8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 19, 2003

HUGHES SUPPLY, INC.

(Exact name of registrant as specified in its charter)

Florida	001-08772	59-0559446
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Hughes Way, Orlando, Florida	32805
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (407) 841-4755

N/A

(Former Name or Former Address, if Changed Since Last Report)

Item 2. Acquisition of Assets.

On December 19, 2003, we acquired Century Maintenance Supply, Inc., a leading distributor of maintenance, repair and operations (MRO) products serving the multi-family apartment market, for total consideration (excluding transaction costs) of approximately $361.7 million, including the assumption of indebtedness. Century has a nationwide distribution network of 39 strategically located branches in major metropolitan markets in 35 states. We acquired Century pursuant to the terms of an Agreement and Plan of Merger dated as of November 26, 2003, among Hughes Supply, Inc., MRO Merger Corp., Century Maintenance Supply, Inc., FS Equity Partners IV, L.P., Century Airconditioning Holdings, Inc., and Dennis C. Bearden, which is attached to this Report as Exhibit 2.1 and incorporated herein by reference, as amended by the First Amendment to the Agreement and Plan of Merger, which is attached to this Report as Exhibit 2.2 and incorporated herein by reference.

We financed this acquisition as follows:

• We borrowed $250.0 million under a new, unsecured term loan agreement with Lehman Commercial Paper, Inc., SunTrust Bank, other lenders that from time to time become parties thereto, and SunTrust Bank, as agent. The term loan agreement, which matures on March 31, 2005, contains financial and other covenants, including limitations on dividends and maintenance of certain financial ratios, essentially identical to the covenants in our revolving credit facility, as amended on the date of the term loan agreement. Interest under the term loan agreement is payable at market rates plus applicable margins and the term loan debt presently ranks on parity with our other senior debt. The term loan agreement is attached to this Report as Exhibit 10.1 and incorporated herein by reference.

• We borrowed the balance of the consideration under our existing $290.0 million revolving credit agreement with SunTrust Bank, individually and as agent for other lenders that from time to time are parties thereto. Effective December 19, 2003, the revolving credit agreement was amended to permit the new term loan borrowings and to make the financial and other covenants essentially the same as those in the term loan agreement. The amendment to the revolving credit agreement is attached to this Report as Exhibit 10.2 and incorporated herein by reference.

If for any reason we do not repay the term loan agreement prior to June 30, 2004, all loans outstanding under the term loan agreement on that date will convert to subordinated loans maturing on March 31, 2005. Upon converting to subordinated loans, the applicable interest rate margin will increase by 4.0% for base rate loans and 4.25% for Eurodollar loans, and some of the financial covenants will become less stringent. We also may be required by the lenders to pursue the repayment of the subordinated loans from the sale of high yield securities.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(a) The financial statements required by this item will be filed by amendment not later than 60 days from the date this report on Form 8-K was required to be filed.

(b) The pro forma financial information required by this item will be filed by amendment not later than 60 days from the date this report on Form 8-K was required to be filed.

(c) Exhibits. The following documents are filed as exhibits to this Report:

2.1 Agreement and Plan of Merger dated as of November 26, 2003, among Hughes Supply, Inc., MRO Merger Corp., Century Maintenance Supply, Inc., FS Equity Partners IV, L.P., Century Airconditioning Holdings, Inc., and Dennis C. Bearden. (Pursuant to Item 601(b)(2) of Regulation S-K, the exhibits and schedules to the Agreement and Plan of Merger have been omitted; we agree to furnish copies of such items supplementally to the Commission upon request).

2.2 First Amendment to Agreement and Plan of Merger dated as of December 19, 2003.

10.1 Senior Term Loan Agreement dated as of December 19, 2003, among Hughes Supply, Inc., Lehman Commercial Paper, Inc., SunTrust Bank, and each of the several other banks and financial institutions from time to time party thereto, Lehman Brothers, Inc. and SunTrust Robinson Humphrey, as exclusive joint advisors, joint book managers and joint lead arrangers, and SunTrust Bank, as administrative agent.

10.2 First Amendment to Revolving Credit Agreement dated as of December 19, 2003, among Hughes Supply, Inc., the several banks and other financial institutions from time to time party thereto, and SunTrust Bank, as administrative agent.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Hughes Supply, Inc.
Date: January 5, 2004	By:	/s/ David Bearman
		David Bearman
		Executive Vice President and Chief Financial Officer

Index to Exhibits filed with Form 8-K

Exhibit	Description of Exhibit
2.1	Agreement and Plan of Merger dated as of November 26, 2003, among Hughes Supply, Inc., MRO Merger Corp., Century Maintenance Supply, Inc., FS Equity Partners IV, L.P., Century Airconditioning Holdings, Inc., and Dennis C. Bearden. (Pursuant to Item 601(b)(2) of Regulation S-K, the exhibits and schedules to the Agreement and Plan of Merger have been omitted; we agree to furnish copies of such items supplementally to the Commission upon request).
2.2	First Amendment to Agreement and Plan of Merger dated as of December 19, 2003.
10.1	Senior Term Loan Agreement dated as of December 19, 2003, among Hughes Supply, Inc., Lehman Commercial Paper, Inc., SunTrust Bank, and each of the several other banks and financial institutions from time to time party thereto, Lehman Brothers, Inc. and SunTrust Robinson Humphrey, as exclusive joint advisors, joint book managers and joint lead arrangers, and SunTrust Bank, as administrative agent.
10.2	First Amendment to Revolving Credit Agreement dated as of December 19, 2003, among Hughes Supply, Inc., the several banks and other financial institutions from time to time party thereto, and SunTrust Bank, as administrative agent.

EX-2.1

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

AMONG

HUGHES SUPPLY, INC.,

MRO MERGER CORP.,

FS EQUITY PARTNERS IV, L.P.,

CENTURY AIRCONDITIONING HOLDINGS, INC., DENNIS C. BEARDEN

AND

CENTURY MAINTENANCE SUPPLY, INC.

November 26, 2003

TABLE OF CONTENTS

1. Definitions.	1
2. The Merger and Conversion of Securities.	6
2.1 The Merger.	6
2.2 The Closing.	7
2.3 Deliveries at the Closing.	7
2.4 Effect on Capital Stock.	8
2.5 Purchase Price Adjustment.	8
2.6 Method of Payment.	11
3. Representations and Warranties Concerning the Transaction.	13
3.1 Representations and Warranties of the Significant Stockholders.	13
3.2 Representations and Warranties of the Buyer and the Merger Sub.	14
4. Representations and Warranties Concerning the Company and Its Subsidiaries.	14
4.1 Organization, Qualification, and Corporate Power.	15
4.2 Capitalization.	15
4.3 Noncontravention.	15
4.4 Brokers’ Fees.	16
4.5 Title to Assets.	16
4.6 Subsidiaries.	16
4.7 Financial Statements.	16
4.8 SEC Filings.	17
4.9 Events Subsequent to Most Recent Fiscal Year End.	17
4.10 Legal Compliance; Permits and Licenses.	19
4.11 Tax Matters.	20
4.12 Real Property.	21
4.13 Intellectual Property.	22
4.14 Tangible Assets.	24
4.15 Contracts.	24
4.16 Powers of Attorney.	25
4.17 Insurance.	25
4.18 Litigation.	26
4.19 Product Warranty.	26
4.20 Employees.	27
4.21 Employee Benefits.	27
4.22 Guaranties.	29
4.23 Environment, Health, and Safety.	29
4.24 Certain Business Relationships with the Company and Its Subsidiaries.	29
4.25 Customers and Suppliers.	29
4.26 Disclosure.	29
5. Pre-Closing Covenants.	30
5.1 General.	30
5.2 Notices and Consents.	30
5.3 Operation of Business.	30
5.4 Preservation of Business.	30
5.5 Access.	30
5.6 Notice of Developments.	31
5.7 Exclusivity.	32
5.8 Certain Financial Matters.	32

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5.9 Employee Benefits.	32
5.10 Approval of Merger and Optional Redemption.	33
5.11 Employment Agreements.	34
5.12 Amendment of Contract.	34
6. Post-Closing Covenants.	34
6.1 General.	34
6.2 Litigation Support.	34
6.3 Transition.	34
6.4 Non-Solicitation.	35
6.5 Provision of Financial Statements.	35
6.6 Certain Tax Matters.	35
6.7 Employee Matters.	37
7. Conditions to Obligation to Close.	37
7.1 Conditions to Obligation of the Buyer.	37
7.2 Conditions to Obligations of the Company and the Significant Stockholders.	38
8. Remedies for Breaches of This Agreement.	39
8.1 Survival of Representations and Warranties.	39
8.2 Indemnification Provisions for Benefit of the Buyer.	39
8.3 Indemnification Provisions for Benefit of the Significant Stockholders.	41
8.4 Matters Involving Third Parties.	41
8.5 Limitations.	42
8.6 Determination of Adverse Consequences.	43
8.7 Other Indemnification Provisions.	43
8.8 Directors’ and Officers’ Indemnification.	43
9. Termination.	44
9.1 Termination of Agreement.	44
9.2 Effect of Termination.	45
10. Miscellaneous.	45
10.1 Nature of Certain Obligations.	45
10.2 Press Releases and Public Announcements.	45
10.3 No Third-Party Beneficiaries.	45
10.4 Entire Agreement.	45
10.5 Succession and Assignment.	46
10.6 Counterparts.	46
10.7 Headings.	46
10.8 Notices.	46
10.9 Governing Law.	47
10.10 Amendments and Waivers.	48
10.11 Severability.	48
10.12 Expenses.	48
10.13 Construction.	48
10.14 Specific Performance.	49
10.15 Attorneys’ Fees.	49
10.16 Stockholders’ Representative.	49
10.17 Confidentiality.	50

Exhibit A=Option Holder Consent

Exhibit B=Letter of Transmittal

Exhibit C=Historical Financial Statements

Exhibit D=Form of Opinions of Counsel to the Company and the Significant Stockholders

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Schedule 1.1(a)=Net Assets Calculation

Schedule 2.6(c)=Certain Significant Stockholders

Schedule 5.2=Consents

Schedule 5.11=Persons subject to Non-Solicitation

Schedule 5.12=Terms of Amended Agreement

Significant Stockholder Disclosure Letter =Exceptions to the Significant Stockholders’ Representation and Warranties Concerning the Transaction

Buyer Disclosure Letter =Exceptions to the Buyer’s Representations and Warranties Concerning the Transaction

Company Disclosure Letter=Exceptions to Representations and Warranties Concerning the Company and Its Subsidiaries

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AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (the “Agreement”) is made and entered into to be effective as of November 26, 2003, by and among Hughes Supply, Inc., a Florida corporation (the “Buyer”), MRO Merger Corp., a Delaware corporation and wholly-owned subsidiary of the Buyer (the “Merger Sub”), FS Equity Partners IV, L.P., a Delaware limited partnership (the “Stockholders’ Representative”), Century Airconditioning Holdings, Inc. (“Century AC”), Dennis C. Bearden (“Bearden”) (the Stockholders’ Representative, Century AC and Bearden are collectively referred to as the “Significant Stockholders”), and Century Maintenance Supply, Inc., a Delaware corporation (the “Company”). The Buyer, the Merger Sub, the Company and the Significant Stockholders are referred to collectively herein as the “Parties.”

Background

The Significant Stockholders in the aggregate own more than 87% of the voting power of the Company Common Shares and all of the Company Preferred Shares. This Agreement contemplates a transaction in which the Buyer will acquire the Company by merging Merger Sub with and into the Company, with the Company as the Surviving Corporation in the Merger and the stockholders of the Company to receive the Purchase Price for such acquisition of the Company by the Buyer. The respective Boards of Directors of the Buyer, the Merger Sub, and the Company have approved this Agreement and the Merger on the terms and conditions set forth herein. Each Significant Stockholder has approved and bound itself to the terms of this Agreement.

Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, covenants and agreements herein contained, the Parties agree as follows:

Terms

1. Definitions.

“Adjustment Dispute Notice” has the meaning set forth in Section 2.5(c) below.

“Adverse Consequences” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, environmental investigation and remedial costs, dues, penalties, fines, costs, amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses.

“Affiliate” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act.

“Affiliated Group” means any affiliated group within the meaning of Code Sec. 1504 or any similar group defined under a similar provision of state, local or foreign law.

“Applicable Rate” means the corporate base rate of interest announced from time to time by SunTrust Bank.

“Basis” means any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction that forms or could form the basis for any specified consequence.

“Buyer” has the meaning set forth in the preface above.

“Buyer Disclosure Letter” has the meaning set forth in Section 3.2 below.

“Certificate” has the meaning set forth in Section 2.6 below.

“Certificate of Merger” has the meaning set forth in Section 2.1 below.

“Closing” has the meaning set forth in Section 2.2 below.

“Closing Date” has the meaning set forth in Section 2.2 below.

“Closing Date Net Assets Amount” has the meaning set forth in Section 2.5(b) below.

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Share Price” means the quotient determined by dividing the Preliminary Purchase Price by the sum of (i) the number of Company Common Shares outstanding immediately prior to the Closing plus (ii) the number of Company Common Shares issuable upon the exercise of the Company Options outstanding and vested immediately prior to or as of the Closing.

“Company” has the meaning set forth in the preface above.

“Company and Stockholder Transaction Expenses” means the costs and expenses (including legal, advisory and other fees and expenses) of the Company and the Stockholders’ Representative incurred in connection with this Agreement and the transactions contemplated hereby.

“Company Common Share” means any share of the Common Stock, par value $0.001 per share, of the Company.

“Company Disclosure Letter” has the meaning set forth in Section 4 below.

“Company Options” means all outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require the Company to issue, sell, or otherwise cause to become outstanding any of its capital stock, all of which are listed in Section 4.2 of the Company Disclosure Letter.

“Company Preferred Share” means any share of the Class B Preferred Stock, par value $0.001 per share, of the Company.

“Company SEC Reports” has the meaning set forth in Section 4.8 below.

“Company Shares” means the Company Common Shares and the Company Preferred Shares.

“Controlled Group of Corporations” has the meaning set forth in Code Sec. 1563.

“DGCL” shall mean the Delaware General Corporation Law, as amended through the date of this Agreement.

“Dissenting Stockholders” has the meaning set forth in Section 2.4(f) below.

“Effective Time” has the meaning set forth in Section 2.1 below.

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“Employee Benefit Plan” means any (a) nonqualified deferred compensation or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b) qualified defined contribution retirement plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or arrangement which is an Employee Pension Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe benefit plan or program.

“Employee Pension Benefit Plan” has the meaning set forth in ERISA Sec. 3(2).

“Employee Welfare Benefit Plan” has the meaning set forth in ERISA Sec. 3(1).

“Environmental Laws” means the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Emergency Planning and Community Right-to-Know Act of 1986, and the Resource Conservation and Recovery Act of 1976, each as amended, together with all other applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof) concerning pollution or protection of the environment, including laws relating to emissions, discharges, releases, or threatened releases of pollutants, contaminants, or chemical, industrial, hazardous, toxic materials or wastes, asbestos, PCBs, methylene chloride, trichloroethylene, 1,2-trans-dichloroethylene, or dioxins into ambient air, surface water, ground water, or lands or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.

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

“Estimated Closing Date Net Assets Amount” has the meaning set forth in Section 2.5(a) below.

“Excess Loss Account” has the meaning set forth in Treas. Reg. Section 1.1502-19.

“Fiduciary” has the meaning set forth in ERISA Sec. 3(21).

“Final Closing Date Balance Sheet” has the meaning set forth in Section 2.5(b) below.

“Final Closing Date Net Assets Amount” has the meaning set forth in Section 2.5(c) below.

“Financial Statement” has the meaning set forth in Section 4.7 below.

“GAAP” means United States generally accepted accounting principles as in effect from time to time.

“Hart-Scott-Rodino Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Indebtedness” means all indebtedness or other obligation of the Company or any of its Subsidiaries for borrowed money, whether current, short-term or long-term, secured or unsecured, capitalized lease obligations (excluding obligations over $50,000 per annum individually or $250,000 per annum in the aggregate), and all accrued interest, premiums, penalties and other obligations relating thereto.

“Indemnified Party” has the meaning set forth in Section 8.4 below.

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“Indemnifying Party” has the meaning set forth in Section 8.4 below.

“Indemnity Cap” has the meaning set forth in Section 8.5 below.

“Indemnity Deductible” has the meaning set forth in Section 8.5 below.

“Intellectual Property” means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations- in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all computer software (including data and related documentation), Internet web sites and domain names, (g) all other proprietary rights, and (h) all copies and tangible embodiments thereof (in whatever form or medium).

“Intercompany Transaction” has the meaning contemplated by Treas. Reg. Section 1.1502-13.

“Knowledge” means with respect to the Company, (i) the actual knowledge of any of Dennis Bearden, Joseph Semmer, Richard Penick and Dennis Teeter, in each case after reasonable investigation, and (ii) the actual knowledge of any of Mark J. Doran, William C. Johnson, Jon D. Ralph and J. Frederick Simmons, in each case without investigation.

“Letter of Transmittal” has the meaning set forth in Section 2.6(b) below.

“Liability” means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

“Material Adverse Effect” means a material adverse effect on the business, assets, financial condition or results of operations of the applicable Person or entity.

“Merger” has the meaning set forth in Section 2.1 below.

“Most Recent Balance Sheet” means the balance sheet contained within the Most Recent Financial Statements.

“Most Recent Financial Statements” has the meaning set forth in Section 4.7 below.

“Most Recent Fiscal Month End” has the meaning set forth in Section 4.7 below.

“Most Recent Fiscal Year End” has the meaning set forth in Section 4.7 below.

“Multiemployer Plan” has the meaning set forth in ERISA Sec. 3(37).

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“Net Assets Amount” means, as of a particular balance sheet date, an amount calculated as set forth in Schedule 1.1(a) attached hereto.

“Net Assets Holdback” has the meaning set forth in Section 2.5(f) below.

“Ordinary Course of Business” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

“Party” has the meaning set forth in the preface above.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or other entity, or a governmental entity (or any department, agency, or political subdivision thereof).

“Preferred Share Amount” means the product of (i) the number of Company Preferred Shares outstanding at the Closing Date multiplied by (ii) the Preferred Share Price.

“Preferred Share Price” means $106.625 (which is the redemption price, including the call premium in effect on the Closing Date) plus all accumulated and unpaid dividends thereon (as set forth in the Company’s certificate of designation for the Company Preferred Shares) for each Company Preferred Share.

“Preliminary Purchase Price” means $360,000,000, plus (i) the aggregate exercise price of the Company Options that are vested immediately prior to or as of the Closing, plus or minus (ii) the amount determined pursuant to the third or fourth sentences of Section 2.5(a) below, as applicable, minus (iii) the amount of any Indebtedness existing at Closing which is to be paid by the Buyer on behalf of the Company as described in Section 7.1(d) below, minus (iv) the Preferred Share Amount, minus (v) the Company and Stockholder Transaction Expenses.

“Prohibited Transaction” has the meaning set forth in ERISA Sec. 406 and Code Sec. 4975.

“Purchase Price” has the meaning set forth in Section 2.5(d) below.

“Reportable Event” has the meaning set forth in ERISA Sec. 4043.

“Reviewing Accountant” has the meaning set forth in Section 2.5(c) below.

“SEC” has the meaning set forth in Section 4.8 below.

“Securities Act” means the Securities Act of 1933, as amended.

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

“Security Interest” means any mortgage, pledge, lien, encumbrance, charge, restriction on transfer, conditional sales agreement, or other security interest, other than (a) mechanic’s, materialmen’s, and similar liens, (b) liens for Taxes not yet delinquent, (c) purchase money liens and liens securing rental payments under capital lease arrangements, (d) those shown on the face of or the footnotes to the Most Recent Financial Statements, (e) those which do not materially detract from the value or use of the property subject thereto, (f) those created by zoning laws and other land use restrictions that do not materially impair the use of the real property as currently conducted, (g)

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easements, rights of way, reservations, licenses, charges, liens and other similar encumbrances that do not materially impair the use of the real property as currently conducted, (h) liens and encumbrances affecting the fee interest of any leased real property, and (i) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money.

“Significant Stockholder Disclosure Letter” has the meaning set forth in Section 3.1 below.

“Subsidiary” means any corporation, partnership, limited liability company or other entity with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors or otherwise direct the management of the entity.

“Surviving Corporation” has the meaning set forth in Section 2.1(b) below.

“Target Net Assets Amount” means $77,422,000.

“Tax” means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Sec. 59A), customs duties, capital stock, franchise, escheat, abandoned property, unclaimed property, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Third Party Claim” has the meaning set forth in Section 8.4 below.

“Transfer” has the meaning set forth in Section 5.10(c) below.

2. The Merger and Conversion of Securities.

2.1 The Merger.

(a) On and subject to the terms and conditions of this Agreement, at the Effective Time the Merger Sub shall be merged with and into the Company (the “Merger”) in accordance with the DGCL. At the Closing a certificate of merger (the “Certificate of Merger”) shall be duly prepared, executed and acknowledged by the Merger Sub and the Company in accordance with the DGCL and shall be filed with the Secretary of State of Delaware. The Merger shall become effective upon the filing of the Certificate of Merger (or at such later time reflected in such Certificate of Merger as shall be agreed to by the Buyer and the Company). The date and time when the Merger shall become effective is hereinafter referred to as the “Effective Time.”

(b) At the Effective Time, the Merger Sub shall be merged with and into the Company, and the separate corporate existence of the Merger Sub shall cease, and the Company shall continue as the “Surviving Corporation” under the laws of the State of Delaware.

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(c) From and after the Effective Time, the Merger shall have the effects set forth in this Agreement and in Section 259 of the DGCL.

(d) At the Effective Time the certificate of incorporation of the Company shall survive the Merger but immediately shall be amended to amend and restate such certificate of incorporation so as to be identical to the certificate of incorporation of Merger Sub in its entirety at the Effective Time (with the addition of Article X of the certificate of incorporation of the Company); provided, however, that the name of the Surviving Corporation shall remain “Century Maintenance Supply, Inc.” unless and until the Buyer shall decide to further amend the Company’s certificate of incorporation to provide for another name. Notwithstanding the foregoing, the terms of the certificate of incorporation of the Surviving Corporation concerning directors’ and officers’ indemnification shall comply with the provisions of Section 8.8 below.

(e) The bylaws of the Merger Sub as in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation (with the addition of Section 8 of the bylaws of the Company) except that the name shown on such bylaws shall be “Century Maintenance Supply, Inc.” unless and until such bylaws thereafter shall be changed in accordance with the provisions thereof, the provisions of the certificate of incorporation of the Surviving Corporation and applicable law. Notwithstanding the foregoing, the terms of the bylaws of the Surviving Corporation concerning directors’ and officers’ indemnification shall comply with the provisions of Section 8.8 below.

(f) At the Effective Time, the directors of the Merger Sub shall be the directors of the Surviving Corporation, with each of such directors to hold office, subject to the applicable provisions of the DGCL and the certificate of incorporation and bylaws of the Surviving Corporation, until the next annual stockholders’ meeting of the Surviving Corporation and until their respective successors shall be duly elected or appointed and qualified. At the Effective Time, the officers of the Merger Sub shall, subject to the applicable provisions of the certificate of incorporation and bylaws of the Surviving Corporation, be the officers of the Surviving Corporation until their respective successors shall be duly elected or appointed and qualified.

2.2 The Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Holland & Knight LLP in Orlando, Florida, commencing at 10:00 a.m. local time on the second business day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective Parties will take at the Closing itself) or such other date, time and place as the Buyer and the Stockholders’ Representative may mutually determine (the “Closing Date”); provided, however, that the Parties shall use their commercially reasonable efforts to close prior to December 31, 2003, but no Party shall be obligated to close prior to December 31, 2003 unless the Buyer and the Stockholders’ Representative otherwise mutually agree in writing.

2.3 Deliveries at the Closing. At the Closing, (a) the Stockholders’ Representative and the Company will deliver to the Buyer the various certificates, instruments, and documents referred to in Section 7.1 below, (b) the Buyer will deliver to the Company the various certificates, instruments, and documents referred to in Section 7.2 below and (c) the Buyer will deliver to the Stockholders’ Representative by wire transfer of immediately available funds to the account designated by the Stockholders’ Representative the Net Assets Holdback and the Stockholder Holdback pursuant to Section 2.6 below.

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2.4 Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the Merger Sub, the Buyer, the Company or any holder of Company Shares or Company Options:

(a) All Company Preferred Shares and Company Common Shares owned by the Company as treasury stock immediately prior to the Effective Time shall, by virtue of the Merger, and without any action on the part of the holder thereof, no longer be outstanding, shall be canceled and retired without payment of any consideration therefor and shall cease to exist.

(b) Each issued and outstanding share of common stock of the Merger Sub shall be converted into and become one fully paid and nonassessable share of common stock of the Surviving Corporation.

(c) Each Company Preferred Share shall be converted into a right to receive, upon surrender of the certificate representing such Company Preferred Share, cash equal to the Preferred Share Price.

(d) Each Company Common Share shall be converted into a right to receive, upon surrender of the certificate representing such Company Common Share, cash equal to the Common Share Price.

(e) Each Company Option that is outstanding and vested immediately prior to or as of the Effective Time (including as a result of the acceleration of the vesting and exercisability of such Company Option pursuant to its terms), shall be cancelled in exchange for a single lump sum cash payment, to be paid by the Surviving Corporation as soon as practicable following the Closing upon its receipt of a release in the form of Exhibit A attached hereto, equal to the product of (i) the number of Company Common Shares subject to such Company Option and (ii) the excess, if any, of the Common Share Price at the Effective Time over the exercise price per share of such Company Option, subject to any required withholding of Taxes, and less such holder’s proportionate share of (A) the Net Assets Holdback and, (B) with respect to the holders of Company Shares listed in Schedule 2.6(c) attached hereto, the Stockholder Holdback (as defined in Section 2.6(c) below), in each case based on the sum of the number of Company Common Shares outstanding immediately prior to the Closing plus the number of Company Common Shares issuable upon the exercise of the Company Options outstanding and vested immediately prior to or as of the Closing.

(f) Notwithstanding anything in this Agreement to the contrary but only to the extent required by the DGCL, and subject to Section 5.10 below, Company Common Shares that are issued and outstanding immediately prior to the Effective Time and are held by Persons who comply with all the provisions of the DGCL concerning appraisal rights for the fair value of their Company Common Shares in connection with the Merger (the “Dissenting Stockholders”) shall not be converted into the right to receive the Common Share Price but shall become the right to receive such consideration as may be determined to be due such Dissenting Stockholder pursuant to Section 262 of the DGCL.

2.5 Purchase Price Adjustment. The Preliminary Purchase Price shall be subject to adjustment according to this Section 2.5.

(a) At least five (5) business days prior to the Closing Date, the Company shall deliver to the Buyer a good faith written estimate of the Net Assets Amount as of the Closing Date (the “Estimated Closing Date Net Assets Amount”), which shall be subject to

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the Buyer’s review. The Estimated Closing Date Net Assets Amount shall be prepared in accordance with Schedule 1.1(a) and GAAP and using the same accounting principles, practices and methodologies that were used to prepare the Most Recent Balance Sheet (and the Company’s delivery of the Estimated Closing Date Net Assets Amount to the Buyer shall include supporting schedules of the type prepared in connection with the Most Recent Balance Sheet). If the Estimated Closing Date Net Assets Amount is greater than the Target Net Assets Amount, the Preliminary Purchase Price shall be increased by such amount. If the Estimated Closing Date Net Assets Amount is less than the Target Net Assets Amount, the Preliminary Purchase Price shall be reduced by such amount. The Company will also deliver to the Buyer, at least five (5) business days prior to the Closing Date, a certificate setting forth an estimate of the Indebtedness and the Company and Stockholder Transaction Expenses as of the Closing Date.

(b) Within twenty (20) days after the Closing Date, the Buyer will prepare and deliver to the Stockholders’ Representative a balance sheet of the Company as of the Closing Date (the “Final Closing Date Balance Sheet”), including a calculation of the Net Assets Amount as of the Closing Date (the “Closing Date Net Assets Amount”). The Final Closing Date Balance Sheet shall be prepared in accordance with Schedule 1.1(a) and GAAP and using the same accounting principles, practices and methodologies that were used to prepare the Most Recent Balance Sheet.

(c) The Stockholders’ Representative shall have a period commencing upon delivery of the Final Closing Date Balance Sheet by Buyer and expiring ten (10) days after such delivery date to review the Final Closing Date Balance Sheet. The Stockholders’ Representative shall have full access during regular business hours and upon reasonable notice to all relevant books and records and employees of the Surviving Corporation to the extent necessary to complete its review of the Final Closing Date Balance Sheet in a manner not unreasonably interfering with the business of the Surviving Corporation. In the event the Stockholders’ Representative disputes the determination of the Closing Date Net Assets Amount, the Stockholders’ Representative shall, within ten (10) days after delivery of the Final Closing Date Balance Sheet, deliver a notice to the Buyer (the “Adjustment Dispute Notice”), setting forth in reasonable detail the component or components which are in dispute and the basis of such dispute. If the Stockholders’ Representative fails to deliver an Adjustment Dispute Notice to Buyer within ten (10) days after Buyer’s delivery of the Final Closing Date Balance Sheet, then the Significant Stockholders and the other holders of the Company Common Shares and the Company Options shall be bound by the calculation of the Closing Date Net Assets Amount that accompanied the Final Closing Date Balance Sheet prepared by Buyer, and the Closing Date Net Assets Amount shall be deemed to be the Final Closing Date Net Assets Amount, and any required payments shall be made pursuant to Section 2.5(e) below based on such Final Closing Date Net Assets Amount. If the Stockholders’ Representative delivers the Adjustment Dispute Notice within such ten (10) day period, then the Buyer and the Stockholders’ Representative will use reasonable efforts to resolve any such dispute within ten (10) days after receipt by the Buyer of the Adjustment Dispute Notice. If the Buyer and the Stockholders’ Representative fail to resolve any such dispute within ten (10) days after receipt by the Buyer of the Adjustment Dispute Notice, they shall submit the dispute to Ernst & Young LLP (the “Reviewing Accountant”) to review the Closing Date Net Assets Amount set forth on the Final Closing Date Balance Sheet. The Buyer and the Stockholders’ Representative shall make available to the Reviewing Accountant all work papers and all other information and material in their possession relating to the matters in the Adjustment Dispute Notice. The Reviewing Accountant shall be instructed to use its commercially reasonable efforts to deliver its determination as promptly as practicable after such submission of the dispute to the Reviewing Accountant.

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The Parties hereby expressly agree that the determination of the Reviewing Accountant shall be final and binding on the parties (absent fraud or manifest bad faith by the Reviewing Accountant). The Closing Date Net Assets Amount on the Final Closing Date Balance Sheet as determined by the Buyer (if not disputed), or as modified (if at all) by agreement of the Buyer and the Stockholders’ Representative or by decision of the Reviewing Accountant, shall be the “Final Closing Date Net Assets Amount”. Each Party shall bear its own expenses and the fees and expenses of its own representatives and experts, including its independent accountants, in connection with the preparation, review, dispute (if any) and final determination of the Final Closing Date Net Assets Amount, and such fees and expenses of the holders of the Company Shares shall be paid, if necessary, from the Net Assets Holdback. The costs, expenses and fees of the Reviewing Accountant shall be borne by the holders of the Company Shares, on the one hand, and the Buyer, on the other hand, based on the percentage which the portion of the contested amount not awarded to such Party bears to the amount actually contested by such Party (and which, in the case of the holders of the Company Shares, shall be paid, if necessary, from the Net Assets Holdback).

(d) Within ten (10) days after the Final Closing Date Net Assets Amount has become final and binding on the parties pursuant to Section 2.5(c), the Preliminary Purchase Price will be adjusted as follows (the Preliminary Purchase Price as so adjusted is referred to as the “Purchase Price”):

(i) If the Final Closing Date Net Assets Amount is greater than the sum of (A) the Estimated Closing Date Net Assets Amount plus (B) $100,000, the Buyer shall pay to the Stockholders’ Representative (for the benefit of the holders of the Company Common Shares and Company Options), by wire transfer in immediately available funds to the account designated by the Stockholders’ Representative, an amount equal to such excess, which amount will be allocated (after reducing such amount by the fees and expenses incurred by such holders pursuant to the last two sentences of Section 2.5(c) above) among and distributed by the Stockholders’ Representative to the holders of the Company Common Shares and Company Options in proportion to their respective holdings of the Company Common Shares (calculated on an as-converted basis) as of the Closing.

(ii) If the Final Closing Date Net Assets Amount is less than the difference between (A) Estimated Closing Date Net Assets Amount minus (B) $100,000, the Stockholders’ Representative shall pay to the Buyer, by wire transfer in immediately available funds to the accounts designated by the Buyer, an amount equal to such deficit (which shall not be limited to the Net Assets Holdback).

(e) Any amounts payable pursuant to this Section 2.5 will bear interest from and including the Closing Date to but excluding the date of payment at the Applicable Rate.

(f) The Stockholders’ Representative agrees that it shall retain, and not distribute to its general or limited partners, or to the holders of the Company Common Shares or the Company Options, $3,000,000 of the Preliminary Purchase Price (the “Net Assets Holdback”) until the Final Closing Date Net Assets Amount has become final and binding on the Parties pursuant to Section 2.5(c) and all amounts required to be paid by the Stockholders’ Representative or the Buyer pursuant to Section 2.5(d) have been paid in full. The Stockholders’ Representative will pay any Company and Stockholder Transaction Expenses exceeding the estimate thereof from the Net Assets Holdback and/or the Stockholder Holdback.

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2.6 Method of Payment.

(a) The Buyer shall act as its own paying agent under this Agreement for purposes of distributing the Preliminary Purchase Price and the Preferred Share Amount as contemplated hereby. On the Closing Date the Buyer shall segregate (and, in the case of the Company Options, cause the Surviving Corporation to segregate) into a separate account monies in an amount equal to the Preliminary Purchase Price and the Preferred Share Amount and shall hold the same for the holders of the Company Shares and the Company Options under this Agreement.

(b) Promptly after the date of this Agreement, and from time to time following the exercise of any Company Options prior to the Effective Time, the Company shall send to each holder of Company Common Shares a letter of transmittal from such holder to the Buyer in substantially the form of Exhibit B attached hereto (the “Letter of Transmittal”) stating:

(i) that payment of the Common Share Price or Preferred Share Price, as applicable, payable to such holder shall be made against and only upon delivery to the Buyer by such holder of the certificates which immediately prior to the Effective Time represented outstanding Company Shares (the “Certificates”) owned by such Person;

(ii) that risk of loss and title to the Certificates and other items required to be delivered by the holder shall pass only upon delivery of such items to the Buyer, and that all such items the form of which is not attached hereto shall be in customary form, including such customary provisions as the Surviving Corporation or the Buyer reasonably may specify in its written instructions for use by the holders of the Company Shares in effecting the surrender to the Buyer of such items.

(c) Following the execution and delivery to the Buyer of a Letter of Transmittal by a holder of Company Shares accompanied by the Certificates, at the Closing the Buyer shall pay (or, if such execution and delivery occurs after the Closing, the Buyer shall pay within three (3) business days) by wire transfer of immediately available funds to the account designated by the holder of Company Shares in its Letter of Transmittal the Common Share Price or Preferred Share Price, as applicable, deliverable in respect thereof, less (i) such holder’s proportionate share of the Net Assets Holdback (based on the sum of the number of Company Common Shares outstanding immediately prior to the Closing plus the number of Company Common Shares issuable upon the exercise of the Company Options outstanding and vested immediately prior to or as of the Closing), which amount shall be delivered at the Closing by the Buyer to the Stockholders’ Representative by wire transfer of immediately available funds to the account designated by the Stockholders’ Representative to hold in accordance with Section 2.5(f) above and (ii) with respect to the holders of Company Shares listed in Schedule 2.6(c) attached hereto, such holder’s share of $8,890,051 (or such different amount as is requested in writing by the Stockholders’ Representative from the Buyer) (the “Stockholder Holdback”), which share of such amount shall be calculated using the percentages set forth next to each such holder’s name in Schedule 2.6(c), and which amount shall be delivered at the Closing by the Buyer to the Stockholders’ Representative by wire transfer of immediately available funds to the account designated by the Stockholders’ Representative. Until so surrendered, each Certificate shall be deemed, for all corporate purposes, to evidence only the right to receive upon such surrender the amount to which such Person is entitled pursuant to this Section 2. No interest shall be paid or accrued in respect of any cash payments made hereunder.

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(d) If the Common Share Price or Preferred Share Price (or any portion thereof) is to be delivered to a Person other than the Person in whose name the Certificates surrendered in exchange therefor are registered, it shall be a condition to the payment of such amount that the Certificates so surrendered shall be properly endorsed or accompanied by appropriate stock powers and otherwise in proper form for transfer, that such transfer otherwise be proper and that the Person requesting such transfer pay to the Buyer any transfer or other Taxes payable by reason of the foregoing or establish to the satisfaction of the Buyer that such Taxes have been paid or are not required to be paid.

(e) At and after the Effective Time, each holder of a Certificate representing Company Shares shall cease to have any rights as a stockholder of the Company, except for the right to surrender its Certificate in exchange for payment of the Common Share Price or Preferred Share Price, as applicable. No transfer of Company Shares shall be made on the stock transfer books of the Surviving Corporation. Certificates presented to the Surviving Corporation after the Effective Time shall be canceled and exchanged for the Common Share Price or Preferred Share Price, as applicable, as provided in this Section 2. At the close of business on the day of the Effective Time the stock ledger of the Company with respect to Company Shares shall be closed.

(f) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed, the Buyer shall issue in exchange for such lost, stolen or destroyed Certificate the amount deliverable in respect thereof as determined in accordance with this Section 2, provided that the Person to whom such amount is paid shall, as a condition precedent to the payment thereof, indemnify the Surviving Corporation in a manner satisfactory to it against any claim that may be made against the Surviving Corporation with respect to the Certificate claimed to have been lost, stolen or destroyed.

(g) The Buyer shall make no distribution of a Dissenting Stockholder’s Common Share Price unless and until the validity of such claim as a Dissenting Stockholder (subject to Section 5.10 below) has been determined and the fair value of a Dissenting Stockholder’s Company Common Shares has been determined for any Dissenting Stockholder in the manner contemplated by Section 262 of the DGCL. At that time, the Buyer shall pay to the Buyer or the Surviving Corporation from the segregated fund established under Section 2.6(a) above the Common Share Price for the Dissenting Stockholder’s Company Common Shares and, subject to Section 8.2(e) below, the Buyer or the Surviving Corporation shall pay from its own funds the fair value of such Dissenting Stockholder’s Company Common Shares.

(h) Any portion of the segregated Preliminary Purchase Price or Preferred Share Amount on deposit with the Buyer that remains undistributed for one year after the Effective Time shall be delivered to or as directed by Buyer, upon demand, and any holders of Certificates who have not theretofore complied with this Section 2 shall thereafter look only to Buyer (subject to abandoned property, escheat and other similar legal requirements) as a general creditor for payment of their claim for the same, with such sums to be paid only upon compliance by such holder of Company Shares with all conditions to payment of the same specified in this Section 2.

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3. Representations and Warranties Concerning the Transaction.

3.1 Representations and Warranties of the Significant Stockholders. Each of the Significant Stockholders represents and warrants to the Buyer, severally and not jointly, that the statements contained in this Section 3.1 are correct and complete as of the date of this Agreement with respect to himself or itself, except as set forth in the disclosure letter delivered by Significant Stockholders to Buyer concurrently with the execution and delivery of this Agreement (the “Significant Stockholder Disclosure Letter”).

(a) Organization of Certain Significant Stockholder. If the Significant Stockholder is an entity, the Significant Stockholder is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization.

(b) Authorization of Transaction. The Significant Stockholder has full power and authority (including, if the Significant Stockholder is a corporation, full corporate power and authority) to execute and deliver this Agreement and to perform his or its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Significant Stockholder, enforceable in accordance with its terms and conditions, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to creditors’ rights generally and general equitable principles. The Significant Stockholder need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement, other than the filings required to be made by the Stockholders’ Representative and the Buyer under the Hart-Scott-Rodino Act.

(c) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Significant Stockholder is subject or, if the Significant Stockholder is a corporation, any provision of its charter or bylaws or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice or consent under any material agreement, contract, lease, license, instrument, or other arrangement to which the Significant Stockholder is a party or by which he or it is bound or to which any of his or its assets is subject, other than termination of the waiting period under the Hart-Scott-Rodino Act.

(d) Brokers’ Fees. The Significant Stockholder has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Buyer could become liable or obligated.

(e) Company Shares. The Significant Stockholder holds of record and owns beneficially the number of Company Shares set forth next to his or its name in Section 4.2 of the Company Disclosure Letter, free and clear of any restrictions on transfer (other than any restrictions under the Securities Act and state securities laws), Taxes, Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands. The Significant Stockholder is not a party to any option, warrant, purchase right, or other contract or commitment that could require the Significant Stockholder to sell, transfer, or otherwise dispose of any capital stock of the Company (other than this Agreement). The Significant Stockholder is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of any capital stock of the Company.

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3.2 Representations and Warranties of the Buyer and the Merger Sub. The Buyer and the Merger Sub represent and warrant to the Company and the Significant Stockholders, jointly and severally, that the statements contained in this Section 3.2 are correct and complete as of the date of this Agreement, except as set forth in the disclosure letter delivered by Buyer to the Stockholders’ Representative concurrently with the execution and delivery of this Agreement (the “Buyer Disclosure Letter”).

(a) Organization. The Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Florida. The Merger Sub is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware.

(b) Authorization of Transaction. Each of the Buyer and the Merger Sub has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of each of the Buyer and the Merger Sub, enforceable in accordance with its terms and conditions, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to creditors’ rights generally and general equitable principles. Neither the Buyer nor the Merger Sub need give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement, other than the filings required to be made by the Stockholders’ Representative and the Buyer under the Hart-Scott-Rodino Act.

(c) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which any of the Buyer or the Merger Sub is subject or any provision of its charter or bylaws or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice or consent under any material agreement, contract, lease, license, instrument, or other arrangement to which any of the Buyer or the Merger Sub is a party or by which it is bound or to which any of its assets is subject, other than termination of the waiting period under the Hart-Scott-Rodino Act.

(d) Brokers’ Fees. Neither the Buyer nor the Merger Sub has any Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which any Significant Stockholder could become liable or obligated.

(e) Investment. The Buyer is not acquiring the Company Shares with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act.

(f) Financing. The Buyer has available, or has firm financing commitments to provide, the funds necessary to pay the Purchase Price and the Preferred Share Amount as contemplated by this Agreement.

4. Representations and Warranties Concerning the Company and Its Subsidiaries. The Company represents and warrants to the Buyer that the statements contained in this Section 4 are correct and complete as of the date of this Agreement, except as set forth in the disclosure letter

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delivered by the Company to the Buyer concurrently with the execution and delivery of this Agreement (the “Company Disclosure Letter”). Nothing in the Company Disclosure Letter shall be deemed adequate to disclose an exception to a representation or warranty made herein, however, unless the Company Disclosure Letter identifies the exception with reasonable particularity and describes the relevant facts in reasonable detail. The Company Disclosure Letter will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Section 4.

4.1 Organization, Qualification, and Corporate Power. Each of the Company and its Subsidiaries is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation. Each of the Company and its Subsidiaries is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required, except where the failure to be in good standing or qualified would not have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. Each of the Company and its Subsidiaries has full corporate power and authority and all material licenses, permits, and authorizations necessary to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. The Company has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms and conditions, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to creditors’ rights generally and general equitable principles. Section 4.1 of the Company Disclosure Letter lists the directors and officers of each of the Company and its Subsidiaries. The Company has delivered to the Buyer correct and complete copies of the charter and bylaws of each of the Company and its Subsidiaries (as amended to date). The minute books (containing the records of meetings of the stockholders, the board of directors, and any committees of the board of directors), the stock certificate books, and the stock record books of each of the Company and its Subsidiaries are correct and complete in all material respects, and no meetings of the stockholders, board of directors or any committees of the board of directors have been held for which minutes have not been prepared and are not contained in such minute books. None of the Company and its Subsidiaries is in default under or in violation of any provision of its charter or bylaws.

4.2 Capitalization. As of the date of this Agreement, the entire authorized capital stock of the Company consists of (a) 15,000,000 Company Common Shares, of which 12,190,498 Company Common Shares are issued and outstanding, and (b) 2,000,000 shares of preferred stock, of which 227,363.7169 Company Preferred Shares are issued and outstanding. All of the issued and outstanding Company Shares have been duly authorized, are validly issued, fully paid, and nonassessable, and are held of record as set forth in Section 4.2 of the Company Disclosure Letter. Except as set forth in Section 4.2 of the Company Disclosure Letter, there are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require the Company to issue, sell, or otherwise cause to become outstanding any of its capital stock. None of the capital stock of the Company was issued in violation of any applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder). There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to the Company. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the capital stock of the Company.

4.3 Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (a) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which any of the Company and its Subsidiaries is subject or any provision of the charter or bylaws of any of the Company and its Subsidiaries or (b) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in

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any party the right to accelerate, terminate, modify, or cancel, or require any notice or consent under any agreement, contract, lease, license, instrument, or other arrangement to which any of the Company and its Subsidiaries is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets), other than termination of the waiting period under the Hart-Scott-Rodino Act, as well as such violations, conflicts, defaults, accelerations, rights, notices or consents under subparagraphs (a) or (b) which would not result in a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole, or impede the ability of the Company and the Significant Stockholders to consummate the transactions contemplated by this Agreement. None of the Company and its Subsidiaries needs to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement, other than the filings required to be made by the Stockholders’ Representative or the Company and the Buyer under the Hart-Scott-Rodino Act, as well as such other notices, filings, authorizations, consents or approvals, the absence of which would not have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole, or impede the ability of the Company and the Significant Stockholders to consummate the transactions contemplated by this Agreement.

4.4 Brokers’ Fees. None of the Company and its Subsidiaries has any Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

4.5 Title to Assets. The Company and its Subsidiaries have good and marketable title to the material properties and assets used by them, located on their premises, or shown on the Most Recent Balance Sheet or acquired after the date thereof, free and clear of all Security Interests, except for properties and assets disposed of in the Ordinary Course of Business since the date of the Most Recent Balance Sheet.

4.6 Subsidiaries. Section 4.6 of the Company Disclosure Letter sets forth for each Subsidiary of the Company (a) its name and jurisdiction of incorporation, (b) the number of shares of authorized capital stock of each class of its capital stock, (c) the number of issued and outstanding shares of each class of its capital stock, the names of the holders thereof, and the number of shares held by each such holder, and (d) the number of shares of its capital stock held in treasury. All of the issued and outstanding shares of capital stock of each Subsidiary of the Company have been duly authorized and are validly issued, fully paid, and nonassessable. One of the Company and its Subsidiaries holds of record and owns beneficially all of the outstanding shares of each Subsidiary of the Company, free and clear of any restrictions on transfer (other than restrictions under the Securities Act and state securities laws), Taxes, Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands. There are no outstanding or authorized options, warrants, purchase rights, conversion rights, exchange rights, or other contracts or commitments that could require any of the Company and its Subsidiaries to sell, transfer, or otherwise dispose of any capital stock of any of its Subsidiaries or that could require any Subsidiary of the Company to issue, sell, or otherwise cause to become outstanding any of its own capital stock. There are no outstanding stock appreciation, phantom stock, profit participation, or similar rights with respect to any Subsidiary of the Company. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of any capital stock of any Subsidiary of the Company. None of the Company and its Subsidiaries controls directly or indirectly or has any direct or indirect equity participation in any corporation, partnership, trust, or other business association which is not a Subsidiary of the Company.

4.7 Financial Statements. Attached hereto as Exhibit C are the following financial statements (collectively the “Financial Statements”): (a) audited consolidated balance

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sheets and statements of income, changes in stockholders’ equity, and cash flow as of and for the fiscal years ended December 31, 2000, December 31, 2001, and December 31, 2002 (the “Most Recent Fiscal Year End”) for the Company and its Subsidiaries; and (b) unaudited consolidated balance sheets and statements of income, changes in stockholders’ equity, and cash flow (the “Most Recent Financial Statements”) as of and for the nine months ended September 30, 2003 (the “Most Recent Fiscal Month End”) for the Company and its Subsidiaries. Prior to the Closing, the Company will deliver to the Buyer, within twenty (20) days after each month end, copies of such monthly financial statements as it customarily prepares in the Ordinary Course of Business. The Financial Statements (including the notes thereto) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby, present fairly in all material respects the financial condition of the Company and its Subsidiaries as of such dates and the results of operations of the Company and its Subsidiaries for such periods and are consistent with the books and records of the Company and its Subsidiaries (which books and records are materially correct and complete); provided, however, that the Most Recent Financial Statements are subject to normal year-end adjustments (which will not be material individually or in the aggregate) and lack footnotes and other presentation items. To the Knowledge of the Company, since December 31, 2002 there has not been any material change in the Company’s internal controls.

4.8 SEC Filings. The Company has filed all required registration statements, prospectuses, reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated by reference) required to be filed by it with the Securities and Exchange Commission (“SEC”) since January 1, 1998. The Company has delivered or made available to the Buyer all such registration statements, prospectuses, reports, schedules, forms, statements and other documents in the form filed with the SEC. All registration statements, prospectuses, reports, schedules, forms, statements and other documents (including those that the Company may file subsequent to the date hereof), as amended, that the Company has filed with the SEC since January 1, 1998 are referred to herein as the “Company SEC Reports”. As of their respective dates, the Company SEC Reports (a) were prepared in accordance and complied in all material respects with the requirements of the Securities Act or the Securities Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Company SEC Reports and (b) did not at the time they were filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except to the extent corrected prior to the date hereof by a subsequently filed Company SEC Report. None of the Company’s Subsidiaries is required to file any forms, reports or other documents with the SEC.

4.9 Events Subsequent to Most Recent Fiscal Year End. Since the Most Recent Fiscal Year End, there has not been any Material Adverse Effect on the Company and its Subsidiaries, taken as a whole, and no event has occurred that may result in such a Material Adverse Effect. Without limiting the generality of the foregoing, since that date the Company and its Subsidiaries have conducted their respective businesses only in the Ordinary Course of Business, and:

(a) none of the Company and its Subsidiaries has sold, leased, transferred, or assigned any of its assets, tangible or intangible, other than for a fair consideration in the Ordinary Course of Business;

(b) none of the Company and its Subsidiaries has entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) either involving more than $200,000 or outside the Ordinary Course of Business, other than those relating to purchases or sales of inventory and the renewal of personal or real property leases entered into in the Ordinary Course of Business;

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(c) no party (including any of the Company and its Subsidiaries) has accelerated, terminated, modified, or cancelled any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) involving more than $200,000 to which any of the Company and its Subsidiaries is a party or by which any of them is bound;

(d) none of the Company and its Subsidiaries has imposed any Security Interest upon any of its assets, tangible or intangible;

(e) none of the Company and its Subsidiaries has made any capital investment in, any loan to, or any acquisition of the securities or assets of (including by merger or consolidation), any other Person (or series of related capital investments, loans, and acquisitions) either involving more than $100,000 or outside the Ordinary Course of Business;

(f) none of the Company and its Subsidiaries has issued any note, bond, or other debt security or created, incurred, assumed, or guaranteed any indebtedness for borrowed money or capitalized lease obligation;

(g) none of the Company and its Subsidiaries has delayed or postponed the payment of accounts payable and other Liabilities outside the Ordinary Course of Business or accelerated or accepted the prepayment of any notes or accounts receivable outside the Ordinary Course of Business;

(h) none of the Company and its Subsidiaries has cancelled, compromised, waived, or released any right or claim (or series of related rights and claims) outside the Ordinary Course of Business;

(i) none of the Company and its Subsidiaries has granted any license or sublicense of any rights under or with respect to any Intellectual Property;

(j) there has been no change made or authorized in the charter or bylaws of any of the Company and its Subsidiaries;

(k) none of the Company and its Subsidiaries has issued, sold, or otherwise disposed of any of its capital stock, or granted any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any of its capital stock;

(l) none of the Company and its Subsidiaries has declared, set aside, or paid any dividend or made any distribution with respect to its capital stock (whether in cash or in kind) or redeemed, purchased, or otherwise acquired any of its capital stock;

(m) none of the Company and its Subsidiaries has experienced any material damage, destruction, or loss (whether or not covered by insurance) to its property;

(n) none of the Company and its Subsidiaries has made any loan to, or entered into any other transaction with, any of its directors, officers, and employees outside the Ordinary Course of Business;

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(o) none of the Company and its Subsidiaries has entered into any employment contract or collective bargaining agreement, written or oral, or modified the terms of any existing such contract or agreement;

(p) none of the Company and its Subsidiaries has granted any increase in the base compensation of any of its directors, officers, and employees outside the Ordinary Course of Business;

(q) none of the Company and its Subsidiaries has adopted, amended, modified, or terminated any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken any such action with respect to any other Employee Benefit Plan);

(r) none of the Company and its Subsidiaries has made any other change in employment terms for any of its directors, officers, and employees outside the Ordinary Course of Business;

(s) none of the Company and its Subsidiaries has made or pledged to make any charitable or other capital contribution outside the Ordinary Course of Business;

(t) there has not been any change in accounting methods, practices or policies followed by the Company and its Subsidiaries (other than as required by GAAP), any increase in reserves or any revaluation of any of their assets from those in effect during the past fiscal year;

(u) there has not been any other material occurrence, event, incident, action, failure to act, or transaction outside the Ordinary Course of Business involving any of the Company and its Subsidiaries; and

(v) none of the Company and its Subsidiaries has committed to any of the foregoing.

4.10 Legal Compliance; Permits and Licenses.

(a) Each of the Company, its Subsidiaries, and their respective predecessors and Affiliates has complied in all material respects with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof), and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against, and no notice, correspondence, inquiry or other communication has been received by, any of them alleging any failure to so comply.

(b) The Company and its Subsidiaries have all material permits, licenses, orders, franchises and approvals of all federal, state, local and foreign governments (and all agencies thereof) necessary or desirable for the operation of the businesses of the Company and its Subsidiaries as currently conducted. All such permits, licenses, orders, franchise and approvals are in full force and effect, and no suspension or cancellation of any of such items are pending or, to the Knowledge of the Company, threatened.

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4.11 Tax Matters.

(a) Each of the Company and its Subsidiaries has filed all Tax Returns that it was required to file. All such Tax Returns were correct and complete in all material respects. All Taxes owed by any of the Company and its Subsidiaries (whether or not shown on any Tax Return) have been or will be paid prior to the Closing or accrued as a Tax liability or payable or as part of the Tax reserve on the Final Closing Date Balance Sheet. None of the Company and its Subsidiaries currently is the beneficiary of any extension of time within which to file any Tax Return. Since December 31, 1998, no claim has been made by an authority in a jurisdiction where any of the Company and its Subsidiaries does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Security Interests on any of the assets of any of the Company and its Subsidiaries that arose in connection with any failure (or alleged failure) to pay any Tax, except for any Tax, the payment of which is not delinquent and not subject to penalties.

(b) Each of the Company and its Subsidiaries has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

(c) There is no dispute or claim concerning any Tax Liability of any of the Company and its Subsidiaries either (i) claimed or raised by any authority in writing delivered to any of the Company and its Subsidiaries or (ii) as to which the Company has Knowledge based upon personal contact with any agent of such authority. Section 4.11 of the Company Disclosure Letter lists all federal, state, local, and foreign income Tax Returns filed with respect to any of the Company and its Subsidiaries for taxable periods ended on or after December 31, 2000, indicates those Tax Returns that have been audited, and indicates those Tax Returns that currently are the subject of audit. The Company has delivered or made available to the Buyer correct and complete copies of all federal income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by any of the Company and its Subsidiaries for all periods beginning after December 31, 1998.

(d) None of the Company and its Subsidiaries has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(e) None of the Company and its Subsidiaries has filed a consent under Code Sec. 341(f) concerning collapsible corporations. None of the Company and its Subsidiaries has made any payments, is obligated to make any payments, or is a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Code Sec. 280G. None of the Company and its Subsidiaries has been a United States real property holding corporation within the meaning of Code Sec. 897(c)(2) during the applicable period specified in Code Sec. 897(c)(1)(A)(ii). Each of the Company and its Subsidiaries has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Code Sec. 6662. None of the Company and its Subsidiaries is a party to any Tax allocation or sharing agreement. None of the Company and its Subsidiaries (A) has been a member of an Affiliated Group filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company) or (B) has any Liability for the Taxes of any Person (other than any of the Company and its Subsidiaries) under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

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(f) The unpaid Taxes of the Company and its Subsidiaries (i) did not, as of the Most Recent Fiscal Month End, exceed the payable or Liability for Taxes plus the reserve for Tax Liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) in each case as set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto) and (ii) do not exceed that payable or Liability for Taxes plus that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Company and its Subsidiaries in filing their Tax Returns.

(g) The Company has made all necessary disclosures required by Treas. Reg. § 1.6011-4. The Company has not been a participant in a “listed transaction” as defined in Treas. Reg. § 1.6011-4(b)(3).

4.12 Real Property.

(a) Neither the Company nor any Subsidiary owns any real property.

(b) Section 4.12(b) of the Company Disclosure Letter lists and describes briefly all real property leased or subleased to any of the Company and its Subsidiaries. The Company and its Subsidiaries have a valid leasehold interest in such real property, free and clear of all Security Interests. The Company has delivered to, or made available for review by, the Buyer correct and complete copies of the leases and subleases listed in Section 4.12(b) of the Company Disclosure Letter (as amended to date). With respect to each lease and sublease listed in Section 4.12(b) of the Company Disclosure Letter:

(i) the lease or sublease is legal, valid, binding, enforceable, and in full force and effect;

(ii) subject to obtaining any necessary consents identified in Section 4.12(b)(ii) of the Company Disclosure Letter, the lease or sublease is valid and will continue to be legal, valid, binding, enforceable, and in full force and effect on the terms and conditions set forth in said leases or subleases following the consummation of the transactions contemplated hereby;

(iii) no party to the lease or sublease is in material breach or default, nor has the Company or any of its Subsidiaries, in its capacity as a tenant or subtenant under a lease or sublease, received written notice of any material breach, default, or event which, with the giving of time or passing of notice would constitute an event of default (including in breach or default of any written notification to the landlord thereunder of storage and/or use of hazardous materials on the leased premises to the extent required by applicable lease or sublease provisions), and to the Knowledge of the Company, no event has occurred which, with notice or lapse of time, would constitute a material breach or default or permit termination, modification, or acceleration thereunder, except for any such breaches or defaults which would not have a Material Adverse Effect, whether individually or in the aggregate, as to the lease or sublease;

(iv) there are no disputes, oral agreements, or forbearance programs in effect which would have a Material Adverse Effect, whether individually or in the aggregate, as to the lease or sublease;

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(v) to the Knowledge of the Company, with respect to each sublease, the representations and warranties set forth in subsections (i) through (iv) above are true and correct with respect to any matter which would have a Material Adverse Effect, whether individually or in the aggregate, to the underlying lease;

(vi) there are no pending or, to the Knowledge of the Company, threatened material condemnation proceedings, lawsuits, or administrative actions which would have a Material Adverse Effect, whether individually or in the aggregate, relating to the property where the facility is leased or subleased or other matters which would have a Material Adverse Effect, whether individually or in the aggregate, on the current use, occupancy, or value thereof; and

(vii) neither the Company nor any Subsidiary, in its capacity as a tenant or subtenant under a lease or sublease, has received any written notice from the landlord or sublandlord, as applicable, that there are any hazardous materials stored and/or used on the leased premises in violation of the terms of the lease or sublease.

4.13 Intellectual Property.

(a) The Company and its Subsidiaries own or have the right to use pursuant to license, sublicense, agreement, or permission all material Intellectual Property necessary for the operation of the businesses of the Company and its Subsidiaries as currently conducted. Each such item of Intellectual Property owned or used by any of the Company and its Subsidiaries immediately prior to the Closing hereunder will be owned or available for use by the Company or the Subsidiary on identical terms and conditions immediately subsequent to the Closing hereunder. Each of the Company and its Subsidiaries has taken all necessary action to maintain and protect each such item of Intellectual Property that it owns or uses.

(b) To the Knowledge of the Company, none of the Company and its Subsidiaries has infringed upon or misappropriated any Intellectual Property rights of third parties, and none of the Company and its Subsidiaries has received, in the five (5) years preceding the date of this Agreement, any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or violation (including any claim that any of the Company and its Subsidiaries must license or refrain from using any Intellectual Property rights of any third party). To the Knowledge of the Company, in the five (5) years preceding the date of this Agreement, no third party has infringed upon or misappropriated any Intellectual Property rights of any of the Company and its Subsidiaries other than those listed in Section 4.13(b) of the Company Disclosure Letter.

(c) Section 4.13(c) of the Company Disclosure Letter identifies each issued or pending patent, issued or pending copyright registration, pending trademark application or trademark registration, if any, which has been made by or issued to any of the Company and its Subsidiaries, and identifies each license, agreement, or other permission which any of the Company and its Subsidiaries has granted to any third party with respect to any of its material Intellectual Property (together with any exceptions). The Company has delivered to the Buyer correct and complete copies of all such applications and registrations, licenses, agreements, and permissions (as amended to date) and have made available to the Buyer correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such item. Section 4.13(c) of the Company Disclosure Letter also identifies each trade name or unregistered trademark owned and currently being

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used by any of the Company and its Subsidiaries in connection with any of its businesses. With respect to each item of Intellectual Property required to be identified in Section 4.13(c) of the Company Disclosure Letter:

(i) the Company’s and its Subsidiaries’ right, title, and interest in and to the items are free and clear of any Security Interest, undisclosed license, or other restriction;

(ii) the item is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge of infringement or misappropriation;

(iii) no action, suit, proceeding, hearing, investigation, charge of infringement or misappropriation, complaint, claim, or demand is currently pending and, to the Knowledge of the Company, no action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand has been threatened in the preceding twelve (12) months which challenges the legality, validity, enforceability, use, or ownership of the item; and

(iv) there are no undisclosed indemnity obligations of the Company or any of its Subsidiaries that have not been disclosed to the Buyer for or against any interference, infringement or misappropriation.

(d) Section 4.13(d) of the Company Disclosure Letter identifies each item of material Intellectual Property that any third party owns and that any of the Company and its Subsidiaries uses pursuant to license, sublicense, agreement, or permission. The Company has delivered to the Buyer correct and complete copies of all such licenses, sublicenses, agreements, and permissions (as amended to date). To the Knowledge of the Company, with respect to each item of Intellectual Property required to be identified in Section 4.13(d) of the Company Disclosure Letter:

(i) the license, sublicense, agreement, or permission covering the item is legal, valid, binding, enforceable, and in full force and effect;

(ii) the license, sublicense, agreement, or permission will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms and conditions following the Closing;

(iii) no party to the license, sublicense, agreement, or permission is in breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default or permit termination, modification, or acceleration thereunder;

(iv) no party to the license, sublicense, agreement, or permission has repudiated any provision thereof;

(v) with respect to each sublicense, the representations and warranties set forth in subsections (i) through (iv) above are true and correct with respect to the underlying license;

(vi) the underlying item of Intellectual Property is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge;

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(vii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to the Knowledge of the Company, is threatened which challenges the legality, validity, or enforceability of the underlying item of Intellectual Property; and

(viii) none of the Company and its Subsidiaries has granted any sublicense or similar right with respect to the license, sublicense, agreement, or permission.

(e) To the Knowledge of the Company, no Intellectual Property owned or used by the Company is currently interfering with, infringing upon, misappropriating or otherwise in conflict with, any Intellectual Property rights of third parties as a result of the continuing operation of its business as currently conducted.

4.14 Tangible Assets. The Company and its Subsidiaries own or lease all buildings, machinery, equipment, and other tangible assets necessary for the conduct of their businesses as currently conducted. The Company and its Subsidiaries also have vehicular access to and access to services for all such tangible real property assets. Such tangible assets have been maintained in the Ordinary Course of Business, are in good operating condition and repair in the aggregate (subject to normal wear and tear), and are suitable for the purposes for which it currently is used. Neither the Company nor its Subsidiaries has received any written notice that any facility lacks legal access to those services necessary for the conduct of their businesses as currently conducted.

4.15 Contracts. Section 4.15 of the Company Disclosure Letter lists the following contracts and other agreements to which any of the Company and its Subsidiaries is a party:

(a) any agreement (or group of related agreements) for the lease of personal property to or from any Person providing for lease payments in excess of $200,000 per annum;

(b) any agreement (or group of related agreements) for the purchase or sale of raw materials, commodities, supplies, products, or other personal property, or for the furnishing or receipt of services, the performance of which will extend over a period of one year or more (and is entered into other than in the Ordinary Course of Business) or involve consideration in excess of $200,000 (other than purchase orders or sales orders in the Ordinary Course of Business);

(c) any agreement concerning a partnership or joint venture or providing for payments to or by any Person based on or determined by reference to sales, purchases or profits, other than direct payments for products;

(d) any agreement (or group of related agreements) under which it has created, incurred, assumed, or guaranteed any indebtedness for borrowed money, or any capitalized lease obligation, or any agreement (or group of related agreements) under which it has imposed a Security Interest on any of its assets, tangible or intangible, or any currency or interest rate swap, collar or hedge agreement;

(e) any agreement concerning confidentiality or noncompetition or which contains any covenant that purports to restrict the business activity of any of the Company and its Subsidiaries or limits their ability to engage in any line of business;

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(f) any agreement with any of the holders of the Company Shares and their Affiliates (other than the Company and its Subsidiaries) or with any employee or director (other than employment or stock option agreements);

(g) any profit sharing, stock option, stock purchase, stock appreciation, deferred compensation or other equity-based or profit sharing type plan or arrangement for the benefit of its current or former directors, officers, and employees;

(h) any collective bargaining agreement;

(i) any agreement for the employment of any individual on a full-time, part-time, consulting, or other basis providing annual compensation in excess of $75,000 (including commissions and bonus payments) or providing severance benefits;

(j) any agreement under which it has advanced or loaned any amount to any of its directors, officers and employees outside the Ordinary Course of Business;

(k) any agreement for the acquisition of the securities or substantially all of the assets of any other Person (including by merger or consolidation);

(l) any agreement containing an express undertaking to pay liquidated damages or a penalty in excess of $200,000; and

(m) any other agreement (or group of related agreements) the performance of which involves consideration in excess of $200,000 (other than purchase orders or sales orders in the Ordinary Course of Business).

The Company has delivered to the Buyer a correct and complete copy of each written agreement listed in Section 4.15 of the Company Disclosure Letter (as amended to date) and a written summary setting forth the terms and conditions of each oral agreement referred to in Section 4.15 of the Company Disclosure Letter. With respect to each such agreement: (A) the agreement is legal, valid, binding, enforceable, and in full force and effect; (B) except as provided in Section 4.15 of the Company Disclosure Letter, the agreement will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms and conditions following the consummation of the transactions contemplated hereby; (C) no party is in material breach or default, and, to the Knowledge of the Company, no event has occurred which with notice or lapse of time would constitute a material breach or default, or permit termination, modification, or acceleration, under the agreement; and (D) no party has repudiated, whether in writing or, to the Knowledge of the Company, otherwise, any material provision of the agreement.

4.16 Powers of Attorney. There are no outstanding powers of attorney executed on behalf of any of the Company and its Subsidiaries.

4.17 Insurance. Section 4.17 of the Company Disclosure Letter sets forth the following information with respect to each insurance policy (including policies providing property, casualty, liability, and workers’ compensation coverage and bond and surety arrangements) to which any of the Company and its Subsidiaries has been a party, a named insured, or otherwise the beneficiary of coverage at any time within the past five (5) years:

(a) the name, address, and telephone number of the agent;

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(b) the name of the insurer, the name of the policyholder, and the name of each covered insured;

(c) the policy number and the period of coverage;

(d) the scope (including an indication of whether the coverage was on a claims made, occurrence, or other basis) and amount (including a description of how deductibles and ceilings are calculated and operate) of coverage;

(e) whether the policy was provided on a primary, excess, umbrella or other basis;

(f) if known, the remaining, intact and unexhausted liability limits; and

(g) a description of any retroactive premium adjustments or other loss-sharing or experience-based Liability arrangements.

With respect to each such insurance policy: (A) the policy is legal, valid, binding, enforceable, and in full force and effect; (B) the policy will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms and conditions following the consummation of the transactions contemplated hereby; (C) neither any of the Company and its Subsidiaries nor, to the Knowledge of the Company, any other party to the policy is in material breach or default (including with respect to the payment of premiums or the giving of notices), and no event has occurred which, with notice or the lapse of time, would constitute such a material breach or default, or permit termination, modification, or acceleration, under the policy against the Company or any of its Subsidiaries; and (D) no party to the policy has repudiated, whether in writing or, to the Knowledge of the Company, otherwise, any material provision thereof. Section 4.17 of the Company Disclosure Letter describes any self-insurance arrangements affecting any of the Company and its Subsidiaries.

4.18 Litigation. Section 4.18 of the Company Disclosure Letter sets forth each instance in which any of the Company and its Subsidiaries (i) is subject to any outstanding injunction, judgment, order, decree, ruling, or charge or (ii) is a party or, to the Knowledge of the Company, is threatened to be made a party to any action, suit, proceeding, hearing, or investigation of, in, or before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator. None of the actions, suits, proceedings, hearings, and investigations set forth in Section 4.18 of the Company Disclosure Letter could have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. To the Knowledge of the Company, no executive or key employee of any of the Company and its Subsidiaries is a party or is threatened to be made a party to any action, suit, proceeding, hearing, or investigation of, in, or before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator that would in any way adversely affect his or her ability to perform his or her employment duties, except for divorce proceedings involving any such individual. The Company has no reason to believe that any such action, suit, proceeding, hearing, or investigation may be brought or threatened against any of the Company and its Subsidiaries, except for divorce proceedings involving any such individual.

4.19 Product Warranty. No product manufactured, sold, leased, or delivered by any of the Company and its Subsidiaries is subject to any guaranty, warranty, or other indemnity beyond the applicable standard guaranty or warranty provided by the third party manufacturer of such product.

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4.20 Employees. Section 4.20 of the Company Disclosure Letter contains a list of the names and current salary rates and bonus commitments for all employees of the Company and its Subsidiaries whose annual salaries exceed $75,000. To the Knowledge of the Company, as of the date of this Agreement, no executive, key employee, or group of employees has any plans to terminate employment with any of the Company and its Subsidiaries. No executive or key employee of any of the Company and its Subsidiaries is a party to, or is otherwise bound by, any agreement that in any way adversely affects or will affect the performance of his or her employment duties, his or her ability to assign to any of the Company and its Subsidiaries any rights to any invention, improvement, discovery or information relating to the business of the Company and its Subsidiaries, or the ability of any of the Company and its Subsidiaries to conduct its business. None of the Company and its Subsidiaries is a party to or bound by any collective bargaining agreement, nor has any of them experienced any strikes, grievances, claims of unfair labor practices, or other collective bargaining disputes. None of the Company and its Subsidiaries has committed any material unfair labor practice, and each of the Company and its Subsidiaries has complied in all material respects with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) relating to employment practices, terms and conditions of employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining and plant closing. The Company has no Knowledge of any organizational effort currently being made or threatened by or on behalf of any labor union with respect to employees of any of the Company and its Subsidiaries.

4.21 Employee Benefits.

(a) Section 4.21 of the Company Disclosure Letter lists each Employee Benefit Plan that any of the Company and its Subsidiaries maintains or to which any of the Company and its Subsidiaries contributes.

(i) Each such Employee Benefit Plan (and each related trust, insurance contract, or fund) has been operated in all material respects in accordance with its terms and complies in form and in operation in all material respects with the applicable requirements of ERISA, the Code, and other applicable laws.

(ii) All reports and descriptions (including Form 5500 Annual Reports, Summary Annual Reports, PBGC-1’s, and Summary Plan Descriptions) required to have been filed or distributed in respect of the three prior plan years as to each such Employee Benefit Plan have been filed or distributed appropriately. The requirements of Part 6 of Subtitle B of Title I of ERISA and of Code Sec. 4980B, if applicable, have been met in all material respects with respect to each such Employee Benefit Plan which is an Employee Welfare Benefit Plan.

(iii) All contributions (including all employer contributions and employee salary reduction contributions) which are due have been paid by the time required by ERISA, the Code, and other applicable laws to each such Employee Benefit Plan which is an Employee Pension Benefit Plan.

(iv) For each Employee Pension Benefit Plan that is intended to be a “qualified plan” under Code Section 401(a), the Company has either (A) received a favorable determination letter (a “GUST Determination Letter”) from the Internal Revenue Service that takes into account any change required to be made to such Employee Pension Benefit Plan in order to comply with the requirements of Code Section 401(a), as amended by the Retirement Protection Act of 1994, enacted as part of the Uruguay Round Agreements Act, the Uniform Services Employment and

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Reemployment Rights Act of 1994, Small Business Job Protection Act of 1996, Taxpayer Relief Act of 1997, Transportation Revenue Act of 1998, Internal Revenue Service Restructuring and Reform Act of 1998, and Community Renewal Tax Relief Act of 2000 (collectively referred to as “GUST”), (B) timely filed an application for determination with the IRS requesting a determination that such Employee Pension Benefit Plan meets the requirements of Code Section 401(a), as amended by GUST, and that an any trust established in connection with the Employee Pension Benefit Plan is exempt from federal income taxation of Code Section 501(a) (hereinafter referred to as a “GUST Application for Determination”), or (C) where there is no GUST Determination Letter or GUST Application for Determination, the Employee Pension Benefit Plan either is within its remedial amendment period or is a prototype plan on which the Company may rely upon the prototype sponsor’s current and effective opinion letter from the Internal Revenue Service. The Company has provided the Buyer with a true and complete copy of each GUST Determination Letter or GUST Application for Determination received or filed by Company with respect to each such Employee Pension Benefit Plan, or in the case of a prototype document (as referenced above) the sponsor’s opinion letter from the Internal Revenue Service.

(v) The Company has delivered to the Buyer correct and complete copies of the plan documents and summary plan descriptions, the three most recently filed Form 5500 Annual Reports, all related trust agreements, insurance contracts, and other funding agreements and third party administrative agreements which implement each such Employee Benefit Plan.

(b) There have been no Prohibited Transactions with respect to any Employee Benefit Plan maintained by the Company or its Subsidiaries which has or could reasonably be expected to result in a material liability of the Company or its Subsidiaries. To the Knowledge of the Company, no Fiduciary has any Liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any such Employee Benefit Plan. No action, suit, proceeding, hearing, or investigation with respect to the administration or the investment of the assets of any such Employee Benefit Plan (other than routine claims for benefits) is pending or, to the Knowledge of the Company, threatened. The Company has no Knowledge of any Basis for any such action, suit, proceeding, hearing, or investigation.

(c) None of the Company and its Subsidiaries has incurred, and none of the Company and its Subsidiaries has any reason to expect that any of the Company and its Subsidiaries will incur, any Liability to the PBGC (other than PBGC premium payments) or otherwise under Title IV of ERISA (including any withdrawal Liability). No Employee Benefit Plan of the Company or its Subsidiaries which is an Employee Pension Benefit Plan is or was a Multiemployer Plan or plan subject to Code Section 412 or Section 302 or Title IV of ERISA.

(d) None of the Company or its Subsidiaries maintains or contributes to, or within the preceding five years has contributed to or been required to contribute to, any Employee Welfare Benefit Plan providing medical, health, or life insurance for current or future retired or terminated employees, their spouses, or their dependents (other than in accordance with Part 6 of Subtitle B of Title 1 of ERISA and Code Sec. 4980B or applicable state insurance laws).

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4.22 Guaranties. None of the Company and its Subsidiaries is a guarantor for any Liability or obligation (including indebtedness) of any other Person.

4.23 Environment, Health, and Safety.

(a) Each of the Company, its Subsidiaries, and their respective corporate predecessors has complied in all material respects with all Environmental Laws, and, to the Knowledge of the Company, no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against any of them alleging any failure so to comply. Without limiting the generality of the preceding sentence, each of the Company and its Subsidiaries and, to the Knowledge of the Company, their respective corporate predecessors, has obtained and been in compliance in all material respects with all of the terms and conditions of all permits, licenses, and other authorizations which are required under, and has complied in all material respects with all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules, and timetables which are contained in, all Environmental Laws.

(b) To the Knowledge of the Company, none of the Company and its Subsidiaries has any Liability, other than Liability inherent in the ownership or operation of real estate (and none of the Company or its Subsidiaries and their respective corporate predecessors has handled or disposed of any substance, arranged for the disposal of any substance in violation of any applicable Environmental Law, or owned or operated any property or facility in any manner that could result in any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against any of the Company and its Subsidiaries giving rise to any Liability under any applicable Environmental Laws) for damage to any site, location, or body of water (surface or subsurface) under any applicable Environmental Laws.

The representations and warranties contained in this Section 4.23 constitute the sole representations and warranties concerning environmental matters.

4.24 Certain Business Relationships with the Company and Its Subsidiaries. None of the Significant Stockholders and their Affiliates has, or since January 1, 2000 has had, any interest in any asset, tangible or intangible, used in the business of any of the Company and its Subsidiaries or any interest in any business arrangement or relationship with any of the Company and its Subsidiaries. None of the Significant Stockholders and their Affiliates owns, or since January 1, 2000 has owned, an equity interest or any other financial or profit interest in a Person that has (a) had business dealings or a financial interest in any transaction with any of the Company and its Subsidiaries or (b) engaged in competition with any of the Company and its Subsidiaries with respect to any products or services of any of the Company and its Subsidiaries, except, in each such case, for the ownership of less than 1% of the outstanding stock of any publicly traded corporation.

4.25 Customers and Suppliers. Section 4.25 of the Company Disclosure Letter includes a true and accurate list of the Company’s and its Subsidiaries’ top ten (10) customers and suppliers for the fiscal year ended December 31, 2002. Since December 31, 2002, no customer or supplier listed in Section 4.25 of the Company Disclosure Letter has materially reduced its business with any of the Company and its Subsidiaries or advised any of the Company and its Subsidiaries that it may cease doing business or materially reduce its business with any of the Company and its Subsidiaries.

4.26 Disclosure. The representations and warranties contained in this Section 4 and the Company Disclosure Letter do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this Section 4 and the Company Disclosure Letter not misleading.

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5. Pre-Closing Covenants. The Parties agree as follows with respect to the period between the execution of this Agreement and the Closing:

5.1 General. Each of the Parties will use his or its commercially reasonable efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Section 7 below).

5.2 Notices and Consents. The Company will, and will cause each of its Subsidiaries to, give any notices to third parties and use its commercially reasonable efforts to obtain any third-party consents and/or estoppel certificates that are listed on Schedule 5.2 and such other third-party consents as the Buyer may reasonably request; provided, however, that Company shall not be required to make any payments to such third parties in order to obtain any such consents. Each of the Parties will give any notices to, make any filings with, and use its commercially reasonable efforts to obtain any authorizations, consents, and approvals of governments and governmental agencies in connection with the matters referred to in Section 3.1(b) and Section 3.2(b) above. Without limiting the generality of the foregoing, each of the Parties will file any Notification and Report Forms and related material that he or it may be required to file with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice under the Hart-Scott-Rodino Act (including, without limitation, using their commercially reasonable efforts to file their initial Notification and Report Forms, with all required exhibits and schedules thereto, on or before December 1, 2003 and, in any event, no later than December 2, 2003), will use his or its commercially reasonable efforts to obtain an early termination of the applicable waiting period, and will make any further filings pursuant thereto that may be necessary, proper, or advisable in connection therewith.

5.3 Operation of Business. The Company will not, and will not cause or permit any of its Subsidiaries to, engage in any practice, take any action, or enter into any transaction outside the Ordinary Course of Business. Without limiting the generality of the foregoing, the Company will not, and will not permit any of its Subsidiaries to, (a) declare, set aside, or pay any dividend or make any distribution with respect to its capital stock or redeem, purchase, or otherwise acquire any of its capital stock, (b) make any capital expenditure (or series of related capital expenditures) outside the Ordinary Course of Business involving more than $50,000 individually or $500,000 in the aggregate, or (c) otherwise engage in any practice, take any action, or enter into any transaction of the sort described in Section 4.9 above.

5.4 Preservation of Business. The Company will, and the Company will cause each of its Subsidiaries to, use its commercially reasonable efforts to keep its business and properties substantially intact, including its present operations, physical facilities, working conditions, and relationships with lessors, licensors, suppliers, customers, and employees in the Ordinary Course of Business.

5.5 Access. The Company will permit, and cause each of its Subsidiaries to permit, representatives of the Buyer to have (subject to the terms of any applicable leases and subleases) access, upon reasonable request and at reasonable times, throughout the period prior to Closing, to all premises, properties, personnel, books, records (including Tax records), contracts, and documents of or pertaining to each of the Company and its Subsidiaries. Without limiting the generality of the preceding sentence, the Company will use its commercially reasonable efforts to cause its independent accountants to provide the Buyer and its independent accountants such access

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to its workpapers and other financial information as the Buyer and its independent accountants may reasonably request in connection with a review of interim unaudited consolidated financial statements of the Company and its Subsidiaries.

5.6 Notice of Developments.

(a) The Company will give prompt written notice to the Buyer of any material adverse development causing a breach of any of the representations and warranties in Section 4 above. Each Party will give prompt written notice to the others of any material adverse development causing a breach of any of his or its own representations and warranties in Section 3 above. The Buyer will give prompt written notice to the Company of any material adverse development known to the Buyer causing a breach of any of the Company’s representations and warranties in Section 4 above. Except as set forth in Section 5.6(b) below, no disclosure by any Party pursuant to this Section 5.6, however, shall be deemed to amend or supplement the Significant Stockholder Disclosure Letter, the Buyer Disclosure Letter or the Company Disclosure Letter or to prevent or cure any misrepresentation, breach of warranty, or breach of covenant or agreement.

(b) No later than three (3) business days prior to the Closing Date, the Company shall deliver to the Buyer supplements to the Company Disclosure Letter showing in reasonable detail any changes from the original Company Disclosure Letter that the Company believes are required to make the representations and warranties in Section 4 either true and correct in all material respects as if made on the Closing Date or true and correct in all respects with respect to any representations or warranties qualified by materiality limitations. If such supplement discloses an event or circumstance that, in the absence of such supplement, would have represented a breach of such representation or warranty (a “Presumed Breach”), then the Buyer shall have the following rights:

(i) If the Adverse Consequences that will or could reasonably be expected to result from all such Presumed Breaches do not equal or exceed $750,000 in the aggregate, then such supplement shall be deemed to have updated the Company Disclosure Letter for the purposes of Section 7.1(a) and Section 4, and the Buyer shall have no right to sue or reserve its rights to indemnification pursuant to Section 8 below in respect of the Adverse Consequences resulting from such Presumed Breaches; provided, however, that the Adverse Consequences resulting from such Presumed Breaches shall apply against the Indemnity Deductible, except with respect to any item (including deductibles therefor) that would reasonably be expected to be covered by the Company’s insurance within policy limits (including any umbrella or excess of loss).

(ii) If the Adverse Consequences that will or could reasonably be expected to result from all such Presumed Breaches shall equal or exceed $750,000 in the aggregate, but in the aggregate shall not constitute a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole, then such supplement shall be deemed to have updated the Company Disclosure Letter for the purposes of Section 7.1(a) and Section 4, and the Buyer shall have the right to reserve its rights to indemnification pursuant to Section 8 below with respect to such Presumed Breaches, and the Adverse Consequences resulting from such Presumed Breaches shall apply against the Indemnity Deductible; provided, that the Buyer shall not reserve rights to indemnification with respect to any item (including deductibles therefor) that would reasonably be expected to be covered by the Company’s insurance within policy limits (including any umbrella or excess of loss).

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(iii) If the aggregate Adverse Consequences that will or could reasonably be expected to result from all such Presumed Breaches shall equal or exceed $750,000 in the aggregate and in the aggregate shall also constitute a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole, then the Buyer shall not be required to close the Merger; provided, that the Buyer shall not exercise its right not to close the Merger with respect to any item (including deductibles therefor) that would reasonably be expected to be covered by the Company’s insurance within policy limits (including any umbrella or excess of loss). If, however, the Buyer shall elect to close the Merger notwithstanding such Presumed Breaches, then the Buyer shall not be entitled to sue or to reserve its rights of indemnification under Section 8 below in respect of such Presumed Breaches, and no Adverse Consequences resulting from such Presumed Breaches shall apply against the Indemnity Deductible.

5.7 Exclusivity. Neither the Company nor any of the Significant Stockholders will (and the Significant Stockholders will not cause or permit any of the Company and its Subsidiaries to) (a) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of any capital stock or other voting securities, or any substantial portion of the assets of, any of the Company and its Subsidiaries (including any acquisition structured as a merger, consolidation, or share exchange) or (b) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing. None of the Significant Stockholders will vote their Company Shares in favor of any such acquisition structured as a merger, consolidation, or share exchange. The Company and the Significant Stockholders will notify the Buyer immediately if any Person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.

5.8 Certain Financial Matters.

(a) If the Buyer determines that it may seek to make a private or public securities offering, and to assist the Buyer with its compliance with applicable periodic reporting requirements under the Securities Exchange Act, at the Buyer’s sole cost and expense, the Company shall use its commercially reasonable efforts to do the following, and shall use its commercially reasonable efforts to cause the Company’s independent accountants to assist with the following: (i) furnish the Buyer audited consolidated financial statements for the Company as of specified dates and for each specified years as may be required in forms meeting the requirements of Regulation S-X under the Securities Act, and (ii) furnish to the Buyer upon receipt of a final proposed draft of any registration statement (or offering memorandum), the consent of the Company’s independent accountants to the inclusion of their reports on such financial statements in a registration statement (or offering memorandum) and any amendments thereto. The Company shall cooperate regarding the foregoing and with the preparation and delivery of any comfort letters, management representation letters and other information and documentation that may be requested by the Buyer, its underwriters or placement agents or others in connection with such matters.

(b) The Company and the Significant Stockholders shall reasonably cooperate with the Buyer and use commercially reasonable efforts to take all action reasonably requested by the Buyer in connection with the financing of the transactions contemplated by this Agreement.

5.9 Employee Benefits. Except as provided in this Section, the Company shall, and shall cause its Subsidiaries to, continue and maintain all of their Employee Benefit Plans

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through the Closing and shall notify the Buyer in writing and in advance if the terms of any Employee Benefit Plan or any insurance contract or other agreement relating to any such Employee Benefit Plan is or are scheduled or proposed to be renewed, terminated or modified. No such renewal, termination or modification shall be made prior to Closing without the prior written consent of the Buyer, which consent shall not be unreasonably withheld. In the event the Buyer requests in writing that any Employee Benefit Plan be terminated prior to Closing, the Company shall, or shall cause its Subsidiaries to, do so, but at earliest immediately prior to and contingent upon the Closing.

5.10 Approval of Merger and Optional Redemption.

(a) By executing this Agreement, each of the Significant Stockholders covenants and agrees that it will, in its capacity as a holder of Company Shares and with the same effect as if such Significant Stockholder had so voted at a meeting of holders of Company Shares called for that purpose (and if such a meeting is called, each Significant Stockholder agrees that it will so vote), consent that the Company enter into this Agreement and consummate the Merger and other transactions contemplated by this Agreement in accordance with the terms and conditions of this Agreement. Immediately following execution of this Agreement, each of the Significant Stockholders will sign a written consent in accordance with the DGCL and the foregoing sentence (the form of which the Buyer shall have an opportunity to review promptly following the date of this Agreement). The Company and the Significant Stockholders will take such action as is necessary under the DGCL to notify the other holders of Company Shares of such consent and, if necessary, to duly call, convene and hold a meeting of the holders of the Company Shares as soon as reasonably practicable after the date of this Agreement for the purpose of voting upon this Agreement and the Merger. The Company’s Board of Directors shall recommend approval and adoption of this Agreement by the holders of the Company Shares and shall take all lawful action to solicit the approval of the holders of the Company Shares. To the extent required by the DGCL, the Company shall promptly prepare and deliver to the holders of the Company Shares an information statement relating to transactions contemplated by this Agreement. The Stockholders’ Representative will exercise any and all rights it has to drag-along holders of Company Shares and Company Options in the transactions contemplated by this Agreement.

(b) At any meeting of the stockholders of the Company, and at every adjournment thereof, and on every action or approval by written consent of the stockholders of the Company, each Significant Stockholder shall vote or cause to be voted the Company Shares and any additional Company Shares acquired by the Significant Stockholder (i) in favor of (A) approval of this Agreement and the Merger and (B) any matter that could reasonably be expected to facilitate the Merger and (ii) against any matter that could reasonably be expected to hinder, impede or delay the consummation of the Merger.

(c) Each Significant Stockholder agrees not (i) to sell, transfer, pledge, encumber, assign or otherwise dispose of (collectively, “Transfer”), or enter into any contract, option or other arrangement or understanding with respect to the Transfer by such Significant Stockholder of, any of the Company Shares or offer any interest in any thereof to any Person other than pursuant to the terms of the Merger, (ii) to enter into any voting arrangement or understanding, whether by proxy, power of attorney, voting agreement, voting trust or otherwise with respect to the Company Shares and agrees not to commit or agree to take any of the foregoing actions or (iii) to take any action that would make any representation or warranty of such Significant Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling such Significant Stockholder from performing its obligations under this Agreement.

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(d) Each Significant Stockholder hereby waives any applicable appraisal rights under the DGCL.

(e) Each of the Significant Stockholders hereby waives any and all notices that may be required from the Company, with respect to the optional redemption of the Company Preferred Shares, pursuant to Section (e)(iii)(b) of the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of the Company Preferred Shares filed with the State of Delaware Office of the Secretary of State on the 8th day of July 1998.

5.11 Employment Agreements. The Company will use its commercially reasonable efforts to assist the Buyer’s efforts to enter into employment and non-competition agreements with the Persons listed on Schedule 5.11 attached hereto, in each case on terms that are mutually agreeable to the Buyer and such Person.

5.12 Amendment of Contract. The Company will use its commercially reasonable efforts to cause the contract identified in Schedule 5.12 attached hereto to have been amended in accordance with the terms set forth in Schedule 5.12.

6. Post-Closing Covenants. The Parties agree as follows with respect to the period following the Closing.

6.1 General. In case at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless such action is required by the terms of this Agreement or the requesting Party is entitled to indemnification therefor under Section 8 below). The Significant Stockholders acknowledge and agree that from and after the Closing the Buyer will be entitled to possession of all documents, books, records (including Tax records), agreements, and financial data of any sort relating to the Company and its Subsidiaries.

6.2 Litigation Support. In the event and for so long as any Party actively is contesting or defending against any action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand in connection with (a) any transaction contemplated under this Agreement or (b) any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction on or prior to the Closing Date involving any of the Company and its Subsidiaries, each of the other Parties will cooperate with him or it and his or its counsel in the contest or defense, make available their personnel, and provide such testimony and access to their books and records as shall be necessary in connection with the contest or defense, all at the sole cost and expense of the contesting or defending Party (unless the contesting or defending Party is entitled to indemnification therefor under Section 8 below).

6.3 Transition. None of the Significant Stockholders will disparage any of the Company and its Subsidiaries in any way that is designed or intended to have the effect of discouraging any lessor, licensor, customer, supplier, or other business associate of any of the Company and its Subsidiaries from maintaining the same business relationships with the Company and its Subsidiaries after the Closing as it maintained with the Company and its Subsidiaries prior to the Closing. Each of the Significant Stockholders will refer all customer inquiries relating to the businesses of the Company and its Subsidiaries to the Buyer from and after the Closing.

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6.4 Non-Solicitation. For a period of one (1) year from and after the Closing Date, and for a period of two (2) years from and after the Closing Date with respect to the Persons listed in Schedule 5.11 attached hereto, the Stockholders’ Representative shall not, directly or indirectly, solicit, induce, influence, combine or conspire with, or attempt to solicit or induce, any officer, director, employee, independent contractor or other Person to terminate its employment or other relationship with any of the Buyer, the Company and its Subsidiaries, except that the foregoing shall not apply to (a) any general advertising or recruitment efforts not specifically targeting such Persons or (b) any Person employed by the Buyer who did not come into contact with the Stockholders’ Representative or a representative of the Company in connection with the transactions contemplated by this Agreement. If the final judgment of a court of competent jurisdiction declares that any term or provision of this Section 6.4 is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed.

6.5 Provision of Financial Statements. To the extent reasonably necessary for the Buyer or its Affiliates to prepare consolidated financial statements and to comply with any reporting obligations in respect thereof, upon written request of the Buyer, the Significant Stockholders will provide, and shall use their commercially reasonable efforts to cause their Affiliates to provide, to the Buyer and its accountants within thirty (30) days of such request such computer support, access to employees and the Significant Stockholders’ accountants and financial information as the Buyer may reasonably request in the format required by the Buyer and, upon the Buyer’s reasonable request, the Significant Stockholders will cooperate regarding the foregoing and comfort letters, management representation letters and other information and documentation that may be reasonably requested by the Buyer, its underwriters or placement agents or others in connection with such matters.

6.6 Certain Tax Matters.

(a) The Stockholders’ Representative shall have the right to prepare, or cause to be prepared, all federal, state and local Tax Returns of the Company and its Subsidiaries to be filed after the Closing Date which relate to a taxable period ending on or before the Closing Date, including any short taxable period (and shall reasonably cooperate with the Company’s personnel in connection therewith); provided, however, (i) the Company and its Subsidiaries shall bear all reasonable costs of preparing and filing such Tax Returns, (ii) the Stockholders’ Representative shall deliver to Buyer for its review, comment and approval (which approval will not be unreasonably withheld) a copy of the proposed Tax Return no later than thirty (30) days prior to the filing date of such Tax Return (including extensions thereof) and (iii) the Stockholders’ Representative shall confirm in writing that the proposed Tax Return has been prepared in a manner that is consistent with the past Tax practices and consistent with the past Tax Returns of the Company and its Subsidiaries. The Company and its Subsidiaries shall file all such Tax Returns and shall pay the amount of any Taxes shown due thereon to the appropriate Tax authorities.

(b) The Buyer shall prepare, or cause to be prepared, and shall file, or cause to be filed, all Tax Returns other than the Tax Returns which the Stockholders’

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Representative shall prepare, or cause to be prepared, pursuant to Section 6.6(a) but if any such Tax Return relates to any period beginning before the Closing Date, (i) the Buyer shall deliver to the Stockholders’ Representative for its review, comment and approval (which approval will not be unreasonably withheld) a copy of the proposed Tax Return no later than thirty (30) days prior to the filing date of such Tax Return (including extensions thereof) and (ii) the Buyer shall confirm in writing that the proposed Tax Return has been prepared in a manner that is consistent with the past Tax practices and consistent with the past Tax Returns of the Company and its Subsidiaries.

(c) The Stockholders’ Representative shall have the right, at the expense of the Significant Stockholders, to control any Tax audit, initiate any claim for refund, contest, resolve and defend against any assessment, notice of deficiency, or other adjustment or proposed adjustment, or contest to any extension or waiver of the limitations period applicable to any Tax claim or assessment (a “Tax Matter”), in each case to the extent relating to all Taxes attributable to taxable periods of the Company and its Subsidiaries covered by the representations under Section 4.11 above. If the Buyer is not entitled to control the Tax Matter under the foregoing provisions, the Stockholders’ Representative will provide, or cause to be provided, to the Buyer copies of all correspondence received from or delivered to the taxing authority in connection with such Tax Matter.

(d) If the Stockholders’ Representative does not elect to control a Tax Matter under Section 6.6(c) or otherwise does not control a Tax Matter which relates in whole or in part to taxable periods of the Company and its Subsidiaries covered by the representations under Section 4.11 hereof, (i) the Buyer will use good faith efforts for the benefit of the Company and its Subsidiaries and the Significant Stockholders in the defense or assertion of such Tax Matter, (ii) the Buyer will provide, or cause to be provided, to the Stockholders’ Representative, copies of all correspondence received from or delivered to the taxing authority in connection with any such Tax Matter, (iii) the Buyer, the Company and its Subsidiaries shall allow the Stockholders’ Representative to participate in such Tax Matter, and (iv) the Buyer, the Company and its Subsidiaries shall not settle such Tax Matter without the consent of the Stockholders’ Representative, which consent will not be unreasonably be withheld.

(e) Any Tax refunds received by the Company and its Subsidiaries relating to a period or partial period ending on or before the Closing Date shall be paid to the Stockholders’ Representative for the benefit of the holders of the Company Shares and the Company Options, except to the extent any such amount is reflected as a receivable or other asset on the Final Closing Date Balance Sheet and taken into account in determining the Final Closing Date Net Assets Amount.

(f) The Stockholders’ Representative and the Buyer shall (i) each provide the other with such assistance as may reasonably be requested by any of them in connection with the preparation of any Tax Return, audit or other examination by any taxing authority or judicial or administrative proceedings relating to liability for Taxes, (ii) each retain and provide the other with any records or other information which may be relevant to such Tax Return, audit or examination, proceeding or determination, and (iii) each provide the other with any final determination of any such audit or examination, proceeding or determination that affects any amount required to be shown on any Tax Return of the other for any period. Without limiting the generality of the foregoing, the Buyer shall retain, and shall cause the Surviving Corporation to retain, and the Stockholders’ Representative shall retain, until the applicable statutes of limitations (including any extensions) have expired, copies of all Tax Returns, supporting work schedules and other records or information which may be relevant

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to such Tax Returns for all tax periods or portions thereof ending before or including the Closing Date and shall not destroy or otherwise dispose of any such records without first providing the other party with a reasonable opportunity to review and copy the same.

6.7 Employee Matters. The Buyer will give employees of the Surviving Corporation or its Subsidiaries who were employees of Company or its Subsidiaries immediately prior to the Effective Time full credit for prior service with the Company or its Subsidiaries under any employee benefit plan maintained by the Buyer to the extent that such employees are or become covered by such plans.

7. Conditions to Obligation to Close.

7.1 Conditions to Obligation of the Buyer and Merger Sub. The obligations of the Buyer and Merger Sub to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

(a) the representations and warranties set forth in Section 3.1 and Section 4 above shall be true and correct in all material respects when made and at and as of the Closing Date as though made as of such date (unless such representation or warranty is specifically made as of an earlier date, in which case it shall remain true and correct as of such earlier date), except for any representations or warranties qualified by materiality limitations, which shall instead be true and correct in all respects;

(b) the Company and the Significant Stockholders shall have performed and complied with all of their covenants and agreements hereunder in all material respects through the Closing;

(c) the Company shall have (i) repaid all Indebtedness or (ii) with respect to any Indebtedness not repaid prior to Closing, obtained payoff letters for such Indebtedness to be paid by the Buyer on behalf of the Company at Closing as a reduction to the Purchase Price and, in each case, shall have provided to the Buyer UCC-3 termination statements that when filed will be sufficient to release any and all security interests held by third parties in connection with any such Indebtedness;

(d) the Company shall have delivered Letters of Transmittal to all holders of the Company Shares and the Significant Stockholders shall have approved this Agreement and the Merger pursuant to Section 5.10 above;

(e) no action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator which has a reasonable likelihood of success and wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (iii) affect adversely the right of the Buyer to own the Company Shares and to control the Company and its Subsidiaries, or (iv) affect adversely the right of any of the Company and its Subsidiaries to own its assets and to operate its businesses (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

(f) the Company shall have delivered to the Buyer a certificate to the effect that each of the conditions specified above in Section 7.1(a)-(e) is satisfied in all respects;

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(g) all applicable waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been terminated and the Parties, the Company, and its Subsidiaries shall have received all other authorizations, consents, and approvals of governments and governmental agencies referred to in Section 5.2 above;

(h) there (i) shall not have occurred or become known to the Buyer any event, development or circumstance since January 31, 2003 that has caused or could reasonably be expected to cause a material adverse condition or material adverse change in or affecting (A) the transactions contemplated by this Agreement, (B) the financial condition, results of operation, assets, liabilities, business or prospects of the Buyer and its Subsidiaries, taken as a whole, or the Company and its Subsidiaries, taken as a whole or (C) the validity or enforceability of any of the loan documentation or the documents relating to any of the financing commitments referred to in Section 3.2(f) above or the rights and remedies of the administrative agents or lenders thereunder, and (ii) shall not have occurred any material disruption or material adverse change, as determined by Lehman Brothers Inc. and SunTrust Robinson Humphrey, in their sole discretion, in the debt capital markets generally, or in the markets for bank loan or bridge loan syndication or high yield debt securities in particular or affecting the syndication or funding of bank loans or bridge loans (or the refinancing thereof) that may have a material adverse impact on the ability to syndicate the financing commitments referred to in Section 3.2(f) above or to sell or place the securities referenced in such financing commitments;

(i) the Buyer shall have received from counsel to the Company and the Stockholders’ Representative one or more opinions from the law firms of Bingham McCutchen and Porter & Hedges, LLP, as well as the Law Offices of Dennis Teeter, in the aggregate in form and substance as set forth in Exhibit D attached hereto, addressed to the Buyer, and dated as of the Closing Date;

(j) the Buyer shall have received the resignations, effective as of the Closing, of each director of the Company other than those whom the Buyer shall have specified;

(k) the Company shall have delivered to the Buyer the Estimated Closing Date Net Assets Amount and the certificate required by the last sentence of Section 2.5(a); and

(l) all actions to be taken by the Company and the Significant Stockholders in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Buyer.

The Buyer may waive any condition specified in this Section 7.1 if it executes a writing so stating at or prior to the Closing.

7.2 Conditions to Obligations of the Company and the Significant Stockholders. The obligations of the Company and the Significant Stockholders to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

(a) the representations and warranties set forth in Section 3.2 above shall be true and correct in all material respects when made and at and as of the Closing Date as though made as of such date (unless such representation or warranty is specifically

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made as of an earlier date, in which case it shall remain true and correct as of such earlier date), except for any representations or warranties qualified by materiality limitations, which shall instead be true and correct in all respects;

(b) the Buyer shall have performed and complied with all of its covenants and agreements hereunder in all material respects through the Closing;

(c) no action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator which has a reasonable likelihood of success and wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

(d) the Buyer shall have delivered to the Company a certificate to the effect that each of the conditions specified above in Section 7.2(a)-(c) is satisfied in all respects;

(e) all applicable waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been terminated and the Parties, the Company, and its Subsidiaries shall have received all other authorizations, consents, and approvals of governments and governmental agencies referred to in Section 5.2 above; and

(f) all actions to be taken by the Buyer in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Stockholders’ Representative.

The Stockholders’ Representative may waive any condition specified in this Section 7.2 if it executes a writing so stating at or prior to the Closing.

8. Remedies for Breaches of This Agreement.

8.1 Survival of Representations and Warranties. All of the representations and warranties of the Parties contained in this Agreement shall survive the Closing hereunder (even if the damaged Party knew or had reason to know of any misrepresentation or breach of warranty at the time of Closing) for one (1) year after the Closing Date; provided, however, that (a) the representations and warranties set forth in Sections 3.1, 3.2, 4.1, 4.2, 4.3, 4.4, 4.5 and 4.6 and the covenants and agreements set forth in this Agreement shall survive indefinitely, without limitation, and (b) the representations and warranties set forth in Sections 4.11 shall survive for three (3) years after the Closing Date. No such termination shall affect the rights of a Party in respect of any claim made by such Party in a writing received by another Party prior to the expiration of any such period. This Section 8 is subject to the provisions set forth in Section 5.6 above.

8.2 Indemnification Provisions for Benefit of the Buyer.

(a) In the event the Company breaches (or in the event any third party alleges facts that, if true, would mean the Company has breached) any of its representations or warranties contained in Section 4 above when made or at and as of the Closing Date as though made as of such date (unless such representation or warranty is specifically made as of an earlier date, in which case it shall remain true and correct as of such earlier date), and,

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if there is an applicable survival period pursuant to Section 8.1 above, provided that the Buyer makes a written claim for indemnification against any of the Significant Stockholders pursuant to Section 10.8 below within such survival period, then the Significant Stockholders, jointly and severally, agree to indemnify the Buyer (including, after the Closing, the Surviving Corporation for all purposes of this Section 8) from and against the entirety of any Adverse Consequences the Buyer may suffer through and after the date of the claim for indemnification (including any Adverse Consequences the Buyer may suffer after the end of any applicable survival period) resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach).

(b) In the event the Company or any of the Significant Stockholders breaches (or in the event any third party alleges facts that, if true, would mean the Company or any of the Significant Stockholders has breached) any of their covenants or agreements contained herein (other than the covenants or agreements of the Significant Stockholders in Section 2.1 above), and, if there is an applicable survival period pursuant to Section 8.1 above, provided that the Buyer makes a written claim for indemnification against any of the Significant Stockholders pursuant to Section 10.8 below within such survival period, then the Significant Stockholders, jointly and severally, agree to indemnify the Buyer from and against the entirety of any Adverse Consequences the Buyer may suffer through and after the date of the claim for indemnification (including any Adverse Consequences the Buyer may suffer after the end of any applicable survival period) resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach).

(c) In the event any of the Significant Stockholders breaches (or in the event any third party alleges facts that, if true, would mean any of the Significant Stockholders has breached) any of his or its covenants or agreements in Section 2.1 above or any of his or its representations or warranties in Section 3.1 above when made or at and as of the Closing Date as though made as of such date (unless such representation or warranty is specifically made as of an earlier date, in which case it shall remain true and correct as of such earlier date), and, if there is an applicable survival period pursuant to Section 8.1 above, provided that the Buyer makes a written claim for indemnification against the Significant Stockholder pursuant to Section 10.8 below within such survival period, then such Significant Stockholder, severally and not jointly, agrees to indemnify the Buyer from and against the entirety of any Adverse Consequences the Buyer may suffer through and after the date of the claim for indemnification (including any Adverse Consequences the Buyer may suffer after the end of any applicable survival period) resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach).

(d) The Significant Stockholders, jointly and severally, agree to indemnify the Buyer from and against the entirety of any Adverse Consequences the Buyer may suffer resulting from, arising out of, relating to, in the nature of, or caused by any Liability of any of the Company and its Subsidiaries for the unpaid Taxes of any Person (other than any of the Company and its Subsidiaries) under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

(e) The Significant Stockholders, jointly and severally, agree to indemnify the Buyer from and against the entirety of any Adverse Consequences the Buyer may suffer resulting from, arising out of, relating to, in the nature of, or caused by the action of any Dissenting Stockholder under Section 262 of the DGCL (provided, however, that to the extent that any amount is finally paid to a Dissenting Stockholder for the fair value of its Company Common Shares, such Adverse Consequences shall be reduced by the Common Share Price for such Dissenting Stockholder’s Company Common Shares).

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8.3 Indemnification Provisions for Benefit of the Significant Stockholders.

(a) In the event the Buyer breaches (or in the event any third party alleges facts that, if true, would mean the Buyer has breached) any of its representations or warranties contained herein when made or at and as of the Closing Date as though made as of such date (unless such representation or warranty is specifically made as of an earlier date, in which case it shall remain true and correct as of such earlier date), and, if there is an applicable survival period pursuant to Section 8.1 above, provided that the Stockholders’ Representative makes a written claim for indemnification against the Buyer pursuant to Section 10.8 below within such survival period, then the Buyer agrees to indemnify each of the Significant Stockholders from and against the entirety of any Adverse Consequences the Significant Stockholders may suffer through and after the date of the claim for indemnification (including any Adverse Consequences the Significant Stockholders may suffer after the end of any applicable survival period) resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach).

(b) In the event the Buyer breaches (or in the event any third party alleges facts that, if true, would mean the Buyer has breached) any of its covenants or agreements contained herein, and, if there is an applicable survival period pursuant to Section 8.1 above, provided that the Stockholders’ Representative makes a written claim for indemnification against the Buyer pursuant to Section 10.8 below within such survival period, then the Buyer agrees to indemnify each of the Significant Stockholders from and against the entirety of any Adverse Consequences the Significant Stockholders may suffer through and after the date of the claim for indemnification (including any Adverse Consequences the Significant Stockholders may suffer after the end of any applicable survival period) resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach).

8.4 Matters Involving Third Parties.

(a) If any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third Party Claim”) which may give rise to a claim for indemnification against any other Party (the “Indemnifying Party”) under this Section 8, then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced.

(b) Any Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice satisfactory to the Indemnified Party so long as (i) the Indemnifying Party notifies the Indemnified Party in writing within 15 days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to which the Indemnified Party is entitled to indemnification pursuant to the terms of this Agreement, (ii) the Indemnifying Party provides the Indemnified Party with evidence acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, (iii) the

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Third Party Claim involves only money damages and does not seek an injunction or other equitable relief, (iv) settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedential custom or practice materially adverse to the continuing business interests of the Indemnified Party, and (v) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently.

(c) So long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with Section 8.4(b) above, (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim, (ii) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party, and (iii) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party, which will not be unreasonably withheld.

(d) In the event any of the conditions in Section 8.4(b) above is or becomes unsatisfied, however, (i) the Indemnified Party will defend against the Third Party Claim actively and diligently, and will not consent to the entry of any judgment or enter into any settlement without the consent of the Indemnifying Party, which will not be unreasonably withheld, (ii) the Indemnifying Parties will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys’ fees and expenses), and (iii) the Indemnifying Parties will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent provided in this Section 8.

8.5 Limitations. The liability of the Significant Stockholders for claims under this Agreement shall be limited by the following:

(a) No Adverse Consequences shall be recoverable by the Buyer pursuant to the provisions of this Section 8 unless and only to the extent that the amount of all such Adverse Consequences equals or exceeds $1,750,000 (the “Indemnity Deductible”) in the aggregate, in which case the Buyer shall be entitled to indemnification only for such excess;

provided, however, that the foregoing limitations in Sections 8.5(a) shall not apply to Adverse Consequences (i) in respect of the breach by the Company or any Significant Stockholder of any of the representations and warranties set forth in Sections 4.1, 4.2, 4.3, 4.4, 4.5 and 4.6, (ii) in respect of claims made pursuant to Section 8.2(b), 8.2(c), or 8.2(e), or (iii) based on fraud.

(b) The aggregate amount of Adverse Consequences recoverable by the Buyer pursuant to the provisions of this Section 8 shall be limited to Adverse Consequences not exceeding an indemnity cap (the “Indemnity Cap”) of (i) $70,000,000, as to all indemnity claims made by the Buyer on or before the first anniversary of the Closing Date, and (ii) $10,000,000, as to all indemnity claims made by the Buyer after the first anniversary of the Closing Date and during the applicable survival period;

provided, however, that the foregoing limitations in Sections 8.5(b) above shall not apply to Adverse Consequences (i) in respect of the breach by the Company or any Significant Stockholder of any of the representations and warranties set forth in Sections 4.1, 4.2, 4.3, 4.4, 4.5 and 4.6, (ii) in respect of claims made pursuant to Section 8.2(b), 8.2(c), or 8.2(e), or (iii) based on fraud.

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8.6 Determination of Adverse Consequences. Any amounts required to be paid to an Indemnified Party pursuant to the terms of this Section 8 shall be (i) reduced by the amount of any Tax benefits reasonably anticipated to be received by the Indemnified Party during the period after Closing and increased by the amount of any increase in Taxes payable by the Indemnified Party with respect to such amounts required to be paid to an Indemnified Party pursuant to the terms of this Section 8 and (ii) reduced by any amount actually received by the Indemnified Party under insurance policies, less any retrospective premium obligations, experience-based premium obligations, other indemnification obligations and the present value of any reasonably anticipated increase in insurance premiums on account of such Adverse Consequences; provided, that the Indemnified Party shall refund to the Indemnifying Party the amount of any increase in insurance premiums which are not incurred. The Parties shall take into account the time cost of money (using the Applicable Rate as the discount rate) in determining Adverse Consequences for purposes of this Section 8. All indemnification payments under this Section 8 shall be deemed adjustments to the Purchase Price.

8.7 Other Indemnification Provisions. After the Closing, the right of the Buyer and the Significant Stockholders (and their respective Affiliates, members, shareholders, officers and directors) to indemnification pursuant to Section 8 of this Agreement shall be the sole and exclusive right and remedy exercisable against any other party to this Agreement; provided, however, that this sentence shall not apply in cases of (i) fraud or (ii) intentional misrepresentation.

8.8 Directors’ and Officers’ Indemnification.

(a) The indemnification provisions of the certificate of incorporation and bylaws of the Surviving Corporation as in effect at the Effective Time shall not be amended, repealed or otherwise modified for a period of six (6) years from the Effective Time in any manner that would adversely affect the rights thereunder of individuals who at the Effective Time were directors or officers of the Company with respect to acts or omissions occurring prior to the Effective Time, unless such modification is required by law. The Buyer shall insure that the Surviving Corporation honors and performs its obligations under the Surviving Corporation’s certificate of incorporation and bylaws. In the event of the liquidation, dissolution or winding up of the Surviving Corporation, the Buyer agrees to assume the obligation of the Surviving Corporation under its certificate of incorporation. At its election, the Stockholders’ Representative will obtain tail directors and officers liability insurance coverage for such period of six (6) years after the Effective Time, and, if such election is made, the Buyer will reimburse the Stockholders’ Representative for up to $130,000 of such expense.

(b) In the event the Surviving Corporation or its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then and in each such case, proper provisions shall be made by the Buyer so that the successors and assigns of the Surviving Corporation shall assume the obligations set out in this Section 8.8.

(c) The Surviving Corporation shall pay all reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any Indemnified Person in enforcing the indemnity and other obligations provided in this Section 8.8.

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(d) The rights of each director, former director, officer and former officer of the Company (“D&O Indemnified Persons”) hereunder shall be in addition to any other rights such D&O Indemnified Person may have under the charter or bylaws of the Company or the Surviving Corporation, under the DGCL or otherwise. The provisions of this Section 8.8 shall survive the consummation of the Merger and expressly are intended to benefit each of the D&O Indemnified Persons. Notwithstanding the foregoing, the Buyer may cause the Surviving Corporation’s certificate of incorporation and bylaws to be modified to reflect the agreement of the Parties that any obligation that the Surviving Corporation may have, whether under the certificate of incorporation, the bylaws or otherwise, to indemnify the D&O Indemnified Parties:

(i) shall not apply to any action taken by any D&O Indemnified Person in connection with this Agreement or the transactions contemplated by this Agreement;

(ii) shall not restrict in any manner the rights of the Buyer pursuant to this Section 8 or require the Company to indemnify D&O Indemnified Persons from any proper claim brought by the Buyer thereunder.

(e) Each of the Significant Stockholders hereby agrees that he or it will not make any claim for indemnification against any of the Company and its Subsidiaries by reason of the fact that he or it was a director, officer, employee, or agent of any such entity or was serving at the request of any such entity as a partner, trustee, director, officer, employee, or agent of another entity (whether such claim is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses, or otherwise and whether such claim is pursuant to any statute, charter document, bylaw, agreement, or otherwise) with respect to any action, suit, proceeding, complaint, claim, or demand brought in good faith by the Buyer against such Significant Stockholder pursuant to this Agreement.

9. Termination.

9.1 Termination of Agreement. Certain of the Parties may terminate this Agreement as provided below:

(a) the Buyer and the Stockholders’ Representative may terminate this Agreement by mutual written consent at any time prior to the Closing;

(b) the Buyer may terminate this Agreement by giving written notice to the Stockholders’ Representative at any time prior to the Closing (i) in the event the Company or any of the Significant Stockholders has breached any material representation, warranty, covenant or agreement contained in this Agreement in any material respect, the Buyer has notified the Company and the Stockholders’ Representative of the breach, and the breach has continued without cure for a period of 15 days after the notice of breach or (ii) if the Closing shall not have occurred on or before February 2, 2004, by reason of the failure of any condition precedent under Section 7.1 hereof (unless the failure results primarily from the Buyer itself breaching any material representation, warranty, covenant or agreement contained in this Agreement in any material respect); provided, however, that such date shall automatically be extended to March 31, 2004 if the failure relates to the Hart-Scott-Rodino Act; and

(c) the Stockholders’ Representative may terminate this Agreement by giving written notice to the Buyer at any time prior to the Closing (i) in the event the Buyer

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has breached any material representation, warranty, covenant or agreement contained in this Agreement in any material respect, the Stockholders’ Representative has notified the Buyer of the breach, and the breach has continued without cure for a period of 15 days after the notice of breach or (ii) if the Closing shall not have occurred on or before February 2, 2004, by reason of the failure of any condition precedent under Section 7.2 hereof (unless the failure results primarily from any of the Significant Stockholders themselves breaching any material representation, warranty, covenant or agreement contained in this Agreement in any material respect); provided, however, that such date shall automatically be extended to March 31, 2004 if the failure relates to the Hart-Scott-Rodino Act.

9.2 Effect of Termination. If any Party terminates this Agreement pursuant to Section 9.1 above, all further obligations of the parties under this Agreement will terminate, except that the obligations in Sections 10.12 and 10.17 will survive; provided, however, that if this Agreement is terminated by a Party because of the willful breach of the Agreement by another Party or because one or more of the conditions to the terminating Party’s obligations under this Agreement is not satisfied as a result of another Party’s willful failure to comply with its obligations under this Agreement, the terminating Party’s right to pursue all legal remedies will survive such termination unimpaired.

10. Miscellaneous.

10.1 Nature of Certain Obligations.

(a) The representations and warranties of each of the Significant Stockholders in Section 3.1 above concerning the transaction are several obligations. This means that the particular Significant Stockholder making the representation, warranty, covenant or agreement will be solely responsible to the extent provided in Section 8 above for any Adverse Consequences the Buyer may suffer as a result of any breach thereof.

(b) The representations, warranties, covenants and agreements of the Significant Stockholders in Section 8 of this Agreement are joint and several obligations. This means that each such Party making a joint and several representation, warranty, covenant or agreement will be responsible to the extent provided in Section 8 above for the entirety of any Adverse Consequences the Buyer may suffer as a result of any breach thereof.

10.2 Press Releases and Public Announcements. No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement prior to or immediately after the Closing without the prior written approval of the Buyer and the Stockholders’ Representative; provided, however, that the Buyer may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly-traded securities.

10.3 No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

10.4 Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they related in any way to the subject matter hereof.

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10.5 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of his or its rights, interests, or obligations hereunder without the prior written approval of the Buyer and the Stockholders’ Representative; provided, however, that the Buyer may (a) assign any or all of its rights and interests hereunder to one or more of its Affiliates and (b) designate one or more of its Affiliates to perform its obligations hereunder (in any or all of which cases the Buyer nonetheless shall remain responsible for the performance of all of its obligations hereunder).

10.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be as effective as delivery of a manually executed counterpart of this Agreement.

10.7 Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

10.8 Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally, or if sent by mail, at the earlier of its receipt or seventy-two (72) hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as set forth below, or, if by telex or telecopy, when confirmation of such transmission has been received by the sender, as set forth below:

If to the Stockholders’ Representative:

Freeman Spogli & Co.

11100 Santa Monica Blvd.

Suite 1900

Los Angeles, CA 90025

Telecopier: (310) 444-1870

Attention: J. Frederick Simmons

Copy to:

Bingham McCutchen LLP

355 South Grand Ave.

Suite 4400

Los Angeles, CA 91709

Telecopier: (213) 680-6499

Attention: Richard J. Welch

If to the Company:

Century Maintenance Supply, Inc.

10050 Cash Road, #1

Stafford, TX 77477

Telecopier: (281) 208-5094

Attention: Richard E. Penick, Chief Financial Officer

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If to the Buyer or the Merger Sub:

Hughes Supply, Inc.

One Hughes Way

Orlando, Florida 32805

Telecopier: (407) 836-5414

Attention: David Bearman, Chief Financial Officer

Copy to:

Hughes Supply, Inc.

One Hughes Way

Orlando, Florida 32805

Telecopier: (407) 649-3018

Attention: John Z. Paré, Senior Vice President and General Counsel

and to:

Holland & Knight LLP

200 South Orange Ave., Suite 2600

Orlando, FL 32801

Telecopier: (407) 244-5288

Attention: Tom McAleavey

If to the Century AC or Bearden:

Dennis C. Bearden

12818 Jarvis

Cypress, TX 77429

Telecopier: (281) 568-3943

Any Party may change the address, telex or telecopy to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

10.9 Governing Law.

(a) This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

(b) The parties hereto agree that any action, suit or proceeding (a “Proceeding”) arising out of the transactions contemplated by this Agreement shall be commenced and litigated exclusively in the United States District for the District of Delaware or in a state court of the State of Delaware.

(c) Each of the parties hereto hereby irrevocably and unconditionally (i) consents to submit to the exclusive jurisdiction of the federal and state courts in the State of Delaware for any Proceeding (and each such party agrees not to commence any Proceeding, except in such courts), (ii) waives any objection to the laying of venue of any Proceeding in the courts of the State of Delaware, and (iii) waives, and agrees not to plead or to make, any claim that any Proceeding brought in any court of the State of Delaware has been brought in an improper or otherwise inconvenient forum.

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(d) Each Party hereto hereby irrevocably designates and appoints R,L & F Service Corp. at One Rodney Square, Wilmington, Delaware 19801 (hereinafter called the “Agent”), as its attorney-in-fact to receive service of process in such Proceeding, it being agreed that service upon such attorney-in-fact shall constitute valid service upon each such party or its successors or assigns, and each party agrees that (i) the sole responsibilities of the Agent shall be (x) to receive such process, (y) to send a copy of any such process so received to such party, by registered airmail, return receipt requested, at the address set out in Section 10.8 of this Agreement, or at the last address filed in writing by such party with the Agent and (z) to give prompt telegraphic notice of receipt thereof to such party at such address, and (ii) the Agent shall have no responsibility for the receipt or non-receipt by such party of such process, nor for any performance or non-performance by such party, or any other party to this Agreement or their successors or assigns. The Company hereby agrees to pay to the Agent such compensation as shall be agreed upon from time to time for services of the Agent hereunder. Each Party hereby agrees that its submission to jurisdiction and its designation of the Agent set out above is made for the express benefit of each of the Parties hereto. Each Party further covenants and agrees that so long as this Agreement shall be in effect, such Party shall maintain a duly appointed agent for the service of summonses and other legal processes in Wilmington, Delaware and will notify the other Parties hereto of the name and address of such agent if it is no longer the Agent.

10.10 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Buyer and the Stockholders’ Representative. No waiver by any Party of any default, misrepresentation, or breach of warranty, covenant or agreement hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty, covenant or agreement hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

10.11 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

10.12 Expenses. Each of the Parties will bear his or its own costs and expenses (including legal and advisory fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. The Buyer will pay the Hart-Scott-Rodino Act filing fee. The Company and Stockholder Transaction Expenses shall reduce the Purchase Price hereunder as set forth in the definition of Preliminary Purchase Price above. The Significant Stockholders agree that none of the Company and its Subsidiaries has borne or will bear any of the costs and expenses of the Company and the Significant Stockholders (including any of their legal and advisory fees and expenses) in connection with this Agreement or any of the transactions contemplated hereby.

10.13 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation. The Parties

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intend that each representation, warranty, covenant and agreement contained herein shall have independent significance. If any Party has breached any representation, warranty, covenant or agreement contained herein in any respect, the fact that there exists another representation, warranty, covenant or agreement relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty, covenant or agreement.

10.14 Specific Performance. Each of the Parties acknowledges and agrees that the other Parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter (subject to the provisions set forth in Section 10.9 above), in addition to any other remedy to which they may be entitled, at law or in equity.

10.15 Attorneys’ Fees. In the event any litigation arises out of or in connection with this Agreement, the prevailing Party in such litigation will be entitled to recover from the other Party or Parties to such litigation all reasonable attorneys’ fees, expenses and litigation costs, including those associated with any appellate or post-judgment collection proceeding.

10.16 Stockholders’ Representative.

(a) The Company and the Significant Stockholders hereby authorize, direct and appoint the Stockholders’ Representative to act as sole and exclusive agent, attorney-in-fact and representative of the Significant Stockholders and the other holders of Company Shares and Company Options, with full power of substitution with respect to all matters under this Agreement, including, without limitation, determining, giving and receiving notices and processes hereunder, receiving certain distributions of the Common Share Price to or for the benefit of the holders of the Company Shares and the Company Options, entering into any documents required or permitted under Section 8, contesting and settling any and all claims for indemnification pursuant to Section 8 hereof, resolving any other disputes hereunder, performing the duties expressly assigned to the Stockholders’ Representative hereunder and to engage and employ agents and representatives and to incur such other expenses as Stockholders’ Representative shall reasonably deem necessary or prudent in connection with the foregoing. The Stockholders’ Representative shall have the sole and exclusive right on behalf of any Significant Stockholder to take any action or provide any waiver, or receive any notice with respect to any claims for indemnification under Section 8 and to settle any claim or controversy arising with respect thereto. Any such actions taken, exercises of rights, power or authority, and any decision or determination made by the Stockholders’ Representative consistent herewith, shall be absolutely and irrevocably binding on each Significant Stockholder as if such Significant Stockholder personally had taken such action, exercised such rights, power or authority or made such decision or determination in such Significant Stockholder’s individual capacity, and no Significant Stockholders shall have the right to object, dissent, protest or otherwise contest the same. Any action required to be taken by the Significant Stockholders hereunder or any action which Significant Stockholders, at their election, have the right to take hereunder, shall be taken only by the Stockholders’ Representative and no Significant Stockholder acting on its own shall be entitled to take any such action. All deliveries and payments to be made by the Buyer to the Stockholders’ Representative pursuant to Sections 2.3(c) and 2.5(d) above shall be made on behalf of the holders of Company Common Shares and Company

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Options and shall constitute full performance of the obligations of the Buyer to the Stockholders’ Representative pursuant to such sections with respect to such amounts. The Buyer shall not be liable for allocation of particular deliveries and payments of such amounts by the Stockholders’ Representative.

(b) The appointment of the Stockholders’ Representative as each Significant Stockholder’s attorney-in-fact revokes any power of attorney heretofore granted that authorized any other person or persons to represent such Significant Stockholder with regard to this Agreement. The appointment of the Stockholders’ Representative as attorney-in-fact pursuant hereto is coupled with an interest and is irrevocable. The obligations of each Significant Stockholder pursuant to this Agreement (i) will not be terminated by operation of law, death, mental or physical incapacity, liquidation, dissolution, bankruptcy, insolvency or similar event with respect to such Significant Stockholder or any proceeding in connection therewith, or in the case of a trust, by the death of any trustee or trustees or the termination of such trust, or any other event, and (ii) shall survive the delivery of an assignment by any Significant Stockholders of the whole or any fraction of its interest in any payment due to it under this Agreement.

(c) The Stockholders’ Representative hereby accepts the foregoing appointment and agrees to serve as Stockholders’ Representative, subject to the provisions hereof, for the period of time from and after the date hereof without compensation except for the reimbursement from the holders of the Company Shares and the Company Options, out of the Net Assets Holdback or the Stockholder Holdback, of reasonable out of pocket expenses incurred by Stockholders’ Representative in its capacity as such. Each of the Significant Stockholders hereby acknowledges and agrees, that in appointing Stockholders’ Representative as their representative pursuant to the terms and provisions of this Section 10.16, and as specified herein, Stockholders’ Representative shall not, in the absence of bad faith, willful misconduct or gross negligence, have any liability to the Significant Stockholders whatsoever with respect to its actions, decisions and determinations, and shall be entitled to assume that all actions, decisions and determinations are fully authorized by each and every one of the Significant Stockholders.

(d) The provisions of this Section 10.16 shall in no way impose any obligations on the Buyer. In particular, notwithstanding any notice received by the Buyer to the contrary and absent bad faith or willful misconduct, the Buyer (i) shall be fully protected in relying upon and shall be entitled to rely upon, shall have no liability to the Significant Stockholders with respect to, actions, decisions and determinations of the Stockholders’ Representative and (ii) shall be entitled to assume that all actions, decisions and determinations of the Stockholders’ Representative are fully authorized by all of the Significant Stockholders.

10.17 Confidentiality.

(a) Between the date of this Agreement and the Closing Date, the Buyer, the Company and the Significant Stockholders will maintain in confidence, and will cause their directors, officers, employees, agents, and advisors to maintain in confidence, any written, oral, or other information obtained in confidence from another Party or its Subsidiaries in connection with this Agreement, unless (i) such information is already known to such Party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such Party, (ii) the use of such information is necessary or appropriate in making any filing or obtaining any consent or approval required for the consummation of the transactions contemplated by this Agreement, or (iii) the furnishing or use of such information is required by legal proceedings.

50

(b) If the transactions contemplated by this Agreement are not consummated, each Party will return or destroy as much of such written information as the other party may reasonably request.

(c) Notwithstanding anything in this Agreement to the contrary, each Party (and each employee, representative or other agent of any Party) may disclose to any and all persons, without limitation of any kind, the U.S. Federal income Tax treatment and U.S. Federal income Tax structure of any and all transactions contemplated by this Agreement (the “Transactions”) and all materials of any kind (including opinions or other tax analyses) that are or have been provided to any Party (or to any employee, representative or other agent of any such Party) relating to such Tax treatment or Tax structure; provided, however, that such disclosure may not be made (i) until the earlier of (x) the date of the public announcement of discussions relating to the Transactions, (y) the date of the public announcement of the Transactions and (z) the date of the execution of any agreement to enter into the Transactions and (ii) to the extent required to be kept confidential to comply with any applicable federal or state securities laws.

* * * * *

51

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as of the date first above written.

BUYER
Hughes Supply, Inc.
By:	/s/ David Bearman
Name:	David Bearman
Title:	Executive Vice President and CFO
MERGER SUB
MRO Merger Corp.
By:	/s/ David Bearman
Name:	David Bearman
Title:	Treasurer
COMPANY
Century Maintenance Supply, Inc.
By:	/s/ Richard Penick
Name:	Richard Penick
Title:	V.P.

STOCKHOLDERS’ REPRESENTATIVE
FS Equity Partners IV, L.P.
	By:	FS Capital Partners LLC
	Its:	General Partner
		By:	/s/ Mark J. Doran
		Name:	Mark J. Doran
		Title:

OTHER SIGNIFICANT STOCKHOLDERS
Century Airconditioning Holdings, Inc.
By:	/s/ Richard Penick
Name:	Richard Penick
Title:	V.P.
/s/ Dennis Bearden
Dennis C. Bearden

52

EX-2.2

Exhibit 2.2

FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER

This First Amendment (this “Amendment”) to Agreement and Plan of Merger, dated as of December 19, 2003, is by and between Hughes Supply, Inc., a Florida corporation (the “Buyer”), and FS Equity Partners IV, L.P., a Delaware limited partnership (the “Stockholders’ Representative”), and Freeman Spogli & Co. LLC (“FS Management Company”). Capitalized terms used but not defined in this Amendment have the meaning given such terms in the Merger Agreement (defined below).

Background

The Parties have entered into an Agreement and Plan of Merger dated November 26, 2003 (the “Agreement”). The Parties now desire to amend the Agreement as set forth in this Amendment. In consideration of the mutual covenants and agreements set forth below, the Buyer and the Stockholders’ Representative agree as follows:

Terms

1. Section 2.3 of the Agreement is hereby amended by deleting such section and replacing it with the following:

2.3 Deliveries at the Closing. At the Closing, (a) the Stockholders’ Representative and the Company will deliver to the Buyer the various certificates, instruments, and documents referred to in Section 7.1 below, (b) the Buyer will deliver to the Company the various certificates, instruments, and documents referred to in Section 7.2 below and (c) the Buyer will deliver to Freeman Spogli & Co. LLC (the “FS Management Company”) by wire transfer of immediately available funds to the account designated by the Stockholders’ Representative the Net Assets Holdback and the Stockholder Holdback pursuant to Section 2.6 below.

2. Section 2.5(a) of the Agreement is hereby amended by deleting the first sentence thereof and replacing it with the following:

(a) At least five (5) business days prior to the Closing Date, the Company shall deliver to the Buyer a good faith written estimate of the Net Assets Amount as of the close of business on the Closing Date (the “Estimated Closing Date Net Assets Amount”), which shall be subject to the Buyer’s review.

3. Section 2.5(b) of the Agreement is hereby amended by deleting the first sentence thereof and replacing it with the following:

(b) Within twenty (20) days after the Closing Date, the Buyer will prepare and deliver to the Stockholders’ Representative a balance sheet of the Company as of the close of business on the Closing Date (the “Final Closing Date Balance Sheet”), including a calculation of the Net Assets Amount as of the close of business on the Closing Date (the “Closing Date Net Assets Amount”).

4. Section 2.5(b) of the Agreement is hereby amended by adding the following as the last sentence of such section:

(b) Within two (2) business days after the Closing Date, the Buyer will deliver to the FS Management Company, by wire transfer in immediately available funds to the account designated by the FS Management Company, as an increase to the Net Assets Holdback, an amount equal to the cash and cash equivalents (including checks that have been received prior to the close of business on the Closing Date that have either not been

cashed or not been cleared) contained in the Company’s accounts as of the close of business on the Closing Date (excluding any amounts delivered by the Buyer to the Company in connection with the consummation of the transactions contemplated by this Agreement), net of the aggregate amount of all drafts, checks or wire transfers issued on such accounts that remain outstanding and uncleared as of the close of business on the Closing Date.

5. Section 2.5(f) of the Agreement is hereby amended by deleting the first sentence thereof and replacing it with the following:

(f) The FS Management Company agrees that it shall retain, and not distribute to its general or limited partners, or to the holders of the Company Common Shares or the Company Options, $3,000,000 of the Preliminary Purchase Price plus the amount delivered to the FS Management Company pursuant to the last sentence of Section 2.5(b) above (the “Net Assets Holdback”) until the Final Closing Date Net Assets Amount has become final and binding on the Parties pursuant to Section 2.5(c) and all amounts required to be paid by the Stockholders’ Representative or the Buyer pursuant to Section 2.5(d) have been paid in full.

6. Section 10.16 of the Agreement is hereby amended by adding the following new subsection (e):

(e) With respect to the rights and obligations of the Stockholders’ Representative relating to the Net Assets Holdback and the Stockholder Holdback in this Agreement, the FS Management Company is hereby substituted for the Stockholders’ Representative throughout this Agreement, and the FS Management Company hereby accepts such substitution and appointment for all such purposes.

7. Waiver. The Buyer hereby acknowledges that it has received each of the Estimated Closing Date Net Assets Amount under Section 2.5(a) of the Agreement, the certificate described in the last sentence of Section 2.5(a) of the Agreement and the supplements to the Company Disclosure Letter described in Section 5.6(b) of the Agreement, and the Buyer hereby waives any failure by the Company to deliver any such item within the time periods set forth in the Agreement. No other waiver is made by the Buyer.

8. Amendment. Except as affected by this Amendment, the Agreement is unchanged and continues in full force and effect. All references to the Agreement shall refer to the Agreement as amended by this Amendment. This Amendment shall be binding upon and inure to the benefit of each of the undersigned and their respective successors and permitted assigns.

9. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile shall be as effective as delivery of a manually executed counterpart of this Amendment.

10. Governing Law. This Amendment shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

2

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above.

BUYER
Hughes Supply, Inc.
By:	/s/ David Bearman
Name:	David Bearman
Title:	Executive Vice President and Chief Financial Officer

STOCKHOLDERS’ REPRESENTATIVE
FS Equity Partners IV, L.P.
By:	FS Capital Partners LLC
Its:	General Partner
	By:	/s/ Jon D. Ralph
	Name:	Jon D. Ralph
	Title:	Managing Member

FS MANAGEMENT COMPANY
Freeman Spogli & Co. LLC
By:	/s/ Jon D. Ralph
Name:	Jon D. Ralph
Title:	Managing Member

3

EX-10.1

Exhibit 10.1

SENIOR TERM LOAN AGREEMENT

dated as of December 19, 2003

among

HUGHES SUPPLY, INC.

as Borrower

LEHMAN COMMERCIAL PAPER INC.,

SUNTRUST BANK

AND EACH OF THE OTHER LENDERS

FROM TIME TO TIME PARTY HERETO

SUNTRUST BANK

as Administrative Agent

and

LEHMAN BROTHERS INC.

SUNTRUST ROBINSON HUMPHREY

a division of SunTrust Capital Markets, Inc.,

as Arrangers

TABLE OF CONTENTS

	Page
ARTICLE I DEFINITIONS; CONSTRUCTION	2
Section 1.1. Definitions	2
Section 1.2. Classifications of Loans and Borrowings	20
Section 1.3. Accounting Terms and Determination	20
Section 1.4. Terms Generally	21
ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS	22
Section 2.1. General Description of Facilities	22
Section 2.2. Revolving Loans	22
Section 2.3. Procedure for Revolving Borrowings	22
Section 2.4. Intentionally Deleted	22
Section 2.5. Intentionally Deleted	22
Section 2.6. Intentionally Deleted	22
Section 2.7. Intentionally Deleted	22
Section 2.8. Funding of Borrowings	22
Section 2.9. Interest Elections	23
Section 2.10. Intentionally Deleted	24
Section 2.11. Repayment of Loans	24
Section 2.12. Evidence of Indebtedness	24
Section 2.13. Optional Mandatory Prepayments	25
Section 2.14. Interest on Loans	26
Section 2.15. Fees	27
Section 2.16. Computation of Interest and Fees	27
Section 2.17. Inability to Determine Interest Rates	27
Section 2.18. Illegality	27
Section 2.19. Increased Costs	28
Section 2.20. Funding Indemnity	29
Section 2.21. Taxes	29
Section 2.22. Payments Generally; Pro Rata Treatment; Sharing of Set-offs	31
Section 2.23. Intentionally Deleted	33

Section 2.24. Limitation on Certain Payment Obligations.	33
ARTICLE III CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT	33
Section 3.1. Conditions To Effectiveness	33
Section 3.2. Each Credit Event	36
Section 3.3. Delivery of Documents	36
ARTICLE IV REPRESENTATIONS AND WARRANTIES	36
Section 4.1. Existence; Power	37
Section 4.2. Organizational Power; Authorization	37
Section 4.3. Governmental Approvals; No Conflicts	37
Section 4.4. Financial Statements	37
Section 4.5. Litigation and Environmental Matters	38
Section 4.6. Compliance with Laws and Agreements	38
Section 4.7. Investment Company Act, Etc	38
Section 4.8. Taxes	38
Section 4.9. Margin Regulations	39
Section 4.10. ERISA	39
Section 4.11. Ownership of Property	39
Section 4.12. Disclosure	40
Section 4.13. Labor Relations	40
Section 4.14. Subsidiaries	40
Section 4.15. Insolvency	40
Section 4.16. Funded Debt	40
ARTICLE V AFFIRMATIVE COVENANTS	41
Section 5.1. Financial Statements and Other Information	41
Section 5.2. Notices of Material Events	42
Section 5.3. Existence; Conduct of Business	43
Section 5.4. Compliance with Laws, Etc.	43
Section 5.5. Payment of Obligations	43
Section 5.6. Books and Records	43
Section 5.7. Visitation, Inspection, Etc.	43
Section 5.8. Maintenance of Properties; Insurance	44
Section 5.9. Use of Proceeds and Letters of Credit	44

ii

Section 5.10. Additional Subsidiaries	44
Section 5.11. Ownership of all Subsidiary Loan Parties.	45
ARTICLE VI FINANCIAL COVENANTS	45
Section 6.1. Leverage Ratio	45
Section 6.2. Maximum Total Funded Debt to Consolidated EBITDA Ratio	45
Section 6.3. Fixed Charge Coverage Ratio	45
Section 6.4. Consolidated Net Worth	45
Section 6.5. Asset Coverage Ratio	45
Section 6.6. Minimum Interest Coverage Ratio	46
ARTICLE VII NEGATIVE COVENANTS	46
Section 7.1. Indebtedness and Preferred Equity.	46
Section 7.2. Negative Pledge	47
Section 7.3. Fundamental Changes	48
Section 7.4. Investments, Loans, Etc.	48
Section 7.5. Restricted Payments	49
Section 7.6. Sale of Assets	50
Section 7.7. Transactions with Affiliates	51
Section 7.8. Restrictive Agreements	51
Section 7.9. Sale and Leaseback Transactions	51
Section 7.10. Hedging Transactions	51
Section 7.11. Fiscal Year	52
Section 7.12. Optional Prepayments.	52
Section 7.13. Actions Under Certain Documents.	52
ARTICLE VIII EVENTS OF DEFAULT	53
Section 8.1. Events of Default	53
ARTICLE IX THE ADMINISTRATIVE AGENT	56
Section 9.1. Appointment of Administrative Agent	56
Section 9.2. Nature of Duties of Administrative Agent	56
Section 9.3. Lack of Reliance on the Administrative Agent	57
Section 9.4. Certain Rights of the Administrative Agent	57
Section 9.5. Reliance by Administrative Agent	57
Section 9.6. The Administrative Agent in its Individual Capacity	57
Section 9.7. Successor Administrative Agent	58

iii

Section 9.8. Authorization to Execute other Loan Documents	58
ARTICLE X MISCELLANEOUS	58
Section 10.1. Notices	58
Section 10.2. Waiver; Amendments	60
Section 10.3. Expenses; Indemnification	61
Section 10.4. Successors and Assigns	62
Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process	64
Section 10.6. WAIVER OF JURY TRIAL	65
Section 10.7. Right of Setoff	66
Section 10.8. Counterparts; Integration	66
Section 10.9. Survival	66
Section 10.10. Severability	66
Section 10.11. Confidentiality	67
Section 10.12. Interest Rate Limitation	67
Section 10.13. Waiver of Effect of Corporate Seal	68
Section 11.1. General Description of Subordinated Term Loans	68
Section 11.2. Repayment of Subordinated Term Loans	68
Section 11.3. Subordination Provisions.	68
Section 11.4. General Description of Subordination Terms	70
Section 11.5. Payment of Principal, Interest or other Amounts.	70
Section 11.6. Liquidation, Dissolution, Bankruptcy.	71
Section 11.7. Turnover of Improper Payments.	71
Section 11.8. Standstill.	71
Section 11.9. Reinstatement.	71
Section 11.10. Subordination Non-Impaired.	72
Section 11.11. Continuing Subordination.	72
Section 11.12. Judgments	72
Section 11.13. Amendments and Modifications to this Article XI.	72
Section 11.14. Subrogation.	73
Section 11.15. Validity of Liens Securing Senior Obligations.	73
Section 11.16. Further Assurances.	73
Section 11.17. Subordination May Not Be Impaired.	73
Section 11.18. Retention of Mandatory Prepayments.	73

iv

Section 11.19. Distribution or Notice to Representative.	74
Section 11.20. Automatic Amendments and Modifications to this Agreement	74
Section 11.21. Other Provisions Related to the Credit Agreement	75

Schedules

Schedule 4.5	-	Environmental Matters
Schedule 4.14	-	Subsidiaries
Schedule 7.1	-	Outstanding Indebtedness
Schedule 7.2	-	Existing Liens
Schedule 7.4	-	Existing Investments
Schedule 7.6	-	Planned Surplus Real Property Dispositions

v

Exhibits

Exhibit A	-	Form of Term Loan Note
Exhibit B	-	Form of Assignment and Acceptance
Exhibit C	-	Form of Subsidiary Guarantee Agreement
Exhibit D	-	Form of Indemnity, Subrogation and Contribution Agreement
Exhibit 2.3	-	Form of Notice of Term Loan Borrowing
Exhibit 2.9	-	Form of Continuation/Conversion
Exhibit 3.1(b)(iv)	-	Form of Secretary’s Certificate
Exhibit 3.1(b)(viii)	-	Form of Officer’s Certificate
Exhibit 3.1(b)(ix)	-	Form of Solvency Certificate
Exhibit 5.1(c)	-	Form of Compliance Certificate

vi

SENIOR TERM LOAN AGREEMENT

THIS SENIOR TERM LOAN AGREEMENT (this “Agreement”) is made and entered into as of December 19, 2003, by and among HUGHES SUPPLY, INC. a Florida corporation (“Hughes Supply” or the “Borrower”), LEHMAN COMMERCIAL PAPER INC. (“LCPI”), SUNTRUST BANK (“STB”) and each of the several other banks and financial institutions from time to time party hereto (collectively, the “Lenders”), LEHMAN BROTHERS INC. (“LBI” and together with LCPI, collectively, “Lehman”) and SUNTRUST ROBINSON HUMPRHEY, a division of SunTrust Capital Markets (“STRH” and together with STB, collectively, “SunTrust”), in their capacities as exclusive joint advisors, joint book managers and joint lead arrangers (the “Arrangers”) and SUNTRUST BANK, in its capacity as administrative agent for the Lenders (the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower proposes to acquire (the “Acquisition”) all of the issued and outstanding common stock of Century Maintenance Supply, Inc. (“Century” or the “Target”; and together with each of its subsidiaries, collectively, the “Acquired Business”) for cash and other consideration, including up to $120,000,000 in borrowings under the Existing Credit Facility (as defined below), in an aggregate amount of approximately $370,000,000 (inclusive of the payment of related fees and expenses and the refinancing of consolidated indebtedness of the Target and other consolidated liabilities of the Target), pursuant to that certain Agreement and Plan of Merger, dated as of November 26, 2003 (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms hereof, the “Acquisition Agreement”), by and among the Borrower, as buyer (in such capacity, the “Buyer”), MRO Merger Corp., a newly-formed, Delaware corporation and wholly-owned subsidiary of the Borrower (the “Merger Sub”), FS Equity Partners IV, L.P., a Delaware limited partnership, Century Airconditioning Holdings, Inc., Dennis C. Bearden, and Century;

WHEREAS, pursuant to the Acquisition Agreement, Merger Sub will merge with and into the Target, with Target surviving such merger, and as a result of which, Target will become a wholly-owned subsidiary of the Borrower;

WHEREAS, the Borrower has requested that the Lenders establish a $250,000,000 term loan facility in favor of the Borrower to finance, in part, the Acquisition;

WHEREAS, subject to the terms and conditions of this Agreement, the Lenders, to the extent of their respective Commitments as defined herein, are willing severally to establish the requested term loan facility in favor of the Borrower.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Borrower, the Lenders and the Administrative Agent agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

Section 1.1. Definitions. In addition to the other terms defined herein, the following terms used herein shall have the meanings herein specified (to be equally applicable to both the singular and plural forms of the terms defined):

“Acquired Business” shall have the meaning set forth in the recitals hereto.

“Acquisition” shall have the meaning set forth in the recitals hereto.

“Acquisition Agreement” shall have the meaning set forth in the recitals hereto.

“Adjusted LIBO Rate” shall mean, with respect to each Interest Period for a Eurodollar Borrowing, the rate per annum obtained by dividing (i) LIBOR for such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve Percentage.

“Administrative Agent” shall have the meaning set forth in the introductory paragraph hereof.

“Administrative Questionnaire” shall mean, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative Agent duly completed by such Lender.

“Affiliate” shall mean, as to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person. For the purposes of this definition, “Control” shall mean the power, directly or indirectly, either to (i) vote 5% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of a Person or (ii) direct or cause the direction of the management and policies of a Person, whether through the ability to exercise voting power, by control or otherwise. The terms “Controlling”, “Controlled by”, and “under common Control with” have the meanings correlative thereto.

“Aggregate Subsidiary Threshold” shall mean an amount equal to ninety-five percent (95%) of the total consolidated revenue or assets of the Borrower and its Subsidiaries (excluding any Securitization Subsidiaries) for the most recent Fiscal Quarter as shown on the financial statements most recently delivered or required to be delivered pursuant to Section 5.1(a) or (b), as the case may be.

“Aggregate Term Loan Commitment Amount” shall mean the aggregate principal amount of the Term Loan Commitments from time to time. On the Closing Date, the Aggregate Term Loan Commitment Amount equals $250,000,000.

“Applicable Lending Office” shall mean, for each Lender and for each Type of Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender) designated for such Type of Loan in the Administrative Questionnaire submitted by such Lender or such other office of such Lender (or an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained.

2

“Applicable Margin” shall mean, as of any date (i) prior to the Conversion Date, with respect to (a) all Eurodollar Borrowings, a rate per annum equal to 2.25% and (b) all Base Rate Borrowings, a rate per annum equal to 0.00% and (ii) on and after the Conversion Date, with respect to (a) all Eurodollar Borrowings, a rate per annum equal to 6.50% and (b) all Base Rate Borrowings, a rate per annum equal to 4.00%.

“Approved Fund” shall mean 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 and that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

“Asset Sale” shall mean any Disposition of property or series of related Dispositions of Property (excluding any such Disposition permitted by clause (a), (b), (c), (d) or (e) of Section 7.6).

“Asset Value” shall mean, with respect to any property or asset of the Borrower or any Subsidiary as of any particular date, an amount equal to the greater of (i) the net book value of such property or asset as of such date as established in accordance with GAAP, and (ii) the fair market value of such property or asset as of such date as determined in good faith by the board of directors of the Borrower or such Subsidiary.

“Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.4(b)) and accepted by the Administrative Agent, in the form of Exhibit B attached hereto or any other form approved by the Administrative Agent.

“Base Rate” shall mean the higher of (i) the per annum rate which the Administrative Agent publicly announces from time to time to be its prime lending rate, as in effect from time to time, and (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%). The Administrative Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate charged to customers. The Administrative Agent may make commercial loans or other loans at rates of interest at, above or below the Administrative Agent’s prime lending rate. Each change in the Administrative Agent’s prime lending rate shall be effective from and including the date such change is publicly announced as being effective.

“Borrower” shall have the meaning set forth in the introductory paragraph hereof.

“Borrowing” shall mean the initial borrowing of the Term Loan and, if the Borrower elects to convert or continue all or any portion of the Term Loan, the term “Borrowing” shall refer to all or any portion of the Term Loan consisting of Loans of the same Type, made, converted or continued on the same date and in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

3

“Business Day” shall mean (i) any day other than a Saturday, Sunday or other day on which commercial banks in Atlanta, Georgia are authorized or required by law to close and (ii) if such day relates to a Borrowing of, a payment or prepayment of principal or interest on, a conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice with respect to any of the foregoing, any day on which dealings in Dollars are carried on in the London interbank market.

“Capital Lease Obligations” of any Person shall mean all obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Capital Stock” shall mean any non-redeemable capital stock (or in the case of a partnership or limited liability company, the partners’ or members’ equivalent equity interest) of the Borrower or any of its Subsidiaries (to the extent issued to a Person other than the Borrower), whether common or preferred.

“Century” shall have the meaning set forth in the recitals hereto.

“Change in Control” shall mean the occurrence of one or more of the following events: (i) any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), other than the Hughes Family shall become the “beneficial owner(s)” (as defined in said Rule 13(d)(3)) of more than 25% or more of the shares of the outstanding common stock of the Borrower entitled to vote for members of the Borrower’s board of directors, (ii) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (a) nominated by the current board of directors nor (b) appointed by directors so nominated or (iii) any event or condition shall occur or exist which, pursuant to the terms of any Change in Control Provision, requires or permits the holder(s) of Indebtedness of the Borrower or any of its Subsidiaries to require that such Indebtedness be redeemed, repurchased, defeased, prepaid or repaid, in whole or in part, or the maturity of such Indebtedness to be accelerated in any respect.

“Change in Control Provision” shall mean any term or provision contained in any indenture, debenture, note, or other agreement or document evidencing or governing Indebtedness of Borrower evidencing debt or a commitment to extend loans in excess of $5,000,000 which requires, or permits the holder(s) of such Indebtedness of Borrower to require that such Indebtedness of Borrower be redeemed, repurchased, defeased, prepaid or repaid, either in whole or in part, or the maturity of such Indebtedness of Borrower to be accelerated in any respect, as a result of a change in ownership of the capital stock of Borrower or voting rights with respect thereto.

“Change in Law” shall mean (i) the adoption of any applicable law, rule or regulation after the date of this Agreement, (ii) any change in any applicable law, rule or regulation, or any change in the interpretation or application thereof, by any Governmental Authority after the date of this Agreement, or (iii) compliance by any Lender (or its Applicable

4

Lending Office) (or for purposes of Section 2.19(b), by such Lender’s holding company, if applicable) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“Closing Date” shall mean the date on which the conditions precedent set forth in Section 3.1 and Section 3.2 have been satisfied or waived in accordance with Section 10.2.

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time.

“Compliance Certificate” shall mean a certificate from the principal executive officer and the principal financial officer of the Borrower in the form of, and containing the certifications set forth in, the certificate attached hereto as Exhibit 5.1(c).

“Consolidated EBITDA” shall mean, for the Borrower and its Subsidiaries for any period, an amount equal to (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated Net Income for such period, (A) Consolidated Interest Expense, (B) income tax expense determined on a consolidated basis in accordance with GAAP and (C) depreciation and amortization determined on a consolidated basis in accordance with GAAP.

“Consolidated EBITDAR” shall mean, for the Borrower and its Subsidiaries for any period, an amount equal to the sum of (i) Consolidated EBITR for such period plus (ii) to the extent deducted in determining Consolidated EBITR, depreciation and amortization determined on a consolidated basis in accordance with GAAP for such period.

“Consolidated EBITR” shall mean, for the Borrower and its Subsidiaries for any period, an amount equal to (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated Net Income for such period, (A) Consolidated Interest Expense, (B) income tax expense determined on a consolidated basis in accordance with GAAP and (C) Consolidated Rental Expense.

“Consolidated Fixed Charges” shall mean, for the Borrower and its Subsidiaries for any period, the sum (without duplication) of (i) Consolidated Interest Expense for such period, plus (ii) Consolidated Rental Expense for such period.

“Consolidated Interest Expense” shall mean, for any period of the Borrower, total interest expense of the Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP, and including without limitation or duplication, interest expense attributable to Capital Lease Obligations, any program costs incurred by the Borrower in connection with a Securitization Transactions and any interest expense attributable to Hedging Transactions.

“Consolidated Net Income” shall mean, for the Borrower and its Subsidiaries for any period, the net income (or loss) of the Borrower and its Subsidiaries for such period (taken as a single accounting period) determined on a consolidated basis in accordance with GAAP, but excluding therefrom (to the extent otherwise included therein) (i) any items of gain or loss which were included in determining such Consolidated Net Income and were not realized in the

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ordinary course of business or the result of a sale of assets other than in the ordinary course of business and (ii) any income (or loss) of any Person accrued prior to the date such Person becomes a Subsidiary, or is merged into or consolidated with Borrower or any Subsidiary, on the date that such Person’s assets are acquired by the Borrower or any Subsidiary; provided, however, that the net income (or loss) of Century accrued prior to the Acquisition shall be included in Consolidated Net Income.

“Consolidated Net Worth” shall mean, as of any date, the Borrower’s total shareholder’s equity of such date as determined in accordance with GAAP.

“Consolidated Rental Expense” shall mean, for the Borrower and its Subsidiaries for any period, the total operating lease expense for such period, determined on a consolidated basis in accordance with GAAP.

“Consolidated Total Capital” shall mean, as of any date, the sum of (i) Consolidated Total Funded Debt as of such date and (ii) Consolidated Net Worth as of such date.

“Consolidated Total Funded Debt” shall mean, as of any date, all Indebtedness of the Borrower and its Subsidiaries other than Indebtedness of the type described in subsections (vi) and (vii) of the definition thereto, but including, without limitation, all Loans made hereunder.

“Contractual Obligation” of any Person shall mean any provision of any security issued by such Person or of any agreement, instrument or undertaking under which such Person is obligated or by which it or any of the property in which it has an interest is bound.

“Conversion Date” shall mean June 30, 2004.

“Default” shall mean any condition or event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

“Default Interest” shall have the meaning set forth in Section 2.14(d).

“Disposition” shall mean with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof; and the terms “Dispose” and “Disposed of” shall have correlative meanings.

“Dollar(s)” and the sign “$” shall mean lawful money of the United States of America.

“Eligible Assignee” shall mean (i) a Lender; (ii) an Affiliate of a Lender; (iii) an Approved Fund; and (iv) any other Person (other than a natural Person) approved by the Administrative Agent and unless (x) such Person is taking delivery of an assignment in connection with physical settlement of a credit derivatives transaction or (y) an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed). If the consent of the Borrower to an assignment or to an Eligible Assignee is required hereunder (including a consent to an assignment which does not meet the minimum assignment thresholds specified in paragraph (b)(i) of Section 10.4), the Borrower shall be

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deemed to have given its consent five (5) Business Days after the date notice thereof has actually been delivered by the assigning Lender (through the Administrative Agent) to the Borrower, unless such consent is expressly refused by the Borrower prior to such fifth Business Day.

“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

“Environmental Liability” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (i) any actual or alleged violation of any Environmental Law, (ii) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (iii) any actual or alleged exposure to any Hazardous Materials, (iv) the Release or threatened Release of any Hazardous Materials or (v) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated), which, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for the purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” shall mean (i) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (ii) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (iv) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (v) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (vii) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

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“Eurodollar” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Adjusted LIBO Rate.

“Eurodollar Reserve Percentage” shall mean the aggregate of the maximum reserve percentages (including, without limitation, any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upwards to the next 1/100^th of 1%) in effect on any day to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate pursuant to regulations issued by the Board of Governors of the Federal Reserve System (or any Governmental Authority succeeding to any of its principal functions) with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities” under Regulation D). Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D. The Eurodollar Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Event of Default” shall have the meaning set forth in Section 8.1.

“8.27% Notes” shall mean, collectively, Hughes Supply’s (i) $28,000,000 8.27% Series B Senior Notes due November 30, 2005 and (ii) $103,000,000 8.42% Series C Senior Notes due 2007.

“Excluded Taxes” shall mean with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (i) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (ii) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Lender is located and (iii) in the case of a Foreign Lender, any withholding tax that (x) is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement, (y) is imposed on amounts payable to such Foreign Lender at any time that such Foreign Lender designates a new lending office, other than taxes that have accrued prior to the designation of such lending office that are otherwise not Excluded Taxes, and (z) is attributable to such Foreign Lender’s failure to comply with Section 2.21(e).

“Existing Credit Agreement” shall mean that certain Revolving Credit Agreement, dated as of March 26, 2003, by and among Hughes Supply, the banks from time to time party thereto and SunTrust Bank as administrative agent, as amended or modified by that certain First Amendment to Revolving Credit Agreement (in form and substance satisfactory to the Arrangers) on or prior to the date hereof and as may be further amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time after the date hereof in accordance with the terms hereof.

“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the next 1/100^th of 1%) equal to the weighted average of the rates on

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overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers, as published by the Federal Reserve Bank of New York on the next succeeding Business Day or if such rate is not so published for any Business Day, the Federal Funds Rate for such day shall be the average rounded upwards, if necessary, to the next 1/100th of 1% of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent.

“Fee Letter” shall mean that certain fee letter, dated as of November 25, 2003, executed by Lehman and SunTrust and accepted by Borrower.

“Financial Letters of Credit” shall mean, collectively, (i) all standby letters of credit issued for the account of the Borrower or any of its Subsidiaries, other than standby letters of credit supporting obligations incurred in the ordinary course of business of the types referred to in clauses (iii) and (iv) of the definition of Permitted Encumbrances, as well as liability insurance, and (ii) all direct pay letters of credit issued for the account of the Borrower or any of its Subsidiaries supporting financing arrangements, including industrial development revenue bonds; provided, however, that the term Financial Letters of Credit shall exclude all trade letters of credit issued for the account of the Borrower or any of its Subsidiaries.

“Fiscal Quarter” shall mean any fiscal quarter of the Borrower.

“Fiscal Year” shall mean any fiscal year of the Borrower.

“Fixed Charge Coverage Ratio” shall mean, as of any date, the ratio of (a) Consolidated EBITDAR to (b) Consolidated Fixed Charges, in each case measured for the four consecutive Fiscal Quarters ending on or immediately prior to such date.

“Foreign Lender” shall mean any Lender that is not a United States person under Section 7701(a)(3) of the Code.

“GAAP” shall mean generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.3.

“Governmental Authority” shall mean the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly and including any obligation, direct or indirect, of the guarantor (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (iii) to maintain working capital, equity capital or any other financial statement

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condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) as an account party in respect of any letter of credit or letter of guaranty issued in support of such Indebtedness or obligation; provided, that the term “Guarantee” shall not include endorsements for collection or deposits in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which Guarantee is made or, if not so stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. The term “Guarantee” used as a verb has a corresponding meaning.

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

“Hedging Obligations” of any Person shall mean any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired under (i) any and all Hedging Transactions, (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions and (iii) any and all renewals, extensions and modifications of any Hedging Transactions and any and all substitutions for any Hedging Transactions, including without limitation any promissory notes issued to pay the Net Mark-to-Market Exposure of any Hedging Transaction that is terminated.

“Hedging Transaction” of any Person shall mean any transaction (including an agreement with respect thereto) now existing or hereafter entered into by such Person that is a derivative instrument as defined under FAS 133 as applied under GAAP.

“High Yield Securities” shall mean senior subordinated debt securities, to be issued and sold by the Borrower in accordance with the Fee Letter, in an amount sufficient to repay all outstanding Loans, accrued and unpaid interest thereon, all related fees and expenses and other Obligations and amounts due in respect thereof or hereunder in full.

“Hughes Family” shall mean (i) David H. Hughes, Vincent S. Hughes and Russell V. Hughes, (ii) any of their direct family members (including, without limitation, lineal ancestors and descendants, siblings, and lineal descendants of siblings), (iii) any trusts and profit-sharing plans and stock option plans established for the sole benefit of the foregoing and (iv) the heirs and personal representatives of the foregoing.

“Indebtedness” of any Person shall mean, without duplication (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business; provided, that for purposes of Section 8.1(f), trade payables overdue by more than 120 days shall be included in this definition except to the extent that any of such trade payables are being disputed in good faith and by appropriate measures), (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to

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property acquired by such Person, (v) all Capital Lease Obligations of such Person, (vi) all obligations, contingent or otherwise, of such Person in respect of Financial Letters of Credit, acceptances or similar extensions of credit, (vii) Hedging Obligations, (viii) all Guarantees of such Person of the type of Indebtedness described in clauses (i) through (vii) above, (ix) all Indebtedness of a third party secured by any Lien on property owned by such Person, whether or not such Indebtedness has been assumed by such Person, (x) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any common stock of such Person and (xi) Off-Balance Sheet Debt. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor. For purposes of determining the amount of attributed Indebtedness from Hedging Obligations, the “principal amount” of any Hedging Obligations at any time shall be the Net Mark-to-Market Exposure of such Hedging Obligations.

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

“Indemnity and Contribution Agreement” shall mean the Indemnity, Subrogation and Contribution Agreement, dated as of the date hereof and substantially in the form of Exhibit D, among the Borrower, the Subsidiary Loan Parties and the Administrative Agent.

“Indemnity and Contribution Agreement Supplement” shall mean each supplement substantially in the form of Annex I to the Indemnity and Contribution Agreement executed and delivered by a Subsidiary of the Borrower pursuant to Section 5.10.

“Initial Lenders” shall mean LCPI and STB, in their respective capacities as Lenders under this Agreement.

“Interest Coverage Ratio” shall mean, as of any date of determination, the ratio of (i) Consolidated EBITDA for the four consecutive Fiscal Quarters of the Borrower ending on such date to (ii) Consolidated Interest Expense for the four consecutive fiscal quarters of the Borrower ending on such date.

“Interest Period” shall mean with respect to any Eurodollar Borrowing, a period of one, two, three or six months; provided, that:

(i) the initial Interest Period for such Borrowing shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of another Type), and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires;

(ii) if any Interest Period would otherwise end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case such Interest Period would end on the next preceding Business Day;

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

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(iv) no Interest Period may extend beyond the Maturity Date.

“Lenders” shall have the meaning set forth in the introductory paragraph hereof and shall include, where appropriate, each additional Lender that joins this Agreement pursuant to Section 10.4.

“Leverage Ratio” shall mean, as of any date, the ratio of (i) Consolidated Total Funded Debt as of such date to (ii) Consolidated Total Capital as of such date.

“LIBOR” shall mean, for any applicable Interest Period with respect to any Eurodollar Loan, the British Bankers’ Association Interest Settlement Rate per annum for deposits in Dollars for a period equal to such Interest Period appearing on the display designated as Page 3750 on the Dow Jones Markets Service (or such other page on that service or such other service designated by the British Bankers’ Association for the display of such Association’s Interest Settlement Rates for Dollar deposits) as of 11:00 a.m. (London, England time) on the day that is two Business Days prior to the first day of the Interest Period or if such Page 3750 is unavailable for any reason at such time, the rate which appears on the Reuters Screen ISDA Page as of such date and such time; provided, that if the Administrative Agent determines that the relevant foregoing sources are unavailable for the relevant Interest Period, LIBOR shall mean the rate of interest determined by the Administrative Agent to be the average (rounded upward, if necessary, to the nearest 1/100^th of 1%) of the rates per annum at which deposits in Dollars are offered to the Administrative Agent two (2) Business Days preceding the first day of such Interest Period by leading banks in the London interbank market as of 10:00 a.m. for delivery on the first day of such Interest Period, for the number of days comprised therein and in an amount comparable to the amount of the Eurodollar Loan of the Administrative Agent.

“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having the practical effect of the foregoing or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing).

“Loan Documents” shall mean, collectively, this Agreement, the Fee Letter, the Notes (if any), the Subsidiary Guaranty Agreement, the Indemnity and Contribution Agreement, the Notices of Borrowing, the Notices of Conversion/Continuation and any and all other instruments, agreements, documents and writings executed in connection with any of the foregoing.

“Loan Parties” shall mean the Borrower and the Subsidiary Loan Parties.

“Loans” shall mean all Term Loans and Subordinated Term Loans, as the context shall require.

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“Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, a material adverse change in, or a material adverse effect on, (i) the Acquisition and the transactions contemplated thereby, (ii) the business, results of operations, financial condition, assets, liabilities or prospects of the Borrower and its Subsidiaries taken as a whole, or Century and its Subsidiaries, taken as a whole, (iii) the ability of the Loan Parties to perform any of their respective obligations under the Loan Documents, (iv) the rights and remedies of the Administrative Agent, the Arrangers and the Lenders under any of the Loan Documents or (v) the legality, validity or enforceability of any of the Loan Documents.

“Material Indebtedness” shall mean the Existing Credit Agreement, the Private Placement Notes and any other Indebtedness (other than the Loans) and Hedging Obligations, of any one or all of the Loan Parties and their Subsidiaries, individually or in an aggregate principal amount exceeding $5,000,000. For purposes of determining the amount of attributed Indebtedness from Hedging Obligations, the “principal amount” of any Hedging Obligations at any time shall be the Net Mark-to-Market Exposure of such Hedging Obligations.

“Material Subsidiary” shall mean at any time any direct or indirect Subsidiary of the Borrower (i) having or acquiring total assets in excess of $1,000,000 or (ii) that accounted for or produced more than 5% of the Consolidated EBITR of the Borrower and its Subsidiaries determined on a consolidated basis during any of the three most recently completed Fiscal Years; provided, however, that the term “Material Subsidiary” shall be deemed to exclude any Securitization Subsidiary.

“Maturity Date” shall mean March 31, 2005.

“Merger Sub” shall have the meaning set forth in the recitals hereto.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA.

“Net Cash Proceeds” shall mean (a) in connection with any Asset Sale, the proceeds thereof in the form of cash and cash equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received) of such Asset Sale, net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset which is the subject of such Asset Sale and other customary fees and expenses actually incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) and (b) in connection with any issuance or sale of equity securities or debt securities or instruments or the incurrence of loans, the cash proceeds received from such issuance or incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith.

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“Net Mark-to-Market Exposure” of any Person shall mean, as of any date of determination with respect to any Hedging Obligation, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from such Hedging Obligation. “Unrealized losses” shall mean the fair market value of the cost to such Person of replacing the Hedging Transaction giving rise to such Hedging Obligation as of the date of determination (assuming the Hedging 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 Hedging Transaction as of the date of determination (assuming such Hedging Transaction were to be terminated as of that date).

“Note Purchase Agreements” shall mean, collectively, (i) the purchase agreement, dated as of December 21, 2000, governing the 8.27% Notes, (ii) the purchase agreement, dated as of May 29, 1996, governing the 2011 Notes, (iii) the purchase agreement, dated as of August 28, 1997, governing the 2012 Notes and (iv) the purchase agreement, dated as of May 5, 1998, governing the 2013 Notes.

“Notes” shall mean, collectively, each Term Loan Note issued hereunder.

“Notice of Conversion/Continuation” shall have the meaning set forth in Section 2.9(b).

“Notice of Borrowing” shall have the meaning set forth in Section 2.3.

“Obligations” shall mean all amounts owing by the Borrower to the Administrative Agent, the Arrangers or any Lender pursuant to or in connection with this Agreement or any other Loan Document, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to the Administrative Agent, the Arrangers and any Lender incurred pursuant to this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, and all Hedging Obligations owed to the Administrative Agent, the Arrangers, any Lender or any of their Affiliates relating to the Term Loans made hereunder, and all obligations and liabilities incurred in connection with collecting and enforcing the foregoing, together with all renewals, extensions, modifications or refinancings thereof.

“Off-Balance Sheet Debt” of any Person shall mean (i) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, including without limitation with respect to a Securitization Transaction, (ii) any Synthetic Lease Obligation or (iii) 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 balance sheet of such Person under GAAP, provided, however, that any liability of such Person with respect to sale and leaseback transactions shall be excluded from this definition.

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“OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended from time to time, and any successor statute.

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

“Participant” shall have the meaning set forth in Section 10.4(d).

“Payment Office” shall mean the office of the Administrative Agent located at 303 Peachtree Street, N.E., Atlanta, Georgia 30308, or such other location as to which the Administrative Agent shall have given written notice to the Borrower and the other Lenders.

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA, and any successor entity performing similar functions.

“Permitted Encumbrances” shall mean:

(v) Liens imposed by law for taxes not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;

(vi) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen and similar Liens arising by operation of law in the ordinary course of business for amounts not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;

(vii) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(viii) deposits to secure the performance of bids, trade contracts, insurance contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(ix) judgment and attachment liens not giving rise to an Event of Default or Liens created by or existing from any litigation or legal proceeding that are currently being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;

(x) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Borrower and its Subsidiaries taken as a whole;

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(xi) other liens incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money and which do not in the aggregate materially detract from the value of property or assets of the Borrower and its Subsidiaries taken as a whole or materially impair the use of such property or assets in the operation of the business of the Borrower and its Subsidiaries;

(xii) liens provided for in equipment leases that are not Capitalized Lease Obligations (including financing statements and undertakings to file financing statements); provided, that such liens are limited to the equipment subject to such leases and the proceeds thereof;

(xiii) leases, subleases, licenses and sublicenses granted to third parties not interfering in any material respect with the business of the Borrower and its Subsidiaries; and

(xiv) any right of set off or banker’s lien (whether by common law, statute, contract or otherwise) in favor of any bank (other than Liens securing Indebtedness);

provided, that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“Permitted Investments” shall mean:

(xv) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof;

(xvi) commercial paper having a rating of at least A-1/P-2, at the time of acquisition thereof, of S&P or Moody’s and in either case maturing within six months from the date of acquisition thereof;

(xvii) certificates of deposit, bankers’ acceptances and time deposits maturing within 180 days of the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

(xviii) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (i) above and entered into with a financial institution satisfying the criteria described in clause (iii) above; and

(xix) mutual funds investing solely in any one or more of the Permitted Investments described in clauses (i) through (iv) above.

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“Permitted Subordinated Debt” shall mean any Indebtedness of the Borrower or any Subsidiary (i) that is expressly subordinated to the Obligations and all guarantees thereof on terms and conditions satisfactory to the Administrative Agent and the Required Lenders in all respects, including without limitation with respect to interest rates, payment terms, maturities, amortization schedules, covenants, defaults, remedies and subordination provisions, as evidenced by the written approval by the Administrative Agent and the Required Lenders.

“Person” shall mean any individual, partnership, firm, corporation, association, joint venture, limited liability company, trust or other entity, or any Governmental Authority.

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Private Placement Notes” shall mean, collectively, the 8.27% Notes, the 2011 Notes, the 2012 Notes and the 2013 Notes.

“Pro Forma Basis” shall mean, with respect to any determination for any period, in connection with an acquisition, that such determination shall be made giving pro forma effect to each such acquisition as if such acquisition (and the incurrence or assumption of any Indebtedness in connection therewith) and any related transactions had been consummated on the first day of such period, in each case based on historical results accounted for in accordance with GAAP.

“Pro Rata Share” shall mean with respect to the Term Loans, the percentage obtained by dividing (i) the Term Loan Commitment of such Lender by (ii) the Aggregate Term Loan Commitment Amount (or, at any time after the Closing Date, the percentage obtained by dividing the principal amount of such Lender’s Term Loans by the aggregate Term Loans of all Lenders).

“Refunding Securities” shall mean the common equity, debt or convertible debt securities to be issued and sold by the Borrower in accordance with the Fee Letter, the net proceeds of which would be used to repay the Loans and all related accrued and unpaid interest and fees and other Obligations and other amounts due in respect thereof or hereunder in full.

“Register” shall have the meaning set forth in Section 10.04(c).

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

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“Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective directors, partners, trustees, officers, employees, shareholders, agents and advisors of such Person and such Person’s Affiliates.

“Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

“Required Lenders” shall mean, at any time, Lenders holding more than 50% of the aggregate outstanding Term Loan Commitments at such time or if the Lenders have no Term Loan Commitments outstanding, then Lenders holding more than 50% of the aggregate principal amount of the Term Loans then outstanding.

“Requirement of Law” for any Person shall mean the articles or certificate of incorporation, bylaws, partnership certificate and agreement, or limited liability company certificate of organization and agreement, as the case may be, and other organizational and governing documents of such Person, and any law, treaty, rule or regulation, or determination of a Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer” shall mean any of the president, the chief executive officer, the chief operating officer, the chief financial officer, the treasurer or a vice president of the Borrower or such other representative of the Borrower as may be designated in writing by any one of the foregoing with the consent of the Administrative Agent; and, with respect to the compliance certificate, the chief executive officer and the chief financial officer of the Borrower.

“Restricted Payment” shall have the meaning set forth in Section 7.5.

“S&P” shall mean Standard & Poor’s, a division of the McGraw-Hill Companies.

“Securitization Subsidiary” shall mean any Subsidiary of the Borrower that is a special purpose entity formed for the purpose of acquiring accounts receivable and related rights from the Borrower or one or more of its other Subsidiaries.

“Securitization Transaction” shall mean any limited recourse or non-recourse sale, assignment or contribution of accounts receivable and related rights of the Borrower or one or more of its Subsidiaries to any Securitization Subsidiary in connection with the issuance of Indebtedness by such Securitization Subsidiary secured by such assets, the proceeds of which are to be made available, directly or indirectly, to the Borrower or such Subsidiaries. The “amount” or “principal amount” of any Securitization Transaction shall be deemed at any time to be the aggregate principal or stated amount of the Indebtedness owing by such Securitization Subsidiary to any Person other than the Borrower or another Subsidiary.

“Subordination Event” shall mean the failure by the Borrower to repay in full, in cash, the Obligations on or before the Conversion Date.

“Subordinated Term Loans” shall have the meaning set forth in Section 11.1.

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“Subsidiary” shall mean, with respect to any Person (the “parent”), any corporation, partnership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, partnership, joint venture, limited liability company, association or other entity (i) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power, or in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (ii) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise indicated, all references to “Subsidiary” hereunder shall mean a Subsidiary of the Borrower. For the avoidance of doubt, references in this Agreement to Subsidiaries of the Borrower shall include those Subsidiaries that comprise the Acquired Business.

“Subsidiary Guaranty Agreement” shall mean the Subsidiary Guaranty Agreement, dated as of the date hereof and substantially in the form of Exhibit C, made by the Subsidiary Loan Parties in favor of the Administrative Agent for the benefit of the Lenders.

“Subsidiary Guaranty Supplement” shall mean each supplement substantially in the form of Annex I to the Subsidiary Guaranty Agreement executed and delivered by a Subsidiary of the Borrower pursuant to Section 5.10.

“Subsidiary Loan Party” shall mean, without duplication, any Material Subsidiary and any other Subsidiary that is listed as a “Subsidiary Guarantor” on the signature pages to that certain First Amendment to the Existing Credit Agreement and any other Subsidiary of the Borrower that becomes a “Subsidiary Guarantor” under and as defined in the Existing Credit Agreement or otherwise guarantees the obligations owed to the lenders under the Existing Credit Agreement or the Obligations hereunder.

“Synthetic Lease” shall mean a lease transaction under which the parties intend that (i) the lease will be treated as an “operating lease” by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property.

“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of (i) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication, and (ii) all rental and purchase price payment obligations of such Person under such Synthetic Leases assuming such Person exercises the option to purchase the lease property at the end of the lease term.

“Target” shall have the meaning set forth in the recitals hereto.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges, fees, deductions or withholdings, and all liabilities, penalties and interest with respect thereto imposed by any Governmental Authority.

“Term Loan” shall have the meaning set forth in Section 2.2.

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“Term Loan Commitment” shall mean, with respect to each Lender, the obligation of such Lender to make Term Loans to the Borrower in an aggregate principal amount not exceeding the amount set forth with respect to such Lender on Annex I, as such annex may be amended through an assignment of an existing Term Loan Commitment, the amount of the assigned “Term Loan Commitment” as provided in the Assignment and Acceptance executed by such Person as an assignee, as the same may be increased or deceased pursuant to terms hereof.

“Term Loan Note” shall mean a promissory note of the Borrower payable to the requesting Lender, or its registered assigns, in the principal amount of such Lender’s Term Loan Commitment, in substantially the form of Exhibit A.

“Total Funded Debt to Consolidated EBITDA Ratio” shall mean, as of any date of determination, the ratio of (i) Consolidated Total Funded Debt as of such date to (ii) Consolidated EBITDA, measured for the four consecutive Fiscal Quarters ending on or immediately prior to such date.

“2011 Notes” shall mean Hughes’ $98,000,000 7.96% Senior Notes due May 30, 2011.

“2012 Notes” shall mean, collectively, Hughes’ (i) $40,000,000 7.14% Senior Notes due May 30, 2012 and (ii) $40,000,000 7.19% Senior Notes due May 30, 2012.

“2013 Notes” shall mean the Borrower’s $50,000,000 6.74% Senior Notes due May 1, 2013.

“Type”, when used in reference to a Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Base Rate.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

Section 1.2. Classifications of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Type (e.g. a “Eurodollar Loan” or “Base Rate Loan”). Borrowings also may be classified and referred to by Type (e.g. “Eurodollar Borrowing”).

Section 1.3. Accounting Terms and Determination. Unless otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a basis consistent with the most recent audited consolidated financial statement of the Borrower delivered pursuant to Section 5.1(a); provided, that if the Borrower notifies the Administrative Agent that the Borrower wishes to amend any covenant in Article VI to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article VI for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect

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immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders.

Section 1.4. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the word “to” means “to but excluding”. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as it was originally executed or as it may from time to time be amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (iii) the words “hereof”, “herein” and “hereunder” and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v) all references to a specific time shall be construed to refer to the time in the city and state of the Administrative Agent’s principal office, unless otherwise indicated.

Section 1.5. Financial Ratios. For purposes of calculating Consolidated EBITDAR and Consolidated EBITR of the Borrower and its Subsidiaries for any period, (i) the Consolidated EBITDAR and Consolidated EBITR of any Person acquired by the Borrower or its Subsidiaries during such period, including, without limitation, pursuant to the Century Acquisition, shall be included on a Pro Forma Basis for such period if the consolidated balance sheet of such acquired Person and its consolidated Subsidiaries as at the end of the period preceding the acquisition of such Person and the related consolidated statements of income and stockholders’ equity for the period in respect of which Consolidated EBITDAR and Consolidated EBITR are to be calculated (x) have been previously provided to the Administrative Agent and the Lenders and (y) either (1) have been reported on without a qualification arising out of the scope of the audit by independent certified public accountants of nationally recognized standing or (2) have been found acceptable by the Arrangers and (ii) the Consolidated EBITDAR and Consolidated EBITR of any Person that is no longer a Subsidiary on the last day of such period shall be excluded for such period (assuming the consummation of such disposition and the repayment of any Indebtedness in connection therewith occurred on the first day of such period). The Arrangers specifically acknowledge the receipt of and approve the consolidated balance sheet and the related consolidated statements of income and stockholders’ equity of Century.

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ARTICLE II

AMOUNT AND TERMS OF THE TERM LOAN COMMITMENTS

Section 2.1. General Description of Facilities. Subject to and upon the terms and conditions herein set forth, the Lenders hereby establish in favor of the Borrower a term loan facility pursuant to which each Lender severally agrees (to the extent of such Lender’s Term Loan Commitment) to make Term Loans to the Borrower in accordance with Section 2.2.

Section 2.2. Term Loans. Subject to the terms and conditions set forth herein (including, without limitation, the terms and conditions of Section 11.1), each Lender severally agrees to make term loans (each, a “Term Loan”) to the Borrower on the Closing Date in an amount for each Lender not to exceed the amount of the Term Loan Commitment of such Lender. The Term Loans may from time to time be Base Rate Loans or Eurodollar Loans. Amounts of Term Loans repaid may not be reborrowed.

Section 2.3. Procedure for Term Loan Borrowings.

The Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of the Term Loan Borrowing substantially in the form of Exhibit 2.3 attached hereto (a “Notice of Borrowing”) prior to 11:00 a.m. (Atlanta, Georgia time) one (1) Business Day prior to the anticipated Closing Date requesting that the Lenders make the Term Loans on the Closing Date. The Term Loans made on the Closing Date shall initially be a Base Rate Borrowing. The Notice of Borrowing shall be irrevocable and shall specify: (i) the aggregate principal amount of such Borrowing, (ii) the date of such Borrowing (which shall be a Business Day), (iii) the Type of such Term Loan comprising such Borrowing and (iv) in the case of a Eurodollar Borrowing, the duration of the initial Interest Period applicable thereto (subject to the provisions of the definition of Interest Period). Promptly following the receipt of the Notice of Borrowing in accordance herewith, the Administrative Agent shall advise each Lender of the details thereof and the amount of such Lender’s Term Loan to be made as part of the requested Term Loan Borrowing.

Section 2.4. Intentionally Deleted.

Section 2.5. Intentionally Deleted.

Section 2.6. Intentionally Deleted.

Section 2.7. Intentionally Deleted.

Section 2.8. Funding of Borrowings.

(a) Each Lender will make available each Loan to be made by it hereunder on the Closing Date by wire transfer in immediately available funds in U.S. Dollars by 11:00 a.m. (Atlanta, Georgia time) to the Administrative Agent at the Payment Office. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts that it receives, in like funds by the close of business on such proposed date, to an account maintained by the Borrower with the Administrative Agent or at the Borrower’s option, by effecting a wire transfer of such amounts to an account designated by the Borrower to the Administrative Agent.

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(b) Unless the Administrative Agent shall have been notified by any Lender prior to 5:00 p.m. (Atlanta, Georgia time) one (1) Business Day prior to the Closing Date that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date, and the Administrative Agent, in reliance on such assumption, may make available to the Borrower on such date a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender on the date of such Borrowing, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest at the Federal Funds Rate until the second Business Day after such demand and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent together with interest at the rate specified for such Borrowing. Nothing in this subsection shall be deemed to relieve any Lender from its obligation to fund its Pro Rata Share of the Term Loan or to prejudice any rights which the Borrower may have against any Lender as a result of any default by such Lender hereunder.

(c) The Term Loan shall be made by the Lenders on the basis of their respective Pro Rata Shares. No Lender shall be responsible for any default by any other Lender in its obligations hereunder, and each Lender shall be obligated to make its Term Loan provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder.

Section 2.9. Interest Elections.

(a) The Term Loan initially shall be of the Type specified in the Notice of Borrowing, and in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Notice of Borrowing. Thereafter, the Borrower may elect to convert such Borrowing into a different Type or to continue such Borrowing, and in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.

(b) To make an election pursuant to this Section, the Borrower shall give the Administrative Agent prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing substantially in the form of Exhibit 2.9 attached hereto (a “Notice of Conversion/Continuation”) that is to be converted or continued, as the case may be, (x) prior to 11:00 a.m. (Atlanta, Georgia time) one (1) Business Day prior to the requested date of a conversion into a Base Rate Borrowing and (y) prior to 11:00 a.m. (Atlanta, Georgia time) three (3) Business Days prior to a continuation of or conversion into a Eurodollar Borrowing. Each such Notice of Conversion/Continuation shall be irrevocable and shall specify (i) the Borrowing

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to which such Notice of Continuation/Conversion applies and if different options are being elected with respect to different portions thereof, the portions thereof that are to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) shall be specified for each resulting Borrowing); (ii) the effective date of the election made pursuant to such Notice of Continuation/Conversion, which shall be a Business Day, (iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing; and (iv) if the resulting Borrowing is to be a Eurodollar Borrowing, the Interest Period applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of “Interest Period”. If any such Notice of Continuation/Conversion requests a Eurodollar Borrowing but does not specify an Interest Period, the Borrower shall be deemed to have selected an Interest Period of one month. The aggregate principal amount of each Eurodollar Borrowing shall be not less than $5,000,000 or a larger multiple of $1,000,000, and the aggregate principal amount of each Base Rate Borrowing shall not be less than $1,000,000 or a larger multiple of $100,000. At no time shall the total number of Eurodollar Borrowings outstanding at any time exceed ten. Promptly following the receipt of a Notice of Continuation/Conversion in accordance herewith, the Administrative Agent shall advise each Lender of the details thereof.

(c) If, on the expiration of any Interest Period in respect of any Eurodollar Borrowing, the Borrower shall have failed to deliver a Notice of Conversion/ Continuation, then the Borrower shall be deemed to have elected to convert such Borrowing to a Base Rate Borrowing. No Borrowing may be converted into, or continued as, a Eurodollar Borrowing if a Default or an Event of Default exists, unless the Administrative Agent and each of the Lenders shall have otherwise consented in writing. No conversion of any Eurodollar Loans shall be permitted except on the last day of the Interest Period in respect thereof.

(d) Upon receipt of any Notice of Conversion/Continuation, the Administrative Agent shall promptly notify each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

Section 2.10. Intentionally Deleted.

Section 2.11. Repayment of Loans. The outstanding principal amount of all Term Loans shall be due and payable (together with accrued and unpaid interest thereon and other Obligations owing in connection therewith) on the Maturity Date; provided, that if such Obligations are not paid in full on the Conversion Date, the Term Loans shall automatically convert to Subordinated Term Loans in accordance with Article XI.

Section 2.12. Evidence of Indebtedness. (a) Each Lender shall maintain in accordance with its usual practice appropriate records evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Lender from time to time under this Agreement. The Administrative Agent, acting, solely for the purposes of Treasury Regulation Section 5F, 103-1(c), as agent for the Borrower, shall maintain appropriate records in which shall be recorded (i) the Term Loan Commitment of each Lender, (ii) the amount of each Loan made hereunder by each Lender, the Type thereof and the Interest Period applicable thereto, (iii) the date of each continuation thereof pursuant to Section 2.9, (iv) the date of each conversion of all or a portion thereof to another Type pursuant to Section 2.9, (v) the date

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and amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder in respect of such Loans and (vi) both the date and amount of any sum received by the Administrative Agent hereunder from the Borrower in respect of the Loans and each Lender’s Pro Rata Share thereof. The entries made in such records shall be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, that the failure or delay of any Lender or the Administrative Agent in maintaining or making entries into any such record or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans (both principal and unpaid accrued interest) of such Lender in accordance with the terms of this Agreement.

(b) At the request of any Lender at any time, the Borrower agrees that it will execute and deliver to such Lender a Term Loan Note, payable to such Lender or its registered assigns.

Section 2.13. Optional Prepayments; Mandatory Prepayments.

(a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, without premium or penalty, by giving irrevocable written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent no later than (i) in the case of prepayment of any Eurodollar Borrowing, 11:00 a.m. (Atlanta, Georgia time) not less than three (3) Business Days prior to any such prepayment, and (ii) in the case of any prepayment of any Base Rate Borrowing, not less than one Business Day prior to the date of such prepayment. Each such notice shall be irrevocable and shall specify the proposed date of such prepayment and the principal amount of each Borrowing or portion thereof to be prepaid. Upon receipt of any such notice, the Administrative Agent shall promptly notify each Lender of the contents thereof and of such Lender’s Pro Rata Share of any such prepayment. If such notice is given, the aggregate amount specified in such notice shall be due and payable on the date designated in such notice, together with accrued interest to such date on the amount so prepaid in accordance with Section 2.14(e); provided, that if a Eurodollar Borrowing is prepaid on a date other than the last day of an Interest Period applicable thereto, the Borrower shall also pay all amounts required pursuant to Section 2.20. Each partial prepayment of any Loan shall be in an amount that would be permitted in the case of any Borrowing of the same Type pursuant to Section 2.9(b). Each prepayment of a Borrowing shall be applied ratably to the Loans comprising such Borrowing.

(b) Unless the Required Lenders shall otherwise agree (without any corresponding repayment or prepayment of any of the Existing Credit Facility, any other existing bank credit facilities or any Private Placement Notes), if, on any date, the Borrower or any of its Subsidiaries shall receive Net Cash Proceeds from

(i) any direct or indirect public offering or private placement of the Refunding Securities, the High Yield Securities or any other subordinated debt securities of the Borrower or any of the Borrower’s Subsidiaries, or any Capital Stock or other equity securities of the Borrower;

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(ii) the incurrence of any other Indebtedness by the Borrower or any of its Subsidiaries (other than the Term Loans, the borrowings under the Existing Credit Facility and other Indebtedness permitted under Section 7.1(b), (c), (d), (e), (f) and (i));

(iii) any other issuance or sale of any Capital Stock of the Borrower or its Subsidiaries; or

(iv) any Asset Sale;

then, in each case, the Term Loans shall be prepaid by an amount equal to the amount of Net Cash Proceeds received by the Borrower or its Subsidiaries in respect of such event, issuance or incurrence, as set forth in Section 2.22. The provisions of this Section 2.13(b) do not constitute a consent to the issuance of any Capital Stock or other equity securities by the Borrower or any Subsidiary Loan Party, the incurrence of any Indebtedness by the Borrower or any Subsidiary Loan Party or the consummation by the Borrower or any Subsidiary Loan Party of any Disposition, in each case that is not otherwise expressly permitted hereby.

Section 2.14. Interest on Loans.

(a) The Borrower shall pay interest on each Base Rate Loan at the Base Rate in effect from time to time and on each Eurodollar Loan at the Adjusted LIBO Rate for the applicable Interest Period in effect for such Loan, plus, in the case of a Eurodollar Loan, the Applicable Margin in effect from time to time.

(b) Notwithstanding clause (a) above, while an Event of Default exists or after acceleration of the Loans, the Borrower shall pay interest (“Default Interest”) with respect to all Eurodollar Loans at the rate otherwise applicable for the then-current Interest Period plus an additional 2% per annum until the last day of such Interest Period, and thereafter, and with respect to all Base Rate Loans, all other Obligations hereunder (other than Loans) at an all-in rate in effect for Base Rate Loans, plus an additional 2% per annum.

(c) Interest on the principal amount of all Loans shall accrue from and including the date such Loans are made to but excluding the date of any repayment thereof. Interest on all outstanding Base Rate Loans shall be payable quarterly in arrears on the last day of each Fiscal Quarter and on the Maturity Date, as the case may be. Interest on all outstanding Eurodollar Loans shall be payable on the last day of each Interest Period applicable thereto, and, in the case of any Eurodollar Loans having an Interest Period in excess of three months or 90 days, respectively, on each day which occurs every three months or 90 days, as the case may be, after the initial date of such Interest Period, and on the Maturity Date. Notwithstanding anything to the contrary in the foregoing, accrued and unpaid fees outstanding and accrued and unpaid interest on the principal amount of all Loans outstanding on the Conversion Date and all other Obligations shall be due and payable on the Conversion Date. Interest on any Loan which is converted into a Loan of another Type or which is repaid or prepaid shall be payable on the date of such conversion or on the date of any such repayment or prepayment (on the amount repaid or prepaid) thereof. All Default Interest shall be payable on demand.

(d) The Administrative Agent shall determine each interest rate applicable to the Loans hereunder and shall promptly notify the Borrower and the Lenders of such rate in writing (or by telephone, promptly confirmed in writing). Any such determination shall be conclusive and binding for all purposes, absent manifest error.

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Section 2.15. Fees.

(a) The Borrower shall pay to the Administrative Agent for its own account fees in the amounts and at the times previously agreed upon in writing by the Borrower and the Administrative Agent.

(b) The Borrower shall pay to each of the Initial Lenders the fees set forth in the Fee Letter, which shall be due and payable on the dates specified therein.

Section 2.16. Computation of Interest and Fees.

All computations of interest and fees hereunder shall be made on the basis of a year of 360 days (365 days, in the case of Base Rate Loans) for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable (to the extent computed on the basis of days elapsed). Each determination by the Administrative Agent of an interest amount or fee hereunder shall be made in good faith and, except for manifest error, shall be final, conclusive and binding for all purposes.

Section 2.17. Inability to Determine Interest Rates. If prior to the commencement of any Interest Period for any Eurodollar Borrowing,

(i) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant interbank market, adequate means do not exist for ascertaining LIBOR for such Interest Period, or

(ii) the Administrative Agent shall have received notice from the Required Lenders that the Adjusted LIBO Rate does not adequately and fairly reflect the cost to such Lenders (or Lender, as the case may be) of making, funding or maintaining their (or its, as the case may be) Eurodollar Loans for such Interest Period,

the Administrative Agent shall give written notice (or telephonic notice, promptly confirmed in writing) to the Borrower and to the Lenders as soon as practicable thereafter. Until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) the obligations of the Lenders to make Eurodollar Loans or to continue or convert outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all such affected Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period applicable thereto unless the Borrower prepays such Loans in accordance with this Agreement.

Section 2.18. Illegality. If any Change in Law shall make it unlawful or impossible for any Lender to make, maintain or fund any Eurodollar Loan and such Lender shall so notify the Administrative Agent, the Administrative Agent shall promptly give notice thereof to the Borrower and the other Lenders, whereupon until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such suspension no longer exist, the

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obligation of such Lender to make Eurodollar Loans, or to continue or convert outstanding Loans as or into Eurodollar Loans, shall be suspended. In the case of the outstanding Eurodollar Borrowings, such Lender’s Loan shall be converted to a Base Rate Loan either (i) on the last day of the then current Interest Period applicable to such Eurodollar Loan if such Lender may lawfully continue to maintain such Loan to such date or (ii) immediately if such Lender shall determine that it may not lawfully continue to maintain such Eurodollar Loan to such date. Notwithstanding the foregoing, the affected Lender shall, prior to giving such notice to the Administrative Agent, designate a different Applicable Lending Office if such designation would avoid the need for giving such notice and if such designation would not otherwise be disadvantageous to such Lender in the good faith exercise of its discretion.

Section 2.19. Increased Costs.

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar requirement that is not otherwise included in the determination of the Adjusted LIBO Rate hereunder against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or

(ii) impose on any Lender or the eurodollar interbank market any other condition affecting this Agreement or any Eurodollar Loans made by such Lender; and the result of either of the foregoing is to increase the cost to such Lender of making, converting into, continuing or maintaining a Eurodollar Loan or to increase the cost to such Lender or to reduce the amount received or receivable by such Lender hereunder (whether of principal, interest or any other amount), then the Borrower shall promptly pay, upon written notice from and demand by such Lender on the Borrower (with a copy of such notice and demand to the Administrative Agent), to the Administrative Agent for the account of such Lender, within five Business Days after the date of such notice and demand, additional amount or amounts sufficient to compensate such Lender for such additional costs incurred or reduction suffered.

(b) If any Lender shall have determined that on or after the date of this Agreement any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital (or on the capital of such Lender’s parent corporation) as a consequence of its obligations hereunder to a level below that which such Lender or such Lender’s or parent corporation could have achieved but for such Change in Law (taking into consideration such Lender’s policies or the policies of such Lender’s parent corporation with respect to capital adequacy) then, from time to time, within five (5) Business Days after receipt by the Borrower of written demand by such Lender (with a copy thereof to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender or such Lender’s parent corporation for any such reduction suffered.

(c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or such Lender’s parent corporation, as the case may be, specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower (with a copy to the Administrative Agent) and shall be conclusive, absent manifest error. The Borrower shall pay any such Lender such amount or amounts within 10 days after receipt thereof.

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(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation.

Section 2.20. Funding Indemnity. In the event of (a) the payment of any principal of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion or continuation of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure by the Borrower to borrow, prepay, convert or continue any Eurodollar Loan on the date specified in any applicable notice (regardless of whether such notice is withdrawn or revoked), unless such failure is a result of a Lender failing to make a Eurodollar Borrowing to Borrower, then, in any such event, the Borrower shall compensate each Lender, within five (5) Business Days after written demand from such Lender, for any loss, cost or expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense shall be deemed to include an amount determined by such Lender to be the excess, if any, of (A) the amount of interest that would have accrued on the principal amount of such Eurodollar Loan if such event had not occurred at the Adjusted LIBO Rate applicable to such Eurodollar Loan for the period from the date of such event to the last day of the then current Interest Period therefor (or in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan) over (B) the amount of interest that would accrue on the principal amount of such Eurodollar Loan for the same period if the Adjusted LIBO Rate were set on the date such Eurodollar Loan was prepaid or converted or the date on which the Borrower failed to borrow, convert or continue such Eurodollar Loan. A certificate as to any additional amount payable under this Section 2.20 submitted to the Borrower by any Lender (with a copy to the Administrative Agent) shall be conclusive, absent manifest error.

Section 2.21. Taxes.

(a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) 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) the Administrative Agent or any Lender (as the case may be) shall receive an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent and each Lender within five (5) Business Days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Lender, as the case

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may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or by the Administrative Agent on its own behalf or on behalf of any Lender, shall be conclusive absent manifest error.

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

(e) (i) Each Lender (whether or not such Lender is a Foreign Lender) must, prior to the time it becomes a Lender, furnish to the Borrower and to the Administrative Agent with forms or certificates as may be appropriate to verify that such Lender is exempt from U.S. withholding tax requirements, provided, however, the provisions of this paragraph (e)(i) of Section 2.21 shall not apply to a Lender that (X) is not a Foreign Lender and (Y) is treated as an exempt recipient based on the indicators described in Treasury Regulation Section 1.6049-4(c)(1)(ii).

(ii) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the Code or any treaty to which the United States is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate. Without limiting the generality of the foregoing, each Foreign Lender agrees that it will deliver to the Administrative Agent and the Borrower (or in the case of a Participant, to the Lender from which the related participation shall have been purchased), as appropriate, two (2) duly completed copies of (i) Internal Revenue Service Form W-8ECI, or any successor form thereto, certifying that the payments received from the Borrower hereunder are effectively connected with such Foreign Lender’s conduct of a trade or business in the United States; or (ii) Internal Revenue Service Form W-8BEN, or any successor form thereto, certifying that such Foreign Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest; or (iii) Internal Revenue Service Form W-8BEN, or any successor form thereto, together with a certificate (A) establishing that the payment to the Foreign Lender qualifies as “portfolio interest” exempt from U.S. withholding tax under Code section 871(h) or 881(c), and (B) stating that (1) the Foreign Lender is not a bank for purposes of Code section 881(c)(3)(A), or the obligation of the Borrower hereunder is not, with respect to such Foreign Lender, a loan agreement entered into in the ordinary course of its trade or business, within the meaning of that section; (2) the Foreign Lender is not a 10% shareholder of the Borrower within the meaning of Code section 871(h)(3) or 881(c)(3)(B); and (3) the Foreign Lender is not a controlled foreign corporation that is related to the Borrower within the meaning of Code section 881(c)(3)(C); or

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(iv) such other Internal Revenue Service forms as may be applicable to the Foreign Lender, including Forms W-8IMY or W-8EXP. Each such Foreign Lender shall deliver to the Borrower and the Administrative Agent such forms on or before the date that it becomes a party to this Agreement (or in the case of a Participant, on or before the date such Participant purchases the related participation). In addition, each such Foreign Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender. Each such Foreign Lender shall promptly notify the Borrower and the Administrative Agent at any time that it determines that it is no longer in a position to provide any previously delivered form or certificate to the Borrower or the Administrative Agent (or any other form of certification adopted by the Internal Revenue Service for such purpose).

(iii) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, 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, provided that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender’s reasonable judgment such completion, execution or submission would not materially prejudice the legal position of such Lender.

(f) The agreements in this Section 2.21 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

Section 2.22. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, or fees, or of amounts payable under Section 2.19, 2.20 or 2.21, or otherwise) prior to 2:00 p.m. (Atlanta, Georgia time), on the date when due, in immediately available funds, free and clear of any defenses, rights of set-off, counterclaim, or withholding or deduction of taxes. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the Payment Office, except that payments pursuant to Sections 2.19, 2.20 and 2.21 and 10.3 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be made payable for the period of such extension. All payments hereunder shall be made in Dollars.

(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees

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then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Term Loans that would result in such Lender receiving payment of a greater proportion of the aggregate amount of its Term Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion (each a “Purchasing Lender”) shall purchase (for cash at face value) participations in the Term Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Term Loans; provided, that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered or the Purchasing Lender is otherwise required to return or restore any such payment, such participations shall be rescinded and each other Lender shall, promptly after request from the Administrative Agent or the Purchasing Lender, return to the Purchasing Lender the purchase price for such participation to the extent of such recovery or the amount otherwise returned or restored by the Purchasing Lender, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount or amounts due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e) If any Lender shall fail to make any payment required to be made by it pursuant to 2.8(b) or 10.3(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

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Section 2.23. Intentionally Deleted.

Section 2.24. Limitation on Certain Payment Obligations.

(a) Each Lender or the Administrative Agent shall make written demand on Borrower for indemnification or compensation pursuant to Section 2.21 no later than 90 days after the earlier of (i) the date on which such Lender or the Administrative Agent makes payment of such Taxes, and (ii) the date on which the relevant taxing authority or other governmental authority makes written demand upon such Lender or the Administrative Agent for payment of such Taxes.

(b) Each Lender or the Administrative Agent shall make written demand on Borrower for indemnification or compensation pursuant to Section 2.20 no later than 90 days after the event giving rise to the claim for indemnification or compensation occurs.

(c) Each Lender or the Administrative Agent shall make written demand on Borrower for indemnification or compensation pursuant to Section 2.19 no later than 90 days after such Lender or the Administrative Agent receives actual notice or obtains actual knowledge of the promulgation of a law, role, order or interpretation or occurrence of another event giving rise to a claim pursuant to such sections.

(d) In the event that the Lenders or the Administrative Agent fail to give Borrower notice within the time limitations prescribed in (a) or (b) above, Borrower shall not have any obligation to pay such claim for compensation or indemnification. In the event that the Lender or the Administrative Agent fail to give Borrower notice within the time limitation prescribed in (c) above, Borrower shall not have any obligation to pay any amount with respect to claims accruing prior to the ninetieth day preceding such written demand.

ARTICLE III

CONDITIONS PRECEDENT TO LOANS

Section 3.1. Conditions To Effectiveness. The obligations of the Lenders to make Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 10.2).

(a) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Closing Date, including reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel to the Administrative Agent, the Arrangers and the Lenders) required to be reimbursed or paid by the Borrower hereunder, under any other Loan Document and under any agreement with the Administrative Agent, the Arrangers or the Initial Lenders.

(b) The Administrative Agent (or its counsel) shall have received the following:

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(i) a counterpart of this Agreement signed by or on behalf of each party hereto or written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement;

(ii) if requested by any Lender, duly executed Term Loan Note payable to such Lender;

(iii) the duly Subsidiary Guaranty Agreement and the Indemnity and Contribution Agreement, with each duly executed by each Subsidiary Loan Party and acknowledged by the Borrower;

(iv) a certificate of the Secretary or Assistant Secretary of each Loan Party, attaching and certifying copies of its bylaws and of the resolutions of its boards of directors, or partnership agreement or limited liability company operating agreement, or comparable organizational documents and authorizations, authorizing the execution, delivery and performance of the Loan Documents to which it is a party and certifying the name, title and true signature of each officer of such Loan Party executing the Loan Documents to which it is a party and attaching copies of each Note Purchase Agreement and certifying that such Note Purchase Agreements are true and correct copies thereof as in effect on the date hereof;

(v) certified copies of the articles or certificate of incorporation, certificate of organization or limited partnership, or other registered organizational documents of each Loan Party, together with certificates of good standing or existence, as may be available from the Secretary of State of the jurisdiction of organization of such Loan Party and each other jurisdiction where such Loan Party is required to be qualified to do business as a foreign corporation and a failure to be so qualified would have a Material Adverse Effect;

(vi) a favorable written opinion of counsel to the Loan Parties, addressed to the Administrative Agent and each of the Lenders, and covering such matters relating to the Loan Parties, the Loan Documents and the transactions contemplated therein as the Administrative Agent or the Required Lenders shall reasonably request;

(vii) copies of each legal opinion delivered to the Borrower by counsel to the Acquired Business, accompanied by reliance letters in favor of the Administrative Agent, the Arrangers and the Lenders;

(viii) a certificate, dated the Closing Date and signed by a Responsible Officer, (A) confirming compliance by the Borrower with the conditions set forth in paragraphs (a), (b) and (c) of Section 3.2 and in the Fee Letter and Commitment Letter among the parties hereto in respect of Term Loan Commitments (B) certifing that all conditions precedent to the Acquisition, other than the funding of the Term Loans, have been satisfied and (C) attaching a true and correct copy of the Existing Credit Agreement, as amended, supplemented or otherwise modified, on or prior to the date hereof;

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(ix) a solvency certificate from the chief financial officer of the Borrower which shall certify as to the solvency of the Borrower and its Subsidiaries after giving effect to the Acquisition and the other transactions contemplated by this Agreement, all in form and substance satisfactory to the Lenders;

(x) a duly executed Notice of Borrowing;

(xi) satisfactory evidence that (x) all material (as reasonably determined by the Arrangers) governmental and other third party consents, approvals, authorizations, registrations and filings and orders necessary or, in the discretion of the Arrangers, reasonably advisable to be made or obtained under any Requirement of Law, or by any Contractual Obligation of each Loan Party in connection with the Acquisition, the financing contemplated hereby and the continuing operations of the Borrower and its Subsidiaries shall have been made or obtained and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the Acquisition or the financing thereof, and (y) no consent decree regarding the Term Loans or the Acquisition shall be in effect on the Closing Date;

(xii) copies of (A) the internally prepared quarterly financial statements of Borrower and its Subsidiaries on a consolidated basis for the Fiscal Quarter ending on October 31, 2003, (B) the audited consolidated financial statements for Borrower and its Subsidiaries for the Fiscal Years ended 2001, 2002 and 2003, (C) the internally prepared quarterly financial statements of Target and its Subsidiaries on a consolidated basis for the Fiscal Quarter ending on September 30, 2003, (D) the audited consolidated financial statements for Target and its Subsidiaries for the Fiscal Years ended 2000, 2001 and 2002 and (E) the Borrower’s most recent quarterly report filed with the Securities and Exchange Commission on Form 10-Q for the Fiscal Quarter ending on October 31, 2003; and

(xiii) certificates of insurance issued on behalf of insurers of the Borrower and all guarantors, describing in reasonable detail the types and amounts of insurance (property and liability) maintained by the Borrower and all guarantors.

(c) The sources and uses of funds for the Acquisition shall be satisfactory to the Administrative Agent and the Arrangers (provided, that the aggregate purchase price shall not exceed $370 million (including fees and expenses not exceeding $10 million in the aggregate)). The Arrangers shall be satisfied that the structure, terms and conditions of the proposed Acquisition are substantially similar to the structure, terms and conditions in the sale and purchase agreement for the Acquisition delivered to the Administrative Agent and the Arrangers prior to the Closing Date; the Administrative Agent shall have received certified copies of all documents (including all schedules and exhibits thereto) relating to the Acquisition, which documentation shall be in form and substance satisfactory to the Lenders. The Arrangers shall have received satisfactory evidence that all conditions precedent to the Acquisition, other than the funding of the Term Loans, have been satisfied.

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(d) No Default or Event of Default shall have occurred or be continuing (after giving pro forma effect for the Acquisition and the financing thereof) under the Credit Agreement. No default or event of default shall have occurred or be continuing (after giving pro forma effect for the Acquisition and the financing thereof) under any other material indebtedness or other agreement of the Borrower, its Subsidiaries or the Acquired Business.

(e) The Lenders shall be satisfied that no event, development or circumstance shall have occurred since January 31, 2003 (the date of the most recent audited financial statements delivered to the Lenders as of the date hereof) that has caused or could reasonably be expected to cause a Material Adverse Effect.

Section 3.2. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions:

(a) at the time of and immediately after giving effect to such Borrowing no Default or Event of Default shall exist; and

(b) all representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects on and as of the date of such Borrowing, both before and after giving effect thereto; and

(c) since the date of the financial statements of the Borrower described in Section 4.4, there shall have been no change which has had or could reasonably be expected to have a Material Adverse Effect; and

(d) the Borrower shall have delivered the required Notice of Borrowing; and

(e) the Administrative Agent shall have received such other documents, certificates, information or legal opinions as the Administrative Agent or the Required Lenders may reasonably request, all in form and substance reasonably satisfactory to the Administrative Agent or the Required Lenders.

Each Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a), (b) and (c) of this Section 3.2.

Section 3.3. Delivery of Documents. All of the Loan Documents, certificates, legal opinions and other documents and papers referred to in this Article III, unless otherwise specified, shall be delivered to the Administrative Agent for the account of each of the Lenders and, except for the Notes, in sufficient counterparts or copies for each of the Lenders and shall be in form and substance satisfactory in all respects to the Administrative Agent.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Administrative Agent and each Lender as follows:

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Section 4.1. Existence; Power. The Borrower and each of its Subsidiaries (i) is duly organized, validly existing and in good standing as a corporation, partnership or limited liability company under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.

Section 4.2. Organizational Power; Authorization. The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party are within such Loan Party’s organizational powers and have been duly authorized by all necessary organizational, and if required, stockholder, partner or member, action. This Agreement has been duly executed and delivered by the Borrower, and constitutes, and each other Loan Document to which any Loan Party is a party, when executed and delivered by such Loan Party, will constitute, valid and binding obligations of the Borrower or such Loan Party (as the case may be), enforceable against such Person in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

Section 4.3. Governmental Approvals; No Conflicts. The execution, delivery and performance by the Borrower of this Agreement, and by each Loan Party of the other Loan Documents to which it is a party (a) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect, (b) will not violate any Requirements of Law applicable to the Borrower or any of its Subsidiaries or any judgment, order or ruling of any Governmental Authority, (c) will not violate or result in a default under any indenture, material agreement or other material instrument binding on the Borrower or any of its Subsidiaries or any of their respective assets or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, except Liens (if any) created under the Loan Documents.

Section 4.4. Financial Statements. The Borrower has furnished to each Lender (i) the audited consolidated balance sheet of the Borrower and its Subsidiaries as of January 31, 2003, and the related consolidated statements of income, shareholders’ equity and cash flows for the Fiscal Year then ended audited by PriceWaterhouseCoopers LLP, (ii) the audited consolidated balance sheet of the Target and its Subsidiaries as of December 31, 2002, and the related consolidated statements of income, shareholders’ equity and cash flows for the Fiscal Year then ended audited by Deloitte & Touche LLP, (iii) the unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of October 31, 2003, and the related unaudited consolidated statements of income and cash flows for the Fiscal Quarter and year-to-date period then ending, certified by a Responsible Officer and (iv) the unaudited consolidated balance sheet of the Target and its Subsidiaries as of September 30, 2003, and the related unaudited consolidated statements of income and cash flows for the Fiscal Quarter and year-to-date period then ending. Such financial statements fairly present the consolidated financial condition of the Borrower and its Subsidiaries or the Target and its Subsidiaries, as applicable, as of such dates and the consolidated results of operations for such periods in conformity with GAAP consistently applied, subject to year end audit adjustments and the absence of footnotes in

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the case of the statements referred to in clauses (iii) and (iv). Since January 31, 2003, there have been no changes with respect to the Borrower and its Subsidiaries which have had or could reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect. Since December 31, 2002, there have been no changes with respect to the Target and its Subsidiaries which have had or could reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect.

Section 4.5. Litigation and Environmental Matters.

(a) No litigation, investigation or proceeding of or before any arbitrators or Governmental Authorities is pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect or (ii) which in any manner draws into question the validity or enforceability of this Agreement or any other Loan Document.

(b) Except for the matters set forth on Schedule 4.5, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability, in each case where the effect of the foregoing could reasonably be expected to result in a Material Adverse Effect.

Section 4.6. Compliance with Laws and Agreements. The Borrower and each Subsidiary is in compliance with (a) all Requirements of Law and all judgments, decrees and orders of any Governmental Authority and (b) all indentures, agreements or other instruments binding upon it or its properties, except where non-compliance, either singly or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

Section 4.7. Investment Company Act, Etc. Neither the Borrower nor any of its Subsidiaries is (a) an “investment company” or is “controlled” by an “investment company”, as such terms are defined in, or subject to regulation under, the Investment Company Act of 1940, as amended, (b) a “holding company” as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935, as amended or (c) otherwise subject to any other regulatory scheme limiting its ability to incur debt or requiring any approval or consent from or registration or filing with, any Governmental Authority in connection therewith.

Section 4.8. Taxes. The Borrower and its Subsidiaries have timely filed or caused to be filed all Federal tax returns and all other material tax returns that, to the best knowledge of the executive officers of Borrower and its Subsidiaries, are required to be filed by them, and have paid all taxes shown to be due and payable on such returns or on any assessments made against it or its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except (i) to the extent the failure to do so would not have a Material Adverse Effect or (ii) where the same are currently being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as the case may be, has set aside on its books adequate reserves in accordance with GAAP; and no tax Lien has

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been filed, and, to the knowledge of Borrower and its Subsidiaries, no claim is being asserted, with respect to any such tax, fee or other charge. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of such taxes are adequate, and no tax liabilities that could be materially in excess of the amount so provided are anticipated.

Section 4.9. Margin Regulations. None of the proceeds of any of the Loans will be used, directly or indirectly, for “purchasing” or “carrying” any “margin stock” with the respective meanings of each of such terms under Regulation U or for any purpose that violates the provisions of Regulation U. Neither the Borrower nor its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying “margin stock.”

Section 4.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans.

Section 4.11. Ownership of Property.

(a) Each of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all of its real and personal property material to the operation of its business, including all such properties reflected in the most recent audited consolidated balance sheet of the Borrower or the Acquired Business, as the case may be, referred to in Section 4.4 or purported to have been acquired by the Borrower or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens, other than Liens permitted under Section 7.2. All leases that individually or in the aggregate are material to the business or operations of the Borrower and its Subsidiaries are valid and subsisting and are in full force.

(b) Each of the Borrower and its Subsidiaries owns, or is licensed, or otherwise has the right, to use, all patents, trademarks, service marks, trade names, copyrights, franchises, licenses and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries does not infringe in any material respect on the rights of any other Person.

(c) The properties of the Borrower and its Subsidiaries are insured within terms reasonably acceptable to the Lenders, with financially sound and reputable insurance companies which are not Affiliates of the Borrower (unless otherwise reasonably acceptable to the Lenders), in such amounts with such deductibles and covering such risks deemed adequate as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or any applicable Subsidiary operates.

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Section 4.12. Disclosure. The Borrower has disclosed to the Lenders all agreements, instruments, and corporate or other restrictions to which the Borrower or any of its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports (including without limitation all reports that the Borrower is required to file with the Securities and Exchange Commission), financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation or any syndication of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by any other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, taken as a whole, in light of the circumstances under which they were made, not misleading.

Section 4.13. Labor Relations. There are no strikes, lockouts or other material labor disputes or grievances against the Borrower or any of its Subsidiaries, or, to the Borrower’s knowledge, threatened against or affecting the Borrower or any of its Subsidiaries, and no significant unfair labor practice, charges or grievances are pending against the Borrower or any of its Subsidiaries, or to the Borrower’s knowledge, threatened against any of them before any Governmental Authority. All payments due from the Borrower or any of its Subsidiaries pursuant to the provisions of any collective bargaining agreement have been paid or accrued as a liability on the books of the Borrower or any such Subsidiary, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

Section 4.14. Subsidiaries. Schedule 4.14 sets forth the name of, the ownership interest of the Borrower in, the jurisdiction of incorporation or organization of, and the type of, each Subsidiary and identifies each Subsidiary that is a Subsidiary Loan Party and that is a Material Subsidiary, in each case as of the Closing Date.

Section 4.15. Insolvency. After giving effect to the execution and delivery of the Loan Documents, the making of the Loans under this Agreement, neither the Borrower nor its Subsidiaries will be “insolvent,” within the meaning of such term as defined in § 101 of Title 11 of the United States Code, as amended from time to time, or be unable to pay its debts generally as such debts become due, or have an unreasonably small capital to engage in any business or transaction, whether current or contemplated.

Section 4.16. Funded Debt. Prior to and after the incurrence by the Borrower of the Loans under the Agreement and the issuance of the guarantee by the Subsidiary Loan Parties pursuant to the Subsidiary Guaranty Agreement, no default or event of default shall have occurred and be continuing under and as defined in the Note Purchase Agreements and (ii) consolidated funded debt (as defined in the Note Purchase Agreements) of the Borrower and its Subsidiaries is less than or equal to 60% of consolidated total capitalization (as defined in the Note Purchase Agreements) of the Borrower and its Subsidiaries.

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ARTICLE V

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that so long as any Lender has a Term Loan Commitment hereunder, any Term Loan remains outstanding or any Obligation remains unpaid or outstanding:

Section 5.1. Financial Statements and Other Information. The Borrower will deliver to the Administrative Agent and each Lender:

(a) as soon as available and in any event within 90 days after the end of each Fiscal Year of Borrower, a copy of the annual audited report for such Fiscal Year for the Borrower and its Subsidiaries, containing a consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows (together with all footnotes thereto) of the Borrower and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all in reasonable detail and reported on by PriceWaterhouseCoopers LLP or other independent public accountants of nationally recognized standing (without a “going concern” or like qualification, exception or explanation and without any qualification or exception as to scope of such audit) to the effect that such financial statements present fairly in all material respects the financial condition and the results of operations of the Borrower and its Subsidiaries for such Fiscal Year on a consolidated basis in accordance with GAAP and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards;

(b) as soon as available and in any event within 60 days after the end of each Fiscal Quarter of the Borrower, an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such Fiscal Quarter and the related unaudited consolidated statements of income and cash flows of the Borrower and its Subsidiaries for such Fiscal Quarter and the then elapsed portion of such Fiscal Year, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of Borrower’s previous Fiscal Year, all certified by the chief financial officer or treasurer of the Borrower as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year end audit adjustments and the absence of footnotes;

(c) concurrently with the delivery of the financial statements referred to in clauses (a) and (b) above, (i) a Compliance Certificate signed by the chief executive officer or the chief financial officer of the Borrower and (ii) a written list of all Material Subsidiaries formed, acquired or created from a transfer of assets or through any other event since the Closing Date with respect to the first delivery of financial statements after the Closing Date and thereafter since the date of the most recently delivered Compliance Certificate, such list to include the name of each new Material Subsidiaries, its state of incorporation, list of its officers and directors and any other information that the Administrative Agent shall reasonably request;

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(d) promptly upon receipt thereof, copies of all reports on the financial statements of the Borrower and its Subsidiaries, submitted by independent public accountants to Borrower in connection with each annual, interim or special audit of Borrower’s consolidated financial statements;

(e) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all functions of said Commission, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be; and

(f) promptly following any request therefor, such other information regarding the results of operations, business affairs and financial condition of the Borrower or any Subsidiary as the Administrative Agent or any Lender may reasonably request.

So long as the Borrower maintains a site on Intralinks® and each Lender has a valid identification number and password with which to access information regarding the Borrower on Intralinks®, Borrower may satisfy its obligation to deliver the financial statements and other reports and materials referred to in clauses (a), (b) and (e) above by posting such financial statements and other reports and materials and having each Lender notified thereof.

Section 5.2. Notices of Material Events. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:

(a) the occurrence of any Default or Event of Default;

(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or, to the knowledge of the Borrower, affecting the Borrower or any Subsidiary which, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

(c) the occurrence of any event or any other development by which the Borrower or any of its Subsidiaries (i) fails to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) becomes subject to any Environmental Liability, (iii) receives notice of any claim with respect to any Environmental Liability, or (iv) becomes aware of any basis for any Environmental Liability and in each of the preceding clauses, which individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;

(d) the occurrence of any ERISA Event that alone, or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $1,000,000;

(e) the occurrence of any default or event of default, or the receipt by Borrower or any of its Subsidiaries of any written notice of an alleged default or event of default, in respect of any Material Indebtedness of the Borrower or any of its Subsidiaries;

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(f) simultaneously with the delivery of each Compliance Certificate, a written list of all Material Subsidiaries formed, acquired, or created from a transfer of assets or through any other event, during the period commencing on the Closing Date and ending on the date on which the first Compliance Certificate is delivered, and thereafter since the date of the most recently delivered Compliance Certificate; such written list shall include the name of each new Material Subsidiary, its state of incorporation, list of its officers and any other information that the Administrative Agent shall reasonably request.

(g) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a written statement of a Responsible Officer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

Section 5.3. Existence; Conduct of Business. The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and maintain in full force and effect its legal existence and its respective rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business; provided, that nothing in this Section shall prohibit any merger, consolidation, liquidation or dissolution permitted under Section 7.3.

Section 5.4. Compliance with Laws, Etc. The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and requirements of any Governmental Authority applicable to its business and properties, including without limitation, all Environmental Laws, ERISA and OSHA, except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

Section 5.5. Payment of Obligations. The Borrower will, and will cause each of its Subsidiaries to, pay and discharge at or before maturity, (i) all taxes, assessments and governmental charges imposed upon it or upon its property, and (ii) all claims (including, without limitation, claims for labor, materials, supplies or services) which might, if unpaid, become a Lien upon its property, unless, in each case, the validity or amount thereof is being contested in good faith by appropriate proceedings and adequate reserves are maintained with respect thereto.

Section 5.6. Books and Records. The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to prepare the consolidated financial statements of Borrower in conformity with GAAP.

Section 5.7. Visitation, Inspection, Etc. The Borrower will, and will cause each of its Subsidiaries to, permit any representative of the Administrative Agent or any Lender, to visit and inspect its properties, to examine its books and records and to make copies and take extracts therefrom, and to discuss its affairs, finances and accounts with any of its officers and

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with its independent certified public accountants, all at such reasonable times and as often as the Administrative Agent or any Lender may reasonably request after reasonable prior notice to the Borrower; provided, however, if an Event of Default has occurred and is continuing, no prior notice shall be required.

Section 5.8. Maintenance of Properties; Insurance. The Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, (b) maintain with financially sound and reputable insurance companies, insurance with respect to its properties and business, and the properties and business of its Subsidiaries, against loss or damage of the kinds customarily insured against by companies in the same or similar businesses operating in the same or similar locations, and (c) at all times shall name Administrative Agent as additional insured on all liability policies of the Borrower and its Subsidiaries.

Section 5.9. Use of Proceeds. The Borrower will use the proceeds of all Loans to fund, in part, the Acquisition. No part of the proceeds of the Term Loan will be used, whether directly or indirectly, for any purpose that would violate any rule or regulation of the Board of Governors of the Federal Reserve System, including Regulations T, U or X.

Section 5.10. Additional Subsidiaries.

(a) If any Subsidiary becomes a Material Subsidiary after the Closing Date, or any Material Subsidiary is acquired or formed after the Closing Date, the Borrower will, simultaneously with delivery of the written list of new Material Subsidiaries required pursuant to Section 5.1(c) above, cause such Material Subsidiary to become a Subsidiary Loan Party by satisfying the requirements of clause (e) below.

(b) If, at any time, the aggregate revenue or assets (on a non-consolidated basis) of the Borrower and those Subsidiaries that are then Subsidiary Loan Parties are less than the Aggregate Subsidiary Threshold, then the Borrower shall cause one or more other Subsidiaries to become additional Subsidiary Loan Parties, as provided in this Section 5.10, within ten (10) Business Days after such revenues or assets become less than the Aggregate Subsidiary Threshold so that after including the revenue or assets of any such additional Subsidiary Loan Parties, the aggregate revenue or assets (on a non-consolidated basis) of the Borrower and all such Subsidiary Loan Parties would equal or exceed the Aggregate Subsidiary Threshold.

(c) The Borrower may elect at any time to have any Subsidiary become an additional Subsidiary Loan Party as provided in this Section 5.10.

(d) Upon the occurrence and during the continuation of any Event of Default, if the Required Lenders so direct, the Borrower shall (i) cause all of its Subsidiaries (other than Securitization Subsidiaries) to become additional Subsidiary Loan Parties, as provided in this Section 5.10, within ten (10) Business Days after the Borrower’s receipt of written confirmation of such direction from the Administrative Agent.

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(e) A Subsidiary shall become an additional Subsidiary Loan Party after the Closing Date by executing and delivering to the Administrative Agent a Subsidiary Guaranty Supplement and an Indemnity and Contribution Agreement Supplement, accompanied by (i) all other Loan Documents related thereto, (ii) certified copies of certificates or articles of incorporation or organization, by-laws, membership operating agreements, and other organizational documents, appropriate authorizing resolutions of the board of directors of such Subsidiaries, and opinions of counsel comparable to those delivered pursuant to Section 3.1(vi), and (iii) such other documents as the Administrative Agent may reasonably request.

Section 5.11. Ownership of all Subsidiary Loan Parties. Borrower shall maintain its percentage of ownership existing as of the date hereof of all Subsidiary Loan Parties, and shall not decrease its ownership percentage in each Person which becomes a Subsidiary Loan Party after the date hereof, as such ownership exists at the time such Person becomes a Subsidiary Loan Party.

ARTICLE VI

FINANCIAL COVENANTS

The Borrower covenants and agrees that so long as any Lender has a Term Loan Commitment hereunder, any Term Loan remains outstanding or any Obligation remains unpaid or outstanding:

Section 6.1. Leverage Ratio. The Borrower shall maintain at all times a Leverage Ratio of not greater than 0.60:1.00.

Section 6.2. Maximum Total Funded Debt to Consolidated EBITDA Ratio. The Borrower shall maintain at all times a Total Funded Debt to Consolidated EBITDA Ratio of not greater than 4.75 to 1.00.

Section 6.3. Fixed Charge Coverage Ratio. The Borrower shall maintain, as of the end of each Fiscal Quarter, an Fixed Charge Coverage Ratio of not less than 1.50 to 1.00.

Section 6.4. Consolidated Net Worth. The Borrower shall maintain at all times a Consolidated Net Worth of not less than the sum of (a) $560,000,000 plus (b) 50% of Consolidated Net Income on a cumulative basis for all preceding Fiscal Quarters, commencing with the Fiscal Quarter ending January 31, 2003; provided, that if Consolidated Net Income is negative in any Fiscal Quarter the amount added for such Fiscal Quarter shall be zero and such negative Consolidated Net Income shall not reduce the amount of Consolidated Net Income added from any previous Fiscal Quarter, plus (c) 100% of the amount by which the Borrower’s “total stockholders’ equity” is increased as a result of any public or private offering of Capital Stock of the Borrower after the Closing Date. Promptly upon the consummation of any such offering of Capital Stock, the Borrower shall notify the Administrative Agent in writing of the amount of such increase in “total stockholders’ equity”.

Section 6.5. Asset Coverage Ratio. The Borrower shall maintain at all times an Asset Coverage Ratio of not less than 1.20 to 1.00.

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Section 6.6. Minimum Interest Coverage Ratio. The Borrower shall maintain at all times an Interest Coverage Ratio of not less than 3.00 to 1.00 .

ARTICLE VII

NEGATIVE COVENANTS

The Borrower covenants and agrees that so long as any Lender has a Term Loan Commitment hereunder, any Term Loan remains outstanding or any Obligation remains outstanding:

Section 7.1. Indebtedness and Preferred Equity. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness created pursuant to the Loan Documents;

(b) Indebtedness outstanding on the date hereof or incurred under lines of credit outstanding on the date hereof, in each case as set forth on Schedule 7.1 and extensions, renewals and replacements of any such Indebtedness and such lines of credit that do not increase the outstanding principal amount thereof (immediately prior to giving effect to such extension, renewal or replacement) or shorten the maturity or the weighted average life thereof;

(c) Indebtedness incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations, and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof; provided, that such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvements or extensions, renewals, and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (immediately prior to giving effect to such extension, renewal or replacement) or shorten the maturity or the weighted average life thereof; provided further, that the aggregate principal amount of such Indebtedness does not exceed $20,000,000 at any time outstanding;

(d) Indebtedness of the Borrower owing to any Subsidiary and of any Subsidiary owing to the Borrower or any other Subsidiary; provided, that any such Indebtedness that is owed by a Subsidiary that is not a Subsidiary Loan Party shall be subject to Section 7.4;

(e) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary; provided, that Guarantees by any Loan Party of Indebtedness of any Subsidiary that is not a Subsidiary Loan Party shall be subject to Section 7.4; provided, further, that neither the Borrower nor any of its Subsidiaries shall be permitted to Guarantee any Indebtedness owed by any Securitization Subsidiary;

(f) Indebtedness of any Person which becomes a Subsidiary after the date of this Agreement; provided, that such Indebtedness exists at the time that such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary;

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(g) Permitted Subordinated Debt;

(h) Indebtedness owed to a Person other than the Borrower or any Subsidiaries in respect of any Securitization Transaction permitted by Section 7.6(c) in an aggregate amount not to exceed $100,000,000;

(i) Indebtedness in respect of Hedging Obligations permitted by Section 7.10; and

(j) other unsecured Indebtedness in an aggregate principal amount not to exceed $75,000,000 at any time outstanding.

Borrower will not, and will not permit any Subsidiary to, issue any preferred stock or other preferred equity interests that (i) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii) is or may become redeemable or repurchaseable at the option of the holder thereof, in whole or in part or (iii) is convertible or exchangeable at the option of the holder thereof for Indebtedness or preferred stock or any other preferred equity interests described in this paragraph, on or prior to, in the case of clause (i), (ii) or (iii), the first anniversary of the Maturity Date.

Section 7.2. Negative Pledge. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its assets or property now owned or hereafter acquired, except:

(a) Permitted Encumbrances;

(b) any Liens on any property or asset of the Borrower or any Subsidiary existing on the Closing Date set forth on Schedule 7.2; provided, that such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary;

(c) purchase money Liens upon or in any fixed or capital assets to secure the purchase price or the cost of construction or improvement of such fixed or capital assets or to secure Indebtedness incurred solely for the purpose of financing the acquisition, construction or improvement of such fixed or capital assets (including Liens securing any Capital Lease Obligations); provided, that (i) such Lien secures Indebtedness permitted by Section 7.1(c), (ii) such Lien attaches to such asset concurrently or within 90 days after the acquisition, improvement or completion of the construction thereof; (iii) such Lien does not extend to any other asset; and (iv) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets;

(d) any Lien (i) existing on any asset of any Person at the time such Person becomes a Subsidiary of the Borrower, (ii) existing on any asset of any Person at the time such Person is merged with or into the Borrower or any Subsidiary of the Borrower or (iii) existing on any asset prior to the acquisition thereof by the Borrower or any Subsidiary of the Borrower; provided, that any such Lien was not created in the contemplation of any of the foregoing and any such Lien secures only those obligations which it secures on the date that such Person becomes a Subsidiary or the date of such merger or the date of such acquisition;

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(e) any Lien arising out of any Securitization Transaction permitted by Section 7.6(c);

(f) Liens (other than those permitted by paragraphs (a) through (e) above) encumbering assets having an Asset Value not greater than $20,000,000 in the aggregate at any one time; and

(g) extensions, renewals, or replacements of any Lien referred to in paragraphs (a) through (f) of this Section; provided, that the principal amount of the Indebtedness secured thereby is not increased and that any such extension, renewal or replacement is limited to the assets originally encumbered thereby.

Section 7.3. Fundamental Changes.

(a) The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate into any other Person, or permit any other Person to merge into or consolidate with it, or sell, or lease, transfer or otherwise Dispose of (in a single transaction or a series of transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired) or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired) or liquidate or dissolve; provided, that if at the time thereof and immediately after giving effect thereto, no Default or Event of Default shall have occurred and be continuing (i) the Borrower or any Subsidiary may merge with a Person if the Borrower (or such Subsidiary if the Borrower is not a party to such merger) is the surviving Person, (ii) any Subsidiary may merge into another Subsidiary; provided, that if any party to such merger is a Subsidiary Loan Party, the Subsidiary Loan Party shall be the surviving Person, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the Borrower or to a Subsidiary Loan Party, (iv) the Borrower and any Subsidiary may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the extent permitted in Section 7.6, and (v) any Subsidiary (other than a Subsidiary Loan Party) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; provided, that any such merger involving a Person that is not a wholly-owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 7.4.

(b) The Borrower will not, and will not permit any of its Subsidiaries to, engage in any business other than businesses of the type conducted by the Borrower and its Subsidiaries taken as whole on the date hereof and businesses reasonably related thereto, except where the Investment made, and other funds expended or committed with respect to such business, do not exceed $5,000,000 in each new business.

Section 7.4. Investments, Loans, Etc. The Borrower will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly-owned Subsidiary prior to such merger), any Capital Stock, evidence of indebtedness or other securities (including any option, warrant, or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person (all of the foregoing being collectively called “Investments”), or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person that constitute a business unit, or create or form any Subsidiary, except:

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(a) Investments (other than Permitted Investments) existing on the date hereof and set forth on Schedule 7.4 (including Investments in Subsidiaries and Investments constituting the Acquisition);

(b) Permitted Investments;

(c) Guarantees constituting Indebtedness permitted by Section 7.1; provided, that the aggregate principal amount of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties that is Guaranteed by any Loan Party shall be subject to the limitation set forth in clause (d) hereof;

(d) Investments made by the Borrower in or to any Subsidiary and by any Subsidiary to the Borrower or in or to another Subsidiary; provided, that the aggregate amount of Investments by Loan Parties in or to, and Guarantees by Loan Parties of Indebtedness of, any Subsidiary that is not a Subsidiary Loan Party (including all such Investments and Guarantees existing on the Closing Date) shall not exceed $30,000,000 at any time outstanding; provided, further, that neither the Borrower nor any of its Subsidiaries shall be permitted to Guarantee any Indebtedness owed by any Securitization Subsidiary;

(e) Investments made by the Borrower in or to any Subsidiary and by any Subsidiary to any Person that is not a Subsidiary; provided, that the aggregate amount of all such Investments in or to, and Guarantees of Indebtedness of, any such Persons (including all such Investments and Guarantees existing on the Closing Date) shall not exceed $25,000,000 at any time outstanding;

(f) loans or advances to employees, officers or directors of the Borrower or any Subsidiary in the ordinary course of business for travel, relocation and related expenses; provided, however, that the aggregate amount of all such loans and advances does not exceed $1,000,000 at any time;

(g) Hedging Obligations permitted by Section 7.10; and

(h) other Investments which in the aggregate do not exceed $5,000,000 in any Fiscal Year.

Notwithstanding the foregoing, prior to the Subordination Event, the Borrower will not, and will not permit any of its Subsidiaries to, make Investments as to which the consideration, in the aggregate, for all such Investments consummated after the Closing Date, shall exceed $30,000,000 in cash plus $100,000,000 in equity and other consideration.

Section 7.5. Restricted Payments. The Borrower will not, and will not permit its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any dividend on any class of its stock, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement, defeasance or other acquisition of, any shares of Capital Stock or Indebtedness subordinated to the Obligations of the Borrower

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or any Guarantee thereof or any options, warrants, or other rights to purchase such Capital Stock or such Indebtedness, whether now or hereafter outstanding (each, a “Restricted Payment”), except for (i) dividends payable by the Borrower solely in shares of any class of its common stock, (ii) Restricted Payments made by any Subsidiary to the Borrower or to another Subsidiary Loan Party, (iii) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, any payments made for the repurchase of outstanding capital stock of the Borrower made since January 31, 1999 in an aggregate amount at any time not to exceed $60,000,000; and (iv) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, cash dividends and distributions paid on, and cash redemptions of, the common stock of the Borrower; provided, that the aggregate amount of all such Restricted Payments made by the Borrower under clauses (i) through (iv) in this Section 7.5 in any Fiscal Year does not exceed 50% of Consolidated Net Income (or, in an event of a loss, minus 100% of Net Income) earned during the Borrower’s Fiscal Year commencing on January 31, 2003 and each Fiscal Year thereafter (such period to be treated as one accounting period).

Section 7.6. Sale of Assets. The Borrower will not, and will not permit any of its Subsidiaries to, Dispose of, any of its assets, business or property, whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any Person other than the Borrower or a Subsidiary Loan Party (or to qualify directors if required by applicable law), except:

(a) the sale of (i) equipment or other personal property being replaced by other equipment or other personal property purchased as a capital expenditure item or (ii) obsolete or worn out equipment not requiring replacement.

(b) the sale of inventory and Permitted Investments in the ordinary course of business;

(c) the sale of accounts receivable and all related rights pursuant to a Securitization Transaction that results in Indebtedness that is permitted under Section 7.1;

(d) the sale of assets in connection with a sale-leaseback transaction permitted under Section 7.9;

(e) the sale of (i) assets the aggregate Asset Value of which does not exceed $1,000,000, or (ii) surplus and unused real property in the ordinary course of business to the extent that the same is disclosed by the Borrower on Schedule 7.6 to this Agreement; and

(f) other asset sales (including the stock of Subsidiaries) where, on the date of execution of a binding obligation to make such asset sale (provided that if the asset sale is not consummated within six (6) months of such execution, then on the date of consummation of such asset sale rather than on the date of execution of such binding obligation), the aggregate Asset Value of all asset sales occurring after March 26, 2003, taking into account the Asset Value of the proposed asset sale, would not exceed ten percent (10%) of the greater of (i) Borrower’s Consolidated Net Worth as of November 1, 2002 and (ii) Borrower’s Consolidated Net Worth as of the date of the most recent financial statements delivered pursuant to this Agreement.

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Section 7.7. Transactions with Affiliates. The Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Borrower and any Subsidiary Loan Party not involving any other Affiliates and (c) any Restricted Payment permitted by Section 7.5.

Section 7.8. Restrictive Agreements. The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit any Lien upon any of its assets or properties, whether now owned or hereafter acquired, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to its common stock, to make or repay loans or advances to the Borrower or any other Subsidiary, to Guarantee Indebtedness of the Borrower or any other Subsidiary or to transfer any of its property or assets to the Borrower or any Subsidiary of the Borrower; provided, that (i) the foregoing shall not apply to restrictions or conditions imposed by law, by this Agreement or any other Loan Document, or by the Existing Credit Agreement (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder, (iii) clause (a) shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions and conditions apply only to the property or assets securing such Indebtedness, (iv) clause (a) shall not apply to customary provisions in leases and other contracts restricting the assignment thereof and (v) the foregoing restrictions shall not apply to restrictions on any Securitization Subsidiaries contained in the documents governing any Securitization Transaction.

Section 7.9. Sale and Leaseback Transactions. The Borrower will not, and will not permit any of the Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except (i) with respect to the Orlando, Florida and Miami, Florida properties that, as of the Closing Date, are subject to Liens noted on Schedule 7.2., and (ii) other property to the extent that the aggregate fair value of all such other property sold and leased back pursuant to this clause (ii) does not exceed $40,000,000 at any one time.

Section 7.10. Hedging Transactions. The Borrower will not, and will not permit any of the Subsidiaries to, enter into any Hedging Transaction, other than Hedging Transactions entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its assets and liabilities. Solely for the avoidance of doubt, the Borrower acknowledges that a Hedging Transaction entered into for speculative purposes or of a speculative nature (which shall be deemed to mean the creation of risk exposure where one does not exist in relation to any of its business operations and shall include without limitation any Hedging Transaction under which

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the Borrower or any of the Subsidiaries is or may become obliged to make any payment (i) in connection with the purchase by any third party of any common stock or any Indebtedness or (ii) as a result of changes in the market value of any common stock or any Indebtedness), is not a Hedging Transaction entered into in the ordinary course of business to hedge or mitigate risks.

Section 7.11. Fiscal Year. The Borrower will not, and will not permit any Subsidiary to, change the fiscal year of the Borrower or of any Subsidiary, except to change the fiscal year of a Subsidiary to conform its fiscal year to that of the Borrower.

Section 7.12. Optional Prepayments. The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, prepay, purchase, redeem, retire, defease or otherwise acquire, or make any optional payment on account of any principal of, interest on, or premium payable in connection with the optional prepayment, redemption or retirement of, any of its Indebtedness, or give a notice of redemption with respect to any such Indebtedness, or make any payment in violation of the subordination provisions of any Permitted Subordinated Debt, except with respect to (i) the Obligations under this Agreement and the Notes, (ii) prepayments of Indebtedness outstanding pursuant to revolving credit, overdraft and line of credit facilities permitted pursuant to Section 7.1, provided, that the Borrower shall have complied with Section 2.13(b) prior to making any such prepayment, and (iii) so long as no Default or Event of Default has occurred and is continuing, intercompany loans made or outstanding pursuant to Section 7.1.

Section 7.13. Actions Under Certain Documents.

(a) The Borrower will not, and will not permit any of its Subsidiaries to, without the prior written consent of the Administrative Agent, (a) modify, amend, cancel or rescind (i) the certificate or articles of incorporation, bylaws or other organizational documents or (ii) the Existing Credit Agreement or any agreements or documents evidencing or governing Permitted Subordinated Debt, or (b) make demand of payment or accept payment on any Permitted Subordinated Debt or on any intercompany Indebtedness permitted by Section 7.1, except that with respect to such intercompany Indebtedness, (i) current interest accrued thereon as of the date of this Agreement and all interest subsequently accruing thereon (whether or not paid currently) may be paid unless a Default or Event of Default has occurred and is continuing and (ii) the Borrower and its Subsidiaries may demand and accept payment on any intercompany Indebtedness owed by a Securitization Subsidiary to the Borrower or such Subsidiary.

(b) The Borrower will not, and will not permit any of its Subsidiaries to, modify or amend the Existing Credit Agreement prior to the Conversion Date, which modification or amendment is more restrictive on the Borrower or its Subsidiaries, without entering into a comparable modification or amendment to this Agreement.

Section 7.14. No Intervening Subordinated Debt. The Borrower will not be permitted to incur any Indebtedness that is subordinated to the Senior Indebtedness (as defined in Article XI) and is senior to the Obligations (after giving effect to Article XI).

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ARTICLE VIII

EVENTS OF DEFAULT

Section 8.1. Events of Default. If any of the following events (each an “Event of Default”) shall occur:

(a) the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment or otherwise; or

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount payable under clause (a) of this Section 8.1) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) Business Days; or

(c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with this Agreement or any other Loan Document (including the Schedules attached thereto) and any amendments or modifications hereof or waivers hereunder, or in any certificate, report, financial statement or other document submitted to the Administrative Agent or the Lenders by any Loan Party or any representative of any Loan Party pursuant to or in connection with this Agreement or any other Loan Document shall prove to be incorrect in any material respect when made or deemed made or submitted; or

(d) the Borrower shall fail to observe or perform any covenant or agreement contained in (i) Sections 5.2, 5.3 (with respect to the Borrower’s existence), 5.12 or Articles VI or VII or (ii) the Fee Letter; or

(e) any Loan Party shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those referred to in clauses (a), (b) and (d) above) or any other Loan Document, and such failure shall remain unremedied for 30 days after the earlier of (i) any officer of the Borrower becomes aware of such failure, or (ii) notice thereof shall have been given to the Borrower by the Administrative Agent or any Lender; or

(f) the Borrower or any Subsidiary (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of, or premium or interest on, any Material Indebtedness that is outstanding, when and as the same shall become due and payable (whether at scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing or governing such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity of such Indebtedness; or any such Indebtedness shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof;

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(g) the Borrower or any Subsidiary shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (i) of this Section, (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any such Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting any of the foregoing; or

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Subsidiary or its debts, or any substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any Subsidiary or for a substantial part of its assets, and in any such case, such proceeding or petition shall remain undismissed for a period of 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or

(i) the Borrower or any Subsidiary shall become unable to pay, shall admit in writing its inability to pay, or shall fail to pay, its debts as they become due; or

(j) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with other ERISA Events that have occurred, could reasonably be expected to result in liability to the Borrower and the Subsidiaries in an aggregate amount exceeding $5,000,000; or

(k) any judgment or order for the payment of money in excess of $5,000,000 in the aggregate shall be rendered against the Borrower or any Subsidiary, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(l) any non-monetary judgment or order shall be rendered against the Borrower or any Subsidiary that could reasonably be expected to have a Material Adverse Effect, and there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(m) a Change in Control shall occur or exist; or

(n) any provision of any Subsidiary Guaranty Agreement shall for any reason cease to be valid and binding on, or enforceable against, any Subsidiary Loan Party, or any Subsidiary Loan Party shall so state in writing, or any Subsidiary Loan Party shall seek to terminate its Subsidiary Guaranty Agreement;

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(o) there shall exist or occur any “Event of Default” as provided under the terms of any other Loan Document, or any Loan Document ceases to be in full force and effect or the validity or enforceability thereof is disaffirmed by or on behalf of Borrower or any other Loan Party, or at any time it is or becomes unlawful for Borrower or any other Loan Party to perform or comply with its obligations under any Loan Document, or the obligations of Borrower or any other Loan Party under any Loan Document are not or cease to be legal, valid and binding on Borrower or any such Loan Party;

(p) an attachment or similar action shall be made on or taken against any of the assets of the Borrower or any Subsidiary with an Asset Value exceeding $5,000,000 in aggregate and is not removed, suspended or enjoined within 60 days of the same being made or any suspension or injunction being lifted;

(q) any default or event of default (after giving effect to any grace period) shall have occurred and be continuing under the Existing Credit Agreement or any “Loan Documents” (as such term is defined under the Existing Credit Agreement, the “Existing Loan Documents”) or the Existing Credit Agreement or any other Existing Loan Documents shall cease to be in full force and effect or the validity or enforceability thereof is disaffirmed by or on behalf of any party thereto or all or any part of the loans under the Existing Credit Agreement or any Permitted Subordinated Debt is accelerated, is declared to be due and payable, or is required to be prepaid or redeemed, in each case prior to the stated maturity thereof;

then, and in every such event (other than an event with respect to the Borrower described in clause (g) or (h) of this Section) and at any time thereafter during the continuance of such event, the Administrative Agent may, and upon the written request of the Required Lenders shall, by notice to the Borrower, take any or all of the following actions, at the same or different times: (i) terminate the Term Loan Commitments, whereupon the Term Loan Commitment of each Lender shall terminate immediately, (ii) declare the principal of and any accrued interest on the Loans, and all other Obligations owing hereunder, to be, whereupon the same shall become, due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, (iii) exercise all remedies contained in any other Loan Document, and (iv) exercise any other remedies available at law or in equity; and that, if an Event of Default specified in either clause (g) or (h) with respect to the Borrower shall occur, the Term Loan Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon, and all fees, and all other Obligations shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

Notwithstanding anything to the contrary in the foregoing, if the Borrower fails to comply with the provisions of the Fee Letter in any material respect at any time, then the Lenders shall be entitled to unilaterally amend the provisions of this Agreement and the other Loan Documents relating to interest rate, optional redemption, maturity and registration rights so as to reflect the terms of the Refunding Securities or the High Yield Securities, as the case may be, that would have been issued in accordance with the Fee Letter had the Borrower complied therewith; provided that in no event may the Lenders (i) increase the interest rate on the Loans payable in cash in excess of 14% per annum (although the interest rate for any portion that compounds or is paid in kind or otherwise accrues without cash payment may be further increased), or (ii) shorten the maturity date for the Loans to a date less than six months from the date this Agreement is amended pursuant to this paragraph.

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ARTICLE IX

THE ADMINISTRATIVE AGENT

Section 9.1. Appointment of Administrative Agent. Each Lender irrevocably appoints SunTrust Bank as the Administrative Agent and authorizes it to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent under this Agreement and the other Loan Documents, together with all such actions and powers that are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder or under the other Loan Documents by or through any one or more sub-agents or attorneys-in-fact appointed by the Administrative Agent. The Administrative Agent and any such sub-agent or attorney-in-fact may perform any and all of its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions set forth in this Article shall apply to any such sub-agent or attorney-in-fact and the Related Parties of the Administrative Agent, any such sub-agent and any such attorney-in-fact and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

Section 9.2. Nature of Duties of Administrative Agent. The Administrative Agent shall not have any duties or obligations except those expressly set forth in this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except those discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.2), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it, its sub-agents or attorneys-in-fact with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.2) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents or attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall not be deemed to have knowledge of any Default or Event of Default unless and until written notice thereof (which notice shall include an express reference to such event being a “Default” or “Event of Default” hereunder) is given to the Administrative Agent by the Borrower or any Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any

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of the covenants, agreements, or other terms and conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article III or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. The Administrative Agent may consult with legal counsel (including counsel for the Borrower) concerning all matters pertaining to such duties.

Section 9.3. Lack of Reliance on the Administrative Agent. Each of the Lenders acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Lenders also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, continue to make its own decisions in taking or not taking of any action under or based on this Agreement, any related agreement or any document furnished hereunder or thereunder.

Section 9.4. Certain Rights of the Administrative Agent. If the Administrative Agent shall request instructions from the Required Lenders with respect to any action or actions (including the failure to act) in connection with this Agreement, the Administrative Agent shall be entitled to refrain from such act or taking such act, unless and until it shall have received instructions from such Lenders; and the Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders where required by the terms of this Agreement.

Section 9.5. Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed, sent or made by the proper Person. The Administrative Agent may also rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or not taken by it in accordance with the advice of such counsel, accountants or experts.

Section 9.6. The Administrative Agent in its Individual Capacity. The bank or other financial institution serving as the Administrative Agent shall have the same rights and powers under this Agreement and any other Loan Document in its capacity as a Lender as any other Lender and may exercise or refrain from exercising the same as though it were not the Administrative Agent; and the terms “Lenders”, “Required Lenders”, “holders of Notes”, or any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity. The bank acting as the Administrative Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or Affiliate of the Borrower as if it were not the Administrative Agent hereunder.

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Section 9.7. Successor Administrative Agent.

(a) The Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent, subject to the approval by the Borrower provided that no Default or Event of Default shall exist at such time. If no successor Administrative Agent shall have been so appointed, and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a commercial bank organized under the laws of the United States of America or any state thereof or a bank which maintains an office in the United States, having a combined capital and surplus of at least $500,000,000.

(b) Upon the acceptance of its appointment as the Administrative Agent hereunder by a successor, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. If within 45 days after written notice is given of the retiring Administrative Agent’s resignation under this Section 9.7 no successor Administrative Agent shall have been appointed and shall have accepted such appointment, then on such 45^th day (i) the retiring Administrative Agent’s resignation shall become effective, (ii) the retiring Administrative Agent shall thereupon be discharged from its duties and obligations under the Loan Documents and (iii) the Required Lenders shall thereafter perform all duties of the retiring Administrative Agent under the Loan Documents until such time as the Required Lenders appoint a successor Administrative Agent as provided above. After any retiring Administrative Agent’s resignation hereunder, the provisions of this Article IX shall continue in effect for the benefit of such retiring Administrative Agent and its representatives and agents in respect of any actions taken or not taken by any of them while it was serving as the Administrative Agent.

Section 9.8. Authorization to Execute other Loan Documents. Each Lender hereby authorizes the Administrative Agent to execute on behalf of all Lenders all Loan Documents other than this Agreement.

ARTICLE X

MISCELLANEOUS

Section 10.1. Notices.

(a) Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications to any party herein to be effective shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by email or telecopy, as follows:

To the Borrower:	Hughes Supply, Inc.
	One Hughes Way

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	Orlando, Florida 32805
	Attention: David Bearman, Chief Financial Officer
	Telecopy Number: 407-649-1670
	Email: David.Bearman@hughessupply.com
with a copy to:	Hughes Supply, Inc.
	One Hughes Way
	Orlando, Florida 32805
	Attention: Jay Clark, Treasurer
	Telecopy Number: 407-540-4914
	Email: jay.clark@hughessupply.com
To the Administrative Agent:	SunTrust Bank
	200 S. Orange Avenue, MC 2064
	Orlando, Florida 32801
	Attention: William C. Barr
	Telecopy Number: (407) 237-4076
	Email: william.barr@suntrust.com
With a copy to:	SunTrust Bank
	Agency Services
	303 Peachtree Street, N. E./ 25th Floor
	Atlanta, Georgia 30308
	Attention: Hope Williams
	Telecopy Number: (404) 658-4906
	and
	King & Spalding
	191 Peachtree Street, N.E.
	Atlanta, Georgia 30303
	Attention: Carolyn Z. Alford
	Telecopy Number: (404) 572-5100
	Email: czalford@kslaw.com
To any other Lender:	the address set forth in the Administrative Questionnaire

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon delivery, or if emailed, upon receipt of confirmation that such email has been read or deleted; provided, that notices delivered to the Administrative Agent shall not be effective until actually received by such Person at its address specified in this Section 10.1.

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(b) Any agreement of the Administrative Agent and the Lenders herein to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Borrower. The Administrative Agent and the Lenders shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Borrower to give such notice and the Administrative Agent and Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Administrative Agent or the Lenders in reliance upon such telephonic or facsimile notice. The obligation of the Borrower to repay the Loans and all other Obligations hereunder shall not be affected in any way or to any extent by any failure of the Administrative Agent and the Lenders to receive written confirmation of any telephonic or facsimile notice or the receipt by the Administrative Agent and the Lenders of a confirmation which is at variance with the terms understood by the Administrative Agent and the Lenders to be contained in any such telephonic or facsimile notice.

Section 10.2. Waiver; Amendments.

(a) No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or any other Loan Document, and no course of dealing between the Borrower and the Administrative Agent or any Lender, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power hereunder or thereunder. The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies provided by law. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default or Event of Default at the time.

(b) No amendment or waiver of any provision of this Agreement or the other Loan Documents, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower and the Required Lenders or the Borrower and the Administrative Agent with the consent of the Required Lenders and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, that no amendment or waiver shall: (i) increase the Term Loan Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder or otherwise modify the Fee Letter, without the written consent of each Lender affected thereby, (iii) postpone the date fixed for any payment of any principal of, or interest on, any Loan or interest thereon or any fees hereunder or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date for payment of such Loan, interest or fees, or the termination or reduction of any Term Loan Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.22 (b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section or the definition of “Required Lenders” or any

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other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the consent of each Lender; (vi) release any guarantor or limit the liability of any such guarantor under any guaranty agreement, without the written consent of each Lender; (vii) release all or substantially all collateral (if any) securing any of the Obligations or agree to subordinate any Lien in such collateral to any other creditor of the Borrower or any Subsidiary, without the written consent of each Lender; provided further, that no such agreement shall amend, modify or otherwise affect the rights, duties or obligations of the Administrative Agent without the prior written consent of such Person.

Section 10.3. Expenses; Indemnification.

(a) The Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of each of the Administrative Agent, the Arrangers, LCPI, STB and each of the other Lenders and each of their respective affiliates and each of their respective Related Parties (each, an “Indemnitee”) including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and the Arrangers, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated), and (ii) all out-of-pocket costs and expenses (including, without limitation, the reasonable fees, charges and disbursements of outside counsel) incurred by the Administrative Agent, the Arrangers or any Lender in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b) The Borrower shall indemnify each of the Indemnities against, and hold each of them harmless from, any and all costs, losses, liabilities, claims, damages and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, which may be incurred by or asserted against any Indemnitee arising out of, in connection with or as a result of (i) the execution or delivery of this Agreement or any other agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of any of the transactions contemplated hereby, (ii) this Agreement, any Loan or any actual or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned by the Borrower or any Subsidiary or any Environmental Liability related in any way to the Borrower or any Subsidiary or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided, that the Borrower shall not be obligated to indemnify any Indemnitee for any of the foregoing arising out of such Indemnitee’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and nonappealable judgment. No Indemnitee shall be liable for any damages arising from the use by others of information or others obtained through internet, Intralinks®, or other similar transmission services in connection with this Agreement.

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(c) The Borrower shall pay, and hold the Administrative Agent and each of the Lenders harmless from and against, any and all present and future stamp, documentary, and other similar taxes with respect to this Agreement and any other Loan Documents, any collateral described therein, or any payments due thereunder, and save the Administrative Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes.

(d) To the extent that the Borrower fails to pay any amount required to be paid to the Administrative Agent or the Arrangers under clauses (a), (b) or (c) hereof, each Lender severally agrees to pay to the Administrative Agent or the Arrangers, as the case may be, such Lender’s Pro Rata Share (determined as of the time that the unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided, that the unreimbursed expense or indemnified payment, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Arrangers in their respective capacities as such.

(e) To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated therein, any Loan or the use of proceeds thereof.

(f) All amounts due under this Section shall be payable promptly after written demand therefor.

Section 10.4. Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Any Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Term Loan Commitment and the Loans at the time owing to it); provided that (i) except in the case of an assignment (w) of the entire remaining amount of the assigning Lender’s Term Loan Commitment and the Loans at the time owing to it, (x) to a Lender, an Affiliate of a Lender or an Approved Fund with respect to a Lender, (y) by STB or LCPI or (z) of funded Term Loans, the aggregate amount of the Term Loan Commitment or Term Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000,

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unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed), and (ii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $1,000, and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. Upon (i) the execution and delivery of the Assignment and Acceptance by the assigning Lender and assignee Lender, (ii) acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, (iii) acceptance thereof from the Borrower to the extent required pursuant to this clause (b) and (iv) if such assignee Lender is a Foreign Lender, compliance by such Person with Section 2.21(e), from and after the effective date specified in each Assignment and Acceptance, the Eligible Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.19, 2.20, 2.21 and 10.3. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph 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 paragraph (d) of this Section.

(c) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in Atlanta, Georgia a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Term Loan Commitments of, and principal amount of the Loans (and related interest amounts) owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative 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. Any assignment of any Loan, whether or not evidenced by a Note, shall be effective only upon appropriate entries with respect thereto being made in the Register (and each Note shall expressly so provide). Any assignment or transfer of all or part of a Loan evidenced by a Note shall be registered on the Register only upon surrender for registration of assignment or transfer of the Note evidencing such Loan, accompanied by a duly executed Assignment and Acceptance; thereupon one or more new Notes in the same aggregate principal amount shall be issued to the designated Assignee, and the old Notes shall be returned by the Administrative Agent to the Borrower marked “canceled”.

(d) Any Lender may, without the consent of, or notice to, the Borrower or the Administrative Agent sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Term Loan Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this

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Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver with respect to the following to the extent affecting such Participant: (i) increase the Term Loan Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the date fixed for any payment of any principal of, or interest on, any Loan or interest thereon or any fees hereunder or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date for the termination or reduction of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.22(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby , without the written consent of each Lender, (v) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the consent of each Lender; (vi) release any guarantor or limit the liability of any such guarantor under any guaranty agreement without the written consent of each Lender except to the extent such release is expressly provided under the terms of the Guaranty Agreement; or (vii) release all or substantially all collateral (if any) securing any of the Obligations. Subject to paragraph (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.19, 2.20, and 2.21 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.7 as though it were a Lender, provided such Participant agrees to be subject to Section 10.7 as though it were a Lender.

(e) A Participant shall not be entitled to receive any greater payment under Section 2.19 and Section 2.21 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.21 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.21(e) as though it were a Lender.

(f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process.

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(a) This Agreement and the other Loan Documents shall be construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the State of Georgia.

(b) The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the United States District Court of the Northern District of Georgia, and of any state court of the State of Georgia located in Fulton County and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Georgia state court or, to the extent permitted by applicable law, such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

(c) The Borrower irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph (b) of this Section and brought in any court referred to in paragraph (b) of this Section. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 10.1. Nothing in this Agreement or in any other Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law.

Section 10.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

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Section 10.7. Right of Setoff. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, each Lender shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, to set off and apply against all deposits (general or special, time or demand, provisional or final) of the Borrower at any time held or other obligations at any time owing by such Lender to or for the credit or the account of the Borrower against any and all Obligations held by such Lender irrespective of whether such Lender shall have made demand hereunder and although such Obligations may be unmatured. Each Lender agrees promptly to notify the Administrative Agent and the Borrower after any such set-off and any application made by such Lender; provided, that the failure to give such notice shall not affect the validity of such set-off and application. Each Lender agrees to apply all amounts collected from any such set-off to the Obligations before applying such amounts to any other Indebtedness or other obligations owed by the Borrower and any of its Subsidiary to such Lender.

Section 10.8. Counterparts; Integration. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Agreement, the Fee Letter, the other Loan Documents, and any separate letter agreement(s) relating to any fees payable to the Administrative Agent in such capacity constitute the entire agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters.

Section 10.9. Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid. The provisions of Sections 2.19, 2.20, 2.21, and 10.3 and Article IX shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Term Loan Commitments or the termination of this Agreement or any provision hereof. All representations and warranties made herein, in the certificates, reports, notices, and other documents delivered pursuant to this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents, and the making of the Loans hereunder.

Section 10.10. Severability. Any provision of this Agreement or any other Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

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Section 10.11. Confidentiality.

(a) Each of the Administrative Agent, the Arrangers and each Lender agrees to take normal and reasonable precautions to maintain the confidentiality of any information designated in writing as confidential and provided to it by the Borrower or any Subsidiary, except that such information may be disclosed (i) to any Related Party of the Administrative Agent or any such Lender, including without limitation accountants, legal counsel and other advisors, (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority, (iv) to the extent that such information becomes publicly available other than as a result of a breach of this Section, or which becomes available to the Administrative Agent, the Arrangers, any Lender or any Related Party of any of the foregoing on a non-confidential basis from a source other than the Borrower, (v) in connection with the exercise of any remedy hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, and (ix) subject to provisions substantially similar to this Section 10.11, to any actual or prospective assignee or Participant, or (vi) with the consent of the Borrower. Any Person required to maintain the confidentiality of any information as provided for in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord its own confidential information.

(b) Notwithstanding any other express or implied agreement, arrangement or understanding to the contrary, the Borrower, the Administrative Agent and the Lenders agree that the Borrower (and each of its employees, representatives or agents) is permitted to disclose to any and all persons, without limitation of any kind, the structure and tax aspects of the Term Loans and the transactions contemplated by this Agreement, and all materials of any kind (including opinions or other tax analyses) that are provided to the Borrower related to such structure and tax aspects.

Section 10.12. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which may be treated as interest on such Loan under applicable law (collectively, the “Charges”), shall exceed the maximum lawful rate of interest (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by a Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been received by such Lender.

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Section 10.13. Waiver of Effect of Corporate Seal. The Borrower represents and warrants that neither it nor any other Loan Party is required to affix its corporate seal to this Agreement or any other Loan Document pursuant to any requirement of law or regulation, agrees that this Agreement shall be deemed delivered by Borrower under seal and waives any shortening of the statute of limitations that may result from not affixing the corporate seal to this Agreement or such other Loan Documents.

ARTICLE XI

SUBORDINATION TERMS

Section 11.1. General Description of Subordinated Term Loans. If the Subordination Event shall have occurred, then, on the Conversion Date, the outstanding Term Loans plus the aggregate amount of all accrued and unpaid interest and fees thereon and other Obligations hereunder will be automatically converted into senior subordinated term loans (the “Subordinated Term Loans”). From and after the Conversion Date, the Subordinated Term Loans shall constitute “Loans” or “Term Loans”, as the context requires, hereunder and, except as modified by or in accordance with this Article XI, such Subordinated Term Loans (i) will be governed by the terms and conditions of this Credit Agreement and (ii) shall have the same terms as the Term Loans.

Section 11.2. Repayment of Subordinated Term Loans. The outstanding principal amount of all Subordinated Term Loans shall be due and payable (together with accrued and unpaid interest thereon and other obligations owing in connection therewith) on the Maturity Date.

Section 11.3. Subordination Provisions. Prior to June 30, 2004, all Obligations shall be senior unsecured obligations of the Borrower. Effective as of June 30, 2004, the terms of this Article XI shall apply to the Obligations, this Agreement and the other Loan Documents, notwithstanding any other provision in this Agreement to the contrary. As of June 30, 2004, the following terms shall have the following meanings:

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended, and the rules promulgated thereunder.

“Payment Blockage Period” means a period commencing on the date that the Borrower shall have received notice from any holder of Senior Indebtedness, or any representative thereof, that a Senior Default shall have occurred and that the Borrower is not permitted to make any payments on account of Subordinated Indebtedness and ending on the earlier of (x) the date on which such Senior Default shall have been cured or waived, in accordance with the terms of the applicable Senior Agreement, or (y) 180 days after the commencement of such

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Payment Blockage Period. Notwithstanding any other provision of this Agreement, not more than one Payment Blockage Period may be commenced in any consecutive 360-day period, and no fact or circumstance constituting a Senior Default existing on the date of the commencement of any Payment Blockage Period may be used as the basis for the commencement of any subsequent Payment Blockage Period.

“Permitted Junior Securities” means debt or equity securities of the Borrower or any successor corporation issued pursuant to a plan of reorganization or readjustment of the Borrower that are subordinated to the payment of all then outstanding Senior Indebtedness at least to the same extent that the Obligations are subordinated to the payment of all Senior Indebtedness on the Conversion Date, so long as to the extent that any Senior Indebtedness outstanding on the date of consummation of any such plan of reorganization or readjustment is not paid in full in cash on such date, the holders of any such Senior Indebtedness not so paid in full in cash have consented to the terms of such plan of reorganization or readjustment.

“Proceeding” means (a) any insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other similar proceeding relating to Borrower or any of its properties as such, (b) any proceeding for any liquidation, dissolution or other winding-up of Borrower, whether voluntary or involuntary, and whether or not involving insolvency or bankruptcy proceedings, or (c) any assignment for the benefit of creditors or marshaling of assets of Borrower or the appointment of a trustee, receiver, sequestrator, custodian or similar official for Borrower or any of its properties.

“Senior Agreement” means the Existing Credit Agreement, the Note Purchase Agreements, the guaranties, promissory notes and security documents (if any) related to the Existing Credit Agreement and Note Purchase Agreements, and any document, instrument or any agreement that evidences or governs any Indebtedness that extends, increases, refinances, renews, replaces or refunds, in whole or in part, Indebtedness outstanding under the foregoing documents or that is incurred pursuant to a credit commitment under a credit facility that extends, increasing refinances, renews, replaces or refunds, in whole or in part, Indebtedness outstanding under the foregoing documents, including, without limitation, successive extensions, increases, refinancings, renewals, replacements and refundings.

“Senior Default” shall mean a default in the payment of any principal, interest or fees when due under any Senior Agreement.

“Senior Indebtedness” means the principal of, premium, if any, and interest (including any interest accruing after the commencement of a Proceeding, whether or not such interest constitutes an allowable claim in such Proceeding) on, and all other amounts payable by Borrower or any of its Subsidiaries under or in respect of, any Indebtedness incurred under any Senior Agreement and all other

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documents, instruments and agreements executed by Borrower and its Subsidiaries in connection with any Senior Agreement, including, without limitation, all fees and indemnities, together with all extensions, increasing refinancings, renewals, replacements and refundings thereof, and all costs and expenses incurred by the holders of such Indebtedness, or any holder of such Indebtedness in connection with its enforcement of any rights or remedies under any Senior Agreement or any document executed and delivered in connection therewith, the collection of any such Indebtedness or the protection thereof, or the realization of any collateral security for any such Indebtedness; provided that the aggregate principal amount of Indebtedness outstanding under the Existing Credit Agreement (as amended, modified, supplemented, refinanced, replaced, increased or otherwise) shall not exceed $315,000,000.

“Senior Payment Default” shall mean the failure to pay any principal, premium, interest, fee or other amount comprising Senior Indebtedness when due, after giving effect to any applicable notice and cure periods.

“Subordinated Indebtedness” means all indebtedness, obligations and liabilities of Borrower and its Subsidiaries arising under or evidenced by this Agreement or any of the other Loan Documents, including, without limitation, the principal of, premium, if any, and interest (including any interest accruing after the commencement of a Proceeding, whether or not such interest constitutes an allowable claim in such Proceeding) on, and all other amounts payable by Borrower and its Subsidiaries under or in respect of, any such Indebtedness, including, without limitation, all fees, costs and expenses provided for therein and all amounts for which Borrower and its Subsidiaries indemnify the holders of such Indebtedness thereunder.

Section 11.4. General Description of Subordination Terms. The Borrower and each Term Lender agree that effective as of June 30, 2004, the outstanding Term Loans plus the aggregate amount of all accrued and unpaid interest and fees thereon and other Obligations hereunder will automatically become subordinated in right of payment, to the extent and in the manner provided in this Article XI, to the prior payment in full of all existing and future Senior Indebtedness on the terms set forth below, which subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness. This Article XI shall constitute a continuing offer to all Persons who become holders of, or continue to hold, Senior Indebtedness; and such holders are made obligees hereunder and any one or more of them may enforce such provisions, and all such holders shall be deemed to have relied thereon.

Section 11.5. Payment of Principal, Interest or other Amounts. No payment or distribution of any kind, whether direct or indirect (by set-off, recoupment or otherwise) and whether in cash, securities or other property, shall be made on account of principal, interest, fees, expenses or any other amount of any Subordinated Indebtedness, or in respect of any redemption, retirement, purchase or other acquisition of any Subordinated Indebtedness, by or for the account of Borrower or any of its Subsidiaries, at any time during which any Senior Indebtedness shall remain unpaid or any commitment to lend additional Senior Indebtedness shall remain outstanding; provided, however, that (i) payments of principal, interest and fees on

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the Subordinated Indebtedness may be paid when due and (ii) prepayments of Subordinated Indebtedness may be paid to the extent contemplated by Section 2.13(b), unless in the case of either clause (i) or (ii), a Senior Payment Default has occurred and is continuing or a Payment Blockage Period is in effect; provided, further, however that nothing in this Section 11.5 shall prohibit the payment of interest in kind or the compounding of interest.

Section 11.6. Liquidation, Dissolution, Bankruptcy. In the event of any Proceeding: (i) all Senior Indebtedness shall first be paid in full in cash before any payment or distribution of any kind, whether direct or indirect (by set-off, recoupment or otherwise) and whether in cash, securities or other property, shall be made by or for the account of Borrower or any of its Subsidiaries in respect of Subordinated Indebtedness (except that the Term Lenders may be paid Permitted Junior Securities), and (ii) any payment or distribution of assets of any kind which would otherwise (but for this Article XI) be payable or deliverable on account of Subordinated Indebtedness shall be paid or delivered directly to the holders of the Senior Indebtedness as their interests may appear for application to and payment of Senior Indebtedness until all Senior Indebtedness shall have been paid in full in cash. So long as any Senior Indebtedness remains outstanding or committed, the agent for the holders of Indebtedness under the Existing Credit Agreement is authorized and empowered, in any Proceeding, in its own name or in the name of the Term Lenders, to (i) file any claim, proof of claim or other instrument of similar character reasonably necessary to enforce the obligations of Borrower and its Subsidiaries in respect of the Subordinated Indebtedness, and (ii) receive and apply to the Senior Indebtedness every payment or distribution referred to in the preceding sentence to which the Term Lenders are entitled in respect thereof and give acceptance therefore.

Section 11.7. Turnover of Improper Payments. If any payment or distribution, whether direct or indirect (by set-off, recoupment or otherwise) and whether in cash, securities or other property, shall be received by any Term Lender from Borrower or any of its Subsidiaries in contravention of any of the terms hereof, such payment or distribution shall be received and held in trust for the benefit of the holders of Senior Indebtedness and shall be promptly paid over and delivered to the holders of Senior Indebtedness as their interests may appear for application to the payment of Senior Indebtedness.

Section 11.8. Standstill. At any time during which a Payment Blockage Period shall be in effect and no Proceeding shall have been commenced and be continuing, no Term Lender shall at any time (i) accelerate the maturity of or otherwise declare due and payable any of the Subordinated Indebtedness, (ii) commence or join with any other creditor in commencing any Proceeding, or (iii) take any other action to collect or enforce any right to receive any payment on account of the Subordinated Indebtedness. In no event shall any Term Lender take any of the actions contemplated in clauses (i), (ii) or (iii) above until a period of thirty (30) consecutive business days has expired after notice of intention to take any such action shall have been given by the Term Lenders to the Borrower and the holders of the Senior Indebtedness.

Section 11.9. Reinstatement. The provisions of this Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment in respect of Senior Indebtedness is rescinded or must otherwise be returned by any holder of Senior Indebtedness in the event of a Proceeding, all as though such payment had not been made. Without limitation to the foregoing, in the event that any Senior Indebtedness is avoided, disallowed or subordinated

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pursuant to Section 548 of the Bankruptcy Code or any applicable state fraudulent conveyance laws, whether asserted directly or under Section 544 of the Bankruptcy Code, the provisions of this Agreement shall continue to be effective or be reinstated, as the case may be.

Section 11.10. Subordination Non-Impaired. All rights of the holders of Senior Indebtedness and all agreements and obligations of Subordinated Lender hereunder shall remain in full force and effect irrespective of (and Subordinated Lender hereby waives any right to notice of):

(a) any amendment, modification, waiver of or consent to any term or provision set forth in any document, instrument or other agreement evidencing or securing any of the Senior Indebtedness;

(b) any change in the time, manner or place of payment of, or any other term of, all or any portion of the Senior Indebtedness;

(c) any change, release or non-perfection of any security interest in or lien on any collateral securing all or any portion of the Senior Indebtedness, or any amendment or waiver of or consent to the departure from any guaranty for all or any part of the Senior Indebtedness; or

(d) any circumstances which might otherwise constitute a defense available to, or a discharge of, Borrower or any Subsidiary in respect of any of the Senior Indebtedness, or a defense available to, or a discharge of, any Term Lender in respect of its obligations under this Agreement.

Section 11.11. Continuing Subordination. The subordination effected by this Agreement is a continuing subordination, and each Term Lender hereby unconditionally waives notice of the incurring of any Senior Indebtedness or any part thereof and reliance by any holder of Senior Indebtedness upon the subordination of this Agreement to Senior Indebtedness. Each Term Lender acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement to and a consideration of each holder of Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the incurrence or creation of any Subordinated Indebtedness and whether such holder is now known or hereafter becomes known, and each holder of Senior Indebtedness shall be deemed conclusively to have relied upon such subordination provisions in acquiring and holding, or in continuing to hold, such Senior Indebtedness and shall be entitled to enforce the provisions of this Agreement directly as if it were a party to this Agreement.

Section 11.12. Judgments. If at any time hereafter, any Term Lender obtains any judgment against Borrower or any of its Subsidiaries in respect of any Subordinated Indebtedness, such judgment shall be subject to the subordination provisions of this Agreement and the rights of the holders of Senior Indebtedness to the same extent as such rights apply to Subordinated Indebtedness under this Agreement.

Section 11.13. Amendments and Modifications to this Article XI. Borrower and the Term Lenders shall not amend, supplement or otherwise modify this Article XI in any manner adverse to the holders of the Senior Indebtedness without the prior written consent of the holders of the Senior Indebtedness.

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Section 11.14. Subrogation. Upon payment in full of all Senior Indebtedness and the termination of all commitments to lend additional Senior Indebtedness, the Term Lenders shall be immediately subrogated to the rights of the holders of Senior Indebtedness (to the extent of payments and distributions made by the Term Lenders to such holders of Senior Indebtedness pursuant to the provisions of this Article XI) to receive payments and distributions on account of Senior Indebtedness until all amounts owing on account of Subordinated Indebtedness shall be paid in full. No payments or distributions on account of Senior Indebtedness which any Term Lender shall receive by reason of this subrogation, as between Borrower, its Subsidiaries, any of their respective creditors other than the holders of Senior Indebtedness and the Term Lenders, shall be deemed to be a payment on account of any Subordinated Indebtedness and, for purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness to which the Term Lenders would be entitled except for the provisions of this Agreement, and no payment over pursuant to the provisions of this Agreement to the holders of Senior Indebtedness by the Term Lenders, as between Borrower, its Subsidiaries and any of their respective creditors other than the holders of Senior Indebtedness and the Term Lenders, shall be deemed to be a payment on account of any Senior Indebtedness, it being understood that the provisions of this Articles XI are intended solely for the purpose of defining the relative rights of the Term Lenders, on the one hand, and the holders of Senior Indebtedness, on the other hand.

Section 11.15. Validity of Liens Securing Senior Obligations. Each Term Lender agrees that it will not, in the event of any Proceeding, challenge or contest (or join in any challenge or contest by any third party) the validity, enforceability, perfection or priority of any security interest or lien granted to the holders of the Senior Indebtedness.

Section 11.16. Further Assurances. Each Term Lender and the Borrower agree that they shall promptly execute such further documents and acknowledgments as the holders of the Senior Indebtedness may reasonably require to confirm or evidence their respective obligations and the rights of the holders of the Senior Indebtedness under this Article XI.

Section 11.17. Subordination May Not Be Impaired. No right of any holder of Senior Indebtedness to enforce the subordination of the Subordinated Indebtedness shall be impaired by any act or failure to act by the Borrower or its Subsidiaries or by its failure to comply with this Agreement or any other Loan Document.

Section 11.18. Retention of Mandatory Prepayments. Notwithstanding anything to the contrary in this Section 11 the subordination provisions will not prevent any holder of Subordinated Term Loans from receiving and retaining any proceeds originally received by the Borrower or any Subsidiary of the Borrower that were used to repay Subordinated Term Loans to the extent required under Section 2.13(b) (as modified, if applicable, in accordance with Section 11.13), and the same may be retained by such holder free and clear of any claims by holders of any Indebtedness, pursuant to the subordination provisions or otherwise.

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Section 11.19. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their representative (if any).

Section 11.20. Automatic Amendments and Modifications to this Agreement. As of June 30, 2004, the following provisions of this Agreement shall be deemed amended as follows:

(a) Section 5.2(d) shall be amended by replacing the reference to $1,000,000 to $1,250,000;

(b) Article VI shall be amended by replacing such Article in its entirety with the following:

6.1 Leverage Ratio. The Borrower will maintain at all times a Leverage Ratio of not greater than 0.72 to 1.00.

6.2 Fixed Charge Coverage Ratio. The Borrower will maintain at all times a Fixed Charge Coverage Ratio of not less than 1.20 to 1.00.

6.3 Consolidated Net Worth. The Borrower will maintain at all times a Consolidated Net Worth of not less than the sum of (a) $450,000,000 plus (b) 40% of Consolidated Net Income on a cumulative basis for all preceding Fiscal Quarters, commencing with the Fiscal Quarter ending January 31, 2003; provided, that if Consolidated Net Income is negative in any Fiscal Quarter the amount added for such Fiscal Quarter shall be zero and such negative Consolidated Net Income shall not reduce the amount of Consolidated Net Income added from any previous Fiscal Quarter, plus (c) 100% of the amount by which the Borrower’s “total stockholders’ equity” is increased as a result of any public or private offering of Capital Stock of the Borrower after the Closing Date. Promptly upon the consummation of any such offering of Capital Stock, the Borrower shall notify the Administrative Agent in writing of the amount of such increase in “total stockholders’ equity”.

6.4 Asset Coverage Ratio. The Borrower will maintain at all times an Asset Coverage Ratio of not less than 1.00 to 1.00.

6.5 Minimum Interest Coverage Ratio. The Borrower shall maintain at all times an Interest Coverage Ratio of not less than 2.40 to 1.00 .

6.6 Maximum Total Funded Debt to Consolidated EBITDA Ratio. The Borrower shall maintain at all times a Total Funded Debt to Consolidated EBITDA Ratio of not greater than 5.70 to 1.00.

(a) Section 7.1 shall be amended by replacing (i) the reference to “$20,000,000” in clause (c) thereof to “$25,000,000”, (ii) the reference to “$100,000,000” in clause (h) thereof to “$120,000,000”; and (iii) the reference to $75,000,000 in clause (j) thereof to “90,000,000”; Section 7.1 shall be further amended by adding the following as a new clause (k): “(k) Indebtedness under the Existing Credit Agreement in excess of the commitments existing thereunder on the Closing Date in an amount equal to $25,000,000”;

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(b) Section 7.2 shall be amended by replacing the reference to “$20,000,000” in clause (f) thereof to “$25,000,000” and by adding the following as a new clause (h): “(h) commencing on June 30, 2004, Liens securing Senior Indebtedness (as defined in Article XI)”;

(c) Section 7.4 shall be amended by replacing (i) the reference to “$30,000,000” in clause (d) thereof to “$36,000,000”, (ii) the reference to “$25,000,000” in clause (e) thereof to “$30,000,000”, (iii) the reference to “$1,000,000” in clause (f) thereof to “$1,250,000” and (iv) the reference to “$5,000,000” in clause (h) thereof to “$6,000,000”; Section 7.4 is further amended by deleting the last paragraph thereof in its entirety;

(d) Section 7.5 shall be amended by replacing (i) the reference to “$60,000,000” in clause (iii) thereof to “$72,000,000”, and (ii) the reference to 50% in the proviso at the end of such Section to 60%.

(e) Section 7.6 shall be amended by replacing clauses (e) and (f) thereof with the following:

(e) asset sales where, the Company or a Guarantor receives consideration at the time of such asset sale at least equal to the fair market value (as determined in good faith by the board of directors of the Borrower) of the assets sold or otherwise disposed of and (y) at least 75% of the consideration therefore received by the Borrower or such Guarantor is in the form of cash equivalents.

(f) Section 7.9 shall be amended by replacing the reference therein to “$40,000,000” to “$48,000,000”; and

(g) Sections 7.12 and 7.13 shall no longer apply;

Section 11.21. Other Provisions Related to the Credit Agreement. From and after the Conversion Date:

(a) the Subordinated Term Loans shall be guaranteed by the Subsidiary Loan Parties on a senior subordinated basis consistent with the subordination provisions of the Subordinated Term Loans;

(b) except as specifically provided in this Article XI, the Subordinated Term Loans will have the same covenants and events of default as applicable to the Term Loans.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed under seal in the case of the Borrower by their respective authorized officers as of the day and year first above written.

HUGHES SUPPLY, INC.
By:	/s/Jay Clark	L.S.
	Jay Clark
	Treasurer

STATE OF GEORGIA

COUNTY OF FULTON

On the 17^th day of December, 2003, there personally appeared before me, an officer duly authorized in the jurisdiction aforesaid to administer oaths and take acknowledgements, Jay Clark, who executed the foregoing Senior Term Loan Agreement on behalf of Hughes Supply, Inc. and acknowledged before me that she executed the same for the purpose therein expressed. She is personally known to me or has produced a Florida driver’s license as identification and did take an oath.

/s/Susan Lake

Signature of Officer

Printed Name: Susan Lake

Official Capacity: Notary/Public

My Commission Expires: April 17, 2004

Commission No:

SUNTRUST BANK, as Administrative Agent and as a Lender
By:	/s/David H. Eidson
Name:	David H. Eidson
Title:	Senior Vice President
	SunTrust Bank

LEHMAN COMMERCIAL PAPER INC.,
as a Lender
By	/s/G. Andrew Keith
Name:	G. Andrew Keith
Title:	Authorized Signatory

ANNEX I

Term Loan Commitments

Institution	Title	Term Loan Commitment
SunTrust Bank	Administrative Agent	$	125,000,000
Lehman Commercial Paper, Inc.	Lender	$	125,000,000
Total		$	250,000,000

EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT

THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (this “Amendment”), is made and entered into as of December 19, 2003, by and among HUGHES SUPPLY, INC., a Florida corporation (the “Borrower”), the several banks and other financial institutions from time to time party hereto (collectively, the “Lenders”) and SUNTRUST BANK, in its capacity as Administrative Agent for the Lenders (the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to that certain Revolving Credit Agreement, dated as of March 26, 2003 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement), pursuant to which the Lenders have made certain financial accommodations available to the Borrower; and

WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent amend certain provisions of the Credit Agreement, and subject to the terms and conditions hereof, the Lenders are willing to do so;

NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of all of which are hereby acknowledged, the Borrower, the Lenders and the Administrative Agent agree as follows:

1. Amendments.

(a) Section 1.1 of the Credit Agreement, “Definitions”, is hereby amended by replacing the definitions of Aggregate Subsidiary Threshold, Applicable Margin, Consolidated Net Income, Indebtedness, Material Adverse Effect, Material Indebtedness, Permitted Subordinated Debt, Revolving Commitment Termination Date, Subsidiary and Subsidiary Loan Party in their entirety with the following definitions:

“Aggregate Subsidiary Threshold” shall mean an amount equal to ninety-five percent (95%) of the total consolidated revenue or assets of the Borrower and its Subsidiaries (excluding any Securitization Subsidiaries) for the most recent Fiscal Quarter as shown on the financial statements most recently delivered or required to be delivered pursuant to Section 5.1(a) or (b), as the case may be.

“Applicable Margin” shall mean, as of any date, with respect to all LIBOR Borrowings and the letter of credit fee, as the case may be, a percentage per annum determined by reference to the applicable Leverage Ratio in effect on such date as set forth on Schedule I; provided, that a change in the Applicable Margin resulting from a change in the Leverage Ratio shall be effective on the first day of the first Fiscal Quarter after

which the Borrower delivers the financial statements required by Section 5.1(a) or (b) and the Compliance Certificate required by Section 5.1 (c); provided further, that if at any time the Borrower shall have failed to deliver such financial statements and such Compliance Certificate when so required, the Applicable Margin shall be at Level V as set forth on Schedule I until such time as such financial statements and certificate are delivered, at which time the Applicable Margin shall be determined as provided above. Notwithstanding the foregoing, (a) the Applicable Margin from the Closing Date until the financial statements and Compliance Certificate for the Fiscal Quarter ending May 2, 2003 are required to be delivered shall be at Level III as set forth on Schedule I and (b) the Applicable Margin with respect to all outstanding and any new LIBOR Borrowings and the letter of credit fee, as the case may be, shall be equal to 2.25% per annum at all times after the Amendment No. 1 Closing Date and prior to the consummation of the Refinancing Equity Issuance.

“Consolidated Net Income” shall mean, for the Borrower and its Subsidiaries for any period, the net income (or loss) of the Borrower and its Subsidiaries for such period (taken as a single accounting period) determined on a consolidated basis in accordance with GAAP, but excluding therefrom (to the extent otherwise included therein) (i) any items of gain or loss which were included in determining such Consolidated Net Income and were not realized in the ordinary course of business or the result of a sale of assets other than in the ordinary course of business and (ii) any income (or loss) of any Person accrued prior to the date such Person becomes a Subsidiary, or is merged into or consolidated with Borrower or any Subsidiary, on the date that such Person’s assets are acquired by the Borrower or any Subsidiary; provided, however, that the net income (or loss) of Century accrued prior to the Century Acquisition shall be included in Consolidated Net Income.

“Indebtedness” of any Person shall mean, without duplication (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business; provided, that for purposes of Section 8.1(f), trade payables overdue by more than 120 days shall be included in this definition except to the extent that any of such trade payables are being disputed in good faith and by appropriate measures), (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person, (v) all Capital Lease Obligations of such Person, (vi) all obligations, contingent or otherwise, of such Person in respect of Financial Letters of Credit, acceptances or similar extensions of credit, (vii) Hedging Obligations (viii) all Guarantees of such Person of the type of Indebtedness described in clauses (i) through (vii) above, (ix) all Indebtedness of a third party

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secured by any Lien on property owned by such Person, whether or not such Indebtedness has been assumed by such Person, (x) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any common stock of such Person (xi) Off-Balance Sheet Debt. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor. For purposes of determining the amount of attributed Indebtedness from Hedging Obligations, the “principal amount” of any Hedging Obligations at any time shall be the Net Mark-to-Market Exposure of such Hedging Obligations.

“Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, a material adverse change in, or a material adverse effect on, (i) the Century Acquisition and the transactions contemplated thereby, (ii) the business, results of operations, financial condition, assets, liabilities or prospects of the Borrower or of the Borrower and its Subsidiaries taken as a whole, or Century and its Subsidiaries, taken as a whole, (iii) the ability of the Loan Parties to perform any of their respective obligations under the Loan Documents, (iv) the rights and remedies of the Administrative Agent, the Issuing Bank, Swingline Lender and the Lenders under any of the Loan Documents or (v) the legality, validity or enforceability of any of the Loan Documents.

“Material Indebtedness” shall mean the Private Placement Notes, the Senior Term Loan, the Senior Subordinated Term Loan and any refinancing of the Senior Term Loan or the Senior Subordinated Term Loan and any other Indebtedness (other than the Loans and Letters of Credit) and Hedging Obligations, of any one or all of the Loan Parties and their Subsidiaries, individually or in an aggregate principal amount exceeding $5,000,000. For purposes of determining the amount of attributed Indebtedness from Hedging Obligations, the “principal amount” of any Hedging Obligations at any time shall be the Net Mark-to-Market Exposure of such Hedging Obligations.

“Permitted Subordinated Debt” shall mean (i) the Senior Subordinated Term Loan, (ii) High Yield Securities (as defined in the Senior Term Loan Agreement) that include customary terms and conditions for such types of Indebtedness that are reasonably satisfactory to the Required Lenders and the Administrative Agent, as evidenced by the written approval of by the Administrative Agent and the Required Lenders, such approval not to be unreasonably withheld or delayed and

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(iii) any other Indebtedness of the Borrower or any Subsidiary that is expressly subordinated to the Obligations and all guarantees thereof on terms and conditions satisfactory to the Administrative Agent and the Required Lenders in all respects including, without limitation, with respect to interest rates, payment terms, maturities, amortization schedules, covenants, defaults, remedies and subordination provisions, as evidenced by the written approval by the Administrative Agent and the Required Lenders.

“Revolving Commitment Termination Date” shall mean the earliest of (i) March 26, 2007, (ii) the date on which the Revolving Commitments are terminated pursuant to Section 2.10, (iii) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise) or (iv) the date that is 120 days prior to (a) the Maturity Date (as defined in the Senior Term Loan Documents, as amended, restated, supplemented or otherwise modified from time to time) or (b) the maturity date of any other Indebtedness that refinances the obligations under the Senior Term Loan Documents.

“Subsidiary” shall mean, with respect to any Person (the “parent”), any corporation, partnership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, partnership, joint venture, limited liability company, association or other entity (i) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power, or in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (ii) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise indicated, all references to “Subsidiary” hereunder shall mean a Subsidiary of the Borrower. For the avoidance of doubt, references in this Agreement to Subsidiaries of the Borrower shall include those Subsidiaries that comprise the Century Acquisition.

“Subsidiary Loan Party” shall mean any Material Subsidiary and any other Subsidiary that guarantees the Obligations (including, without limitation, each Subsidiary that guarantees the obligations of the Borrower under the Senior Term Loan Documents).

(b) Section 1.1 of the Credit Agreement, “Definitions”, is hereby amended by inserting the following definitions in appropriate alphabetical order therein:

“2011 Notes” shall mean Borrower’s $98,000,000 7.96% Senior Notes due May 30, 2011.

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“2012 Notes” shall mean, collectively, Borrower’s (i) $40,000,000 7.14% Senior Notes due May 30, 2012 and (ii) $40,000,000 7.19% Senior Notes due May 30, 2012.

“2013 Notes” shall mean the Borrower’s $50,000,000 6.74% Senior Notes due May 1, 2013.

“8.27% Notes” shall mean, collectively, Borrower’s (i) $28,000,000 8.27% Series B Senior Notes due November 30, 2005 and (ii) $103,000,000 8.42% Series C Senior Notes due 2007.

“Amendment No. 1 Closing Date” shall mean December 19, 2003.

“Century” shall mean Century Maintenance Supply, Inc., a Delaware corporation.

“Century Acquisition” shall mean the acquisition by the Borrower or a wholly owned Subsidiary of the Borrower of 100% of the issued and outstanding capital stock of Century.

“Consolidated EBITDA” shall mean, for the Borrower and its Subsidiaries for any period, an amount equal to (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated Net Income for such period, (A) Consolidated Interest Expense, (B) income tax expense determined on a consolidated basis in accordance with GAAP and (C) depreciation and amortization determined on a consolidated basis in accordance with GAAP.

“Interest Coverage Ratio” shall mean, as of any date of determination, the ratio of (i) Consolidated EBITDA for the four consecutive fiscal quarters of the Borrower ending on such date to (ii) Consolidated Interest Expense for the four consecutive fiscal quarters of the Borrower ending on such date.

“Note Purchase Agreements” shall mean, collectively, (i) the purchase agreement, dated as of December 21, 2000, governing the 8.27% Notes, (ii) the purchase agreement, dated as of May 29, 1996, governing the 2011 Notes, (iii) the purchase agreement, dated as of August 28, 1997, governing the 2012 Notes and (iv) the purchase agreement, dated as of May 5, 1998, governing the 2013 Notes.

“Private Placement Notes” shall mean, collectively, the 8.27% Notes, the 2011 Notes, the 2012 Notes and the 2013 Notes.

“Pro Forma Basis” shall mean, with respect to any determination for any period, in connection with an acquisition, that such determination shall be made giving pro forma effect to each such acquisition as if such acquisition (and the incurrence or assumption of any Indebtedness in connection therewith) and any related transactions had been consummated on the first day of such period, in each case based on historical results accounted for in accordance with GAAP.

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“Refinancing Equity Issuance” shall mean the issuance of at least $180,000,000 of common stock of the Borrower, the proceeds of which are applied to repay the Senior Term Loan, the Senior Subordinated Term Loan or any Permitted Subordinated Debt issued to refinance the Senior Term Loan or the Senior Subordinated Term Loan.

“Senior Funded Debt” shall mean, as of any date of determination, (i) Consolidated Total Funded Debt as of such date minus (ii) the aggregate principal amount of all Permitted Subordinated Debt as of such date.

“Senior Funded Debt to Consolidated EBITDA Ratio” shall mean, as of any date of determination, the ratio of (i) Senior Funded Debt as of such date to (ii) Consolidated EBITDA, measured for the four consecutive Fiscal Quarters ending on or immediately prior to such date.

“Senior Subordinated Term Loan” shall mean the Senior Term Loan on and after June 30, 2004, which shall be subordinate to the Obligations pursuant to Article XI of the Senior Term Loan Agreement.

“Senior Term Loan” shall mean the $250,000,000 term loan made to the Borrower on the Amendment No. 1 Closing Date pursuant to the Senior Term Loan Documents, which shall rank pari passu with the Obligations prior to June 30, 2004.

“Senior Term Loan Agreement” shall mean that certain Loan Agreement, dated as of the Amendment No. 1 Closing Date, by and among the Borrower, the lenders party thereto, and SunTrust Bank, in its capacity as administrative agent for such lenders.

“Senior Term Loan Documents” shall mean, collectively, the Senior Term Loan Agreement and all other agreements, certificates and other documents executed in connection therewith.

“Subordination Event” shall mean the conversion of the Senior Term Loan into the Senior Subordinated Term Loan on June 30, 2004 pursuant to the terms and conditions of the Senior Term Loan Documents.

“Total Funded Debt to Consolidated EBITDA Ratio” shall mean, as of any date of determination, the ratio of (i) Consolidated Total Funded Debt as of such date to (ii) Consolidated EBITDA, measured for the four consecutive Fiscal Quarters ending on or immediately prior to such date.

(c) Article I of the Credit Agreement is hereby amended by inserting the following Section 1.5, “Financial Ratios”, immediately following Section 1.4, “Terms Generally”:

Section 1.5 Financial Ratios. For purposes of calculating Consolidated EBITDAR and Consolidated EBITR of the Borrower and its

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Subsidiaries for any period, (i) the Consolidated EBITDAR and Consolidated EBITR of any Person acquired by the Borrower or its Subsidiaries during such period, including, without limitation, pursuant to the Century Acquisition, shall be included on a Pro Forma Basis for such period if the consolidated balance sheet of such acquired Person and its consolidated Subsidiaries as at the end of the period preceding the acquisition of such Person and the related consolidated statements of income and stockholders’ equity for the period in respect of which Consolidated EBITDAR and Consolidated EBITR are to be calculated (x) have been previously provided to the Administrative Agent and the Lenders and (y) either (1) have been reported on without a qualification arising out of the scope of the audit by independent certified public accountants of nationally recognized standing or (2) have been found acceptable by the Administrative Agent and (ii) the Consolidated EBITDAR and Consolidated EBITR of any Person that is no longer a Subsidiary on the last day of such period shall be excluded for such period (assuming the consummation of such disposition and the repayment of any Indebtedness in connection therewith occurred on the first day of such period). The Administrative Agent and the Required Lenders specifically acknowledge the receipt of and approve the consolidated balance sheet and the related consolidated statements of income and stockholders’ equity of Century.

(d) Article IV of the Credit Agreement is hereby amended by inserting the following Section 4.16, “Subordination of Subordinated Debt”, and Section 4.17, “Funded Debt” immediately following Section 4.15, “Insolvency”:

Section 4.16 Subordination of Subordinated Debt. This Agreement, and all amendments, modifications, extensions, renewals, refinancings and refundings hereof, constitute a “Senior Agreement” within the meaning of the Senior Term Loan Documents; and the Revolving Loans and all other Obligations of the Borrower to the Lenders and the Administrative Agent under this Agreement, the Notes and all other Loan Documents, and all amendments, modifications, extensions, renewals, refundings or refinancings of any of the foregoing constitute “Senior Indebtedness” of the Borrower within the meaning of the Senior Term Loan Documents, and the holders thereof from time to time shall be entitled to all of the rights of a holder of “Senior Indebtedness” pursuant to the Senior Term Loan Documents.

Section 4.17 Funded Debt. No default or event of default shall have occurred and be continuing under and as defined in the Note Purchase Agreements and consolidated funded debt (as defined in the Note Purchase Agreements) of the Borrower and its Subsidiaries is less than or equal to 60% of consolidated total capitalization (as defined in the Note Purchase Agreements) of the Borrower and its Subsidiaries.

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(e) Section 2.9, “Interest Elections”, of the Credit Agreement is hereby amended by adding the following sentence to the end of subsection (b) thereof.

At no time shall the total number of Eurodollar Borrowings outstanding at any time exceed ten.

(f) Article V, “Affirmative Covenants”, of the Credit Agreement is hereby amended by inserting the following Section 5.12, “Mandatory Repayment of Senior Term Loan and Senior Subordinated Term Loan,” immediately following Section 5.11, “Ownership of Subsidiary Loan Parties:”

Section 5.12. Mandatory Repayment of Senior Term Loan and Senior Subordinated Term Loan. The Borrower will, and will cause each of its Subsidiaries to, comply with the mandatory repayment provisions set forth in Section 2.13(b) of the Senior Term Loan Agreement, subject in all respects to Article XI of the Senior Term Loan Agreement.

(g) Section 6.1, “Leverage Ratio”, of the Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

Section 6.1 Leverage Ratio. Prior to the earlier of (i) the repayment in full of the Senior Term Loan, the Senior Subordinated Term Loan and all Permitted Subordinated Debt issued to refinance the Senior Term Loan or the Senior Subordinated Term Loan or (ii) December 31, 2004, the Borrower shall maintain at all times a Leverage Ratio of not greater than 0.60:1.00; thereafter, the Borrower shall maintain at all times a Leverage Ratio of not greater than 0.55:1.00.

(h) Article VI of the Credit Agreement, “Financial Covenants”, is hereby amended by inserting the following Section 6.5, “Maximum Total Funded Debt to Consolidated EBITDA Ratio”, Section 6.6, “Maximum Senior Funded Debt to Consolidated EBITDA Ratio”, and Section 6.7, “Minimum Interest Coverage Ratio”, immediately following Section 6.4, “Asset Coverage Ratio”:

Section 6.5 Maximum Consolidated Total Funded Debt to Consolidated EBITDA Ratio. Prior to January 31, 2005, the Borrower shall maintain at all times a Total Funded Debt to Consolidated EBITDA Ratio of not greater than 4.75:1.00; thereafter, the Borrower shall maintain at all times a Total Funded Debt to Consolidated EBITDA Ratio of not greater than 3.75:1.00; provided, however, after the Senior Term Loan, the Senior Subordinated Term Loan and all Permitted Subordinated Debt issued to refinance the Senior Term Loan or the Senior Subordinated Term Loan are refinanced in full with the proceeds of a Refinancing Equity Issuance, this Section 6.5 shall cease to apply.

Section 6.6 Maximum Senior Funded Debt to Consolidated EBITDA Ratio. Commencing on June 30, 2004, the Borrower shall

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maintain at all times a Senior Funded Debt to Consolidated EBITDA Ratio of not greater than 3.50:1.00; provided, however, after the Senior Term Loan, the Senior Subordinated Term Loan and all Permitted Subordinated Debt issued to refinance the Senior Term Loan or the Senior Subordinated Term Loan are refinanced in full with the proceeds of a Refinancing Equity Issuance, this Section 6.6 shall cease to apply.

Section 6.7 Minimum Interest Coverage Ratio. The Borrower shall maintain at all times an Interest Coverage Ratio of not less than (i) 3.00:1.00 at all times prior to the Subordination Event and (ii) a less restrictive level for the period from and after the Subordination Event to be determined by the Administrative Agent and the Required Lenders prior to the Subordination Event; provided, however, after the Senior Term Loan, the Senior Subordinated Term Loan and all Permitted Subordinated Debt issued to refinance the Senior Term Loan or the Senior Subordinated Term Loan are refinanced in full with the proceeds of a Refinancing Equity Issuance, this Section 6.7 shall cease to apply.

(i) Section 7.1, “Indebtedness and Preferred Equity”, of the Credit Agreement is hereby amended by deleting the word “and” at the end of subsection (i) thereof, by replacing the period at the end of subsection (j) thereof with “; and” and by inserting the following subsection (k) immediately following subsection (j):

(k) prior to June 30, 2004, the Senior Term Loan in a principal amount not to exceed $250,000,000, less any principal repayments thereof.

(j) Section 7.4, “Investments, Loans, Etc.”, of the Credit Agreement is hereby amended by deleting the word “and” at the end of subsection (g) thereof, by replacing the period at the end of subsection (h) thereof with “; and” and by inserting the following subsection (i) immediately following subsection (h):

(i) the Century Acquisition.

(k) Section 7.4, “Investments, Loans, Etc.”, of the Credit Agreement is further amended by inserting the following paragraph at the end thereof:

Notwithstanding anything to the contrary contained herein, prior to the earlier of the Subordination Event or the repayment in full of the Senior Term Loan, the Borrower will not, and will not permit any of its Subsidiaries to, make Investments as to which the consideration, in the aggregate, for all such Investments consummated after the Amendment No. 1 Closing Date, shall exceed $30,000,000 in cash plus $100,000,000 in equity and other consideration.

(l) Section 7.5, “Restricted Payments”, of the Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

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Section 7.5 Restricted Payments. The Borrower will not, and will not permit its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any dividend on any class of its stock, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement, defeasance or other acquisition of, any shares of Capital Stock or Indebtedness subordinated to the Obligations of the Borrower or any Guarantee thereof or any options, warrants, or other rights to purchase such Capital Stock or such Indebtedness, whether now or hereafter outstanding (each, a “Restricted Payment”), except for (i) dividends payable by the Borrower solely in shares of any class of its common stock, (ii) Restricted Payments made by any Subsidiary to the Borrower or to another Subsidiary Loan Party, (iii) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, any payments made for the repurchase of outstanding capital stock of the Borrower made since January 31, 2003 in an aggregate amount at any time not to exceed $60,000,000; (iv) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, cash dividends and distributions paid on, and cash redemptions of, the common stock of the Borrower; provided, that (a) prior to the earlier of the Subordination Event or the repayment in full of the Senior Term Loan, the aggregate amount of all such Restricted Payments made by the Borrower under clauses (i) through (iv) in this Section 7.5 in any Fiscal Year does not exceed (A) 50% of Consolidated Net Income (or, in an event of a loss, minus 100% of Net Income) earned during the Borrower’s Fiscal Year commencing on January 31, 2003 and each Fiscal Year thereafter (such period to be treated as one accounting period) and (b) thereafter, the aggregate amount of all such Restricted Payments made by the Borrower under clauses (i) through (iv) in this Section 7.5 in any Fiscal Year does not exceed (A) 50% of Consolidated Net Income (or, in an event of a loss, minus 100% of Net Income) earned during the Borrower’s Fiscal Year commencing on January 30, 1999 and each Fiscal Year thereafter (such period to be treated as one accounting period) and (v) so long as no Default or Event of Default has occurred and is continuing or would result therefrom and the Borrower has delivered a compliance certificate to the Administrative Agent demonstrating pro forma compliance with the financial covenants contained in Article VI, prepayment of the Senior Subordinated Term Loan from the proceeds of a Refinancing Equity Issuance or a public debt issuance.

(m) Section 7.8, “Restrictive Agreements”, of the Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

Section 7.8 Restrictive Agreements. The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to

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create, incur or permit any Lien upon any of its assets or properties, whether now owned or hereafter acquired, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to its common stock, to make or repay loans or advances to the Borrower or any other Subsidiary, to Guarantee Indebtedness of the Borrower or any other Subsidiary or to transfer any of its property or assets to the Borrower or any Subsidiary of the Borrower; provided, that (i) the foregoing shall not apply to restrictions or conditions imposed by law or by this Agreement or any other Loan Document, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder, (iii) clause (a) shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions and conditions apply only to the property or assets securing such Indebtedness, (iv) clause (a) shall not apply to customary provisions in leases and other contracts restricting the assignment thereof, (v) the foregoing restrictions shall not apply to restrictions on any Securitization Subsidiaries contained in the documents governing any Securitization Transaction and (vi) the foregoing restrictions shall not apply to restrictions and covenants contained in the Senior Term Loan Documents consistent with the terms of this Agreement provided that such restrictions and covenants are no more restrictive or burdensome than the restrictions and covenants contained in this Agreement.

(n) Section 7.9, “Sale and Leaseback Transactions”, of the Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

Section 7.9 Sale and Leaseback Transactions. The Borrower will not, and will not permit any of the Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except (i) with respect to the Orlando, Florida and Miami, Florida properties that, as of the Closing Date, are subject to Liens noted on Schedule 7.2 and (ii) other property to the extent that the aggregate fair market value of all such other property sold and leased back pursuant to this clause (ii) does not exceed $40,000,000 at any one time.

(o) Section 7.12, “Optional Prepayments”, of the Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

Section 7.12 Optional Prepayments. The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, prepay,

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purchase, redeem, retire, defease or otherwise acquire, or make any optional payment on account of any principal of, interest on, or premium payable in connection with the optional prepayment, redemption or retirement of, any of its Indebtedness, or give a notice of redemption with respect to any such Indebtedness, or make any payment in violation of the subordination provisions of any Permitted Subordinated Debt, except with respect to (i) the Obligations under this Agreement and the Notes, (ii) prepayments of Indebtedness outstanding pursuant to revolving credit, overdraft and line of credit facilities permitted pursuant to Section 7.1, (iii) so long as no Default or Event of Default has occurred and is continuing, intercompany loans made or outstanding pursuant to Section 7.1, (iv) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, prepayment of the Senior Term Loan and the Senior Subordinated Term Loan from the proceeds of a Refinancing Equity Issuance or the issuance of Permitted Subordinated Debt and (v) mandatory repayments required pursuant to Section 2.13 of the Senior Term Loan Agreement, but subject to the subordination provision contained in Article XI thereof after the Subordination Event.

(p) Section 7.13, “Actions under Certain Documents”, of the Credit Agreement is hereby amended by replacing such Section in its entirety with the following:

Section 7.13 Actions Under Certain Documents.

(a) The Borrower will not, and will not permit any of its Subsidiaries to, without the prior written consent of the Administrative Agent, (a) modify, amend, cancel or rescind (i) the certificate or articles of incorporation, bylaws or other organizational documents or (ii) any agreements or documents evidencing or governing Permitted Subordinated Debt except for repayments or refinancings of the Senior Subordinated Term Loan as specifically permitted hereunder or (b) make demand of payment or accept payment on any intercompany Indebtedness permitted by Section 7.1, except that with respect to such intercompany Indebtedness, (i) current interest accrued thereon as of the date of this Agreement and all interest subsequently accruing thereon (whether or not paid currently) may be paid unless a Default or Event of Default has occurred and is continuing and (ii) the Borrower and its Subsidiaries may demand and accept payment on any intercompany Indebtedness owed by a Securitization Subsidiary to the Borrower or such Subsidiary.

(b) The Borrower will not, and will not permit any of its Subsidiaries to, modify or amend the Senior Term Loan Documents, prior to the Subordination Event, which modification or amendment is more restrictive on the Borrower or its Subsidiaries, without entering into a comparable modification or amendment to this Agreement.

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(q) Section 8.1, “Events of Default”, of the Credit Agreement is hereby amended by inserting the following subsection (q) and (r) immediately following subsection (p):

(q) All or any portion of the Senior Term Loan, the Senior Subordinated Term Loan or any Indebtedness refinancing the foregoing with a maturity date on or before June 25, 2007 remains outstanding on November 30, 2004.

(r) any default or event of default (after giving effect to any grace period) shall have occurred and be continuing under the Senior Term Loan Documents or any Senior Term Loan Document shall cease to be in full force and effect or the validity or enforceability thereof is disaffirmed by or on behalf of any party thereto, or any Obligations fail to constitute “Senior Indebtedness” for purposes of the Senior Term Loan Documents, or all or any part of the Senior Term Loan, Senior Subordinated Term Loan or any Permitted Subordinated Debt is accelerated, is declared to be due and payable is required to be prepaid or redeemed, in each case prior to the stated maturity thereof.

2. Conditions to Effectiveness of this Amendment. Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of the Lenders hereunder, it is understood and agreed that this Amendment shall not become effective, and the Borrower shall have no rights under this Amendment, until the Administrative Agent shall have received (i) all fees required pursuant to that certain Fee Letter dated as of November 18, 2003, among SunTrust Capital Markets, Inc., the Administrative Agent and the Borrower, (ii) such other fees as the Borrower has previously agreed to pay the Administrative Agent or any of its affiliates in connection with this Amendment, (iii) reimbursement or payment of its costs and expenses incurred in connection with this Amendment, the transactions contemplated hereby or the Credit Agreement (including reasonable fees, charges and disbursements of King & Spalding LLP, counsel to the Administrative Agent), and (iv) each of the following conditions shall have been satisfied:

(a) the Borrower, each of the Subsidiary Loan Parties and the Lenders shall have executed and delivered counterparts to this Amendment to the Administrative Agent;

(b) Each of Hughes MRO, LP, Century Maintenance, L.P., Century Maintenance (Houston), L.P. and Century Maintenance Supply – S. Cal., Inc. shall have executed and delivered a Subsidiary Guaranty Supplement and an Indemnity and Contribution Agreement Supplement, each in form and substance satisfactory to the Administrative Agent;

(c) the Administrative Agent shall have received certified articles of formation (or equivalent constitutive documents), good standing certificates and certified copies of other organizational documents, including any partnership agreements, and closing certificates (including an incumbency certification) for Hughes MRO, LP, Century Maintenance, L.P., Century Maintenance (Houston), L.P., and Century Maintenance Supply – S. Cal., Inc.;

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(d) the Administrative Agent shall have received certified copies of authorizing resolutions of board of directors (or other equivalent governing body) for the Borrower, each Subsidiary Guarantor, Hughes MRO, LP, Century Maintenance, L.P., Century Maintenance (Houston), L.P. and Century Maintenance Supply – S. Cal., Inc.;

(e) the Administrative Agent shall have received such legal opinions (including opinions (i) from counsel to the Borrower and its Subsidiaries and (ii) delivered to the Borrower by counsel to Century, accompanied by reliance letters in favor of the Administrative Agent and the Lenders ) as it may reasonably request;

(f) the sources and uses of funds for the Century Acquisition shall be satisfactory to the Administrative Agent and the Required Lenders (provided, that the aggregate purchase price shall not exceed $370,000,000 (including fees and expenses not exceeding $10,000,000 in the aggregate)). The Administrative Agent and the Required Lenders shall be satisfied that the structure, terms and conditions of the Century Acquisition are substantially similar to the structure, terms and conditions in the sale and purchase agreement for the Century Acquisition delivered to the Administrative Agent and the Lenders prior to the date hereof; the Administrative Agent shall have received certified copies of all documents (including all schedules and exhibits thereto) relating to the Century Acquisition, which documentation shall be in form and substance satisfactory to the Required Lenders. The Administrative Agent shall have received satisfactory evidence that all conditions precedent to the Century Acquisition, other than the funding of the purchase price, have been satisfied;

(g) the Administrative Agent shall have received satisfactory evidence that all material (as reasonably determined by the Administrative Agent) governmental and other third party consents, approvals, authorizations, registrations or filings necessary or, in the discretion of the Administrative Agent, reasonably advisable in connection with the Century Acquisition, the Credit Agreement, the Senior Term Loan Documents and the continuing operations of the Borrower, the Borrower’s Subsidiaries, Century and Century’s Subsidiaries shall have been obtained and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the Century Acquisition or the financing thereof. No consent decree regarding the Credit Agreement, the Senior Term Loan Documents or the Century Acquisition shall be in effect on the Amendment No. 1 Closing Date;

(h) there shall not exist (pro forma for the Century Acquisition and the financing thereof) any Default or Event of Default under the Credit Agreement, the Senior Term Loan Documents or under any other material indebtedness or agreement of the Borrower or Century;

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(i) there shall not have occurred or become known to the Administrative Agent or the Required Lenders any event, development or circumstance since January 31, 2003 that has caused or could reasonably be expected to cause a Material Adverse Effect;

(j) the Administrative Agent shall have received a solvency certificate from the chief financial officer of the Borrower which shall certify as to the solvency of the Borrower and its Subsidiaries after giving effect to the Century Acquisition, the Senior Term Loan Documents and the other transactions contemplated hereby, all in form and substance satisfactory to the Administrative Agent; and

(k) the Administrative Agent shall have received such other certificates, documents and agreements with respect to the Borrower, the Subsidiary Loan Parties, Century and the Century Acquisition as the Administrative Agent and the Lenders may reasonably request.

3. Representations and Warranties. To induce the Lenders and the Administrative Agent to enter into this Amendment, each Loan Party hereby represents and warrants to the Lenders and the Administrative Agent that:

(a) The execution, delivery and performance by such Loan Party of this Amendment (i) are within such Loan Party’s power and authority; (ii) have been duly authorized by all necessary corporate, shareholder or similar action; (iii) are not in contravention of any provision of such Loan Party’s certificate of incorporation or bylaws or other organizational documents; (iv) do not violate any law or regulation, or any order or decree of any Governmental Authority; (v) do not conflict with or result in the breach or termination of, constitute a default under or accelerate any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which such Loan Party or any of its Subsidiaries is a party or by which such Loan Party or any such Subsidiary or any of their respective property is bound; (vi) do not result in the creation or imposition of any Lien upon any of the property of such Loan Party or any of its Subsidiaries; and (vii) do not require the consent or approval of any Governmental Authority or any other person;

(b) This Amendment has been duly executed and delivered for the benefit of or on behalf of each Loan Party and constitutes a legal, valid and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with its terms except as the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights and remedies in general;

(c) After giving effect to this Amendment, the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects, and no Default or Event of Default has occurred and is continuing as of the date hereof; and

(d) After receipt of a Subsidiary Guaranty Supplement and an Indemnity and Contribution Agreement Supplement from each of Hughes MRO, LP, Century

15

Maintenance, L.P., Century Maintenance (Houston), L.P. and Century Maintenance Supply – S. Cal., Inc. as required in Section 2(b) hereof and the consummation of the Century Acquisition, each Material Subsidiary shall be a Subsidiary Loan Party and the aggregate revenue or assets (on a non-consolidated basis) of the Subsidiary Loan Parties shall be equal to, or in excess of, the Aggregate Subsidiary Threshold.

4. Reaffirmations of Guaranty. Each Subsidiary Guarantor consents to the execution and delivery by the Borrower of this Amendment, together with all other actions taken by the Borrower in connection with the Credit Agreement prior to the date hereof, and jointly and severally ratify and confirm the terms of the Subsidiary Guaranty Agreement with respect to the indebtedness now or hereafter outstanding under the Credit Agreement as amended hereby or thereby and all promissory notes issued thereunder. Each Subsidiary Guarantor acknowledges that, notwithstanding anything to the contrary contained herein or in any other document evidencing any indebtedness of the Borrower to the Lenders or any other obligation of the Borrower, or any actions now or hereafter taken by the Lenders with respect to any obligation of the Borrower, the Subsidiary Guaranty Agreement (i) is and shall continue to be a primary obligation of the Subsidiary Guarantors, (ii) is and shall continue to be an absolute, unconditional, joint and several, continuing and irrevocable guaranty of payment, and (iii) is and shall continue to be in full force and effect in accordance with its terms. Nothing contained herein to the contrary shall release, discharge, modify, change or affect the original liability of the Subsidiary Guarantors under the Subsidiary Guaranty Agreement.

5. Effect of Amendment. Except as set forth expressly herein, all terms of the Credit Agreement, as amended hereby, and the other Loan Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Borrower to the Lenders and the Administrative Agent. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement. This Amendment shall constitute a Loan Document for all purposes of the Credit Agreement.

6. Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of Georgia and all applicable federal laws of the United States of America.

7. No Novation. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Credit Agreement or an accord and satisfaction in regard thereto.

8. Costs and Expenses. The Borrower agrees to pay on demand all costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of outside counsel for the Administrative Agent with respect thereto.

9. Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all

16

of which, taken together, shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of this Amendment by facsimile transmission or by electronic mail in pdf form shall be as effective as delivery of a manually executed counterpart hereof.

10. Binding Nature. This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns.

11. Entire Understanding. This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto.

[Signature Pages To Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed, under seal in the case of the Borrower and the Subsidiary Guarantors, by their respective authorized officers as of the day and year first above written.

BORROWER:
HUGHES SUPPLY, INC.
By:	/s/David Bearman	L.S.
	David Bearman
	Executive Vice President and Chief Financial
	Officer

SUBSIDIARY GUARANTORS:
CAROLINA PUMP & SUPPLY CORP.
DOUGLAS LEONHARDT & ASSOCIATES, INC.
ELECTRIC LABORATORIES AND SALES
CORPORATION
GILLELAND CONCRETE PRODUCTS, INC.
HSI ACQUISITION CORPORATION
HSI FUSION SERVICES, INC.
HSI INDIANA, LLC
HSI NORTH CAROLINA, LLC
HUGHES AVIATION, INC.
HUGHES MRO, INC. (f/k/a Chad Supply, Inc.)
HUGHES SUPPLY SHARED SERVICES, INC.
HUGHES SUPPLY (CA), LLC
HUGHES SUPPLY (VA), INC.
HUGHES WATER & SEWER COMPANY
JUNO INDUSTRIES, INC.
KAMEN SUPPLY COMPANY, INC.
KINGSTON PIPE INDUSTRIES, INC.
METALS INCORPORATED
METALS, INC. - GULF COAST DIVISION
MILLS & LUPTON SUPPLY COMPANY
MOORE ELECTRIC SUPPLY, INC.
MOUNTAIN COUNTRY SUPPLY, INC.
NATIONAL POWERX, INC.
OLANDER & BROPHY, INCORPORATED
ONE-STOP SUPPLY, INC.
PAINE SUPPLY OF JACKSON, INC.
PANHANDLE PIPE AND SUPPLY CO., INC.
REACTION SUPPLY CORPORATION
SCOTT-PARISH ELECTRICAL SUPPLY COMPANY
SHRADER HOLDING COMPANY, INC.
STAINLESS TUBULAR PRODUCTS, INC.
USCO INCORPORATED
U.S. FUSION SERVICES, INC.
UTILISERVE, INC.
WATERWORKS SALES COMPANY
WCC MERGER CORPORATION
By:	/s/David Bearman
	David Bearman
	Treasurer

L & T OF DELAWARE, INC.
SWS ACQUISITION, LLC
SWS FUNDING, LLC
HSI FUNDING, LLC
HSI HOLDINGS, INC.
HSI IP, INC.
By:	/s/Carl E. Gillert
	Carl E. Gillert
	Assistant Treasurer
Z & L ACQUISITION CORP.
By:	/s/David Bearman
	David Bearman
	Treasurer

SOUTHWEST STAINLESS, L.P.
HUGHES MRO, LP
By:	Z&L ACQUISITION CORP.,
Its General Partner
	By:	/s/David Bearman
		David Bearman
		Treasurer

CENTURY MAINTENANCE, L.P.,
By:	CENTURY MAINTENANCE
	MANAGEMENT, LLC
Its General Partner
	By:	/s/David Bearman
		David Bearman
		Manager

CENTURY MAINTENANCE (HOUSTON), L.P.
By:	CENTURY MAINTENANCE
	MANAGEMENT, LLC
Its General Partner
	By:	/s/David Bearman
		David Bearman
		Manager

CENTURY MAINTENANCE SUPPLY – S. CAL., INC.
By:	/s/David Bearman
	David Bearman
	Vice President

LENDERS:
SUNTRUST BANK, as Administrative Agent, Issuing Bank, Swingline Lender and as a Lender
By:	/s/Kimberly Evans
Name:	Kimberly Evans
Title:	Director

WACHOVIA BANK, N.A.,
as Syndication Agent and as a Lender
By:	/s/David L. Driggers
Name:	David L. Driggers
Title:	Managing Director

SOUTHTRUST BANK,
as Documentation Agent and as a Lender
By	/s/Todd H. Banes
Name:	Todd H. Banes
Title:	Group Vice President

BANK OF AMERICA, N.A.,
as a Lender
By	/s/Brian K. Kerney
Name:	Brian K. Kerney
Title:	Sr. Vice President

PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By	/s/Luke McElhinny
Name:	Luke McElhinny
Title:	Assistant Vice President

THE FIFTH THIRD BANK,
as a Lender
By	/s/Addy Buschle
Name:	Addy Buschle
Title:	Vice President

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender
By	/s/Alex Idichandy
Name:	Alex Idichandy
Title:	Vice President
By	/s/William J. Darby
Name:	William J. Darby
Title:	Vice President

US BANK, NATIONAL ASSOCIATION,
as a Lender
By	/s/Richard J. Popp
Name:	Richard J. Popp
Title:	Vice President

ISRAEL DISCOUNT BANK OF NEW YORK,
as a Lender
By	/s/Roberto R. Muñoz
Name:	Roberto R. Muñoz
Title:	Senior Vice President
	Chief Lending Officer for Florida
By	/s/David Keinan
Name:	David Keinan
Title:	Senior Vice President
	Regional Manager for Florida

BNP PARIBAS, as a Lender
By	/s/Angela Arnold
Name:	Angela Arnold
Title:	Vice President
By	/s/Aurora Abella
Name:	Aurora Abella
Title:	Vice President

COMMERCEBANK, N.A., as a Lender
By	/s/Alan L. Hills
Name:	Alan L. Hills
Title:	Vice President