Document:

Exhibit 10.4

 

 

CREDIT
AGREEMENT

Dated as of
December 13, 2006

among

MWI
VETERINARY SUPPLY CO.,

as Borrower,

MWI VETERINARY SUPPLY, INC.,

MEMORIAL
PET CARE, INC.,

as Guarantors,

BANK OF AMERICA, N.A.,

WELLS
FARGO BANK, N.A.,

as Lenders,

BANK OF
AMERICA, N.A.,

as Agent,

and

L/C Issuer

 

TABLE OF
CONTENTS

	
  SECTION

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  I.

  	
   

  	
  DEFINITIONS
  AND ACCOUNTING TERMS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.01

  	
   

  	
  Defined Terms

  	
   

  	
  1

  
	
  1.02

  	
   

  	
  Other
  Interpretive Provisions

  	
   

  	
  16

  
	
  1.03

  	
   

  	
  Accounting Terms

  	
   

  	
  16

  
	
  1.04

  	
   

  	
  Rounding

  	
   

  	
  17

  
	
  1.05

  	
   

  	
  Times of Day

  	
   

  	
  17

  
	
  1.06

  	
   

  	
  Letter of Credit
  Amounts

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  II.

  	
   

  	
  THE
  COMMITMENTS AND CREDIT EXTENSIONS

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.01

  	
   

  	
  Loans

  	
   

  	
  17

  
	
  2.02

  	
   

  	
  Borrowings,
  Conversions and Continuations of Loans

  	
   

  	
  17

  
	
  2.03

  	
   

  	
  Letters of
  Credit

  	
   

  	
  19

  
	
  2.04

  	
   

  	
  Prepayments

  	
   

  	
  25

  
	
  2.05

  	
   

  	
  Termination or
  Reduction of Commitments

  	
   

  	
  25

  
	
  2.06

  	
   

  	
  Repayment of
  Loans

  	
   

  	
  26

  
	
  2.07

  	
   

  	
  Interest

  	
   

  	
  26

  
	
  2.08

  	
   

  	
  Fees

  	
   

  	
  27

  
	
  2.09

  	
   

  	
  Computation of
  Interest and Fees

  	
   

  	
  27

  
	
  2.10

  	
   

  	
  Evidence of Debt

  	
   

  	
  27

  
	
  2.11

  	
   

  	
  Payments
  Generally; Agent’s Clawback

  	
   

  	
  28

  
	
  2.12

  	
   

  	
  Sharing of
  Payments

  	
   

  	
  29

  
	
  2.13

  	
   

  	
  Increase in
  Commitments

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  III.

  	
   

  	
  TAXES,
  YIELD PROTECTION AND ILLEGALITY

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.01

  	
   

  	
  Taxes

  	
   

  	
  30

  
	
  3.02

  	
   

  	
  Illegality

  	
   

  	
  31

  
	
  3.03

  	
   

  	
  Inability to
  Determine Rates

  	
   

  	
  32

  
	
  3.04

  	
   

  	
  Increased Costs

  	
   

  	
  32

  
	
  3.05

  	
   

  	
  Compensation for
  Losses

  	
   

  	
  33

  
	
  3.06

  	
   

  	
  Mitigation Obligations

  	
   

  	
  33

  
	
  3.07

  	
   

  	
  Survival

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IV.

  	
   

  	
  CONDITIONS
  PRECEDENT TO CREDIT EXTENSIONS

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.01

  	
   

  	
  Conditions of
  Initial Credit Extension

  	
   

  	
  34

  
	
  4.02

  	
   

  	
  Conditions to
  All Credit Extensions

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.01

  	
   

  	
  Existence,
  Qualification and Power

  	
   

  	
  35

  
	
  5.02

  	
   

  	
  Authorization;
  No Contravention

  	
   

  	
  36

  
	
  5.03

  	
   

  	
  Governmental
  Authorization; Other Consents

  	
   

  	
  36

  
	
  5.04

  	
   

  	
  Binding Effect

  	
   

  	
  36

  
	
  5.05

  	
   

  	
  Financial
  Statements; No Material Adverse Effect; No Internal Control Event

  	
   

  	
  36

  
	
  5.06

  	
   

  	
  Litigation

  	
   

  	
  36

  
	
  5.07

  	
   

  	
  No Default

  	
   

  	
  37

  
	
  5.08

  	
   

  	
  Ownership of
  Property; Liens

  	
   

  	
  37

  
	
  5.09

  	
   

  	
  Environmental
  Compliance

  	
   

  	
  37

  
	
  5.10

  	
   

  	
  Insurance

  	
   

  	
  37

  
	
  5.11

  	
   

  	
  Taxes

  	
   

  	
  37

  
	
  5.12

  	
   

  	
  ERISA Compliance

  	
   

  	
  37

  
	
  5.13

  	
   

  	
  Subsidiaries

  	
   

  	
  38

  

 

 i
 

 

	
  5.14

  	
   

  	
  Margin
  Regulations; Investment Company Act; Public Utility Holding Company Act

  	
   

  	
  38

  
	
  5.15

  	
   

  	
  Disclosure

  	
   

  	
  38

  
	
  5.16

  	
   

  	
  Compliance with
  Laws

  	
   

  	
  38

  
	
  5.17

  	
   

  	
  Taxpayer
  Identification Number

  	
   

  	
  38

  
	
  5.18

  	
   

  	
  Intellectual
  Property; Licenses, Etc

  	
   

  	
  38

  
	
  5.19

  	
   

  	
  Solvency

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI.

  	
   

  	
  AFFIRMATIVE
  COVENANTS

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.01

  	
   

  	
  Financial
  Statements

  	
   

  	
  39

  
	
  6.02

  	
   

  	
  Certificates;
  Other Information

  	
   

  	
  39

  
	
  6.03

  	
   

  	
  Notices

  	
   

  	
  40

  
	
  6.04

  	
   

  	
  Payment of
  Obligations

  	
   

  	
  41

  
	
  6.05

  	
   

  	
  Preservation of
  Existence, Etc

  	
   

  	
  41

  
	
  6.06

  	
   

  	
  Maintenance of
  Properties

  	
   

  	
  41

  
	
  6.07

  	
   

  	
  Maintenance of
  Insurance

  	
   

  	
  41

  
	
  6.08

  	
   

  	
  Compliance with
  Laws

  	
   

  	
  41

  
	
  6.09

  	
   

  	
  Books and
  Records

  	
   

  	
  42

  
	
  6.10

  	
   

  	
  Inspection
  Rights

  	
   

  	
  42

  
	
  6.11

  	
   

  	
  Financial
  Covenants

  	
   

  	
  42

  
	
  6.12

  	
   

  	
  Use of Proceeds

  	
   

  	
  42

  
	
  6.13

  	
   

  	
  Additional
  Guarantors

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII.

  	
   

  	
  NEGATIVE
  COVENANTS

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.01

  	
   

  	
  Liens

  	
   

  	
  43

  
	
  7.02

  	
   

  	
  Investments

  	
   

  	
  43

  
	
  7.03

  	
   

  	
  Indebtedness

  	
   

  	
  44

  
	
  7.04

  	
   

  	
  Fundamental
  Changes

  	
   

  	
  44

  
	
  7.05

  	
   

  	
  Dispositions

  	
   

  	
  45

  
	
  7.06

  	
   

  	
  Change in Nature
  of Business

  	
   

  	
  45

  
	
  7.07

  	
   

  	
  Transactions
  With Affiliates

  	
   

  	
  45

  
	
  7.08

  	
   

  	
  Burdensome
  Agreements

  	
   

  	
  45

  
	
  7.09

  	
   

  	
  Use of Proceeds

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII.

  	
   

  	
  EVENTS
  OF DEFAULT AND REMEDIES

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.01

  	
   

  	
  Events of
  Default

  	
   

  	
  46

  
	
  8.02

  	
   

  	
  Remedies Upon
  Event of Default

  	
   

  	
  47

  
	
  8.03

  	
   

  	
  Application of
  Funds

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IX.

  	
   

  	
  ADMINISTRATIVE
  AGENT

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.01

  	
   

  	
  Appointment and
  Authorization of Administrative Agent

  	
   

  	
  49

  
	
  9.02

  	
   

  	
  Rights as a
  Lender

  	
   

  	
  49

  
	
  9.03

  	
   

  	
  Exculpatory
  Provisions

  	
   

  	
  49

  
	
  9.04

  	
   

  	
  Reliance by
  Administrative Agent

  	
   

  	
  50

  
	
  9.05

  	
   

  	
  Delegation of
  Duties

  	
   

  	
  50

  
	
  9.06

  	
   

  	
  Resignation of
  Agent

  	
   

  	
  50

  
	
  9.07

  	
   

  	
  Non-Reliance on
  Agent and Other Lenders

  	
   

  	
  51

  
	
  9.08

  	
   

  	
  No Other Duties,
  Etc

  	
   

  	
  51

  
	
  9.09

  	
   

  	
  Administrative
  Agent May File Proofs of Claim

  	
   

  	
  51

  
	
  9.10

  	
   

  	
  Guaranty Matters

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  X.

  	
   

  	
  CONTINUING
  GUARANTY

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.01

  	
   

  	
  Guaranty.

  	
   

  	
  52

  
	
  10.02

  	
   

  	
  Rights of
  Lenders

  	
   

  	
  52

  

 

 ii
 

 

	
  10.03

  	
   

  	
  Certain Waivers

  	
   

  	
  52

  
	
  10.04

  	
   

  	
  Obligations
  Independent

  	
   

  	
  52

  
	
  10.05

  	
   

  	
  Limitation of
  Liability

  	
   

  	
  53

  
	
  10.06

  	
   

  	
  Borrower
  Indemnity

  	
   

  	
  53

  
	
  10.07

  	
   

  	
  Guarantor
  Contribution

  	
   

  	
  53

  
	
  10.08

  	
   

  	
  Subrogation

  	
   

  	
  53

  
	
  10.09

  	
   

  	
  Termination;
  Reinstatement

  	
   

  	
  53

  
	
  10.10

  	
   

  	
  Subordination

  	
   

  	
  53

  
	
  10.11

  	
   

  	
  Stay of
  Acceleration

  	
   

  	
  54

  
	
  10.12

  	
   

  	
  Condition of
  Borrower

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XI.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.01

  	
   

  	
  Amendments, Etc

  	
   

  	
  54

  
	
  11.02

  	
   

  	
  Notices;
  Effectiveness; Electronic Communications

  	
   

  	
  55

  
	
  11.03

  	
   

  	
  No Waiver;
  Cumulative Remedies

  	
   

  	
  56

  
	
  11.04

  	
   

  	
  Expenses; Indemnity;
  Damage Waiver

  	
   

  	
  56

  
	
  11.05

  	
   

  	
  Payments Set
  Aside

  	
   

  	
  58

  
	
  11.06

  	
   

  	
  Successors and
  Assigns

  	
   

  	
  58

  
	
  11.07

  	
   

  	
  Treatment of
  Certain Information; Confidentiality

  	
   

  	
  61

  
	
  11.08

  	
   

  	
  Right of Setoff

  	
   

  	
  62

  
	
  11.09

  	
   

  	
  Interest Rate
  Limitation

  	
   

  	
  62

  
	
  11.10

  	
   

  	
  Counterparts;
  Integration; Effectiveness

  	
   

  	
  62

  
	
  11.11

  	
   

  	
  Survival of
  Representations and Warranties

  	
   

  	
  62

  
	
  11.12

  	
   

  	
  Severability

  	
   

  	
  62

  
	
  11.13

  	
   

  	
  Governing Law;
  Jurisdiction; Etc

  	
   

  	
  63

  
	
  11.14

  	
   

  	
  Arbitration

  	
   

  	
  63

  
	
  11.15

  	
   

  	
  Waiver of Jury
  Trial

  	
   

  	
  64

  
	
  11.16

  	
   

  	
  No Advisory or
  Fiduciary Responsibility

  	
   

  	
  64

  
	
  11.17

  	
   

  	
  Time of the
  Essence

  	
   

  	
  65

  
	
  11.18

  	
   

  	
  USA PATRIOT Act
  Notice

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.01

  	
  Commitments and
  Applicable Percentages

  	
   

  	
   

  
	
  5.06

  	
  Litigation

  	
   

  	
   

  
	
  5.09

  	
  Environmental
  Matters

  	
   

  	
   

  
	
  5.13

  	
  Subsidiaries and
  Other Equity Investments

  	
   

  	
   

  
	
  7.01

  	
  Existing Liens

  	
   

  	
   

  
	
  7.03

  	
  Existing
  Indebtedness

  	
   

  	
   

  
	
  10.02

  	
  Administrative
  Agent’s Office, Certain Addresses for Notices

  	
   

  	
   

  
	
  10.06

  	
  Processing and
  Recordation Fees

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Form of

  	
   

  	
   

  
	
  A

  	
  Loan Notice

  	
   

  	
   

  
	
  B

  	
  Note

  	
   

  	
   

  
	
  C

  	
  Compliance
  Certificate

  	
   

  	
   

  
	
  D

  	
  Joinder
  Agreement

  	
   

  	
   

  
	
  E

  	
  Assignment and
  Assumption

  	
   

  	
   

  
							

 

 iii

CREDIT
AGREEMENT

CREDIT AGREEMENT (this “Agreement”)
is entered into as of December 13, 2006, among MWI VETERINARY SUPPLY CO.,
an Idaho corporation (the “Borrower”), MWI VETERINARY SUPPLY, INC., a
Delaware corporation (the “Parent”), MEMORIAL PET CARE, INC., an Idaho
corporation (“Memorial” and together with Parent and each other
guarantor becoming a party hereto as provided in Section 6.13,
collectively, the “Guarantors” and individually, a “Guarantor”),
BANK OF AMERICA, N.A., a national banking association (“Bank of America”),
WELLS FARGO BANK, N.A., a national banking association (“Wells Fargo”
and together with Bank of America and each other lender from time to time party
hereto, collectively, the “Lenders” and individually, a “Lender”),
and BANK OF AMERICA, N.A., a national banking association, as Administrative
Agent and L/C Issuer.

Borrower has requested
that Lenders provide a revolving credit facility, and Lenders are willing to do
so on the terms and conditions set forth herein.  In consideration of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I.                                DEFINITIONS AND ACCOUNTING TERMS

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

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

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

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

“Agent Fee Letter”
has the meaning specified in Section 2.08(b).

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

“Aggregate Commitments”
means the Commitments of all Lenders.

“Agreement” means
this Credit Agreement.

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

“Applicable Rate”
means, from time to time, the following percentages per annum, based upon the
Funded Debt to EBITDA Ratio (the “Financial Covenant”) as set forth in
the most recent Compliance Certificate received by Agent pursuant to Section 6.02(a):

 1
 

Applicable Rate

 

	
  Pricing

  Level

  	
   

  	
  Funded Debt to

  EBITDA Ratio

  	
   

  	
  Commitment

  Fee

  	
   

  	
  Eurodollar

  Rate

  +

  	
   

  	
  Letters of

  Credit

  	
   

  	
  Base Rate

  +

  	
   

  
	
  1

  	
   

  	
  <1.75:1

  	
   

  	
  0.125%

  	
   

  	
  0.70%

  	
   

  	
  0.575

  	
   

  	
  0.00%

  	
   

  
	
  2

  	
   

  	
  <2.50:1
  but >1.75:1

  	
   

  	
  0.185%

  	
   

  	
  1.00%

  	
   

  	
  0.875

  	
   

  	
  0.00%

  	
   

  
	
  3

  	
   

  	
  >2.50:1

  	
   

  	
  0.250%

  	
   

  	
  1.25%

  	
   

  	
  1.125

  	
   

  	
  0.25%

  	
   

  

 

Any increase or decrease
in the Applicable Rate resulting from a change in the Financial Covenant shall
become effective commencing on the 5th Business Day immediately following the
date a Compliance Certificate is delivered pursuant to Section 6.02(a);
provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then Pricing Level 3 shall
apply commencing on the 5th Business Day following the date such Compliance
Certificate was required to have been delivered.  The Applicable Rate in effect from the
Closing Date through the date a Compliance Certificate is delivered pursuant to
Section 6.02(a) for the fiscal quarters of Parent ended
December 31, 2006, shall be determined based upon Pricing Level 1.

“Assignee Group”
means two or more Eligible Assignees that are Affiliates of one another.

“Assignment and Assumption”
means an assignment and assumption entered into by a Lender and an assignee
(with the consent of any party whose consent is required by Section 11.06(b)),
and accepted by Agent, in substantially the form of Exhibit E or
any other form approved by Agent.

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

“Audited Financial
Statements” means the audited consolidated balance sheet of the Parent,
Borrower and its Subsidiaries for the fiscal year ended September 30,
2005, and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Parent, Borrower and its
Subsidiaries, including the notes thereto.

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

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

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

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

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

“Borrower Account”
has the meaning specified in Section 2.11(a)(ii).

 2
 

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

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

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

“Capital Stock”
means (a) in the case of a corporation, capital stock, (b) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company,
membership interests and (e) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

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

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

“Change of Control”
means,

(a)           with
respect to the Parent, an event or series of events by which:

(i)            any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a person or group shall be deemed to have “beneficial ownership” of all
securities that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time (such right,
an “option right”)), directly or indirectly, of 30% or more of the equity securities
of such Person entitled to vote for members of the board of directors or
equivalent governing body of such Person on a fully-diluted basis (and taking
into account all such securities that such person or group has the right to
acquire pursuant to any option right);

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

 3
 

directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors);
or

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

(b)           with
respect to Borrower, an event or series of events by which the Parent ceases to
directly own and control all of the Equity Interests of Borrower; and

(c)           with
respect to Memorial and each other Guarantor (other than Parent), an event or
series of events by which Borrower or Parent ceases to directly own and control
all of the Equity Interests of such Person.

“Closing Date”
means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 11.01.

“Code” means the Internal
Revenue Code of 1986.

“Collected Balances”
means, on any day, all funds on deposit in the Borrower Account for which final
credit has been given to Borrower pursuant to applicable Laws governing Bank of
America.

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

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

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

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

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

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

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

“Default Rate”
means (a) when used with respect to Obligations other than L/C Fees an
interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus
(iii) 2% per annum; provided, however, that with respect to
a Eurodollar Rate Loan, the Default Rate shall

 4
 

be an interest rate equal
to Eurodollar Rate otherwise applicable to such Loan plus 2% per annum,
and (b) when used with respect to L/C Fees, a rate equal to the Applicable
Rate plus 2% per annum.

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

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

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

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

“EBITDA” means,
for any period, for Parent and its Subsidiaries on a consolidated basis, an
amount equal to the net income of Parent and its Subsidiaries plus
(a) the following to the extent deducted in calculating such net income
(i) losses from discontinued operations and extraordinary items,
(ii) income taxes, (iii) interest expense and (iv) depreciation,
depletion, and amortization less (b) income from discontinued
operations and extraordinary items.

“Eligible Assignee”
means any Person that meets the requirements to be an assignee under Section 11.06(b)(iii),
(v) and (vi) (subject to such consents, if any, as may be
required under Section 11.06(b)(iii)).

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

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

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

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

 5
 

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

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

“Eurodollar Fixed Rate”
means for any Interest Period with respect to a Eurodollar Fixed Rate Loan, a
rate per annum determined by Agent pursuant to the following formula:

	
  Eurodollar Fixed Rate =

  	
  Eurodollar Base
  Rate

  
	
   

  	
  1.00 –
  Eurodollar Reserve Percentage

  

 

Where,

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

“Eurodollar Reserve Percentage” means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal, carried out to
five decimal places) in effect on such day, whether or not applicable to any
Lender, under regulations issued from time to time by the Board of Governors of
the Federal Reserve System of the United States for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred
to as “Eurocurrency liabilities”).  The
Eurodollar Fixed Rate for each outstanding Eurodollar Fixed Rate Loan shall be
adjusted automatically as of the effective date of any change in the Eurodollar
Reserve Percentage.

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

“Eurodollar Floating
Rate” means for any day with respect to a Eurodollar Floating Rate Loan, a
rate per annum determined by Agent pursuant to the following formula:

	
  Eurodollar Floating Rate =

  	
  Eurodollar Base
  Rate

  
	
   

  	
  1.00 –
  Eurodollar Reserve Percentage

  

 

 6
 

Where,

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

“Eurodollar Reserve Percentage” means, for any day, the reserve
percentage (expressed as a decimal, carried out to five decimal places) in
effect on such day, whether or not applicable to any Lender, under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System of the United States for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).  The Eurodollar Floating
Rate for each outstanding Eurodollar Floating Rate Loan shall be adjusted
automatically as of the effective date of any change in the Eurodollar Reserve
Percentage.

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

“Eurodollar Rate”
means (i) with respect to a Eurodollar Floating Rate Loan, the Eurodollar
Floating Rate and (ii) with respect to a Eurodollar Fixed Rate Loan, the
Eurodollar Fixed Rate.

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

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

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

“Excluded Taxes”
means, with respect to Agent, any Lender, the L/C Issuer or any other recipient
of any payment to be made by or on account of any obligation of Borrower
hereunder, (a) taxes imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable Lending Office is
located, and (b) any branch profits taxes imposed by the United States or
any similar tax imposed by any other jurisdiction in which Borrower is located.

“Existing Credit Agreement”
has the meaning specified in Section 4.01(a)(ix).

“Existing Letters of
Credit” means the following letters of credit issued by Bank of America
under the Existing Credit Agreement:

 7
 

 

	
  Letter of Credit No.

  	
   

  	
  Beneficiary

  
	
  3077641

  	
   

  	
  Arizona State Board of Pharmacy

  
	
  3061325

  	
   

  	
  Florida Dept. of Health Services

  
	
  3074646

  	
   

  	
  Florida Dept. of Health Services

  
	
  3074647

  	
   

  	
  Florida Dept. of Health Services

  
	
  3079479

  	
   

  	
  Florida Dept. of Health Services

  
	
  3083840

  	
   

  	
  Florida Dept. of Health Services

  
	
  3083841

  	
   

  	
  Florida Dept. of Health Services

  
	
  3083843

  	
   

  	
  Florida Dept. of Health Services

  
	
  3084523

  	
   

  	
  Florida Dept. of Health Services

  
	
  3083842

  	
   

  	
  Indiana State Board of Pharmacy

  
	
  3084547

  	
   

  	
  Nevada State Board of Pharmacy

  
	
  3080067

  	
   

  	
  California State Board of Pharmacy

  

 

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

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

“Funded Debt”
means, as of any date of determination, for Parent and its Subsidiaries on a
consolidated basis, the sum of (a) all outstanding liabilities for
borrowed money and other interest-bearing liabilities of Parent and its
Subsidiaries, including current and long term liabilities, less
(b) the non-current portion of Subordinated Liabilities.

“Funded Debt to EBITDA
Ratio” has the meaning specified in Section 6.11(b).

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

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

“Guarantee” means,
as to any Person, any (a) any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or other
obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay

 8
 

such Indebtedness or
other obligation, or (iv) entered into for the purpose of assuring in any
other manner the obligee in respect of such Indebtedness or other obligation of
the payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of
such Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person
(or any right, contingent or otherwise, of any holder of such Indebtedness to
obtain any such Lien).  The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing
Person in good faith.  The term “Guarantee”
as a verb has a corresponding meaning.

“Guarantors”
means, collectively, Parent, Memorial and each other Subsidiary that shall be
required to execute and deliver a Joinder Agreement pursuant to Section 6.13.

“Guaranty” means
the Guaranty made by the Guarantors under Article X in favor of
Agent, the Lenders and the L/C Issuer.

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

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

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

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

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

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

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

(f)            capital
leases and Synthetic Lease Obligations;

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

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

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

 9
 

amount of any capital
lease or Synthetic Lease Obligation as of any date shall be deemed to be the
amount of Attributable Indebtedness in respect thereof as of such date.

“Indemnified Taxes”
means Taxes other than Excluded Taxes.

“Indemnitees” has
the meaning specified in Section 11.04(b).

“Information” has
the meaning specified in Section 11.07.

“Interest Payment Date”
means, (a) as to any Eurodollar Floating Rate Loan, the last Business Day
of each month and the Maturity Date; (b) as to any Eurodollar Fixed Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; and (c) as to any Base Rate Loan, the last Business Day of
each month and the Maturity Date

“Interest Period”
means, as to each Eurodollar Fixed Rate Loan, the period commencing on the date
such Eurodollar Fixed Rate Loan is disbursed or converted to or continued as a
Eurodollar Fixed Rate Loan and ending on the date one month thereafter, as
selected by Borrower in its Loan Notice; provided that:

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

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

iii.            no
Interest Period shall extend beyond the Maturity Date.

“Internal Control
Event” means a material weakness in, or fraud that involves management or
other employees who have a significant role in, Borrower’s internal controls
over financial reporting, in each case as described in the Securities Laws.

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

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

“IRS” means the
United States Internal Revenue Service.

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

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

 10

“Joinder Agreement”
means an additional guarantor joinder agreement entered into by a Subsidiary,
and accepted by Agent, substantially in the form of Exhibit D or
any other form approved by Agent.

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

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

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

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

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

“L/C Expiration Date”
means the day that is thirty days prior to the Maturity Date then in effect
(or, if such day is not a Business Day, the next preceding Business Day).

“L/C Fee” has the
meaning specified in Section 2.03(i).

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

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

“L/C Sublimit”
means an amount equal to $10,000,000. 
The L/C Sublimit is part of, and not in addition to, the Aggregate
Commitments.

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

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

“Letter of Credit”
means any standby letter of credit issued hereunder and shall include the Existing
Letters of Credit.  A Letter of Credit
may be a commercial letter of credit or a standby letter of credit.

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

 11
 

“Loan” has the
meaning specified in Section 2.01.

“Loan Documents”
means this Agreement, each Note, each Issuer Document, the Agent Fee Letter and
each Joinder Agreement.

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

“Loan Parties”
means, collectively, Borrower and each Person (other than Agent, the L/C
Issuer, or any Lender) executing a Loan Document including, without limitation,
each Guarantor.

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

“Maturity Date”
means December 1, 2011; provided, however, that if such date
is not a Business Day, the Maturity Date shall be the next preceding Business
Day.

“Memorial” means
Memorial Pet Care, Inc., an Idaho corporation.

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

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

“Obligations”
means (a) all advances to, and debts, liabilities, obligations, covenants
and duties of, any Loan Party arising under any Loan Document or otherwise with
respect to any Loan or Letter of Credit, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due,
now existing or hereafter arising and (b) all debts, liabilities,
obligations, covenants and duties of the Borrower owing to any Lender or any
Affiliate of any Lender and arising under any Swap Contract permitted by Section 7.03(d),
whether absolute or contingent, due or to become due, now existing or hereafter
arising, and, in each case, including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in
such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding.

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

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

 12
 

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

“Participant” has
the meaning specified in Section 11.06(d).

“Parent” means MWI
Veterinary Supply, Inc., a Delaware corporation.

“PBGC” means the
Pension Benefit Guaranty Corporation.

“PCAOB” means the
Public Company Accounting Oversight Board.

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

“Permitted Acquisition”
means any acquisition, whether by purchase, merger or otherwise, of all or
substantially all of the assets of, or more than 50% of the voting Capital
Stock of, or a business line or a division of, any Person; provided
that:

(a)                                  all Persons, assets,
business lines or divisions acquired shall be in the type of business permitted
to be engaged in by Borrower and its Subsidiaries pursuant to Section 7.06
or such other lines of business as may be consented to by Required Lenders;

(b)                                 no Default or Event of
Default shall then exist or would exist after giving effect to such
acquisition;

(c)                                  as of the closing of
any acquisition, such acquisition shall have been approved by the board of
directors or equivalent governing body of the Person to be acquired or from
which such assets, business line or division is to be acquired;

(d)                                 not less than ten
Business Days prior to the closing of any acquisition for consideration
(including assumed liabilities, earnout payments and any other deferred
payment) in excess of $5,000,000, Borrower shall have delivered to the Agent a
written description of the Person, assets, business line or division to be
acquired and its operations;

(e)                                  Borrower shall
demonstrate to the reasonable satisfaction of the Agent that, after giving
effect to such acquisition, Borrower will be in pro forma
compliance with all of the terms and provisions of the financial covenants set
forth in Section 6.11; and

(f)                                    if such acquisition
is structured as a merger, Borrower (or if such merger is with any Subsidiary,
then such Subsidiary) shall be the surviving Person after giving effect to such
merger.

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

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

“Platform” has the
meaning specified in Section 6.02.

 13
 

“Register” has the
meaning specified in Section 11.06(c).

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

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

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

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

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

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

“Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other
property) with respect to any Capital Stock or other Equity Interest of
Borrower or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Capital Stock or other Equity Interest or on account of any return
of capital to Borrower’s stockholders, partners or members (or the equivalent
Person thereof).

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

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

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

“Solvent” and “Solvency”
mean, with respect to any Person on any date of determination, that on such
date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature, (d) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such Person’s
property would constitute an unreasonably small capital, and (e) such
Person is able to pay its debts and liabilities, contingent obligations and
other commitments as they mature in the ordinary course of business.  The amount of contingent liabilities at

 14
 

any time shall be computed
as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

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

“Subordinated
Liabilities” means liabilities for borrowed money and other
interest-bearing liabilities of Parent and its Subsidiaries that are
subordinated to the Obligations in a manner acceptable to Required Lenders in
their sole discretion.

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

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

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

“Target Balance”
means, for any day, the amount of (a) $250,000 plus (b) the
total of all amounts to be debited against the Borrower Account on that day,
including checks and other items to be paid, and any other debits requested or
authorized by Borrower.

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

“Threshold Amount”
means $5,000,000.

“Total Liabilities”
means the sum of current liabilities plus long term liabilities.

 15
 

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

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

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

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

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

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

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

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

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

1.03                        Accounting
Terms.

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

(b)                                 Changes in GAAP. 
If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either
Borrower or the Required

 16
 

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

(c)                                  Consolidation of Variable Interest
Entities.  All references herein to consolidated
financial statements of Borrower and its Subsidiaries or to the determination
of any amount for Borrower and its Subsidiaries on a consolidated basis or any
similar reference shall, in each case, be deemed to include each variable
interest entity that Borrower is required to consolidate pursuant to FASB
Interpretation No. 46 — Consolidation of Variable Interest Entities: an
interpretation of ARB No. 51 (January 2003) as if such variable interest entity
were a Subsidiary as defined herein.

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

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

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

ARTICLE II.                            THE COMMITMENTS AND CREDIT EXTENSIONS

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

2.02                        Borrowings,
Conversions and Continuations of Loans.

(a)                                  Each Borrowing, each conversion of
Loans from one Type to the other, and each continuation of Eurodollar Fixed
Rate Loans shall be made upon Borrower’s irrevocable notice to Agent, which may
be given by telephone.  Each such notice
must be received by Agent not later than 11:00 a.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Fixed Rate Loans or of any conversion of Eurodollar
Fixed Rate Loans to Base Rate Loans or Eurodollar Floating Rate Loans, and
(ii) on the requested date of any Borrowing of Base Rate Loans or
Eurodollar Floating Rate Loans.  Each
telephonic notice by Borrower pursuant to this Section 2.02(a) must
be confirmed promptly by delivery to Agent of a written Loan Notice,
appropriately completed and signed by a Responsible Officer of Borrower.  Each Borrowing of, conversion to or
continuation of Eurodollar Fixed Rate Loans shall be in a principal amount of
$2,000,000 or a whole multiple of $500,000 in excess thereof.  Except as provided in Sections 2.03(c),
each Borrowing of or conversion to Base Rate

 17
 

Loans
or Eurodollar Floating Rate Loans shall be in a principal amount of $500,000 or
a whole multiple of $100,000 in excess thereof. 
Each Loan Notice (whether telephonic or written) shall specify
(i) whether Borrower is requesting a Borrowing, a conversion of Loans from
one Type to the other, or a continuation of Eurodollar Fixed Rate Loans,
(ii) the requested date of the Borrowing, conversion or continuation, as
the case may be (which shall be a Business Day), (iii) the principal
amount of Loans to be borrowed, converted or continued, (iv) the Type of
Loans to be borrowed or to which existing Loans are to be converted, and
(v) if applicable, the duration of the Interest Period with respect
thereto.  If Borrower fails to specify a
Type of Loan in a Loan Notice or if Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be
made as, or converted to, Eurodollar Floating Rate Loans.  Any such automatic conversion to Eurodollar
Floating Rate Loans shall be effective as of the last day of the Interest
Period then in effect with respect to the applicable Eurodollar Fixed Rate
Loans.

(b)                                 On each Business Day that the Target
Balance exceeds the Collected Balances in the Borrower Account at 11:00 a.m. on
such Business Day, Bank of America shall promptly give Agent notice of the
amount, if any, by which the Target Balance exceeds the Collected Balances in
the Borrower Account at such time (such amount, the “Target Balance
Shortfall Amount”) and upon such notice Borrower shall be deemed to have
requested a Borrowing of Eurodollar Floating Rate Loans to be disbursed on such
Business Day in an amount equal to the Target Balance Shortfall Amount or
$50,000, whichever is greater, without regard to the minimum and multiples
specified in Section 2.02(a) for the principal amount of Eurodollar
Floating Rate Loans, but subject to the amount of the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02
(other than the delivery of a Loan Notice). 
Borrower shall, if requested by Agent, promptly deliver to Agent a
written Loan Notice as additional evidence of its request for a Borrowing of
Eurodollar Floating Rate Loans.

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

(d)                                 Except as otherwise provided herein,
a Eurodollar Fixed Rate Loan may be continued or converted only on the last day
of an Interest Period for such Eurodollar Rate Loan.  During the existence of a Default, no Loans
may be requested as, converted to or continued as Eurodollar Rate Loans without
the consent of the Required Lenders, and the Required Lenders may demand that
any or all of the then outstanding Eurodollar Rate Loans be converted
immediately to Base Rate Loans and Borrower agrees to pay all amounts due under
Section 3.05 in accordance with the terms thereof due to any such
conversion.

(e)                                  Agent shall promptly notify Borrower
and Lenders of the interest rate applicable to any Interest Period for
Eurodollar Fixed Rate Loans upon determination of such interest rate.

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

 18
 

2.03                        Letters
of Credit.

(a)                                  The Letter of Credit Commitment.

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

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

(A)                              subject to Section 2.03(b)(iv),
the expiry date of such requested Letter of Credit would occur more than twelve
months after the date of issuance or last extension, unless the Required
Lenders have approved such expiry date; or

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

(iii)                               The L/C Issuer shall be under no
obligation to issue any Letter of Credit if:

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

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

(C)                                except as otherwise agreed by Agent
and the L/C Issuer, such Letter of Credit is in an initial stated amount less
than $100,000, in the case of a commercial Letter of Credit, or $100,000, in
the case of a standby Letter of Credit;

 19
 

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

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

(F)                                 unless specifically provided for in
this Agreement, such Letter of Credit contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder.

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

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

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

(b)                                 Procedures for Issuance and
Amendment of Letters of Credit; Auto-Extension Letters of Credit.

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

(ii)                                  Promptly
after receipt of any L/C Application at the address set forth in Section 11.02
for receiving L/C Applications and related correspondence, the L/C Issuer will
confirm with Agent (by telephone or in writing) that Agent has received a copy
of such L/C Application from Borrower and, if not, the L/C Issuer will provide
Agent with a copy thereof.  Unless the
L/C Issuer has received written notice from any Lender, Agent or any Loan
Party, at

 20

least
one Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions in Article IV
shall not then be satisfied, then, subject to the terms and conditions hereof,
the L/C Issuer shall, on the requested date, issue a Letter of Credit for the
account of Borrower (or the applicable Subsidiary) or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C Issuer’s
usual and customary business practices. 
Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the L/C Issuer a risk participation in such Letter of Credit in
an amount equal to the product of such Lender’s Applicable Percentage times the
amount of such Letter of Credit.

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

(iv)                              If Borrower so requests in any
applicable L/C Application, the L/C Issuer may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic extension
provisions (each, an “Auto-Extension Letter of Credit”); provided
that any such Auto-Extension Letter of Credit must permit the L/C Issuer to
prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the
time such Letter of Credit is issued. 
Unless otherwise directed by the L/C Issuer, Borrower shall not be
required to make a specific request to the L/C Issuer for any such
extension.  Once an Auto-Extension Letter
of Credit has been issued, the Lenders shall be deemed to have authorized (but
may not require) the L/C Issuer to permit the extension of such Letter of
Credit at any time to an expiry date not later than the L/C Expiration Date; provided,
however, that the L/C Issuer shall not permit any such extension if
(A) the L/C Issuer has determined that it would not be permitted, or would
have no obligation, at such time to issue such Letter of Credit in its revised
form (as extended) under the terms hereof (by reason of the provisions of
clause (ii) or (iii) of Section 2.03(a) or otherwise), or
(B) it has received notice (which may be by telephone or in writing) on or
before the day that is five Business Days before the Non-Extension Notice Date
(1) from Agent that the Required Lenders have elected not to permit such
extension or (2) from Agent, any Lender or Borrower that one or more of
the applicable conditions specified in Section 4.02 is not then
satisfied, and in each such case directing the L/C Issuer not to permit such
extension.

(c)                                  Drawings and Reimbursements; Funding
of Participations.

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

(ii)                                  Each Lender  shall upon any notice pursuant to Section 2.03(c)(i)
make funds available to Agent for the account of the L/C Issuer at the
Administrative Agent’s Office in an amount equal to its Applicable Percentage
of the Unreimbursed Amount not later than 1:00 p.m.

 21
 

on the
Business Day specified in such notice by Agent, whereupon, subject to the provisions
of Section 2.03(c)(iii), each Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to Borrower in such amount.  Agent shall remit the funds so received to
the L/C Issuer.

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

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

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

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

(d)                                 Repayment of Participations.

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

 22
 

(ii)                                  If any payment received by Agent for
the account of the L/C Issuer pursuant to Section 2.03(c)(i) is
required to be returned under any of the circumstances described in Section 11.05
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to Agent for the account of the L/C Issuer
its Applicable Percentage thereof on demand of Agent, plus interest
thereon from the date of such demand to the date such amount is returned by
such Lender, at a rate per annum equal to the Federal Funds Rate from time to
time in effect.  The obligations of
Lenders under this clause shall survive the payment in full of the Obligations
and the termination of this Agreement.

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

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

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

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

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

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

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

(f)                                    Role of L/C Issuer.  Each Lender and Borrower agree that, in paying
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of the L/C Issuer, Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of
the L/C Issuer shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of Lenders
or the Required Lenders, as applicable; (ii) any action taken or omitted
in the absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Issuer Document.  Borrower hereby assumes all risks of the

 23
 

acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not
intended to, and shall not preclude Borrower’s pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement.  None of the L/C
Issuer, Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer, shall be liable or responsible for
any of the matters described in clauses (i) through (v) of Section 2.03(e);
provided, however, that anything in such clauses to the contrary
notwithstanding, Borrower may have a claim against the L/C Issuer, and the L/C
Issuer may be liable to Borrower, to the extent, but only to the extent, of any
direct, as opposed to consequential or exemplary, damages suffered by Borrower
which Borrower proves were caused by the L/C Issuer’s willful misconduct or
gross negligence or the L/C Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit.  In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason.

(g)                                 Cash Collateral. 
Upon the request of Agent, (i) if the L/C Issuer has honored any
full or partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Borrowing, or (ii) if, as of the L/C Expiration Date,
any L/C Obligation for any reason remains outstanding, Borrower shall, in each
case, immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations.  Sections 2.04
and 8.02(c) set forth certain additional requirements to deliver Cash
Collateral hereunder.  For purposes
hereof, “Cash Collateralize” means to pledge and deposit with or deliver
to Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for
the L/C Obligations, cash or deposit account balances pursuant to documentation
in form and substance satisfactory to Agent and the L/C Issuer (which documents
are hereby consented to by Lenders). 
Derivatives of such term have corresponding meanings.  Borrower hereby grants to Agent, for the
benefit of the L/C Issuer and Lenders, a security interest in all such cash,
deposit accounts and all balances therein and all proceeds of the
foregoing.  Cash collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Bank of
America.

(h)                                 Applicability of ISP and UCP. 
Unless otherwise expressly agreed by the L/C Issuer and Borrower when a
Letter of Credit is issued (including any such agreement applicable to an
Existing Letter of Credit), (i) the rules of the ISP shall apply to each
standby Letter of Credit, and (ii) the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce (the “ICC”) at the time of issuance
shall apply to each commercial Letter of Credit.

(i)                                     L/C Fees. 
Borrower shall pay to Agent for the account of each Lender in accordance
with its Applicable Percentage a L/C fee (the “L/C Fee”) (i) for
each commercial Letter of Credit equal to 1% per annum times the daily amount
available to be drawn under such Letter of Credit, and (ii) for each
standby Letter of Credit equal to the Applicable Rate times the daily  amount available to be drawn under such
Letter of Credit.  For purposes of
computing the daily amount available to be drawn under any Letter of Credit,
the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  L/C Fees shall be (i) due and payable on
the first Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the L/C Expiration Date and thereafter on demand and
(ii) computed on a quarterly basis in arrears.  If there is any change in the Applicable Rate
during any quarter, the daily amount available to be drawn under each standby
Letter of Credit shall be computed and multiplied by the Applicable Rate separately
for each period during such quarter that such Applicable Rate was in
effect.  Notwithstanding anything to the
contrary contained herein, upon the request of the Required Lenders, while any
Event of Default exists, all L/C Fees shall accrue at the Default Rate.

(j)                                     Fronting Fee and Documentary and
Processing Charges Payable to L/C Issuer.  Borrower
shall pay directly to the L/C Issuer for its own account a fronting fee
(i) with respect to each commercial Letter of Credit at the rate specified
in the Agent Fee Letter, computed on the amount of such Letter of Credit, and
payable upon the issuance thereof, (ii) with respect to any amendment of a

 24
 

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

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

(l)                                     Letters of Credit Issued for
Subsidiaries.  Notwithstanding that a Letter of Credit
issued or outstanding hereunder is in support of any obligations of, or is for
the account of, a Subsidiary, Borrower shall be obligated to reimburse the L/C
Issuer hereunder for any and all drawings under such Letter of Credit.  Borrower hereby acknowledges that the
issuance of Letters of Credit for the account of Subsidiaries inures to the
benefit of Borrower, and that Borrower’s business derives substantial benefits
from the businesses of such Subsidiaries.

2.04                        Prepayments.

(a)                                  Borrower may, upon notice to Agent,
at any time or from time to time voluntarily prepay Loans in whole or in part
without premium or penalty; provided that (i) such notice must be
received by Agent not later than 11:00 a.m. (A) three Business Days
prior to any date of prepayment of Eurodollar Fixed Rate Loans and (B) on
the date of prepayment of Base Rate Loans or Eurodollar Floating Rate Loans;
(ii) any prepayment of Eurodollar Fixed Rate Loans shall be in a principal
amount of $2,000,000 or a whole multiple of $500,000 in excess thereof; and
(iii) any prepayment of Base Rate Loans or Eurodollar Floating Rate Loans
shall be in a principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding.  Each such notice shall
specify the date and amount of such prepayment and the Type(s) of Loans to be
prepaid and, if Eurodollar Fixed Rate Loans are to be prepaid, the Interest
Period(s) of such Loans.  Agent will
promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender’s Applicable Percentage of such prepayment.  If such notice is given by Borrower, Borrower
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein.  Any prepayment of a Eurodollar Fixed Rate
Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.05.  Each such prepayment shall be applied to the
Loans of Lenders in accordance with their respective Applicable Percentages.

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

2.05                        Termination
or Reduction of Commitments. 
Borrower may, upon notice to Agent, terminate the Aggregate Commitments,
or from time to time permanently reduce the Aggregate Commitments; provided
that (i) any such notice shall be received by Agent not later than
11:00 a.m. five Business Days prior to the date of termination or
reduction, (ii) any such partial reduction shall be in an aggregate amount
of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, and
(iii) Borrower shall not terminate or reduce the Aggregate Commitments if,
after giving effect thereto and to any

 25
 

concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments.  Agent will promptly notify the Lenders of any
such notice of termination or reduction of the Aggregate Commitments.  Any reduction of the Aggregate Commitments
shall be applied to the Commitment of each Lender according to its Applicable
Percentage.  All fees accrued until the
effective date of any termination of the Aggregate Commitments shall be paid on
the effective date of such termination.

2.06                        Repayment
of Loans.

(a)                                  On each Business Day that the
Collected Balances in the Borrower Account at 1:00 p.m. on such Business Day
exceeds the sum of (i) the Target Balance plus $50,000 (the “Payment
Trigger Balance”), Bank of America shall promptly give Agent notice of the
amount, if any, by which the Collected Balances in the Borrower Account at such
time exceeds the Payment Trigger Balance (such amount, the “Target Balance
Excess Amount”) and upon such notice Agent shall, without any further
authorization from or prior notice to Borrower, apply the Target Balance Excess
Amount first, to the payment in full of any outstanding Base Rate Loans, and
second, to the payment in full of any outstanding Eurodollar Floating Rate
Loans.

(b)                                 Borrower shall repay to Lenders on
the Maturity Date the aggregate principal amount of Loans outstanding on such
date.

2.07                        Interest.

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

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

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

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

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

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

 26
 

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

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

(b)                                 Agent’s Fees. 
Borrower shall pay to Agent for Agent’s own account, fees in the amounts
and at the times specified in the letter agreement, dated December 13,
2006 (the “Agent Fee Letter”), between Borrower and Agent.  Such fees shall be fully earned when paid and
shall be nonrefundable for any reason whatsoever.

(c)                                  Lenders’ Upfront Fee. 
On the Closing Date, Borrower shall pay to Agent, for the account of
each Lender in accordance with their respective Applicable Percentages, an
upfront fee in an amount of $87,500. 
Such upfront fees are for the credit facilities committed by Lenders under
this Agreement and are fully earned on the date paid.  The upfront fee paid to each Lender is solely
for its own account and is nonrefundable for any reason whatsoever.

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

2.10                        Evidence
of Debt.

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

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

 27
 

2.11                        Payments
Generally; Agent’s Clawback.

(a)                                  (i) General.  All payments to be made by Borrower shall be
made without condition or deduction for any counterclaim, defense, recoupment
or setoff.  Except as otherwise expressly
provided herein, all payments by Borrower hereunder shall be made to Agent, for
the account of the respective Lenders to which such payment is owed, at the
Administrative Agent’s Office in Dollars and in immediately available funds not
later than 12:00 noon on the date specified herein.  Agent will promptly distribute to each Lender
its Applicable Percentage (or other applicable share as provided herein) of
such payment in like funds as received by wire transfer to such Lender’s
Lending Office.  All payments received by
Agent after 12:00 noon shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by Borrower shall
come due on a day other than a Business Day, payment shall be made on the next
following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.

(ii)                                  On
each date when the payment of any principal, interest or fees are due hereunder
or under any Note, Borrower agrees to maintain on deposit in an ordinary checking
account maintained by Borrower with Bank of America (as such account shall be
designated by Borrower in a written notice to Borrower and Agent from time to
time, the “Borrower Account”) an amount sufficient to pay such
principal, interest or fees in full on such date.  Borrower hereby authorizes Agent (A) to
deduct automatically all principal, interest or fees when due hereunder or
under any Note from the Borrower Account, and (B) if and to the extent any
payment of principal, interest or fees under this Agreement or any Note is not
made when due to deduct any such amount from any or all of the accounts of
Borrower maintained at Bank of America. 
Agent agrees to provide written notice to Borrower of any automatic deduction
made pursuant to this Section 2.11(a)(ii) showing in reasonable
detail the amounts of such deduction. 
Lenders agree to reimburse Borrower based on their Applicable Percentage
for any amounts deducted from such accounts in excess of amount due hereunder
and under any other Loan Documents.

(b)                                 (i) Funding by Lenders;
Presumption by Agent.  Unless Agent
shall have received notice from a Lender prior to the proposed date of any
Borrowing of Eurodollar Fixed Rate Loans (or, in the case of any Borrowing of
Base Rate Loans or Eurodollar Floating Rate Loans, prior to 12:00 noon on the
date of such Borrowing) that such Lender will not make available to Agent such
Lender’s share of such Borrowing, Agent may assume that such Lender has made
such share available on such date in accordance with Section 2.02
(or, in the case of a Borrowing of Base Rate Loans or Eurodollar Floating Rate
Loans, that such Lender has made such share available in accordance with and at
the time required by Section 2.02) and may, in reliance upon such
assumption, make available to Borrower a corresponding amount.  In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to Agent, then the
applicable Lender and Borrower severally agree to pay to Agent forthwith on
demand such corresponding amount in immediately available funds with interest
thereon, for each day from and including the date such amount is made available
to Borrower to but excluding the date of payment to Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by Agent in accordance with banking industry rules
on interbank compensation, plus any administrative, processing or
similar fees customarily charged by Agent in connection with the foregoing and
(B) in the case of a payment to be made by Borrower, the interest rate
applicable to Eurodollar Floating Rate Loans. 
If Borrower and such Lender shall pay such interest to Agent for the
same or an overlapping period, Agent shall promptly remit to Borrower the amount
of such interest paid by Borrower for such period.  If such Lender pays its share of the
applicable Borrowing to Agent, then the amount so paid shall constitute such
Lender’s Loan included in such Borrowing. 
Any payment by Borrower shall be without prejudice to any claim Borrower
may have against a Lender that shall have failed to make such payment to Agent.

(ii)                                  Payments
by Borrower; Presumptions by Agent. 
Unless Agent shall have received notice from Borrower prior to the date
on which any payment is due to Agent for the account of the Lenders or the L/C
Issuer hereunder that Borrower will not make such payment, Agent may assume
that Borrower has made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to Lenders or the L/C Issuer,
as the case

 28
 

may be, the amount due.  In such event, if Borrower has not in fact
made such payment, then each of Lenders or the L/C Issuer, as the case may be,
severally agrees to repay to Agent forthwith on demand the amount so
distributed to such Lender or the L/C Issuer, in immediately available funds
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to Agent, at the greater
of the Federal Funds Rate and a rate determined by Agent in accordance with
banking industry rules on interbank compensation.  A notice of Agent to any Lender or Borrower
with respect to any amount owing under this subsection (b) shall be
conclusive, absent manifest error.

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

(d)                                 Obligations of Lenders Several. 
The obligations of Lenders hereunder to make Loans, to fund
participations in Letters of Credit and to make payments under Section 11.04(c)
are several and not joint.  The failure
of any Lender to make any Loan, to fund any such participation or  to make any payment under Section 11.04(c)
on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan, purchase
its participation or to make its payment under Section 11.04(c).

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

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

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

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

Each Loan Party consents
to the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Loan Party rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of such Loan Party in the amount of such participation.

 29
 

2.13                        Increase
in Commitments.

(a)                                  Request for Increase. 
Provided there exists no Default, upon notice to the Administrative
Agent (which shall promptly notify the Lenders), the Borrower may from time to
time, request an increase in the Aggregate Commitments by an amount (for all
such requests) not exceeding $30,000,000; provided that (i) any
such request for an increase shall be in a minimum amount of $10,000,000, and
(ii) the Borrower may make a maximum of three such requests.  At the time of sending such notice, the
Borrower (in consultation with the Administrative Agent) shall specify the time
period within which each Lender is requested to respond (which shall in no
event be less than ten Business Days from the date of delivery of such notice
to the Lenders).

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

(c)                                  Notification by Administrative
Agent; Additional Lenders.  The
Administrative Agent shall notify the Borrower and each Lender of the Lenders’
responses to each request made hereunder.

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

(e)                                  Conditions to Effectiveness of
Increase.  As a condition precedent to such increase,
the Borrower shall (i) deliver to the Administrative Agent a certificate
of each Loan Party dated as of the Increase Effective Date (in sufficient
copies for each Lender) signed by a Responsible Officer of such Loan Party
(A) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (B) in the case of the
Borrower, certifying that, before and after giving effect to such increase,
(1) the representations and warranties contained in Article V
and the other Loan Documents are true and correct on and as of the Increase
Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, and except that for purposes of this Section 2.13,
the representations and warranties contained in subsections (a) and (b) of Section 5.05
shall be deemed to refer to the most recent statements furnished pursuant to
clauses (a) and (b), respectively, of Section 6.01, and (2) no
Default exists and (ii) pay to Agent, for the account of each Lender in
accordance with their respective Applicable Percentages, an upfront fee in an
amount equal to one eighth of one percent (0.125%) of the amount of the
requested increase in the Aggregate Commitments.  The upfront fee paid to each Lender will be
solely for its own account and will be nonrefundable for any reason whatsoever
when paid.  The Borrower shall prepay any
Committed Loans outstanding on the Increase Effective Date (and pay any
additional amounts required pursuant to Section 3.05) to the extent
necessary to keep the outstanding Committed Loans ratable with any revised
Applicable Percentages arising from any nonratable increase in the Commitments
under this Section.

(f)                                    Conflicting Provisions. 
This Section shall supersede any provisions in Section 2.12
or 11.01 to the contrary.

ARTICLE III.     TAXES,
YIELD PROTECTION AND ILLEGALITY

3.01                        Taxes.

(a)                                  Payments
Free of Taxes.  Any and all payments
by Borrower to or on account of any obligation of Borrower hereunder or under
any other Loan Document shall be made free and clear of and without reduction
or withholding for any Indemnified Taxes or Other Taxes, provided that
if Borrower shall be required by any applicable law to deduct any Indemnified
Taxes (including any Other Taxes) from such payments, then, (i) the sum
payable shall be increased as necessary so that after making all

 30

required
deductions (including deductions applicable to additional sums payable under
this Section), Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) Borrower shall make such deductions, and (iii) Borrower
shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

(b)                                 Payment of Other Taxes by Borrower. 
Without limiting the provisions of subsection (a) above, Borrower
shall timely pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.

(c)                                  Indemnification by Borrower. 
Borrower shall indemnify Agent, each Lender and the L/C Issuer, within
10 days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by Agent, such
Lender or the L/C Issuer, as the case may be, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to Borrower by a Lender or the L/C Issuer (with
a copy to Agent), or by Agent on its own behalf or on behalf of a Lender or the
L/C Issuer, shall be conclusive absent manifest error.

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

(e)                                  Status of Lenders. 
Any Lender, if requested by Borrower or Agent, shall deliver such
documentation prescribed by applicable law or reasonably requested by Borrower
or Agent as will enable Borrower or Agent to determine whether or not such
Lender is subject to backup withholding or information reporting requirements.

(f)                                    Treatment of Certain Refunds. 
If Agent, any Lender or the L/C Issuer determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by Borrower or with respect to which Borrower has
paid additional amounts pursuant to this Section, it shall pay to Borrower an amount
equal to such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by Borrower under this Section with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of Agent, such Lender or the L/C Issuer, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that Borrower, upon the
request of Agent, such Lender or the L/C Issuer, agrees to repay the amount
paid over to Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to Agent, such Lender or the
L/C Issuer in the event Agent, such Lender or the L/C Issuer is required to
repay such refund to such Governmental Authority.  This subsection shall not be construed to
require Agent, any Lender or the L/C Issuer to make available its tax returns
(or any other information relating to its taxes that it deems confidential) to
Borrower or any other Person.

3.02                        Illegality.  If any Lender determines that any Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurodollar Rate Loans, or to determine or charge interest rates based upon
the Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to Borrower through Agent, any obligation of such Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate
Loans shall be suspended until such Lender notifies Agent and Borrower that the
circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, Borrower shall,
upon demand from such Lender (with a copy to Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain

 31
 

such Eurodollar Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such Eurodollar Rate Loans.  Upon
any such prepayment or conversion, Borrower shall also pay accrued interest on
the amount so prepaid or converted and all amounts due under Section 3.05
in accordance with the terms thereof due to such prepayment or conversion.

3.03                        Inability
to Determine Rates.  If Agent
determines in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not
being offered to banks in the London interbank eurodollar market for the
applicable amount and Interest Period of such Eurodollar Rate Loan,
(b) adequate and reasonable means do not exist for determining the
Eurodollar Base Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan, or (c) the Eurodollar Base Rate for any
requested Interest Period (or, in the case of a Eurodollar Floating Rate Loan,
a one month Interest Period is deemed to be requested) with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost
to such Lenders of funding such Loan, Agent will promptly so notify Borrower
and each Lender.  Thereafter, the
obligation of Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until Agent (upon the instruction of the Required Lenders) revokes
such notice.  Upon receipt of such
notice, Borrower may revoke any pending request for a Borrowing of, conversion
to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to
have converted such request into a request for a Borrowing of Base Rate Loans in
the amount specified therein.

3.04                        Increased
Costs.

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

(i)                                     impose, modify or deem applicable
any reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
reflected in the Eurodollar Rate) or the L/C Issuer;

(ii)                                  subject any Lender or the L/C Issuer
to any tax of any kind whatsoever with respect to this Agreement, any Letter of
Credit, any participation in a Letter of Credit or any Eurodollar Rate Loan
made by it, or change the basis of taxation of payments to such Lender or the
L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 3.01 and the imposition of, or any change in the
rate of, any Excluded Tax payable by such Lender or the L/C Issuer); or

(iii)                               impose on any Lender or the L/C
Issuer or the London interbank market any other condition, cost or expense
affecting this Agreement or Eurodollar Rate Loans made by such Lender or any
Letter of Credit or participation therein;

and the result of any of
the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make
any such Loan), or to increase the cost to such Lender or the L/C Issuer of
participating in, issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of Credit),
or to reduce the amount of any sum received or receivable by such Lender or the
L/C Issuer hereunder (whether of principal, interest or any other amount) then,
upon request of such Lender or the L/C Issuer, Borrower will pay to such Lender
or the L/C Issuer, as the case may be, such additional amount or amounts as
will compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.

(b)                                 Capital Requirements. 
If any Lender or the L/C Issuer determines that any Change in Law
affecting such Lender or the L/C Issuer or any Lending Office of such Lender or
such Lender’s or the L/C Issuer’s holding company, if any, regarding capital
requirements has or would have the effect of reducing the rate of return on
such Lender’s or the L/C Issuer’s capital or on the capital of such Lender’s or
the L/C Issuer’s holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the L/C
Issuer, to a level below that which such Lender or the L/C Issuer or such
Lender’s or the L/C Issuer’s holding company could have achieved but for such
Change in Law

 32
 

(taking
into consideration such Lender’s or the L/C Issuer’s policies and the policies
of such Lender’s or the L/C Issuer’s holding company with respect to capital
adequacy), then from time to time Borrower will pay to such Lender or the L/C
Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s
holding company for any such reduction suffered.

(c)                                  Certificates for Reimbursement. 
A certificate of a Lender or the L/C Issuer setting forth the amount or
amounts necessary to compensate such Lender or the L/C Issuer or its holding
company, as the case may be, as specified in subsection (a) or (b) of this
Section and delivered to Borrower shall be conclusive absent manifest error.  Borrower shall pay such Lender or the L/C
Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.

(d)                                 Delay in Requests. 
Failure or delay on the part of any Lender or the L/C Issuer to demand
compensation pursuant to the foregoing provisions of this Section shall not
constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such
compensation, provided that Borrower shall not be required to compensate
a Lender or the L/C Issuer pursuant to the foregoing provisions of this Section
for any increased costs incurred or reductions suffered more than nine months
prior to the date that such Lender or the L/C Issuer, as the case may be,
notifies Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or the L/C Issuer’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

3.05                        Compensation
for Losses.  Upon demand of any
Lender (with a copy to Agent) from time to time, Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:

(a)                                  any continuation, conversion,
payment or prepayment of any Loan other than a Base Rate Loan on a day other
than the last day of the Interest Period for such Loan (whether voluntary,
mandatory, automatic, by reason of acceleration, or otherwise); or

(b)                                 any failure by Borrower (for a
reason other than the failure of such Lender to make a Loan) to prepay, borrow,
continue or convert any Loan other than a Base Rate Loan on the date or in the
amount notified by Borrower;

including any loss of
anticipated profits and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan or from fees payable
to terminate the deposits from which such funds were obtained.  Borrower shall also pay any customary
administrative fees charged by such Lender in connection with the
foregoing.  For purposes of calculating
amounts payable by Borrower to Lenders under this Section 3.05,
each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it
at the Eurodollar Base Rate used in determining the Eurodollar Rate for such
Loan by a matching deposit or other borrowing in the London interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan was in fact so funded.

3.06                        Mitigation
Obligations.  If any Lender requests
compensation under Section 3.04, or Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.01, or if any Lender gives a
notice pursuant to Section 3.02, then such Lender shall use
reasonable efforts to designate a different Lending Office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 3.01 or 3.04, as the
case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02,
as applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.  Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

 33
 

3.07                        Survival.  All of Borrower’s obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

ARTICLE IV.    CONDITIONS
PRECEDENT TO CREDIT EXTENSIONS

4.01                        Conditions
of Initial Credit Extension.  The
obligation of the L/C Issuer and each Lender to make its initial Credit
Extension hereunder is subject to satisfaction of the following conditions
precedent:

(a)                                  Agent’s receipt of the following,
each of which shall be originals or telecopies (followed promptly by originals)
unless otherwise specified, each properly executed by a Responsible Officer of
the signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance satisfactory to Agent and each of the Lenders:

(i)                                     executed counterparts of this
Agreement, sufficient in number for distribution to Agent, each Lender and
Borrower;

(ii)                                  a Note executed by Borrower in favor
of each Lender;

(iii)                               such certificates of resolutions or
other action, incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as Agent may require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to act as
a Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party;

(iv)                              such documents and certifications as
Agent may reasonably require to evidence that each Loan Party is duly organized
or formed, and that each Loan Party is validly existing, in good standing and
qualified to engage in business in each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect;

(v)                                 a favorable opinion of counsel to
the Loan Parties acceptable to Agent addressed to Agent and each Lender, as to
the matters set forth concerning the Loan Parties and the Loan Documents in
form and substance satisfactory to Agent;

(vi)                              a certificate of a Responsible
Officer of each Loan Party either (A) attaching copies of all consents,
licenses and approvals required in connection with the execution, delivery and
performance by such Loan Party and the validity against such Loan Party of the
Loan Documents to which it is a party, and such consents, licenses and
approvals shall be in full force and effect, or (B) stating that no such
consents, licenses or approvals are so required;

(vii)                           a certificate signed by a
Responsible Officer of Borrower certifying (A) that the conditions
specified in Sections 4.02(a) and (b) have been satisfied,
and (B) that there has been no event or circumstance since the date of the
Audited Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect;

(viii)                        evidence that all insurance required
to be maintained pursuant to the Loan Documents has been obtained and is in
effect;

(ix)                                evidence that all commitments under
the Credit Agreement dated June 18, 2002 among Borrower, Bank of America,
as agent and a syndicate of lenders (the “Existing Credit Agreement”)
have been or concurrently with the Closing Date are being terminated, and all
outstanding amounts thereunder paid in full and all Liens securing obligations
under the Existing Credit Agreement have been or concurrently with the Closing
Date are being released; and

 34
 

(x)                                   such other assurances, certificates,
documents, consents or opinions as Agent, the L/C Issuer or the Required
Lenders reasonably may require.

(b)                                 Any fees required to be paid on or
before the Closing Date shall have been paid.

(c)                                  Unless waived by Agent, Borrower
shall have paid all fees, charges and disbursements of counsel to Agent
(directly to such counsel if requested by Agent) to the extent invoiced prior
to or on the Closing Date, plus such additional amounts of such fees,
charges and disbursements as shall constitute its reasonable estimate of such
fees, charges and disbursements incurred or to be incurred by it through the
closing proceedings (provided that such estimate shall not thereafter preclude
a final settling of accounts between Borrower and Agent).

(d)                                 The Closing Date shall have occurred
on or before December 18, 2006.

Without limiting the
generality of the provisions of Section 9.04, for purposes of
determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless Agent shall have received notice from such
Lender prior to the proposed Closing Date specifying its objection thereto.

4.02                        Conditions
to All Credit Extensions.  The
obligation of each Lender to honor any Request for Credit Extension is subject
to the following conditions precedent:

(a)                                  The representations and warranties
of Borrower and each other Loan Party contained in Article V or any
other Loan Document, or which are contained in any document furnished at any
time under or in connection herewith or therewith, shall be true and correct on
and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that
for purposes of this Section 4.02, the representations and
warranties contained in subsections (a) and (b) of Section 5.05
shall be deemed to refer to the most recent statements furnished pursuant to
clauses (a) and (b), respectively, of Section 6.01.

(b)                                 No Default shall exist, or would
result from such proposed Credit Extension or from the application of the
proceeds thereof.

(c)                                  Agent and, if applicable, the L/C
Issuer shall have received a Request for Credit Extension in accordance with
the requirements hereof.

(d)                                 Agent shall have received, in form
and substance satisfactory to it, such other assurances, certificates,
documents or consents related to the foregoing as Agent or the Required Lenders
reasonably may require.

Each Request for Credit
Extension submitted by Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b)
have been satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V.                           REPRESENTATIONS AND WARRANTIES

Each Loan Party
represents and warrants to Agent and the Lenders that:

5.01                        Existence,
Qualification and Power.  Each Loan
Party and each Subsidiary thereof (a) is duly organized or formed, validly
existing and, as applicable, in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own or lease its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the
Loan Documents to which it is a party, and (c) is duly qualified and is
licensed and, as applicable, in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business

 35
 

requires such
qualification or license; except in each case referred to in clause (b)(i)
or (c), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.

5.02                        Authorization;
No Contravention.  The execution,
delivery and performance by each Loan Party of each Loan Document to which such
Person is party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of
any of such Person’s Organization Documents; (b) conflict with or result
in any breach or contravention of, or the creation of any Lien under, or
require any payment to be made under (i) any Contractual Obligation to
which such Person is a party or affecting such Person or the properties of such
Person or any of its Subsidiaries or (ii) any order, injunction, writ or
decree of any Governmental Authority or any arbitral award to which such Person
or its property is subject; or (c) violate any Law.

5.03                        Governmental
Authorization; Other Consents.  No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document.

5.04                        Binding
Effect.  This Agreement has been, and
each other Loan Document, when delivered hereunder, will have been, duly
executed and delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is
party thereto in accordance with its terms.

5.05                        Financial
Statements; No Material Adverse Effect; No Internal Control Event.

(a)                                  The Audited Financial Statements
(i) were prepared in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein;
(ii) fairly present the financial condition of the Parent and its
Subsidiaries as of the date thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein; and
(iii) show all material indebtedness and other liabilities, direct or
contingent, of the Parent and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness.

(b)                                 The unaudited consolidated balance
sheets of the Parent and its Subsidiaries dated June 30, 2006, and the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for the fiscal quarter ended on that date (i) were prepared
in accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein, and (ii) fairly
present the financial condition of the Parent and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby,
subject, in the case of clauses (i) and (ii), to the absence of footnotes
and to normal year-end audit adjustments.

(c)                                  Since the date of the Audited
Financial Statements, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.

(d)                                 To the best knowledge of Parent, no
Internal Control Event exists or has occurred since the date of the Audited
Financial Statements that has resulted in or could reasonably be expected to
result in a misstatement in any material respect, in any financial information
delivered or to be delivered to Agent or Lenders, of (i) covenant
compliance calculations provided hereunder or (ii) the assets,
liabilities, financial condition or results of operations of the Parent and its
Subsidiaries on a consolidated basis.

5.06                        Litigation.  There are no actions, suits, proceedings,
claims or disputes pending or, to the knowledge of any Loan Party after due and
diligent investigation, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against any Loan Party
or any Subsidiary thereof or against any of their properties or revenues that
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby, or (b) except as
specifically disclosed in Schedule 5.06, either individually or in
the aggregate, if determined adversely,

 36
 

could reasonably be
expected to have a Material Adverse Effect, and there has been no adverse
change in the status, or financial effect on any Loan Party or any Subsidiary
thereof, of the matters described on Schedule 5.06.

5.07                        No
Default.  No Loan Party nor any
Subsidiary thereof is in default under or with respect to any Contractual
Obligation that could, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. 
No Default has occurred and is continuing or would result from the
consummation of the transactions contemplated by this Agreement or any other
Loan Document.

5.08                        Ownership
of Property; Liens.  Each Loan Party
and each Subsidiary thereof has good record and marketable title in fee simple
to, or valid leasehold interests in, all real property necessary or used in the
ordinary conduct of its business, except for such defects in title as could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.  The property of
each Loan Party and each Subsidiary thereof are subject to no Liens, other than
Liens permitted by Section 7.01.

5.09                        Environmental
Compliance.  Each Loan Party and each
Subsidiary thereof conduct in the ordinary course of business a review of the
effect of existing Environmental Laws and claims alleging potential liability
or responsibility for violation of any Environmental Law on their respective
businesses, operations and properties, and as a result thereof each Loan Party
has reasonably concluded that, except as specifically disclosed in Schedule 5.09,
such Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

5.10                        Insurance.  The properties of each Loan Party and each
Subsidiary thereof are insured with financially sound and reputable insurance
companies not Affiliates of Borrower, in such amounts (after giving effect to
any self-insurance compatible with the following standards), with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
such Loan Party or the applicable Subsidiary operates.

5.11                        Taxes.  Each Loan Party and each Subsidiary thereof
have filed all Federal, state and other material tax returns and reports
required to be filed, and have paid all Federal, state and other material
taxes, assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets otherwise due and payable, except
those which are being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been provided in
accordance with GAAP.  There is no
proposed tax assessment against any Loan Party or any Subsidiary thereof that
would, if made, have a Material Adverse Effect.

5.12                        ERISA
Compliance.

(a)                                  Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal or state Laws.  Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge each Loan Party, nothing has occurred which would prevent, or cause
the loss of, such qualification. 
Borrower and each ERISA Affiliate have made all required contributions
to each Plan subject to Section 412 of the Code, and no application for a
funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.

(b)                                 There are no pending or, to the best
knowledge of Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that could be reasonably be
expected to have a Material Adverse Effect. 
There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

(c)                                  (i) No ERISA Event has occurred
or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded
Pension Liability; (iii) no Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) no Loan Party nor any ERISA

 37
 

Affiliate
has incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) neither Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.

5.13                        Subsidiaries.  As of the Closing Date, no Loan Party has any
Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13,
and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by a Loan Party
in the amounts specified on Part (a) of Schedule 5.13 free and
clear of all Liens.  No Loan Party has
any equity investments in any other corporation or entity other than those
specifically disclosed in Part (b) of Schedule 5.13.  All of the outstanding Equity Interests in
Borrower have been validly issued and are fully paid and nonassessable and are
owned by the Parent in the amounts specified on Part (c) of Schedule 5.13
free and clear of all Liens.

5.14                        Margin
Regulations; Investment Company Act; Public Utility Holding Company Act.

(a)                                  Borrower is not engaged and will not
engage, principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock.

(b)                                 None of Borrower, any Person
Controlling Borrower, or any Subsidiary (i) 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, or (ii) is or is required to be
registered as an “investment company” under the Investment Company Act of 1940.

5.15                        Disclosure.  Loan Parties have disclosed to Agent and
Lenders all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known to
it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.  No
report, financial statement, certificate or other information furnished
(whether in writing or orally) by or on behalf of any Loan Party to Agent or
any Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case, as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, each Loan Party represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

5.16                        Compliance
with Laws.  Each Loan Party and each
Subsidiary thereof is in compliance in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which
(a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or (b) the
failure to comply therewith, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

5.17                        Taxpayer
Identification Number.  Borrower’s
true and correct U.S. taxpayer identification number is set forth on Schedule 10.02.

5.18                        Intellectual
Property; Licenses, Etc. Each Loan
Party and each Subsidiary thereof own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other
Person.  To the best knowledge of each
Loan Party, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by any Loan Party or any Subsidiary thereof infringes upon any rights
held by any other Person.  No claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of each

 38
 

Loan Party, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

5.19                        Solvency Each Loan Party is, individually and
together with its Subsidiaries on a consolidated basis, Solvent.

ARTICLE VI.                       AFFIRMATIVE COVENANTS

So long as any Lender
shall have any Commitment hereunder, any Loan or other Obligation hereunder
shall remain unpaid or unsatisfied, or any Letter of Credit shall remain
outstanding, Parent shall, and shall (except in the case of the covenants set
forth in Sections 6.01, 6.02, and 6.03) cause
Borrower and each other Subsidiary to:

6.01                        Financial
Statements.  Deliver to Agent a
sufficient number of copies for delivery by Agent to each Lender, in form and
detail satisfactory to Agent and the Required Lenders:

(a)                                  as soon as available and in any
event within the earlier of (i) five days after the time period specified
by the SEC under the Exchange Act (including any reporting extensions granted
to Parent by the SEC) for annual reporting or (ii) 120 days after the end
of each fiscal year of Parent, a consolidated balance sheet of Parent and its
Subsidiaries as at the end of such fiscal year, and the related consolidated statements
of income or operations, shareholders’ equity and cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, such consolidated statements to be audited and accompanied by a report
and opinion of a Registered Public Accounting Firm of nationally recognized
standing reasonably acceptable to the Required Lenders, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and applicable Securities Laws and shall not be subject to any “going
concern” or like qualification or exception or any qualification or exception
as to the scope of such audit or with respect to the absence of any material
misstatement; provided, however, that at any time Parent shall be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, delivery within the time period specified in clause (i) above of
copies of the annual consolidated balance sheets and statements on Form 10-K of
Parent and its Subsidiaries for such annual period as filed with the SEC shall
be deemed to satisfy the requirements of this subsection (a);

(b)                                 as soon as available and in any
event within the earlier of (i) five days after the time period specified
by the SEC under the Exchange Act (including any reporting extensions granted
to Parent by the SEC) for quarterly reporting or (ii) 45 days after the
end of each of the first three quarters of each fiscal year of Parent, a
consolidated balance sheet of Parent and its Subsidiaries as at the end of such
fiscal quarter, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal quarter and for
the portion of Parent’s fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail; provided, however, that at any time
Parent shall be subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, delivery within the time period specified in clause (i)
above of copies of the quarterly consolidated balance sheets and statements on
Form 10-Q of Parent and its Subsidiaries for such quarterly period as filed
with the SEC shall be deemed to satisfy the requirements of this
subsection (b); and

(c)                                  as soon as available, but in any
event not later than the end of each fiscal year of the Parent, financial
forecasts prepared by management of Parent, in form satisfactory to Agent and
the Required Lenders, for the immediately following fiscal year (including the
fiscal year in which the Maturity Date occurs).

6.02                        Certificates;
Other Information.  Deliver to Agent
a sufficient number of copies for delivery by Agent to each Lender, in form and
detail satisfactory to Agent and Required Lenders:

 39
 

(a)                                  concurrently with the delivery of
the financial statements referred to in Sections 6.01(a) and (b),
a duly completed Compliance Certificate signed by the chief executive officer,
chief financial officer, treasurer or controller of Parent;

(b)                                 promptly after any request by Agent
or any Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of Parent by independent accountants in connection with
the accounts or books of the Parent or any Subsidiary, or any audit of any of
them;

(c)                                  promptly after the same are
available, copies of each annual report, proxy or financial statement or other
report or communication sent to the stockholders of Parent, and copies of all
annual, regular, periodic and special reports and registration statements which
Parent may file or be required to file with the SEC under Section 13 or
15(d) of the Exchange Act, and not otherwise required to be delivered to Agent
pursuant hereto;

(d)                                 promptly after the furnishing
thereof, copies of any statement or report furnished to any holder of debt
securities of any Loan Party or any Subsidiary thereof pursuant to the terms of
any indenture, loan or credit or similar agreement and not otherwise required
to be furnished to Lenders pursuant to Section 6.01 or any other
clause of this Section 6.02;

(e)                                  promptly, and in any event within
five Business Days after receipt thereof by any Loan Party or any Subsidiary
thereof, copies of each notice or other correspondence received from the SEC
(or comparable agency in any applicable non-U.S. jurisdiction) concerning any
investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of any Loan Party or any
Subsidiary thereof (which, for the avoidance of doubt, shall not include
general correspondence received from the SEC on other matters); and

(f)                                    promptly, such additional
information regarding the business, financial or corporate affairs of any Loan
Party or any Subsidiary thereof, or compliance with the terms of the Loan
Documents, as Agent or any Lender may from time to time reasonably request.

Borrower hereby
acknowledges that (a) Agent will make available to Lenders and the L/C
Issuer materials and/or information provided by or on behalf of a Loan Party
hereunder (collectively, “Borrower Materials”) by posting Borrower
Materials on IntraLinks or another similar electronic system (the “Platform”)
and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders
that do not wish to receive material non-public information with respect to a
Loan Party or its securities) (each, a “Public Lender”).  Each Loan Party hereby agrees that
(w) all Borrower Materials that are to be made available to Public Lenders
shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC,” each Loan Party shall be
deemed to have authorized Agent, the L/C Issuer and the Lenders to treat such
Borrower Materials as not containing any material non-public information with
respect to such Loan Party or its securities for purposes of United States
Federal and state securities laws (provided, however, that to the
extent such Borrower Materials constitute Information, they shall be treated as
set forth in Section 11.07); (y) all Borrower Materials marked
“PUBLIC” are permitted to be made available through a portion of the Platform
designated “Public Investor;” and (z) Agent shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.

6.03                        Notices.  Promptly notify Agent and each Lender:

(a)                                  of the occurrence of any Default;

(b)                                 of
any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect, including (i) breach or non-performance of, or
any default under, a Contractual Obligation of any Loan Party or any Subsidiary
thereof; (ii) any dispute, litigation, investigation, proceeding or suspension
between any Loan Party or any Subsidiary thereof and any Governmental
Authority; or

 40

(iii) the
commencement of, or any material development in, any litigation or proceeding
affecting any Loan Party or any Subsidiary thereof, including pursuant to any
applicable Environmental Laws;

(c)                                  of the occurrence of any ERISA
Event;

(d)                                 of any dispute, litigation,
investigation or proceeding affecting any Guarantor which, if adversely
determined, could reasonably be expected to result in a judgment, order, decree
or arbitration award of $1,000,000 or more;

(e)                                  of any material change in accounting
policies or financial reporting practices by any Loan Party or any Subsidiary
thereof, and

(f)                                    of Parent’s determination at any
time of the occurrence or existence of any Internal Control Event.

Each notice pursuant to
this Section shall be accompanied by a statement of a Responsible Officer of
Borrower setting forth details of the occurrence referred to therein and
stating what action the applicable Loan Party has taken and proposes to take
with respect thereto.  Each notice
pursuant to Section 6.03(a) shall describe with particularity any
and all provisions of this Agreement and any other Loan Document that have been
breached.

6.04                        Payment of
Obligations.  Pay and discharge as
the same shall become due and payable, all its obligations and liabilities,
including (a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings diligently conducted and adequate
reserves in accordance with GAAP are being maintained by Parent or such
Subsidiary; (b) all lawful claims which, if unpaid, would by law become a
Lien upon its property; and (c) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any instrument
or agreement evidencing such Indebtedness.

6.05                        Preservation
of Existence, Etc. 
(a) Preserve, renew and maintain in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.04 or 7.05;
(b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct
of its business, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.

6.06                        Maintenance
of Properties.  (a) Maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary
wear and tear excepted; (b) make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) use the
standard of care typical in the industry in the operation and maintenance of
its facilities.

6.07                        Maintenance
of Insurance.  Maintain with
financially sound and reputable insurance companies not Affiliates of any Loan
Party, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts (after giving effect to
any self-insurance compatible with the following standards) as are customarily
carried under similar circumstances by such other Persons and providing for not
less than 30 days’ prior notice to Agent of termination, lapse or cancellation
of such insurance.

6.08                        Compliance
with Laws.  Comply in all material
respects with the requirements of all Laws and all orders, writs, injunctions
and decrees applicable to it or to its business or property, except in such
instances in which (a) such requirement of Law or order, write, injunction
or decree is being contested in good faith by appropriate proceedings
diligently conducted; or (b) the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.

 41
 

6.09                        Books and
Records.  (a) Maintain proper
books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of Parent, Borrower
or such Subsidiary, as the case may be; and (b) maintain such books of
record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over Parent, Borrower
or such Subsidiary, as the case may be.

6.10                        Inspection
Rights.  Permit representatives and
independent contractors of Agent and each Lender to visit and inspect any of
its properties, to examine its corporate, financial and operating records, and
make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants, all at the expense of Borrower and at such reasonable times during
normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to Borrower; provided, however, that
when an Event of Default exists Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of Borrower at any time during normal business hours and without
advance notice.

6.11                        Financial
Covenants.

(a)                                  Fixed Charge Coverage Ratio. 
Maintain on a consolidated basis, a Fixed Charge Coverage Ratio of at
least 1.50:1.0.  For purposes hereof, “Fixed
Charge Coverage Ratio” means the ratio of (i) the sum of EBITDA plus
lease expense and rent expense, minus income tax, minus
Restricted Payments, to (ii) the sum of interest expense, lease expense,
rent expense, the current portion of long term debt and the current portion of
capitalized lease obligations.  This
ratio will be calculated at the end of each reporting period for which this
Agreement requires Parent to deliver financial statements, using the results of
Parent and its Subsidiaries for the twelve-month period ending with that
reporting period.  The current portion of
long-term liabilities will be measured as of the date twelve (12) months prior
to the current financial statement.

(b)                                 Funded Debt to EBITDA Ratio. 
Maintain on a consolidated basis, a ratio of Funded Debt to EBITDA not
exceeding 3.00:1.0.  This ratio will be
calculated at the end of each reporting period for which this Agreement
requires Parent to deliver financial statements, using the results of Parent
and its Subsidiaries for the twelve-month period ending with that reporting
period.  In the event that Parent or
Borrower makes a Permitted Acquisition during the twelve-month period ending
with the relevant reporting period, calculation of this ratio shall include, to
the extent not included in the EBITDA used in such calculation, the EBITDA of
the Persons, assets, business lines or divisions acquired as a part of such
Permitted Acquisition, giving effect to any such acquisition as of the first
day of such twelve-month period.

6.12                        Use of
Proceeds.  Use the proceeds of the
Credit Extensions (a) to refinance Indebtedness arising under the Existing
Credit Agreement, and (b) for working capital and other general corporate
purposes, including Permitted Acquisitions, in each case not in contravention
of any Law or of any Loan Document.

6.13                        Additional
Guarantors.  Notify Agent at the time
that any Person becomes a direct or indirect Domestic Subsidiary of Parent, and
promptly thereafter (and in any event within 30 days), cause such Person to
(a) become a Guarantor by executing and delivering to Agent a Joinder
Agreement, and (b) deliver to Agent documents of the types referred to in
clauses (iii) and (iv) of Section 4.01(a) and favorable opinions of
counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the Joinder Agreement referred
to in clause (a)), all in form, content and scope reasonably satisfactory to Agent.  Upon the execution and delivery by such
Subsidiary of a Joinder Agreement and acceptance thereof by Agent, such
Subsidiary shall become a Guarantor hereunder with the same force and effect as
if originally named as a Guarantor herein. 
The execution and delivery of any such instrument shall not require the
consent of any Lender, the L/C Issuer or any Loan Party.  The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Agreement.

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ARTICLE VII.                   NEGATIVE COVENANTS

So long as any Lender
shall have any Commitment hereunder, any Loan or other Obligation hereunder
shall remain unpaid or unsatisfied, or any Letter of Credit shall remain
outstanding, Parent shall not, nor shall it permit Borrower or any other
Subsidiary to, directly or indirectly:

7.01                        Liens.  Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than the following:

(a)                                  Liens pursuant to any Loan Document;

(b)                                 Liens existing on the date hereof
and listed on Schedule 7.01 and any renewals or extensions thereof,
provided that (i) the property covered thereby is not changed,
(ii) the amount secured or benefited thereby is not increased except as
contemplated by Section 7.03(b), (iii) the direct or any
contingent obligor with respect thereto is not changed, and (iv) and any
renewal or extension of the obligations secured or benefited thereby is
permitted by Section 7.03(b);

(c)                                  Liens for taxes not yet due or which
are being contested in good faith and by appropriate proceedings diligently
conducted, if adequate reserves with respect thereto are maintained on the
books of the applicable Person in accordance with GAAP;

(d)                                 carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s or other like Liens arising in the ordinary course
of business which are not overdue for a period of more than 30 days or which
are being contested in good faith and by appropriate proceedings diligently
conducted, if adequate reserves with respect thereto are maintained on the
books of the applicable Person in accordance with GAAP;

(e)                                  pledges or deposits in the ordinary
course of business in connection with workers’ compensation, unemployment
insurance and other social security legislation, other than any Lien imposed by
ERISA;

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

(g)                                 easements, rights-of-way,
restrictions and other similar encumbrances affecting real property which,
individually or in the aggregate do not materially detract from the value of
the property subject thereto or materially interfere with the ordinary conduct
of the business of the applicable Person;

(h)                                 Liens securing judgments for the
payment of money not constituting an Event of Default under Section 8.01(h);
and

(i)                                     Liens securing Indebtedness
permitted under Section 7.03(e); provided that (i) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition.

7.02                        Investments.  Make any Investments, except:

(a)                                  Investments held by Parent, Borrower
or such Subsidiary in the form of cash equivalents or short-term marketable
debt securities;

(b)                                 Advances to officers, directors and
employees of Parent, Borrower and Subsidiaries in an aggregate amount not to
exceed $250,000 at any time outstanding, for travel, entertainment, relocation
and analogous ordinary business purposes;

 43
 

(c)                                  Investments of Parent in Borrower or
any other wholly-owned Subsidiary of Parent, Investments of Borrower in any
wholly-owned Subsidiary of Borrower and Investments of any wholly-owned
Subsidiary in Parent, Borrower or in another wholly-owned Subsidiary;

(d)                                 Permitted Acquisitions made by
Parent or Borrower;

(e)                                  Investments consisting of extensions
of credit in the nature of accounts receivable or notes receivable arising from
the grant of trade credit in the ordinary course of business, and Investments
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss;

(f)                                    Guarantees permitted by Section 7.03;
and

(g)                                 other Investments made on or after
the Closing Date not described in subsections (a) through (f) above; provided
that the aggregate amount of all such Investments shall not exceed $5,000,000
at any time outstanding.

7.03                        Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, except:

(a)                                  Indebtedness under the Loan
Documents;

(b)                                 Indebtedness outstanding on the date
hereof and listed on Schedule 7.03 and any refinancings,
refundings, renewals or extensions thereof; provided that (i) the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder and (ii) the terms relating to
principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any such refinancing, refunding,
renewing or extending Indebtedness, and of any agreement entered into and of
any instrument issued in connection therewith, are no less favorable in any
material respect to the Loan Parties or Lenders than the terms of any agreement
or instrument governing the Indebtedness being refinanced, refunded, renewed or
extended and the interest rate applicable to any such refinancing, refunding,
renewing or extending Indebtedness does not exceed the then applicable market
interest rate;

(c)                                  Guarantees of any Loan Party or any
Subsidiary in respect of Indebtedness otherwise permitted hereunder of any Loan
Party or any wholly-owned Subsidiary;

(d)                                 Obligations (contingent or
otherwise) of Borrower or any Subsidiary existing or arising under any Swap
Contract, provided that (i) such obligations are (or were) entered
into by such Person in the ordinary course of business for the purpose of
directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a “market view;” and (ii) such Swap
Contract does not contain any provision exonerating the non-defaulting party
from its obligation to make payments on outstanding transactions to the
defaulting party;

(e)                                  Indebtedness in respect of capital
leases, Synthetic Lease Obligations and purchase money obligations for fixed or
capital assets within the limitations set forth in Section 7.01(i);
provided, however, that the aggregate amount of all such
Indebtedness at any one time outstanding shall not exceed (i) $10,000,000 minus
(ii) the aggregate outstanding amount of all Indebtedness permitted by
subsection (f) below; and

(f)                                    unsecured Indebtedness in an
aggregate principal amount not to exceed at any time outstanding
(i) $10,000,000 minus (ii) the aggregate outstanding amount of
all Indebtedness permitted by subsection (e) above.

7.04                        Fundamental
Changes.  Merge, dissolve, liquidate,
consolidate with or into another Person, or Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of

 44
 

its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:

(a)                                  any Subsidiary may merge with
(i) Borrower, provided that Borrower shall be the continuing or
surviving Person, or (ii) any one or more other Subsidiaries, provided
that when any wholly-owned Subsidiary is merging with another Subsidiary, the
wholly-owned Subsidiary shall be the continuing or surviving Person, and, provided
further that if a Guarantor (other than Parent) is merging with another
Subsidiary, such Guarantor shall be the surviving Person;

(b)                                 Parent or Borrower may merge with
any Person as part of a Permitted Acquisition; and

(c)                                  any Subsidiary may Dispose of all or
substantially all of its assets (upon voluntary liquidation or otherwise) to
Borrower or to another Subsidiary; provided that if the transferor in
such a transaction is a wholly-owned Subsidiary, then the transferee must
either be Borrower or a wholly-owned Subsidiary and, provided further
that if the transferor of such assets is a Guarantor, the transferee must
either be Borrower or a Guarantor.

7.05                        Dispositions.  Make any Disposition or enter into any
agreement to make any Disposition, except:

(a)                                  Dispositions of obsolete or worn out
property, whether now owned or hereafter acquired, in the ordinary course of
business;

(b)                                 Dispositions of inventory in the
ordinary course of business;

(c)                                  Dispositions of equipment or real
property to the extent that (i) such property is exchanged for credit
against the purchase price of similar replacement property or (ii) the
proceeds of such Disposition are reasonably promptly applied to the purchase
price of such replacement property;

(d)                                 Dispositions of property by any
Subsidiary to Borrower or to a wholly-owned Subsidiary; provided that if
the transferor of such property is a Guarantor, the transferee thereof must
either be Parent, Borrower or a Guarantor; and

(e)                                  Dispositions permitted by Section 7.04.

provided,
however, that any Disposition pursuant to clauses (a) through (e)
shall be for fair market value.

7.06                        Change in
Nature of Business.  Engage in any
material line of business substantially different from those lines of business
conducted by Parent and its Subsidiaries on the date hereof or any business
substantially related or incidental thereto. 
For the avoidance of doubt, each of the parties hereto acknowledge and
agree that as of the Closing Date, Parent and its Subsidiaries were engaged in
the animal health business.

7.07                        Transactions
With Affiliates.  Enter into any
transaction of any kind with any Affiliate of Parent, whether or not in the ordinary
course of business, other than on fair and reasonable terms substantially as
favorable to Parent, Borrower or such Subsidiary as would be obtainable by
Parent, Borrower or such Subsidiary at the time in a comparable arm’s length
transaction with a Person other than an Affiliate, provided that the
foregoing restriction shall not apply to transactions between or among any Loan
Party.

7.08                        Burdensome
Agreements.  Enter into any
Contractual Obligation (other than this Agreement or any other Loan Document)
that (a) limits the ability (i) of any Subsidiary to make Restricted
Payments to Borrower or any Guarantor or to otherwise transfer property to any
Loan Party, (ii) of any Subsidiary to Guarantee the Indebtedness of
Borrower or (iii) of Borrower or any Subsidiary to create, incur, assume
or suffer to exist Liens on property of such Person; provided, however,
that this clause (iii) shall not prohibit any negative pledge incurred or
provided in favor of any holder of Indebtedness permitted under Section 7.03(e)
solely to the extent any such negative pledge relates to the property

 45
 

financed by or the
subject of such Indebtedness; or (b) requires the grant of a Lien to
secure an obligation of such Person if a Lien is granted to secure another
obligation of such Person.

7.09                        Use of
Proceeds.  Use the proceeds of any
Credit Extension, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase or carry margin stock (within the
meaning of Regulation U of the FRB) or to extend credit to others for the
purpose of purchasing or carrying margin stock or to refund indebtedness
originally incurred for such purpose.

ARTICLE VIII.               EVENTS OF DEFAULT AND REMEDIES

8.01                        Events
of Default.  Any of the following
shall constitute an Event of Default:

(a)                                  Non-Payment. 
Borrower or any other Loan Party fails to pay (i) when and as
required to be paid herein, any amount of principal of any Loan or any L/C
Obligation, or (ii) within three days after the same becomes due, any
interest on any Loan or on any L/C Obligation, or any fee due hereunder, or
(iii) within five days after the same becomes due, any other amount
payable hereunder or under any other Loan Document; or

(b)                                 Specific Covenants. 
Borrower or any other Loan Party fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02,
6.03, 6.05, 6.10, 6.12 or 6.13 or Article VII;
or

(c)                                  Other Defaults. 
Borrower or any other Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days or any default or Event of Default occurs under
any other Loan Document; or

(d)                                 Representations and Warranties. 
Any representation, warranty, certification or statement of fact made or
deemed made by or on behalf of Borrower or any other Loan Party herein, in any
other Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading when made or deemed made; or

(e)                                  Cross-Default. 
(i) Parent, Borrower or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts)
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition relating
to any such Indebtedness or Guarantee or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased,
prepaid, defeased or redeemed (automatically or otherwise), or an offer to
repurchase, prepay, defease or redeem such Indebtedness to be made, prior to
its stated maturity, or such Guarantee to become payable or cash collateral in
respect thereof to be demanded; or (ii) there occurs under any Swap
Contract an Early Termination Date (as defined in such Swap Contract) resulting
from (A) any event of default under such Swap Contract as to which
Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap
Contract as to which Parent, Borrower or any Subsidiary is an Affected Party
(as so defined) and, in either event, the Swap Termination Value owed by
Parent, Borrower or such Subsidiary as a result thereof is greater than the
Threshold Amount; or

(f)                                    Insolvency Proceedings, Etc. 
Any Loan Party or any Subsidiary thereof institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or

 46
 

any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed without the application or consent of such Person and the
appointment continues undischarged or unstayed for 60 calendar days; or any
proceeding under any Debtor Relief Law relating to any such Person or to all or
any material part of its property is instituted without the consent of such
Person and continues undismissed or unstayed for 60 calendar days, or an order
for relief is entered in any such proceeding; or

(g)                                 Inability to Pay Debts; Attachment. 
(i) Any Loan Party or any Subsidiary thereof becomes unable or
admits in writing its inability or fails generally to pay its debts as they
become due, or (ii) any writ or warrant of attachment or execution or
similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or

(h)                                 Judgments. 
There is entered against any Loan Party or any Subsidiary thereof
(i) one or more final judgments or orders for the payment of money in an
aggregate amount (as to all such judgments or orders) exceeding the Threshold
Amount (to the extent not covered by independent third-party insurance as to
which the insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in
either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of 10 consecutive
days during which a stay of enforcement of such judgment, by reason of a
pending appeal or otherwise, is not in effect; or

(i)                                     ERISA. 
(i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the
Threshold Amount, or (ii) Borrower or any ERISA Affiliate fails to pay
when due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of
ERISA under a Multiemployer Plan in an aggregate amount in excess of the
Threshold Amount; or

(j)                                     Invalidity of Loan Documents. 
Any Loan Document  or any provision
thereof, at any time after its execution and delivery and for any reason other
than as expressly permitted hereunder or thereunder or satisfaction in full of
all the Obligations, ceases to be in full force and effect; or any Loan Party
or any other Person contests in any manner the validity or enforceability of
any Loan Document or any provision thereof; or any Loan Party denies that it
has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind any Loan Document or any provision thereof; or

(k)                                  Change of Control. 
There occurs any Change of Control with respect to any Loan Party; or

(l)                                     Material Adverse Effect. 
There occurs any event or circumstance that has a Material Adverse
Effect.

8.02                        Remedies
Upon Event of Default.  If any Event
of Default occurs and is continuing, Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:

(a)                                  declare the commitment of each
Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit
Extensions to be terminated, whereupon such commitments and obligation shall be
terminated;

(b)                                 declare the unpaid principal amount
of all outstanding Loans, all interest accrued and unpaid thereon, and all
other amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by each Loan
Party;

 47
 

(c)                                  require that Borrower Cash
Collateralize the L/C Obligations (in an amount equal to the then Outstanding
Amount thereof); and

(d)                                 exercise on behalf of itself, the
Lenders and the L/C Issuer all rights and remedies available to it, the Lenders
and the L/C Issuer under the Loan Documents;

provided,
however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions shall automatically terminate,
the unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of Borrower to Cash Collateralize the L/C Obligations as aforesaid
shall automatically become effective, in each case without further act of Agent
or any Lender.

8.03                        Application
of Funds.  After the exercise of
remedies provided for in Section 8.02 (or after the Loans have
automatically become immediately due and payable and the L/C Obligations have
automatically been required to be Cash Collateralized as set forth in the
proviso to Section 8.02), any amounts received on account of the
Obligations shall be applied by Agent in the following order:

First,
to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of
counsel to Agent (including fees and time charges for attorneys who may be
employees of Agent) and amounts payable under Article III) payable
to Agent in its capacity as such;

Second,
to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal, interest and L/C Fees) payable to
Lenders and the L/C Issuer (including fees, charges and disbursements of
counsel to the respective Lenders and the L/C Issuer (including fees and time
charges for attorneys who may be employees of any Lender or the L/C Issuer) and
amounts payable under Article III), ratably among them in
proportion to the respective amounts described in this clause Second
payable to them;

Third,
to payment of that portion of the Obligations constituting (i) accrued and
unpaid L/C Fees and interest on the Loans, L/C Borrowings and other Obligations
and (ii) fees, premiums and scheduled periodic payments due under any Swap
Contract between Borrower or any Subsidiary and any Lender or any Affiliate of
any Lender permitted by Section 7.03(d) and any interest accrued
thereon, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Third payable to them;

Fourth,
to payment of that portion of the Obligations constituting (i) unpaid
principal of the Loans and L/C Borrowings and (ii) breakage, termination
or other payments due under any Swap Contract between any Lender or any
Affiliate of any Lender permitted by Section 7.03(d) and any
interest accrued thereon, ratably among the Lenders and the L/C Issuer in
proportion to the respective amounts described in this clause Fourth
held by them;

Fifth,
to Agent for the account of the L/C Issuer, to Cash Collateralize that portion
of L/C Obligations comprised of the aggregate undrawn amount of Letters of
Credit; and

Last,
the balance, if any, after all of the Obligations have been indefeasibly paid
in full, to Borrower or as otherwise required by Law.

Subject to Section 2.03(c),
amounts used to Cash Collateralize the aggregate undrawn amount of Letters of
Credit pursuant to clause Fifth above shall be applied to satisfy
drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash
Collateral after all Letters of Credit have either been fully drawn or expired,
such remaining amount shall be applied to the other Obligations, if any, in the
order set forth above.

 48
 

ARTICLE IX.                       ADMINISTRATIVE AGENT

9.01                        Appointment
and Authorization of Administrative Agent.

(a)                                  Each of the Lenders and the L/C
issuer hereby irrevocably appoints Bank of America to act on its behalf as
Administrative Agent hereunder and under the other Loan Documents  and authorizes Agent to take such actions on
its behalf and to exercise such powers as are delegated to Agent by the terms
hereof and thereof, together with such actions and powers as are reasonably
incidental thereto.  The provisions of
this Article are solely for the benefit of Agent, the Lenders and the L/C
Issuer, and neither Borrower nor any other Loan Party shall have rights as a third
party beneficiary of any of such provisions.

(b)                                 Agent shall also act as the “collateral
agent” under the Loan Documents, and each of the Lenders and the L/C Issuer
hereby irrevocably appoints and authorizes Agent to act as the agent of such
Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any
and all Liens on any collateral security held by Agent on behalf of the Lenders
or the L/C Issuer under any of the Loan Documents, together with such powers
and discretion as are reasonably incidental thereto.  In this connection, Agent, as “collateral
agent” and any co-agents, sub-agents and attorneys-in-fact appointed by Agent
pursuant to Section 9.05 or otherwise for purposes of holding or
enforcing any Lien on any collateral security (or any portion thereof) held by
Agent on behalf of the Lenders or the L/C Issuer under any of the Loan
Documents, or for exercising any rights and remedies thereunder at the
direction of Agent), shall be entitled to the benefits of all provisions of
this Article IX and Article XI, as though such
co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under
the Loan Documents as if set forth in full herein with respect thereto.

9.02                        Rights as
a Lender.  The Person serving as
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not
Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated or unless the context otherwise requires, include the Person serving
as Agent hereunder in its individual capacity. 
Such Person and its Affiliates may accept deposits from, lend money to,
act as the financial advisor or in any other advisory capacity for and
generally engage in any kind of business with Borrower or any Subsidiary or
other Affiliate thereof as if such Person were not Agent hereunder and without
any duty to account therefor to Lenders.

9.03                        Exculpatory
Provisions.  Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents.  Without limiting the
generality of the foregoing, Agent:

(a)                                  shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing;

(b)                                 shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that Agent is required to exercise as directed in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), provided
that Agent shall not be required to take any action that, in its opinion or the
opinion of its counsel, may expose Agent to liability or that is contrary to
any Loan Document or applicable Law; and

(c)                                  shall not, except as expressly set
forth herein and in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
Borrower or any of its Affiliates that is communicated to or obtained by the
Person serving as Agent or any of its Affiliates in any capacity.

(d)                                 Agent shall not be liable for any
action taken or not taken by it (i) with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary, or as Agent shall believe in good faith shall be necessary,
under the circumstances as

 49
 

provided
in Sections 8.02 and 11.01) or (ii) in the absence of
its own gross negligence or willful misconduct. 
Agent shall be deemed not to have knowledge of any Default unless and
until written notice describing such Default is given to Agent by Borrower, a
Lender or the L/C Issuer.  Agent shall
not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection
with this Agreement or any other Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of
any of the covenants, agreements or other terms or conditions set forth herein
or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to Agent.

9.04                        Reliance
by Administrative Agent.  Agent shall
be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person.  Agent also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition
hereunder to the making of a Loan, or the issuance of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or the L/C
Issuer, Agent may presume that such condition is satisfactory to such Lender or
the L/C Issuer unless Agent shall have received notice to the contrary from
such Lender or the L/C Issuer prior to the making of such Loan or the issuance
of such Letter of Credit.  Agent may
consult with legal counsel (who may be counsel for Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

9.05                        Delegation
of Duties.  Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub agents appointed by
Agent.  Agent and any such sub agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. 
The exculpatory provisions of this Article shall apply to any such sub
agent and to the Related Parties of Agent and any such sub agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Agent.

9.06                        Resignation
of Agent.  Agent may at any time give
notice of its resignation to Lenders, the L/C Issuer and Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
Borrower, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States.  If no such successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring  Agent may
on behalf of Lenders and the L/C Issuer, appoint a successor Agent meeting the
qualifications set forth above; provided that if Agent shall notify
Borrower and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Loan Documents
(except that in the case of any collateral security held by Agent on behalf of
the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Agent shall continue to hold such collateral security until such time as a
successor Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through Agent shall instead be
made by or to each Lender and the L/C Issuer directly, until such time as the
Required Lenders appoint a successor Agent as provided for above in this
Section.  Upon the acceptance of a
successor’s appointment as Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Agent, and the retiring Agent shall be discharged from
all of its duties and obligations hereunder or under the other Loan Documents
(if not already discharged therefrom as provided above in this Section).  The fees payable by Borrower to a successor
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between Borrower and such successor. 
After the retiring Agent’s resignation hereunder and under the other
Loan

 50

Documents, the provisions
of this Article and Section 11.04 shall continue in effect for the
benefit of such retiring Agent, its sub agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.

Any resignation by Bank
of America as Agent pursuant to this Section shall also constitute its
resignation as L/C Issuer.  Upon the
acceptance of a successor’s appointment as Agent hereunder, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer, (b) the retiring L/C
Issuer shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents, and (c) the successor L/C Issuer shall
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations
of the retiring L/C Issuer with respect to such Letters of Credit.

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

9.08        No Other Duties, Etc.  Anything herein to the contrary
notwithstanding, no Lender holding a title listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any
of the other Loan Documents, except in its capacity, as applicable, as Agent, a
Lender or the L/C Issuer hereunder.

9.09        Administrative Agent May File Proofs of Claim.  In case of the pendency of any proceeding
under any Debtor Relief Law or any other judicial proceeding relative to any
Loan Party, Agent (irrespective of whether the principal of any Loan or L/C
Obligation shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether Agent shall have made any demand on
Borrower) shall be entitled and empowered, by intervention in such proceeding
or otherwise.

(a)           to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of Lenders, the L/C Issuer and Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of Lenders, the L/C Issuer 
and Agent and their respective agents and counsel and all other amounts
due Lenders, the L/C Issuer and Agent under Sections 2.03(i) and (j),
2.08 and 11.04) allowed in such judicial proceeding; and

(b)           to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the L/C
Issuer to make such payments to Agent and, in the event that Agent shall
consent to the making of such payments directly to Lenders and  the L/C Issuer, to pay to Agent any amount
due for the reasonable compensation, expenses, disbursements and advances of
Agent and its agents and counsel, and any other amounts due Agent under Sections 2.08
and 11.04.  Nothing contained
herein shall be deemed to authorize Agent to authorize or consent to or accept
or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or the L/C Issuer or to authorize Agent to vote in respect of the
claim of any Lender or the L/C Issuer in any such proceeding.

 51
 

9.10        Guaranty Matters.  Each Lender and the L/C Issuer hereby
irrevocably authorizes Agent, at its option and in its discretion, to release
any Guarantor from its obligations under the Guaranty if such Person ceases to
be a Subsidiary as a result of a transaction permitted hereunder.  Upon request by Agent at any time, each
Lender and the L/C Issuer will confirm in writing Agent’s authority to release
any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.

ARTICLE X.                           CONTINUING GUARANTY

10.01      Guaranty.   Each Guarantor hereby absolutely and
unconditionally guarantees, as a guaranty of payment and performance and not
merely as a guaranty of collection, prompt payment when due, whether at stated
maturity, by required prepayment, upon acceleration, demand or otherwise, and
at all times thereafter, of any and all of the Obligations, whether for
principal, interest, premiums, fees, indemnities, damages, costs, expenses or
otherwise, of Borrower to Agent, the Lenders and the L/C Issuer, arising
hereunder and under the other Loan Documents (including all renewals,
extensions, amendments, refinancings and other modifications thereof and all
costs, attorneys’ fees and expenses incurred by Agent, the Lenders or the L/C
Issuer in connection with the collection or enforcement thereof).  The Agent’s books and records showing the
amount of the Obligations shall be admissible in evidence in any action or
proceeding, and shall be binding upon each Guarantor, and conclusive for the
purpose of establishing the amount of the Obligations.  This Guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Obligations or any
instrument or agreement evidencing any Obligations, or by the existence,
validity, enforceability, perfection, non-perfection or extent of any
collateral therefor, or by any fact or circumstance relating to the Obligations
which might otherwise constitute a defense to the obligations of any Guarantor
under this Guaranty, and each Guarantor hereby irrevocably waives any defenses
it may now have or hereafter acquire in any way relating to any or all of the
foregoing.

10.02      Rights of Lenders   Each Guarantor consents and agrees that
Agent, the Lenders and the L/C Issuer may, at any time and from time to time,
without notice or demand, and without affecting the enforceability or
continuing effectiveness hereof: 
(a) amend, extend, renew, compromise, discharge, accelerate or
otherwise change the time for payment or the terms of the Obligations or any
part thereof; (b) take, hold, exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any security for the payment of this
Guaranty or any Obligations; (c) apply such security and direct the order
or manner of sale thereof as Agent, the L/C Issuer and the Lenders in their
sole discretion may determine; and (d) release or substitute one or more
of any endorsers or other guarantors of any of the Obligations.  Without limiting the generality of the
foregoing, each Guarantor consents to the taking of, or failure to take, any
action which might in any manner or to any extent vary the risks of any
Guarantor under this Guaranty or which, but for this provision, might operate
as a discharge of such Guarantor.

10.03      Certain Waivers   Each Guarantor waives (a) any defense
arising by reason of any disability or other defense of the Borrower or any
other guarantor, or the cessation from any cause whatsoever (including any act
or omission of Agent, the L/C Issuer or any Lender) of the liability of the
Borrower; (b) any defense based on any claim that such Guarantor’s
obligations exceed or are more burdensome than those of the Borrower;
(c) the benefit of any statute of limitations affecting such Guarantor’s
liability hereunder; (d) any right to proceed against the Borrower,
proceed against or exhaust any security for the Obligations, or pursue any
other remedy in the power of Agent, the L/C Issuer or any Lender whatsoever;
(e) any benefit of and any right to participate in any security now or
hereafter held by Agent, the L/C Issuer or any Lender; and (f) to the
fullest extent permitted by Law, any and all other defenses or benefits that
may be derived from or afforded by applicable Law limiting the liability of or
exonerating guarantors or sureties.  Each
Guarantor expressly waives all setoffs and counterclaims and all presentments,
demands for payment or performance, notices of nonpayment or nonperformance,
protests, notices of protest, notices of dishonor and all other notices or
demands of any kind or nature whatsoever with respect to the Obligations, and
all notices of acceptance of this Guaranty or of the existence, creation or
incurrence of new or additional Obligations.

10.04      Obligations Independent   The obligations of each Guarantor hereunder
are those of primary obligor, and not merely as surety, and are independent of
the Obligations and the obligations of

 52
 

any other guarantor, and
a separate action may be brought against any Guarantor to enforce this Guaranty
whether or not the Borrower or any other Person is joined as a party.

10.05      Limitation of Liability   Notwithstanding anything in this Guaranty to
the contrary, the obligations of each Guarantor hereunder shall be limited to
an aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the Bankruptcy
Code (Title 11, United States Code) or any comparable provisions of any
applicable state law.

10.06      Borrower Indemnity   In addition to all such rights of indemnity
and subrogation as Guarantors may have under applicable Law, Borrower agrees
that in the event a payment shall be made by any Guarantor under this Guaranty,
Borrower shall indemnify such Guarantor for the full amount of such payment and
such Guarantor shall be subrogated to the rights of the Person to whom such
payment shall have been made to the extent of such payment.

10.07      Guarantor Contribution   Each Guarantor (for purposes of this Section,
a “Contributing Guarantor”) agrees that, in the event a payment shall be
made by any other Guarantor under this Guaranty and such Guarantor (for
purposes of this Section, the “Claiming Guarantor”) shall not have been
fully indemnified by Borrower as provided in Section 10.06, the
Contributing Guarantor shall indemnify the Claiming Guarantor in an amount
equal to the amount of such payment, in each case multiplied by a fraction of
which the numerator shall be the net worth of the Contributing Guarantor on the
date of this Agreement (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 6.13, the date of the Joinder Agreement
executed and delivered by such Guarantor) and the denominator shall be the
aggregate net worth of all Guarantors on the date of this Agreement (or, in the
case of any Guarantor becoming a party hereto pursuant to Section 6.13,
the date of the Joinder Agreement executed and delivered by such
Guarantor).  Any Contributing Guarantor
making any payment to a Claiming Guarantor pursuant to this Section shall be
subrogated to the rights of such Claiming Guarantor under Section 10.06
to the extent of such payment.

10.08      Subrogation   No Guarantor shall exercise any right of
subrogation, contribution, indemnity, reimbursement or similar rights with
respect to any payments it makes under this Guaranty until all of the
Obligations and any amounts payable under this Guaranty have been indefeasibly
paid and performed in full and the Commitments are terminated.  If any amounts are paid to any Guarantor in
violation of the foregoing limitation, then such amounts shall be held in trust
for the benefit of Agent, the L/C Issuer and the Lenders and shall forthwith be
paid to Agent to reduce the amount of the Obligations, whether matured or
unmatured.

10.09      Termination; Reinstatement   This Guaranty is a continuing and irrevocable
guaranty of all Obligations now or hereafter existing and shall remain in full
force and effect until all Obligations and any other amounts payable under this
Guaranty are indefeasibly paid in full in cash and the Commitments are
terminated.  Notwithstanding the
foregoing, this Guaranty shall continue in full force and effect or be revived,
as the case may be, if any payment by or on behalf of the Borrower or any
Guarantor is made, or Agent, the L/C Issuer or any Lender exercises its right
of setoff, in respect of the Obligations and such payment or the proceeds of
such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by Agent, the L/C Issuer or any Lender in their
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Laws or otherwise, all
as if such payment had not been made or such setoff had not occurred and
whether or not Agent, the L/C Issuer or any Lender is in possession of or have
released this Guaranty and regardless of any prior revocation, rescission,
termination or reduction.  The
obligations of each Guarantor under this Section shall survive termination of
this Guaranty.

10.10      Subordination   Each Guarantor hereby subordinates the
payment of all obligations and indebtedness of the Borrower owing to such
Guarantor, whether now existing or hereafter arising, including but not limited
to any obligation of the Borrower to such Guarantor as subrogee of Agent, the
L/C Issuer or any Lender or resulting from such Guarantor’s performance under
this Guaranty, to the indefeasible payment in full in cash of all
Obligations.  If Agent, the L/C Issuer or
any Lender so request, any such obligation or indebtedness of the Borrower to
any Guarantor shall be enforced and performance

 53
 

received by such
Guarantor as trustee for Agent, the L/C Issuer and the Lenders and the proceeds
thereof shall be paid over to Agent on account of the Obligations, but without
reducing or affecting in any manner the liability of such Guarantor under this
Guaranty.

10.11      Stay of Acceleration   If acceleration of the time for payment of
any of the Obligations is stayed, in connection with any case commenced by or
against any Guarantor or the Borrower under any Debtor Relief Laws, or
otherwise, all such amounts shall nonetheless be payable by the Guarantors
immediately upon demand by Agent, the L/C Issuer or any Lender.

10.12      Condition of Borrower   Each Guarantor acknowledges and agrees that
it has the sole responsibility for, and has adequate means of, obtaining from
the Borrower and any other guarantor such information concerning the financial
condition, business and operations of the Borrower and any such other guarantor
as such Guarantor requires, and that none of Agent, the L/C Issuer or any
Lender has any duty, and such Guarantor is not relying on Agent, the L/C Issuer
or any Lender at any time, to disclose to such Guarantor any information
relating to the business, operations or financial condition of the Borrower or
any other guarantor (each Guarantor waiving any duty on the part of Agent, the
L/C Issuer and each Lender to disclose such information and any defense
relating to the failure to provide the same).

ARTICLE XI.                       MISCELLANEOUS

11.01      Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and Borrower or the applicable Loan
Party, as the case may be, and acknowledged by Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such
amendment, waiver or consent shall:

(a)           waive
any condition set forth in Section 4.01(a) without the written consent
of each Lender; provided, however, in the sole discretion of
Agent, only a waiver by Agent shall be required with respect to immaterial
matters or items specified in Section 4.01(a)(iii) or (iv)
with respect to which Borrower has given assurances satisfactory to Agent that
such items shall be delivered promptly following the Closing Date;

(b)           extend
or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of
such Lender;

(c)           postpone
any date fixed by this Agreement or any other Loan Document for any payment
(excluding mandatory prepayments) of principal, interest, fees or other amounts
due to Lenders (or any of them) hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby;

(d)           reduce
the principal of, or the rate of interest specified herein on, any Loan or L/C
Borrowing, or (subject to clause (iv) of the second proviso to this Section 11.01)
any fees or other amounts payable hereunder or under any other Loan Document,
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Required Lenders shall be
necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of Borrower to pay interest or L/C Fees at the Default Rate or
(ii) to amend any financial covenant hereunder (or any defined term used
therein) even if the effect of such amendment would be to reduce the rate of
interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;

(e)           change
Section 2.12 or Section 8.03 in a manner that would
alter the pro rata sharing of payments required thereby without the written
consent of each Lender;

(f)            change
any provision of this Section or the definition of “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders required
to amend, waive or otherwise

 54
 

modify
any rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender; or

(g)           release
any Guarantor from the Guaranty in any transaction or series of related
transactions without the written consent of each Lender;

and, provided further,
that (i) no amendment, waiver or consent shall, unless in writing and
signed by the L/C Issuer in addition to the Lenders required above, affect the
rights or duties of the L/C Issuer under this Agreement or any Issuer Document
relating to any Letter of Credit issued or to be issued by it; (ii) no amendment,
waiver or consent shall, unless in writing and signed by Agent in addition to
the Lenders required above, affect the rights or duties of Agent under this
Agreement or any other Loan Document; and (iii) the Agent Fee Letter may
be amended, or rights or privileges thereunder waived, in a writing executed
only by the parties thereto. 
Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.

11.02      Notices;
Effectiveness; Electronic Communications.

(a)           Notices
Generally.  Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in subsection (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:

(i)            if to Borrower, Parent, Memorial,
Agent or the L/C Issuer, to the address, telecopier number, electronic mail
address or telephone number specified for such Person on Schedule 10.02;

(ii)           if to any other Guarantor, to the
address, telecopier number, electronic mail address or telephone number
specified in its Joinder Agreement; and

(iii)          if to any other Lender, to the
address, telecopier number, electronic mail address or telephone number
specified in its Administrative Questionnaire.

Notices sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next business day for the recipient).  Notices delivered through electronic
communications to the extent provided in subsection (b) below, shall be
effective as provided in such subsection (b).

(b)           Electronic
Communications.  Notices and other communications
to Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by Agent, provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II
if such Lender or the L/C Issuer, as applicable has notified the Agent that it
is incapable of receiving notices under such Article by electronic
communication.  Agent or Borrower may, in
its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.  Unless Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgement from
the intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided
that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been sent at the opening of business on the next business day for the
recipient, and (ii) notices or communications posted

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to
an Internet or intranet website shall be deemed received upon the deemed
receipt by the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(c)           The
Platform.  THE PLATFORM IS PROVIDED “AS
IS” AND “AS AVAILABLE.”  THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH BORROWER
MATERIALS OR THE PLATFORM.  In no event
shall Agent or any of its Related Parties (collectively, the “Agent Parties”)
have any liability to Borrower, any Lender, the L/C Issuer or any other Person
for losses, claims, damages, liabilities or expenses of any kind (whether in
tort, contract or otherwise) arising out of Borrower’s or Agent’s transmission
of Borrower Materials through the Internet, except to the extent that such
losses, claims, damages, liabilities or expenses are determined by a court of
competent jurisdiction by a final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Agent Party; provided,
however, that in no event shall any Agent Party have any liability to
Borrower, any Lender, the L/C Issuer or any other Person for indirect, special,
incidental, consequential or punitive damages (as opposed to direct or actual
damages).

(d)           Change
of Address, Etc.  Each of Borrower,
Agent and the L/C Issuer may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the other parties
hereto.  Each other Lender may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to Borrower, Agent and the L/C Issuer.  In addition, each Lender agrees to notify
Agent from time to time to ensure that Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

(e)           Reliance
by Agent, L/C Issuer and Lenders. 
Agent, the L/C Issuer and Lenders shall be entitled to rely and act upon
any notices (including telephonic Loan Notices) purportedly given by or on
behalf of Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof.  Borrower shall indemnify Agent, the L/C
Issuer, each Lender and the Related Parties of each of them from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of Borrower.  All telephonic notices to and other
telephonic communications with Agent may be recorded by Agent, and each of the
parties hereto hereby consents to such recording.

11.03      No Waiver; Cumulative
Remedies.  No failure by any
Lender, the L/C Issuer or Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.

11.04      Expenses;
Indemnity; Damage Waiver.

(a)           Costs
and Expenses.  Borrower shall pay
(i) all reasonable out of pocket expenses incurred by Agent and its
Affiliates (including the reasonable fees, charges and disbursements of counsel
for Agent), in connection with the syndication of the credit facilities
provided for herein, the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out of pocket expenses incurred by the
L/C Issuer in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder and (iii) all out
of pocket expenses incurred

 56
 

by
Agent, any Lender or the L/C Issuer (including the fees, charges and
disbursements of any counsel for Agent, any Lender or the L/C Issuer), and
shall pay all fees and time charges for attorneys who may be employees of
Agent, any Lender or the L/C Issuer, in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the
other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out of pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

(b)           Indemnification
by Borrower.  Borrower shall
indemnify Agent (and any sub-agent thereof), each Lender and the L/C Issuer,
and each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), and
shall indemnify and hold harmless each Indemnitee from all fees and time
charges and disbursements for attorneys who may be employees of any Indemnitee,
incurred by any Indemnitee or asserted against any Indemnitee by any third
party or by Borrower or any other Loan Party arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder, or the consummation of the transactions contemplated
hereby or thereby, or, in the case of Agent (and any sub-agent thereof) and its
Related Parties only, the administration of this Agreement and the other Loan
Documents, (ii) any Loan or Letter of Credit or the use or proposed use of
the proceeds therefrom (including any refusal by the L/C Issuer to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to
Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought
by a third party or by Borrower or any other Loan Party, and regardless of
whether any Indemnitee is a party thereto, in all cases, whether or not caused
by or arising, in whole or in part, out of the comparative, contributory or
sole negligence of the Indemnitee; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by Borrower or any other Loan Party
against an Indemnitee for breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Loan Document, if Borrower or such Loan Party has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.

(c)           Reimbursement
by Lenders.  To the extent that
Borrower for any reason fails to indefeasibly pay any amount required under
subsection (a) or (b) of this Section to be paid by it to Agent (or any
sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing,
each Lender severally agrees to pay to Agent (or any such sub-agent), the L/C
Issuer or such Related Party, as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against Agent (or any
such sub-agent) or the L/C Issuer in its capacity as such, or against any
Related Party of any of the foregoing acting for Agent (or any such sub-agent)
or L/C Issuer in connection with such capacity. 
The obligations of the Lenders under this subsection (c) are
subject to the provisions of Section 2.11(d).

(d)           Waiver
of Consequential Damages, Etc.  To
the fullest extent permitted by applicable law, Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. 
No Indemnitee referred to in subsection (b)

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above
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed to such unintended recipients
by such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.

(e)           Payments.  All amounts due under this Section shall be
payable not later than ten Business Days after demand therefor.

(f)            Loan
Documentation Expenses. 
Notwithstanding subsection (a), Agent, the L/C Issuer and each Lender
agree that the maximum amount that the Borrower shall be obligated to pay to
Agent in respect of expenses incurred by Agent in connection with the
preparation of the initial Loan Documents is $35,000.

(g)           Survival.  The agreements in this Section shall survive
the resignation of Agent and the L/C Issuer, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

11.05      Payments Set Aside.  To the extent that any payment by or on
behalf of Borrower is made to Agent, the L/C Issuer or any Lender, or Agent,
the L/C Issuer  or any Lender exercises
its right of setoff, and such payment or the proceeds of such setoff or any
part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by Agent, the L/C Issuer  or
such Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to
pay to Agent upon demand its applicable share (without duplication) of any
amount so recovered from or repaid by Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders and the L/C
Issuer under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.

11.06      Successors
and Assigns.

(a)           Successors
and Assigns Generally.  The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except
that neither Borrower nor any other Loan Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
Agent, the L/C Issuer and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an
assignee in accordance with the provisions of subsection (b) of this
Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section, or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection (f)  of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in subsection (d) of this Section and, to the
extent expressly contemplated hereby, the Related Parties of each of Agent, the
L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under
or by reason of this Agreement.

(b)           Assignments
by Lenders.  Any Lender may at any
time assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations) at the time owing to it); provided
that any such assignment shall be subject to the following conditions:

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(i)            Minimum Amounts.

(A)          in the case of an assignment of the entire
remaining amount of the assigning Lender’s Commitment and the Loans at the time
owing to it or in the case of an assignment to a Lender or an Affiliate of a
Lender no minimum amount need be assigned; and

(B)           in any case not described in
subsection (b)(i)(A) of this Section, 
the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to each
such assignment, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $5,000,000 unless each of Agent and, so long as no Event of Default
has occurred and is continuing, Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed); provided, however,
that concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single assignee (or to an
assignee and members of its Assignee Group) will be treated as a single
assignment for purposes of determining whether such minimum amount has been
met;

(ii)           Proportionate Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned;

(iii)          Required Consents.  No consent shall be required for any
assignment except to the extent required by subsection (b)(i)(B) of this
Section and, in addition:

(A)          the consent of Borrower (such consent
not to be unreasonably withheld or delayed) shall be required unless
(1) an Event of Default has occurred and is continuing at the time of such
assignment or (2) such assignment is to a Lender or an Affiliate of a
Lender;

(B)           the consent of Agent (such consent
not to be unreasonably withheld or delayed) shall be required if such assignment
is to a Person that is not a Lender or an Affiliate of such Lender with respect
to such Lender; and

(C)           the consent of the L/C Issuer (such
consent not to be unreasonably withheld or delayed) shall be required for any
assignment that increases the obligation of the assignee to participate in
exposure under one or more Letters of Credit (whether or not then outstanding).

(iv)          Assignment and Assumption.  The parties to each assignment shall execute
and deliver to Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount, if any, required as set forth in Schedule 10.06;
provided, however, that the Agent may, in its sole discretion,
elect to waive such processing and recordation fee in the case of any
assignment. The assignee, if it is not a Lender, shall deliver to Agent an
Administrative Questionnaire.

(v)           No Assignment to Borrower.  No such assignment shall be made to Borrower
or any of Borrower’s Affiliates or Subsidiaries.

(vi)          No Assignment to Natural Persons.  No such assignment shall be made to a natural
person.

Subject to acceptance and
recording thereof by Agent pursuant to subsection (c) of this Section,
from and after the effective date specified in each Assignment and Assumption,
the assignee thereunder shall be a

 59
 

party to this Agreement
and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, and 11.04
with respect to facts and circumstances occurring prior to the effective date
of such assignment.  Upon request,
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

(c)           Register.  Agent, acting solely for this purpose as an
agent of Borrower, shall maintain at Administrative Agent’s Office a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and Borrower, Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by Borrower and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.

(d)           Participations.  Any Lender may at any time, without the
consent of, or notice to, Borrower or Agent, sell participations to any Person
(other than a natural person or Borrower or any of Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender’s participations in L/C
Obligations) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) Borrower, Agent, the L/C Issuer and the
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any  provision
of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 11.01 that affects such Participant.  Subject to subsection (e) of this
Section, Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.08
as though it were a Lender, provided such Participant agrees to be subject to Section 2.12
as though it were a Lender.

(e)           Limitations
Upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under Section 3.01
or 3.04 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with Borrower’s prior written
consent.

(f)            Certain
Pledges.  Any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under this
Agreement (including under its Note, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release
such Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.

(g)           Electronic
Execution of Assignments.  The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and
Assumption shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as

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the
case may be, to the extent and as provided for in any applicable law, including
the Federal Electronic Signatures in Global and National Commerce Act, the New
York State Electronic Signatures and Records Act, or any other similar state
laws based on the Uniform Electronic Transactions Act.

(h)           Deemed
Consent of Borrower.  If the consent
of Borrower to an assignment to an Eligible Assignee is required hereunder
(including a consent to an assignment which does not meet the minimum
assignment threshold specified in Section 11.06(b)(i)(B)), Borrower
shall be deemed to have given its consent five Business Days after the date
notice thereof has been delivered to Borrower by the assigning Lender (through
Agent) unless such consent is expressly refused by Borrower prior to such fifth
Business Day.

(i)            Resignation
as L/C Issuer.  Notwithstanding
anything to the contrary contained herein, if at any time Bank of America
assigns all of its Commitment and Loans pursuant to subsection (b) above,
Bank of America may, upon 30 days’ notice to Borrower and the Lenders, resign
as L/C Issuer.  In the event of any such
resignation as L/C Issuer, Borrower shall be entitled to appoint from among
Lenders a successor L/C Issuer hereunder; provided, however, that
no failure by Borrower to appoint any such successor shall affect the
resignation of Bank of America as L/C Issuer. 
If Bank of America resigns as L/C Issuer, it shall retain all the
rights, powers, privileges and duties of the L/C Issuer hereunder with respect
to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund
risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  Upon the appointment of a successor L/C
Issuer, (a) such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring L/C Issuer, and
(b) the successor L/C Issuer shall issue letters of credit in substitution
for the Letters of Credit, if any, outstanding at the time of such succession
or make other arrangements satisfactory to Bank of America to effectively
assume the obligations of Bank of America with respect to such Letters of Credit.

11.07      Treatment of Certain Information; Confidentiality.  Each of Agent, Lenders and the L/C Issuer
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its
and its Affiliates’ respective partners, directors, officers, employees,
agents, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential),
(b) to the extent requested by any regulatory authority, purporting to
have jurisdiction over it  (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to Borrower and its obligations, (g) with the consent
of Borrower or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or
(y) becomes available to Agent, any Lender, the L/C Issuer or any of their
respective Affiliates on a nonconfidential basis from a source other than
Borrower.  For purposes of this Section, “Information”
means all information received from Borrower or any Subsidiary relating to
Borrower or any Subsidiary or any of their respective businesses, other than
any such information that is available to Agent, any Lender or the L/C Issuer
on a nonconfidential basis prior to disclosure by Borrower or any Subsidiary, provided
that, in the case of information received from Borrower or any Subsidiary after
the date hereof, such information is clearly identified at the time of delivery
as confidential.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential
information.    Each of Agent, the
Lenders and the L/C Issuer acknowledges that (a) the Information may
include material non-public information concerning Borrower or a Subsidiary, as
the case may be, (b) it has developed compliance

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procedures regarding the
use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
Federal and state securities Laws.

11.08      Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender, the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the L/C Issuer or any such Affiliate to or for the
credit or the account of Borrower or any other Loan Party against any and all
of the obligations of Borrower or such Loan Party now or hereafter existing
under this Agreement or any other Loan Document to such Lender or the L/C
Issuer or any such Affiliate, irrespective of whether or not such Lender or the
L/C Issuer shall have made any demand under this Agreement or any other Loan
Document and although such obligations of Borrower or such Loan Party may be
contingent or unmatured or are owed to a branch or office of such Lender or the
L/C Issuer different from the branch or office holding such deposit or
obligated on such indebtedness.  The
rights of each Lender, the L/C Issuer and their respective Affiliates under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the L/C Issuer or their respective
Affiliates may have.  Each Lender and the
L/C Issuer agrees to notify Borrower and Agent promptly after any such setoff
and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application.

11.09      Interest Rate Limitation.  Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under
the Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”).  If Agent or any Lender shall receive interest
in an amount that exceeds the Maximum Rate, the excess interest shall be
applied to the principal of the Loans or, if it exceeds such unpaid principal,
refunded to Borrower.  In determining
whether the interest contracted for, charged, or received by Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate,
and spread in equal or unequal parts the total amount of interest throughout
the contemplated term of the Obligations hereunder.

11.10      Counterparts; Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof.  Except as
provided in Section 4.01, this Agreement shall become effective
when it shall have been executed by Agent and when Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

11.11      Survival of Representations and Warranties.  All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. 
Such representations and warranties have been or will be relied upon by
Agent and each Lender, regardless of any investigation made by Agent or any
Lender or on their behalf and notwithstanding that Agent or any Lender may have
had notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.

11.12      Severability. 
If any provision of this Agreement or the other Loan Documents is held
to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby and (b) the parties
shall endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid

 62
 

or unenforceable
provisions.  The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

11.13      Governing
Law; Jurisdiction; Etc.

(a)           GOVERNING
LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF IDAHO.

(b)           SUBMISSION
TO JURISDICTION.  BORROWER AND EACH
OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF IDAHO
SITTING IN ADA COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE DISTRICT
OF IDAHO, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH IDAHO STATE COURT OR,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT, ANY
LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST BORROWER OR ANY
OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c)           WAIVER
OF VENUE.  BORROWER AND EACH OTHER
LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH
(B) OF THIS SECTION.  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

(d)           SERVICE
OF PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES
IN SECTION 11.02.  NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

11.14      Arbitration.

(a)           This
Section concerns the resolution of any controversies or claims between the
parties, whether arising in contract, tort or by statute, including but not
limited to controversies or claims that arise out of or relate to this
Agreement or any other Loan Document (collectively a “Claim”).  For the purposes of this Section only, the
term “parties” shall include any parent corporation, subsidiary or affiliate of
Bank of America involved in the servicing, management or administration of any
Obligation.

(b)           At
the request of any party to this Agreement, any Claim shall be resolved by
binding arbitration in accordance with the Federal Arbitration Act (Title 9,
U.S. Code) (the “Act”).  The Act
will apply even though this Agreement provides that it is to be governed by,
and construed in accordance with, the Laws of the State of Idaho.  The arbitration will take place on an
individual basis without resort to any form of class action.

(c)           Arbitration
proceedings will be determined in accordance with the Act, the then-current
rules and procedures for the arbitration of financial services disputes of the
American Arbitration Association or any successor thereof (“AAA”), and
the terms of this Section.  In the event
of any

 63
 

inconsistency,
the terms of this Section shall control. 
If AAA is unwilling or unable to (i) serve as the provider of
arbitration or (ii) enforce any provision of this Section, Agent may
designate another arbitration organization with similar procedures to serve as
the provider of arbitration.

(d)           The
arbitration shall be administered by AAA and conducted, unless otherwise
required by applicable Laws, in any U.S. state where real or tangible personal
property collateral is located or if there is no such collateral, in the state
of Idaho.  All Claims shall be determined
by one arbitrator; however, if Claims exceed $5,000,000, upon the request of
any party, the Claims shall be decided by three arbitrators.  All arbitration hearings shall commence within
ninety (90) days of the demand for arbitration and close within ninety (90)
days of commencement and the award of the arbitrator(s) shall be issued within
thirty (30) days of the close of the hearing. 
However, the arbitrator(s), upon a showing of good cause, may extend the
commencement of the hearing for up to an additional sixty (60) days.  The arbitrator(s) shall provide a concise
written statement of reasons for the award. 
The arbitration award may be submitted to any court having jurisdiction
to be confirmed, judgment entered and enforced.

(e)           The
arbitrator(s) will give effect to statutes of limitation in determining any
Claim and may dismiss the arbitration on the basis that the Claim is
barred.  For purposes of the application
of the statute of limitations, the service on AAA under applicable AAA rules of
a notice of Claim is the equivalent of the filing of a lawsuit.  Any dispute concerning this arbitration
provision or whether a Claim is arbitrable shall be determined by the
arbitrator(s).  The arbitrator(s) shall
have the power to award legal fees pursuant to the terms of this agreement.

(f)            This
Section does not limit the right of any party to: (i) exercise self-help
remedies, such as but not limited to, setoff; (ii) initiate judicial or
non-judicial foreclosure against any real or personal property collateral;
(iii) exercise any judicial or power of sale rights, or (iv) act in a
court of law to obtain an interim remedy, such as but not limited to,
injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies.

(g)           The
filing of a court action is not intended to constitute a waiver of the right of
any party, including the suing party, thereafter to require submittal of the
Claim to arbitration.

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

11.16      No Advisory or Fiduciary Responsibility.  In connection with all aspects of each
transaction contemplated hereby, Borrower and each other Loan Party
acknowledges and agrees, and acknowledges its Affiliates’ understanding, that:
(i) the credit facilities provided for hereunder and any related arranging
or other services in connection therewith (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document)
are an arm’s-length commercial transaction between Borrower, each other Loan
Party and their respective Affiliates, on the one hand, and Agent, on the other
hand, and Borrower and each other Loan Party is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of
the transactions contemplated hereby and by the other Loan Documents (including
any amendment, waiver or other modification hereof or thereof); (ii) in
connection with the process leading to such transaction, Agent is and has been
acting solely as a principal and is not the financial advisor, agent or
fiduciary, for Borrower, any other Loan Party or any of their respective
Affiliates, stockholders, creditors or employees or any other Person;
(iii) Agent has not assumed and will not assume an advisory, agency or
fiduciary responsibility in favor of Borrower or any other Loan Party with respect
to any of the transactions

 64
 

contemplated hereby or
the process leading thereto, including with respect to any amendment, waiver or
other modification hereof or of any other Loan Document (irrespective of
whether Agent has advised or is currently advising Borrower, any other Loan
Party or any of their respective Affiliates on other matters) and Agent has no
obligation to Borrower, any other Loan Party or any of their respective
Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents;
(iv) Agent and its Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of Borrower, the
other Loan Parties and their respective Affiliates, and Agent has no obligation
to disclose any of such interests by virtue of any advisory, agency or
fiduciary relationship; and (v) Agent has not provided and will not
provide any legal, accounting, regulatory or tax advice with respect to any of
the transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Loan Document) and each of Borrower and the
other Loan Parties has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate.  Each of Borrower and the other Loan Parties
hereby waives and releases, to the fullest extent permitted by law, any claims
that it may have against Agent with respect to any breach or alleged breach of
agency or fiduciary duty.

11.17      Time of the Essence.  Time is of the essence of the Loan Documents.

11.18      USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and Agent (for itself and not on behalf of any Lender)
hereby notifies Borrower that pursuant to the requirements of the USA PATRIOT
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”),
it is required to obtain, verify and record information that identifies
Borrower, which information includes the name and address of Borrower and other
information that will allow such Lender or Agent, as applicable, to identify
Borrower in accordance with the Act.

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

	
   

  	
  MWI VETERINARY SUPPLY CO.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Mary Pat
  Thompson

  	 

	
   

  	
  Name:

  	
  Mary Pat
  Thompson

  	
   

  
	
   

  	
  Title:

  	
  Sr. VP & CFO

  	
   

  
	
   

  	
   

  	 

	
   

  	
  MWI
  VETERINARY SUPPLY, INC.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Mary Pat
  Thompson

  	
   

  
	
   

  	
  Name:

  	
  Mary Pat Thompson

  	
   

  
	
   

  	
  Title:

  	
  Sr. VP & CFO

  	
   

  
	
   

  	
   

  	 

	
   

  	
  MEMORIAL
  PET CARE, INC.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Mary Pat
  Thompson

  	
   

  
	
   

  	
  Name:

  	
  Mary Pat
  Thompson

  	
   

  
	
   

  	
  Title:

  	
  Sr. VP & CFO

  	
   

  
												

 

 65
 

 

	
  

  	
  BANK OF
  AMERICA, N.A., as Agent

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Dora A.
  Brown

  	 

	
   

  	
  Name:

  	
  Dora A. Brown

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	 

	
   

  	
  BANK OF
  AMERICA, N.A., as a Lender and L/C Issuer

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Brad Ruland

  	
   

  
	
   

  	
  Name:

  	
  Brad Ruland

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice
  President

  	
   

  
	
   

  	
   

  	 

	
   

  	
  WELLS
  FARGO BANK, N.A., as a Lender

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Linda K.
  Armstrong

  	
   

  
	
   

  	
  Name:

  	
  Linda K.
  Armstrong

  	
   

  
	
   

  	
  Title:

  	
  V.P. and
  Commercial Relationship Manager

  	
   

  
											

 

 66Exhibit 10.1

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement
(the “Agreement”) is entered into as of this 30th day of
January, 2007, by and between Camera Platforms International, Inc., a Delaware
corporation (“Seller”), and Moving Vehicular Platforms, Inc., or an affiliated
entity (“Purchaser”).

R E C I T A L S :

The Seller desires to sell to the
Purchaser, and the Purchaser desires to purchase from the Seller, the Assets
(as hereinafter defined), all upon the terms and subject to the conditions set
forth herein.

NOW,
THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

A G R E E M E N T

1.             Purchase
of Assets.  (a)  Assets
To Be Sold.  On the terms and in
reliance on the representations and warranties contained herein, Seller shall,
at the Closing (as hereinafter defined), sell, convey, transfer, assign and
deliver to the Purchaser, and the Purchaser shall purchase from the Seller, all
of Seller’s right, title and interest in and to the following, and only the
following, assets described in Schedule 1 attached hereto and incorporated
herein by this reference (collectively, the “Transferred Assets”):

(b)           License Agreement.  At the
Closing, the Seller and the Purchaser shall enter into a license agreement (the
“License Agreement”) in substantially the form of Exhibit 1(b),
pursuant to which the Seller, or the Seller’s successor-in-interest, will
license to the Purchaser the right to use the names “Shotmaker” solely in the
United States.

2.             Sublease
Agreement.  At the request of the Purchaser and subject
to the prior consent of the landlord, the Seller and Purchaser shall, at the
Closing, execute and deliver a sublease agreement (the “Sublease Agreement”)
pursuant to which Seller would sublease up to approximately 6,663 square feet
of the premises commonly known by the street address of 10909 Vanowen Street,
Unit A, North Hollywood, California 91605 (the “Subleased Premises”)
until December 31, 2007, on the terms and conditions set forth in the Standard
Industrial/Commercial Multi-Tenant Lease — Gross, between IPA Burbank Airport
Partners, and Seller (the “Master Lease”).  The Sublease Agreement shall require the
first month’s rent, last month’s rent and security deposit (the “Sublease
Deposit Amounts”) upon the execution of the Sublease Agreement.

3.             Purchase
Price; Allocation of Purchase Price.  (a)  In addition to the assumption by the Purchaser of the
Assumed Liabilities, the aggregate purchase price for the Transferred Assets
(the “Purchase Price”) shall be $500,000.

(a)           Twenty Five Thousand dollars
($25,000) of the Purchase Price has been paid as an Option Advance pursuant to
the terms of the Letter of Intent dated as of December 13, 2006 (the “Option
Advance”);

(b)           Twenty Five Thousand dollars
($25,000) of the Purchase Price shall be paid upon the execution of this Asset
Purchase Agreement (the “Additional Deposit” and, together with the Option
Advance, the “Deposit”); and

(c)           Four Hundred Fifty Thousand Dollars ($450,000)
of the Purchase Price will be paid to Seller at the Closing (as defined below).

4.             Closing.  The
consummation of the transactions contemplated hereby (the “Closing”)
shall take place immediately following fulfillment or waiver, in accordance
with this Agreement, of all conditions to the Closing, but in any event no
later than April 30, 2007, unless extended by mutual agreement of the parties
(the “Closing Date”).  The Closing shall take place at the offices of
Stradling, Yocca, Carlson & Rauth, 800 Anacapa Street, Suite A, Santa
Barbara, California 93101, or at such other place as the Seller and the
Purchaser may mutually agree.

5.             Closing
Deliveries by the Seller.  At the Closing, the Seller shall deliver to
the Purchaser:

(a)           a duly executed counterpart of a Bill of Sale and Undertaking (the “Bill
of Sale”) substantially in the form of Exhibit 5(a) and such other
endorsements, certificates of title, assignments and other good and sufficient
instruments of conveyance and transfer as may be reasonably requested by the
Purchaser in order to vest in the Purchaser good and valid title to the
Transferred Assets in accordance herewith.

(b)           a duly executed counterpart of the License Agreement;

(c)           a receipt for the Purchase Price;

(d)           to the extent applicable, a duly executed counterpart of the Sublease
Agreement.

6.             Closing Deliveries by the Purchaser.  At the
Closing, the Purchaser shall deliver to the Seller:

(a)           the Purchase Price by check or wire transfer in immediately available
funds to an account designated in writing by the Seller;

(b)           a duly executed counterpart of the Bill of Sale;

(c)           a duly executed counterpart of the License Agreement; and

(d)           if applicable, a duly executed counterpart to the Sublease Agreement,
together with the Sublease Deposit Amounts.

7.             Representations
and Warranties of Seller.  The Seller represents and warrants to the
Purchaser that Seller is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has all necessary
corporate power and authority to enter into this Agreement and the other
agreements, documents and instruments contemplated hereby (the “Ancillary
Agreements”), and, subject to obtaining the necessary approvals of the
stockholders of

 2
 

the Seller, to
carry out and perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.

8.             Representations
and Warranties of Purchaser.  The Purchaser represents and warrants to the
Seller as follows:

(a)           The Purchaser is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of California and has all
necessary corporate power and authority to enter into this Agreement and the
Ancillary Agreements, to carry out and perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and
thereby.  The execution and delivery by
the Purchaser of this Agreement and the Ancillary Agreements, the consummation
by the Purchaser of the transactions contemplated hereby and thereby and the
performance by the Purchaser of its obligations hereunder and thereunder have
been duly and validly authorized by all necessary corporate action.  This Agreement and the Ancillary Agreements
have been duly executed and delivered by the Purchaser, and (assuming due
authorization, execution and delivery by the Seller) this Agreement and each
Ancillary Agreement constitutes, the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.

(b)           There are no consents or approvals required in order for the Purchaser
to consummate the transactions which are the subject of this Agreement other
than consents which have been made or obtained on or before the date hereof.

9.             Employee Matters.  The
Purchaser shall offer employment to each and every employee of the
Business.  Those employees accepting such
offer shall become employees of the Purchaser as of the Effective Time.

10.          Indemnification.  Purchaser
and its successors and assigns shall indemnify and hold Seller, its successors
and assigns, shareholders, employees, directors and agents harmless from all
liabilities, damages, costs and expenses, including reasonable attorneys’ fees,
suffered, sustained, incurred or required to be paid in connection with the use
of the Transferred Assets.

11.          Conditions
to the Closing.  (a)  Conditions
to Obligations of the Seller.  The
obligations of the Seller to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to Closing, of each
of the following conditions:

(i)            The representations and warranties of the
Purchaser contained in this Agreement shall have been true and correct in all
material respects when made and shall be true and correct in all material
respects as of the Closing; all covenants contained in this Agreement shall
have been complied with in all material respects, and the Seller shall have
received a certificate of the Purchaser to such effect signed by a duly
authorized officer thereof;

(ii)           The Seller shall have received the Purchase Price;

(iii)          The Purchaser shall have executed and delivered to
the Seller a counterpart of the Bill of Sale;

(iv)          The Seller
shall have received the vote or written consent of the

 3
 

Stockholders of the Company; and

(v)           To the extent
applicable, the Purchaser shall have delivered a duly executed counterpart to
the Sublease Agreement, together with the Sublease Deposit Amounts.

(b)           Conditions to Obligations of the Purchaser.  The
obligations of the Purchaser to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment, at or prior to the Closing,
of each of the following conditions:

(i)            The representations and warranties of the Seller
contained in this Agreement shall have been true and correct in all materials
respects when made and shall be true and correct in all material respects as of
the Closing; all covenants contained in this Agreement shall have been complied
with in all material respects, and the Purchaser shall have received a
certificate of the Seller to such effect signed by a duly authorized officer
thereof;

(ii)           Seller shall have delivered to the Purchaser a
counterpart of the Bill of Sale;

(iii)          Seller shall have delivered to the Purchaser a
counterpart of the License Agreement;

(iv)          To the extent applicable, Seller shall have
delivered to the Purchaser a counterpart signature page to the Sublease
Agreement; and

(v)           Purchaser shall have received the proceeds of the financing
from City National Bank on substantially the terms and conditions contemplated
by the commitment letter delivered to Seller or otherwise received the proceeds
of other financing on such terms and conditions as Purchaser reasonably
determines, in good faith, are substantially comparable to Purchaser (the “Financing”).

Notwithstanding
anything herein to the contrary, in the event that the transactions
contemplated by this Agreement are not consummated as a result of (i) the
failure of the Purchaser to deliver the items set forth in Section 6, or (ii)
the failure to obtain the Financing necessary to consummate the transactions
contemplated by this Agreement, then Purchaser shall forfeit the Deposit, and
the Seller shall have the right to retain the Deposit.

12.          Disclaimer
of Warranties.  THE TRANSFERRED ASSETS ARE BEING SOLD IN
THEIR “AS IS” CONDITION AND, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
SELLER MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES, EITHER EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION WITH RESPECT TO THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  Neither the representations and warranties of
Seller contained herein, if any, nor the covenants and agreements of Seller
contained herein shall survive the Closing; provided, however, that Seller
agrees to execute and deliver at Purchaser’s cost and expense such other
instruments and documents as Purchaser may from time to time reasonably request
after the Closing to further evidence the sale, transfer and conveyance to
Purchaser of the Transferred Assets.

13.          Bulk Sales
Law.  The Purchaser hereby waives compliance with
any applicable bulk sale or bulk transfer laws of any jurisdiction in
connection with the sale of the Transferred Asset to

 4
 

the Purchaser.

14.          Sales and
Use Taxes.  Purchaser shall be responsible for, and pay
when due, all sales or use taxes imposed as a result of the consummation of the
transactions contemplated in this Agreement, if any.

15.          Notices.  All
notices, requests, demands or other communications hereunder shall be in
writing and shall be deemed to have been duly given, if delivered in person or
by a nationally recognized courier service, if sent by facsimile machine (“fax”)
or mailed, certified, return-receipt requested, postage prepaid:

(i)            If to the Seller, addressed to:

Martin
Perellis

Camera
Platforms International, Inc.

10909
Vanowen Street

North
Hollywood, California 91605

(ii)           If to the Purchaser, addressed to:

Moving Vehicular Platforms, Inc.

1778 N. First Avenue

Upland,
California 91784-2007

Any party hereto may from time to
time, by written notice to the other parties, designate a different address,
which shall be substituted for the one specified above for such party.  If any notice or other document is sent by
certified or registered mail, return receipt requested, postage prepaid,
properly addressed as aforementioned, the same shall be deemed served or
delivered upon receipt or refusal thereof. 
If any notice is sent by fax to a party, it will be deemed to have been
delivered on the date the fax thereof is actually received, provided the
original thereof is sent by certified or registered mail, in the manner set
forth above, within twenty-four (24) hours after the fax is sent.  If the notice is delivered in person or is
sent by a nationally recognized courier service, it shall be deemed to have
been delivered on the date received by the recipient of such notice or refusal
of such delivery.

16.          Expenses.  Each of
the parties shall pay all costs and expenses incurred or to be incurred by it
in connection with this Agreement and the transactions contemplated hereby.

17.          Attorneys’
Fees.  If any legal action is instituted with
respect to the subject matter of this Agreement, the prevailing party shall be
entitled to recover all costs of suit, including reasonable attorneys’ fees.

18.          Severability.  If any
provision of this Agreement is held to be invalid or unenforceable by any court
of final jurisdiction, it is the intent of the parties that all other
provisions of this Agreement may be construed or remain fully valid,
enforceable and binding on the parties to the fullest extent permitted by law.

19.          Entire
Agreement.  This Agreement contains the entire agreement
among the parties hereto and supersedes all prior discussions and negotiations.

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20.          Amendment.  This
Agreement may not be amended except by an instrument in writing executed by
both parties.

21.          Applicable
Law.  This Agreement shall be governed by the laws
of the State of California and all questions concerning the validity and
construction hereof shall be determined in accordance with the laws of said
state without regard to its conflicts of law principles or rules.

22.          Binding
Effect.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and permitted
assigns.

23.          Counterparts.  This
Agreement may be executed in any number of counterparts each of which when
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute one and the same instrument.

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IN WITNESS
WHEREOF, the undersigned
have executed this Agreement as of the day and year first above written.

	
  

  	
  Camera Platforms
  International, Inc.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Martin Perellis

  
	
   

  	
   

  	
   

  	
  Martin Perellis, Chairman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Moving Vehicular Platforms, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Kortan Waddell

  
	
   

  	
  Its:

  	
   

  	
  Chief Financial Officer

  

 

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EXHIBIT 1(b)

License
Agreement

EXHIBIT 5(a)

Bill
of Sale and Assignment Agreement

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