Document:

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                                                                   Exhibit 10.13

                           THIRD AMENDED AND RESTATED
                           CONTRACT PURCHASE AGREEMENT

         THIS THIRD AMENDED AND RESTATED CONTRACT PURCHASE AGREEMENT is made as
of June 19, 2002 (the "Agreement") between PATTERSON DENTAL COMPANY, a Minnesota
corporation ("PDC"), PATTERSON DENTAL SUPPLY, INC., a Minnesota corporation
("PDSI"), WEBSTER VETERINARY SUPPLY, INC., a Minnesota corporation ("Webster;"
Webster and PDSI are each referred to as a "Seller" and are collectively
referred to as the "Sellers"), U.S. BANK NATIONAL ASSOCIATION, a national
banking association ("U.S. Bank"), individually and as agent (in such capacity,
the "Agent") for the "Buyers"(as defined below), and THE NORTHERN TRUST COMPANY
("Northern;" U.S. Bank in its individual capacity, and Northern, together with
any other Person that may become a party hereto pursuant to Section 13.4 are
collectively referred to herein as the "Buyers").

                              W I T N E S S E T H:

         WHEREAS, each Seller holds or expects to hold certain contracts
providing for the sale of equipment and supplies for a purchase price payable
over time and secured by a security interest in the purchased equipment and
supplies, which contracts were acquired or will be acquired by the Sellers in
the regular course of their respective business; and

         WHEREAS, the Sellers desire to sell, and the Buyers desire to purchase,
from time to time, certain of such contracts; and

         WHEREAS, PDC, PDSI and the Buyers are parties to that certain Second
Amended and Restated Contract Purchase Agreement dated as of April 28, 2000, as
amended by First Amendment to Amended and Restated Contract Purchase Agreement,
dated as of April 30, 2001 (the "Existing Purchase Agreement"); and

         WHEREAS, the Sellers and the Buyers wish to amend and restate the
Existing Purchase Agreement to decrease the "Contract Purchase Commitment
Amount" thereunder and to make certain other changes;

         NOW THEREFORE, in consideration of the mutual covenants and agreements
of the parties herein contained and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
that the Existing Purchase Agreement is hereby amended and restated to read, and
the parties hereby agree, as follows:

                                    ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS

         Section 1.1  Defined Terms. As used in this Agreement the following
terms shall have the following respective meanings (and such meanings shall be
equally applicable to both the singular and plural form of the terms defined, as
the context may require):

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         Account: A Seller's or a Subsidiary's right to the payment of money
from the sale, lease or other disposition of goods or other assets by that
Seller or a Subsidiary, a rendering of services by that Seller or a Subsidiary,
a loan by that Seller or a Subsidiary, the overpayment of taxes or other
liabilities of that Seller, or otherwise, however such right to payment may be
evidenced, together with all other rights and interests (including all liens and
security interests) that such Seller or a Subsidiary may at any time have
against any account debtor or other party obligated thereon or against any of
the property of such account debtor or other party.

         Accounting Period: Each fiscal month of the Sellers, at the end of
which PDC, as Servicer, and the Sellers reconcile accounting information
relating to the Contracts.

         "Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which PDC
or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company or other business entity.

         Adverse Event: The occurrence of any event that could have a material
adverse effect on the business, operations, property, assets or condition
(financial or otherwise) of PDC and its Subsidiaries as a consolidated
enterprise or on the ability of either Seller, PDC or any other party obligated
thereunder to perform its obligations under this Agreement and the Assignments.

         Affiliate: When used with reference to any Person, (a) each Person
that, directly or indirectly, controls, is controlled by or is under common
control with, the Person referred to, (b) each Person which beneficially owns or
holds, directly or indirectly, twenty-five percent or more of any class of
voting stock of the Person referred to (or if the Person referred to is not a
corporation, twenty-five percent or more of the equity interest), (c) each
Person, twenty-five percent or more of the voting stock (or if such Person is
not a corporation, twenty-five percent or more of the equity interest) of which
is beneficially owned or held, directly or indirectly, by the Person referred
to, and (d) each of such Person's officers, directors, joint venturers and
partners. The term control (including the terms "controlled by" and "under
common control with") means the possession, directly, of the power to direct or
cause the direction of the management and policies of the Person in question.

         Aggregate Repurchase Commitment Amount: The sum of the Individual
Repurchase Commitment Amounts for the Sellers.

         Applicable Commitment Percentage: With respect to each fiscal quarter
of the Sellers, the Applicable Commitment Percentage set forth in the table
below, based on the BD/EBITDA Ratio computed as of the last day of the
immediately preceding fiscal quarter:

                BD/EBITDA Ratio                 Applicable Commitment Percentage

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                  Less than or equal to 1.0                        0.125%
                  Greater than 1.0                                 0.20%

If at any time of determination the applicable BD/EBITDA Ratio cannot be
determined, the Applicable Commitment Percentage shall be 0.20%.

Applicable Margin:": Subject to the last sentence of this definition, with
respect to the period beginning five days after the financial statements and
compliance certificate required by Sections 6.2(b) and (c) are delivered with
respect to any fiscal quarter and ending on the day five days after the date
such financial statements and compliance certificate for the next fiscal quarter
are actually delivered, the percentage specified, based on the BD/EBITDA Ratio
calculated as of the end of the fiscal quarter for which such financial
statements were delivered:

                  BD/EBITDA Ratio                    Applicable Margin

                  Less than or equal to 1.0                0.75%
                  Greater than 1.0                         1.00%

During the period beginning on the date five days after the financial statements
and compliance certificate for a fiscal quarter are required to be delivered
pursuant to Sections 6.2(b) and (c) but are not delivered and ending five days
after the date such financial statements are delivered, the Applicable Margin
shall be as specified for a BD/EBITDA Ratio greater than 1.0 to 1.0. The
Applicable Margin shall change on the date of adjustment notwithstanding any
Fixed Interest Period.

         Assignment: As defined in Section 2.2(i).

         Bank One Securitization: The sale of Contracts to PDC Funding by the
Sellers and the subsequent sale by PDC Funding to Bank One, NA (Main Office
Chicago), as agent.

         Bank One Securitization Documents: The Receivables Sale Agreement dated
as of May 10, 2002 among PDSI, Webster and PDC Funding (including any Sale
Assignment (as defined therein) executed pursuant thereto) and the Receivables
Purchase Agreement dated as of May 10, 2002 among PDC, PDC Funding, Bank One, NA
(Main Office Chicago), as agent, and the financial institutions from time to
time party thereto, in each case as the same may be amended, restated,
supplemented or otherwise modified from time to time.

         BD/EBITDA Ratio: The ratio of (i) the Consolidated Total Debt minus the
obligations arising from the purchase price of Permitted Account Sales and other
forms of off-balance sheet financing as of the last day of a fiscal quarter, to
(ii) EBITDA for the period of four fiscal quarters ending on such date.

         Board: The Board of Governors of the Federal Reserve System or any
successor thereto.

         Business Day: Any day (other than a Saturday, Sunday or legal holiday
in the State of Minnesota) on which national banks are permitted to be open in
Minneapolis, Minnesota.

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         Buyers' Contracts: Collectively, as of any date of determination, all
Contracts that have been purchased by the Buyers pursuant to this Agreement and
that have not been repurchased by the Sellers.

         Buyers' Interest Amount: For any Interest Period, the amount determined
by applying the Buyers' Rate as in effect during such Interest Period to the
outstanding principal balance of the Buyers' Contracts as of the first day of
such Interest Period.

         Buyer's Percentage: With respect to any Buyer, the percentage
equivalent of a fraction, the numerator of which is the Individual Contract
Purchase Commitment Amount of such Buyer and the denominator of which is the
Contract Purchase Commitment Amount.

         Buyers' Rate: Prior to the occurrence of a Termination Event, for any
Interest Period, and except as otherwise provided in Sections 12.2 and 12.3, a
rate per annum equal to the weighted average of the Eurodollar Rates (Reserve
Adjusted) in effect during such Interest Period plus the Applicable Margin, and
from and after the occurrence and during the continuance of a Termination Event,
a floating rate per annum equal to the Prime Rate plus two percent (2.0%) per
annum.

         Closing Date: The Business Day on which the conditions precedent to the
Obligations of the Buyers to purchase the initial Contracts, as set forth in
Article V, have been satisfied.

         Code: The Internal Revenue Code of 1986, as amended, or any successor
statute, together with regulations thereunder.

         Collection Account: As defined in Section 3.1.

         Collection Period: Each period commencing on a Determination Date and
ending on the day immediately preceding the next Determination Date.

         Commitment Fee: As defined in Section 2.4.

         "Consolidated Adjusted EBITDA": As to any Person for any period, the
sum of Consolidated EBIT for such period (i) plus consolidated depreciation and
amortization for such period, (ii) plus extraordinary losses incurred other than
in the ordinary course of business, (iii) minus extraordinary gains realized
other than in the ordinary course of business. For Persons acquired by PDC
during the relevant measurement period, their EBITDA results will be included in
the calculation of Consolidated Adjusted EBITDA as if those Persons were owned
by PDC for the entire reporting period. Consolidated Adjusted EBITDA will be
calculated on a rolling four-quarter basis.

         "Consolidated EBIT": As to any Person and with reference to any period,
Consolidated Net Income plus, to the extent deducted from revenues in
determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii)
expense for federal, state, local and foreign income and franchise taxes paid or
accrued and (iii) extraordinary losses incurred other than in the ordinary
course of business, minus, to the extent included in Consolidated Net Income,
extraordinary gains realized other than in the ordinary course of business, all
calculated for such Person and its Subsidiaries on a consolidated basis.

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         "Consolidated Interest Expense": As to any Person and with reference to
any period, the interest expense of such Person and its Subsidiaries calculated
on a consolidated basis for such period including, without limitation, such
interest expense as may be attributable to capitalized leases, receivables
transaction financing costs, the discount or implied interest component of
off-balance sheet liabilities, all commissions, discounts and other fees and
charges owed with respect to letters of credit and net mark-to-market exposure.

         "Consolidated Net Income": As to any Person and with reference to any
period, the net income (or loss) of such Person and its Subsidiaries calculated
on a consolidated basis for such period, excluding any non-cash charges or gains
which are unusual, non-recurring or extraordinary.

         "Consolidated Tangible Net Worth": As of any date of determination, the
consolidated total stockholders' equity (including capital stock, additional
paid in capital and retained earnings) of PDC and its Subsidiaries determined in
accordance with GAAP, less goodwill and other intangible assets.

         "Consolidated Total Debt": (a) all indebtedness of PDC and its
Subsidiaries, on a consolidated basis, reflected on a balance sheet prepared in
accordance with GAAP, plus, without duplication (b) the face amount of all
outstanding letters of credit in respect of which PDC or any Subsidiary has any
reimbursement obligation and the principal amount of all contingent obligations
of PDC and its Subsidiaries, plus obligations associated with capitalized
leases, plus obligations arising from Permitted Account Sales (including the
Bank One Securitization) and other forms of off-balance sheet financing,
including receivables transaction attributed indebtedness.

         Contract: Collectively, a contract evidencing a sale of dental
equipment and supplies, in the case of PDSI, or veterinary equipment and
supplies, in the case of Webster, entered into by a Seller, as the seller of
such equipment and supplies, in the regular course of its business, or an Eagle
Soft Contract, and all written agreements (and each of them) purporting to
modify the terms of any such contract, and includes, without limitation, all
related security interests and any and all rights to receive payments which are
due pursuant thereto.

         Contract Default: With respect to any Buyers' Contract: (i) the failure
of the Obligor(s) to pay within one hundred twenty (120) days of the due date
any amount payable thereunder; (ii) the writing off of such Buyers' Contract in
accordance with the customary credit and collection policies of the Sellers; or
(iii) the occurrence of any default under the terms of the Buyers' Contract or
any Related Security Document (other than a payment default) which continues for
the shorter of any grace or cure period provided in the Buyers' Contract or
Related Security Document or ten days from the date that any notice of such
nonpayment default required by the Buyers' Contract or the Related Security
Document is given to the Obligor(s).

         Contract Purchase Commitment: The obligation of the Buyers to purchase
Contracts from the Sellers, on the terms and subject to the conditions and
limitations set forth in this Agreement, on a Purchase Date in an aggregate
principal amount not to exceed the remainder of: (x) the Contract Purchase
Commitment Amount, minus (y) the sum of (i) the aggregate principal

                                       -5-

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amount outstanding on all Buyers' Contracts as of the relevant Purchase Date,
plus (ii) the aggregate principal portion of all payments by Obligors under
Buyers' Contracts that have not been remitted to the Agent for the benefit of
the Buyers as of the relevant Purchase Date pursuant to Section 4.1(a).

         Contract Purchase Commitment Amount: As of any date, the sum of the
Individual Contract Purchase Commitment Amounts of all Buyers.

         Contract Purchase Commitment Period: The period commencing on the
Closing Date and ending on the Business Day preceding the Contract Purchase
Termination Date.

         Contract Purchase Termination Date: The earliest of (a) April 26, 2003,
as the same may be extended from time to time in writing by the Buyers, in their
sole and absolute discretion, at the request of the Sellers, (b) the date on
which the Contract Purchase Commitment is terminated pursuant to Section 11.2,
(c) the date on which the Contract Purchase Commitment Amount is reduced to zero
pursuant to Section 2.3, or (d) the date on which the sum of the Repurchase
Prices of all Contracts repurchased by the Sellers pursuant to Section 7.1(b)
since April 26, 2002 equals or exceeds five percent (5%) of the average of the
aggregate Net Ending Principal Balance for the 12 preceding Settlement Dates.

         Determination Date: The last day of every Accounting Period.

         Discounted Contract: A Contract identified in the relevant Purchase
Request as a Contract (i) with respect to which the principal amount exceeds the
remainder of (x) the aggregate purchase price for all equipment and supplies
subject to such Contract that would be charged by the Related Seller for a cash
sale, minus (y) any downpayment by the relevant Obligor, or (ii) providing for a
single grace period of not more than 150 days during which no payments will be
due and no interest will accrue with respect to such Contract.

         Eagle Soft Contract: Collectively, a contract evidencing a sale of
dental software entered into by PDSI as the seller or licensor of such dental
software in the regular course of its business, and all written agreements (and
each of them) purporting to modify the terms of any such contract, and
including, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto.

         EBITDA: For any period of determination, the consolidated net income of
PDC and its Subsidiaries before deductions for interest expense, income taxes,
depreciation and amortization, all determined in accordance with GAAP.

         Eligible Contract: A Contract:

                  (i)  the Obligor of which is a United States resident, is not
         an Affiliate of either Seller, and is not a government or a
         governmental subdivision or agency;

                  (ii) the principal Obligor of which is a dentist, veterinarian
         or a professional association, partnership or other Person that
         provides dental or veterinary services to consumers, or a dental or
         veterinary laboratory or other person who provides dental or veterinary
         services to other Persons who in turn provide dental or veterinary
         services to

                                       -6-

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         consumers, and that on the Purchase Date with respect to such Contract
         has an ongoing business relationship with the Related Seller;

                  (iii)  with respect to which no payment of principal, interest
         or other amounts is past due by more than sixty (60) days as of the
         date that such Contract is proposed to be sold to the Buyers hereunder;

                  (iv)   the Obligor of which is not the Obligor of any Contract
         in respect of which any payment of principal, interest or other amounts
         is past due by more than sixty (60) days as of the date that such
         Contract is proposed to be sold to the Buyers hereunder and is not
         otherwise in material default under any other contract or agreement
         with a Seller;

                  (v)    which is denominated and payable only in United States
         dollars in the United States;

                  (vi)   which has been duly authorized (if the Obligor thereon
         is not a natural person) and which is in full force and effect and
         constitutes the legal, valid and binding obligation of the Obligor of
         such Contract enforceable against such Obligor in accordance with its
         terms;

                  (vii)  which does not contravene in any material respect any
         laws, rules or regulations applicable thereto (including, without
         limitation, laws, rules and regulations relating to truth in lending,
         fair credit billing, fair credit reporting, equal credit opportunity,
         fair debt collection practices and privacy) and with respect to which
         the Related Seller is not in violation of any such law, rule or
         regulation in any material respect;

                  (viii) which has not been modified or extended except in
         compliance with all applicable requirements of the Related Seller's
         normal credit policies;

                  (ix)   which has not been acquired by the Related Seller from
         another Person;

                  (x)    which constitutes chattel paper or an instrument as
         such terms are used in the Uniform Commercial Code of the State of
         Minnesota;

                  (xi)   which, pursuant to its terms, is required to be paid in
         full on or before the Final Maturity Date;

                  (xii)  which is secured by a valid and perfected, first
         priority security interest in the assets sold to the principal Obligor
         by the Related Seller pursuant to such Contract and, if the principal
         amount thereof exceeds $10,000, with respect to which the Related
         Seller has delivered to the Agent UCC financing statements filed in
         each jurisdiction necessary to perfect such security interest;

                  (xiii) which (A) does not require the Obligor under such
         Contract to consent to the transfer, sale or assignment of the rights
         of the Related Seller in order for the Buyers or the Agent to receive
         payments under such Contract or the right to enjoy the benefits of

                                       -7-

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         any Related Security therefor, and (B) does not restrict the ability of
         the Buyers or the Agent to exercise their rights under this Agreement;

                  (xiv)   which is not owed by an Obligor that is a debtor in
         any proceeding under the Bankruptcy Code or comparable provision of
         state or foreign law or an assignor for the benefit of creditors;

                  (xv)    which is not subject to any off-set, counterclaim or
         other claimed defense;

                  (xvi)   with respect to which the liability of the Obligor
         thereon is not conditioned upon the approval of the Obligor of any
         goods sold or financed in connection therewith, and no such goods are
         subject to any repurchase obligations on the part of the Seller or any
         return privilege on the part of such Obligor;

                  (xvii)  under which the initial payment is or was due no more
         than one month after the date the equipment sold thereunder was
         delivered, and that is payable in monthly installments, consisting of
         either level principal installments, together with accrued interest, or
         level payments of principal and interest, except that: (1) Contracts
         having an aggregate outstanding balance at the time of determination of
         up to five percent (5%) of the aggregate outstanding balance for all
         Buyers' Contracts existing as of the date of determination may be
         Eligible Contracts despite having final balloon principal payments that
         are less than or equal to forty-five percent (45%) of the initial
         principal amount of such Contracts, (2) Contracts having an aggregate
         outstanding balance at the time of determination of up to ten percent
         (10%) of the aggregate outstanding balance for all Buyers' Contracts
         existing as of the date of determination may be Eligible Contracts
         despite providing for payments of interest only for a period of up to
         twelve months after the date of the Contract, and (3) Contracts having
         an aggregate outstanding balance at the time of determination of up to
         fifteen percent (15%) of the aggregate outstanding balance for all
         Buyers' Contracts existing as of the date of determination may be
         Eligible Contracts despite providing a single grace period of up to one
         hundred twenty (120) days (or, with respect to Discounted Contracts, as
         and to the extent provided in the definition thereof, one hundred fifty
         (150) days) during which no payment is due;

                  (xviii) that is evidenced by an Installment Sale Contract -
         Security Agreement or Software Agreement in substantially the form of
         one of the four forms of Contract attached hereto as Exhibit A, or
         another form of contract approved by the Majority Buyers in their sole
         and unlimited discretion;

                  (xix)   that is owned by the Related Seller free and clear of
         any Lien or any claim of any other Person;

                  (xx)    under which at least seventy-five percent (75%) of the
         principal amount outstanding represents the purchase price of equipment
         (unless the Contract is an Eagle Soft Contract); and

                  (xxi)   which has an interest rate at least equal to the
         Buyers' Rate plus 1% per annum as of the relevant Purchase Date and
         under which the principal amount outstanding does not exceed the
         remainder of (x) the aggregate purchase price for all

                                       -8-

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         equipment and supplies subject to such Contract that would be charged
         by the Related Seller for a cash sale, minus (y) any downpayment by the
         relevant Obligor, except that Contracts having an aggregate Purchase
         Price of up to fifteen percent (15%) of the aggregate outstanding
         balance for all Buyers' Contracts as of the date of determination may
         be Eligible Contracts despite being Discounted Contracts.

                  (xxii)  which, if an Eagle Soft Contract, has a final maturity
         of no more than 36 months after the date of such Eagle Soft Contract
         and an aggregate outstanding balance at the time of determination that
         when added to the outstanding balance of all Buyers' Contracts that are
         Eagle Soft Contracts, does not exceed ten percent (10%) of the
         outstanding balance of all Buyers' Contracts as of the date of
         determination.

                  (xxiii) which excludes residual value and any maintenance
         component.

                  (xxiv)  which provides for aggregate payments thereunder in an
         amount not greater than $250,000.

                  (xxv)   the Purchase Price of which, together with the
         outstanding balance of all Contracts with the same Obligor as the
         Contract, does not exceed $250,000.

                  (xxvi)  which, if originated by Webster, has an outstanding
         balance that, when added to the outstanding balance of all other
         Buyers' Contracts originated by Webster, does not exceed 5% of the
         outstanding balance of all Buyers' Contracts as of the date of
         determination.

         ERISA: The Employee Retirement Income Security Act of 1974, as amended,
and any successor statute, together with regulations thereunder.

         ERISA Affiliate: Any trade or business (whether or not incorporated)
that is a member of a group of which a Seller is a member and which is treated
as a single employer under Section 414 of the Code.

         Eurodollar Business Day: A Business Day which is also a day for trading
by and between banks in United States dollar deposits in the interbank
Eurodollar market and a day on which banks are open for business in New York
City.

         Eurodollar Interbank Rate: With respect to each Interest Period or, if
elected by the Sellers pursuant to Section 2.7, a fixed rate period, the average
offered rate for deposits in United States dollars (rounded upward, if
necessary, to the nearest 1/16 of 1%) for delivery of such deposits on the first
day of such Interest Period or Fixed Rate Period, for the number of days in such
Interest Period or Fixed Rate Period, which appears on the Telerate page 3750 as
of 11:00 a.m., London time (or such other time as of which such rate appears)
two Eurodollar Business Days prior to the first day of such Interest Period or
Fixed Rate Period, or the rate for such deposits determined by the Agent at such
time based on such other published service of general application as shall be
selected by the Agent for such purpose (including, without limitation, Reuters
Screen LIBO page); provided, that in lieu of determining the rate in the
foregoing manner, the Agent may determine the rate based on rates at which
United States dollar deposits are offered to the Agent in the interbank
Eurodollar market at such time for delivery in

                                       -9-

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Immediately Available Funds on the first day of such Interest Period or Fixed
Rate Period in an amount approximately equal to the purchase by the Agent to
which such Interest Period or Fixed Rate Period is to apply (rounded upward, if
necessary, to the nearest 1/16 of 1%). "Telerate page 3750 " means the display
designated as such on Telerate System Incorporated (or such other page as may
replace page 3750 or that service for the purpose of displaying London interbank
offered rates of major banks for U.S. Dollar deposits). "Reuters Screen LIBO
page" means the display designated as page "LIBO" on the Reuters Monitor Money
Rate Screen (or such other page as may replace the LIBO page on such service for
the purpose of displaying London interbank offered rates of major banks for
United States dollar deposits).

         Eurodollar Rate (Reserve Adjusted): With respect to each Interest
Period or Fixed Rate Period, the rate (rounded upward, if necessary, to the next
one sixteenth of one percent) determined by dividing the Eurodollar Rate for
such Interest Period or Fixed Rate Period by 1.00 minus the Eurodollar Reserve
Percentage.

         Eurodollar Reserve Rate: As of any day, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board for
determining the maximum reserve requirement (including any basic, supplemental
or emergency reserves) for a member bank of the Federal Reserve System, with
deposits comparable in amount to those held by the Agent, in respect of
"Eurocurrency Liabilities" as such term is defined in Regulation D of such
Board. The rate of interest applicable to any outstanding purchase shall be
adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.

         Final Maturity Date: April 26, 2008, as the same may be extended from
time to time in writing by the Buyers, in their sole and absolute discretion, at
the request of the Sellers.

         Financial Officer: With respect to each Seller, its Chief Executive
Officer, Chief Financial Officer, Treasurer or Controller.

         Financing Statements: As defined in Section 2.6.

         Fixed Rate Period: As defined in Section 2.7.

         Fixed Rate Tranches: As defined in Section 2.7.

         GAAP: Generally accepted accounting principles as applied in the
preparation of the audited financial statement of PDC referred to in Section
8.5.

         Holding Account: An interest-bearing deposit account belonging to the
Agent, for the benefit of the Banks, into which either Seller may be required to
make deposits pursuant to the provisions of this Agreement, such account to be
under the sole dominion and control of the Agent and not subject to withdrawal
by either Seller, with any amounts therein to be held for application toward
payment of the depositing Seller's repurchase obligations with respect to any
outstanding Buyers' Contracts.

         Immediately Available Funds: Funds with good value on the day and in
the city in which payment is received.

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         Individual Contract Purchase Commitment Amount: With respect to any
Buyer, initially the amount set opposite such Buyer's name on the signature
pages hereof as its Individual Contract Purchase Commitment Amount, as the same
may be reduced or increased from time to time pursuant to Section 2.3 or Section
13.4.

         Individual Repurchase Commitment Amount: On any date of determination
during the Contract Purchase Commitment Period with respect to each Seller, 25%
of the Net Ending Principal Balance for such Seller on the most recent
Settlement Date, and on any date of determination occurring after the Contract
Purchase Commitment Period, 25% of the Net Ending Principal Balance for such
Seller on the first Settlement Date occurring on or after the Termination Date
minus the sum of the Repurchase Prices paid by such Seller since such Settlement
Date.

         Intercreditor Agreement: The Intercreditor Agreement dated as of June
19, 2002 among Bank One, NA (Main Office Chicago), the Agent, the Sellers, PDC
and PDC Funding.

         Interest Period: Each period beginning on a Settlement Date and ending
on the day before the next Settlement Date. The final Interest Period shall end
on the Final Maturity Date.

         Inventory: All goods held by a Seller or any Subsidiary for sale or
lease, or leased by a Seller or any Subsidiary, or furnished or to be furnished
by the Seller or any Subsidiary under any contract of service, or held by a
Seller or any Subsidiary as raw materials, work in process or materials used or
consumed in a business, and all returned and repossessed goods.

         Lien: With respect to any Person, any security interest, mortgage,
pledge, lien, charge, encumbrance, title retention agreement or analogous
instrument or device (including but not limited to the interest of each lessor
under any capitalized lease), in, of or on any assets or properties of such
Person, now owned or hereafter acquired, whether arising by agreement or
operation of law.

         Majority Buyers: At any time, if there are two or fewer Buyers, Buyers
whose Buyer's Percentages aggregate 100%; if there are more than two Buyers,
Buyers whose Buyer's Percentages aggregate at least 60%.

         Multiemployer Plan: A multiemployer plan, as such term is defined in
Section 4001 (a) (3) of ERISA, which is maintained (on the Closing Date, within
the five years preceding the Closing Date, or at any time after the Closing
Date) for employees of either Seller or any ERISA Affiliate.

         Net Ending Principal Balance: On any Settlement Date for any Seller,
the sum of the outstanding principal balances of all Buyers' Contracts purchased
from such Seller as of such Settlement Date.

         Obligor: Any Person who or which is directly or indirectly obligated to
pay any Contract, including, without limitation, any guarantor and any
accommodation maker.

         PBGC: The Pension Benefit Guaranty Corporation, established pursuant to
Subtitle A of Title IV of ERISA, and any successor thereto or to the functions
thereof.

                                       -11-

<PAGE>

         PDC Documents: As defined in Section 5.1(a).

         PDC Guaranty: The amended and restated guaranty of PDC dated as of June
19, 2002, guaranteeing the obligations of PDSI and Webster to the Buyers under
this Agreement.

         PDC Funding: PDC Funding Company, LLC, a Minnesota limited liability
company.

         PDSI Documents: As defined in Section 5.1(a).

         Permitted Account Sales: Sales (including licenses), with limited
recourse, or no recourse, (i) by PDSI or Webster of Accounts derived from sales
on contract of furnishings and equipment (but not, however, open-account sales
of supplies and not accounts derived from provision of services) or (ii) by
PDSI, Webster or PDC Funding under the Bank One Securitization Documents.

         Permitted Liens: Any of the following: (a) Liens for taxes, assessments
or governmental charges or levies not yet due and payable, except to the extent
that such Liens materially adversely affect a Seller's or PDC's property or
their respective use of such property in the ordinary course of their respective
business, and adequate reserves with respect thereto have been set aside on a
Seller's or PDC's books in accordance with GAAP; (b) Liens imposed by law, such
as landlords', materialmen's, mechanics', carriers', workmen's, employees' and
repairmen's liens except to the extent that such Liens materially and adversely
affects a Seller's or PDC's title to its property or their respective use of
such property in the ordinary course of their respective business, and adequate
reserves with respect thereto which have been set aside on a Seller's or PDC's
books in accordance with GAAP; (c) pledges or deposits to secure payment of
workers' compensation, unemployment insurance, old age pensions or other social
security obligations, in the ordinary course of business of a Seller or a
Subsidiary; (d) any security interest pertaining to the Permitted Account Sales;
(e) the landlord's interest in any security deposit provided by a Seller or a
Subsidiary under any lease of real property used in its business; and (f) any
Lien securing either a loan whose proceeds were used by a Seller or a Subsidiary
to acquire assets or a capitalized lease, provided that such Lien does not
extend to any assets other than those acquired with such loan proceeds or
subject to such capitalized lease and that the aggregate amount payable under
all such loans and capitalized leases at any time does not exceed $5,000,000;
provided, however, that none of the Liens listed in clauses (a) through (c) or
(e) above shall constitute "Permitted Liens" on and after the commencement in
respect thereof of any enforcement, collection, execution, levy or foreclosure
or forfeiture proceeding, including any setoff, which remains unstayed or
unbonded for thirty (30) consecutive days.

         Person: Any natural person, corporation, partnership, limited
partnership, limited liability company, joint venture, firm, association, trust,
unincorporated organization, government or governmental agency or political
subdivision or any other entity, whether acting in an individual, fiduciary or
other capacity.

         Plan: Each employee benefit plan (whether in existence on the Closing
Date or thereafter instituted), as such term is defined in Section 3 of ERISA,
maintained for the benefit of employees, officers or directors of the Seller or
of any ERISA Affiliate, other than a Multiemployer Plan.

                                       -12-

<PAGE>

         Positive Interest Differential: As defined in Section 4.1(b).

         Prime Rate: The rate of interest from time to time publicly announced
by the Agent as its "prime rate." The Agent may lend to its customers at rates
that are at, above or below the Prime Rate. For purposes of determining any
interest rate hereunder which is based on the Prime Rate, such interest rate
shall change as and when the Prime Rate shall change.

         Purchase Date: The Closing Date and any subsequent Settlement Date
selected by a Seller pursuant to Section 2.1 hereof on which a purchase of
Contracts is made pursuant to this Agreement.

         Purchase Price: With respect to each Contract other than a Discounted
Contract, the aggregate principal amount outstanding thereunder on the Purchase
Date with respect to that Contract; with respect to each Discounted Contract, an
amount equal to the present value of the amount remaining unpaid under such
Contract on the Purchase Date with respect to that Contract, discounted to its
present value as of such Purchase Date using as the discount rate the Related
Seller's "book basis yield" for that Contract, as reflected on the Related
Seller's books and disclosed to the Buyers in the relevant Purchase Request,
which discount rate shall not be less than the Buyers' Rate in effect on the
Purchase Date with respect to such Contract.

         Purchase Request: As defined in Section 2.2.

         Quarterly Payment Date: The last Business Day of each March, June,
September and December, and the Final Maturity Date.

         Related Security: With respect to any Contract, any property or
interest in property securing payment of that Contract, together with any
related guaranty, surety bond, insurance policy or other document or instrument
given as assurance for the repayment of that Contract.

         Related Security Document: With respect to any Contract, any security
agreement, financing statement, mortgage, deed of trust or similar instrument,
guaranty, pledge agreement, letter of credit or other agreement, instrument or
document evidencing, setting forth or otherwise pertaining to the Related
Security for that Contract.

         Related Seller: With respect to any Contract, the Seller that
originated such Contract and that delivers a Purchase Request with respect to
such Contract to the Buyers.

         Reportable Event: A reportable event as defined in Section 4043 of
ERISA and the regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation has waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any waiver in accordance with
Section 412(d) of the Code.

         Repurchase Price: With respect to any Contract(s) repurchased by a
Seller hereunder, the outstanding principal balance of such Contract(s) as of
the immediately preceding Settlement Date, plus interest thereon at the Buyers'
Rate to the date of repurchase, together with any other

                                      -13-

<PAGE>

amount due under this Agreement (including, without limitation, Section 4.1
hereof) with respect to such Contract.

         Servicer: PDC, in its capacity as agent and servicer for the Buyers
hereunder.

         Servicing Fee: As defined in Section 4.2.

         Settlement Date: The third Friday of each Accounting Period, or if such
date is not a Business Day, then the next succeeding Business Day; provided,
however, that at the Servicer's option, the Settlement Date shall be postponed
by one Business Day for each holiday of the Servicer that occurs during the
relevant Accounting Period and prior to the date that would otherwise be the
Settlement Date (but no Settlement Date shall be postponed by more than three
Business Days); provided further, however, that June 19, 2002 shall also be a
Settlement Date.

         Subsidiary: Any corporation or other entity of which more than fifty
percent (50%) of the securities or other ownership interests having ordinary
voting power for the election of the board of directors or other Persons
performing similar functions are owned by PDC either directly or through one or
more Subsidiaries.

         Termination Event: Any event described in Section 11.1.

         Transaction Documents: The PDC Documents, the PDSI Documents and the
Webster Documents.

         Unmatured Termination Event: Any event which, with the giving of notice
(whether such notice is required under Article XI, under some other provision of
this Agreement, or otherwise) or lapse of time, or both, would constitute a
Termination Event.

         Unused Contract Purchase Commitment: As of any date of determination,
the amount (if any) by which the Contract Purchase Commitment Amount exceeds the
sum of (x) the principal amount outstanding under all Buyers' Contracts, all as
of the date of determination, plus (y) the aggregate principal amount of all
payments by Obligors under Buyers' Contracts that have not been remitted to the
Agent for the benefit of the Buyers pursuant to Section 4.1(a).

         Webster Documents: As defined in Section 5.1(a).

         Section 1.2 Accounting Terms and Calculations. Except as may be
expressly provided to the contrary herein, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder shall be made
in accordance with GAAP, consistently applied. To the extent any change in GAAP
affects any computation or determination required to be made pursuant to this
Agreement, such computation or determination shall be made as if such change in
GAAP had not occurred unless the Sellers and the Buyers agree in writing on an
adjustment to such computation or determination to account for such change in
GAAP.

         Section 1.3 Computation of Time Periods. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
unless otherwise stated the word "from" means "from and including" and the word
"to" or "until" each means "to but excluding".

                                      -14-

<PAGE>

         Section 1.4 Other Definitional Terms. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. References to Sections, Exhibits, schedules and like references are
to this Agreement unless otherwise expressly provided. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". Unless the context in which used herein otherwise clearly requires,
"or" has the inclusive meaning represented by the phrase "and/or".

                                   ARTICLE II
                         TERMS OF THE CONTRACT PURCHASES

         Section 2.1 Purchase and Sale of Contracts; Purchase Price. Subject to
the terms and conditions of this Agreement, on such Purchase Date or Purchase
Dates prior to the Contract Purchase Termination Date with respect to which one
or both Sellers shall have given the Agent, on behalf of the Buyers, a timely
Purchase Request pursuant to Section 2.2, the Related Seller will sell to the
Buyers and the Buyers will severally purchase from the Related Seller undivided
percentage ownership interests in all Eligible Contracts tendered by the Related
Seller, together with all of the Related Seller's right, title and interest in
and to any Related Security, any Related Security Documents and the proceeds of
any of the foregoing; provided, however, that the Buyers will not be required to
purchase any Contract that would cause:

                     (i)   the sum of (i) the aggregate principal amount
                 outstanding under all Buyers' Contracts as of the relevant
                 Purchase Date, plus (ii) the aggregate principal portion of all
                 payments by Obligors under Buyers' Contracts that have not been
                 remitted to the Agent for the benefit of the Buyers as of the
                 relevant Purchase Date pursuant to Section 4.1(a),

                 to exceed

                     (ii)  the Contract Purchase Commitment Amount,

all determined as of the relevant Purchase Date; and

provided further that the Buyers shall not be required to purchase any Contracts
from a Seller unless the aggregate Purchase Price of the Contracts to be
purchased from that Seller on that Purchase Date is $300,000 or more. Undivided
percentage ownership interests in Eligible Contracts tendered by a Seller
hereunder shall be purchased by the Buyers ratably in the proportion of their
respective Individual Contract Purchase Commitment Amounts. The price to
be paid by the Buyers to each Seller on each Purchase Date shall equal the
aggregate Purchase Price of all Contracts tendered to the Buyers by that Seller
and accepted by the Buyers on such Purchase Date. The sales of Contracts
contemplated hereby shall be made pursuant to and in reliance upon the
representations, warranties and agreements of the Sellers contained herein and
in the documents delivered pursuant hereto, and shall be without recourse
against the Sellers except as provided herein.

         Section 2.2 Procedures For Contract Purchases. Not less than five
Business Days before the date a Seller desires to sell Contracts to the Buyers
hereunder, that Seller shall deliver to the Agent a written request to buy
Contracts in the form of Exhibit C attached hereto or

                                      -15-

<PAGE>

another form acceptable to the Majority Buyers (a "Purchase Request"), setting
forth (a) the proposed Purchase Date, (b) the Contracts that Seller proposes to
sell on such date, identified by the name of the Obligor under, the principal
amounts outstanding under, and the number of months remaining until the final
maturity date with respect to, each Contract, and specifying which Contracts, if
any, are Discounted Contracts and the Seller's "book basis yield" with respect
to each such Discounted Contract, and (c) the Purchase Price for such Contracts.
The Agent shall promptly notify each other Buyer of the receipt of such Purchase
Request, the matters specified therein, and of such Buyer's ratable share of the
requested Purchase Price (which shall be that Buyer's respective Buyer's
Percentage thereof). The Agent and the Buyers shall have an opportunity prior to
each Purchase Date to inspect all documentation relating to the Contracts
tendered for sale and the Related Security as the Agent or the Buyers shall
request and shall in no event be obligated to purchase any Contract that the
Agent, in its reasonable discretion, determines is not an Eligible Contract. On
or before each Purchase Date:

                     (i)   the Related Seller shall deliver to the Agent an
                 assignment in the form of Exhibit D hereto (including Schedule
                 I thereto) (an "Assignment"), which will be effective to
                 transfer to the Agent, for the benefit of the Buyers, as of
                 such Purchase Date all of the Related Seller's right, title and
                 interest in, to and under all Contracts tendered for purchase
                 by that Related Seller and any Related Security and Related
                 Security Documents (and such additional forms of assignment or
                 conveyance concerning the Related Security and Related Security
                 Documents as shall be necessary or appropriate, in the Agent's
                 sole determination, to transfer of record the Related Seller's
                 rights therein to the Buyer);

                     (ii)  the Related Seller shall conspicuously stamp the
                 first page of each Contract tendered for purchase with the
                 following notice: "This Contract has been assigned to U.S. Bank
                 National Association, as Agent. Any purchase of this Contract
                 would violate the rights of U.S. Bank National Association";

                     (iii) the Related Seller shall deliver to the Servicer the
                 original executed Contracts tendered for purchase by that
                 Related Seller to be held by the Servicer in accordance with
                 Section 3.8 hereof; and

                     (iv)  the Related Seller shall place all records maintained
                 by that Related Seller relating to such tendered Contracts in
                 separate files with appropriate markings to indicate the
                 Buyers' ownership thereof.

         On each Purchase Date, each Buyer shall provide its Buyer's Percentage
of the requested Purchase Price to the Agent in Immediately Available Funds not
later than 3:00 p.m., Minneapolis time. Unless (i) the Agent determines that any
applicable condition specified in Article V has not been satisfied, or (ii) one
or more of the Buyers does not provide its Buyer's Percentage of the requested
Purchase Price in a timely fashion, the Agent will pay to each Seller, in
Immediately Available Funds, the Purchase Price of the Contracts (if any)
tendered by that Seller and accepted by the Buyers, such payment to be made at
the Agent's principal office in Minneapolis, Minnesota in immediately available
funds not later than 4:00 p.m. (Minneapolis time) on the requested Purchase
Date.

                                      -16-

<PAGE>

         Section 2.3 Optional Reduction of Contract Purchase Commitment Amount.
The Sellers may, at any time, upon not less than five Business Days prior
written notice to the Agent, executed by both Sellers, reduce the Contract
Purchase Commitment Amount, with any such reduction in a minimum amount of
$1,000,000, or, if more, in an integral multiple of $500,000; provided, however
that the Contract Purchase Commitment Amount may not be reduced to an amount
less than the principal amount outstanding under all Buyers' Contracts as of the
date of the reduction.

         Section 2.4 Commitment and Agent's Fee. The Sellers hereby jointly and
severally agree to pay to the Buyers a commitment fee (the "Commitment Fee") in
an amount equal to the Applicable Commitment Percentage per annum of the average
daily Unused Contract Purchase Commitment. Such Commitment Fees are payable in
arrears on each Quarterly Payment Date. The Commitment Fees shall be computed on
the basis of actual days elapsed and a year of 360 days. The Sellers hereby
jointly and severally agree to pay to the Agent on each anniversary of the
Closing Date, for the Agent's own account, a yearly agent's fee in the amount
provided in a fee letter dated April 28, 2000 from the Agent to PDC. No Buyer
(other than the Agent) shall be entitled to any portion of such fee.

         Section 2.5 Payments. Payments and prepayments of principal and
interest on the Contracts and all fees, expenses and other obligations under
this Agreement shall be made without setoff or counterclaim in Immediately
Available Funds (a) if to the Agent for the benefit of the Buyers or for its own
account, not later than 12:00 noon (Minneapolis time) on the dates called for
under this Agreement at its main office in Minneapolis, Minnesota, and (b) if to
a Seller, by deposit of the same into that Seller's operating account with the
Agent not later than 12:00 noon (Minneapolis time) on such date. Funds received
after such time shall be deemed to have been received on the next Business Day.
Whenever any payment to be made hereunder shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time, in the case of a payment of principal,
shall be included in the computation of any interest on such principal payment.
In the event either Seller for any reason fails to pay or remit any amount or
charge due hereunder, such overdue amount shall bear interest from the due date
thereof until paid at the Prime Rate plus two percent (2%) per annum.

         Section 2.6 Security Interest. The Sellers and the Buyers intend that
the transactions contemplated hereby shall be treated as a purchase and sale of
the Contracts, Related Security, Related Security Documents and proceeds for all
purposes (except, to the extent permitted by law, for tax purposes) and not as a
lending transaction. In the event the transactions contemplated hereby are
determined not to constitute purchases and sales despite the intentions of the
parties, (a) each Seller shall be deemed to have granted to the Agent, for the
benefit of the Buyers, and each Seller does hereby grant to the Agent, for the
benefit of the Buyers, a security interest in and to that Seller's interest in
each Contract identified in an Assignment or delivered to the Agent, the Related
Security with respect to such Contract, the Related Security Documents with
respect to such Contract, any amounts in the Holding Account, and all proceeds
of all of the foregoing, to secure all of that Seller's obligations under this
Agreement, whether now existing or hereafter created, the Servicer's obligations
to remit proceeds of the Contracts and make other payments to the Bank as
provided in Article IV, and that Seller's obligations to repurchase the

                                      -17-

<PAGE>

Contracts as provided in Article VII, and (b) the Financing Statements shall
perfect such security interest.

         Section 2.7 Continuation of Buyer's Rate. PDC may elect to fix the
Eurodollar Interbank Rate with respect to any portion of the outstanding
principal balance of the Buyers' Contracts (each such portion, a "Fixed Rate
Tranche") for a period of two, three, six or (if acceptable to all of the
Buyers, in their sole and absolute discretion) nine or twelve Interest Periods
(each a "Fixed Rate Period"), by giving the Agent notice, which may be by
telephone, given so as to be received by the Agent not later than 10:00 a.m.,
Minneapolis time, three Business Days prior to the first day of such Fixed Rate
Period (which must be a Settlement Date). No Fixed Rate Tranche may be elected
if, after giving effect thereto, the scheduled amortization of the Buyers'
Contracts would result in any portion of any Fixed Rate Tranche being repaid
before the end of the Fixed Rate Period applicable thereto. Fixed Rate Tranches
may only be elected in amounts of $500,000 or an integral multiple thereof. Each
such notice shall specify (i) the portion of the outstanding principal balance
of the Buyers' Contracts to be included in such Fixed Rate Tranche and (ii) the
number of Interest Periods to be included in such Fixed Rate Period. For all or
any portion of the outstanding principal balance of the Buyers' Contracts with
respect to which no election pursuant to this Section 2.7 is effective, the
Eurodollar Interbank Rate and the Eurodollar Rate (Reserve Adjusted) will be
determined for a single Interest Period. No election pursuant to this Section
2.7 may be made if a Termination Event or Unmatured Termination Event has
occurred and is continuing. No more than five Fixed Rate Tranches may be
outstanding at any one time.

         Section 2.8 Funding Losses; Fixed Rate Tranches. PDC shall compensate
each Buyer, upon its written request, for all losses, expenses and liabilities
(including any interest paid by such Buyer to lenders of funds borrowed by it to
make or carry Fixed Rate Tranches to the extent not recovered by such Buyer in
connection with the re-employment of such funds and including loss of
anticipated profits) which such Buyer may sustain if, for whatever reason, any
principal amount of a Fixed Rate Tranche is paid, or the rate payable thereon is
converted pursuant to Section 12.3, on any day prior to the last day of the
Fixed Rate Period applicable thereto. A Buyer's request for compensation shall
set forth the basis for the amount requested and shall be final, conclusive and
binding, absent error.

                                   ARTICLE III
                            COLLECTIONS AND SERVICING

         Section 3.1 Servicing Agency; Holding of Buyers' Contracts.

         (a) Contract Collections. Until such time, if any, as the Agent shall
notify Seller in writing pursuant to Section 3.4 hereof of the revocation of
such power and authority, PDC shall, as agent for the Buyers, at PDC's expense,
and for the consideration described in Section 4.4, collect or cause to be
collected, for and on behalf of the Buyers, from the Obligors under all Buyers'
Contracts (whether purchased from PDSI or Webster), Related Security and Related
Security Documents, all amounts as and when due and owing thereunder. The
Servicer shall convert all checks and other instruments received on account of
such amounts into immediately available funds as soon as is commercially
reasonable. All such immediately available funds collected by the Servicer shall
be deposited as promptly as practicable (not later than the

                                      -18-

<PAGE>

Business Day after the date such amounts are received) into the "Collection
Account" (as defined in the next sentence). The Collection Account shall be an
escrow account in the name of the Agent, for the benefit of the Buyers, at U.S.
Bank National Association under that certain Escrow Agreement dated as of June
20, 1997, as amended by a First Amendment to Escrow Agreement dated as of June
19, 2002, between PDC, PDSI, the Agent and U.S. Bank National Association. On
each Settlement Date, the Servicer shall withdraw such portion of the funds in
the Collection Account as is necessary to make any payments due to the Buyers on
such Settlement Date, under Sections 4.1, 4.2 or any other section hereof, and
to pay itself the amount of any Positive Interest Differentials and any accrued,
unpaid earnings on the Collection Account pursuant to Section 4.6. At any time
after the occurrence of a Termination Event, the Agent may withdraw any amounts
in the Collection Account to pay any amounts due under Sections 4.1, 4.2 or any
other section hereof at any time, without instructions from the Servicer. Any
amounts withdrawn by the Agent shall be applied first to amounts payable to the
Buyers under Sections 4.1 and 4.2, next to any other obligations owed to the
Buyers under this Agreement, and any surplus shall be paid pursuant to Section
4.6.

         (b) Manner of Holding Buyers' Contracts. The Servicer shall hold in
trust, for the benefit of the Agent and the Buyers, the Buyers' Contracts, until
its status as Servicer is terminated as set forth herein. The Servicer shall not
release, deliver, sell, pledge or grant a security interest in or authorize the
release, delivery, sale, pledge or the granting of a security interest in, any
Buyers' Contract to any other entity or person, or take any other action with
respect to any Buyers' Contract which could cause the sale to the Buyers to
become unperfected or which could otherwise jeopardize the perfected sale of any
Buyers' Contract. The Servicer shall physically segregate all Buyers' Contracts
from all other contracts or documents of PDC or
         any Seller, and shall adequately designate such area as an area
containing only Buyers' Contracts. The Servicer shall review Buyers' Contracts
for compliance with the legending requirements set forth in Section 2.2(ii)
hereof. Upon receipt of written notice from the Agent, the Servicer shall
deliver the Buyers' Contracts immediately to the Agent. The Servicer shall not
honor any requests or instructions from any Person other than the Agent relating
to any Buyers' Contract.

         Section 3.2 Standard of Care. The Servicer shall, as part of its
administrative and servicing obligations hereunder, be responsible for all
administration, servicing and collection of all Buyers' Contracts, Related
Security and Related Security Documents. In performing such functions, the
Servicer agrees to exercise the same degree of skill and care and apply the same
standards, policies and procedures that it applies to the performance of the
same functions with respect to Contracts, Related Security and Related Security
Documents and rights of recourse owned by it (or, if it no longer owns any
Contracts, in accordance with its practices when it did own Contracts).

         Section 3.3 Sellers' Obligations to Obligors. Anything herein to the
contrary notwithstanding, (a) the Related Seller shall remain liable under the
Contracts and the Related Security Documents to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed and the Contracts had not been sold to the
Buyers, (b) the exercise by the Agent or any Buyer of any of the rights
hereunder shall not release the Related Seller from any of its duties or
obligations under the Contracts and the Related Security Documents, and (c) the
Agent and the Buyer shall have no

                                       -19-

<PAGE>

obligation or liability under the Contracts and the Related Security Documents
by reason of this Agreement, nor shall the Agent or the Buyer be obligated to
perform any of the obligations or duties of the Related Seller thereunder or to
take any action to collect or enforce any claim for payment assigned hereunder.
The Related Seller will at all times observe and perform, or cause to be
observed and performed, all contractual undertakings of the Related Seller to
the Obligor under each Contract and the Related Security Documents.

         Section 3.4 Termination of Servicing Agency. Notwithstanding the other
provisions of this Article III, if the Agent reasonably determines at any time,
in its sole discretion, that (i) the Servicer has failed to perform its
servicing and collection functions hereunder and has not corrected such failure
within ten (10) days of Agent's notifying the Servicer of such failure, (ii) a
Termination Event has occurred and is continuing, or (iii) there has been a
material adverse change in PDC's financial condition, the Agent may terminate
PDC's agency hereunder by delivering written notice of the Agent's revocation of
PDC's power and authority to service the Buyers' Contracts. After delivering
written notice pursuant to the preceding sentence, the Agent may directly
service the Buyers' Contracts and Related Security (or engage a third party to
do so on the Buyers' behalf). In such event, the Agent shall have the right,
without limitation, and notwithstanding Section 4.4 hereof, to collect and
retain all payments (excluding Positive Interest Differentials) received from
Obligors and shall be entitled to reimbursement (not to exceed the amounts from
time to time collected constituting Positive Interest Differentials and earnings
on the Collection Account) from PDC on demand for all reasonable expenses
incurred by the Agent (including but not limited to any fees and expenses of any
successor servicer and fees, service charges and disbursements of legal counsel)
in connection with such servicing activities (and the Agent may deduct such
expenses from collected amounts constituting Positive Interest Differentials and
earnings on the Collection Account) as provided in Section 4.6. Nothing
contained in this paragraph shall be construed to limit or otherwise affect or
modify PDC's obligation to make up interest deficiencies as provided in Section
4.2 and, if the Agent assumes servicing and collection functions under this
Article III, the Agent may from time to time deduct the amount of such
deficiencies from amounts constituting Positive Interest Differentials.

         Section 3.5 Notices of Assignment to Obligors. On or before the
Purchase Date with respect to each Contract sold to the Buyers, PDSI or Webster,
as the case may be, shall notify the Obligor that the Servicer is authorized to
service such Contract on behalf of PDSI or Webster, as the case may be. Each
Seller shall join in giving to any Obligor such notice as the Agent may
reasonably request of the Buyers' purchase of Contracts under this Agreement.
The Agent may give such notice at any time, in its sole and unlimited
discretion.

         Section 3.6 Books and Records. The Servicer will keep and maintain at
its own cost and expense, satisfactory and complete records of the Buyers'
Contracts, the Related Security Documents and the Related Security, including a
record of all payments received and credits granted with respect to all
Contracts.

         Section 3.7 Insurance; Notice of Loss. The Servicer shall enforce the
provisions of the Buyers' Contracts requiring the Obligors to maintain insurance
as described in Section 8.27, in accordance with the standard of care required
by Section 3.2. Each Seller will promptly notify the Agent of any loss of or
material damage to any Contract, Related Security Document or

                                       -20-

<PAGE>

Related Security or of any substantial adverse change, known to that Seller, in
any Contract or material item of Related Security or the prospect of payment or
performance thereof.

                                   ARTICLE IV
                                   SETTLEMENTS

         Section 4.1 Payments to Buyers. On each Settlement Date, the Servicer
will remit to the Agent, for the benefit of the Buyers:

                 (a) the full amount of all principal payments (including,
         without limitation, scheduled principal payments, prepayments of
         principal, overdue principal, and principal payable on acceleration)
         received by the Servicer under the Buyers' Contracts during the
         preceding Collection Period;

                 (b) all payments of interest received by the Servicer under
         the Buyers' Contracts during the preceding Collection Period, provided,
         however, that if the total of such interest payments received is
         greater than the Buyers' Interest Amount for the Interest Period ending
         on such Settlement Date, then the amount of interest to be remitted may
         be reduced by the amount of such excess (such reduction being herein
         called the "Positive Interest Differential"); and

                 (c) all other amounts received by the Servicer in respect of
         the Buyers' Contracts during the preceding Collection Period, including
         without limitation, proceeds received from any life, disability or
         property insurance and any other proceeds of or from Related Security,
         provided, however that if the Servicer is not in default under Section
         4.2, the Servicer may retain any late charges received by the Servicer.

         Section 4.2 Additional Payments to Buyer.

                 (a) If the Servicer shall have released any Related Security,
         the Servicer shall make the payment required by Section 9.1 with
         respect thereto on the Settlement Date next succeeding such release.

                 (b) Should the amount of all payments of interest received
         during a Collection Period be less than the Buyers' Interest Amount for
         the Interest Period ending on the first Settlement Date after such
         Collection Period, PDC shall advance to the Agent, for the benefit of
         the Buyers, on the next Settlement Date the difference between the
         total of all such payments of interest and the Buyer's Interest Amount.
         The obligations of PDC under the preceding sentence shall be absolute
         and irrevocable, and shall not be affected by the Agent's termination
         of PDC's servicing agency pursuant to Section 3.4 or by any other
         event.

         Section 4.3 Defaulted Contracts. If a Contract Default shall have
occurred with respect to any Buyers' Contract and such Contract is not
repurchased by the Related Seller hereunder, the Servicer shall take all
reasonable actions, which may include filing lawsuits, to collect such Contract
and to enforce the Agent's and the Buyers' rights under any Related Security
Document. The proceeds of any action to collect such a Contract or of a sale of
any Related Security for such Contract shall be applied first to the Servicer's
reasonable out-of-

                                       -21-

<PAGE>

pocket costs and expenses (including the fees and disbursements of its counsel)
incurred in obtaining such proceeds, second, to the Agent's and the Buyers'
reasonable costs and expenses (including the fees and disbursements of its
counsel), third, at the Agent's option, to accrued, unpaid interest on the
Contract or to the outstanding principal balance of the Contract, fourth, to
accrued, unpaid interest on the Contract or the outstanding principal balance of
the Contract (whichever was not chosen by the Agent pursuant to clause third
above), and the remainder, if any, to any other Person legally entitled thereto,
including, without limitation, the Related Seller.

         Section 4.4 Consideration to PDC. As full consideration for all of the
Servicer's servicing and collection functions hereunder and for the Servicer's
obligation to advance such additional amounts as may from time to time be
required hereunder, until the Servicer's servicing agency is terminated pursuant
to Section 3.4, the Servicer shall be entitled to receive for its individual
account, out of any Positive Interest Differentials and all earnings on the
Collection Account, subject to Section 4.6 below, a fee (the "Servicing Fee") in
an amount equal to 1% per annum of the outstanding principal balance of the
Buyers' Contracts. As full consideration for PDC's obligations under Section
4.2(b) and Article XII, PDC shall be entitled to receive for its individual
account the portion of the Positive Interest Differentials and all earnings on
the Collection Account described in Section 4.6(d) (the "Guaranty Fee"). The
Servicing Fee and the Guaranty Fee shall accrue and be calculated for each
Collection Period and payable on each Settlement Date. All collections will,
notwithstanding the terms of this Section 4.4, be deposited in the Collection
Account no later than the Business Day following the Servicer's receipt of
immediately available funds with respect thereto.

         Section 4.5 Payments by the Agent. Any amounts paid or prepaid on
account of the Buyers' Contracts or the Sellers' obligations with respect
thereto shall be paid to the Agent for the account of each Buyer in proportion
to its undivided percentage ownership interest of outstanding Buyers' Contracts.
The Agent will promptly distribute in like funds to each Buyer its ratable share
of each payment of principal, interest or fees received by the Agent for the
account of the Buyer.

         Section 4.6 Application of Positive Interest Differentials and Earnings
on Collection Account. On each Settlement Date, the Positive Interest
Differential, if any, and all earnings on the Collection Account shall be
distributed as follows:

                 (a) first, to the Agent and the Buyers, in an amount
         sufficient to pay or reimburse all amounts owed to them hereunder;

                 (b) second, to the Servicer, to reimburse the Servicer for all
         advances made by it pursuant to Section 4.2, in an amount up to the
         unreimbursed amount of all such advances made;

                 (c) third, to the Servicer, in an amount equal to all accrued,
         unpaid Servicing Fees; and

                 (d) fourth, to PDC, as the Guaranty Fee.

                                       -22-

<PAGE>

         Neither the Servicer nor PDS shall have any claim for reimbursement of
advances made pursuant to Section 4.2, the Servicing Fee or the Guaranty Fee
except as provided in this Section 4.6.

                                   ARTICLE V
                        CONDITIONS PRECEDENT TO PURCHASES

         Section 5.1 Conditions to Initial Purchase. The Buyers' obligation to
purchase Contracts hereunder and the effectiveness of this Agreement, is subject
to the satisfaction of the following conditions:

                 (a) Documents. The Agent shall have received the
         following, in sufficient counterparts for each Buyer:

                     (i)    A copy of this Agreement, duly executed by PDC, each
                 of the Sellers and the Buyers.

                     (ii)   A copy of the PDC Guaranty, duly executed by PDC.

                     (iii)  A copy of the corporate resolutions of PDC
                 authorizing the execution, delivery and performance of this
                 Agreement and the PDC Guaranty (collectively, the "PDC
                 Documents"), certified as of the Closing Date by the Secretary
                 or an Assistant Secretary of PDC.

                     (iv)   An incumbency certificate showing the names and
                 titles and bearing the signatures of the officers of PDC
                 authorized to execute the PDC Documents, certified as of the
                 Closing Date by the Secretary or an Assistant Secretary of PDC.

                     (v)    A copy of the Articles of Incorporation of PDC
                 with all amendments thereto, certified by the appropriate
                 governmental official of the jurisdiction of its incorporation
                 as of a date not more than 15 days prior to the Closing Date.

                     (vi)   A long-form certificate of good standing for
                 PDC in the jurisdiction of its incorporation, certified by the
                 appropriate governmental officials as of a date not more than
                 15 days prior to the Closing Date.

                     (vii)  A copy of the bylaws of PDC, certified as of
                 the Closing Date by the Secretary or an Assistant Secretary of
                 PDC.

                     (viii) A copy of the corporate resolutions of PDSI
                 authorizing the execution, delivery and performance of this
                 Agreement, the Assignments hereunder and any Financing
                 Statements executed by PDSI (collectively, the "PDSI
                 Documents"), certified as of the Closing Date by the Secretary
                 or an Assistant Secretary of PDSI.

                                       -23-

<PAGE>

                           (ix)    An incumbency certificate showing the names
                  and titles and bearing the signatures of the officers of PDSI
                  authorized to execute the PDSI Documents, and to request
                  purchases of Contracts hereunder, certified as of the Closing
                  Date by the Secretary or an Assistant Secretary of PDSI.

                           (x)     A copy of the Articles of Incorporation of
                  PDSI with all amendments thereto, certified by the appropriate
                  governmental official of the jurisdiction of its incorporation
                  as of a date not more than 15 days prior to the Closing Date.

                           (xi)    A long-form certificate of good standing for
                  PDSI in the jurisdiction of its incorporation, certified by
                  the appropriate governmental officials as of a date not more
                  than 15 days prior to the Closing Date.

                           (xii)   A copy of the bylaws of PDSI, certified as of
                  the Closing Date by the Secretary or an Assistant Secretary of
                  PDSI.

                           (xiii)  A copy of the corporate resolutions of
                  Webster authorizing the execution, delivery and performance of
                  this Agreement, the Assignments hereunder and any Financing
                  Statements executed by Webster (collectively, the "Webster
                  Documents"), certified as of the Closing Date by the Secretary
                  or an Assistant Secretary of Webster.

                           (xiv)   An incumbency certificate showing the names
                  and titles and bearing the signatures of the officers of
                  Webster authorized to execute the Webster Documents, and to
                  request purchases of Contracts hereunder, certified as of the
                  Closing Date by the Secretary or an Assistant Secretary of
                  Webster.

                           (xv)    A copy of the Articles of Incorporation of
                  Webster with all amendments thereto, certified by the
                  appropriate governmental official of the jurisdiction of its
                  incorporation as of a date not more than 15 days prior to the
                  Closing Date.

                           (xvi)   A long-form certificate of good standing for
                  Webster in the jurisdiction of its incorporation, certified by
                  the appropriate governmental officials as of a date not more
                  than 15 days prior to the Closing Date.

                           (xvii)  A copy of the bylaws of Webster, certified as
                  of the Closing Date by the Secretary or an Assistant Secretary
                  of Webster.

                           (xviii) Proper Financing Statements (Form UCC-1) or
                  amendments thereto duly executed and suitable for filing under
                  the Uniform Commercial Code for all jurisdictions as may be
                  necessary or, in the opinion of the Agent, desirable to
                  perfect the interest of the Agent and the Buyers in the
                  Buyers' Contracts, Related Security, Related Security
                  Documents and proceeds thereof.

                           (xix)   Completed UCC, tax lien and judgment searches
                  against each Seller or other evidence satisfactory to the
                  Agent that there are no Liens superior

                                       -24-

<PAGE>

          to the interest of the Agent and the Buyers in the Buyers' Contracts,
          the Related Security, the Related Security Documents or the proceeds
          thereof.

                  (xx) A certificate dated the Closing Date of a Financial
          Officer of PDC, PDSI and Webster certifying as to the matters set
          forth in Sections 5.2(b) and 5.2(c) below.

          (b)     Opinion. The Seller shall have requested Matthew Levitt, Esq.,
     its counsel, to prepare a written opinion, addressed to the Agent and the
     Buyers and dated the Closing Date, covering the matters set forth in
     Exhibit E hereto, and such opinion shall have been delivered to the Agent
     in sufficient counterparts for each Buyer.

          (c)     Compliance. PDC and the Sellers shall have performed and
     complied with all agreements, terms and conditions contained in this
     Agreement required to be performed or complied with by the Sellers prior to
     or simultaneously with the Closing Date.

          (d)     Credit and Collection Policies. PDC and each Seller shall have
     provided the Buyers with copies of its credit and collection policies as in
     effect on the Closing Date, which shall be satisfactory in all respects to
     the Buyers.

          (e)     Fees and Expenses. The Agent shall have received (i) for the
     account of the Buyers, an extension fee in the amount of $25,000, and (ii)
     all other fees and amounts due and payable by the Agent or the Buyers on or
     prior to the Closing Date, including the reasonable fees and expenses of
     counsel of the Agent.

     Section 5.2  Conditions Precedent to All Purchases of Contracts. The
obligation of the Buyers to purchase any Contracts hereunder (including the
first Contracts to be purchased hereunder) shall be subject to the fulfillment
of the following conditions:

          (a)     all obligations in Section 2.2 hereof shall have been
     fulfilled to the satisfaction of the Agent;

          (b)     the representations and warranties of PDC and the Related
     Seller herein shall be true and correct on the Purchase Date in all
     material respects with the same force and effect as if originally made on
     such Purchase Date, and PDC and the Related Seller shall have performed and
     complied with all agreements and conditions required hereby to be performed
     or complied with prior to or on such Purchase Date;

          (c)     no Unmatured Termination Event or Termination Event shall have
     occurred and be continuing on any Purchase Date or will exist after giving
     effect to the purchase and sale of Contracts to be made on such Purchase
     Date; and

          (d)     there shall have been delivered to the Agent such additional
     documents as shall be requested by the Agent pursuant to Section 9.6.

                                      -25-

<PAGE>

                                   ARTICLE VI
                       REPORTS AND INFORMATION; INSPECTION

     Section 6.1  Settlement Date Statements. The Servicer shall deliver to each
Buyer on or before each Settlement Date a settlement statement certified by a
duly authorized officer or employee of the Servicer, in substantially the form
of Exhibit F:

             (a) setting forth as to each Buyers' Contract that remains
     outstanding:

                 (i)  the amount of principal collected during the preceding
             Collection Period and to be paid over to the Agent for the benefit
             of the Buyers; the amount of interest collected during the
             preceding Collection Period; the amount of interest to be paid over
             to the Agent for the benefit of the Buyers; the amount of any other
             payment collected by PDC with respect to such Contracts during the
             preceding Collection Period and being paid over to the Agent for
             the benefit of the Buyers; and the remaining principal balance with
             respect to such Contracts as of the last occurring Determination
             Date; all determined and reported on an aggregate basis for all
             Buyers' Contracts; and

                 (ii) the principal balance outstanding; the number of payments
             remaining to be made; whether such Contract has been modified or
             amended or contains provisions authorizing the Obligor to skip a
             payment, interest only or balloon payments; and whether to the
             Servicer's knowledge any Obligor is in any way in default under the
             terms of the Contract or any Related Security Documents; all
             determined and reported for each Buyers' Contract on an individual
             basis;

             (b) listing each Buyers' Contract that remains outstanding with
     respect to which the Obligor has not paid any amount due thereunder within
     sixty (60) days of its due date;

             (c) setting out the aggregate of all Repurchase Prices paid by each
     Seller pursuant to Section 7.1(b) during the preceding Collection Period
     and since the Closing Date, and including a computation of each Individual
     Repurchase Commitment Amount as of the Settlement Date with respect to
     which such certificate is prepared;

             (d) listing each Contract to be purchased on that Settlement Date
     that is an Eligible Contract pursuant to one or more of clauses (xvii)(1)
     through (3) or (xxi) of the definition of Eligible Contract, identifying
     which clauses are applicable to each such Contract and giving the Purchase
     Price of each such Contract;

             (e) giving the total Purchase Price of all Contracts purchased by
     the Buyers on or prior to that Settlement Date that were Eligible Contracts
     under each of clauses (xvii)(1) through (3) or (xxi) of the definition of
     Eligible Contract, and including computations demonstrating that such
     aggregate Purchase Price does not exceed the maximums specified in such
     clauses (xvii)(1) through (3) and (xxi) of the definition of Eligible
     Contract; and

                                      -26-

<PAGE>

             (f) describing each modification of a Contract entered into by the
     Servicer during the preceding Collection Period and containing calculations
     demonstrating that the aggregate Purchase Price of all Contracts modified
     by the Servicer does not exceed the maximum specified in Section 9.1.

     Section 6.2 Financial Statements. PDC and the Sellers shall deliver to each
Buyer:

             (a) As soon as available and in any event within 90 days after the
     end of each fiscal year of PDC, the annual audit report of PDC and its
     Subsidiaries prepared on a consolidated basis and in conformity with GAAP,
     consisting of at least statements of income, cash flow, changes in
     financial position and stockholders' equity, and a consolidated balance
     sheet as at the end of such year, setting forth in each case in comparative
     form corresponding figures from the previous annual audit, certified
     without qualification by independent certified public accountants of
     recognized standing selected by PDC and acceptable to the Agent and the
     Buyers, together with any management letters, management reports or other
     supplementary comments or reports to PDC or its board of directors
     furnished by such accountants.

             (b) As soon as available and in any event within 45 days after the
     end of each of the first three fiscal quarters of each fiscal year, a copy
     of the unaudited financial statement of PDC and its Subsidiaries, prepared
     on the basis of the same accounting principles applied in the preparation
     of the annual audited financial statements referred to in Section 6.2(a)
     (but omitting footnotes and year-end adjustments), signed by a Financial
     Officer of PDC, consisting of at least consolidated statements of income
     and cash flow for PDC and the Subsidiaries for such quarter and for the
     period from the beginning of such fiscal year to the end of such quarter,
     and a consolidated balance sheet of PDC as at the end of such quarter
     setting forth in each case in comparative form corresponding figures from
     the previous year.

             (c) Together with the financial statements furnished by PDC under
     Sections 6.2(a) and (b), a statement signed by a Financial Officer of PDC
     demonstrating in reasonable detail compliance (or noncompliance, as the
     case may be) with each of the financial ratios and restrictions contained
     in Article X and stating that as at the date of each such financial
     statement there did not exist any Unmatured Termination Event or
     Termination Event or, if an Unmatured Termination Event or Termination
     Event existed, specifying the nature and period of existence thereof and
     what action the Sellers propose to take with respect thereto.

             (d) Immediately upon becoming aware of any Unmatured Termination
     Event or Termination Event, a notice describing the nature thereof and what
     action the Sellers propose to take with respect thereto.

             (e) Immediately upon becoming aware of the occurrence, with respect
     to any Plan, of any Reportable Event (other than a Reportable Event for
     which the reporting requirements have been waived by PBGC regulations) or
     any "prohibited transaction" (as defined in Section 4975 of the Code), a
     notice specifying the nature thereof and what

                                      -27-

<PAGE>

     action the Sellers propose to take with respect thereto, and, when
     received, copies of any notice from PBGC of intention to terminate or have
     a trustee appointed for any Plan.

             (f) Promptly upon the mailing or filing thereof, copies of all
     financial statements, reports and proxy statements mailed to PDC's
     shareholders, and copies of all registration statements, periodic reports
     and other documents filed with the Securities and Exchange Commission (or
     any successor thereto) or any national securities exchange.

             (g) Immediately upon becoming aware of the occurrence thereof,
     notice of the institution of any litigation, arbitration or governmental
     proceeding, or the rendering of a judgment or decision in such litigation
     or proceeding, which could constitute an Adverse Event, and the steps being
     taken by the Person(s) affected by such proceeding.

             (h) Immediately upon becoming aware of the occurrence thereof,
     notice of any violation as to any environmental matter by PDC, either
     Seller or any Subsidiary and of the commencement of any judicial or
     administrative proceeding relating to health, safety or environmental
     matters (i) in which an adverse determination or result could result in the
     revocation of or have a material adverse effect on any operating permits,
     air emission permits, water discharge permits, hazardous waste permits or
     other permits held by PDC, either Seller or any Subsidiary which are
     material to the operations of either Seller or such Subsidiary, or (ii)
     which will or threatens to impose a material liability on PDC, either
     Seller or such Subsidiary to any Person or which will require a material
     expenditure by PDC, either Seller or such Subsidiary to cure any alleged
     problem or violation.

             (i) From time to time, such other information regarding the
     business, operation and financial condition of PDC, the Sellers and the
     Subsidiaries as the Agent or any Buyer may reasonably request.

     Section 6.3 Inspection. PDC and each Seller shall permit any Person
designated by the Agent or any Buyer to visit and inspect any of such Person's
properties, corporate books and financial records, to examine and to make copies
of such Person's books of accounts and other financial records, and to discuss
the affairs, finances and accounts of such Person's and the Subsidiaries with,
and to be advised as to the same by, its officers at such reasonable times and
intervals as the Agent or any Buyer may designate. So long as no Termination
Event exists, such visits, inspections and examinations shall be at the expense
of the Agent or Buyer conducting such visit, inspection or examination, but any
such visits, inspections and examinations made while any Termination Event is
continuing shall be at the expense of the Sellers.

     Section 6.4 Fiscal Periods. PDC and each Seller will have the same fiscal
year and schedule of fiscal months, determined for each year on a basis
consistent with PDC's historical practices. PDC and the Sellers will deliver a
schedule of fiscal months and Settlement Dates for each fiscal year to the Agent
on or before the end of the preceding fiscal year.

                                   ARTICLE VII
                   SELLERS' OBLIGATION TO REPURCHASE CONTRACTS

     Each Seller shall have an obligation to repurchase Contracts, as follows:

                                      -28-

<PAGE>

     Section 7.1 Sellers' Obligations to Repurchase.

             (a) Repurchases Without Limit. Each Seller agrees to repurchase, on
     the Agent's demand, any Contract previously purchased by the Buyers from
     that Seller hereunder:

                 (i)   If such Contract was not, on the applicable Purchase
             Date, an Eligible Contract;

                 (ii)  If any representation or warranty by that Seller with
             respect to such Contract was not true and correct on the applicable
             Purchase Date;

                 (iii) Upon any failure by that Seller, or by the Servicer, to
             comply with any of its covenants or other agreements hereunder with
             respect to such Contract; and

                 (iv)  If such Contract is or becomes subject to any Liens or
             other adverse claims created by or arising through PDC or that
             Seller.

             (b) Limited Repurchases Following Contract Default. In addition to
     any repurchases required by Section 7.1(a), each Seller agrees to
     repurchase, on the Agent's demand, any Contract previously purchased by the
     Buyers from that Seller hereunder upon the occurrence of a Contract Default
     with respect to such Contract; provided, however that a Seller shall not be
     obligated to repurchase any Contract pursuant to this Section 7.1(b) if the
     principal amount outstanding under that Contract exceeds the remainder of
     that Seller's Individual Repurchase Commitment Amount as of the date of
     determination; and provided further that neither Seller shall be obligated
     to repurchase a Contract pursuant to this Section 7.1(b) if such repurchase
     would cause the portion of the aggregate Repurchase Price for all Contracts
     repurchased after the Closing Date under this Section 7.1(b) that is
     attributable to principal outstanding under such Contracts to exceed the
     Aggregate Repurchase Commitment Amount.

     Section 7.2 Seller's Option to Repurchase. If on any Settlement Date the
aggregate outstanding principal balance of the Buyers' Contracts is less than or
equal to $1,000,000, the Sellers may repurchase from the Buyers all but not less
than all of such Contracts for the Repurchase Price.

     Section 7.3 Terms of Repurchase. Repurchases of Contract(s) by a Seller
under the provisions of this Article VII shall be made by payment of the
Repurchase Price for such Contract(s) to the Agent for the benefit of the
Buyers. Each repurchase by a Seller from the Buyers under this Article VII shall
be made in Immediately Available Funds and shall be without recourse,
representation or warranty except as to the absence of encumbrances created by
the Buyers. In the event a Seller is obligated to repurchase a Contract under
the provisions of this Article VII, the Agent shall, at that Seller's expense
and after payment of the full Repurchase Price therefor, take such action as
that Seller may reasonably request in order to reassign to that Seller the
Contract, all Related Security Documents and all Related Security for such
Contract. Notwithstanding any other provision hereof, following the repurchase
of a Contract by a Seller and payment of the full Repurchase Price therefor, the
Agent and the Buyers shall have no

                                      -29-

<PAGE>

further rights therein and all collections on such repurchased Contract shall be
the sole property of that Seller.

                                  ARTICLE VIII
                PDC'S AND SELLERS' REPRESENTATIONS AND WARRANTIES

     In order to induce the Agent and the Buyers to execute this Agreement and
to purchase Contracts hereunder, PDC and the Sellers make the following
representations and warranties to the Agent and the Buyers, each of which shall
survive the execution and delivery of this Agreement and shall be deemed given
as of the date hereof and as of each Purchase Date:

     Section 8.1 Organization; Standing, Etc. PDC and each of its corporate
Subsidiaries, including PDSI and Webster, are corporations duly incorporated and
validly existing and in good standing under the laws of the jurisdiction of
their respective incorporation and have all requisite corporate power and
authority to carry on their respective businesses as now conducted and to enter
into the Transaction Documents executed by it and to perform its obligations
under the Transaction Documents executed by it. PDC and each of its
Subsidiaries, including PDSI and Webster, are duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the character of
the properties owned, leased or operated by it or the business conducted by it
makes such qualification necessary and where failure to so qualify or to
maintain such good standing would constitute an Adverse Event.

     Section 8.2 Authorization and Validity. The execution, delivery and
performance by PDC and the Sellers of the Transaction Documents executed by it
have been duly authorized by all necessary corporate action by PDC and the
Sellers, and the Transaction Documents executed by it constitute the respective
legal, valid and binding obligations of PDC and the Sellers, enforceable against
PDC and the Sellers in accordance with their respective terms, subject to
limitations as to enforceability which might result from bankruptcy, insolvency,
moratorium and other similar laws affecting creditors' rights generally and
subject to limitations on the availability of equitable remedies.

     Section 8.3 No Conflict; No Default. The execution, delivery and
performance by PDC and the Sellers of the Transaction Documents executed by it
will not (a) violate any provision of any law, statute, rule or regulation or
any order, writ, judgment, injunction, decree, determination or award of any
court, governmental agency or arbitrator presently in effect having
applicability to PDC or either Seller, (b) violate or contravene any provisions
of the Articles (or Certificate) of Incorporation or by-laws of PDC or either
Seller, or (c) result in a breach of or constitute a default under any
indenture, loan or credit agreement or any other agreement, lease or instrument
to which PDC or either Seller is a party or by which it or any of its properties
may be bound or result in the creation of any Lien on any asset of PDC or either
Seller or any Subsidiary. Neither PDC or nor either Seller nor any Subsidiary is
in default under or in violation of any such law, statute, rule or regulation,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, loan or credit agreement or other agreement, lease or instrument in
any case in which the consequences of such default or violation could constitute
an Adverse Event.

                                      -30-

<PAGE>

         Section 8.4  Government Consent. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority is required on the
part of PDC or either Seller to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, the Transaction Documents executed by it.

         Section 8.5  Financial Statements and Condition. PDC's audited
consolidated financial statements as at April 28, 2001 and its unaudited
consolidated financial statements as at January 26, 2002, as heretofore
furnished to the Agent, have been prepared in accordance with GAAP on a
consistent basis and fairly present the financial condition of PDC and its
Subsidiaries as at such dates and the results of their operations and changes in
financial position for the respective periods then ended. As of the dates of
such financial statements, neither a Seller nor any Subsidiary had any material
obligation, contingent liability, liability for taxes or long-term lease
obligation which is not reflected in such financial statements or in the notes
thereto. Since April 28, 2001, no Adverse Event has occurred.

         Section 8.6  Litigation and Contingent Liabilities. Except as
previously disclosed to the Buyers in writing, there are no actions, suits or
proceedings pending or, to the knowledge of PDC or either Seller, threatened
against or affecting either PDC or Seller or any Subsidiary or any of their
properties before any court or arbitrator, or any governmental department,
board, agency or other instrumentality which, if determined adversely to PDC or
either Seller or such Subsidiary, could constitute an Adverse Event.

         Section 8.7  Compliance. PDC and its Subsidiaries, including PDSI and
Webster, are in material compliance with all statutes and governmental rules and
regulations applicable to them.

         Section 8.8  Environmental, Health and Safety Laws. There does not
exist any violation by PDC or either Seller or any Subsidiary of any applicable
federal, state or local law, rule or regulation or order of any government,
governmental department, board, agency or other instrumentality relating to
environmental, pollution, health or safety matters which will or threatens to
impose a material liability on PDC or either Seller or a Subsidiary or which
would require a material expenditure by PDC or either Seller or such Subsidiary
to cure. Neither PDC nor either Seller nor any Subsidiary has received any
notice to the effect that any part of its operations or properties is not in
material compliance with any such law, rule, regulation or order or notice that
it or its property is the subject of any governmental investigation evaluating
whether any remedial action is needed to respond to any release of any toxic or
hazardous waste or substance into the environment, the consequences of which
non-compliance or remedial action could constitute an Adverse Event.

         Section 8.10 ERISA. Each Plan complies with all material applicable
requirements of ERISA and the Code and with all material applicable rulings and
regulations issued under the provisions of ERISA and the Code setting forth
those requirements. No Reportable Event, other than a Reportable Event for which
the reporting requirements have been waived by regulations of the PBGC, has
occurred and is continuing with respect to any Plan. All of the minimum funding
standards applicable to such Plans have been satisfied and there exists no event
or condition which would permit the institution of proceedings to terminate any
Plan under

                                       -31-

<PAGE>

Section 4042 of ERISA. The current value of the Plans' benefits guaranteed under
Title IV of ERISA does not exceed the current value of the Plans' assets
allocable to such benefits.

         Section 8.10 Regulation U. None of PDC or either Seller is engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System) and no part of the proceeds of any purchase of Contracts
by the Buyers hereunder will be used to purchase or carry margin stock or for
any other purpose which would violate any of the margin requirements of the
Board of Governors of the Federal Reserve System.

         Section 8.11 Liens. None of the Accounts or Inventory of PDC or either
Seller or any Subsidiaries is subject to a Lien, except for Permitted Liens.

         Section 8.12 Taxes. Each of PDC, the Sellers and the Subsidiaries has
filed all federal, state and local tax returns required to be filed and has paid
or made provision for the payment of all taxes due and payable pursuant to such
returns and pursuant to any assessments made against it or any of its property
and all other taxes, fees and other charges imposed on it or any of its property
by any governmental authority (other than taxes, fees or charges the amount or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have been
provided on the books of PDC). No tax Liens have been filed and no material
claims are being asserted with respect to any such taxes, fees or charges. The
charges, accruals and reserves on the books of PDC and the Sellers in respect of
taxes and other governmental charges are adequate.

         Section 8.13 Investment Company Act. None of PDC, either Seller or any
Subsidiary is an "investment company" or a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as amended.

         Section 8.14 Public Utility Holding Company Act. None of PDC, either
Seller or any Subsidiary is a "holding company" or a "subsidiary company" of a
holding 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 1935, as amended.

         Section 8.15 Subsidiaries. Exhibit G sets forth as of the date of this
Agreement a list of all Subsidiaries and the number and percentage of the shares
of each class of capital stock owned beneficially or of record by the Seller or
any Subsidiary therein, and the jurisdiction of incorporation of each
Subsidiary. PDSI is a wholly owned Subsidiary of PDC.

         Section 8.16 Partnerships and Joint Ventures. None of PDC, nor either
Seller or any Subsidiary is currently a partner (limited or general) or joint
venturer in any partnership or joint venture, except for Webster Management, LP,
100% of the equity in which is owned by Webster and PDSI.

         Section 8.17 Enforceability of Agreements and Assignments. This
Agreement has been duly executed and delivered by PDC and each Seller and is a
valid and binding agreement of each PDC and Seller enforceable in accordance
with its terms. Each Assignment, upon delivery to the Agent, will have been duly
executed and delivered by the Related Seller with respect to the Contracts
subject to that Assignment and will constitute a valid and binding assignment by
the

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<PAGE>

Related Seller enforceable against the Related Seller in accordance with its
terms. Each Seller has full right, power and authority to sell the Buyers'
Contracts, the Related Security, the Related Security Documents and proceeds
hereunder and has the ability to fulfill completely its obligations to the
Obligors with respect to the Buyers' Contracts.

         Section 8.18 Sale of Contracts. On each Purchase Date, the Related
Seller will be the owner of all right, title and interest in and to the
Contracts to be sold to the Buyers on such Purchase Date, all Related Security
Documents and the Related Seller's interest in the Related Security and upon the
delivery of the Assignment to the Buyer on such Purchase Date, such ownership
interest will be vested in the Buyer. Each Contract offered to and/or purchased
by the Buyers hereunder, all Related Security Documents and the Related Seller's
interest in the Related Security will be, when offered and/or purchased, owned
by the Related Seller free and clear of all Liens and rights of others excepting
the rights in favor of the Agent and the Buyers created or to be created
pursuant to this Agreement. Except in connection with the sale of Contracts
hereunder, neither Seller has sold, pledged, transferred, assigned or granted
any Lien in any Contracts sold or to be sold to the Buyers hereunder, any
Related Security or the Related Security Documents. No financing statement
describing or referring to any Contract (other than any financing statement
naming the Agent as secured party) is on file in any public office, except for
financing statements in favor of U.S. Bank, and financing statements evidencing
Permitted Account Sales. There is only one original executed copy of each
Contract, and on the relevant Purchase Date such original executed copy of each
Contract purchased by the Buyers will be legended in accordance with Section
2.2(ii) and be delivered to the Servicer to be held for the benefit of the
Buyers in accordance with Section 3 hereof.

         Section 8.19 Related Security. Immediately prior to the purchase of any
Contract on a Purchase Date, the Related Seller will have a perfected first
priority Lien on all Related Security for such Contract. Following the
assignment of any Contract to the Agent for the benefit of the Buyers, the
Buyers will have a valid and perfected and enforceable first priority security
interest in such Buyers' Contract and the Related Security. With respect to each
Buyers' Contract, the dental equipment included in the Related Security is
located in a state in which the filing of a financing statement under the UCC is
required to perfect a security interest in goods of the type including such
dental equipment; such filings have been duly made and show the Related Seller
as secured party; and the Agent has the same rights as the secured party of
record would have (if such secured party were still the owner of the Contract)
against all Persons (including the Related Seller and any trustee in bankruptcy
of the Related Seller) claiming an interest in such dental equipment included in
the Related Security.

         Section 8.20 Eligibility and Enforceability of Contracts; Accuracy of
Information; Compliance. As of the relevant Purchase Date, each Contract sold to
the Buyers by a Seller hereunder is an Eligible Contract. Each Contract sold to
the Buyers by a Seller hereunder, and all Related Security Documents, will
constitute the legal, valid and binding obligation of the Obligor(s) thereof,
enforceable in accordance with their respective terms. Each such Contract will
accurately reflect the name(s) and residence or business address of the
Obligor(s), the signature(s) of the Obligor(s) on each Contract are genuine and
all parties to each Contract had full legal capacity to execute that Contract.
At the date of origination of each Contract, and on the Purchase Date with
respect thereto, all requirements of any federal and state laws, rules and
regulations applicable to the Contract, including, without limitation, usury,
truth in lending and

                                       -33-

<PAGE>

equal credit opportunity laws, have been complied with, and the Related Seller
shall for at least the period of this Agreement, maintain in its possession,
available for the Agent's and the Buyers' inspection, and shall deliver to the
Agent upon demand, evidence of compliance with all such requirements. Such
compliance is not affected by the Buyers' ownership of the Contracts.

         Section 8.21 Contract Defaults. As of the relevant Purchase Date: (i)
each Contract sold to the Buyers by a Seller hereunder will be current, or no
more than 60 days past due; (ii) there will be no default, breach, violation or
event permitting acceleration existing under the Contract and no event which,
with notice and the expiration of any grace or cure period, would constitute
such a default, breach, violation or event permitting acceleration under such
Contract (except payment delinquencies permitted by clause (i) above); (iii)
neither the Related Seller nor the Servicer will have waived any such default,
breach, violation or event permitting acceleration except payment delinquencies
permitted by clause (i) above; (iv) the Related Security will be free of damage
and in good repair; (v) each Contract will not have had its terms of payment
extended or modified in a manner inconsistent with the Related Seller's normal
credit policies; (vi) each Contract has not been satisfied or subordinated in
whole or in part or rescinded, and the Related Security securing each Contract
has not been released from the lien of the Contract in whole or in part. Neither
Seller has changed its credit and collection policies in any material respect or
taken any action which would materially impair the collectability of any
Contract.

         Section 8.22 Goods Sold. Immediately prior to the date on which title
to any goods sold to an Obligor by a Seller and financed by indebtedness
evidenced by a Contract or Contracts passes to the Obligor thereof, the Related
Seller shall have been the owner of such goods free and clear of all mortgages,
deeds of trust, pledges, liens, security interests and other charges or
encumbrances. As of the Purchase Date with respect to each Contract, there will
be no liens or claims filed for work, labor or materials affecting the Related
Security securing the Contract which are or may be liens prior to, or equal or
coordinate with, the lien of the Contract.

         Section 8.23 Financing Statements. Appropriate Uniform Commercial Code
financing statements relating to the sale of Contracts hereunder have been filed
in all offices where such filing is necessary to give the Agent on behalf of the
Buyers a prior perfected security interest in the Buyers' Contracts, the Related
Security Documents and any Related Security superior to any other interest
therein. The Buyers' Contracts, the Related Security Documents and any Related
Security are or will be sufficiently described in the Assignments and such
financing statements in order to perfect and protect Buyers' interest in the
Buyers' Contracts, the Related Security Documents and any Related Security
against all other Persons. All filing fees and taxes, if any, necessary to make
the foregoing filing effective have been paid in full.

         Section 8.24 Records. PDC and both Sellers' chief executive office and
the place where they maintain the books and records relating to the Contracts
and any Related Security is located at 1031 Mendota Heights Road, St. Paul,
Minnesota 55120.

         Section 8.25 Licenses. All import and exchange licenses, if required
under applicable law or regulations for the exportation, importation and payment
of the purchase price and related costs of goods underlying the Contracts or the
shipment thereof, have been obtained.

                                       -34-

<PAGE>

         Section 8.26 No Defenses or Waivers. As of the Purchase Date with
respect to each Contract: (i) the Contract is not subject to any right of
rescission, setoff, counterclaim or defense, including the defense of usury;
(ii) the operation of any of the terms of the Contract or the exercise of any
right thereunder will not render the Contract unenforceable in whole or in part
or subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury; (iii) no such right of rescission, setoff,
counterclaim or defense has been asserted with respect thereto; and (iv) the
terms of the Contract have not been waived, altered or modified in any respect,
except by instruments or documents identified in the exhibits to the relevant
Assignment.

         Section 8.27 Insurance Coverage. The Obligor under each Contract is
contractually obligated to maintain all risk physical damage insurance upon the
equipment securing such Contract in an amount at least equal to the lesser of
the principal amount of such Contract or the replacement cost of such equipment,
which insurance policy must name the Related Seller as loss payee and additional
insured and require at least 10 days' prior written notice to the Related Seller
before cancellation. In the case of any Contract as to which the unpaid
principal balance as of the Purchase Date with respect to such Contract exceeds
$100,000, the Related Seller has obtained written proof of such insurance.

         Section 8.28 Origination. Each Contract was originated by the Related
Seller in the ordinary course of its business. No Contract was originated in or
is subject to the laws of any jurisdiction whose laws would make the transfer of
the Contract pursuant to this Agreement, or the ownership of the Contract by the
Buyers, unlawful or render the Contract unenforceable as a result thereof.

         Section 8.29 Retirement Benefits. Except as required under Section
4980B of the Code, Section 601 of ERISA or applicable state law, neither a
Seller nor any Subsidiary is obligated to provide post-retirement medical or
insurance benefits with respect to employees or former employees.

         Section 8.30 Full Disclosure. Subject to the following sentence,
neither the financial statements referred to in Sections 6.2 or 8.5 nor any
other certificate, written statement, exhibit or report furnished by or on
behalf of PDC or either Seller in connection with or pursuant to this Agreement
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements contained therein not misleading.
Certificates or statements furnished by or on behalf of PDC or either Seller to
the Agent or the Buyers consisting of projections or forecasts of future results
or events have been prepared in good faith and based on good faith estimates and
assumptions of the management of PDC or that Seller, and PDC or the Sellers have
no reason to believe that such projections or forecasts are not reasonable.

                                   ARTICLE IX
                        SELLERS' AGREEMENTS WITH RESPECT
                        TO CONTRACTS AND RELATED SECURITY

         In order to induce the Agent and the Buyers to execute this Agreement
and to purchase Contracts hereunder, the Sellers jointly and severally agree
that, with respect to each Buyers'

                                       -35-

<PAGE>

Contract, for as long as such Contract or any amount thereunder remains
outstanding, and whether or not the Agent has terminated PDC as Servicer of such
Contract under Section 3.4:

         Section 9.1 Modification of Contracts. Except as provided in the
remainder of this Section 9.1, neither Seller nor the Servicer will, as agent of
the Agent and the Buyers or otherwise, extend or otherwise compromise or modify
the terms of any Buyers' Contract or the terms of any Related Security Documents
without the prior written approval of the Agent, release any Related Security or
alter or amend in any material respect its credit policies with respect to
Contracts, Related Security Documents and Related Security as in effect on the
date hereof. The foregoing shall not prohibit the Servicer, as long as the Agent
has not terminated PDC's power to act as Servicer pursuant to Section 3.4, from
modifying the terms of any Buyers' Contract in a manner consistent with the
Servicer's credit polices as they exist as of the date of this Agreement,
provided that (a) notice of such modification is included in each settlement
statement delivered to the Agent pursuant to Section 6.1 with respect to the
Collection Period during which such modification occurred, (b) the Servicer does
not permit more than one such modification to the amortization schedule with
respect to any Contract, (c) no modification extends the date for final payment
under a Contract beyond the Final Maturity Date, (d) if any modification
releases any Related Security, the Servicer pays to the Agent for the benefit of
the Buyers on the next Settlement Date an amount equal to the portion of the
principal amount outstanding under the modified Contract that is attributable to
the released Related Security, (e) no modification may reduce the interest rate
payable on a Contract (other than a Discounted Contract) below the Buyers' Rate
in effect as of the date of the modification, (f) no modification may reduce the
principal amount outstanding under a Contract without the Buyers' prior consent,
and (g) no Contract may be modified pursuant to this Section 9.1 that would
cause the aggregate Purchase Price of all Contracts that have been modified by
the Servicer under this Section 9.1 to be ten percent (10%) or more of the
aggregate Purchase Price of all Buyers' Contracts.

         Section 9.2 Assignments. Each Assignment executed and delivered in
connection with any purchase and sale of Contracts will vest in the Agent on
behalf of the Buyers all of the Related Seller's right, title and interest in
and to such Contracts, any Related Security, any Related Security Documents and
the proceeds thereof.

         Section 9.3 Adverse Interests. None of PDC or either Seller will, as
agent for the Agent, the Buyers or otherwise, pledge, hypothecate, convey or
otherwise transfer, or grant any security or other interest in, any Buyers'
Contract or any Related Security or Related Security Document.

         Section 9.4 Continuation of Related Security. The Servicer shall
maintain in full force and effect, in the name of the Related Seller (unless
assigned to the Agent for the benefit of the Buyers by the Seller's execution
and delivery to the Agent of a UCC assignment), all Liens constituting Related
Security for Buyers' Contracts sold by that Seller, with the priority such Liens
had on the applicable Purchase Date, until all amounts owing under the related
Contract have been paid in full.

         Section 9.5 Taxes and Claims. Each Seller will promptly pay all taxes
and other governmental charges levied or assessed upon or against any of the
Buyers' Contracts sold by that Seller and the Related Security or upon or
against the creation, perfection or continuance of

                                       -36-

<PAGE>

the Buyers' interest therein, as well as all other claims of any kind (including
claims for labor, material and supplies) against or with respect to any such
Contract or Related Security, except to the extent (a) such taxes, charges or
claims are being contested in good faith by appropriate proceedings, (b) such
proceedings do not involve any material danger of the sale, forfeiture or loss
of any of the Buyers' Contracts or Related Security or any interest therein and
(c) such taxes, charges or claims are adequately reserved against on the
Seller's books in accordance with generally accepted accounting principles.

     Section 9.6  Further Assurances.

          (a)     Each Seller and the Servicer agrees that from time to time, at
     its expense, it will promptly execute and deliver all further instruments
     and documents, and take all further action, that may be necessary or that
     the Agent or a Buyer may reasonably request, in order to perfect and
     protect the sale of the Buyers' Contracts, the Related Security, the
     Related Security Documents and proceeds hereunder or to enable the Agent or
     a Buyer to exercise and enforce its rights and remedies hereunder with
     respect to any of such Contracts, Related Security, Related Security
     Documents and proceeds (but any failure to request or assure that a Seller
     execute and deliver such instrument or documents or to take such action
     shall not affect or impair the validity, sufficiency or enforceability of
     this Agreement and the sale of the Contracts hereunder, regardless of
     whether any such item was or was not executed and delivered or action taken
     in a similar context or on a prior occasion). Without limiting the
     generality of the foregoing, each Seller will, promptly and from time to
     time at the request of the Agent, execute and file such financing
     statements or continuation statements in respect thereof, or amendments
     thereto, and such other instruments or notices, as the Agent may reasonably
     request, in order to perfect, preserve, and enhance the sale of the Buyers'
     Contracts sold by that Seller, the Related Security, the Related Security
     Documents and proceeds hereunder and attempt to obtain waivers, in form
     satisfactory to the Agent, of any claim to any such Contracts, Related
     Security or Related Security Documents from any other party claiming or in
     a position to claim an interest therein.

          (b)     Each Seller hereby authorizes the Agent to file one or more
     financing statements or continuation statements in respect thereof, and
     amendments thereto, relating to all or any part of the Buyers' Contracts
     sold by that Seller, the Related Security, the Related Security Documents
     and proceeds without the signature of the Seller where permitted by law. A
     photocopy or other reproduction of this Agreement or any financing
     statement covering the Buyers' Contracts, Related Security, Related
     Security Documents and proceeds or any part thereof shall be sufficient as
     a financing statement where permitted by law.

          (c)     The Servicer will furnish to the Agent from time to time
     statements and schedules further identifying and describing the Buyers'
     Contracts or Related Security and such other reports in connection with the
     Buyers' Contracts or Related Security as the Agent may reasonably request,
     all in reasonable detail and in form and substance reasonably satisfactory
     to the Agent.

                                      -37-

<PAGE>

          (d)     Each Seller shall, at the request of the Agent, deliver or
     cause the Servicer to deliver the originals of all Related Security
     Documents to the Agent, and allow the Agent to verify that the Sellers or
     the Servicer marked all of its relevant records to show the Buyers'
     ownership of the Buyers' Contracts, Related Security and Related Security
     Documents by labeling the same "Property of U.S. Bank National Association,
     as agent for the benefit of the `Buyers' as defined in that certain Third
     Amended and Restated Contract Purchase Agreement dated as of June 19, 2002
     (as amended) between Patterson Dental Company, Patterson Dental Supply,
     Inc., Webster Veterinary Supply, Inc., U.S. Bank National Association,
     individually and as agent, and the Buyers named therein from time to time."

     Section 9.7  Secured Party Subsidiaries. If any Subsidiary of PDC at any
time becomes a secured party or creditor with respect to any Obligor, PDC shall
cause such Subsidiary to conduct its business with such Obligor in a manner such
that no defense to such Obligor's obligations under any Buyers' Contract arise
from the Obligor's relationship with such Subsidiary.

                                    ARTICLE X
                                GENERAL COVENANTS

     In order to induce the Agent and the Buyers to execute this Agreement and
to purchase Contracts hereunder, PDC and the Sellers jointly and severally agree
that, until the Contract Purchase Commitment shall have expired or been
terminated and all Buyers' Contracts have been paid in full, unless the Majority
Banks shall otherwise consent in writing:

     Section 10.1 Corporate Existence. Subject to Section 10.9 in the instance
of a Subsidiary, PDC, each of the Sellers and each Subsidiary will maintain its
corporate existence in good standing under the laws of its jurisdiction of
incorporation and its qualification to transact business in each jurisdiction in
which the character of the properties owned, leased or operated by it or the
business conducted by it makes such qualification necessary and where the
failure so to qualify or to maintain such good standing would constitute an
Adverse Event.

     Section 10.2 Insurance. PDC, each of the Sellers and each Subsidiary will
maintain with financially sound and reputable insurance companies such insurance
as may be required by law and such other insurance in such amounts and against
such hazards as is customary in the case of reputable corporations engaged in
the same or similar business and similarly situated.

     Section 10.3 Payment of Taxes and Claims. PDC, each of the Sellers and each
Subsidiary will file all tax returns and reports which are required by law to be
filed by it and pay before they become delinquent all taxes, assessments and
governmental charges and levies imposed upon it or its property and all claims
or demands of any kind (including, without limitation, those of suppliers,
mechanics, carriers, warehouses, landlords and other like Persons) which, if
unpaid, might result in the creation of a Lien upon its property; provided that
the foregoing items need not be paid if they are being contested in good faith
by appropriate proceedings, and as long as PDC and the Seller's or such
Subsidiary's title to its property is not materially adversely affected, its use
of such property in the ordinary course of its business is not

                                       -38-

<PAGE>

materially interfered with and adequate reserves with respect thereto have been
set aside on PDC, the Seller's or such Subsidiary's books in accordance with
GAAP.

     Section 10.4  Maintenance of Properties. PDC, each of the Sellers and each
Subsidiary will maintain its properties used or useful in the conduct of its
business in good condition, repair and working order, and supplied with all
necessary equipment, and make all necessary repairs, renewals, replacements,
betterments and improvements thereto, all as may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.

     Section 10.5  Books and Records. PDC, each of the Sellers and each
Subsidiary will keep adequate and proper records and books of account in which
full and correct entries will be made of its dealings, business and affairs.

     Section 10.6  Compliance. PDC, each of the Sellers and each Subsidiary will
comply in all material respects with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject.

     Section 10.7  ERISA. PDC, each of the Sellers and each Subsidiary will
maintain each Plan in compliance with all material applicable requirements of
ERISA and of the Code and with all material applicable rulings and regulations
issued under the provisions of ERISA and of the Code.

     Section 10.8  Environmental Matters. PDC, each of the Sellers and each
Subsidiary will observe and comply with all laws, rules, regulations and orders
of any government or government agency relating to health, safety, pollution,
hazardous materials or other environmental matters to the extent non-compliance
could result in a material liability or otherwise constitute an Adverse Event.

     Section 10.9  Merger. None of PDC, either Seller or any Subsidiary will
merge or consolidate or enter into any analogous reorganization or transaction
with any Person, unless PDC shall be the surviving corporation and no Default or
Event of Default shall exist before and after giving effect to such merger,
consolidation, reorganization, or transaction; provided, however, any
wholly-owned Subsidiary may be merged with or liquidated into a Seller (if the
Seller is the surviving corporation) or any other wholly-owned Subsidiary.

     Section 10.10 Sale of Assets. None of PDC, either Seller or any Subsidiary
will sell, transfer, lease or otherwise convey all or any substantial part of
its assets except for (a) sales and leases of inventory in the ordinary course
of business, (b) Permitted Account Sales and (c) sales by PDC or a Subsidiary of
PDC to PDC or a Subsidiary of PDC.

     Section 10.11 Plans. None of PDC, either Seller or any Subsidiary will
permit any condition to exist in connection with any Plan which might constitute
grounds for the PBGC to institute proceedings to have such Plan terminated or a
trustee appointed to administer such Plan, permit any Plan to terminate under
any circumstances which would cause the lien provided for in Section 4068 of
ERISA to attach to any property, revenue or asset of PDC, either Seller or any
Subsidiary or permit the underfunded amount of Plan benefits guaranteed under
Title IV of ERISA to exceed $500,000.

                                      -39-

<PAGE>

     Section 10.12 Change in Nature of Business. None of PDC, either Seller or
any Subsidiary will make any material change in the nature of the business of
PDC or either Seller or such Subsidiary, as carried on at the date hereof.

     Section 10.13 Liens. None of PDC, either Seller or any Subsidiary will
create, incur, assume or suffer to exist any Lien on any Account or Inventory,
except for Permitted Liens.

     Section 10.14 Use of Proceeds. None of PDC, either Seller or any Subsidiary
will permit any proceeds of the sales of the Contracts to be used, either
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of "purchasing or carrying any margin stock" within the meaning of
Regulation U of the Federal Reserve Board, as amended from time to time, and PDC
or each Seller will furnish to the Buyer, upon its request, a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
Regulation U.

     Section 10.15 Accounting Changes. PDC or the Sellers will not, and will not
permit any Subsidiary to, make any change in accounting treatment or reporting
practices, except as required by GAAP, that would have a significant effect on
any determination made or required to be made hereunder, or change their fiscal
year or the fiscal year of any Subsidiary.

     Section 10.16 Changes in Name or Location. None of PDC nor either Seller
will at any time change its name, identity, address of its chief executive
office or corporate structure (including without limitation changing its
jurisdiction of organization) in any manner which would, could or might make any
financing or continuation statement filed hereunder seriously misleading within
the meaning of ss. 9-503 or ss. 9-507 (or similar section) of any applicable
enactment of the Uniform Commercial Code or transact any business with respect
to Contracts under a name other than its present corporate title unless in
either case it shall have given the Agent at least sixty (60) days prior written
notice thereof and shall have made and cause to be filed such amendments to the
financing statements filed hereunder or such financing statements as are
necessary to maintain the perfection and priority of the Buyers' security
interest or as may be requested by the Agent.

     Section 10.17 Indemnity. PDC and each Seller hereby agree, jointly and
severally, to indemnify and defend the Agent and the Buyers against all losses,
damages, costs, expenses, claims and liabilities (including, without limitation,
the Agent's and the Buyers' reasonable out-of-pocket expenses and reasonable
fees and expenses of counsel):

          (a)      arising out of or resulting from (i) the use, ownership,
     operation, sale or consumption by any Obligor, or any agent, employee or
     customer of any Obligor, of any product distributed by a Seller or which at
     any time was or shall have been related to any financing transaction from
     which a Buyers' Contract arises, or (ii) any breach of warranty or alleged
     breach of warranty by a Seller or any other Person, or (iii) any failure of
     any Buyers' Contract or Related Security Document at any time to comply
     with any legal requirement;

          (b)      arising from the assertion by an Obligor of any right to
     set-off against amounts owing under any Contract or Related Security any
     claim of whatsoever nature against a Seller or its employees or agents;

                                      -40-

<PAGE>

          (c)      relating to license and registration fees, duties or other
     similar charges (including without limitation, any charges related to doing
     business in a particular jurisdiction), or taxes, imposed or assessed
     (including without limitation, any penalties, fees, additions to tax or
     interest thereon, but excluding taxes imposed on the overall net income of
     a Buyer by the United States or the jurisdiction in which the Buyer has its
     principal office) by any government or taxing authority upon or with
     respect to amounts received as collections on the Contracts solely as a
     result of the Buyers' ownership of any Contract;

          (d)      actually incurred by the Agent or a Buyer by reason of the
     existence of any lien or encumbrance (other than those in favor of or
     created by the Agent or a Buyer) on any Buyers' Contract, Related Security
     Document or Related Security;

          (e)      arising by reason of, relating to or in connection with the
     execution, delivery, performance or enforcement of the Transaction
     Documents or any transaction contemplated hereby or thereby; and

          (f)      arising by reason of, relating to or in connection with the
     purchase of any Contracts, Related Security, Related Security Documents and
     proceeds hereunder, or any act done or omitted by any Person with respect
     thereto or the exercise of any rights or remedies thereunder (other than
     nonpayment by an Obligor, or any other Contract Default, not attributable
     to or caused by the failure of the Contract to constitute an Eligible
     Contract or the actions or failure to act of the Sellers or the Servicer).

provided, however, that PDC and the Sellers shall not be liable to the Agent or
a Buyer for any portion of such losses, damages, costs, expenses, claims and
liabilities resulting from: (i) such Person's gross negligence or willful
misconduct, or (ii) the acts or omissions of any Person appointed by the Agent
(after the removal of PDC as Servicer) as the successor servicer for the Buyers'
Contracts. In the event this indemnity is unenforceable as a matter of law as to
a particular matter or consequence referred to herein, it shall be enforceable
to the full extent permitted by law. The foregoing indemnifications shall
survive full payment, any repurchase by or assignment to a Seller of any
Contract and the termination of this Agreement as provided in Section 13.14
hereof. The Sellers will jointly and severally indemnify the Agent and the
Buyers and save them harmless from and against any claims, actions, damages,
losses or expenses (including reasonable attorneys' fees and court costs)
awarded against or incurred by the Agent or a Buyer as a result of any breach of
this covenant.

     Section 10.18 Filing Fees. PDC and each Seller shall pay all filing fees
and other expenses incurred by the Agent to validate, perfect, continue or
otherwise protect the Buyers' interest in the Contracts sold by that Seller, any
Related Security and any Related Security Documents, including appropriate
filings under the Uniform Commercial Code.

     Section 10.19 Guaranties. When so requested by the Agent from time to time,
PDC will execute and deliver to the Agent reaffirmations of the PDC Guaranty in
such form as the Agent may require.

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<PAGE>

                                   ARTICLE XI
                         TERMINATION EVENTS AND REMEDIES

     Section 11.1  Termination Events. The occurrence of any one or more of the
following events shall constitute a Termination Event:

          (a)      PDC, either Seller or the Servicer shall fail to pay when due
     any amounts required to be paid to the Agent or the Buyers pursuant hereto.

          (b)      Any representation or warranty made or deemed to have been
     made by or on behalf of a Seller or any Subsidiary in the Transaction
     Documents or on behalf of a Seller or any Subsidiary in any certificate,
     statement, report or other writing furnished by or on behalf of a Seller to
     the Agent or a Buyer pursuant to this Agreement or the Assignments or any
     other instrument, document or agreement shall prove to have been false or
     misleading in any material respect on the date as of which the facts set
     forth are stated or certified or deemed to have been stated or certified;

          (c)      PDC or either Seller shall fail to comply with any agreement,
     covenant, condition, provision or term contained in the Transaction
     Documents (and such failure shall not constitute a Termination Event under
     any of the other provisions of this Section 11.1) and such failure to
     comply shall continue for 30 calendar days after notice thereof to that
     Seller by the Agent;

          (d)      PDC, Seller or any Subsidiary shall become insolvent or shall
     generally not pay its debts as they mature or shall apply for, shall
     consent to, or shall acquiesce in the appointment of a custodian, trustee
     or receiver of PDC, a Seller or Subsidiary or for a substantial part of the
     property thereof or, in the absence of such application, consent or
     acquiescence, a custodian, trustee or receiver shall be appointed for PDC,
     a Seller or a Subsidiary or for a substantial part of the property thereof
     and shall not be discharged within 30 days;

          (e)      Any bankruptcy, reorganization, debt arrangement or other
     proceedings under any bankruptcy or insolvency law shall be instituted by
     or against PDC, a Seller or a Subsidiary, and, if instituted against PDC, a
     Seller or a Subsidiary, shall have been consented to or acquiesced in by
     PDC, the Seller or Subsidiary, or shall remain undismissed for 30 days, or
     an order for relief shall have been entered against PDC, a Seller or a
     Subsidiary, or PDC, a Seller or any Subsidiary shall take any corporate
     action to approve institution of, or acquiescence in, such a proceeding;

          (f)      Any dissolution or liquidation proceeding shall be instituted
     by or against PDC, a Seller or a Subsidiary and, if instituted against PDC,
     a Seller or Subsidiary, shall be consented to or acquiesced in by PDC, a
     Seller or Subsidiary or shall remain for 30 days undismissed, or PDC, a
     Seller or any Subsidiary shall take any corporate action to approve
     institution of, or acquiescence in, such a proceeding;

          (g)      A judgment or judgments for the payment of money in excess of
     the sum of $2,000,000 in the aggregate shall be rendered against PDC, a
     Seller or a Subsidiary and PDC, the Seller or Subsidiary shall not
     discharge the same or provide for its

                                      -42-

<PAGE>

     discharge in accordance with its terms, or procure a stay of execution
     thereof, prior to any execution on such judgments by such judgment
     creditor, within 30 days from the date of entry thereof, and within said
     period of 30 days, or such longer period during which execution of such
     judgment shall be stayed, appeal therefrom and cause the execution thereof
     to be stayed during such appeal;

          (h)  The institution by PDC, a Seller or any ERISA Affiliate of steps
     to terminate any Plan if in order to effectuate such termination, PDC, the
     Seller or any ERISA Affiliate would be required to make a contribution to
     such Plan, or would incur a liability or obligation to such Plan, in excess
     of $2,000,000, or the institution by the PBGC of steps to terminate any
     Plan;

          (i)  The maturity of any indebtedness of PDC (including its
     obligations under any Permitted Account Sales), a Seller or a Subsidiary in
     an aggregate amount of $2,000,000 or more shall be accelerated, or PDC, a
     Seller or a Subsidiary shall fail to pay any such indebtedness in such
     amount when due or, in the case of such indebtedness payable on demand,
     when demanded, or any event shall occur or condition shall exist and shall
     continue for more than the period of grace, if any, applicable thereto and
     shall have the effect of causing, or permitting the holder of any such
     indebtedness or any trustee or other Person acting on behalf of such holder
     to cause, such indebtedness in such amount to become due prior to its
     stated maturity or to realize upon any collateral given as security
     therefor;

          (j)  Any Person, or group of Persons acting in concert, that owned
     less than 5% of the shares of any voting class of stock of PDC shall have
     acquired more than 50% of the shares of such voting stock;

          (k)  This Agreement or the PDC Guaranty shall, at any time after the
     execution and delivery hereof, cease to be in full force and effect or
     shall be declared to be null and void, or the validity or enforceability
     thereof shall be contested by PDC or any Seller, or PDC or any Seller shall
     deny that it has any or further liability or obligation under this
     Agreement or PDC's Guaranty;

          (l)  Any execution or attachment shall be issued whereby any
     substantial part of the property of PDC, a Seller or any Subsidiary shall
     be taken or attempted to be taken and the same shall not have been vacated
     or stayed within 30 days after the issuance thereof; or

          (m)  PDSI or Webster shall cease to be a wholly-owned Subsidiary of
     PDC; or

          (n)  That certain Escrow Agreement among PDC, PDSI, the Agent and U.S.
     Bank National Association shall be terminated, amended or otherwise
     modified without the Majority Buyers' prior written consent, or U.S. Bank
     National Association shall resign or be removed as escrow agent thereunder
     and not be replaced with a substitute escrow agent satisfactory to the
     Majority Buyers; or

          (o)  The Intercreditor Agreement shall, at any time after the
     execution and delivery thereof, be breached by any Seller or Bank One, NA,
     cease to be in full force

                                      -43-

<PAGE>

     and effect or shall be declared to be null and void, or the validity or
     enforceability thereof shall be contested by any Seller or Bank One, NA, or
     any Seller or Bank One, NA, shall deny that it has any or further liability
     or obligation under the Intercreditor Agreement.

          (p)     PDC's Consolidated Tangible Net Worth at any time shall be
     less than the sum of (i) $300,000, plus (ii) 50% of the cumulative positive
     quarterly Consolidated Net Income for all fiscal quarters of PDC following
     the fiscal quarter of PDC ending April 27, 2002 (without taking into
     account any net loss in any such fiscal quarter), plus (iii) 100% of the
     amount, if any, by which stockholder's equity of PDC is, in accordance with
     GAAP, increased for all fiscal quarters of PDC following the fiscal quarter
     of PDC ending April 27, 2002 as a result of (A) the issuance of any capital
     stock of PDC or (B) any Acquisition.

          (q)     PDC's ratio of Consolidated Total Debt to Consolidated
     Adjusted EBITDA at any time to be greater than 2.0 to 1.0.

     Section 11.2 Remedies.

          (a)     If (i) any Termination Event described in Sections 11.1(e),
     (f) or (g) shall occur with respect to PDC, a Seller, the Contract Purchase
     Commitment shall automatically terminate and each Seller shall without
     demand pay into the Holding Account an amount equal to its Individual
     Repurchase Commitment Amount as of such date; or (ii) any other Termination
     Event shall occur and be continuing, then the Agent may, and at the request
     of the Majority Buyers shall, (A) declare the Contract Purchase Commitment
     terminated, whereupon the Contract Purchase Commitment shall terminate, and
     (B) demand that each Seller pay into the Holding Account an amount equal to
     its Individual Repurchase Commitment Amount as of such date. If a Seller
     makes any deposit in the Holding Account, then, upon any reduction in the
     aggregate unpaid principal amount of all outstanding Buyers' Contracts
     purchased from that Seller resulting from (y) the Buyers' receipt of
     principal payments thereon or (z) that Seller's repurchase thereof, the
     Buyer shall withdraw from the Holding Account the amount (if any) by which
     the amount on deposit in the Holding Account exceeds such aggregate unpaid
     principal amount plus accrued, unpaid interest thereon at the Buyer's Rate,
     and pay such amount to that Seller.

          (b)     Upon the occurrence of any Termination Event:

                  (i)  the Agent may exercise and enforce any and all rights and
          remedies available upon default to a secured party under the Uniform
          Commercial Code;

                  (ii) the Agent may deliver notice of the Buyers' purchase of
          the Buyers' Contracts to one or more Obligors and may, in the Agent's
          name, in the Buyers' name or in the Related Seller's name, demand, sue
          for, collect or receive any money or property at any time payable or
          receivable on account of, or securing, any of the Buyers' Contracts or
          the Related Security or grant any extension to, make any compromise or
          settlement with or otherwise agree to

                                      -44-

<PAGE>

          waive, modify, amend or change the obligation of any Obligor. If any
          payments on any of the Buyers' Contracts or the Related Security are
          received by a Seller after a Termination Event has occurred, such
          payments shall be held in trust by that Seller as the property of the
          Buyers and shall not be commingled with any funds or property of that
          Seller and shall be forthwith remitted to the Agent for the benefit of
          the Buyers;

                  (iii) the Agent may require PDC and each Seller to, and PDC
          and each Seller hereby agrees that it will, at its expense and upon
          request of the Agent forthwith, assemble all of the Contracts, Related
          Security Documents and records related thereto (to the extent not
          already in the Agent's possession) as directed by the Agent and make
          them available to the Agent at a place or places to be designated by
          the Agent; and

                  (iv)  the Agent may exercise or enforce any and all other
          rights or remedies available by law or agreement against the Buyers'
          Contracts and the Related Security, against PDC and a Seller
          (including under PDC Guaranty), or against any other Person or
          property.

If notice to a Seller of any intended disposition of the Contracts and the
Related Security or any other intended action is required by law in a particular
instance, such notice shall be deemed commercially reasonable if given in the
manner specified for the giving of notice in Section 13.3 at least ten calendar
days prior to the date of intended disposition or other action. In addition to
the other remedies set forth in this Section 11.2, upon the occurrence of any
Termination Event and thereafter while the same be continuing, each Seller
hereby irrevocably authorizes each Buyer to set off any obligations of that
Seller hereunder to such Buyer, or to make deposits into the Holding Account,
against all deposits and credits of that Seller with, and any and all claims of
that Seller against, such Buyer. Such right shall exist whether or not such
Buyer shall have made any demand hereunder, whether or not the deposits and
credits held for the account of that Seller is or are matured or unmatured, and
regardless of the existence or adequacy of any security, right or remedy
available to such Buyer. Each Buyer agrees that, as promptly as is reasonably
possible after the exercise of any such setoff right, it shall notify the
affected Seller of its exercise of such setoff right; provided, however, that
the failure of a Buyer to provide such notice shall not affect the validity of
the exercise of such setoff rights.

                                   ARTICLE XII
                             CHANGE IN CIRCUMSTANCES

     Section 12.1 Increased Costs. If, as a result of any law, rule, regulation,
treaty or directive, or any change therein or in the interpretation or
administration thereof, or compliance by a Buyer with any request or directive
(whether or not having the force of law) from any court, central bank,
governmental authority, agency or instrumentality, or comparable agency:

          (a)     any tax, duty or other charge with respect to the Buyers'
     Contracts or the Buyers' obligation to purchase Contracts is imposed,
     modified or deemed applicable, or the basis of taxation of payments to any
     Buyer of interest or principal on the Contracts or any amounts due under
     this Agreement (other than taxes imposed on the overall net

                                      -45-

<PAGE>

     income of a Buyer by the United States and the jurisdiction in which the
     Buyer has its principal office) is changed;

          (b)     any reserve, special deposit, special assessment or similar
     requirement against assets of, deposits with or for the account of, or
     credit extended by, any Buyer is imposed, modified or deemed applicable; or

          (c)     any other condition affecting this Agreement, the Buyers'
     Contracts or the Buyers' obligation to purchase the Contracts is imposed on
     any Buyer or the relevant funding markets;

and any Buyer determines that, by reason thereof, the cost to that Buyer of
purchasing or maintaining the Contracts or the Buyers' obligation to purchase
Contracts is increased, or the amount of any sum receivable by that Buyer
hereunder or under this Agreement or any Contract is reduced;

then, PDC shall pay to such Buyer upon demand by such Buyer (with a copy to the
Agent) such additional amount or amounts as will compensate such Buyer (or the
controlling Person in the instance of (c) above) for such additional costs or
reduction (provided that the Buyer has not been compensated for such additional
cost or reduction in the calculation of the Eurodollar Reserve Rate). Each Buyer
will promptly notify PDC of any event of which such Buyer has knowledge,
occurring after the date hereof, which will entitle such Buyer to compensation
pursuant to this Section. If a Buyer fails to give such notice within 45 days
after it obtains knowledge of such an event, such Buyer shall, with respect to
compensation payable pursuant to this Section, only be entitled to payment under
this Section for costs incurred from and after the date 45 days prior to the
date that such Buyer does give such notice. A certificate of a Buyer claiming
compensation under this Section, setting forth the additional amount or amounts
to be paid to it hereunder and stating in reasonable detail the basis for the
charge and the method of computation, shall be conclusive in the absence of
manifest error. In determining such amount, each Buyer may use any reasonable
averaging and attribution methods. Failure on the part of a Buyer to demand
compensation for any increased costs or reduction in amounts received or
receivable with respect to any Interest Period shall not constitute a waiver of
that Buyer's rights to demand compensation for any increased costs or reduction
in amounts received or receivable in any subsequent Interest Period (subject to
the limitation contained in the third preceding sentence).

     Section 12.2 Deposits Unavailable or Interest Rate Unascertainable or
Inadequate; Impracticability. If any Buyer reasonably determines (which
determination shall be conclusive and binding on the parties hereto) that:

          (a)     deposits of the necessary amount for the relevant Interest
     Period or Fixed Rate Period elected by PDC pursuant to Section 2.7 are not
     available to that Buyer in the relevant markets or that, by reason of
     circumstances affecting such market, adequate and reasonable means do not
     exist for ascertaining the Eurodollar Rate for such Interest Period or
     Fixed Rate Period;

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<PAGE>

          (b)     the use of the Eurodollar Rate (Reserve Adjusted) as the basis
     for the Buyers' Rate will not adequately and fairly reflect the cost to
     that Buyer of purchasing or maintaining the Buyers' Contracts for a
     relevant Interest Period or Fixed Rate Period; or

          (c)     the use of the Eurodollar Rate (Reserve Adjusted) as the basis
     for the Buyers' Rate has become impracticable as a result of any event
     occurring after the date of this Agreement which, in the opinion of that
     Buyer, materially and adversely affects the Buyers' Contracts or the
     Buyers' obligation to purchase Contracts or the relevant market;

such Buyer shall promptly give notice of such determination to PDC, with a copy
to the Agent, and the Buyers' Rate with respect to the Buyer's Percentage of
that Buyer of the principal amount outstanding under the Buyers' Contracts shall
be the Prime Rate for as long as such condition persists; provided, however,
that if at the time of any such determination the affected Buyer is using a
reserve-adjusted certificate of deposit rate or similar rate as a basis for
pricing, and if PDC so requests and enters into such amendments to this
Agreement as the Agent and the Buyers may reasonably request in order to
incorporate appropriate definitions and other terms typically included in the
affected Buyer's documentation with respect to such rates, then the Buyers' Rate
for the Buyer's Percentage of the affected Buyer of the Buyers' Contracts shall
be the sum of (i) such reserve-adjusted certificate of deposit or similar rate,
(ii) the Applicable Margin, and (iii) one eighth of one percent (0.125%).

     Section 12.3 Illegality. If at any time due to the adoption of any law,
rule, regulation, treaty or directive, or any change therein or in the
interpretation or administration thereof by any court, central bank,
governmental authority, agency or instrumentality, or comparable agency charged
with the interpretation or administration thereof, or for any other reason
arising subsequent to the date of this Agreement, it shall become unlawful or
impossible for a Buyer to purchase Contracts at a rate based on the Eurodollar
Rate (Reserve Adjusted), the obligation of such Buyer to purchase Contracts
shall, upon the happening of such event, forthwith be suspended for the duration
of such illegality or impossibility. If any such event shall make it unlawful or
impossible for a Buyer to maintain any Buyers' Contracts previously purchased by
it hereunder, such Buyer shall, upon the happening of such event, notify PDC
thereof in writing, and the Buyers' Rate with respect to the Buyer's Percentage
of that Buyer of the principal amount outstanding under the Buyers' Contracts
shall thereafter be the Prime Rate.

     Section 12.4 Capital Adequacy. In the event that any change in any law,
rule, regulation, treaty or directive, or any change therein or in the
interpretation or administration thereof by any court, central bank,
governmental authority, agency or instrumentality, or comparable agency (a
"Governmental Agency") charged with the interpretation or administration
thereof, or compliance by any Bank with any request or directive (whether or not
having the force of law) of any such Governmental Agency, reduces or shall have
the effect of reducing the rate of return on any Buyer's capital or the capital
of its parent corporation (by an amount such Buyer deems material) as a
consequence of its Individual Contract Purchase Commitment Amount and/or its
undivided percentage ownership interest in the Buyers' Contracts to a level
below that which such Buyer or its parent corporation could have achieved but
for such change (taking into account such Buyer's policies and the policies of
its parent corporation with respect to capital adequacy), then PDC shall, within
30 days after written notice and demand from such Buyer (with a copy to the
Agent), pay to such Buyer additional amounts sufficient to compensate

                                      -47-

<PAGE>

such Buyer or its parent corporation for such reduction. Any determination by
such Buyer under this Section and any certificate as to the amount of such
reduction given to PDC by such Buyer shall be final, conclusive and binding for
all purposes, absent error. Each Buyer will promptly notify PDC of any event of
which such Buyer has knowledge, occurring after the date hereof, which will
entitle such Buyer to compensation pursuant to this Section. If a Buyer fails to
give such notice within 45 days after it obtains knowledge of such an event,
such Buyer shall, with respect to compensation payable pursuant to this Section,
only be entitled to payment under this Section for costs incurred from and after
the date 45 days prior to the date that such Buyer does give such notice.

                                  ARTICLE XIII
                                  MISCELLANEOUS

     Section 13.1 Waiver and Amendment. No failure on the part of the Agent or
any Buyer to exercise and no delay in exercising any power or right hereunder or
under any Assignment shall operate as a waiver thereof; nor shall any single or
partial exercise of any power or right preclude any other or further exercise
thereof or the exercise of any other power or right. The remedies herein and in
any other instrument, document or agreement delivered or to be delivered to the
Agent or the Buyers hereunder or in connection herewith are cumulative and not
exclusive of any remedies provided by law. No notice to or demand on PDC or a
Seller not required hereunder or under an Assignment shall in any event entitle
PDC or either Seller to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the right of the Agent or the
Buyers to any other or further action in any circumstances without notice or
demand. No amendment, modification or waiver of any provision of this Agreement
or consent to any departure by PDC or a Seller therefrom shall be effective
unless the same shall be in writing and signed by the Agent and the Majority
Buyers, and then such amendment, modifications, waiver or consent shall be
effective only in the specific instances and for the specific purpose for which
given. Notwithstanding the foregoing, no such amendment, modification, waiver or
consent shall:

          (a)     Reduce the rate or extend the time of payment of interest
     thereon, or reduce the amount of the principal thereof, modify any of the
     provisions of any Buyers' Contract with respect to the payment or repayment
     thereof, release any Guaranty, modify any repurchase or other payment
     obligation of the Sellers, or transfer title to (or release any security
     interest that the Agent may be deemed to hold, pursuant to Section 2.6, in)
     any Buyers' Contract, without the consent of each Buyer; or

          (b)     Increase the amount or extend the time of any Individual
     Contract Purchase Commitment Amount of any Buyer, without the consent of
     such Buyer; or

          (c)     Reduce the rate or extend the time of payment of any fee
     payable to a Buyer, without the consent of the Buyer affected; or

          (d)     Amend the definition of Majority Buyers or otherwise reduce
     the percentage of the Buyers required to approve or effectuate any such
     amendment, modification, waiver, or consent, without the consent of all the
     Buyers; or

                                      -48-

<PAGE>

          (e)     Amend any of the foregoing Sections 13.1 (a) through (d) or
     this Section 13.1 (e) without the consent of all the Buyers; or

          (f)     Amend any provision of this Agreement relating to the Agent in
     its capacity as Agent without the consent of the Agent.

     Section 13.2 Expenses. Whether or not any Contract is purchased hereunder,
the Sellers jointly and severally agree to reimburse the Agent upon demand for
all reasonable expenses paid or incurred by the Agent (including filing and
recording costs and fees and expenses of legal counsel, who may be employees of
the Agent) in connection with the preparation, negotiation, execution, delivery,
amendment, modification and interpretation of the Transaction Documents. PDC and
the Sellers also jointly and severally agree to reimburse the Agent and each
Buyer upon demand for all reasonable out-of-pocket expenses (including expenses
of legal counsel) paid or incurred by the Agent or any Buyer in connection with
the collection and enforcement of the Transaction Documents, the Buyers'
Contracts and the Related Security Documents. PDC and the Sellers jointly and
severally agree to indemnify and hold the Agent and the Buyers harmless from any
loss or expense which may arise or be created by the acceptance of telephonic or
other instructions for purchasing Contracts or disbursing the proceeds thereof.
The obligations of PDC and the Sellers under this Section 13.2 shall survive any
termination of this Agreement.

     Section 13.3 Notices. Except when telephonic notice is expressly authorized
by this Agreement, any notice or other communication to any party in connection
with this Agreement shall be in writing and shall be sent by manual delivery,
telegram, telex, facsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the
signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by telegram, telex or facsimile transmission, from
the first Business Day after the date of sending if sent by overnight courier,
or from four days after the date of mailing if mailed; provided, however, that
any notice to the Agent or any Buyer under Article II hereof shall be deemed to
have been given only when received by the Agent or that Buyer.

     Section 13.4 Successors and Assigns; Disposition of Interests in Buyers'
Contracts; Transferees.

          (a)     This Agreement shall be binding upon and inure to the benefit
     of PDC, the Sellers, the Buyers, the Agent, and their respective successors
     and assigns, except that PDC or the Sellers may not assign or transfer any
     of their rights or obligations under this Agreement without the prior
     written consent of each Buyer.

          (b)     Any Buyer may, in the ordinary course of its business and in
     accordance with applicable law, at any time sell to one or more banks or
     other entities ("Participants") participating interests in such Buyer's
     undivided percentage ownership interest in the Buyers' Contracts, and the
     Individual Contract Purchase Commitment Amount of such Buyer, or any other
     interest of such Buyer hereunder. In the event of any such sale by a Buyer
     of participating interests to a Participant, (i) such Buyer's

                                      -49-

<PAGE>

          obligations under this Agreement to the other parties to this
          Agreement shall remain unchanged, (ii) such Buyer shall remain solely
          responsible for the performance thereof, (iii) such Buyer shall remain
          the owner of such Buyer's undivided percentage ownership interest in
          the Buyers' Contracts for all purposes under this Agreement, (iv) PDC,
          the Sellers and the Agent shall continue to deal solely and directly
          with such Buyer in connection with such Buyer's rights and obligations
          under this Agreement and (v) the agreement pursuant to which such
          Participant acquires its participating interest herein shall provide
          that such Buyer shall retain the sole right and responsibility to
          enforce its rights hereunder and with respect to the Buyers'
          Contracts, including, without limitation the right to consent or agree
          to any amendment, modification, consent or waiver with respect to this
          Agreement or any other Buyers' Contract, provided that such agreement
          may provide that such Buyer will not consent or agree to any such
          amendment, modification, consent or waiver with respect to the matters
          set forth in Sections 13.1(a) - (c) without the prior consent of such
          Participant. PDC and the Sellers agree that if amounts outstanding
          under this Agreement are due and unpaid, or shall have been declared
          or shall have become due and payable upon the occurrence of a
          Termination Event, each Participant shall be deemed to have, to the
          extent permitted by applicable law, the right of setoff in respect of
          its participating interest in amounts owing under this Agreement to
          the same extent as if the amount of its participating interest were
          owing directly to it as a Buyer under this Agreement; provided, that
          such right of setoff shall be subject to the obligation of such
          Participant to share with the Buyers, and the Buyers agree to share
          with such Participant, as provided in subsection 14.11.

               (c)   Each Buyer may, from time to time, with the consent of the
          Agent (which consent shall not be unreasonably withheld), assign to
          other Persons ("Assignees") part of such Buyer's undivided percentage
          ownership interest in the Buyers' Contracts, together with equivalent
          proportions of its Individual Contract Purchase Commitment Amount and
          its Buyer's Percentage, pursuant to written agreements executed by
          such assigning Buyer, such Assignee(s) and the Agent in substantially
          the form of Exhibit H, which agreements shall specify in each instance
          the portion of the Buyer's Percentage and its undivided percentage
          ownership interest in the Buyers' Contracts which is to be assigned to
          each Assignee and the portion of the Individual Contract Purchase
          Commitment Amount of such Buyer to be assumed by each Assignee (each,
          an "Assignment Agreement"); provided, however, that the assigning
          Buyer must pay to the Agent a processing and recordation fee of $3,500
          and that each Assignment must be for an aggregate amount of
          $15,000,000 or more (or the entire amount of the assigning Buyer's
          Individual Contract Purchase Commitment Amount, if lesser). Upon the
          execution of each Assignment Agreement by the assigning Buyer, the
          relevant Assignee, PDC, the Sellers and the Agent, payment to the
          assigning Buyer by such Assignee of the purchase price for the portion
          of the assigning Buyer's undivided percentage ownership interest in
          the Buyers' Contracts being acquired by the Assignee and receipt by
          PDC and the Sellers of a copy of the relevant Assignment Agreement,
          (x) such Assignee lender shall thereupon become a "Buyer" for all
          purposes of this Agreement with an Individual Contract Purchase
          Commitment Amount in the amount set forth in such Assignment Agreement
          and with all the rights, powers and obligations afforded a Buyer under
          this Agreement, (y) such assigning Buyer shall have no further
          liability for funding the portion of its Individual Contract Purchase
          Commitment Amount assumed by such

                                      -50-

<PAGE>

     Assignee and (z) the address for notices to such Assignee shall be as
     specified in the Assignment Agreement executed by it.

          (d)      PDC and the Sellers shall not be liable for any costs
     incurred by the Buyers in effecting any participation or assignment.

          (e)      Each Buyer may disclose to any Assignee or Participant and to
     any prospective Assignee or Participant any and all financial information
     in such Buyer's possession concerning PDC or the Sellers or any of their
     Subsidiaries which has been delivered to such Buyer by or on behalf of PDC
     or the Sellers or any of their Subsidiaries pursuant to this Agreement or
     which has been delivered to such Buyer by or on behalf of PDC or the
     Sellers or any of its Subsidiaries in connection with such Buyer's credit
     evaluation of PDC or the Sellers or any of their Subsidiaries prior to
     entering into this Agreement, provided that prior to disclosing such
     information, such Buyer shall first obtain the agreement of such
     prospective Assignee or Participant to comply with the provisions of
     Section 13.13.

     Section 13.5  Severability. Any provision of this Agreement or any
Assignment 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.

     Section 13.6  Subsidiary References. The provisions of this Agreement
relating to Subsidiaries shall apply only during such times as PDC or a Seller
has one or more Subsidiaries.

     Section 13.7  Captions. The captions or headings herein and any table of
contents hereto are for convenience only and in no way define, limit or describe
the scope or intent of any provision of this Agreement.

     Section 13.8  Entire Agreement. The Transaction Documents embody the entire
agreement and understanding between PDC, the Sellers, the Agent and the Buyers
with respect to the subject matter hereof and thereof. The Transaction Documents
supersede all prior agreements and understandings relating to the subject matter
hereof.

     Section 13.9  Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and either of the parties hereto may execute this Agreement by
signing any such counterpart.

     Section 13.10 Governing Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY
OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT
GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.

     Section 13.11 Consent to Jurisdiction. AT THE OPTION OF THE AGENT, THIS
AGREEMENT AND THE ASSIGNMENTS MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA
STATE COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA; AND THE SELLERS
CONSENT TO THE JURISDICTION AND VENUE OF

                                      -51-

<PAGE>

ANY SUCH COURT AND WAIVE ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT
CONVENIENT. IN THE EVENT PDC OR A SELLER COMMENCES ANY ACTION IN ANOTHER
JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR
INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE AGENT AT ITS
OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.

     Section 13.12 Waiver of Jury Trial. PDC, EACH OF THE SELLERS, THE AGENT AND
THE BUYERS IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (a) UNDER THIS AGREEMENT OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (b) ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

     Section 13.13 Confidentiality of Information. The Agent and the Buyers
shall use reasonable efforts to assure that information about PDC and the
Sellers and their operations, affairs and financial condition, not generally
disclosed to the public or to trade and other creditors, which is furnished to
the Agent or the Buyers pursuant to the provisions hereof is used only for the
purposes of this Agreement and any other relationship between the Agent or a
Buyer and the Sellers and shall not be divulged to any Person other than the
Agents, the Buyers, their Affiliates and their respective officers, directors,
employees and agents, except: (a) to their attorneys and accountants, (b) in
connection with the enforcement of the rights of the Agent or the Buyer
hereunder or otherwise in connection with applicable litigation, (c) in
connection with assignments and participations and the solicitation of
prospective assignees and participants referred to in Section 13.4 and (d) as
may otherwise be required or requested by any regulatory authority having
jurisdiction over the Agent or a Buyer or by any applicable law, rule,
regulation or judicial process, the opinion of the Agent's or Buyer's counsel
concerning the making of such disclosure to be binding on the parties hereto.
The Agent and the Buyers shall not incur any liability to the Sellers by reason
of any disclosure permitted by this Section 13.13.

     Section 13.14 Survival of Agreement. All representations, warranties,
covenants and agreement made by PDC and the Sellers herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be deemed to have been relied upon by the Agent
and the Buyers, regardless of any investigation made by or on behalf of the
Agent or the Buyers, and shall continue in full force and effect as long as any
Contract is outstanding and unpaid and so long as the Contract Purchase
Commitment has not been terminated; provided, however, that the obligations of
the Sellers under Sections 10.20 and 13.2 shall survive payment in full of the
Contracts and the termination of the Contract Purchase Commitment.

                                       -52-

<PAGE>

     Section 13.15 Withholding Taxes.

          (a)      Buyers to Submit Forms. Each Buyer represents to the Sellers
     and the Agent that, as of the date it becomes a Buyer and at all times
     thereafter, it is either (i) a corporation organized under the laws of the
     United States or any State thereof or (ii) entitled to complete exemption
     from United States withholding tax imposed on or with respect to any
     payments, including fees, to be made pursuant to this Agreement (x) under
     an applicable provision of a tax convention to which the United States is a
     party or (y) because it is acting through a branch, agency or office in the
     United States and any payment to be received by it hereunder is effectively
     connected with a trade or business in the United States. Each Buyer that is
     not a United States person (as such term is defined in Section 7701(a)(30)
     of the Code) shall submit to the Sellers and the Agent, on or before the
     later of the date hereof or the day on which such Buyer becomes a Buyer,
     duly completed and signed copies of either Form 1001 (relating to such
     Buyer and entitling it to a complete exemption from withholding on all
     payments to be received by such Buyer hereunder) or Form 4224 (relating to
     all payments to be received by such Buyer hereunder) of the United States
     Internal Revenue Service. Thereafter and from time to time, each such Buyer
     shall submit to the Sellers and the Agent such additional duly completed
     and signed copies of one or the other of such Forms (or such successor
     Forms as shall be adopted from time to time by the relevant United States
     taxing authorities) as may be (i) reasonably requested by the Sellers or
     the Agent and (ii) required and permitted under then-current United States
     law or regulations to avoid United States withholding taxes on payments in
     respect of all payments to be received by such Buyer hereunder. Upon the
     request of the Sellers or the Agent, each Buyer that is a United States
     person (as such term is defined in Section 7701(a)(30) of the Code) shall
     submit to the Sellers and the Agent a certificate in such form as is
     reasonably satisfactory to the Sellers and the Agent to the effect that it
     is such a United States person.

          (b)      Inability of a Buyer. If any Buyer that is not a United
     States person (as such term is defined in Section 7701(a)(30) of the Code)
     determines that, as a result of any change in law or regulation or the
     interpretation thereof, any Seller or Obligor, or the Agent, is required by
     law or regulation to make any deduction, withholding or backup withholding
     (in which case either Seller or the Agent is hereby authorized to make such
     deduction, withholding or backup withholding) of any taxes, levies,
     imposts, duties, fees, liabilities or similar charges of the United States
     of America, any possession or territory of the United States of America
     (including the Commonwealth of Puerto Rico) or any area subject to the
     jurisdiction of the United States of America ("U.S. Taxes") from any
     payments to a Buyer pursuant to this Agreement in respect of the
     obligations payable to such Buyer then or thereafter outstanding under this
     Agreement or any Buyers' Contract, the Sellers will pay to such Buyer an
     amount which, after deduction from such increased amount of all U.S. Taxes
     required to be withheld or deducted therefrom, will yield the amount
     required under this Agreement or the Buyers' Contract to be paid with
     respect thereto; provided, that the Sellers shall not be required to pay
     any additional amount pursuant to this Section 13.15(b) to any Buyer (i)
     that is not, either on the date this Agreement is executed by such Buyer or
     on the date such Buyer becomes such under Section 13.4(c), either (x)
     entitled to submit Form 1001 (relating to such Buyer and entitling it to a
     complete exemption from withholding on all payments to be received by

                                       -53-

<PAGE>

     such Buyer hereunder) or Form 4224 (relating to all payments to be received
     by such Buyer hereunder) or (y) a United States person (as such term is
     defined in Section 7701(a)(30) of the Code), or (ii) that has failed to
     submit any form or certificate that it was required to file pursuant to
     subsection (a) and entitled to file under applicable law or (iii) arising
     from such Buyer's failure to comply with any certification, identification
     or other similar requirement under United States income tax laws or
     regulations (including backup withholding) to establish entitlement to
     exemption from such U.S. Taxes; and provided, further, that if a Buyer, as
     a result of any amount paid by the Sellers to such Buyer pursuant to this
     Section 13.15, shall realize a tax credit or refund, which tax credit or
     refund would not have been realized but for the Sellers' payment of such
     amount, such Buyer shall pay to the Sellers an amount equal to such tax
     credit or refund. Each Buyer may determine the portion, if any, of any tax
     credit or refund attributable to the Sellers' payments using such
     attribution and accounting methods as such Buyer reasonably selects, and
     such Buyer's determination of the portion of any tax credit or refund
     attributable to the Sellers' payments shall be conclusive in the absence of
     manifest error. The obligation of the Sellers under this Section 13.15(b)
     shall survive the payment in full of the Obligations and the termination of
     the Commitments of such Buyer.

          (c)      Substitution of Buyer. In the event the Sellers are required
     pursuant to this Section 13.15 to pay any additional amount to any Buyer,
     such Buyer shall, if no Event of Default has occurred and is continuing,
     upon the request of the Sellers to such Buyer and the Agent, assign,
     pursuant to and in accordance with the provisions of Section 13.4, all of
     its rights and obligations under this Agreement and with respect to the
     Buyers' Contracts to another Buyer or an assignee selected by the Sellers
     and reasonably satisfactory to the Agent, in consideration for (i) the
     payment by such assignee to the assigning Buyer of the Buyer's Percentage
     of the assigning Buyer of the principal outstanding under, and interest
     accrued at the Buyers' Rate on, the Buyers' Contracts, (ii) the payment by
     the Sellers to the assigning Buyer of any and all other amounts owing to
     such Buyer under any provision of this Agreement accrued and unpaid to the
     date of such assignment and (iii) the Sellers' release of the assigning
     Buyer from any further obligation or liability under this Agreement.
     Notwithstanding anything to the contrary in this Section 13.15(c), in no
     event shall the replacement of any Buyer result in a decrease in the
     aggregate Contract Purchase Commitments without the written consent of the
     Majority Buyers.

                                   ARTICLE XIV
                                    THE AGENT

     The following provisions shall govern the relationship of the Agent with
the Buyers.

     Section 14.1  Appointment and Authorization. Each Buyer appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such respective powers under this Agreement and with respect to the Buyers'
Contracts as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto. Neither the Agent nor any of its
directors, officers or employees shall be liable for any action taken or omitted
to be taken by it under or in connection with this Agreement and with respect to
the Buyers' Contracts,

                                       -54-

<PAGE>

except for its own gross negligence or willful misconduct. The Agent shall act
as an independent contractor in performing its obligations as Agent hereunder
and nothing herein contained shall be deemed to create any fiduciary
relationship among or between the Agent, the Sellers or the Buyers.

     Section 14.2  Buyers. The Agent may treat each Buyer as the owner of its
respective Buyer's Percentage until written notice of transfer shall have been
filed with it, signed by such Buyer and in the form of Exhibit H.

     Section 14.3  Consultation With Counsel. The Agent may consult with legal
counsel selected by it and shall not be liable for any action taken or suffered
in good faith by it in accordance with the advice of such counsel.

     Section 14.4  Validity of Agreement and Buyers' Contracts. The Agent shall
not be under a duty to examine or pass upon the validity, effectiveness,
genuineness or value of any of this Agreement or the Buyers' Contracts or any
other instrument or document furnished pursuant thereto, and the Agent shall be
entitled to assume that the same are valid, effective and genuine and what they
purport to be.

     Section 14.5  U.S. Bank and Affiliates. With respect to its Individual
Contract Purchase Commitment Amount and the undivided percentage ownership
interest in the Buyers' Contracts purchased by it, U.S. Bank shall have the same
rights and powers under this Agreement and with respect to the Buyers' Contracts
as any other Buyer and may exercise the same as though it were not the Agent
consistent with the terms thereof, and U.S. Bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Sellers as if it were not the Agent.

     Section 14.6  Action by Agent. Except as may otherwise be expressly stated
in this Agreement, the Agent shall be entitled to use its discretion with
respect to exercising or refraining from exercising any rights which may be
vested in it by, or with respect to taking or refraining from taking any action
or actions which it may be able to take under or in respect of, this Agreement
and the Buyers' Contracts. The Agent shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Buyers, and such instructions shall be
binding upon all owners of undivided percentage ownership interests in the
Buyers' Contracts; provided, however, that the Agent shall not be required to
take any action which exposes the Agent to personal liability or which is
contrary to this Agreement, the Buyers' Contracts or applicable law. The Agent
shall incur no liability under or in respect of any of this Agreement or the
Buyers' Contracts by acting upon any notice, consent, certificate, warranty or
other paper or instrument believed by it to be genuine or authentic or to be
signed by the proper party or parties and to be consistent with the terms of
this Agreement.

     Section 14.7  Credit Analysis. Each Buyer has made, and shall continue to
make, its own independent investigation or evaluation of the operations,
business, property and condition, financial and otherwise, of the Sellers in
connection with entering into this Agreement and has made its own appraisal of
the creditworthiness of the Sellers. Except as explicitly provided herein, the
Agent has no duty or responsibility, either initially or on a continuing basis,
to

                                      -55-

<PAGE>

provide any Buyer with any credit or other information with respect to such
operations, business, property, condition or creditworthiness, whether such
information comes into its possession on or before the first Termination Event
or at any time thereafter.

     Section 14.8  Notices of Termination Event, Etc. In the event that the
Agent shall have acquired actual knowledge of any Termination Event or Unmatured
Termination Event, the Agent shall promptly give notice thereof to the Buyers.

     Section 14.9  Indemnification. Each Buyer agrees to indemnify the Agent, as
Agent (to the extent not reimbursed by PDC or the Sellers), ratably according to
such Buyer's Individual Contract Purchase Commitment Amount, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on or incurred by the Agent in any way relating
to or arising out of this Agreement or the Buyers' Contracts or any action taken
or omitted by the Agent under this Agreement or with respect to the Buyers'
Contracts, provided that no Buyer shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. No payment by any Buyer under this Section shall relieve the
Sellers of any of their obligations under this Agreement.

     Section 14.10 Payments and Collections. All funds received by the Agent in
respect of any payments made by PDC or the Sellers under this Agreement shall be
distributed forthwith by the Agent among the Buyers, in like currency and funds
as received, ratably according to each Bank's Individual Contract Purchase
Commitment Amount. After any Event of Default has occurred, all funds received
by the Agent, whether as payments by PDC or the Sellers or as realization on any
collateral or on any guaranties, shall (except as may otherwise be required by
law) be distributed by the Agent in the following order: (a) first to the Agent
or any Buyer who has incurred unreimbursed costs of collection with respect to
any amount payable hereunder, ratably to the Agent and each Buyer in the
proportion that the costs incurred by the Agent or such Buyer bear to the total
of all such costs incurred by the Agent and all Buyers; (b) next to the Agent
for the account of the Buyers (in accordance with their respective Individual
Contract Purchase Commitment Amounts) for application on the amounts owing
hereunder; and (c) last to the Agent for application to any unpaid agent's fees.

     Section 14.11 Sharing of Payments. If any Buyer shall receive and retain
any payment, voluntary or involuntary, whether by setoff, application of deposit
balance or security, or otherwise, in respect of Indebtedness under this
Agreement in excess of such Buyer's share thereof as determined under this
Agreement, then such Buyer shall purchase from the other Buyers for cash and at
face value and without recourse, such participation in the percentage ownership
interests in the Buyers' Contracts held by such other Buyers as shall be
necessary to cause such excess payment to be shared ratably as aforesaid with
such other Buyers; provided, that if such excess payment or part thereof is
thereafter recovered from such purchasing Buyer, the related purchases from the
other Buyers shall be rescinded ratably and the purchase price restored as to
the portion of such excess payment so recovered, but without interest. Subject
to the participation purchase obligation above, each Buyer agrees to exercise
any and all rights of setoff, counterclaim or banker's lien first fully against
any indebtedness of PDC or the Sellers to such Buyer arising under or pursuant
to this Agreement and to any participations held by such

                                       -56-

<PAGE>

Buyer in indebtedness of PDC or the Sellers arising under or pursuant to this,
and only then to any other indebtedness of PDC or the Sellers to such Buyer.

     Section 14.12 Advice to Buyers. The Agent shall forward to the Buyers
copies of all notices, financial reports and other communications received
hereunder from PDC or the Sellers by it as Agent, excluding, however, notices,
reports and communications which by the terms hereof are to be furnished by PDC
or the Sellers directly to each Buyer.

     Section 14.13 Resignation. If at any time U.S. Bank shall deem it
advisable, in its sole discretion, it may submit to each of the Buyers, the
Sellers and PDC a written notification of its resignation as Agent under this
Agreement, such resignation to be effective upon the appointment of a successor
Agent, but in no event later than 30 days from the date of such notice. Upon
submission of such notice, the Majority Buyers may appoint a successor Agent.

            [The remainder of this page is intentionally left blank]

                                      -57-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above.

                                    PATTERSON DENTAL COMPANY

                                    By:  /s/ R. Stephen Armstrong
                                        ---------------------------------------
                                        R. Stephen Armstrong
                                        Executive Vice President,
                                        Treasurer and Chief Financial Officer

                                    1031 Mendota Heights Road
                                    St. Paul, MN 55120
                                    Attention: Mr. Ronald E. Ezerski
                                    Telecopier: (612) 686-8984

                                    PATTERSON DENTAL SUPPLY, INC.

                                    By:  /s/ R. Stephen Armstrong
                                        ---------------------------------------
                                        R. Stephen Armstrong
                                        Vice President and Treasurer

                                    1031 Mendota Heights Road
                                    St. Paul, MN 55120
                                    Attention: Mr. Ronald E. Ezerski
                                    Telecopier: (612) 686-8984

                                    WEBSTER VETERINARY SUPPLY, INC.

                                    By:  /s/ R. Stephen Armstrong
                                        ---------------------------------------
                                        R. Stephen Armstrong
                                        Vice President and Treasurer

                                    1031 Mendota Heights Road
                                    St. Paul, MN 55120
                                    Attention: Mr. Ronald E. Ezerski
                                    Telecopier: (612) 686-8984

                                       S-1

<PAGE>

Individual Contract Purchase
Commitment Amounts
$30,00,000                          U.S. BANK NATIONAL ASSOCIATION

                                    By:  /s/ Mark R. Olmon
                                        ---------------------------------------
                                        Mark R. Olmon
                                        Senior Vice President

                                    U.S. Bank Place
                                    601 Second Avenue South
                                    Minneapolis, MN  55402
                                    Attention: Mr. Mark R. Olmon
                                    Telecopier: (612) 973-0825

$20,00,000                          THE NORTHERN TRUST COMPANY
                                    By:  /s/ Jeffrey B. Clark
                                        ---------------------------------------
                                        Name: Jeffrey B. Clark
                                             ----------------------------------
                                        Title: Vice President
                                              ---------------------------------

                                    The Northern Trust Company
                                    50 South LaSalle Street, Floor B2
                                    Chicago, Illinois 60675
                                    Attention: Jeffrey Clark
                                    Telecopier: (312) 444-7028

                                       S-2<PAGE>

                                                                   Exhibit 10.14

                         RECEIVABLES PURCHASE AGREEMENT

                            dated as of May 10, 2002

                                      Among

                      PDC FUNDING COMPANY, LLC, as Seller,

                     PATTERSON DENTAL COMPANY, as Servicer,

                   PREFERRED RECEIVABLES FUNDING CORPORATION,

                     THE FINANCIAL INSTITUTIONS PARTY HERETO

                                       and

                       BANK ONE, NA (MAIN OFFICE CHICAGO),
                                    as Agent

<PAGE>

                         RECEIVABLES PURCHASE AGREEMENT

     This Receivables Purchase Agreement, dated as of May 10, 2002, is by and
among PDC Funding Company, LLC, a Minnesota limited liability company
("Seller"), Patterson Dental Company, a Minnesota corporation (together with its
successors and assigns "PDCo"), as initial Servicer (the Servicer together with
Seller, the "Seller Parties" and each a "Seller Party"), the entities listed on
Schedule A to this Agreement (together with any of their respective successors
and assigns hereunder, the "Financial Institutions"), Preferred Receivables
Funding Corporation ("Conduit") and Bank One, NA (Main Office Chicago), as agent
for the Purchasers hereunder or any successor agent hereunder (together with its
successors and assigns hereunder, the "Agent"). Unless defined elsewhere herein,
capitalized terms used in this Agreement shall have the meanings assigned to
such terms in Exhibit I.

                             PRELIMINARY STATEMENTS

     Seller desires to transfer and assign Purchaser Interests to the Purchasers
from time to time.

     Conduit may, in its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to time.

     In the event that Conduit declines to make any purchase, the Financial
Institutions shall, at the request of Seller, purchase Purchaser Interests from
time to time. In addition, the Financial Institutions have agreed to provide a
liquidity facility to Conduit in accordance with the terms hereof.

     Bank One, NA (Main Office Chicago) has been requested and is willing to act
as Agent on behalf of Conduit and the Financial Institutions in accordance with
the terms hereof.

                                    ARTICLE I
                              PURCHASE ARRANGEMENTS

          Section 1.1 Purchase Facility.

               (a)    Upon the terms and subject to the conditions hereof,
Seller may, at its option, sell and assign Purchaser Interests to the Agent for
the benefit of one or more of the Purchasers. In accordance with the terms and
conditions set forth herein, Conduit may, at its option, instruct the Agent to
purchase on behalf of Conduit, or if Conduit shall decline to purchase, the
Agent shall purchase, on behalf of the Financial

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

Institutions, Purchaser Interests from time to time in an aggregate amount not
to exceed at such time the lesser of (i) the Purchase Limit and (ii) the
aggregate amount of the Commitments during the period from the date hereof to
but not including the Facility Termination Date.

               (b)    Seller may, upon at least 10 Business Days' prior notice
to the Agent, terminate in whole or reduce in part, ratably among the Financial
Institutions, the unused portion of the Purchase Limit; provided that each
partial reduction of the Purchase Limit shall be in an amount equal to
$5,000,000 or an integral multiple thereof.

          Section 1.2 Increases.

          Seller shall provide the Agent with at least two Business Days' prior
notice in a form set forth as Exhibit II hereto of each Incremental Purchase (a
"Purchase Notice"). Each Purchase Notice shall be subject to Section 6.2 hereof
and, except as set forth below, shall be irrevocable, shall specify the
requested Purchase Price (which shall not be less than $10,000,000 and in
additional increments of $100,000) and date of purchase (which, in the case of
any Incremental Purchase (after the initial Incremental Purchase hereunder),
shall only be on a Settlement Date) and, in the case of an Incremental Purchase
to be funded by the Financial Institutions, the requested Discount Rate and
Tranche Period and shall be accompanied by a current listing of all Receivables
(including any Receivables to be purchased by Seller under the Receivables Sale
Agreement on the date of purchase specified in such Purchase Notice). Following
receipt of a Purchase Notice, the Agent will determine whether Conduit agrees to
make the purchase. If Conduit declines to make a proposed purchase, Seller may
cancel the Purchase Notice or, in the absence of such a cancellation, the
Incremental Purchase of the Purchaser Interest will be made by the Financial
Institutions. On the date of each Incremental Purchase, upon satisfaction of the
applicable conditions precedent set forth in Article VI, Conduit or the
Financial Institutions, as applicable, shall deposit to the Facility Account, in
immediately available funds, no later than 12:00 noon (Chicago time), an amount
equal to (i) in the case of Conduit, the aggregate Purchase Price of the
Purchaser Interests Conduit is then purchasing or (ii) in the case of a
Financial Institution, such Financial Institution's Pro Rata Share of the
aggregate Purchase Price of the Purchaser Interests the Financial Institutions
are purchasing.

          Section 1.3 [Intentionally Omitted].

          Section 1.4 Payment Requirements. All amounts to be paid or deposited
by any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (Chicago
time) on the day when due in immediately available funds, and if not received
before 11:00 a.m. (Chicago time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Agent, for the account of

                                        2

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

such Purchaser, at 1 Bank One Plaza, Chicago, Illinois 60670 until otherwise
notified by the Agent. Upon notice to Seller, the Agent may debit the Facility
Account for all amounts due and payable hereunder. All computations of Financial
Institution Yield, per annum fees calculated as part of any CP Costs, per annum
fees hereunder and per annum fees under the Fee Letter shall be made on the
basis of a year of 360 days for the actual number of days elapsed. If any amount
hereunder shall be payable on a day which is not a Business Day, such amount
shall be payable on the next succeeding Business Day.

                                   ARTICLE II
                            PAYMENTS AND COLLECTIONS

          Section 2.1 Payments. Notwithstanding any limitation on recourse
contained in this Agreement, Seller shall immediately pay to the Agent when due,
for the account of the relevant Purchaser or Purchasers on a full recourse
basis, (i) such fees as set forth in the Fee Letter (which fees shall be
sufficient to pay all fees owing to the Financial Institutions), (ii) all
amounts payable as CP Costs, (iii) all amounts payable as Financial Institution
Yield, (iv) all amounts payable as Deemed Collections (which shall be
immediately due and payable by Seller and applied to reduce outstanding
Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (v)
all amounts required pursuant to Section 2.5 or 2.6, (vi) all amounts payable
pursuant to Article X, if any, (vii) all Servicer costs and expenses, including
the Servicing Fee, in connection with servicing, administering and collecting
the Receivables, (viii) all Broken Funding Costs, (ix) all Hedging Obligations
and (x) all Default Fees (collectively, the "Obligations"). If any Person fails
to pay any of the Obligations when due, such Person agrees to pay, on demand,
the Default Fee in respect thereof until paid. Notwithstanding the foregoing, no
provision of this Agreement or the Fee Letter shall require the payment or
permit the collection of any amounts hereunder in excess of the maximum
permitted by applicable law. If at any time Seller receives any Collections or
is deemed to receive any Collections, Seller shall immediately pay such
Collections or Deemed Collections to the Servicer for application in accordance
with the terms and conditions hereof and, at all times prior to such payment,
such Collections or Deemed Collections shall be held in trust by Seller for the
exclusive benefit of the Purchasers and the Agent.

          Section 2.2 Collections Prior to Amortization.

               (a)    Collections Generally. On any day prior to the
Amortization Date that the Servicer receives any Collections and/or Deemed
Collections, such Collections and/or Deemed Collections shall be set aside and
held in trust by the Servicer in the Collection Accounts in the manner set forth
in Sections 7.1(j) and 8.2. Prior to the Amortization Date, all such amounts
shall be applied as set forth in this Section 2.2. The Servicer shall, on each
Settlement Date, determine the portion of Collections set aside in

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

accordance with the first sentence of this Section 2.2 during the related
Settlement Period which constitute Principal Collections and the portion of such
Collections which constitute Finance Charge Collections. On each Settlement
Date, the Servicer shall remit the Principal Collections set aside pursuant to
this subsection (a) to an account designated by the Agent (the "Agent's
Account") to be distributed in accordance with subsection (b) below and the
Servicer shall remit the Finance Charge Collections set aside pursuant to this
subsection (a) to the Agent's Account to be distributed in accordance with
subsection (c) below.

                  (b)    Application of Principal Collections. On each
Settlement Date, the Agent will apply the Principal Collections deposited to the
Agent's Account pursuant to Section 2.2(a) to make the following distributions
in the following amounts and order of priority:

                         first, to each Terminating Financial Institution, an
     amount equal to such Terminating Financial Institution's Termination
     Percentage of such Principal Collections for the ratable reduction of the
     Capital of each such Terminating Financial Institution, and

                         second, if any Purchase Notice shall have been
     delivered in accordance with Section 1.2, to Seller to fund the Purchase
     Price of the Incremental Purchase to be made on such date; otherwise, to
     the Agent for the account of the Purchasers (other than any Terminating
     Financial Institution) as a further reduction of Aggregate Capital.

                  (c)    Application of Finance Charge Collections.  On each
Settlement Date, the Agent will apply the Finance Charge Collections deposited
to the Agent's Account pursuant to Section 2.2(a), together with the Hedge
Floating Amount, if any, paid to the Servicer by the Hedge Provider pursuant to
the Hedging Agreement and any net income from Permitted Investments deposited to
the Agent's Account pursuant to Section 2.8, to make the following distributions
in the following amounts and order of priority:

                  first, if the Hedging Agreement shall be in effect, to the
     Hedge Provider, the Hedge Fixed Amount, if any, due to the Hedge Provider
     pursuant to the Hedging Agreement as of such Settlement Date,

                  second, to the reimbursement of the Agent's costs of
     collection and enforcement of this Agreement,

                  third, to the Agent for the account of the Purchasers, all
     accrued and unpaid fees under the Fee Letter and all accrued and unpaid CP
     Costs and Financial Institution Yield, including any accrued CP Costs and
     Financial Institution Yield in

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

     respect of Capital reduced pursuant to clause second of subsection (b)
     above, together with any Broken Funding Costs,

               fourth, if the Servicer is not then Seller or an Affiliate of
     Seller, to the Servicer in payment of the Servicing Fee,

               fifth, to the Agent as a reduction of Aggregate Capital an amount
     necessary to pay in full the Outstanding Balance of any Receivables that
     became Defaulted Receivables during the related Settlement Period and
     Receivables that became Defaulted Receivables during any prior Settlement
     Period that have not previously been the subject of payment hereunder,

               sixth, if Seller or an Affiliate of Seller is then acting as
     Servicer, to the Servicer in payment of the Servicing Fee,

               seventh, to the applicable Persons, for the ratable payment in
     full of all other unpaid Obligations, and

               eighth, the balance, if any, (i) to the Agent for deposit to the
     Second-Tier Account if the conditions of Section 7.3 requiring that the
     Hedging Agreement be in effect have occurred, but the Hedging Agreement is
     not then in effect (such amount to be set aside and held in trust for
     application in accordance with this Section 2.2(c) on the next occurring
     Settlement Date) and (ii) otherwise, to the Seller.

               (d)    Each Terminating Financial Institution shall be allocated
a ratable portion of Collections from the date of any assignment by Conduit
pursuant to Section 13.6 (the "Termination Date") until such Terminating
Financial Institution's Capital shall be paid in full. This ratable portion
shall be calculated on the Termination Date of each Terminating Financial
Institution as a percentage equal to (i) Capital of such Terminating Financial
Institution outstanding on its Termination Date, divided by (ii) the Aggregate
Capital outstanding on such Termination Date (the "Termination Percentage").
Each Terminating Financial Institution's Termination Percentage shall remain
constant prior to the Amortization Date. On and after the Amortization Date,
each Termination Percentage shall be disregarded, and each Terminating Financial
Institution's Capital shall be reduced ratably with all Financial Institutions
in accordance with Section 2.3.

          Section 2.3 Collections Following Amortization. On the Amortization
Date and on each day thereafter, the Servicer shall set aside and hold in trust
for the Purchasers, in the Collection Accounts in the manner set forth in
Sections 7.1(j) and 8.2, all Collections and/or Deemed Collections received on
such day and any additional amount for the payment of any accrued and unpaid
Obligations owed by Seller and not previously paid

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

by Seller in accordance with Section 2.1. On and after the Amortization Date,
the Servicer shall, at any time upon the request from time to time by (or
pursuant to standing instructions from) the Agent (i) remit to the Agent's
Account the amounts set aside pursuant to the preceding sentence, and (ii) apply
such amounts at the Agent's direction to reduce the Aggregate Capital and any
other Aggregate Unpaids. If there shall be insufficient funds on deposit for the
Servicer to distribute funds in payment in full of the aforementioned amounts,
the Servicer shall distribute funds:

          first, if the Hedging Agreement shall be in effect, the Hedge Fixed
     Amount, if any due to the Hedge Provider pursuant to the Hedging Agreement
     as of such Settlement Date,

          second, to the reimbursement of the Agent's costs of collection and
     enforcement of this Agreement,

          third, ratably to the payment of all accrued and unpaid fees under the
     Fee Letter and all accrued and unpaid CP Costs and Financial Institution
     Yield,

          fourth, to the payment of the Servicer's reasonable out-of-pocket
     costs and expenses in connection with servicing, administering and
     collecting the Receivables, including the Servicing Fee, if Seller, or one
     of its Affiliates is not then acting as the Servicer,

          fifth, for the ratable payment of all other unpaid Obligations,
     provided that to the extent such Obligations relate to the payment of
     Servicer costs and expenses, including the Servicing Fee, when Seller or
     one of its Affiliates is acting as the Servicer, such costs and expenses
     will not be paid until after the payment in full of all other Obligations,

          sixth, to the ratable reduction of Aggregate Capital to zero,

          seventh, to the ratable payment in full of all other Aggregate
     Unpaids, and

          eighth, after the Aggregate Unpaids have been indefeasibly reduced to
     zero and this Agreement has terminated in accordance with its terms, any
     remaining Collections shall be remitted to Seller.

          Section 2.4    Ratabe Payments. Collections applied to the payment of
Aggregate Unpaids shall be distrbed in accordance with the aforementioned
provisions, and giving effect to each of the priorities set forth in Sections
2.2 and 2.3 above, shall be shared ratably (within each priority) among the
Agent and the Purchasers in accordance

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

with the amount of such Aggregate Unpaids owing to each of them in respect of
each such priority.

          Section 2.5 Payment Rescission. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Agent (for application to the Person or Persons who suffered such
rescission, return or refund) the full amount thereof, plus the Default Fee from
the date of any such rescission, return or refunding.

          Section 2.6 Maximum Purchaser Interests. Seller shall ensure that the
Purchaser Interests of the Purchasers shall at no time exceed in the aggregate
100%. If the aggregate of the Purchaser Interests of the Purchasers exceeds
100%, Seller shall pay to the Agent within one (1) Business Day an amount to be
applied to reduce the Aggregate Capital (as allocated by the Agent), such that
after giving effect to such payment the aggregate of the Purchaser Interests
equals or is less than 100%.

          Section 2.7 Clean Up Call. In addition to Seller's rights pursuant to
Section 1.3, Seller shall have the right (after providing written notice to the
Agent in accordance with the Required Notice Period), at any time following the
reduction of the Aggregate Capital to a level that is less than 10.0% of the
original Purchase Limit, to repurchase from the Purchasers all, but not less
than all, of the then outstanding Purchaser Interests. The purchase price in
respect thereof shall be an amount equal to the Aggregate Unpaids through the
date of such repurchase, payable in immediately available funds. Such repurchase
shall be without representation, warranty or recourse of any kind by, on the
part of, or against any Purchaser or the Agent.

          Section 2.8 Investment of Collections in Second-Tier Account. All
amounts from time to time held in, deposited in or credited to, the Second-Tier
Account shall be invested by the Servicer (as agent for the Agent) in Permitted
Investments selected in writing by the Servicer. All such investments shall at
all times be held by or on behalf of the Agent for the benefit of the Purchasers
and the Hedge Provider (if any), provided, that neither the Agent, any Purchaser
nor the Hedge Provider shall be held liable in any way by reason of any loss
arising from the investment of amounts on deposit in the Second-Tier Account in
Permitted Investments. All income or other gain from investment of monies
deposited in or credited to the Second-Tier Account shall be deposited in or
credited to the Second-Tier Account immediately upon receipt, and any loss
resulting from such investment shall be charged thereto. Any net income from
such investments shall be transferred to the Agent's Account on a monthly basis
on the Business Day preceding each Settlement Date to be applied in accordance
with Section 2.2. Except as permitted in writing by the Agent,

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<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

funds on deposit in the Second-Tier Account shall be invested in Permitted
Investments that will mature no later than the Business Day immediately
preceding the next Settlement Date. No Permitted Investment shall be sold or
otherwise disposed of prior to its scheduled maturity date unless a default
occurs with respect to such Permitted Investment and the Agent directs the
Servicer in writing to dispose of such Permitted Investment.

          Section 2.9 PDCo Advances. If, on any Settlement Date occurring when
the Hedging Agreement is required to be in effect pursuant to Section 7.3 but
such Hedging Agreement is not in full force and effect, Finance Charge
Collections are insufficient to pay the amounts set forth in clauses second and
third of Section 2.2(c), PDCo shall advance, by payment to the Agent for the
account of the Purchasers, an amount equal to the lesser of (a) such shortfall
and (b) the product of (i) 5% minus Excess Spread (to the extent that Excess
Spread is less than 5% but greater than zero) and (ii) the aggregate Outstanding
Balance of all Receivables. The obligations of PDCo under the preceding sentence
shall be absolute and irrevocable, and shall not be affected by any termination
of PDCo as Servicer pursuant to Section 8.1 or by any other event.

                                   ARTICLE III
                                 CONDUIT FUNDING

          Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the
Capital associated with each Purchaser Interest of Conduit for each day that any
Capital in respect of such Purchaser Interest is outstanding.

          Section 3.2 CP Costs Payments. On each Settlement Date, Seller shall
pay to the Agent (for the benefit of Conduit) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the Capital associated with all
Purchaser Interests of Conduit for the related Settlement Period in accordance
with Article II.

          Section 3.3 Calculation of CP Costs. On the third Business Day
immediately preceding each Settlement Date, Conduit shall calculate the
aggregate amount of CP Costs for the related Settlement Period and shall notify
Seller of such aggregate amount.

                                   ARTICLE IV
                          FINANCIAL INSTITUTION FUNDING

          Section 4.1 Financial Institution Funding. Each Purchaser Interest of
the Financial Institutions shall accrue Financial Institution Yield for each day
during its Tranche Period at either the LIBO Rate or the Prime Rate in
accordance with the terms and conditions hereof. Until Seller gives notice to
the Agent of another Discount Rate in

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<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

accordance with Section 4.4, the initial Discount Rate for any Purchaser
Interest transferred to the Financial Institutions pursuant to the terms and
conditions hereof shall be the Prime Rate. If the Financial Institutions acquire
by assignment from Conduit any Purchaser Interest pursuant to Article XIII, each
Purchaser Interest so assigned shall each be deemed to have a new Tranche Period
commencing on the date of any such assignment.

          Section 4.2 Financial Institution Yield Payments. On the Settlement
Date for each Purchaser Interest of the Financial Institutions, Seller shall pay
to the Agent (for the benefit of the Financial Institutions) an aggregate amount
equal to the accrued and unpaid Financial Institution Yield for the entire
Tranche Period of each such Purchaser Interest in accordance with Article II.

          Section 4.3 Selection and Continuation of Tranche Periods.

               (a)    With consultation from (and approval by) the Agent, Seller
shall from time to time request Tranche Periods for the Purchaser Interests of
the Financial Institutions, provided that, if at any time the Financial
Institutions shall have a Purchaser Interest, Seller shall always request
Tranche Periods such that at least one Tranche Period shall end on the date
specified in clause (A) of the definition of Settlement Date.

               (b)    Seller or the Agent, upon notice to and consent by the
other received at least three (3) Business Days prior to the end of a Tranche
Period (the "Terminating Tranche") for any Purchaser Interest, may, effective on
the last day of the Terminating Tranche: (i) divide any such Purchaser Interest
into multiple Purchaser Interests, (ii) combine any such Purchaser Interest with
one or more other Purchaser Interests that have a Terminating Tranche ending on
the same day as such Terminating Tranche or (iii) combine any such Purchaser
Interest with a new Purchaser Interests to be purchased on the day such
Terminating Tranche ends, provided, that in no event may a Purchaser Interest of
Conduit be combined with a Purchaser Interest of the Financial Institutions.

          Section 4.4 Financial Institution Discount Rates. Seller may select
the LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Tranche with respect to
which the LIBO Rate is being requested as a new Discount Rate and (ii) at least
one (1) Business Day prior to the expiration of any Terminating Tranche with
respect to which the Prime Rate is being requested as a new Discount Rate, give
the Agent irrevocable notice of the new Discount Rate for the Purchaser Interest
associated with such Terminating Tranche. Until Seller gives notice to the Agent
of another Discount Rate, the initial Discount Rate for any Purchaser Interest
transferred to the Financial Institutions pursuant to the terms and conditions
hereof shall be the Prime Rate.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

          Section 4.5 Suspension of the LIBO Rate. If any Financial Institution
notifies the Agent that it has determined that funding its Pro Rata Share of the
Purchaser Interests of the Financial Institutions at a LIBO Rate would violate
any applicable law, rule, regulation, or directive of any governmental or
regulatory authority, whether or not having the force of law, or that (i)
deposits of a type and maturity appropriate to match fund its Purchaser
Interests at such LIBO Rate are not available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Purchaser Interest at
such LIBO Rate, then the Agent shall suspend the availability of such LIBO Rate
and require Seller to select the Prime Rate for any Purchaser Interest accruing
Financial Institution Yield at such LIBO Rate.

                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

          Section 5.1 Representations and Warranties of the Seller Parties. Each
Seller Party hereby represents and warrants to the Agent and the Purchasers, as
to itself, as of the date hereof and as of the date of each Incremental Purchase
that:

               (a)    Existence and Power. Such Seller Party is a corporation or
limited liability company, as applicable, duly organized, validly existing and
in good standing under the laws of its state of organization. Such Seller Party
is duly qualified to do business and is in good standing as a foreign entity,
and has and holds all power, corporate or otherwise, and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted, except where
the failure to be so qualified or to have and hold such governmental licenses,
authorization, consents and approvals could not reasonably be expected to have a
Material Adverse Effect.

               (b)    Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by such Seller Party of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and, in the case of Seller, Seller's
use of the proceeds of purchases made hereunder, are within its powers and
authority, corporate or otherwise, and have been duly authorized by all
necessary action, corporate or otherwise, on its part. This Agreement and each
other Transaction Document to which such Seller Party is a party has been duly
executed and delivered by such Seller Party.

               (c)    No Conflict. The execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party, and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its certificate or articles of incorporation or
organization, by-laws or limited liability company agreement (or equivalent
governing documents), (ii) any law, rule or regulation applicable to it, (iii)
any restrictions under any agreement, contract or instrument to which it is a
party

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<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on assets of such Seller Party or its Subsidiaries (except as created
hereunder); and no transaction contemplated hereby requires compliance with any
bulk sales act or similar law.

               (d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder and thereunder.

               (e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Seller Party's knowledge, threatened, against or
affecting such Seller Party, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Such Seller Party is not in default with respect to any order of
any court, arbitrator or governmental body.

               (f) Binding Effect. This Agreement and each other Transaction
Document to which such Seller Party is a party constitute the legal, valid and
binding obligations of such Seller Party enforceable against such Seller Party
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

               (g) Accuracy of Information. All information heretofore furnished
by such Seller Party or any of its Affiliates to the Agent or the Purchasers for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by such Seller Party or any of its Affiliates to
the Agent or the Purchasers will be, true and accurate in every material respect
on the date such information is stated or certified and does not and will not
contain any material misstatement of fact or omit to state a material fact or
any fact necessary to make the statements contained therein not materially
misleading.

               (h) Use of Proceeds. No proceeds of any purchase hereunder will
be used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time

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<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

or (ii) to acquire any security in any transaction which is subject to Section
12, 13 or 14 of the Securities Exchange Act of 1934, as amended.

               (i) Good Title. Immediately prior to each purchase hereunder,
Seller shall be the legal and beneficial owner of the Receivables and Related
Security with respect thereto, free and clear of any Adverse Claim, except as o
created by the Transaction Documents. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Seller's
ownership interest in each Receivable, its Collections and the Related Security.

               (j) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to, and shall, upon each
purchase hereunder, transfer to the Agent for the benefit of the relevant
Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or
Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing
or hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transaction Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect the Agent's (on
behalf of the Purchasers) ownership or security interest in the Receivables, the
Related Security and the Collections.

               (k) Jurisdiction of Organization; Places of Business and
Locations of Records. The principal places of business, jurisdiction of
organization and chief executive office of such Seller Party and the offices
where it keeps all of its Records are located at the address(es) listed on
Exhibit III or such other locations of which the Agent has been notified in
accordance with Section 7.2(a) in jurisdictions where all action requ ired by
Section 7.1(h) and/or Section 14.4(a) has been taken and completed. Such Seller
party's organizational number assigned to it by its jurisdiction of organization
and such Seller Party's Federal Employer Identification Number are correctly set
forth on Exhibit III. Such Seller Party has not, within a period of one year
prior to the date hereof, (i) changed the location of its principal place of
business or chief executive office or its organizational structure, (ii) changed
its legal name, (iii) become a "new debtor" (as defined in Section 9-102(a)(56)
of the UCC in effect in the State of Minnesota) or (iv) changed its jurisdiction
of organization. Seller is a Minnesota limited liability company and is a
"registered organization" (within the meaning of Section 9-102 of the UCC in
effect in the State of Minnesota).

               (l) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

names and addresses of all Collection Banks, together with the account numbers
of the Collection Accounts at each Collection Bank and the post office box
number of each Lock-Box or P.O. Box, are listed on Exhibit IV. Seller has not
granted any Person, other than the Agent as contemplated by this Agreement,
dominion and control or "control" (within the meaning of Section 9-104 of the
UCC of all applicable jurisdictions) of any Lock-Box, P.O. Box or Collection
Account, or the right to take dominion and control or "control" (within the
meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any such
Lock-Box, P.O. Box or Collection Account at a future time or upon the occurrence
of a future event. Each Seller Party has taken all steps necessary to ensure
that the Agent has "control" (within the meaning of Section 9-104 of the UCC of
all applicable jurisdictions) over all Collection Accounts. Such Seller Party
has the ability to identify, within one Business Day of deposit, all amounts
that are deposited to any First Tier Account as constituting Collections or
non-Collections. No funds other than the proceeds of Receivables are deposited
to the Second-Tier Account.

               (m) Material Adverse Effect. (i) The initial Servicer represents
and warrants that since January 26, 2002, no event has occurred that would have
a material adverse effect on the financial condition or operations of the
initial Servicer and its Subsidiaries or the ability of the initial Servicer to
perform its obligations under this Agreement, and (ii) Seller represents and
warrants that since the date of this Agreement, no event has occurred that would
have a material adverse effect on (A) the financial condition or operations of
Seller, (B) the ability of Seller to perform its obligations under the
Transaction Documents, or (C) the collectibility of the Receivables generally or
any material portion of the Receivables.

               (n) Names. In the past five (5) years, Seller has not used any
corporate or other names, trade names or assumed names other than the name in
which it has executed this Agreement.

               (o) Ownership of Seller. PDCo owns, directly or indirectly, 100%
of the issued and outstanding membership units of Seller, free and clear of any
Adverse Claim. Such membership units are validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.

               (p) Not a Holding Company or an Investment Company. Such Seller
Party is not 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 any successor statute. Such Seller Party is not and, after giving
effect to the transactions contemplated hereby, will not be required to be
registered as, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or any successor statute.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

               (q) Compliance with Law. Such Seller Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Averse
Effect. Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation.

               (r) Compliance with Credit and Collection Policy. Such Seller
Party has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not made
any material change to such Credit and Collection Policy, except such material
change as to which the Agent has been notified in accordance with Section
7.1(a)(vii).

               (s) Payments to Originators. With respect to each Receivable
transferred to Seller under the Receivables Sale Agreement, Seller has given
reasonably equivalent value to the applicable Originator in consideration
therefor and such transfer was not made for or on account of an antecedent debt.
No transfer by any Originator of any Receivable under the Receivables Sale
Agreement is or may be voidable under any section of the Federal Bankruptcy
Code.

               (t) Enforceability of Contracts. Each Contract with respect to
each Receivable is effective to create, and has created, a legal, valid and
binding obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

               (u) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable was an Eligible Receivable on the
date of its purchase under the Receivables Sale Agreement.

               (v) Net Receivables Balance. Seller has determined that,
immediately after giving effect to each purchase hereunder, the Net Receivables
Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the
Credit Enhancement.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

               (w) Accounting. The manner in which such Seller Party accounts
for the transactions contemplated by this Agreement and the Receivables Sale
Agreement does not jeopardize the true sale analysis.

       Section 5.2 Financial Institution Representations and Warranties. Each
Financial Institution hereby represents and warrants to the Agent and Conduit
that:

               (a) Existence and Power. Such Financial Institution is a
corporation or a banking association duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, and has all corporate power to perform its obligations hereunder.

               (b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on its assets. This Agreement has been duly authorized, executed and
delivered by such Financial Institution.

               (c) Governmental Authorization. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder.

               (d) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of such Financial Institution enforceable against such
Financial Institution in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).

                                   ARTICLE VI
                             CONDITIONS OF PURCHASES

       Section 6.1 Conditions Precedent to Initial Incremental Purchase. The
initial Incremental Purchase of a Purchaser Interest under this Agreement is
subject to the conditions precedent that (a) the Agent shall have received on or
before the date of such

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

purchase those documents listed on Schedule B, (b) the Agent shall have received
all fees and expenses required to be paid on or prior to such date pursuant to
the terms of this Agreement and the Fee Letter, (c) Seller shall have marked its
books and records with a legend satisfactory to the Agent identifying the
Agent's interest therein, (d) the Agent shall have completed to its satisfaction
a due diligence review of each Originator's and Seller's billing, collection and
reporting systems and other items related to the Receivables and (e) each of the
Purchasers shall have received the approval of its credit committee of the
transactions contemplated hereby.

               Section 6.2 Conditions Precedent to All Purchases. Each purchase
of a Purchaser Interest (other than pursuant to Section 13.1) shall be subject
to the further conditions precedent that (a) in the case of each such purchase:
(i) the Servicer shall have delivered to the Agent on or prior to the date of
such purchase, in form and substance satisfactory to the Agent, all Monthly
Reports as and when due under Section 8.5 and (ii) upon the Agent's request, the
Servicer shall have delivered to the Agent at least three (3) days prior to such
purchase an interim Monthly Report showing the amount of Eligible Receivables;
(b) the Facility Termination Date shall not have occurred; (c) the Agent shall
have received a duly executed Purchase Notice and such other approvals, opinions
or documents as it may reasonably request, (d) if required to be in effect
pursuant to Section 7.3, the Hedging Agreement shall be in full force and effect
and (e) on the date of each such Incremental Purchase, the following statements
shall be true (and acceptance of the proceeds of such Incremental Purchase shall
be deemed a representation and warranty by Seller that such statements are then
true):

               (i)        the representations and warranties set forth in
Section 5.1 are true and correct on and as of the date of such Incremental
Purchase as though made on and as of such date;

               (ii)       no event has occurred and is continuing, or would
result from such Incremental Purchase, that will constitute an Amortization
Event, and no event has occurred and is continuing, or would result from such
Incremental Purchase, that would constitute a Potential Amortization Event; and

               (iii)      the Aggregate Capital does not exceed the Purchase
Limit and the aggregate Purchaser Interests do not exceed 100%.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                                   ARTICLE VII
                                    COVENANTS

               Section 7.1 Affirmative Covenants of The Seller Parties. Until
the date on which the Aggregate Unpaids have been indefeasibly paid in full and
this Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:

                       (a) Financial Reporting. Such Seller Party will maintain,
for itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent:

                                    (i)  Annual Reporting. Within 90 days after
         the close of each of its respective fiscal years, (x) audited,
         unqualified consolidated financial statements (which shall include
         balance sheets, statements of income and retained earnings and a
         statement of cash flows) for PDCo and its consolidated Subsidiaries for
         such fiscal year certified in a manner acceptable to the Agent by
         independent public accountants acceptable to the Agent and (y)
         unaudited balance sheets of Seller as at the close of such fiscal year
         and statements of income and retained earnings and a statement of cash
         flows for Seller for such fiscal year, all certified by its chief
         financial officer. Delivery within the time period specified above of
         PDCo's annual report on Form 10-K for such fiscal year (together with
         PDCo's annual report to shareholders, if any, prepared pursuant to Rule
         14a-3 under the Securities Exchange Act of 1934, as amended) prepared
         in accordance with the requirements therefor and filed with the
         Securities and Exchange Commission shall be deemed to satisfy the
         requirements of clause (x) of this Section 7.1(a)(i), provided that the
         report of the independent public accountants contained therein is
         acceptable to the Agent.

                                    (ii) Quarterly Reporting. Within 45 days
         after the close of the first three (3) quarterly periods of each of its
         respective fiscal years, unaudited balance sheets of PDCo as at the
         close of each such period and statements of income and retained
         earnings and a statement of cash flows for PDCo for the period from the
         beginning of such fiscal year to the end of such quarter, all certified
         by its chief financial officer. Delivery within the time period
         specified above of copies of PDCo's quarterly report Form 10-Q for such
         fiscal quarter prepared in accordance with the requirements therefor
         and filed with the Securities and Exchange Commission shall be deemed
         to satisfy the foregoing requirements of this Section 7.1(a)(ii).

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                                    (iii)  Compliance Certificate. Together with
         the financial statements required hereunder, a compliance certificate
         in substantially the form of Exhibit V signed by such Seller Party's
         Authorized Officer and dated the date of such annual financial
         statement or such quarterly financial statement, as the case may be.

                                    (iv)   Shareholders Statements and Reports.
         Promptly upon the furnishing thereof to the shareholders of such Seller
         Party copies of all financial statements, reports and proxy statements
         so furnished.

                                    (v)    S.E.C. Filings. Promptly upon the
         filing thereof, copies of all registration statements and annual,
         quarterly, monthly or other regular reports which PDCo, any Originator
         or any of their respective Subsidiaries files with the Securities and
         Exchange Commission.

                                    (vi)   Copies of Notices. Promptly upon its
         receipt of any notice, request for consent, financial statements,
         certification, report or other communication under or in connection
         with any Transaction Document from any Person other than the Agent or
         Conduit, copies of the same.

                                    (vii)  Change in Credit and Collection
         Policy. At least thirty (30) days prior to the effectiveness of any
         material change in or material amendment to the Credit and Collection
         Policy, a copy of the Credit and Collection Policy then in effect and a
         notice (A) indicating such change or amendment, and (B) if such
         proposed change or amendment would be reasonably likely to adversely
         affect the collectibility of the Receivables or decrease the credit
         quality of any newly created Receivables, requesting the Agent's
         consent thereto.

                                    (viii) Sale Assignments. Promptly upon its
         receipt of any Sale Assignment under and as defined in the Receivables
         Sale Agreement, copies of the same.

                                    (ix)   Other Information. Promptly, from
         time to time, such other information, documents, records or reports
         relating to the Receivables or the condition or operations, financial
         or otherwise, of such Seller Party as the Agent may from time to time
         reasonably request in

                                       18

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         order to protect the interests of the Agent and the Purchasers under or
         as contemplated by this Agreement.

                       (b) Notices. Such Seller Party will notify the Agent in
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:

                                    (i)    Amortization Events or Potential
         Amortization Events. The occurrence of each Amortization Event and each
         Potential Amortization Event, by a statement of an Authorized Officer
         of such Seller Party.

                                    (ii)   Judgment and Proceedings. (A) (1) The
         entry of any judgment or decree against the Servicer or any of its
         respective Subsidiaries if the aggregate amount of all judgments and
         decrees then outstanding against the Servicer and its Subsidiaries
         exceeds $1,000,000 and (2) the institution of any litigation,
         arbitration proceeding or governmental proceeding against the Servicer
         that could, individually or in the aggregate, reasonably be expected to
         have a Material Adverse Effect; and (B) the entry of any judgment or
         decree or the institution of any litigation, arbitration proceeding or
         governmental proceeding against Seller.

                                    (iii)  Material Adverse Effect. The
         occurrence of any event or condition that has had, or could reasonably
         be expected to have, a Material Adverse Effect.

                                    (iv)   Termination Date. The occurrence of
         the "Termination Date" under and as defined in the Receivables Sale
         Agreement.

                                    (v)    Defaults Under Other Agreements. The
         occurrence of a default or an event of default under any other
         financing arrangement pursuant to which such Seller Party is a debtor
         or an obligor.

                                    (vi)   Downgrade of PDCo or any Originator.
         Any downgrade in the rating of any Indebtedness of PDCo or any
         Originator by Standard & Poor's Ratings Services or by Moody's
         Investors Service, Inc., setting forth the Indebtedness affected and
         the nature of such change.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                       (c) Compliance with Laws and Preservation of Existence.
Such Seller Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Such Seller Party will preserve and
maintain its legal existence, rights, franchises and privileges in the
jurisdiction of its organization, and qualify and remain qualified in good
standing as a foreign entity in each jurisdiction where its business is
conducted, except where the failure to so preserve and maintain any such rights,
franchises or privileges or to so qualify could not reasonably be expected to
have a Material Adverse Effect.

                       (d) Audits. Such Seller Party will furnish to the Agent
from time to time such information with respect to it and the Receivables as the
Agent may reasonably request. Such Seller Party will, from time to time during
regular business hours as requested by the Agent upon reasonable notice and at
the sole cost of such Seller Party, permit the Agent, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Person relating to the
Receivables and the Related Security, including, without limitation, the related
Contracts, and (ii) to visit the offices and properties of such Person for the
purpose of examining such materials described in clause (i) above, and to
discuss matters relating to such Person's financial condition or the Receivables
and the Related Security or any Person's performance under any of the
Transaction Documents or any Person's performance under the Contracts and, in
each case, with any of the officers or employees of Seller or the Servicer
having knowledge of such matters. Without limiting the foregoing, such Seller
Party will, annually and prior to any Financial Institution renewing its
Commitment hereunder, during regular business hours as requested by the Agent
upon reasonable notice and at the sole cost of such Seller Party, permit the
Agent, or its agents or representatives, to conduct a follow-up audit.

                       (e) Keeping and Marking of Records and Books.

                                    (i)    The Servicer will maintain and
         implement administrative and operating procedures (including, without
         limitation, an ability to recreate records evidencing Receivables in
         the event of the destruction of the originals thereof), and keep and
         maintain all documents, books, records and other information reasonably
         necessary or advisable for the collection of all Receivables
         (including, without limitation, records adequate to permit the
         immediate identification of each new Receivable and all Collections of
         and adjustments to each existing Receivable). The Servicer will give
         the Agent notice of any material change in the administrative and
         operating procedures referred to in the previous sentence.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                                  (ii)   Such Seller Party will (A) on or prior
         to the date hereof, mark its master data processing records and other
         books and records relating to the Purchaser Interests with a legend,
         acceptable to the Agent, describing the Purchaser Interests and (B)
         upon the request of the Agent (x) mark each Contract with a legend
         describing the Purchaser Interests and (y) deliver to the Agent all
         Contracts (including, without limitation, all multiple originals of any
         such Contract) relating to the Receivables.

                   (f)  Compliance with Contracts and Credit and Collection
Policy. Such Seller Party will timely and fully (i) perform and comply with all
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Receivables, and (ii) comply in all respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract.

                   (g)  Performance and Enforcement of Receivables Sale
Agreement. Seller will, and will require each Originator to, perform each of
their respective obligations and undertakings under and pursuant to the
Receivables Sale Agreement, will purchase Receivables thereunder in strict
compliance with the terms thereof and will vigorously enforce the rights and
remedies accorded to Seller under the Receivables Sale Agreement. Seller will
take all actions to perfect and enforce its rights and interests (and the rights
and interests of the Agent and the Purchasers as assignees of Seller) under the
Receivables Sale Agreement as the Agent may from time to time reasonably
request, including, without limitation, making claims to which it may be
entitled under any indemnity, reimbursement or similar provision contained in
the Receivables Sale Agreement.

                   (h)  Ownership. Seller will take all necessary action to (i)
vest legal and equitable title to the Receivables, the Related Security and the
Collections purchased under the Receivables Sale Agreement irrevocably in
Seller, free and clear of any Adverse Claims other than Adverse Claims in favor
of the Agent and the Purchasers (including, without limitation, the filing of
all financing statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to
perfect Seller's interest in such Receivables, Related Security and Collections
and such other action to perfect, protect or more fully evidence the interest of
Seller therein as the Agent may reasonably request), and (ii) establish and
maintain, in favor of the Agent, for the benefit of the Purchasers, a valid and
perfected first priority undivided percentage ownership interest (and/or a valid
and perfected first priority security interest) in all Receivables, Related
Security and Collections to the full extent contemplated herein, free and clear
of any Adverse Claims other than Adverse Claims in favor of the

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<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

Agent for the benefit of the Purchasers (including, without limitation, the
filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect the Agent's (for the benefit of the Purchasers) interest in such
Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interest of the Agent for the benefit of the
Purchasers as the Agent may reasonably request).

                    (i)    Purchasers' Reliance.  Seller acknowledges that the
Purchasers are entering into the transactions contemplated by this Agreement in
reliance upon Seller's identity as a legal entity that is separate from each
Patterson Entity and their respective Affiliates. Therefore, from and after the
date of execution and delivery of this Agreement, Seller will take all
reasonable steps, including, without limitation, all steps that the Agent or any
Purchaser may from time to time reasonably request, to maintain Seller's
identity as a separate legal entity and to make it manifest to third parties
that Seller is an entity with assets and liabilities distinct from those of each
Patterson Entity and any Affiliates thereof and not just a division of any
Patterson Entity. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, Seller will:

                                     (A)   conduct its own business in its own
name and require that all full-time employees of Seller, if any, identify
themselves as such and not as employees of any Patterson Entity (including,
without limitation, by means of providing appropriate employees with business or
identification cards identifying such employees as Seller's employees);

                                     (B)   compensate all employees, consultants
and agents directly, from Seller's own funds, for services provided to Seller by
such employees, consultants and agents and, to the extent any employee,
consultant or agent of Seller is also an employee, consultant or agent of any
Patterson Entity or any Affiliate thereof, allocate the compensation of such
employee, consultant or agent between Seller and such Patterson Entity or such
Affiliate, as applicable on a basis that reflects the services rendered to
Seller and such Patterson Entity or such Affiliate, as applicable;

                                     (C)   clearly identify its offices (by
signage or otherwise) as its offices and, if such office is located in the
offices of any Patterson Entity or an Affiliate thereof, Seller will lease such
office at a fair market rent;

                                     (D)   have a separate telephone number,
which will be answered only in its name and separate stationery, invoices and
checks in its own name;

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                                    (E)  conduct all transactions with each
Patterson Entity and the Servicer and their respective Affiliates strictly on an
arm's-length basis, allocate all overhead expenses (including, without
limitation, telephone and other utility charges) for items shared between Seller
and any Patterson Entity or any Affiliate thereof on the basis of actual use to
the extent practicable and, to the extent such allocation is not practicable, on
a basis reasonably related to actual use;

                                    (F)  at all times have a Board of Governors
consisting of three members, at least one member of which is an Independent
Governor;

                                    (G)  observe all limited liability company
formalities as a distinct entity, and ensure that all limited liability company
actions relating to (1) the selection, maintenance or replacement of the
Independent Governor, (2) the dissolution or liquidation of Seller or (3) the
initiation of, participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Seller, are duly
authorized by unanimous vote of its Board of Governors (including the
Independent Governor);

                                    (H)  maintain Seller's books and records
separate from those of each Patterson Entity and any Affiliate thereof and
otherwise readily identifiable as its own assets rather than assets of any
Patterson Entity and any Affiliate thereof;

                                    (I)  prepare its financial statements
separately from those of each Patterson Entity and insure that any consolidated
financial statements of any Patterson Entity or any Affiliate thereof that
include Seller, including any that are filed with the Securities and Exchange
Commission or any other governmental agency have notes clearly stating that
Seller is a separate legal entity and that its assets will be available first
and foremost to satisfy the claims of the creditors of Seller;

                                    (J)  except as herein specifically otherwise
provided, maintain the funds or other assets of Seller separate from, and not
commingled with, those of any Patterson Entity or any Affiliate thereof and only
maintain bank accounts or other depository accounts to which Seller alone (or
the Servicer in the performance of its duties hereunder) is the account party
and from which Seller alone (or the Servicer in the performance of its duties
hereunder or the Agent hereunder) has the power to make withdrawals;

                                    (K)  pay all of Seller's operating expenses
from Seller's own assets (except for certain payments by any Patterson Entity or
other Persons

                                       23

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

pursuant to allocation arrangements that comply with the requirements of this
Section 7.1(i));

                                  (L)  operate its business and activities such
that: it does not engage in any business or activity of any kind, or enter into
any transaction or indenture, mortgage, instrument, agreement, contract, lease
or other undertaking, other than the transactions contemplated and authorized by
this Agreement and the Receivables Sale Agreement; and does not create, incur,
guarantee, assume or suffer to exist any Indebtedness or other liabilities,
whether direct or contingent, other than (1) as a result of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (2) the incurrence of obligations under this
Agreement, (3) the incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to the Originators thereunder for
the purchase of Receivables from the Originators under the Receivables Sale
Agreement, and (4) the incurrence of operating expenses in the ordinary course
of business of the type otherwise contemplated by this Agreement;

                                  (M)  maintain its articles of organization and
bylaws in conformity with this Agreement, such that it does not amend, restate,
supplement or otherwise modify its articles of organization or bylaws in any
respect that would impair its ability to comply with the terms or provisions of
any of the Transaction Documents, including, without limitation, Section 7.1(i)
of this Agreement;

                                  (N)  maintain the effectiveness of, and
continue to perform under the Receivables Sale Agreement, the Performance
Undertaking and the other Transaction Documents, such that it does not amend,
restate, supplement, cancel, terminate or otherwise modify the Receivables Sale
Agreement, the Performance Undertaking or any other Transaction Document, or
give any consent, waiver, directive or approval thereunder or waive any default,
action, omission or breach under the Receivables Sale Agreement, the Performance
Undertaking, or any other Transaction Document, or otherwise grant any
indulgence thereunder, without (in each case) the prior written consent of the
Agent;

                                  (O)  maintain its legal separateness such that
it does not merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions,
and except as otherwise contemplated herein) all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person, nor at any time create, have,
acquire, maintain or hold any interest in any Subsidiary;

                                  (P)  maintain at all times the Required
Capital Amount (as defined in the Receivables Sale Agreement) and refrain from
making any

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

dividend, distribution, redemption of membership units or payment of any
subordinated Indebtedness or other liabilities which would cause the Required
Capital Amount to cease to be so maintained; and

                                        (Q)   take such other actions as are
necessary on its part to ensure that the facts and assumptions set forth in the
opinion issued by Briggs and Morgan, Professional Association, as counsel for
Seller, in connection with the closing or initial Incremental Purchase under
this Agreement and relating to substantive consolidation issues, and in the
certificates accompanying such opinion, remain true and correct in all material
respects at all times.

                           (j)    Collections.  Such Seller Party will cause (1)
all items from all P.O. Boxes to be processed and deposited into a Collection
Account within 1 Business Day after receipt in a P.O. Box, all ACH Receipts to
be deposited immediately to a Collection Account and all proceeds from all
Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account, (2) all Collections deposited to any First-Tier Account to be
electronically swept or otherwise transferred to the Second-Tier Account within
1 Business Day of being deposited to such First-Tier Account, and (3) each
Lock-Box, P.O. Box and Collection Account to be subject at all times to a
Collection Account Agreement that is in full force and effect. In the event any
payments relating to Receivables are remitted directly to any Seller Party or
any Affiliate of any Seller Party, such Seller Party will remit (or will cause
all such payments to be remitted) directly to a Collection Bank and deposited
into a Collection Account within 1 Business Day following receipt thereof, and,
at all times prior to such remittance, such Seller Party or Affiliate will
itself hold or, if applicable, will cause such payments to be held in trust for
the exclusive benefit of the Agent and the Purchasers. Seller will maintain
exclusive ownership, dominion and control (subject to the terms of this
Agreement) of each Lock-Box, P.O. Box and Collection Account and shall not grant
the right to take dominion and control or establish "control" (within the
meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any
Lock-Box, P.O. Box or Collection Account at a future time or upon the occurrence
of a future event to any Person, except to the Agent as contemplated by this
Agreement. With respect to each Collection Account, each Seller Party shall take
all steps necessary to ensure that the Agent has "control" (within the meaning
of Section 9-104 of the UCC of all applicable jurisdictions) over each such
Collection Account.

                           (k)    Taxes. Such Seller Party will file all tax
returns and reports required by law to be filed by it and will promptly pay all
taxes and governmental charges at any time owing. Seller will pay when due any
taxes payable in connection with the Receivables, exclusive of taxes on or
measured by income or gross receipts of Conduit, the Agent or any Financial
Institution.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                    (l) Insurance. Seller will maintain in effect, or cause to
be maintained in effect, at Seller's own expense, such casualty and liability
insurance as Seller shall deem appropriate in its good faith business judgment.
The Agent, for the benefit of the Purchasers, shall be named as an additional
insured with respect to all such liability insurance maintained by Seller.
Seller will pay or cause to be paid, the premiums therefor and deliver to the
Agent evidence satisfactory to the Agent of such insurance coverage. Copies of
each policy shall be furnished to the Agent and any Purchaser in certificated
form upon the Agent's or such Purchaser's request. The foregoing requirements
shall not be construed to negate, reduce or modify, and are in addition to,
Seller's obligations hereunder.

                    (m) Payments to Originators. With respect to any Receivable
purchased by Seller from any Originator, such sale shall be effected under, and
in strict compliance with the terms of, the Receivables Sale Agreement,
including, without limitation, the terms relating to the amount and timing of
payments to be made to such Originator in respect of the purchase price for such
Receivable.

            Section 7.2 Negative Covenants of The Seller Parties. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:

                    (a) Name Change, Offices and Records. Such Seller Party will
not change its name, jurisdiction of organization, identity or organizational
structure (within the meaning of Sections 9-503 and/or 9-507 of the UCC of all
applicable jurisdictions) or relocate its chief executive office, principal
place of business or any office where Records are kept unless it shall have: (i)
given the Agent at least forty-five (45) days' prior written notice thereof and
(ii) delivered to the Agent all financing statements, instruments and other
documents requested by the Agent in connection with such change or relocation.

                    (b) Change in Payment Instructions to Obligors. Except as
may be required by the Agent pursuant to Section 8.2(b), such Seller Party will
not add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box, P.O. Box
or Collection Account, unless the Agent shall have received, at least ten (10)
days before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account, P.O. Box or Lock-Box, an executed
Collection Account Agreement with respect to the new Collection Account or
Lock-Box or P.O. Box; provided, however, that the Servicer may make changes in
instructions to Obligors regarding payments if such new instructions require
such Obligor to make payments to another existing Collection Account.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                    (c) Modifications to Contracts and Credit and Collection
Policy. Such Seller Party will not make any change to the Credit and Collection
Policy that could adversely affect the collectibility of the Receivables or
decrease the credit quality of any newly created Receivables. Except as provided
in Section 8.2(d), the Servicer will not extend, amend or otherwise modify the
terms of any Receivable or any Contract related thereto other than in accordance
with the Credit and Collection Policy.

                    (d) Sales, Liens. Seller will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box, P.O. Box or
Collection Account, or assign any right to receive income with respect thereto
(other than, in each case, the creation of the interests therein in favor of the
Agent and the Purchasers provided for herein), and Seller will defend the right,
title and interest of the Agent and the Purchasers in, to and under any of the
foregoing property, against all claims of third parties claiming through or
under Seller or any Originator. Seller will not create or suffer to exist any
mortgage, pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory, the financing or lease of which gives rise
to any Receivable.

                    (e) Net Receivables Balance. At no time prior to the
Amortization Date shall Seller permit the Net Receivables Balance to be less
than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the
Credit Enhancement.

                    (f) Termination Date Determination. Seller will not
designate the Termination Date (as defined in the Receivables Sale Agreement),
or send any written notice to any Originator in respect thereof, without the
prior written consent of the Agent, except with respect to the occurrence of
such Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale
Agreement.

                    (g) Restricted Junior Payments. From and after the
occurrence of any Amortization Event, Seller will not make any Restricted Junior
Payment if, after giving effect thereto, Seller would fail to meet its
obligations set forth in Section 7.2(e).

                    (h) Collections. No Seller Party will deposit or otherwise
credit, or cause or permit to be so deposited or credited, to the Second-Tier
Account cash or cash proceeds other than Collections. Except as may be required
by the Agent pursuant to the last sentence of Section 8.2(b), no Seller Party
will deposit or otherwise credit, or cause or permit to be so deposited or
credited, any Collections or proceeds thereof to any lock-box account or to any
other account not covered by a Collection Account Agreement.

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<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

            Section 7.3 Hedging Agreement. If at any time, Excess Spread
shall be less than 5% and PDCo shall have an unsecured, unguaranteed, long-term
debt rating of less than A- as rated and determined by Bank One in accordance
with its internal credit standards, the Conduit shall enter into an interest
rate hedge agreement with the Hedge Provider pursuant to which Conduit shall
have the fixed rate obligation and the Hedge Provider shall have the floating
rate obligation (such hedge agreement, together with the related confirmations
and schedules thereunder, the "Hedging Agreement"). The obligations under the
Hedging Agreement shall be based upon a schedule of notional amounts that shall
initially equal the Aggregate Capital of all Purchaser Interests outstanding at
the time such Hedging Agreement is entered into and shall decline over time. On
the date of each Incremental Purchase occurring thereafter, such notional
amounts shall be amended to reflect a future anticipated amount of Aggregate
Capital, based upon scheduled payments and an anticipated level of defaults on
the Receivables and, on the Settlement Date occurring after each such
Incremental Purchase, the Hedge Fixed Rate shall be re-set to an interest rate
agreed to by the Conduit and the Hedge Provider, and if Bank One is then acting
as Hedge Provider, the Agent shall notify Seller of such interest rate. After
the Hedging Agreement has been entered into in accordance with the terms of this
Section 7.3, on each Settlement Date, the Hedge Provider shall be obligated to
pay the Hedge Floating Amount to the Agent, for the account of the Purchasers
and distribution pursuant to Article II and the Hedge Provider shall be entitled
to receive out of Finance Charge Collections, the Hedge Fixed Amount. If a Hedge
Provider Downgrade shall occur, within 10 days thereof, the then current Hedge
Provider shall transfer its obligations under this Agreement and the Hedging
Agreement, at the Hedge Provider's cost and expense, to a bank or other
financial institution acceptable to the Agent and consented to by Seller (such
consent not to be unreasonably withheld) which possesses an unsecured,
unguaranteed, long-term debt rating of A- or better by Standard & Poor's Ratings
Service and A3 or better by Moody's Investors Service.

                                  ARTICLE VIII
                          ADMINISTRATION AND COLLECTION

            Section 8.1 Designation of Servicer. (a) The servicing,
administration and collection of the Receivables shall be conducted by such
Person (the "Servicer") so designated from time to time in accordance with this
Section 8.1. PDCo is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Servicer pursuant to the terms of this Agreement.
The Agent may at any time following the occurrence of an Amortization Event
designate as Servicer any Person to succeed PDCo or any successor Servicer.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                    (b) Without the prior written consent of the Agent and the
Required Financial Institutions, PDCo shall not be permitted to delegate any of
its duties or responsibilities as Servicer to any Person other than (i) an
Originator (with respect to Receivables originated by such Originator), (ii)
Seller and (iii) with respect to certain Charged-Off Receivables, outside
collection agencies and lawyers in accordance with its customary practices. None
of Seller or any Originator shall be permitted to further delegate to any other
Person any of the duties or responsibilities of the Servicer delegated to it by
PDCo. If at any time the Agent shall designate as Servicer any Person other than
PDCo, all duties and responsibilities theretofore delegated by PDCo to Seller
and any Originator may, at the discretion of the Agent, be terminated forthwith
on notice given by the Agent to PDCo and to Seller.

                    (c) Notwithstanding the foregoing subsection (b), (i) PDCo
shall be and remain primarily liable to the Agent and the Purchasers and the
Hedge Provider (if any) for the full and prompt performance of all duties and
responsibilities of the Servicer hereunder and (ii) the Agent and the Purchasers
shall be entitled to deal exclusively with PDCo in matters relating to the
discharge by the Servicer of its duties and responsibilities hereunder. The
Agent and the Purchasers shall not be required to give notice, demand or other
communication to any Person other than PDCo in order for communication to the
Servicer and its sub-servicer or other delegate with respect thereto to be
accomplished. PDCo, at all times that it is the Servicer, shall be responsible
for providing any sub-servicer or other delegate of the Servicer with any notice
given to the Servicer under this Agreement.

            Section 8.2 Duties of Servicer. (a) The Servicer shall take or cause
to be taken all such actions as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.

                    (b) The Servicer will instruct all Obligors to pay all
Collections either (i) directly to a Collection Account by means of an automatic
electronic funds transfer, wire transfer or otherwise or (ii) directly to a
Lock-Box or P.O. Box. The Servicer shall cause any payments made by means of
automatic electronic funds transfer to be deposited directly into a Collection
Account from each Obligor's relevant account. The Servicer shall effect a
Collection Account Agreement substantially in the form of Exhibit VI with each
bank party to a Collection Account at any time. In the case of any remittances
received in any Lock-Box, P.O. Box or Collection Account that shall have been
identified, to the satisfaction of the Servicer, to not constitute Collections
or other proceeds of the Receivables or the Related Security, the Servicer shall
promptly remit such items to the Person identified to it as being the owner of
such remittances. From and after the date the Agent delivers a Collection Notice
to any Collection Bank or a Postal Notice to any post office pursuant to Section
8.3, the Agent may request that the Servicer, and the Servicer

                                       29

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

thereupon promptly shall instruct all Obligors with respect to the Receivables,
to remit all payments thereon to a new lock-box, post office box or depositary
account specified by the Agent and, at all times thereafter, Seller and the
Servicer shall not deposit or otherwise credit, and shall not permit any other
Person to deposit or otherwise credit to such new lock-box, post office box or
depositary account any cash or payment item other than Collections.

                    (c) The Servicer shall administer the Collections in
accordance with the procedures described herein and in Article II. The Servicer
shall set aside and hold in trust for the account of Seller, the Purchasers and
the Hedge Provider (if any) their respective shares of the Collections in
accordance with Article II. The Servicer shall, upon the request of the Agent,
segregate, in a manner acceptable to the Agent, all cash, checks and other
instruments received by it from time to time constituting Collections from the
general funds of the Servicer or Seller prior to the remittance thereof in
accordance with Article II. If the Servicer shall be required to segregate
Collections pursuant to the preceding sentence, the Servicer shall segregate and
deposit with a bank designated by the Agent such allocable share of Collections
of Receivables set aside for the Purchasers on the first Business Day following
receipt by the Servicer of such Collections, duly endorsed or with duly executed
instruments of transfer.

                    (d) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable, Defaulted Receivable or Charged-Off Receivable or limit
the rights of the Agent or the Purchasers under this Agreement. Notwithstanding
anything to the contrary contained herein, the Agent shall have the absolute and
unlimited right to direct the Servicer to commence or settle any legal action
with respect to any Receivable or to foreclose upon or repossess any Related
Security.

                    (e) The Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent, deliver or make available to the Agent all such Records, at
a place selected by the Agent. The Servicer shall, as soon as practicable
following receipt thereof turn over to Seller any cash collections or other cash
proceeds received with respect to Indebtedness not constituting Receivables. The
Servicer shall, from time to time at the request of any Purchaser, furnish to
the Purchasers (promptly after any such request) a calculation of the amounts
set aside for the Purchasers pursuant to Article II.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

               (f)    Any payment by an Obligor in respect of any Indebtedness
or other liability owed by it to the applicable Originator or Seller shall,
except as otherwise specified by such Obligor or otherwise required by contract
or law and unless otherwise instructed by the Agent, be applied as a Collection
of any Receivable of such Obligor (starting with the oldest such Receivable) to
the extent of any amounts then due and payable thereunder before being applied
to any other receivable or other obligation of such Obligor.

         Section 8.3  Collection Notices. The Agent is authorized at any time
after the occurrence of an Amortization Event to date and to deliver to the
Collection Banks the Collection Notices and to date and deliver the Postal
Notices to the applicable post offices. Seller hereby transfers to the Agent for
the benefit of the Purchasers, effective when the Agent delivers such notices,
the dominion and control and "control" (within the meaning of Section 9-104 of
the UCC of all applicable jurisdictions) of each Lock-Box, P. O. Box, each
Collection Account and the amounts on deposit therein. In case any authorized
signatory of Seller whose signature appears on a Collection Account Agreement
shall cease to have such authority before the delivery of such notice, such
Collection Notice or Postal Notice shall nevertheless be valid as if such
authority had remained in force. Seller hereby authorizes the Agent, and agrees
that the Agent shall be entitled to (i) endorse Seller's name on checks and
other instruments representing Collections, (ii) enforce the Receivables, the
related Contracts and the Related Security and (iii) take such action as shall
be necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the Agent
rather than Seller.

         Section 8.4  Responsibilities of Seller. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder shall not release the Servicer, any Originator or Seller from
any of their duties or obligations with respect to any Receivables or under the
related Contracts. The Purchasers shall have no obligation or liability with
respect to any Receivables or related Contracts, nor shall any of them be
obligated to perform the obligations of Seller.

         Section 8.5  Reports. The Servicer shall prepare and forward to the
Agent (i) three Business Days prior to each Settlement Date and at such times as
the Agent shall request, a Monthly Report and (ii) at such times as the Agent
shall request, a listing by Obligor of all Receivables together with an aging of
such Receivables. Unless otherwise requested by the Agent, all computations in
such Monthly Report shall be made as of the close of business on the last day of
the Accrual Period preceding the date on which such Monthly Report is delivered.

         Section 8.6  Servicing Fees. In consideration of PDCo's agreement to
act as Servicer hereunder, the Purchasers hereby agree that, so long as PDCo
shall continue to perform as Servicer hereunder, Seller shall pay over to PDCo a
fee (the "Servicing Fee")

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<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

on the 19/th/ calendar day of each month (or, if such day is not a Business Day,
then the next Business Day thereafter), in arrears for the immediately preceding
Fiscal Month, equal to 1% per annum of the average Net Receivables Balance
during such period, as compensation for its servicing activities.

                                   ARTICLE IX
                               AMORTIZATION EVENTS

         Section 9.1  Amortization Events. The occurrence of any one or more of
the following events shall constitute an "Amortization Event":

               (a)    Any Seller Party shall fail (i) to make any payment or
deposit required hereunder when due, or (ii) to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause (i) of this
paragraph (a) and Section 9.1(e)) or any other Transaction Document and such
failure shall continue for seven (7) consecutive Business Days.

               (b)    Any representation, warranty, certification or statement
made by any Seller Party in this Agreement, any other Transaction Document or in
any other document delivered pursuant hereto or thereto shall prove to have been
incorrect in any material respect when made or deemed made.

               (c)    Failure of Seller to pay any Indebtedness when due or the
failure of any other Seller Party to pay Indebtedness when due in excess of
$1,000,000; or the default by any Seller Party in the performance of any term,
provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of any Seller
Party shall be declared to be due and payable or required to be prepaid (other
than by a regularly scheduled payment) prior to the date of maturity thereof.

               (d)    (i) Any Seller Party, the Hedge Provider (if any), the
Performance Provider or any of their respective Subsidiaries shall generally not
pay its debts as such debts become due or shall admit in writing its inability
to pay its debts generally or shall make a general assignment for the benefit of
creditors; or (ii) any proceeding shall be instituted by or against any Seller
Party, the Hedge Provider (if any), the Performance Provider or any of their
respective Subsidiaries seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or

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<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

the appointment of a receiver, trustee or other similar official for it or any
substantial part of its property, and solely in the case of the Servicer and the
Performance Provider and a proceeding instituted against (and not by) such
Person, such proceeding is not dismissed within 60 days or (iii) any Seller
Party, the Hedge Provider (if any), the Performance Provider or any of their
respective Subsidiaries shall take any corporate or other action to authorize
any of the actions set forth in clauses (i) or (ii) above in this subsection
(d).

               (e)  Seller shall fail to comply with the terms of Section 2.6
hereof.

               (f)  As at the end of any Fiscal Month:

                         (i)   the average of the Delinquency Ratio for such
     Fiscal Month and each of the two immediately preceding Fiscal Months shall
     exceed 8.25%, or

                         (ii)  the average of the Default Ratio for such Fiscal
     Month and each of the two immediately preceding Fiscal Months shall exceed
     3.30%, or

                         (iii) Excess Spread is less than 4.0%.

               (g)  A Change of Control shall occur.

               (h)  A Hedge Provider Downgrade shall occur and a replacement
Hedge Provider meeting the requirements of Section 7.3 fails to assume the then
current Hedge Provider's obligations under this Agreement and the Hedging
Agreement as provided in Section 7.3 after such occurrence.

               (i)  One or more final judgments for the payment of money shall
be entered against Seller or (ii) one or more final judgments for the payment of
money in an amount in excess of $1,000,000, individually or in the aggregate,
shall be entered against the Servicer on claims not covered by insurance or as
to which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for fifteen (15) consecutive days
without a stay of execution.

               (j)  The "Termination Date" under and as defined in the
Receivables Sale Agreement shall occur under the Receivables Sale Agreement or
any Originator shall for any reason cease to transfer, or cease to have the
legal capacity to transfer, or otherwise be incapable of transferring
Receivables to Seller under the

                                       33

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

Receivables Sale Agreement; or Seller shall for any reason cease to purchase, or
cease to have the legal capacity to purchase, or otherwise be incapable of
accepting Receivables from any Originator under the Receivables Sale Agreement.

               (k)    This Agreement shall terminate in whole or in part (except
in accordance with its terms), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of Seller, or any Obligor
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of the Purchasers
shall cease to have a valid and perfected first priority security interest in
the Receivables, the Related Security and the Collections with respect thereto
and the Collection Accounts.

               (l)    If required to be in effect pursuant to Section 7.3, the
Hedging Agreement shall for any reason not be in full force and effect.

               (m)    The Intercreditor Agreement shall terminate in whole or in
part or shall cease to be in full force and effect or US Bank shall directly or
indirectly contest in any manner the effectiveness or enforceability thereof.

               (n)    The Consolidated Tangible Net Worth of PDCo shall at any
time be less than the sum of (i) $300,000,000, plus (ii) 50% of the cumulative
positive quarterly Consolidated Net Income for all fiscal quarters of PDCo
following the fiscal quarter of PDCo ending April 27, 2002 (without taking into
account any net loss in any such fiscal quarter), plus (iii) 100% of the amount,
if any, by which stockholder's equity of PDCo is, in accordance with GAAP,
increased for all fiscal quarters of PDCo following the fiscal quarter of PDCo
ending April 27, 2002 as a result of (A) the issuance of any capital stock of
PDCo or (B) any Acquisition.

               (o)    The ratio of Consolidated Total Debt to Consolidated
Adjusted EBITDA shall at any time be greater than 2.0 to 1.0.

               (p)    Performance Provider shall fail to perform or observe any
term, covenant or agreement required to be performed by it under the Performance
Undertaking, or the Performance Undertaking shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Performance Provider,
or Performance Provider shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability.

         Section 9.2  Remedies. Upon the occurrence and during the continuation
of an Amortization Event, the Agent may, or upon the direction of the Required
Financial Institutions shall, take any of the following actions: (i) replace the
Person then acting as

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<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

Servicer, (ii) declare the Amortization Date to have occurred, whereupon the
Amortization Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Seller
Party; provided, however, that upon the occurrence of an Amortization Event
described in Section 9.1(d), or of an actual or deemed entry of an order for
relief with respect to any Seller Party under the Federal Bankruptcy Code or
under any other applicable bankruptcy, insolvency, arrangement, moratorium or
similar laws of any other jurisdiction (foreign or domestic), the Amortization
Date shall automatically occur, without demand, protest or any notice of any
kind, all of which are hereby expressly waived by each Seller Party, (iii) to
the fullest extent permitted by applicable law, declare that the Default Fee
shall accrue with respect to any of the Aggregate Unpaids outstanding at such
time, (iv) deliver the Collection Notices to the Collection Banks and the Postal
Notices to any post office where a P.O. Box is located, and (v) notify Obligors
of the Purchasers' interest in the Receivables. The aforementioned rights and
remedies shall be without limitation, and shall be in addition to all other
rights and remedies of the Agent and the Purchasers otherwise available under
any other provision of this Agreement, by operation of law, at equity or
otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights and remedies provided under the UCC, all of which rights
shall be cumulative.

                                    ARTICLE X
                                 INDEMNIFICATION

         Section 10.1 Indemnities by The Seller Parties. Without limiting any
other rights that the Agent or any Purchaser may have hereunder or under
applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to)
the Agent, each Purchaser and the Hedge Provider (if any) and their respective
assigns, officers, directors, agents and employees (each an "Indemnified Party")
from and against any and all damages, losses, claims, taxes, liabilities, costs,
expenses and for all other amounts payable, including reasonable attorneys' fees
(which attorneys may be employees of the Agent or such Purchaser) and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or as a result of this Agreement or the Hedging Agreement or the acquisition,
either directly or indirectly, by a Purchaser of an interest in the Receivables,
and (B) the Servicer hereby agrees to indemnify (and pay upon demand to) each
Indemnified Party for Indemnified Amounts awarded against or incurred by any of
them arising out of the Servicer's activities as Servicer hereunder excluding,
however, in all of the foregoing instances under the preceding clauses (A) and
(B):

                         (x)  Indemnified Amounts to the extent a final judgment
     of a court of competent jurisdiction holds that such Indemnified Amounts
     resulted

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

     from gross negligence or willful misconduct on the part of the Indemnified
     Party seeking indemnification;

               (y)    Indemnified Amounts to the extent the same includes losses
     in respect of Receivables that are uncollectible on account of the
     insolvency, bankruptcy or lack of creditworthiness of the related Obligor;
     or

               (z)    taxes imposed by the jurisdiction in which such
     Indemnified Party's principal executive office is located, on or measured
     by the overall net income of such Indemnified Party to the extent that the
     computation of such taxes is consistent with the characterization for
     income tax purposes of the acquisition by the Purchasers of Purchaser
     Interests as a loan or loans by the Purchasers to Seller secured by the
     Receivables, the Related Security, the Collection Accounts and the
     Collections;

provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, Seller shall indemnify each Indemnified Party
for Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to Seller or the Servicer) relating to or resulting from:

                    (i)   any representation or warranty made by any Seller
     Party, any Originator or Performance Provider (or any officers of any such
     Person) under or in connection with this Agreement, any other Transaction
     Document or any other information or report delivered by any such Person
     pursuant hereto or thereto, which shall have been false or incorrect when
     made or deemed made;

                    (ii)  the failure by Seller, the Servicer or any Originator
     to comply with any applicable law, rule or regulation with respect to any
     Receivable or Contract related thereto, or the nonconformity of any
     Receivable or Contract included therein with any such applicable law, rule
     or regulation or any failure of any Originator to keep or perform any of
     its obligations, express or implied, with respect to any Contract;

                    (iii) any failure of Seller, the Servicer, any Originator or
     Performance Provider to perform its duties, covenants or other obligations
     in accordance with the provisions of this Agreement or any other
     Transaction Document;

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                    (iv)   any products liability, personal injury or damage
     suit, or other similar claim arising out of or in connection with
     merchandise, insurance or services that are the subject of any Contract or
     any Receivable;

                    (v)    any dispute, claim, offset or defense (other than
     discharge in bankruptcy of the Obligor) of the Obligor to the payment of
     any Receivable (including, without limitation, a defense based on such
     Receivable or the related Contract not being a legal, valid and binding
     obligation of such Obligor enforceable against it in accordance with its
     terms), or any other claim resulting from the sale of the merchandise or
     service related to such Receivable or the furnishing or failure to furnish
     such merchandise or services;

                    (vi)   the commingling of Collections of Receivables at any
     time with other funds;

                    (vii)  any investigation, litigation or proceeding related
     to or arising from this Agreement or any other Transaction Document, the
     transactions contemplated hereby, the use of the proceeds of an Incremental
     Purchase or a Reinvestment, the ownership of the Purchaser Interests or any
     other investigation, litigation or proceeding relating to Seller, the
     Servicer or any Originator in which any Indemnified Party becomes involved
     as a result of any of the transactions contemplated hereby;

                    (Viii) any inability to litigate any claim against any
     Obligor in respect of any Receivable as a result of such Obligor being
     immune from civil and commercial law and suit on the grounds of sovereignty
     or otherwise from any legal action, suit or proceeding;

                    (ix)   any Amortization Event described in Section 9.1(d);

                    (x)    any failure of Seller to acquire and maintain legal
     and equitable title to, and ownership of, any Receivable and the Related
     Security and Collections with respect thereto from any Originator, free and
     clear of any Adverse Claim (other than as created hereunder); or any
     failure of Seller to give reasonably equivalent value to any Originator
     under the Receivables Sale Agreement in consideration of

                                       37

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

     the transfer by such Originator of any Receivable, or any attempt by any
     Person to void such transfer under statutory provisions or common law or
     equitable action;

                    (xi)   any failure to vest and maintain vested in the Agent
     for the benefit of the Purchasers, or to transfer to the Agent for the
     benefit of the Purchasers, legal and equitable title to, and ownership of,
     a first priority perfected undivided percentage ownership interest (to the
     extent of the Purchaser Interests contemplated hereunder) or security
     interest in the Receivables, the Related Security and the Collections, free
     and clear of any Adverse Claim (except as created by the Transaction
     Documents);

                    (xii)  the failure to have filed, or any delay in filing,
     financing statements or other similar instruments or documents under the
     UCC of any applicable jurisdiction or other applicable laws with respect to
     any Receivable, the Related Security and Collections with respect thereto,
     and the proceeds of any thereof, whether at the time of any Incremental
     Purchase or Reinvestment or at any subsequent time;

                    (xiii) any action or omission by any Seller Party which
     reduces or impairs the rights of the Agent or the Purchasers with respect
     to any Receivable or the value of any such Receivable;

                    (xiv)  any attempt by any Person to void any Incremental
     Purchase under statutory provisions or common law or equitable action; and

                    (xv)   the failure of any Receivable included in the
     calculation of the Net Receivables Balance as an Eligible Receivable to be
     an Eligible Receivable at the time so included.

          Section 10.2 Increased Cost and Reduced Return.

          If after the date hereof, any Funding Source shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
with any request or directive (whether or not

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

having the force of law) of any such authority, central bank or comparable
agency: (i) that subjects any Funding Source to any charge or withholding on or
with respect to any Funding Agreement or a Funding Source's obligations under a
Funding Agreement, or on or with respect to the Receivables, or changes the
basis of taxation of payments to any Funding Source of any amounts payable under
any Funding Agreement (except for changes in the rate of tax on the overall net
income of a Funding Source or taxes excluded by Section 10.1) or (ii) that
imposes, modifies or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for
the account of a Funding Source, or credit extended by a Funding Source pursuant
to a Funding Agreement or (iii) that imposes any other condition the result of
which is to increase the cost to a Funding Source of performing its obligations
under a Funding Agreement, or to reduce the rate of return on a Funding Source's
capital as a consequence of its obligations under a Funding Agreement, or to
reduce the amount of any sum received or receivable by a Funding Source under a
Funding Agreement or to require any payment calculated by reference to the
amount of interests or loans held or interest received by it, then, upon demand
by the Agent, Seller shall pay to the Agent, for the benefit of the relevant
Funding Source, such amounts charged to such Funding Source or such amounts to
otherwise compensate such Funding Source for such increased cost or such
reduction.

          Section 10.3 Other Costs and Expenses. Seller shall reimburse the
Agent and Conduit on demand for all costs and out-of-pocket expenses in
connection with the preparation, negotiation, arrangement, execution, delivery,
enforcement and administration of this Agreement, the transactions contemplated
hereby and the other documents to be delivered hereunder, including without
limitation, the cost of Conduit's auditors auditing the books, records and
procedures of Seller, reasonable fees and out-of-pocket expenses of legal
counsel for Conduit and the Agent (which such counsel may be employees of
Conduit or the Agent) with respect thereto and with respect to advising Conduit
and the Agent as to their respective rights and remedies under this Agreement.
Seller shall reimburse the Agent on demand for any and all costs and expenses of
the Agent and the Purchasers, if any, including reasonable counsel fees and
expenses in connection with the enforcement of this Agreement and the other
documents delivered hereunder and in connection with any restructuring or
workout of this Agreement or such documents, or the administration of this
Agreement following an Amortization Event. Seller shall reimburse Conduit on
demand for all other costs and expenses incurred by Conduit ("Other Costs"),
including, without limitation, the cost of auditing Conduit's books by certified
public accountants, the cost of rating the Commercial Paper by independent
financial rating agencies, and the reasonable fees and out-of-pocket expenses of
counsel for Conduit or any counsel for any shareholder of Conduit with respect
to advising Conduit or such shareholder as to matters relating to Conduit's
operations.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

          Section 10.4 Allocations. Conduit shall allocate the liability for
Other Costs among Seller and other Persons with whom Conduit has entered into
agreements to purchase interests in receivables ("Other Sellers"). If any Other
Costs are attributable to Seller and not attributable to any Other Seller,
Seller shall be solely liable for such Other Costs. However, if Other Costs are
attributable to Other Sellers and not attributable to Seller, such Other Sellers
shall be solely liable for such Other Costs. All allocations to be made pursuant
to the foregoing provisions of this Article X shall be made by Conduit in its
sole and absolute discretion and shall be binding on Seller and the Servicer.

                                   ARTICLE XI
                                    THE AGENT

          Section 11.1 Authorization and Action. Each Purchaser hereby
designates and appoints Bank One to act as its agent hereunder and under each
other Transaction Document, and authorizes the Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Agent by
the terms of this Agreement and the other Transaction Documents together with
such powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in any
other Transaction Document, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to authorize each of the Uniform
Commercial Code financing or continuations statements (and amendments thereto
and assignments or terminations thereof) on behalf of such Purchaser (the terms
of which shall be binding on such Purchaser).

          Section 11.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

               Section 11.3 Exculpatory Provisions. Neither the Agent nor any of
its directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall
not be under any obligation to any Purchaser to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Seller Parties. The Agent shall
not be deemed to have knowledge of any Amortization Event or Potential
Amortization Event unless the Agent has received notice from Seller or a
Purchaser.

               Section 11.4 Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to any Seller Party),
independent accountants and other experts selected by the Agent. The Agent shall
in all cases be fully justified in failing or refusing to take any action under
this Agreement or any other Transaction Document unless it shall first receive
such advice or concurrence of Conduit or the Required Financial Institutions or
all of the Purchasers, as applicable, as it deems appropriate and it shall first
be indemnified to its satisfaction by the Purchasers, provided that unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Conduit or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.

               Section 11.5 Non-Reliance on Agent and Other Purchasers. Each
Purchaser expressly acknowledges that neither the Agent, nor any of its
officers, directors,

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Agent hereafter taken, including,
without limitation, any review of the affairs of any Seller Party, shall be
deemed to constitute any representation or warranty by the Agent. Each Purchaser
represents and warrants to the Agent that it has and will, independently and
without reliance upon the Agent or any other Purchaser and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of each Seller Party and
made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.

               Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller Parties (i) for
any amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.

               Section 11.7 Agent in its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Seller Party or any Affiliate of any Seller Party as
though the Agent were not the Agent hereunder. With respect to the acquisition
of Purchaser Interests pursuant to this Agreement, the Agent shall have the same
rights and powers under this Agreement in its individual capacity as any
Purchaser and may exercise the same as though it were not the Agent, and the
terms "Financial Institution," "Purchaser," "Financial Institutions" and
"Purchasers" shall include the Agent in its individual capacity.

               Section 11.8 Successor Agent. The Agent may, upon 10 Business
Days' notice to Seller and the Purchasers, and the Agent will, upon the
direction of all of the Purchasers (other than the Agent, in its individual
capacity) resign as Agent. If the Agent shall resign, then the Required
Financial Institutions during such five-day period shall appoint from among the
Purchasers a successor agent. If for any reason no successor Agent is appointed
by the Required Financial Institutions during such five-day period, then
effective upon the termination of such five-day period, the Purchasers shall
perform all of the duties of the Agent hereunder and under the other Transaction
Documents and Seller and the Servicer (as applicable) shall make all payments in
respect of the Aggregate Unpaids directly to the applicable Purchasers and for
all purposes shall deal directly with the Purchasers. After the effectiveness of
any retiring Agent's resignation hereunder as Agent, the retiring Agent shall be
discharged from its duties and obligations hereunder and

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

under the other Transaction Documents and the provisions of this Article XI and
Article X shall continue in effect for its benefit with respect to any actions
taken or omitted to be taken by it while it was Agent under this Agreement and
under the other Transaction Documents.

                                   ARTICLE XII
                           ASSIGNMENTS; PARTICIPATIONS

               Section 12.1 Assignments. (a) Seller, the Servicer, the Agent and
each Financial Institution hereby agree and consent to the complete or partial
assignment by Conduit of all or any portion of its rights under, interest in,
title to and obligations under this Agreement to the Financial Institutions
pursuant to Section 13.1 or to any other Person, and upon such assignment,
Conduit shall be released from its obligations so assigned. Further, Seller, the
Servicer, the Agent and each Financial Institution hereby agree that any
assignee of Conduit of this Agreement or of all or any of the Purchaser
Interests of Conduit shall have all of the rights and benefits under this
Agreement as if the term "Conduit" explicitly referred to such party (provided
that the Purchaser Interests of any such assignee shall accrue Financial
Institution Yield pursuant to Article IV as if such assignee were a Financial
Institution hereunder), and no such assignment shall in any way impair the
rights and benefits of Conduit hereunder. Neither Seller nor the Servicer shall
have the right to assign its rights or obligations under this Agreement.

                        (b) Any Financial Institution may at any time and from
time to time assign to one or more Persons ("Purchasing Financial Institutions")
all or any part of its rights and obligations under this Agreement pursuant to
an assignment agreement, substantially in the form set forth in Exhibit VII
hereto (the "Assignment Agreement") executed by such Purchasing Financial
Institution and such selling Financial Institution. The consent of Conduit shall
be required prior to the effectiveness of any such assignment. Each assignee of
a Financial Institution must (i) have a short-term debt rating of A-1 or better
by Standard & Poor's Ratings Services and P-1 by Moody's Investors Service, Inc.
and (ii) agree to deliver to the Agent, promptly following any request therefor
by the Agent or Conduit, an enforceability opinion in form and substance
satisfactory to the Agent and Conduit. Upon delivery of the executed Assignment
Agreement to the Agent, such selling Financial Institution shall be released
from its obligations hereunder to the extent of such assignment. Thereafter the
Purchasing Financial Institution shall for all purposes be a Financial
Institution party to this Agreement and shall have all the rights and
obligations of a Financial Institution under this Agreement to the same extent
as if it were an original party hereto and no further consent or action by
Seller, the Purchasers or the Agent shall be required.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                        (c) Each of the Financial Institutions agrees that in
the event that it shall cease to have a short-term debt rating of A-1 or better
by Standard & Poor's Ratings Services and P-1 by Moody's Investors Service, Inc.
(an "Affected Financial Institution"), such Affected Financial Institution shall
be obliged, at the request of Conduit or the Agent, to assign all of its rights
and obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by the Agent and acceptable to Conduit, and willing to
participate in this Agreement through the Liquidity Termination Date in the
place of such Affected Financial Institution; provided that the Affected
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Financial Institution's Pro Rata Share of
the Aggregate Capital and Financial Institution Yield owing to the Financial
Institutions and all accrued but unpaid fees and other costs and expenses
payable in respect of its Pro Rata Share of the Purchaser Interests of the
Financial Institutions.

               Section 12.2 Participations. Any Financial Institution may, in
the ordinary course of its business at any time sell to one or more Persons
(each a "Participant") participating interests in its Pro Rata Share of the
Purchaser Interests of the Financial Institutions, its obligation to pay Conduit
its Acquisition Amounts or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Conduit and the Agent shall continue to deal
solely and directly with such Financial Institution in connection with such
Financial Institution's rights and obligations under this Agreement. Each
Financial Institution agrees that any agreement between such Financial
Institution and any such Participant in respect of such participating interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 14.1(b)(i).

                                  ARTICLE XIII
                               LIQUIDITY FACILITY

               Section 13.1 Transfer to Financial Institutions. Each Financial
Institution hereby agrees, subject to Section 13.4, that immediately upon
written notice from Conduit delivered on or prior to the Liquidity Termination
Date, it shall acquire by assignment from Conduit, without recourse or warranty,
its Pro Rata Share of one or more of the Purchaser Interests of Conduit as
specified by Conduit. Each such assignment by Conduit shall be made pro rata
among all of the Financial Institutions, except for pro rata assignments to one
or more Terminating Financial Institutions pursuant to Section 13.6.

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

Each such Financial Institution shall, no later than 1:00 p.m. (Chicago time) on
the date of such assignment, pay in immediately available funds (unless another
form of payment is otherwise agreed between Conduit and any Financial
Institution) to the Agent at an account designated by the Agent, for the benefit
of Conduit, its Acquisition Amount. Unless a Financial Institution has notified
the Agent that it does not intend to pay its Acquisition Amount, the Agent may
assume that such payment has been made and may, but shall not be obligated to,
make the amount of such payment available to Conduit in reliance upon such
assumption. Conduit hereby sells and assigns to the Agent for the ratable
benefit of the Financial Institutions, and the Agent hereby purchases and
assumes from Conduit, effective upon the receipt by Conduit of the Conduit
Transfer Price, the Purchaser Interests of Conduit which are the subject of any
transfer pursuant to this Article XIII.

               Section 13.2 Transfer Price Reduction Financial Institution
Yield. If the Adjusted Funded Amount is included in the calculation of the
Conduit Transfer Price for any Purchaser Interest, each Financial Institution
agrees that the Agent shall pay to Conduit the Reduction Percentage of any
Financial Institution Yield received by the Agent with respect to such Purchaser
Interest.

               Section 13.3 Payments to Conduit. In consideration for the
reduction of the Conduit Transfer Prices by the Conduit Transfer Price
Reductions, effective only at such time as the aggregate amount of the Capital
of the Purchaser Interests of the Financial Institutions equals the Conduit
Residual, each Financial Institution hereby agrees that the Agent shall not
distribute to the Financial Institutions and shall immediately remit to Conduit
any Financial Institution Yield, Collections or other payments received by it to
be applied pursuant to the terms hereof or otherwise to reduce the Capital of
the Purchaser Interests of the Financial Institutions.

               Section 13.4 Limitation on Commitment to Purchase from Conduit.
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Purchaser Interest from
Conduit, pursuant to Section 13.1 or otherwise, if:

                                 (i)  Conduit shall have voluntarily commenced
         any proceeding or filed any petition under any bankruptcy, insolvency
         or similar law seeking the dissolution, liquidation or reorganization
         of Conduit or taken any corporate action for the purpose of
         effectuating any of the foregoing; or

                                 (ii) involuntary proceedings or an involuntary
         petition shall have been commenced or filed against Conduit by any
         Person under any bankruptcy, insolvency or similar law seeking the

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

     dissolution, liquidation or reorganization of Conduit and such proceeding
     or petition shall have not been dismissed.

         Section 13.5  Defaulting Financial Institutions. If one or more
Financial Institutions defaults in its obligation to pay its Acquisition Amount
pursuant to Section 13.1 (each such Financial Institution shall be called a
"Defaulting Financial Institution" and the aggregate amount of such defaulted
obligations being herein called the "Conduit Transfer Price Deficit"), then upon
notice from the Agent, each Financial Institution other than the Defaulting
Financial Institutions (a "Non-Defaulting Financial Institution") shall promptly
pay to the Agent, in immediately available funds, an amount equal to the lesser
of (x) such Non-Defaulting Financial Institution's proportionate share (based
upon the relative Commitments of the Non-Defaulting Financial Institutions,
after excluding the Commitment of any Approved Unconditional Liquidity
Providers) of the Conduit Transfer Price Deficit and (y) the unused portion of
such Non-Defaulting Financial Institution's Commitment; provided, however, that
if an Approved Unconditional Liquidity Provider is the Defaulting Financial
Institution, the Non-Defaulting Financial Institutions shall have no obligation
to pay any amount to the Agent pursuant to this Section 13.5 as a result of a
default by such Approved Unconditional Liquidity Provider; provided, further,
that in no event shall any Approved Unconditional Liquidity Provider be required
to make any payment as a Non-Defaulting Financial Institution pursuant to this
Section 13.5. A Defaulting Financial Institution shall forthwith upon demand pay
to the Agent for the account of the Non-Defaulting Financial Institutions all
amounts paid by each Non-Defaulting Financial Institution on behalf of such
Defaulting Financial Institution, together with interest thereon, for each day
from the date a payment was made by a Non-Defaulting Financial Institution until
the date such Non-Defaulting Financial Institution has been paid such amounts in
full, at a rate per annum equal to the Federal Funds Effective Rate plus two
percent (2%). In addition, without prejudice to any other rights that Conduit
may have under applicable law, each Defaulting Financial Institution shall pay
to Conduit forthwith upon demand, the difference between such Defaulting
Financial Institution's unpaid Acquisition Amount and the amount paid with
respect thereto by the Non-Defaulting Financial Institutions, together with
interest thereon, for each day from the date of the Agent's request for such
Defaulting Financial Institution's Acquisition Amount pursuant to Section 13.1
until the date the requisite amount is paid to Conduit in full, at a rate per
annum equal to the Federal Funds Effective Rate plus two percent (2%).

         Section 13.6  Terminating Financial Institutions.

               (a)     Each Financial Institution hereby agrees to deliver
written notice to the Agent not more than 30 Business Days and not less than 5
Business Days prior to the Liquidity Termination Date indicating whether such
Financial Institution, in its sole and absolute discretion, intends to renew its
Commitment hereunder. If any Financial

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

Institution fails to deliver such notice on or prior to the date that is 5
Business Days prior to the Liquidity Termination Date, such Financial
Institution will be deemed to have declined to renew its Commitment (each
Financial Institution which has declined or has been deemed to have declined to
renew its Commitment hereunder, a "Non-Renewing Financial Institution"). The
Agent shall promptly notify Conduit of each Non-Renewing Financial Institution
and Conduit, in its sole and absolute discretion, may (A) to the extent of
Commitment Availability, declare that such Non-Renewing Financial Institution's
Commitment shall, to such extent, automatically terminate on a date specified by
Conduit on or before the Liquidity Termination Date or (B) upon one (1) Business
Days' notice to such Non-Renewing Financial Institution assign to such
Non-Renewing Financial Institution on a date specified by Conduit its Pro Rata
Share of the aggregate Purchaser Interests then held by Conduit, subject to, and
in accordance with, Section 13.1. In addition, Conduit may, in its sole and
absolute discretion, at any time (x) to the extent of Commitment Availability,
declare that any Affected Financial Institution's Commitment shall automatically
terminate on a date specified by Conduit or (y) assign to any Affected Financial
Institution on a date specified by Conduit its Pro Rata Share of the aggregate
Purchaser Interests then held by Conduit, subject to, and in accordance with,
Section 13.1 (each Affected Financial Institution or each Non-Renewing Financial
Institution is hereinafter referred to as a "Terminating Financial
Institution"). The parties hereto expressly acknowledge that any declaration of
the termination of any Commitment, any assignment pursuant to this Section 13.6
and the order of priority of any such termination or assignment among
Terminating Financial Institutions shall be made by Conduit in its sole and
absolute discretion.

               (b)     Upon any assignment to a Terminating Financial
Institution as provided in this Section 13.6, any remaining Commitment of such
Terminating Financial Institution shall automatically terminate. Upon reduction
to zero of the Capital of all of the Purchaser Interests of a Terminating
Financial Institution (after application of Collections thereto pursuant to
Sections 2.2 and 2.3) all rights and obligations of such Terminating Financial
Institution hereunder shall be terminated and such Terminating Financial
Institution shall no longer be a "Financial Institution" hereunder; provided,
however, that the provisions of Article X shall continue in effect for its
benefit with respect to Purchaser Interests held by such Terminating Financial
Institution prior to its termination as a Financial Institution.

                                   ARTICLE XIV
                                  MISCELLANEOUS

         Section 14.1  Waivers and Amendments. (a) No failure or delay on the
part of the Agent or any Purchaser in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which given.

               (b)  No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 14.1(b). Conduit, Seller and the Agent, at the direction of the Required
Financial Institutions, may enter into written modifications or waivers of any
provisions of this Agreement, provided, however, that no such modification or
waiver shall:

                         (i)  without the consent of each affected Purchaser,
     (A) extend the Liquidity Termination Date or the date of any payment or
     deposit of Collections by Seller or the Servicer, (B) reduce the rate or
     extend the time of payment of Financial Institution Yield or any CP Costs
     (or any component of Financial Institution Yield or CP Costs), (C) reduce
     any fee payable to the Agent for the benefit of the Purchasers, (D) except
     pursuant to Article XII hereof, change the amount of the Capital of any
     Purchaser, any Financial Institution's Pro Rata Share (except pursuant to
     Sections 13.1 or 13.5) or any Financial Institution's Commitment, (E)
     amend, modify or waive any provision of the definition of Required
     Financial Institutions or this Section 14.1(b), (F) consent to or permit
     the assignment or transfer by Seller of any of its rights and obligations
     under this Agreement, (G) change the definition of "Eligible Receivable,"
     "Credit Enhancement," "Hedging Agreement" or "Hedge Provider" or (H) amend
     or modify any defined term (or any defined term used directly or indirectly
     in such defined term) used in clauses (A) through (G) above in a manner
     that would circumvent the intention of the restrictions set forth in such
     clauses; or

                         (ii) without the written consent of the then Agent,
     amend, modify or waive any provision of this Agreement if the effect
     thereof is to affect the rights or duties of such Agent.

Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Conduit may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
Section 14.13 or any other provision of this Agreement without the consent of
any Seller Party, provided that such amendment has no negative impact upon such
Seller

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                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

Party. Any modification or waiver made in accordance with this Section
14.1 shall apply to each of the Purchasers equally and shall be binding upon
each Seller Party, the Purchasers and the Agent.

          Section 14.2  Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 14.2. Seller hereby authorizes the Agent to effect purchases and Tranche
Period and Discount Rate selections based on telephonic notices made by any
Person whom the Agent in good faith believes to be acting on behalf of Seller.
Seller agrees to deliver promptly to the Agent a written confirmation of each
telephonic notice signed by an authorized officer of Seller; provided, however,
the absence of such confirmation shall not affect the validity of such notice.
If the written confirmation differs from the action taken by the Agent, the
records of the Agent shall govern absent manifest error.

          Section 14.3  Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.2 or 10.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.

          Section 14.4  Protection of Ownership Interests of the Purchasers. (a)
Seller agrees that from time to time, at its expense, it will promptly execute
and deliver all instruments and documents, and take all actions, that may be
necessary or desirable, or that the Agent may request, to perfect, protect or
more fully evidence the Purchaser Interests, or to enable the Agent or the
Purchasers to exercise and enforce their rights and remedies hereunder. Without
limiting the foregoing, Seller will, upon the request of the Agent, file such
financing or continuation statements, or amendments thereto or assignments
thereof, and execute and file such other instruments and documents, that may be
necessary or

                                       49

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

desirable, or that the Agent may reasonably request, to perfect, protect or
evidence such Purchaser Interests. At any time following the occurrence of an
Amortization Event, the Agent may, or the Agent may direct Seller or the
Servicer to, notify the Obligors of Receivables, at Seller's expense, of the
ownership or security interests of the Purchasers under this Agreement and may
also direct that payments of all amounts due or that become due under any or all
Receivables be made directly to the Agent or its designee. Seller or the
Servicer (as applicable) shall, at any Purchaser's request, withhold the
identity of such Purchaser in any such notification.

               (b)     If any Seller Party fails to perform any of its
obligations hereunder, the Agent or any Purchaser may (but shall not be required
to) perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes
the Agent at any time and from time to time in the sole and absolute discretion
of the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf
of such Seller Party (i) to authorize and/or execute on behalf of such Seller
Party as debtor and to file financing or continuation statements (and amendments
thereto and assignments thereof) necessary or desirable in the Agent's sole and
absolute discretion to perfect and to maintain the perfection and priority of
the interest of the Purchasers in the Receivables and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Receivables as a financing statement in such offices as the
Agent in its sole and absolute discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the interests of the
Purchasers in the Receivables. This appointment is coupled with an interest and
is irrevocable. The authorization by each Seller Party set forth in the second
sentence of this Section 14.4(b) is intended to meet all requirements for
authorization by a debtor under Article 9 of any applicable enactment of the
UCC, including, without limitation, Section 9-509 thereof.

         Section 14.5  Confidentiality. (a) Each Seller Party and each Purchaser
shall maintain and shall cause each of its employees and officers to maintain
the confidentiality of this Agreement and the other confidential or proprietary
information with respect to the Agent and Conduit and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
such Seller Party and such Purchaser and its officers and employees may disclose
such information to such Seller Party's and such Purchaser's external
accountants and attorneys and as required by any applicable law or order of any
judicial or administrative proceeding.

               (b)     Anything herein to the contrary notwithstanding, each
Seller Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Financial Institutions or Conduit by each
other, (ii) by the Agent or

                                       50

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

the Purchasers to any prospective or actual assignee or participant of any of
them and (iii) by the Agent to any rating agency, Commercial Paper dealer or
provider of a surety, guaranty or credit or liquidity enhancement to Conduit or
any entity organized for the purpose of purchasing, or making loans secured by,
financial assets for which Bank One acts as the administrative agent and to any
officers, directors, employees, outside accountants and attorneys of any of the
foregoing, provided each such Person is informed of and agrees to maintain the
confidential nature of such information. In addition, the Purchasers and the
Agent may disclose any such nonpublic information pursuant to any law, rule,
regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings (whether or not having the force or effect
of law).

               Section 14.6 Bankruptcy Petition. Seller, the Servicer, the Agent
and each Financial Institution hereby covenants and agrees that, prior to the
date that is one year and one day after the payment in full of all outstanding
senior indebtedness of Conduit or any Unconditional Liquidity Provider, it will
not institute against, or join any other Person in instituting against, Conduit
or any such entity any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.

               Section 14.7 Limitation of Liability. Except with respect to any
claim arising out of the willful misconduct or gross negligence of Conduit, the
Agent or any Financial Institution, no claim may be made by any Seller Party or
any other Person against Conduit, the Agent or any Financial Institution or
their respective Affiliates, directors, officers, employees, attorneys or agents
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each Seller Party hereby waives,
releases, and agrees not to sue upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.

               Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.

               Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR

                                       51

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE
AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY
PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.

               Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT
EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.

               Section 14.11 Integration; Binding Effect; Survival of Terms.

                       (a)   This Agreement and each other Transaction Document
contain the final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof superseding all prior oral or written understandings.

                       (b)   This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy) and shall inure to the benefit of
the Hedge Provider (if any) and its successors and permitted assigns (including
any trustee in bankruptcy). This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms and
shall remain in full force and effect until terminated in accordance with its
terms; provided, however, that the rights and remedies with respect to (i) any
breach of any representation and warranty made by any Seller Party pursuant to
Article V, (ii) the indemnification and payment provisions of Article X, and
Sections 14.5 and 14.6 shall be continuing and shall survive any termination of
this Agreement.

                                       52

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

               Section 14.12 Counterparts; Severability; Section References.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same Agreement. Any provisions of this Agreement which are
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. Unless otherwise
expressly indicated, all references herein to "Article," "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.

               Section 14.13 Bank One Roles. Each of the Financial Institutions
acknowledges that Bank One acts, or may in the future act, (i) as administrative
agent for Conduit or any Financial Institution, (ii) as issuing and paying agent
for the Commercial Paper, (iii) to provide credit or liquidity enhancement for
the timely payment for the Commercial Paper and (iv) to provide other services
from time to time for Conduit or any Financial Institution (collectively, the
"Bank One Roles"). Without limiting the generality of this Section 14.13, each
Financial Institution hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action that it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Conduit, and the giving of notice to the Agent of a mandatory purchase
pursuant to Section 13.1.

               Section 14.14 Characterization. (a) It is the intention of the
parties hereto that each purchase hereunder shall constitute and be treated as
an absolute and irrevocable sale, which purchase shall provide the applicable
Purchaser with the full benefits of ownership of the applicable Purchaser
Interest. Except as specifically provided in this Agreement, each sale of a
Purchaser Interest hereunder is made without recourse to Seller; provided,
however, that (i) Seller shall be liable to each Purchaser and the Agent for all
representations, warranties, covenants and indemnities made by Seller pursuant
to the terms of this Agreement, and (ii) such sale does not constitute and is
not intended to result in an assumption by any Purchaser or the Agent or any
assignee thereof of any obligation of Seller or any Originator or any other
person arising in connection with the Receivables, the Related Security, or the
related Contracts, or any other obligations of Seller or any Originator.

                       (b)   In addition to any ownership interest which the
Agent may from time to time acquire pursuant hereto, Seller hereby grants to the
Agent for the ratable benefit of the Purchasers a valid and perfected security
interest in all of Seller's right, title and interest in, to and under all
Receivables now existing or hereafter arising, the

                                       53

<PAGE>

                                       PATTERSON RECEIVABLES PURCHASE AGREEMENT

Collections, each Lock-Box, each P.O. Box, each Collection Account, all Related
Security, all other rights and payments relating to such Receivables, and all
proceeds of any thereof prior to all other liens on and security interests
therein to secure the prompt and complete payment of the Aggregate Unpaids. The
Agent and the Purchasers shall have, in addition to the rights and remedies that
they may have under this Agreement, all other rights and remedies provided to a
secured creditor under the UCC and other applicable law, which rights and
remedies shall be cumulative.

               Section 14.15 Excess Funds. Each of Seller, the Servicer, each
Purchaser and the Agent agrees that Conduit shall be liable for any claims that
such party may have against Conduit only to the extent that Conduit has funds in
excess of those funds necessary to pay matured and maturing Commercial Paper and
to the extent such excess funds are insufficient to satisfy the obligations of
Conduit hereunder, Conduit shall have no liability with respect to any amount of
such obligations remaining unpaid and such unpaid amount shall not constitute a
claim against Conduit. Any and all claims against Conduit shall be subordinate
to the claims against Conduit of the holders of Commercial Paper and any Person
providing liquidity support to Conduit.

                            (Signature Pages Follow)

                                       54

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date hereof.

                                    PDC FUNDING COMPANY, LLC

                                    By:    /s/ Jeffrey J. Stang
                                    Name:  Jeffrey J. Stang
                                    Title: Vice President and Treasurer

                                    Address:      1031 Mendota Heights Road
                                                  St. Paul, MN 55120

                                                  Attn: Chief Financial Officer
                                                  Facsimile: (651) 686-8984

                                    PATTERSON DENTAL COMPANY,
                                    as Servicer

                                    By:    /s/ R. Stephen Armstrong
                                    Name:  R. Stephen Armstrong
                                    Title: Executive Vice President, Treasurer
                                           and Chief Financial Officer

                                    Address:      1031 Mendota Heights Road
                                                  St. Paul, MN 55120

                                                  Attn: Chief Financial Officer
                                                  Facsimile: (651) 686-8984

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                       PREFERRED RECEIVABLES FUNDING
                       CORPORATION

                       By:      /s/ Patrick J. Power
                       Authorized Signatory

                       Address:       c/o Bank One, NA (Main Office Chicago),
                                       as Agent
                                      Asset Backed Finance
                                      Suite IL1-0079, 1-19
                                      1 Bank One Plaza
                                      Chicago, Illinois 60670-0079
                                      Facsimile: (312) 732-1844

                       BANK ONE, NA (MAIN OFFICE CHICAGO),
                       as a Financial Institution and as Agent

                       By:      /s/ Patrick J. Power
                       Name:    Patrick J. Power
                       Title:   Authorized Signatory

                       Address:       Bank One, NA (Main Office Chicago)
                                      Asset Backed Finance
                                      Suite IL1-0612, 1-19
                                      1 Bank One Plaza
                                      Chicago, Illinois  60670-0612
                                      Facsimile: (312) 732-4487

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                                    EXHIBIT I

                                   DEFINITIONS

         As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):

         "Accrual Period" means each Fiscal Month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial purchase hereunder to (and including) the last day of the Fiscal Month
thereafter.

         "ACH Receipts" means funds received in respect of Automatic Debit
Collections.

         "Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which PDCo
or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company or other business entity.

         "Acquisition Amount" means, on the date of any purchase from Conduit of
one or more Purchaser Interests pursuant to Section 13.1, (a) with respect to
each Financial Institution (other than any Unconditional Liquidity Provider),
the lesser of (i) such Financial Institution's Pro Rata Share of the sum of (A)
the lesser of (1) the Adjusted Liquidity Price of each such Purchaser Interest
and (2) the Capital of each such Purchaser Interest and (B) all accrued and
unpaid CP Costs for each such Purchaser Interest and (ii) such Financial
Institution's unused Commitment and (b) with respect to each Unconditional
Liquidity Provider, the lesser of (x) such Unconditional Liquidity Provider's
Pro Rata Share of the sum of (1) the Capital of each such Purchaser Interest and
(2) all accrued and unpaid CP Costs for each such Purchaser Interest and (y)
such Unconditional Liquidity Provider's unused Commitment.

         "Adjusted Funded Amount" means, in determining the Conduit Transfer
Price for any Purchaser Interest, an amount equal to the sum of (a) the Adjusted
Liquidity Price of each such Purchaser Interest and (b) an amount equal to each
Unconditional Liquidity

                                    Exh. I-1

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

Provider's Pro Rata Share of the difference between (i) the Adjusted Liquidity
Price of each such Purchaser Interest and (ii) the Capital of each such
Purchaser Interest.

         "Adjusted Liquidity Price" means an amount equal to:

                                               NDR
                     RI [ (i) DC + (ii) [---------------] ]
                                         1 + (.50 x .10)

         where:

                  RI     =       the undivided percentage interest evidenced by
                                 such Purchaser Interest.

                  DC     =       the Deemed Collections.

                  NDR    =       the Outstanding Balance of all Receivables that
                                 are not Defaulted Receivables.

Each of the foregoing shall be determined from the most recent Monthly Report
received from the Servicer.

         "Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any other Person.

         "Affected Financial Institution" has the meaning specified in Section
12.1(c).

         "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or any Subsidiary of such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the

                                       Exh. I-2

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

direction of the management or policies of the controlled Person, whether
through ownership of stock, by contract or otherwise.

         "Agent" has the meaning set forth in the preamble to this Agreement.

         "Agent's Account" has the meaning set forth in Section 2.2(a).

         "Aggregate Capital" means, on any date of determination, the aggregate
amount of Capital of all Purchaser Interests outstanding on such date.

         "Aggregate Unpaids" means, at any time, an amount equal to the sum of
all accrued and unpaid fees under the Fee Letter, CP Costs, Financial
Institution Yield, Aggregate Capital, Hedging Obligations and all other unpaid
Obligations (whether due or accrued) at such time.

         "Agreement" means this Receivables Purchase Agreement, as it may be
amended, restated, supplemented or otherwise modified and in effect from time to
time.

         "Amortization Date" means the earliest to occur of (i) the day on which
any of the conditions precedent set forth in Section 6.2 are not satisfied, (ii)
the Business Day immediately prior to the occurrence of an Amortization Event
set forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written
notice from the Agent following the occurrence of any other Amortization Event
and, (iv) the date which is 5 Business Days after the Agent's receipt of written
notice from Seller that it wishes to terminate the facility evidenced by this
Agreement.

         "Amortization Event" has the meaning specified in Article IX.

         "Approved Unconditional Liquidity Provider" means an Unconditional
Liquidity Provider which has received approval from Standard & Poor's Ratings
Services and Moody's Investors Service, Inc. to be relieved from any obligation
to pay amounts as a Non-Defaulting Financial Institution pursuant to Section
13.5 hereof.

         "Assignment Agreement" has the meaning set forth in Section 12.1(b).

         "Authorized Officer" means, with respect to any Person, its president,
corporate controller, treasurer or chief financial officer.

         "Automatic Debit Collection" means the payment of Collections by an
Obligor by means of automatic electronic funds transfer from the Obligor's bank
account.

                                       Exh. I-3

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Balloon Payment Receivable" means a Receivable that arises under a
Contract that requires the final payment to be in an amount equal to 35% of the
initial balance of such Receivable.

         "Bank One" means Bank One, NA (Main Office Chicago) in its individual
capacity and its successors.

         "Broken Funding Costs" means for any Purchaser Interest which: (i) has
its Capital reduced without compliance by Seller with the notice requirements
hereunder or (ii) is assigned under Article XIII or terminated prior to the date
on which it was originally scheduled to end; an amount equal to the excess, if
any, of (A) the CP Costs or Financial Institution Yield (as applicable) that
would have accrued during the remainder of the Tranche Periods or the tranche
periods for Commercial Paper determined by the Agent to relate to such Purchaser
Interest (as applicable) subsequent to the date of such reduction, assignment or
termination of the Capital of such Purchaser Interest if such reduction,
assignment or termination had not occurred or such Reduction Notice had not been
delivered, over (B) the sum of (x) to the extent all or a portion of such
Capital is allocated to another Purchaser Interest, the amount of CP Costs or
Financial Institution Yield actually accrued during the remainder of such period
on such Capital for the new Purchaser Interest, and (y) to the extent such
Capital is not allocated to another Purchaser Interest, the income, if any,
actually received during the remainder of such period by the holder of such
Purchaser Interest from investing the portion of such Capital not so allocated.
In the event that the amount referred to in clause (B) exceeds the amount
referred to in clause (A), the relevant Purchaser or Purchasers agree to pay to
Seller the amount of such excess. All Broken Funding Costs shall be due and
payable hereunder upon demand.

         "Business Day" means any day on which banks are not authorized or
required to close in New York, New York or Chicago, Illinois and The Depository
Trust Company of New York is open for business, and, if the applicable Business
Day relates to any computation or payment to be made with respect to the LIBO
Rate, any day on which dealings in dollar deposits are carried on in the London
interbank market.

         "Capital" of any Purchaser Interest means, at any time, (A) the
Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate
amount of Collections and other payments received by the Agent which in each
case are applied to reduce such Capital in accordance with the terms and
conditions of this Agreement; provided that such Capital shall be restored (in
accordance with Section 2.5) in the amount of any Collections or other payments
so received and applied if at any time the distribution of such Collections or
payments are rescinded, returned or refunded for any reason.

                                       Exh. I-4

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Change of Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock
of Servicer or (ii) PDCo ceases to own, directly or indirectly, 100% of the
outstanding membership units of Seller or 100% of the outstanding capital stock
of any Originator.

         "Charged-Off Receivable" means a Receivable: (i) as to which the
Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 9.1(d) (as if references to Seller Party therein refer
to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off Seller's books as uncollectible, (iv) which has been identified
by Seller as uncollectible or (v) as to which any payment, or part thereof,
remains unpaid for 180 days or more from the original due date for such payment.

         "Collection Account" means, collectively, each First-Tier Account and
the Second-Tier Account.

         "Collection Account Agreement" means (i) with respect to each Lock-Box
or Collection Account, an agreement, substantially in the form of Exhibit VI,
among an Originator (if applicable), Seller, the Agent and a Collection Bank, or
any similar or analogous agreement among an Originator, Seller, the Agent and a
Collection Bank and (ii) with respect to each P.O. Box, a Postal Notice.

         "Collection Bank" means, at any time, any of the banks holding one or
more Collection Accounts.

         "Collection Notice" means a notice, in substantially the form of Annex
A to Exhibit VI, from the Agent to a Collection Bank, or any similar or
analogous notice from the Agent to a Collection Bank.

         "Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all scheduled payments, prepayments, yield, Finance Charges
or other related amounts accruing in respect thereof, all cash proceeds of
Related Security with respect to such Receivable and all payments received
pursuant to the Hedging Agreement.

         "Commercial Paper" means promissory notes of Conduit issued by Conduit
in the commercial paper market.

                                       Exh. I-5

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Commitment" means, for each Financial Institution, the commitment of
such Financial Institution to purchase Purchaser Interests from (i) Seller and
(ii) Conduit, in an amount not to exceed (i) in the aggregate, the amount set
forth opposite such Financial Institution's name on Schedule A to this
Agreement, as such amount may be modified in accordance with the terms hereof
(including, without limitation, any termination of Commitments pursuant to
Section 13.6 hereof) and (ii) with respect to any individual purchase hereunder,
its Pro Rata Share of the Purchase Price therefor.

         "Commitment Availability" means at any time the positive difference (if
any) between (a) an amount equal to the aggregate amount of the Commitments
minus an amount equal to 2% of such aggregate Commitments at such time minus (b)
the Aggregate Capital at such time.

         "Concentration Limit" means, at any time, for any Obligor, 2% of the
aggregate Outstanding Balance of all Eligible Receivables, or such other amount
(a "Special Concentration Limit") for such Obligor designated by the Agent;
provided, that in the case of an Obligor and any Affiliate of such Obligor, the
Concentration Limit shall be calculated as if such Obligor and such Affiliate
are one Obligor; and provided, further, that Conduit or the Required Financial
Institutions may, upon not less than three Business Days' notice to Seller,
cancel any Special Concentration Limit.

         "Conduit" has the meaning set forth in the preamble to this Agreement.

         "Conduit Residual" means the sum of the Conduit Transfer Price
Reductions.

         "Conduit Transfer Price" means, with respect to the assignment by
Conduit of one or more Purchaser Interests to the Agent for the benefit of one
or more of the Financial Institutions pursuant to Section 13.1, the sum of (i)
the lesser of (a) the Capital of each such Purchaser Interest and (b) the
Adjusted Funded Amount of each such Purchaser Interest and (ii) all accrued and
unpaid CP Costs for each such Purchaser Interest.

         "Conduit Transfer Price Deficit" has the meaning set forth in Section
13.5.

         "Conduit Transfer Price Reduction" means in connection with the
assignment of a Purchaser Interest by Conduit to the Agent for the benefit of
the Financial Institutions, the positive difference (if any) between (i) the
Capital of such Purchaser Interest and (ii) the Adjusted Funded Amount for such
Purchaser Interest.

                                       Exh. I-6

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Consolidated Adjusted EBITDA" means, as to any Person for any period,
the sum of Consolidated EBIT for such period (i) plus consolidated depreciation
and amortization for such period, (ii) plus extraordinary losses incurred other
than in the ordinary course of business, (iii) minus extraordinary gains
realized other than in the ordinary course of business. For Persons acquired by
PDCo during the relevant measurement period, their EBITDA results will be
included in the calculation of Consolidated Adjusted EBITDA as if those Persons
were owned by PDCo for the entire reporting period. Consolidated Adjusted EBITDA
will be calculated on a rolling four-quarter basis.

         "Consolidated EBIT" means, as to any Person and with reference to any
period, Consolidated Net Income plus, to the extent deducted from revenues in
determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii)
expense for federal, state, local and foreign income and franchise taxes paid or
accrued and (iii) extraordinary losses incurred other than in the ordinary
course of business, minus, to the extent included in Consolidated Net Income,
extraordinary gains realized other than in the ordinary course of business, all
calculated for such Person and its Subsidiaries on a consolidated basis.

         "Consolidated Interest Expense" means, as to any Person and with
reference to any period, the interest expense of such Person and its
Subsidiaries calculated on a consolidated basis for such period including,
without limitation, such interest expense as may be attributable to capitalized
leases, receivables transaction financing costs, the discount or implied
interest component of off-balance sheet liabilities, all commissions, discounts
and other fees and charges owed with respect to letters of credit and net
mark-to-market exposure.

         "Consolidated Net Income" means as to any Person and with reference to
any period, the net income (or loss) of such Person and its Subsidiaries
calculated on a consolidated basis for such period, excluding any non-cash
charges or gains which are unusual, non-recurring or extraordinary.

         "Consolidated Tangible Net Worth" means, as of any date of
determination, the consolidated total stockholders' equity (including capital
stock, additional paid-in capital and retained earnings) of PDCo and its
Subsidiaries determined in accordance with GAAP, less goodwill and other
intangible assets.

         "Consolidated Total Debt" means (a) all Indebtedness of PDCo and its
Subsidiaries, on a consolidated basis, reflected on a balance sheet prepared in
accordance with GAAP, plus, without duplication (b) the face amount of all
outstanding letters of credit in respect of which PDCo or any Subsidiary has any
reimbursement obligation and the principal amount of all contingent obligations
of PDCo and its Subsidiaries, plus obligations associated with capitalized
leases, plus obligations arising from the sale of accounts

                                       Exh. I-7

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

receivable and other forms of off-balance sheet financing, including receivables
transaction attributed indebtedness.

         "Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.

         "Contract" means, with respect to any Receivable, any and all
instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidences such Receivable.

         "CP Costs" means for any day during which a Purchaser Interest is held
by the Conduit, an amount equal to the Capital of such Purchaser Interest
multiplied by a per annum rate equivalent to the "weighted average cost" (as
defined below) related to the issuance of indexed Commercial Paper of the
Conduit that is allocated, in whole or in part, to fund such Capital (and which
may also be allocated in part to the funding of other assets of the Conduit);
provided, however, that if any component of such rate is a discount rate, in
calculating such rate for such Capital for such date, the rate used to calculate
such component of such rate shall be a rate resulting from converting such
discount rate to an interest bearing equivalent rate per annum. As used in this
definition, the "weighted average cost" shall consist of (x) the actual interest
rate paid to purchasers of indexed Commercial Paper issued by the Conduit, (y)
the costs associated with the issuance of such Commercial Paper (including
dealer fees and commissions to placement agents), and (z) interest on other
borrowing or funding sources by the Conduit, including to fund small or odd
dollar amounts that are not easily accommodated in the commercial paper market.

         "Credit and Collection Policy" means Seller's and/or the applicable
Originator's credit and collection policies and practices relating to Contracts
and Receivables existing on the date hereof and summarized in Exhibit VIII
hereto, as modified from time to time in accordance with this Agreement.

         "Credit Enhancement" means, on any date, an amount equal to (i) the Net
Receivables Balance as of the close of business of the Servicer on such date,
multiplied by the greater of (x) 10% and (y) 3 times the Default Ratio.

         "Deemed Collections" means the aggregate of all amounts Seller shall
have been deemed to have received as a Collection of a Receivable. If at any
time, (i) the Outstanding

                                       Exh. I-8

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

Balance of any Receivable is either (x) reduced as a result of any defective or
rejected goods or services, any discount or any adjustment or otherwise by
Seller or any Originator (other than cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction), (ii) any of the representations or
warranties in Article V are no longer true with respect to any Receivable or
(iii) the Related Equipment for any Receivable is Repossessed and sold for less
than the fair market value of such Related Equipment, Seller shall be deemed to
have received a Collection of such Receivable in the amount of (A) such
reduction or cancellation in the case of clause (i) above, (B) the entire
Outstanding Balance in the case of clause (ii) above and (C) the difference
between the fair market value of the Repossessed Related Equipment and the gross
proceeds received upon the sale of such Repossessed Related Equipment in the
case of clause (c) above.

         "Default Fee" means with respect to any amount due and payable by
Seller in respect of any Aggregate Unpaids, an amount equal to the greater of
(i) $1000 and (ii) interest on any such unpaid Aggregate Unpaids at a rate per
annum equal to 2% above the Prime Rate.

         "Default Ratio" means, as of the last day of each Fiscal Month, a
percentage equal to: (i) the aggregate Outstanding Balance of all Defaulted
Receivables on such day, divided by (ii) the aggregate Outstanding Balance of
all Receivables on such day.

         "Defaulted Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 121 days or more from the original due date for
such payment.

         "Defaulting Financial Institution" has the meaning set forth in Section
13.5.

         "Delinquency Ratio" means, at any time, a percentage equal to (i) the
aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables at such time divided by (ii) the aggregate Outstanding Balance of
all Receivables at such time.

         "Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 61 days or more from the original due date for
such payment.

         "Designated Obligor" means an Obligor indicated by the Agent to Seller
in writing.

         "Dilutions" means, at any time, the aggregate amount of reductions or
cancellations described in clause (i) of the definition of "Deemed Collections".

                                       Exh. I-9

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Discount Rate" means, the LIBO Rate or the Prime Rate, as applicable,
with respect to each Purchaser Interest of the Financial Institutions.

         "Discounted Receivable" means a Receivable that arises under a Contract
that does not contain a stated rate of interest applicable to the Outstanding
Balance of such Receivable.

         "Discounted Receivable Discounted Balance" means, at any time, with
respect to any Discounted Receivable, the discounted Outstanding Balance of such
Receivable, which Outstanding Balance shall be discounted using a discount rate
of 10%.

         "EagleSoft Computer Receivable" means a Receivable originated by PDSI
that arises from the sale or financing of computer hardware equipment by PDSI.

         "EagleSoft Software Receivable" means a Receivable originated by PDSI
that arises from the sale, licensing or financing of computer software by PDSI.

         "Eligible Receivable" means, at any time, a Receivable:

                  (i) the Obligor of which (a) if a natural person, is a
         resident of the United States or, if a corporation or other business
         organization, is organized under the laws of the United States or any
         political subdivision thereof and has its chief executive office in the
         United States; (b) is not an Affiliate of any of the parties hereto;
         (c) is not a Designated Obligor; and (d) is not a government or a
         governmental subdivision or agency,

                  (ii) the Obligor of which is not, and has not been, the
         Obligor of any Charged-Off Receivable or any Defaulted Receivable,

                  (iii) that is not a Charged-Off Receivable or a Defaulted
         Receivable,

                  (iv) that is not a Delinquent Receivable at the time a
         Purchaser Interest in such Receivable is purchased hereunder,

                  (v) that arises under a Contract that has not had any payment
         or other terms of such Contract extended, modified or waived, unless
         such Receivable is a Modified Receivable,

                  (vi) that is an "account" or "chattel paper" within the
         meaning of Article 9 of the UCC of all applicable jurisdictions,

                                       Exh. I-10

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                  (vii) that is denominated and payable only in United States
         dollars in the United States,

                  (viii) that arises under a Contract in substantially the form
         of one of the form contracts set forth on Exhibit IX hereto or
         otherwise approved by the Agent in writing, which, together with such
         Receivable, is in full force and effect and constitutes the legal,
         valid and binding obligation of the related Obligor enforceable against
         such Obligor in accordance with its terms subject to no offset,
         counterclaim or other defense,

                  (ix) that arises under a Contract that (A) does not require
         the Obligor under such Contract to consent to the transfer, sale or
         assignment of the rights and duties of the applicable Originator or any
         of its assignees under such Contract and (B) does not contain a
         confidentiality provision that purports to restrict the ability of any
         Purchaser to exercise its rights under this Agreement, including,
         without limitation, its right to review the Contract,

                  (x) that arises under a Contract that contains an obligation
         to pay a specified sum of money, contingent only upon the sale of goods
         or the provision of services by the applicable Originator,

                  (xi) that, together with the Contract related thereto, does
         not contravene any law, rule or regulation applicable thereto
         (including, without limitation, any law, rule and regulation relating
         to truth in lending, fair credit billing, fair credit reporting, equal
         credit opportunity, fair debt collection practices and privacy) and
         with respect to which no part of the Contract related thereto is in
         violation of any such law, rule or regulation,

                  (xii) that satisfies all applicable requirements of the Credit
         and Collection Policy,

                  (xiii) that was generated in the ordinary course of the
         applicable Originator's business,

                  (xiv) that arises solely from the sale, licensing or financing
         of goods or the provision of services to the related Obligor by the
         applicable Originator, and not by any other Person (in whole or in
         part),

                  (xv) as to which the Agent has not notified Seller that the
         Agent has determined that such Receivable or class of Receivables is
         not acceptable as an

                                       Exh. I-11

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         Eligible Receivable, including, without limitation, because such
         Receivable arises under a Contract that is not acceptable to the Agent,

                  (xvi) that is not subject to any right of rescission, set-off,
         counterclaim, any other defense (including defenses arising out of
         violations of usury laws) of the applicable Obligor against the
         applicable Originator or any other Adverse Claim, and the Obligor
         thereon holds no right as against such Originator to cause such
         Originator to repurchase the goods or merchandise the sale of which
         shall have given rise to such Receivable (except with respect to sale
         discounts effected pursuant to the Contract, or defective goods
         returned in accordance with the terms of the Contract),

                  (xvii) that, (a) if such Receivable is a Discounted
         Receivable, the related Contract requires that payment in full of the
         Outstanding Balance of such Receivable be made not later than 63 months
         after the date such Receivable was originated; (b) if such Receivable
         is an EagleSoft Computer Receivable or EagleSoft Software Receivable,
         the related Contract requires that payment in full of the Outstanding
         Balance of such Receivable to be made not later than 39 months after
         the date such Receivable was originated; and (c) otherwise, the related
         Contract requires that payment in full of the Outstanding Balance of
         such Receivable to be made not later than 60 months after the date such
         Receivable was originated,

                  (xviii) as to which the applicable Originator has satisfied
         and fully performed all obligations on its part with respect to such
         Receivable required to be fulfilled by it, and no further action is
         required to be performed by any Person with respect thereto other than
         payment thereon by the applicable Obligor,

                  (xix) all right, title and interest to and in which has been
         validly transferred by the applicable Originator directly to Seller
         under and in accordance with the Receivables Sale Agreement, and Seller
         has good and marketable title thereto free and clear of any Adverse
         Claim,

                  (xx) that arises under a Contract that requires the
         Outstanding Balance of such Receivable to be paid in equal consecutive
         monthly installments, unless such Receivable is a Balloon Payment
         Receivable,

                  (xxi) that, if such Receivable is a Veterinary Receivable, the
         Outstanding Balance thereof, when added to the Outstanding Balance of
         all other Veterinary Receivables, does not exceed 5% of the aggregate
         Outstanding Balance of all Receivables,

                                       Exh. I-12

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

                  (xxii) that, if such Receivable is a Balloon Payment
         Receivable, the Outstanding Balance thereof, when added to the
         Outstanding Balance of all other Balloon Payment Receivables, does not
         exceed 5% of the aggregate Outstanding Balance of all Receivables,

                  (xxiii) that, if such Receivable is an EagleSoft Software
         Receivable, the Outstanding Balance thereof, when added to the
         Outstanding Balance of all other EagleSoft Software Receivables, does
         not exceed 15% of the aggregate Outstanding Balance of all Receivables,

                  (xxiv) that, if such Receivable is an EagleSoft Computer
         Receivable, the Outstanding Balance thereof, when added to the
         Outstanding Balance of all other EagleSoft Computer Receivables, does
         not exceed 10% of the aggregate Outstanding Balance of all Receivables,

                  (xxv) that, if such Receivable is a Modified Receivable, the
         Outstanding Balance thereof, when added to the Outstanding Balance of
         all other Modified Receivables, does not exceed 5% of the aggregate
         Outstanding Balance of all Receivables,

                  (xxvi) that, if such Receivable is a Discounted Receivable,
         the Outstanding Balance thereof, when added to the Outstanding Balance
         of all other Discounted Receivables, does not exceed 5% of the
         aggregate Outstanding Balance of all Receivables,

                  (xxvii) that, together with the related Contract, has not been
         sold, assigned or pledged by the applicable Originator or Seller,
         except pursuant to the terms of the Receivables Sale Agreement and this
         Agreement,

                  (xxviii) that (a) if such Receivable is an EagleSoft Software
         Receivable, the Obligor thereof has made at least three payments on
         such Receivable and (b) otherwise, the Obligor thereof has made at
         least one payment on such Receivable,

                  (xxix) that arises under a Contract that provides for
         aggregate payments thereunder in an amount less than $250,000,

                  (xxx) the Obligor of which is not the Obligor of other
         Receivables with an aggregate Outstanding Balance in excess of
         $250,000,

                  (xxxi) with respect to which there is only one original
         executed copy of the related Contract, which will, together with the
         related records be held by the Servicer as

                                       Exh. I-13

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         bailee of the Agent and the Purchasers, and no other custodial
         agreements are in effect with respect thereto, and

                  (xxxii) that excludes residual value and any maintenance
         component.

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

         "Excess Spread" means, as of the last day of any Fiscal Month, the sum
of (i) the weighted average annual percentage rate accruing on the Receivables,
minus (ii) 1%, minus (iii) if the Hedging Agreement shall have been entered into
in accordance with Section 7.3, the Hedge Fixed Rate otherwise, a per annum
percentage that is the percentage equivalent of the CP Costs accrued during such
Fiscal Month or the Financial Institution Yield accrued during such month (as
applicable), minus (iv) the Program Fee Rate (as defined in the Fee Letter),
minus (v) the Facility Fee Rate (as defined in the Fee Letter).

         "Facility Account" means the account numbered 1109495 maintained by
Seller in the name of "PDC Funding Company, LLC" at Bank One, together with any
successor account or sub-account.

         "Facility Termination Date" means the earliest of (i) the Liquidity
Termination Date and (ii) the Amortization Date.

         "Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy," as amended and any successor statute thereto.

         "Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.

         "Fee Letter" means that certain letter agreement dated as of the date
hereof among Seller, Conduit and the Agent, as it may be amended, restated,
supplemented or otherwise modified and in effect from time to time.

         "Finance Charge Collections" means Collections consisting of Finance
Charges.

                                       Exh. I-14

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Finance Charges" means, with respect to a Contract, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to such Contract.

         "Financial Institution Yield" means for each respective Tranche Period
relating to Purchaser Interests of the Financial Institutions, an amount equal
to the product of the applicable Discount Rate for each Purchaser Interest
multiplied by the Capital of such Purchaser Interest for each day elapsed during
such Tranche Period, annualized on a 360 day basis.

         "Financial Institutions" has the meaning set forth in the preamble in
this Agreement.

         "First Tier Account" means each concentration account, depositary
account, lock-box account or similar account in which any Collections are
collected or deposited, including, without limitation, by means of automatic
funds transfer (other than the Second-Tier Account) and which is listed on
Exhibit IV.

         "Fiscal Month" means any of the thirteen consecutive four week or five
week accounting periods used by PDCo for accounting purposes which begin on the
Sunday after the last Saturday in April of each year and ending on the last
Saturday in April of the next year.

         "Funding Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Conduit.

         "Funding Source" means (i) any Financial Institution or (ii) any
insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Conduit.

         "GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement, provided, that if
there occurs after the date of this Agreement any change in GAAP that affects in
any material respect the calculation of any amount described in Section 9.2(f),
(m) or (n), the Agent and Seller shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such amounts with
the intent of having the respective positions of the Agent and the Purchasers
and Seller after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the amounts described in Sections 9.1(f), (m)
and (n) shall be calculated as if no such change in GAAP has occurred.

                                       Exh. I-15

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Hedge Fixed Amount" means, with respect to each Settlement Period, an
amount equal to the product of (i) the average Aggregate Capital outstanding
during such Settlement Period, times (ii) the Hedge Fixed Rate, times (iii) a
fraction, the numerator of which is the number of days in such Settlement Period
and the denominator of which is 360.

         "Hedge Fixed Rate" means, for any day during a Settlement Period, the
fixed rate payable under the Hedging Agreement (without taking into account any
netting provisions thereunder), as such rate may be, reset from time to time.

         "Hedge Floating Amount" means, with respect to each Settlement Period,
an amount equal to the product of (i) the average Aggregate Capital outstanding
during such Settlement Period, times (ii) the one-month LIBO Rate applicable to
the outstanding Aggregate Capital during such Settlement Period, times (iii) a
fraction, the numerator of which is the number of days in such Settlement Period
and the denominator of which is 360.

         "Hedge Provider" means Bank One and any replacement therefor selected
by the Agent and Seller in accordance with Section 7.3.

         "Hedge Provider Downgrade" means the unsecured, unguaranteed, long-term
debt rating of the Hedge Provider under the then current Hedging Agreement, if
any, is reduced below A- or withdrawn by Standard & Poor's Ratings Service or
below A3 or withdrawn by Moody's Investors Service.

         "Hedging Agreement" has the meaning set forth in Section 7.3.

         "Hedging Obligations" means all amounts payable to the Hedge Provider
under the Hedging Agreement, including, without limitation, the accrued fixed
amount under the Hedging Agreement and all breakage costs associated with the
termination of the Hedging Agreement.

         "Incremental Purchase" means a purchase of one or more Purchaser
Interests which increases the total outstanding Aggregate Capital hereunder.

         "Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate

                                       Exh. I-16

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

swap, exchange or cap agreements, (vii) Contingent Obligations and (viii)
liabilities in respect of unfunded vested benefits under plans covered by Title
IV of ERISA.

         "Independent Governor" shall mean a governor of Seller who is not at
such time, and has not been at any time during the preceding five (5) years, (A)
a director, officer, governor, manager, member, employee or affiliate of Seller,
any Patterson Entity, or any of their respective Subsidiaries or Affiliates, or
(B) the beneficial owner (at the time of such individual's appointment as an
Independent Governor or at any time thereafter while serving as an Independent
Governor) of any of the outstanding common membership units or capital stock, as
applicable, of Seller, any Patterson Entity, or any of their respective
Subsidiaries or Affiliates, having general voting rights.

         "Intercreditor Agreement" means an intercreditor agreement by and among
the Agent, US Bank, as agent under the US Bank Contract Purchase Agreement,
PDCo, PDSI, Webster and Seller, as the same may be amended, restated
supplemented or otherwise modified from time to time.

         "LIBO Rate" means the rate per annum equal to the sum of (i) (a) the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars appearing on Reuters Screen LIBOR01 as of 11:00 a.m. (London time)
two Business Days prior to the first day of the relevant Tranche Period, and
having a maturity equal to such Tranche Period, provided that, (i) if Reuters
Screen LIBOR01 is not available to the Agent for any reason, the applicable LIBO
Rate for the relevant Tranche Period shall instead be the applicable British
Bankers' Association Interest Settlement Rate for deposits in U.S. dollars as
reported by any other generally recognized financial information service as of
11:00 a.m. (London time) two Business Days prior to the first day of such
Tranche Period, and having a maturity equal to such Tranche Period, and (ii) if
no such British Bankers' Association Interest Settlement Rate is available to
the Agent, the applicable LIBO Rate for the relevant Tranche Period shall
instead be the rate determined by the Agent to be the rate at which Bank One
offers to place deposits in U.S. dollars with first-class banks in the London
interbank market at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Tranche Period, in the approximate amount to be
funded at the LIBO Rate and having a maturity equal to such Tranche Period,
divided by (b) one minus the maximum aggregate reserve requirement (including
all basic, supplemental, marginal or other reserves) which is imposed against
the Agent in respect of Eurocurrency liabilities, as defined in Regulation D of
the Board of Governors of the Federal Reserve System as in effect from time to
time (expressed as a decimal), applicable to such Tranche Period plus (ii) 1.00%
per annum. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16
of 1%.

                                       Exh. I-17

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Liquidity Termination Date" means May 9, 2003, as extended by mutual
agreement of Seller, the Agent and the Purchasers.

         "Lock-Box" means each locked postal box with respect to which a bank
who has executed a Collection Account Agreement has been granted exclusive
access for the purpose of retrieving and processing payments made on the
Receivables and which is listed on Exhibit IV.

         "Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of any Seller Party and its Subsidiaries, (ii)
the ability of any Seller Party to perform its obligations under this Agreement
or the Performance Provider to perform its obligations under the Performance
Undertaking, (iii) the legality, validity or enforceability of this Agreement or
any other Transaction Document, (iv) any Purchaser's interest in the Receivables
generally or in any significant portion of the Receivables, the Related Security
or the Collections with respect thereto, or (v) the collectibility of the
Receivables generally or of any material portion of the Receivables.

         "Modified Receivable" means a Receivable as to which the payment terms
of the related Contract have been extended or modified for credit reasons since
the origination of such Receivable.

         "Monthly Report" means a report, in substantially the form of Exhibit X
hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to Section 8.5.

         "Net Receivables Balance" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by (i) the aggregate
amount by which the Outstanding Balance of all Eligible Receivables of each
Obligor and its Affiliates exceeds the Concentration Limit for such Obligor and
(ii) the excess of the aggregate Outstanding Balance of all Eligible Receivables
that are Discounted Receivables over the aggregate Discounted Receivable
Discounted Balance of all such Receivables.

         "Non-Defaulting Financial Institution" has the meaning set forth in
Section 13.5.

         "Non-Renewing Financial Institution" has the meaning set forth in
Section 13.6(a).

         "Obligations" shall have the meaning set forth in Section 2.1.

         "Obligor" means a Person obligated to make payments pursuant to a
Contract.

                                       Exh. I-18

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Originated Receivable" means all indebtedness and other obligations
owed to Seller or an Originator (at the time it arises, and before giving effect
to any transfer or conveyance under the Receivables Sale Agreement or hereunder)
or in which Seller or an Originator has a security interest or other interest,
including, without limitation, any indebtedness, obligation or interest
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale, licensing or financing of goods or the
rendering of services by an Originator, and further includes, without
limitation, the obligation to pay any Finance Charges with respect thereto.
Indebtedness and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual invoice, shall constitute a Receivable separate
from an Originated Receivable consisting of the indebtedness and other rights
and obligations arising from any other transaction; provided further, that any
indebtedness, rights or obligations referred to in the immediately preceding
sentence shall be an Originated Receivable regardless of whether the account
debtor, any Originator or Seller treats such indebtedness, rights or obligations
as a separate payment obligation.

         "Originator" means each of PDSI and Webster, in their respective
capacities as seller under the Receivables Sale Agreement.

         "Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.

         "Participant" has the meaning set forth in Section 12.2.

         "Patterson Entity" means each of PDCo and each Originator and their
respective successors.

         "PDCo" has the meaning set forth in the preamble to this Agreement.

         "PDSI" means Patterson Dental Supply, Inc., a Minnesota corporation,
together with its successors and assigns.

         "Performance Provider" means PDCo in its capacity as Provider under the
Performance Undertaking.

         "Performance Undertaking" means that certain Performance Undertaking,
dated as of May 10, 2002, by Performance Provider in favor of Seller,
substantially in the form of Exhibit XI, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

                                       Exh. I-19

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Permitted Investments" means (a) evidences of indebtedness maturing
within thirty days after the date of loan thereof, issued by, or guaranteed by
the full faith and credit of, the federal government of the United States, (b)
repurchase agreements with banking institutions or broker-dealers registered
under the Securities Exchange Act of 1934 which are fully secured by obligations
of the kind specified in clause (a), (c) money market funds (i) rated not lower
than the highest rating category from Moody's Investors Service and "AAA m" or
"AAAm-g," from Standard & Poor's Rating Service or (ii) which are otherwise
acceptable to the Agent or (d) commercial paper issued by any corporation
incorporated under the laws of the United States and rated at least "A-1+" (or
the equivalent) by Standard & Poor's Ratings Service and at least "P-1" (or the
equivalent) by Moody's Investors Service.

         "Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

         "P.O. Box" means a locked postal box located in a United States post
office to which Obligors remit payments of Receivables.

         "Postal Notice" means a notice from an Originator directing the United
States post office where any P.O. Box is located to transfer control of such
P.O. Box to the Agent, which notice shall be substantially in the form of
Exhibit XII.

         "Potential Amortization Event" means an event which, with the passage
of time or the giving of notice, or both, would constitute an Amortization
Event.

         "Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.

         "Principal Collections" means Collections other than Finance Charge
Collections.

         "Pro Rata Share" means, for each Financial Institution, a percentage
equal to (i) the Commitment of such Financial Institution, divided by (ii) the
aggregate amount of all Commitments of all Financial Institutions hereunder,
adjusted as necessary to give effect to the application of the terms of Sections
13.5 or 13.6.

         "Purchase Limit" means $200,000,000.

         "Purchase Notice" has the meaning set forth in Section 1.2.

                                       Exh. I-20

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Purchase Price" means, with respect to any Incremental Purchase of a
Purchaser Interest, the amount paid to Seller for such Purchaser Interest which
shall not exceed the least of (i) the amount requested by Seller in the
applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the
applicable purchase date and (iii) the excess, if any, of the Net Receivables
Balance (less the Credit Enhancement) on the applicable purchase date over the
aggregate outstanding amount of Aggregate Capital determined as of the date of
the most recent Monthly Report, taking into account such proposed Incremental
Purchase.

         "Purchaser Interest" means, at any time, an undivided percentage
ownership interest (computed as set forth below) associated with a designated
amount of Capital, selected pursuant to the terms and conditions hereof in (i)
each Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:

                                        C
                                    --------
                                    NRB - CE

         where:

         C        =        the Capital of such Purchaser Interest.

         CE       =        the Credit Enhancement.

         NRB      =        the Net Receivables Balance.

Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
Business Day immediately preceding the Amortization Date shall remain constant
at all times thereafter.

                                       Exh. I-21

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         "Purchasers" means Conduit and each Financial Institution.

         "Purchasing Financial Institution" has the meaning set forth in Section
12.1(b).

         "Receivable" means at any time, each and every Originated Receivable
that has been identified for sale to Seller in any Sale Assignment (as defined
in the Receivables Sale Agreement), including all schedules thereto, delivered
pursuant to Section 1.1(a)(ii) of the Receivables Sale Agreement.

         "Receivables Sale Agreement" means that certain Receivables Sale
Agreement, dated as of May 10, 2002, by and among the Originators and Seller, as
the same may be amended, restated, supplemented or otherwise modified from time
to time.

         "Records" means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.

         "Reduction Notice" has the meaning set forth in Section 1.3.

         "Reduction Percentage" means, for any Purchaser Interest acquired by
the Financial Institutions from Conduit for less than the Capital of such
Purchaser Interest, a percentage equal to a fraction the numerator of which is
the Conduit Transfer Price Reduction for such Purchaser Interest and the
denominator of which is the Capital of such Purchaser Interest.

         "Related Equipment" means with respect to any Receivable, the goods
sold or licensed to or financed for the Obligor which sale, licensing or
financing gave rise to such Receivable and all financing statements or other
filings with respect thereto.

         "Related Security" means, with respect to any Receivable:

                  (i) all of Seller's interest in the Related Equipment or other
         inventory and goods (including returned or repossessed inventory or
         goods), if any, the sale, licensing or financing of which by the
         applicable Originator gave rise to such Receivable, and all insurance
         contracts with respect thereto,

                  (ii) all other security interests or liens and property
         subject thereto from time to time, if any, purporting to secure payment
         of such Receivable, whether pursuant to the Contract related to such
         Receivable or otherwise, together with all

                                       Exh. I-22

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

         financing statements and security agreements describing any collateral
         securing such Receivable,

                  (iii) all guaranties, letters of credit, insurance,
         "supporting obligations" (within the meaning of Section 9-102(a) of the
         UCC of all applicable jurisdictions) and other agreements or
         arrangements of whatever character from time to time supporting or
         securing payment of such Receivable whether pursuant to the Contract
         related to such Receivable or otherwise,

                  (iv) all service contracts and other contracts and agreements
         associated with such Receivable,

                  (v) all Records related to such Receivable,

                  (vi) all of Seller's right, title and interest in, to and
         under the Receivables Sale Agreement and the Performance Undertaking,

                  (vii) all of Seller's right, title and interest in and to each
         Lock-Box, P.O. Box and Collection Account, and any and all agreements
         related thereto,

                  (viii) all of Seller's right, title and interest in, to and
         under the Hedging Agreement, and

                  (ix) all proceeds of any of the foregoing.

         "Repossessed" means that, with respect to any Related Equipment, the
applicable Originator or its agent has obtained possession, control and dominion
of such Related Equipment from the related Obligor.

         "Required Financial Institutions" means, at any time, Financial
Institutions with Commitments in excess of 66-2/3% of the Purchase Limit.

         "Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
membership units of Seller now or hereafter outstanding, except a dividend
payable solely in shares of that class of membership units or in any junior
class of membership units of Seller, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of membership units of Seller now or
hereafter outstanding, (iii) any payment or prepayment of principal of, premium,
if any, or interest, fees or other charges on or with respect to, and any
redemption, purchase, retirement, defeasance, sinking fund or similar payment
and any claim for rescission with respect to the Subordinated Loans

                                       Exh. I-23

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

(as defined in the Receivables Sale Agreement), (iv) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of membership
units of Seller now or hereafter outstanding, and (v) any payment of management
fees by Seller (except for reasonable management fees to the Originators or
their Affiliates in reimbursement of actual management services performed).

         "Second Tier Account" means the account numbered 1109735 maintained by
Seller in the name of "PDC Funding Company, LLC" at Bank One, together with any
successor account or sub-account.

         "Seller" has the meaning set forth in the preamble to this Agreement.

         "Seller Parties" has the meaning set forth in the preamble to this
Agreement.

         "Servicer" means at any time the Person (which may be the Agent) then
authorized pursuant to Article VIII to service, administer and collect
Receivables.

         "Servicing Fee" has the meaning set forth in Section 8.6.

         "Settlement Date" means (A) the 19th day of each calendar month, and
(B) the last day of the relevant Tranche Period in respect of each Purchaser
Interest of the Financial Institutions; or, in each case, if such day is not a
Business Day, then the first Business Day thereafter.

         "Settlement Period" means (A) in respect of each Purchaser Interest of
Conduit, (i) at any time when the Hedge Agreement is not in full force and
effect, the immediately preceding Accrual Period and (ii) at any time when the
Hedge Agreement is in full force and effect, each period commencing on (and
including) a Settlement Date and ending on (but excluding) the next Settlement
Date, and (B) in respect of each Purchaser Interest of the Financial
Institutions, the entire Tranche Period of such Purchaser Interest. As used
herein, the "related" Settlement Period with respect to a Settlement Date means
the Settlement Period which precedes such Settlement Date in the case of
Purchaser Interests of the Conduit or which ends on such Settlement Date in the
case of Purchaser Interests of the Financial Institutions.

         "Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the

                                       Exh. I-24

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

ownership interests having ordinary voting power of which shall at the time be
so owned or controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of Seller.

         "Termination Date" has the meaning set forth in Section 2.2(d).

         "Termination Percentage" has the meaning set forth in Section 2.2(d).

         "Terminating Financial Institution" has the meaning set forth in
Section 13.6(a).

         "Terminating Tranche" has the meaning set forth in Section 4.3(b).

         "Tranche Period" means, with respect to any Purchaser Interest held by
a Financial Institution:

                  (a) if Financial Institution Yield for such Purchaser Interest
         is calculated on the basis of the LIBO Rate, a period of one month, or
         such other period as may be mutually agreeable to the Agent and Seller,
         commencing on a Business Day selected by Seller or the Agent pursuant
         to this Agreement. Such Tranche Period shall end on the day in the
         applicable succeeding calendar month which corresponds numerically to
         the beginning day of such Tranche Period, provided, however, that if
         there is no such numerically corresponding day in such succeeding
         month, such Tranche Period shall end on the last Business Day of such
         succeeding month; or

                  (b) if Financial Institution Yield for such Purchaser Interest
         is calculated on the basis of the Prime Rate, a period commencing on a
         Business Day selected by Seller and agreed to by the Agent, provided no
         such period shall exceed one month.

If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
which commences after the Amortization Date shall be of such duration as
selected by the Agent.

         "Transaction Documents" means, collectively, this Agreement, each
Purchase Notice, the Receivables Sale Agreement, the Performance Undertaking,
the Intercreditor Agreement, each Collection Account Agreement, the Hedging
Agreement, the Fee Letter,

                                       Exh. I-25

<PAGE>

                                        PATTERSON RECEIVABLES PURCHASE AGREEMENT

the Subordinated Note (as defined in the Receivables Sale Agreement) and all
other instruments, documents and agreements executed and delivered in connection
herewith.

         "UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.

         "Unconditional Liquidity Provider" means a Financial Institution that
is identified by the Agent or by Bank One as an entity which will not under any
circumstance receive any Conduit Transfer Price Reduction hereunder.

         "US Bank" means U.S. Bank National Association, a national banking
association, together with its successors.

         "US Bank Contract Purchase Agreement" means that certain Second Amended
and Restated Contract Purchase Agreement, dated as of April 28, 2000, by and
among PDCo, PDSI, certain financial institutions party thereto and US Bank, as
agent, as amended by the First Amendment to Second Amended and Restated Contract
Purchase Agreement, dated as of April 30, 2001 and as further amended, restated,
supplemented or otherwise modified from time to time.

         "US Bank Receivable" means each receivable identified on a schedule to
the US Bank Contract Purchase Agreement (or in any other writing delivered
pursuant thereto) as a receivable to be sold thereunder and identified at least
by the obligor thereof and the outstanding principal amount thereof.

         "Veterinary Receivable" means a Receivable arising from the sale or
financing by Webster of veterinary equipment.

         "Webster" means Webster Veterinary Supply, Inc., a Minnesota
corporation, together with its successors and assigns.

         All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC in the State of
Illinois, and not specifically defined herein, are used herein as defined in
such Article 9.

                                       Exh. I-26

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