Document:

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                                                                    EXHIBIT 10.1

                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                            DATED AS OF MAY 25, 2004

                                      AMONG

                          TESORO PETROLEUM CORPORATION,
                                   AS BORROWER

          THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO,
                                   AS LENDERS

                             BANK OF AMERICA, N.A.,
                              AS SYNDICATION AGENT

                           WELLS FARGO FOOTHILL, LLC,
                             AS DOCUMENTATION AGENT

                       BANK ONE, NA (MAIN OFFICE CHICAGO)

                                       AND

                             BANK OF AMERICA, N.A.,
                             AS CO-COLLATERAL AGENTS

                                       AND

                       BANK ONE, NA (MAIN OFFICE CHICAGO),
                             AS ADMINISTRATIVE AGENT

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

                         BANC ONE CAPITAL MARKETS, INC.,
                   AS SOLE LEAD ARRANGER AND SOLE BOOK RUNNER

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

                         SIDLEY AUSTIN BROWN & WOOD LLP
                                 Bank One Plaza
                            10 South Dearborn Street
                             Chicago, Illinois 60603

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TABLE OF CONTENTS

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<S>                                                                                                                      <C>
ARTICLE I    DEFINITIONS...............................................................................................    1

    1.1.   Certain Defined Terms.......................................................................................    1
    1.2.   Plural Forms................................................................................................   31

ARTICLE II   THE CREDITS...............................................................................................   31

    2.1.   Commitments; Loans..........................................................................................   31
    2.2.   Required Payments; Termination..............................................................................   33
    2.3.   Ratable Loans; Types of Advances............................................................................   35
    2.4.   Commitment Fee; Aggregate Revolving Loan Commitment.........................................................   35
    2.5.   Minimum Amount of Each Advance..............................................................................   36
    2.6.   Optional Principal Payments; Optional Reductions of the Aggregate Pre-Funded Letter of Credit Commitment....   36
    2.7.   Method of Selecting Types and Interest Periods for New Advances.............................................   37
    2.8.   Conversion and Continuation of Outstanding Advances; No Conversion or Continuation of Eurodollar
           Advances After Default......................................................................................   37
    2.9.   Changes in Interest Rate, etc...............................................................................   38
    2.10.  Rates Applicable After Default..............................................................................   38
    2.11.  Method of Payment; Settlement...............................................................................   39
    2.12.  Noteless Agreement; Evidence of Indebtedness................................................................   41
    2.13.  Telephonic Notices..........................................................................................   42
    2.14.  Payments of Interest........................................................................................   42
    2.15.  Notification of Advances, Interest Rates, Prepayments and Revolving Loan Commitment Reductions;
           Availability of Loans.......................................................................................   44
    2.16.  Lending Installations.......................................................................................   44
    2.17.  Non-Receipt of Funds by the Agent...........................................................................   45
    2.18.  Replacement of Lender.......................................................................................   45
    2.19.  Facility LCs................................................................................................   46
    2.20.  Increase of Aggregate Revolving Loan Commitment.............................................................   53

ARTICLE III  YIELD PROTECTION; TAXES...................................................................................   54

    3.1.   Yield Protection............................................................................................   54
    3.2.   Changes in Capital Adequacy Regulations.....................................................................   55
    3.3.   Availability of Types of Advances...........................................................................   55
    3.4.   Funding Indemnification.....................................................................................   55
    3.5.   Taxes.......................................................................................................   55
    3.6.   Lender Statements; Survival of Indemnity....................................................................   57
    3.7.   Alternative Lending Installation............................................................................   58

ARTICLE IV   CONDITIONS PRECEDENT......................................................................................   58

    4.1.   Effectiveness of Revolving Loan Commitments and Pre-Funded Letter of Credit Commitments.....................   58
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    4.2.   Each Credit Extension.......................................................................................   60

ARTICLE V    REPRESENTATIONS AND WARRANTIES............................................................................   60

    5.1.   Existence and Standing......................................................................................   60
    5.2.   Authorization and Validity..................................................................................   61
    5.3.   No Conflict; Government Consent.............................................................................   61
    5.4.   Financial Statements........................................................................................   61
    5.5.   Material Adverse Change.....................................................................................   61
    5.6.   Taxes.......................................................................................................   62
    5.7.   Litigation and Contingent Obligations.......................................................................   62
    5.8.   Subsidiaries................................................................................................   62
    5.9.   ERISA.......................................................................................................   62
    5.10.  Accuracy of Information.....................................................................................   62
    5.11.  Regulation U................................................................................................   62
    5.12.  Material Agreements.........................................................................................   63
    5.13.  Compliance With Laws........................................................................................   63
    5.14.  Ownership of Properties.....................................................................................   63
    5.15.  Plan Assets; Prohibited Transactions........................................................................   63
    5.16.  Environmental Matters.......................................................................................   63
    5.17.  Investment Company Act......................................................................................   63
    5.18.  Public Utility Holding Company Act..........................................................................   64
    5.19.  Insurance...................................................................................................   64
    5.20.  No Default or Unmatured Default.............................................................................   64

ARTICLE VI   COVENANTS.................................................................................................   64

    6.1.   Financial Reporting.........................................................................................   64
    6.2.   Use of Proceeds.............................................................................................   67
    6.3.   Notice of Default...........................................................................................   67
    6.4.   Conduct of Business.........................................................................................   67
    6.5.   Taxes.......................................................................................................   68
    6.6.   Insurance...................................................................................................   68
    6.7.   Compliance with Laws........................................................................................   68
    6.8.   Maintenance of Properties...................................................................................   68
    6.9.   Inspection; Keeping of Books and Records....................................................................   69
    6.10.  Restricted Payments.........................................................................................   69
    6.11.  Merger......................................................................................................   69
    6.12.  Sale of Assets..............................................................................................   70
    6.13.  Investments and Acquisitions................................................................................   70
    6.14.  Indebtedness................................................................................................   72
    6.15.  Liens; Negative Pledge......................................................................................   73
    6.16.  Affiliates..................................................................................................   75
    6.17.  Financial Contracts.........................................................................................   76
    6.18.  Subsidiary Covenants........................................................................................   76
    6.19.  Contingent Obligations......................................................................................   76
    6.20.  Amendments to Agreements....................................................................................   76
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<S>                                                                                                                      <C>
    6.21.  Fixed Charge Coverage Ratio.................................................................................   77
    6.22.  Minimum Consolidated Tangible Net Worth.....................................................................   77
    6.23.  Subsidiary Collateral Documents; Subsidiary Guarantors......................................................   77
    6.24.  Insurance and Condemnation Proceeds.........................................................................   78
    6.25.  Collection Accounts.........................................................................................   78
    6.26.  Subordinated Indebtedness...................................................................................   79
    6.27.  Multiemployer Plans.........................................................................................   79
    6.28.  Consolidated Capital Expenditures...........................................................................   79

ARTICLE VII  DEFAULTS..................................................................................................   79

ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............................................................   82

    8.1. Acceleration..................................................................................................   82
    8.2. Amendments....................................................................................................   83
    8.3. Preservation of Rights........................................................................................   84

ARTICLE IX   GENERAL PROVISIONS........................................................................................   85

    9.1. Survival of Representations...................................................................................   85
    9.2. Governmental Regulation.......................................................................................   85
    9.3. Headings......................................................................................................   85
    9.4. Entire Agreement..............................................................................................   85
    9.5. Several Obligations; Benefits of this Agreement...............................................................   85
    9.6. Expenses; Indemnification.....................................................................................   85
    9.7. Numbers of Documents..........................................................................................   86
    9.8. Accounting....................................................................................................   86
    9.9. Severability of Provisions....................................................................................   87
    9.10.Nonliability of Lenders.......................................................................................   87
    9.11.Confidentiality...............................................................................................   87
    9.12.Lenders Not Utilizing Plan Assets.............................................................................   87
    9.13.Nonreliance...................................................................................................   88
    9.14.Disclosure....................................................................................................   88
    9.15.Performance of Obligations....................................................................................   88
    9.16.Partial Guaranty Release......................................................................................   89
    9.17.Subordination of Intercompany Indebtedness....................................................................   89
    9.18.Certifications Regarding Indentures...........................................................................   90
    9.19.Co-Agents.....................................................................................................   91

ARTICLE X    THE AGENT.................................................................................................   91

    10.1.  Appointment; Nature of Relationship.........................................................................   91
    10.2.  Powers......................................................................................................   91
    10.3.  General Immunity............................................................................................   91
    10.4.  No Responsibility for Loans, Recitals, etc..................................................................   92
    10.5.  Action on Instructions of Lenders...........................................................................   92
    10.6.  Employment of Agents and Counsel............................................................................   92
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<S>                                                                                                                      <C>
    10.7.  Reliance on Documents; Counsel..............................................................................   92
    10.8.  Agent's Reimbursement and Indemnification...................................................................   92
    10.9.  Notice of Default...........................................................................................   93
    10.10. Rights as a Lender..........................................................................................   93
    10.11. Lender Credit Decision......................................................................................   93
    10.12. Successor Agent.............................................................................................   94
    10.13. Agent and Arranger Fees.....................................................................................   94
    10.14. Delegation to Affiliates....................................................................................   94
    10.15. Collateral Documents........................................................................................   94
    10.16. Intercreditor Agreement.....................................................................................   95

ARTICLE XI   SETOFF; RATABLE PAYMENTS..................................................................................   97

    11.1.  Setoff......................................................................................................   97
    11.2.  Ratable Payments............................................................................................   97
    11.3.  Application of Payments.....................................................................................   97

ARTICLE XII  BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.........................................................   98

    12.1.  Successors and Assigns; Designated Lenders..................................................................   98
    12.2.  Participations..............................................................................................  100
    12.3.  Assignments.................................................................................................  101
    12.4.  Dissemination of Information................................................................................  103
    12.5.  Tax Certifications..........................................................................................  103

ARTICLE XIII NOTICES...................................................................................................  103

    13.1.  Notices.....................................................................................................  103
    13.2.  Change of Address...........................................................................................  103

ARTICLE XIV  COUNTERPARTS..............................................................................................  103

ARTICLE XV   CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL..............................................  104

ARTICLE XVI  PRIOR CREDIT AGREEMENT....................................................................................  105

ARTICLE XVII USA PATRIOT ACT NOTIFICATION..............................................................................  105
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                                    SCHEDULES

Commitment Schedule

Pricing Schedule

Schedule 1.1    -  Eligible Carriers

Schedule 2.19.1 -  Letters of Credit Issued Under Prior Credit Agreement

Schedule 5.8    -  Subsidiaries

Schedule 6.13   -  Investments

Schedule 6.14   -  Indebtedness

Schedule 6.15   -  Liens

                                    EXHIBITS

Exhibit A       -  Form of Borrower's Counsel's Opinion

Exhibit B       -  Form of Compliance Certificate

Exhibit C       -  Form of Assignment and Assumption Agreement

Exhibit D       -  Form of Loan/Credit Related Money Transfer Instruction

Exhibit E       -  Form of Revolving Note (if requested)

Exhibit F       -  Form of Designation Agreement

Exhibit G       -  Form of Officer's Certificate

Exhibit H       -  List of Closing Documents

Exhibit I       -  Form of Intercreditor Agreement

Exhibit J-1     -  Form of Interim Collateral Report

Exhibit J-2     -  Form of Monthly Collateral Report

                                       v
<PAGE>

                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

      This Third Amended and Restated Credit Agreement, dated as of May 25,
2004, is entered into by and among Tesoro Petroleum Corporation, a Delaware
corporation, the Lenders, the LC Issuers, and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as Administrative
Agent. The parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      1.1. Certain Defined Terms. As used in this Agreement:

      "Accounting Changes" is defined in Section 9.8 hereof.

      "Account Debtor" means the account debtor or obligor with respect to any
of the Receivables and/or the prospective purchaser with respect to any contract
right, and/or any party who enters into or proposes to enter into any contract
or other arrangement with the Borrower or any Subsidiary.

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

      "Advance" means a borrowing hereunder consisting of the aggregate amount
of several Loans (i) made by some or all of the Lenders on the same Borrowing
Date, or (ii) converted or continued by the Lenders on the same date of
conversion or continuation, consisting, in either case, of the aggregate amount
of the several Loans of the same Type and, in the case of Eurodollar Loans, for
the same Interest Period. The term "Advance" shall, unless otherwise indicated,
include Non-Ratable Loans and Collateral Protection Advances.

      "Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of voting securities, by contract
or otherwise.

      "Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, as Administrative Agent, and any successor Agent appointed pursuant to
Article X.

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      "Aggregate Credit Linked Deposit" means, at any time, the aggregate of the
Credit Linked Deposits, which aggregate amount shall equal $100,000,000 as of
the Closing Date and which aggregate amount may be reduced from time to time
pursuant to the terms of this Agreement.

      "Aggregate Outstanding Credit Exposure" means, at any time, the aggregate
of the Outstanding Credit Exposure of all the Lenders.

      "Aggregate Outstanding Pre-Funded Letter of Credit Exposure" means, at any
time, the aggregate of the Outstanding Pre-Funded Letter of Credit Exposure of
all the Lenders.

      "Aggregate Outstanding Revolving Loan Credit Exposure" means, at any time,
the aggregate of the Outstanding Revolving Loan Credit Exposures of all the
Lenders.

      "Aggregate Pre-Funded Letter of Credit Commitment" means the aggregate of
the Pre-Funded Letter of Credit Commitments of all the Lenders, which aggregate
amount equals One Hundred Million and 00/100 Dollars ($100,000,000) as of the
Closing Date.

      "Aggregate Revolving Loan Commitment" means the aggregate of the Revolving
Loan Commitments of all the Lenders, as increased or reduced from time to time
pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is
Five Hundred Fifty Million and 00/100 Dollars ($550,000,000).

      "Agreement" means this Third Amended and Restated Credit Agreement, as it
may be amended, restated, supplemented or otherwise modified and as in effect
from time to time.

      "Agreement Accounting Principles" means US GAAP, applied in a manner
consistent with that used in preparing the financial statements of the Borrower
referred to in Section 5.4; provided, however, that except as provided in
Section 9.8, with respect to the calculation of the financial covenants set
forth in Sections 6.21 and 6.22 (and the defined terms used in such Sections),
"Agreement Accounting Principles" means US GAAP as in effect in the United
States as of the Closing Date, applied in a manner consistent with that used in
preparing the financial statements of the Borrower referred to in Section 5.4
hereof.

      "Alternate Base Rate" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Prime Rate for such day and (ii) the
sum of (a) the Federal Funds Effective Rate for such day and (b) one-half of one
percent (0.5%) per annum.

      "Applicable Fee Rate" means, with respect to the Commitment Fee at any
time, the percentage rate per annum which is applicable at such time with
respect to such fee as set forth in the Pricing Schedule.

      "Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type consisting of Revolving Loans as set forth in
the Pricing Schedule.

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

      "Arranger" means Banc One Capital Markets, Inc., a Delaware corporation,
and its successors, in its capacity as Sole Lead Arranger and Sole Book Runner.

      "Article" means an article of this Agreement unless another document is
specifically referenced.

      "Assignment Agreement" is defined in Section 12.3.1.

      "Authorized Officer" means any of the chief executive officer, president,
chief operating officer, chief financial officer, treasurer, vice
president-finance or vice president-controller of the Borrower, acting singly.

      "Available Aggregate Revolving Loan Commitment" means, at any time, the
lesser of (i) the Aggregate Revolving Loan Commitment and (ii) the Borrowing
Base then in effect, minus the Aggregate Outstanding Revolving Loan Credit
Exposure at such time.

      "Bank One" means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.

      "Bank Products" means, with respect to any Lender, any of the following
services provided to the Borrower or an Affiliate thereof by any Lender or the
Agent: (i) Rate Management Transactions, (ii) commercial credit card services,
(iii) cash management and other treasury management services (including, without
limitation, controlled disbursements, automated clearinghouse transactions,
return items, and interstate depository network services), and (iv) foreign
exchange related services.

      "Borrower" means Tesoro Petroleum Corporation, a Delaware corporation, and
its permitted successors and assigns (including, without limitation, a debtor in
possession on its behalf).

      "Borrowing Base" means, as of any date of calculation, an amount equal to
the lesser of (x) the Aggregate Revolving Loan Commitment plus the Aggregate
Pre-Funded Letter of Credit Commitment, and (y) as set forth on the most current
Interim Collateral Report or Monthly Collateral Report, as applicable, delivered
to the Agent, the aggregate of (i) 100% of Perfected Cash Interests, plus (ii)
eighty-five percent (85%) of the Gross Amount of Eligible Receivables, plus
(iii) eighty percent (80%) of the Gross Amount of Eligible Petroleum Inventory,
minus (iv) the Rental Reserve, minus (v) the Standard Reserve, and minus (vi)
such reserves as the Agent may from time to time reasonably deem appropriate;
provided, however, that the Agent, upon the occurrence and during the
continuance of a Default, may, in its reasonable discretion and without the
Borrower's consent, decrease the foregoing percentages.

      "Borrowing Date" means a date on which an Advance is made hereunder.

      "Borrowing Notice" is defined in Section 2.7.

                                       3
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      "Business Activity Report" means (A) a Notice of Business Activities
Report filed with the State of Minnesota, Department of Revenue or (B) any
similar report required by any other State relating to the ability of the
Borrower or any Subsidiary Guarantor to enforce its Receivables claims against
Account Debtors located in any such state.

      "Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Illinois and New York, New York for
the conduct of substantially all of their commercial lending activities,
interbank wire transfers can be made on the Fedwire system and dealings in
Dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago, Illinois and New York, New York for the conduct of
substantially all of their commercial lending activities and interbank wire
transfers can be made on the Fedwire system.

      "Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.

      "Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.

      "Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.

      "Change in Control" means the occurrence of any of the following events:
(i) there shall be consummated (A) any consolidation or merger of the Borrower
in which the Borrower is not the continuing or surviving corporation or pursuant
to which shares of the Borrower's common stock would be converted into cash,
securities or other property, other than a merger of the Borrower where a
majority of the Board of Directors of the surviving corporation are, and for a
two year period after the merger continue to be, persons who were directors of
the Borrower immediately prior to such merger or were elected as directors, or
nominated for election as directors, by a vote of at least two-thirds of the
directors then still in office who were directors of the Borrower immediately
prior to such merger, or (B) any sale, lease, exchange or transfer (in one
transaction or a series of transactions) of all or substantially all of the
assets of the Borrower, unless, immediately following such sale, lease, exchange
or transfer, such assets are owned, directly or indirectly, by the Borrower or
one or more Subsidiaries of the Borrower; (ii) the shareholders of the Borrower
shall approve any plan or proposal for the liquidation or dissolution of the
Borrower; (iii) (A) any "person" as defined in the Securities Exchange Act of
1934 (the "Exchange Act"), other than the Borrower or a Subsidiary or any
employee benefit plan sponsored by the Borrower or a Subsidiary, shall become
the beneficial owner (within the

                                       4
<PAGE>

meaning of Rule 13d-3 under the Exchange Act) of securities of the Borrower
representing 50% or more of the combined voting power of the Borrower's then
outstanding securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, and (B) at any time during a period of two
consecutive years thereafter, individuals who immediately prior to the beginning
of such period constituted the Board of Directors of the Borrower shall cease
for any reason to constitute at least a majority thereof, unless the election or
the nomination by the Board of Directors for election by the Borrower's
shareholders of each new director during such period was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of such period; or (iv) a "Change of Control" or like event under
any agreement, document or instrument evidencing Material Indebtedness.

      "Closing Date" means May 25, 2004.

      "Co-Agent" means each of Bank of America, N.A., as syndication agent and
as co-collateral agent, Bank One, as co-collateral agent, and Wells Fargo
Foothill, LLC, as documentation agent, together with their respective successors
and assigns.

      "Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.

      "Collateral" means all property and interests in property now owned or
hereafter acquired by the Borrower or any of its Subsidiary Guarantors in or
upon which a security interest or lien is granted to the Agent, for the benefit
of the Holders of Secured Obligations, or to the Agent, for the benefit of the
Lenders, whether under the Security Agreement, under any of the other Collateral
Documents or under any of the other Loan Documents.

      "Collateral Documents" means all agreements, instruments and documents
executed in connection with this Agreement that are intended to create or
evidence Liens to secure the Secured Obligations, including, without limitation,
the Security Agreement and all other security agreements, loan agreements,
notes, guarantees, subordination agreements, pledges, powers of attorney,
consents, assignments, contracts, fee letters, notices, leases, financing
statements and all other written matter whether heretofore, now, or hereafter
executed by or on behalf of the Borrower or any of its Subsidiary Guarantors and
delivered to the Agent or any of the Lenders, together with all agreements and
documents referred to therein or contemplated thereby.

      "Collateral Protection Advance" is defined in Section 2.1.2.

      "Collateral Shortfall Amount" is defined in Section 8.1.

      "Collection Account" is defined in Section 6.25.

      "Commitment Fee" is defined in Section 2.4.1.

      "Commitment Schedule" means the Schedule identifying the Lenders'
respective Revolving Loan Commitments as of the Closing Date and the Lenders'
respective Pre-Funded Letter of Credit Commitments as of the Closing Date, as
attached hereto and identified as such.

                                       5
<PAGE>

      "Consolidated Capital Expenditures" means, for any period, with respect to
the Borrower and its Subsidiaries, the aggregate of all expenditures by the
Borrower and its Subsidiaries for the acquisition or leasing (pursuant to a
Capitalized Lease) of fixed or capital assets or additions to equipment
(including replacements, capitalized repairs, and improvements during such
period) which are capitalized under Agreement Accounting Principles on the
Borrower's or any Subsidiary's balance sheet.

      "Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) income and franchise tax expense, (iii) depreciation,
(iv) amortization and (v) any other non-cash charges, minus, to the extent
included in Consolidated Net Income, (i) interest income (except to the extent
deducted in determining Consolidated Interest Expense) and (ii) any other
non-cash income, all reported for the Borrower and its Subsidiaries on a
consolidated basis.

      "Consolidated Interest Expense" means, with reference to any period, the
accrued interest expense of the Borrower and its Subsidiaries reported on a
consolidated basis for such period, including, without limitation, yield or any
other financing costs resembling interest which are payable under any
Receivables Purchase Facility.

      "Consolidated Net Income" means, with reference to any period, the
consolidated net earnings (or loss) of the Borrower and its Subsidiaries
reported for such period.

      "Consolidated Tangible Net Worth" means at any time, with respect to any
Person, the consolidated total stockholders' equity of such Person and its
Subsidiaries reported on a consolidated basis in accordance with Agreement
Accounting Principles and as reported in such Person's most recent Form 10-K or
Form 10-Q filing, as applicable, with the U.S. Securities and Exchange
Commission, minus at all times all items that are reported in such Form 10-K or
Form 10-Q filing, as applicable, as "acquired intangibles net" and "goodwill."

      "Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss; provided, however, that amounts held or allocated as reserves for
obligations arising under or in connection with (i) any Plan or other pension
fund related item, (ii) litigation, judgments and legal proceedings, and (iii)
compliance with Environmental Laws, including, without limitation, the
remediation of any environmental related issues with respect to its Property,
shall not constitute "Contingent Obligations."

      "Continuing Director" means, with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (i) was a
member of such board of directors on the Closing Date, or (ii) was nominated for
election or elected to such board of directors with the approval of the required
majority of the Continuing Directors who were members of such board at the time
of such nomination or election; provided that any individual who is so elected
or nominated in connection with a merger, consolidation, acquisition or similar

                                       6
<PAGE>

transaction shall not be a Continuing Director unless such individual was a
Continuing Director prior thereto.

      "Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.

      "Conversion/Continuation Notice" is defined in Section 2.8.

      "Conversion Event" means the occurrence of a Default, including, without
limitation, the Borrower's failure to deposit into the Pre-Funded Letter of
Credit Account a Pre-Funded Account Reimbursement Amount when required pursuant
to Section 2.19.6.

      "Credit Extension" means the making of an Advance or the issuance of a
Facility LC.

      "Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.

      "Credit Linked Deposit" means, for any Lender, the amount required to be
deposited by such Lender into the Pre-Funded Letter of Credit Account on the
Closing Date or when such Lender otherwise becomes party to this Agreement,
which amount (i) shall equal such Lender's Pre-Funded Letter of Credit
Commitment on the date on which such Lender becomes subject hereto, and (ii) may
be reduced from time to time pursuant to the terms of this Agreement.

      "Current Petroleum Inventory Market Price" means, with respect to any
Petroleum Inventory, the market price for such Petroleum Inventory as set forth
in a published or reported price index maintained by a third-party that is not
an Affiliate of the Borrower and that prepares such index in the ordinary course
of its business or such other price as the Agent may ascribe thereto in its
reasonable credit judgment. Current Petroleum Inventory Market Price shall be
determined using published or reported price indices created or distributed by
Oil Price Information Service, commonly known as OPIS, and/or Platts Oilgram
Price Report, commonly known as Platts. In the event OPIS or Platts no longer
provides the aforementioned price indices, or in the event the Borrower and the
Agent determine that either OPIS or Platts no longer accurately provides pricing
information for Petroleum Inventory, the Borrower and the Agent shall replace
one or both of the OPIS and Platts price indices, as applicable, with other
third-party price indices reasonably acceptable to each of the Borrower and the
Agent.

      "Default" means an event described in Article VII.

      "Designated Lender" means, with respect to each Designating Lender, each
Eligible Designee designated by such Designating Lender pursuant to Section
12.1.2.

      "Designating Lender" means, with respect to each Designated Lender, the
Lender that designated such Designated Lender pursuant to Section 12.1.2.

      "Designation Agreement" is defined in Section 12.1.2.

                                       7
<PAGE>

      "Dollar", "dollar" and "$" means the lawful currency of the United States
of America.

      "Eligible Carrier" means any of the carriers and pipeline companies listed
or described in Schedule 1.1 to this Agreement, as such Schedule 1.1 may be
revised by the Borrower from time to time with the consent of the Agent, such
consent not to be unreasonably withheld.

      "Eligible Designee" means a special purpose corporation, partnership,
trust, limited partnership or limited liability company that is administered by
the respective Designating Lender or an Affiliate of such Designating Lender and
(i) is organized under the laws of the United States of America or any state
thereof, (ii) is engaged primarily in making, purchasing or otherwise investing
in commercial loans in the ordinary course of its business and (iii) issues (or
the parent of which issues) commercial paper rated at least A-1 or the
equivalent thereof by S&P or P-1 or the equivalent thereof by Moody's.

      "Eligible Petroleum Inventory" means Petroleum Inventory of the Borrower
and the Subsidiary Guarantors which is held for sale or lease in the ordinary
course of business or furnished under any contract of service by the Borrower or
such Subsidiary Guarantors in the ordinary course of business which is at all
times and shall continue to meet standards of eligibility from time to time
established in accordance with this Agreement. Initially, standards of
eligibility will be established by the Agent in its reasonable credit judgment
(which credit judgment shall be exercised in a manner that is not arbitrary or
capricious) and may be revised from time to time by the Agent in its reasonable
credit judgment (which credit judgment shall be exercised in a manner that is
not arbitrary or capricious). In general, without limiting the foregoing, the
following Petroleum Inventory includes Eligible Petroleum Inventory:

      (a)(i) Petroleum Inventory that is subject to a valid, first
priority perfected lien and security interest in favor of the Agent on behalf of
the Holders of Secured Obligations or (ii) Petroleum Inventory that has been
delivered to an Eligible Carrier subject to a valid, first priority perfected
lien and security interest in favor of the Agent on behalf of the Holders of
Secured Obligations with UCC financing statements (or any other applicable form)
perfecting or continuing the perfection of the security interest of the Agent on
behalf of the Holders of Secured Obligations in such Petroleum Inventory having
been duly filed where necessary and either (x) no document of title is issued
with respect to such Petroleum Inventory by such Eligible Carrier, or (y) if a
document of title is issued with respect to such Petroleum Inventory by such
Eligible Carrier, the original of such document of title is delivered to the
Agent or its designated bailee or agent,

      (b)Petroleum Inventory that is in good saleable condition, is not
deteriorating in quality and is not obsolete, and is of a quality which (in
locations where sold by the Borrower) is marketable at prevailing market prices
for such products and meets all applicable governmental regulations and
standards at the place of intended sale,

      (c)Petroleum Inventory that is owned by the Borrower or its Subsidiaries
(provided all documentation necessary to provide the Agent with a first
priority, perfected Lien thereon shall be in full force and effect) or, in the
case of Petroleum Inventory described in clause (ii) of paragraph (a) above, the
Borrower has the absolute and unconditional right to obtain such Petroleum
Inventory or Petroleum Inventory equivalent to such Petroleum Inventory from an

                                       8
<PAGE>

Eligible Carrier, in each case, free and clear of any and all Liens whatsoever,
other than those (1) in favor of the Agent on behalf of the Holders of Secured
Obligations created pursuant to the Collateral Documents and (2) those in favor
of an Eligible Carrier that arise under applicable law and for which appropriate
amounts have been allocated under the Rental Reserve,

      (d)Petroleum Inventory that is (1) located at a location owned by
the Borrower or a Subsidiary Guarantor, (2) delivered to an Eligible Carrier
under an arrangement described in clause (ii) of paragraph (a) above, or (3)
located at a location leased by the Borrower or a Subsidiary Guarantor so long
as such location is either subject to a Third Party Agreement or such location
is subject to the Rental Reserve;

      (e)Petroleum Inventory that is not commingled with Petroleum Inventory of
any Person other than the Borrower and/or its Subsidiaries or has been delivered
to an Eligible Carrier under an arrangement described in clause (ii) of
paragraph (a) above,

      (f)Petroleum Inventory that is in full conformity with the representations
and warranties made by the Borrower or a Subsidiary Guarantor to the Agent with
respect thereto whether contained in this Agreement or the Security Agreement,
and

      (g)To the extent Petroleum Inventory is in transit on the high seas
to or from a non-Affiliate, (1) it does not constitute a Receivable, (2) if
purchased with a Letter of Credit, a copy of such Letter of Credit has been
delivered to the Agent, (3) it is covered by insurance in form and substance
reasonably acceptable to the Agent, and (4) all applicable documents of title
have been delivered to the Agent; provided, however, that with respect to the
high seas Petroleum Inventory described in this clause (g), the amount of such
high seas Petroleum Inventory on any date of determination in excess of 15% of
the aggregate amount of all Petroleum Inventory then owned by the Borrower and
its Subsidiary Guarantors on such date of determination shall not constitute
Eligible Petroleum Inventory.

Notwithstanding anything to the contrary set forth in this Agreement or any
other Loan Document, no Petroleum Inventory located, stored or maintained at any
retail service station or in a railroad car, or otherwise in transit upon a
railway system, shall constitute Eligible Petroleum Inventory.

      "Eligible Receivables" means Receivables created by the Borrower or any
Subsidiary Guarantor, in each case in the ordinary course of its business
arising out of the sale of goods or rendition of services by the Borrower or
such Subsidiary Guarantor, which Receivables are and at all times shall continue
to meet standards of eligibility from time to time reasonably established in
accordance with this Agreement. Initially, standards of eligibility will be
established by the Agent in its reasonable credit judgment (which credit
judgment shall be exercised in a manner that is not arbitrary or capricious) and
may be revised from time to time by the Agent in its reasonable credit judgment
(which credit judgment shall be exercised in a manner that is not arbitrary or
capricious). In general, without limiting the foregoing, the following
Receivables are not Eligible Receivables:

      (a) Receivables which remain unpaid sixty (60) days after the date on
which payment was due or ninety (90) days after the date of the original
applicable invoice;

                                       9
<PAGE>

      (b) Receivables on any date of determination which are owing by an Account
Debtor and its Affiliates to the extent that the aggregate amount of Receivables
owing by such Account Debtor and its Affiliates to the Borrower or any
Subsidiary Guarantor exceeds 15% times the aggregate amount of all Eligible
Receivables on such date;

      (c) all Receivables owing by a single Account Debtor (including
Receivables which remain unpaid fewer than sixty (60) days after the date on
which payment was due or ninety (90) days after the date of the original
applicable invoice) if fifty percent (50%) of the aggregate balance owing by
such Account Debtor, calculated without taking into account any credit balances
of such Account Debtor, remains unpaid ninety (90) days after the date of the
original applicable invoice or has otherwise become, or has been determined by
the Agent to be ineligible in accordance with the provisions of this definition;

      (d) Receivables with respect to which the Account Debtor is a director,
officer, employee, Subsidiary or Affiliate of the Borrower or any Subsidiary
thereof;

      (e) (i) Receivables with respect to which the Account Debtor is the United
States of America, any federal, state, local or other political subdivision
thereof or any department, agency or instrumentality of any of the foregoing,
unless the Borrower or applicable Subsidiary Guarantor has complied with the
provisions of the Federal Assignment of Claims Act or other applicable statutes,
including executing and delivering to the Agent all statements of assignment
and/or notification which are in form and substance acceptable to the Agent and
which are deemed necessary by the Agent to effectuate the assignment of such
Receivables to the Agent for the benefit of the Holders of Secured Obligations;
and (ii) Receivables with respect to which the Account Debtor is a foreign
government, any federal, state, local or other political subdivision thereof, or
any department, agency, or instrumentality of any of the foregoing described in
this clause (ii);

      (f) Receivables not denominated in Dollars;

      (g) Receivables with respect to which the Account Debtor is not a resident
of the United States (which shall not be deemed to include any territories of
the United States) or Canada unless (i) the Account Debtor has supplied the
Borrower or applicable Subsidiary Guarantor with an irrevocable letter of credit
(which letter of credit shall be delivered to the Agent and shall be in form and
substance acceptable to the Agent), or (ii) the full payment of such Receivable
shall have been insured by the Borrower or applicable Subsidiary Guarantor
pursuant to an insurance policy in form and substance acceptable to the Agent
issued by a financial institution satisfactory to the Agent, which policy names
the Agent as the loss payee or beneficiary thereof;

      (h) Receivables that are subject to any dispute, contra-account, defense,
offset or counterclaim, volume rebate or advertising or other allowance;
provided that if any portion of any such Receivables is not subject to any
dispute, contra-account, defense, offset, counterclaim, volume rebate or
advertising or other allowance and the payment of such portion is not being
withheld or delayed or otherwise affected in any manner due to the portion that
is subject to such dispute, contra-account, defense, offset, counterclaim,
volume rebate or advertising or other allowance, then such portion which is not
subject to any dispute, contra-account, defense, offset,

                                       10
<PAGE>

counterclaim, volume rebate or advertising or other allowance shall not be
excluded from Eligible Receivables because of this clause (h); provided,
further, that the portion of a contra-account that arises from a claim against
the Borrower or a Subsidiary Guarantor that is supported by a letter of credit
issued on behalf of the Borrower or a Subsidiary Guarantor in favor of a
customer as payment for goods or services shall not be excluded from Eligible
Receivables because of this clause (h);

      (i) Receivables with respect to which the Account Debtor is the subject of
a bankruptcy or similar insolvency proceeding or has made an assignment for the
benefit of creditors or whose assets have been conveyed to a receiver, trustee
or assignee for the benefit of creditors;

      (j) Receivables with respect to which the Account Debtor's obligation to
pay the Receivable is conditional upon the Account Debtor's approval or is
otherwise subject to any repurchase obligation or return right, as with sales
made on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval
(except with respect to Receivables in connection with which Account Debtors are
entitled to return Petroleum Inventory on the basis of the quality of such
Petroleum Inventory) or consignment basis, or where such Receivables represent
progress billings;

      (k) Receivables with respect to which the Account Debtor is located in
Minnesota (or any other jurisdiction which adopts a statute or other requirement
with respect to which any Person that obtains business from within such
jurisdiction or is otherwise subject to such jurisdiction's tax law requiring
such Person to file a Business Activity Report or make any other required
filings in a timely manner in order to enforce its claims in such jurisdiction's
courts or arising under such jurisdiction's laws); provided, however, such
Receivables shall nonetheless be eligible if the Borrower or applicable
Subsidiary Guarantor has filed a Business Activity Report (or other applicable
report) with the applicable state office, or is qualified to do business in such
jurisdiction and, at the time the Receivable was created, was qualified to do
business in such jurisdiction, or had on file with the applicable state office a
current Business Activity Report (or other applicable report), or is exempt from
such filing requirement;

      (l) Receivables with respect to which the Account Debtor's obligation does
not constitute its legal, valid and binding obligation, enforceable against it
in accordance with its terms;

      (m) Receivables with respect to which the Borrower or applicable
Subsidiary Guarantor has not yet shipped the applicable goods or performed the
applicable service;

      (n) any Receivable which is not in conformity with the representations and
warranties made by the Borrower or the applicable Subsidiary Guarantors to the
Agent with respect thereto, whether contained in this Agreement or the Security
Agreement;

      (o) Receivables in connection with which the Borrower or applicable
Subsidiary Guarantor (or any other party to such Receivable) is in default in
the performance or observance of any of the terms thereof (other than payment of
such Receivable) in any material respect;

                                       11
<PAGE>

      (p) Receivables that are not bona fide existing obligations created by the
sale and actual delivery of inventory, goods or other property or the furnishing
of services of other good and sufficient consideration to customers of the
Borrower or the applicable Subsidiary Guarantors in the ordinary course of
business;

      (q) Receivables subject to any Lien or the Petroleum Inventory, goods,
property, services or other consideration of which any such Receivable
constitutes proceeds is subject to any such Lien, in either case other than the
Lien granted to the Agent in connection herewith for the benefit of the Holders
of Secured Obligations;

      (r) Receivables that have been classified by the Borrower or any
Subsidiary Guarantor as doubtful or that have otherwise failed to meet
established or customary credit standards of the Borrower or the Subsidiary
Guarantors, to the extent of such write-down;

      (s) Receivables evidenced by a promissory note or other similar
instrument;

      (t) Receivables that are subordinate or junior in right or priority of
payment to any other obligation or claim;

      (u) Receivables that are consigned or otherwise assigned to any Person for
collection or otherwise; and

      (v) Receivables generated by sales on a cash-on-delivery basis.

      "Environmental Laws" means any and all federal, state and local statutes,
laws, judicial decisions, regulations, ordinances, rules, judgments, orders,
decrees, plans, injunctions, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to (i) the protection of
the environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rules or regulations promulgated thereunder.

      "Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.10, bears interest at the applicable Eurodollar Rate.

      "Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers' Association LIBOR rate
for deposits in Dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, if no such British Bankers' Association LIBOR
rate is available to the Agent, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the rate determined by the Agent to be
the rate at which Bank One or one of its affiliate banks offers to place
deposits in Dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of

                                       12
<PAGE>

such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.

      "Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.10, bears interest at the applicable Eurodollar Rate.

      "Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the then Applicable Margin, changing as and when the Applicable Margin
changes.

      "Excess Availability" means, on any date of determination, the excess of
the Borrowing Base over the Aggregate Outstanding Credit Exposure on such date.

      "Excluded Proceeds" is defined in Section 6.24.

      "Excluded Subsidiary" means each of Tesoro Indonesia Petroleum Company,
Tesoro Equipment Company, Tesoro Crude Oil Company, Tesoro Gasoline Marketing
Company, Tesoro Pump & Valve Company, Tesoro Environmental Products Company,
Tesoro Latin America Company, Tesoro High Plains Company, Tesoro South Pacific
Petroleum Company, Tesoro Technology Company, Tesoro Geotech Company, Tesoro
Marine Services Holding Company, Tesoro Marine Services, LLC, Tesoro Building
Project, L.P., Interior Fuels Company, Coastwide Marine Services, Inc., Tesoro
Petroleum (Singapore) Pte. Ltd., the Pipeline Subsidiaries, and such other
Subsidiaries that the Borrower, with the Agent's prior written consent, may
identify to the Agent and the Lenders from time to time.

      "Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or any political
combination or subdivision or taxing authority thereof or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.

      "Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.

      "Facility LC" is defined in Section 2.19.1.

      "Facility LC Application" is defined in Section 2.19.3.

      "Facility LC Collateral Account" is defined in Section 2.19.11.

      "Facility LC Pro Rata Share" means, for any Lender:

      (x) at any time the LC Obligations are less than or equal to the Aggregate
Outstanding Pre-Funded Letter of Credit Exposure, a portion equal to a fraction
the numerator of which is

                                       13
<PAGE>

such Lender's Outstanding Pre-Funded Letter of Credit Exposure and the
denominator of which is the Aggregate Outstanding Pre-Funded Letter of Credit
Exposure; and

      (y) at any time the LC Obligations exceed the Aggregate Outstanding
Pre-Funded Letter of Credit Exposure then in effect, a portion equal to

            (i) for that part of the LC Obligations that equal the Aggregate
            Outstanding Pre-Funded Letter of Credit Exposure, the amount
            calculated in clause (x) hereof, plus

            (ii) for that part of the LC Obligations that exceeds the Aggregate
            Outstanding Pre-Funded Letter of Credit Exposure, the amount derived
            from a fraction the numerator of which is such Lender's Revolving
            Loan Commitment and the denominator of which is the Aggregate
            Revolving Loan Commitment; provided, however, that if the Revolving
            Loan Commitments have been terminated, the amount required by this
            clause (ii) shall be calculated using the then outstanding principal
            amount of such Lender's Revolving Loans and the aggregate
            outstanding principal amount of all outstanding Revolving Loans.

      "Federal Funds Effective Rate" means, for any day, an interest 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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.

      "Financing" means, with respect to any Person, (i) the issuance or sale by
such Person of any equity interests in such Person, or (ii) the issuance or sale
by such Person of any Indebtedness other than Indebtedness described in Sections
6.14.1 through 6.14.5; provided, however, that the foregoing clause (ii) shall
not permit the incurrence by the Borrower or any Subsidiary of any Indebtedness
if such incurrence is not otherwise permitted by this Agreement.

      "Fixed Charges" means, for any period of determination, the sum of (i)
Consolidated Interest Expense on a cash basis, and (ii) scheduled cash payments
of the principal amount of Indebtedness; provided, however, that payments of
principal owing under or in connection with the Revolving Loans shall not be
included in any determination of Fixed Charges.

      "Floating Rate" means, for any day, a rate per annum equal to the sum of
(i) the Alternate Base Rate for such day, changing when and as the Alternate
Base Rate changes plus (ii) the then Applicable Margin, changing as and when the
Applicable Margin changes.

      "Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.10, bears interest at the Floating Rate.

                                       14
<PAGE>

      "Floating Rate Loan" means a Revolving Loan which, except as otherwise
provided in Section 2.10, bears interest at the Floating Rate.

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

      "Gross Amount of Eligible Petroleum Inventory" means Eligible Petroleum
Inventory valued at market value, less (i) the value of reserves which have been
recorded by the Borrower and the Subsidiary Guarantors with respect to obsolete,
slow-moving or excess Petroleum Inventory, and (ii) such other reserves as the
Agent elects to establish in accordance with its reasonable credit judgment
(which credit judgment shall be exercised in a manner that is not arbitrary or
capricious).

      "Gross Amount of Eligible Receivables" means the outstanding face amount
of Eligible Receivables, determined in accordance with Agreement Accounting
Principles, consistently applied, less (i) all financing charges, late fees and
other fees that are unearned, (ii) the value of any accrual that has been
recorded by the Borrower and the Subsidiary Guarantors with respect to downward
price adjustments, and (iii) such other reserves as the Agent elects to
establish in accordance with its reasonable credit judgment (which credit
judgment shall be exercised in a manner that is not arbitrary or capricious).

      "Guaranty" means the Subsidiary Guaranty, dated as of April 17, 2003, made
by certain Subsidiaries of the Borrower in favor of the Agent for the benefit of
the Holders of Secured Obligations, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

      "Highest Lawful Rate" means, at any time, the maximum rate of interest the
Holders of Secured Obligations may lawfully contract for, charge, or receive in
respect of the Secured Obligations as allowed by any applicable law. For
purposes of determining the Highest Lawful Rate under applicable law of the
State of Texas, the applicable rate ceiling shall be (a) the "weekly ceiling"
described in and computed in accordance with the provisions of Section 303.003
of the Texas Finance Code, as amended, or (b) if the parties subsequently
contract as allowed by any applicable law, the "quarterly ceiling" or the
"annualized ceiling" computed pursuant to Section 303.008 of the Texas Finance
Code, as amended; provided, however, that at any time the "weekly ceiling", the
"quarterly ceiling", or the "annualized ceiling" shall be less than eighteen
percent (18.0%) per annum or more than twenty-four percent (24.0%) per annum,
the provisions of Section 303.009(a) and Section 300.009(b) of the Texas Finance
Code, as amended, shall control for purposes of such determination, as
applicable.

      "Holders of Secured Obligations" means the holders of the Secured
Obligations from time to time and shall refer to (i) each Lender in respect of
its Loans and its Outstanding Pre-Funded Letter of Credit Exposure, (ii) each LC
Issuer in respect of Reimbursement Obligations, (iii) the Agent, the Lenders,
and the LC Issuers in respect of all other present and future obligations and
liabilities of the Borrower or any of its Subsidiary Guarantors of every type
and description arising under or in connection with this Agreement or any other
Loan Document, (iv) each Person benefiting from indemnities made by the Borrower
or any Subsidiary Guarantor

                                       15
<PAGE>

hereunder or under other Loan Documents in respect of the obligations and
liabilities of the Borrower or such Subsidiary Guarantor to such Person, (v)
each Lender (or affiliate thereof), in respect of all Rate Management
Obligations of the Borrower to such Lender (or such affiliate) as exchange party
or counterparty under any Rate Management Transaction, and (vi) their respective
successors, transferees and assigns.

      "Indebtedness" of a Person means, at any time, without duplication, such
Person's (i) obligations for borrowed money, (ii) obligations representing the
deferred purchase price of Property or services (other than current accounts
payable arising in the ordinary course of such Person's business payable on
terms customary in the trade), (iii) obligations, whether or not assumed,
secured by Liens or payable out of the proceeds or production from Property now
or hereafter owned or acquired by such Person, (iv) obligations which are
evidenced by notes, bonds, debentures, acceptances, or other instruments, (v)
obligations to purchase securities or other Property arising out of or in
connection with the sale of the same or substantially similar securities or
Property, (vi) Capitalized Lease Obligations, (vii) Contingent Obligations of
such Person, (viii) reimbursement obligations under Letters of Credit, bankers'
acceptances, surety bonds and similar instruments, (ix) Off-Balance Sheet
Liabilities, (x) obligations under Sale and Leaseback Transactions, (xi) Net
Mark-to-Market Exposure under Rate Management Transactions, (xii) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any capital stock of such Person, (xiii) the
liquidation value of any mandatorily redeemable preferred capital stock of such
Person or its Subsidiaries held by any Person other than such Person and its
wholly-owned Subsidiaries, (xiv) obligations of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer, but only to the extent to which there is recourse to such Person
for the payment of such obligations, and (xv) any other obligation for borrowed
money which in accordance with Agreement Accounting Principles would be shown as
a liability on the consolidated balance sheet of such Person. Obligations of the
Borrower and its Subsidiaries to pay dues to Marine Spill Response Corporation
in an aggregate amount of up to $2,000,000 shall not be deemed to constitute
Indebtedness. Obligations in an aggregate amount not in excess of $3,000,000 at
any time owing in respect of the Borrower's retention and use of Cook Inlet
Spill Prevention and Response, Inc. (which provides the Borrower with
spill-response capabilities) shall not constitute Indebtedness.

      "Intercreditor Agreement" means, collectively, (x) Article XI of the
Senior Note Indenture and Article X of the Senior Term Loan Agreement, attached
hereto as Exhibit I, as in effect on the Closing Date, and (y) an intercreditor
agreement between the Agent and the Multiparty Collateral Agent, in form and
substance acceptable to each such party, entered into pursuant to Section 11.01
of the Senior Note Indenture and Section 10.01 of the Senior Term Loan
Agreement.

      "Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months, commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on but
exclude the day which corresponds numerically to such date one, two, three or
six months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business

                                       16
<PAGE>

Day, such Interest Period shall end on the next succeeding Business Day,
provided, however, that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately preceding
Business Day. Notwithstanding the foregoing or anything to the contrary in any
Loan Document, from the Closing Date through the date on which the Agent
confirms to the Borrower that the syndication of the Loans and Revolving Loan
Commitments has been completed (the "Syndication Period"), each Interest Period
for Eurodollar Advances shall equal seven days.

      "Interim Collateral Report" means a report, in form and substance
substantially similar to Exhibit J-1 hereto and acceptable to the Agent.

      "Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any
deposit accounts and certificates of deposit owned by such Person; and
structured notes, derivative financial instruments and other similar instruments
or contracts owned by such Person.

      "LC Fee" is defined in Section 2.19.4.

      "LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) or any other Lender (or any subsidiary or affiliate of
such Lender designated by such Lender), subject to the Agent's prior written
consent (which consent shall not be unreasonably withheld), in its separate
capacity as an issuer of Facility LCs hereunder.

      "LC Obligations" means, at any time, the sum, without duplication, of (i)
the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations.

      "LC Payment Date" is defined in Section 2.19.5.

      "Lenders" means the lending institutions listed on the signature pages of
this Agreement or lending institutions parties to Assignment Agreements
delivered pursuant to Section 12.3, in each case together with their respective
successors and assigns. Unless otherwise specified, the term "Lenders" includes
each LC Issuer, the Non-Ratable Lender, each Pre-Funded Lender and the Agent
with respect to Collateral Protection Advances.

      "Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed on
the signature pages hereof or on the administrative information sheets provided
to the Agent in connection herewith or on a Schedule or otherwise selected by
such Lender or the Agent pursuant to Section 2.16.

      "Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.

                                       17
<PAGE>

      "Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement, and, in the case of stock, stockholders agreements, voting trust
agreements and all similar arrangements).

      "Loan" means, with respect to a Lender, any loan of such Lender made
pursuant to Article II (or any conversion or continuation thereof), including,
without limitation, Revolving Loans, Collateral Protection Advances and
Non-Ratable Loans.

      "Loan Documents" means this Agreement, the Facility LC Applications, the
Collateral Documents, the Guaranty, the Intercreditor Agreement, and all other
documents, instruments, notes (including any Notes issued pursuant to Section
2.12 (if requested)) and agreements executed in connection herewith or therewith
or contemplated hereby or thereby, as the same may be amended, restated or
otherwise modified and in effect from time to time.

      "Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), operations or results of
operations or prospects of the Borrower and its Subsidiaries taken as a whole,
(ii) the ability of the Borrower or any Subsidiary Guarantor to perform its
obligations under the Loan Documents, or (iii) the validity or enforceability of
the Loan Documents or the rights or remedies of the Agent, the LC Issuers, or
the Lenders thereunder or their rights with respect to the Collateral.

      "Material Indebtedness" means any Indebtedness in an outstanding principal
amount of $25,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than Dollars).

      "Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).

      "Modify" and "Modification" are defined in Section 2.19.1.

      "Monthly Collateral Report" means a report, in form and substance
substantially similar to Exhibit J-2 hereto and acceptable to the Agent, which
shall include, among other things, the following additional information:

      (i) a detailed aged trial balance of each Receivable of the Borrower and
its Subsidiaries in existence as of the date of such report specifying the name
and balance due for the applicable Account Debtor, as reconciled in a manner
reasonably acceptable to the Agent;

      (ii) with respect to Petroleum Inventory, a detailed listing of product
type, volume on hand by location, and Current Petroleum Inventory Market Price;

      (iii) a spreadsheet which identifies all Eligible Receivables and Eligible
Petroleum Inventory and all non-Eligible Receivables and non-Eligible Petroleum
Inventory; and

                                       18
<PAGE>

      (iv) a schedule and aging of the Borrower's and its Subsidiaries' accounts
payable.

      "Moody's" means Moody's Investors Services, Inc. and any successor
thereto.

      "Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, which is covered by Title IV of ERISA and to which the
Borrower or any member of the Controlled Group is obligated to make
contributions.

      "Multiparty Collateral Agent" means Wilmington Trust Company, together
with its successors and permitted assigns, in its capacity as "Collateral Agent"
for the Senior Noteholders and the Senior Term Loan Holders.

      "Net Cash Proceeds" means, with respect to any sale of Property or any
Financing by any Person, (a) cash (freely convertible into Dollars) received by
such Person or any Subsidiary of such Person from such sale of Property
(including cash received as consideration for the assumption or incurrence of
liabilities incurred in connection with or in anticipation of such sale of
Property) or Financing, after (i) provision for all income or other taxes
measured by or resulting from such sale of Property, (ii) payment of all
reasonable brokerage commissions and other fees and expenses related to such
sale of Property or Financing, and (iii) all amounts used to repay Indebtedness
secured by a Lien on any asset disposed of in such sale of Property which is or
may be required (by the express terms of the instrument governing such
Indebtedness) to be repaid in connection with such sale of Property (including
payments made to obtain or avoid the need for the consent of any holder of such
Indebtedness) or Financing.

      "Net Consolidated Capital Expenditures" means, with respect to any fiscal
quarter, Consolidated Capital Expenditures for such quarter minus Net Cash
Proceeds resulting from Asset Sales during such quarter minus the aggregate
amount of purchase money Indebtedness incurred during such quarter.

      "Net Mark-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and "unrealized
profits" means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).

      "Non-Lender Asset Sale Proceeds" means any amount (x) that results from a
sale of the Borrower's or any Subsidiary's Property, (y) that does not
constitute Collateral, and (z) that is not required to be applied in reduction
of the principal amount of outstanding Loans under Section 2.2.2.

      "Non-Ratable Lender" means Bank One or such other Lender which may succeed
to Bank One's rights and obligations as Non-Ratable Lender pursuant to the terms
of this Agreement.

      "Non-Ratable Loan" has the meaning set forth in Section 2.1.3.

                                       19
<PAGE>

      "Non-U.S. Lender" is defined in Section 3.5(iv).

      "Note" is defined in Section 2.12.

      "Obligations" means all Revolving Loans, Non-Ratable Loans, Reimbursement
Obligations, other obligations owing to Pre-Funded Lenders as described in
Section 2.19, including, without limitation, any Pre-Funded Account
Reimbursement Amount, advances, debts, liabilities, obligations, covenants and
duties owing by the Borrower to the Agent, any Lender, the Non-Ratable Lender,
any LC Issuer, the Arranger, any affiliate of the Agent, any Lender, the
Non-Ratable Lender, any LC Issuer, or the Arranger, or any indemnitee under the
provisions of Section 9.6 or any other provisions of the Loan Documents, in each
case of any kind or nature, present or future, arising under this Agreement or
any other Loan Document, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether arising by reason
of an extension of credit, loan, foreign exchange risk, guaranty,
indemnification, or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, paralegals' fees (in each case whether or not allowed), and any
other sum chargeable to the Borrower or any of its Subsidiaries under this
Agreement or any other Loan Document.

      "Off-Balance Sheet Liability" of a Person means the principal component of
(i) any repurchase obligation or liability of such Person with respect to
Receivables sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any
so-called "synthetic lease" or "tax ownership operating lease" transaction
entered into by such Person, (iv) any Receivables Purchase Facility, or (v) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the consolidated balance sheets of such Person, but excluding from
this clause (v) all Operating Leases.

      "Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.

      "Operating Lease Obligations" means, as of any date of determination, the
amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under Agreement Accounting
Principles if such Operating Lease were a Capitalized Lease) from the date on
which each fixed lease payment is due under such Operating Lease to such date of
determination, of all fixed lease payments due under all Operating Leases of the
Borrower and its Subsidiaries.

      "Other Senior Secured Debt" means the Senior Term Loans and the Senior
Notes.

      "Other Senior Secured Debt Collateral Proceeds" means any amount
constituting the Borrower's or any Subsidiary's Property (including proceeds
thereof) that secures obligations

                                       20
<PAGE>

owing by the Borrower or its Subsidiaries to the Senior Noteholders under the
Senior Notes or the Senior Term Loan Holders under the Senior Term Loan
Agreement.

      "Other Taxes" is defined in Section 3.5(ii).

      "Outstanding Credit Exposure" means, as to any Lender at any time, the sum
of (i) the aggregate principal amount of its Revolving Loans outstanding at such
time (which shall include, without limitation, the amount of its ratable
obligation to purchase participations in (a) the aggregate principal amount of
Non-Ratable Loans outstanding at such time, (b) the LC Obligations at such time,
and (c) Collateral Protection Advances outstanding at such time), plus (ii) if
such Lender has a Pre-Funded Letter of Credit Commitment, its ratable obligation
to purchase participations in the LC Obligations to the extent not already
covered above in clause (i)(b) plus, subsequent to the occurrence of a
Conversion Event, such Lender's ratable obligation to purchase participations in
those items described above in clauses 1(a), (b), and (c), in all cases in
accordance with the terms of this Agreement.

      "Outstanding Pre-Funded Letter of Credit Exposure" means, as to any Lender
at any time, its ratable obligation to purchase participations in the LC
Obligations at such time plus the LC Obligations held by such Lender at such
time; provided, however, that the aggregate thereof shall at no time exceed such
Lender's Pre-Funded Letter of Credit Commitment; provided, further, that no such
purchase obligation shall at any time exceed the then available balance of such
Lender's Credit Linked Deposit.

      "Outstanding Revolving Loan Credit Exposure" means, as to any Lender at
any time, the sum of (i) the aggregate principal amount of its Revolving Loans
outstanding at such time, plus (ii) an amount equal to its Revolving Loan Pro
Rata Share of the LC Obligations at such time.

      "Participants" is defined in Section 12.2.1.

      "Payment Date" means April 1st, July 1st, October 1st, and January 1st of
each calendar year and the Termination Date. Each Payment Date other than the
Termination Date shall relate to the calendar quarter immediately preceding it.
For example, quarterly payments which accrue in respect of the quarter ending
March 31st shall be due and payable on April 1st.

      "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

      "Perfected Cash Interests" means Dollars or Cash Equivalent Investments on
deposit in collection accounts subject to control agreements in form and
substance acceptable to the Agent that grant the Agent first priority perfected
security interests in such accounts and the Dollars and Cash Equivalent
Investments (including proceeds thereof) on deposit or otherwise maintained
therein.

      "Permitted Acquisition" is defined in Section 6.13.3.

      "Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

                                       21
<PAGE>

      "Petroleum Inventory" means inventory consisting of crude oil, petroleum,
refined petroleum products, byproducts and intermediate feedstocks, and other
energy-related commodities, including, without limitation, blend components
commonly used in the petroleum industry to improve characteristics of, or meet
governmental or customer specifications for, petroleum or refined petroleum
products, all of which inventory shall be valued at market.

      "Pipeline Subsidiaries" means each of Kenai Pipeline Company, Tesoro
Alaska Pipeline Company, Tesoro High Plains Pipeline Company, and each other
Person (i) that does not own Collateral or Property required to be Collateral
hereunder, and (ii) substantially all of the assets of which consist of one or
more pipelines comparable to the ones owned by Kenai Pipe Line Company, Tesoro
Alaska Pipeline Company, and Tesoro High Plains Pipeline Company, in each case
together with their respective permitted successors and assigns, including,
without limitation, debtors in possession on their behalf.

      "Plan" means an employee pension benefit plan, excluding any Multiemployer
Plan, which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code as to which the Borrower or any member
of the Controlled Group, may have any liability.

      "Pre-Funded Account Reimbursement Amount" means, with respect to any
election by the Borrower to reimburse an LC Issuer in respect of a draw under a
Facility LC with Credit Linked Deposits, an amount equal to such reimbursement
amount plus any return on investment which would have accrued on such amount
pursuant to Section 2.19.4 had such amount not been withdrawn.

      "Pre-Funded Investment Earnings" is defined in Section 2.19.4.

      "Pre-Funded Lender" means any Lender with a Pre-Funded Letter of Credit
Commitment.

      "Pre-Funded Letter of Credit Account" is defined in Section 2.1.4.

      "Pre-Funded Letter of Credit Commitment" means, for each Lender, the
commitment of such Lender to participate in LC Obligations and, subsequent to a
Conversion Event, a portion of the Aggregate Outstanding Credit Exposure, in
each case in an aggregate principal amount not to exceed the amount set forth
for such Lender on the Commitment Schedule or in an Assignment Agreement
delivered pursuant to Section 12.3.

      "Pre-Funded Letter of Credit Fee" is defined in Section 2.19.4(a).

      "Pre-Funded Letter of Credit Fee Rate" means, with respect to the
Pre-Funded Letter of Credit Fee at any time, the percentage rate per annum which
is applicable at such time with respect to such fee as set forth in the Pricing
Schedule.

      "Pre-Funded Letter of Credit LIBO Rate" means, on any date of
determination, a per annum rate equal to the Eurodollar Rate without giving
effect to or including in the calculation thereof the then effective Applicable
Margin.

                                       22
<PAGE>

      "Pre-Funded Letter of Credit Early Reduction Event" is defined in Section
2.2.6(b).

      "Pre-Funded Letter of Credit Pro Rata Share" means, with respect to a
Lender, a portion equal to a fraction the numerator of which is such Lender's
Outstanding Pre-Funded Letter of Credit Exposure at such time and the
denominator of which is the Aggregate Outstanding Pre-Funded Letter of Credit
Exposure at such time.

      "Pricing Schedule" means the Schedule identifying the Applicable Margin,
the Applicable Fee Rate, and the Pre-Funded Letter of Credit Fee Rate attached
hereto and identified as such.

      "Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.

      "Prior Credit Agreement" means the Second Amended and Restated Credit
Agreement, dated as of June 17, 2003, by and among the Borrower, certain
financial institutions, and Bank One, as Administrative Agent, as amended or
modified prior to the Closing Date.

      "Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

      "Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is the sum of such Lender's Revolving Loan
Commitment and Pre-Funded Letter of Credit Commitment at such time (in each
case, as adjusted from time to time in accordance with the provisions of this
Agreement), and the denominator of which is the sum of the Aggregate Revolving
Loan Commitment at such time and the Aggregate Pre-Funded Letter of Credit
Commitment; provided, that if the Revolving Loan Commitments have been
terminated, "Pro Rata Share" means a fraction the numerator of which is such
Lender's Outstanding Credit Exposure at such time and the denominator of which
is the Aggregate Outstanding Credit Exposure at such time.

      "Purchase Price" means the total consideration and other amounts payable
in connection with any Acquisition, including, without limitation, any portion
of the consideration payable in cash, all Indebtedness, liabilities and
contingent obligations incurred or assumed in connection with such Acquisition
and all transaction costs and expenses incurred in connection with such
Acquisition, but exclusive of the value of any capital stock or other equity
interests of the Borrower or any Subsidiary issued as consideration for such
Acquisition.

      "Purchasers" is defined in Section 12.3.1.

      "Rate Management Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.

                                       23
<PAGE>

      "Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by the
Borrower or a Subsidiary which is a rate swap, basis swap, forward rate
transaction, equity or equity index swap, equity or equity index option, bond
option, interest rate option, foreign exchange transaction, cap transaction,
floor transaction, collar transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of these
transactions) or any combination thereof, whether linked to one or more interest
rates, foreign currencies, or equity prices.

      "Receivable(s)" means and includes any and all of the Borrower's and its
Subsidiaries' presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Borrower and its
Subsidiaries to payment for goods sold or leased or for services rendered
(except those evidenced by instruments or chattel paper), whether or not they
have been earned by performance, and all rights in and to any merchandise or
goods which any of the same may represent, and all rights, title, security and
guaranties with respect to each of the foregoing, including, without limitation,
any right of stoppage in transit.

      "Receivables Purchase Documents" means any series of receivables purchase
or sale agreements generally consistent with terms contained in comparable
structured finance transactions pursuant to which the Borrower or any of its
Subsidiaries, in their respective capacities as sellers or transferors of any
Receivables, sell or transfer to SPVs all of their respective right, title and
interest in and to certain Receivables for further sale or transfer (or granting
of Liens to other purchasers of or investors in such assets or interests therein
(and the other documents, instruments and agreements executed in connection
therewith), as any such agreements may be amended, restated, supplemented or
otherwise modified from time to time, or any replacement or substitution
therefor.

      "Receivables Purchase Facility" means any securitization facility made
available to the Borrower or any of its Subsidiaries, pursuant to which
Receivables of the Borrower or any of its Subsidiaries are transferred to one or
more SPVs, and thereafter to certain investors, pursuant to the terms and
conditions of the Receivables Purchase Documents.

      "Refinancing Indebtedness" means any Indebtedness permitted under this
Agreement that exists (with respect to any amendments, modifications or
supplements thereof) or that is incurred to refund, refinance, replace,
exchange, renew, repay, extend, modify, amend or supplement (including pursuant
to any defeasance or discharge mechanism) (collectively, "refinance",
"refinances" and "refinanced" shall have a correlative meaning) any other
specified Indebtedness permitted under this Agreement, including any
Indebtedness that refinances Refinancing Indebtedness, provided, however, that:

      (i)if the Stated Maturity (as such term is hereinafter defined) of the
Indebtedness being refinanced is earlier than the Termination Date as set forth
in clause (a) of the definition thereof, the Refinancing Indebtedness has a
Stated Maturity no earlier than the Stated Maturity of the Indebtedness being
refinanced, or if the Stated Maturity of the Indebtedness is being refinanced is
later than the Termination Date as set forth in clause (a) of the definition
thereof, the Refinancing Indebtedness has a Stated Maturity that is at least 91
days later than such Termination Date;

                                       24
<PAGE>

      (ii)the Refinancing Indebtedness has an Average Life (as such term is
hereinafter defined) at the time such Refinancing Indebtedness is incurred equal
to or greater than the Average Life of the Indebtedness being refinanced;

      (iii)such Refinancing Indebtedness is incurred in an aggregate principal
amount (or if issued with original issue discount, an aggregate issue price)
that is equal to or less than the sum of the aggregate principal amount (or if
issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being refinanced (plus, without duplication, any
additional Indebtedness incurred to pay interest or premiums required by
instruments governing such existing Indebtedness and fees incurred in connection
therewith);

      (iv)after giving effect to the incurrence of such Refinancing
Indebtedness, no Default or Unmatured Default would exist hereunder;

      (v)the obligor(s) of such Refinancing Indebtedness shall not be materially
different than the obligors of the Indebtedness being refinanced;

      (vi)the terms and conditions of such Refinancing Indebtedness shall be no
less favorable in any material respect than the terms and conditions of the
Indebtedness being refinanced; and

      (vii)any Property securing such Refinancing Indebtedness shall not include
Collateral and shall either (a) constitute Property that secures the
Indebtedness being replaced by such Refinancing Indebtedness or other
Indebtedness permitted by this Agreement or (b) constitute Property that secures
or formerly secured purchase money Indebtedness permitted under Section 6.14.4.

      As used in this definition the term "Stated Maturity" means, with respect
to any Indebtedness, the date specified in the documents or instruments
evidencing such Indebtedness as the fixed date on which the payment of principal
of such Indebtedness is due and payable, including pursuant to any mandatory
prepayment or redemption provision, but shall not include any contingent
obligations to repay, prepay, redeem or repurchase any such principal prior to
the date originally scheduled for the payment thereof. As used in this
definition, the term "Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (a) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such Indebtedness multiplied
by the amount of such payment by (b) the sum of all such payments.

      "Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

      "Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks

                                       25
<PAGE>

and non-broker lenders for the purpose of purchasing or carrying margin stocks
applicable to member banks of the Federal Reserve System.

      "Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).

      "Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.19 to reimburse
each LC Issuer for amounts paid by such LC Issuer in respect of any one or more
drawings under Facility LCs.

      "Rental Reserve" means (i) with respect to any Eligible Carrier, such
amount as the Agent in its reasonable credit judgment shall establish from time
to time for such Eligible Carrier and (ii) with respect to any location not
owned by the Borrower or a Subsidiary Guarantor at which Petroleum Inventory is
located, stored, processed, maintained or otherwise held, until such time as
such location is subject to a Third Party Agreement, an amount equal to 1
month's rent for such location.

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

      "Required Lenders" means Lenders in the aggregate having greater than 50%
of the sum of (i) the Aggregate Revolving Loan Commitment and (ii) the Aggregate
Pre-Funded Letter of Credit Commitment; provided, that if the Revolving Loan
Commitment has been terminated, "Required Lenders" means Lenders in the
aggregate holding greater than 50% of the Aggregate Outstanding Credit Exposure.

      "Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
"Eurocurrency liabilities" (as defined in Regulation D).

      "Restricted Payments" is defined in Section 6.10.

      "Retail Property" means Property of the Borrower or any Subsidiary owned
in connection with the sale of motor fuels and convenience products and services
to consumers in the retail market.

      "Revolver Prepayment Event" is defined in Section 2.2.6(a).

      "Revolving Loan" means, with respect to a Lender, such Lender's loan made
pursuant to its commitment to lend set forth in Section 2.1 (and any conversion
or continuation thereof).

                                       26
<PAGE>

      "Revolving Loan Commitment" means, for each Lender, including, without
limitation, each LC Issuer, such Lender's obligation to make Revolving Loans to,
and participate in Facility LCs issued upon the application of, the Borrower in
an aggregate amount not exceeding the amount set forth for such Lender on the
Commitment Schedule or in an Assignment Agreement delivered pursuant to Section
12.3, as such amount may be modified from time to time pursuant to the terms
hereof.

      "Revolving Loan Pro Rata Share" means, with respect to a Lender, a portion
equal to a fraction the numerator of which is such Lender's Revolving Loan
Commitment at such time and the denominator of which is the Aggregate Revolving
Loan Commitment at such time; provided, however, that if the Revolving Loan
Commitments have been terminated pursuant to the terms of this Agreement,
"Revolving Loan Pro Rata Share" means a portion equal to a fraction the
numerator of which is such Lender's Outstanding Revolving Loan Credit Exposure
at such time and the denominator of which is the Aggregate Outstanding Revolving
Loan Credit Exposure at such time.

      "S&P" means Standard and Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.

      "Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.

      "Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

      "Section" means a numbered section of this Agreement, unless another
document is specifically referenced.

      "Secured Obligations" means, collectively, (i) the Obligations, (ii) all
Rate Management Obligations owing in connection with Rate Management
Transactions to any Lender or any affiliate of any Lender, and (iii) to the
extent not covered in clauses (i) and (ii), amounts owing to any Lender or the
Agent under or in connection with Bank Products provided by such Lender or the
Agent to the Borrower or its Affiliates.

      "Security Agreement" means the Security Agreement, dated as of April 17,
2003, by and among the Borrower, certain Subsidiaries thereof and the Agent for
the benefit of the Holders of Secured Obligations, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

      "Senior Note Indenture" means the Indenture, dated as of April 17, 2003,
by and among the Borrower, certain Subsidiaries of the Borrower, in their
capacities as "Guarantors" thereunder, and the Senior Note Trustee, together
with the agreements, documents and instruments delivered in connection therewith
or issued pursuant thereto, including, without limitation, the Senior Notes and
any guarantees, security documents, mortgages, and collateral agency agreement
required thereunder, in each case as the same may be amended, restated,
supplemented or otherwise modified from time to time.

                                       27
<PAGE>

      "Senior Note Trustee" means The Bank of New York, together with its
successors and permitted assigns.

      "Senior Noteholders" means those Persons that from time to time hold
Senior Notes.

      "Senior Notes" means the Indebtedness evidenced by the promissory notes
from time to time issued by the Borrower under the Senior Note Indenture, as
such Indebtedness may be refinanced from time to time by Refinancing
Indebtedness.

      "Senior Term Loan Agreement" means the Credit and Guaranty Agreement,
dated as of April 17, 2003, by and among the Borrower, certain Subsidiaries of
the Borrower as "Guarantors", Goldman Sachs Credit Partners L.P., as sole lead
arranger, sole bookrunner, and syndication agent, and the Senior Term Loan
Agreement Agent, together with the agreements, documents and instruments
delivered in connection therewith or issued pursuant thereto, including, without
limitation, the promissory notes issued thereunder and any guarantees, security
documents, mortgages and collateral agency agreement required thereunder, in
each case as the same may be amended, restated, supplemented or otherwise
modified from time to time.

      "Senior Term Loan Agreement Agent" means Goldman Sachs Credit Partners
L.P., together with its successors and permitted assigns.

      "Senior Term Loan Holders" means the Persons from time to time party to
the Senior Term Loan Agreement as "Lenders" and the Senior Term Loan Agreement
Agent.

      "Senior Term Loans" means the Indebtedness incurred by the Borrower under
the Senior Term Loan Agreement, as such Indebtedness may be refinanced from time
to time by Refinancing Indebtedness.

      "Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.

      "Specified Customers" means nine customers of the Borrower and the
Subsidiary Guarantors from time to time identified as "Specified Customers" to
the Agent by the Borrower. The Agent may from time to time request that the
Borrower update or revise, to the Agent's reasonable satisfaction, the list of
"Specified Customers." The Agent agrees that it has received an initial list of
"Specified Customers" as of the Closing Date.

      "SPV" means any special purpose entity established for the purpose of
purchasing Receivables in connection with a Receivables securitization
transaction permitted under the terms of this Agreement.

      "Standard Reserve" means $40,000,000 unless the "Fixed Charge Coverage
Ratio", as calculated pursuant to Section 6.21 for each fiscal quarter based
upon the four then most-recently ended fiscal quarters, is less than 1.00 to
1.00, in which case "Standard Reserve" means the greater of $40,000,000 and 15%
of the then effective Borrowing Base (as calculated without giving effect to or
including the Standard Reserve, the first purchaser crude liability reserve and
the taxes held in trust/priming lien reserve and as the amount of such Borrowing
Base may

                                       28
<PAGE>

change from time to time upon the delivery of Interim Collateral Reports or
Monthly Collateral Reports).

      "Subordinated Indebtedness" means any Indebtedness the payment of which is
subordinated to the payment of the Secured Obligations to the written
satisfaction of the Agent and the Lenders.

      "Subordinated Indebtedness Prepayment Conditions" means:

            (x) if no Revolving Loans are outstanding immediately before or
            after the applicable prepayment, defeasance, purchase, redemption,
            retirement or acquisition, (1) no Default or Unmatured Default
            exists, (2) Excess Availability equals or exceeds 25% of the
            Borrowing Base then in effect and shall remain equal to or in excess
            of 25% for the remainder of the day on which such prepayment is
            made, and (3) the "Fixed Charge Coverage Ratio" as calculated in
            Section 6.21 on a rolling four quarter basis equals or exceeds 1.10
            to 1.00; and

            (y) if Revolving Loans are outstanding immediately before or after
            the applicable prepayment, defeasance, purchase, redemption,
            retirement or acquisition, (1) no more than $100,000,000 of
            Revolving Loan proceeds are used to make the applicable payments,
            (2) no Default or Unmatured Default exists, (3) Excess Availability
            equals or exceeds 35% of the Borrowing Base then in effect and shall
            remain equal to or in excess of 35% for the remainder of the day on
            which such prepayment is made, and (4) the "Fixed Charge Coverage
            Ratio" as calculated in Section 6.21 on a rolling four quarter basis
            exceeds 1.25 to 1.00.

      "Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower and no Excluded Subsidiary shall
constitute a Subsidiary of the Borrower.

      "Subsidiary Guarantors" means each of the following Subsidiaries of the
Borrower subject to the Guaranty as of the Closing Date, together with those
other Persons organized under the laws of the United States or a political
subdivision thereof that become subject to the Guaranty in accordance with
Section 6.23 after the Closing Date, in each case together with its permitted
successors and assigns (including, without limitation, a debtor in possession on
its behalf): Tesoro Petroleum Companies, Inc., Digicomp, Inc., Tesoro Aviation
Company, Tesoro Financial Services Holding Company, Victory Finance Company,
Tesoro Alaska Company, Tesoro Northstore Company, Tesoro Hawaii Corporation,
Smiley's Super Service, Inc., Tesoro

                                       29
<PAGE>

Refining and Marketing Company, Tesoro Vostok Company, Tesoro Maritime Company,
Far East Maritime Company, Gold Star Maritime Company, Tesoro Wasatch, LLC,
Tesoro Trading Company, Tesoro Environmental Resources Company, and Tesoro Gas
Resources Company, Inc.

      "Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries or property which is
responsible for more than 10% of the consolidated net sales or of the
Consolidated Net Income of the Borrower and its Subsidiaries, in each case, as
would be shown in the consolidated financial statements of the Borrower and its
Subsidiaries, as at the end of the four fiscal quarter period ending with the
fiscal quarter immediately prior to the fiscal quarter in which such
determination is made (or if financial statements have not been delivered
hereunder for that fiscal quarter which ends the four fiscal quarter period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that quarter).

      "Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.

      "Termination Date" means the earlier of (a) June 30, 2007 and (b) the date
of termination in whole of the Aggregate Revolving Loan Commitment pursuant to
Section 2.4 hereof or the Revolving Loan Commitments pursuant to Section 8.1
hereof.

      "Third Party Agreement" means a letter agreement, in form and substance
acceptable to the Agent, pursuant to which a landlord, bailee, consignee,
processor, warehouseman, or other third party who stores, processes, maintains
or holds Collateral acknowledges, among other things, the Agent's Lien on such
Collateral, the Agent's ability to enforce its Lien on such Collateral, and the
subordination of any Lien held by such landlord, bailee, consignee, processor,
warehouseman, or other third party on such Collateral to the Agent's Lien
thereon.

      "Transferee" is defined in Section 12.4.

      "Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance, and with respect to any Loan, its nature as a
Floating Rate Loan or a Eurodollar Loan.

      "Unencumbered Property Proceeds" means any amount constituting proceeds
from the sale of the Borrower's or any Subsidiary's Property (including proceeds
thereof) that does not constitute or qualify as Collateral or Property securing
amounts owing by the Borrower or its Subsidiaries to the Senior Noteholders
under the Senior Notes or the Senior Term Loan Holders under the Senior Term
Loan Agreement.

      "Unfunded Liabilities" means the amount, if any, by which the current
liability as shown on line 1d(2)(a) of the most recently filed Schedule B of
Form 5500 under each Single Employer Plan subject to Title IV of ERISA exceeds
the fair market value of all such Plan's assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plan for which a
Schedule B is available.

                                       30
<PAGE>

      "Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.

      "US GAAP" means generally accepted accounting principles as in effect in
the United States from time to time.

      "U.S." and "United States" means the United States of America.

      "Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.

      1.2. Plural Forms. The foregoing definitions shall be equally applicable
to both the singular and plural forms of the defined terms.

                                   ARTICLE II

                                   THE CREDITS

      2.1. Commitments; Loans.

            2.1.1 Revolving Loans. From and including the Closing Date and prior
      to the Termination Date, upon the satisfaction of the conditions precedent
      set forth in Sections 4.1 and 4.2, as applicable, each Lender severally
      and not jointly agrees, on the terms and conditions set forth in this
      Agreement, to (i) make Revolving Loans to the Borrower from time to time
      and (ii) participate in Facility LCs issued upon the request of the
      Borrower, in each case in an amount not to exceed in the aggregate at any
      one time outstanding of (a) with respect to Lenders with Revolving Loan
      Commitments, such Lenders' respective Revolving Loan Pro Rata Shares of
      the Available Aggregate Revolving Loan Commitment and (b) with respect to
      Lenders with Pre-Funded Letter of Credit Commitments, such Lenders'
      respective Pre-Funded Letter of Credit Pro Rata Shares of the Aggregate
      Credit Linked Deposit not previously used to purchase participations in LC
      Obligations, or, subsequent to the occurrence of a Conversion Event, other
      portions of the Aggregate Outstanding Credit Exposure; provided that,
      unless caused by a Collateral Protection Advance, at no time shall the
      Aggregate Outstanding Credit Exposure hereunder exceed the Borrowing Base
      and at no time shall the Aggregate Outstanding Credit Exposure minus the
      Aggregate Pre-Funded Letter of Credit Commitment exceed the Aggregate
      Revolving Loan Commitment; provided, further, that during the continuance
      of a Conversion Event, all Lenders shall participate in the Aggregate
      Outstanding Credit Exposure based on their respective Pro Rata Shares
      thereof. Subject to the terms of this Agreement, the Borrower may borrow,
      repay and reborrow Revolving Loans at any time prior to the Termination
      Date. The commitment of each Lender to lend hereunder shall automatically
      expire on the Termination Date. Each LC Issuer will issue Facility LCs
      hereunder on the terms and conditions set forth in Section 2.19.

                                       31
<PAGE>

            2.1.2 Collateral Protection Advances. Subject to the limitations set
      forth below, the Agent is authorized by the Borrower and the Lenders, from
      time to time in the Agent's sole discretion, (i) during the existence of a
      Default or an Unmatured Default, or (ii) at any time that any of the other
      conditions precedent set forth in Article IV have not been satisfied, to
      make Advances (each such advance to be a Floating Rate Advance) to the
      Borrower on behalf of the Lenders in an aggregate amount outstanding at
      any time not to exceed $10,000,000 which the Agent, in its reasonable
      business judgment, deems necessary or desirable (A) to preserve or protect
      the Collateral, or any portion thereof, (B) to enhance the likelihood of,
      or maximize the amount of, repayment of the Secured Obligations, or (C) to
      pay any other amount chargeable to or required to be paid by the Borrower
      pursuant to the terms of this Agreement, including costs, fees, and
      expenses as described in Section 9.6 (any of such Advances are herein
      referred to as "Collateral Protection Advances"); provided that the
      Required Lenders may at any time revoke the Agent's authorization to make
      Collateral Protection Advances. Any such revocation must be in writing and
      shall become effective prospectively upon the Agent's receipt thereof.
      Absent such revocation, the Agent's determination that the making of a
      Collateral Protection Advance is required for any such purposes shall be
      conclusive. The Collateral Protection Advances shall be secured by the
      Liens in favor of the Agent in and to the Collateral and shall constitute
      Secured Obligations hereunder. Each Lender shall participate in each
      Collateral Protection Advance in an amount equal to its Revolving Loan Pro
      Rata Share thereof. No Collateral Protection Advance shall be made
      hereunder if the result thereof causes (i) the Aggregate Outstanding
      Credit Exposure to exceed the Aggregate Revolving Loan Commitment plus the
      Aggregate Pre-Funded Letter of Credit Commitment or (ii) any Lender's ----
      Revolving Loan Pro Rata Share thereof to exceed such Lender's Revolving
      Loan Commitment.

            2.1.3 Making of Non-Ratable Loans. If the Agent elects to have the
      terms of this Section 2.1.3 apply to a Floating Rate Advance requested by
      the Borrower in order to fund such Floating Rate Advance pursuant to this
      Section 2.1.3 instead of Section 2.7, the Non-Ratable Lender shall make a
      Floating Rate Advance in the amount requested available to the Borrower on
      the applicable Borrowing Date by transferring same day funds to the
      Borrower's funding account. Each Advance made solely by the Non-Ratable
      Lender pursuant to this Section 2.1.3 is referred to in this Agreement as
      a "Non-Ratable Loan," and such Advances are referred to as the
      "Non-Ratable Loans." Each Non-Ratable Loan shall be subject to all the
      terms and conditions applicable to other Advances funded by the Lenders,
      except that all payments thereon shall be payable to the Non-Ratable
      Lender solely for its own account. The Agent shall not request the
      Non-Ratable Lender to make any Non-Ratable Loan if (A) the Agent has
      received written notice from any Lender that one or more of the applicable
      conditions precedent set forth in Article IV will not be satisfied on the
      requested Borrowing Date for the applicable Non-Ratable Loan, or (B) the
      requested Non-Ratable Loan exceeds the Available Aggregate Revolving Loan
      Commitment (before giving effect to such Non-Ratable Loan) or would cause
      the Aggregate Outstanding Credit Exposure (after giving effect to such
      Non-Ratable Loan) to exceed the Borrowing Base on the applicable Borrowing
      Date, or would cause the Aggregate Outstanding Credit Exposure (after
      giving effect to such Non-Ratable Loan) minus the Aggregate Pre-Funded
      Letter of Credit Commitment to exceed the Aggregate Revolving Loan
      Commitment on the applicable Borrowing Date. The

                                       32
<PAGE>

      Non-Ratable Loans shall be secured by the Liens granted to the Agent in
      and to the Collateral and shall constitute Secured Obligations hereunder.
      All Non-Ratable Loans shall be Floating Rate Advances. Each Lender shall
      participate in each Non-Ratable Loan in an amount equal to its Revolving
      Loan Pro Rata Share thereof.

            2.1.4 Aggregate Credit Linked Deposit; Pre-Funded Letter of Credit
      Account. Subject to the satisfaction of the conditions precedent set forth
      in Sections 4.1 and 4.2, as applicable, each Lender with a Pre-Funded
      Letter of Credit Commitment severally and not jointly agrees, on the terms
      and conditions set forth in this Agreement, to remit to the Agent on the
      Closing Date an amount equal to such Lender's then effective Pre-Funded
      Letter of Credit Commitment. The Agent shall deposit such amounts into
      account #2600466700 maintained with Bank One (the "Pre-Funded Letter of
      Credit Account"). Such amounts shall be such Lenders' respective initial
      Credit Linked Deposits and the aggregate of such amounts shall be the
      initial Aggregate Credit Linked Deposit. No Lender shall be required to
      make subsequent deposits into the Pre-Funded Letter of Credit Account
      after its initial remittance to the Agent. The Agent shall at all times
      have exclusive control of the Pre-Funded Letter of Credit Account and all
      amounts on deposit therein, including, without limitation, the Credit
      Linked Deposits. The Borrower shall have no right to the Pre-Funded Letter
      of Credit Account and the amounts on deposit therein (including, without
      limitation, the Credit Linked Deposits) and shall not have the ability to
      direct the use of such deposits other than as provided in Section 2.19.6.
      The Lenders' deposits into the Pre-Funded Letter of Credit Account and any
      remittance of all or any portion of the Credit Linked Deposits to an LC
      Issuer in respect of any draw made under a Facility LC shall not
      constitute Loans or extensions of credit to the Borrower. In the event any
      judicial or governmental entity re-characterizes the nature of the
      Pre-Funded Letter of Credit Account and the Credit Linked Deposits and
      deems the foregoing to be the Borrower's property or a Loan extended to
      the Borrower, then the Borrower hereby grants to the Agent a security
      interest in the Pre-Funded Letter of Credit Account and all amounts on
      deposit therein, including, without limitation, the Aggregate Credit
      Linked Deposit. Such grant shall be deemed made as of the date hereof.

      2.2. Required Payments; Termination.

            2.2.1 Generally. Any outstanding Advances and all other unpaid
      Secured Obligations shall be paid in full by the Borrower on the
      Termination Date. Notwithstanding the termination of the Revolving Loan
      Commitments under this Agreement on the Termination Date, until all of the
      Secured Obligations (other than contingent indemnity obligations) shall
      have been fully paid and satisfied and all financing arrangements among
      the Borrower and the Lenders hereunder and under the other Loan Documents
      shall have been terminated, all of the rights and remedies under this
      Agreement and the other Loan Documents shall survive. In addition to the
      other mandatory prepayments required under this Agreement, if at any time
      and for any reason, including, without limitation, as a result of the
      reduction of the Aggregate Revolving Loan Commitment or a fluctuation of
      the Borrowing Base, the Aggregate Outstanding Credit Exposure exceeds the
      Borrowing Base, the Borrower shall immediately make a mandatory prepayment
      of the Secured Obligations in an amount equal to such excess.

                                       33
<PAGE>

            2.2.2 Asset Sales; Insurance Proceeds. Upon the consummation by the
      Borrower or any Subsidiary of any sale of (i) Retail Property, and (ii)
      any Property constituting Collateral (other than sales permitted under
      Sections 6.12.1 and 6.12.2), in each case except to the extent that the
      Net Cash Proceeds of such sale, when combined with the Net Cash Proceeds
      of all such sales during the immediately preceding twelve-month period, do
      not exceed $15,000,000 for any such sale or series of related sales,
      within three (3) Business Days after the Borrower's or any of its
      Subsidiaries' receipt of any Net Cash Proceeds from any such sale, or upon
      the Borrower's receipt of Net Cash Proceeds under any insurance policy
      covering Collateral as contemplated in Section 6.24, the Borrower shall
      make a mandatory prepayment of the outstanding principal amount of the
      Revolving Loans in the amount of such Net Cash Proceeds. Such mandatory
      prepayment shall be applied in accordance with Section 2.2.5.

            2.2.3 Financings. Upon the consummation of any Financing by the
      Borrower or any Subsidiary of the Borrower (other than a Financing
      consisting solely Refinancing Indebtedness), within three (3) Business
      Days after the Borrower's or any of its Subsidiaries' receipt of any Net
      Cash Proceeds from such Financing, the Borrower shall make a mandatory
      prepayment of the outstanding principal amount of the Revolving Loans in
      the amount of such Net Cash Proceeds. Such mandatory prepayment shall be
      applied in accordance with Section 2.2.5.

            2.2.4 Effect on Aggregate Revolving Loan Commitment. No prepayment
      described in Sections 2.2.2 and 2.2.3 shall result in a reduction of the
      Aggregate Revolving Loan Commitment and the Borrower may request an
      Advance immediately after such prepayment so long as the terms and
      conditions hereunder for an Advance have been satisfied.

            2.2.5 Application and Priority of Mandatory Prepayments. The
      Borrower shall remit a prepayment to the Agent in the amount of any Net
      Cash Proceeds described in Section 2.2.2 or 2.2.3 on the dates required
      under such Sections. The Agent shall deposit such prepayment in a
      Collection Account or another cash collateral account subject to the
      Agent's sole control and shall apply such prepayment to the Revolving
      Loans. Any portion of such prepayment remaining thereafter shall be
      returned to the Borrower for general corporate purposes. With respect to
      the reduction of the Revolving Loans on any date, prepayments made under
      Section 2.2.2 or 2.2.3 shall first be applied to Floating Rate Loans and
      to any Eurodollar Rate Loans maturing on such date and then to
      subsequently maturing Eurodollar Rate Loans in order of maturity.

            2.2.6 Prepayment Fees.

            (a) Aggregate Revolving Loan Commitment. If, prior to May 25, 2005,
      the Borrower voluntarily reduces the Aggregate Revolving Loan Commitment
      by more than the $100,000,000 permitted in Section 2.4.3 (any such
      reduction, a "Revolver Prepayment Event"), then the Borrower shall pay to
      the Agent for the benefit of the Lenders with Revolving Loan Commitments
      in immediately available funds a prepayment fee on the date of such
      Revolver Prepayment Event equal to the Aggregate Revolving Loan Commitment
      in effect immediately prior to such reduction times 0.25%.

                                       34
<PAGE>

      Notwithstanding the foregoing, the Borrower shall not be required to pay
      any prepayment fee upon the occurrence of a Revolver Prepayment Event if
      such Revolver Prepayment Event occurs contemporaneously with a refinancing
      of the aggregate outstanding Obligations pursuant to a bank credit
      facility provided or arranged by Bank One or an Affiliate thereof.

            (b) If, prior to May 25, 2005, the Borrower causes the voluntary
      reduction of the Aggregate Pre-Funded Letter of Credit Commitment to any
      amount below $100,000,000 (any such reduction, a "Pre-Funded Letter of
      Credit Early Reduction Event"), then the Borrower shall pay to the Agent
      for the benefit of the Pre-Funded Lenders in immediately available funds a
      prepayment fee on the date of such Pre-Funded Letter of Credit Early
      Reduction Event equal to the amount of such reduction times 0.25%;
      provided, however, that no such reduction shall occur if such reduction
      would result in (i) the Aggregate Outstanding Credit Exposure exceeding
      the Borrowing Base or (ii) the Aggregate Outstanding Credit Exposure
      exceeding the Aggregate Revolving Loan Commitment plus the Aggregate
      Pre-Funded Letter of Credit Commitment.

      2.3. Ratable Loans; Types of Advances. (a) Each Advance hereunder (other
than a Non-Ratable Loan or a Collateral Protection Advance) shall consist of
Revolving Loans made from the several Lenders ratably in proportion to the ratio
that their respective Revolving Loan Commitments bear to the Aggregate Revolving
Loan Commitment.

            (b) The Advances may be Floating Rate Advances or Eurodollar
Advances, or a combination thereof, selected by the Borrower in accordance with
Sections 2.7 and 2.8, or Non-Ratable Loans selected by the Borrower in
accordance with Section 2.1.3.

      2.4. Commitment Fee; Aggregate Revolving Loan Commitment.

            2.4.1 Commitment Fee. The Borrower shall pay to the Agent, for the
      account of the Lenders with Revolving Loan Commitments in accordance with
      their Revolving Loan Pro Rata Shares of the Aggregate Revolving Loan
      Commitment, from and after the Closing Date until the date on which the
      Aggregate Revolving Loan Commitment shall be terminated in whole, a
      commitment fee (the "Commitment Fee") accruing daily at the rate of the
      then Applicable Fee Rate on the Aggregate Revolving Loan Commitment minus
      the Aggregate Outstanding Revolving Loan Credit Exposure, each as in
      effect from time to time. All such Commitment Fees payable hereunder shall
      be payable quarterly in arrears on each Payment Date.

            2.4.2 Closing Fees. The Borrower shall pay to the Agent for the
      ratable benefit of the Lenders on the Closing Date those closing fees
      described in the fee letter dated May 25, 2004 by and among the Borrower,
      the Agent and the Arranger, as amended or modified from time to time.

            2.4.3 Reductions in Aggregate Revolving Loan Commitment. The
      Borrower may permanently reduce the Aggregate Revolving Loan Commitment to
      $0. Any such reduction shall require the payment of the prepayment fee
      described in Section 2.2.6. The Borrower may permanently reduce the
      Aggregate Revolving Loan Commitment

                                       35
<PAGE>

      from the initial amount of $550,000,000 (or from such higher amount if the
      Aggregate Revolving Loan Commitment has been increased pursuant to Section
      2.20) by $100,000,000 in integral multiples of $10,000,000. No prepayment
      fee under Section 2.2.6 shall be required with respect to such
      $100,000,000 reduction. No other optional reduction of the Aggregate
      Revolving Loan Commitment by the Borrower is permitted hereunder. Any such
      permitted reduction may only occur upon at least three (3) Business Days'
      written notice to the Agent, which notice shall specify the amount of any
      such reduction, provided, however, that the amount of the Aggregate
      Revolving Loan Commitment plus the Aggregate Pre-Funded Letter of Credit
      Commitment may not be reduced below the Aggregate Outstanding Credit
      Exposure, and the amount of the Aggregate Revolving Loan Commitment may
      not be reduced below the Aggregate Outstanding Credit Exposure minus the
      Aggregate Pre-Funded Letter of Credit Commitment. All accrued Commitment
      Fees shall be payable on the effective date of any termination of the
      obligations of the Lenders to make Credit Extensions hereunder and on the
      final date upon which all Loans are repaid.

      2.5. Minimum Amount of Each Advance. Each Eurodollar Advance shall be in
the minimum amount of $1,000,000 (and in multiples of $500,000 if in excess
thereof), and each Floating Rate Advance (other than an Advance to repay
Non-Ratable Loans or Collateral Protection Advances) shall be in the minimum
amount of $100,000 (and in multiples of $50,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the Available
Aggregate Revolving Loan Commitment.

      2.6. Optional Principal Payments; Optional Reductions of the Aggregate
Pre-Funded Letter of Credit Commitment. The Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances, or any
portion of the outstanding Floating Rate Advances. Subject to Section 2.2.6, the
Borrower may from time to time pay, subject to the payment of any funding
indemnification amounts required by Section 3.4 but without penalty or premium,
all outstanding Eurodollar Advances, or, in a minimum aggregate amount of
$1,000,000 or any integral multiple of $500,000 in excess thereof, any portion
of the outstanding Eurodollar Advances upon three (3) Business Days' prior
notice to the Agent. The Borrower may from time to time request reductions in
the Aggregate Pre-Funded Letter of Credit Commitment. So long as no Default is
then continuing, and subject to the remainder of this Section 2.6, the
Pre-Funded Lenders shall be obligated to accept the initial $25,000,000 of such
requested reductions. The Borrower may also request from time to time that the
Agent reduce the Aggregate Pre-Funded Letter of Credit Commitment in excess of
$25,000,000. Such additional reductions may be accepted in the sole discretion
of the Pre-Funded Lenders. Subsequent to the reduction of the Aggregate
Pre-Funded Letter of Credit Commitment by an initial $25,000,000, the Agent
shall notify the Pre-Funded Lenders each time the Borrower requests a further
reduction of the Aggregate Pre-Funded Letter of Credit Commitment. Each
Pre-Funded Lender shall have three Business Days from the date the Agent
transmits the Borrower's request to approve or reject such request. Failure by a
Pre-Funded Lender to respond to the Agent with respect to such request in
writing by the end of such three Business Day period shall be deemed to
constitute the approval thereof by such Pre-Funded Lender. At the end of such
three Business Day period, the Agent shall notify the Borrower of those
Pre-Funded Lenders consenting to the reduction of the Aggregate Pre-Funded
Letter of Credit Commitment. Those Pre-Funded Lenders that approve such
reduction shall have a ratable portion of their

                                       36
<PAGE>

respective Pre-Funded Letter of Credit Commitments reduced. No Lender that
rejects a reduction of the Aggregate Pre-Funded Letter of Credit Commitment
shall be subject to a reduction of its ratable portion thereof. Notwithstanding
the foregoing, if the Borrower requests a reduction of the Aggregate Pre-Funded
Letter of Credit Commitment to $0, the Agent and the Pre-Funded Lenders agree
that they shall consent to such request. In connection with any reduction of the
Aggregate Pre-Funded Letter of Credit Commitment, the Agent shall return to the
Pre-Funded Lenders subject to such reduction their ratable portion of the
Aggregate Credit Linked Deposit. The amount returned to a Pre-Funded Lender
shall equal the amount by which such Lender's Pre-Funded Letter of Credit
Commitment is reduced plus any investment return to which such Lender is
entitled under Section 2.19.4. In no event shall the Borrower request a
reduction of the Aggregate Pre-Funded Letter of Credit Commitment and neither
the Agent nor any Pre-Funded Lender shall approve a reduction in the Aggregate
Pre-Funded Letter of Credit Commitment if, subsequent to such reduction (i) the
Aggregate Outstanding Credit Exposure exceeds the Borrowing Base and (ii) the
Aggregate Outstanding Credit Exposure exceeds the Aggregate Revolving Loan
Commitment plus the Aggregate Pre-Funded Letter of Credit Commitment.

      2.7. Method of Selecting Types and Interest Periods for New Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance, the Interest Period applicable thereto from time to time; provided that
there shall be no more than 8 Interest Periods in effect with respect to all of
the Loans at any time, unless such limit has been waived by the Agent in its
sole discretion; provided, further, that no Interest Period for Eurodollar
Advances during the "Syndication Period," as defined in the definition of
Interest Period, shall exceed seven days, and the Interest Periods with respect
to such Eurodollar Advances during the Syndication Period shall be required to
expire on the same date. The Borrower shall give the Agent irrevocable notice (a
"Borrowing Notice") not later than 12:00 noon (Chicago time) on the Borrowing
Date of each Floating Rate Advance (other than a Non-Ratable Loan) and three
Business Days before the Borrowing Date for each Eurodollar Advance, specifying:

      (i)   the Borrowing Date, which shall be a Business Day, of such Advance,

      (ii)  the aggregate amount of such Advance,

      (iii) the Type of Advance selected, and

      (iv)  in the case of each Eurodollar Advance, the Interest Period
applicable thereto.

Not later than 2:00 p.m. (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans in Federal or other funds immediately
available in Chicago to the Agent at its address specified pursuant to Article
XIII. The Agent will promptly make the funds so received from the Lenders
available to the Borrower at the Agent's aforesaid address.

      2.8. Conversion and Continuation of Outstanding Advances; No Conversion or
Continuation of Eurodollar Advances After Default. Floating Rate Advances (other
than Non-Ratable Loans) shall continue as Floating Rate Advances unless and
until such Floating Rate Advances are converted into Eurodollar Advances
pursuant to this Section 2.8 or are repaid in

                                       37
<PAGE>

accordance with Section 2.6. Each Eurodollar Advance shall continue as a
Eurodollar Advance until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Advance shall be automatically converted
into a Floating Rate Advance unless (x) such Eurodollar Advance is or was repaid
in accordance with Section 2.6 or (y) the Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance
for the same or another Interest Period. Subject to the terms of Section 2.5,
the Borrower may elect from time to time to convert all or any part of an
Advance of any Type (other than a Non-Ratable Loan) into any other Type or Types
of Advances; provided that any conversion of any Eurodollar Advance shall be
made on, and only on, the last day of the Interest Period applicable thereto.
Notwithstanding anything to the contrary contained in this Section 2.8, during
the continuance of a Default or an Unmatured Default, the Agent may (or shall at
the direction of the Required Lenders), by notice to the Borrower, declare that
no Advance may be made, converted or continued as a Eurodollar Advance. The
Borrower shall give the Agent irrevocable notice (a "Conversion/Continuation
Notice") of each conversion of an Advance or continuation of a Eurodollar
Advance not later than 11:00 a.m. (Chicago time) at least one (1) Business Day,
in the case of a conversion into a Floating Rate Advance, or three (3) Business
Days, in the case of a conversion into or continuation of a Eurodollar Advance,
prior to the date of the requested conversion or continuation, specifying:

      (i)   the requested date, which shall be a Business Day, of such
            conversion or continuation,

      (ii)  the aggregate amount and Type of the Advance which is to be
            converted or continued, and

      (iii) the amount of such Advance which is to be converted into or
            continued as a Eurodollar Advance and the duration of the Interest
            Period applicable thereto.

      2.9. Changes in Interest Rate, etc. Each Floating Rate Advance (other than
a Non-Ratable Loan) shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is made or is
automatically converted from a Eurodollar Advance into a Floating Rate Advance
pursuant to Section 2.8, to but excluding the date it is paid or is converted
into a Eurodollar Advance pursuant to Section 2.8 hereof, at a rate per annum
equal to the Floating Rate for such day. Changes in the rate of interest on that
portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate. Each Eurodollar
Advance shall bear interest on the outstanding principal amount thereof from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the Eurodollar Rate
determined by the Agent as applicable to such Eurodollar Advance based upon the
Borrower's selections under Sections 2.7 and 2.8 and otherwise in accordance
with the terms hereof. No Interest Period with respect to Revolving Loans may
end after the Termination Date and no investment period related to amounts owing
on the Credit Linked Deposits, as described in Section 2.19.4, may end after the
Termination Date.

      2.10. Rates Applicable After Default. During the continuance of a Default
(including the Borrower's failure to pay any Loan at maturity), the Agent or the
Required Lenders may, at

                                       38
<PAGE>

their option, by notice to the Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that (i) each Eurodollar Advance shall bear interest at the rate
otherwise applicable to such Interest Period plus 2% per annum, (ii) each
Floating Rate Advance shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time plus 2% per annum, (iii) amounts owing
in respect of Credit Linked Deposits shall accrue interest at the Pre-Funded
Letter of Credit LIBO Rate plus 2% per annum and (iv) each of the LC Fee and the
Pre-Funded Letter of Credit Fee shall be increased by 2% per annum; provided
that, during the continuance of a Default under Section 7.6 or 7.7, the interest
rates set forth in clauses (i), (ii) and (iii) above and the increase in each of
the LC Fee and the Pre-Funded Letter of Credit Fee set forth in clause (iv)
above shall be applicable to all Credit Extensions, Advances, fees and other
Obligations hereunder without any election or action on the part of the Agent or
any Lender.

      2.11. Method of Payment; Settlement.

            2.11.1 Method of Payment. All payments of the Obligations hereunder
      shall be made, without setoff, deduction, or counterclaim, in immediately
      available funds to the Agent at the Agent's address specified pursuant to
      Article XIII, or at any other Lending Installation of the Agent specified
      in writing by the Agent to the Borrower, by 12:00 p.m. (Chicago time) on
      the date when due and shall (except in the case of Reimbursement
      Obligations for which the applicable LC Issuer has not been fully
      indemnified by the Lenders, or as otherwise specifically required
      hereunder) be applied ratably by the Agent among the Lenders. Each payment
      delivered to the Agent for the account of any Lender shall be delivered
      promptly by the Agent to such Lender in the same type of funds that the
      Agent received at its address specified pursuant to Article XIII or at any
      Lending Installation specified in a notice received by the Agent from such
      Lender. The Agent is hereby authorized to charge the account of the
      Borrower maintained with Bank One for each payment of the Obligations as
      it becomes due hereunder. The Agent is also hereby authorized to charge
      each Collection Account into which Receivables collections and other
      proceeds of Collateral are deposited. The Agent shall apply such amounts
      on a daily basis to reduce outstanding Obligations. For purposes of
      computing interest, fees and the Available Aggregate Revolving Loan
      Commitment as of any date, (x) all amounts constituting immediately
      available goods funds shall be deemed received by the Agent on the
      Business Day on which such amounts are deposited into one of the
      aforementioned Collection Accounts maintained with Bank One or an
      Affiliate thereof, and (y) all amounts not constituting immediately
      available good funds shall be deemed received by the Agent on the first
      Business Day following the Business Day on which such amounts are
      deposited into one of the aforementioned Collection Accounts maintained
      with Bank One or an Affiliate thereof. In the event any such amount is
      applied and the payment item evidencing such amount is subsequently
      dishonored, returned for insufficient funds, required to be returned to
      the applicable Account Debtor, or required to be remitted to a Person
      other than the Agent or a Lender, the Obligations shall be increased by
      the amount originally applied in reduction thereof and interest shall be
      deemed to have accrued on such amount from the Business Day on which such
      amount was originally credited as a reduction of the Obligations through
      the Business Day on which such amount is repaid. The Borrower shall also
      be required to pay any

                                       39
<PAGE>

      fees that would have accrued during such period had such amount not been
      deemed paid during such period. Each reference to the Agent in this
      Section 2.11 shall also be deemed to refer, and shall apply equally, to
      each LC Issuer in the case of payments required to be made by the Borrower
      to such LC Issuer pursuant to Section 2.19.6.

            2.11.2 Settlement. (a) Each Lender's funded portion of any Advance
      is intended by the Lenders to be equal at all times to such Lender's Pro
      Rata Share of such Advance; provided, however, that for purposes of this
      Section 2.11.2 and all other applicable provisions of this Agreement, only
      Lenders with Revolving Loan Commitments shall participate in Collateral
      Protection Advances and Non-Ratable Loans in amounts equal to their
      respective Revolving Loan Pro Rata Shares thereof. Notwithstanding such
      agreement, the Agent, the Non-Ratable Lender (with respect to the
      Non-Ratable Loans), and the Lenders agree (which agreement shall not be
      for the benefit of or enforceable by the Borrower) that in order to
      facilitate the administration of this Agreement and the other Loan
      Documents, settlement among them as to any Advance, including the
      Non-Ratable Loans and the Collateral Protection Advances, shall take place
      on a periodic basis in accordance with this Section 2.11.2.

            (b) The Agent shall request settlement (a "Settlement") with the
      Lenders on at least a weekly basis, or on a more frequent basis at the
      Agent's election, (A) on behalf of the Non-Ratable Lender, with respect to
      each outstanding Non-Ratable Loan, (B) for itself, with respect to each
      Collateral Protection Advance, and (C) with respect to collections
      received, in each case, by notifying the Lenders of such requested
      Settlement by telephone or facsimile, no later than 12:30 p.m. (Chicago
      time) on the date of such requested Settlement (the "Settlement Date").
      Each Lender (other than the Non-Ratable Lender, in the case of the
      Non-Ratable Loans, and the Agent in the case of the Collateral Protection
      Advances) shall transfer the amount of such Lender's Pro Rata Share of the
      outstanding principal amount of the applicable Advances with respect to
      which Settlement is requested to the Agent, to such account of the Agent
      as the Agent may designate, not later than 2:30 p.m. (Chicago time), on
      the Settlement Date applicable thereto. Settlements may occur during the
      existence of a Default or an Unmatured Default and whether or not the
      applicable conditions precedent set forth in Article IV have then been
      satisfied. Such amounts transferred to the Agent shall be applied against
      the amounts of the applicable Non-Ratable Loan or Collateral Protection
      Advance and, together with the portion of such Non-Ratable Loan or
      Collateral Protection Advance representing the Non-Ratable Lenders or the
      Agent's Pro Rata Share thereof, shall constitute Revolving Loans of such
      Lenders, respectively. If any such amount is not transferred to the Agent
      by any Lender on the Settlement Date applicable thereto, the Agent shall
      be entitled to recover such amount on demand from such Lender together
      with interest thereon at the Alternate Base Rate for the first three days
      from and after the Settlement Date and thereafter at the then applicable
      Floating Rate (1) on behalf of the Non-Ratable Lender with respect to each
      outstanding Non-Ratable Loan and (2) for itself with respect to each
      Collateral Protection Advance.

            (c) Notwithstanding the foregoing, not more than one Business Day
      after demand is made by the Agent (whether before or after the occurrence
      of a Default or an Unmatured Default and regardless of whether the Agent
      has requested a Settlement with

                                       40
<PAGE>

      respect to a Non-Ratable Loan or Collateral Protection Advance), each
      other Lender (A) shall irrevocably and unconditionally purchase and
      receive from the Non-Ratable Lender or the Agent, as applicable, without
      recourse or warranty, an undivided interest and participation in such
      Non-Ratable Loan or Collateral Protection Advance equal to such Lender's
      Pro Rata Share of such Non-Ratable Loan or Collateral Protection Advance,
      and (B) if Settlement has not previously occurred with respect to such
      Non-Ratable Loans or Collateral Protection Advances, upon demand by the
      Agent or the Non-Ratable Lender, as applicable, shall pay to the Agent or
      the Non-Ratable Lender, as applicable, as the purchase price of such
      participation an amount equal to 100% of such Lender's Pro Rata Share of
      such Non-Ratable Loans or Collateral Protection Advances. If such amount
      is not in fact transferred to the Agent or the Non-Ratable Lender, as
      applicable, by any Lender, the Agent shall be entitled to recover such
      amount on demand from such Lender together with interest thereon at the
      Alternate Base Rate for the first three days from and after such demand
      and thereafter at the then applicable Floating Rate.

            (d) From and after the date, if any, on which any Lender purchases
      an undivided interest and participation in any Non-Ratable Loan or
      Collateral Protection Advance pursuant to Section 2.11.2(c), the Agent
      shall promptly distribute to such Lender such Lender's Pro Rata Share of
      all payments of principal and interest and all proceeds of Collateral
      received by the Agent in respect of such Non-Ratable Loan or Collateral
      Protection Advance.

            (e) Between Settlement Dates, to the extent no Collateral Protection
      Advances are outstanding, the Agent may pay over to the Non-Ratable Lender
      any payments received by the Agent, which in accordance with the terms of
      this Agreement would be applied to the reduction of the Revolving Loans,
      for application to the Non-Ratable Lender's Revolving Loans including
      Non-Ratable Loans. If, as of any Settlement Date, collections received
      since the then immediately preceding Settlement Date have been applied to
      the Non-Ratable Lender's Revolving Loans (other than to Non-Ratable Loans
      or Collateral Protection Advances in which a Lender has not yet funded its
      purchase of a participation pursuant to Section 2.11.2(c)), as provided
      for in the previous sentence, the Non-Ratable Lender shall pay to the
      Agent for the accounts of the Lenders, to be applied to the outstanding
      Revolving Loans of such Lenders, an amount such that each Lender shall,
      upon receipt of such amount, have, as of such Settlement Date, its Pro
      Rata Share of the Revolving Loans. Subject to Section 2.11.1, during the
      period between Settlement Dates, the Non-Ratable Lender with respect to
      Non-Ratable Loans, the Agent with respect to Collateral Protection
      Advances, and each Lender with respect to the Revolving Loans other than
      Non-Ratable Loans and Collateral Protection Advances, in each case ratably
      in accordance with the funds employed by each of them, shall be entitled
      to interest at the applicable rate or rates payable under this Agreement
      on the actual average daily amount of funds employed by the Non-Ratable
      Lender, the Agent, and the other Lenders.

      2.12. Noteless Agreement; Evidence of Indebtedness. (i) Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender from time to time,

                                       41
<PAGE>

including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.

      (ii)  The Agent shall also maintain accounts in which it will record (a)
            the date and the amount of each Loan made hereunder, the Type
            thereof and the Interest Period (in the case of a Eurodollar
            Advance) with respect thereto, (b) the amount of any principal or
            interest due and payable or to become due and payable from the
            Borrower to each Lender hereunder, (c) the original stated amount of
            each Facility LC and the amount of LC Obligations outstanding at any
            time, (d) the effective date and amount of each Assignment Agreement
            delivered to and accepted by it and the parties thereto pursuant to
            Section 12.3, (e) the amount of any sum received by the Agent
            hereunder from the Borrower and each Lender's share thereof, and (f)
            all other appropriate debits and credits as provided in this
            Agreement, including, without limitation, all fees, charges,
            expenses and interest.

      (iii) The entries maintained in the accounts maintained pursuant to
            paragraphs (i) and (ii) above shall be prima facie evidence of the
            existence and amounts of the Obligations therein recorded; provided,
            however, that the failure of the Agent or any Lender to maintain
            such accounts or any error therein shall not in any manner affect
            the obligation of the Borrower to repay the Obligations in
            accordance with their terms.

      (iv)  Any Lender may request that its Revolving Loans be evidenced by a
            promissory note in substantially the form of Exhibit E (a "Note").
            In such event, the Borrower shall prepare, execute and deliver to
            such Lender the appropriate Note payable to the order of such
            Lender. Thereafter, the Loans evidenced by such Note and interest
            thereon shall at all times (prior to any assignment pursuant to
            Section 12.3) be represented by one or more Notes payable to the
            order of the payee named therein, except to the extent that any such
            Lender subsequently returns any such Note for cancellation and
            requests that such Loans once again be evidenced as described in
            paragraphs (i) and (ii) above.

      2.13. Telephonic Notices. The Borrower hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, signed by an Authorized Officer, if such
confirmation is requested by the Agent or any Lender, of each telephonic notice.
If the written confirmation differs in any material respect from the action
taken by the Agent and the Lenders, the records of the Agent and the Lenders
shall govern absent manifest error.

      2.14. Payments of Interest.

            2.14.1 Interest Payment Dates; Interest and Fee Basis. Fees and
      other amounts owing in respect of the Credit Linked Deposits shall be paid
      in accordance with Section

                                       42
<PAGE>

      2.19.4. With respect to all Advances, interest shall be payable as
      follows. Interest accrued on each Floating Rate Advance shall be payable
      in arrears on each Payment Date, commencing with the first such date to
      occur after the Closing Date, and at maturity, whether due to acceleration
      or otherwise. Interest accrued on each Eurodollar Advance shall be payable
      on the last day of its applicable Interest Period, on any date on which
      the Eurodollar Advance is prepaid, whether by acceleration or otherwise,
      and at maturity. Interest accrued on each Eurodollar Advance having an
      Interest Period longer than three months shall also be payable on the last
      day of each three-month interval during such Interest Period. Interest on
      Eurodollar Advances, Pre-Funded Letter of Credit Fees, LC Fees and all
      other fees hereunder, and amounts owing in respect of Credit Linked
      Deposits shall be calculated for actual days elapsed on the basis of a
      360-day year. Interest on Floating Rate Advances shall be calculated for
      actual days elapsed on the basis of a 365/366-day year. Interest shall be
      payable for the day an Advance is made but not for the day of any payment
      (unless payment is on the same date as the Advance) on the amount paid if
      payment is received prior to 12:00 p.m. (Chicago time) at the place of
      payment. If any payment of principal of or interest on an Advance, any
      fees or any other amounts payable to the Agent or any Lender hereunder
      shall become due on a day which is not a Business Day, such payment shall
      be made on the next succeeding Business Day and, in the case of a
      principal payment, such extension of time shall be included in computing
      interest, fees and commissions in connection with such payment.

            2.14.2 Limitation on Interest. The Borrower, the Agent and the
      Holders of Secured Obligations intend to strictly comply with all
      applicable laws, including applicable usury laws. Accordingly, the
      provisions of this Section 2.14.2 shall govern and control over every
      other provision of this Agreement or any other Loan Document which
      conflicts or is inconsistent with this Section 2.14.2, even if such
      provision declares that it controls. As used in this Section 2.14.2, the
      term "interest" includes the aggregate of all charges, fees, benefits, or
      other compensation which constitute interest under applicable law,
      provided that, to the maximum extent permitted by applicable law, (a) any
      non-principal payment shall be characterized as an expense or as
      compensation for something other than the use, forbearance, or detention
      of money and not as interest and (b) all interest at any time contracted
      for, reserved, charged, or received shall be amortized, prorated,
      allocated, and spread, in equal parts during the full term of the Secured
      Obligations. In no event shall the Borrower or any other Person be
      obligated to pay, or any Holder of Secured Obligations have any right or
      privilege to reserve, receive, or retain, (i) any interest in excess of
      the maximum amount of nonusurious interest permitted under the laws of the
      State of New York or the applicable laws (if any) of the U.S. or of any
      other applicable state or (ii) total interest in excess of the amount
      which such Holder of Secured Obligations could lawfully have contracted
      for, reserved, received, retained, or charged had the interest been
      calculated for the full term of the Secured Obligations at the Highest
      Lawful Rate. On each day, if any, that the interest rate (the "Stated
      Rate") called for under this Agreement or any other Loan Document exceeds
      the Highest Lawful Rate, the rate at which interest shall accrue shall
      automatically be fixed by operation of this sentence at the Highest Lawful
      Rate for that day, and shall remain fixed at the Highest Lawful Rate for
      each day thereafter until the total amount of interest accrued equals the
      total amount of interest which would have accrued if there were no such
      ceiling rate as is imposed by this sentence. Thereafter,

                                       43
<PAGE>

      interest shall accrue at the Stated Rate unless and until the Stated Rate
      again exceeds the Highest Lawful Rate when the provisions of the
      immediately preceding sentence shall again automatically operate to limit
      the interest accrual rate. The daily interest rates to be used in
      calculating interest at the Highest Lawful Rate shall be determined by
      dividing the applicable Highest Lawful Rate per annum by the number of
      days in the calendar year for which such calculation is being made. None
      of the terms and provisions contained in this Agreement or in any other
      Loan Document which directly or indirectly relate to interest shall ever
      be construed without reference to this Section 2.14.2, or be construed to
      create a contract to pay for the use, forbearance, or detention of money
      at an interest rate in excess of the Highest Lawful Rate. If the term of
      any Secured Obligation is shortened by reason of acceleration of maturity
      as a result of any Default or by any other cause, or by reason of any
      required or permitted prepayment, and if for that (or any other) reason
      any Holder of Secured Obligations at any time, including but not limited
      to, the stated maturity, is owed or receives (and/or has received)
      interest in excess of interest calculated at the Highest Lawful Rate, then
      and in any such event all of any such excess interest shall be canceled
      automatically as of the date of such acceleration, prepayment, or other
      event which produces the excess, and, if such excess interest has been
      paid to such Holder of Secured Obligations, it shall be credited pro tanto
      against the then outstanding principal balance of the Borrower's
      obligations to such Holder of Secured Obligations, effective as of the
      date or dates when the event occurs which causes it to be excess interest,
      until such excess is exhausted or all of such principal has been fully
      paid and satisfied, whichever occurs first, and any remaining balance of
      such excess shall be promptly refunded to its payor. Chapter 346 of the
      Texas Finance Code (which regulates certain revolving credit accounts
      (formerly Tex. Rev. Civ. Stat. Ann. Art. 5069, Ch. 15)) shall not apply to
      this Agreement or to any Loan, nor shall this Agreement or any Loan be
      governed by or be subject to the provisions of such Chapter 346 in any
      manner whatsoever.

      2.15. Notification of Advances, Interest Rates, Prepayments and Revolving
Loan Commitment Reductions; Availability of Loans. Promptly after receipt
thereof, the Agent will notify each Lender of the contents of each Aggregate
Revolving Loan Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
Promptly after notice from the applicable LC Issuer, the Agent will notify each
Lender of the contents of each request for issuance of a Facility LC hereunder.
The Agent will notify the Borrower and each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give the Borrower and each Lender prompt notice of each
change in the Alternate Base Rate. Not later than 2:00 p.m. (Chicago time) on
each Borrowing Date, each Lender shall make available its Loan or Revolving
Loans in funds immediately available in Chicago to the Agent at its address
specified pursuant to Article XIII. The Agent will promptly make the funds so
received from the Lenders available to the Borrower at the Agent's aforesaid
address.

      2.16. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and other Obligations and each LC Issuer may
book its Facility LCs at any Lending Installation selected by such Lender or
such LC Issuer, as applicable, and may change its Lending Installation from time
to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans, Facility LCs, and participations in LC Obligations
and other

                                       44
<PAGE>

Obligations, and any Notes issued hereunder shall be deemed held by each Lender
or the relevant LC Issuer, for the benefit of any such Lending Installation.
Each Lender and each LC Issuer may, by written notice to the Agent and the
Borrower in accordance with Article XIII, designate replacement or additional
Lending Installations through which Loans will be made by it or Facility LCs
will be issued by it and for whose account Loan payments or payments with
respect to Facility LCs are to be made.

      2.17. Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.

      2.18. Replacement of Lender. If (i) the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 or (ii) any
Lender refuses to consent to certain proposed amendments, modifications,
waivers, discharges or terminations with respect to this Agreement that require
the consent of all Lenders (or all affected Lenders) pursuant to Section 8.2 and
the same have been approved by the Required Lenders (any Lender described in
clause (i) or clause (ii) being an "Affected Lender"), the Borrower may elect to
terminate or replace the Revolving Loan Commitment of such Affected Lender and
such Lender's Pre-Funded Letter of Credit Pro Rata Share of the Aggregate Credit
Linked Deposit, provided that no Default or Unmatured Default shall have
occurred and be continuing at the time of such termination or replacement, and
provided further that, concurrently with such termination or replacement, (i) if
the Affected Lender is being replaced, another bank or other entity which is
reasonably satisfactory to the Borrower and the Agent shall agree, as of such
date, to purchase for cash the Outstanding Credit Exposure of the Affected
Lender pursuant to an Assignment Agreement substantially in the form of Exhibit
C and to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments, and (ii)
the Borrower shall pay to such Affected Lender in immediately available funds on
the day of such replacement (A) all interest, fees and other amounts then
accrued but unpaid to such Affected Lender by the Borrower hereunder to and
including the date of termination, including without limitation payments due to
such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any,
equal to the payment which would have been due to such Lender on the day of such
replacement under Section 3.4 had the Loans of such Affected Lender been prepaid
on such date rather than sold to the replacement Lender, in each case to the
extent not paid by the purchasing lender and (iii) if

                                       45
<PAGE>

the Affected Lender is being terminated, the Borrower shall pay to such Affected
Lender all Obligations due to such Affected Lender (including the amounts
described in the immediately preceding clauses (i) and (ii) plus the outstanding
principal balance of such Affected Lender's Credit Extensions).

      2.19. Facility LCs.

            2.19.1 Issuance. Each LC Issuer hereby agrees, on the terms and
      conditions set forth in this Agreement, to issue standby and commercial
      letters of credit (each, a "Facility LC") and to renew, extend, increase,
      decrease or otherwise modify each Facility LC ("Modify," and each such
      action, a "Modification"), from time to time from and including the date
      of this Agreement and prior to the Termination Date upon the request of
      the Borrower or any Subsidiary Guarantor; provided that immediately after
      each such Facility LC is issued or Modified, (i) the aggregate amount of
      the outstanding LC Obligations shall not exceed $650,000,000, (ii) the
      Aggregate Outstanding Credit Exposure shall not exceed the Borrowing Base
      and (iii) the Aggregate Outstanding Credit Exposure shall not exceed the
      Aggregate Revolving Loan Commitment plus the ---- Aggregate Pre-Funded
      Letter of Credit Commitment. Any reference in this Section 2.19 to a
      request for a Facility LC by the Borrower shall be deemed to include
      requests by any Subsidiary Guarantor. The Borrower agrees that it is
      obligated to satisfy any amount arising under or in connection with
      Facility LCs issued hereunder at the request of any Subsidiary Guarantor,
      including, without limitation, all Reimbursement Obligations, and that no
      Facility LC requested by any such Person shall be issued hereunder unless
      all conditions to issuance have been satisfied. No Facility LC shall have
      an expiry date later than the earlier of (x) the fifth Business Day prior
      to the Termination Date and (y) one year after its issuance; provided,
      however, that any Facility LC with a one-year term may provide for the
      renewal thereof for additional one-year periods that do not extend beyond
      the date referenced in clause (x) hereof. Schedule 2.19.1 sets forth
      certain letters of credit issued under the Prior Credit Agreement. Subject
      to the satisfaction on the Closing Date of the conditions precedent set
      forth in Sections 4.1 and 4.2, such letters of credit shall constitute, on
      and after the Closing Date, Facility LCs and shall be subject to and
      benefit from this Agreement.

            2.19.2 Participations. Upon the issuance or Modification by an LC
      Issuer of a Facility LC in accordance with this Section 2.19, such LC
      Issuer shall be deemed, without further action by any party hereto, to
      have unconditionally and irrevocably sold to each Lender, and each Lender
      shall be deemed, without further action by any party hereto, to have
      unconditionally and irrevocably purchased from such LC Issuer, a
      participation in such Facility LC (and each Modification thereof) and the
      related LC Obligations in proportion to its Facility LC Pro Rata Share
      thereof; provided, however, that no Lender with a Credit Linked Deposit
      shall be required to make such a purchase in excess of the amount of its
      Credit Linked Deposit or its Pre-Funded Letter of Credit Commitment and
      such purchase shall only be made with the proceeds of such Lender's Credit
      Linked Deposit. The Agent shall notify the Lenders of their Facility LC
      Pro Rata Shares of the then outstanding LC Obligations on each Settlement
      Date and on each date on which a Facility LC is issued, Modified, drawn or
      terminated, in each case after giving effect to the applicable issuance,
      Modification, draw or termination.

                                       46
<PAGE>

            2.19.3 Notice. Subject to Section 2.19.1, the Borrower shall give
      the applicable LC Issuer notice prior to 12:00 noon (Chicago time) at
      least one Business Day prior to the proposed date of issuance or
      Modification of the applicable Facility LC, specifying the beneficiary,
      the proposed date of issuance (or Modification) and the expiry date of
      such Facility LC, and describing the proposed terms of such Facility LC
      and the nature of the transactions proposed to be supported thereby. Upon
      receipt of such notice, the applicable LC Issuer shall promptly notify the
      Agent, and the Agent shall promptly notify each Lender, of the contents
      thereof and of the amount of such Lender's Facility LC Pro Rata Share of
      the Lenders' aggregate participation in such proposed Facility LC. The
      issuance or Modification by the applicable LC Issuer of a Facility LC
      shall, in addition to the conditions precedent set forth in Article IV
      (the satisfaction of which the applicable LC Issuer shall have no duty to
      ascertain), be subject to the conditions precedent that such Facility LC
      shall be satisfactory to the applicable LC Issuer and that the Borrower
      shall have executed and delivered such application agreement and/or such
      other instruments and agreements relating to such Facility LC as the
      applicable LC Issuer shall have reasonably requested (each, a "Facility LC
      Application"). In the event of any conflict between the terms of this
      Agreement and the terms of any Facility LC Application, the terms of this
      Agreement shall control.

            2.19.4 LC Fees; Pre-Funded Letter of Credit Fees; Return on
      Aggregate Credit Linked Deposit.

            (a) The Borrower shall pay to the Agent, for the account of the
Lenders with Revolving Loan Commitments (or, if the Revolving Loan Commitments
have terminated, Outstanding Revolving Loan Credit Exposure) ratably in
accordance with their respective Facility LC Pro Rata Shares, with respect to
issued and outstanding Facility LCs, a letter of credit fee at a per annum rate
equal to the Applicable Margin for Revolving Loans that are Eurodollar Loans in
effect from time to time on the maximum stated amount under such Facility LCs,
with such fee to be payable in arrears on each Payment Date. No Lender with a
Revolving Loan Commitment shall receive any such letter of credit fee until such
time as the LC Obligations exceed the Aggregate Pre-Funded Letter of Credit
Commitment then in effect and such letter of credit fee shall only be payable to
such Lenders on the amount of the LC Obligations in excess of the Aggregate
Pre-Funded Letter of Credit Commitment then in effect. The Borrower shall pay to
the Agent, for the account of the Pre-Funded Lenders ratably in accordance with
their respective Facility LC Pro Rata Shares, a fee at a per annum rate equal to
the Aggregate Pre-Funded Letter of Credit Commitment times the Pre-Funded Letter
of Credit Rate in effect from time to time, with such fee to be paid in arrears
on each Payment Date. The foregoing fees shall be payable in the manner
described above regardless of whether or not a Conversion Event is then
continuing. The Borrower shall also pay to the applicable LC Issuer for its own
account (x) on the first Payment Date to occur after the issuance of a Facility
LC issued by such LC Issuer, a fronting fee in an amount equal to 0.125% per
annum times the face amount of such Facility LC, and (y) documentary and
processing charges in connection with the issuance, amendment, cancellation,
negotiation, transfer, or other Modification of and draws under Facility LCs in
accordance with such LC Issuer's standard schedule for such charges as in effect
from time to time. Each fee described in this Section 2.19.4, other than those
paid to the Pre-Funded Lenders, shall constitute an "LC Fee". Each fee described
in this Section 2.19.4 that is paid to the Pre-Funded Lenders shall constitute a
"Pre-Funded Letter of Credit Fee".

                                       47
<PAGE>

            (b) The Agent shall invest the Aggregate Credit Linked Deposit from
time to time in such a manner as is necessary to receive a return on such
investment (the "Pre-Funded Investment Earnings") equal to or greater than the
Pre-Funded Letter of Credit LIBO Rate, as such rate may change from time to
time. The Pre-Funded Letter of Credit LIBO Rate shall be calculated using a
one-month interest period. Pre-Funded Lenders shall receive on each Payment Date
their Pre-Funded Letter of Credit Pro Rata Shares of the Pre-Funded Investment
Earnings; provided, however, that, so long as no Default is then continuing, if
on any Payment Date the aggregate amount of Pre-Funded Investment Earnings then
available exceeds the return then required to be paid (as calculated using the
applicable Pre-Funded Letter of Credit LIBO Rate) to the Pre-Funded Lenders, the
Agent shall remit to the Borrower such excess. If on any Payment Date the return
on investment then payable (as calculated using the applicable Pre-Funded Letter
of Credit LIBO Rate) to the Pre-Funded Lenders exceeds the Pre-Funded Investment
Earnings then available, the Borrower shall remit to the Agent on such Payment
Date an amount equal to such deficiency. A Default shall occur if the Borrower
does not remit to the Agent such amounts, if any, as are necessary to pay the
Lenders with Credit Linked Deposits the investment return due and payable on any
Payment Date. The Agent shall not be liable for any loss (including, without
limitation, breakage amounts) resulting from any investment of all or any
portion of the Aggregate Credit Linked Deposit or any use of Pre-Funded
Investment Earnings to make any payment to the Pre-Funded Lenders hereunder
unless the Agent is grossly negligent or has engaged in willful misconduct in
connection with the investment of all or the applicable portion of the Aggregate
Credit Linked Deposit.

            2.19.5 Administration; Reimbursement by Lenders. Upon receipt from
      the beneficiary of any Facility LC of any demand for payment under such
      Facility LC, the applicable LC Issuer shall notify the Agent and the Agent
      shall promptly notify the Borrower and each other Lender as to the amount
      to be paid by such LC Issuer as a result of such demand and the proposed
      payment date (the "LC Payment Date"). The responsibility of the applicable
      LC Issuer to the Borrower and each Lender shall be only to determine that
      the documents (including each demand for payment) delivered under each
      Facility LC issued by such LC Issuer in connection with such presentment
      shall be in conformity in all material respects with such Facility LC.
      Each LC Issuer shall endeavor to exercise the same care in the issuance
      and administration of its Facility LCs as it does with respect to letters
      of credit in which no participations are granted, it being understood that
      in the absence of any gross negligence or willful misconduct by such LC
      Issuer, each Lender shall be unconditionally and irrevocably liable
      without regard to the occurrence of any Default or any condition precedent
      whatsoever, to reimburse such LC Issuer on demand for (i) such Lender's
      (x) Facility LC Pro Rata Share prior to the occurrence of a Conversion
      Event and (y) Pro Rata Share during the continuance of a Conversion Event,
      of the amount of each payment made by such LC Issuer under each Facility
      LC issued by it to the extent such amount is not reimbursed by the
      Borrower pursuant to Section 2.19.6 below or, if applicable, by a
      withdrawal from the Pre-Funded Letter of Credit Account pursuant to
      Section 2.19.6 below, plus (ii) interest on the foregoing amount to be
      reimbursed by such Lender, for each day from the date of such LC Issuer's
      demand for such reimbursement (or, if such demand is made after 11:00 a.m.
      (Chicago time) on such date, from the next succeeding Business Day) to the
      date on which such Lender pays the amount to be reimbursed by it, at a
      rate of interest per annum equal to the Federal Funds Effective Rate for
      the first three days and, thereafter, at a rate

                                       48
<PAGE>

      of interest equal to the rate applicable to Floating Rate Advances. With
      respect to any Pre-Funded Lender, such reimbursement obligation shall not
      exceed the amount of its Pre-Funded Letter of Credit Commitment or its
      Credit Linked Deposit and shall be satisfied solely with the proceeds of
      such Credit Linked Deposit. The Lenders shall be reimbursed for any
      payment required under this Section 2.19.5 to the extent of such Lender's
      Facility LC Pro Rata Share, or Pro Rata Share, as applicable, of any
      payment made by the Borrower as required under Section 2.19.6.

            2.19.6 Reimbursement by Borrower. The Borrower shall be irrevocably
      and unconditionally obligated to reimburse each LC Issuer on or before the
      applicable LC Payment Date for any amounts to be paid by such LC Issuer
      upon any drawing under any Facility LC, issued by it, without presentment,
      demand, protest or other formalities of any kind; provided that neither
      the Borrower nor any Lender shall hereby be precluded from asserting any
      claim for direct (but not consequential) damages suffered by the Borrower
      or such Lender to the extent, but only to the extent, caused by (i) the
      willful misconduct or gross negligence of such LC Issuer in determining
      whether a request presented under any Facility LC issued by it complied
      with the terms of such Facility LC or (ii) such LC Issuer's failure to pay
      under any Facility LC issued by it after the presentation to it of a
      request strictly complying with the terms and conditions of such Facility
      LC. Subject to the terms and conditions of this Agreement (including,
      without limitation, the submission of a Borrowing Notice in compliance
      with Section 2.7 and the satisfaction of the applicable conditions
      precedent set forth in Article IV), the Borrower may request an Advance
      hereunder for the purpose of satisfying any Reimbursement Obligation.
      Prior to the occurrence of a Conversion Event, the Borrower may also
      request that a portion of the Aggregate Credit Linked Deposit be remitted
      to the applicable LC Issuer in satisfaction of any amount drawn under a
      Facility LC. So long as no Conversion Event is continuing, the Agent shall
      honor such a request. The Borrower, within one Business Day of the date on
      which Credit Linked Deposits are used to satisfy such drawn amount, shall
      remit to the Agent for deposit into the Pre-Funded Letter of Credit
      Account the Pre-Funded Account Reimbursement Amount owing in respect of
      such drawn Facility LC amount. A Conversion Event shall occur if the
      Borrower does not remit such Pre-Funded Account Reimbursement Amount to
      the Agent within such one Business Day period. Upon the LC Issuer's
      receipt of any such portion of the Aggregate Credit Linked Deposit in
      payment of such drawn Facility LC amount, such LC Issuer shall be deemed
      to automatically transfer to the Pre-Funded Lenders the Reimbursement
      Obligations that arose as a result of such draw and the Pre-Funded Lenders
      shall directly hold such Reimbursement Obligations until such time as the
      corresponding Pre-Funded Account Reimbursement Amount is deposited into
      the Pre-Funded Letter of Credit Account. If the Borrower does not
      reimburse the applicable LC Issuer in accordance with the foregoing, the
      Lenders shall be required to reimburse such LC Issuer on demand for such
      Lender's (x) Facility LC Pro Rata Share prior to the occurrence of a
      Conversion Event and (y) Pro Rata Share during the continuance of a
      Conversion Event, of the amount of each payment made by such LC Issuer
      under the applicable Facility LC in accordance with Section 2.19.5. All
      such amounts paid by such LC Issuer and remaining unpaid by the Borrower,
      shall bear interest payable on demand, for each day until paid at a rate
      per annum equal to (x) the rate applicable to Floating Rate Advances for
      such day if such day falls on or before the applicable LC Payment Date and
      (y) the sum of 2% plus the rate

                                       49
<PAGE>

      applicable to Floating Rate Advances for such day if such day falls after
      such LC Payment Date. The Agent and each LC Issuer will pay to each Lender
      ratably in accordance with its Facility LC Pro Rata Share or Pro Rata
      Share, as applicable, all amounts received by it from the Borrower for
      application in payment, in whole or in part, of the Reimbursement
      Obligation in respect of any Facility LC issued by it, but only to the
      extent such Lender has made payment to such LC Issuer in respect of such
      Facility LC pursuant to Section 2.19.5. Any payment made to the Pre-Funded
      Lenders shall be remitted directly to the Pre-Funded Letter of Credit
      Account.

            2.19.7 Obligations Absolute. The Borrower's obligations under this
      Section 2.19 shall be absolute and unconditional under any and all
      circumstances and irrespective of any setoff, counterclaim or defense to
      payment which the Borrower may have or have had against any LC Issuer, any
      Lender or any beneficiary of a Facility LC. The Borrower further agrees
      with each LC Issuer and the Lenders that the LC Issuers and the Lenders
      shall not be responsible for, and the Borrower's Reimbursement Obligation
      in respect of any Facility LC shall not be affected by, among other
      things, the validity or genuineness of documents or of any endorsements
      thereon, even if such documents should in fact prove to be in any or all
      respects invalid, fraudulent or forged, or any dispute between or among
      the Borrower, any of its Affiliates, the beneficiary of any Facility LC or
      any financing institution or other party to whom any Facility LC may be
      transferred or any claims or defenses whatsoever of the Borrower or of any
      of its Affiliates against the beneficiary of any Facility LC or any such
      transferee. No LC Issuer shall be liable for any error, omission,
      interruption or delay in transmission, dispatch or delivery of any message
      or advice, however transmitted, in connection with any Facility LC. The
      Borrower agrees that any action taken or omitted by any LC Issuer or any
      Lender under or in connection with each Facility LC and the related drafts
      and documents, if done without gross negligence or willful misconduct,
      shall be binding upon the Borrower and shall not put any LC Issuer or any
      Lender under any liability to the Borrower. Nothing in this Section 2.19.7
      is intended to limit the right of the Borrower to make a claim against the
      applicable LC Issuer for damages as contemplated by the proviso to the
      first sentence of Section 2.19.6.

            2.19.8 Actions of LC Issuers. Each LC Issuer shall be entitled to
      rely, and shall be fully protected in relying, upon any Facility LC issued
      by it, draft, writing, resolution, notice, consent, certificate,
      affidavit, letter, cablegram, telegram, telecopy, telex or teletype
      message, statement, order or other document believed by it to be genuine
      and correct and to have been signed, sent or made by the proper Person or
      Persons, and upon advice and statements of legal counsel, independent
      accountants and other experts selected by such LC Issuer. Each LC Issuer
      shall be fully justified in failing or refusing to take any action under
      this Agreement unless it shall first have received such advice or
      concurrence of the Required Lenders as it reasonably deems appropriate or
      it shall first be indemnified to its reasonable satisfaction by the
      Lenders against any and all liability and expense which may be incurred by
      it by reason of taking or continuing to take any such action.
      Notwithstanding any other provision of this Section 2.19, each LC Issuer
      shall in all cases be fully protected in acting, or in refraining from
      acting, under this Agreement in accordance with a request of the Required
      Lenders, and such request and any action

                                       50
<PAGE>

      taken or failure to act pursuant thereto shall be binding upon the Lenders
      and any future holders of a participation in any Facility LC.

            2.19.9 Indemnification. The Borrower hereby agrees to indemnify and
      hold harmless each Lender required to participate in Facility LCs under
      Section 2.19.2, each LC Issuer and the Agent, and their respective
      directors, officers, agents and employees from and against any and all
      claims and damages, losses, liabilities, costs or expenses which such
      Lender, such LC Issuer or the Agent may incur (or which may be claimed
      against such Lender, such LC Issuer or the Agent by any Person whatsoever)
      by reason of or in connection with the issuance, execution and delivery or
      transfer of or payment or failure to pay under any Facility LC or any
      actual or proposed use of any Facility LC, including, without limitation,
      any claims, damages, losses, liabilities, costs or expenses which such LC
      Issuer may incur by reason of or in connection with (i) the failure of any
      other Lender to fulfill or comply with its obligations to such LC Issuer
      hereunder (but nothing herein contained shall affect any rights the
      Borrower may have against any defaulting Lender) or (ii) by reason of or
      on account of such LC Issuer issuing any Facility LC which specifies that
      the term "Beneficiary" included therein includes any successor by
      operation of law of the named Beneficiary, but which Facility LC does not
      require that any drawing by any such successor Beneficiary be accompanied
      by a copy of a legal document, satisfactory to the applicable LC Issuer,
      evidencing the appointment of such successor Beneficiary; provided that
      the Borrower shall not be required to indemnify any Lender, any LC Issuer
      or the Agent for any claims, damages, losses, liabilities, costs or
      expenses to the extent, but only to the extent, caused by (x) the willful
      misconduct or gross negligence of such LC Issuer in determining whether a
      request presented under any Facility LC complied with the terms of such
      Facility LC or (y) such LC Issuer's failure to pay under any Facility LC
      issued by it after the presentation to it of a request strictly complying
      with the terms and conditions of such Facility LC. Nothing in this Section
      2.19.9 is intended to limit the obligations of the Borrower under any
      other provision of this Agreement.

            2.19.10 Lenders' Indemnification. Each Lender shall, ratably in
      accordance with its Facility LC Pro Rata Share or Pro Rata share, as and
      when applicable, indemnify each LC Issuer, its affiliates and their
      respective directors, officers, agents and employees (to the extent not
      reimbursed by the Borrower) against any cost, expense (including
      reasonable counsel fees and disbursements), claim, demand, action, loss or
      liability (except such as result from such indemnitees' gross negligence
      or willful misconduct or such LC Issuer's failure to pay under any
      Facility LC issued by it after the presentation to it of a request
      strictly complying with the terms and conditions of such Facility LC) that
      such indemnitees may suffer or incur in connection with this Section 2.19
      or any action taken or omitted by such indemnitees hereunder; provided,
      however, that no Pre-Funded Lender's indemnity obligation hereunder shall
      exceed the amount of its Credit Linked Deposit or its Pre-Funded Letter of
      Credit Commitment.

            2.19.11 Facility LC Collateral Account. Subsequent to the occurrence
      and during the continuance of a Default, or at any time the Aggregate
      Outstanding Credit Exposure exceeds the Borrowing Base, or at any time the
      Aggregate Outstanding Credit Exposure exceeds the Aggregate Revolving Loan
      Commitment plus the Aggregate Pre-Funded

                                       51
<PAGE>

      Letter of Credit Commitment, the Borrower agrees that it will, upon the
      request of the Agent or the Required Lenders and until the final
      expiration date of any Facility LC and thereafter as long as any amount is
      payable to any LC Issuer or the Lenders in respect of any Facility LC,
      maintain a special collateral account pursuant to arrangements
      satisfactory to the Agent (the "Facility LC Collateral Account") at the
      Agent's office at the address specified pursuant to Article XIII, in the
      name of the Borrower but under the sole dominion and control of the Agent,
      for the benefit of the Lenders and in which the Borrower shall have no
      interest other than as set forth in Section 8.1. The Borrower hereby
      pledges, assigns and grants to the Agent, on behalf of and for the ratable
      benefit of the Lenders and the LC Issuers, a security interest in all of
      the Borrower's right, title and interest in and to all funds which may
      from time to time be on deposit in the Facility LC Collateral Account to
      secure the prompt and complete payment and performance of the Secured
      Obligations. The Agent will invest any funds on deposit from time to time
      in the Facility LC Collateral Account in certificates of deposit of Bank
      One having a maturity not exceeding 30 days. Nothing in this Section
      2.19.11 shall either obligate the Agent to require the Borrower to deposit
      any funds in the Facility LC Collateral Account or limit the right of the
      Agent to release any funds held in the Facility LC Collateral Account in
      each case other than as required by Section 8.1.

            2.19.12 Rights as a Lender. In its capacity as a Lender, each LC
      Issuer shall have the same rights and obligations as any other Lender.

            2.19.13 Conversion Event. Upon the occurrence and during the
      continuance of a Conversion Event, if any Revolving Loans or Facility LCs
      are outstanding at such time, the Pre-Funded Lenders shall purchase from
      the Lenders with Revolving Loan Commitments a portion of the Aggregate
      Outstanding Revolving Loan Credit Exposure held by such Lenders. Such
      purchase shall be funded with all or a portion, as applicable, of the
      Credit Linked Deposits. No such purchase shall include the unfunded
      portion of any Lender's Revolving Loan Commitment and no such purchase
      shall require a Pre-Funded Lender to fund its purchase beyond the amount
      of its Pre-Funded Letter of Credit Commitment or its Credit Linked
      Deposit. Subsequent to such purchase, each Pre-Funded Lender and each
      other Lender shall hold a portion of the Aggregate Outstanding Credit
      Exposure in an amount equal to its Pro Rata Share thereof. Such purchase
      shall occur automatically upon the occurrence of a Conversion Event and
      shall not require any action by any Lender. The Agent shall consummate
      such purchase by withdrawing such portion of the Credit Linked Deposits
      then on deposit in the Pre-Funded Letter of Credit Account as are
      necessary to fund such purchase and shall distribute such amounts to the
      Lenders with Revolving Loan Commitments so that each such Lender receives
      its Revolving Loan Pro Rata Share thereof. Contemporaneously with such
      purchase by the Pre-Funded Lenders, the Lenders with Revolving Loan
      Commitments shall purchase from the Pre-Funded Lenders a portion of those
      LC Obligations in which the Pre-Funded Lenders were solely participating
      pursuant to Section 2.19.6. Pre-Funded Lenders shall divide the proceeds
      of such purchase based on their Pre-Funded Letter of Credit Pro Rata
      Shares thereof. If such Conversion Event is cured or waived, the Lenders
      with Revolving Loan Commitments shall re-purchase from the Pre-Funded
      Lenders those Loans and LC Obligations sold to the Pre-Funded Lenders upon
      the occurrence of such Conversion Event, and the Pre-Funded Lenders shall
      re-purchase from the other Lenders those LC

                                       52
<PAGE>

      Obligations sold to such other Lenders upon the occurrence of such
      Conversion Event; provided, that all such re-purchases shall give effect
      to any reductions of the balance of such Loans and LC Obligations during
      the period they were held by the Pre-Funded Lenders and the other Lenders,
      as applicable. Such re-purchases are intended to result in the Lenders
      holding only those Obligations they would have held had no Conversion
      Event occurred. Repurchase proceeds owing to the Pre-Funded Lenders shall
      be returned to the Pre-Funded Letter of Credit Account and shall once
      again constitute Credit Linked Deposits. The purchases and re-purchases
      described above may be net against one another and the Lenders may satisfy
      their obligations hereunder by remitting the net purchase amounts to one
      another, as applicable. All purchases and re-purchases described herein
      shall be made without recourse or warranty. The purchases to occur after a
      Conversion Event shall result in all Lenders holding their respective Pro
      Rata Shares of the Aggregate Outstanding Credit Exposure so long as such
      Conversion Event remains outstanding.

      2.20. Increase of Aggregate Revolving Loan Commitment. The Borrower may
from time to time request that the Aggregate Revolving Loan Commitment be
increased to an amount which does not exceed $650,000,000 minus the aggregate
amount of all permitted partial reductions of the Aggregate Revolving Loan
Commitment under Section 2.4.3; provided, however, that (x) if such request
would cause the Aggregate Revolving Loan Commitment to exceed $550,000,000, no
such request shall be made by the Borrower until (1) the Borrower certifies in
writing to the Agent that its "Fixed Charge Coverage Ratio" under the indenture
referenced in clause (i) of Section 9.18 is equal to or greater than 2.0 to 1.0
and the incurrence of such additional Indebtedness is otherwise permitted under
such indenture or (2) the indenture referenced in clause (i) of Section 9.18 has
been amended, to the Agent's satisfaction, to permit a senior secured revolving
credit facility in excess of $550,000,000 plus the amount of the requested
increase; provided, however, that no action shall be required under clause (1)
or clause (2) subsequent to the termination of such indenture and the repayment
of all amounts outstanding in connection therewith, (y) each requested increase
shall be in an amount equal to $10,000,000 or an incremental amount in excess
thereof, and (z) an increase in the Aggregate Revolving Loan Commitment
hereunder may only be made at a time when no Unmatured Default or Default shall
have occurred and be continuing or would result therefrom. The Agent may request
an opinion of counsel from the Borrower in connection with any such increase. In
the event of such a requested increase in the Aggregate Revolving Loan
Commitment under this clause (ii), each of the Lenders shall be given the
opportunity to participate in the increased Aggregate Revolving Loan Commitment,
(x) initially ratably in the proportion that its Revolving Loan Commitment bears
to the Aggregate Revolving Loan Commitment and (y) to the extent that the
requested increase in the Aggregate Revolving Loan Commitment is not fulfilled
pursuant to the preceding clause, in such additional amounts as any Lender,
including any new Lender, the Agent and the Borrower agree. No Lender shall have
any obligation to increase its Revolving Loan Commitment pursuant to a request
by the Borrower under this clause (ii). No increase hereunder shall be effective
without the prior written consent of the Agent (no such consent to be
unreasonably withheld), including, without limitation, the Agent's prior written
consent to the documentation evidencing such increase.

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<PAGE>

                                  ARTICLE III

                             YIELD PROTECTION; TAXES

      3.1.  Yield Protection. If, on or after the Closing Date, the adoption of
any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any change
in any such law, rule, regulation, policy, guideline or directive or in the
interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or any LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:

      (i)   subjects any Lender or any applicable Lending Installation or any LC
            Issuer to any Taxes, or changes the basis of taxation of payments
            (other than with respect to Excluded Taxes) to any Lender or any LC
            Issuer in respect of its Eurodollar Loans, Facility LCs, or
            participations therein, or

      (ii)  imposes or increases or deems applicable any reserve, assessment,
            insurance charge, special deposit or similar requirement against
            assets of, deposits with or for the account of, or credit extended
            by, any Lender or any applicable Lending Installation or any LC
            Issuer (other than reserves and assessments taken into account in
            determining the interest rate applicable to Eurodollar Advances), or

      (iii) imposes any other condition the result of which is to increase the
            cost to any Lender or any applicable Lending Installation of making,
            funding or maintaining its Revolving Loan Commitment or Eurodollar
            Loans or of issuing or participating in Facility LCs, or reduces any
            amount receivable by any Lender or any applicable Lending
            Installation or any LC Issuer in connection with its Revolving Loan
            Commitment or Eurodollar Loans or Facility LCs (including
            participations therein), or requires any Lender or any applicable
            Lending Installation or any LC Issuer to make any payment calculated
            by reference to the amount of Revolving Loan Commitment or
            Eurodollar Loans or Facility LCs (including participations therein)
            held or interest or LC Fees or Pre-Funded Letter of Credit Fees
            received by it, by an amount deemed material by such Lender or any
            LC Issuer, as applicable,

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or such LC Issuer of making or maintaining its
Eurodollar Loans or Revolving Loan Commitment or of issuing or participating in
Facility LCs, as applicable, or to reduce the return received by such Lender or
applicable Lending Installation or such LC Issuer in connection with such
Eurodollar Loans or Revolving Loan Commitment, or Facility LCs (including
participations therein), then, within 15 days of demand, accompanied by the
written statement required by Section 3.6, by such Lender or LC Issuer, the
Borrower shall pay such Lender or LC Issuer such additional amount or amounts as
will compensate such Lender or LC Issuer for such increased cost or reduction in
amount received.

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<PAGE>

      3.2.  Changes in Capital Adequacy Regulations. If a Lender or LC Issuer
determines the amount of capital required or expected to be maintained by such
Lender or LC Issuer, any Lending Installation of such Lender or LC Issuer, or
any corporation controlling such Lender or LC Issuer is increased as a result of
a Change, then, within 15 days of demand, accompanied by the written statement
required by Section 3.6, by such Lender or LC Issuer, the Borrower shall pay
such Lender or LC Issuer the amount necessary to compensate for any shortfall in
the rate of return on the portion of such increased capital which such Lender or
LC Issuer determines is attributable to this Agreement, its Outstanding Credit
Exposure or its Revolving Loan Commitment to make Revolving Loans and issue or
participate in Facility LCs, as applicable, hereunder (after taking into account
such Lender's or LC Issuer's policies as to capital adequacy). "Change" means
(i) any change after the Closing Date in the Risk-Based Capital Guidelines or
(ii) any adoption of, or change in, or change in the interpretation or
administration of any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the Closing Date which affects the amount of
capital required or expected to be maintained by any Lender or LC Issuer or any
Lending Installation or any corporation controlling any Lender or LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the Closing Date, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the Closing Date.

      3.3.  Availability of Types of Advances. If (x) any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or (y) the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, or
(iii) no reasonable basis exists for determining the Eurodollar Base Rate, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate Advances
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law, subject to the
payment of any funding indemnification amounts required by Section 3.4.

      3.4.  Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made or continued, or a Floating Rate Advance is not converted
into a Eurodollar Advance, on the date specified by the Borrower for any reason
other than default by the Lenders, or a Eurodollar Advance is not prepaid on the
date specified by the Borrower for any reason, the Borrower will indemnify each
Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain such Eurodollar Advance.

      3.5.  Taxes. (i) All payments by the Borrower to or for the account of any
Lender, any LC Issuer, or the Agent hereunder or under any Note shall be made
free and clear of and without deduction for any and all Taxes. If the Borrower
shall be required by law to deduct any Taxes

                                       55
<PAGE>

from or in respect of any sum payable hereunder to any Lender, any LC Issuer, or
the Agent, (a) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 3.5) such Lender, LC Issuer, or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (b) the Borrower shall make such deductions, (c)
the Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof or, if a receipt
cannot be obtained with reasonable efforts, such other evidence of payment as is
reasonably acceptable to the Agent, in each case within 30 days after such
payment is made.

      (ii)  In addition, the Borrower shall pay any present or future stamp or
            documentary taxes and any other excise or property taxes, charges or
            similar levies which arise from any payment made hereunder or under
            any Note or Facility LC Application or from the execution or
            delivery of, or otherwise with respect to, this Agreement, any Note
            or any Facility LC Application ("Other Taxes").

      (iii) The Borrower shall indemnify the Agent, each LC Issuer, and each
            Lender for the full amount of Taxes or Other Taxes (including,
            without limitation, any Taxes or Other Taxes imposed on amounts
            payable under this Section 3.5) paid by the Agent, such LC Issuer,
            or such Lender as a result of its Revolving Loan Commitment, any
            Credit Extensions made by it hereunder, or any Facility LC issued or
            participated in by it hereunder, or otherwise in connection with its
            participation in this Agreement and any liability (including
            penalties, interest and expenses) arising therefrom or with respect
            thereto. Payments due under this indemnification shall be made
            within 30 days of the date the Agent or such LC Issuer or such
            Lender makes demand therefor pursuant to Section 3.6.

      (iv)  Each Lender that is not incorporated under the laws of the United
            States of America or a state thereof (each a "Non-U.S. Lender")
            agrees that it will, not more than ten Business Days after the date
            on which it becomes a party to this Agreement (but in any event
            before a payment is due to it hereunder), (i) deliver to each of the
            Borrower and the Agent two duly completed copies of United States
            Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either
            case that such Lender is entitled to receive payments under this
            Agreement without deduction or withholding of any United States
            federal income taxes, or (ii) in the case of a Non-U.S. Lender that
            is fiscally transparent, deliver to the Agent a United States
            Internal Revenue Form W-8IMY together with the applicable
            accompanying forms, W-8 or W-9, as the case may be, and certify that
            it is entitled to an exemption from United States withholding tax.
            Each Non-U.S. Lender further undertakes to deliver to the Borrower
            and the Agent (x) renewals or additional copies of such form (or any
            successor form) on or before the date that such form expires or
            becomes obsolete, and (y) after the occurrence of any event
            requiring a change in the most recent forms so delivered by it, such
            additional forms or amendments thereto as may be reasonably
            requested by the Borrower or the Agent. All forms or amendments
            described in the preceding sentence shall certify that such Lender
            is entitled to receive payments under this

                                       56
<PAGE>

            Agreement without deduction or withholding of any United States
            federal income taxes, unless an event (including without limitation
            any change in treaty, law or regulation) has occurred prior to the
            date on which any such delivery would otherwise be required which
            renders all such forms inapplicable or which would prevent such
            Lender from duly completing and delivering any such form or
            amendment with respect to it and such Lender advises the Borrower
            and the Agent that it is not capable of receiving payments without
            any deduction or withholding of United States federal income tax.

      (v)   For any period during which a Non-U.S. Lender has failed to provide
            the Borrower with an appropriate form pursuant to clause (iv) above
            (unless such failure is due to a change in treaty, law or
            regulation, or any change in the interpretation or administration
            thereof by any governmental authority, occurring subsequent to the
            date on which a form originally was required to be provided), such
            Non-U.S. Lender shall not be entitled to indemnification under this
            Section 3.5 with respect to Taxes imposed by the United States;
            provided that, should a Non-U.S. Lender which is otherwise exempt
            from or subject to a reduced rate of withholding tax become subject
            to Taxes because of its failure to deliver a form required under
            clause (iv) above, the Borrower shall take such steps as such
            Non-U.S. Lender shall reasonably request to assist such Non-U.S.
            Lender to recover such Taxes.

      (vi)  Any Lender that is entitled to an exemption from or reduction of
            withholding tax with respect to payments under this Agreement or any
            Note pursuant to the law of any relevant jurisdiction or any treaty
            shall deliver to the Borrower (with a copy to the Agent), at the
            time or times prescribed by applicable law, such properly completed
            and executed documentation prescribed by applicable law as will
            permit such payments to be made without withholding or at a reduced
            rate.

      (vii) If the U.S. Internal Revenue Service or any other governmental
            authority of the United States or any other country or any political
            subdivision thereof asserts a claim that the Agent did not properly
            withhold tax from amounts paid to or for the account of any Lender
            (because the appropriate form was not delivered or properly
            completed, because such Lender failed to notify the Agent of a
            change in circumstances which rendered its exemption from
            withholding ineffective, or for any other reason), such Lender shall
            indemnify the Agent fully for all amounts paid, directly or
            indirectly, by the Agent as tax, withholding therefor, or otherwise,
            including penalties and interest, and including taxes imposed by any
            jurisdiction on amounts payable to the Agent under this subsection,
            together with all costs and expenses related thereto (including
            attorneys fees and time charges of attorneys for the Agent, which
            attorneys may be employees of the Agent). The obligations of the
            Lenders under this Section 3.5(vii) shall survive the payment of the
            Obligations and termination of this Agreement.

      3.6.  Lender Statements; Survival of Indemnity. Each Lender shall deliver
a written statement of such Lender to the Borrower (with a copy to the Agent) as
to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written
statement shall set forth in reasonable detail

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<PAGE>

the calculations upon which such Lender determined such amount and shall be
final, conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type, currency and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by the Borrower of such written
statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5
shall survive payment of the Obligations and termination of this Agreement.

      3.7.  Alternative Lending Installation. To the extent reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Loans to reduce any liability of the Borrower to such Lender
under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar
Advances under Section 3.3, so long as such designation is not, in the judgment
of such Lender, reasonably disadvantageous to such Lender. A Lender's
designation of an alternative Lending Installation shall not affect the
Borrower's rights under Section 2.18 to replace a Lender.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

      4.1.  Effectiveness of Revolving Loan Commitments and Pre-Funded Letter of
Credit Commitments. The Lenders' Revolving Loan Commitments and Pre-Funded
Letter of Credit Commitments shall not be effective hereunder until the Agent
shall have received on the Closing Date a fully executed copy of this Agreement.
The following conditions precedent were satisfied by the Borrower and copies of
the following deliveries were received by the Agent in connection with the Prior
Credit Agreement:

            4.1.1 Copies of the articles or certificate of incorporation (or the
      equivalent thereof) of (a) the Borrower and (b) each Subsidiary Guarantor,
      in each case together with all amendments thereto, and a certificate of
      good standing, each certified by the appropriate governmental officer in
      its jurisdiction of organization.

            4.1.2 Copies, certified by the Secretary or Assistant Secretary (or
      the equivalent thereof) of (a) the Borrower and (b) each Subsidiary
      Guarantor, in each case, of its by-laws and of its Board of Directors'
      resolutions and of resolutions or actions of any other body authorizing
      the execution of the Loan Documents to which the Borrower or such
      Subsidiary, as applicable, is a party.

            4.1.3 An incumbency certificate, executed by the Secretary or
      Assistant Secretary (or the equivalent thereof) of (a) the Borrower and
      (b) each Subsidiary Guarantor, in each case which shall identify by name
      and title and bear the signatures of the Authorized Officers and any other
      officers of the Borrower and such Subsidiary authorized to sign the Loan
      Documents to which the Borrower and such Subsidiary are parties, upon
      which

                                       58
<PAGE>

      certificate the Agent and the Lenders shall be entitled to rely until
      informed of any change in writing by the Borrower or such Subsidiary, as
      applicable.

            4.1.4 A certificate, in substantially the form of Exhibit G, signed
      by the chief financial officer of the Borrower, stating that on the
      initial Credit Extension Date (a) no Default or Unmatured Default has
      occurred and is then continuing, (b) all of the representations and
      warranties in Article V shall be true and correct in all material respects
      as of such date (or an earlier date if a representation or warranty
      relates to a specified earlier date) and (c) no material adverse change in
      the business, Property, condition (financial or otherwise), operations or
      results of operations or prospects of the Borrower or any of its
      Subsidiary Guarantors has occurred since December 31, 2002.

            4.1.5 A written opinion of the Borrower's counsel, in form and
      substance satisfactory to the Agent and addressed to the Lenders, in
      substantially the form of Exhibit A hereto.

            4.1.6 Any Notes requested by a Lender pursuant to Section 2.12
      payable to the order of each such requesting Lender.

            4.1.7 Written money transfer instructions, in substantially the form
      of Exhibit D, addressed to the Agent and signed by an Authorized Officer,
      together with such other related money transfer authorizations as the
      Agent may have reasonably requested.

            4.1.8 The Agent shall have determined that the Borrower has fully
      cooperated with the Agent's syndication efforts, including, without
      limitation, by providing the Agent with information regarding the
      Borrower's operations and prospects and such other information as the
      Agent deems necessary to successfully syndicate the Loans hereunder.

            4.1.9 [Intentionally Omitted]

            4.1.10 A fully-executed copy of each of this Agreement, the Security
      Agreement, the Senior Note Indenture, and the Senior Term Loan Agreement.

            4.1.11 Evidence satisfactory to the Agent that the Borrower has
      received Net Cash Proceeds resulting from the issuance of Other Senior
      Secured Debt in an aggregate amount equal to or greater than $550,000,000.

            4.1.12 A Monthly Collateral Report for February 2003, an Interim
      Collateral Report dated as of April 17, 2003, and such other evidence
      reasonably requested by the Agent to demonstrate that, among other things,
      the excess of the Borrowing Base as set forth in the above-mentioned
      Interim Collateral Report over the Aggregate Outstanding Credit Exposure
      on the Closing Date, after giving effect to all Advances requested by the
      Borrower and to be made on the Closing Date, equals or exceeds
      $175,000,000.

            4.1.13 An initial compliance certificate dated as of April 17, 2003,
      in substantially the form of Exhibit B hereto, together with (i) the
      Borrower's most recently completed audited financial statements for the
      fiscal year ended December 31, 2002 as

                                       59
<PAGE>

      filed on Form 10-K with the U.S. Securities and Exchange Commission, (ii)
      the Borrower's most recently completed financial summaries, and (iii) the
      Borrower's financial projections, in a format reasonably acceptable to the
      Agent, for the period beginning January 1, 2003 and ending December 31,
      2006.

            4.1.14 All fees owing to the Agent and the Lenders on the Closing
      Date, including, without limitation, those referenced in Section 10.13,
      shall have been fully paid.

            4.1.15 Those deliveries required in connection with the
      Intercreditor Agreement.

            4.1.16 Such other documents as any Lender or its counsel may have
      reasonably requested, including, without limitation, those documents set
      forth in Exhibit H hereto.

      4.2.  Each Credit Extension. The Lenders shall not be required to make any
Credit Extension (except as otherwise set forth in Section 2.1.3(d) with respect
to Revolving Loans extended for purposes of repaying Non-Ratable Loans and other
than in connection with Collateral Protection Advances) unless on the applicable
Credit Extension Date:

            4.2.1 There exists no Default or Unmatured Default.

            4.2.2 The representations and warranties contained in Article V are
      true and correct as of such Credit Extension Date except (x) with respect
      to Sections 5.5 and 5.7, the representations and warranties set forth in
      such Sections shall have been true and correct on and as of the date of
      the most recent Form 10-K or Form 10-Q filing, as applicable, made by the
      Borrower with the U.S. Securities and Exchange Commission, and (y) with
      respect to any other representation and warranty set forth in Article V,
      to the extent such representation or warranty is stated to relate solely
      to an earlier date, such representation or warranty shall have been true
      and correct on and as of such earlier date.

      Each Borrowing Notice, or request for issuance of a Facility LC, or
request for issuance of a Pre-Funded Facility LC, with respect to each such
Credit Extension shall constitute a representation and warranty by the Borrower
that the conditions contained in Sections 4.2.1 and 4.2.2 have been satisfied.

                                   ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

      The Borrower represents and warrants to each Lender and the Agent as of
each of (i) the Closing Date, (ii) the date of the initial Credit Extension
hereunder (if different from the Closing Date) and (iii) each date as required
by Section 4.2:

      5.1.  Existence and Standing. Each of the Borrower and its Subsidiaries is
a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which

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<PAGE>

its business is conducted, except where the failure to be so qualified does not
or could not be expected to cause or result in the occurrence of a Material
Adverse Effect.

      5.2.  Authorization and Validity. Each of the Borrower and each Subsidiary
Guarantor has the power and authority and legal right to execute and deliver the
Loan Documents to which the Borrower or each such Subsidiary Guarantor, as
applicable, is a party and to perform its obligations thereunder. The execution
and delivery by each of the Borrower and each Subsidiary Guarantor of the Loan
Documents to which the Borrower or each such Subsidiary Guarantor, as
applicable, is a party and the performance of its obligations thereunder have
been duly authorized by proper proceedings, and the Loan Documents to which the
Borrower or such Subsidiary Guarantor, as applicable, is a party constitute
legal, valid and binding obligations of the Borrower or such Subsidiary
Guarantor, as applicable, enforceable against the Borrower or such Subsidiary
Guarantor, as applicable, in accordance with their terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyances, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally; (ii) general equitable principles
(whether considered in a proceeding in equity or at law); and (iii) requirements
of reasonableness, good faith and fair dealing.

      5.3.  No Conflict; Government Consent. Neither the execution and delivery
by the Borrower or the Subsidiary Guarantors, as applicable, of the Loan
Documents, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will violate (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any of the Subsidiary Guarantors, or (ii) the Borrower's or any
Subsidiary Guarantor's articles or certificate of incorporation, partnership
agreement, certificate of partnership, articles or certificate of organization,
by-laws, or operating agreement or other management agreement, as the case may
be, or (iii) the provisions of any indenture, instrument or agreement to which
the Borrower or any of the Subsidiary Guarantors is a party or is subject, or by
which it, or its Property, is bound, or conflict with, or constitute a default
under, or result in, or require, the creation or imposition of any Lien in, of
or on the Property of the Borrower or a Subsidiary Guarantor pursuant to the
terms of, any such indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or exemption
by, any governmental or public body or authority, or any subdivision thereof,
which has not been obtained by the Borrower or any of the Subsidiary Guarantors,
is required to be obtained by the Borrower or any of the Subsidiary Guarantors
in connection with the execution and delivery of the Loan Documents, the
borrowings under this Agreement, the payment and performance by the Borrower of
the Obligations or the legality, validity, binding effect or enforceability of
any of the Loan Documents.

      5.4.  Financial Statements. The December 31, 2003 consolidated financial
statements of the Borrower and its Subsidiaries heretofore delivered to the
Agent and the Lenders were prepared in accordance with US GAAP in effect on the
date such statements were prepared and fairly present the consolidated financial
condition of the Borrower and its Subsidiaries at such date.

      5.5.  Material Adverse Change. Since December 31, 2003, there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the

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Borrower and its Subsidiaries, taken together, which could reasonably be
expected to have a Material Adverse Effect.

      5.6.  Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except in
respect of such taxes, if any, as are being contested in good faith and as to
which adequate reserves have been provided in accordance with Agreement
Accounting Principles and as to which no Lien exists (except as permitted by
Section 6.15.1). The United States income tax returns of the Borrower and its
Subsidiaries have been audited by the Internal Revenue Service through the
fiscal year ended 1998. No liens have been filed with respect to such taxes. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of any taxes or other governmental charges are adequate.

      5.7.  Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Loans. Other than any liability incident to any litigation, arbitration or
proceeding which could not reasonably be expected to have a Material Adverse
Effect, the Borrower has no material contingent obligations not provided for or
disclosed in the financial statements referred to in Section 5.4.

      5.8.  Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. Schedule 5.8 also identifies those Subsidiaries that
constitute Subsidiary Guarantors. All of the issued and outstanding shares of
capital stock or other ownership interests of such Subsidiaries have been (to
the extent such concepts are relevant with respect to such ownership interests)
duly authorized and issued and are fully paid and non-assessable.

      5.9.  ERISA. As of the Closing Date, the Unfunded Liabilities of all
Single Employer Plans do not in the aggregate exceed $75,000,000. As of the
Closing Date, each Plan complies with all minimum funding requirements under
ERISA. As of the Closing Date, neither the Borrower nor any member of the
Controlled Group is party to a Multiemployer Plan or has, or could reasonably be
expected to have, any liability to a Multiemployer Plan.

      5.10. Accuracy of Information. The information, exhibits or reports
furnished by the Borrower to the U.S. Securities and Exchange Commission on Form
10-K and Form 10-Q do not contain any material misstatement of fact or omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading. The information furnished by the Borrower in each
Monthly Collateral Report and Interim Collateral Report is, to the best of the
Borrower's knowledge, accurate in all material respects.

      5.11. Regulation U. Neither the Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the

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purpose, whether immediate, incidental or ultimate of buying or carrying margin
stock (as defined in Regulation U), and after applying the proceeds of each
Credit Extension, margin stock (as defined in Regulation U) constitutes less
than 25% of the value of those assets of the Borrower and its Subsidiaries which
are subject to any limitation on sale, pledge, or any other restriction
hereunder.

      5.12. Material Agreements. Neither the Borrower nor any Subsidiary is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement or instrument to which it
is a party, which default could reasonably be expected to have a Material
Adverse Effect or (ii) any agreement or instrument evidencing or governing
Indebtedness.

      5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, except where the
failure to do so has not caused or resulted in the occurrence of a Material
Adverse Effect.

      5.14. Ownership of Properties. On the date of this Agreement, the Borrower
and its Subsidiaries have indefeasible title, free of all Liens other than those
permitted by Section 6.15, to all of the assets reflected in the Borrower's most
recent consolidated financial statements provided to the Agent, as owned by the
Borrower and its Subsidiaries.

      5.15. Plan Assets; Prohibited Transactions. The Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101
of an employee benefit plan (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA or any plan (within the meaning of Section 4975 of
the Code), and neither the execution of this Agreement nor the making of
Revolving Loans hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.

      5.16. Environmental Matters. In the ordinary course of its business, the
officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.

      5.17. Investment Company Act. Neither the Borrower nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.

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      5.18. Public Utility Holding Company Act. The Borrower is not a "holding
company" as such term is defined in the Public Utility Holding Company Act of
1935, as amended.

      5.19. Insurance. The Borrower maintains, and has caused each Subsidiary to
maintain, with financially sound and reputable insurance companies, insurance on
all their Property in such amounts, subject to such deductibles and
self-insurance retentions and covering such properties and risks as is
consistent with sound business practice. The Borrower has delivered to the Agent
and the Lenders a complete and accurate list of its insurance policies and
programs and the Property subject thereto. The Borrower has caused all such
policies to be subject to provisions which prohibit the cancellation thereof by
the provider thereof without at least 30 days' prior written notice to the
Borrower and each loss payee thereof.

      5.20. No Default or Unmatured Default. No Default or Unmatured Default has
occurred and is continuing.

                                   ARTICLE VI

                                    COVENANTS

      During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:

      6.1.  Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with US GAAP, and furnish to the Agent for the benefit of the Lenders:

            6.1.1 Within 105 days after the close of each of its fiscal years,
      (a) financial statements prepared in accordance with Agreement Accounting
      Principles on a consolidated basis for itself and its Subsidiaries, as
      filed on Form 10-K with the U.S. Securities and Exchange Commission,
      accompanied by (i) an auditor's report, unqualified as to scope, of a
      nationally recognized firm of independent public accountants or other
      independent public accountants reasonably acceptable to the Required
      Lenders; (ii) any management letter prepared by said accountants; and
      (iii) a certificate of said accountants that, in the course of their
      examination necessary for their certification of the foregoing, they have
      obtained no knowledge of any Default or Unmatured Default, or if, in the
      opinion of such accountants, any Default or Unmatured Default shall exist,
      stating the nature and status thereof.

            6.1.2 Within (x) 30 days after the end of each calendar month other
      than those calendar months that end the first three fiscal quarters of
      each of the Borrower's fiscal years, and (y) 45 days after the end of each
      December of each calendar year, for itself and its Subsidiaries, the
      Borrower's financial summaries for such month, which shall be in form and
      substance substantially similar to the financial summaries delivered on or
      prior to the Closing Date or shall otherwise be in form and substance
      reasonably acceptable to the Agent.

            6.1.3 Within 45 days after the close of each of the first three
      fiscal quarters of each of its fiscal years, for itself and its
      Subsidiaries, consolidated unaudited financial

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<PAGE>

      statements for such period as filed on Form 10-Q with the U.S. Securities
      and Exchange Commission, prepared in accordance with Agreement Accounting
      Principles and (except for the exclusion of any disclosure permitted by
      the U.S. Securities and Exchange Commission) certified as to fairness of
      presentation and consistency by its chief financial officer or treasurer.

            6.1.4 Together with the financial statements required under Sections
      6.1.1 and 6.1.3, a compliance certificate in substantially the form of
      Exhibit B signed by its chief financial officer or treasurer showing the
      calculations necessary to determine compliance with this Agreement, an
      officer's certificate in substantially the form of Exhibit G stating that
      no Default or Unmatured Default exists, or if any Default or Unmatured
      Default exists, stating the nature and status thereof, and, together with
      the financial statements required under Section 6.1.1 and Section 6.1.3, a
      certificate executed and delivered by the chief executive officer or chief
      financial officer stating that the Borrower is in compliance with all
      requirements of Section 302 and Section 906 of the Sarbanes-Oxley Act of
      2002 and all rules and regulations related thereto.

            6.1.5 Within 270 days after the close of each fiscal year of the
      Borrower, a copy of the actuarial report and Form 5500 with Schedule B
      showing the Unfunded Liabilities of each Single Employer Plan as of the
      valuation date occurring in such fiscal year, certified by an actuary
      enrolled under ERISA.

            6.1.6 As soon as practicable and in any event within 10 days after
      the Borrower knows that any Reportable Event has occurred with respect to
      any Plan, a statement, signed by the chief financial officer or treasurer
      of the Borrower, describing said Reportable Event and the action which the
      Borrower proposes to take with respect thereto.

            6.1.7 As soon as practicable and in any event within 10 days after
      receipt by the Borrower, a copy of (a) any notice or claim to the effect
      that the Borrower or any of its Subsidiaries is or may be liable to any
      Person as a result of the release by the Borrower, any of its
      Subsidiaries, or any other Person of any toxic or hazardous waste or
      substance into the environment, and (b) any notice alleging any violation
      of any federal, state or local environmental, health or safety law or
      regulation by the Borrower or any of its Subsidiaries, which, in either
      case, could reasonably be expected to have a Material Adverse Effect.

            6.1.8 Promptly upon the filing thereof, copies of all registration
      statements and annual, quarterly, or other regular reports which the
      Borrower or any of its Subsidiaries files with the Securities and Exchange
      Commission, including, without limitation, all certifications and other
      filings required by Section 302 and Section 906 of the Sarbanes-Oxley Act
      of 2002 and all rules and regulations related thereto.

            6.1.9 On each date on which an Interim Collateral Report or a
      Monthly Collateral Report is delivered, the Borrower shall provide the
      Agent with all supporting documents the Agent reasonably deems desirable,
      all certified as being true and correct by an Authorized Officer of the
      Borrower. The Borrower may update Interim Collateral

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<PAGE>

      Reports and Monthly Collateral Reports more frequently than the periods
      set forth below and, so long as such Interim Collateral Reports or Monthly
      Collateral Reports are delivered together with all supporting information
      reasonably requested by the Agent, the most recently delivered Interim
      Collateral Report or Monthly Collateral Report, as applicable, shall be
      the applicable Interim Collateral Report or Monthly Collateral Report for
      purposes of determining the Borrowing Base at any time.

            6.1.10 As soon as practicable, and in any event within 15 calendar
      days of the end of each calendar month, the Borrower shall provide the
      Agent with a Monthly Collateral Report for such calendar month certified
      as being true and correct in all material respects by an Authorized
      Officer of the Borrower. In addition to the foregoing, the Borrower, upon
      the Agent's reasonable request, shall deliver copies of invoices, purchase
      orders, credit memoranda, shipping and delivery documents and other
      information related to Eligible Receivables and Eligible Petroleum
      Inventory identified in the applicable Monthly Collateral Report.

            6.1.11 For so long as Excess Availability is:

            (x) less than or equal to 25% of the Borrowing Base then in effect,
            as soon as practicable, and in any event within three Business Days
            after the end of each calendar week during such period; and

            (y) greater than 25% but less than or equal to 35% of the Borrowing
            Base then in effect, as soon as practicable, and in any event within
            3 Business Days after the end of each of the second and fourth full
            calendar weeks of any calendar month during such period;

            the Borrower shall provide to the Agent an Interim Collateral Report
            for the applicable one-week or two-week period certified as being
            true and correct by an Authorized Officer of the Borrower. Each
            Interim Collateral Report shall identify, for the applicable
            reporting period, the aggregate amount of all contra-accounts
            related to Specified Customers net of the aggregate of the face
            amounts of all letters of credit issued on behalf of the Borrower or
            the applicable Subsidiary Guarantor to Specified Customers as
            payment for goods or services purchased by the Borrower or the
            applicable Subsidiary Guarantor from the Specified Customers.

            No Interim Collateral Report described in this Section 6.1.11 shall
            be required to be delivered by the Borrower pursuant to this Section
            6.1.11 during any period Excess Availability exceeds 35% of the
            Borrowing Base then in effect.

            6.1.12 If on any date Excess Availability exceeds 35% of the then
      effective Borrowing Base, and the dollar value of the then existing
      Eligible Petroleum Inventory is less than 80% of the dollar value of
      Eligible Petroleum Inventory reported in the last

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<PAGE>

      Interim Collateral Report or Monthly Collateral Report delivered to the
      Agent, as applicable, the Borrower shall provide to the Agent, within five
      Business Days of such date, a new Interim Collateral Report certified as
      being true and correct by an Authorized Officer of the Borrower, together
      with all supporting documentation reasonably requested by the Agent. If on
      any date Excess Availability is greater than 25% of the then effective
      Borrowing Base but less than or equal to 35% of the then effective
      Borrowing Base, and the dollar value of the then existing Eligible
      Petroleum Inventory is less than 85% of the dollar value of Eligible
      Petroleum Inventory reported in the last Interim Collateral Report or
      Monthly Collateral Report delivered to the Agent, as applicable, the
      Borrower shall provide to the Agent, within five Business Days of such
      date, a new Interim Collateral Report certified as being true and correct
      by an Authorized Officer of the Borrower, together with all supporting
      documentation reasonably requested by the Agent.

            6.1.13 Within 30 days after the close of each of its fiscal years, a
      copy of the plan and forecast (including a projected balance sheet,
      projected income statements, and projected funds flow statement) of the
      Borrower and its Subsidiaries, for the upcoming fiscal year prepared in
      such detail as shall be reasonably satisfactory to the Agent. Any plan and
      forecast in form and substance substantially similar to the plan and
      forecast delivered on or prior to the Closing Date shall be deemed to be
      reasonably satisfactory by the Agent.

            6.1.14 Such other information (including non-financial information
      and additional or supplemental reporting) as the Agent or any Lender may
      from time to time reasonably request.

      6.2.  Use of Proceeds. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Credit Extensions for general corporate purposes,
including, without limitation, for working capital, to repay certain
Indebtedness, expenditures constituting Consolidated Capital Expenditures,
Permitted Acquisitions, and to pay fees and expenses incurred in connection with
this Agreement. The Borrower shall use the proceeds of Credit Extensions in
compliance with all applicable legal and regulatory requirements and any such
use shall not result in a violation of any such requirements, including, without
limitation, Regulation U and X, the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and the regulations promulgated
thereunder.

      6.3.  Notice of Default. Within five (5) Business Days after an Authorized
Officer becomes aware thereof, the Borrower will, and will cause each Subsidiary
Guarantor to, give notice in writing to the Lenders of the occurrence of any
Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.

      6.4.  Conduct of Business. The Borrower will, and will cause each
Subsidiary Guarantor to, carry on and conduct its business in substantially the
same manner and in substantially the same fields of enterprise as it is
presently conducted and do all things necessary to remain duly incorporated or
organized, validly existing and (to the extent such concept applies to such
entity) in good standing as a corporation, partnership or limited liability
company in its jurisdiction of incorporation or organization, as the case may
be, and maintain all requisite

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<PAGE>

authority to conduct its business in each jurisdiction in which its business is
conducted, except where the failure to do so could not reasonably be expected to
cause or result in the occurrence of a Material Adverse Effect.

      6.5.  Taxes. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay when due all taxes, assessments
and governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Agreement Accounting Principles.

      6.6.  Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts, subject to such deductibles and
self-insurance retentions, and covering such risks as is consistent with sound
business practice and as is reasonably satisfactory to the Agent. The Agent
confirms that the Borrower's and its Subsidiaries' insurance on the Closing Date
is reasonably satisfactory to the Agent. The Borrower will furnish to the Agent
(for distribution to any Lender) upon request full information as to the
insurance carried. The Borrower shall deliver to the Agent lender's loss payable
endorsements in form and substance acceptable to the Agent to all insurance
policies providing coverage for the Collateral. In the event the Borrower or any
of its Subsidiaries at any time or times hereafter shall fail to obtain or
maintain any of the policies or insurance required herein or to pay any premium
in whole or in part relating thereto, then the Agent, without waiving or
releasing any obligations or resulting Default hereunder, may at any time or
times thereafter (but shall be under no obligation to do so) obtain and maintain
such policies of insurance and pay such premiums and take any other action with
respect thereto which the Agent deems advisable. All sums so disbursed by the
Agent shall constitute part of the Obligations, payable as provided in this
Agreement. Each such policy maintained by the Borrower or a Subsidiary shall be
subject to a provision that prevents the cancellation thereof without thirty
days' prior written notice to the Borrower or the applicable Subsidiary, and the
Agent.

      6.7.  Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, (i) Section 302 and Section 906 of the Sarbanes-Oxley Act of
2002, and (ii) except where the failure to do so could not reasonably be
expected to cause or result in the occurrence of a Material Adverse Effect, all
Environmental Laws.

      6.8.  Maintenance of Properties. Subject to Section 6.12, the Borrower
will, and will cause each Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property used in the operation of its business in
good repair, working order and condition, (ordinary wear and tear excepted), and
make all necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times in the ordinary course; provided, however, that the foregoing shall not
prohibit, limit or impair the Borrower's or any Subsidiary's ability to sell or
discontinue the use of, in its reasonable business judgment, any Property.

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<PAGE>

      6.9.  Inspection; Keeping of Books and Records. The Borrower will, and
will cause each Subsidiary to, permit the Agent, by its respective
representatives and agents, to inspect any of the Property, books and financial
records of the Borrower and each Subsidiary, to examine and make copies of the
books of accounts and other financial records of the Borrower and each
Subsidiary, and to discuss the affairs, finances and accounts of the Borrower
and each Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Agent may designate. The
Borrower shall keep and maintain, and cause each of its Subsidiaries to keep and
maintain, in all material respects, proper books of record and account in which
entries in conformity with Agreement Accounting Principles shall be made of all
dealings and transactions in relation to their respective businesses and
activities. If a Default has occurred and is continuing, the Borrower, upon the
Agent's request, shall turn over copies of any such records to the Agent or its
representatives. The Agent agrees that it shall conduct any such inspection or
examination in reasonable accordance with the Borrower's and its Subsidiaries'
safety policies and procedures and shall not materially interfere with or impair
the Borrower's or its Subsidiaries' operations. Without limiting the foregoing,
the Agent shall have the right to enter the Borrower's or any Subsidiary's
premises for any of the purposes described on the Closing Date in Section 11.04
of the Senior Note Indenture and Section 10.04 of the Senior Term Loan
Agreement.

      6.10. Restricted Payments. The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividend or make any distribution on its
capital stock (other than dividends or other distributions payable in its own
capital stock) or redeem, repurchase or otherwise acquire or retire any of its
capital stock at any time outstanding (any of the foregoing, a "Restricted
Payment"), except that:

            (a)   any Subsidiary may declare and pay dividends or make
distributions to the Borrower or any Subsidiary Guarantor;

            (b)   the Borrower and its Subsidiaries may make Restricted Payments
in any calendar year in an aggregate amount not in excess of $30,000,000 so long
as, on a pro forma basis, both immediately before and immediately after the
making of any such Restricted Payment, (i) no Default or Unmatured Default
exists, and (ii) the "Fixed Charge Coverage Ratio" as calculated in Section 6.21
on a rolling four quarter basis equals or exceeds 1.10 to 1.00; and

            (c)   the Borrower and its Subsidiaries may make Restricted Payments
in any calendar year in an aggregate amount in excess of $30,000,000 but not in
excess of $50,000,000 so long as, on a pro forma basis, both immediately before
and immediately after the making of any such Restricted Payment, (i) no Default
or Unmatured Default exists, (ii) the "Fixed Charge Coverage Ratio" as
calculated in Section 6.21 on a rolling four quarter basis equals or exceeds
1.10 to 1.00, and (iii) Excess Availability equals or exceeds 25% of the
Borrowing Base then in effect.

      6.11. Merger. The Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, except that a Subsidiary may
merge into the Borrower or a Wholly Owned Subsidiary that is party to the
Guaranty.

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<PAGE>

      6.12. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:

            6.12.1 Sales of inventory in the ordinary course of business.

            6.12.2 A disposition of assets by a Subsidiary to the Borrower or a
      Subsidiary Guarantor or by the Borrower to a Subsidiary Guarantor.

            6.12.3 A disposition of obsolete property, property no longer used
      in the business of the Borrower or its Subsidiaries or other assets in the
      ordinary course of business of the Borrower or any Subsidiary.

            6.12.4 Sales of Retail Property.

            6.12.5 Leases, sales or other dispositions of its Property that,
      together with all other Property of the Borrower and its Subsidiaries
      previously leased, sold or disposed of (other than dispositions otherwise
      permitted by this Section 6.12) as permitted by this Section during the
      twelve-month period ending with the month in which any such lease, sale or
      other disposition occurs, do not result in proceeds (including non-cash
      proceeds, whether in the form of an instrument or otherwise) in excess of
      $30,000,000; provided, however, that the Borrower and its Subsidiaries may
      lease, sell, or otherwise dispose of Property which results in proceeds
      (including non-cash proceeds, whether in the form of an instrument or
      otherwise) in excess of the aforementioned $30,000,000 limitation if (i)
      immediately before and immediately after such lease, sale, or disposition,
      no Default or Unmatured Default exists, and (ii) the Borrower or the
      applicable Subsidiary demonstrates to the Agent's satisfaction, on a pro
      forma basis for the four fiscal quarter period reflected in the compliance
      certificate most recently delivered to the Agent pursuant to Section
      6.1.4, and without giving effect to the Property to be subject to such
      lease, sale or other disposition, that the Borrower's "Fixed Charge
      Coverage Ratio" as calculated in Section 6.21 on a rolling four quarter
      basis equals or exceeds 1.00 to 1.00.

      6.13. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:

            6.13.1 Cash Equivalent Investments.

            6.13.2 Existing Investments in Subsidiary Guarantors and other
      Investments in existence on the date hereof and described in Schedule
      6.13.

            6.13.3 Acquisitions meeting the following requirements, or otherwise
      approved by the Required Lenders (each such Acquisition constituting a
      "Permitted Acquisition"):

      (i)   as of the date of the consummation of such Acquisition, no Default
            or Unmatured Default shall have occurred and be continuing or would
            result from such

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            Acquisition, and the representation and warranty contained in
            Section 5.11 shall be true both before and after giving effect to
            such Acquisition;

      (ii)  such Acquisition is consummated on a non-hostile basis pursuant to a
            negotiated acquisition agreement approved by the board of directors
            or other applicable governing body of the seller or entity to be
            acquired, and no material challenge to such Acquisition (excluding
            the exercise of appraisal rights) shall be pending or threatened by
            any shareholder or director of the seller or entity to be acquired;

      (iii) the business to be acquired in such Acquisition is similar or
            related to one or more of the lines of business in which the
            Borrower and its Subsidiaries are engaged on the Closing Date;

      (iv)  as of the date of the consummation of such Acquisition, all material
            governmental and corporate approvals required in connection
            therewith shall have been obtained;

      (v)   the Purchase Price for each such Acquisition together with the
            Purchase Price of all other Permitted Acquisitions shall not exceed
            an amount equal to (a) $50,000,000 during any period of twelve
            consecutive months; and (b) $100,000,000 during the period beginning
            on the Closing Date and ending on the Termination Date; provided,
            however, the aggregate Purchase Price for all such Acquisitions may
            exceed the aforementioned $50,000,000 and $100,000,000 limitations
            if any such excess amount was paid solely with Other Senior Secured
            Debt Collateral Proceeds;

      (vi)  with respect to each Permitted Acquisition, not less than thirty
            (30) days prior to the consummation of such Permitted Acquisition,
            the Borrower shall have delivered to the Agent a pro forma
            consolidated balance sheet, income statement and cash flow statement
            of the Borrower and its Subsidiaries (the "Acquisition Pro Forma"),
            based on the Borrower's most recent financial statements delivered
            pursuant to Section 6.1.1 and using historical financial statements
            for the acquired entity provided by the seller(s) or which shall be
            complete and shall fairly present, in all material respects, the
            financial condition and results of operations and cash flows of the
            Borrower and its Subsidiaries in accordance with Agreement
            Accounting Principles, but taking into account such Permitted
            Acquisition and the funding of all Credit Extensions in connection
            therewith, and such Acquisition Pro Forma shall reflect that, on a
            pro forma basis, for the four fiscal quarter period reflected in the
            compliance certificate most recently delivered to the Agent pursuant
            to Section 6.1.4 prior to the consummation of such Permitted
            Acquisition (giving effect to such Permitted Acquisition and all
            Credit Extensions funded in connection therewith as if made on the
            first day of such period), the Borrower's "Fixed Charge Coverage
            Ratio" as calculated in Section 6.21 on a rolling four quarter basis
            is equal to or greater than 1.10 to 1.00 and that Excess
            Availability equals or exceeds 25% of the Borrowing Base then in
            effect; and

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      (vii) prior to each such Permitted Acquisition, the Borrower shall deliver
            to the Agent a documentation, information and certification package
            in form and substance acceptable to the Agent, including, without
            limitation;

            (A)   all of the Collateral Documents necessary for the perfection
                  of a first priority security interest in all of the assets to
                  be acquired that constitute or qualify as Collateral,
                  including, without limitation, Petroleum Inventory,
                  Receivables and related cash or cash equivalents, instruments,
                  general intangibles and intercompany Indebtedness;

            (B)   a supplement to the Guaranty if the Permitted Acquisition is
                  an Acquisition of equities and the target company will not be
                  merged with the Borrower or any existing Subsidiary Guarantor;

            (C)   financial information for the target entity in form and
                  substance reasonably acceptable to the Agent;

            (D)   a copy of the acquisition agreement for such Acquisition,
                  together with drafts of the material schedules thereto;

            (E)   a copy of all documents, instruments and agreements with
                  respect to any Indebtedness to be incurred or assumed in
                  connection with such Acquisition; and

            (F)   such other documents or information as shall be reasonably
                  requested by any Agent or any Lender.

      6.14. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

            6.14.1 The Obligations and the Other Senior Secured Debt so long as
      the aggregate principal amount of the Other Senior Secured Debt does not
      at any time exceed $725,000,000; provided, however, that any increase in
      the aggregate principal amount of the Other Senior Secured Debt above
      $575,000,000 shall require the Agent's prior consent thereto.

            6.14.2 Indebtedness existing on the date hereof and described in
      Schedule 6.14, together with any Refinancing Indebtedness in respect
      thereof.

            6.14.3 Indebtedness arising under Rate Management Transactions;

            6.14.4 Purchase money Indebtedness, whether secured or unsecured
      (including Capitalized Leases), incurred by the Borrower or any of its
      Subsidiaries after the Closing Date to finance the acquisition of assets
      used in its business, if (1) at the time of such incurrence, no Default or
      Unmatured Default has occurred and is continuing or would result from such
      incurrence, (2) such Indebtedness does not exceed the lower of the fair
      market value or the cost of the applicable assets on the date acquired,
      (3) such Indebtedness does not exceed the lower of the fair market value
      or the costs of the

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      applicable assets on the date acquired, (4) such Indebtedness does not
      exceed $100,000,000 in the aggregate outstanding at any time, and (5) any
      Lien securing such Indebtedness is permitted under Section 6.15 (such
      Indebtedness being referred to herein as "Permitted Purchase Money
      Indebtedness").

            6.14.5 Indebtedness arising from intercompany loans and advances (i)
      made by any Subsidiary to the Borrower or any Subsidiary Guarantor, (ii)
      made by the Borrower to any Subsidiary Guarantor, or (iii) made by the
      Borrower to any Excluded Subsidiary or Wholly-Owned Subsidiary not
      constituting a Subsidiary Guarantor in an aggregate principal amount in
      Dollars not to exceed $10,000,000 at any time for all such Indebtedness;
      provided that all such Indebtedness shall be expressly subordinated to the
      Secured Obligations.

            6.14.6 Indebtedness not described in or otherwise subject to
      Sections 6.14.1 through 6.14.5 that is unsecured and that does not at any
      time exceed an aggregate amount equal to $75,000,000; provided, however,
      that the Borrower shall not incur more than $25,000,000 of unsecured
      Indebtedness under this Section 6.14.6 without the Agent's prior consent.

      6.15. Liens; Negative Pledge. The Borrower will not, nor will it permit
any Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except for the following,
which are permitted hereunder:

            6.15.1 Liens, if any, securing (x) Secured Obligations, and (y)
      Other Senior Secured Debt permitted under Section 6.14.1.

            6.15.2 Liens for taxes, assessments or governmental charges or
      levies on its Property if the same shall not at the time be delinquent or
      thereafter can be paid without penalty, or are being contested in good
      faith and by appropriate proceedings and for which adequate reserves in
      accordance with Agreement Accounting Principles shall have been set aside
      on its books.

            6.15.3 Liens for landlords', wage earners', carriers',
      warehousemen's and mechanics' liens and other similar liens arising in the
      ordinary course of business which secure payment of obligations not more
      than 45 days past due or which are being contested in good faith by
      appropriate proceedings and for which adequate reserves in accordance with
      Agreement Accounting Principles shall have been set aside on its books.

            6.15.4 Liens arising out of pledges or deposits under worker's
      compensation laws, unemployment insurance, old age pensions, or other
      social security or retirement benefits, or similar legislation.

            6.15.5 Liens existing on the date hereof and described in Schedule
      6.15.

            6.15.6 Deposits securing liability to insurance carriers under
      insurance or self-insurance arrangements.

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            6.15.7 Deposits to secure the performance of bids, trade contracts
      (other than for borrowed money), leases, statutory obligations, surety and
      appeal bonds, performance bonds and other obligations of a like nature
      incurred in the ordinary course of business.

            6.15.8 Easements, reservations, rights-of-way, restrictions, survey
      exceptions and other similar encumbrances as to real property of the
      Borrower and its Subsidiaries which customarily exist on properties of
      corporations engaged in similar activities and similarly situated and
      which do not materially interfere with the conduct of the business of the
      Borrower or such Subsidiary conducted at the property subject thereto.

            6.15.9 Liens arising by reason of any judgment, decree or order of
      any court or other governmental authority, if appropriate legal
      proceedings are being diligently prosecuted and shall not have been
      finally terminated or the period within which such proceedings may be
      initiated shall not have expired, in an aggregate amount not to at any
      time exceed $15,000,000.

            6.15.10 Liens existing on any asset of any Subsidiary of the
      Borrower at the time such Subsidiary becomes a Subsidiary and not created
      in contemplation of such event.

            6.15.11 Liens on any asset securing Indebtedness incurred or assumed
      for the purpose of financing or refinancing all or any part of the cost of
      acquiring or constructing such asset; provided that such Lien attaches to
      such asset concurrently with or within eighteen (18) months after the
      acquisition or completion or construction thereof.

            6.15.12 Liens existing on any asset of any Subsidiary of the
      Borrower at the time such Subsidiary is merged or consolidated with or
      into the Borrower or any Subsidiary and not created in contemplation of
      such event.

            6.15.13 Liens existing on any asset prior to the acquisition thereof
      by the Borrower or any Subsidiary and not created in contemplation
      thereof; provided that such Liens do not encumber any other property or
      assets.

            6.15.14 Liens arising out of the refinancing, extension, renewal or
      refunding of any Indebtedness secured by any Lien permitted under Sections
      6.15.11 through 6.15.14; provided that (a) such Indebtedness is not
      secured by any additional assets, and (b) the amount of such Indebtedness
      secured by any such Lien is not increased.

            6.15.15 Purchase money Liens securing Permitted Purchase Money
      Indebtedness (as defined in Section 6.14); provided, that such Liens shall
      not apply to any property of the Borrower or its Subsidiaries other than
      that purchased with the proceeds of such Permitted Purchase Money
      Indebtedness.

            6.15.16 any Lien securing Indebtedness, neither assumed nor
      guaranteed by the Borrower or any of its Subsidiaries nor on which it
      customarily pays interest, existing upon real estate or rights in or
      relating to real estate acquired by the Borrower for substation, metering
      station, pump station, storage, gathering line, transmission line,
      transportation line, distribution line or for right-of-way purposes, any
      Liens reserved in leases for rent and for compliance with the terms of the
      leases in the case of leasehold

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      estates, to the extent that any such Lien referred to in this Section
      6.15.16 does not materially impair the use of the Property covered by such
      Lien for the purposes of which such Property is held by the Borrower or
      any of its Subsidiaries.

            6.15.17 Liens arising under ERISA provided that such Liens do not
      secure liabilities which, in the aggregate, equal or exceed $5,000,000.

            6.15.18 any obligations or duties affecting any of the Property of
      the Borrower or its Subsidiaries to any municipality or public authority
      with respect to any franchise, grant, license or permit which do not
      materially impair the use of such Property for the purposes for which it
      is held.

            6.15.19 defects, irregularities and deficiencies in title of any
      rights of way or other Property constituting real estate of the Borrower
      or any Subsidiary thereof which in the aggregate do not materially impair
      the use of such rights of way or other Property constituting real estate
      for the purposes for which such rights of way and other Property
      constituting real estate are held by the Borrower or any Subsidiary, and
      defects, irregularities and deficiencies in title to any Property
      constituting real estate of the Borrower or its Subsidiaries, which
      defects, irregularities or deficiencies have been cured by possession
      under applicable statues of limitation.

            6.15.20 any interest or title of a lessor under any lease entered
      into by the Borrower or any other Subsidiary in the ordinary course of its
      business and covering only the assets so leased.

            6.15.21 Liens in favor of collecting or payor banks having a right
      of setoff, revocation, refund or chargeback with respect to money or
      instruments of the Borrower or any of its Subsidiaries on deposit with or
      in possession of such bank.

            6.15.22 Liens upon Retail Property not constituting Collateral.

            6.15.23 Liens in favor of counterparties arising in connection with
      the Borrower's or any Subsidiary's commodity hedging activities,
      including, without limitation, hydrocarbon hedging.

Notwithstanding the foregoing or anything to the contrary contained in any Loan
Document, neither the Borrower nor any Subsidiary shall pledge, encumber or
otherwise grant a Lien to any Person upon any equity interest held by the
Borrower or such Subsidiary in any other Subsidiary or an Affiliate of the
Borrower or such Subsidiary, except for equity interests in the Pipeline
Subsidiaries granted by the Borrower to the Multiparty Collateral Agent in order
to secure Other Senior Secured Debt.

      6.16. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate (other than the Borrower and its Subsidiaries) except
in the ordinary course of business and pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and upon fair and reasonable
terms

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no less favorable to the Borrower or such Subsidiary than the Borrower or such
Subsidiary would obtain in a comparable arm's-length transaction.

      6.17. Financial Contracts. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Rate Management Transactions
except for those entered into in the ordinary course of business for bona fide
hedging purposes and not for speculative purposes.

      6.18. Subsidiary Covenants. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary (i) to
pay dividends or make any other distribution on its stock, (ii) to pay any
Indebtedness or other obligation owed to the Borrower or any other Subsidiary,
(iii) to make loans or advances or other Investments in the Borrower or any
other Subsidiary, or (iv) to sell, transfer or otherwise convey any of its
property to the Borrower or any other Subsidiary.

      6.19. Contingent Obligations. The Borrower will not, nor will it permit
any Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except (i) by endorsement of instruments for deposit or
collection in the ordinary course of business, (ii) the Reimbursement
Obligations, (iii) any guaranty of the Secured Obligations, (iv) any guaranty of
Other Senior Secured Debt, and (v) Contingent Obligations arising in connection
with Indebtedness permitted under Section 6.14.

      6.20. Amendments to Agreements. The Borrower will not amend, modify or
supplement, or permit any Subsidiary to amend, modify or supplement (or consent
to any amendment, modification or supplement of), any document, agreement or
instrument evidencing the Senior Notes or the Senior Term Loans (or any
replacements, substitutions or renewals thereof), or pursuant to which the
Senior Notes or the Senior Term Loans are issued or extended, where such
amendment, modification or supplement provides for the following or which has
any of the following effects:

            (a)   increases the overall principal amount of any such
Indebtedness or increases the amount of any single scheduled installment of
principal or interest in excess of amounts otherwise permitted under this
Agreement;

            (b)   shortens or accelerates the date upon which any installment of
principal or interest becomes due or adds any additional mandatory redemption
provisions;

            (c)   shortens the final maturity date of such Indebtedness or
otherwise accelerates the amortization schedule with respect to such
Indebtedness;

            (d)   increases the rate of interest accruing on such Indebtedness;

            (e)   provides for the payment of additional fees or increases
existing fees other than amendment fees paid in the ordinary course;

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            (f)   amends or modifies any financial or negative covenant (or
covenant which prohibits or restricts the Borrower or any of its Subsidiaries
from taking certain actions) in a manner which is more onerous or more
restrictive in any material respect to the Borrower or such Subsidiary or which
is otherwise materially adverse to the Borrower, its Subsidiaries and/or the
Lenders or, in the case of adding covenants, which places material additional
restrictions on the Borrower or such Subsidiary or which requires the Borrower
or such Subsidiary to comply with more restrictive financial ratios or which
requires the Borrower to better its financial performance from that set forth in
the existing financial covenants (taking into account the aggregate adjustments,
if any, to the thresholds and exceptions applicable thereto on a covenant by
covenant basis);

            (g)   results in this Agreement, the other Loan Documents, and the
credit facilities evidenced hereby, not constituting a "Qualified Credit
Facility" under the Senior Note Indenture or the Senior Term Loan Agreement; or

            (h)   amends, modifies or adds any affirmative covenant in a manner
which, when taken as a whole, is materially adverse to the Borrower, its
Subsidiaries and/or the Lenders.

      6.21. Fixed Charge Coverage Ratio. The Borrower, as of the end of the
following fiscal quarters, will not permit the ratio of (x) Consolidated EBITDA,
minus expenses for cash federal income taxes paid, minus Net Consolidated
Capital Expenditures, minus Restricted Payments, to (y) Fixed Charges, all
calculated for the Borrower and its Subsidiaries, on a consolidated basis, and
without duplication with respect to Capitalized Leases, to be less than 1.00 to
1.00 for each fiscal quarter, beginning with the fiscal quarter ending June 30,
2003, and with compliance for each such fiscal quarter based upon the four then
most-recently ended fiscal quarters; provided, however, that the aforementioned
ratio may be less than 1.00 to 1.00 for any fiscal quarter if Excess
Availability at the end of such fiscal quarter exceeds 15% of the Borrowing Base
then in effect.

      6.22. Minimum Consolidated Tangible Net Worth. The Borrower will at all
times maintain Consolidated Tangible Net Worth of not less than (i)
$547,000,000, plus (ii) 75% of Consolidated Net Income (if positive) earned in
each fiscal quarter beginning with the fiscal quarter ending March 31, 2004,
plus (iii) 75% of the amount of all Net Cash Proceeds resulting from any
issuance of the Borrower's or any Subsidiary's capital stock.

      6.23. Subsidiary Collateral Documents; Subsidiary Guarantors. The Borrower
shall execute or shall cause to be executed:

      (i) on the date any Person that is organized under the laws of the United
      States or any political subdivision thereof becomes a Subsidiary of the
      Borrower, (a) a supplement to the Guaranty pursuant to which such Person
      shall become a party thereto; provided, that such Person shall not
      guaranty any of its own obligations owing to the Holders of Secured
      Obligations or Secured Obligations that arose prior to its becoming a
      party to the Guaranty, (b) a Security Agreement in substantially the form
      executed on April 17, 2003 (or a supplement thereto); and (c) a supplement
      to Schedule 5.8 identifying the applicable additional new Subsidiary
      Guarantor;

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      (ii) in order to further effect the requirements of this Section 6.23, the
      Borrower shall deliver or cause to be delivered to the Agent all
      Collateral Documents, together with appropriate corporate resolutions and
      other documentation (including opinions of counsel, UCC financing
      statements, and such other documents as shall be reasonably requested to
      perfect the Agent's Lien), in each case in form and substance reasonably
      satisfactory to the Agent, necessary to reasonably satisfy the Agent that
      it has a first priority perfected pledge of, security interest in and Lien
      upon the Collateral owned by such new Subsidiary Guarantor.

      (iii) The Borrower shall cause each Subsidiary Guarantor to acknowledge
      and agree that such Subsidiary Guarantor's entry into the Guaranty is a
      condition to and is given as an inducement for and in consideration of
      credit accommodations extended to the Borrower under this Agreement and
      the other Loan Documents and not for any credit accommodation extended to
      such Subsidiary Guarantor.

      (iv) This Section 6.23 shall not apply with respect to Excluded
      Subsidiaries, including, without limitation, Pipeline Subsidiaries.

      6.24. Insurance and Condemnation Proceeds. The Borrower directs (and, if
applicable, shall cause its Subsidiaries to direct) all insurers under policies
relating to Property constituting Collateral to pay all proceeds payable under
such policies or with respect to such claim or award for any loss with respect
to the Collateral directly to the Agent, for the benefit of the Agent and the
Holders of the Secured Obligations; provided, however, in the event that such
proceeds or awards are less than $1,000,000 ("Excluded Proceeds"), unless a
Default shall have occurred and be continuing, the Agent shall remit such
Excluded Proceeds to the Borrower. Such amounts shall reduce outstanding
principal Obligations pursuant to the mandatory prepayment provision of Section
2.2. Each such policy shall contain a long-form loss-payable endorsement naming
the Agent as loss payee, which endorsement shall be in form and substance
acceptable to the Agent.

      6.25. Collection Accounts. The Borrower and its Subsidiaries shall cause
the majority of their deposit, collection and other cash management accounts to
be maintained with Bank One, NA or an Affiliate thereof. The Borrower and its
Subsidiaries shall cause all collections of Receivables constituting Collateral
and all proceeds of Collateral to be directly deposited into collection accounts
(such accounts, "Collection Accounts") subject to account control agreements, in
form and substance acceptable to the Agent, which grant the Agent control over
and a first-priority perfected security interest in such collection accounts,
including, without limitation, amounts and other items on deposit therein.
Amounts and other items on deposit in Collection Accounts that are not
maintained with Bank One, NA or an Affiliate thereof shall be transferred at
least once a week to one or more Collection Accounts maintained with Bank One,
NA or an Affiliate thereof. If any collections are received by the Borrower, a
Subsidiary, or any other Person, such collections shall be deemed to have been
received by the Borrower, such Subsidiary or such other Person in trust for the
Agent, and, upon the Borrower's, such Subsidiary's, or such other Person's
receipt thereof, the Borrower shall (or shall cause such Subsidiary or other
Person) to immediately remit all of such collections, in their original form, to
the Agent, Bank One or an Affiliate thereof for deposit into a Collection
Account. Following the occurrence and during the continuance of a Default, all
amounts received by the Agent, all amounts on deposit in the Collection
Accounts, and all amounts constituting collections required

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to be deposited into Collection Accounts shall be the sole property of the Agent
for the benefit of the Holders of Secured Obligations and shall be deemed
received by the Agent for application to the Secured Obligations pursuant to the
terms of this Agreement. With respect to any Collection Account described in
this Section 6.25, the Borrower and its Subsidiaries shall have 90 days from the
later of the Closing Date and the date on which such Collection Account is
opened or converted to cause such account to become subject to one of the
aforementioned account control agreements. The Pre-Funded Letter of Credit
Account shall not constitute a Collection Account.

      6.26. Subordinated Indebtedness. The Borrower will not, and will not
permit any Subsidiary to, make any amendment or modification to any indenture,
note agreement or other agreement, document or instrument evidencing or
governing Subordinated Indebtedness or directly or indirectly voluntarily
prepay, defease, or in substance defease, purchase, redeem, retire, or otherwise
acquire, any Subordinated Indebtedness unless, with respect to a prepayment,
defeasance, purchase, redemption, retirement or acquisition, the Subordinated
Indebtedness Prepayment Conditions have been satisfied.

      6.27. Multiemployer Plans. The Borrower will not, nor will it permit any
Subsidiary to, become a party to a Multiemployer Plan.

      6.28. Consolidated Capital Expenditures. At any time Non-Lender Asset Sale
Proceeds are on deposit in accounts subject to the Multiparty Collateral Agent's
control, including, without limitation, any "Asset Sale Proceeds Account"
described in the Senior Note Indenture and the Senior Term Loan Agreement, the
Borrower shall, and shall cause each Subsidiary to, fund all Consolidated
Capital Expenditures with respect to Property constituting or required to
constitute collateral securing Other Senior Secured Debt under the Senior Note
Indenture and the Senior Term Loan Agreement and otherwise permitted hereunder
with such Non-Lender Asset Sale Proceeds prior to using any other amounts to
fund such Consolidated Capital Expenditures.

                                   ARTICLE VII

                                    DEFAULTS

      The occurrence of any one or more of the following events shall constitute
a Default:

      7.1.  Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or
in connection with this Agreement, any Credit Extension, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be false in any material respect on the date as of which made or
deemed made.

      7.2.  Nonpayment of (i) principal of any Loan when due, (ii) any
Reimbursement Obligation within one Business Day after the same becomes due,
(iii) any Pre-Funded Account Reimbursement Amount when due under Section 2.19.6,
or (iv) interest upon any Loan or any Commitment Fee, LC Fee, or other
Obligations under any of the Loan Documents within one (1) Business Day after
such interest, fee or other Obligation becomes due.

      7.3.  The breach by the Borrower of any of the terms or provisions of
Section 6.1.11, 6.2, 6.3, 6.4, 6.6, 6.7, 6.9, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15
(to the extent related to or affecting

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Property constituting or required to constitute Collateral), 6.16, 6.17, 6.18,
6.19, 6.20, 6.21, 6.22, 6.24, 6.25, 6.26, 6.27, or 6.28.

      7.4.  The breach by the Borrower (other than a breach which constitutes a
Default under another Section of this Article VII) of:

      (i)   Section 6.1.9 (solely with respect to the Interim Collateral Reports
described therein) or Section 6.15 (to the extent related to or affecting
Property not constituting or not required to constitute Collateral) and such
breach is not remedied within two (2) Business Days of the earlier to occur of
(x) written notice from the Agent or any Lender to the Borrower or (y) an
Authorized Officer otherwise becomes aware of any such breach;

      (ii)  Section 6.1.1, 6.1.2, 6.1.3, 6.1.4, 6.1.6, 6.1.7, 6.1.9 (solely with
respect to the Monthly Collateral Reports described therein), 6.1.10, 6.1.12 or
6.1.13 and such breach is not remedied within five (5) Business Days of the
earlier to occur of (x) written notice from the Agent or any Lender to the
Borrower or (y) an Authorized Officer otherwise becomes aware of any such
breach; or

      (iii) any of the other terms or provisions of this Agreement or any Loan
Document which is not remedied within twenty (20) Business Days after the
earlier to occur of (x) written notice from the Agent or any Lender to the
Borrower or (y) an Authorized Officer otherwise becomes aware of any such
breach.

      7.5.  Failure of the Borrower or any of its Subsidiaries to pay when due
any Material Indebtedness; or the default by the Borrower or any of its
Subsidiaries in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any Material
Indebtedness Agreement, or any other event shall occur or condition exist, the
effect of which default, event or condition is to cause, or to permit the
holder(s) of such Material Indebtedness or the lender(s) under any Material
Indebtedness Agreement to cause, such Material Indebtedness to become due prior
to its stated maturity or any commitment to lend under any Material Indebtedness
Agreement to be terminated prior to its stated expiration date; or any Material
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or the
Borrower or any of its Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.

      7.6.  The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate or partnership action to

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authorize or effect any of the foregoing actions set forth in this Section 7.6
or (vi) fail to contest in good faith any appointment or proceeding described in
Section 7.7.

      7.7.  Without the application, approval or consent of the Borrower or any
of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 45 consecutive days.

      7.8.  Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of the Borrower and its Subsidiaries which, when taken together with
all other Property of the Borrower and its Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month period
ending with the month in which any such action occurs, constitutes a Substantial
Portion.

      7.9.  The Borrower or any of its Subsidiaries shall fail within 30 days to
pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of money in excess of $15,000,000 (or the equivalent thereof in
currencies other than Dollars) in the aggregate, or (ii) nonmonetary judgments
or orders which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, which judgment(s), in any such case, is/are
not stayed on appeal or otherwise being appropriately contested in good faith.

      7.10. The Unfunded Liabilities of all Single Employer Plans shall exceed
$75,000,000 in the aggregate, or any Reportable Event shall occur in connection
with any Plan.

      7.11. Any Change in Control shall occur.

      7.12. The Borrower or any of its Subsidiaries shall (i) be the subject of
any proceeding or investigation pertaining to the release by the Borrower, any
of its Subsidiaries or any other Person of any toxic or hazardous waste or
substance into the environment, or (ii) violate any Environmental Law, which, in
the case of an event described in clause (i) or clause (ii), has resulted in
liability to the Borrower or any of its Subsidiaries in an amount equal to
$30,000,000 or more, which liability is not paid, bonded, covered in its
entirety by an insurance policy provided to the Borrower or the applicable
Subsidiary by a non-Affiliate, or otherwise discharged within 45 days or which
is not stayed on appeal and being appropriately contested in good faith.

      7.13. Any Loan Document shall fail to remain in full force or effect or
any action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Loan Document or any Lien in favor of the Agent under
the Loan Documents, or such Lien shall not have the priority contemplated by the
Loan Documents.

      7.14. An event (such event, an "Off-Balance Sheet Trigger Event") shall
occur which (i) permits the investors or purchasers in respect of Off-Balance
Sheet Liabilities of the Borrower or any Affiliate of the Borrower to require
the amortization or liquidation of such Off-Balance Sheet Liabilities and (x)
such Off-Balance Sheet Trigger Event shall not be remedied or waived

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within the later to occur of the tenth day after the occurrence thereof or the
expiry date of any grace period related thereto under the agreement evidencing
such Off-Balance Sheet Liabilities, or (y) such investors shall require the
amortization or liquidation of such Off-Balance Sheet Liabilities as a result of
such Off-Balance Sheet Trigger Event, (ii) results in the termination of
reinvestments of collections or proceeds of receivables and related assets under
the agreements evidencing such Off-Balance Sheet Liabilities, or (iii) causes or
otherwise permits the replacement or substitution of the Borrower or any
Affiliate thereof as the servicer under the agreements evidencing such
Off-Balance Sheet Liabilities; provided, however, that this Section 7.14 shall
not apply on any date with respect to any voluntary request by the Borrower or
an Affiliate thereof for an above-described amortization, liquidation, or
termination of reinvestments so long as the aforementioned investors or
purchasers cannot independently require on such date such amortization,
liquidation or termination of reinvestments.

                                  ARTICLE VIII

                 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

      8.1.  Acceleration. (i) If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder, and the obligation and power of the LC Issuers to issue
Facility LCs shall automatically terminate and the Secured Obligations shall
immediately become due and payable without any election or action on the part of
the Agent, any LC Issuer, or any Lender. With respect to Facility LCs, the
Borrower will be and become thereby unconditionally obligated, without any
further notice, act or demand, to pay the Agent an amount in immediately
available funds, which funds shall be held in the Facility LC Collateral
Account, equal to the difference of (x) the amount of LC Obligations at such
time less (y) the amount or deposit in the Facility LC Collateral Account at
such time which is free and clear of all rights and claims of third parties and
has not been applied against the Obligations (the "Collateral Shortfall
Amount"). If any other Default occurs, the Required Lenders (or the Agent with
the consent of the Required Lenders) may (a) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuers to issue Facility LCs, or declare the Secured Obligations to
be due and payable, or both, whereupon the Secured Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrower hereby expressly waives and (b) upon notice
to the Borrower and in addition to the continuing right to demand payment of all
amounts payable under this Agreement, make demand on the Borrower to pay, and
the Borrower will forthwith upon such demand and without any further notice or
act pay to the Agent the Collateral Shortfall Amount which funds shall be
deposited in the Facility LC Collateral Account.

      (ii)  If at any time while any Default is continuing, the Agent determines
that the Collateral Shortfall Amount at such time is greater than zero, the
Agent may make demand on the Borrower to pay, and the Borrower will, forthwith
upon such demand and without any further notice or act, pay to the Agent the
Collateral Shortfall Amount, which funds shall be deposited in the Facility LC
Collateral Account.

      (iii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Secured Obligations and

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any other amounts as shall from time to time have become due and payable by the
Borrower to the Lenders or the LC Issuers under the Loan Documents.

      (iv)  At any time while any Default is continuing, neither the Borrower
nor any Person claiming on behalf of or through the Borrower shall have any
right to withdraw any of the funds held in the Facility LC Collateral Account.
After all of the Secured Obligations have been indefeasibly paid in full and the
Aggregate Revolving Loan Commitment has been terminated, any funds remaining in
the Facility LC Collateral Account shall be returned by the Agent to the
Borrower or paid to whomever may be legally entitled thereto at such time.

      (v)   If, after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans and the obligation
and power of the LC Issuers to issue Facility LCs hereunder as a result of any
Default (other than any Default as described in Section 7.6 or 7.7 with respect
to the Borrower) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required Lenders (in
there sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.

      8.2.  Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents, including,
without limitation, the Intercreditor Agreement, or changing in any manner the
rights of the Lenders or the Borrower hereunder or thereunder or waiving any
Default hereunder or thereunder; provided, however, that no such supplemental
agreement shall, without the consent of all of the Lenders:

            8.2.1 Extend the Termination Date, extend the final maturity of any
      Loan, extend the expiry date of any Facility LC to a date after the
      Termination Date, or postpone any regularly scheduled payment of principal
      of any Loan or forgive all or any portion of the principal amount thereof,
      or any Reimbursement Obligation related thereto, or reduce the rate or
      extend the time of payment of interest or fees thereon or Reimbursement
      Obligations related thereto (other than (x) a waiver of the application of
      the default rate of interest pursuant to Section 2.10 hereof and (y) any
      reduction of the amount of or any extension of the payment date for the
      mandatory payments required under Section 2.2 (other than Section 2.2.1),
      in each case which shall only require the approval of the Required
      Lenders).

            8.2.2 Reduce the percentage specified in the definition of Required
      Lenders or any other percentage of Lenders specified to be the applicable
      percentage in this Agreement to act on specified matters or amend the
      definitions of "Required Lenders," "Pro Rata Share" or "Revolving Loan Pro
      Rata Share."

            8.2.3 Increase the amount of the Revolving Loan Commitment or the
      Pre-Funded Letter of Credit Commitment of any Lender hereunder or the
      commitment to issue Facility LCs, require any Lender with a Credit Linked
      Deposit to increase the size thereof or make any deposit into the
      Pre-Funded Letter of Credit Account in excess of its Pre-

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      Funded Letter of Credit Commitment, or permit the Borrower to assign its
      rights or obligations under this Agreement.

            8.2.4 Amend, modify or waive this Section 8.2.

            8.2.5 Other than in connection with a transaction permitted under
      this Agreement, release in any calendar year Collateral with an aggregate
      value equal to or in excess of $10,000,000.

            8.2.6 Other than in connection with a transaction permitted under
      this Agreement, release any Subsidiary party to the Guaranty from its
      obligations thereunder.

            8.2.7 Increase the advance rate percentages for Perfected Cash
      Interests, Eligible Receivables and Eligible Petroleum Inventory set forth
      in the definition of Borrowing Base as of the Closing Date.

            8.2.8 Amend, modify or waive Section 11.2, Section 11.3, or any
      other provision of this Agreement requiring ratable payments to or
      disbursements by the Lenders.

No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.3 without obtaining the consent of any
other party to this Agreement. No amendment of any provision of this Agreement
relating to the Non-Ratable Lender or any Non-Ratable Loan shall be effective
without the written consent of the Non-Ratable Lender. No amendment of any
provision of this Agreement relating to an LC Issuer shall be effective without
the written consent of such LC Issuer. The limit set forth in Section 2.1.2 on
the aggregate amount of Collateral Protection Advances that may be outstanding
at any time shall not be increased without the written consent of the Agent and
the Lenders in the aggregate having 75% or more of the sum of (i) the Aggregate
Revolving Loan Commitment and (ii) the Aggregate Pre-Funded Letter of Credit
Commitment; provided, however, that if all of the Revolving Loan Commitments
have been terminated, the consent of Lenders holding 75% or more of the
Aggregate Outstanding Credit Exposure shall be required to approve any such
increase.

      8.3.  Preservation of Rights. No delay or omission of the Lenders, the LC
Issuers, or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or Unmatured Default or the inability of the Borrower to
satisfy the conditions precedent to such Credit Extension shall not constitute
any waiver or acquiescence. Any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by, or by the Agent with the consent of, the requisite number
of Lenders required pursuant to Section 8.2, and then only to the extent in such
writing specifically set forth. All remedies contained in the Loan Documents or
by law afforded shall be cumulative and all shall be available to the Agent, the
LC Issuers, and the Lenders until all of the Secured Obligations have been paid
in full.

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                                   ARTICLE IX

                               GENERAL PROVISIONS

      9.1.  Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.

      9.2.  Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, neither any LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.

      9.3.  Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.

      9.4.  Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent, the LC Issuers, and the Lenders and
supersede all prior agreements and understandings among the Borrower, the Agent,
the LC Issuers, and the Lenders relating to the subject matter thereof other
than those contained in the fee letter described in Section 10.13 which shall
survive and remain in full force and effect during the term of this Agreement.

            THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
            PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
            CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
            ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

      9.5.  Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.

      9.6.  Expenses; Indemnification. (i) The Borrower shall reimburse the
Agent and the Arranger for any reasonable costs, internal charges and
out-of-pocket expenses (including outside attorneys' and paralegals' fees and
time charges of attorneys for the Agent and expenses of and fees for other
advisors and professionals engaged by the Agent or the Arranger) paid or

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incurred by the Agent or the Arranger in connection with the investigation,
preparation, negotiation, documentation, execution, delivery, syndication,
distribution (including, without limitation, via the internet), review,
amendment, modification and administration of the Loan Documents. The Borrower
also agrees to reimburse the Agent, the Arranger, the LC Issuers, and the
Lenders for any reasonable costs, internal charges and out-of-pocket expenses
(including outside attorneys' and paralegals' fees and time charges and expenses
of attorneys and paralegals for the Agent, the Arranger, the LC Issuers, and the
Lenders) paid or incurred by the Agent, the Arranger, any LC Issuer, or any
Lender in connection with the collection and enforcement of the Loan Documents.
In addition to expenses set forth above, the Borrower agrees to reimburse,
without duplication, the Agent and Bank of America, N.A., as co-collateral
agent, promptly after the Agent's or such co-collateral agent's request
therefor, for each audit, or other business analysis performed by or for the
benefit of the Holders of Secured Obligations in connection with this Agreement
or the other Loan Documents in an amount equal to the Agent's or such
co-collateral agent's then customary charges for each person employed to perform
such audit or analysis (which, solely with respect to charges for audits of
Collateral, shall not exceed a rate of $750 per day for the Agent or such
co-collateral agent, as applicable, performing such audit), plus all reasonable
costs and expenses (including without limitation, travel expenses) incurred by
the Agent or such co-collateral agent in the performance of such audit or
analysis.

      (ii)  The Borrower hereby further agrees to indemnify the Agent, the
Arranger, each LC Issuer, each Lender, and their respective affiliates, and each
of their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
Arranger, any LC Issuer, any Lender or any affiliate is a party thereto, and all
attorneys' and paralegals' fees, time charges and expenses of attorneys and
paralegals of the party seeking indemnification, which attorneys and paralegals
may or may not be employees of such party seeking indemnification) which any of
them may pay or incur arising out of or relating to this Agreement, the other
Loan Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Credit Extension
hereunder except to the extent that they have resulted from the gross negligence
or willful misconduct of the party seeking indemnification. The obligations of
the Borrower under this Section 9.6 shall survive the termination of this
Agreement.

      9.7.  Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders, to the
extent that the Agent deems necessary.

      9.8.  Accounting. Except as provided to the contrary herein, all
accounting terms used in the calculation of any financial covenant or test shall
be interpreted and all accounting determinations hereunder in the calculation of
any financial covenant or test shall be made in accordance with Agreement
Accounting Principles. If any changes in US GAAP are hereafter required or
permitted and are adopted by the Borrower or any of its Subsidiaries with the
agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, tests, restrictions or standards herein or in the related definitions
or terms used therein ("Accounting Changes"), the parties hereto agree, at the
Borrower's request, to enter into negotiations, in good faith, in order to amend
such provisions in a credit neutral manner so as to reflect equitably such
changes with the desired

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result that the criteria for evaluating the Borrower's and its Subsidiaries'
financial condition shall be the same after such changes as if such changes had
not been made; provided, however, until such provisions are amended in a manner
reasonably satisfactory to the Agent and the Required Lenders, no Accounting
Change shall be given effect in such calculations. In the event such amendment
is entered into, all references in this Agreement to Agreement Accounting
Principles shall mean US GAAP as of the date of such amendment. Notwithstanding
the foregoing, all financial statements to be delivered by the Borrower pursuant
to Section 6.1 shall be prepared in accordance with US GAAP in effect at such
time.

      9.9.  Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.

      9.10. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders, the LC Issuers, and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, the Arranger,
any LC Issuer, nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger, any LC Issuer, nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations. The Borrower agrees that neither the Agent, the Arranger, any LC
Issuer, nor any Lender shall have liability to the Borrower (whether sounding in
tort, contract or otherwise) for losses suffered by the Borrower in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger, any LC Issuer, nor any
Lender shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to sue for, any special, indirect, consequential or
punitive damages suffered by the Borrower in connection with, arising out of, or
in any way related to the Loan Documents or the transactions contemplated
thereby.

      9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, for use solely in connection with the transactions
contemplated hereby, (ii) to legal counsel, accountants, and other professional
advisors to such Lender or to a Transferee, in each case which have been
informed as to the confidential nature of such information, (iii) to regulatory
officials having jurisdiction over it, (iv) to any Person as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, in each case
which have been informed as to the confidential nature of such information, and
(vii) permitted by Section 12.4.

      9.12. Lenders Not Utilizing Plan Assets. Each Lender and Designated Lender
represents and warrants that none of the consideration used by such Lender or
Designated

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Lender to make its Loans constitutes for any purpose of ERISA or Section 4975 of
the Code assets of any "plan" as defined in Section 3(3) of ERISA or Section
4975 of the Code and the rights and interests of such Lender or Designated
Lender in and under the Loan Documents shall not constitute such "plan assets"
under ERISA.

      9.13. Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U) as collateral in the
extension or maintenance of the credit provided for herein.

      9.14. Disclosure. The Borrower and each Lender, including each LC Issuer,
hereby acknowledge and agree that each Lender and/or its Affiliates from time to
time may hold investments in, make other loans to or have other relationships
with the Borrower and its Affiliates.

      9.15. Performance of Obligations. The Borrower agrees that the Agent may,
but shall have no obligation to (i) at any time, pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened
against any Collateral and (ii) after the occurrence and during the continuance
of a Default make any other payment or perform any act required of the Borrower
under any Loan Document or take any other action which the Agent in its
discretion deems necessary or desirable to protect or preserve the Collateral,
including, without limitation, any action to (x) effect any repairs or obtain
any insurance called for by the terms of any of the Loan Documents and to pay
all or any part of the premiums therefor and the costs thereof and (y) pay any
rents payable by the Borrower which are more than 30 days past due, or as to
which the landlord has given notice of termination, under any lease. The Agent
shall use its best efforts to give the Borrower notice of any action taken under
this Section 9.15 prior to the taking of such action or promptly thereafter
provided the failure to give such notice shall not affect the Borrower's
obligations in respect thereof. The Borrower agrees to pay the Agent, upon
demand, the principal amount of all funds advanced by the Agent under this
Section 9.15, together with interest thereon at the rate from time to time
applicable to Floating Rate Loans from the date of such advance until the
outstanding principal balance thereof is paid in full. If the Borrower fails to
make payment in respect of any such advance under this Section 9.15 within one
(1) Business Day after the date the Borrower receives written demand therefor
from the Agent, the Agent shall promptly notify each Lender and each Lender
agrees that it shall thereupon make available to the Agent, in Dollars in
immediately available funds, the amount equal to such Lender's Revolving Loan
Pro Rata Share of such advance. If such funds are not made available to the
Agent by such Lender within one (1) Business Day after the Agent's demand
therefor, the Agent will be entitled to recover any such amount from such Lender
together with interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of such demand and ending on the date
such amount is received. The failure of any Lender to make available to the
Agent its Revolving Loan Pro Rata Share of any such unreimbursed advance under
this Section 9.15 shall neither relieve any other Lender of its obligation
hereunder to make available to the Agent such other Lender's Revolving Loan Pro
Rata Share of such advance on the date such payment is to be made nor increase
the obligation of any other Lender to make such payment to the Agent. All
outstanding principal of, and interest on, advances made under this Section 9.15
shall constitute Obligations secured by the Collateral until paid in full by the
Borrower.

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      9.16. Partial Guaranty Release. The Borrower has requested that the Agent
and the Lenders release Tesoro Technology Company, Tesoro Marine Services
Holding Company and Tesoro Marine Services, LLC (the "Release Entities") from
the Guaranty, the Security Agreement, and all other Collateral Documents to
which such Release Entities are subject. The Borrower represents, warrants and
covenants to the Agent and the Lenders that no Release Entity (i) has guaranteed
or secured, or shall guaranty or secure, the Other Senior Secured Debt or (ii)
owns or controls, or expects to own or control, Property with an aggregate value
in excess of $1,000,000 at any time; provided, however, that if any such Release
Entity shall own or control Property in excess of $1,000,000 at any time, the
Borrower shall cause such Release Entity to guaranty the Secured Obligations and
shall cause such Release Entity to secure its guaranty obligations pursuant to
the terms of the Guaranty, the Security Agreement, and such other Collateral
Documents as may be reasonably requested by the Agent. The Agent and the
Lenders, by their execution hereof, hereby release, as of the Closing Date, the
Release Entities from the Guaranty, the Security Agreement, and the other
Collateral Documents to which such Release Entities are subject. The Agent shall
record such instruments and documents, including, without limitation, UCC-3
termination statements, as are reasonably necessary, in the Agent's discretion,
to further evidence such release.

      9.17. Subordination of Intercompany Indebtedness. The Borrower agrees that
any and all claims of the Borrower against any of its Subsidiaries that is a
guarantor with respect to any "Intercompany Indebtedness" (as hereinafter
defined), any endorser, obligor or any other guarantor of all or any part of the
Secured Obligations, or against any of its properties shall be subordinate and
subject in right of payment to the prior payment, in full and in cash, of all
Secured Obligations; provided that, and not in contravention of the foregoing,
so long as no Default has occurred and is continuing the Borrower may make loans
to and receive payments in the ordinary course with respect to such Intercompany
Indebtedness from each such guarantor to the extent permitted by the terms of
this Agreement and the other Loan Documents. Notwithstanding any right of the
Borrower to ask, demand, sue for, take or receive any payment from any
guarantor, all rights, liens and security interests of the Borrower, whether now
or hereafter arising and howsoever existing, in any assets of any guarantor
shall be and are subordinated to the rights of the Holders of Secured
Obligations in those assets. The Borrower shall not have any right to possession
of any such asset or to foreclose upon any such asset, whether by judicial
action or otherwise, unless and until all of the Secured Obligations (other than
contingent indemnity obligations) shall have been fully paid and
satisfied (in cash) and all financing arrangements pursuant to any Loan Document
among the Borrower and the Holders of Secured Obligations (or any affiliate
thereof) have been terminated. If all or any part of the assets of any
guarantor, or the proceeds thereof, are subject to any distribution, division or
application to the creditors of such guarantor, whether partial or complete,
voluntary or involuntary, and whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding, or if the business of any such guarantor is dissolved or
if substantially all of the assets of any such guarantor are sold, then, and in
any such event (such events being herein referred to as an "Insolvency Event"),
any payment or distribution of any kind or character, either in cash, securities
or other property, which shall be payable or deliverable upon or with respect to
any Indebtedness of any guarantor to the Borrower ("Intercompany Indebtedness")
shall be paid or delivered directly to the Agent for application on any of the
Secured Obligations, due or to become due, until such Secured Obligations (other
than contingent indemnity obligations) shall have first been fully paid and

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satisfied (in cash). Should any payment, distribution, security or instrument or
proceeds thereof be received by the Borrower upon or with respect to the
Intercompany Indebtedness after an Insolvency Event prior to the satisfaction of
all of the Secured Obligations (other than contingent indemnity obligations) and
the termination of all financing arrangements pursuant to any Loan Document
among the Borrower and the Holders of Secured Obligations (and their
Affiliates), the Borrower shall receive and hold the same in trust, as trustee,
for the benefit of the Holders of Secured Obligations and shall forthwith
deliver the same to the Agent, for the benefit of such Persons, in precisely the
form received (except for the endorsement or assignment of the Borrower where
necessary), for application to any of the Secured Obligations, due or not due,
and, until so delivered, the same shall be held in trust by the Borrower as the
property of the Holder of Secured Obligations. If the Borrower fails to make any
such endorsement or assignment to the Agent, the Agent or any of its officers or
employees are irrevocably authorized to make the same. The Borrower agrees that
until the Secured Obligations (other than the contingent indemnity obligations)
have been paid in full (in cash) and satisfied and all financing arrangements
pursuant to any Loan Document among the Borrower and the Holders of the Secured
Obligations (and their Affiliates) have been terminated, the Borrower will not
assign or transfer to any Person (other than the Agent) any claim the Borrower
has or may have against any guarantor.

      9.18. Certifications Regarding Indentures. The Borrower hereby certifies
to the Agent and the Lenders that, immediately prior to the effectiveness of the
Revolving Loan Commitments and the Pre-Funded Letter of Credit Commitments, and
immediately prior to the initial Credit Extension hereunder, the Borrower's
incurrence of Indebtedness under this Agreement and the other Loan Documents
does not violate (i) Section 4.09 of the Indenture, dated as of July 2, 1998, as
amended or modified from time to time, to which the Borrower and certain of its
Subsidiaries are subject and pursuant to which the Borrower issued certain 9%
Senior Subordinated Notes Due 2008, (ii) Section 4.09 of the Indenture, dated as
of November 6, 2001, as amended or modified from time to time, to which the
Borrower and certain of its Subsidiaries are subject and pursuant to which the
Borrower issued certain 9-5/8% Senior Subordinated Notes Due 2008, and (iii)
Section 4.09 of the Indenture, dated as of April 9, 2002, as amended or modified
from time to time, to which the Borrower is subject and pursuant to which the
Borrower issued certain 9-5/8% Senior Subordinated Notes Due 2012. The Borrower
further certifies to the Agent and the Lenders that both the Revolving Loan
Commitment component of this Agreement and the other Loan Documents constitute a
"Credit Facility" and a "Senior Credit Facility" under each of the foregoing
Indentures, and that neither the Aggregate Credit Linked Deposit nor the
Aggregate Pre-Funded Letter of Credit Commitment constitutes on the Closing Date
or at any other time a "Senior Credit Facility" under the indenture referenced
in clause (i) hereof, and shall not constitute such a "Senior Credit Facility"
until such indenture is appropriately amended or unless the "Fixed Charge
Coverage Ratio" under such indenture is equal to or greater than 2.0 to 1.0 on
the date on which the Aggregate Pre-Funded Letter of Credit Commitment goes into
effect and the effectiveness thereof is otherwise permitted under such
indenture. The Borrower further certifies that the Revolving Loan Commitments,
the Pre-Funded Letter of Credit Commitments, the Aggregate Credit Linked
Deposit, this Agreement, and the other Loan Documents collectively constitute
"Senior Debt" under each of the aforementioned indentures.

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      9.19. Co-Agents. Other than as set forth in Section 9.6, no Lender
identified in this Agreement as the syndication agent, the documentation agent,
a co-collateral agent or any other Co-Agent shall have any right, power,
obligation, liability, responsibility, or duty under any Loan Document other
than those applicable to any Lender as such. Without limiting the foregoing, no
such Lender shall have or be deemed to have a fiduciary relationship with any
Lender.

                                   ARTICLE X

                                   THE AGENT

      10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents, including, without limitation, the
Agent's agreement to bind itself and the Lenders to the Intercreditor Agreement
and to act on its behalf and on behalf of the Lenders thereunder. The Agent
agrees to act as such contractual representative upon the express conditions
contained in this Article X. Notwithstanding the use of the defined term
"Agent," it is expressly understood and agreed that the Agent shall not have any
fiduciary responsibilities to any of the Holders of Secured Obligations by
reason of this Agreement or any other Loan Document and that the Agent is merely
acting as the contractual representative of the Lenders with only those duties
as are expressly set forth in this Agreement and the other Loan Documents. In
its capacity as the Lenders' contractual representative, the Agent (i) does not
hereby assume any fiduciary duties to any of the Holders of Secured Obligations,
(ii) is a "representative" of the Holders of Secured Obligations within the
meaning of the term "secured party" as defined in the New York Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders, for itself and on behalf of its
Affiliates as Holders of Secured Obligations, hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Holder of Secured Obligations
hereby waives.

      10.2. Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.

      10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, or any Lender or
Holder of Secured Obligations for any action taken or omitted to be taken by it
or them hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final,
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.

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      10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
Collateral; or (g) the financial condition of the Borrower or any guarantor of
any of the Obligations or of any of the Borrower's or any such guarantor's
respective Subsidiaries. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Borrower to the Agent at
such time, but is voluntarily furnished by the Borrower to the Agent (either in
its capacity as Agent or in its individual capacity).

      10.5. Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders (or all of the Lenders in the event that and to the extent that
this Agreement expressly requires such), and such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders.
The Lenders hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders (or all of the Lenders in the event
that and to the extent that this Agreement expressly requires such). The Agent
shall be fully justified in failing or refusing to take any action hereunder and
under any other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.

      10.6. Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.

      10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.

      10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to the Lenders' Pro Rata
Shares of the Aggregate

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Revolving Loan Commitment and the Aggregate Credit Linked Deposit (or, if the
Aggregate Revolving Loan Commitment has been terminated, of the Aggregate
Outstanding Revolving Loan Credit Exposure) (i) for any amounts not reimbursed
by the Borrower for which the Agent is entitled to reimbursement by the Borrower
under the Loan Documents, (ii) for any other expenses incurred by the Agent on
behalf of the Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, without
limitation, for any expenses incurred by the Agent in connection with any
dispute between the Agent and any Lender or between two or more of the Lenders)
and (iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Agent in connection with any dispute between the Agent and any
Lender or between two or more of the Lenders), or the enforcement of any of the
terms of the Loan Documents or of any such other documents, provided that (i) no
Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent and (ii) any indemnification required pursuant to Section 3.5(vii)
shall, notwithstanding the provisions of this Section 10.8, be paid by the
relevant Lender in accordance with the provisions thereof. The obligations of
the Lenders under this Section 10.8 shall survive payment of the Secured
Obligations and termination of this Agreement.

      10.9.  Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or the Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.

      10.10. Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Revolving Loan Commitment and its Credit Extensions
as any Lender and may exercise the same as though it were not the Agent, and the
term "Lender" or "Lenders" shall, at any time when the Agent is a Lender, unless
the context otherwise indicates, include the Agent in its individual capacity.
The Agent and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not obligated to remain a Lender.

      10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents

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and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.

      10.12. Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.

      10.13. Agent and Arranger Fees. The Borrower agrees to pay to the Agent
and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Agent and the Arranger pursuant to that certain letter agreement
dated May 25, 2004, or as otherwise agreed from time to time.

      10.14. Delegation to Affiliates. The Borrower and the Lenders agree that
the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.

      10.15. Collateral Documents. (a) Each Lender authorizes the Agent to enter
into each of the Collateral Documents to which it is a party and to take all
action contemplated by such documents. Each Lender agrees that no Holder of
Secured Obligations (other than the Agent)

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shall have the right individually to seek to realize upon the security granted
by any Collateral Document, it being understood and agreed that such rights and
remedies may be exercised solely by the Agent for the benefit of the Holders of
Secured Obligations upon the terms of the Collateral Documents.

            (b)   In the event that any Collateral is hereafter pledged by any
Person as collateral security for the Secured Obligations, the Agent is hereby
authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Agent on behalf of the Holders of
Secured Obligations.

            (c)   The Lenders hereby authorize the Agent, at its option and in
its discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Aggregate Revolving Loan Commitment and
payment and satisfaction of all of the Obligations (other than contingent
indemnity obligations and Rate Management Obligations) at any time arising under
or in respect of this Agreement or the Loan Documents or the transactions
contemplated hereby or thereby; (ii) as permitted by, but only in accordance
with, the terms of the applicable Loan Document; or (iii) if approved,
authorized or ratified in writing by the Required Lenders, unless such release
is required to be approved by all of the Lenders hereunder. Upon request by the
Agent at any time, the Lenders will confirm in writing the Agent's authority to
release particular types or items of Collateral pursuant to this Section 10.15.

            (d)   Upon any sale or transfer of assets constituting Collateral
which is permitted pursuant to the terms of any Loan Document, or consented to
in writing by the Required Lenders or all of the Lenders, as applicable, and
upon at least five Business Days' prior written request by the Borrower to the
Agent, the Agent shall (and is hereby irrevocably authorized by the Lenders to)
execute such documents as may be necessary to evidence the release of the Liens
granted to the Agent for the benefit of the Holders of Secured Obligations
herein or pursuant hereto upon the Collateral that was sold or transferred;
provided, however, that (i) the Agent shall not be required to execute any such
document on terms which, in the Agent's opinion, would expose the Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Secured Obligations or any
Liens upon (or obligations of the Borrower or any Subsidiary Guarantor in
respect of) all interests retained by the Borrower or any Subsidiary Guarantor,
including, without limitation, the proceeds of the sale, all of which shall
continue to constitute part of the Collateral.

      10.16. Intercreditor Agreement.

            10.16.1 The Intercreditor Agreement sets forth certain relative
      rights, as holders of Liens, of the Agent on behalf of the Holders of
      Secured Obligations and the Multiparty Collateral Agent on behalf of the
      Senior Noteholders and the Senior Term Loan Holders. Each of the Lenders
      has received a copy of the Intercreditor Agreement attached hereto as
      Exhibit I and each such Person (including, without limitation, those
      Persons that become Lenders subject hereto pursuant to an Assignment
      Agreement) agrees to be bound by the terms and conditions of such attached
      Intercreditor Agreement. The future consent of the Lenders shall not be
      required in order for the Agent to enter into any

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      Intercreditor Agreement described in clause (y) of the definition thereof,
      and the Lenders hereby authorize the Agent to enter into such
      Intercreditor Agreement. The Lenders authorize the Agent to deliver
      written notice to the Multiparty Collateral Agent, the Senior Note
      Trustee, the Senior Term Loan Agreement Agent, the Senior Noteholders and
      the Senior Term Loan Holders that this Agreement, the other Loan
      Documents, and the credit facilities evidenced hereby, constitute a
      "Qualified Credit Facility" as defined on the Closing Date in the Senior
      Note Indenture and Senior Term Loan Agreement. The Agent shall require the
      written agreement of the Multiparty Collateral Agent, on behalf of itself,
      the Senior Note Trustee, the Senior Noteholders, the Senior Term Loan
      Agreement Agent, and the Senior Term Loan Holders, to be bound by the
      Intercreditor Agreement. Notwithstanding the foregoing, nothing in the
      Intercreditor Agreement will:

            (a)   impair, as between (1) the Borrower and the Subsidiary
      Guarantors, and (2) the Agent, the Lenders, the LC Issuers, the
      obligations of the Borrower or any Subsidiary Guarantor, which are
      absolute and unconditional, to pay principal, interest, fees and expenses
      hereunder in accordance with the terms hereof or to perform any other
      obligation of the Borrower or such Subsidiary Guarantor under the Loan
      Documents;

            (b)   affect the relative rights of the Holders of Secured
      Obligations, the Senior Noteholders or the Senior Term Loan Holders and
      other creditors of the Borrower or any of its Subsidiaries;

            (c)   restrict the right of any Holder of Secured Obligations,
      Senior Noteholder or Senior Term Loan Holder to sue for payments that are
      then due and owing;

            (d)   prevent the Agent, the Holders of Secured Obligations, the
      Multiparty Collateral Agent, the Senior Note Trustee, the Senior Term Loan
      Agreement Agent, the Senior Noteholders or the Senior Term Loan Holders,
      from exercising against the Borrower or any Subsidiary Guarantor any of
      its other available remedies upon a Default or Unmatured Default or a
      "default" or "event of default" under the Senior Notes or the Senior Term
      Loan Agreement (or any comparable event which would permit the
      acceleration of the repayment of the Indebtedness held by such Persons or
      which would otherwise allow such Persons to exercise rights and remedies
      against the Borrower or any Subsidiary Guarantor); or

            (e)   restrict the right of the Agent, the Holders of Secured
      Obligations, the Multiparty Collateral Agent, the Senior Note Trustee, the
      Senior Term Loan Agreement Agent, the Senior Noteholders or the Senior
      Term Loan Holders to file and prosecute a petition seeking an order for
      relief in an involuntary bankruptcy case as to the Borrower or any
      Subsidiary Guarantor or otherwise to commence, or seek relief commencing,
      any insolvency or liquidation proceeding involuntarily against the
      Borrower or any Subsidiary Guarantor or to assert or enforce any claim,
      Lien, right or remedy in any voluntary or involuntary bankruptcy case or
      insolvency or liquidation proceeding.

            10.16.2 The Agent and the Lenders agree that, until the Senior Notes
      and the Senior Term Loans are repaid and the Multiparty Collateral Agent's
      Lien upon certain of the Borrower's and its Subsidiaries' Property is
      released as a result of such repayment,

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      the Agent, on behalf of the Lenders, shall be bound by and shall perform
      each of its obligations set forth in the Intercreditor Agreement. The
      Agent and the Lenders further agree that neither the Lenders nor the Agent
      shall accept, enforce, claim or retain any benefit of any guaranty from or
      by any Pipeline Subsidiary, any Lien upon any Property of any Pipeline
      Subsidiary as Collateral for the Secured Obligations, or any consensual
      Lien upon any equities of any Subsidiary of the Borrower. The Multiparty
      Collateral Agent, the Senior Note Trustee, the Senior Term Loan Agreement
      Agent, the Senior Term Loan Holders, and the Senior Noteholders shall be
      deemed to be third party beneficiaries of this Section 10.16.2.

                                   ARTICLE XI

                            SETOFF; RATABLE PAYMENTS

      11.1. Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Secured Obligations owing to
such Lender, whether or not the Secured Obligations, or any part thereof, shall
then be due.

      11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a participation in the Aggregate Outstanding Credit Exposure held by
the other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their respective Pro Rata Shares of the
Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by
legal process, or otherwise, appropriate further adjustments shall be made.

      11.3. Application of Payments. Principal and interest payments shall be
apportioned ratably among the Lenders (according to the unpaid principal balance
of the Loans to which such payments relate held by each Lender) and payments of
the fees shall, as applicable, be apportioned ratably among the Lenders, except
for fees payable solely to the Agent or any LC Issuer and except as provided in
the fee letter referenced in Section 10.13. Subject to the provisions of Section
2.2 governing the application of mandatory prepayments, all payments shall be
remitted to the Agent and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of any Collateral received by the Agent following acceleration of
the maturity of the Obligations pursuant to Section 8.1, shall be applied,
ratably, subject to the provisions of this Agreement, first, to pay any fees,
indemnities, or expense reimbursements including amounts then due to the Agent
from the Borrower, second, to pay any fees or expense reimbursements then due to
the Lenders from

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the Borrower, third, to pay ratably interest due in respect of the Revolving
Loans, including Non-Ratable Loans and Collateral Protection Advances, and fees
due in respect of the Aggregate Credit Linked Deposit, fourth, to pay or prepay
ratably the principal amount of the Collateral Protection Advances, fifth, to
pay or prepay ratably the principal amount of the Non-Ratable Loans and the
Revolving Loans, unpaid Reimbursement Obligations in respect of Facility LCs,
unpaid reimbursement obligations resulting from withdrawals from the Pre-Funded
Letter of Credit Account, and an amount to the Agent equal to one hundred ten
percent (110%) of the aggregate undrawn face amount of all outstanding Facility
LCs to be held as cash collateral for such Obligations, sixth, to pay any
amounts owing with respect to Bank Products, and seventh, to the payment of any
other Secured Obligation due to the Agent or any Lender by the Borrower.

      Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by the Borrower, or unless a Default is in existence, neither
the Agent nor any Lender shall apply any payment which it receives to any
Eurodollar Loan, except (a) on the expiration date of the Interest Period
applicable to any such Eurodollar Loan, or (b) in the event, and only to the
extent, that there are no outstanding Floating Rate Loans and, in any event, the
Borrower shall pay the breakage losses with respect to Eurodollar Loans in
accordance with Section 3.4. The Agent and the Required Lenders shall have the
continuing and exclusive right to apply and reverse and reapply any and all such
proceeds and payments to any portion of the Secured Obligations. Unless
otherwise required by the terms of this Agreement, all principal payments in
respect of Loans (other than Non-Ratable Loans and Collateral Protection
Advances) shall be applied first to repay outstanding Floating Rate Loans, and
then to repay outstanding Eurodollar Loans with those Eurodollar Loans which
have earlier expiring Interest Periods being repaid prior to those which have
later expiring Interest Periods.

                                   ARTICLE XII

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

      12.1. Successors and Assigns; Designated Lenders.

            12.1.1 Successors and Assigns. The terms and provisions of the Loan
      Documents shall be binding upon and inure to the benefit of the Borrower,
      the Agent and the Lenders and their respective successors and assigns
      permitted hereby, except that (i) the Borrower shall not have the right to
      assign its rights or obligations under the Loan Documents without the
      prior written consent of each Lender, (ii) any assignment by any Lender
      must be made in compliance with Section 12.3, and (iii) any transfer by
      Participants must be made in compliance with Section 12.2. Any attempted
      assignment or transfer by any party not made in compliance with this
      Section 12.1 shall be null and void, unless such attempted assignment or
      transfer is treated as a participation in accordance with Section 12.3.2.
      The parties to this Agreement acknowledge that clause (ii) of this Section
      12.1 relates only to absolute assignments and this Section 12.1 does not
      prohibit assignments creating security interests, including, without
      limitation, (x) any pledge or assignment by any Lender of all or any
      portion of its rights under this Agreement and any Note to a Federal
      Reserve Bank, (y) in the case of a Lender which is a Fund, any pledge or
      assignment of all or any portion of its rights under this Agreement

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      and any Note to its trustee in support of its obligations to its trustee
      or (z) any pledge or assignment by any Lender of all or any portion of its
      rights under this Agreement and any Note to direct or indirect contractual
      counterparties in swap agreements relating to the Loans; provided,
      however, that no such pledge or assignment creating a security interest
      shall release the transferor Lender from its obligations hereunder unless
      and until the parties thereto have complied with the provisions of Section
      12.3. The Agent may treat the Person which made any Loan or which holds
      any Note as the owner thereof for all purposes hereof unless and until
      such Person complies with Section 12.3; provided, however, that the Agent
      may in its discretion (but shall not be required to) follow instructions
      from the Person which made any Loan or which holds any Note to direct
      payments relating to such Loan or Note to another Person. Any assignee of
      the rights to any Loan or any Note agrees by acceptance of such assignment
      to be bound by all the terms and provisions of the Loan Documents. Any
      request, authority or consent of any Person, who at the time of making
      such request or giving such authority or consent is the owner of the
      rights to any Loan (whether or not a Note has been issued in evidence
      thereof), shall be conclusive and binding on any subsequent holder or
      assignee of the rights to such Loan.

            12.1.2 Designated Lenders.

      (i)   Subject to the terms and conditions set forth in this Section
            12.1.2, any Lender may from time to time elect to designate an
            Eligible Designee to provide all or any part of the Loans to be made
            by such Lender pursuant to this Agreement; provided that the
            designation of an Eligible Designee by any Lender for purposes of
            this Section 12.1.2 shall be subject to the approval of the Agent
            (which consent shall not be unreasonably withheld or delayed). Upon
            the execution by the parties to each such designation of an
            agreement in the form of Exhibit F hereto (a "Designation
            Agreement") and the acceptance thereof by the Agent, the Eligible
            Designee shall become a Designated Lender for purposes of this
            Agreement. The Designating Lender shall thereafter have the right to
            permit the Designated Lender to provide all or a portion of the
            Loans to be made by the Designating Lender pursuant to the terms of
            this Agreement and the making of the Loans or portion thereof shall
            satisfy the obligations of the Designating Lender to the same
            extent, and as if, such Loan was made by the Designating Lender. As
            to any Loan made by it, each Designated Lender shall have all the
            rights a Lender making such Loan would have under this Agreement and
            otherwise; provided, (x) that all voting rights under this Agreement
            shall be exercised solely by the Designating Lender, (y) each
            Designating Lender shall remain solely responsible to the other
            parties hereto for its obligations under this Agreement, including
            the obligations of a Lender in respect of Loans made by its
            Designated Lender and (z) no Designated Lender shall be entitled to
            reimbursement under Article III hereof for any amount which would
            exceed the amount that would have been payable by the Borrower to
            the Lender from which the Designated Lender obtained any interests
            hereunder. No additional Notes shall be required with respect to
            Loans provided by a Designated Lender; provided, however, to the
            extent any Designated Lender shall advance funds, the Designating
            Lender shall be deemed to hold the Notes in its possession as an
            agent for such Designated Lender to the extent of the Loan

                                       99
<PAGE>

            funded by such Designated Lender. Such Designating Lender shall act
            as administrative agent for its Designated Lender and give and
            receive notices and communications hereunder. Any payments for the
            account of any Designated Lender shall be paid to its Designating
            Lender as administrative agent for such Designated Lender and
            neither the Borrower nor the Agent shall be responsible for any
            Designating Lender's application of such payments. In addition, any
            Designated Lender may (1) with notice to, but without the consent of
            the Borrower or the Agent, assign all or portions of its interests
            in any Loans to its Designating Lender or to any financial
            institution consented to by the Agent providing liquidity and/or
            credit facilities to or for the account of such Designated Lender
            and (2) subject to advising any such Person that such information is
            to be treated as confidential in accordance with Section 9.11,
            disclose on a confidential basis any non-public information relating
            to its Loans to any rating agency, commercial paper dealer or
            provider of any guarantee, surety or credit or liquidity enhancement
            to such Designated Lender.

      (ii)  Each party to this Agreement hereby agrees that it shall not
            institute against, or join any other Person in instituting against,
            any Designated Lender any bankruptcy, reorganization, arrangement,
            insolvency or liquidation proceeding or other proceedings under any
            federal or state bankruptcy or similar law for one year and a day
            after the payment in full of all outstanding senior indebtedness of
            any Designated Lender; provided that the Designating Lender for each
            Designated Lender hereby agrees to indemnify, save and hold harmless
            each other party hereto for any loss, cost, damage and expense
            arising out of its inability to institute any such proceeding
            against such Designated Lender. This Section 12.1.2 shall survive
            the termination of this Agreement.

      12.2. Participations.

            12.2.1 Permitted Participants; Effect. Any Lender may at any time
      sell to one or more banks or other entities ("Participants") participating
      interests in any Outstanding Credit Exposure of such Lender, any Note held
      by such Lender, any Revolving Loan Commitment of such Lender or any other
      interest of such Lender under the Loan Documents. In the event of any such
      sale by a Lender of participating interests to a Participant, such
      Lender's obligations under the Loan Documents shall remain unchanged, such
      Lender shall remain solely responsible to the other parties hereto for the
      performance of such obligations, such Lender shall remain the owner of its
      Outstanding Credit Exposure and the holder of any Note issued to it in
      evidence thereof for all purposes under the Loan Documents, all amounts
      payable by the Borrower under this Agreement shall be determined as if
      such Lender had not sold such participating interests, and the Borrower
      and the Agent shall continue to deal solely and directly with such Lender
      in connection with such Lender's rights and obligations under the Loan
      Documents.

            12.2.2 Voting Rights. Each Lender shall retain the sole right to
      approve, without the consent of any Participant, any amendment,
      modification or waiver of any provision of the Loan Documents other than
      any amendment, modification or waiver with respect

                                      100
<PAGE>

      to any Credit Extension or Revolving Loan Commitment in which such
      Participant has an interest which would require consent of all of the
      Lenders pursuant to the terms of Section 8.2.

            12.2.3 Benefit of Certain Provisions. The Borrower agrees that each
      Participant shall be deemed to have the right of setoff provided in
      Section 11.1 in respect of its participating interest in amounts owing
      under the Loan Documents to the same extent as if the amount of its
      participating interest were owing directly to it as a Lender under the
      Loan Documents, provided that each Lender shall retain the right of setoff
      provided in Section 11.1 with respect to the amount of participating
      interests sold to each Participant. The Lenders agree to share with each
      Participant, and each Participant, by exercising the right of setoff
      provided in Section 11.1, agrees to share with each Lender, any amount
      received pursuant to the exercise of its right of setoff, such amounts to
      be shared in accordance with Section 11.2 as if each Participant were a
      Lender. The Borrower further agrees that each Participant shall be
      entitled to the benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same
      extent as if it were a Lender and had acquired its interest by assignment
      pursuant to Section 12.3, provided that (i) a Participant shall not be
      entitled to receive any greater payment under Section 3.1, 3.2 or 3.5 than
      the Lender who sold the participating interest to such Participant would
      have received had it retained such interest for its own account, unless
      the sale of such interest to such Participant is made with the prior
      written consent of the Borrower, and (ii) any Participant not incorporated
      under the laws of the United States of America or any State thereof agrees
      to comply with the provisions of Section 3.5 to the same extent as if it
      were a Lender.

      12.3. Assignments.

            12.3.1 Permitted Assignments. Any Lender may at any time assign to
      one or more banks or other entities ("Purchasers") all or any part of its
      rights and obligations under the Loan Documents. Such assignment shall be
      evidenced by an agreement substantially in the form of Exhibit C or in
      such other form as may be agreed to by the parties thereto (each such
      agreement, an "Assignment Agreement"). Each such assignment with respect
      to a Purchaser which is not a Lender or an Affiliate of a Lender or an
      Approved Fund shall, unless otherwise consented to in writing by the
      Borrower and the Agent, either be in an amount equal to the entire
      applicable Outstanding Credit Exposure of the assigning Lender or (unless
      each of the Borrower and the Agent otherwise consents) be in an aggregate
      amount not less than (x) $10,000,000 with respect to Revolving Loans and
      (y) $1,000,000 with respect to Pre-Funded Letter of Credit Commitments and
      related Credit Linked Deposits. The amount of the assignment shall be
      based on the Outstanding Credit Exposure subject to the assignment,
      determined as of the date of such assignment or as of the "Trade Date," if
      the "Trade Date" is specified in the Assignment Agreement.

            12.3.2 Consents. The consent of the Borrower shall be required prior
      to an assignment becoming effective unless the Purchaser is a Lender, an
      Affiliate of a Lender or an Approved Fund, provided that the consent of
      the Borrower shall not be required if (i) a Default has occurred and is
      continuing or (ii) such assignment is in connection with the physical
      settlement of any Lender's obligations to direct or indirect contractual

                                      101
<PAGE>

      counterparties in swap agreements relating to the Loans; provided, that
      the assignment without the Borrower's consent pursuant to clause (ii)
      shall not increase the Borrower's liability under Section 3.5. The consent
      of the Agent shall be required prior to an assignment becoming effective
      unless the Purchaser is a Lender, an Affiliate of a Lender or an Approved
      Fund. Any consent required under this Section 12.3.2 shall not be
      unreasonably withheld or delayed.

            12.3.3 Effect; Effective Date. Upon (i) delivery to the Agent of an
      Assignment Agreement, together with any consents required by Sections
      12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the Agent for
      processing such assignment (unless such fee is waived by the Agent or
      unless such assignment is made to such assigning Lender's Affiliate or an
      Approved Fund), such assignment shall become effective on the effective
      date specified in such assignment. The Assignment Agreement shall contain
      a representation and warranty by the Purchaser to the effect that the
      assignment evidenced thereby will not result in a non-exempt "prohibited
      transaction" under Section 406 of ERISA. On and after the effective date
      of such assignment, such Purchaser shall for all purposes be a Lender
      party to this Agreement and any other Loan Document executed by or on
      behalf of the Lenders and shall have all the rights, benefits and
      obligations of a Lender under the Loan Documents, to the same extent as if
      it were an original party thereto, and the transferor Lender shall be
      released with respect to the Outstanding Credit Exposure assigned to such
      Purchaser without any further consent or action by the Borrower, the
      Lenders or the Agent. In the case of an assignment covering all of the
      assigning Lender's rights, benefits and obligations under this Agreement,
      such Lender shall cease to be a Lender hereunder but shall continue to be
      entitled to the benefits of, and subject to, those provisions of this
      Agreement and the other Loan Documents which survive payment of the
      Obligations and termination of the Loan Documents. Any assignment or
      transfer by a Lender of rights or obligations under this Agreement that
      does not comply with this Section 12.3 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 Section 12.2. Upon the consummation of
      any assignment to a Purchaser pursuant to this Section 12.3.3, the
      transferor Lender, the Agent and the Borrower shall, if the transferor
      Lender or the Purchaser desires that its Loans be evidenced by Notes, make
      appropriate arrangements so that, upon cancellation and surrender to the
      Borrower of the Notes (if any) held by the transferor Lender, new Notes
      or, as appropriate, replacement Notes are issued to such transferor
      Lender, if applicable, and new Notes or, as appropriate, replacement
      Notes, are issued to such Purchaser, in each case in principal amounts
      reflecting their Revolving Loan Commitments (or, if the Termination Date
      has occurred, their respective Outstanding Credit Exposure), as adjusted
      pursuant to such assignment.

            12.3.4 Register. The Agent, acting solely for this purpose as an
      agent of the Borrower (and the Borrower hereby designates the Agent to act
      in such capacity), shall maintain at one of its offices in Chicago,
      Illinois a copy of each Assignment and Assumption delivered to it and a
      register (the "Register") for the recordation of the names and addresses
      of the Lenders, and the Revolving Loan Commitments of, and principal
      amounts of and interest on the Loans owing to, each Lender pursuant to the
      terms hereof from time to time and whether such Lender is an original
      Lender or assignee of another Lender pursuant to an assignment under this
      Section 13.3. The entries in the Register

                                      102
<PAGE>

      shall be conclusive, and the Borrower, the Agent and the Lenders may treat
      each Person whose name is recorded in the Register pursuant to the terms
      hereof as a Lender hereunder for all purposes of this Agreement,
      notwithstanding notice to the contrary. The Register shall be available
      for inspection by the Borrower and any Lender, at any reasonable time and
      from time to time upon reasonable prior notice.

      12.4. Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries; provided
that each Transferee and prospective Transferee agrees to be bound by Section
9.11 of this Agreement.

      12.5. Tax Certifications. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).

                                  ARTICLE XIII

                                     NOTICES

      13.1. Notices. Except as otherwise permitted by Section 2.13 with respect
to borrowing notices, all notices, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower, the Lenders, the LC Issuers, or the Agent, at its
address or facsimile number set forth on the signature pages hereof or, (y) in
the case of any party, at such other address or facsimile number as such party
may hereafter specify for the purpose by notice to the Agent and the Borrower in
accordance with the provisions of this Section 13.1. Each such notice, request
or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Agent under Article II shall not
be effective until received.

      13.2. Change of Address. The Borrower, the Agent, any LC Issuer, and any
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.

                                   ARTICLE XIV

                                  COUNTERPARTS

      This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this

                                      103
<PAGE>

Agreement by signing any such counterpart. This Agreement shall be effective
when it has been executed by the Borrower, the Agent, the initial LC Issuer, and
the Lenders and each party has notified the Agent by facsimile transmission or
telephone that it has taken such action.

                                   ARTICLE XV

          CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

      15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATION LAW BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS) OF
THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS. IF ANY COURT, TRIBUNAL OR OTHER ENTITY WITH JURISDICTION OVER THE LOAN
DOCUMENTS AND THE TRANSACTIONS EVIDENCED THEREBY REJECTS THE FOREGOING CHOICE OF
NEW YORK LAW, THEN THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ.
BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

      15.2 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL COURT SITTING IN OR
WITH DIRECT JURISDICTION OVER THE SOUTHERN DISTRICT OF NEW YORK OR ANY NEW YORK
STATE COURT SITTING IN OR WITH DIRECT JURISDICTION OVER THE BOROUGH OF MANHATTAN
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND
THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, ANY LC
ISSUER, ANY LENDER OR ANY HOLDER OF SECURED OBLIGATIONS TO BRING PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE BORROWER AGAINST THE AGENT, ANY LC ISSUER, ANY LENDER OR ANY
HOLDER OF SECURED OBLIGATIONS OR ANY AFFILIATE OF THE AGENT, ANY LC ISSUER, ANY
LENDER OR ANY HOLDER OF SECURED OBLIGATIONS INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A UNITED STATES FEDERAL COURT SITTING IN OR
WITH DIRECT JURISDICTION OVER THE SOUTHERN DISTRICT OF NEW YORK OR ANY NEW

                                      104
<PAGE>

YORK STATE COURT SITTING IN OR WITH DIRECT JURISDICTION OVER THE BOROUGH OF
MANHATTAN.

      15.3 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, EACH LC ISSUER, EACH
LENDER, AND EACH OTHER HOLDER OF SECURED OBLIGATIONS HEREBY WAIVE TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.

                                   ARTICLE XVI

                             PRIOR CREDIT AGREEMENT

      The Borrower, certain of the Lenders, and the Agent are parties to the
Prior Credit Agreement. The Borrower, the Lenders, and the Agent agree that upon
(i) the execution and delivery of this Agreement by each of the parties hereto
and (ii) satisfaction (or waiver by the aforementioned parties) of the
conditions precedent set forth in Section 4.1, the terms and conditions of the
Prior Credit Agreement shall be and hereby are amended, superseded, and restated
in their entirety by the terms and provisions of this Agreement. All amounts
outstanding or otherwise due and payable under the Prior Credit Agreement prior
to the Closing Date shall, on and after the Closing Date, be outstanding and due
and payable under this Agreement. Notwithstanding the foregoing, the Borrower
affirms its rights, duties and obligations under the Security Agreement,
including, without limitation, the security interest granted thereunder, and the
other Loan Documents delivered in connection herewith, and agrees and
acknowledges that this Agreement constitutes the "Credit Agreement" referenced
therein.

                                  ARTICLE XVII

                          USA PATRIOT ACT NOTIFICATION

      The following notification is provided to the Borrower pursuant to Section
326 of the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) of 2001, 31
U.S.C. Section 5318:

      IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help
the government of the United States of America fight the funding of terrorism
and money laundering activities, Federal law requires all financial institutions
to obtain, verify, and record information that identifies each Person that opens
an account, including any deposit account, treasury management account, loan,
other extension of credit, or other financial services product. Accordingly,
when the Borrower opens an account, the Agent and the Lenders will ask for the
Borrower's name, tax identification number, business address, and other
information that will allow the Agent and the Lenders to identify the Borrower.
The Agent and the Lenders may also ask to see the Borrower's legal
organizational documents or other identifying documents.

                                      105
<PAGE>

      IN WITNESS WHEREOF, the Borrower, the Lenders, the initial LC Issuer, and
the Agent have executed this Agreement as of the date first above written.

                                     TESORO PETROLEUM CORPORATION,
                                     as the Borrower

                                     By: /s/ G. Scott Spendlove
                                         ---------------------------------------
                                     Print Name: G. Scott Spendlove
                                     Title: Vice President, Finance
                                                 and Treasurer

          Signature Page to Third Amended and Restated Credit Agreement

<PAGE>

                                     BANK ONE, NA (MAIN OFFICE CHICAGO),
                                     individually, as initial LC Issuer, and as
                                     Administrative Agent

                                     By: /s/ Andrew D. Hall
                                         ---------------------------------------
                                     Print Name: Andrew D. Hall
                                     Title: Director

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                     BANK OF AMERICA, N.A.

                                     By: /s/ Dennis M. Hansen
                                         ---------------------------------------
                                     Print Name: Dennis M. Hansen
                                     Title: Authorized Officer

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                     STATE OF CALIFORNIA PUBLIC
                                     EMPLOYEES RETIREMENT SYSTEM

                                     By: /s/ Curtis D. Ishii
                                         ---------------------------------------
                                     Print Name: Curtis D. Ishii
                                     Title:  Senior Investment Officer

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                     FORTIS CAPITAL CORP.

                                     BY: /s/ CASEY LOWARY
                                         ---------------------------------------
                                     PRINT NAME: CASEY LOWARY
                                     TITLE: Senior Vice President

                                     BY: /s/ Darrell W. Holley
                                         ---------------------------------------
                                     PRINT NAME: Darrell W. Holley
                                     TITLE: Managing Director

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                     WELL FARGO FOOTHILL, LLC

                                     By: /s/ Claudia L. Hughes
                                         ---------------------------------------
                                     Print Name: Claudia L. Hughes
                                     Title: Assistant Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                     LASALLE BUSINESS CREDIT, LLC

                                     By: /s/ Joe Fudacz
                                         ---------------------------------------
                                     Print Name: Joe Fudacz
                                     Title: Senior Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                     PNC BANK, N.A.

                                     By: /s/ Christy West
                                         ---------------------------------------
                                     Print Name: Christy West
                                     Title: Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                     PB CAPITAL CORPORATION

                                     By: /s/ Michael J. Bedore
                                         ---------------------------------------
                                     Print Name: Michael J. Bedore
                                     Title: Vice President

                                     By: /s/ Kevin Braddish
                                         ---------------------------------------
                                     Print Name: Kevin Braddish
                                     Title: Managing Director

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                     GUARANTY BANK

                                     By: /s/  Jim R. Hamilton
                                         ---------------------------------------
                                     Print Name: Jim R. Hamilton
                                     Title: Senior Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE
<PAGE>

                                       CALYON NEW YORK BRANCH

                                       By: /s/ ATTILA COACH
                                           -------------------------------------
                                       Name:  ATTILA COACH
                                       Title: MANAGING DIRECTOR

                                       By: /s/ CHARLES HEIDSIECK
                                           -------------------------------------
                                       Name:  CHARLES HEIDSIECK
                                       Title: MANAGING DIRECTOR

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       UBS AG, STAMFORD BRANCH

                                       By: /s/ Wilfred V. Salm
                                           -------------------------------------
                                       Print Name: Wilfred V. Salm
                                       Title:      Director
                                                   Banking Products
                                                   Service, US

                                       By: /s/ Thomas R. Salzano
                                           -------------------------------------
                                       Print Name: Thomas R. Salzano
                                       Title:      Executive Director
                                                   Banking Products
                                                   Service, US

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       SIEMENS FINANCIAL SERVICES, INC.

                                       By: /s/ MICHAEL COILEY
                                           -------------------------------------
                                       Print Name: Michael Coiley
                                       Title:      Senior Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       THE ROYAL BANK OF SCOTLAND PLC

                                       By: /s/ Paul McDonagh
                                           -------------------------------------

                                       Print Name: Paul McDonagh
                                       Title:      Senior Vice President

<PAGE>

                                       U,S. BANK, NATIONAL ASSOCIATION

                                       By: /s/ Thomas Visconti
                                           -------------------------------------

                                       Print Name: Thomas Visconti
                                       Title:      Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       HIBERNIA NATIONAL BANK

                                       By: /s/ Nancy G. Moragas
                                           -------------------------------------

                                       Print Name: Nancy G. Moragas
                                       Title:      Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       ALLIED IRISH BANKS PLC

                                       By: /s/ Martin S. Chin
                                           -------------------------------------

                                       Print Name: Martin Chin
                                       Title:      VP

                                       By: /s/ John Farrace
                                           -------------------------------------

                                       Print Name: John Farrace
                                       Title:      SVP

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       WACHOVIA BANK, NATIONAL ASSOCIATION

                                       BY: /s/ Catherine A. Cowan
                                           -------------------------------------

                                       Print Name: Catherine A. Cowan
                                       Title:      Director

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       NATIONAL CITY BUSINESS CREDIT, INC.

                                       By: /s/ Shane Leary
                                           -------------------------------------

                                       Print Name: Shane Leary
                                       Title:      AVP

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       UFJ BANK LIMITED

                                       By: /s/ Clyde L. Redford
                                           -------------------------------------

                                       Print Name: Clyde L. Redford
                                       Title:      Senior Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       SUMITOMO MITSUI BANKING CORP.

                                       By: /s/ Yasuhiko Imai
                                           -------------------------------------

                                       Print Name: Yasuhiko Imai
                                       Title:      Senior Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       THE FROST NATIONAL BANK

                                       By: /s/ Richard Murray
                                           -------------------------------------

                                       Print Name: Richard Murray
                                       Title:      Senior Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                       NATEXIS BANQUES POPULAIRES

                                       By: /s/ Daniel Payer
                                           -------------------------------------

                                       Print Name: Daniel Payer
                                       Title:      Vice President

                                       By: /s/ Louis P. Laville
                                           -------------------------------------
                                       Print Name: Louis P. Laville, III
                                       Title:      Vice President and Group
                                                   Manager

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE
<PAGE>

                                      THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                      HOUSTON AGENCY

                                      By: /s/ Kelton G. Glasscock
                                          --------------------------------------

                                      Print Name: Kelton G. Glasscock
                                      Title:      Vice President & Manager

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                      BANK OF SCOTLAND

                                      By: /s/ Karen Workman
                                          --------------------------------------

                                      Print Name: Karen Workman
                                      Title:      Assistant Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE

<PAGE>

                                      RZB FINANCE LLC,

                                      By: /s/ John A. Valiska
                                          --------------------------------------

                                      Print Name: John A. Valiska
                                      Title:      Group Vice President

                                      RZB FINANCE LLC,

                                      By: /s/ Juan M. Csillagi
                                          --------------------------------------

                                      Print Name: Juan M. Csillagi
                                      Title:      Group Vice President

<PAGE>

                                      WEBSTER BUSINESS CREDIT CORPORATION

                                      By: /s/ Carl Giordano
                                          --------------------------------------

                                      Print Name: Carl Giordano
                                      Title:      Assistant Vice President

           THIRD AMENDED AND RESTATED CREDIT AGREEMENT SIGNATURE PAGE
<PAGE>

                                  ALASKA PACIFIC BANK

                                      By: /s/ JOHN E. ROBERTSON
                                          --------------------------------------

                                      Print Name: JOHN E. ROBERTSON
                                      Title:      SENIOR VICE PRESIDENT

<PAGE>

COMMIMENT SCHEDULE

 <Table>
<Caption>
                                              REVOLVER               PREFUNDED
EXISTING LENDERS                             ALLOCATION              ALLOCATION              TOTAL
----------------                             ----------              ----------              -----
<S>                                           <C>            <C>     <C>           <C>     <C>           <C>
Bank of America/Fleet                         58,000,000     10.50%  5,000,000     5.00%   63,000,000    8.70%
Bank One                                      58,000,000     10.50%  5,000,000     5.00%   63,000,000    8.70%
CalPERS                                       45,000,000      0.20%                0.00%   45,000,000    6.90%
Fortis Capital                                37,500,000      0.60%                0.00%   37,500,000    5.80%
Wells Fargo Foothill                          30,000,000      5.50%  5,000,000     6.00%   35,000,000    3.40%
LaSalle Business Credit                       27,500,000      5.00%                0.00%   27,500,000    4.20%
PNC Bank                                      25,000,000      4.50%                0.00%   25,000,000    3.80%
Guaranty Bank                                 20,000,000      3.60%  3,000,000     3.00%   23,000,000    3.50%
PB Capital                                    20,000,000      3.60%  3,000,000     3.00%   23,000,000    2.50%
UBS                                           17,500,000      3.20%  5,000,000     5.00%   22,500,000    3.50%
Credit Lyonnias                               20,000,000      3.50%                0.00%   20,000,000    3.50%
TCW                                           18,000,000      3.30%                0.00%   18,000,000        ?
Allied Irish Bank                             12,500,000      2.30%  3,000,000     3.00%   15,500,000    2.00%
Royal Bank of Scottland                       15,000,000      2.70%                0.00%   15,000,000    2.00%
Siemens Financial                             15,000,000      2.70%                0.00%   15,000,000    2.30%
US Bank                                       14,000,000      2.60%                0.00%   14,000,000    2.30%
Natexis                                       10,000,000          ?  3,000,000     3.00%   13,000,000    2.20%
Hibernia National Bank                        12,500,000      2.30%                0.00%   12,500,000    2.00%
National City                                 12,500,000      2.30%                0.00%   12,500,000    1.80%
Sumitomo                                      12,500,000      2.30%                0.00%   12,500,000    1.90%
UFJ                                           12,500,000      2.30%                0.00%   12,500,000    1.80%
Wachovia (Congress)                           12,500,000      2.30%                0.00%   12,500,000    1.00%
Bank of Scottland                             10,000,000      1.80%                0.00%   10,000,000    1.90%
BOTM                                          10,000,000      1.00%                0.00%   10,000,000    1.50%
Frost National Bank                           10,000,000      1.00%                0.00%   10,000,000    1.50%
Webster Business Credit                        5,000,000      0.90%  3,000,000     3.00%    8,000,000    1.50%
RZB                                            7,500,000      1.40%                0.00%    7,500,000    1.20%
Credit Suisse Asset Management                                0.00%  7,000,000     7.70%    7,000,000        ?
TCW                                                           0.00%  7,000,000     7.00%    7,000,000        ?
D.L. Babson (IDM)                                             0.00%  6,000,000     6.00%    6,000,000        ?
AMEX                                                          0.00%  5,000,000     5.00%    5,000,000    0.90%
Deerfield                                                     0.00%  5,000,000     5.00%    5,000,000    0.80%
Eaton Vance                                                   0.00%  5,000,000     5.00%    5,000,000    0.80%
Franklin                                                      0.00%  5,000,000     5.00%    5,000,000    0.00%
Guggenheim                                                    0.00%  5,000,000     5.00%    5,000,000    0.00%
Sankaty                                                       0.00%  5,000,000     5.00%    5,000,000    0.00%
Travelers                                                     0.00%  5,000,000     5.00%    5,000,000    0.80%
Invesco                                                       0.00%  4,000,000     4.00%    4,000,000    0.60%
Alladin                                                       0.00%  3,000,000     3.00%    3,000,000    0.50%
Harch                                                         0.00%  3,000,000     3.00%    3,000,000    0.50%
Alaska Pacific Bank                            2,000,000      0.40%                0.00%    2,000,000    0.03%
                                             -----------      ----   ---------     ----     ---------    ----
                                             550,000,000

</Table>

<PAGE>

                                PRICING SCHEDULE

<TABLE>
<CAPTION>
   Applicable
   Margin for                            Revolving           Revolving          Revolving           Revolving
   Revolving           Revolving          Level II           Level III           Level IV            Level V
     Loans          Level I Status         Status              Status             Status              Status
     -----          --------------         ------              ------             ------              ------
<S>                 <C>                  <C>                 <C>                <C>                 <C>
Eurodollar Rate          2.00%              2.25%               2.50%              2.75%               3.00%
Floating Rate            0.25%              0.50%               0.75%              1.00%               1.25%
</TABLE>

<TABLE>
<CAPTION>
                               Pre-Funded             Pre-Funded              Pre-Funded              Pre-Funded
                             Level I Status         Level II Status        Level III Status        Level IV Status
                             --------------         ---------------        ----------------        ---------------
<S>                          <C>                    <C>                    <C>                     <C>
Pre-Funded Letter of              2.00%                  2.25%                   2.50%                  2.75%
  Credit Fee Rate
</TABLE>

<TABLE>
<CAPTION>
Applicable Fee Rate            Tier I Utilization           Tier II Utilization         Tier III Utilization
-------------------            ------------------           -------------------         --------------------
<S>                            <C>                          <C>                         <C>
  Commitment Fee                     0.25%                         0.50%                        0.75%
</TABLE>

      For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:

      "Revolving Level I Status" exists at any date if, as of the last day of
the applicable fiscal quarter of the Borrower, average daily Excess Availability
for such fiscal quarter was greater than 55% of the average weekly Borrowing
Base for such fiscal quarter.

      "Revolving Level II Status" exists at any date if, as of the last day of
the applicable fiscal quarter of the Borrower, (i) the Borrower has not
qualified for Revolving Level I Status and (ii) average daily Excess
Availability for such fiscal quarter was less than or equal to 55% of the
average weekly Borrowing Base for such fiscal quarter but greater than 45% of
the average weekly Borrowing Base for such fiscal quarter.

      "Revolving Level III Status" exists at any date if, as of the last day of
the applicable fiscal quarter, (i) the Borrower has not qualified for Revolving
Level I Status or Revolving Level II Status and (ii) average daily Excess
Availability for such fiscal quarter was less than or equal to 45% of the
average weekly Borrowing Base for such fiscal quarter but greater than 30% of
the average weekly Borrowing Base for such fiscal quarter.

<PAGE>

      "Revolving Level IV Status" exists at any date if, as of the last day of
the applicable fiscal quarter, (i) the Borrower has not qualified for Revolving
Level I Status, Revolving Level II Status, or Revolving Level III Status and
(ii) average daily Excess Availability for such fiscal quarter was less than or
equal to 30% of the average weekly Borrowing Base for such fiscal quarter but
greater than 15% of the average weekly Borrowing Base for such fiscal quarter.

         "Revolving Level V Status" exists at any date if, as of the last day of
the applicable fiscal quarter, (i) the Borrower has not qualified for Revolving
Level I Status, Revolving Level II Status, Revolving Level III Status or
Revolving Level IV Status, and (ii) average daily Excess Availability for such
fiscal quarter was less than or equal to 15% of the average weekly Borrowing
Base for such fiscal quarter.

      "Revolving Status" means either Revolving Level I Status, Revolving Level
II Status, Revolving Level III Status, Revolving Level IV Status, or Revolving
Level V Status.

      "Pre-Funded Level I Status" exists at any date if, as of the last day of
the applicable fiscal quarter of the Borrower, average daily Excess Availability
for such fiscal quarter was greater than 45% of the average weekly Borrowing
Base for such fiscal quarter.

      "Pre-Funded Level II Status" exists at any date if, as of the last day of
the applicable fiscal quarter, (i) the Borrower has not qualified for Pre-Funded
Level I Status and (ii) average daily Excess Availability for such fiscal
quarter was less than or equal to 45% of the average weekly Borrowing Base for
such fiscal quarter but greater than 30% of the average weekly Borrowing Base
for such fiscal quarter.

      "Pre-Funded Level III Status" exists at any date if, as of the last day of
the applicable fiscal quarter, (i) the Borrower has not qualified for Pre-Funded
Level I Status or Pre-Funded Level II Status, and (ii) average daily Excess
Availability for such fiscal quarter was less than or equal to 30% of the
average weekly Borrowing Base for such fiscal quarter but greater than 15% of
the average weekly Borrowing Base for such fiscal quarter.

      "Pre-Funded Level IV Status" exists at any date if, as of the last day of
the applicable fiscal quarter, (i) the Borrower has not qualified for Pre-Funded
Level I Status, Pre-Funded Level II Status or Pre-Funded Level III Status and
(ii) average daily Excess Availability for such fiscal quarter was less than or
equal to 15% of the average weekly Borrowing Base for such fiscal quarter.

      "Pre-Funded Status" means either Pre-Funded Level I Status, Pre-Funded
Level II Status, Pre-Funded Level III Status or Pre-Funded Level IV Status.

      "Tier I Utilization" means, on any date of determination, the average
Aggregate Outstanding Revolving Loan Credit Exposure on such date was greater
than 66% of the Aggregate Revolving Loan Commitment on such date.

      "Tier II Utilization" means, on any date of determination, the average
Aggregate Outstanding Revolving Loan Credit Exposure on such date was greater
than or equal to 33--1/3rd% of the Aggregate Revolving Loan Commitment on such
date but less than or equal to 66% of the Aggregate Revolving Loan Commitment on
such date.

<PAGE>

      "Tier III Utilization" means, on any date of determination, the average
Aggregate Outstanding Revolving Loan Credit Exposure on such date was less than
33-1/3rd% of the Aggregate Revolving Loan Commitment on such date.

         The Applicable Margin, the Applicable Fee Rate, and the Pre-Funded
Letter of Credit Fee Rate shall be determined in accordance with the foregoing
table based on the Borrower's Revolving Status or Pre-Funded Status, as
applicable, for the applicable fiscal quarter. Such Revolving Status or
Pre-Funded Status, as applicable, shall be determined based upon the Interim
Collateral Reports and Monthly Collateral Reports delivered for such fiscal
quarter. Adjustments, if any, to the Applicable Margin, the Applicable Fee Rate
and the Pre-Funded Letter of Credit Fee Rate shall be effective five Business
Days after the Agent has received all of the applicable Interim Collateral
Reports and Monthly Collateral Reports. If the Borrower fails to deliver such
Interim Collateral Reports and Monthly Collateral Reports to the Agent at the
time required pursuant to Section 6.1, then the Applicable Margin, the
Applicable Fee Rate, and the Pre-Funded Letter of Credit Fee Rate shall be the
highest Applicable Margin, Applicable Fee Rate, and Pre-Funded Letter of Credit
Fee Rate set forth in the foregoing table until the date on which such Interim
Collateral Reports and Monthly Collateral Reports are so delivered.
Notwithstanding the foregoing, for the period beginning on the Closing Date and
ending on the fifth Business Day following the date on which the last Interim
Collateral Report and the last Monthly Collateral Report are required to be
delivered pursuant to Section 6.1 for the fiscal quarter ending September 30,
2004, Revolving Level II Status, Pre-Funded Level I Status and Tier II
Utilization shall be in effect.<PAGE>

                                                                    EXHIBIT 10.1

                                                                  Execution Copy
================================================================================

                                U.S. $100,000,000
                     RECEIVABLES LOAN AND SECURITY AGREEMENT

                            Dated as of June 24, 2004

                                      Among

                             MAXTOR RECEIVABLES LLC,
                                 as the Borrower

                                       and

                               MAXTOR CORPORATION,
                                 as the Servicer

                                       and

                     MERRILL LYNCH COMMERCIAL FINANCE CORP.,
                                  as the Lender

                                       and

                     MERRILL LYNCH COMMERCIAL FINANCE CORP.,
                                    as Agent

                                       and

                         U.S. BANK NATIONAL ASSOCIATION,
                   the Trustee and the Collection Account Bank

                                       and

 LYON FINANCIAL SERVICES, INC. (doing business as U.S. Bank Portfolio Services),
                             as the Backup Servicer

================================================================================
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       Page
                                                                                                       ----
<S>                                                                                                    <C>
I.    DEFINITIONS...................................................................................     2
      SECTION 1.01 Certain Defined Terms............................................................     2
      SECTION 1.02 Other Terms......................................................................    25
      SECTION 1.03 Computation of Time Periods......................................................    25

II.   THE RECEIVABLES FACILITY......................................................................    25
      SECTION 2.01 Borrowings.......................................................................    25
      SECTION 2.02 The Initial Borrowing and Subsequent Borrowings..................................    26
      SECTION 2.03 Facility Maturity Date...........................................................    26
      SECTION 2.04 Determination of Fixed Periods...................................................    27
      SECTION 2.05 Remittance Procedures............................................................    27
            (a) Yield and Liquidation Fees..........................................................    27
            (b) [Intentionally omitted.]............................................................    27
            (c) Remittance Date Transfers from Collection Account...................................    27
            (d) Borrower Deficiency Payments........................................................    28
            (e) [Intentionally omitted.]............................................................    29
            (f) Reinvestment Withdrawals............................................................    29
            (g) Instructions to the Collection Account Bank.........................................    29
      SECTION 2.06 Payments and Computations, Etc...................................................    29
      SECTION 2.07 Fees.............................................................................    30
      SECTION 2.08 Increased Costs; Capital Adequacy................................................    30
      SECTION 2.09 Collateral Assignment of Agreements..............................................    31
      SECTION 2.10 Grant of a Security Interest.....................................................    32
      SECTION 2.11 Limitations on Duties............................................................    33
      SECTION 2.12 Exculpatory Provisions...........................................................    33
      SECTION 2.13 Reliance.........................................................................    33
      SECTION 2.14 Delegation of Duties by the Agent................................................    34
      SECTION 2.15 Agent............................................................................    35
      SECTION 2.16 Evidence of Debt.................................................................    35
      SECTION 2.17 Survival of Representations and Warranties; Repayment Obligations................    36
      SECTION 2.18 Release of Pledged Receivables...................................................    36
      SECTION 2.19 Treatment of Amounts Paid by the Borrower........................................    36
      SECTION 2.20 Termination......................................................................    36
      SECTION 2.21 Increase of Borrowing Limit......................................................    36
      SECTION 2.22 Successor Trustee................................................................    37

III.  CONDITIONS OF LOANS...........................................................................    37
      SECTION 3.01 Conditions Precedent to Initial Borrowing........................................    37
      SECTION 3.02 Conditions Precedent to All Borrowings...........................................    37
      SECTION 3.03 Advances Do Not Constitute a Waiver..............................................    39

IV.   REPRESENTATIONS AND WARRANTIES................................................................    39
      SECTION 4.01 Representations and Warranties of the Borrower...................................    39
      SECTION 4.02 Representations and Warranties of the Servicer...................................    44
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                                     <C>
      SECTION 4.03 Sale of Receivables Upon Breach of Covenant or Representation and
                   Warranty by Borrower.............................................................    50
      SECTION 4.04 Representations and Warranties of the Trustee and the Collection Account Bank....    50
      SECTION 4.05 Representations and Warranties of the Backup Servicer............................    51

V.    GENERAL COVENANTS OF THE BORROWER AND THE SERVICER............................................    51
      SECTION 5.01 General Covenants................................................................    51

VI.   ADMINISTRATION AND SERVICING; CERTAIN COVENANTS...............................................    56
      SECTION 6.01 Appointment and Designation of the Servicer......................................    56
      SECTION 6.02 Collection of Receivable Payments; Modification and Amendment of Receivables.....    58
      SECTION 6.03 Realization Upon Receivables.....................................................    59
      SECTION 6.04 Conformity with Applicable Laws..................................................    59
      SECTION 6.05 Maintenance of Security Interests in the Related Security........................    59
      SECTION 6.06 Pledged Receivable Receipts......................................................    60
      SECTION 6.07 Unidentified Payments; Lender's Right of Presumption.............................    60
      SECTION 6.08 No Rights of Withdrawal..........................................................    60
      SECTION 6.09 Permitted Investments............................................................    60
      SECTION 6.10 Servicing Compensation...........................................................    60
      SECTION 6.11 Reports; Account Statements; Servicing Information...............................    61
      SECTION 6.12 Statements as to Compliance; Financial Statements................................    63
      SECTION 6.13 Access to Certain Documentation..................................................    65
      SECTION 6.14 Backup Servicer..................................................................    67
      SECTION 6.15 Additional Remedies of Agent Upon Early Amortization Event.......................    70
      SECTION 6.16 Waiver of Defaults...............................................................    70
      SECTION 6.17 Maintenance of Certain Insurance.................................................    70
      SECTION 6.18 Segregation of Collections.......................................................    70
      SECTION 6.19 UCC Matters; Protection and Perfection of Pledged Assets.........................    70
      SECTION 6.20 Servicer Advances................................................................    71
      SECTION 6.21 [Intentionally Omitted.].........................................................    72
      SECTION 6.22 Breach of Covenant or Representation and Warranty by Servicer....................    72
      SECTION 6.23 Compliance with Applicable Law...................................................    72

VII.  EARLY AMORTIZATION EVENTS.....................................................................    72
      SECTION 7.01 Early Amortization Events........................................................    72
      SECTION 7.02 Additional Remedies..............................................................    75

VIII. INDEMNIFICATION...............................................................................    76
      SECTION 8.01 Indemnities by the Borrower......................................................    76
      SECTION 8.02 Indemnities by the Servicer......................................................    78

IX.   MISCELLANEOUS.................................................................................    79
      SECTION 9.01 Amendments and Waivers...........................................................    79
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                     <C>
      SECTION 9.02 Notices, Etc.....................................................................    79
      SECTION 9.03 No Waiver; Remedies..............................................................    80
      SECTION 9.04 Binding Effect; Assignability; Multiple Lenders..................................    80
      SECTION 9.05 Term of This Agreement...........................................................    81
      SECTION 9.06 Governing Law; Jury Waiver.......................................................    81
      SECTION 9.07 Costs, Expenses and Taxes........................................................    81
      SECTION 9.08 No Proceedings...................................................................    82
      SECTION 9.09 Recourse Against Certain Parties.................................................    82
      SECTION 9.10 Execution in Counterparts; Severability; Integration.............................    82
      SECTION 9.11 Tax Characterization.............................................................    83
      SECTION 9.12 [Intentionally Omitted.].........................................................    83
      SECTION 9.13 No Reliance......................................................................    83
</TABLE>

                                       iii

<PAGE>

                         LIST OF SCHEDULES AND EXHIBITS

SCHEDULES
Schedule I       Condition Precedent Documents
Schedule II      [Intentionally omitted.]
Schedule III     Prior Names, Tradenames, Fictitious Names and "Doing Business
                 As" Names
Schedule IV-A    Litigation of the Borrower
Schedule IV-B    Litigation of the Servicer
Schedule V       Debt Ratings of Obligors
Schedule VI      Cut-Off Dates
Schedule VII     Representations and Warranties With Respect to
                 Eligible Receivables

EXHIBITS
EXHIBIT A        Form of Borrowing Report
EXHIBIT B        Form of Daily Report
EXHIBIT C        Form of Monthly Remittance Report
EXHIBIT D-1      Form of Contracts: Agreement
EXHIBIT D-2      Form of Contract: Invoice
EXHIBIT E        Form of Notice of Borrowing
EXHIBIT F-1      Form of Backup Servicer Certification Letter Regarding Monthly
                 Remittance Report
EXHIBIT F-2      Form of Backup Servicer Certification Letter Regarding
                 Borrowing Report
EXHIBIT G        Required Backup Servicer Data

                                       iv

<PAGE>

            THIS RECEIVABLES LOAN AND SECURITY AGREEMENT is made as of June 24,
2004, among:

      (1)   MAXTOR RECEIVABLES LLC, a Delaware limited liability company (the
            "Borrower");

      (2)   MAXTOR CORPORATION, a Delaware corporation, as the Servicer (as
            defined herein);

      (3)   MERRILL LYNCH COMMERCIAL FINANCE CORP., as the Lender (as defined
            herein);

      (4)   MERRILL LYNCH COMMERCIAL FINANCE CORP., as agent for the Lenders
            (the "Agent");

      (5)   U.S. BANK NATIONAL ASSOCIATION, as the Trustee and the Collection
            Account Bank (as such terms are defined herein); and

      (6)   LYON FINANCIAL SERVICES, INC., a Minnesota corporation (doing
business as U.S. BANK PORTFOLIO SERVICES), as the Backup Servicer (as such term
is defined herein).

            IT IS AGREED as follows:

I.    DEFINITIONS

            SECTION 1.01 Certain Defined Terms. Certain capitalized terms used
throughout this Agreement are defined above or in this Section 1.01.

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

            "Accountants' Report" has the meaning assigned to that term in
Section 6.13(a).

            "Adjusted Base Rate" means with respect to any Fixed Period for any
Loan allocated to such Fixed Period, an interest rate per annum equal to the sum
of (i) the Applicable Margin in effect during such Fixed Period (or if more than
one Applicable Margin was in effect during such Fixed Period, the average of the
Applicable Margins in effect on each day during such Fixed Period) plus (ii) the
average of the Base Rates in effect on each day during such Fixed Period.

            "Adjusted Canadian Overconcentration Amount" means, as of any date
of determination, an amount which bears the same proportionate relationship to
the aggregate Outstanding Balance of all Eligible Receivables as of such date of
determination as the Canadian Overconcentration Amount calculated (or as should
have been calculated) as of the Cut-Off Date reported upon (or as should have
been reported upon) in the most recent Monthly Remittance

                                        2

<PAGE>

Report required hereunder bore to the aggregate Outstanding Balance of all
Eligible Receivables as of such Cut-Off Date.

            "Adjusted Dilution Reserve" means, as of any date of determination,
an amount which bears the same proportionate relationship to the aggregate
Outstanding Balance of all Eligible Receivables as of such date of determination
as the Dilution Reserve calculated (or as should have been calculated) as of the
Cut-Off Date reported upon (or as should have been reported upon) in the most
recent Monthly Remittance Report required hereunder bore to the aggregate
Outstanding Balance of all Eligible Receivables as of such Cut-Off Date.

            "Adjusted Eurodollar Rate" means with respect to any Fixed Period
for any Loan allocated to such Fixed Period, an interest rate per annum equal to
the sum of (i) the Applicable Margin in effect during such Fixed Period (or if
more than one Applicable Margin was in effect during such Fixed Period, the
average of the Applicable Margins in effect on each day during such Fixed
Period) plus (ii) the Eurodollar Rate for such Fixed Period.

            "Adjusted Loss Reserve" means, as of any date of determination, an
amount which bears the same proportionate relationship to the aggregate
Outstanding Balance of all Eligible Receivables as of such date of determination
as the Loss Reserve calculated (or as should have been calculated) as of the
Cut-Off Date reported upon (or as should have been reported upon) in the most
recent Monthly Remittance Report required hereunder bore to the aggregate
Outstanding Balance of all Eligible Receivables as of such Cut-Off Date.

            "Adjusted Net Eligible Receivables Balance" means, (x) as of any
Cut-Off Date, an amount equal to (i) the Net Eligible Receivables Balance as of
such Cut-Off Date minus (ii) the greater of (1) the sum of (a) the Loss Reserve
as of such Cut-Off Date, (b) the Dilution Reserve as of such Cut-Off Date and
(c) the Yield and Fee Reserve as of such Cut-Off Date and (2) 21% of the Net
Eligible Receivables Balance as of such Cut-Off Date and (y) as of any date of
determination other than a Cut-Off Date, an amount equal to (i) the Net Eligible
Receivables Balance as of such date of determination minus (ii) the greater of
(1) the sum of (a) the Adjusted Loss Reserve as of such date of determination,
(b) the Adjusted Dilution Reserve as of such date of determination and (c) the
Adjusted Yield and Fee Reserve as of such date of determination and (2) 21% of
the Net Eligible Receivables Balance as of such date of determination.

            "Adjusted Overconcentration Amount" means, as of any date of
determination, an amount which bears the same proportionate relationship to the
aggregate Outstanding Balance of all Eligible Receivables as of such date of
determination as the Overconcentration Amount calculated (or as should have been
calculated) as of the Cut-Off Date reported upon (or as should have been
reported upon) in the most recent Monthly Remittance Report required hereunder
bore to the aggregate Outstanding Balance of all Eligible Receivables as of such
Cut-Off Date.

            "Adjusted Yield and Fee Reserve" means, as of any date of
determination, an amount which bears the same proportionate relationship to the
aggregate Outstanding Balance of all Eligible Receivables as of such date of
determination as the Yield and Fee Reserve calculated (or as should have been
calculated) as of the Cut-Off Date reported upon (or as should have been
reported upon) in the most recent Monthly Remittance Report required hereunder
bore to the aggregate Outstanding Balance of all Eligible Receivables as of such
Cut-Off Date.

                                        3

<PAGE>

            "Adjusted Yield Rate" means with respect to any Fixed Period for any
Loan allocated to such Fixed Period, an interest rate per annum equal to the
Stressed Eurodollar Rate; provided, however, that if the Lender shall have
notified the Agent that a Eurodollar Disruption Event has occurred, the Adjusted
Yield Rate shall be equal to the Stressed Base Rate until the Lender has
notified the Agent that such Eurodollar Disruption Event has ceased, at which
time the Adjusted Yield Rate shall again be equal to the Stressed Eurodollar
Rate.

            "Adverse Claim" means a lien, security interest, charge, encumbrance
or other right or claim of any Person other than, with respect to the Pledged
Assets, any lien, security interest, charge, encumbrance or other right or claim
in favor of the Lender (or the Agent on behalf of the Lender).

            "Affected Party" has the meaning assigned to that term in Section
2.08(a).

            "Affiliate" when used with respect to a Person means any other
Person controlling, controlled by or under common control with such Person. For
the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

            "Agent" has the meaning assigned to that term in the preamble
hereto.

            "Agreement" means this Receivables Loan and Security Agreement, as
the same may be amended, restated, supplemented and/or otherwise modified from
time to time hereafter in accordance with Section 9.01 hereof.

            "Amortization Commencement Date" means the earlier of (i) the date
of the declaration or automatic occurrence of the Amortization Commencement Date
pursuant to Section 7.01 hereof or (ii) the Facility Maturity Date.

            "Applicable Margin" has the meaning ascribed to such term in the Fee
Letter.

            "Assigned Documents" has the meaning assigned to that term in
Section 2.09.

            "Assignment and Acceptance" has the meaning assigned to that term in
Section 9.04(a).

            "Backup Servicer" means Lyon Financial Services, Inc., a Minnesota
Corporation (doing business as U.S. Bank Portfolio Services), or any substitute
Backup Servicer appointed by the Agent, in its sole discretion, pursuant to
Section 6.14.

            "Backup Servicer Fee" means, for any Remittance Period or portion
thereof after the occurrence of a Servicer Default and the appointment of the
Backup Servicer as Servicer hereunder, an amount, payable out of Collections on
the Pledged Receivables and amounts applied to the payment of, or treated as
payments on, the Pledged Receivables, equal to the Backup Servicing Fee Rate
multiplied by the Net Eligible Receivables Balance as of the first day of such
Remittance Period.

                                        4

<PAGE>

            "Backup Servicer Standby Fee" means, for any Remittance Period or
portion thereof, an amount payable out of Collections on the Pledged Receivables
and amounts applied to the payment of, or treated as payments on, the Pledged
Receivables, equal to the greater of (i) the Backup Servicer Standby Fee Rate
multiplied by the Net Eligible Receivables Balance as of the first day of such
Remittance Period or (ii) an amount equal to (x) $2,000 plus (y) $750 multiplied
by the number of any Borrowing Reports in excess of one delivered during such
Remittance Period; provided, that during the period, if any, when the Backup
Servicer is acting as the Servicer, the Backup Servicer Standby Fee shall equal
$0.00.

            "Backup Servicer Standby Fee Rate" means the per annum rate of
0.03%.

            "Backup Servicing Fee Rate" means the per annum rate of 0.75%.

            "Bankruptcy Code" means Title 11, United States Code, 11 U.S.C.
Sections 101 et seq., as amended.

            "Bankruptcy Event" shall be deemed to have occurred with respect to
a Person if:

            (a) a case or other proceeding shall be commenced, without the
      application or consent of such Person, in any court, seeking the
      liquidation, reorganization, debt arrangement, dissolution, winding up, or
      composition or readjustment of debts of such Person, the appointment of a
      trustee, receiver, custodian, liquidator, assignee, sequestration or the
      like for such Person or all or substantially all of its assets, or any
      similar action with respect to such Person under any law relating to
      bankruptcy, insolvency, reorganization, winding up or composition or
      adjustment of debts, and such case or proceeding shall continue
      undismissed, or unstayed and in effect, for a period of 60 consecutive
      days or an order for relief in respect of such Person shall be entered in
      an involuntary case under the federal bankruptcy laws or other similar
      laws now or hereafter in effect; or

            (b) such Person shall commence a voluntary case or other proceeding
      under any applicable bankruptcy, insolvency, reorganization, debt
      arrangement, dissolution or other similar law now or hereafter in effect,
      or shall consent to the appointment of or taking possession by a receiver,
      liquidator, assignee, trustee, custodian, sequestration (or other similar
      official) for such Person or for any substantial part of its property, or
      shall make any general assignment for the benefit of creditors, or shall
      fail to, or admit in writing its inability to, pay its debts generally as
      they become due, or, if a corporation or similar entity, its board of
      directors shall vote to implement any of the foregoing.

            "Base Rate" means, on any date, a fluctuating rate of interest per
annum equal to the arithmetic average of the rates of interest publicly
announced by JPMorgan Chase Bank and Citibank, N.A. (or their respective
successors) as their respective prime commercial lending rates (or, as to any
such bank that does not announce such a rate, such bank's "base" or other rate
determined by the Lender to be the equivalent rate announced by such bank),
except that, if any such bank shall, for any period, cease to announce publicly
its prime commercial lending (or equivalent) rate, the Agent shall, during such
period, determine the Base Rate based upon the prime commercial lending (or
equivalent) rates announced publicly by the other such banks or, if

                                        5

<PAGE>

each such bank ceases to announce publicly its prime commercial lending (or
equivalent) rate, based upon the prime commercial lending (or equivalent) rate
or rates announced publicly by one or more other banks reasonably acceptable to
the Borrower and the Agent. The prime commercial lending (or equivalent) rates
used in computing the Base Rate are not intended to be the lowest rates of
interest charged by such banks in connection with extensions of credit to
debtors. The Base Rate shall change as and when such banks' prime commercial
lending (or equivalent) rates change.

            "Borrower" has the meaning assigned to that term in the preamble
hereto.

            "Borrowing" means a borrowing of Loans under this Agreement.

            "Borrowing Base Deficiency" means, at any time that the Capital
Limit shall be less than the Facility Amount, an amount equal to the amount of
such deficiency.

            "Borrowing Date" means, with respect to any Borrowing, the date on
which such Borrowing is funded (which date, other than in the case of the
initial Borrowing, shall be a "Subsequent Borrowing Date").

            "Borrowing Limit" means initially $100,000,000 as such amount may be
increased pursuant to Section 2.23; provided, that at all times, on or after the
Amortization Commencement Date, the Borrowing Limit shall mean the aggregate
outstanding Loans.

            "Borrowing Report" means a report, in substantially the form of
Exhibit A, delivered by the Servicer pursuant to Section 6.11(h) which, among
other things, (a) shall calculate the Adjusted Net Eligible Receivables Balance
using (i) Eligible Receivables data current as of (and, in any event, not
including any Receivable which was a Delinquent Receivable as of) the end of
business on the Business Day prior to the Business Day it is delivered by the
Servicer to the Agent (the "Borrowing Report Delivery Date") and (ii) an
Overconcentration Amount, a Canadian Overconcentration Amount, an Adjusted Loss
Reserve, an Adjusted Dilution Reserve and an Adjusted Yield and Fee Reserve, in
each case, as of the end of business on the Business Day prior to such Borrowing
Report Delivery Date, (b) sets forth the amount of the Borrowing which the
Borrower requests be advanced on the next Borrowing Date and (c) demonstrates
that after giving effect to such Borrowing and the Pledge of the Eligible
Receivables to be purchased by the Borrower with the proceeds of such Borrowing,
if any, the Capital Limit shall not be less than the Facility Amount.

            "Business Day" means a day of the year other than a Saturday or a
Sunday or any other day on which banks are not authorized or required to close
in New York City or the State of Minnesota; provided, that, if any determination
of a Business Day shall relate to a Loan bearing interest at the Adjusted
Eurodollar Rate, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

            "Canadian Overconcentration Amount" means, at any time, the amount
by which the sum of the Outstanding Balances of all Eligible Receivables which
are payable by Obligors that are residents of, or have a principal place of
business or a billing address in, Canada or any Affiliate thereof exceeds (i)
15% of the sum of the Outstanding Balances of all Eligible Receivables (to the
extent not in excess of the Borrowing Limit) at such time or (ii) if the foreign

                                        6

<PAGE>

currency rating of Canada is less than A from S&P, A from Fitch or A2 by
Moody's, 10% of the sum of the Outstanding Balances of all Eligible Receivables
(to the extent not in excess of the Borrowing Limit) at such time.

            "Capital Limit" means, at any time, an amount equal to:

                        ANEB + CA

where:      ANEB =      the Adjusted Net Eligible Receivables Balance at such
                        time; and

            CA   =      the amount of Collections on deposit in the Collection
                        Account at such time to be applied in accordance with
                        Section 2.05 on the next Remittance Date.

            "Change of Control" means that at any time (i) Maxtor shall fail to
own directly 100% of all of the outstanding Capital Stock of the Borrower or
shall cease to have the right or ability by voting power, contract or otherwise,
to elect or designate for election a majority of the Board of Directors of the
Borrower, (ii) Maxtor or the Borrower merges or consolidates with any other
Person or (iii) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), shall
become or obtain rights (whether by means of warrants, options or otherwise) to
become, the "beneficial owner" (as defined under the Securities Exchange Act of
1934, as amended), directly or indirectly, of more than 50% of the outstanding
Capital Stock of Maxtor. For purposes of this definition, the following terms
have the following meanings:

            "Board of Directors" means, with respect to any Person, such
      Person's board of directors or any committee thereof duly authorized to
      act on behalf of such board of directors.

            "Capital Stock" of any Person means any and all shares, interests,
      rights to purchase, warrants, options, contingent share issuances,
      participations or other equivalents of or interest in equity (however
      designated) of such Person.

            "Closing Date" means June 24, 2004.

            "Code" means the Internal Revenue Code of 1986, as amended.

            "Collection Account" means the special trust account (account number
091000022 at the Collection Account Bank) in the name of the Borrower and under
the sole dominion and control of the Agent for the benefit of the Lender;
provided, that the funds deposited in such account (including any interest and
earnings thereon) from time to time shall constitute the property and assets of
the Borrower and the Borrower shall be solely liable for any taxes payable with
respect to the Collection Account.

            "Collection Account Agreement" means that certain "Collection
Account Securities Account Agreement" dated as of the date hereof among the
Agent, the Borrower, the Servicer and the Collection Account Bank, as securities
intermediary, as such agreement may from time to time be amended, supplemented
or otherwise modified in accordance with the terms

                                        7

<PAGE>

thereof, which agreement shall (i) provide that the Collection Account Bank
shall not release any funds from the Collection Account other than pursuant to a
Daily Report confirmed and signed by the Trustee or on a Remittance Date
pursuant to Section 2.05(c) and (ii) otherwise be satisfactory to the Agent in
form and substance.

            "Collection Account Bank" means U.S. Bank National Association and
its successors in interest.

            "Collection Date" means the date on which the aggregate outstanding
principal amount of the Loans have been repaid in full and all Yield and Fees
and all other Obligations have been paid in full and the Lender shall have no
further obligation to make any additional Loans.

            "Collections" means, without duplication, with respect to any
Pledged Receivable all cash receipts and proceeds in respect of such Pledged
Receivable, including, without limitation, all payments of any purchase price,
finance charge, interest, fees, delinquent payments recovered by the Servicer,
Liquidation Proceeds or any other proceeds from any disposition of any Pledged
Assets related to such Pledged Receivable, late fees, redemption fees, other
penalty fees and charges, Servicer Advances, any payments under any insurance
policies related to such Pledged Receivable, all cash proceeds of Related
Security with respect to such Receivable or other amounts received by the
Borrower or the Servicer with respect to the related Contract, all cash proceeds
received pursuant to any Guaranty, all cash proceeds of any other Pledged Assets
with respect to such Pledged Receivable, any other payments made to the Borrower
or Maxtor with respect to the related Contract, any other payments made by an
Obligor in respect of any Contract, any amounts paid to the Borrower pursuant
to, or in connection with, the Purchase Agreement and any interest earned on
amounts on deposit in the Collection Account, any income from the investment in
Permitted Investments of amounts deposited into the Collection Account.

            "Commitment Percentage" has the meaning assigned to that term in
Section 9.04(b).

            "Computer Tape or Listing" means the computer tape or listing
(whether in electronic form or otherwise) generated by the Servicer on behalf of
the Borrower which provides information relating to the Receivables included in
the Net Eligible Receivables Balance.

            "Contract" means (i) collectively, an agreement between the
Originator and an Obligor substantially in the forms attached hereto as Exhibit
D-1 and an invoice in the form attached hereto as Exhibit D-2 pursuant to or
under which an Obligor shall be obligated to pay for merchandise, products or
services from time to time or (ii) (in the case of any open account agreement)
an invoice in the form attached hereto as Exhibit D-2 pursuant to or under which
an Obligor shall be obligated to pay for merchandise, products or services from
time to time.

            "Credit and Collection Policy" means the credit and collection
policy of Maxtor and the Borrower to be delivered to the Agent pursuant to
Section 5.01(m) hereof, together with

                                        8

<PAGE>

all exhibits thereto, as such policies may hereafter be amended, modified or
supplemented from time to time in compliance with this Agreement.

            "Cut-Off Date" means the last day of each Fiscal Month, as set forth
on Schedule VI hereto, as amended or replaced pursuant to the terms hereof.

            "Daily Report" means a report, in substantially the form attached
hereto as Exhibit B which, among other things, (a) shall calculate the Adjusted
Net Eligible Receivables Balance using (i) Eligible Receivables data current as
of (and, in any event, not including any Receivable which was a Delinquent
Receivable as of) the end of business on the Business Day prior to the Business
Day it is delivered by the Servicer to the Trustee (the "Delivery Date") and
(ii) an Adjusted Overconcentration Amount, an Adjusted Canadian
Overconcentration Amount, an Adjusted Loss Reserve, an Adjusted Dilution Reserve
and an Adjusted Yield and Fee Reserve, in each case, as of the end of business
on the Business Day prior to such Delivery Date, (b) sets forth an amount of
funds which the Borrower requests be released from the Collection Account on the
Business Day following such Delivery Date and demonstrates that (1) after giving
effect to such withdrawal and the Pledge of the Eligible Receivables to be
purchased by the Borrower with such funds, the Capital Limit shall not be less
than the Facility Amount and (2) the amount to be withdrawn from the Collection
Account is not in excess of (x) the amount of funds on deposit in the Collection
Account minus (y) an amount equal to the accrued and unpaid (i) Yield, (ii)
Non-Use Fees, (iii) Servicing Fees and Backup Servicer Standby Fees (or, if the
Backup Servicer has been appointed as Servicer hereunder, the Backup Servicer
Fees) and (iv) the Trustee Fees and (c) if such report is delivered on the 25th
day of any calendar month (or, if no such report is delivered on such 25th day,
if such report is the first such report delivered after such 25th day), sets
forth, in a manner satisfactory to the Agent, the aggregate amount of Pledged
Receivables owed by each of the Top Ten Obligors as of the date of such report.

            "Debt" of any Person means (i) indebtedness of such Person for
borrowed money, (ii) obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) obligations of such Person to pay the
deferred purchase price of property or services, (iv) obligations of such Person
as lessee under leases which shall have been or should be, in accordance with
GAAP, recorded as capital leases, (v) obligations secured by an Adverse Claim
upon property or assets owned by such Person, even though such Person has not
assumed or become liable for the payment of such obligations and (vi)
obligations of such Person under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (v) above.

            "Default Ratio" means, as of any Cut-Off Date, the ratio, expressed
as a percentage, equal to (i) the aggregate Outstanding Balances of all
Defaulted Receivables on such Cut-Off Date divided by (ii) the aggregate
Outstanding Balances of all Pledged Receivables on such Cut-Off Date.

            "Default Yield" means, with respect to any Remittance Date after the
occurrence of an Early Amortization Event, all Yield on all Loans which is
accrued and unpaid as of, and including, the day immediately preceding such
Remittance Date minus the amount of Yield on

                                        9

<PAGE>

all Loans which would have been accrued and unpaid as of, and including, the day
immediately preceding such Remittance Date if such Early Amortization Event had
not occurred.

            "Defaulted Receivable" means a Receivable:

                  (i) as to which any payment, or part thereof, remains unpaid
      for more than 90 days from the original due date for such payment;

                  (ii) if a Bankruptcy Event has occurred with respect to the
      Obligor thereof or any other Person obligated thereon; or

                  (iii) which, consistent with the Credit and Collection Policy,
      should be written off the Originator's or the Borrower's books as
      uncollectible.

            "Deferred Purchase Price" has the meaning set forth in the Purchase
Agreement.

            "Delinquency Ratio" means, as of any Cut-Off Date, the ratio,
expressed as a percentage, equal to (i) the aggregate Outstanding Balances of
all Delinquent Receivables on such Cut-Off Date divided by (ii) the aggregate
Outstanding Balances of all Pledged Receivables on such Cut-Off Date.

            "Delinquent Receivable" means a Receivable that is not a Defaulted
Receivable and:

                  (i) as to which any payment, or part thereof, remains unpaid
      for more than 30 days, but less than or equal to 90 days, from the
      original due date for such payment; or

                  (ii) which, consistent with the Credit and Collection Policy,
      would be classified as delinquent by the Originator, the Servicer or the
      Borrower.

            "Dell" means Dell Computer Corporation.

            "Dell Concentration Percentage" means, as of any date of
determination, (x) (A) 20% if Dell's Long Term Rating is A- or higher from S&P
and A3 or higher from Moody's as of such date of determination, (B) 12% if
Dell's Long Term Rating is BBB+ or BBB from S&P and Baa1 or Baa2 from Moody's as
of such date of determination, (C) 10% if Dell's Long Term Rating is BBB- from
S&P and Baa3 from Moody's as of such date of determination, (D) 4.5% if Dell's
Long Term Rating is BB+ or BB from S&P and Ba1 or Ba2 from Moody's as of such
date of determination and (E) 3% if Dell's Long Term Rating is below BB from S&P
or has been cancelled, suspended or withdrawn by S&P or below Ba2 from Moody's
or has been cancelled, suspended or withdrawn by Moody's as of such date of
determination; provided, that, if Dell's Long Term Ratings from S&P and Moody's
do not appear in the same clause above, the Dell Concentration Percentage shall
be the lower of the percentages set forth in the two clauses in which such Long
Term Ratings appear, or (y) at the option of the Borrower, a percentage not in
excess of 25%; provided, that to the extent that such percentage exceeds the
percentage that would have been calculated pursuant to clause (x) above, the
Borrower must have put into place

                                       10

<PAGE>

a credit default swap with respect to such excess that is provided by a Person,
and on terms, satisfactory to the Agent in their sole discretion.

            "Dilution" means the portion of any Receivable which is either (a)
reduced or canceled as a result of (i) any defective, rejected or returned
merchandise or services, any cash discount, or any failure by the Originator to
deliver any merchandise or services or otherwise perform under the related
Contract, (ii) any change in or cancellation of any of the terms of the related
Contract or any other adjustment by the Originator which reduces the amount
payable by the Obligor on the related Receivable (including, without limitation,
any price protection, marketing, incentive and "meet the competition" credits or
other program credits and any volume and revenue rebates and advertising
allowances), or (iii) any setoff in respect of any claim by the Obligor thereof
(whether such claim arises out of the same or a related transaction or an
unrelated transaction) or (b) subject to any specific dispute, offset,
counterclaim or defense whatsoever (except the discharge in bankruptcy of the
Obligor thereof). The Borrower shall be deemed to have received Collections
equal to the amount of any Dilution on the day such Dilution occurs and the
Outstanding Balance of the related Receivable shall be reduced by that amount.

            "Dilution Reserve" means, as of any date of determination, an amount
equal to (i) the Net Eligible Receivables Balance as of such date of
determination multiplied by (ii) the Dilution Reserve Percentage as calculated
in, or as should have been calculated in, the most recent Monthly Remittance
Report required to have been delivered pursuant to Section 6.11(b) hereof.

            "Dilution Reserve Percentage" means a percentage, determined as of a
Cut-Off Date, in accordance with the following formula:

            {(SF x ED) + ((DS-ED) x DS/ED)} x DHR where:

            SF = the Stress Factor;

            ED = the "Expected Dilution", which shall be equal to the average of
the Sales-Based Dilution Ratios during the twelve-Fiscal Month period ending on
such Cut-Off Date, expressed as a percentage;

            DS = the "Dilution Spike", which shall be equal to the highest
average of the Sales-Based Dilution Ratios for any three successive Fiscal
Months during the immediately preceding 24 Fiscal Months, expressed as a
percentage; and

            DHR = the "Dilution Horizon Ratio", which shall be equal to the
Sales during the Fiscal Month ending on such Cut-Off Date divided by the Net
Eligible Receivables Balance as of such Cut-Off Date.

            "Dilution-to-Liquidation Ratio" means, as of any Cut-Off Date, the
ratio, expressed as a percentage, equal to (i) the aggregate amount of Dilution
with respect to all Pledged Receivables which occurred during the twelve Fiscal
Month period ending on such Cut-Off Date divided by (ii) the aggregate amount of
Collections from Obligors on all Pledged Receivables received by the Borrower
during such period.

                                       11

<PAGE>

            "Dynamic Loss Reserve Percentage" means the greater of (a) 12% and
(b) an amount calculated pursuant to the following formula:

            DLRP = LR x LH x SF where:

            DLRP = the Dynamic Loss Reserve Percentage;

            LR = the Loss Ratio, which shall be equal to the greater of (i) the
average of the Sales-Based Default Ratios as of the three most recent
consecutive Cut-Off Dates and (ii) the highest average of the Sales-Based
Default Ratios as of any three consecutive Cut-Off Dates occurring during the
previous twelve Fiscal Months;

            LH = the Loss Horizon, which shall be equal to the cumulative Sales
during the previous 90 days divided by the Net Eligible Receivables Balance as
of the most recent Cut-Off Date; and

            SF = 2.5 during the period from the date hereof to, and including,
the last day of the Fiscal Month ending in December, 2004, and 2.0 after the
conclusion of such period.

            "Early Amortization Event" has the meaning set forth in Section 7.01
hereof.

            "Earned Discount Rate" means, as of any date of determination, a
percentage rate calculated by the Agent equal to the sum of the weighted average
of the Adjusted Yield Rates related to the Fixed Periods in effect as of such
date of determination.

            "Eligible Receivable" means, as of any date, each Pledged Receivable
with respect to which each representation and warranty set forth on Schedule VII
annexed hereto is true and correct.

            "ERISA" means the United States Employee Retirement Income Security
Act of 1974, as amended from time to time.

            "Eurodollar Disruption Event" means any of the following: (i) a
determination by the Lender that it would be contrary to law or to the directive
of any central bank or other governmental authority (whether or not having the
force of law) to obtain United States dollars in the London interbank market to
make, fund or maintain any Loan, (ii) a determination by the Lender that the
rate at which deposits of United States dollars are being offered in the London
interbank market does not accurately reflect the cost to the Lender of making,
funding or maintaining any Loan or (iii) the inability of the Lender to obtain
United States dollars in the London interbank market to make, fund or maintain
any Loan.

            "Eurodollar Rate" means with respect to any Fixed Period for any
Loan allocated to such Fixed Period, the rate per annum appearing on Telerate
Access Service Page 3750 (British Bankers Association Settlement Rate) as the
London Interbank Offered Rate for United States dollar deposits having a term of
thirty (30) days and a principal amount of $1,000,000 or more (or, if such page
shall cease to be publicly available or, if the information contained on such
page, in the Lender's sole judgment, shall cease to accurately reflect such
London Interbank Offered Rate, such rate as reported by any publicly available
recognized source of similar market

                                       12

<PAGE>

data selected by the Agent that, in the Agent's reasonable judgment, accurately
reflects such London Interbank Offered Rate) at approximately 11:00 a.m., London
time, two Business days prior to the commencement of such Fixed Period.

            "Facility Amount" means, at any time, the sum of the aggregate Loans
Outstanding hereunder plus accrued and unpaid Yield and Non-Use Fees at such
time.

            "Facility Maturity Date" means June 23, 2005.

            "Fee Letter" has the meaning assigned to that term in Section
2.07(a).

            "Fees" has the meaning assigned to that term in Section 2.07(a).

            "Final Maturity Date" has the meaning assigned to that term in
Section 2.03.

            "Fiscal Month" means a fiscal month of the Originator and the
Borrower.

            "Fitch" means Fitch Ratings, Ltd. (or its successors in interest).

            "Fixed Period" means for any outstanding Loans, a period determined
pursuant to Section 2.04.

            "GAAP" means generally accepted accounting principles as in effect
from time to time in the United States.

            "Government Entity" means the United States, any State, any
political subdivision of a State and any agency or instrumentality of the United
States or any State or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

            "Guaranty" means any guaranty executed by any Person in respect of
the obligations of an Obligor arising under or in connection with a Contract.

            "HPQ" means Hewlett Packard Company.

            "HPQ Concentration Percentage" means, as of any date of
determination, (A) 20% if HPQ's Long Term Rating is A- or higher from S&P and A3
or higher from Moody's as of such date of determination, (B) 12% if HPQ's Long
Term Rating is BBB+ or BBB from S&P and Baa1 or Baa2 from Moody's as of such
date of determination, (C) 10% if HPQ's Long Term Rating is BBB- from S&P and
Baa3 from Moody's as of such date of determination, (D) 4.5% if HPQ's Long Term
Rating is BB+ or BB from S&P and Ba1 or Ba2 from Moody's as of such date of
determination and (E) 3% if HPQ's Long Term Rating is below BB from S&P or has
been cancelled, suspended or withdrawn by S&P or below Ba2 from Moody's or has
been cancelled, suspended or withdrawn by Moody's as of such date of
determination; provided, that, if HPQ's Long Term Ratings from S&P and Moody's
do not appear in the same clause above, the HPQ Concentration Percentage shall
be the lower of the percentages set forth in the two clauses in which such Long
Term Ratings appear.

                                       13

<PAGE>

            "Increase Fee" has the meaning ascribed thereto in the Fee Letter.

            "Indemnified Amounts" has the meaning assigned to that term in
Section 8.01.

            "Independent Accountants" has the meaning assigned to that term in
Section 6.13(a).

            "Lender" means, collectively, MLCFC and/or any other Person
(including, without limitation, any present or future Affiliate of MLCFC) that
agrees, pursuant to the pertinent Assignment and Acceptance, to make Loans
secured by Pledged Assets pursuant to Article II of this Agreement.

            "Lender Prepayment Discount Rate" means with respect to any date of
determination, the rate per annum appearing on Telerate Access Service Page 3750
(British Bankers Association Settlement Rate) as the London Interbank Offered
Rate for United States dollar deposits having a term of thirty (30) days and a
principal amount of $1,000,000 or more (or, if such page shall cease to be
publicly available or, if the information contained on such page, in the Agent's
sole judgment, shall cease to accurately reflect such London Interbank Offered
Rate, such rate as reported by any publicly available recognized source of
similar market data selected by the Agent that, in the Agent's reasonable
judgment, accurately reflects such London Interbank Offered Rate) at
approximately 11:00 a.m., London time, two Business days prior to such date of
determination.

            "Level I Obligor" means an Obligor (other than Dell or HPQ) whose
Long Term Ratings and Short Term Ratings correspond to Level I as determined in
accordance with Schedule V annexed hereto.

            "Level II Obligor" means an Obligor (other than Dell or HPQ) whose
Long Term Ratings and Short Term Ratings correspond to Level II as determined in
accordance with Schedule V annexed hereto.

            "Level III Obligor" means an Obligor (other than Dell or HPQ) whose
Long Term Ratings and Short Term Ratings correspond to Level III as determined
in accordance with Schedule V annexed hereto.

            "Level IV Obligor" means an Obligor (other than Dell or HPQ) whose
Long Term Ratings and Short Term Ratings correspond to Level IV as determined in
accordance with Schedule V annexed hereto.

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

            "Liquidation Fee" means, for Loans allocated to any Fixed Period
during which such Loans are repaid (in whole or in part) prior to the end of
such Fixed Period, the amount, if any, by which (i) Yield (calculated without
taking into account any Liquidation Fee) which would have accrued on the amount
of the payment of such Loans during such Fixed Period (as so computed) if such
payment had not been made, as the case may be, exceeds (ii) the sum of

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(A) Yield actually received by the Lender in respect of such Loans for such
Fixed Period plus, if applicable, (B) the income, if any, received by the Lender
from the Lender's investing the proceeds of such payments on such Loans.

            "Liquidation Proceeds" means with respect to a Receivable with
respect to which the related inventory has been foreclosed upon by the Servicer,
all amounts realized with respect to such Receivable net of reasonable expenses
of the Servicer incurred in connection with the collection, repossession and
disposition of the related Related Security; provided, however, that the
Liquidation Proceeds with respect to any Receivable shall in no event be less
than zero.

            "Loan" has the meaning set forth in Section 2.01(a).

            "Loans Outstanding" means the sum of the principal amounts loaned to
the Borrower for the initial and any subsequent Borrowings pursuant to Sections
2.01 and 2.02, reduced from time to time by Collections received and distributed
on account of such Loans Outstanding pursuant to Section 2.05; provided,
however, that such Loans Outstanding shall not be reduced by any distribution of
any portion of Collections if at any time such distribution is rescinded or must
be returned for any reason.

            "Lockbox" means a post office box (box number 73255) to which
Collections are remitted for retrieval by the Lockbox Bank and for deposit by
the Lockbox Bank into the Lockbox Account.

            "Lockbox Account" means the deposit account (account number
12334-05099 at the Lockbox Bank) in the name of the Borrower and under the sole
dominion and control of the Agent for the benefit of the Lender.

            "Lockbox Agreement" means an agreement relating to lockbox services
in connection with the Lockbox and the Lockbox Account and the control of the
Agent, for the benefit of the Lender, over the Lockbox Account, which is
satisfactory to the Agent in form and substance and among the Borrower, the
Servicer, the Agent and the Lockbox Bank, as such agreement may from time to
time be amended, supplemented or otherwise modified in accordance with the terms
thereof.

            "Lockbox Bank" means Bank of America, N.A. and its successors in
interest.

            "Long Term Rating" for any Person, shall mean the rating by Moody's
or S&P of such Person's long-term public senior unsecured non-credit-enhanced
debt.

            "Loss Reserve" means, as of any date of calculation, the product of
(A) the Dynamic Loss Reserve Percentage, as calculated in, or as should have
been calculated in, the most recent Monthly Remittance Report required to have
been delivered pursuant to Section 6.11(b) hereof and (B) the Net Eligible
Receivables Balance as of such date of calculation.

            "Material Adverse Effect" means a material adverse effect on (i) the
business, operations, condition (financial or otherwise) of the Borrower or
Maxtor (in its capacity as Servicer or otherwise), (ii) the ability of the
Borrower or Maxtor (in its capacity as Servicer or

                                       15

<PAGE>

otherwise) to conduct its business as is currently conducted, (iii) the ability
of the Borrower or Maxtor (in its capacity as Servicer or otherwise) to perform
its obligations under this Agreement or any other Transaction Document to which
it is a party, (iv) the validity or enforceability of this Agreement or any
other Transaction Document to which the Borrower or Maxtor (in its capacity as
Servicer or otherwise), as applicable, is a party, (v) the rights and remedies
of the Lender and/or the Agent under this Agreement or any of the Transaction
Documents or (vi) the validity, enforceability or collectibility of all or any
portion (other than an inconsequential portion) of the Pledged Receivables.

            "Maxtor" means Maxtor Corporation, a Delaware corporation.

            "MLCFC" means Merrill Lynch Commercial Finance Corp.

            "Monthly Remittance Report" means a report, in substantially the
form of Exhibit C, furnished by the Servicer to the Agent, the Lender, the
Trustee and the Backup Servicer pursuant to Section 6.11(b).

            "Moody's" means Moody's Investors Service, Inc. (or its successors
in interest).

            "Net Eligible Receivables Balance" means, (x) as of any Cut-Off
Date, an amount equal to (i) the Outstanding Balance of all Eligible Receivables
as of such Cut-Off Date minus (ii) the sum of (a) the Overconcentration Amount
as of such Cut-Off Date and (b) the Canadian Overconcentration Amount as of such
Cut-Off Date and (y) as of any date of determination other than a Cut-Off Date,
an amount equal to (i) the Outstanding Balance of all Eligible Receivables as of
such date of determination minus (ii) the sum of (a) the Adjusted
Overconcentration Amount as of such date of determination and (b) the Adjusted
Canadian Overconcentration Amount as of such date of determination.

            "Net Worth" means, with respect to the Borrower as of any date of
determination, the excess, if any, of (a) the aggregate Outstanding Balance of
the Pledged Receivables at such time, over (b) the sum of (i) the Loans
Outstanding at such time plus (ii) the aggregate outstanding principal balance
of the Subordinated Note (including any Deferred Purchase Price proposed to be
incurred on the date of determination).

            "Non-Use Fee" has the meaning ascribed thereto in the Fee Letter.

            "Notice of Borrowing" has the meaning assigned to that term in
Section 2.02(b) hereof.

            "Obligations" means all present and future indebtedness and other
liabilities and obligations (howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, or due or to become due) of the
Borrower to the Lender or the Agent arising under this Agreement and the other
Transaction Documents and shall include, without limitation, all Fees
(including, without limitation, any unpaid portion of the Structuring Fee) all
liability for principal of and interest on the Loans, indemnifications and other
amounts due or to become due under this Agreement and such other documents,
including, without limitation, interest, fees, premiums and other obligations
that accrue after the commencement of an insolvency proceeding (in each case
whether or not allowed as a claim in such insolvency proceeding).

                                       16

<PAGE>

            "Obligor" means a Person obligated to make payments under a
Contract.

            "Officer's Certificate" means a certificate signed by the chief
executive officer, president, the secretary, the chief financial officer or any
vice president of any Person.

            "Opinion of Counsel" means a written opinion of independent counsel
acceptable to the Agent in its reasonable discretion, which opinion, if such
opinion or a copy thereof is required by the provisions of this Agreement or the
Purchase Agreement, is reasonably acceptable in form and substance to the Agent.

            "Originator" means Maxtor in its capacity as the seller under the
Purchase Agreement.

            "Other Conveyed Property" means, with respect to any Receivable, all
of the Borrower's right, title and interest in, to and under (i) all monies at
any time received or receivable with respect to such Receivable, including,
without limitation, Collections, (ii) the Related Security with respect to such
Receivable and any and all agreements, documents, certificates and instruments
evidencing such Related Security, (iii) the payment rights and all rights
related to such payment rights under the related Contract and any and all other
documents or electronic records that the Borrower keeps on file in accordance
with its customary procedures relating to such Receivable, the Related Security
or the related Obligor, (iv) all property (including the right to receive future
Liquidation Proceeds) that secures such Receivable and that has been acquired by
or on behalf of the Borrower pursuant to the liquidation of such Receivable, and
(v) all present and future rights, claims, demands, causes and choses in action
in respect of any or all of the foregoing and all payments on or under and all
proceeds and investments of any kind and nature in respect of any of the
foregoing.

            "Other Permitted Liens" means tax liens or statutory liens which, in
the aggregate, are not in excess of an inconsequential amount.

            "Outstanding Balance" means, as of any date, with respect to a
Receivable, the unpaid balance of such Receivable, minus an amount equal to (i)
the actual volume rebates and actual advertising allowances that the Obligor is
entitled to credit or offset against such balance plus (ii) without duplication,
the amount of all other actual Dilution that has occurred with respect to such
Receivable.

            "Overconcentration Amount" means, at any time, without duplication,
the sum of:

            (a) for each single Level I Obligor, the amount by which the sum of
      the Outstanding Balances of all Eligible Receivables which are payable by
      such single Level I Obligor and/or its Affiliates (regardless of whether
      such Persons are assigned one or more "bill to" numbers by the Originator)
      exceeds 12% of the sum of the Outstanding Balances of all Eligible
      Receivables (to the extent not in excess of the Borrowing Limit) at such
      time;

            (b) for each single Level II Obligor, the amount by which the sum of
      the Outstanding Balances of all Eligible Receivables which are payable by
      such single Level II Obligor and/or its Affiliates (regardless of whether
      such Persons are assigned

                                       17

<PAGE>

      one or more "bill to" numbers by the Originator) exceeds 10% of the sum of
      the Outstanding Balances of all Eligible Receivables (to the extent not in
      excess of the Borrowing Limit) at such time;

            (c) for each single Level III Obligor, the amount by which the sum
      of the Outstanding Balances of all Eligible Receivables which are payable
      by such single Level III Obligor and/or its Affiliates (regardless of
      whether such Persons are assigned one or more "bill to" numbers by the
      Originator) exceeds 5% (or, with respect to Level III Obligors which are
      only rated by Moody's, 3%) of the sum of the Outstanding Balances of all
      Eligible Receivables (to the extent not in excess of the Borrowing Limit)
      at such time;

            (d) for each single Level IV Obligor, the amount by which the sum of
      the Outstanding Balances of all Eligible Receivables which are payable by
      such single Level IV Obligor and/or its Affiliates (regardless of whether
      such Persons are assigned one or more "bill to" numbers by the Originator)
      exceeds 3% of the sum of the Outstanding Balances of all Eligible
      Receivables (to the extent not in excess of the Borrowing Limit) at such
      time;

            (e) the amount by which the sum of the Outstanding Balances of all
      Eligible Receivables which are payable by Dell and/or its Affiliates
      (regardless of whether such Persons are assigned one or more "bill to"
      numbers by the Originator) exceeds the applicable Dell Concentration
      Percentage of the sum of the Outstanding Balances of all Eligible
      Receivables (to the extent not in excess of the Borrowing Limit) at such
      time;

            (f) the amount by which the sum of the Outstanding Balances of all
      Eligible Receivables which are payable by HPQ and/or its Affiliates
      (regardless of whether such Persons are assigned one or more "bill to"
      numbers by the Originator) exceeds the applicable HPQ Concentration
      Percentage of the sum of the Outstanding Balances of all Eligible
      Receivables (to the extent not in excess of the Borrowing Limit) at such
      time; and

            (g) the amount by which the sum of the Outstanding Balances of all
      Eligible Receivables which are payable by an Obligor other than Dell and
      which are required to be paid in full pursuant to the related Contract
      later than 45 days, but not later than 60 days, from the date of the
      related Contract, exceeds 5% of the sum of the Outstanding Balances of all
      Eligible Receivables (to the extent not in excess of the Borrowing Limit)
      at such time.

            "Past Due Receivable" means a Receivable that is not a Defaulted
Receivable and as to which any payment, or part thereof, remains unpaid for 60
or more days, but less than or equal to 90 days, from the original due date for
such payment.

            "Permitted Investments" means any one or more of the following:

                  (i) direct obligations of, or obligations fully guaranteed as
      to principal and interest by, the United States or any agency or
      instrumentality thereof, provided such obligations are backed by the full
      faith and credit of the United States;

                                       18

<PAGE>

                  (ii) repurchase obligations (the collateral for which is held
      by a third party) with respect to any security described in clause (i)
      above, provided that the long-term unsecured obligations of the party
      agreeing to repurchase such obligations are at the time rated by Moody's
      and S&P in one of their two highest long-term rating categories and if
      rated by Fitch, in one of its two highest long-term rating categories;

                  (iii) certificates of deposit, time deposits, demand deposits
      and bankers' acceptances of any bank or trust company incorporated under
      the laws of the United States or any State thereof or the District of
      Columbia, provided that the short-term commercial paper of such bank or
      trust company (or, in the case of the principal depository institution in
      a depository institution holding company, the long-term unsecured debt
      obligations of the depository institution holding company) at the date of
      acquisition thereof has been rated by Moody's and S&P in their highest
      short-term rating category, and if rated by Fitch, in its highest
      short-term rating category;

                  (iv) commercial paper (having original maturities of not more
      than 270 days) of any corporation incorporated under the laws of the
      United States or any State thereof or the District of Columbia, having a
      rating, on the date of acquisition thereof, of no less than P-1 by
      Moody's, A-1 by S&P and F-1 if rated by Fitch; and

                  (v) money market mutual funds registered under the Investment
      Company Act of 1940, as amended, having a rating, at the time of such
      investment, of no less than Aaa by Moody's, AAAm by S&P and AAA/V1+ if
      rated by Fitch;

provided, that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive either (a) interest only payments with
respect to the obligations underlying such instrument or (b) both principal and
interest payments derived from obligations underlying such instrument where the
principal and interest payments with respect to such instrument provide a yield
to maturity exceeding 120% of the yield to maturity at par of such underlying
obligation. Each Permitted Investment may be purchased by the Collection Account
Bank or through an Affiliate of the Collection Account Bank.

            "Permitted Liens" means Liens created under and pursuant to the
Transaction Documents.

            "Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture, Government Entity or other entity.

            "Personal Property Act" means the Personal Property Security Act of
Ontario (or any successor statute) or similar legislation of any other province
of Canada.

            "Pledge" means the pledge of any Receivable pursuant to Article II.

            "Pledged Assets" has the meaning assigned to that term in Section
2.10.

            "Pledged Receivables" has the meaning assigned to that term in
Section 2.10(a).

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<PAGE>

            "Pre-payment Fee" means a fee, in an amount equal to the net present
value as of the date of determination (calculated using a discount rate equal to
the Lender Prepayment Discount Rate as of such date of determination) of the fee
that would accrue at a rate equal to the Pre-payment Non-Use Fee Rate on the
entire Borrowing Limit hereunder (as the same may be increased pursuant to any
amendment hereto or amendment and restatement hereof) from the effective date of
the termination of this Agreement through and including the Facility Maturity
Date.

            "Pre-payment Non-Use Fee Rate" has the meaning ascribed thereto in
the Fee Letter.

            "Program Deficiency" means, at any time, that the Facility Amount at
such time exceeds the lesser of (x) the Borrowing Limit at such time and (y) the
Capital Limit at such time.

            "Purchase Agreement" means that certain Purchase and Contribution
Agreement, dated as of the date hereof, by and between the Borrower, as
purchaser, and Maxtor, as seller, together with all instruments, documents and
agreements executed in connection therewith, as the same may from time to time
be amended, restated, supplemented and/or otherwise modified in accordance with
the terms hereof.

            "Rating Agencies" mean Moody's, S&P and Fitch, or such other
nationally recognized statistical rating organizations as may be designated by
the Agent.

            "Receivable" means the indebtedness of, and the right to all
payments from, an Obligor resulting from the sale of merchandise, products or
services by the Originator under a Contract, including, without limitation, the
right to any payments with respect to (i) interest or finance charges with
respect thereto, (ii) any other obligations of such Obligor with respect thereto
and (iii) all Related Security with respect thereto.

            "Records" means all documents, books, records and other information
(including, without limitation, computer programs, tapes, disks, data processing
software and related property and rights) maintained with respect to Receivables
and the related Obligors which the Borrower has itself generated, in which the
Borrower has acquired an interest pursuant to the applicable Purchase Agreement
or in which the Borrower has otherwise obtained an interest.

            "Related Security" means with respect to any Receivable:

                  (i) all of the Borrower's interest in any merchandise or
      products (including returned merchandise or products) relating to any sale
      giving rise to such Receivable;

                  (ii) all security interests or liens and property subject
      thereto from time to time purporting to secure payment of such Receivable,
      whether pursuant to the Contract related to such Receivable or otherwise,
      together with all financing statements under which an Obligor is the
      debtor describing any collateral securing such Receivable;

                  (iii) all guaranties, letters of credit, letter of credit
      rights, supporting obligations, insurance and other agreements or
      arrangements of whatever character from

                                       20

<PAGE>

      time to time supporting or securing payment of such Receivable whether
      pursuant to the Contract related to such Receivable or otherwise;

                  (iv) the payment rights and all rights related to such payment
      rights under the Contract related to such Receivable and, to the extent
      that the assignment of the Borrower's interests therein is enforceable
      under applicable law, all Records relating to such Receivable and the
      related Obligor; and

                  (v) all proceeds of the foregoing.

            "Release Price" means with respect to a Pledged Receivable to be
released hereunder, an amount equal to the Outstanding Balance of such Pledged
Receivable plus all accrued but unpaid interest and fees thereon.

            "Remittance Date" means the tenth Business Day of each Fiscal Month;
provided, that the final Remittance Date shall occur on the Collection Date.

            "Remittance Period" means, (i) as to the initial Remittance Date,
the period beginning on the date of this Agreement and ending on, and including,
the last day of the Fiscal Month in which such date shall occur (or such other
dates as the Agent and the Borrower may agree) and (ii) as to any subsequent
Remittance Date, the period beginning on, and including, the first day of the
most recently ended Fiscal Month and ending on, and including, the last day of
the most recently ended Fiscal Month; provided, that the final Remittance Period
shall begin on the first day of the most recently ended Fiscal Month and shall
end on the Collection Date.

            "Required Capital Amount" means, at any time of determination, the
greater of (i) $5,000,000 and (ii) an amount equal to 3% of the Outstanding
Balance of all Pledged Receivables at such time of determination.

            "Rollover Fixed Period" means any Fixed Period other than any Fixed
Period (i) applicable to the Loan arising as a result of the Borrowing on the
initial Borrowing Date or (ii) applicable to any new Loan arising as a result of
a Borrowing on a Subsequent Borrowing Date.

            "S&P" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. (or its successors in interest).

            "Sales" means, with respect to any period, the aggregate original
Outstanding Balances (without giving effect to any reduction for volume rebates,
advertising allowances or other Dilution) of the Receivables generated by the
sales of merchandise, products and services by the Originator during such
period.

            "Sales-Based Default Ratio" means, with respect to any Cut-Off Date,
the ratio, expressed as a percentage, of (i) the aggregate Outstanding Balance
of all Past Due Receivables as of such Cut-Off Date, divided by (ii) the Sales
during the Fiscal Month ending on the third Cut-Off Date prior to such Cut-Off
Date.

                                       21

<PAGE>

            "Sales-Based Dilution Ratio" means, with respect to any Cut-Off
Date, the aggregate amount of Dilution (other than Dilution attributable to
volume rebates and advertising allowances) which occurred with respect to
Pledged Receivables during the Fiscal Month ending on such Cut-Off Date; divided
by the Sales during the Fiscal Month immediately prior to such Fiscal Month.

            "Servicer" means at any time the Person then authorized, pursuant to
Section 6.01, to service, administer and collect Pledged Receivables.

            "Servicer Account" has the meaning assigned to such term in the
Lockbox Agreement.

            "Servicer Advance" has the meaning assigned to such term in Section
6.20.

            "Servicer Default" means the occurrence of any of the following
events:

                  (i) the failure (which failure shall not have been cured
      within one Business Day) of the Servicer to deliver any payments,
      collections or proceeds which it is obligated to deliver under the terms
      hereof or of any other Transaction Document at the times it is obligated
      to make such deliveries under the terms hereof or of any other Transaction
      Document;

                  (ii) the inability or failure (which failure shall not have
      been cured within three Business Days) of the Servicer to satisfy any of
      its reporting, certification, notification or documentation requirements
      under the terms hereof or of any other Transaction Document or the failure
      of the Servicer to observe or perform any other covenant under the terms
      hereof or of any other Transaction Document;

                  (iii) any representation, warranty or statement of the
      Servicer made herein or in any other Transaction Document shall prove to
      be incorrect in any material respect; provided, however, that if any such
      event is cured by the repurchase of Receivables pursuant to Section 6.22
      hereof, such event shall cease to constitute a Servicer Default;

                  (iv) the occurrence of an Early Amortization Event described
      in clause (j) through (n) of Section 7.01; or

                  (v) the occurrence of any Bankruptcy Event in respect of the
      Servicer.

            "Servicing Fee" means, for any Remittance Period, an amount, payable
out of Collections on the Pledged Receivables and amounts applied to the payment
of, or treated as payments on, the Pledged Receivables, equal to (i) the
Servicing Fee Rate multiplied by (ii) the Net Eligible Receivables Balance as of
the first day of such Remittance Period.

            "Servicing Fee Rate" means with respect to the Pledged Receivables,
the per annum rate of 0.75%.

                                       22

<PAGE>

            "Short Term Rating" for any Person, shall mean the rating by Moody's
or S&P of such Person's short-term public senior unsecured non-credit-enhanced
debt.

            "State" means one of the fifty states of the United States or the
District of Columbia.

            "Stressed Base Rate" means with respect to any Fixed Period for any
Loan allocated to such Fixed Period, an interest rate per annum equal to the sum
of (i) the Applicable Margin in effect during such Fixed Period (or if more than
one Applicable Margin was in effect during such Fixed Period, the average of the
Applicable Margins in effect on each day during such Fixed Period) plus (ii) an
amount equal to 1.5 multiplied by the average of the Base Rates in effect on
each day during such Fixed Period.

            "Stressed Eurodollar Rate" means with respect to any Fixed Period
for any Loan allocated to such Fixed Period, an interest rate per annum equal to
the sum of (i) the Applicable Margin in effect during such Fixed Period (or if
more than one Applicable Margin was in effect during such Fixed Period, the
average of the Applicable Margins in effect on each day during such Fixed
Period) plus (ii) an amount equal to 1.5 multiplied by the Eurodollar Rate for
such Fixed Period.

            "Stress Factor" means (i) 2.00 at any time that the average of the
Dilution-to-Liquidation Ratios for the immediately preceding three Cut-Off Dates
is less than 15.0%, (ii) 2.25 at any time that the average of the
Dilution-to-Liquidation Ratios for the immediately preceding three Cut-Off Dates
is greater than 15.0% but less than or equal to 16.0%, (iii) 2.50 at any time
that the average of the Dilution-to-Liquidation Ratios for the immediately
preceding three Cut-Off Dates is greater than 16.0% but less than or equal to
17.0% and (iv) 2.75 at any time that the average of the Dilution-to-Liquidation
Ratios for the immediately preceding three Cut-Off Dates is greater than 17.0%
but less than or equal to 17.5%. Notwithstanding anything to the contrary set
forth in the immediately preceding sentence, the "Stress Factor" shall be 2.50
solely for the period from the date hereof to, and including, the last day of
the Fiscal Month ending in December, 2004; provided, however, that the "Stress
Factor" shall be increased to 2.75 at any time during such period that the
Dilution-to-Liquidation Ratio for the immediately preceding three Cut-Off Dates
is greater than 17.0%.

            "Structuring Fee" has the meaning ascribed thereto in the Fee
Letter.

            "Subordinated Note" has the meaning set forth in the Purchase
Agreement.

            "Subsequent Borrowing" means a Borrowing which occurs on a
Subsequent Borrowing Date.

            "Subsequent Borrowing Date" has the meaning ascribed to such term in
the definition of "Borrowing Date".

            "Top Ten Obligors" means as of any date of determination the ten
Obligors owing the largest aggregate Outstanding Balances of Receivables as of
such date of determination.

                                       23

<PAGE>

            "Transaction Documents" means this Agreement, the Purchase
Agreement, the Lockbox Agreement, the Collection Account Agreement, the Fee
Letter and each document and instrument related to any of the foregoing.

            "Transition Fee" means a fee in the amount of $50,000 payable to the
Backup Servicer in connection with a transfer of servicing from the Servicer to
the Backup Servicer as the successor Servicer.

            "Trustee" means U.S. Bank National Association or any successor
Trustee appointed by the Agent pursuant to Section 2.25 hereof.

            "Trustee Fee" means, for any Remittance Period or portion thereof,
an amount payable out of Collections on the Pledged Receivables and amounts
applied to the payment of, or treated as payments on, the Pledged Receivables,
equal to the greater of (i) the Trustee Fee Rate multiplied by the Net Eligible
Receivables Balance as of the first day of such Remittance Period or (ii)
$2,000.

            "Trustee Fee Rate" means the per annum rate of 0.04%.

            "Turnover Rate" means the ratio (expressed as a percentage), as of
any Cut-Off Date, of (i) the aggregate Outstanding Balances of all Eligible
Receivables as of such Cut-Off Date divided by (ii) the aggregate Collections
from Obligors of Eligible Receivables received by the Borrower during the Fiscal
Month ending on such Cut-Off Date.

            "UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.

            "United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.

            "Unmatured Early Amortization Event" means any event that, if it
continues uncured, will, with lapse of time or notice or lapse of time and
notice, constitute an Early Amortization Event.

            "Yield" means with respect to any Fixed Period for any Loan
allocated to such Fixed Period, the product of:

                        YR x L x ED
                                ---
                                360

where:      YR =        the Yield Rate for such Fixed Period;

            L  =        the principal amount of Loans Outstanding allocated to
                        such Fixed Period; and

            ED =        the actual number of days elapsed during such Fixed
                        Period;

                                       24

<PAGE>

provided, however, that (i) no provision of this Agreement shall require the
payment or permit the collection of Yield in excess of the maximum permitted by
applicable law and (ii) Yield shall not be considered paid by any distribution
if at any time such distribution is required to be rescinded by the Lender to
the Borrower or any other Person for any reason including, without limitation,
such distribution becoming void or otherwise avoidable under any statutory
provision or common law or equitable action, including, without limitation, any
provision of the Bankruptcy Code.

            "Yield and Fee Reserve" means, as of any date of determination, an
amount equal to (i) the Net Eligible Receivables Balance as of such date of
determination multiplied by (ii) the sum of (A) the Earned Discount Rate in
effect as of such date of determination, (B) at any time prior to the occurrence
of a Servicer Default and the appointment of the Backup Servicer as Servicer
hereunder, the Servicing Fee Rate, (C) at any time prior to the occurrence of a
Servicer Default and the appointment of the Backup Servicer as Servicer
hereunder, the Backup Servicer Standby Fee Rate, (D) at any time after the
occurrence of a Servicer Default and the appointment of the Backup Servicer as
Servicer hereunder, the Backup Servicing Fee Rate, (E) the Trustee Fee Rate and
(F) an amount, expressed as a percentage, equal to the amount paid to the
Lockbox Bank pursuant to the Lockbox Agreement during the immediately preceding
Remittance Period divided by the Net Eligible Receivables Balance as of the
first day of such Remittance Period divided by (iii) 12, multiplied by (iv) 2.5
during the period from the date hereof to, and including, the last day of the
Fiscal Month ending in December, 2004, and 2.0 after the conclusion of such
period, multiplied by (v) the Turnover Rate calculated in, or as should have
been calculated in, the most recent Monthly Remittance Report required to have
been delivered pursuant to Section 6.11(b) hereof.

            "Yield Rate" means with respect to any Fixed Period for any Loan
allocated to such Fixed Period, an interest rate per annum equal to the Adjusted
Eurodollar Rate; provided, however, that if the Lender shall have notified the
Agent that a Eurodollar Disruption Event has occurred, the Yield Rate shall be
equal to the Adjusted Base Rate until the Lender shall have notified the Agent
that such Eurodollar Disruption Event has ceased, at which time the Yield Rate
shall again be equal to the Adjusted Eurodollar Rate).

            SECTION 1.02 Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in the UCC of the State of New York

            SECTION 1.03 Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."

II.   THE RECEIVABLES FACILITY

            SECTION 2.01 Borrowings. On the terms and conditions hereinafter set
forth, the Lender shall make loans ("Loans") to the Borrower secured by Pledged
Assets from time to time during the period from the date hereof until the
Amortization Commencement Date. Under

                                       25

<PAGE>

no circumstances shall the Borrower request, or the Lender make, any Loan if,
(a) the principal amount of such Loan is less than $1,000,000 or (b) after
giving effect to the Borrowing of such Loan, (i) an Early Amortization Event or
an event that but for notice or lapse of time or both would constitute an Early
Amortization Event shall have occurred and is continuing or (ii) a Program
Deficiency shall have occurred and is continuing. Under no circumstances shall
the Borrower request more than six Loans be advanced in any one calendar month.

            SECTION 2.02 The Initial Borrowing and Subsequent Borrowings. (a)
Until the occurrence of the Amortization Commencement Date, the Lender will make
Loans on any Business Day at the request of the Borrower, subject to and in
accordance with the terms and conditions of Sections 2.01 and this Section 2.02
and subject to the provisions of Article III hereof.

            (b) The initial Borrowing and each Subsequent Borrowing shall be
made on at least four Business Days' irrevocable written notice from the
Borrower to the Agent in the form attached hereto as Exhibit E, (any such
written notice, a "Notice of Borrowing"), provided that such Notice of Borrowing
is received by the Agent no later than 1:00 P.M. (New York City time) on the
Business Day of receipt. Any Notice of Borrowing received after 1:00 P.M. (New
York City time) shall be deemed received prior to 1:00 P.M. (New York City time)
on the following Business Day. Each such Notice of Borrowing shall include (A)
the aggregate amount of such Borrowing and (B) the requested Borrowing Date.
Each such Notice of Borrowing, other than a Notice of Borrowing requesting a
Borrowing on a Remittance Date, shall be accompanied by a Borrowing Report. On
each Borrowing Date, the Lender shall, upon satisfaction of the applicable
conditions set forth in this Section 2.02 and Article III, make available to the
Borrower on such Borrowing Date, no later than 4:00 P.M. (New York City time) in
same day funds, the amount of the Borrowing requested for such Borrowing Date
(net of amounts payable to or for the benefit of the Lender) by payment into the
Borrower's account number 12332-01771 at Bank of America, N.A., ABA No.
121000358 or such other account which the Borrower has designated in writing.

            (c) Unless otherwise provided in this Agreement, the Loans shall
bear interest at the Yield Rate.

            (d) Subject to the terms, conditions, provisions and limitations set
forth herein, the Borrower may borrow, repay or prepay Loans, on and after the
date hereof and prior to the Amortization Commencement Date.

            (e) Determinations by the Lender of the existence of any Eurodollar
Disruption Event, or of the effect of any Eurodollar Disruption Event on its
making or maintaining Loans at the Adjusted Eurodollar Rate, shall be conclusive
absent manifest error.

            SECTION 2.03 Facility Maturity Date. Any Loans outstanding on the
Facility Maturity Date shall mature on the Facility Maturity Date.
Notwithstanding any other provision hereof, on the Facility Maturity Date, the
outstanding principal of all outstanding Loans, if any, and all Yield and all
Fees accrued thereon and other Obligations shall be immediately due and payable
(and the Borrower shall pay all such amounts immediately).

                                       26

<PAGE>

            SECTION 2.04 Determination of Fixed Periods. The initial Fixed
Period applicable to any new Loan arising as a result of a Borrowing shall
commence on, and include, the date of such Borrowing and shall terminate on, and
include, the day immediately prior to the next occurring Remittance Date. All
outstanding Loans allocated to one or more initial Fixed Periods or Rollover
Fixed Periods maturing on the same date shall be combined and allocated to a
single Rollover Fixed Period at the end of such initial Fixed Periods or
Rollover Fixed Periods. Each Rollover Fixed Period shall commence on, and
include, the Remittance Date following the last day of the immediately preceding
Fixed Period and shall terminate on, and include, the day immediately prior to
the next occurring Remittance Date.

            SECTION 2.05 Remittance Procedures. Subject to the other provisions
of this Section 2.05, the Trustee, as agent for the Servicer, the Agent and the
Lender shall instruct the Collection Account Bank, and, to the extent that if
the Trustee fails to do so, the Agent may instruct the Collection Account Bank
to apply funds on deposit in the Collection Account as described in this Section
2.05. No funds shall be transferred from the Collection Account except in
accordance with this Section 2.05.

            (a) Yield and Liquidation Fees. On each Business Day (including any
Remittance Date), the Trustee shall, and, to the extent that the Trustee fails
to do so, the Agent may, direct the Collection Account Bank to set aside in the
Collection Account (whether on such day or on a subsequent day) collected funds
in an amount equal to Yield accrued through such day on the Loans, the Non-Use
Fees, the Trustee Fee, the Backup Server Standby Fee and the Servicing Fee
accrued through such day, in each case, not so previously set aside and the
amount of any unpaid Liquidation Fees owed to the Lender on such day. Any funds
set aside in respect of accrued Yield, Non-Use Fees, Trustee Fee, Backup
Servicer Standby Fee, Servicing Fee and Liquidation Fees pursuant to this
Section 2.05(a) shall remain set aside in the Collection Account until the next
Remittance Date, at which time such funds shall be disbursed pursuant to Section
2.05(c).

            (b) [Intentionally omitted.]

            (c) Remittance Date Transfers from Collection Account. The Trustee
shall, pursuant to a Monthly Remittance Report that has been prepared by the
Servicer and confirmed and certified by the Backup Server pursuant to Section
6.14(e) hereof, and, to the extent that the Trustee fails to do so, the Agent
may, on each Remittance Date, direct the Collection Account Bank to transfer
collected funds held by the Collection Account Bank in the Collection Account,
in the following amounts and priority:

                  (i) at any time after the occurrence of a Servicer Default and
      the appointment of the Backup Servicer as the Servicer hereunder, to the
      Backup Servicer in an amount equal to the Backup Servicer Fees which are
      accrued and unpaid as of the last day of the preceding Remittance Period
      plus any Transition Fee not previously paid to the Backup Servicer;

                  (ii) on a pari passu basis (A) to the Trustee in an amount
      equal to the Trustee Fee which is accrued and unpaid as of the last day of
      the preceding Remittance Period, (B) at any time prior to the appointment
      of the Backup Servicer as the Servicer

                                       27

<PAGE>

      hereunder, to the Backup Servicer in an amount equal to the Backup
      Servicer Standby Fees which are accrued and unpaid as of the last day of
      the preceding Remittance Period and (C) to the Lockbox Bank in an amount
      equal to fees and expenses (but not amounts related to indemnification
      obligations or any other amounts) due and owing to the Lockbox Bank under
      the Lockbox Agreement which are accrued and unpaid as of the last day of
      the preceding Remittance Period;

                  (iii) to the Agent for the account of the Lender in an amount
      equal to (and for the pro rata payment of) (x) all Yield (other than
      Default Yield) on all Loans which is accrued and unpaid as of, and
      including, the day immediately preceding such Remittance Date, (y) any
      Lender Non-Use Fee which is payable as of such Remittance Date pursuant to
      the terms of the Fee Letter and (z) any unpaid Liquidation Fees;

                  (iv) to the Servicer (if the Servicer is Maxtor or any
      Affiliate thereof) in an amount equal to the Servicing Fee which is
      accrued and unpaid as the last day of the preceding Remittance Period plus
      any Servicer Advances not previously reimbursed to the Servicer;

                  (v) to the Agent for the account of the Lender in an amount
      equal to the Borrowing Base Deficiency (if any) as of such Remittance
      Date;

                  (vi) on or after the occurrence of the Amortization
      Commencement Date, to the Agent for the account of the Lender for the
      repayment of Loans outstanding in an amount equal to the lesser of (i) all
      remaining funds in the Collection Account and (ii) an amount necessary to
      repay the outstanding principal amount of all Loans in full;

                  (vii) to the Agent for the account of the Lender in an amount
      equal to all Default Yield on all Loans which is accrued and unpaid as of,
      and including, the day immediately preceding such Remittance Date;

                  (viii) to the Agent for the account of the Lender in an amount
      equal to the aggregate amount of all other Obligations then due from the
      Borrower to the Agent, the Lender and any Affected Party hereunder or
      under any other Transaction Document;

                  (ix) to the Lockbox Bank in an amount equal to any amounts
      (other than fees and expenses) due and owing to the Lockbox Bank under the
      Lockbox Agreement which are accrued and unpaid as of the last day of the
      preceding Remittance Period; and

                  (x) to, or at the direction of, the Borrower (or at the
      direction of the Servicer, on behalf of the Borrower), any remaining
      amounts.

Upon its receipt of funds pursuant to clauses (v), (vi), (vii) and (viii), the
Agent shall apply such funds as directed by the Lender or as otherwise provided
in this Agreement.

            (d) Borrower Deficiency Payments. Notwithstanding anything to the
contrary contained in this Section 2.05 or in any other provision in this
Agreement, if, on any day prior to the Collection Date, a Program Deficiency
shall occur, then the Borrower shall remit to the

                                       28

<PAGE>

Agent, within three Business Days, a payment (to be applied by the Agent to
repay Loans selected by the Agent, in its sole discretion) in such amount as may
be necessary to eliminate such Program Deficiency.

            (e) [Intentionally omitted.]

            (f) Reinvestment Withdrawals. Notwithstanding anything to the
contrary contained in this Section 2.05 or in any other provision in this
Agreement, on any Business Day (provided that such Business Day shall be prior
to the Amortization Commencement Date and no amount payable by the Borrower
hereunder or under any other Transaction Document shall be past due including,
without limitation, any amount which would have been paid on the immediately
preceding Remittance Date pursuant to Section 2.05(c) but for the insufficiency
of funds in the Collection Account on such Remittance Date) the Borrower may
request (by causing the Servicer to deliver a Daily Report to the Trustee) that
the Trustee cause the Collection Account Bank to withdraw from the Collection
Account and deposit, on behalf of the Borrower, into the Originator's account
number 1484004218 at Bank of America, N.A., ABA No. 121000358, or such other
account which the Borrower has designated in writing an amount not in excess of
(x) the amount of funds on deposit in the Collection Account minus (y) an amount
equal to the accrued and unpaid (i) Yield, (ii) Non-Use Fees, (iii) Servicing
Fees and Backup Servicer Standby Fees (or, if the Backup Servicer has been
appointed as Servicer hereunder, the Backup Servicer Fees) and (v) Trustee Fees,
in each case, as of such Business Day; provided, that the Daily Report delivered
in connection with such request has been confirmed by the Trustee pursuant to
Section 6.11(c), signed by the Trustee and delivered by the Trustee to the Agent
(via telecopier or other electronic means approved by the Agent), and such Daily
Report demonstrates that (1) after giving effect to such withdrawal, the Capital
Limit shall not be less than the Facility Amount and (2) the amount to be
withdrawn from the Collection Account on such Business Day is not in excess of
(x) the amount of funds on deposit in the Collection Account minus (y) an amount
equal to the accrued and unpaid (i) Yield, (ii) Non-Use Fees, (iii) Servicing
Fees and Backup Servicer Standby Fees (or, if the Backup Servicer has been
appointed as Servicer hereunder, the Backup Servicer Fees) and (iv) Trustee
Fees, in each case, as of such Business Day.

            (g) Instructions to the Collection Account Bank. All instructions
and directions given to the Collection Account Bank by the Trustee or the Agent
pursuant to this Section 2.05 shall be in writing (including instructions and
directions transmitted to the Collection Account Bank by telecopy) and such
written instructions and directions shall be delivered with a written
certification that such instructions and directions are in compliance with the
provisions of this Section 2.05. A copy of all instructions and directions given
to the Collection Account Bank by the Trustee pursuant to this Section 2.05
shall be immediately transmitted by the Trustee to the Agent by telecopy. A copy
of all instructions and directions given to the Collection Account Bank by the
Agent pursuant to this Section 2.05, shall be immediately transmitted by the
Agent to the Servicer and the Borrower by telecopy.

            SECTION 2.06 Payments and Computations, Etc. (a) All amounts to be
paid or deposited by the Borrower or the Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 1:00 P.M. (New York
City time) on the day when due in lawful money of the United States in
immediately available funds to the Collection Account or

                                       29

<PAGE>

such other account as is designated by the Agent. The Borrower shall, to the
extent permitted by law, pay to the Agent interest on all amounts not paid or
deposited when due hereunder (whether owing by the Borrower or the Servicer) at
the Base Rate plus 2.00%, payable on demand; provided, however, that such
interest rate shall not at any time exceed the maximum rate permitted by
applicable law. Such interest shall be for the account of, and distributed by
the Agent to the Lender. Any Obligation hereunder shall not be reduced by any
distribution of any portion of Collections if at any time such distribution is
rescinded or returned to the Borrower or any other Person for any reason. All
computations of interest and all computations of Yield, Liquidation Fee and
other fees hereunder (including, without limitation, the Fees, the Backup
Servicer Fee, the Backup Servicer Standby Fee, the Trustee Fee and the Servicing
Fee) shall be made on the basis of a year of 360 days for the actual number of
days (including the first but excluding the last day) elapsed.

            (b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of Yield, interest or any fee payable hereunder, as the
case may be.

            (c) If any Borrowing requested by the Borrower and approved by the
Lender and the Agent pursuant to Section 2.02 is not for any reason whatsoever,
except as a result of the gross negligence or wilful misconduct of the Lender
and/or the Agent, made on the date specified therefor, the Borrower shall
indemnify the Lender against any loss, cost or expense incurred by the Lender
(other than any such loss, cost or expense solely due to the gross negligence or
willful misconduct of the Lender or the Agent), including, without limitation,
any loss (including cost of funds and out-of-pocket expenses), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by the Lender to fund Loans or maintain Loans during such Fixed Period.

            SECTION 2.07 Fees. (a) The Borrower shall pay the Lender (either
directly or through the Agent) certain fees (the "Fees") in the amounts and on
the dates set forth in a fee letter (the "Fee Letter"), dated the date hereof,
among the Borrower, the Agent, and the Lender as in effect on the date hereof
and as such fee letter may be amended by the parties thereto.

            (b) All of the Fees payable pursuant to this Section 2.07 shall be
payable solely from amounts available for application pursuant to, and subject
to the priority of payment set forth in, Section 2.05.

            SECTION 2.08 Increased Costs; Capital Adequacy. (a) If, due to
either (i) the introduction of or any change (including, without limitation, any
change by way of imposition or increase of reserve requirements) in or in the
interpretation, administration or application of any law or regulation
(including, without limitation, any law or regulation resulting in any interest
payments paid to the Lender under this Agreement being subject to United States
withholding tax) or any guideline of any accounting board or authority (whether
or not a part of any government) which is responsible for the establishment or
interpretation of national or international accounting principles, in each case
whether foreign or domestic or (ii) the compliance with any guideline or request
from any central bank or other Government Entity (whether or not having the
force of law), there shall be any increase in the cost to the Agent, the

                                       30

<PAGE>

Lender, or any Affiliate, successor or assign thereof (each of which shall be an
"Affected Party") of agreeing to make or making, funding or maintaining any Loan
(or any reduction of the amount of any payment (whether of principal, interest,
fees, compensation or otherwise) to any Affected Party hereunder), as the case
may be, the Borrower shall, from time to time, upon written demand complying
with Section 2.08(c) by the Agent, on behalf of such Affected Party, pay to the
Agent (from Collections pursuant to, and subject to the priority of payment set
forth in, Section 2.05), on behalf of such Affected Party, additional amounts
sufficient to compensate such Affected Party for such increased costs or reduced
payments. For the avoidance of doubt, FASB Interpretation No. 46 or any other
interpretation of Accounting Research Bulletin No. 51 by the Financial
Accounting Standards Board shall constitute a change in the interpretation,
administration or application of a guideline subject to this Section 2.08(a).

            (b) If either (i) the introduction of or any change in or in the
interpretation, administration or application of any law, guideline, rule or
regulation, directive or request or (ii) the compliance by any Affected Party
with any law, guideline, rule, regulation, directive or request, from any
central bank, any Government Entity or any accounting board or authority
(whether or not a part of government) which is responsible for the establishment
or interpretation of national or international accounting principles, in each
case whether foreign or domestic (whether or not having the force of law),
including, without limitation, compliance by an Affected Party with any request
or directive regarding capital adequacy, has or would have the effect of
reducing the rate of return on the capital of any Affected Party, as a
consequence of its obligations hereunder or any related document or arising in
connection herewith or therewith to a level below that which any such Affected
Party could have achieved but for such introduction, change or compliance
(taking into consideration the policies of such Affected Party with respect to
capital adequacy), by an amount deemed by such Affected Party to be material,
then, from time to time, after demand by such Affected Party (which demand shall
be accompanied by a statement setting forth the basis of such demand), the Agent
shall be paid, on behalf of such Affected Party (from Collections pursuant to,
and subject to the priority of payment set forth in, Section 2.05), such
additional amounts as will compensate such Affected Party for such reduction.
For the avoidance of doubt, FASB Interpretation No. 46 or any other
interpretation of Accounting Research Bulletin No. 51 by the Financial
Accounting Standards Board shall constitute a change in the interpretation,
administration or application of a guideline subject to this Section 2.08(b).

            (c) In determining any amount provided for in this Section 2.08, the
Affected Party may use any reasonable averaging and attribution methods. The
Agent, on behalf of any Affected Party making a claim under this Section 2.08,
shall submit to the Borrower a certificate setting forth in reasonable detail
the basis for and the computations of such additional or increased costs, which
certificate shall be conclusive absent demonstrable error.

            SECTION 2.09 Collateral Assignment of Agreements. The Borrower
hereby collaterally assigns to the Agent, for the benefit of the Lender, all of
the Borrower's right, title and interest in, to and under the Lockbox Agreement,
the Purchase Agreement and all Contracts related to each Pledged Receivable and
all other agreements, documents and instruments evidencing, securing or
guarantying any Pledged Receivable and all other agreements, documents and
instruments related to any of the foregoing (the "Assigned Documents"). The
Borrower confirms and agrees that the Agent (or any designee thereof) shall
have, following an

                                       31

<PAGE>

Early Amortization Event, the sole right to enforce the Borrower's rights and
remedies under each Assigned Document, but without any obligation on the part of
the Agent and the Lender or any of their respective Affiliates to perform any of
the obligations of the Borrower under any such Assigned Document. In addition,
each of the Servicer and the Borrower confirms and agrees that the Servicer or
the Borrower will send to the Agent, a notice of (i) any breach of any
representation, warranty, agreement or covenant under any such Assigned Document
or (ii) any event or occurrence that, upon notice to the Servicer or the
Borrower, as applicable, or upon the passage of time or both, would constitute
such a breach. The Borrower further confirms and agrees that such assignment to
the Agent shall terminate upon the Collection Date.

            SECTION 2.10 Grant of a Security Interest. (a) To secure the prompt
and complete payment when due of the Obligations and the performance by the
Borrower of all of the covenants and obligations to be performed by it pursuant
to the Transaction Documents, the Borrower hereby assigns and pledges to the
Agent, on behalf of the Lender (and their successors and assigns) and grants to
the Agent, on behalf of the Lender (and their successors and assigns), a
security interest in all of the Borrower's right, title and interest in, to and
under all of its assets, including without limitation all of the following
property and interests in property (collectively, the "Pledged Assets"), whether
tangible or intangible and whether now owned or existing or hereafter arising or
acquired and wheresoever located:

                  (i) all Receivables purchased by or contributed (or otherwise
      transferred or pledged pursuant to the terms of the Purchase Agreement) to
      the Borrower under the Purchase Agreement from time to time (the "Pledged
      Receivables"), all Other Conveyed Property related to the Pledged
      Receivables purchased by or contributed (or otherwise transferred or
      pledged pursuant to the terms of the Purchase Agreement) to the Borrower
      under the Purchase Agreement, all Related Security related to the Pledged
      Receivables, and all Collections and other monies due and to become due
      under the Contracts related to the Pledged Receivables;

                  (ii) the Assigned Documents, including in each case, without
      limitation, all monies due and to become due to the Borrower under or in
      connection therewith, and, to the extent of the Borrower's interests
      therein (including any causes of actions thereunder and collections
      related thereto), all legal opinions, if any, delivered or rendered in
      connection with any item included in clause (i) above or this clause (ii)
      or any transaction related to any of the foregoing;

                  (iii) the Collection Account, the Lockbox (and all checks and
      other items therein), the Lockbox Account, and all other bank and similar
      accounts relating to the collection of Pledged Receivables (whether now
      existing or hereafter established) and all funds held therein or in such
      other accounts, and all investments in and all income from the investment
      of funds in the Collection Account, the Lockbox Account and such other
      accounts;

                  (iv) to the extent of the Borrower's interests therein, the
      Records relating to any Pledged Receivables;

                                       32

<PAGE>

                  (v) all UCC financing statements filed by the Borrower against
      Maxtor under or in connection with the Purchase Agreement;

                  (vi) all Liquidation Proceeds relating to any Pledged
      Receivables; and

                  (vii) all proceeds of the foregoing property described in
      clauses (i) through (vi) above, including interest, dividends, cash,
      instruments and other property from time to time received, receivable or
      otherwise distributed in respect of or in exchange for or on account of
      the sale or other disposition of any or all of the then existing Pledged
      Receivables.

            SECTION 2.11 Limitations on Duties. The Backup Servicer, the Trustee
and the Collection Account Bank shall be obligated to perform such duties and
only such duties as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against any such
Person. The Backup Servicer, the Trustee and the Collection Account Bank shall
exercise the rights and powers vested in it by this Agreement or by any other
Transaction Document, and no such Person shall be liable with respect to any
action taken or omitted to be taken by it in accordance with the direction of
the Agent in accordance with the terms of this Agreement.

            SECTION 2.12 Exculpatory Provisions. The Backup Servicer, the
Trustee and the Collection Account Bank shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations or
warranties contained herein or in the other Transaction Documents, except for
those made by or required to be verified by such Person. None of the Backup
Servicer, the Trustee or the Collection Account Bank makes any representations
as to the value or condition of the Pledged Assets or any part thereof, or as to
the title of the Borrower thereto or as to the security afforded by the
Transaction Documents or this Agreement. None of the Backup Servicer (prior to
its appointment as Servicer hereunder), the Trustee and the Collection Account
Bank shall be responsible for insuring the Pledged Assets or for the payment of
taxes, charges, assessments or liens upon the Pledged Assets or for the
maintenance of the Pledged Assets.

            SECTION 2.13 Reliance. (a) Whenever in the administration of the
Pledged Assets under this Agreement the Backup Servicer, the Trustee or the
Collection Account Bank shall deem it necessary or desirable that a matter be
proved or established in connection with the taking, suffering or omission of
any action hereunder by the Backup Servicer, the Trustee or the Collection
Account Bank, such matter (unless other evidence in respect thereof is
specifically prescribed under this Agreement) may be deemed to be conclusively
provided or established by Officer's Certificate of the Agent delivered to such
Person. Without in any way limiting the foregoing, all certificates, notices or
directions required to be delivered by the Agent to the Backup Servicer, the
Trustee or the Collection Account Bank pursuant to the terms hereof shall in all
cases be signed by a duly authorized officer of such Person.

            (b) The Backup Servicer, the Trustee or the Collection Account Bank
may consult with counsel, accountants and other experts, and any opinion or
advice of any such counsel, any such accountant, and any such other expert shall
be full and complete authorization and protection in respect of any action taken
or suffered by such Person hereunder in accordance

                                       33

<PAGE>

therewith. The Backup Servicer, the Trustee or the Collection Account Bank shall
have the right at any time to seek instructions concerning the administration of
the Pledged Assets from any court of competent jurisdiction.

            (c) The Backup Servicer, the Trustee or the Collection Account Bank
may rely, and shall be fully protected in acting, upon any resolution,
statement, certificate, instrument, opinion, report, notice, request, consent,
order, bond or other paper or document which it has no reasonable reason to
believe to be other than genuine and to have been signed or presented by the
proper party or parties or, in the case of cables, telecopies and telexes, to
have been sent by the proper party or parties. In the absence of its negligence
or willful misconduct, the Backup Servicer, the Trustee or the Collection
Account Bank may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to such Person and conforming to the requirements of this Agreement or
any other Transaction Document.

            (d) None of the Backup Servicer, the Trustee or the Collection
Account Bank nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them as the Backup Servicer, the Trustee or the Collection Account Bank, as
applicable, under or in connection with this Agreement or any other agreement
executed pursuant hereto, except for its or their own negligence or willful
malfeasance. Without limiting the foregoing, each of the Backup Servicer, the
Trustee and the Collection Account Bank: (i) may consult with legal counsel
(including counsel for the Borrower, the Servicer, the Backup Servicer or the
Collection Account Bank), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranties or representations to the
Lender other than those set forth in Section 4.04 hereof and shall not be
responsible to the Lender for any statements, warranties or representations made
in or in connection with this Agreement, or in connection with any of the other
agreements executed pursuant hereto, on the part of any other Person, except for
those made by or required to be verified by the Backup Servicer, the Trustee or
the Collection Account Bank; (iii) shall not, except as otherwise provided
herein, have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement on the
part of the Borrower or the Servicer or to inspect the property (including the
books and records) of the Borrower or the Servicer; (iv) shall not, except as
otherwise provided herein, be responsible to the Lender for the due execution,
liability, validity, enforceability, genuineness or sufficiency of value of this
Agreement or any other agreement, instrument or document furnished pursuant
hereto any other Person; and (v) shall incur no liability under or in respect of
this Agreement or any other agreement executed pursuant hereto, by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telex or facsimile) believed by it to be genuine and signed or sent by the
proper party or parties.

            SECTION 2.14 Delegation of Duties by the Agent. The Backup Servicer,
the Trustee, the Agent and the Collection Account Bank may execute any of its
duties under this Agreement by or through agents or attorneys-in-fact approved
by the Lender and shall be entitled to advice of counsel concerning all matters
pertaining to such duties; provided, that the Backup Servicer, the Trustee, the
Agent and the Collection Account Bank shall remain responsible for all

                                       34

<PAGE>

actions and failures to act and any negligence or misconduct of any such agents
or attorneys-in-fact.

            SECTION 2.15 Agent. (a) The Agent may, upon thirty (30) days' notice
to the Borrower, the Servicer, the Lender and each other party hereto, resign as
Agent. If MLCFC shall resign as Agent under this Agreement, then the Lender
during such thirty-day period shall appoint a successor Agent, whereupon such
successor Agent shall succeed to the rights, powers and duties of the Agent and
references herein to the Agent shall mean such successor agent, effective upon
its appointment; and such former Agent's rights, powers and duties in such
capacity shall be terminated, without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement. After any
retiring Agent's resignation hereunder as such agent, the provisions of Article
VIII, this Article II and Section 9.07 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.

            (b) Neither the Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them as Agent, as applicable, under or in connection with this Agreement or any
other agreement executed pursuant hereto, except for its or their own gross
negligence or willful malfeasance. Without limiting the foregoing, the Agent:
(i) may consult with legal counsel (including counsel for the Borrower, the
Servicer, the Backup Servicer and the Collection Account Bank), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to the Lender and shall not be responsible to the Lender for any
statements, warranties or representations made by any Person other than the
Agent in or in connection with this Agreement or in connection with any of the
other agreements executed pursuant hereto; (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of the Borrower or the
Servicer or to inspect the property (including the books and records) of the
Borrower or the Servicer; (iv) shall not be responsible to the Lender for the
genuineness or sufficiency of value of the Pledged Assets or the due execution,
liability, validity, enforceability, genuineness or sufficiency of value of this
Agreement or any other agreement, instrument or document furnished pursuant
hereto; and (v) shall incur no liability under or in respect of this Agreement
or any other agreement executed pursuant hereto, by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telex or
facsimile) believed by it to be genuine and signed or sent by the proper party
or parties.

            (c) The Agent may execute any of its duties under this Agreement by
or through agents or attorneys-in-fact approved by the Lender or any Affiliate
of the Agent and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Agent shall not be responsible for the negligence
or misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.

            SECTION 2.16 Evidence of Debt. The Lender shall maintain an account
or accounts evidencing the indebtedness of the Borrower to the Lender resulting
from each Loan owing to the Lender from time to time, including the amounts of
principal and interest payable

                                       35

<PAGE>

and paid to the Lender from time to time hereunder. The entries made in such
account(s) of the Lender shall be conclusive and binding for all purposes,
absent manifest error.

            SECTION 2.17 Survival of Representations and Warranties; Repayment
Obligations. It is understood and agreed that the representations and warranties
set forth in Section 4.01 are made on the date of this Agreement (which
representations and warranties shall survive the execution and delivery of this
Agreement), at the time of the initial Borrowing, and on each Subsequent
Borrowing Date and Remittance Date thereafter. If, as a result of the breach of
any of the representations and warranties in Section 4.01 or for any other
reason there exists or would exist a Program Deficiency, the Borrower shall
promptly (and, in any case, within three Business Days) prepay to the Agent, for
the account of the Lender, the portion of the Loans as is necessary to cure such
Program Deficiency. The Borrower shall promptly reimburse the Agent and the
Lender for any reasonable out-of-pocket expenses incurred by the Agent and the
Lender, respectively, in respect of any such prepayment including, without
limitation, Liquidation Fees.

            SECTION 2.18 Release of Pledged Receivables. (a) Solely in
connection with the consummation of any payment in full by the related Obligor
or liquidation by the Servicer of any Receivable, or any required repurchase by
Maxtor of Pledged Receivables pursuant to the Purchase Agreement, the Borrower
shall be entitled to obtain the release of any Pledged Receivable and the
related Other Conveyed Property or Related Security subject to any such
transaction, pay off, liquidation or repurchase at any time after the date
hereof by depositing into the Collection Account the Release Price therefor on
any Remittance Date and upon such deposit the Agent shall execute and deliver,
within a reasonable period of time and at the sole expense of the Borrower, such
documents as the Borrower determines in its reasonable discretion to be
necessary to effect such release; provided, that the foregoing release shall
only be available (in cases other than a required repurchase by Maxtor of
Pledged Receivables pursuant to the Purchase Agreement) if, after giving effect
thereto and the application of the proceeds thereof in accordance with the terms
hereof, there shall not be a Program Deficiency or Early Amortization Event.

            (b) The Borrower shall notify the Agent of any Release Price to be
paid pursuant to this Section 2.20 on the Business Day on which such Release
Price shall be paid specifying the Pledged Receivables to be released and the
Release Price.

            SECTION 2.19 Treatment of Amounts Paid by the Borrower. Amounts paid
by the Borrower pursuant to Section 2.20 on account of Pledged Receivables shall
be treated as Collections hereunder.

            SECTION 2.20 Termination. The Borrower may terminate this Agreement
solely upon (i) 45 Business Days' prior written notice to the Agent and the
Lender, (ii) the payment in full of the Facility Amount as of the date of such
termination, (iii) the payment of the Pre-payment Fee to the Agent and (iv) the
payment by the Borrower of all other Obligations owed to the Agent and the
Lender.

            SECTION 2.21 Increase of Borrowing Limit. The Borrower may, upon 30
days' prior written notice to the Lender and the Agent, request that the
Borrowing Limit be increased, which request may be granted in the sole
discretion of the Lender, it being agreed that the Borrower shall pay to the
Lender the Increase Fee in connection with any such increase,

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<PAGE>

which fee shall be the exclusive fee payable to the Lender or the Agent in
connection with such increase other than the additional Yield and Fees which
will accrue as a result of the increased outstanding balance of Loans and the
increase in the Borrowing Limit; provided, that the Borrower shall remain liable
for any expenses (including legal fees) incurred by the Lender or the Agent in
connection with such increase.

            SECTION 2.22 Successor Trustee. U.S. Bank National Association may,
upon sixty (60) days' notice to the Borrower, the Servicer, the Agent, the
Lender, and each other party hereto, resign as Trustee. If U.S. Bank National
Association shall resign as Trustee under this Agreement, then the Agent shall
appoint a successor Trustee, whereupon such successor Trustee shall succeed to
the rights, powers and duties of the Trustee hereunder (and, without limitation,
such successor Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the former Trustee, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the transfer of the rights, powers
and duties of the former Trustee hereunder to such successor Trustee) and
references herein to the Trustee shall mean such successor Trustee, effective
upon its appointment; and such former Trustee's rights, powers and duties in
such capacity shall be terminated, without any other or further act or deed on
the part of such former Trustee or any of the parties to this Agreement. No such
resignation shall be effective until a successor Trustee designated by the Agent
shall have assumed the responsibilities and obligations of the Trustee
hereunder. The Trustee agrees to cooperate with any successor Trustee in
effecting the termination of the Trustee's responsibilities and rights
hereunder.

III.  CONDITIONS OF LOANS

            SECTION 3.01 Conditions Precedent to Initial Borrowing. The initial
Borrowing hereunder is subject to the conditions precedent that:

            (a) all fees due on the Closing Date, including the Structuring Fee
      shall have been paid in full, on the Closing Date, to the Agent pursuant
      to the terms of the Fee Letter and all acts and conditions (including,
      without limitation, the obtaining of any necessary regulatory approvals
      and the making of any required filings, recordings or registrations)
      required to be done and performed and to have happened prior to the
      execution, delivery and performance of this Agreement and all related
      documents and to constitute the same legal, valid and binding obligations,
      enforceable in accordance with their respective terms, shall have been
      done and performed and shall have happened in due and strict compliance
      with all applicable laws; and

            (b) the Agent shall have received on or before the date of such
      Borrowing the items listed in Schedule I annexed hereto, each in form and
      substance satisfactory to the Agent.

            SECTION 3.02 Conditions Precedent to All Borrowings. Except as
otherwise expressly provided below, each Borrowing (including the initial
Borrowing) by the Borrower from the Lender shall be subject to the further
conditions precedent that:

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<PAGE>

            (a) With respect to any such Borrowing (other than the initial
      Borrowing), on or prior to the date of such Borrowing, the Servicer shall
      have delivered to the Agent, in form and substance satisfactory to the
      Agent, the most recent Monthly Remittance Report required by the terms of
      Section 6.11(b);

            (b) At least four Business Days prior to the date of such Borrowing,
      the Servicer shall have delivered to the Agent and the Backup Servicer a
      Borrowing Report, in form and substance satisfactory to the Agent, signed
      by an officer of the Borrower having responsibility for financial matters
      of the Borrower which shall demonstrate that, after giving effect to such
      Borrowing requested by the Borrower no Program Deficiency shall exist and
      such Borrowing Report shall have been verified by the Backup Servicer
      pursuant to Section 6.14(g);

            (c) On the Borrowing Date of such Borrowing, the following
      statements shall be true, and the Borrower by accepting the amount of such
      Borrowing shall be deemed to have certified that:

                  (i) the representations and warranties contained in Section
      4.01 are true and correct, before and after giving effect to the Borrowing
      to take place on such Borrowing Date and to the application of proceeds
      therefrom, on and as of such day as though made on and as of such date;

                  (ii) no event has occurred and is continuing, or would result
      from such Borrowing, which constitutes an Early Amortization Event
      hereunder, or an event that but for notice or lapse of time or both would
      constitute an Early Amortization Event;

                  (iii) (a) the principal amount of such Loan being advanced on
      such Borrowing Date is not less than $1,000,000 and (b) on and as of such
      day, after giving effect to such Borrowing no Program Deficiency shall
      exist;

                  (iv) (A) the Borrower has delivered to the Agent a timely copy
      of a Notice of Borrowing pursuant to Section 2.02(b), appropriately
      completed and executed by the Borrower and (B) the Contract related to
      each Pledged Receivable hereunder on such Borrowing Date has been duly
      assigned by Maxtor to the Borrower and duly assigned by the Borrower to
      the Agent;

                  (v) all terms and conditions of the Purchase Agreement
      required to be satisfied in connection with the transfer and sale of each
      Receivable (and the Other Conveyed Property related thereto) being Pledged
      hereunder on such Borrowing Date, including, without limitation, the
      perfection of the Borrower's interests therein shall have been satisfied
      in full, and all filings (including, without limitation, UCC filings)
      required to be made by any Person and all actions required to be taken or
      performed by any Person in any jurisdiction to give the Agent, for the
      benefit of the Lender, a first priority perfected security interest in the
      Pledged Assets and the proceeds thereof (subject only to Other Permitted
      Liens) shall have been made, taken or performed; and

                                       38

<PAGE>

            (d) No law or regulation shall prohibit, and no order, judgment or
      decree of any federal, state or local court or Government Entity shall
      prohibit or enjoin, the making of such Loans by the Lender in accordance
      with the provisions hereof;

            (e) The Agent shall have received and found to be satisfactory with
      respect to the Pledged Receivables being Pledged in connection with such
      Borrowing, which have been previously pledged, assigned or otherwise
      transferred to any Person by Maxtor, the Borrower or any Affiliate thereof
      under any other financing facility, evidence of the release of any liens
      granted in connection with such financing with respect to any such Pledged
      Receivables; and

            (f) The Agent shall have received such other opinions, documents and
      instruments, as such Person shall have reasonably requested to be
      delivered by the Servicer or the Borrower.

            SECTION 3.03 Advances Do Not Constitute a Waiver. No advance of a
Loan hereunder shall constitute a waiver of any condition to the Lender's
obligation to make such an advance unless such waiver is in writing and executed
by the Lender. The acceptance of funds by the Borrower on any Borrowing Date
shall be deemed to be a representation and warranty by the Borrower that each of
the conditions hereunder to the Borrowing on such Borrowing Date have been
fulfilled or waived in writing by the Agent.

IV.   REPRESENTATIONS AND WARRANTIES

            SECTION 4.01 Representations and Warranties of the Borrower. The
Borrower hereby represents and warrants to the Agent and the Lender, as of the
date hereof, on each Borrowing Date, on the date of each withdrawal from the
Collection Account pursuant to Section 2.05(f) hereof and on each Remittance
Date, as follows:

            (a) Each Pledged Receivable designated as an Eligible Receivable on
      any Borrowing Report, Monthly Remittance Report or Daily Report is an
      Eligible Receivable.

            (b) The Borrower is a limited liability company duly formed, validly
      existing and in good standing under the laws of the State of Delaware and
      has the power and all licenses necessary to own its assets and to transact
      the business in which it is presently engaged, and is duly qualified and
      in good standing under the laws of each jurisdiction where its ownership
      of the Pledged Receivables requires such qualification except where
      failure to obtain such licenses or to be so qualified would not cause a
      Material Adverse Effect.

            (c) The Servicer is a corporation duly formed, validly existing and
      in good standing under the laws of the State of Delaware and has the power
      and all licenses necessary to own its assets and to transact the business
      in which it is presently engaged (which includes servicing Receivables on
      behalf of third parties and itself), and is duly qualified and in good
      standing under the laws of each jurisdiction where its servicing of the
      Pledged Receivables requires such qualification except where failure to
      obtain such licenses or to be so qualified would not cause a Material
      Adverse Effect.

                                       39

<PAGE>

            (d) Each of the Servicer and the Borrower has the power, authority
      and legal right to make, deliver and perform this Agreement and each of
      the Transaction Documents to which it is a party and all of the
      transactions contemplated hereby and thereby, and has taken all necessary
      action to authorize the execution, delivery and performance of this
      Agreement and each of the Transaction Documents to which it is a party,
      and, in the case of the Borrower, to grant to the Agent, for the benefit
      of the Lender, a first priority perfected security interest in the Pledged
      Assets (subject only to Other Permitted Liens) on the terms and conditions
      of this Agreement. This Agreement and each of the Transaction Documents to
      which the Servicer or the Borrower is a party constitutes the legal, valid
      and binding obligation of the Servicer and the Borrower, as applicable,
      enforceable against such Person in accordance with their respective terms
      except as the enforceability hereof and thereof may be limited by
      bankruptcy, insolvency, moratorium, reorganization and other similar laws
      of general application affecting creditors' rights generally and by
      general principles of equity (whether such enforceability is considered in
      a proceeding in equity or at law). No consent of any other party and no
      consent, license, approval or authorization of, or registration or
      declaration with, any Government Entity is required in connection with the
      execution, delivery or performance by the Borrower or the Servicer of this
      Agreement or any Transaction Document to which it is a party, or the
      validity or enforceability of this Agreement or any such Transaction
      Document or the Pledged Receivables.

            (e) The execution, delivery and performance of this Agreement, the
      other Transaction Documents and all other agreements and instruments
      executed and delivered or to be executed and delivered pursuant hereto or
      thereto will not (i) create any Adverse Claim on the Pledged Assets or any
      other assets of the Borrower or the Servicer other than as contemplated
      herein or (ii) violate any provision of any existing law or regulation or
      any order or decree of any court, regulatory body or administrative agency
      or the certificate of incorporation or the bylaws of the Servicer or the
      certificate of formation or limited liability company agreement of the
      Borrower or any mortgage, indenture, contract or other agreement to which
      the Servicer or the Borrower is a party or by which the Servicer or the
      Borrower or any property or assets of the Servicer or the Borrower may be
      bound, other than, in the case of the Servicer, any such mortgage,
      indenture, contract or other agreement the violation of which would not
      reasonably be expected to have a Material Adverse Effect.

            (f) Except as set forth on Schedule IV-A annexed hereto, as amended
      from time to time by delivery to the Agent by the Servicer of an updated
      schedule, no litigation or administrative proceeding of or before any
      court, tribunal or Government Entity is presently pending or, to the best
      of the Borrower's knowledge , threatened against the Borrower or any
      properties of the Borrower or with respect to this Agreement (x) which, if
      adversely determined, could reasonably be expected to have a Material
      Adverse Effect or (y) which purports to affect the legality, validity or
      enforceability of this Agreement, any Transaction Document to which the
      Borrower is a party, or any of the other applicable documents forming part
      of the Pledged Assets or which seeks to prevent the Pledge by the Borrower
      of the Pledged Assets or the consummation of any other transactions
      contemplated by this Agreement or any other Transaction Document.

                                       40

<PAGE>

            (g) Except as set forth on Schedule IV-B annexed hereto, as amended
      from time to time by delivery to the Agent by the Servicer of an updated
      schedule, no litigation or administrative proceeding of or before any
      court, tribunal or Government Entity is presently pending or, to the best
      of the Borrower's knowledge, threatened against the Servicer or any
      properties of the Servicer or with respect to this Agreement (x) which is
      reasonably likely to have a Material Adverse Effect or (y) which purports
      to affect the legality, validity or enforceability of this Agreement, any
      Transaction Document to which the Servicer is a party, or any of the other
      applicable documents forming part of the Pledged Assets or which seeks to
      prevent the Pledge by the Borrower of the Pledged Assets or the
      consummation of any other transactions contemplated by this Agreement or
      any other Transaction Document.

            (h) The grant of the security interest in the Pledged Assets by the
      Borrower to the Agent for the benefit of the Lender pursuant to this
      Agreement is in the ordinary course of business for the Borrower and is
      not subject to the bulk transfer or any similar statutory provisions in
      effect in any applicable jurisdiction. No such Pledged Assets have been
      sold, transferred, assigned or pledged by the Borrower to any Person other
      than the Agent, for the benefit of the Lender, pursuant to the terms of
      this Agreement.

            (i) The Borrower has no Debt or other indebtedness, other than Debt
      incurred under (or contemplated by) the terms of this Agreement and the
      Purchase Agreement.

            (j) The Borrower has been formed solely for the purpose of engaging
      in transactions of the types contemplated by this Agreement and the
      Purchase Agreement.

            (k) No injunction, writ, restraining order or other order of any
      nature adversely affects the Servicer's or the Borrower's performance of
      their respective obligations under this Agreement or any Transaction
      Document to which the Servicer or the Borrower is a party.

            (l) Each of the Servicer and the Borrower has filed (on a
      consolidated basis or otherwise) on a timely basis all federal, state and
      other material tax returns required to be filed, is not liable for taxes
      payable by any other Person and has paid or made adequate provisions for
      the payment of all taxes, assessments and other governmental charges due
      from the Servicer or the Borrower, as applicable. No tax lien or similar
      adverse claim has been filed, and, to the best of the Borrower's
      knowledge, no claim is being asserted, with respect to any such tax,
      assessment or other governmental charge other than any Other Permitted
      Liens. Any taxes, fees and other governmental charges payable by the
      Servicer or the Borrower, as applicable in connection with the execution
      and delivery of this Agreement and the other Transaction Documents and the
      transactions contemplated hereby or thereby have been paid, if due, or
      shall have been paid prior to delinquency.

            (m) The chief executive office of the Servicer (and the location of
      the Servicer's records regarding the Pledged Receivables) is located at
      500 McCarthy Boulevard, Milpitas, CA 95035. The chief executive office of
      the Borrower (and the location of the Borrower's records regarding the
      Pledged Receivables) is located at 500 McCarthy Boulevard, #22777,
      Milpitas, CA 95035. Neither the Servicer nor the

                                       41

<PAGE>

      Borrower has had any chief executive office outside the state of
      California since its formation.

            (n) Each of the Servicer's and the Borrower's legal names and
      jurisdiction of formation are as set forth in this Agreement; each of the
      Servicer and the Borrower has not changed its jurisdiction of formation;
      each of the Servicer and the Borrower has not changed its name since its
      formation, each of the Servicer and the Borrower does not have tradenames,
      fictitious names, assumed names or "doing business as" names other than as
      disclosed on Schedule III annexed hereto (as such Schedule may be updated
      from time to time upon receipt of a notice delivered to the Agent pursuant
      to Section 6.19 and compliance with all terms and conditions of Section
      6.19). The Servicer's only jurisdiction of formation is Delaware. The
      Borrower's only jurisdiction of formation is Delaware.

            (o) Each of the Servicer and the Borrower is solvent and will not
      become insolvent after giving effect to the transactions contemplated
      hereby; each of the Servicer and the Borrower is paying its debts as they
      become due; and each of the Servicer and the Borrower, after giving effect
      to the transactions contemplated hereby, will have adequate capital to
      conduct its business.

            (p) The Borrower has no subsidiaries and has engaged in no business
      activities other than those expressly contemplated in this Agreement and
      the Purchase Agreement.

            (q) The Borrower has received as a contribution to its capital from
      the Originator under the Purchase Agreement, or given fair consideration
      and reasonably equivalent value in exchange for the sale of, the Pledged
      Receivables under the Purchase Agreement (and no such contribution or sale
      is or may be void or subject to avoidance under any section of the
      Bankruptcy Code).

            (r) No Monthly Remittance Report, Borrowing Report or Daily Report
      (each if prepared by the Borrower or the Servicer, or to the extent that
      information contained therein is supplied by the Borrower or the
      Servicer), information, exhibit, financial statement, document, book,
      record or report furnished by the Borrower or the Servicer to the Agent or
      the Lender in connection with this Agreement is inaccurate in any material
      respect as of the date it is dated or (except as otherwise disclosed in
      writing to the Agent or the Lender, as the case may be, at such time) as
      of the date so furnished, and no such document contains any material
      misstatement of fact or omits or shall omit to state a material fact or
      any fact necessary to make the statements contained therein not
      misleading.

            (s) No proceeds of any Loans have been used by the Borrower to
      acquire any security in any transaction which is subject to Section 13 or
      14 of the Securities Exchange Act of 1934, as amended.

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<PAGE>

            (t) There are no agreements in effect adversely affecting the rights
      of the Borrower to make, or cause to be made, the grant of the security
      interest in the Pledged Assets contemplated by Section 2.10.

            (u) Neither the Servicer nor the Borrower is an "investment company"
      or an "affiliated person" of or "promoter" or "principal underwriter" for
      an "investment company" as such terms are defined in the Investment
      Company Act of 1940, as amended, nor is the Servicer or the Borrower
      otherwise subject to regulation thereunder.

            (v) No Early Amortization Event or Unmatured Early Amortization
      Event has occurred and is continuing.

            (w) Each of the Pledged Receivables was underwritten and is being
      serviced in conformance with the Servicer's and the Borrower's standard
      underwriting, credit, collection, operating and reporting procedures and
      systems (including, without limitation, the Credit and Collection Policy).

            (x) Each of the Servicer and the Borrower is in compliance in all
      material respects with ERISA and has not incurred and does not expect to
      incur any material liabilities (except for premium payments arising in the
      ordinary course of business) to the Pension Benefit Guaranty Corporation
      (or any successor thereto) under ERISA.

            (y) There is not now, nor will there be at any time in the future,
      any agreement or understanding between the Servicer and the Borrower
      (other than as expressly set forth herein) providing for the allocation or
      sharing of obligations to make payments or otherwise in respect of any
      taxes, fees, assessments or other governmental charges.

            (z) On or prior to the date of the initial Borrowing hereunder (i)
      all filings (including, without limitation, UCC filings) required to be
      made by any Person and all other actions required to be taken or performed
      by any Person in any jurisdiction to give the Agent for the benefit of the
      Lender a first priority perfected security interest on all Pledged Assets,
      including without limitation all Related Security related thereto and the
      proceeds thereof (subject only to Other Permitted Liens), shall have been
      made, taken or performed and (ii) all filings (including, without
      limitation, UCC filings) required to be made by any Person and all other
      actions required to be taken or performed by any Person in any
      jurisdiction to grant the Borrower a first priority perfected security
      interest on all Receivables and Other Conveyed Property transferred to it
      under the Purchase Agreement and the proceeds thereof (subject only to
      Other Permitted Liens) shall have been made, taken or performed.

            (aa) No Obligor is an Affiliate of the Servicer or the Borrower.

            (bb) There has been no material adverse change in the condition
      (financial or otherwise), business, operations, results of operations, or
      properties of the Servicer or the Borrower since the date of the
      Servicer's most recent audited financial statements delivered to the Agent
      and the date of the Borrower's organization.

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<PAGE>

            (cc) The Pledged Assets are free and clear of any Adverse Claim
      other than any Other Permitted Liens.

            (dd) All Obligors have been instructed to remit all Collections
      directly to the Lockbox or the Lockbox Account. The Lockbox and Lockbox
      Account are subject to the Lockbox Account Agreement.

            (ee) The Borrower has good and marketable title to the Pledged
      Receivables.

            (ff) Upon the initial Borrowing hereunder this Agreement will create
      a valid and continuing security interest (as defined in any applicable
      UCC) in the Pledged Assets in favor of the Agent for the benefit of the
      Lender, which security interest is prior to all other Liens (other than
      Other Permitted Liens), and is enforceable as such as against creditors of
      and purchasers from the Borrower.

            (gg) The Pledged Receivables constitute "accounts" within the
      meaning of any applicable UCC.

            (hh) Other than the security interest granted to the Agent for the
      benefit of the Lender pursuant to this Agreement, neither the Borrower nor
      the Servicer has pledged, assigned, sold, granted a security interest in,
      or otherwise conveyed any of the Pledged Assets. Neither the Borrower nor
      the Servicer has authorized the filing of, or is aware of, any financing
      statements against the Borrower that include a description of any portion
      of the Pledged Assets other than any such financing statement relating to
      the security interest granted to the Agent for the benefit of the Lender
      hereunder or any such financing statement that has been terminated.
      Neither the Borrower nor the Servicer is aware of any judgment or tax lien
      filings against the Borrower.

            SECTION 4.02 Representations and Warranties of the Servicer. The
Servicer, in its capacity as Servicer, hereby represents and warrants to the
Agent and the Lender, as of the date hereof, on each Borrowing Date, on the date
of each withdrawal from the Collection Account pursuant to Section 2.05(f)
hereof and on each Remittance Date, as follows:

            (a) (i) No Pledged Receivable designated as an Eligible Receivable
      on any Borrowing Report, Monthly Remittance Report or Daily Report is a
      Defaulted Receivable or a Delinquent Receivable and (ii) to the best of
      the Servicer's knowledge, each Pledged Receivable designated as an
      Eligible Receivable on any Borrowing Report, Monthly Remittance Report or
      Daily Report is an Eligible Receivable.

            (b) To the best of the Servicer's knowledge, the Borrower is a
      limited liability company duly formed, validly existing and in good
      standing under the laws of the State of Delaware and has the power and all
      licenses necessary to own its assets and to transact the business in which
      it is presently engaged, and is duly qualified and in good standing under
      the laws of each jurisdiction where its ownership of the Pledged
      Receivables requires such qualification except where failure to obtain
      such licenses or to be so qualified would not cause a Material Adverse
      Effect.

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<PAGE>

            (c) The Servicer is a corporation duly formed, validly existing and
      in good standing under the laws of the State of Delaware and has the power
      and all licenses necessary to own its assets and to transact the business
      in which it is presently engaged (which includes servicing Receivables on
      behalf of third parties and itself), and is duly qualified and in good
      standing under the laws of each jurisdiction where its servicing of the
      Pledged Receivables requires such qualification except where failure to
      obtain such licenses or to be so qualified would not cause a Material
      Adverse Effect.

            (d) Each of the Servicer and, to the best of the Servicer's
      knowledge, the Borrower has the power, authority and legal right to make,
      deliver and perform this Agreement and each of the Transaction Documents
      to which it is a party and all of the transactions contemplated hereby and
      thereby, and has taken all necessary action to authorize the execution,
      delivery and performance of this Agreement and each of the Transaction
      Documents to which it is a party, and, to the best of the Servicer's
      knowledge in the case of the Borrower, to grant to the Agent, for the
      benefit of the Lender, a first priority perfected security interest in the
      Pledged Assets (subject only to Other Permitted Liens) on the terms and
      conditions of this Agreement. This Agreement and each of the Transaction
      Documents to which the Servicer or the Borrower is a party constitutes the
      legal, valid and binding obligation of the Servicer and, to the best of
      the Servicer's knowledge, the Borrower, as applicable, enforceable against
      the Servicer and, to the best of the Servicer's knowledge, the Borrower in
      accordance with their respective terms except as the enforceability hereof
      and thereof may be limited by bankruptcy, insolvency, moratorium,
      reorganization and other similar laws of general application affecting
      creditors' rights generally and by general principles of equity (whether
      such enforceability is considered in a proceeding in equity or at law). No
      consent of any other party and no consent, license, approval or
      authorization of, or registration or declaration with, any Government
      Entity is required in connection with the execution, delivery or
      performance by the Servicer or, to the best of the Servicer's knowledge,
      the Borrower, of this Agreement or any Transaction Document to which it is
      a party, or the validity or enforceability of this Agreement or any such
      Transaction Document or the Pledged Receivables.

            (e) The execution, delivery and performance of this Agreement, the
      other Transaction Documents and all other agreements and instruments
      executed and delivered or to be executed and delivered pursuant hereto or
      thereto will not (i) create any Adverse Claim on the Pledged Assets or any
      other assets of the Servicer or, to the best of the Servicer's knowledge,
      the Borrower other than as contemplated herein or (ii) violate any
      provision of any existing law or regulation or any order or decree of any
      court, regulatory body or administrative agency or the certificate of
      incorporation or the bylaws of the Servicer or, to the best of the
      Servicer's knowledge, the certificate of formation or limited liability
      company agreement of the Borrower or any mortgage, indenture, contract or
      other agreement to which the Servicer or, to the best of the Servicer's
      knowledge, the Borrower is a party or by which the Servicer or, to the
      best of the Servicer's knowledge, the Borrower or any property or assets
      of the Servicer or, to the best of the Servicer's knowledge, the Borrower
      may be bound, other than, in the case of the Servicer, any such mortgage,
      indenture, contract or other agreement the violation of which would not
      reasonably be expected to have a Material Adverse Effect.

                                       45

<PAGE>

            (f) Except as set forth on Schedule IV-A annexed hereto, as amended
      from time to time by delivery to the Agent by the Servicer of an updated
      schedule, no litigation or administrative proceeding of or before any
      court, tribunal or Government Entity is, to the best of the Servicer's
      knowledge, presently pending or threatened against the Borrower or any
      properties of the Borrower or with respect to this Agreement (x) which, if
      adversely determined, could reasonably be expected to have a Material
      Adverse Effect or (y) which purports to affect the legality, validity or
      enforceability of this Agreement, any Transaction Document to which the
      Borrower is a party, or any of the other applicable documents forming part
      of the Pledged Assets or which seeks to prevent the Pledge by the Borrower
      of the Pledged Assets or the consummation of any other transactions
      contemplated by this Agreement or any other Transaction Document.

            (g) Except as set forth on Schedule IV-B annexed hereto, as amended
      from time to time by delivery to the Agent by the Servicer of an updated
      schedule, no litigation or administrative proceeding of or before any
      court, tribunal or Government Entity is presently pending or, to the best
      of the Servicer's knowledge, threatened against the Servicer or any
      properties of the Servicer or with respect to this Agreement (x) which is
      reasonably likely to have a Material Adverse Effect or (y) which purports
      to affect the legality, validity or enforceability of this Agreement, any
      Transaction Document to which the Servicer is a party, or any of the other
      applicable documents forming part of the Pledged Assets or which seeks to
      prevent the Pledge by the Borrower of the Pledged Assets or the
      consummation of any other transactions contemplated by this Agreement or
      any other Transaction Document.

            (h) To the best of the Servicer's knowledge, the grant of the
      security interest in the Pledged Assets by the Borrower to the Agent for
      the benefit of the Lender pursuant to this Agreement is in the ordinary
      course of business for the Borrower and is not subject to the bulk
      transfer or any similar statutory provisions in effect in any applicable
      jurisdiction. To the best of the Servicer's knowledge, no such Pledged
      Assets have been sold, transferred, assigned or pledged by the Borrower to
      any Person other than the Agent, for the benefit of the Lender, pursuant
      to the terms of this Agreement.

            (i) To the best of the Servicer's knowledge, the Borrower has no
      Debt or other indebtedness, other than Debt incurred under (or
      contemplated by) the terms of this Agreement and the Purchase Agreement.

            (j) To the best of the Servicer's knowledge, the Borrower has been
      formed solely for the purpose of engaging in transactions of the types
      contemplated by this Agreement and the Purchase Agreement.

            (k) No injunction, writ, restraining order or other order of any
      nature adversely affects the Servicer's or, to the best of the Servicer's
      knowledge, the Borrower's performance of their respective obligations
      under this Agreement or any Transaction Document to which the Servicer or
      the Borrower is a party.

            (l) Each of the Servicer and, to the best of the Servicer's
      knowledge, the Borrower has filed (on a consolidated basis or otherwise)
      on a timely basis all federal,

                                       46

<PAGE>

      state and other material tax returns required to be filed, is not liable
      for taxes payable by any other Person and has paid or made adequate
      provisions for the payment of all taxes, assessments and other
      governmental charges due from the Servicer or the Borrower, as applicable.
      No tax lien or similar adverse claim has been filed, and, to the best of
      the Servicer's knowledge, no claim is being asserted, with respect to any
      such tax, assessment or other governmental charge with respect to the
      Servicer or, to the best of the Servicer's knowledge, the Borrower other
      than any Other Permitted Liens. Any taxes, fees and other governmental
      charges payable by the Servicer or, to the best of the Servicer's
      knowledge, the Borrower, as applicable in connection with the execution
      and delivery of this Agreement and the other Transaction Documents and the
      transactions contemplated hereby or thereby have been paid, if due, or
      shall have been paid prior to delinquency.

            (m) The chief executive office of the Servicer (and the location of
      the Servicer's records regarding the Pledged Receivables) is located at
      500 McCarthy Boulevard, Milpitas, CA 95035. To the best of the Servicer's
      knowledge, the chief executive office of the Borrower (and the location of
      the Borrower's records regarding the Pledged Receivables) is located at
      500 McCarthy Boulevard, #22777, Milpitas, CA 95035. Neither the Servicer
      nor, to the best of the Servicer's knowledge, the Borrower has had any
      chief executive office outside the State of California since its
      formation.

            (n) Each of the Servicer's and, to the best of the Servicer's
      knowledge, the Borrower's legal names and jurisdiction of formation are as
      set forth in this Agreement; each of the Servicer and, to the best of the
      Servicer's knowledge, the Borrower has not changed its jurisdiction of
      formation, each of the Servicer and, to the best of the Servicer's
      knowledge, the Borrower has not changed its name since its formation, each
      of the Servicer and, to the best of the Servicer's knowledge, the Borrower
      does not have tradenames, fictitious names, assumed names or "doing
      business as" names other than as disclosed on Schedule III annexed hereto
      (as such Schedule may be updated from time to time upon receipt of a
      notice delivered to the Agent pursuant to Section 6.19 and compliance with
      all terms and conditions of Section 6.19). The Servicer's only
      jurisdiction of formation is Delaware. To the best of the Servicer's
      knowledge, the Borrower's only jurisdiction of formation is Delaware.

            (o) Each of the tradenames set forth on Schedule III annexed hereto
      and marked with an asterisk is a tradename employed by the Servicer in
      connection with a specific product and/or service manufactured and/or
      provided by Servicer and has not been employed by the Servicer in
      connection with the general business of the Servicer. The Servicer has not
      employed any of such tradenames and/or fictitious name so marked in
      connection with the business of the Servicer, and there are no UCC
      financing statements filed against, or anyway related to, any of such
      tradenames.

            (p) Each of the Servicer and, to the best of the Servicer's
      knowledge, the Borrower is solvent and will not become insolvent after
      giving effect to the transactions contemplated hereby; each of the
      Servicer and, to the best of the Servicer's knowledge, the Borrower is
      paying its debts as they become due; and each of the Servicer and, to the

                                       47

<PAGE>

      best of the Servicer's knowledge, the Borrower, after giving effect to the
      transactions contemplated hereby, will have adequate capital to conduct
      its business.

            (q) To the best of the Servicer's knowledge, the Borrower has no
      subsidiaries and has engaged in no business activities other than those
      expressly contemplated in this Agreement and the Purchase Agreement.

            (r) To the best of the Servicer's knowledge, the Borrower has
      received as a contribution to its capital from the Originator under the
      Purchase Agreement, or given fair consideration and reasonably equivalent
      value in exchange for the sale of, the Pledged Receivables under the
      Purchase Agreement (and no such contribution or sale is or may be void or
      subject to avoidance under any section of the Bankruptcy Code).

            (s) No Monthly Remittance Report, Borrowing Report or Daily Report
      (each if prepared by the Servicer or, to the best of the Servicer's
      knowledge, by the Borrower, or to the extent that information contained
      therein is supplied by the Servicer or, to the best of the Servicer's
      knowledge, by the Borrower), information, exhibit, financial statement,
      document, book, record or report furnished or to be furnished by the
      Servicer or, to the best of the Servicer's knowledge, the Borrower to the
      Agent or the Lender in connection with this Agreement is inaccurate in any
      material respect as of the date it is dated or (except as otherwise
      disclosed in writing to the Agent or the Lender, as the case may be, at
      such time) as of the date so furnished, and no such document contains any
      material misstatement of fact or omits or shall omit to state a material
      fact or any fact necessary to make the statements contained therein not
      misleading.

            (t) To the best of the Servicer's knowledge, no proceeds of any
      Loans have been used by the Borrower to acquire any security in any
      transaction which is subject to Section 13 or 14 of the Securities
      Exchange Act of 1934, as amended.

            (u) To the best of the Servicer's knowledge, there are no agreements
      in effect adversely affecting the rights of the Borrower to make, or cause
      to be made, the grant of the security interest in the Pledged Assets
      contemplated by Section 2.10.

            (v) Neither the Servicer nor, to the best of the Servicer's
      knowledge, the Borrower is an "investment company" or an "affiliated
      person" of or "promoter" or "principal underwriter" for an "investment
      company" as such terms are defined in the Investment Company Act of 1940,
      as amended, nor is the Servicer or, to the best of the Servicer's
      knowledge, the Borrower otherwise subject to regulation thereunder.

            (w) No Early Amortization Event or Unmatured Early Amortization
      Event (other than an Early Amortization Event or Unmatured Early
      Amortization Event caused by or related to the Borrower) has occurred and
      is continuing and, to the best of the Servicer's knowledge, no Early
      Amortization Event or Unmatured Early Amortization Event caused by or
      related to the Borrower has occurred and is continuing.

            (x) Each of the Pledged Receivables was underwritten and is being
      serviced in conformance with the Servicer's and, to the best of the
      Servicer's knowledge, the

                                       48

<PAGE>

      Borrower's standard underwriting, credit, collection, operating and
      reporting procedures and systems (including, without limitation, the
      Credit and Collection Policy).

            (y) Each of the Servicer and, to the best of the Servicer's
      knowledge, the Borrower is in compliance in all material respects with
      ERISA and has not incurred and does not expect to incur any material
      liabilities (except for premium payments arising in the ordinary course of
      business) to the Pension Benefit Guaranty Corporation (or any successor
      thereto) under ERISA.

            (z) There is not now, nor will there be at any time in the future,
      any agreement or understanding between the Servicer and the Borrower
      (other than as expressly set forth herein) providing for the allocation or
      sharing of obligations to make payments or otherwise in respect of any
      taxes, fees, assessments or other governmental charges.

            (aa) On or prior to the date of the initial Borrowing hereunder (i)
      all filings (including, without limitation, UCC filings) required to be
      made by any Person and all other actions required to be taken or performed
      by any Person in any jurisdiction to give the Agent for the benefit of the
      Lender a first priority perfected security interest on all Pledged Assets,
      including without limitation all Related Security related thereto and the
      proceeds thereof (subject only to Other Permitted Liens), shall have been
      made, taken or performed and (ii) all filings (including, without
      limitation, UCC filings) required to be made by any Person and all other
      actions required to be taken or performed by any Person in any
      jurisdiction to grant the Borrower a first priority perfected security
      interest on all Receivables and Other Conveyed Property transferred to it
      under the Purchase Agreement and the proceeds thereof (subject only to
      Other Permitted Liens) shall have been made, taken or performed.

            (bb) No Obligor is an Affiliate of the Servicer or, to the best of
      the Servicer's knowledge, the Borrower.

            (cc) There has been no material adverse change in the condition
      (financial or otherwise), business, operations, results of operations, or
      properties of the Servicer or, to the best of the Servicer's knowledge,
      the Borrower since the date of the Servicer's most recent audited
      financial statements delivered to the Agent and the date of the Borrower's
      organization.

            (dd) To the best of the Servicer's knowledge, the Pledged Assets are
      free and clear of any Adverse Claim other than any Other Permitted Liens.

            (ee) All Obligors have been instructed to remit all Collections
      directly to the Lockbox or the Lockbox Account. The Lockbox and Lockbox
      Account are subject to the Lockbox Account Agreement.

            (ff) To the best of the Servicer's knowledge, the Borrower has good
      and marketable title to the Pledged Receivables.

                                       49

<PAGE>

            (gg) Upon the initial Borrowing hereunder this Agreement will create
      a valid and continuing security interest (as defined in any applicable
      UCC) in the Pledged Assets in favor of the Agent for the benefit of the
      Lender, which security interest is prior to all other Liens (other than
      Other Permitted Liens), and is enforceable as such as against creditors of
      and purchasers from the Borrower.

            (hh) The Pledged Receivables constitute "accounts" within the
      meaning of any applicable UCC.

            (ii) Other than the security interest granted to the Agent for the
      benefit of the Lender pursuant to this Agreement, neither the Servicer
      nor, to the best of the Servicer's knowledge, the Borrower has pledged,
      assigned, sold, granted a security interest in, or otherwise conveyed any
      of the Pledged Assets. Neither the Servicer nor, to the best of the
      Servicer's knowledge, the Borrower has authorized the filing of, or is
      aware of, any financing statements against the Borrower that include a
      description of any portion of the Pledged Assets other than any such
      financing statement relating to the security interest granted to the Agent
      for the benefit of the Lender hereunder or any such financing statement
      that has been terminated. Neither the Servicer nor, to the best of the
      Servicer's knowledge, the Borrower is aware of any judgment or tax lien
      filings against the Borrower.

            SECTION 4.03 Sale of Receivables Upon Breach of Covenant or
Representation and Warranty by Borrower. The Borrower or the Servicer, as the
case may be, shall inform each other and the other parties to this Agreement
promptly, in writing, upon the discovery of any breach of the representations,
warranties and/or covenants contained in Section 4.01, Section 4.02 or Article
V; provided, however, that the failure to provide any such notice shall not
diminish, in any manner whatsoever, any obligation of the Borrower hereunder to
sell any Pledged Receivable. Upon the discovery by or notice to the Borrower of
such breach that also constitutes a Maxtor Purchase Event under and as defined
in the Purchase Agreement, the Borrower shall have an obligation to, and the
Borrower shall, sell to Maxtor pursuant to the Purchase Agreement (and the Agent
may enforce such obligation of the Borrower to sell) any Pledged Receivable
adversely affected by any such breach. The Servicer shall notify the Agent, in
writing, promptly after it learns of any failure by the Borrower to so resell
any such Pledged Receivable. In connection with the resale of such Pledged
Receivable, the Borrower shall remit funds in an amount equal to the Release
Price for such Pledged Receivable to the Collection Account on the date of such
resale.

            SECTION 4.04 Representations and Warranties of the Trustee and the
Collection Account Bank. Each of the Backup Servicer, the Trustee and the
Collection Account Bank hereby represents and warrants to the Agent and the
Lender, as of the date hereof, as follows:

            (a) It is a national banking association, duly formed, validly
      existing and in good standing under the laws of the United States and has
      the power and all licenses necessary to own its assets and to transact the
      business in which it is presently engaged.

                                       50

<PAGE>

            (b) It has the power, authority and legal right to make, deliver and
      perform under this Agreement and each of the Transaction Documents to
      which it is a party, and has taken all necessary action to authorize the
      execution, delivery and performance of this Agreement and each of the
      Transaction Documents to which it is a party. This Agreement and each of
      the Transaction Documents to which it is a party constitutes its legal,
      valid and binding obligation, enforceable against it in accordance with
      their respective terms except as the enforceability hereof and thereof may
      be limited by bankruptcy, insolvency, moratorium, reorganization and other
      similar laws of general application affecting creditors' rights generally
      and by general principles of equity (whether such enforceability is
      considered in a proceeding in equity or at law). No consent of any other
      party and no consent, license, approval or authorization of, or
      registration or declaration with, any Government Entity is required in
      connection with the execution, delivery or performance by it of this
      Agreement or any Transaction Document to which it is a party, or the
      validity or enforceability of this Agreement or any such Transaction
      Document.

            SECTION 4.05 Representations and Warranties of the Backup Servicer.
The Backup Servicer hereby represents and warrants to the Agent and the Lender,
as of the date hereof, as follows:

            (a) It is a Minnesota corporation duly formed, validly existing and
      in good standing under the laws of the United States and has the power and
      all licenses necessary to own its assets and to transact the business in
      which it is presently engaged.

            (b) It has the power, authority and legal right to make, deliver and
      perform under this Agreement and each of the Transaction Documents to
      which it is a party, and has taken all necessary action to authorize the
      execution, delivery and performance of this Agreement and each of the
      Transaction Documents to which it is a party. This Agreement and each of
      the Transaction Documents to which it is a party constitutes its legal,
      valid and binding obligation, enforceable against it in accordance with
      their respective terms except as the enforceability hereof and thereof may
      be limited by bankruptcy, insolvency, moratorium, reorganization and other
      similar laws of general application affecting creditors' rights generally
      and by general principles of equity (whether such enforceability is
      considered in a proceeding in equity or at law). No consent of any other
      party and no consent, license, approval or authorization of, or
      registration or declaration with, any Government Entity is required in
      connection with the execution, delivery or performance by it of this
      Agreement or any Transaction Document to which it is a party, or the
      validity or enforceability of this Agreement or any such Transaction
      Document.

V.    GENERAL COVENANTS OF THE BORROWER AND THE SERVICER

            SECTION 5.01 General Covenants. (a) The Servicer will observe all
corporate procedures required by its certificate of incorporation and bylaws and
the laws of its jurisdiction of incorporation. The Borrower will observe all
limited liability company procedures required by its certificate of formation
and limited liability company agreement and the laws of its jurisdiction of
organization. The Servicer will maintain its corporate existence in good
standing

                                       51

<PAGE>

under the laws of its jurisdiction of incorporation and will promptly obtain and
thereafter maintain qualifications to do business as a foreign corporation in
any other state in which it does business and in which it is required to so
qualify in accordance with applicable law. The Borrower will maintain its
limited liability company existence in good standing under the laws of its
jurisdiction of organization and will promptly obtain and thereafter maintain
qualifications to do business as a foreign limited liability company in any
other state in which it does business and in which it is required to so qualify
in accordance with applicable law.

            (b) The Borrower will at all times ensure that (i) its directors act
independently and in its interests and in the interest of its creditors, (ii) it
shall at all times maintain at least two independent directors (x) each of whom
is not currently and has not been during the five years preceding the date of
this Agreement an officer, director or employee of the Borrower or an Affiliate
thereof and (y) each of whom is not a holder of any equity interest of the
Borrower or an Affiliate thereof, (iii) its assets are not commingled with those
of Maxtor or any other Affiliate of the Borrower, (iv) its directors authorize
all of its limited liability company actions, (v) it maintains separate and
accurate records and books of account and such books and records are kept
separate from those of Maxtor and any other Affiliate of the Borrower, (vi) it
shall use the mailing address and telephone number set forth for it in the
signature pages hereto and (vii) it maintains minutes of the meetings and other
proceedings of the directors. Where necessary, the Borrower will obtain proper
authorization from its directors for limited liability company action.

            (c) The Borrower will pay its operating expenses and liabilities
from its own assets; provided, however, that the Borrower's organizational
expenses and the expenses incurred in connection with the negotiation and
execution of this Agreement and the other Transaction Documents may be paid by
Maxtor.

            (d) Furthermore, the Borrower will not hold itself out, or permit
itself to be held out, as having agreed to pay or as being liable for the debts
of Maxtor or any Affiliate of Maxtor and the Borrower will not engage in
business transactions with Maxtor or any Affiliate of Maxtor, except on an
arm's-length basis. The Borrower will not hold Maxtor or any Affiliate of Maxtor
out to third parties as other than an entity with assets and liabilities
distinct from the Borrower. The Borrower will cause any financial statements
consolidated with those of Maxtor or any Affiliate of Maxtor to state that the
Borrower is a separate legal entity with its own separate creditors who, in any
liquidation of the Borrower, will be entitled to be satisfied out of the
Borrower's assets prior to any value in the Borrower becoming available to the
Borrower's equity holders. The Borrower will not act in any other manner that
could foreseeably mislead others with respect to the Borrower's separate
identity.

            (e) In its capacity as Servicer, Maxtor will, to the extent
necessary, maintain separate records on behalf of and for the benefit of the
Agent and the Lender, will act in accordance with instructions and directions,
delivered in accordance with the terms hereof, from the Borrower, the Agent
and/or the Lender in connection with its servicing of the Pledged Receivables
hereunder, and will ensure that, at all times when it is dealing with or in
connection with the Pledged Receivables in its capacity as Servicer, it holds
itself out as Servicer, and not in any other capacity.

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            (f) The Servicer shall, to the extent required by applicable law,
disclose all material transactions associated with this transaction in
appropriate regulatory filings and public announcements.

            (g) The Borrower shall take all other actions necessary to maintain
the accuracy of the factual assumptions and understandings set forth in the
legal opinion of Morrison & Foerster LLP, special counsel to Maxtor and the
Borrower, issued in connection with the Purchase Agreement and relating to the
issues of substantive consolidation and true sale or contribution of the Pledged
Receivables.

            (h) Except as otherwise provided herein or in any other Transaction
Document, neither the Borrower nor the Servicer, in its capacity as Servicer,
shall (i) sell, assign (by operation of law or otherwise) or otherwise dispose
of, or create or (other than any Other Permitted Liens) suffer to exist any
Adverse Claim upon or with respect to, any Pledged Receivable, any Collections
related thereto or any other Pledged Assets related thereto, or upon or with
respect to any account to which any Collections of any Receivable are sent, or
assign any right to receive income in respect thereof or (ii) create or (other
than any Other Permitted Liens) suffer to exist any Adverse Claim upon or with
respect to any of the Borrower's assets.

            (i) The Borrower will not merge or consolidate with, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions), all or substantially all of its assets (whether now
owned or hereafter acquired), or acquire all or substantially all of the assets
or capital stock or other ownership interest of any Person.

            (j) The Borrower will not account for or treat (whether in financial
statements or otherwise) the transactions contemplated by the Purchase Agreement
in any manner other than the sale or contribution of Receivables, Related
Security and Other Conveyed Property by Maxtor, as the case may be, to the
Borrower.

            (k) The Borrower will not amend, modify, waive or terminate any
terms or conditions of the Purchase Agreement (including, without limitation,
any eligibility criteria thereunder) without the written consent of the Agent,
and shall perform its obligations thereunder.

            (l) The Borrower will not amend, modify or otherwise make any change
to its certificate of formation or limited liability company agreement without
the prior written consent of the Agent.

            (m) The Servicer and the Borrower shall, by no later than the date
hereof, deliver to the Agent a correct and complete copy of the Credit and
Collection Policy which shall be (i) in form and substance satisfactory to the
Agent and (ii) accompanied by certificates from the chief executive officer,
president or secretary of each of the Servicer and the Borrower certifying that
attached thereto is a correct and complete copy of the Credit and Collection
Policy. Neither the Borrower nor the Servicer will make or allow to be made any
material amendment to the Credit and Collection Policy without the prior written
consent of the Agent. Each of the Borrower and, unless the Backup Servicer has
succeeded Maxtor as Servicer, the Servicer shall comply with all provisions of
the Credit and Collection Policy.

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            (n) If the Borrower or the Servicer receive any Collections, the
Borrower or the Servicer, as applicable, will remit such Collections to the
Collection Account within two (2) Business Day of the Borrower's or the
Servicer's receipt thereof.

            (o) Each of the Servicer and the Borrower shall take all actions
necessary (including, without limitation, making payment of premiums payable) in
order for payments to be made by the applicable insurer under and pursuant to
the terms of each insurance policy required hereunder.

            (p) The Servicer shall instruct and the Borrower shall cause the
Obligor of each Receivable that is Pledged hereunder to remit all Collections
owed by such Obligor by delivery of checks to the Lockbox or by wire transfers
to the Lockbox Account (and shall ensure that only funds constituting
Collections shall be deposited into the Lockbox Account). The Servicer shall
instruct and the Borrower shall cause (i) the Lockbox Bank to deposit all
Collections in the Lockbox into the Lockbox Account on each Business Day and
(ii) the Lockbox Bank to remit all Collections on deposit in the Lockbox Account
to the Collection Account on each Business Day.

            (q) The Servicer shall terminate the Servicer Account within ninety
(90) days from the date hereof.

            (r) Each of the Borrower and the Servicer shall promptly, from time
to time, provide to the Lender and the Agent such information, documents,
records or reports relating to the Receivables or the condition or operations,
financial or otherwise, of the Borrower or the Servicer as the Agent may from
time to time reasonably request in order to protect the interests of the Agent
and the Lender under or as contemplated by this Agreement.

            (s) Each of the Borrower and the Servicer will notify the Agent in
writing of any of the following events within one Business Day (or in the case
of the event described in clause (iii) below, within two Business Days) of
learning of the occurrence thereof, describing the same and, if applicable, the
steps being taken with respect thereto:

                  (i) The occurrence of each Early Amortization Event and each
      Unmatured Early Amortization Event.

                  (ii) (A) (1) The entry of any judgment or decree against the
      Servicer or any of its Subsidiaries if the aggregate amount of all
      judgments and decrees then outstanding against the Servicer and its
      Subsidiaries exceeds $1,000,000 after deducting (a) the amount with
      respect to which the Servicer or any such Subsidiary is insured and with
      respect to which the insurer has assumed responsibility in writing, and
      (b) the amount for which the Servicer or any such Subsidiary is otherwise
      indemnified if the terms of such indemnification are satisfactory to the
      Agent, and (2) the institution of any litigation, arbitration proceeding
      or governmental proceeding against the Servicer which, individually or in
      the aggregate, could reasonably be expected to have a Material Adverse
      Effect; and (B) the entry of any judgment or decree, or the institution of
      any litigation, arbitration proceeding or governmental proceeding, against
      the Borrower.

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

                  (iv) The occurrence of a default or an event of default under
      any other financing arrangement pursuant to which the Servicer is a debtor
      or an obligor.

                  (v) Any downgrade in the rating of any Indebtedness of, or of
      any implied rating of, the Servicer by S&P or Moody's, setting forth the
      Indebtedness, if any, affected and the nature of such change.

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

            (u) The Borrower and the Servicer will (and will cause Originator
to) upon the occurrence of an Early Amortization Event and the request of the
Agent, deliver to the Agent (or its designee) all Contracts (including, without
limitation, all multiple originals of any such Contract to the extent that
originals may be necessary to allow the enforcement of rights thereunder)
relating to the Pledged Receivables.

            (v) [Intentionally omitted.]

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

            (x) Each of the Borrower and the Servicer will file all tax returns
and reports required by law to be filed by it and will promptly pay all taxes
and governmental charges at any time owing by it, except any such taxes which
are not yet delinquent or are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books. The Borrower will pay when due any taxes
payable in connection with the Receivables.

            (y) The Borrower shall maintain its Net Worth at an amount which
shall be at all times greater than or equal to the Required Capital Amount and
the Borrower will refrain from making any dividend, distribution, redemption of
capital stock or payment of or borrowing

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<PAGE>

under any subordinated indebtedness which would cause the Net Worth of the
Borrower to be less than the Required Capital Amount at any time. The Borrower
shall maintain non-restricted and unencumbered cash in an amount not less than
$100,000 at all times, it being understood and agreed that, without limitation
to the foregoing, such cash shall not include any funds in the Collection
Account or the Lockbox Account.

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

            (aa) Each of the Borrower and the Servicer will cause the Lockbox
Agreement and the Collection Account Agreement to be in full force and effect at
all times.

            (bb) No Monthly Remittance Report, Borrowing Report or Daily Report
(each if prepared by the Borrower or the Servicer, or to the extent that
information contained therein is supplied by the Borrower or the Servicer),
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by the Borrower or the Servicer to the Agent, or
the Lender in connection with this Agreement will be inaccurate in any material
respect as of the date it shall be dated or (except as otherwise disclosed in
writing to the Agent or the Lender, as the case may be, at such time) as of the
date so furnished, and no such document will contain any material misstatement
of fact or omits or shall omit to state a material fact or any fact necessary to
make the statements contained therein not misleading.

            (cc) The Borrower will not use the proceeds of any Loans to acquire
any security in any transaction which is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, as amended.

VI.   ADMINISTRATION AND SERVICING; CERTAIN COVENANTS

            SECTION 6.01 Appointment and Designation of the Servicer. (a) The
Borrower, the Lender and the Agent hereby appoint the Person designated by the
Agent from time to time, pursuant to this Section 6.01 (the "Servicer"), as
their agent to service, administer and collect the Pledged Receivables and
otherwise to enforce their respective rights and interests in and under the
Pledged Receivables and the other Pledged Assets. The Servicer shall collect
such Pledged Receivables by means of the collection procedures set forth in the
Credit and Collection Policy, to the extent consistent with the provisions of
this Article VI; provided, that if the Backup Servicer has succeeded Maxtor as
Servicer, then the Servicer shall collect such Pledged Receivables by means of
the collection procedures that are in accordance with

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<PAGE>

customary and usual procedures of institutions which service comparable
receivables and, to the extent more exacting, the degree of skill and attention
that the Backup Servicer exercises from time to time with respect to all
comparable receivables that it services for itself or others and, to the extent
more exacting, the requirements of this Article VI. The Servicer's authorization
under this Agreement shall terminate on the Collection Date. Maxtor is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms hereof at all times until the earliest of (i) the
Agent's designation of a new Servicer upon the occurrence of any Servicer
Default, or (ii) the Collection Date. Upon the occurrence of any Servicer
Default, the Agent may at any time designate as Servicer any Person to succeed
Maxtor, as Servicer, or any successor Servicer, on the condition in each case
that any such Person so designated shall agree to perform the duties and
obligations of the Servicer pursuant to the terms hereof. Each of the Borrower
and Maxtor, as Servicer, hereby grants to any successor Servicer an irrevocable
power of attorney and license to take any and all steps in the name of the
Borrower or Maxtor, as Servicer, as applicable, and on behalf of the Borrower or
Maxtor, as Servicer, necessary or desirable, in the determination of such
successor Servicer, to service, administer or collect any and all Pledged
Receivables.

            (b) The Servicer is hereby authorized to act for the Borrower, the
Lender and the Agent and in such capacity shall manage, service, administer and
make collections on the Pledged Receivables, and perform the other actions
required by the Servicer under this Agreement for the benefit of the Agent and
the Lender. The Servicer agrees that its servicing of the Pledged Receivables
shall be carried out in accordance with customary and usual procedures of
institutions which service comparable receivables and, to the extent more
exacting, the degree of skill and attention that the Servicer exercises from
time to time with respect to all comparable receivables that it services for
itself or others in accordance with (to the extent that the Backup Servicer has
not been appointed as the Servicer) the Credit and Collection Policy and, to the
extent more exacting, the requirements of this Article VI. The Servicer's duties
shall include, without limitation, collection and posting of all payments on the
Pledged Receivables, responding to inquiries of Obligors on the Pledged
Receivables, investigating delinquencies, sending notices to Obligors of
Delinquent Receivables and Defaulted Receivables demanding payment of amounts
due with respect thereto, reporting any required tax information to Obligors,
policing all Related Security, complying with the provisions of the Credit and
Collection Policy (to the extent that the Backup Servicer has not been appointed
as the Servicer) and the terms of the Collection Account Agreement, accounting
for collections, furnishing monthly and annual statements to the Agent with
respect to distributions and performing the other duties specified herein.

            (c) To the extent consistent with the standards, policies and
procedures otherwise required hereby, the Servicer shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable. The Servicer is authorized to release Liens on any Pledged
Receivables in order to collect insurance with respect thereto and to liquidate
the Related Security in accordance with its customary standards, policies and
procedures; provided, however, that notwithstanding the foregoing, the Servicer
shall not, (i) except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under any
Pledged Receivable or (ii) waive the right to collect the unpaid balance of any
Pledged Receivable from such Obligor, except that, subject to Section 6.02(a),
the Servicer may

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<PAGE>

forego collection efforts if the amount which the Servicer, in its reasonable
judgment, expects to realize in connection with such collection efforts is
determined by the Servicer in its reasonable judgment to be less than the
reasonably expected costs of pursuing such collection efforts, and if the
Servicer would forego such collection efforts in accordance with its customary
procedures. The Servicer is hereby authorized to commence, in its own name or in
the name of the Borrower, the Agent or the Lender (provided that if the Servicer
is acting in the name of the Borrower, the Agent or the Lender, the Servicer
shall have obtained the Borrower's, the Agent's or the Lender's consent, as the
case may be, which consent shall not be unreasonably withheld), a legal
proceeding to enforce a Pledged Receivable or to commence or participate in any
other legal proceeding (including, without limitation, a bankruptcy proceeding)
relating to or involving a Pledged Receivable, an Obligor or any Pledged Assets.
If the Servicer commences or participates in such a legal proceeding in its own
name, the Borrower, the Agent or the Lender, as the case may be, shall thereupon
be deemed to have automatically assigned such Pledged Receivable to the Servicer
solely for purposes of commencing or participating in any such proceeding as a
party or claimant, and the Servicer is authorized and empowered by the Borrower,
the Agent or the Lender, as the case may be, to execute and deliver in the
Servicer's name any notices, demands, claims, complaints, responses, affidavits
or other documents or instruments in connection with any such proceeding. The
Borrower, the Agent or the Lender, as the case may be, shall furnish the
Servicer with any powers of attorney and other documents which the Servicer may
reasonably request in writing and which the Servicer deems necessary or
appropriate and take any other steps which the Servicer may deem necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.

            (d) The Servicer shall not resign from the obligations and duties
hereby imposed on it hereunder except upon determination that (i) the
performance of its duties hereunder is no longer permissible under applicable
law and (ii) there is no reasonable action which can be taken to make the
performance of its duties hereunder permissible under applicable law. Any such
determination permitting the resignation of the Servicer pursuant to clause (ii)
of the previous sentence hereof shall be evidenced by an Opinion of Counsel to
such effect delivered to the Agent. Unless otherwise required by applicable law,
no such resignation shall be effective until a successor Servicer designated by
the Agent shall have assumed the responsibilities and obligations of the
Servicer hereunder.

            SECTION 6.02 Collection of Receivable Payments; Modification and
Amendment of Receivables. (a) Consistent with the standards, policies and
procedures required by this Agreement, the Servicer shall make reasonable
efforts to collect all payments called for under the terms and provisions of the
Pledged Receivables as and when the same shall become due, and shall follow such
collection procedures as it follows with respect to all comparable receivables
that it services for itself or others (or that it formerly serviced for itself
or others) and otherwise act with respect to the Pledged Receivables in such
manner as will, in the reasonable judgment of the Servicer, maximize the amount
to be received by the Borrower and the Lender with respect thereto.

            (b) The Servicer may not permit any extensions, amendments or other
modifications to a Pledged Receivable except in accordance with the Credit and
Collection Policy and as otherwise permitted herein.

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            (c) The Servicer shall remit all payments by or on behalf of the
Obligors received directly by the Servicer to the Collection Account, without
deposit into any intervening account as soon as practicable, but in no event
later than two (2) Business Days after receipt thereof.

            (d) The Servicer shall hold in trust for the Agent, for the benefit
of the Lender, all Contracts and all Records which evidence or relate to any
Pledged Receivables.

            SECTION 6.03 Realization Upon Receivables. Consistent with the
standards, policies and procedures required by this Agreement, the Servicer
shall use its best efforts to foreclose upon (or otherwise comparably convert
the ownership of) and liquidate any Related Security securing a Pledged
Receivable (to the extent it has the right to do so under the related Contract)
with respect to which the Servicer has determined that payments thereunder have
ceased and are not likely to be resumed, as soon as is practicable after default
on such Pledged Receivable but in no event later than thirty (30) days after
such determination or an earlier date that would be customary under the
circumstances involved and, in any case, in a manner as will, in the reasonable
judgment of the Servicer, maximize the amount to be received by the Borrower and
the Lender with respect thereto. The Servicer is authorized to follow such
customary practices and procedures as it shall deem necessary or advisable,
consistent with the standard of care required by Section 6.01, which practices
and procedures may include reasonable efforts to realize upon any recourse to
any Obligor, selling the Related Security at public or private sale, and other
actions by the Servicer in order to realize upon such Pledged Receivable. All
Liquidation Proceeds shall be remitted directly by the Servicer to the
Collection Account without deposit into any intervening account as soon as
practicable, but in no event later than two (2) Business Days after receipt
thereof.

            SECTION 6.04 Conformity with Applicable Laws. The Servicer shall
take all actions necessary to ensure that the Pledged Assets conform with any
applicable law, rule or regulation relating to such Pledged Assets.

            SECTION 6.05 Maintenance of Security Interests in the Related
Security. If the Borrower has failed to, the Servicer shall (and is hereby
authorized by the Borrower to) take all steps necessary under all applicable law
in order to cause a valid, subsisting and enforceable first priority security
interest to exist in the Agent's favor (for the benefit of the Lender) in the
Receivables, all Other Conveyed Property and all Related Security (and the
proceeds thereof) being Pledged hereunder (and immediately prior to the Pledge
of such Receivables, Other Conveyed Property and Related Security by the
Borrower to the Agent (for the benefit of the Lender), there shall have existed
in favor of the Borrower as secured party, a valid, subsisting and enforceable
first priority perfected security interest in such Receivable, Other Conveyed
Property and Related Security (and the proceeds thereof)), and the Agent's
security interest is and shall be prior to all other liens upon and security
interests in such Receivable, Other Conveyed Property and Related Security (and
the proceeds thereof) that now exist or may hereafter arise or be created (other
than Other Permitted Liens); provided, however, that the Servicer shall not be
required to expend its own funds to repay any debt secured by Receivables, Other
Conveyed Property or Related Security in order to cause such valid, subsisting
and enforceable first priority security interest to exist.

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            SECTION 6.06 Pledged Receivable Receipts. The Servicer shall
promptly make a deposit or cause the Borrower or any of its Affiliates to make a
deposit into the Collection Account in an amount equal to the Collections
received or made by or on behalf of it, the Borrower or any such Affiliate, as
the case may be, within two (2) Business Days of receiving any such Collections.

            SECTION 6.07 Unidentified Payments; Lender's Right of Presumption.
The Borrower agrees and consents that the Servicer and/or the Backup Servicer
may apply any payment it receives (or any such payment the Servicer deposits
into the Collection Account) from an Obligor to any Loan secured by a Pledged
Receivable if the Servicer and/or the Backup Servicer is unable in good faith to
determine whether such payment from an Obligor relates to such Pledged
Receivable.

            SECTION 6.08 No Rights of Withdrawal. Until the Collection Date, the
Borrower shall have no rights of direction or withdrawal with respect to amounts
held in the Collection Account or the Lockbox Account, except as provided for
herein.

            SECTION 6.09 Permitted Investments. The Servicer (if Maxtor or an
Affiliate thereof and, if the Servicer is not Maxtor or an Affiliate thereof,
the Borrower) shall, pursuant to written instruction, direct the Collection
Account Bank (and if the Servicer or the Borrower, as applicable, fails to do
so, the Agent may, pursuant to written instruction, direct the Collection
Account Bank) to invest, or cause the investment of, funds on deposit in the
Collection Account, in Permitted Investments, from the date of this Agreement
until the Collection Date. Absent any such written instruction, the Collection
Account Bank shall invest, or cause the investment of, such funds in the First
American Prime Obligations Fund ("First Prime"), so long as First Prime is a
Permitted Investment at the time of such investment, or in Permitted Investments
described in clause (v) of the definition thereof. A Permitted Investment
acquired with funds deposited in the Collection Account shall mature not later
than the Business Day immediately preceding the last day of the next ending
Fixed Period, and shall not be sold or disposed of prior to its maturity. All
such Permitted Investments shall be registered in the name of the Agent (in its
capacity as such) or its nominee for the benefit of the Lender. All income and
gain realized from any such investment as well as any interest earned on
deposits in the Collection Account shall be distributed in accordance with the
provisions of Section 2.05 hereof. The Servicer (if Maxtor or an Affiliate
thereof and, if the Servicer is not Maxtor or an Affiliate thereof, the
Borrower) shall deposit in the Collection Account (with respect to investments
made hereunder of funds held therein), an amount equal to the amount of any
actual loss incurred in respect of any such investment immediately upon
realization of such loss. None of the Collection Account Bank or the Agent shall
be liable for the amount of any loss incurred in respect of any investment, or
lack of investment, of funds held in the Collection Account.

            SECTION 6.10 Servicing Compensation. As compensation for its
activities hereunder, the Servicer shall be entitled to be paid the Servicing
Fee from the Collection Account as provided in Section 2.05(c). The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor, except any Servicer Advances made by the Servicer pursuant hereto;
provided, that the Backup Servicer, if serving as the Servicer, shall not be
required to pay any expenses in connection with curing or otherwise remedying
mistakes made by the predecessor

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Servicer or the costs of attorneys engaged in connection with the enforcement
and/or collection of any Receivables to the extent that such attorneys and the
related enforcement and/or collection action have been consented to in writing
by the Agent. The Servicing Fee may not be transferred in whole or in part
except in connection with the transfer of all the Servicer's responsibilities
and obligations under this Agreement.

            SECTION 6.11 Reports; Account Statements; Servicing Information. (a)
The Borrower will deliver to the Agent (i) on the Amortization Commencement
Date, a report identifying the Pledged Receivables (and any information with
respect thereto requested by the Agent) on the day immediately preceding the
Amortization Commencement Date and (ii) upon the Agent's reasonable request and
upon reasonable notice, on any other Business Day, a report identifying the
Pledged Receivables (and any information with respect thereto reasonably
requested by the Agent) on such day.

            (b) On the sixth Business Day of each Fiscal Month, the Servicer
shall prepare and deliver or have delivered to the Trustee and the Agent, (i) a
Monthly Remittance Report and any other information reasonably requested by the
Agent relating to all Pledged Receivables (including if requested, a Computer
Tape or Listing), all information in the Monthly Remittance Report (including,
without limitation, the calculation of the Dell Concentration Percentage, the
HPQ Concentration Percentage, the Dilution Reserve Percentage, the Dynamic Loss
Reserve Percentage, the Turnover Rate, the Default Ratio, Delinquency Ratio,
Sales Based Dilution Ratio, Sales-Based Default Ratio, Dilution-to-Liquidation
Ratio and the three-month rolling averages for the immediately preceding Cut-Off
Date) and all other such information to be accurate as of the immediately
preceding Cut-Off Date, (ii) a listing, in form and substance satisfactory to
the Agent, of the Outstanding Balance of Pledged Receivables allocated to each
"bill to number" under the Servicer's accounting records, (iii) in an electronic
format mutually acceptable to the Servicer and the Agent, all additional
information reasonably requested by the Agent relating to all Pledged
Receivables and (iv) all other information necessary for, or useful to, the
Agent to determine whether an Early Amortization Event or Unmatured Early
Amortization Event has occurred. If any Monthly Remittance Report indicates the
existence of a Borrowing Base Deficiency, the Borrower shall on the date of
delivery of such Monthly Remittance Report prepay to the Agent, for the account
of the Lender, a portion of the Loans as is necessary to cure such Borrowing
Base Deficiency (or otherwise cure such Borrowing Base Deficiency).

            (c) By no later than 9:00 P.M. (New York City time) on each Business
Day, the Servicer shall prepare and deliver to the Trustee a Daily Report. If
any Daily Report indicates the existence of a Borrowing Base Deficiency, the
Borrower shall on the date of delivery of such Daily Report prepay to the Agent,
for the account of the Lender, a portion of the outstanding Loans as is
necessary to cure such Borrowing Base Deficiency (or otherwise cure such
Borrowing Base Deficiency). The Trustee shall by 12:00 noon (New York City time)
on the Business Day following its receipt of a Daily Report (i) either (a)
confirm such Daily Report pursuant to the following sentence, sign such Daily
Report and deliver to the Agent (via telecopier or other electronic means
approved by the Agent) a signed copy of such Daily Report or (b) notify the
Servicer and the Agent that the Trustee could not confirm such Daily Report
pursuant to the following sentence, and (ii) direct the Collection Account Bank
to release to the Borrower (or the designee of the Borrower) funds from the
Collection Account requested in such

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Daily Report, if such Daily Report has been confirmed pursuant to the following
sentence and demonstrates that (1) after giving effect to the withdrawal of
funds from the Collection Account requested in such Daily Report and the Pledge
of the Receivables purchased with such funds, the Capital Limit shall not be
less than the Facility Amount and (2) the amount requested to be withdrawn from
the Collection Account is not in excess of (x) the amount of funds on deposit in
the Collection Account minus (y) an amount equal to the accrued and unpaid (i)
Yield, (ii) Non-Use Fees and (iii) Servicing Fees and Backup Servicer Standby
Fees (or, if the Backup Servicer has been appointed as Servicer hereunder, the
Backup Servicer Fees) and (v) the Trustee Fees. On each Business Day, the
Trustee shall review the information on the computer tape or diskette (or other
means of electronic transmission acceptable to the Trustee) to be delivered by
the Servicer to the Trustee concurrently with any Daily Report and shall
recalculate and confirm the Adjusted Net Eligible Receivables Balance included
in such Daily Report using (i) the Eligible Receivables information contained in
such computer tape, diskette or other means of electronic transmission and (ii)
an Adjusted Overconcentration Amount, an Adjusted Canadian Overconcentration
Amount, an Adjusted Loss Reserve, an Adjusted Dilution Reserve and an Adjusted
Yield and Fee Reserve, in each case, as calculated by the Trustee based upon the
Eligible Receivables information on such computer tape, diskette or other means
of electronic transmission and the Overconcentration Amount, Canadian
Overconcentration Amount, Loss Reserve, Dilution Reserve and Yield and Fee
Reserve set forth in the most recent Monthly Remittance Report delivered to the
Trustee by the Servicer pursuant to Section 6.11(b).

            (d) On the sixth Business Day of each Fiscal Month, the Servicer
shall prepare and deliver or have delivered to the Backup Servicer (i) a Monthly
Remittance Report in respect of the immediately preceding Remittance Period and
(ii) a computer tape or a diskette or any other electronic transmission in a
format acceptable to the Backup Servicer containing the information (in raw and
not summary form) with respect to the Pledged Receivables during such Remittance
Period which was necessary for preparation of such Monthly Remittance Report,
including, without limitation, the information listed in Exhibit G hereto.

            (e) On each Business Day, the Servicer shall prepare and deliver or
have delivered to the Trustee a computer tape or a diskette or any other
electronic transmission in a format acceptable to the Trustee containing
information with respect to the Pledged Receivables which was necessary for
preparation of the Daily Report delivered on such Business Day.

            (f) The Borrower shall deliver to the Agent all reports it receives
pursuant to the Purchase Agreement within one (1) Business Day of the receipt
thereof.

            (g) Together with the information provided to the Lender and the
Agent under Section 6.12(f) herein, the Servicer shall deliver to the Lender and
the Agent a report, in form and substance satisfactory to the Lender and the
Agent, (i) which demonstrates that the Early Amortization Events described in
Section 7.01(v) and Section 7.01(w) have not occurred during or with respect to
such fiscal quarter and (ii) which is signed by, and the accuracy of which is
certified by, the financial vice president, treasurer, chief financial officer
or controller of the Servicer.

            (h) At least four Business Days prior to the date of any Borrowing
other than a Borrowing to take place on a Remittance Date, the Servicer shall
(i) deliver to the Agent and

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the Backup Servicer, a Borrowing Report, in form and substance satisfactory to
the Agent, signed by an officer of the Borrower having responsibility for
financial matters of the Borrower which shall demonstrate that, after giving
effect to such Borrowing and the Pledge of the Eligible Receivables to be
purchased by the Borrower with the proceeds of such Borrowing, the Capital Limit
shall not be less than the Facility Amount and (ii) deliver or have delivered to
the Backup Servicer a computer tape or a diskette or any other electronic
transmission in a format acceptable to the Backup Servicer containing the
information (in raw and not summary form) with respect to the Pledged
Receivables which was necessary for preparation of such Borrowing Report.

            SECTION 6.12 Statements as to Compliance; Financial Statements. (a)
The Servicer shall deliver to the Agent, the Backup Servicer, the Borrower and
the Lender on or before January 15 of each year, beginning with January 15,
2004, an Officer's Certificate stating that (x) a review of the activities of
the Servicer during the preceding calendar year and of its performance under
this Agreement has been made under such officer's supervision, and (y) to the
best of such officers' knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement throughout such calendar
year (or portion thereof, as the case may be) or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof and the action being taken to
cure such default.

            (b) [Intentionally omitted.]

            (c) As soon as available and no later than forty-five (45) days
after the end of each fiscal quarter in each fiscal year of Maxtor, the Servicer
shall deliver, or cause to be delivered, to the Lender, the Backup Servicer and
the Agent copies of:

                  (i) a consolidated balance sheet of Maxtor and its
      consolidated subsidiaries (including the Borrower) as of the end of such
      calendar quarter setting forth in comparative form the corresponding
      figures for the most recent year-end for which an audited balance sheet
      has been prepared, which such balance sheet shall be prepared and
      presented in accordance with, and provide all necessary disclosure
      required by, GAAP and shall be accompanied by a certificate signed by the
      financial vice president, treasurer, chief financial officer or controller
      of Maxtor stating that such balance sheet presents fairly the financial
      condition of the companies being reported upon and has been prepared in
      accordance with GAAP consistently applied; and

                  (ii) consolidated statements of income, stockholders' equity
      and cash flow of Maxtor and its consolidated subsidiaries (including the
      Borrower) for such calendar quarter, in each case and for the portion of
      the fiscal year ending with such calendar quarter setting forth in
      comparative form the corresponding figures for the comparable period one
      year prior thereto (subject to normal year-end adjustments), which such
      statements shall be prepared and presented in accordance with, and provide
      all necessary disclosure required by, GAAP and shall be accompanied by a
      certificate signed by the financial vice president, treasurer, chief
      financial officer or controller of Maxtor, stating that such financial
      statements present fairly the financial condition and results of
      operations of the companies being reported upon and have been prepared in
      accordance with GAAP consistently applied.

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            (d) As soon as available and no later than one-hundred and twenty
(120) days after the end of each fiscal year of Maxtor, the Servicer shall
deliver, or cause to be delivered, to the Lender, the Backup Servicer and the
Agent copies of:

                  (i) a consolidated balance sheet of Maxtor and its
      consolidated subsidiaries (including the Borrower), all as of the end of
      the fiscal year, setting forth in comparative form the figures for the
      previous fiscal year and accompanied by an opinion of the Independent
      Accountants stating that such balance sheet presents fairly the financial
      condition of the companies being reported upon and has been prepared in
      accordance with GAAP consistently applied (except for changes in
      application in which such accountants concur); and

                  (ii) consolidated statements of income, stockholders' equity
      and cash flow of Maxtor and its consolidated subsidiaries (including the
      Borrower), for such fiscal year; in each case setting forth in comparative
      form the figures for the previous fiscal year and accompanied by an
      opinion of the Independent Accountants stating that such financial
      statements present fairly the financial condition of the companies being
      reported upon and have been prepared in accordance with GAAP consistently
      applied (except for changes in application in which such accountants
      concur).

            (e) As soon as available and no later than one-hundred and twenty
(120) days after the end of each fiscal year of the Borrower, the Borrower shall
deliver to the Lender and the Agent copies of:

                  (i) a balance sheet of the Borrower, as of the end of the
      fiscal year, setting forth in comparative form the figures for the
      previous fiscal year (if applicable) and accompanied by an opinion of the
      Independent Accountants stating that such balance sheet presents fairly
      the financial condition of the Borrower and has been prepared in
      accordance with GAAP consistently applied (except for changes in
      application in which such accountants concur); and

                  (ii) statements of income, stockholders' equity and cash flow
      of the Borrower for such fiscal year; setting forth in comparative form
      the figures for the previous fiscal year and accompanied by an opinion of
      the Independent Accountants stating that such financial statements present
      fairly the financial condition of the Borrower and have been prepared in
      accordance with GAAP consistently applied (except for changes in
      application in which such accountants concur).

            (f) As soon as available and no later than forty-five (45) days
after the end of each fiscal quarter of the Borrower, the Borrower shall deliver
to the Lender and the Agent copies of:

                  (i) a balance sheet of the Borrower, as of the end of such
      fiscal quarter, which such balance sheet shall be prepared and presented
      in accordance with, and provide all necessary disclosure required by, GAAP
      and shall be accompanied by a certificate signed by the financial vice
      president, treasurer, chief financial officer or controller of Maxtor,
      stating that such financial statements present fairly the financial

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      condition and results of operations of the companies being reported upon
      and have been prepared in accordance with GAAP consistently applied); and

                  (ii) a statement of income of the Borrower for such fiscal
      quarter, which such statement shall be prepared and presented in
      accordance with, and provide all necessary disclosure required by, GAAP
      and shall be accompanied by a certificate signed by the financial vice
      president, treasurer, chief financial officer or controller of Maxtor,
      stating that such statement presents fairly the financial condition and
      results of operations of the companies being reported upon and have been
      prepared in accordance with GAAP consistently applied).

            SECTION 6.13 Access to Certain Documentation. (a) (i) Each of the
Lender and the Agent (and their respective agents or professional advisors
including, without limitation, any independent certified public accountants
acceptable to the Agent (the "Independent Accountants")) shall at the expense of
the Borrower, have the right under this Agreement, four (4) times during each
calendar year, upon reasonable prior notice to the Servicer, to examine and
audit, during business hours or at such other times as might be reasonable under
applicable circumstances, any and all of the books, records, or other
information of the Servicer or the Borrower, or held by another for the Servicer
or the Borrower or on the Servicer's or the Borrower's behalf, concerning this
Agreement. Each of the Lender and the Agent (and their respective agents or
professional advisors including, without limitation, any Independent
Accountants) shall at the expense of the Borrower and as frequently as the
Lender and the Agent may desire, have the right under this Agreement after the
occurrence and during the continuance of an Early Amortization Event or if, in
the opinion of the Agent, the circumstances warrant additional examinations and
audits, upon reasonable prior notice to the Servicer, to examine and audit,
during business hours or at such other times as might be reasonable under
applicable circumstances, any and all of the books, records, or other
information of the Servicer or the Borrower, or held by another for the Servicer
or the Borrower or on the Servicer's or the Borrower's behalf, concerning this
Agreement and to discuss such matters relating to the Servicer's and Borrower's
financial condition or the Pledged Assets or the Servicer's or the Borrower's
performance under the Transaction Documents or the Contracts with any of the
officers or employees of the Borrower or the Servicer having knowledge of such
matters. The Lender and the Agent and their respective agents and professional
advisors) shall treat as confidential any information obtained during such
examination which is not already publicly known or available; provided, however,
that the Lender and the Agent may disclose such information (i) to such of its
officers, directors, employees, agents and representatives as need to know such
information in connection with the transaction contemplated hereunder; (ii) to
the Rating Agencies; (iii) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, or if requested by any
Government Entity having authority over it; (iv) to the extent such confidential
information becomes publicly available other than as a result of a breach of
this agreement; (v) that was already in the Agent's or the Lender's possession
prior to the date hereof; and (vi) to the extent the Borrower shall have
consented to such a disclosure in writing; provided, that to the extent that the
Lender or the Agent is requested pursuant to any subpoena or similar legal
process to disclose such information, the Lender or the Agent, as applicable,
shall provide the Borrower and the Servicer with reasonably prompt notice of
such request unless, the Lender or the Agent believes that it is prohibited from
doing so by applicable law or court order. Notwithstanding anything to the
contrary described herein or any

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related document, the Parties hereto and each of their respective employees,
representatives or other agents, are, and hereby confirm that they have been at
all times, permitted to disclose to any and all Persons, without limitations of
any kind, the tax treatment and tax structure of the transactions contemplated
hereunder and all materials of any kind (including opinions or other tax
analyses) that are or have been provided to such Parties related to such tax
treatment and tax structure.

                  (ii) Each of the Lender and the Agent shall make available to
each other the results, findings and reports related to any examinations and
audits described in clause (i) above.

                  (iii) In connection with any examinations and audits described
above, the Agent may, at the expense of the Borrower, cause a firm of
Independent Accountants, to deliver to the Agent a statement (the "Accountants'
Report") addressed to the Agent, to the effect that such firm has examined such
Borrowing Reports, Monthly Remittance Reports and Daily Reports prepared by the
Servicer during a designated period as it deemed necessary in order to issue the
Accountants' Report and that such examination was made in accordance with
generally accepted auditing standards, and accordingly included such tests of
the accounting records and such other auditing procedures as such firm
considered necessary in the circumstances. Each Accountants' Report shall
further state that (i) a review in accordance with agreed upon procedures (which
procedures are agreed to by the Agent) was made; (ii) except as disclosed in the
Accountants' Report, no exceptions or errors in the Borrowing Reports, Monthly
Remittance Reports and Daily Reports examined were found except for (A) such
exceptions as the Independent Accountants believe to be immaterial and (B) such
other exceptions as shall be set forth in the Accountants' Report. The
Accountants' Report shall also indicate that the firm is independent of the
Borrower and the Servicer within the meaning of the Code of Professional Ethics
of the American Institute of Certified Public Accountants.

            (b) The Lender and the Agent (and their respective agents or
professional advisors) shall, at their own expense (and, after the occurrence
and during the continuance of an Early Amortization Event, at the expense of the
Borrower), have the right under this Agreement to, not more frequently than
twice each calendar year (but as frequently as the Lender or the Agent may
desire after the occurrence and during the continuance of an Early Amortization
Event), contact any or all Obligors with respect to any Receivables which are
Pledged hereunder in order to procure such information related to any or all
such Obligors, the related Contracts, and the Receivables as the Lender or the
Agent deems reasonable under the circumstances; provided, that so long as no
Early Amortization Event has occurred and is continuing, the Lender and the
Agent shall (i) provide the Servicer with five Business Days' prior written
notice of such contact, indicating the purpose of such contact and any specific
information sought from such Obligors by such contact and (ii) make such contact
with such Obligors only in the presence of the Servicer or its authorized
representative (unless such requirement is waived by the Servicer or the
Servicer does not make itself or an authorized representative available to
accompany the Lender and the Agent in connection with such contact by the fifth
Business Day after notice of such Person's desire to make such contact is
delivered to the Servicer). The Servicer and the Borrower hereby agree to
cooperate with the Lender and the Agent (and their respective agents or
professional advisors) in connection with any attempt thereby to contact any
such Obligor and shall provide to the Lender and the Agent such information as
is needed in order to facilitate

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such contact. The Lender and the Agent (and their respective agents and
professional advisors) shall treat as confidential any information obtained
during any such contact with any such Obligor which is not already publicly
known or available; provided, however, that the Lender and the Agent may
disclose such information (i) to such of its officers, directors, employees,
agents and representatives as need to know such information in connection with
the transaction contemplated hereunder; (ii) to the Rating Agencies; (iii) to
the extent required by applicable laws and regulations or by any subpoena or
similar legal process, or if requested by any Governmental Entity having
authority over it; (iv) to the extent such information becomes publicly
available other than as a result of a breach of this agreement; (v) that was
already in the Agent's or the Lender's possession prior to the date hereof; and
(vi) to the extent the Borrower shall have consented to such a disclosure in
writing.

            SECTION 6.14 Backup Servicer. (a) The Agent may at any time after a
Servicer Default, by notice to the Servicer, the Borrower and the Backup
Servicer, terminate all of the rights and obligations of the Servicer under this
Agreement. Upon the delivery to the Servicer of such notice, all obligations,
authority and power of the Servicer under this Agreement, whether with respect
to the Pledged Assets or otherwise, shall pass to and be vested in the Backup
Servicer pursuant to and under this Section, and, without limitation, the Backup
Servicer is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer or the Borrower, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination or to perform the duties of the Servicer under this Agreement. The
Servicer agrees to cooperate with the Agent and the Backup Servicer in effecting
the termination of the Servicer's responsibilities and rights hereunder,
including, without limitation, delivering notification to the Obligors of the
assignment of the servicing function and instructions to abide by payment
directions delivered by the Agent or the Backup Servicer, providing the Backup
Servicer with all records, in electronic or other form, reasonably requested by
it to enable the Backup Servicer to assume the servicing functions hereunder and
the transfer to the Backup Servicer for administration by it all cash amounts
which at the time should be or should have been deposited by the Servicer in the
Collection Account or thereafter be received by the Servicer with respect to the
Pledged Receivables. Neither the Agent nor the Backup Servicer shall be deemed
to have breached any obligation hereunder as a result of a failure to make or
delay in making any distribution as and when required hereunder caused by the
failure of the Servicer to remit any amounts received by it or to deliver any
documents held by it with respect to the Pledged Assets.

            (b) The Backup Servicer Fees and Transition Fee shall be paid out of
Collections as set forth in Section 2.05(c) on and after the date, if any, that
the Backup Servicer assumes the responsibilities of the Servicer pursuant to
this Section.

            (c) Any obligations of Maxtor under any Transaction Document other
than in its capacity as Servicer shall continue in effect notwithstanding
Maxtor's termination as Servicer.

            (d) On and after the time the Servicer receives a notice of
termination pursuant to this Section 6.14, the Backup Servicer shall be (and the
Backup Servicer hereby agrees to be) the successor in all respects to the
Servicer in its capacity as Servicer under this Agreement and the transactions
set forth or provided for herein and therein and shall have all the

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rights and powers and be subject thereafter to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof and thereof; provided, however, that any failure to perform
such duties or responsibilities caused by the Servicer's failure to provide
information required by this Section 6.14 shall not be considered a default by
the Backup Servicer hereunder. The Backup Servicer shall have (i) no liability
with respect to any obligation which was required to be performed by the
terminated Servicer prior to the date that the Backup Servicer becomes the
successor to the Servicer or any claim of a third party based on any alleged
action or inaction of the terminated Servicer, (ii) no obligation to perform any
repurchase or advancing obligations, if any, of the Servicer, (iii) no
obligation to pay any taxes required to be paid by the Servicer (provided that
the Backup Servicer shall pay any income taxes for which it is liable), (iv) no
obligation to pay any of the fees and expenses of any other party to the
transactions contemplated hereby, and (v) no liability or obligation with
respect to any Servicer indemnification obligations of any prior Servicer,
including the original Servicer. The liability and indemnification obligations
of the Backup Servicer, upon becoming a successor Servicer, are expressly
limited to those arising on account of its negligence or willful misconduct. In
addition, the Backup Servicer shall have no liability relating to the
representations and warranties of the Servicer contained in Section 4.02 hereof.
Notwithstanding the above, the Agent may, if the Backup Servicer shall be
unwilling to so act, or shall, if the Backup Servicer is unable to so act,
appoint any established servicing institution acceptable to the Agent, as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. Pending
appointment of a successor to the Servicer hereunder, and after the Agent
notifies the Servicer to discontinue performing servicing functions under this
Agreement, the Backup Servicer (or the Agent if there is no Backup Servicer)
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Agent may make such arrangements for the
compensation of such successor out of payments on Pledged Receivables as it and
such successor shall agree. The Borrower and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.

            (e) Not later than the Business Day immediately prior to each
Remittance Date, the Backup Servicer shall compare the information on the
computer tape or diskette (or other means of electronic transmission acceptable
to the Backup Servicer) most recently delivered to the Backup Servicer by the
Servicer pursuant to Section 6.11(d) to the Monthly Remittance Report most
recently delivered to the Backup Servicer by the Servicer pursuant to Section
6.11(d) and shall:

                  (i) confirm that such Monthly Remittance Report is in the form
      attached hereto as Exhibit C and is complete on its face;

                  (ii) recompute, using the raw per Obligor Receivables
      information contained in such computer tape or diskette (or other means of
      electronic transmission acceptable to the Backup Servicer), and verify the
      accuracy of items 1 through 9 on such Monthly Remittance Report and all
      other information specified by the Agent, in each case, in a manner
      satisfactory to the Agent; and

                  (iii) deliver to the Agent a certification letter with respect
      to the above substantially in the form of Exhibit F-1 hereto on or before
      such Business Day.

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            (f) In the event of any discrepancy between the information set
forth in Section 6.14(e)(ii) as calculated by the Servicer from that determined
or calculated by the Backup Servicer, the Backup Servicer shall promptly report
such discrepancy to the Servicer and the Agent. In the event of a discrepancy as
described in the preceding sentence, the Servicer and the Backup Servicer shall
attempt to reconcile such discrepancies prior to the related Remittance Date,
but in the absence of a reconciliation, distributions on the related Remittance
Date shall be made consistent with the information calculated by the Servicer,
the Servicer and the Backup Servicer shall attempt to reconcile such
discrepancies prior to the next Remittance Date, and the Servicer shall promptly
report to the Agent regarding the progress, if any, which shall have been made
in reconciling such discrepancies. If the Backup Servicer and the Servicer are
unable to reconcile such discrepancies with respect to such Monthly Remittance
Report by the next Remittance Date that falls in April, July, October or
January, the Servicer shall cause independent accountants acceptable to the
Agent, at the Servicer's expense, to examine such Monthly Remittance Report and
attempt to reconcile such discrepancies at the earliest possible date (and the
Servicer shall promptly provide the Agent with a report regarding such events).
The effect, if any, of such reconciliation shall be reflected in the Monthly
Remittance Report for the next succeeding Remittance Date.

            (g) Not later than two Business Days prior to each Borrowing Date
(other than a Borrowing Date that is also a Remittance Date), the Backup
Servicer shall compare the information on the computer tape or diskette (or
other means of electronic transmission acceptable to the Backup Servicer) most
recently delivered to the Backup Servicer by the Servicer pursuant to Section
6.11(h) to the related Borrowing Report delivered to the Backup Servicer by the
Servicer pursuant to Section 6.11(h) and shall:

                  (i) confirm that such Borrowing Report is in the form attached
      hereto as Exhibit A and is complete on its face;

                  (ii) recompute using the raw per Obligor Receivables
      information contained in such computer tape or diskette (or other means of
      electronic transmission acceptable to the Backup Servicer), and verify the
      accuracy of, items 1 through 9 on such Borrowing Report in a manner
      satisfactory to the Agent; and

                  (iii) deliver to the Agent a certification letter with respect
      to the above substantially in the form of Exhibit F-2 hereto.

            (h) In the event of any discrepancy between the information set
forth in Section 6.14(g)(ii) as calculated by the Servicer from that determined
or calculated by the Backup Servicer, the Backup Servicer shall promptly report
such discrepancy to the Servicer and the Agent. In the event of a discrepancy as
described in the preceding sentence, the Servicer and the Backup Servicer shall
attempt to reconcile such discrepancies prior to the related Borrowing Date and
the Backup Servicer shall promptly report to the Agent the progress, if any,
which shall have been made in reconciling such discrepancies.

            (i) The Backup Servicer may not resign except upon sixty (60) day's
prior written notice to the Agent, the Servicer and the Borrower. In addition,
the Backup Servicer may be removed by the Agent with or without cause at any
time upon thirty (30) day's prior written

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notice to the Backup Servicer, the Servicer and the Borrower. In the event of
any such resignation or removal, the Backup Servicer may be replaced by a new
Backup Servicer selected by the Agent upon notice to the Servicer and the
Borrower.

            SECTION 6.15 Additional Remedies of Agent Upon Early Amortization
Event. During the continuance of any Early Amortization Event and upon and at
the direction of the Agent, the Agent, in addition to the rights specified in
Section 7.01, shall, in its own name and as agent for the Lender, take all
actions now or hereafter existing at law, in equity or by statute to enforce its
rights and remedies and to protect the interests, and enforce the rights and
remedies, of the Lender (including the institution and prosecution of all
judicial, administrative and other proceedings and the filings of proofs of
claim and debt in connection therewith). Except as otherwise expressly provided
in this Agreement, no remedy provided for by this Agreement shall be exclusive
of any other remedy, and each and every remedy shall be cumulative and in
addition to any other remedy, and no delay or omission to exercise any right or
remedy shall impair any such right or remedy or shall be deemed to be a waiver
of any Early Amortization Event.

            SECTION 6.16 Waiver of Defaults. The Agent may waive any default by
the Servicer or the Borrower in the performance of their respective obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Default and/or any Early
Amortization Event arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall be effective unless it
shall be in writing and signed by the Agent on the Lender's behalf and no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.

            SECTION 6.17 Maintenance of Certain Insurance. During the term of
its service as Servicer, the Servicer shall maintain in force an "errors and
omissions" and an employee fidelity/crime insurance policy, in each case, (i) in
an amount not less than $2,000,000, (ii) in a form reasonably acceptable to the
Agent and, in any case, that would, in the case of the employee fidelity/crime
insurance policy, cover any loss of Collections by the Servicer hereunder caused
by employee dishonesty, (iii) with an insurance company reasonably acceptable to
the Agent and (iv) covering the Servicer and the Borrower as insured parties.
Unless otherwise directed by the Agent, the Servicer shall prepare and present,
on behalf of itself, the Agent and the Lender, claims under any such policy in a
timely fashion in accordance with the terms of such policy, and upon the filing
of any claim on any policy described in this Section, the Servicer shall
promptly notify the Agent of such claim and deposit the proceeds of any such
claim into the Collection Account.

            SECTION 6.18 Segregation of Collections. The Servicer shall not
commingle funds constituting Collections with any other funds of the Servicer
(nor shall it allow any other Person to do so).

            SECTION 6.19 UCC Matters; Protection and Perfection of Pledged
Assets. The Borrower will not change the jurisdiction of its organization or
make any change to its name or use any tradenames, fictitious names, assumed
names, "doing business as" names or other names (other than those listed on
Schedule III annexed hereto, as such Schedule may be revised

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from time to time to reflect name changes and name usage permitted under the
terms of this Section 6.19 after compliance with all terms and conditions of
this Section 6.19 related thereto) unless prior to the effective date of any
such change in the jurisdiction of its organization or name change or use, the
Borrower notifies the Agent of such change in writing and delivers to the Agent
such financing statements as the Agent may reasonably request to reflect such
name change or use, together with such Opinions of Counsel, other documents and
instruments as the Agent may reasonably request in connection therewith. The
Borrower will not change the location of its chief executive office or the
location of its records regarding the Pledged Receivables unless prior to the
effective date of any such change of location, the Borrower notifies the Agent
of such change of location in writing and delivers to the Agent such financing
statements as the Agent may reasonably request to reflect such change of
location, together with such Opinions of Counsel, documents and instruments as
the Agent may reasonably request in connection therewith. The Borrower agrees
that from time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the Agent
may reasonably request in order to perfect, protect or more fully evidence the
Agent's interest in the Pledged Assets acquired hereunder, or to enable the
Agent to exercise or enforce any of their respective rights hereunder. Without
limiting the generality of the foregoing, the Borrower will upon the request of
the Agent: (i) execute (if necessary) and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate or as the Agent may
request and (ii) mark its master data processing records evidencing such Pledged
Receivables with a legend acceptable to the Agent, evidencing that the Agent,
for the benefit of the Lender, has acquired an interest therein as provided in
this Agreement. The Borrower hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Pledged Receivables and the Other
Conveyed Property and the Related Security related thereto and the proceeds of
the foregoing now existing or hereafter arising without the signature of the
Borrower where permitted by law. Subject to applicable law, a carbon,
photographic or other reproduction of this Agreement or any financing statement
covering the Pledged Receivables, or any part thereof shall be sufficient as a
financing statement. The Borrower shall, upon the request of the Agent at any
time after the occurrence of an Early Amortization Event and at the Borrower's
expense, notify the Obligors obligated to pay any Pledged Receivables, or any of
them, of the security interest of the Agent (for the benefit of the Lender) in
the Pledged Assets. If the Borrower fails to perform any of its agreements or
obligations under this Section 6.19, the Agent may (but shall not be required
to) itself perform, or cause performance of, such agreement or obligation, and
the expenses of the Agent incurred in connection therewith shall be payable by
the Borrower upon the Agent's demand therefor. For purposes of enabling the
Agent to exercise its rights described in the preceding sentence and elsewhere
in this Article VI, the Borrower and the Lender hereby authorize each of the
Agent and its successors and assigns to take any and all steps in the Borrower's
name and on behalf of the Borrower and the Lender necessary or desirable, in the
determination of the Agent, to collect all amounts due under any and all Pledged
Receivables, including, without limitation, endorsing the Borrower's name on
checks and other instruments representing Collections and enforcing such Pledged
Receivables and other Contracts and, if any, the related Guarantees.

            SECTION 6.20 Servicer Advances. The Servicer may, in its sole
discretion, make an advance in respect of any payment due on a Pledged
Receivable to the extent such payment has not been received by the Servicer as
of its due date and the Servicer reasonably

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expects such payment will be ultimately recoverable (a "Servicer Advance"). The
Servicer shall deposit into the Collection Account in immediately available
funds the aggregate of all Servicer Advances to be made during a Remittance
Period on or prior to the Business Day immediately preceding the related
Remittance Date. The Servicer shall be entitled to reimbursement for such
Servicer Advances from monies in the Collection Account as provided in Section
2.05(c) hereof.

            SECTION 6.21 [Intentionally Omitted.]

            SECTION 6.22 Breach of Covenant or Representation and Warranty by
Servicer. The Servicer hereby indemnifies the Borrower, the Lender and the Agent
against all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them in connection with any of the events or facts giving
rise to a breach of the Servicer's representations, warranties, agreements
and/or covenants set forth in Article IV, Article V or Article VI, except for
any such amounts (i) resulting from any gross negligence, bad faith or willful
misconduct of the Borrower, the Agent or the Lender or (ii) to the extent that
providing such indemnity would constitute recourse for losses due to the
uncollectibility of any Receivable due to the insolvency, bankruptcy, or
financial inability to pay of the Obligor.

            SECTION 6.23 Compliance with Applicable Law. Each of the Servicer
and the Borrower shall at all times comply in all material respects with all
requirements of federal, state and local laws, and regulations thereunder, that
are applicable to the conduct of its business (including, without limitation but
only if and to the extent applicable, usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair
Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief Act of 1940 and
state adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and all other credit laws and equal credit opportunity and
disclosure laws and any regulations promulgated thereunder).

VII.  EARLY AMORTIZATION EVENTS

            SECTION 7.01 Early Amortization Events. If any of the following
events (each, an"Early Amortization Event") shall occur:

            (a) the Borrower, the Servicer (if Maxtor or any Affiliate thereof)
      or Maxtor (in any capacity) shall fail to (i) perform or observe any term,
      covenant or agreement hereunder or under any other Transaction Document or
      (ii) make any payment or deposit to be made by it hereunder or under the
      Fee Letter or any other Transaction Document when due or otherwise
      required to be paid; or

            (b) any representation or warranty made or deemed to be made by the
      Borrower, Maxtor or the Servicer (or any of their respective officers)
      under or in connection with this Agreement or any other Transaction
      Document, any remittance report or other information or report delivered
      pursuant hereto or any other Transaction Document shall prove to have been
      false or incorrect in any material respect when made (including, without
      limitation, any representation or warranty made or deemed to be

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      made by Maxtor (or any of its officers or agents) under or in connection
      with the Purchase Agreement); provided, however, that if any breach
      described above is cured by the repurchase of Receivables pursuant to
      Article VI of the Purchase Agreement or by a repayment pursuant to Section
      2.19 hereof, such breach shall cease to constitute an Early Amortization
      Event; or

            (c) the Borrower, Maxtor or any other Affiliate of Maxtor shall fail
      to pay any principal of or premium or interest on any Debt, which Debt is
      in an amount in excess of $1,000,000 in the aggregate, when the same
      becomes due and payable (whether by scheduled maturity, required
      prepayment, acceleration, demand or otherwise) and such failure shall
      continue beyond the applicable grace period, if any, specified in the
      agreement or instrument relating to such Debt; or any other default under
      any agreement or instrument relating to any Debt or any other event, shall
      occur and shall continue beyond the applicable grace period, if any,
      specified in such agreement or instrument if the effect of such default or
      event is to accelerate, or to permit the acceleration of, the maturity of
      such Debt; or any such Debt shall be declared to be due and payable or
      required to be prepaid (other than by a regularly scheduled required
      prepayment) prior to the stated maturity thereof; or

            (d) the occurrence of any Bankruptcy Event with respect to the
      Borrower, the Servicer or Maxtor; or

            (e) (i) the Agent shall at any time fail to have a valid, perfected,
      first priority security interest in any of the Pledged Assets or (ii) any
      purchase by the Borrower of a Receivable and the Collections, Related
      Security and Other Conveyed Property under the Purchase Agreement shall,
      for any reason, cease to create in favor of the Borrower a perfected
      ownership interest in such Receivable and the Collections, Related
      Security and the Other Conveyed Property; provided, however, that if an
      event described in the foregoing clause (i) or (ii) is cured by the
      repurchase of Receivables pursuant to Article VI of the Purchase Agreement
      or by a repayment pursuant to Section 2.19 or a repurchase pursuant to
      Section 6.22 hereof, such event shall cease to constitute an Early
      Amortization Event; or

            (f) this Agreement, the Purchase Agreement or any other Transaction
      Document shall cease to be in full force and effect or any provision
      thereof shall for any reason cease to be the valid, binding and
      enforceable obligation of Maxtor or the Borrower, as the case may be, or
      Maxtor or the Borrower shall directly or indirectly contest in any manner
      such effectiveness, validity, binding nature or enforceability; or

            (g) a Change of Control shall occur; or

            (h) the Borrower, Maxtor or the Servicer (if Maxtor or an Affiliate
      thereof) shall have suffered any material adverse change to its financial
      condition, prospects or operations, the collectibility of the Pledged
      Receivables or the ability of the Borrower, Maxtor or the Servicer (if
      Maxtor or an Affiliate thereof) to collect such Pledged Receivables or
      otherwise perform their respective obligations under the Transaction
      Documents or conduct their respective businesses; or

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            (i) the Long Term Rating, or any implied rating, of Maxtor is at any
      time rated less than "B" by S&P or less than "B2" by Moody's for a period
      of at least five (5) Business Days; or

            (j) the rolling average of the Delinquency Ratios for the
      immediately preceding three Cut-Off Dates shall at any time exceed 5.00%;
      or

            (k) the rolling average of the Default Ratios for the immediately
      preceding three Cut-Off Dates shall at any time exceed 15.00%; or

            (l) the rolling average of the Sales-Based Dilution Ratios for the
      immediately preceding three Cut-Off Dates shall at any time exceed 12.00%;
      or

            (m) the rolling average of the Dilution-to-Liquidation Ratios for
      the immediately preceding three Cut-Off Dates shall at any time exceed
      17.50%; or

            (n) the sum of the Dynamic Loss Reserve Percentage at any time and
      the Dilution Reserve Percentage as of the immediately preceding Cut-Off
      Date shall at any time equal or exceed 50.00%; or

            (o) a Program Deficiency shall occur and shall remain unremedied for
      three (3) Business Days; or

            (p) the occurrence of a Servicer Default; or

            (q) (i) one or more final judgments for the payment of money shall
      be entered against the Borrower or (ii) one or more final judgments for
      the payment of money in an amount in excess of $5,000,000, individually or
      in the aggregate, shall be entered against the Servicer on claims not
      covered by insurance or as to which the insurance carrier has denied its
      responsibility, and such judgment shall continue unsatisfied and in effect
      for fifteen (15) consecutive days without a stay of execution; or

            (r) the Originator shall for any reason cease to transfer, or cease
      to have the legal capacity to transfer, or otherwise be incapable of
      transferring all of its Receivables to the Borrower under the Purchase
      Agreement; or

            (s) the non-restricted and unencumbered cash, non-restricted and
      unencumbered cash equivalents (determined and valued in accordance with
      GAAP) and non-restricted and unencumbered marketable securities
      (determined and valued in accordance with GAAP) of the Servicer (if Maxtor
      or any Affiliate thereof) and its consolidated subsidiaries (including the
      Borrower) shall be, in the aggregate, less than $175 million at any time;
      or

            (t) with respect to each fiscal quarter of the Servicer (if Maxtor
      or any Affiliate thereof) commencing after the Fiscal Month ending in
      December, 2004, the income or loss from operations plus depreciation and
      amortization of good will and intangible assets (determined in accordance
      with GAAP) of the Servicer (if Maxtor or any Affiliate thereof) and its
      consolidated subsidiaries (including the Borrower) for any

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      fiscal quarter of the Servicer multiplied by four (4) shall be less than
      20% of the long-term debt (determined in accordance with GAAP) of the
      Servicer and its consolidated subsidiaries (including the Borrower) as of
      the last day of such fiscal quarter;

then the Agent may, by notice to each other and the Borrower, declare the
Amortization Commencement Date to have occurred; provided, that, in the case of
any event described in Section 7.01(d) above, the Amortization Commencement Date
shall be deemed to have occurred automatically upon the occurrence of such
event. Upon any such declaration or automatic occurrence, (i) the Borrower shall
cease purchasing Receivables from Maxtor under the Purchase Agreement, (ii) at
the request of the Agent, the Servicer shall direct and cause the Obligors to
make all payments under the Pledged Receivables directly to the Backup Servicer,
the Agent, the Lender or any lockbox or account established by the Backup
Servicer as directed by the Agent, (iii) at the request of the Agent and at the
Borrower's expense, the Borrower and the Servicer shall assemble all of the
documents, instruments and other records (including, without limitation,
computer tapes and disks) that evidence or relate to any Pledged Receivable, and
shall make the same available to the Agent at a place selected by the Agent or
its designee.

            SECTION 7.02 Additional Remedies. (a) The Agent shall have, in
addition to all the rights and remedies provided herein and provided by
applicable federal, state, foreign, and local laws (including, without
limitation, the rights and remedies of a secured party under the Uniform
Commercial Code of any applicable state, to the extent that the Uniform
Commercial Code is applicable, and the right to offset any mutual debt and
claim), all rights and remedies available to the lenders in law, in equity, or
under any other agreement between the Lender and the Borrower.

            (b) Except as otherwise expressly provided in this Agreement, no
remedy provided for by this Agreement shall be exclusive of any other remedy,
and each and every remedy shall be cumulative and in addition to any other
remedy, and no delay or omission to exercise any right or remedy shall impair
any such right or remedy or shall be deemed to be a waiver of any Early
Amortization Event.

            (c) If on the Final Maturity Date, the outstanding principal of all
outstanding Loans, if any, and all Yield and all Fees accrued thereon and all
other Obligations shall not have been paid in full, then the Agent, in addition
to all other rights and remedies specified hereunder, shall have the right, in
its own name and as agent for the Lender, to immediately sell in a commercially
reasonable manner, in a recognized market (if one exists) at such price or
prices as the Agent may reasonably deem satisfactory, any or all Pledged
Receivables and all Other Conveyed Property related thereto. The parties hereto
recognize that it may not be possible to sell all of the Pledged Receivables and
the Other Conveyed Property related thereto on a particular Business Day, or in
a transaction with the same purchaser, or in the same manner because the market
for such assets may not be liquid. Accordingly, the Agent may elect, in its sole
discretion, the time and manner of liquidating any Pledged Receivables and the
Other Conveyed Property related thereto, and nothing contained herein shall
obligate the Agent to liquidate any such assets on in the same manner or on the
same Business Day. Any amounts received from any sale or liquidation of assets
pursuant to this paragraph shall be deposited into the Collection Account for
distribution pursuant to Section 2.05(c).

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VIII. INDEMNIFICATION

            SECTION 8.01 Indemnities by the Borrower. Without limiting any other
rights which the Agent, the Lender, the Backup Servicer, the Collection Account
Bank, the Trustee or any of their respective Affiliates may have hereunder or
under applicable law, the Borrower hereby agrees to indemnify the Agent, the
Lender, the Backup Servicer, the Collection Account Bank, the Trustee and each
of their respective Affiliates, officers, directors, successors, assigns,
employees and agents (each an "Indemnified Party" for purposes of this Article
VIII) from and against any and all damages, losses, claims, liabilities and
related costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or as a result of this Agreement or any other Transaction Document or in respect
of any Pledged Assets, excluding, however, Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of the Agent,
the Lender, the Backup Servicer, the Collection Account Bank, the Trustee or
such Affiliate. Without limiting the foregoing, but subject to the
aforementioned exclusion, the Borrower shall indemnify each Indemnified Party
for Indemnified Amounts relating to or resulting from:

            (a) any Pledged Receivable treated as or represented by the Borrower
      to be an Eligible Receivable which is not an Eligible Receivable;

            (b) reliance on any representation or warranty made or deemed made
      by the Borrower, the Servicer or any of their respective officers under or
      in connection with this Agreement or any Transaction Document, which shall
      have been false or incorrect when made or deemed made or delivered;

            (c) the failure by the Borrower or the Servicer to comply with any
      term, provision or covenant contained in this Agreement or any agreement
      executed in connection with this Agreement, or with any applicable law,
      rule or regulation with respect to any Pledged Assets, or the
      nonconformity of any Pledged Assets with any such applicable law, rule or
      regulation;

            (d) the failure to vest and maintain vested in the Agent, for the
      benefit of the Lender, or to transfer to the Agent, for the benefit of the
      Lender, a first priority perfected security interest in the Receivables
      which are, or are purported to be, Pledged Receivables, together with all
      Collections, Related Security and other Pledged Assets related thereto,
      free and clear of any Adverse Claim whether existing at the time of the
      related Borrowing or at any time thereafter;

            (e) the failure to maintain, as of the close of business on each
      Business Day prior to the Collection Date, a Facility Amount which is less
      than or equal to the lesser of (x) the Borrowing Limit on such Business
      Day, or (y) the Capital Limit on such Business Day (provided, that in
      determining the Capital Limit for purposes of this Section 8.01(e), all
      information used in such determination must be accurate as of the date of
      such determination);

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            (f) the failure to file, or any delay in filing, financing
      statements or other similar instruments or documents under the UCC of any
      applicable jurisdiction or other applicable laws with respect to any
      Receivables which are, or are purported to be, Pledged Receivables or the
      other Pledged Assets related thereto, whether at the time of any Borrowing
      or at any subsequent time;

            (g) any dispute, claim, offset or defense (other than the discharge
      in bankruptcy of an Obligor) to the payment of any Receivable which is, or
      is purported to be, a Pledged Receivable (including, without limitation, a
      defense based on such Receivable (or the Contract evidencing such
      Receivable) not being a legal, valid and binding obligation of such
      Obligor enforceable against it in accordance with its terms) or any other
      claim resulting from the sale of the merchandise, products or services
      related to such Receivable or the furnishing or failure to furnish such
      merchandise or services or relating to collection activities with respect
      to such Receivable (if such collection activities were performed by the
      Seller or any of its Affiliates acting as Servicer);

            (h) any products liability or other claim arising out of or in
      connection with the merchandise, products or services which are the
      subject of any Contract;

            (i) any failure of the Borrower or the Servicer to perform its
      duties or obligations in accordance with the provisions of this Agreement;

            (j) the failure to pay prior to delinquency any taxes payable in
      connection with the Pledged Receivables or the Pledged Assets related
      thereto;

            (k) any repayment by the Agent or the Lender of any amount
      previously distributed in payment of Loans or payment of Yield or Fees or
      any other amount due hereunder, in each case which amount the Agent or the
      Lender believes in good faith is required to be repaid;

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

            (m) any investigation, litigation or proceeding related to this
      Agreement or the use of proceeds of Loans or the Pledged Assets;

            (n) any failure by the Borrower to give reasonably equivalent value
      to Maxtor in consideration for the transfer by Maxtor to the Borrower of
      any Receivable or any attempt by any Person to void or otherwise avoid any
      such transfer under any statutory provision or common law or equitable
      action, including, without limitation, any provision of the Bankruptcy
      Code;

            (o) any failure of the Borrower, the Servicer or any of their
      respective agents or representatives (including, without limitation,
      agents, representatives and employees of the Servicer acting pursuant to
      authority granted under Section 6.01 hereof) to remit to the Servicer or
      the Agent, Collections of Pledged Receivables remitted to the Borrower,
      the Servicer or any such agent or representative;

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            (p) any claim arising out of or in connection with the Borrower's or
      the Servicer's administration or servicing of the Receivables; or

            (q) the sale or other transfer of any Receivables, or any interests
      therein, in violation of applicable law.

Any amounts subject to the indemnification provisions of this Section 8.01 shall
be paid from monies in the Collection Account, subject to the order of priority
set forth in Section 2.05(c) hereof, to the applicable Indemnified Party on the
Remittance Date following such Indemnified Party's written demand therefor.

            SECTION 8.02 Indemnities by the Servicer. Without limiting any other
rights which the Agent, the Lender, the Trustee or any of their respective
Affiliates may have hereunder or under applicable law, the Servicer (if Maxtor
or one of its Affiliates) hereby agrees to indemnify each Indemnified Party from
and against any and all Indemnified Amounts awarded against or incurred by any
of them arising out of or as a result of the Servicer's performance of or
failure to perform its obligations under this Agreement excluding, however,
Indemnified Amounts to the extent (i) resulting from gross negligence or willful
misconduct on the part of the Agent, the Lender, the Trustee or such Affiliate
or (ii) that paying such Indemnified Amounts would constitute recourse for
losses due to the uncollectibility of any Receivable due to the insolvency,
bankruptcy, or financial inability to pay of the Obligor. Without limiting the
foregoing, but subject to the aforementioned exclusion, the Servicer (if Maxtor
or one of its Affiliates) shall indemnify each Indemnified Party for Indemnified
Amounts relating to or resulting from:

            (a) any Pledged Receivable treated as or represented by the Servicer
      to be an Eligible Receivable which is (i) a Defaulted Receivable or a
      Delinquent Receivable or (ii) to the best of the Servicer's knowledge, not
      an Eligible Receivable; or

            (b) reliance on any representation or warranty made or deemed made
      by any officer of the Servicer (if Maxtor or one of its Affiliates) under
      or in connection with this Agreement or any other Transaction Document,
      which shall have been false or incorrect in any material respect when made
      or deemed made or delivered; or

            (c) the failure by the Servicer (if Maxtor or one of its Affiliates)
      to comply with any term, provision or covenant applicable to it under this
      Agreement or any agreement executed in connection with this Agreement, or
      with any law, rule or regulation applicable to the Servicer's duties
      hereunder or any Pledged Assets, or the nonconformity of any Pledged
      Assets with any such law, rule or regulation; or

            (d) the failure to vest and maintain vested in the Agent, for the
      benefit of the Lender, or to transfer to the Agent, for the benefit of the
      Lender, a first priority perfected security interest in the Receivables
      which are, or are purported to be, Pledged Receivables, together with all
      Collections, Related Security and other Pledged Assets related thereto,
      free and clear of any Adverse Claim whether existing at the time of the
      related Borrowing or at any time thereafter; or

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            (e) the commingling by the Servicer of Collections any time with
      other funds; or

            (f) any failure of the Servicer or any of its respective agents or
      representatives (including, without limitation, agents, representatives
      and employees of the Servicer acting pursuant to authority granted under
      Section 6.01 hereof) to remit to the Collection Account, Collections of
      Pledged Receivables remitted to the Borrower, the Servicer or any such
      agent or representative; or

            (g) any claim arising out of or in connection with the Servicer's
      administration or servicing of the Receivables.

Any amounts subject to the indemnification provisions of this Section 8.02 shall
be paid by the Servicer to the applicable Indemnified Party, within five (5)
Business Days following such Indemnified Party's written demand therefor.

            Each applicable Indemnified Party shall deliver to the indemnifying
party under Section 8.01 and/or Section 8.02 within a reasonable time after such
Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by such Indemnified Party relating to the
claim giving rise to the Indemnified Amounts. Each such Indemnified Party will
cooperate with the Borrower and the Servicer in connection with any claim giving
rise to the Indemnified Amounts to minimize the liability of such indemnifying
parties, provided that nothing contained herein shall obligate any such
Indemnified Party to take any action which, in the opinion of such Indemnified
Party, is unlawful or otherwise disadvantageous to such Indemnified Party.

IX.   MISCELLANEOUS

            SECTION 9.01 Amendments and Waivers. (a) Except as provided in
Section 9.01(b), no amendment or modification of any provision of this Agreement
shall be effective without the written agreement of the Borrower, the Servicer,
the Agent, the Trustee and the Lender and no termination or waiver of any
provision of this Agreement or consent to any departure therefrom by the
Borrower or the Servicer shall be effective without the written concurrence of
the Agent and the Lender. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

            (b) In addition to the consents required by Section 9.01(a) the
written consent of each Lender (in the event that there is more than one Lender)
shall be required for any amendment, modification or waiver (i) reducing any
outstanding Loans, or the Yield thereon, (ii) postponing any date for any
payment of any Loan, or the Yield thereon, (iii) modifying the provisions of
this Section 9.01 or (iv) increasing the Capital Limit or the Borrowing Limit.

            SECTION 9.02 Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telex communication and communication by facsimile copy) and mailed,
telexed, transmitted or delivered, as to each party hereto, at its address set
forth under its name on the signature pages hereof or specified in such party's
Assignment and Acceptance or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall

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be effective, upon receipt, or in the case of (i) notice by mail, five days
after being deposited in the United States mails, first class postage prepaid,
(ii) notice by telex, when telexed against receipt of answerback, or (iii)
notice by facsimile copy, when verbal communication of receipt is obtained,
except that notices and communications pursuant to Article II shall not be
effective until received.

            SECTION 9.03 No Waiver; Remedies. Except as set forth in Section
9.13 hereof, no failure on the part of the Agent or the Lender to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

            SECTION 9.04 Binding Effect; Assignability; Multiple Lenders. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Servicer, the Agent, the Lender, the Backup Servicer, the Trustee and the
Collection Account Bank, and their respective successors and permitted assigns.
This Agreement and the Lender's rights and obligations hereunder and interest
herein shall be assignable in whole or in part (including by way of the sale of
participation interests therein) by the Lender and its successors and assigns.
This Agreement and the Agent's rights and obligations hereunder and interest
herein shall be assignable in whole or in part by the Agent and its successors
and assigns. None of the Borrower, the Servicer, the Backup Servicer, the
Trustee or the Collection Account Bank may assign any of its rights or
obligations hereunder or any interest herein without the prior written consent
of the Lender and the Agent. The parties to each assignment or participation
made pursuant to this Section 9.04 shall execute and deliver to the Agent for
its acceptance and recording in its books and records, an assignment and
acceptance agreement (an "Assignment and Acceptance") or a participation
agreement or other transfer instrument reasonably satisfactory in form and
substance to the Agent and the Borrower. Each such assignment or participation
shall be effective as of the date specified in the applicable Assignment and
Acceptance or other agreement or instrument only after the execution, delivery,
acceptance and recording as described in the preceding sentence. The Agent shall
notify the Borrower of any assignment or participation thereof made pursuant to
this Section 9.04. The Lender may, in connection with any assignment or
participation or any proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower and the Pledged Assets
furnished to the Lender by or on behalf of the Borrower or the Servicer;
provided, however that the Lender shall obtain an agreement from such assignee
or participant or proposed assignee or participant that they shall treat as
confidential (under terms mutually satisfactory to the Agent and such assignee
or participant or proposed assignee or participant) any information obtained
which is not already publicly known or available.

            (b) Whenever the term "Lender" is used herein, it shall mean MLCFC
and/or any other Person which shall have executed an Assignment and Acceptance;
provided, however, that each such party shall have a pro rata share of the
rights and obligations of the Lender hereunder in such percentage amount (the
"Commitment Percentage") as shall be obtained by dividing such party's
commitment to fund Loans hereunder by the total commitment of all parties to
fund Loans hereunder. Any right at any time of the Lender to enforce any remedy,
or

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instruct the Agent to take (or refrain from taking) any action hereunder, shall
be exercised by the Agent only upon direction by such parties that hold a
majority of the Commitment Percentages at such time. Each of the parties hereto
agree, in connection with any assignment of the Lender's rights and obligations
hereunder pursuant to the terms hereof, to enter into any amendment of the
Agreement as is reasonably requested by the Lender or the Agent in order to more
fully provide for the existence of two or more Lenders hereunder.

            SECTION 9.05 Term of This Agreement. This Agreement including,
without limitation, the Borrower's obligation to observe its covenants set forth
in Articles V and VI, and the Servicer's obligation to observe its covenants set
forth in Articles V and VI, shall remain in full force and effect until the
Collection Date; provided, however, that the rights and remedies with respect to
any breach of any representation and warranty made or deemed made by the
Borrower or Servicer pursuant to Articles III and IV and the indemnification and
payment provisions of Article VIII and Article IX and the provisions of Section
9.08 and Section 9.09 shall be continuing and shall survive any termination of
this Agreement.

            SECTION 9.06 GOVERNING LAW; JURY WAIVER. THIS AGREEMENT SHALL, IN
ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
ANY CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF
THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE INTERESTS OF THE AGENT IN THE PLEDGED ASSETS, OR REMEDIES
HEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER.

            SECTION 9.07 Costs, Expenses and Taxes. (a) In addition to the
rights of indemnification granted to the Backup Servicer, the Collection Account
Bank, the Agent, the Lender, the Trustee and the other Indemnified Parties under
Article VIII hereof, the Borrower agrees to pay on demand all reasonable costs
and expenses of the Backup Servicer, the Collection Account Bank, the Agent, the
Lender, the Trustee or such other Indemnified Parties incurred in connection
with the preparation, execution, delivery, administration of, or any waiver or
consent issued or amendment prepared in connection with, this Agreement, the
other Transaction Documents and the other documents to be delivered hereunder or
in connection herewith or therewith or incurred in connection with any
amendment, waiver or modification of this Agreement, any other Transaction
Document, and any other documents to be delivered hereunder or thereunder or in
connection herewith or therewith including, without limitation, the reasonable
fees and reasonable out-of-pocket expenses of counsel for the Backup Servicer,
the Collection Account Bank, the Agent, the Lender, the Trustee or such other
Indemnified Parties with respect thereto and with respect to advising the Backup
Servicer, the Collection Account Bank, the Trustee, the Agent and the Lender as
to their respective rights and remedies under this Agreement and the other
documents to be delivered hereunder or in connection herewith, and all

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costs and expenses, if any (including reasonable counsel fees and expenses),
incurred by the Backup Servicer, the Collection Account Bank, the Agent, the
Lender, the Trustee or such other Indemnified Parties in connection with the
enforcement of this Agreement and/or the other Transaction Documents.

            (b) The Borrower shall pay on demand any and all stamp, sales,
excise and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement
or the other documents to be delivered hereunder.

            SECTION 9.08 No Proceedings. The Servicer and U.S. Bank National
Association each hereby agrees that it will not institute against, or join any
other Person in instituting against, the Borrower any proceedings of the type
referred to in the definition of Bankruptcy Event unless and until one year and
one day shall have elapsed after the Collection Date.

            SECTION 9.09 Recourse Against Certain Parties. No recourse under or
with respect to any obligation, covenant or agreement (including, without
limitation, the payment of any fees or any other obligations) of the Lender or
the Agent as contained in this Agreement or any other agreement, instrument or
document entered into by the Lender or the Agent pursuant hereto or in
connection herewith shall be had against any administrator of the Lender or the
Agent or any incorporator, affiliate, stockholder, officer, employee or director
of the Lender or the Agent or of any such administrator, as such, by the
enforcement of any assessment or by any legal or equitable proceeding, by virtue
of any statute or otherwise; it being expressly agreed and understood that the
agreements of each party hereto contained in this Agreement and all of the other
agreements, instruments and documents entered into by the Lender or the Agent
pursuant hereto or in connection herewith are, in each case, solely the
corporate obligations of such party (and nothing in this Section 9.09 shall be
construed to diminish in any way such corporate obligations of such party), and
that no personal liability whatsoever shall attach to or be incurred by any
administrator of the Lender or the Agent or any incorporator, stockholder,
affiliate, officer, employee or director of the Lender or the Agent or of any
such administrator, as such, or any of them, under or by reason of any of the
obligations, covenants or agreements of the Lender or the Agent contained in
this Agreement or in any other such instruments, documents or agreements, or
which are implied therefrom, and that any and all personal liability of every
such administrator of the Lender or the Agent and each incorporator,
stockholder, affiliate, officer, employee or director of the Lender or the Agent
or of any such administrator, or any of them, for breaches by the Lender or the
Agent of any such obligations, covenants or agreements, which liability may
arise either at common law or at equity, by statute or constitution, or
otherwise, is hereby expressly waived as a condition of and in consideration for
the execution of this Agreement. The provisions of this Section 9.09 shall
survive the termination of this Agreement.

            SECTION 9.10 Execution in Counterparts; Severability; Integration.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement. In case any provision in or

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obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. This
Agreement contains the final and complete integration of all prior expressions
by the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings
other than the Fee Letter.

            SECTION 9.11 Tax Characterization. Notwithstanding any provision of
this Agreement, the parties hereto intend for the transactions effected
hereunder to constitute a financing transaction for federal taxation purposes.

            SECTION 9.12 [Intentionally Omitted.]

            SECTION 9.13 No Reliance. (a) Each of the parties hereto hereby
confirms that neither the Agent nor the Lender has not made any warranties or
representations as to (x) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Transaction Document or the condition
or value of the Pledged Assets or the creation, perfection or priority of any
security interest therein created under the Transaction Documents, or (y) the
business condition (financial or otherwise), operations, properties or prospects
of the Backup Servicer, the Servicer, the Originator and/or the Borrower or the
performance or observance by any such Person of any of its obligations under any
Transaction Document.

                          [SIGNATURE PAGES TO FOLLOW.]

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            IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

THE BORROWER:                            MAXTOR RECEIVABLES LLC

                                         By: ___________________________________
                                             Title:

                                         500 McCarthy Boulevard, #22777
                                         Milpitas, CA  95035
                                         Attention: Treasurer
                                         Facsimile No.: 408-952-3984
                                         Confirmation No.: 408-894-4410

THE SERVICER:                            MAXTOR CORPORATION

                                         By: ___________________________________
                                             Title:

                                         500 McCarthy Boulevard
                                         Milpitas, CA  95035
                                         Attention: Treasurer
                                         Facsimile No.: 408-952-3984
                                         Confirmation No.: 408-894-4416

THE AGENT:                               MERRILL LYNCH COMMERCIAL FINANCE CORP.

                                         By: ___________________________________
                                             Title:

                                         Four World Financial Center, 10th Floor
                                         New York, NY 10080
                                         Attention: Joseph Magnus
                                         Facsimile No.: 212-738-2700
                                         Confirmation No.: 212-449-7854

<PAGE>

THE LENDER:                              MERRILL LYNCH COMMERCIAL FINANCE CORP.

                                         By: ___________________________________
                                             Title:

                                         Four World Financial Center, 10th Floor
                                         New York, NY 10080
                                         Attention:  Joseph Magnus
                                         Facsimile No.: 212-738-2700
                                         Confirmation No.: 212-449-7854

THE TRUSTEE
AND THE COLLECTION ACCOUNT BANK:

                                         U.S. BANK NATIONAL ASSOCIATION

                                         By: ___________________________________
                                             Title:

                                         60 Livingston Avenue
                                         St. Paul, MN 55107-1419
                                         Attn: Structured Finance/Maxtor
                                               Receivables
                                         Facsimile No.: 651-495-8090
                                         Confirmation No.: 651-495-3851

THE BACKUP SERVICER:                     LYON FINANCIAL SERVICES, INC. (doing
                                         business as U.S. BANK PORTFOLIO
                                         SERVICES)

                                         By: ___________________________________
                                             Title:

                                         1310 Madrid Street
                                         Suite 103
                                         Marshall, MN 56258
                                         Attn: Joseph Andries
                                         Facsimile No.: 507-537-5201
                                         Confirmation No.: 507-537-5201

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