings Group,
a division of McGraw-Hill, Inc.

    

    In
valuing any Investments for the purpose of any determination of “Consolidated
Net Worth”, (i) at any time when an entity becomes a Restricted Subsidiary, all
Investments of such entity at such time shall be deemed to have been made by
such entity, as a Restricted Subsidiary, at such time and (ii) all Investments
of the Company and its Restricted Subsidiaries in a Restricted Subsidiary which
is redesignated as an Unrestricted Subsidiary pursuant to paragraph 5D of this
Agreement shall be deemed to have been made immediately after such
redesignation.

    

    “Restricted Subsidiary” shall
mean any Subsidiary which is not an Unrestricted Subsidiary.

    

    “Sale and Leaseback
Transaction” shall mean, with respect to a Person and property, a
transaction or series of transactions pursuant to which such Person sells such
property with the intent at the time of entering into such transaction or
transactions of leasing such property for a term in excess of six
months.

    
      
         

      

      
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    “Security” shall have the same
meaning as in Section 2(a)(1) of the Securities Act.

    

    “Securities Act” shall mean
the Securities Act of 1933, as amended.

     

    “Senior Financial Officer”
shall mean the chief financial officer, principal accounting officer, treasurer
or comptroller of the Company.

     

    “Significant Subsidiary” shall
mean at any time any Subsidiary that would at such time constitute a
"significant subsidiary" (as such term is defined in Regulation S-X of the
Securities and Exchange Commission as in effect on the date of the closing) of
the Company.

     

    “Subsidiary” shall mean, as to
any Person, any corporation, association or other business entity in which such
Person or one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable it or them (as
a group) ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar function) of such entity, and any
partnership or joint venture if more than a 50% interest in profits or capital
thereof is owned by such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries (unless such partnership can and does
ordinarily taken major business actions without the approval of such Person or
one or more of its Subsidiaries).  Unless the context otherwise
clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary
of the Company.

     

    “Swaps” shall mean, with
respect to any Person, payment obligations with respect to interest rate swaps,
currency swaps and similar obligations obligating such Person to make payments,
whether periodically or upon the happening of a contingency. For the purposes of
this Agreement, the amount of the obligation under any Swap shall be the amount
determined in respect thereof as of the end of the then most recently ended
fiscal quarter of such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such determination,
if any agreement relating to such Swap provides for the netting of amounts
payable by and to such Person thereunder or if any such agreement provides for
the simultaneous payment of amounts by and to such Person, then in each such
case, the amount of such obligation shall be the net amount so
determined.

     

    “Transaction Documents” shall
mean this Agreement, the Notes, the Guaranty Agreements and the other
agreements, documents, certificates and instruments now or hereafter executed or
delivered by the Company or any Subsidiary or Affiliate in connection with this
Agreement.

     

    “Transferee” shall mean any
direct or indirect transferee of all or any part of any Note purchased by any
Purchaser under this Agreement.

     

    “Unrestricted Subsidiary”
shall mean a Subsidiary designated as such by the Company in the most
recent notice (or, prior to any such notice, on Schedule 8A(1)) with respect to
such Subsidiary given by the Company pursuant to and in accordance with the
provisions of paragraph 5D.

    
      
         

      

      
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    “USA Patriot Act” means United
States Public Law 107-56, Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT)
Act of 2001, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time in effect.

     

    “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).

     

    “Wholly-Owned Restricted
Subsidiary” shall mean, at any time, any Restricted Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Restricted Subsidiaries at such
time.

     

    10C.        Accounting and Legal Principles,
Terms and Determinations.  All references in this Agreement to
“generally accepted accounting principles” 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 generally accepted accounting
principles, applied on a basis consistent with the most recent audited
consolidated financial statements of the Company and its Subsidiaries 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.  Any reference herein to any specific citation,
section or form of law, statute, rule or regulation shall refer to such new,
replacement or analogous citation, section or form should citation, section or
form be modified, amended or replaced.  Notwithstanding the foregoing
or any other provision of this Agreement providing for any amount to be
determined in accordance with generally accepted accounting principles, for
purposes of determining compliance with the covenants contained in this
Agreement, any election by the Company to measure an item of Debt using fair
value (as permitted by Accounting Standards Codification 825-10-25, formerly
known as Statement of Financial Accounting Standards No. 159, or any similar
accounting standard) shall be disregarded and such determination shall be made
as if such election had not been made.  Any reference herein to any
specific citation, section or form of law, statute, rule or regulation shall
refer to such new, replacement or analogous citation, section or form should
citation, section or form be modified, amended or replaced.

    
      
         

      

      
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    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 time, on the date due) to such Purchaser’s account or
accounts as specified in the Purchaser Schedule attached hereto, or such other
account or accounts in the United States as such Purchaser may 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, such Purchaser 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 each Purchaser has made in this paragraph
11A.  No holder shall be required to present or surrender any Note or
make any notation thereon, except that upon the written request of the Company
made concurrently with or reasonably promptly after the payment or prepayment in
full of any Note, the applicable holder shall surrender such Note for
cancellation, reasonably promptly after such request, to the Company at its
principal office.

     

    11B.       Expenses.  Whether
or not the transactions contemplated hereby shall be consummated, the Company
shall pay all out-of-pocket expenses arising in connection with such
transactions, including:

     

    (i)           (a)
all stamp and documentary taxes and similar charges in connection with the
issuance of the Notes (but not in connection with any transfer thereof), (b)
costs of obtaining a private placement number from Standard and Poor’s Ratings
Group for the Notes and (c) fees and expenses of brokers, agents, dealers,
investment banks or other intermediaries or placement agents (including without
limitation William Blair and Company on behalf of the Company), in each case as
a result of the execution and delivery of this Agreement or the other
Transaction Documents or the issuance of the Notes (other than those retained by
any Purchaser, or any such fees or expenses upon transfer of
Notes);

     

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

     

    (iii)           the
costs and expenses, including attorneys’ and financial advisory fees, incurred
by such Purchaser or such Transferee (a) in enforcing (or determining whether or
how to enforce) any rights under this Agreement or the Notes or any other
Transaction Document or (b) in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement or any
other Transaction Document or the transactions contemplated hereby or by reason
of your 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, (a) including the use of the proceeds of the Notes by the Company and
(b) excluding the transfer of any Note.

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    The
Company also will promptly pay or reimburse each Purchaser or holder of a Note
(upon demand, in accordance with each such Purchaser’s or holder’s written
instruction) for all fees and costs paid or payable by such Purchaser or holder
to the Securities Valuation Office of the National Association of Insurance
Commissioners in connection with the initial filing of this Agreement and all
related documents and financial information.

     

    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.

     

    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,
without the written consent of the holder or holders of all Notes at the time
outstanding, no amendment to this Agreement shall change the maturity of any
Note, or change the principal of, or the rate, method of computation or time of
payment of interest on or any Yield-Maintenance Amount payable with respect to
any Note, or affect the time, amount or allocation of
any  prepayments, or change the proportion of the principal amount of
the Notes required with respect to any consent, amendment, waiver or
declaration.  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 any 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 $500,000, except
as may be necessary to (i) reflect any principal amount not evenly divisible by
$500,000 or (ii) enable the registration of transfer by a holder of its entire
holding of Notes; provided, however, that no such minimum denomination shall
apply to Notes issued upon transfer by any holder of the Notes to Prudential or
any of Prudential’s Affiliates or to any other entity or group of Affiliates
with respect to which the Notes so issued or transferred shall be managed by a
single entity.  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.  Each Transferee shall make the representations of
Purchasers set forth in paragraph 9 and shall agree to be bound by paragraph
11T.  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.  Every Note surrendered for registration 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.

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

    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, 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 such Note to any Person on such
terms and conditions as may be determined by such holder in its sole and
absolute discretion, provided that no additional obligation is sought to be
imposed on Company thereby.

     

    11F.        Survival of Representations and
Warranties; Entire Agreement.  All representations and
warranties contained herein or in any other Transaction Documents or made in
writing by or on behalf of the Company or any Guarantor in connection herewith
or therewith shall survive the execution and delivery of this Agreement, the
other Transaction Documents 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 other Transaction Documents and the
Notes embody the entire agreement and understanding between the Purchasers and
the Company 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.

     

    11H.       Independence of
Covenants.  All covenants hereunder and in the other
Transaction Documents shall be given independent effect so that if a particular
action or condition is prohibited by any one of such covenants, the fact that it
would be permitted by an exception to, or otherwise be in compliance within the
limitations of, another covenant shall not (i) avoid the occurrence of a Default
or Event of Default if such action is taken or such condition exists or (ii) in
any way prejudice an attempt by the holder of any Note to prohibit through
equitable action or otherwise the taking of any action by the Company or any
Subsidiary which would result in a Default or Event of Default.

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

    11I.         Notices.  All
written communications provided for hereunder shall be sent by first class mail
or nationwide overnight delivery service (with charges prepaid) and (i) if to
any Purchaser, addressed to such Purchaser at the address specified for such
communications in the Purchaser Schedule attached hereto, or at such other
address as such Purchaser shall have specified to the Company in writing, (ii)
if to any other holder of any Note, addressed to such other holder at such
address as such other holder shall have specified to the Company in writing or,
if any such other holder shall not have so specified an address to the Company,
then addressed to such other 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 410 North Michigan Avenue, Suite 400, Chicago,
Illinois, 60611, Attention: Chief Financial Officer, or at such other address as
the Company shall have specified to the holder of each Note in writing;
provided, however, that the financial statements required to be delivered under
paragraphs 5(A)(i), (ii), (iii) and (iv) will be considered delivered when
transmitted electronically to an address designated by the holder of the Notes
if such an address has been so designated.  Any communication to the
Company may, in addition to the above, be delivered by any other means either to
the Company at its address specified above or to any officer of the
Company.

     

    11J.        Payments Due on Non-Business
Days.  Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Yield-Maintenance Amount or
interest on 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.

     

    11K.       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 any Purchaser or to the Required Holder(s), the
determination of such satisfaction shall be made by such Purchaser 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.

     

    11L.       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 ILLINOIS (EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE
THIS AGREEMENT TO BE CONSTRUED OR ENFORCED IN ACCORDANCE WITH, OR THE RIGHTS OF
THE PARTIES TO BE GOVERNED BY, THE LAWS OF ANY OTHER
JURISDICTION).

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    11M.       SUBMISSION
TO JURISDICTION; WAIVER OF JURY TRIAL.  ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE OTHER TRANSACTION DOCUMENTS MAY
BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS IN COOK COUNTY, ILLINOIS, OR
OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY IRREVOCABLY ACCEPTS,
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO ANY
SUCH ACTION OR PROCEEDING.  THE COMPANY FURTHER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN PARAGRAPH 11I, SUCH
SERVICE TO BECOME EFFECTIVE UPON RECEIPT.  THE COMPANY AGREES THAT A
FINAL AND NON-APPEALABLE JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT OR SUCH
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING HEREIN SHALL
AFFECT THE RIGHT OF ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.  THE COMPANY HEREBY IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS BROUGHT IN ANY OF THE
AFORESAID COURTS AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT
THAT THE COMPANY HAS OR MAY HEREAFTER ACQUIRE IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE WITH
RESPECT TO ITSELF OR ITS PROPERTY), THE COMPANY HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR THE OTHER
TRANSACTION DOCUMENTS.  THE COMPANY AND EACH PURCHASER HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.

     

    11N.        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.

     

    11O.        Descriptive Headings; Advice of
Counsel; Interpretation.  The descriptive headings of the
several paragraphs of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.  Each party to this Agreement
represents to the other parties to this Agreement that such party has been
represented by counsel in connection with this Agreement and the other
Transaction Documents, that such party has discussed this Agreement and the
other Transaction Documents  with its counsel and that any and all
issues with respect to this Agreement and the other Transaction
Documents  have been resolved as set forth herein.  No
provision of this Agreement or any other Transaction Document shall be construed
against or interpreted to the disadvantage of any party hereto by any court or
other governmental or judicial authority by reason of such party having or being
deemed to have structured, drafted or dictated such provision.

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    11P.        Counterparts; Facsimile
Signatures.  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.  Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be effective as delivery of
a manually executed counterpart of this Agreement.

     

    11Q.        Severalty of
Obligations.  The sales of Notes to the Purchasers are to be
several sales, and the obligations of the Purchasers under this Agreement are
several obligations.  No failure by any Purchaser to perform its
obligations under this Agreement shall relieve any other Purchaser or the
Company of any of its obligations hereunder, and no Purchaser shall be
responsible for the obligations of, or any action taken or omitted by, any other
Purchaser hereunder.

     

    11R.        Independent
Investigation.  Each Purchaser represents to and agrees with
each other Purchaser that it has made its own independent investigation of the
condition (financial and otherwise), prospects and affairs of the Company and
its Subsidiaries in connection with its purchase of the Notes hereunder and has
made and shall continue to make its own appraisal of the creditworthiness of the
Company.  No holder of Notes shall have any duties or responsibility
to any other holder of Notes, either initially or on a continuing basis, to make
any such investigation or appraisal or to provide any credit or other
information with respect thereto.  No holder of Notes is acting as
agent or in any other fiduciary capacity on behalf of any other holder of
Notes.

     

    11S.        Directly or
Indirectly.  Where any provision in this Agreement refers to
actions to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether the action in question in
taken directly or indirectly by such Person.

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

    11T.        Confidential
Information.  For the purposes of this paragraph 11T,
“Confidential Information” means information delivered to any Purchaser by or on
behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise adequately identified
when received by such Purchaser as being confidential information of the Company
or such Subsidiary, provided that such term does not include information that
(a) was publicly known or otherwise known to such Purchaser prior to the time of
such disclosure, (b) subsequently becomes publicly known through no act or
omission by such Purchaser or any Person acting on such Purchaser's behalf, (c)
otherwise becomes known to such Purchaser other than through disclosure by or on
behalf of the Company or any Subsidiary or other person under obligation of
confidentiality to the Company or any Subsidiary or (d) constitutes financial
statements delivered to such Purchaser under paragraph 5A that are otherwise
publicly available. Each Purchaser will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by such Purchaser
in good faith to protect confidential information of third parties delivered to
such Purchaser, provided that such Purchaser may deliver or disclose
Confidential Information together with notice of its confidentiality to (i) such
Purchaser's directors, trustees, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by such Purchaser's Notes), (ii)
such Purchaser's financial advisors and other professional advisors who agree to
hold confidential the Confidential Information substantially in accordance with
the terms of this paragraph 11T, (iii) any other holder of any Note, (iv) any
Institutional Investor to which such Purchaser sells or offers to sell such Note
or any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this paragraph 11T), (v) any Person from which such Purchaser
offers to purchase any security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this paragraph 11T), (vi) any federal or state regulatory
authority having jurisdiction over such Purchaser, (vii) the National
Association of Insurance Commissioners or any successor thereto (the “NAIC”) or
the Securities Valuation Office of the NAIC or any successor to such Office or,
in each case, any or any similar organization, or any nationally recognized
rating agency that requires access to information about such Purchaser's
investment portfolio, or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to such Purchaser, (x) in response to
any subpoena or other legal process, (y) in connection with any litigation to
which such Purchaser is a party or (z) if an Event of Default has occurred and
is continuing, to the extent such Purchaser may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement or for
the protection of the rights and remedies under such Purchaser's Notes and this
Agreement.  Each holder of a Note, by its acceptance of a Note, will
be deemed to have agreed to be bound by and to be entitled to the benefits of
this paragraph 11T as though it were a party to this Agreement. On reasonable
request by the Company in connection with the delivery to any holder of a Note
of information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this paragraph 11T.

     

    11U.          Transaction
References.  The Company agrees that Prudential and Prudential
Capital Group may (a) refer to the purchase of the Notes and the maximum
aggregate principal amount of the Notes and the date on which the Notes were
established, on its internet site or in marketing materials, press releases,
published “tombstone” announcements or any other print or electronic medium and
(b) display the Company’s corporate logo in conjunction with any such reference
so long as prior to any such use or reference the Company has approved such use
or reference (such approval not to be unreasonably withheld or
delayed).

     

    [THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.

      SIGNATURES
ON THE FOLLOWING PAGE.]

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

    11V.        Binding
Agreement.  When this Agreement is executed and delivered by
the Company and each of the Purchasers it shall become a binding agreement
between the Company and each of the Purchasers.

     

    
      
        
          	
                  Very
      truly yours,

                
	 
      
	
                  OIL-DRI
      CORPORATION OF AMERICA

                
	 
      
	
                  By:

                	
                  /s/

                	
                  Jeffrey M. Libert

                
	 
      	
                  Name:  

                	
                  Jeffrey M. Libert

                
	 
      	
                  Title:

                	
                  Vice
President

                

        

      

    

    

    The
foregoing Agreement

    is hereby
accepted as of the

    date
first above written

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        THE
      PRUDENTIAL INSURANCE COMPANY

                                      
	
                                        OF
      AMERICA

                                      
	 
      
	
                                        By:

                                      	
                                        /s/

                                      	
                                        Julia Buthman

                                      
	
                                        Vice
      President

                                      	 
      
	 
	
                                        PRUDENTIAL
      RETIREMENT INSURANCE

                                      
	
                                        AND
      ANNUITY COMPANY

                                      
	 
      
	
                                        By:

                                      	
                                        Prudential
      Investment Management, Inc.,

                                      
	 
      	
                                        as
      investment manager

                                      
	 
      	 
      	 
      	 
      
	 
      	
                                        By:

                                      	
                                        /s/

                                      	
                                        Julia Buthman

                                      
	 
      	 
      	
                                        Vice
      President

                                      
	 
      
	
                                        FORETHOUGHT
      LIFE INSURANCE COMPANY

                                      
	 
      
	
                                        PHYSICIANS
      MUTUAL INSURANCE

                                      
	
                                        COMPANY

                                      
	 
      
	
                                        BCBSM,
      INC. DBA BLUE CROSS AND BLUE

                                      
	
                                        SHIELD
      OF
MINNESOTA

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    
      
        	
                By:

              	
                Prudential
      Private Placement Investors,

              
	 
      	
                L.P.
      (as Investment Advisor)

              
	 
      	 
      
	
                By:

              	
                Prudential
      Private Placement Investors, Inc.

              
	
                (as
      its General Partner)

              
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/

              	
                Julia Buthman

              
	 
      	 
      	
                Vice
      President

              

      

       

    

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    PURCHASER
SCHEDULE

    Oil-Dri
Corporation of America

    3.96%
Senior Notes due August 1, 2020

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	 
      	 
      	 	
                                                      Aggregate

                                                      Principal

                                                      Amount of

                                                      Senior Notes

                                                      to be Purchased

                                                    	 	 	
                                                      Note

                                                      Denomination(s)

                                                    	 
	 
      	 
      	 	 	 	 	 	 
	 
      	
                                                      THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA

                                                    	 	$	5,650,000	 	 	$	5,650,000	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                                      (1)              

                                                    	
                                                      All
      payments on account of Notes held by such purchaser shall be made by wire
      transfer of immediately available funds for credit to:

                                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                                      JPMorgan
      Chase Bank

                                                      New
      York, NY

                                                      ABA
      No.:  021-000-021

                                                    	 	 	 	 	 	 	 	 
	 
      	
                                                      Account
      Name:  Prudential Managed Portfolio

                                                      Account
      No.:  P86188 (please do not include spaces)

                                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                                      Each
      such wire transfer shall set forth the name of the Company, a reference to
      "3.96% Senior Notes due 2020, Security No. INV11006, PPN 677864 B@8" and
      the due date and application (as among principal, interest and
      Yield-Maintenance Amount) of the payment being made.

                                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                                      (2)

                                                    	
                                                      Address
      for all notices relating to payments:

                                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                                      The
      Prudential Insurance Company of America

                                                      c/o
      Investment Operations Group

                                                      Gateway
      Center Two, 10th Floor

                                                      100
      Mulberry Street

                                                      Newark,
      NJ 07102-4077

                                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                                      Attention:  Manager,
      Billings and Collections

                                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                                      (3)

                                                    	
                                                      Address
      for all other communications and notices:

                                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                                      The
      Prudential Insurance Company of America

                                                      c/o
      Prudential Capital Group

                                                      Two
      Prudential Plaza, Suite 5600

                                                      180
      N. Stetson Avenue

                                                      Chicago,
      IL 60601

                                                    	 	 	 	 	 	 	 	 

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  Attention:  Managing
      Director, Corporate Finance

                	 
      	 
      
	 
      	 
      	 
      	 
      
	
                  (4)             

                	
                  Recipient
      of telephonic prepayment notices:

                	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                  Manager,
      Trade Management Group

                	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                  Telephone:  (973)
      367-3141

                	 
      	 
      
	 
      	
                  Facsimile:   (888)
      889-3832

                	 
      	 
      
	 
      	 
      	 
      	 
      
	
                  (5)

                	
                  Address
      for Delivery of Notes:

                	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                  Send
      physical security by nationwide overnight delivery service
to:

                   

                  Prudential
      Capital Group

                  Two
      Prudential Plaza, Suite 5600

                  180
      N. Stetson Avenue

                  Chicago,
      IL 60601

                   

                  Attention:  Armando
      M. Gamboa

                  Telephone:  (312)
      540-4203

                	 
      	 
      
	 
      	 
      	 
      	 
      
	
                  (6)

                	
                  Tax
      Identification No.:  22-1211670

                	 
      	 
      

        

      

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 
      	 
      	 	
                                      Aggregate

                                      Principal

                                      Amount of

                                      Senior Notes

                                      to be Purchased

                                    	 	 	
                                      Note

                                      Denomination(s)

                                    	 
	 
      	 
      	 	 	 	 	 	 
	 
      	
                                      PRUDENTIAL
      RETIREMENT INSURANCE AND ANNUITY COMPANY

                                    	 	$	3,600,000	 	 	$	3,600,000	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                      (1)             

                                    	
                                      All
      payments on account of Notes held by such purchaser shall be made by wire
      transfer of immediately available funds for credit to:

                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                      JP
      Morgan Chase Bank

                                      New
      York, NY

                                      ABA
      No. 021000021

                                    	 	 	 	 	 	 	 	 
	 
      	
                                      Account
      Name:  PRIAC - SA - Principal Preservation -
      Privates

                                      Account
      No. P86345 (please do not include spaces)

                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                      Each
      such wire transfer shall set forth the name of the Company, a reference to
      "3.96% Senior Notes due 2020, Security No. INV11006, PPN 677864 B@8” and
      the due date and application (as among principal, interest and
      Yield-Maintenance Amount) of the payment being made.

                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                      (2)

                                    	
                                      Address
      for all notices relating to payments:

                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                      Prudential
      Retirement Insurance and Annuity Company

                                      c/o
      Prudential Investment Management, Inc.

                                      Private
      Placement Trade Management

                                      PRIAC
      Administration

                                      Gateway
      Center Four, 7th Floor

                                      100
      Mulberry Street

                                      Newark,
      NJ 07102

                                       

                                      Telephone:  (973)
      802-8107

                                      Facsimile:   (888)
      889-3832

                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                      (3)

                                    	
                                      Address
      for all other communications and notices:

                                    	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                      Prudential
      Retirement Insurance and Annuity Company

                                      c/o
      Prudential Capital Group

                                      Two
      Prudential Plaza, Suite 5600

                                      180
      N. Stetson Avenue

                                      Chicago,
      IL 60601

                                    	 	 	 	 	 	 	 	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    
      
        	 
      	
                Attention:  Managing
      Director, Corporate Finance

              	 
      	 
      
	 
      	 
      	 
      	 
      
	
                (4)             

              	
                Address
      for Delivery of Notes:

              	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                Send
      physical security by nationwide overnight delivery service
to:

                 

                Prudential
      Capital Group

                Two
      Prudential Plaza, Suite 5600

                180
      N. Stetson Avenue

                Chicago,
      IL 60601

                 

                Attention:  Armando
      M. Gamboa

                Telephone:  (312)
      540-4203

              	 
      	 
      
	 
      	 
      	 
      	 
      
	
                (5)

              	
                Tax
      Identification No.:  06-1050034

              	 
      	 
      

      

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	 
      	 	
                                  Aggregate

                                  Principal

                                  Amount of

                                  Senior Notes

                                  to be Purchased

                                	 	 	
                                  Note

                                  Denomination(s)

                                	 
	 
      	 
      	 	 	 	 	 	 
	 
      	
                                  FORETHOUGHT
      LIFE INSURANCE COMPANY

                                	 	$	4,960,000	 	 	$	4,960,000	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                  (1)             

                                	
                                  All
      payments on account of Notes held by such purchaser shall be made by wire
      transfer of immediately available funds for credit to:

                                	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                  State
      Street Bank

                                  ABA
      # 01100-0028

                                  DDA
      Account # 24564783

                                   

                                  For
      Further Credit:

                                  Forethought
      Life Insurance Company

                                  Fund
      # 3N1H

                                	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                  Each
      such wire transfer shall set forth the name of the Company, a reference to
      "3.96% Senior Notes due 2020, PPN 677864 B@8" and the due date and
      application (as among principal, interest and Yield-Maintenance Amount) of
      the payment being made.

                                	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                  (2)

                                	
                                  All
      notices of payments and written confirmations of such wire
      transfers:

                                	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                  Forethought
      Life Insurance Company

                                  Attn:  Russell
      Jackson

                                  300
      North Meridian

                                  Suite
      1800

                                  Indianapolis,
      IN 46204

                                   

                                  with
      copy to:

                                   

                                  State
      Street Bank

                                  Attn:  Deb
      Hartner

                                  801
      Pennsylvania

                                  Kansas
      City, MO 64105

                                	 	 	 	 	 	 	 	 

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      

      
        
          
            
              
                	
                        (3)             

                      	
                        Address
      for all other communications and notices:

                      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                        Prudential
      Private Placement Investors, L.P.

                        c/o
      Prudential Capital Group

                        Two
      Prudential Plaza, Suite 5600

                        180
      N. Stetson Avenue

                        Chicago,
      IL 60601

                         

                        Attention:  Managing
      Director, Corporate Finance

                      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                        (4)

                      	
                        Address
      for Delivery of Notes:

                      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                        (a)          Send
      physical security by nationwide overnight delivery

                        service to:

                         

                        DTC
      / New York Window

                        55
      Water Street

                        New
      York, NY 10041

                         

                        Attention:  Robert
      Mendez

                         

                        Please
      include in the cover letter accompanying the Notes a reference to SSB Fund
      # 3N1H.

                         

                        (b)          Send
      copy by nationwide overnight delivery service to:

                         

                        Prudential
      Capital Group

                        Gateway
      Center 4

                        100
      Mulberry, 7th Floor

                        Newark,
      NJ 07102

                         

                        Attention:  Trade
      Management, Manager

                        Telephone:  (973)
      367-3141

                         

                        and

                         

                        Forethought
      Life Insurance Company

                        Attn:  Eric
      Todd

                        300
      North Meridian

                        Suite
      1800

                        Indianapolis,
      IN 46204

                      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                        (5)

                      	
                        Tax
      Identification No.:  06-1016329

                      	 
      	 
      

              

            

          

        

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	 
      	 
      	 	
                                          Aggregate

                                          Principal

                                          Amount of

                                          Senior Notes

                                          to be Purchased

                                        	 	 	
                                          Note

                                          Denomination(s)

                                        	 
	 
      	 
      	 	 	 	 	 	 
	 
      	
                                          PHYSICIANS
      MUTUAL INSURANCE COMPANY

                                        	 	$	2,960,000	 	 	$	2,960,000	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                          Notes/Certificates
      to be registered in the name of:

                                        	 	 	 	 	 	 	 	 
	 
      	
                                          How
      & Co.

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                          (1)             

                                        	
                                          All
      payments on account of Notes held by such purchaser shall be made by wire
      transfer of immediately available funds for credit to:

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                          The
      Northern Trust Company

                                          Chicago,
      IL

                                          ABA
      No.:  071000152

                                        	 	 	 	 	 	 	 	 
	 
      	
                                          Account
      Name:  Physicians Mutual Insurance Company

                                          Account
      No.:  26-27099

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                          Each
      such wire transfer shall set forth the name of the Company, a reference to
      "3.96% Senior Notes due 2020, PPN 677864 B@8" and the due date and
      application (as among principal, interest and Yield-Maintenance Amount) of
      the payment being made.

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                          (2)

                                        	
                                          All
      notices of payments and written confirmations of such wire
      transfers:

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                          Physicians
      Mutual Insurance Company

                                          2600
      Dodge Street

                                          Omaha,
      NE 68131

                                           

                                          Attention:  Steve
      Scanlan

                                           

                                          Facsimile:  (402)
      633-1096

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                          (3)

                                        	
                                          Address
      for all other communications and notices:

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                          Prudential
      Private Placement Investors, L.P.

                                          c/o
      Prudential Capital Group

                                          Two
      Prudential Plaza, Suite 5600

                                          180
      N. Stetson Avenue

                                          Chicago,
      IL 60601

                                        	 	 	 	 	 	 	 	 

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    
      
        	 
      	
                Attention:  Managing
      Director, Corporate Finance

              	 
      	 
      
	 
      	 
      	 
      	 
      
	
                (4)             

              	
                Address
      for Delivery of Notes:

              	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                (a)          Send
      physical security by nationwide overnight delivery

                service to:

                 

                The
      Northern Trust Company of New York

                Harborside
      Financial Center 10, Suite 1401

                3
      Second Street

                Jersey
      City, NJ 07311

                 

                Attention:  Jose
      Mero & Ruby Vega

                 

                Please
      include in the cover letter accompanying the Notes a reference to the
      Purchaser's account number (Physicians Mutual Insurance
      Company-Prudential; Account Number:  26-27099).

                 

                (b)       
        Send copy by nationwide overnight delivery service
      to:

                 

                Prudential
      Capital Group

                Gateway
      Center 4

                100
      Mulberry, 7th Floor

                Newark,
      NJ 07102

                 

                Attention:  Trade
      Management, Manager

                Telephone:  (973)
      367-3141

              	 
      	 
      
	 
      	 
      	 
      	 
      
	
                (5)

              	
                Tax
      Identification No.:  47-0270450

              	 
      	 
      

      

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	 
      	 
      	 	
                                          Aggregate

                                          Principal

                                          Amount of

                                          Senior Notes

                                          to be Purchased

                                        	 	 	
                                          Note

                                          Denomination(s)

                                        	 
	 
      	 
      	 	 	 	 	 	 
	 
      	
                                          BCBSM,
      INC. DBA BLUE CROSS AND BLUE SHIELD OF MINNESOTA

                                        	 	$	1,330,000	 	 	$	1,330,000	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                          Notes/Certificates
      to be registered in the name of:

                                          Blue
      Cross and Blue Shield of Minnesota

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                          (1)             

                                        	
                                          All
      payments on account of Notes held by such purchaser shall be made by wire
      transfer of immediately available funds for credit to:

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                          U.S.
      Bank N.A.

                                          ABA
      No.:  091000022

                                          Account
      No. 180183083765

                                          60
      Livingston Avenue

                                          St.
      Paul, MN 55107

                                          Attn:  Income
      Team (CUSIP Number, Account No. 10561811 and payment
      breakdown)

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                          Each
      such wire transfer shall set forth the name of the Company, a reference to
      "3.96% Senior Notes due 2020, PPN 677864 B@8" and the due date and
      application (as among principal, interest and Yield-Maintenance Amount) of
      the payment being made.

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                          (2)

                                        	
                                          All
      notices of payments and written confirmations of such wire
      transfers:

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                                          Blue
      Cross and Blue Shield of Minnesota

                                          1303
      Corporate Center Drive

                                          Eagan,
      MN 55121-1204

                                           

                                          Attention:  James
      K. Rochat, Director, Investments

                                           
      

                                          Telephone:  (651)
      662-8372

                                          Facsimile:   (651)
      662-2164

                                        	 	 	 	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                                          (3)

                                        	
                                          Address
      for all other communications and notices:

                                        	 	 	 	 	 	 	 	 

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    
      
        	 
      	
                Prudential
      Private Placement Investors, L.P.

                c/o
      Prudential Capital Group

                Two
      Prudential Plaza, Suite 5600

                180
      N. Stetson Avenue

                Chicago,
      IL 60601

                 

                Attention:  Managing
      Director, Corporate Finance

              	 
      	 
      
	 
      	 
      	 
      	 
      
	
                (4)             

              	
                Address
      for Delivery of Notes:

              	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                (a)          Send
      physical security by nationwide overnight delivery

                service to:

                 

                U.S.
      Bank

                Cindy
      Procai EP MN WS41

                60
      Livingston Ave.

                St.
      Paul, MN 55107

                 

                Attention:  Kate
      O'Connor

                Telephone:  (651)
      495-4175

                 

                Please
      include in the cover letter accompanying the Notes a reference to the
      Purchasers account number (Blue Cross & Blue Shield of Minnesota;
      Account Number:  10561811).

                 

                (b)          Send
      copy by nationwide overnight delivery service to:

                 

                Prudential
      Capital Group

                Gateway
      Center 4

                100
      Mulberry, 7th Floor

                Newark,
      NJ 07102

                 

                Attention:  Trade
      Management, Manager

                Telephone:  (973)
      367-3141

              	 
      	 
      
	 
      	 
      	 
      	 
      
	
                (5)

              	
                Tax
      Identification No.:  41-0984460

              	 
      	 
      

      

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    EXHIBIT A

     

    [FORM
OF NOTE]

     

    OIL-DRI
CORPORATION OF AMERICA

     

    3.96%
SENIOR NOTE DUE AUGUST 1, 2020

     

    
      	
              No.
      R-__

            	
              [Date]

            
	
              $________

            	 
      

    

     

    FOR VALUE
RECEIVED, the undersigned, OIL-DRI CORPORATION OF AMERICA, a corporation
organized and existing under the laws of the State of Delaware (herein called
the “Company”), hereby promises to pay to ____________________________
___________________________, or registered assigns, the principal sum of
_________________________ DOLLARS on August 1, 2020, with interest (computed on
the basis of a 360-day year—30-day month) (a) on the unpaid balance thereof at
the rate of 3.96% per annum (or, during any period when an Event of Default
shall be in existence, at the election of the Required Holder(s) at the Default
Rate (as defined below)) from the date hereof, payable semiannually on the 1st
day of February and August in each year, commencing with the February or August
next succeeding the date hereof, until the principal hereof shall have become
due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of Yield-Maintenance Amount and,
to the extent permitted by applicable law, any overdue payment of interest,
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the Default
Rate.  The “Default Rate” shall mean a rate per annum from time to
time equal to the greater of (i) 5.96% or (ii) 2.0% over the rate of interest
publicly announced by JPMorgan Chase Bank from time to time in New York City as
its Prime Rate.

     

    Payments
of principal of, interest on and any Yield-Maintenance Amount payable with
respect to this Note are to be made at the main office of JPMorgan Chase Bank in
New York City or at such other place as the holder hereof shall designate to the
Company in writing, in lawful money of the United States of
America.

     

    This Note
is one of a series of Senior Notes (herein called the “Notes”) issued pursuant
to a Note Agreement, dated as of November 12, 2010 (herein called the
“Agreement”), among the Company and the original purchasers of the Notes named
in the Purchaser Schedule attached thereto and is entitled to the benefits
thereof.  Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
paragraph 11T of the Agreement and (ii) to have made the representations set
forth in paragraph 9 of the Agreement.

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    This Note
is a registered Note and, as provided in the Agreement, upon surrender of this
Note for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such
holder’s attorney duly authorized in writing, a new Note for a like principal
amount will be issued to, and registered in the name of, the transferee. Prior
to due presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.

     

    The
Company agrees to make required prepayments of principal on the dates and in the
amounts specified in the Agreement.  This Note is also subject to
optional prepayment, in whole or from time to time in part, on the terms
specified in the Agreement.

     

    This Note
is guaranteed pursuant to one or more Guaranty Agreements executed by certain
guarantors.  Reference is made to such Guaranty Agreements for a
statement concerning the terms and conditions governing such guarantee of the
obligations of the Company hereunder.

     

    The
Company and any and all endorsers, guarantors and sureties severally waive
grace, demand, presentment for payment, notice of dishonor or default, notice of
intent to accelerate, notice of acceleration (except to the extent required in
the Agreement), protest and diligence in collecting in connection with this
Note, whether now or hereafter required by applicable law.

     

    In case
an Event of Default shall occur and be continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner and with the
effect provided in the Agreement.

     

    Capitalized
terms used herein which are defined in the Agreement and not otherwise defined
herein shall have the meanings as defined in the Agreement.

     

    THIS
NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF ILLINOIS AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE (EXCLUDING ANY CONFLICTS
OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS NOTE TO BE CONSTRUED OR ENFORCED
IN ACCORDANCE WITH THE LAWS OF ANY OTHER JURISDICTION).

     

    
      
        
          
            
              	
                      OIL-DRI
      CORPORATION OF AMERICA

                    
	 	 
	
                      By:

                    	 
      
	 
      	
                      Title:

                    	 
      

            

          

        

      

    

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    EXHIBIT B

     

    [FORM
OF DISBURSEMENT DIRECTION LETTER]

     

    [On
Company Letterhead - place on one page]

     

                     
November 12, 2010

     

    [Purchasers]

    c/o
Prudential Capital Group

    Two
Prudential Plaza

    Chicago,
Illinois 60601

     

    Re:           3.96%
Senior Notes due August 1, 2020 (the “Notes”)

     

    Ladies
and Gentlemen:

     

    Reference
is made to that certain Note Agreement (the “Note Agreement”), dated November
12, 2010, between Oil-Dri Corporation of America, a Delaware corporation (the
“Company”), and you.  Capitalized terms used herein shall have the
meanings assigned to such terms in the Note Agreement.

     

    You are
hereby irrevocably authorized and directed to disburse the $18,500,000 purchase
price of the Notes by wire transfer of immediately available funds to [bank name
and address], ABA #______________, for credit to the account of the ___________,
account no. _____________.

     

    Disbursement
when so made shall constitute payment in full of the purchase price of the Notes
and shall be without liability of any kind whatsoever to you.

     

    
      
        
          
            	
                    Very
      truly yours,

                  
	 
      	 
      
	
                    Oil-Dri
      Corporation of America

                  
	 
      	 
      
	
                    By:

                  	 
      
	 
      	
                    Title:

                  	 
      

          

        

      

    

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

    EXHIBIT C

     

    [FORM
OF GUARANTY AGREEMENT]

     

    GUARANTY
AGREEMENT

     

    This
AGREEMENT (the “Guaranty”), dated as of
November 12, 2010, is made by each of the parties signatory hereto as a
“Guarantor” (each, a “Guarantor”) in favor of the
holders of the Notes (as defined below) from time to time (the “Holders”).

     

    WITNESSETH:

     

    WHEREAS, Oil-Dri Corporation
of America, a Delaware corporation (the “Company”), has entered into
that certain Note Agreement, dated as of November 12, 2010, between the Company
and the Purchasers named in the Purchaser Schedule attached thereto (as amended,
the “Note Agreement”),
pursuant  which the Company has issued its 3.96% Senior Notes due
August 1, 2020 in the aggregate original principal amount of $18,500,000 (the
“Notes”);
and

     

    WHEREAS, each of the
Guarantors is a Subsidiary of the Company; and

     

    WHEREAS, as a condition to
entering into the Note Agreement, each Purchaser has required that the
Guarantors execute and deliver this Guaranty for the benefit of the
Holders;

     

    NOW THEREFORE, to satisfy one
of the conditions precedent to the effectiveness of the Note Agreement, for and
in consideration of the premises and mutual covenants herein contained, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, each Guarantor, intending to be legally bound, does hereby
covenant and agree as follows:

     

    1.           DEFINITIONS;
RECITALS.  Capitalized terms that are used in this Guaranty and
not defined in this Guaranty shall have the meaning ascribed to them in the Note
Agreement.  The recitals in this Guaranty are incorporated into this
Guaranty.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    2.           THE
GUARANTY.

     

    2A.         Guaranty of
Payment.  Each Guarantor, jointly and severally, absolutely,
unconditionally and irrevocably guarantees the full and prompt payment in United
States currency when due (whether at maturity, a stated prepayment date or
earlier by reason of acceleration or otherwise) and at all times thereafter, of
all of the indebtedness, existing on the date hereof or arising from time to
time hereafter, whether direct or indirect, joint or several, actual, absolute
or contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, of the Company to
any Holder under or in respect of the Note Agreement, the Notes and the other
Transaction Documents, including, without limitation, the principal of and
interest (including, without limitation, interest accruing before, during or
after any bankruptcy, insolvency, reorganization, arrangement, readjustment of
debt, liquidation or dissolution proceeding, and, if interest ceases to accrue
by operation of law by reason of any such proceeding, interest which otherwise
would have accrued in the absence of such proceeding, whether or not allowed as
a claim in such proceeding) on the Notes and any
Yield-Maintenance Amount (collectively, the “Guarantied
Obligations”).  This is a continuing guaranty of payment and
not of collection.  Notwithstanding the foregoing, the aggregate
amount of any Guarantor’s liability under this Guaranty shall not exceed the
maximum amount that such Guarantor can guaranty without violating, or causing
this Guaranty or such Guarantor’s obligations under this Guaranty to be void,
voidable or otherwise unenforceable under, any fraudulent conveyance or
fraudulent transfer law, including Section 548(a)(2) of the Bankruptcy
Code.

     

    Upon an
Event of Default, any Holder may, at its sole election and without notice,
proceed directly and at once against any Guarantor to seek and enforce payment
of, and to collect and recover, the Guarantied Obligations, or any portion
thereof, without first proceeding against the Company, any other Guarantor or
any other Person or against any security for the Guarantied Obligations or for
the liability of any such other Person or the Guarantor
hereunder.  Each Holder shall have the exclusive right to determine
the application of payments and credits, if any, to such Holder from each
Guarantor, the Company or from any other Person on account of the Guarantied
Obligations or otherwise.  This Guaranty and all covenants and
agreements of each Guarantor contained herein shall continue in full force and
effect and shall not be discharged until such a time as all of the Guarantied
Obligations shall be indefeasibly paid in full in cash.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    2B.         Obligations
Unconditional.  The obligations of each Guarantor under this
Guaranty shall be continuing, absolute and unconditional, irrespective of (i)
the invalidity or unenforceability of the Note Agreement, the Notes or any other
agreements, documents, certificates and instruments now or hereafter executed or
delivered by the Company or any other Guarantor or any other Person in
connection with the Note Agreement or any provision thereof; (ii) the absence of
any attempt by any Holder to collect the Guarantied Obligations or any portion
thereof from the Company, any other Guarantor or any other Person or other
action to enforce the same; (iii) any failure by any Holder to acquire, perfect
or maintain any security interest or lien in, or take any steps to preserve its
rights to, any security for the Guarantied Obligations or any portion thereof or
for the liability of any Guarantor hereunder or the liability of the Company,
any other Guarantor or any other Person or any or all of the Guarantied
Obligations; (iv) any defense arising by reason of any disability (other than a
defense of payment, unless the payment on which such defense is based was or is
subsequently invalidated, declared to be fraudulent or preferential, otherwise
avoided and/or required to be repaid to the Company or a Guarantor, as the case
may be, or the estate of any such party, a trustee, receiver or any other Person
under any bankruptcy law, state or federal law, common law or equitable cause,
in which case there shall be no defense of payment with respect to such payment)
of the Company or any other Person liable on the Guarantied Obligations or any
portion thereof; (v) any Holder's election, in any proceeding instituted under
Chapter 11 of Title 11 of the Federal Bankruptcy Code (11 U.S.C. §101 et seq.)
(the “Bankruptcy Code”), of the application of Section 1111(b)(2) of the
Bankruptcy Code; (vi) any borrowing or grant of a security interest to any
Holder by the Company as debtor-in-possession, or extension of credit, under
Section 364 of the Bankruptcy Code; (vii) the disallowance or avoidance of all
or any portion of any Holder's claim(s) for repayment of the Guarantied
Obligations under the Bankruptcy Code or any similar state law or the avoidance,
invalidity or unenforceability of any Lien securing the Guarantied Obligations
or the liability of any Guarantor hereunder or of the Company or any other
guarantor of all or any part of the Guarantied Obligations; (viii) any amendment
to, waiver or modification of, or consent, extension, indulgence or other action
or inaction under or in respect of the Note Agreement, the Notes or any other
agreements, documents, certificates and instruments now or hereafter executed or
delivered by the Company or any Guarantor or any other guarantor in connection
with the Note Agreement (including, without limitation, any increase in the
interest rate on the Notes); (ix) any change in any provision of any applicable
law or regulation; to the extent the same may be waived under any such
applicable law or regulation; (x) any order, judgment, writ, award or decree of
any court, arbitrator or governmental authority, domestic or foreign, binding on
or affecting any Guarantor, the Company or any other guarantor or any of their
assets; (xi) the certificate of incorporation or articles of organization (as
the case may be), or the by-laws or limited liability company agreement (as the
case may be) of any Guarantor or the Company or any other guarantor; (xii) any
mortgage, indenture, lease, contract, or other agreement (including without
limitation any agreement with stockholders), instrument or undertaking to which
any Guarantor or the Company is a party or which purports to be binding on or
affect any such Person or any of its assets; (xiii) any bankruptcy, insolvency,
readjustment, composition, liquidation or similar proceeding with respect to the
Company, any Guarantor or any other guarantor of all or any portion of any
Guarantied Obligations or any such Person's property and any failure by any
Holder to file or enforce a claim against the Company, any Guarantor or any such
other Person in any such proceeding; (xiv) any failure on the part of the
Company for any reason to comply with or perform any of the terms of any other
agreement with any Guarantor; or (xv) any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor
(other than a defense of payment, unless the payment on which such defense is
based was or is subsequently invalidated, declared to be fraudulent or
preferential, otherwise avoided and/or required to be repaid to the Company or a
Guarantor, as the case may be, or the estate of any such party, a trustee,
receiver or any other Person under any bankruptcy law, state or federal law,
common law or equitable cause, in which case there shall be no defense of
payment with respect to such payment).

     

    2C.         Obligations Unimpaired. Each
Guarantor agrees that each Holder is authorized, without demand or notice, which
demand and notice are hereby waived, and without discharging or otherwise
affecting the obligations of any Guarantor hereunder (which shall remain
absolute and unconditional notwithstanding any such action or omission to act),
from time to time to (i) renew, extend, accelerate or otherwise change the time
for payment of, or other terms relating to, the Guarantied Obligations or any
portion thereof, or otherwise modify, amend or change the terms of the Note
Agreement, the Notes or any other agreements, documents, certificates and
instruments now or hereafter executed or delivered by the Company or any
Guarantor in connection with the Note Agreement; (ii) accept partial payments on
the Guarantied Obligations; (iii) take and hold security  for the
Guarantied Obligations or any portion thereof or any other liabilities of the
Company, the obligations of any Guarantor under this Guaranty and the
obligations under any other guaranties and sureties of all or any of the
Guarantied Obligations, and exchange, enforce, waive, release, sell, transfer,
assign, abandon, fail to perfect, subordinate or otherwise deal with any such
security; (iv) apply such security and direct the order or manner of sale
thereof as any Holder may determine in its sole discretion; (v) settle, release,
compromise, collect or otherwise liquidate the Guarantied Obligations or any
portion thereof and any security therefor or guaranty thereof in any manner;
(vi) extend additional loans, credit and financial accommodations to the Company
and otherwise create additional Guarantied Obligations; (vii) waive strict
compliance with the terms of the Note Agreement, the Notes or any other
agreements, documents, certificates and instruments now or hereafter executed or
delivered by the Company or any Guarantor in connection with the Note Agreement
and otherwise forbear from asserting any Holder's rights and remedies
thereunder; (viii) take and hold additional guaranties or sureties and enforce
or forbear from enforcing any guaranty or surety of any other guarantor or
surety of the Guarantied Obligations, any portion thereof or release or
otherwise take any action (or omit to take any action) with respect to any such
guarantor or surety; (ix) assign this Guaranty in part or in whole in connection
with any assignment of the Guarantied Obligations or any portion thereof; (x)
exercise or refrain from exercising any of its rights against the Company or any
Guarantor; and (xi) apply any sums, by whomsoever paid or however realized, to
the payment of the Guarantied Obligations as any Holder in its sole discretion
may determine.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    2D.         Waivers of
Guarantors.  Each Guarantor waives for the benefit of the
Holders:

     

    (i)      
     any right to require any Holder, as a condition of
payment or performance by such Guarantor or otherwise to (a) proceed against the
Company, any other Guarantor, any other guarantor of the Guarantied Obligations
or any other Person, (b) proceed against or exhaust any security given to or
held by any Holder in connection with the Guarantied Obligations or any other
guaranty, or (c) pursue any other remedy available to any Holder
whatsoever;

     

    (ii)           any
defense arising by reason of (a) the incapacity, lack of authority or any
disability of the Company, including, without limitation, any defense based on
or arising out of the lack of validity or the unenforceability of the Guarantied
Obligations or any agreement or instrument relating thereto (other than a
defense of payment, unless the payment on which such defense is based was or is
subsequently invalidated, declared to be fraudulent or preferential, otherwise
avoided and/or required to be repaid to the Company or a Guarantor, as the case
may be, or the estate of any such party, a trustee, receiver or any other Person
under any bankruptcy law, state or federal law, common law or equitable cause,
in which case there shall be no defense of payment with respect to such
payment), (b) the cessation of the liability of the Company from any cause other
than indefeasible payment in full of the Guarantied Obligations in cash or (c)
any act or omission of any Holder or any other Person which directly or
indirectly, by operation of law or otherwise, results in or aids the discharge
or release of the Company or any security given to or held by any Holder in
connection with the Guarantied Obligations or any other guaranty;

     

    (iii)          any
defense based upon any Holder's errors or omissions in the administration of the
Guarantied Obligations;

     

    (iv)           (a)
any principles or provisions of law, statutory or otherwise, which are or might
be in conflict with the terms of this Guaranty and any legal or equitable
discharge of such Guarantor’s obligations thereunder except to the extent any
such principle, provision or discharge may not be waived under applicable law,
(b) the benefit of any statute of limitations affecting the Guarantied
Obligations or such Guarantor’s liability hereunder or the enforcement hereof,
(c) any rights to set-offs, recoupments and counterclaims, and (d) promptness,
diligence and any requirement that any Holder protect, maintain, secure, perfect
or insure any Lien or any property subject thereto;

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (v)           notices
(a) of nonperformance or dishonor, (b) of acceptance of this Guaranty by any
Holder or by any Guarantor, (c) of default in respect of the Guarantied
Obligations or any other guaranty, (d) of the existence, creation or incurrence
of new or additional indebtedness, arising either from additional loans extended
to the Company or otherwise, (e) that the principal amount, or any portion
thereof, and/or any interest on any document or instrument evidencing all or any
part of the Guarantied Obligations is due, (f) of any and all proceedings to
collect from the Company, any Guarantor or any other guarantor of all or any
part of the Guarantied Obligations, or from anyone else, (g) of exchange, sale,
surrender or other handling of any security or collateral given to any Holder to
secure payment of the Guarantied Obligations or any guaranty therefor, (h) of
renewal, extension or modification of any of the Guarantied Obligations, (i) of
assignment, sale or other transfer of any Note to a Transferee, or (j) of any of
the matters referred to in paragraph 2B and any right to consent to any
thereof;

     

    (vi)           presentment,
demand for payment or performance and protest and notice of protest with respect
to the Guarantied Obligations or any guaranty with respect thereto;
and

     

    (vii)          any
defenses or benefits that may be derived from or afforded by law which limit the
liability of or exonerate guarantors or sureties, or which may conflict with the
terms of this Guaranty.

     

    Each
Guarantor agrees that no Holder shall be under any obligation to marshall any
assets in favor of such Guarantor or against or in payment of any or all of the
Guarantied Obligations.

     

    No
Guarantor will exercise any rights which it may have acquired by way of
subrogation under this Guaranty, by any payment made hereunder or otherwise, or
accept any payment on account of such subrogation rights, or any rights of
reimbursement or indemnity or contribution or any rights or recourse to any
security for the Guarantied Obligations or this Guaranty unless at the time of
such Guarantor's exercise of any such right there shall have been performed and
indefeasibly paid in full in cash all of the Guarantied
Obligations.

     

    2E.          Revival.  Each
Guarantor agrees that, if any payment made by the Company or any other Person is
applied to the Guarantied Obligations and is at any time annulled, set aside,
rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of any security are required
to be returned by any Holder to the Company, its estate, trustee, receiver or
any other Person, including, without limitation, any Guarantor, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, such Guarantor's liability hereunder
(and any lien, security interest or other collateral securing such liability)
shall be and remain in full force and effect, as fully as if such payment had
never been made, or, if prior thereto this Guaranty shall have been canceled or
surrendered (and if any lien, security interest or other collateral securing
such Guarantor's liability hereunder shall have been released or terminated by
virtue of such cancellation or surrender), this Guaranty (and such lien,
security interest or other collateral) shall be reinstated and returned in full
force and effect, and such prior cancellation or surrender shall not diminish,
release, discharge, impair or otherwise affect the obligations of such Guarantor
in respect of the amount of such payment (or any lien, security interest or
other collateral securing such obligation).

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    2F.          Obligation to Keep
Informed.  Each Guarantor shall be responsible for keeping
itself informed of the financial condition of the Company and any other Persons
primarily or secondarily liable on the Guarantied Obligations or any portion
thereof, and of all other circumstances bearing upon the risk of nonpayment of
the Guarantied Obligations or any portion thereof, and each Guarantor agrees
that no Holder shall have any duty to advise such Guarantor of information known
to such Holder regarding such condition or any such circumstance.  If
any Holder, in its discretion, undertakes at any time or from time to time to
provide any such information to any Guarantor, such Holder shall not be under
any obligation (i) to undertake any investigation, whether or not a part of its
regular business routine, (ii) to disclose any information which such Holder
wishes to maintain confidential, or (iii) to make any other or future
disclosures of such information or any other information to any
Guarantor.

     

    2G.         Bankruptcy.  If any
Event of Default specified in clauses (vii) or (viii) of paragraph 7A of the
Note Agreement shall occur and be continuing, then each Guarantor agrees to
immediately pay to the Holders the full outstanding amount of the Guarantied
Obligations without notice.

     

    No waiver
by any Guarantor in this Guaranty shall, in and of itself, be deemed a waiver by
the Company of any right of, or benefit afforded to, the Company under the Note
Agreement.

     

    3.           REPRESENTATIONS
AND WARRANTIES.

     

    Each
Guarantor represents, covenants and warrants as follows:

     

    3A.         Organization.  Such
Guarantor is a corporation or limited liability company (as the case may be)
duly organized and existing in good standing under the laws of the state of its
organization and is qualified to do business and in good standing in every
jurisdiction where the ownership of its property or the nature of the business
conducted by it makes such qualification necessary and in which the failure to
be so qualified or licensed could be reasonably likely to have a Material
Adverse Effect.

     

    3B.         Power and
Authority.  Such Guarantor has all requisite power to conduct
its business as currently conducted and as currently proposed to be
conducted.  Such Guarantor has all requisite power to execute, deliver
and perform its obligations under this Guaranty.  The execution,
delivery and performance of this Guaranty have been duly authorized by all
requisite action and this Guaranty has been duly executed and delivered by
authorized officers of such Guarantor and is the valid obligation of such
Guarantor, legally binding upon and enforceable against such Guarantor in
accordance with its terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    3C.         Conflicting Agreements and Other
Matters.  The execution and delivery of this Guaranty and the
fulfillment of or the compliance with the terms and provisions hereof will not
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 such Guarantor or
any of its Subsidiaries pursuant to, the certificate of incorporation or
articles of organization (as the case may be), the by-laws or limited liability
company agreement (as the case may be) of such Guarantor or any of its
Subsidiaries any award of any arbitrator or any agreement (including any
agreement with stockholders or holders of membership interests (as the case may
be) of such Guarantor or Persons with direct or indirect ownership interests in
stockholders or holders of membership interests (as the case may be) of such
Guarantor), instrument, order, judgment, decree, statute, law, rule or
regulation to which such Guarantor or any of its Subsidiaries is
subject.  Neither such Guarantor nor any of its Subsidiaries is a
party to, or otherwise subject to any provision contained in, any instrument
evidencing any Indebtedness of such Guarantor 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, obligations of such Guarantor of the type to be evidenced by this
Guaranty.

     

    3D.         ERISA.  The
execution and delivery of this Guaranty will be exempt 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.

     

    3E.      
   Governmental
Consent.  Neither the nature of such Guarantor or of any
Subsidiary of such Guarantor nor any of their respective businesses or
properties, nor any relationship between such Guarantor or any Subsidiary of
such Guarantor and any other Person, nor any circumstance in connection with the
execution, delivery and performance of this Guaranty, is such as to require any
authorization, consent, approval, exemption or other action by or notice to or
filing with any court or administrative or governmental body (including, without
limitation, notifications required by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, but excluding routine filings after the date of
closing with the Securities and Exchange Commission and/or state Blue Sky
authorities).

     

    3F.          Regulatory
Status.  Neither such Guarantor nor any Subsidiary of the
Guarantor is (i) an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, (ii) a “holding company” or a “subsidiary company” or an “affiliate”
of a “holding company” or a “subsidiary company” of a “holding company”, within
the meaning of the Public Utility Holding Company Act of 1935, as amended, or
(iii) a “public utility” within the meaning of the Federal Power Act, as
amended.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    4.           MISCELLANEOUS.

     

    4A.         Successors, Assigns and
Participants.  This Guaranty shall be binding upon each
Guarantor and its successors and assigns and shall inure to the benefit of each
Holder and its successors, transferees and assigns; all references herein to a
Guarantor shall be deemed to include its successors and assigns, and all
references herein to any Holder shall be deemed to include its successors and
assigns.  This Guaranty shall be enforceable by each Holder and any of
such Holder's successors, assigns and participants, and any such successors and
assigns shall have the same rights and benefits with respect to each Guarantor
under this Guaranty as such Holder hereunder.

     

    4B.         Consent to
Amendments.  This Guaranty may be amended, and a Guarantor may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, if such Guarantor shall obtain the written consent to such
amendment, action or omission to act, of the Required Holder(s) of the Notes,
except that, without the written consent of all of the holders of the Notes, (i)
no amendment to or waiver of the provisions of this Guaranty shall change or
affect the provisions of this paragraph 4B insofar as such provisions relate to
proportions of the principal amount of the Notes, or the rights of any
individual holder of the Notes, required with respect to any consent, (ii) no
Guarantor shall be released from this Guaranty, and (iii) no amendment, consent
or waiver with respect to paragraph 2A or the definition of “Guarantied
Obligations” (except to add additional obligations of the Company) shall be
effective. Each Holder at the time or thereafter outstanding shall be bound by
any consent authorized by this paragraph 4B, whether or not the Note held by
such Holder 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 any Guarantor and any Holder
nor any delay in exercising any rights hereunder or under any Note shall operate
as a waiver of any rights of any Holder.  As used herein, the term
“this Guaranty” and references thereto shall mean this Guaranty as it may from
time to time be amended or supplemented.  Notwithstanding the
foregoing, this Guaranty may be amended by the addition of additional Guarantors
pursuant to a Guaranty Joinder in the form of Exhibit A hereto.

     

    4C.         Survival of Representations and
Warranties; Entire Agreement.  All representations and
warranties contained herein or made in writing by or on behalf of each Guarantor
in connection herewith shall survive the execution and delivery of this
Guaranty, the transfer by any Holder 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 Holder
or any Transferee.  Subject to the preceding sentence, this Guaranty
embodies the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings relating to the subject matter hereof.

     

    4D.         Notices.  All
written communications provided for hereunder shall be sent by first class mail
or telegraphic notice or nationwide overnight delivery service (with charges
prepaid) or by hand delivery or telecopy and addressed:

     

    (i)           in
the case of each Guarantor, to:

     

    c/o
Oil-Dri Corporation of America

    410 North
Michigan Avenue

    Chicago,
Illinois, 60611

    Attention:
Chief Financial Officer

    Phone:
(312) 706-3209

    Fax:
(312) 706-1223

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (ii)           in
the case of any Holder, to the address specified for notices to such Holder
under the Note Agreement;

     

    or, in
either case, at such other address as shall be designated by such Person in a
written notice to the other parties hereto.

     

    4E.      
   Descriptive
Headings.  The descriptive headings of the several paragraphs
of this Guaranty are inserted for convenience only and do not constitute a part
of this Guaranty.

     

    4F.          Satisfaction
Requirement.  If any agreement, certificate or other writing,
or any action taken or to be taken, is by the terms of this Guaranty required to
be satisfactory to any Holder or the Required Holder(s) of the Notes, the
determination of such satisfaction shall be made by such Holder or such 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.

     

    4G.         Governing
Law.  THIS GUARANTY SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE
OF ILLINOIS (EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE
THIS GUARANTY TO BE CONSTRUED OR ENFORCED IN ACCORDANCE WITH, OR THE RIGHTS OF
THE PARTIES TO BE GOVERNED BY, THE LAWS OF ANY OTHER JURISDICTION).

     

    4H.         Counterparts.  This
Guaranty may be executed simultaneously in two or more counterparts, each of
which shall be an original and constitute one and the same
agreement.  It shall not be necessary in making proof of this Guaranty
to produce or account for more than one such counterpart. Delivery of an
executed counterpart of a signature page hereto by facsimile shall be effective
as delivery of a manually executed counterpart of this Guaranty.

     

    4I.           SUBMISSION TO
JURISDICTION.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS MAY BE BROUGHT IN THE COURTS OF
THE STATE OF ILLINOIS IN COOK COUNTY, ILLINOIS, OR OF THE UNITED STATES FOR THE
NORTHERN DISTRICT OF ILLINOIS AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS, UNCONDITIONALLY, THE JURISDICTION OF
THE AFORESAID COURTS WITH RESPECT TO ANY SUCH ACTION OR
PROCEEDING.  EACH GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION 4D(i), SUCH SERVICE TO
BECOME EFFECTIVE UPON RECEIPT.  EACH GUARANTOR AGREES THAT A FINAL AND
NON-APPEALABLE JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON SUCH JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW.  NOTHING HEREIN SHALL AFFECT THE RIGHT
OF ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR IN ANY
OTHER JURISDICTION.  EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
GUARANTY BROUGHT IN ANY OF THE AFORESAID COURTS AND HEREBY FURTHER IRREVOCABLY
WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    4J.          Independence of
Covenants.  All covenants hereunder shall be given independent
effect so that if a particular action or condition is prohibited by any one of
such covenants, the fact that it would be permitted by an exception to, or
otherwise be in compliance within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or such condition exists.

     

    4K.         Severability.  Any
provision of this Guaranty 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.

     

    [signature
page follows]

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each
Guarantor has caused this Guaranty Agreement to be duly executed as of the date
first above written.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  OIL-DRI
      CORPORATION OF GEORGIA,  a

                                                  Georgia
      corporation

                                                
	 
      
	
                                                  By:

                                                	 
      
	 
      	
                                                  Title:

                                                	 
      
	 
	
                                                  OIL-DRI PRODUCTION COMPANY,
      a

                                                  Mississippi
      corporation

                                                
	 
      
	
                                                  By:

                                                	 
      
	 
      	
                                                  Title:

                                                	 
      
	 
      	 
      	 
      
	
                                                  OIL-DRI
      CORPORATION OF NEVADA, a
      

                                                  Nevada
      corporation

                                                
	 
      
	
                                                  By:

                                                	 
      
	 
      	
                                                  Title:

                                                	 
      
	 
      	 
      	 
      
	
                                                  MOUNDS
      PRODUCTION COMPANY, LLC,

                                                  an
      Illinois limited liability company

                                                
	 
      	 
      	 
      
	
                                                  By:
      MOUNDS
      MANAGEMENT, INC., Its

                                                  Managing
      Member

                                                
	 
      	 
      	 
      
	
                                                  By:

                                                	 
      
	 
      	
                                                  Title:

                                                	 
      
	 
      	 
      	 
      
	
                                                  MOUNDS
      MANAGEMENT, INC., a
      Delaware

                                                  corporation

                                                
	 
      	 
      	 
      
	
                                                  By:

                                                	 
      
	 
      	
                                                  Title:

                                                	 
      

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  	
                          BLUE
      MOUNTAIN PRODUCTION

                          COMPANY,
      a
      Mississippi corporation

                        
	 
      	 
      	 
      
	
                          By:

                        	 
      
	 
      	
                          Title:

                        	 
      
	 
      
	
                          TAFT
      PRODUCTION COMPANY, a Delaware

                          corporation

                        
	 
      	 
      	 
      
	
                          By:

                        	 
      
	 
      	
                          Title:

                        	 
      

                

              

            

          

        

      

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    [FORM
OF JOINDER AGREEMENT TO GUARANTY AGREEMENT]

     

    JOINDER
AGREEMENT NO.____TO GUARANTY AGREEMENT

     

    Re:
OIL-DRI CORPORATION OF AMERICA

     

    This
Joinder Agreement is made as of ______________, in favor of the Holders (as such
terms are defined in the Oil-Dri Guaranty, as hereinafter defined).

     

    A.           Reference
is made to the Guaranty Agreement made as of November 12, 2010 (as such
Guarantee may be supplemented, amended, restated or consolidated from time to
time, the “Oil-Dri Guaranty”) by certain Persons in favor of the Holders (as
defined in the Oil-Dri Guaranty), under which such Persons have guaranteed to
the Holders the due payment and performance by Oil-Dri Corporation of America, a
Delaware corporation (“Oil-Dri”) of the Guarantied Obligations (as defined in
the Oil-Dri Guaranty).

     

    B.           Capitalized
terms used but not otherwise defined in this Joinder Agreement have the
respective meanings given to such terms in the Oil-Dri Guaranty, including the
definitions of terms incorporated in the Oil-Dri Guaranty by reference to other
agreements.

     

    C.           Section
4B of the Oil-Dri Guaranty provides that additional Persons may from time to
time after the date of the Oil-Dri Guaranty become Guarantors under the Oil-Dri
Guaranty by executing and delivering to the Holders a supplemental agreement to
the Oil-Dri Guaranty in the form of this Joinder Agreement.

     

    For
valuable consideration, each of the undersigned (each a “New Guarantor”) severally (and not
jointly, or jointly and severally) agrees as follows:

     

    1.           Each
of the New Guarantors has received a copy of, and has reviewed, the Oil-Dri
Guaranty and the Transaction Documents in existence on the date of this Joinder
Agreement and is executing and delivering this Joinder Agreement to the Holders
pursuant to Section 4B of the Oil-Dri Guaranty.

     

    2.           Effective
from and after the date this Joinder Agreement is executed and delivered to the
Holders by any one of the New Guarantors (and irrespective of whether this
Joinder Agreement has been executed and delivered by any other Person), such New
Guarantor is, and shall be deemed for all purposes to be, a Guarantor under the
Oil-Dri Guaranty with the same force and effect, and subject to the same
agreements, representations, guarantees, indemnities, liabilities and
obligations, as if such New Guarantor was, effective as of the date of this
Joinder Agreement, an original signatory to the Oil-Dri Guaranty as a
Guarantor.  In furtherance of the foregoing, each of the New
Guarantors jointly and severally guarantees to Holders in accordance with the
provisions of the Oil-Dri Guaranty the due and punctual payment and performance
in full of each of the Guarantied Obligations as each such Guarantied Obligation
becomes due from time to time (whether because of maturity, default, demand,
acceleration or otherwise) and understands, agrees and confirms that the Holders
may enforce the Oil-Dri Guaranty and this Joinder Agreement against such New
Guarantor for the benefit of the Holders up to the full amount of the Guarantied
Obligations without proceeding against any other Guarantor, Oil-Dri, any other Person or any
collateral securing the Guarantied Obligations.  The terms and
provisions of the Oil-Dri Guaranty are incorporated by reference in this Joinder
Agreement.

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

     

    3.           Upon
this Joinder Agreement bearing the signature of any Person having authority to
bind any New Guarantor being delivered to any Holder, and irrespective of
whether this Joinder Agreement has been executed by any other Person, this
Joinder Agreement will be deemed to be finally and irrevocably executed and
delivered by, and be effective and binding on, and enforceable against, such New
Guarantor free from any promise or condition affecting or limiting the
liabilities of such New Guarantor and such New Guarantor shall be, and shall be
deemed for all purposes to be, a Guarantor under the Oil-Dri
Guaranty.  No statement, representation, agreement or promise by any
officer, employee or agent of any Holder forms any part of this Joinder
Agreement or the Oil-Dri Guaranty or has induced the making of this Joinder
Agreement or the Oil-Dri Guaranty by any of the New Guarantors or in any way
affects any of the obligations or liabilities of any of the New Guarantors in
respect of the Guarantied Obligations.

     

    4.           This
Joinder Agreement may be executed in counterparts.  Each executed
counterpart shall be deemed to be an original and all counterparts taken
together shall constitute one and the same Joinder
Agreement.  Delivery of an executed signature page to this Joinder
Agreement by any New Guarantor by facsimile transmission shall be as effective
as delivery of a manually executed copy of this Joinder Agreement by such New
Guarantor.

     

    5.           This
Joinder Agreement is a contract made under, and will for all purposes be
governed by and interpreted and enforced according to, the internal laws of the
State of Illinois excluding any conflict of laws rule or principle which might
refer these matters to the laws of another jurisdiction.

     

    6.           This
Joinder Agreement and the Oil-Dri Guaranty shall be binding upon each of the New
Guarantors and the successors of each of the New
Guarantors.   None of the New Guarantors may assign any of its
obligations or liabilities in respect of the Guarantied
Obligations.

     

    IN WITNESS OF WHICH this
Joinder Agreement has been duly executed and delivered by each of the New
Guarantors as of the date indicated on the first page of this Joinder
Agreement.

     

    
      
        
          
            
              	
                      [NEW
      GUARANTOR]

                    	 
	 
      	 
	
                      By:

                    	
                         

                    	 
	
                      Name:

                    	
                         

                    	 
	
                      Title:

                    	
                         

                    	 

            

          

        

      

    

    
      
         

      

      
        C-2

        
          

        

      

      
         

      

    

    EXHIBIT D

     

    [FORM
OF OPINION OF COMPANY’S AND GUARANTORS’ COUNSEL]

     

    [Letterhead of SNR Denton]

     

                            
November 12, 2010

     

    [Purchasers]

    c/o
Prudential Capital Group

    Two
Prudential Plaza, Suite 5600

    Chicago,
Illinois 60601 

     

    Ladies
and Gentlemen:

     

    We have
acted as counsel for Oil-Dri Corporation of America (the “Company”) in
connection with the Note Agreement, dated as of November 12, 2010 among the
Company and you (the “Note Agreement”), pursuant to which the Company has issued
to you today the 3.96% Senior Notes due August 1, 2020 of the Company in the
aggregate principal amount of $18,500,000.  All terms used herein that
are defined in the Note Agreement have the respective meanings specified in the
Note Agreement.  This letter is being delivered to you in satisfaction
of the condition set forth in paragraph 3C of the Note Agreement and with the
understanding that you are purchasing the Notes in reliance on the opinions
expressed herein.

     

    In this
connection, we have examined such certificates of public officials, certificates
of officers of the Company and copies certified to our satisfaction of corporate
documents and records of the Company and of other papers, and have made such
other investigations, as we have deemed relevant and necessary as a basis for
our opinion hereinafter set forth.  We have relied upon such
certificates of public officials and of officers of the Company with respect to
the accuracy of material factual matters contained therein which were not
independently established; nothing, however, has come to our attention to cause
us to believe that any such factual matters are untrue.  With respect
to the opinion expressed in paragraph 3 below, we have also relied upon the
representation made by each of you in paragraph 9A of the Note
Agreement.

     

    Based on
the foregoing, it is our opinion that:

     

    1.           The
Company and each of its Restricted Subsidiaries is a corporation or limited
liability company, as the case may be, duly organized and validly existing in
good standing under the laws of the State of its organization. The Company and
each of its Restricted Subsidiaries is duly qualified to transact business and
is in good standing in each jurisdiction where the ownership of property by it
or the nature of the business conducted by it makes such qualification
necessary. The Company and each of its Restricted Subsidiaries has all requisite
corporate power to conduct its business as currently conducted and as currently
proposed to be conducted.

    
      
         

      

      
        D-1

        
          

        

      

      
         

      

    

     

    2.           The
Company and each Guarantor has all requisite corporate power to execute, deliver
and perform its obligations under the Note Agreement, the Notes and the other
Transaction Documents to which it is a party.  The Note Agreement, the
Notes and the other Transaction Documents have been duly authorized by all
requisite corporate action on the part of the Company and each Guarantor which
is a party thereto and duly executed and delivered by authorized officers of the
Company and each such Guarantor, and are valid obligations of the Company and
each such Guarantor, legally binding upon and enforceable against the Company
and each such Guarantor in accordance with their respective terms, except as
such enforceability may be limited by (a) bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors’ rights generally
and (b) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

     

    3.           It
is not necessary in connection with the offering, issuance, sale and delivery of
the Notes under the circumstances contemplated by the Note Agreement to register
the Notes under the Securities Act or to qualify an indenture in respect of the
Notes under the Trust Indenture Act of 1939, as amended.

     

    4.           The
extension, arranging and obtaining of the credit represented by the Notes do not
result in any violation of Regulation T, U or X of the Board of Governors of the
Federal Reserve System.

     

    5.           The
execution and delivery of the Note Agreement, the Notes and the other
Transaction Documents, the offering, issuance and sale of the Notes and
fulfillment of and compliance with the respective provisions of the Note
Agreement, the Notes and the other Transaction Documents do not 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, or require any authorization, consent, approval,
exemption or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the charter or by-laws or operating
agreement, as the case may be, of the Company or any of its Subsidiaries, any
applicable law (including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made due inquiry with
respect thereto) any agreement (including, without limitation, any agreement
listed in Schedule 8G to the Note Agreement), instrument, order, judgment or
decree to which the Company or any of its Subsidiaries is a party or otherwise
subject.

     

    6.           The
Company is not (a) 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, (b) a “holding company” of a “public utility
company” of an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company”, within the meaning of the Public Utility Holding Company
Act of 2005, as amended, or (c) a “public utility” within the meaning of the
Federal Power Act, as amended.

    
      
         

      

      
        D-2

        
          

        

      

      
         

      

    

    7.           
To our knowledge, there are no actions, suits or proceedings pending or
threatened against or affecting the Company or any of its Subsidiaries or any
property of the Company or any of its Subsidiaries in any court or before any
arbitrator of any kind or before or by any governmental authority either (i)
with respect to the Note Agreement, the Notes or the other Transaction
Documents, or (ii) that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

     

    We
acknowledge that the Company has requested that this opinion letter be rendered
to each of you and to any Transferee, that this opinion letter is rendered with
the intention that each of you and any Transferee may rely on this opinion
letter, and that each of you and any Transferee may rely on this opinion
letter.

     

    Very
truly yours,

    
      
         

      

      
        D-3

        
          

        

      

      
         

      

    

    SCHEDULE
8A(1)

    

    SUBSIDIARIES

    

    
      
        
          
            
              
                	
                        Name of

                        Subsidiary

                      	 
      	
                        Jurisdiction of

                        Organization

                      	 
      	
                        Status

                      	 
      	
                        Significant

                      	 
      	
                        % Shares of  Capital Stock

                        owned by Company, other

                        Subsidiaries, Affiliates and

                        Company’s Directors and

                        Senior Officers

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Oil-Dri
      Corporation of Georgia

                      	 
      	
                        Georgia

                      	 
      	
                        Restricted

                      	 
      	
                        Yes

                      	 
      	
                        100%
      directly owned by Oil-Dri Corporation of America

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Oil-Dri
      Production Company

                      	 
      	
                        Mississippi

                      	 
      	
                        Restricted

                      	 
      	
                        Yes

                      	 
      	
                        100%
      directly owned by Oil-Dri Corporation of America

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Oil-Dri
      Corporation of Nevada

                      	 
      	
                        Nevada

                      	 
      	
                        Restricted

                      	 
      	
                        No

                      	 
      	
                        100%
      directly owned by Oil-Dri Corporation of America

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Mounds
      Production Company, LLC

                      	 
      	
                        Illinois

                      	 
      	
                        Restricted

                      	 
      	
                        Yes

                      	 
      	
                        75%
      directly owned by Mounds Management, Inc.; 25% directly owned by Blue
      Mountain Production Company

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Mounds
      Management, Inc.

                      	 
      	
                        Delaware

                      	 
      	
                        Restricted

                      	 
      	
                        Yes

                      	 
      	
                        100%
      directly owned by Oil-Dri Corporation of America

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Blue
      Mountain Production Company

                      	 
      	
                        Mississippi

                      	 
      	
                        Restricted

                      	 
      	
                        Yes

                      	 
      	
                        100%
      indirectly owned by Oil-Dri Corporation of America

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Taft
      Production Company

                      	 
      	
                        Delaware

                      	 
      	
                        Restricted

                      	 
      	
                        No

                      	 
      	
                        100%
      directly owned by Oil-Dri Corporation of America

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        ODC
      Acquisition Corp.

                      	 
      	
                        Illinois

                      	 
      	
                        Restricted

                      	 
      	
                        No

                      	 
      	
                        100%
      directly owned by Oil-Dri Corporation of America

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Oil-Dri
      S.A.

                      	 
      	
                        Switzerland

                      	 
      	
                        Restricted

                      	 
      	
                        No

                      	 
      	
                        100%
      directly owned by Oil-Dri Corporation of America

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Oil-Dri
      (U.K.) Limited

                      	 
      	
                        United
      Kingdom

                      	 
      	
                        Restricted

                      	 
      	
                        No

                      	 
      	
                        100%
      directly owned by Oil-Dri Corporation of America

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Favorite
      Products Company, Ltd.

                      	
                          

                      	
                        Canada

                      	
                          

                      	
                        Restricted

                      	
                          

                      	
                        No

                      	
                          

                      	
                        100%
      indirectly owned by Oil-Dri Corporation of
  America

                      

              

            

          

        

      

    

     

    
      
         

      

      
        8A(1)-1

        
          

        

      

      
         

      

    

    SCHEDULE
8G

     

    LIST
OF AGREEMENTS RESTRICTING INDEBTEDNESS

     

    As of November ,
2010

     

    Prudential
Insurance Company of America and Prudential Retirement Insurance & Annuity
Company

    $15,000,000
5.89% Senior Notes Due 10/15/15

     

    Teachers
Insurance and Annuity Association of America

    $25,000,000
6.55% Senior Notes Due 4/15/13

     

    Harris
N.A.

    Credit
Agreement dated as of 1/27/06

    
      
         

      

      
        8G1

        
          

        

      

      
         

      

    

    SCHEDULE
8S

     

    EXISTING
INDEBTEDNESS, INVESTMENTS AND LIENS

    

    1.           Oil-Dri
Corporation of America

    Delaware Secretary of
State

    

    
      
        
          
            
              
                	
                        Secured Party

                      	 
      	
                        Filing

                        Number

                      	 
      	
                        Filing

                        Date

                      	 
      	
                        Collateral

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        IBM
      Credit LLC

                      	 
      	
                        22080995884

                      	 
      	
                        3/21/08

                      	 
      	
                        Equipment
      and Software

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Xerox
      Corporation

                      	 
      	
                        20091716189

                      	 
      	
                        6/1/09

                      	 
      	
                        Equipment

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        Banc
      of America Leasing & Capital, L.L.C.

                      	 
      	
                        30357650

                      	 
      	
                        2/10/03

                      	 
      	
                        In
      lieu of filing - Equipment

                      
	
                        -
      continuation

                      	 
      	
                        20074420666

                      	 
      	
                        11/20/07

                      	 
      	 
      
	
                        -
      amendment

                      	 
      	
                        20074475330

                      	 
      	
                        11/27/07

                      	 
      	
                        Amends
      Secured Party’s name from Fleet Capital Corporation to Banc of America
      Leasing & Capital, L.L.C.

                      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                        IBM
      Credit LLC

                      	
                          

                      	
                        61107846

                      	
                          

                      	
                        4/3/06

                      	
                          

                      	
                        Equipment
      and
Software

                      

              

            

          

        

      

    

    

    2.           Oil-Dry
Corporation of Georgia

    Georgia Secretary of State

    

    
      
        
          
            
              
                
                  	
                          Secured Party

                        	 
      	
                          Filing Number

                        	 
      	
                          Filing

                          Date

                        	 
      	
                          Collateral

                        
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                          Doosan
      Infracore America Corporation

                        	 
      	
                          033-2008-012537

                        	 
      	
                          12/18/08

                        	 
      	
                          Equipment

                        
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                          Caterpillar
      Financial Services Corporation

                        	
                            

                        	
                          035-2008-000202

                        	
                            

                        	
                          2/1/08

                        	
                            

                        	
                          Equipment

                        

                

              

            

          

        

      

    

     

    
      
         

      

      
        8S-1

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