<PAGE>   1
                                                                   EXHIBIT 10.1


                      AMENDED AND RESTATED CREDIT AGREEMENT


                           Dated as of August 5, 1999


                                      among


                              RAILWORKS CORPORATION

                                       and

                          CERTAIN OF ITS SUBSIDIARIES,


                            THE LENDERS NAMED HEREIN,


                             BANK OF AMERICA, N.A.,
                        as Domestic Administrative Agent,


                             BANK OF AMERICA CANADA,
                        as Canadian Administrative Agent


                                       AND


                           FIRST UNION NATIONAL BANK,
                             as Documentation Agent




<PAGE>   2


                                TABLE OF CONTENTS

<TABLE>
<S>     <C>                                                                                          <C>
SECTION 1 DEFINITIONS.................................................................................1
         1.1 Definitions..............................................................................1
         1.2 Computation of Time Periods.............................................................33
         1.3 Accounting Terms; Certain Calculations..................................................33

SECTION 2 CREDIT FACILITIES..........................................................................34
         2.1 Commitments.............................................................................34
         2.2 Method of Borrowing.....................................................................40
         2.3 Interest................................................................................42
         2.4 Repayment...............................................................................42
         2.5 Notes...................................................................................43
         2.6 Additional Provisions relating to Letters of Credit.....................................43
         2.7 Additional Provisions relating to Swingline Loans.......................................47

SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.............................................53
         3.1 Default Rate............................................................................53
         3.2 Extension and Conversion................................................................54
         3.3 Prepayments.............................................................................54
         3.4 Termination and Reduction of Commitments................................................55
         3.5 Fees....................................................................................56
         3.6 Capital Adequacy........................................................................57
         3.7 Inability To Determine Interest Rate....................................................58
         3.8 Illegality..............................................................................59
         3.9 Requirements of Law.....................................................................59
         3.10 Taxes..................................................................................60
         3.11 Indemnity..............................................................................62
         3.12 Certain Limitations....................................................................63
         3.15 Pro Rata Treatment.....................................................................64
         3.16 Sharing of Payments....................................................................65
         3.17 Payments, Computations, Etc............................................................67
         3.18 Evidence of Debt.......................................................................69

SECTION 4 GUARANTY...................................................................................70
         4.1 The Guarantee...........................................................................70
         4.2 Obligations Unconditional...............................................................71
         4.3 Reinstatement...........................................................................72
         4.4 Certain Additional Waivers..............................................................73
         4.5 Remedies................................................................................73
         4.6 Rights of Contribution..................................................................73
         4.7 Continuing Guarantee....................................................................74

SECTION 5 CONDITIONS.................................................................................74
</TABLE>



<PAGE>   3

<TABLE>
<S>      <C>                                                                                       <C>
         5.1 Conditions to Closing...................................................................74
         5.2 Conditions to All Extensions of Credit..................................................76

SECTION 6 REPRESENTATIONS AND WARRANTIES.............................................................77
         6.1 Financial Condition.....................................................................77
         6.2 No Changes or Restricted Payments.......................................................77
         6.3 Organization; Existence; Compliance with Law............................................78
         6.4 Power; Authorization; Enforceable Obligations...........................................78
         6.5 No Legal Bar............................................................................78
         6.6 No Material Litigation..................................................................79
         6.7 No Default..............................................................................79
         6.8 Ownership of Property; Liens............................................................79
         6.9 Intellectual Property...................................................................79
         6.10 No Burdensome Restrictions.............................................................80
         6.11 Taxes..................................................................................80
         6.12 ERISA..................................................................................80
         6.13 Governmental Regulations, Etc..........................................................81
         6.14 Subsidiaries...........................................................................82
         6.15 Purpose of Extensions of Credit........................................................82
         6.16 Environmental Matters..................................................................82
         6.17 Year 2000 Compliance...................................................................83
         6.18 Canadian Pension Plans.................................................................83

SECTION 7 AFFIRMATIVE COVENANTS......................................................................84
         7.1 Financial Statements....................................................................84
         7.2 Certificates; Other Information.........................................................85
         7.3 Notices.................................................................................86
         7.4 Payment of Obligations..................................................................88
         7.5 Conduct of Business and Maintenance of Existence........................................88
         7.6 Maintenance of Property; Insurance......................................................88
         7.7 Inspection of Property; Books and Records; Discussions..................................89
         7.8 Environmental Laws......................................................................89
         7.9 Financial Covenants.....................................................................90
         7.10 Administrative Fees....................................................................90
         7.11 Additional Guaranties and Stock Pledges................................................90
         7.12 Ownership of Subsidiaries..............................................................93
         7.13 Use of Proceeds........................................................................93

SECTION 8 NEGATIVE COVENANTS.........................................................................94
         8.1 Indebtedness............................................................................94
         8.2 Liens...................................................................................96
         8.3 Consolidation, Merger, Amalgamation Divestiture, etc....................................96
         8.4 Acquisitions............................................................................97
         8.5 Investments.............................................................................98
</TABLE>

                                       ii
<PAGE>   4

<TABLE>
<S>      <C>                                                                                       <C>
         8.6 Ownership of Equity Interests...........................................................98
         8.7 Fiscal Year.............................................................................98
         8.8 Restricted Payments.....................................................................98
         8.9 Sale Leasebacks.........................................................................98
         8.10 No Further Negative Pledges............................................................98

SECTION 9 EVENTS OF DEFAULT.........................................................................100
         9.1 Events of Default......................................................................100
         9.2 Acceleration; Remedies.................................................................103
         9.3 Conversion and Redenomination of Certain Loans; Purchase of Risk Participation.........104

SECTION 10 AGENCY PROVISIONS........................................................................105
         10.1 Appointment...........................................................................105
         10.2 Delegation of Duties..................................................................106
         10.3 Exculpatory Provisions................................................................106
         10.4 Reliance on Communications............................................................106
         10.5 Notice of Default.....................................................................107
         10.6 Non-Reliance on Administrative Agent and Other Lenders................................107
         10.7 Indemnification.......................................................................108
         10.8 Administrative Agent in its Individual Capacity.......................................108
         10.9 Successor Administrative Agent........................................................109

SECTION 11 MISCELLANEOUS............................................................................109
         11.1 Notices...............................................................................109
         11.2 Right of Set-Off......................................................................111
         11.3 Benefit of Agreement..................................................................111
         11.4 No Waiver; Remedies Cumulative........................................................114
         11.5 Payment of Expenses, etc..............................................................114
         11.6 Amendments, Waivers and Consents......................................................115
         11.7 Counterparts..........................................................................117
         11.8 Headings..............................................................................117
         11.9 Survival..............................................................................117
         11.10 Governing Law; Submission to Jurisdiction; Venue.....................................117
         11.11 Severability.........................................................................118
         11.12 Entirety.............................................................................118
         11.13 Binding Effect; Termination..........................................................119
         11.14 Confidentiality......................................................................119
         11.15 Source of Funds......................................................................119
         11.16 Judgment Currency....................................................................120
         11.17 Conflict.............................................................................121
</TABLE>


                                      iii

<PAGE>   5


                                    SCHEDULES

<TABLE>
<S>                       <C>
Schedule 2.1              Lenders and Commitments
Schedule 2.2(a)(i)        Form of Notice of Borrowing for Domestic Revolving Loans
Schedule 2.2(a)(ii)       Form of Notice of Request for Letter of Credit
Schedule 2.2(a)(iii)      Form of Notice of Borrowing for Swingline Loans
Schedule 2.2(a)(iv)       Form of Notice of Borrowing for Canadian Revolving Loans
Schedule 2.2(a)(v)        Form of Notice of Borrowing for Bankers' Acceptances
Schedule 2.5-1            Form of Domestic Revolving Note
Schedule 2.5-2            Form of Canadian Revolving Note
Schedule 2.6(b)           Existing Letters of Credit
Schedule 3.2              Form of Notice of Extension/Conversion
Schedule 5.1(f)(iii)-1    Form of Officer's Certificate
Schedule 5.1(f)(iii)-2    Form of Officer's Certificate
Schedule 5.1(f)(iii)-3    Form of Officer's Certificate
Schedule 6.8              Existing Liens
Schedule 6.14             Subsidiaries
Schedule 7.2(b)           Form of Officer's Compliance Certificate
Schedule 7.11-1           Form of Joinder Agreement for Domestic Subsidiaries
Schedule 7.11-2           Form of Joinder Agreement for Canadian Subsidiaries
Schedule 8.1              Existing Indebtedness
Schedule 11.1             Lenders and Addresses
Schedule 11.3(b)          Form of Assignment and Acceptance
</TABLE>



                                       iv

<PAGE>   6



                      AMENDED AND RESTATED CREDIT AGREEMENT

         THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 5, 1999
(the "Credit Agreement"), is by and among RAILWORKS CORPORATION, a Delaware
corporation, certain of its Subsidiaries identified herein, the lenders
identified herein, FIRST UNION NATIONAL BANK, as documentation agent for the
Lenders, BANK OF AMERICA CANADA, as administrative agent for the Canadian
Lenders (in such capacity, the "Canadian Administrative Agent") and BANK OF
AMERICA, N.A., as administrative agent for the Domestic Lenders (in such
capacity, the "Domestic Administrative Agent").

                               W I T N E S S E T H

         WHEREAS, a $75 million revolving credit facility has been established
in favor of RailWorks Corporation pursuant to the terms of that Credit Agreement
dated as of August 4, 1998 (as amended and modified, the "Original Credit
Agreement") among RailWorks Corporation, as borrower, the subsidiaries
identified therein, as guarantors, the lenders identified therein, First Union
National Bank, as Documentation Agent, and NationsBank, N.A. (now known as Bank
of America, N.A.), as Administrative Agent;

         WHEREAS, RailWorks Corporation has requested certain modifications to
the credit facility established pursuant to the Original Credit Agreement,
including, among other things, an increase in the size of the facility to $90
million and the establishment of a $15 million Canadian credit facility;

         WHEREAS, the Lenders have agreed to the requested modifications on the
terms and conditions provided herein;

         WHEREAS, this Credit Agreement is given in amendment to, restatement of
and substitution for the Original Credit Agreement;

         NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

                                    SECTION 1
                                   DEFINITIONS

         1.1      Definitions.

                  As used in this Credit Agreement, the following terms shall
have the meanings specified below unless the context otherwise requires:

                  "Acceptance Fee" shall have the meaning provided in Section
         3.5(c).
<PAGE>   7

                  "Acquisition" means any transaction in which the Domestic
         Borrower or any of its Subsidiaries directly or indirectly (i) acquires
         any Property with which an ongoing business is conducted or is to be
         conducted, (ii) acquires all or substantially all of the assets of any
         Person or division thereof, whether through a purchase of assets,
         merger or otherwise, (iii) acquires (in one transaction or as the most
         recent transaction in a series of transactions) control of at least a
         majority of the Voting Stock of a corporation, other than the
         acquisition of Voting Stock of a wholly-owned Subsidiary solely in
         connection with the organization and capitalization of that Subsidiary
         by the Domestic Borrower or another Credit Party, or (iv) acquires
         control of more than 50% ownership interest in any partnership, joint
         venture or limited liability company.

                  "Administrative Agents" means the Domestic Administrative
         Agent and the Canadian Administrative Agent.

                  "Administrative Agent's Fee Letter" means that certain letter
         agreement, dated as of May 14, 1999, between the Domestic
         Administrative Agent and the Domestic Borrower, as amended, modified,
         supplemented or replaced from time to time.

                  "Administrative Agent's Fees" shall have the meaning assigned
         to such term in Section 3.5(d).

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

                  "Agency Services Address" means Bank of America, N.A.,
         NC1-001-15-04, 101 North Tryon Street, Charlotte, North Carolina 28255,
         Attn: Agency Services, or such other address as may be identified by
         written notice from the Domestic Administrative Agent to the Domestic
         Borrower.

                  "Agents" means the Domestic Administrative Agent, the Canadian
         Administrative Agent and the Collateral Agent.

                  "Aggregate Canadian Revolving Committed Amount" shall have the
         meaning assigned to such term in Section 2.1(d).

                  "Aggregate Domestic Revolving Committed Amount" shall have the
         meaning assigned to such term in Section 2.1(a).

                  "Applicable BA Discount Rate" means (i) with respect to any
         Canadian Lender named on Schedule I to the Bank Act (Canada), as
         applicable to a Bankers' Acceptance


                                       2
<PAGE>   8

         being purchased or otherwise funded by such Canadian Lender on any day,
         the respective percentage discount rate per annum for a Canadian Dollar
         bankers' acceptance for the term and face amount comparable to the term
         and face amount of such Bankers' Acceptance that appears on the Reuters
         Screen CDOR Page as of 10:00 A.M. (Toronto, Ontario time) on the date
         of determination as reported by the Canadian Administrative Agent;
         provided, however, that if on such day no rate appears on the Reuters
         Screen CDOR Page as contemplated, the rate for such day shall be the
         average (as determined by the Canadian Administrative Agent) of the
         respective discount rates per annum (expressed to two decimal places
         and rounded upwards, if necessary, to the nearest 1/100th of 1%) quoted
         to the Canadian Administrative Agent by each of the five largest
         Canadian chartered banks named on Schedule I to the Bank Act (Canada)
         (each a "Schedule I Reference Bank") as the percentage discount rate at
         which such Schedule I Reference Bank would, in accordance with its
         normal practices, at or about 10:00 A.M. (Toronto, Ontario time) on
         such day, be prepared to purchase bankers' acceptances accepted by such
         Schedule I Reference Bank having a term and a face amount comparable to
         the term and face amount of such Bankers' Acceptance, and (ii) with
         respect to any Canadian Lender named on Schedule II to the Bank Act
         (Canada) and any Canadian Lender which is not named on either Schedule
         I or Schedule II to the Bank Act (Canada), as applicable to a Bankers'
         Acceptance being purchased or otherwise funded by such Canadian Lender
         on any day, the lesser of (x) the percentage discount rate per annum
         (expressed to two decimal places and rounded upward, if necessary, to
         the nearest 1/100th of 1%) quoted to the Canadian Administrative Agent
         by Bank of America Canada (the "Schedule II Reference Bank") as the
         percentage discount rate at which the Schedule II Reference Bank would,
         in accordance with its normal practices, at or about 10:00 A.M.
         (Toronto, Ontario time) on such day, be prepared to purchase bankers'
         acceptances accepted by the Schedule II Reference Bank having a term
         and a face amount comparable to the term and face amount of such
         Bankers' Acceptance and (y) the rate per annum that is 10 basis points
         per annum in excess of the rate determined pursuant to clause (i) of
         this definition in connection with the relevant issuance of Bankers'
         Acceptances.

                  "Applicable Percentage" means, for any day, the rate per annum
         set forth below opposite the applicable Consolidated Total Leverage
         Ratio then in effect, it being understood that the Applicable
         Percentage for (i) Base Rate Loans shall be the percentage set forth
         under the column "Applicable Percentage for Base Rate Loans", (ii)
         Eurodollar Loans shall be the percentage set forth under the column
         "Applicable Percentage for Eurodollar Loans, Bankers' Acceptances and
         Letter of Credit Fee", (iii) the Letter of Credit Fee shall be the
         percentage set forth under the column "Applicable Percentage for
         Eurodollar Loans, Bankers' Acceptances and Letter of Credit Fee", (iv)
         the Domestic Commitment Fee and the Canadian Commitment Fee shall be
         the percentage set forth under the column "Commitment Fee", and (v) the
         Acceptance Fee for Bankers' Acceptances shall be the percentage set
         forth under the column "Applicable Percentage for Eurodollar Loans,
         Bankers' Acceptances and Letter of Credit Fee":



                                       3
<PAGE>   9

<TABLE>
<CAPTION>
                                                        Applicable
                                                      Percentage for
                                                    Eurodollar Loans,
                                                         Bankers'
           Pricing           Consolidated            Acceptances and      Applicable Percentage    Applicable Percentage
            Level        Total Leverage Ratio      Letter of Credit Fee   for Base Rate Loans       for Commitment Fee
            -----        --------------------      --------------------   -------------------       ------------------
           <S>           <C>                       <C>                    <C>                      <C>
              I                [ ] 3.5                    2.50%                  1.00%                    0.50%
             II           [ ] 3.0 but < 3.5               2.25%                  0.75%                    0.50%
             III          [ ] 2.5 but < 3.0               2.00%                  0.50%                    0.375%
             IV           [ ] 2.0 but < 2.5               1.75%                    0%                     0.30%
              V           [ ] 1.5 but < 2.0               1.50%                    0%                     0.30%
             VI                  < 1.5                    1.25%                    0%                     0.25%
</TABLE>


         The Applicable Percentage shall be determined and adjusted quarterly on
         the date (each a "Rate Determination Date") five (5) Business Days
         after the date by which the annual and quarterly compliance
         certificates and related financial statements and information are
         required in accordance with the provisions of Sections 7.1(a) and (b)
         and Section 7.2(b), as appropriate; provided that:

                           (i)      from the Closing Date until the Rate
                  Determination Date occurring in connection with delivery of
                  the financial statements for the fiscal quarter ending June
                  30, 1999, the Applicable Percentages shall be based on Pricing
                  Level II; and

                           (ii)     in the event an annual or quarterly
                  compliance certificate and related financial statements and
                  information are not delivered timely to the Agency Services
                  Address by the date required by Sections 7.1(a) and (b) and
                  Section 7.2(b), as appropriate, the Applicable Percentages
                  shall be based on Pricing Level I until such time as an
                  appropriate compliance certificate and related financial
                  statements and information are delivered, whereupon the
                  applicable Pricing Level shall be adjusted based on the
                  information contained in such compliance certificate and
                  related financial statements and information.

         Each Applicable Percentage shall be effective from a Rate Determination
         Date until the next Rate Determination Date. The Domestic
         Administrative Agent shall determine the appropriate Applicable
         Percentages in the pricing matrix promptly upon receipt of the
         quarterly or annual compliance certificate and related financial
         information and shall promptly notify the Borrowers and the Lenders of
         any change thereof. Such determinations by the Domestic Administrative
         Agent shall be conclusive absent manifest error. Adjustments in the
         Applicable Percentages shall be effective as to existing Extensions of
         Credit as well as new Extensions of Credit made thereafter.



                                       4
<PAGE>   10

                  "BA Discount Proceeds" means proceeds in respect of any
         Bankers' Acceptance to be purchased on any day under Section 2.8(e), in
         an amount (rounded to the nearest whole Canadian cent, and with
         one-half of one Canadian cent being rounded up) calculated on such day
         by dividing:

                  (a)      the Face Amount of such Bankers' Acceptance; by

                  (b)      the sum of one plus the product of:

                           (i)      the Applicable BA Discount Rate (expressed
                  as a decimal) applicable to such Bankers' Acceptance; and

                           (ii)     a fraction, the numerator of which is the
                  number of days remaining in the term of such Bankers'
                  Acceptance and the denominator of which is 365 days;

                  with such product being rounded up or down to the fifth
         decimal place and .000005 being rounded up.

                  "BA Documents" means with respect to any Bankers' Acceptance,
         such documents and agreements as the Canadian Lenders accepting the
         same may require in connection with the creation of such Bankers'
         Acceptance.

                  "BA Obligations" means all obligations of the Canadian
         Borrowers with respect to Bankers' Acceptances created under the BA
         Revolving Commitments.

                  "BA Revolving Commitment" means the commitment of the Canadian
         Lenders to accept Bankers' Acceptances, and with respect to each
         Canadian Lender, the commitment of each Canadian Lender to accept
         Bankers' Acceptances up to such Canadian Lender's Canadian Revolving
         Committed Amount, as such amount may be reduced from time to time in
         accordance with the provisions hereof.

                  "Bank of America" means Bank of America, N.A., and its
         successors.

                  "Bankers' Acceptance" means a depository bill as defined in
         the Depository Bills and Notes Act (Canada) in Canadian Dollars that is
         in the form of an order signed by the Canadian Borrower and accepted by
         a Canadian Lender pursuant to this Agreement or, for Canadian Lenders
         not participating in clearing services contemplated in that Act, a
         draft or bill of exchange in Canadian Dollars payable in Canada that is
         drawn in Canada by a Canadian Borrower and accepted by a Canadian
         Lender pursuant to this Agreement. Orders that become depository bills,
         drafts and bills of exchange are sometimes collectively referred to in
         this Agreement as "orders".



                                       5
<PAGE>   11

                  "Bankruptcy Code" means either (a) the Bankruptcy Code in
         Title 11 of the United States Code, as amended, modified, succeeded or
         replaced from time to time or (b) the Bankruptcy and Insolvency Act
         (Canada), as amended, modified, succeeded or replaced from time to
         time.

                  "Bankruptcy Event" means, with respect to any Person, the
         occurrence of any of the following with respect to such Person: (i) a
         court or governmental agency having jurisdiction in the premises shall
         enter a decree or order for relief in respect of such Person in an
         involuntary case under any applicable bankruptcy, insolvency or other
         similar law now or hereafter in effect, or appointing a receiver,
         liquidator, assignee, custodian, trustee, sequestrator (or similar
         official) of such Person or for any substantial part of its Property or
         ordering the winding up or liquidation of its affairs; or (ii) there
         shall be commenced against such Person an involuntary case under any
         applicable bankruptcy, reorganization, insolvency or other similar law
         now or hereafter in effect, or any case, proceeding or other action for
         the appointment of a receiver, liquidator, assignee, custodian,
         trustee, sequestrator (or similar official) of such Person or for any
         substantial part of its Property or for the winding up or liquidation
         of its affairs, and such involuntary case or other case, proceeding or
         other action shall remain undismissed, undischarged or unbonded for a
         period of sixty (60) consecutive days; or (iii) such Person shall
         commence a voluntary case under any applicable bankruptcy, insolvency
         or other similar law now or hereafter in effect, or consent to the
         entry of an order for relief in an involuntary case under any such law,
         or consent to the appointment or taking possession by a receiver,
         liquidator, assignee, custodian, trustee, sequestrator (or similar
         official) of such Person or for any substantial part of its Property or
         make any general assignment for the benefit of creditors; or (iv) such
         Person shall be unable to, or shall admit in writing its inability to,
         pay its debts generally as they become due.

                  "Base Rate" means, for any day, the rate per annum (rounded
         upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
         equal to

                           (i)      in the case of Domestic Revolving Loans and
                  Canadian Revolving Loans denominated in U.S. Dollars, the
                  greater of (a) the Federal Funds Rate in effect on such day
                  plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If
                  for any reason the Domestic Administrative Agent shall have
                  determined (which determination shall be conclusive absent
                  manifest error) that it is unable after due inquiry to
                  ascertain the Federal Funds Rate for any reason, including the
                  inability or failure of the Domestic Administrative Agent to
                  obtain sufficient quotations in accordance with the terms
                  hereof, the Base Rate shall be determined without regard to
                  clause (a) of the first sentence of this subsection until the
                  circumstances giving rise to such inability no longer exist.
                  Any change in the Base Rate due to a change in the Prime Rate
                  or the Federal Funds Rate shall be effective on the effective
                  date of such change in the Prime Rate or the Federal Funds
                  Rate, respectively.

                           (ii)     in the case of Canadian Revolving Loans
                  denominated in Canadian Dollars, the greater of (a) the market
                  bid rate for bankers' acceptances denominated



                                       6
<PAGE>   12

                  in Canadian Dollars having a term of 30 days as appears on the
                  Reuters Screen CDOR Page as of 10:00 A.M. (Toronto, Ontario
                  time) in effect on such day plus 1/2 of 1% or (b) the Prime
                  Rate in effect on such day. Any change in the Base Rate due to
                  a change in the Prime Rate or the foregoing bankers'
                  acceptance rate shall be effective on the effective date of
                  such change in the Prime Rate or bankers' acceptance rate,
                  respectively.

                  "Base Rate Loan" means any Loan bearing interest at a rate
         determined by reference to the Base Rate.

                  "Borrowing Base" means, as of any day, an amount equal to the
         sum of (i) eighty-five percent (85%) of Eligible Receivables of the
         Credit Parties, (ii) fifty percent (50%) of Eligible Receivables
         Retainage of the Credit Parties and (iii) sixty percent (60%) of
         Eligible Inventory of the Credit Parties, in each case as set forth in
         the most recent Borrowing Base Certificate delivered to the
         Administrative Agents and the Lenders in accordance with the terms of
         Section 7.1(c), with adjustments to give effect to Acquisitions and
         Divestitures since the date of such Borrowing Base Certificate on a Pro
         Forma Basis.

                  "Borrowers" means the Domestic Borrower and the Canadian
         Borrowers.

                  "Borrowing Base Certificate" shall have the meaning assigned
         to such term in Section 7.1(c).

                  "Business Day" means a day other than a Saturday or a Sunday;
         provided that, in addition, (a) in the case of Domestic Revolving
         Loans, Swingline Loans and Letters of Credit, such day is not a day on
         which commercial banks in Charlotte, North Carolina, Baltimore,
         Maryland or New York, New York are authorized or required by law to
         close and (b) in the case of Canadian Revolving Loans and Bankers'
         Acceptances, such day is not a day on which banking institutions in
         Toronto, Ontario are authorized or required by law or other
         governmental action to close; provided, further, that, when used in
         connection with a Eurodollar Loan, such day shall also be a day on
         which dealings between banks are carried on in U.S. Dollar deposits in
         London, England.

                  "Canadian Administrative Agent" shall have the meaning
         assigned to such term in the heading hereof, together with its
         successors in such capacity.

                  "Canadian Borrowers" means (a) Gantrex RW Company, a Nova
         Scotia unlimited liability company, (b) RailWorks of Canada Company, a
         Nova Scotia unlimited liability company and (c) any other Canadian
         Subsidiary of the Domestic Borrower joined as a Canadian Borrower
         hereunder pursuant to such joinder agreement(s) and other documentation
         as are reasonably satisfactory to the Canadian Administrative Agent,
         and, in each case, together with permitted successors and assigns.



                                       7
<PAGE>   13

                  "Canadian Commitment Fee" shall have the meaning provided in
         Section 3.5(a)(ii).

                  "Canadian Credit Parties" means the Canadian Borrowers and the
         Canadian Guarantors.

                  "Canadian Dollars" and "CDN$" means dollars in lawful currency
         of Canada.

                  "Canadian Guarantors" means (i) the Domestic Borrower, (ii)
         the Canadian Subsidiaries identified as Canadian Guarantors on the
         signature pages hereto, and (iii) any other Persons which may guarantee
         the Canadian Obligations hereunder by joinder as a Canadian Guarantor
         hereunder.

                  "Canadian Lenders" means Lenders holding Canadian Revolving
         Commitments.

                  "Canadian Obligations" means, collectively, the Canadian
         Revolving Loans and the BA Obligations.

                  "Canadian Pension Plan" means any plan, program or arrangement
         that is a pension plan for the purposes of any applicable pension
         benefits legislation or any tax laws of Canada or a province thereof,
         whether or not registered under any such laws, which is maintained or
         contributed to by, or to which there is or may be an obligation to
         contribute by, any Borrower in respect of any Person's employment in
         Canada with such Borrower.

                  "Canadian Pension Laws" shall have the meaning assigned to
         such term in Section 6.18.

                  "Canadian Pledge Agreement" means the Pledge Agreement dated
         as of the Closing Date given by the Canadian Borrowers and certain
         other Credit Parties identified therein to the Collateral Agent to
         secure the obligations of the Canadian Credit Parties under the Credit
         Documents, as amended and modified from time to time.

                  "Canadian Register" shall have the meaning given such term in
         Section 11.3(c)(ii).

                  "Canadian Required Lenders" means, at any time, Canadian
         Lenders having more than fifty percent (50%) of the Canadian Revolving
         Commitments, or if the Canadian Revolving Commitments have been
         terminated, Canadian Lenders having more than fifty percent (50%) of
         the aggregate principal amount of the Canadian Obligations outstanding
         (taking into account in each case Participation Interests or
         obligations to participate therein); provided that the Canadian
         Revolving Commitments of, and outstanding principal amount of Canadian
         Obligations (taking into account Participation Interests therein) owing
         to, a Defaulting Lender shall be excluded for purposes hereof in making
         a determination of Canadian Required Lenders.



                                       8
<PAGE>   14

                  "Canadian Revolving Commitment" means, with respect to each
         Canadian Lender, the commitment of such Canadian Lender to make
         Canadian Revolving Loans and to create Bankers' Acceptances in an
         aggregate principal amount at any time outstanding of up to such
         Canadian Lender's Canadian Revolving Commitment Percentage of the
         Aggregate Canadian Revolving Committed Amount.

                  "Canadian Revolving Commitment Percentage" means, with respect
         to each Canadian Lender, a fraction (expressed as a percentage) the
         numerator of which is the Canadian Revolving Commitment of such
         Canadian Lender at such time and the denominator of which is the
         Aggregate Canadian Revolving Committed Amount at such time. The initial
         Canadian Revolving Commitment Percentages are set out on Schedule 2.1.

                  "Canadian Revolving Committed Amount" means, with respect to
         each Canadian Lender, the amount of each Canadian Lender's Canadian
         Revolving Commitment as specified in Schedule 2.1, as such amount may
         be reduced from time to time in accordance with the provisions hereof.

                  "Canadian Revolving Loans" shall have the meaning assigned to
         such term in Section 2.1(e).

                  "Canadian Revolving Note" or "Canadian Revolving Notes" means
         the promissory notes of the Canadian Borrowers in favor of each of the
         Canadian Lenders evidencing the Canadian Revolving Loans in
         substantially the form attached as Schedule 2.5-2, individually or
         collectively, as appropriate, as such promissory notes may be amended,
         modified, supplemented, extended, renewed or replaced from time to
         time.

                  "Canadian Security Agreement" means the Security Agreement
         dated as of the Closing Date given by the Canadian Borrowers and
         certain other Canadian Credit Parties to the Collateral Agent to secure
         the obligations of the Canadian Credit Parties under the Credit
         Documents, as amended and modified from time to time.

                  "Canadian Subsidiary" means any Subsidiary which is
         incorporated or organized under the laws of Canada or its provinces.

                  "Capital Expenditures" means, for any period, without
         duplication, all expenditures (whether paid in cash or other
         consideration) during such period that, in accordance with GAAP, are or
         should be included in additions to property, plant and equipment or
         similar items reflected in the consolidated statement of cash flows for
         such period; provided, that Capital Expenditures shall not include, for
         purposes hereof, expenditures of proceeds of insurance settlements,
         condemnation awards and other settlements in respect of lost,
         destroyed, damaged or condemned assets, equipment or other property to
         the extent such expenditures are made to replace or repair such lost,


                                       9
<PAGE>   15

         destroyed, damaged or condemned assets, equipment or other property or
         otherwise to acquire assets or properties useful in the business of the
         members of the Consolidated Group.

                  "Capital Lease" means, as applied to any Person, any lease of
         any Property by that Person as lessee which, in accordance with GAAP,
         is or should be accounted for as a capital lease on the balance sheet
         of that Person.

                  "Capital Lease Obligation" means the capital lease obligations
         relating to a Capital Lease determined in accordance with GAAP.

                  "Cash Equivalents" means (a) securities issued or directly and
         fully guaranteed or insured by the United States of America or any
         agency or instrumentality thereof (provided that the full faith and
         credit of the United States of America is pledged in support thereof)
         having maturities of not more than twelve months from the date of
         acquisition, (b) U.S. Dollar denominated time deposits and certificates
         of deposit of (i) any Lender, or (ii) any domestic commercial bank of
         recognized standing (y) having capital and surplus in excess of
         US$500,000,000 and (z) whose short-term commercial paper rating from
         S&P is at least A-1 or the equivalent thereof or from Moody's is at
         least P-1 or the equivalent thereof (any such bank being an "Approved
         Bank"), in each case with maturities of not more than 270 days from the
         date of acquisition, (c) commercial paper and variable or fixed rate
         notes issued by any Approved Bank (or by the parent company thereof) or
         any variable rate notes issued by, or guaranteed by, any domestic
         corporation rated A-1 (or the equivalent thereof) or better by S&P or
         P-1 (or the equivalent thereof) or better by Moody's and maturing
         within six months of the date of acquisition, (d) repurchase agreements
         entered into by a Person with a bank or trust company (including any of
         the Lenders) or recognized securities dealer having capital and surplus
         in excess of US$500,000,000 for direct obligations issued by or fully
         guaranteed by the United States of America in which such Person shall
         have a perfected first priority security interest (subject to no other
         Liens) and having, on the date of purchase thereof, a fair market value
         of at least 100% of the amount of the repurchase obligations, (e)
         obligations of any State of the United States or any political
         subdivision thereof, the interest with respect to which is exempt from
         federal income taxation under Section 103 of the Internal Revenue Code,
         having a long term rating of at least AA- or Aa-3 by S&P or Moody's,
         respectively, and maturing within three years from the date of
         acquisition thereof, (f) Investments in municipal auction preferred
         stock (i) rated AAA (or the equivalent thereof) or better by S&P or Aaa
         (or the equivalent thereof) or better by Moody's and (ii) with
         dividends that reset at least once every 365 days, (g) Investments,
         classified in accordance with GAAP as current assets, in money market
         investment programs registered under the Investment Company Act of
         1940, as amended, which are administered by reputable financial
         institutions having capital of at least US$100,000,000 and the
         portfolios of which are limited to Investments of the character
         described in the foregoing subdivisions (a) through (f), and (h) other
         Investments deemed to be cash equivalents in accordance with GAAP.



                                       10
<PAGE>   16

                  "Change of Control" means the occurrence of either of the
         following events: (i) any "person" (as such term is used in Sections
         13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
         "Exchange Act")), other than a trustee or other fiduciary holding
         securities under an employee benefit plan of the Domestic Borrower, a
         corporation owned directly or indirectly by the stockholders of the
         Domestic Borrower (immediately after the IPO) or any of their
         respective Affiliates, becomes the "beneficial owner" (as defined in
         Rule 13d-3 under the Exchange Act), directly or indirectly, of
         securities of the Domestic Borrower representing 50% or more of the
         total voting power represented by the Domestic Borrower's then
         outstanding securities that vote generally in the election of
         directors; or (ii) during any period of two consecutive years,
         individuals who at the beginning of such period constitute the Domestic
         Borrower's Board of Directors and any new directors whose election by
         the Domestic Borrower's Board of Directors or nomination for election
         by the Domestic Borrower's stockholders was approved by a vote or a
         majority of the directors then still in office who either were
         directors at the beginning of the period or whose election or
         nomination for election was previously so approved, cease for any
         reason to constitute a majority of the Domestic Borrower's Board of
         Directors.

                  "Closing Date" means the date hereof.

                  "Collateral Agent" means Bank of America, N.A., and its
         successors in such capacity.

                  "Combination" has the meaning assigned to such term in the
         Registration Statement.

                  "Commitment" means the Domestic Revolving Commitments, the LOC
         Commitment, the Swingline Commitment and the Canadian Revolving
         Commitments.

                  "Commitment Period" means the period from and including the
         Closing Date to but not including the earlier of (i) the Termination
         Date, or (ii) the date on which the Commitments terminate in accordance
         with the provisions of this Credit Agreement.

                  "Consolidated Capital Expenditures" means, for any period,
         Capital Expenditures for the Consolidated Group on a consolidated basis
         determined in accordance with GAAP applied on a consistent basis.

                  "Consolidated EBITDA" means, for any period for the
         Consolidated Group, the sum of Consolidated Net Income plus
         Consolidated Interest Expense plus all provisions for any Federal,
         state or other domestic and foreign income taxes plus depreciation and
         amortization minus, to the extent not deducted in determining
         Consolidated Net Income, earn-out payments made in connection with the
         Permitted Acquisitions, in each case on a consolidated basis determined
         in accordance with GAAP applied on a consistent basis,




                                       11
<PAGE>   17

         but excluding for purposes hereof extraordinary gains and losses and
         related tax effects thereon.

                  "Consolidated Fixed Charge Coverage Ratio" means, for the
         period of four consecutive fiscal quarters ending as of the date of
         determination, the ratio of Consolidated EBITDA to Consolidated Fixed
         Charges.

                  "Consolidated Fixed Charges" means, for any period for the
         Consolidated Group, the sum of the cash portion of Consolidated
         Interest Expense plus current maturities of Funded Debt for the four
         consecutive fiscal quarters beginning the day after the date of
         determination plus the greater of (i) twenty percent (20%) of
         Obligations outstanding hereunder on the date of determination, or (ii)
         Two Million Dollars (US$2,000,000), in each case on a consolidated
         basis determined in accordance with GAAP applied on an consistent
         basis. Except as otherwise expressly provided, the applicable period
         shall be for the four consecutive fiscal quarters ending as of the date
         of determination.

                  "Consolidated Group" means the Domestic Borrower and its
         consolidated subsidiaries as determined in accordance with GAAP.

                  "Consolidated Interest Expense" means, for any period for the
         Consolidated Group, all interest expense, including the amortization of
         debt discount and premium, the interest component under Capital Leases
         and the implied interest component under Securitization Transactions,
         in each case on a consolidated basis determined in accordance with GAAP
         applied on a consolidated basis. Except as expressly provided
         otherwise, the applicable period shall be for the four consecutive
         quarters ending as of the date of determination.

                  "Consolidated Net Income" means for any period for the
         Consolidated Group, net income on a consolidated basis determined in
         accordance with GAAP applied on a consistent basis plus the amount of
         any deduction from such net income with respect to the fiscal quarter
         ending September 30, 1998 attributable to (i) the Stock Incentive Plan
         and (ii) other nonrecurring expenses related to the IPO, the
         Combination and the Original Credit Agreement. Except as expressly
         provided otherwise, the applicable period shall be for the four
         consecutive quarters ending as of the date of determination.

                  "Consolidated Net Worth" means, as of any date for the
         Consolidated Group, shareholders' equity or net worth as determined in
         accordance with GAAP.

                  "Consolidated Rent Expense" means rental expense under
         Operating Leases of the Consolidated Group on a consolidated basis for
         the applicable period, as determined in accordance with GAAP. Except as
         expressly provided otherwise, the applicable period shall be for the
         four consecutive quarters ending as of the date of determination.



                                       12
<PAGE>   18

                  "Consolidated Senior Debt" means Consolidated Total Funded
         Debt less Subordinated Debt of the Consolidated Group on a consolidated
         basis as determined in accordance with GAAP.

                  "Consolidated Senior Leverage Ratio" means, as of the last day
         of any fiscal quarter, the ratio of Consolidated Senior Debt on such
         day to Consolidated EBITDA for the period of four consecutive fiscal
         quarters ending as of such day.

                  "Consolidated Total Funded Debt" means Funded Debt of the
         Consolidated Group determined on a consolidated basis in accordance
         with GAAP applied on a consistent basis.

                  "Consolidated Total Leverage Ratio" means, as of the last day
         of any fiscal quarter, the ratio of Consolidated Total Funded Debt on
         such day to Consolidated EBITDA for the period of four consecutive
         fiscal quarters ending as of such day.

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

                  "Credit Documents" means a collective reference to this Credit
         Agreement, the Notes, the LOC Documents, the BA Documents, the Domestic
         Pledge Agreement, the Canadian Pledge Agreement, the Domestic Security
         Agreement, the Canadian Security Agreement, each Joinder Agreement, the
         Administrative Agent's Fee Letter, and all other related agreements and
         documents issued or delivered hereunder or thereunder or pursuant
         hereto or thereto.

                  "Credit Party" means any of the Domestic Credit Parties and
         the Canadian Credit Parties.

                  "Debt Transaction" means, with respect to any member of the
         Consolidated Group, any sale, issuance or placement of Subordinated
         Debt permitted by Section 8.1.

                  "Default" means any event, act or condition which with notice
         or lapse of time, or both, would constitute an Event of Default.

                  "Defaulting Lender" means, at any time, any Lender that, at
         such time, (i) has failed to make an Extension of Credit required
         pursuant to the terms of this Credit Agreement, (ii) has failed to pay
         to any Agent or any Lender an amount owed by such Lender pursuant to
         the terms of the Credit Agreement or any other of the Credit Documents,
         or (iii) has been deemed insolvent or has become subject to a
         bankruptcy or insolvency proceeding or to a receiver, trustee or
         similar proceeding.



                                       13
<PAGE>   19

                  "Determination Date" means with respect to any Obligations
         denominated in foreign currency (including Canadian Dollars):

                           (i)      in connection with the origination of any
                  new Extension of Credit, the Business Day which is the
                  earliest of the date such credit is extended, the date the
                  rate is set or the date the bid is accepted, as applicable;
                  and

                           (ii)     the last Business Day of each month; and

                           (iii)    in connection with any extension, conversion
                  or continuation of an existing Obligation, the Business Day
                  which is the earlier of the date such Obligation is extended,
                  converted or continued, or the date the rate is set, as
                  applicable, in connection therewith; and

                           (iv)     the date of any reduction in the Aggregate
                  Domestic Revolving Committed Amount or the Aggregate Canadian
                  Revolving Committed Amount pursuant to Section 3.4; and

                           (v)      such additional dates (but not more than one
                  additional date per month) as determined by the Domestic
                  Administrative Agent;

                  For purposes of determining availability, the rate of exchange
                  for foreign currencies (including Canadian Dollars) shall be
                  the spot rate therefor as quoted by the Domestic
                  Administrative Agent at or about 10:00 A.M. (Charlotte, North
                  Carolina time or Toronto, Ontario time, as appropriate) on the
                  date of determination.

                  "Divestiture" means any transaction by which the Domestic
         Borrower or any Subsidiary sells, leases, transfers or otherwise
         disposes of (i) any Property with which an ongoing business is
         conducted or to be conducted; (ii) all or substantially all or any
         substantial portion of its assets; or (iii) the capital stock of a
         Subsidiary, in each case other than (x) the sale of Inventory in the
         ordinary course of business, (y) the sale, lease, transfer or other
         disposition of plant, property and equipment which is no longer used or
         useful in the business of such Credit Party or as to which the proceeds
         thereof are reinvested in plant, property or equipment within six
         months thereof, or (z) sales, leases, transfers or other dispositions
         of Property or capital stock of a Subsidiary by one Credit Party to
         another.

                  "Dollar Amount" means (i) with respect to U.S. Dollars or an
         amount denominated in U.S. Dollars, such amount, and (ii) with respect
         to Canadian Dollars or an amount denominated in Canadian Dollars, the
         Dollar Equivalent thereof as of the most recent Determination Date.



                                       14
<PAGE>   20

                  "Dollar Equivalent" means, on any date, with respect to an
         amount denominated in any foreign currency (including Canadian
         Dollars), the amount of U.S. Dollars into which the Domestic
         Administrative Agent could, in accordance with its practice, convert
         such amount of foreign currency in the interbank foreign exchange
         market at its spot rate of exchange (inclusive of all reasonably
         related costs of conversion, if any, that are actually incurred) at or
         about 10:00 A.M. (Charlotte, North Carolina time or Toronto, Ontario
         time, as appropriate), on such date.

                  "Domestic Administrative Agent" shall have the meaning
         assigned to such term in the heading hereof, together with its
         successors in such capacity.

                  "Domestic Borrower" means RailWorks Corporation, a Delaware
         corporation, and its permitted successors and assigns.

                  "Domestic Commitment Fee" shall have the meaning provided in
         Section 3.5(a)(i).

                  "Domestic Credit Parties" means the Domestic Borrower and the
         Domestic Guarantors.

                  "Domestic Guarantors" means (i) the Domestic Subsidiaries
         identified as Domestic Guarantors on the signature pages hereto and
         (ii) any other Persons which may guarantee the Domestic Obligations
         hereunder by joinder as a Domestic Guarantor hereunder.

                  "Domestic Lenders" means Lenders holding Domestic Revolving
         Commitments.

                  "Domestic Obligations" means, collectively, the Domestic
         Revolving Loans, the LOC Obligations and the Swingline Loans.

                  "Domestic Pledge Agreement" means the Amended and Restated
         Pledge Agreement dated as of the Closing Date given by the Domestic
         Borrower and certain other Credit Parties identified therein to the
         Collateral Agent to secure the obligations of the Domestic Credit
         Parties, as such Amended and Restated Pledge Agreement may be amended
         and modified from time to time.

                  "Domestic Register" shall have the meaning given such term in
         Section 11.3(c)(i).

                  "Domestic Required Lenders" means, at any time, Domestic
         Lenders having more than fifty percent (50%) of the Domestic Revolving
         Commitments (as such Domestic Revolving Commitments may be increased
         pursuant to Section 2.1(h)), or if the Domestic Revolving Commitments
         have been terminated, Domestic Lenders having more than fifty percent
         (50%) of the aggregate principal amount of the Domestic Obligations
         outstanding (taking into account in each case Participation Interests
         or



                                       15
<PAGE>   21

         obligations to participate therein); provided that the Domestic
         Revolving Commitments of, and outstanding principal amount of Domestic
         Obligations (taking into account Participation Interests therein) owing
         to, a Defaulting Lender shall be excluded for purposes hereof in making
         a determination of Domestic Required Lenders.

                  "Domestic Revolving Commitment" means, with respect to each
         Domestic Lender, the commitment of such Domestic Lender to make
         Domestic Revolving Loans in an aggregate principal amount at any time
         outstanding of up to such Domestic Lender's Domestic Revolving
         Commitment Percentage of the Aggregate Domestic Revolving Committed
         Amount, as such amount may be reduced from time to time in accordance
         with the provisions hereof.

                  "Domestic Revolving Commitment Percentage" means, with respect
         to each Domestic Lender, a fraction (expressed as a percentage) the
         numerator of which is the Domestic Revolving Commitment of such
         Domestic Lender at such time and the denominator of which is the
         Aggregate Domestic Revolving Committed Amount at such time. The initial
         Domestic Revolving Commitment Percentages are set out on Schedule 2.1.

                  "Domestic Revolving Committed Amount" means, with respect to
         each Domestic Lender, the amount of each Domestic Lender's Domestic
         Revolving Commitment, as specified in Schedule 2.1, as such amount may
         be reduced from time to time in accordance with the provisions hereof.

                  "Domestic Revolving Loans" shall have the meaning assigned to
         such term in Section 2.1(a).

                  "Domestic Revolving Note" or "Domestic Revolving Notes" means
         the promissory notes of the Domestic Borrower in favor of each of the
         Domestic Lenders evidencing the Domestic Revolving Loans and the
         Swingline Loans in substantially the form attached as Schedule 2.5-1,
         individually or collectively, as appropriate, as such promissory notes
         may be amended, modified, supplemented, extended, renewed or replaced
         from time to time.

                  "Domestic Security Agreement" means the Amended and Restated
         Security Agreement dated as of the Closing Date given by the Domestic
         Credit Parties to the Collateral Agent to secure the obligations of the
         Domestic Credit Parties, as such Amended and Restated Security
         Agreement may be amended and modified from time to time.

                  "Domestic Subsidiary" means any Subsidiary which is
         incorporated or organized under the laws of any State of the United
         States or the District of Columbia.

                  "Eligible Inventory" means, as of any date of determination,
         the aggregate book value (based on a FIFO valuation) of all inventory
         owned by the Credit Parties on a



                                       16
<PAGE>   22

         consolidated basis after deducting allowances or reserves relating
         thereto, as shown on the books and records of the Credit Parties, but
         excluding in any event (i) inventory which is (a) not subject to a
         perfected, first priority Lien in favor for the Collateral Agent to
         secure the obligations of the Credit Parties under the Domestic
         Security Agreement or the Canadian Security Agreement, as applicable,
         or (b) subject to any other Lien that is not a Permitted Lien

                  "Eligible Receivables" means, as of any date of determination,
         the aggregate book value of all accounts, accounts receivable,
         receivables, and obligations for payment created or arising from the
         sale of inventory or the rendering of services in the ordinary course
         of business (collectively, the "Receivables"), owned by or owing to the
         Credit Parties on a consolidated basis after deducting retainage and
         allowances or reserves relating thereto, as shown on the books and
         records of the Credit Parties, but excluding in any event (a)
         Receivables owing by an account debtor which is not solvent or is
         subject to any bankruptcy or insolvency proceeding of any kind and (b)
         any Receivable which is (i) not subject to a perfected, first priority
         Lien in favor for the Collateral Agent to secure the obligations of the
         Credit Parties under the Domestic Security Agreement or the Canadian
         Security Agreement, as applicable, or (ii) subject to any other Lien
         that is not a Permitted Lien

                  "Eligible Receivables Retainage" means, as of any date of
         determination, the aggregate book value of that portion of Receivables
         owned by or owing to the Credit Parties on a consolidated basis
         consisting of retainage but excluding in any event such portion of
         Receivables owing by an account debtor which is not solvent or is
         subject to any bankruptcy or insolvency proceeding of any kind.

                  "Environmental Laws" means any and all lawful and applicable
         Federal, state, provincial, local and foreign statutes, laws,
         regulations, ordinances, rules, judgments, orders, decrees, permits,
         concessions, grants, franchises, licenses, agreements or other
         governmental restrictions relating to the environment or to emissions,
         discharges, releases or threatened releases of pollutants,
         contaminants, chemicals, or industrial, toxic or hazardous substances
         or wastes into the environment including, without limitation, ambient
         air, surface water, ground water, or land, or otherwise relating to the
         manufacture, processing, distribution, use, treatment, storage,
         disposal, transport, or handling of pollutants, contaminants,
         chemicals, or industrial, toxic or hazardous substances or wastes.

                  "Equity Transaction" means, with respect to any member of the
         Consolidated Group, any issuance of shares of its capital stock or
         other equity interest, other than an issuance (i) to a member of the
         Consolidated Group, (ii) in connection with a conversion of debt
         securities to equity or (iii) in connection with exercise by a present
         or former employee, officer or director under a stock incentive plan,
         stock option plan or other equity-based compensation plan or
         arrangement.



                                       17
<PAGE>   23

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended, and any successor statute thereto, as interpreted by
         the rules and regulations thereunder, all as the same may be in effect
         from time to time. References to sections of ERISA shall be construed
         also to refer to any successor sections.

                  "ERISA Affiliate" means an entity which is under common
         control with any Credit Party or any of its Subsidiaries within the
         meaning of Section 4001(a)(14) of ERISA, or is a member of a group
         which includes any Credit Party or any of its Subsidiaries and which is
         treated as a single employer under Sections 414(b) or (c) of the
         Internal Revenue Code.

                  "ERISA Event" means (i) with respect to any Plan, the
         occurrence of a Reportable Event or the substantial cessation of
         operations (within the meaning of Section 4062(e) of ERISA); (ii) the
         withdrawal by any Credit Party or any of its Subsidiaries or any ERISA
         Affiliate from a Multiple Employer Plan during a plan year in which it
         was a substantial employer (as such term is defined in Section
         4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
         (iii) the distribution of a notice of intent to terminate or the actual
         termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
         (iv) the institution of proceedings to terminate or the actual
         termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
         event or condition which would reasonably be expected to constitute
         grounds under Section 4042 of ERISA for the termination of, or the
         appointment of a trustee to administer, any Plan; (vi) the complete or
         partial withdrawal of any Credit Party or any of its Subsidiaries or
         any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for
         imposition of a lien under Section 302(f) of ERISA exist with respect
         to any Plan; or (vii) the adoption of an amendment to any Plan
         requiring the provision of security to such Plan pursuant to Section
         307 of ERISA.

                  "Eurodollar Loan" means any Revolving Loan bearing interest at
         a rate determined by reference to the Eurodollar Rate.

                  "Eurodollar Rate" means, for the Interest Period for each
         Eurodollar Loan comprising part of the same borrowing (including
         conversions, extensions and renewals), a per annum interest rate
         determined pursuant to the following formula:

                   Eurodollar Rate  =         Interbank Offered Rate
                                       -------------------------------------
                                        1 - Eurodollar Reserve Percentage

                  "Eurodollar Reserve Percentage" means, for any day, that
         percentage (expressed as a decimal) which is in effect from time to
         time under any regulations of the Board of Governors of the Federal
         Reserve System (or any successor) or other Governmental Authority
         having jurisdiction with respect thereto) as the maximum reserve
         requirement (including, without limitation, any basic, supplemental,
         emergency, special, or marginal reserves) applicable with respect to
         Eurocurrency liabilities as that term is defined in Regulation D (or
         against any other category of liabilities that includes deposits by
         reference to which the interest rate of Eurodollar Loans is
         determined), whether or not Lender has any



                                       18
<PAGE>   24

         Eurocurrency liabilities subject to such reserve requirement at that
         time. Eurodollar Loans shall be deemed to constitute Eurocurrency
         liabilities and as such shall be deemed subject to reserve requirements
         without benefits of credits for proration, exceptions or offsets that
         may be available from time to time to a Lender. The Eurodollar Rate
         shall be adjusted automatically on and as of the effective date of any
         change in the Eurodollar Reserve Percentage.

                  "Event of Default" means such term as defined in Section 9.1.

                  "Existing Letters of Credit" means those Letters of Credit
         outstanding on the Closing Date identified on Schedule 2.6(b).

                  "Extension of Credit" means, as to any Lender, the making of,
         or participation in, a Loan by such Lender or the issuance or extension
         of, or participation in, a Letter of Credit by such Lender or the
         creation of a Bankers' Acceptance by such Lender.

                  "Face Amount" means, in respect of a Bankers' Acceptance, the
         amount payable to the holder thereof at maturity.

                  "Fees" means all fees payable pursuant to Section 3.5.

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

                  "Foreign Subsidiary" means a Subsidiary which is not a
         Domestic Subsidiary.

                  "Founding Companies" means the Domestic Subsidiaries which
         were party to the Original Credit Agreement on the closing date thereof
         (being August 4, 1998), as they existed immediately prior to the
         Combination.

                  "Funded Debt" means, with respect to any Person, without
         duplication, (i) all Indebtedness of such Person for borrowed money,
         (ii) all obligations of such Person evidenced by bonds, debentures,
         notes or similar instruments, or upon which interest payments are
         customarily made, (iii) all purchase money Indebtedness (including for
         purposes hereof, indebtedness and obligations described in clauses
         (iii) and (iv) of the definition of "Indebtedness") of such Person,
         including without limitation the principal


                                       19
<PAGE>   25

         portion of all obligations of such Person under Capital Leases, (iv)
         all Support Obligations of such Person with respect to Funded Debt of
         another Person, (v) the maximum available amount of all standby letters
         of credit or acceptances issued or created for the account of such
         Person, (vi) all Funded Debt of another Person secured by a Lien on any
         Property of such Person, whether or not such Funded Debt has been
         assumed, provided that for purposes of this clause (vi) the amount of
         such Funded Debt shall be limited to the greater of (A) the amount of
         such Funded Debt as to which there is recourse to such Person and (B)
         the fair market value of the property which is subject to the Lien,
         (vii) the outstanding attributed principal amount under any
         Securitization Transaction, and (viii) the principal balance
         outstanding under any synthetic lease, tax retention operating lease,
         off-balance sheet loan or similar off-balance sheet financing product
         to which such Person is a party, where such transaction is considered
         borrowed money indebtedness for tax purposes but is classified as an
         operating lease in accordance with GAAP. The Funded Debt of any Person
         shall (i) include the Funded Debt of any partnership or joint venture
         in which such Person is a general partner or joint venturer, but only
         to the extent to which there is recourse to such Person for the payment
         of such Funded Debt, but (ii) exclude, in any event, amounts in respect
         of financed insurance premium obligations permitted under Section
         8.1(g).

                  "GAAP" means generally accepted accounting principles in the
         United States applied on a consistent basis and subject to the terms of
         Section 1.3.

                  "Governmental Authority" means any Federal, state, provincial,
         local or foreign court or governmental agency, authority,
         instrumentality or regulatory body.

                  "Guaranteed Obligations" means

                           (i)      as to each of the Domestic Guarantors,
                  without duplication, (A) all obligations of the Borrowers
                  (including interest accruing after a Bankruptcy Event
                  regardless of whether such interest is allowed as a claim
                  under the Bankruptcy Code) to the Lenders and the Agents,
                  whenever arising, under this Credit Agreement, the Notes or
                  the other Credit Documents, and (B) all liabilities and
                  obligations, whenever arising, under any Hedging Agreement
                  with a Credit Party relating to the Obligations. The
                  obligations of the Domestic Guarantors in respect of the
                  Guaranteed Obligations hereunder shall be joint and several in
                  nature as among themselves; and

                           (ii)     as to each of the Canadian Guarantors,
                  without duplication, (A) all obligations of the Canadian
                  Borrowers (including interest accruing after a Bankruptcy
                  Event regardless of whether such interest is allowed as a
                  claim under the Bankruptcy Code) to the Canadian Lenders, the
                  Canadian Administrative Agent and the Collateral Agent,
                  whenever arising, under this Credit Agreement, the Canadian
                  Revolving Notes or the other Credit Documents, and (B) all
                  liabilities and obligations, whenever arising under any
                  Hedging Agreement with a Canadian Credit Party (other than the
                  Domestic Borrower) relating to the



                                       20
<PAGE>   26

                  Canadian Obligations hereunder. The obligations of the
                  Canadian Guarantors in respect of the Guaranteed Obligations
                  hereunder shall be joint and several in nature as among
                  themselves. The obligations of the Canadian Guarantors
                  hereunder shall not, however, extend to the Domestic
                  Obligations or to the obligations of the Domestic Guarantors
                  in respect thereof, as to which the Canadian Guarantors shall
                  have no obligation.

                  "Guarantors" means the Domestic Guarantors and the Canadian
         Guarantors.

                  "Hedging Agreement" means any interest rate protection
         agreement or foreign currency exchange agreement between any Borrower
         and any Lender, or any Affiliate of a Lender, relating to the
         Obligations.

                  "Indebtedness" of any Person means (i) all obligations of such
         Person for borrowed money, (ii) all obligations of such Person
         evidenced by bonds, debentures, notes or similar instruments, or upon
         which interest payments are customarily made, (iii) all obligations of
         such Person under conditional sale or other title retention agreements
         relating to Property purchased by such Person (other than customary
         reservations or retentions of title under agreements with suppliers
         entered into in the ordinary course of business), (iv) all obligations
         of such Person issued or assumed as the deferred purchase price of
         Property or services purchased by such Person (other than trade debt
         incurred in the ordinary course of business and due within six months
         of the incurrence thereof) which would appear as liabilities on a
         balance sheet of such Person, (v) all obligations of such Person under
         take-or-pay or similar arrangements or under commodities agreements,
         (vi) all Indebtedness of others secured by (or for which the holder of
         such Indebtedness has an existing right, contingent or otherwise, to be
         secured by) any Lien on, or payable out of the proceeds of production
         from, Property owned or acquired by such Person, whether or not the
         obligations secured thereby have been assumed, provided that for
         purposes hereof the amount of such Indebtedness shall be limited to the
         greater of (A) the amount of such Indebtedness as to which there is
         recourse to such Person and (B) the fair market value of the property
         which is subject to the Lien, (vii) all Support Obligations of such
         Person, (viii) the principal portion of all obligations of such Person
         under Capital Leases, (ix) all obligations of such Person in respect of
         interest rate protection agreements, foreign currency exchange
         agreements, commodity purchase or option agreements or other interest
         or exchange rate or commodity price hedging agreements (including, but
         not limited to, the Hedging Agreements), (x) the maximum amount of all
         standby letters of credit issued or bankers' acceptances facilities
         created for the account of such Person and, without duplication, all
         drafts drawn thereunder (to the extent unreimbursed), (xi) all
         preferred stock issued by such Person and required by the terms thereof
         to be redeemed, or for which mandatory sinking fund payments are due,
         by a fixed date, (xii) the outstanding attributed principal amount
         under any Securitization Transaction and (xiii) the principal balance
         outstanding under any synthetic lease, tax retention operating lease,
         off-balance sheet loan or similar off-balance sheet financing product
         to which such Person is a party, where such transaction is considered
         borrowed money indebtedness for tax purposes but is classified as



                                       21
<PAGE>   27

         an operating lease in accordance with GAAP. 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,
         but only to the extent to which there is recourse to such Person for
         payment of such Indebtedness.

                  "IPO" means the initial public offering of the Domestic
         Borrower's common stock pursuant to the Registration Statement.

                  "Interbank Offered Rate" means, for the Interest Period for
         each Eurodollar Loan comprising part of the same borrowing (including
         conversions, extensions and renewals), a per annum interest rate
         (rounded upwards, if necessary, to the nearest whole multiple of 1/100
         of 1%) equal to the rate of interest, determined by the relevant
         Administrative Agent on the basis of the offered rates for deposits in
         U.S. Dollars for a period of time corresponding to such Interest Period
         (and commencing on the first day of such Interest Period), appearing on
         Telerate Page 3750 (or, if, for any reason, Telerate Page 3750 is not
         available, the Reuters Screen LIBO Page) as of approximately 11:00 A.M.
         (London time) two (2) Business Days before the first day of such
         Interest Period. As used herein, "Telerate Page 3750" means the display
         designated as page 3750 by Dow Jones Markets, Inc. (or such other page
         as may replace such page on that service for the purpose of displaying
         the British Bankers Association London interbank offered rates) and
         "Reuters Screen LIBO Page" means the display designated as page "LIBO"
         on the Reuters Monitor Money Rates Service (or such other page as may
         replace the LIBO page on that service for the purpose of displaying
         London interbank offered rates of major banks).

                  "Interest Payment Date" means (i) as to any Swingline Loan,
         the last day of each Interest Period for such Swingline Loan or such
         other dates as the Swingline Lender may agree or require, (ii) as to
         any Base Rate Loan (other than a Swingline Loan), the last day of each
         March, June, September and December and the Termination Date and (iii)
         as to any Eurodollar Loan, the last day of each Interest Period for
         such Loan, the date of repayment of principal of such Loan and on the
         Termination Date, and in addition where the applicable Interest Period
         is more than three months, then also on the date three months from the
         beginning of the Interest Period, and each three months thereafter. If
         an Interest Payment Date falls on a date which is not a Business Day,
         such Interest Payment Date shall be deemed to be the next succeeding
         Business Day.

                  "Interest Period" means (i) as to any Eurodollar Loan, a
         period of one, two, three or six months' duration, as the applicable
         Borrower may elect, commencing in each case on the date of the
         borrowing (including conversions, extensions and renewals) and (ii) as
         to any Swingline Loan, a period of such duration as the Domestic
         Borrower may request and the Swingline Lender may agree in accordance
         with the provisions of Section 2.7, commencing in each case on the date
         of borrowing; provided, however, (A) if any Interest Period would end
         on a day which is not a Business Day, such Interest Period shall be
         extended to the next succeeding Business Day (where the next succeeding
         Business Day falls in the next succeeding calendar month, then on the
         next preceding Business Day), (B)



                                       22
<PAGE>   28

         no Interest Period shall extend beyond the Termination Date, and (C)
         where an Interest Period begins on a day for which there is no
         numerically corresponding day in the calendar month in which the
         Interest Period is to end, such Interest Period shall end on the last
         day of such calendar month.

                  "Internal Revenue Code" means the Internal Revenue Code of
         1986, as amended, and any successor statute thereto, as interpreted by
         the rules and regulations issued thereunder, in each case as in effect
         from time to time. References to sections of the Internal Revenue Code
         shall be construed also to refer to any successor sections.

                  "Investment", in any Person, means any loan or advance to such
         Person, any purchase or other acquisition of any capital stock,
         warrants, rights, options, obligations or other securities of, or
         equity interest in, such Person, any capital contribution to such
         Person or any other investment in such Person, including, without
         limitation, any Support Obligation incurred for the benefit of such
         Person.

                  "Issuing Lender" means Bank of America.

                  "Issuing Lender Fees" shall have the meaning given such term
         in Section 3.5(b)(ii).

                  "Joinder Agreement" means (a) in the case of a Domestic
         Subsidiary, a joinder agreement substantially in the form of Schedule
         7.11-1 hereto and (b) in the case of a Canadian Subsidiary, a joinder
         agreement substantially in the form of Schedule 7.11-2 hereto, in each
         case executed and delivered by such Subsidiary in accordance with the
         provisions of Section 7.11.

                  "Joint Venture" means any corporation, partnership, limited
         liability company or other entity in which the Domestic Borrower or any
         other Credit Party owns or acquires fifty percent (50%) or less of the
         Voting Stock or economic interests, and which conducts any business
         that the Credit Parties would be permitted to conduct in accordance
         with Section 7.5.

                  "Lenders" means each of the Persons identified as a "Lender"
         on the signature pages hereto, and their successors and assigns.

                  "Letter of Credit" means any Existing Letter of Credit or any
         letter of credit issued by the Issuing Lender for the account of the
         Domestic Borrower in accordance with the terms of Section 2.1(b).

                  "Letter of Credit Fee" shall have the meaning given such term
         in Section 3.5(b)(i).

                  "Lien" means any mortgage, pledge, hypothecation, assignment,
         deposit arrangement, security interest, encumbrance, lien (statutory or
         otherwise), preference,



                                       23
<PAGE>   29

         priority or charge of any kind (including any agreement to give any of
         the foregoing, any conditional sale or other title retention agreement,
         and any lease in the nature thereof).

                  "Loan" or "Loans" means the Revolving Loans and/or the
         Swingline Loans.

                  "LOC Commitment" means the commitment of the Issuing Lender to
         issue, and to honor payment obligations under, Letters of Credit
         hereunder and with respect to each Domestic Lender, the commitment of
         each Domestic Lender to purchase participation interests in the Letters
         of Credit up to such Domestic Lender's LOC Committed Amount.

                  "LOC Committed Amount" shall have the meaning assigned to such
         term in Section 2.1(b).

                  "LOC Documents" means, with respect to any Letter of Credit,
         such Letter of Credit, any amendments thereto, any documents delivered
         in connection therewith, any application therefor, and any agreements,
         instruments, guarantees or other documents (whether general in
         application or applicable only to such Letter of Credit) governing or
         providing for (i) the rights and obligations of the parties concerned
         or at risk or (ii) any collateral security for such obligations.

                  "LOC Obligations" means, at any time, the sum of (i) the
         maximum amount which is, or at any time thereafter may become,
         available to be drawn under Letters of Credit then outstanding,
         assuming compliance with all requirements for drawings referred to in
         such Letters of Credit plus (ii) the aggregate amount of all drawings
         under Letters of Credit honored by the Issuing Lender but not
         theretofore reimbursed.

                  "Material Adverse Effect" means a material adverse effect on
         (i) the condition (financial or otherwise), operations, business,
         assets or liabilities of the Consolidated Group taken as a whole, (ii)
         the ability of the Credit Parties taken as a whole to perform any
         material obligation under the Credit Documents to which it is a party
         or (iii) the rights and remedies of the Lenders under the Credit
         Documents.

                  "Material Credit Party" means (i) the Domestic Borrower, (ii)
         any Canadian Borrower and (iii) any other Credit Party at any time
         whose assets at the time of determination constitute five percent (5%)
         or more of the assets of the Consolidated Group or whose revenues at
         the time of determination constitute five percent (5%) or more of the
         revenues of the Consolidated Group.

                  "Materials of Environmental Concern" means any gasoline or
         petroleum (including crude oil or any fraction thereof) or petroleum
         products or any hazardous or toxic substances, materials or wastes,
         defined or regulated as such in or under any Environmental Laws,
         including, without limitation, asbestos, polychlorinated biphenyls and
         ureaformaldehyde insulation.



                                       24
<PAGE>   30

                  "Moody's" means Moody's Investors Service, Inc., or any
         successor or assignee of the business of such company in the business
         of rating securities.

                  "Multiemployer Plan" means a Plan which is a multiemployer
         plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.

                  "Multiple Employer Plan" means a Plan which any Credit Party
         or any of its Subsidiaries or any ERISA Affiliate and at least one
         employer other than any Credit Party or any of its Subsidiaries or any
         ERISA Affiliate are contributing sponsors.

                  "Notes" means the Domestic Revolving Notes and the Canadian
         Revolving Notes.

                  "Notice of Borrowing" means a written notice of borrowing in
         substantially the form of (a) with respect to Domestic Revolving Loans,
         Schedule 2.2(a)(i), (b) with respect to Swingline Loans, Schedule
         2.2(a)(iii), (c) with respect to Canadian Revolving Loans, Schedule
         2.2(a)(iv), and (d) with respect to Bankers' Acceptances, Schedule
         2.2(a)(v), in each case as required by Section 2.2(a).

                  "Notice of Extension/Conversion" means a written notice of
         extension or conversion in substantially the form of Schedule 3.2, as
         required by Section 3.2.

                  "Obligations" means the Domestic Obligations and the Canadian
         Obligations.

                  "Operating Lease" means, as applied to any Person, any lease
         (including, without limitation, leases which may be terminated by the
         lessee at any time) of any Property which is not a Capital Lease other
         than any such lease in which that Person is the lessor.

                  "Participation Interest" means the purchase by a Lender of a
         participation in LOC Obligations as provided in Section 2.6(b), in
         Swingline Loans as provided in Section 2.7, in Loans as provided in
         Section 3.16 and in Obligations after termination of Commitments as
         provided in Section 9.3(b).

                  "PBGC" means the Pension Benefit Guaranty Corporation
         established pursuant to Subtitle A of Title IV of ERISA and any
         successor thereof.

                  "Permitted Acquisitions" means (i) the acquisition by the
         Domestic Borrower or any of its Subsidiaries of the following entities:
         (a) Gantrex Group, (b) FCM Rail, LTD., (c) Walpar Inc., (d) Midwest
         Railroad Construction, (e) F&V Metro Contracting Corp. and affiliates
         and (e) Earl Campbell Construction Company, Inc. and (ii) other
         acquisitions as may be permitted hereunder or consented to by the
         Required Lenders in accordance with the provisions hereof.

                  "Permitted Investments" means Investments which are either (i)
         cash and Cash Equivalents; (ii) accounts receivable created, acquired
         or made in the ordinary course of



                                       25
<PAGE>   31

         business and payable or dischargeable in accordance with customary
         trade terms; (iii) Investments consisting of stock, obligations,
         securities or other property received in settlement of accounts
         receivable (created in the ordinary course of business) from obligors;
         (iv) Support Obligations permitted by Section 8.1; (v) Acquisitions
         permitted by Section 8.4; (vi) advances or loans to employees,
         directors or officers to pay the tax liabilities associated with
         participation in the Stock Incentive Plan and other advances or loans
         to employees, directors, officers or agents not to exceed US$1,000,000
         in the aggregate at any time outstanding; (vii) advances or loans to
         customers or suppliers (other than advance payment of sums due under
         contracts in the ordinary course of business) that do not exceed
         US$500,000 in the aggregate at any one time outstanding; (viii)
         Investments by a member of the Consolidated Group or an Affiliate of a
         member of the Consolidated Group in connection with a Permitted
         Securitization Transaction; (ix) Investments by members of the
         Consolidated Group in their Subsidiaries existing on the Closing Date;
         (x) Investments by a Domestic Credit Party in and to another Domestic
         Credit Party; (xi) Investments by a Canadian Credit Party in and to
         another Credit Party; (xii) advances of working capital by a Domestic
         Credit Party to a Canadian Credit Party; (xiii) Investments in Joint
         Ventures not to exceed, on a cost basis, US$5,000,000 in any individual
         Joint Venture, and US$10,000,000 in the aggregate in all Joint Ventures
         at any one time outstanding; and (xiv) other loans, advances and
         investments of a nature not contemplated in the foregoing subsections
         in an amount not to exceed US$1,000,000 in the aggregate at any time
         outstanding.

                  "Permitted Liens" means:

                           (i)      Liens in favor of the Collateral Agent on
                  behalf of the Lenders;

                           (ii)     Liens in favor of a Lender or an Affiliate
                  of a Lender pursuant to a Hedging Agreement, but only (A) to
                  the extent such Liens secure obligations under such agreements
                  permitted under Section 8.1, (B) to the extent such Liens are
                  on the same collateral as to which the Lenders also have a
                  Lien and (C) so long as the obligations under such Hedging
                  Agreement and the Obligations hereunder and under the other
                  Credit Documents shall share pari passu in the collateral
                  subject to such Liens

                           (iii)    Liens (other than Liens created or imposed
                  under ERISA) for taxes, assessments or governmental charges or
                  levies not yet due or Liens for taxes being contested in good
                  faith by appropriate proceedings for which adequate reserves
                  determined in accordance with GAAP have been established (and
                  as to which the Property subject to any such Lien is not yet
                  subject to foreclosure, sale or loss on account thereof);

                           (iv)     statutory Liens of landlords and Liens of
                  carriers, warehousemen, mechanics, materialmen and suppliers
                  and other Liens imposed by law or pursuant to customary
                  reservations or retentions of title arising in the ordinary
                  course of



                                       26
<PAGE>   32

                  business, provided that such Liens secure only amounts not yet
                  due and payable or, if due and payable, are unfiled and no
                  other action has been taken to enforce the same or are being
                  contested in good faith by appropriate proceedings for which
                  adequate reserves determined in accordance with GAAP have been
                  established (and as to which the Property subject to any such
                  Lien is not yet subject to foreclosure, sale or loss on
                  account thereof);

                           (v)      Liens (other than Liens created or imposed
                  under ERISA) incurred or deposits made by the Domestic
                  Borrower and its Subsidiaries in the ordinary course of
                  business in connection with workers' compensation,
                  unemployment insurance and other types of social security, or
                  to secure the performance of tenders, statutory obligations,
                  bids, leases, government contracts, performance and
                  return-of-money bonds and other similar obligations (exclusive
                  of obligations for the payment of borrowed money);

                           (vi)     Liens in connection with attachments or
                  judgments (including judgment or appeal bonds) provided that
                  the judgments secured shall, within 30 days after the entry
                  thereof, have been discharged or execution thereof stayed
                  pending appeal, or shall have been discharged within 30 days
                  after the expiration of any such stay;

                           (vii)    easements, rights-of-way, restrictions
                  (including zoning restrictions), minor defects or
                  irregularities in title and other similar charges or
                  encumbrances not, in any material respect, impairing the use
                  of the encumbered Property for its intended purposes;

                           (viii)   Liens securing purchase money and
                  sale/leaseback Indebtedness (including Capital Leases) to the
                  extent permitted under Sections 8.1(b) and 8.1(c) provided
                  that any such Lien attaches only to the Property financed or
                  leased and such Lien attaches thereto concurrently with or
                  within 90 days after the acquisition thereof in connection
                  with the purchase money transactions and within 30 days after
                  the closing of any sale/leaseback transaction;

                           (ix)     leases or subleases granted to others not
                  interfering in any material respect with the business of any
                  member of the Consolidated Group;

                           (x)      any interest of title of a lessor under, and
                  Liens arising from UCC financing statements (or equivalent
                  filings, registrations or agreements in foreign jurisdictions)
                  relating to, leases permitted by this Credit Agreement;

                           (xi)     Liens in favor of customs and revenue
                  authorities arising as a matter of law to secure payment of
                  customs duties in connection with the importation of goods;



                                       27
<PAGE>   33

                           (xii)    Liens created or deemed to exist in
                  connection with a Permitted Securitization Transaction
                  (including any related filings of any financing statements),
                  but only to the extent that any such Lien relates to the
                  applicable receivables and related property actually sold,
                  contributed or otherwise conveyed pursuant to such
                  transaction;

                           (xiii)   Liens deemed to exist in connection with
                  Investments in repurchase agreements permitted under Section
                  8.5;

                           (xiv)    normal and customary rights of setoff upon
                  deposits of cash in favor of banks or other depository
                  institutions;

                           (xv)     Liens in respect of Indebtedness permitted
                  under Section 8.1(g), limited solely to sums payable under the
                  policy or policies to which such Indebtedness relates;

                           (xvi)    Liens on personal property of the Canadian
                  Subsidiaries in favor of one or more Canadian lenders securing
                  the Indebtedness described under Section 8.1(j); and

                           (xvii)   Liens existing as of the Closing Date and
                  set forth on Schedule 6.8; provided that no such Lien shall at
                  any time be extended to or cover any Property other than the
                  Property subject thereto on the Closing Date.

                  "Person" means any individual, partnership, joint venture,
         firm, corporation, limited liability company, association, trust or
         other enterprise (whether or not incorporated) or any Governmental
         Authority.

                  "Plan" means any employee benefit plan (as defined in Section
         3(3) of ERISA) which is covered by ERISA and with respect to which any
         Credit Party or any of its Subsidiaries or any ERISA Affiliate is (or,
         if such plan were terminated at such time, would under Section 4069 of
         ERISA be deemed to be) an "employer" within the meaning of Section 3(5)
         of ERISA.

                  "Pledge Agreements" means the Domestic Pledge Agreement and
         the Canadian Pledge Agreement.

                  "Prime Rate" means

                                    (i)      in the case of Domestic Revolving
                  Loans, the rate of interest per annum publicly announced from
                  time to time by Bank of America as its prime rate in effect at
                  its principal office in Charlotte, North Carolina, with each
                  change in the Prime Rate being effective on the date such
                  change is publicly announced as effective (it being understood
                  and agreed that the Prime Rate is a reference rate used



                                       28
<PAGE>   34

                  by Bank of America in determining interest rates on certain
                  loans and is not intended to be the lowest rate of interest
                  charged on any extension of credit by Bank of America to any
                  debtor);

                                    (ii)     in the case of Canadian Revolving
                  Loans denominated in U.S. Dollars, the rate of interest
                  publicly announced by the Canadian Administrative Agent as its
                  prime or reference rate in effect for commercial loans in
                  Canada denominated in U.S. Dollars, with each change thereof
                  being effective on the date any such change is publicly
                  announced as effective (it being understood and agreed that
                  such prime or reference rate is a reference rate used in
                  determining interest rates on certain loans and is not
                  intended to be the lowest rate of interest charged on any
                  extension of credit); and

                                    (iii)    in the case of Canadian Revolving
                  Loans denominated in Canadian Dollars, the rate of interest
                  publicly announced by the Canadian Administrative Agent as its
                  prime or reference rate in effect for commercial loans in
                  Canada denominated in Canadian Dollars, with each change
                  thereof being effective on the date any such change is
                  publicly announced as effective (it being understood and
                  agreed that such prime or reference rate is a reference rate
                  used in determining interest rates on certain loans and is not
                  intended to be the lowest rate of interest charged on any
                  extension of credit).

                  "Pro Forma Basis" means, with respect to any calculation of
         financial covenants in connection with any proposed Acquisition or
         Divestiture pursuant to Sections 8.4 or 8.3, respectively, that (i)
         such financial covenants shall be calculated on a pro forma basis
         giving effect to such Acquisition or Divestiture, (ii) such Acquisition
         or Divestiture shall be deemed to have occurred as of the first day of
         the four fiscal quarter period ending as of the most recent fiscal
         quarter end preceding the date of such Acquisition or Divestiture with
         respect to which both Administrative Agents and the Lenders have
         received the Officer's Certificate required by Section 7.2(b), (iii)
         any Indebtedness incurred in connection with any such Acquisition shall
         be deemed to have been incurred as of the first day of such four fiscal
         quarter period, (iv) any Indebtedness repaid in connection with any
         such Divestiture shall be deemed to have been repaid as of the first
         day of such four fiscal quarter period, and (v) if such Indebtedness
         incurred or repaid for the purposes of clause (iv) has a floating or
         formula rate, then the implied rate of interest for such Indebtedness
         for the applicable four quarter period shall be determined by utilizing
         the rate which is or would be in effect with respect to such
         Indebtedness as at the relevant date of determination.

                  "Property" means any interest in any kind of property or
         asset, whether real, personal or mixed, or tangible or intangible.



                                       29
<PAGE>   35

                  "Quoted Rate" means, with respect to a Quoted Rate Swingline
         Loan, the fixed or floating percentage rate per annum, if any, offered
         by the Swingline Lender and accepted by the Domestic Borrower in
         accordance with the provisions hereof.

                  "Quoted Rate Swingline Loan" means a Swingline Loan bearing
         interest at the Quoted Rate.

                  "Registers" means the Domestic Register and the Canadian
         Register.

                  "Registration Statement" means the Registration Statement of
         the Domestic Borrower on Form S-1, initially filed with the SEC on May
         22, 1998, as amended and supplemented through Post-Effective Amendment
         No. 1 thereto, filed with the SEC on July 29, 1998 and declared
         effective by the SEC on July 29, 1998.

                  "Regulation D, O, T, U or X" means Regulation D, O, T, U or X,
         respectively, of the Board of Governors of the Federal Reserve System
         as from time to time in effect and any successor to all or a portion
         thereof.

                  "Release" means any spilling, leaking, pumping, pouring,
         emitting, emptying, discharging, injecting, escaping, leaching, dumping
         or disposing into the environment (including the abandonment or
         discarding of barrels, containers and other closed receptacles
         containing any Materials of Environmental Concern).

                  "Reportable Event" means any of the events set forth in
         Section 4043(c) of ERISA, other than those events as to which the
         notice requirement has been waived by regulation.

                  "Required Lenders" means, at any time, Lenders having more
         than fifty percent (50%) of the Commitments (as such Commitments may be
         increased pursuant to Section 2.1(h)), or if the Commitments have been
         terminated, Lenders having more than fifty percent (50%) of the
         aggregate principal amount of the Obligations outstanding (taking into
         account in each case Participation Interests or obligation to
         participate therein); provided that the Commitments of, and outstanding
         principal amount of Obligations (taking into account Participation
         Interests therein) owing to, a Defaulting Lender shall be excluded for
         purposes hereof in making a determination of Required Lenders.

                  "Requirement of Law" means any law, treaty, rule or regulation
         or determination of an arbitrator or a court or other Governmental
         Authority, in each case applicable to or binding upon such Person or
         any of its material property is subject.

                  "Responsible Officer" means the Chief Executive Officer, the
         Chief Financial Officer, the Controller, the Chief Operating Officer,
         the Chief Accounting Officer and the Treasurer of the Domestic
         Borrower.



                                       30
<PAGE>   36

                  "Restricted Payment" means (i) any dividend or other
         distribution, direct or indirect, on account of any shares of any class
         of stock now or hereafter outstanding, except (A) a dividend payable
         solely in shares of that class to the holders of that class, (B)
         dividends and other distributions payable to a Credit Party, (C)
         dividends paid or payable to the shareholders of certain of the
         Founding Companies in respect of tax liabilities incurred under
         Subchapter S of the Internal Revenue Code on or before the Closing Date
         (whether such dividends are paid on, before or after the Closing Date)
         and (D) the repurchase of stock of a minority shareholder of one of the
         Founding Companies referred to in note 4g(1) to the unaudited pro forma
         as adjusted financial statements of the Domestic Borrower, as set forth
         on page F-8 of the Registration Statement, (ii) any redemption,
         retirement, sinking fund or similar payment, purchase or other
         acquisition for value, direct or indirect, of any shares of any class
         of stock now or hereafter outstanding, and (iii) any payment made to
         retire, or to obtain the surrender of, any outstanding warrants,
         options or other rights to acquire shares of any class of stock now or
         hereafter outstanding.

                  "Revolving Loan" means any Domestic Revolving Loan or any
         Canadian Revolving Loan.

                  "SEC" means the Securities and Exchange Commission and any
         successor Governmental Authority.

                  "S&P" means Standard & Poor's Ratings Group, a division of
         McGraw Hill, Inc., or any successor or assignee of the business of such
         division in the business of rating securities.

                  "Securitization Transaction" means any financing transaction
         or series of financing transactions that have been or may be entered
         into by a member of the Consolidated Group pursuant to which such
         member of the Consolidated Group may sell, convey or otherwise transfer
         to (i) a Subsidiary or affiliate (a "Securitization Subsidiary"), or
         (ii) any other Person, or may grant a security interest in, any
         receivables or interests therein secured by merchandise or services
         financed thereby (whether such receivables are then existing or arising
         in the future) of such member of the Consolidated Group, and any assets
         related thereto, including without limitation, all security interests
         in merchandise or services financed thereby, the proceeds of such
         receivables, and other assets which are customarily sold or in respect
         of which security interests are customarily granted in connection with
         securitization transactions involving such assets.

                  "Security Agreements" means the Domestic Security Agreement
         and the Canadian Security Agreement.

                  "Senior Subordinated Notes" means those 11 1/2% Senior
         Subordinated Notes of the Domestic Borrower due 2009 issued on April
         15, 1999, as amended, modified and extended.



                                       31
<PAGE>   37

                  "Single Employer Plan" means any Plan which is covered by
         Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
         Employer Plan.

                  "Stock Incentive Plan" means the Domestic Borrower's 1998
         Stock Incentive Plan described in the Registration Statement.

                  "Subordinated Debt" means (i) the Indebtedness evidenced by
         the Senior Subordinated Notes, and (ii) any other Indebtedness of a
         member of the Consolidated Group which by its terms is expressly
         subordinated in right of payment to the prior payment of the
         obligations under the Credit Agreement and the other Credit Documents
         on terms and conditions satisfactory to the Required Lenders.

                  "Subsidiary" means, as to any Person, (a) any corporation more
         than 50% of whose stock of any class or classes having by the terms
         thereof ordinary voting power to elect a majority of the directors of
         such corporation (irrespective of whether or not at the time, any class
         or classes of such corporation shall have or might have voting power by
         reason of the happening of any contingency) is at the time owned by
         such Person directly or indirectly through Subsidiaries, and (b) any
         partnership, association, joint venture or other entity in which such
         Person directly or indirectly through Subsidiaries has more than 50% of
         the voting interests at any time. Unless otherwise identified,
         "Subsidiary" or "Subsidiaries" shall mean Subsidiaries of the Domestic
         Borrower.

                  "Support Obligations" means, with respect to any Person,
         without duplication, any obligations of such Person (other than
         endorsements in the ordinary course of business of negotiable
         instruments for deposit or collection) guaranteeing or intended to
         guarantee any Indebtedness of any other Person in any manner, whether
         direct or indirect, and including without limitation any obligation,
         whether or not contingent, (i) to purchase any such Indebtedness or any
         Property constituting security therefor, (ii) to advance or provide
         funds or other support for the payment or purchase of any such
         Indebtedness or to maintain working capital, solvency or other balance
         sheet condition of such other Person (including without limitation keep
         well agreements, maintenance agreements, comfort letters or similar
         agreements or arrangements) for the benefit of any holder of
         Indebtedness of such other Person, (iii) to lease or purchase Property,
         securities or services primarily for the purpose of assuring the holder
         of such Indebtedness, or (iv) to otherwise assure or hold harmless the
         holder of such Indebtedness against loss in respect thereof, but
         specifically excluding guaranties or other assurances with respect to
         any Credit Party's performance obligations under bids or contracts made
         or entered into in the ordinary course of business (including, without
         limitation, guaranties in favor of sureties under performance bonds or
         the like and guaranties issued by Credit Parties in substitution for or
         in support of such guaranties issued prior to the Closing Date by the
         Founding Companies or their respective stockholders and principals).
         The amount of any Support Obligation hereunder shall (subject to any
         limitations set forth therein) be deemed to be an amount equal to the
         outstanding principal amount (or maximum principal amount, if larger)
         of the Indebtedness in respect of which such Support Obligation is
         made.



                                       32
<PAGE>   38

                  "Swingline Commitment" means the commitment of the Swingline
         Lender to make Swingline Loans in an aggregate principal amount at any
         time outstanding up to the Swingline Committed Amount and the
         commitment of the Domestic Lenders to purchase participation interests
         in the Swingline Loans up to their respective Domestic Revolving
         Commitment Percentage.

                  "Swingline Committed Amount" shall have the meaning assigned
         to such term in Section 2.1(c).

                  "Swingline Lender" means Bank of America.

                  "Swingline Loan" means a swingline revolving loan made by the
         Swingline Lender pursuant to the provisions of Section 2.1(c).

                  "Termination Date" means August 5, 2002, or if extended
         pursuant to the provisions of Section 2.1(e), such later date as to
         which the Termination Date may be extended.

                  "U.S. Dollars" and "US$" means dollars in lawful currency of
         the United States of America.

                  "Voting Stock" means, with respect to any Person, capital
         stock issued by such Person the holders of which are ordinarily, in the
         absence of contingencies, entitled to vote for the election of
         directors (or persons performing similar functions) of such Person,
         even though the right so to vote has been suspended by the happening of
         such a contingency.

         1.2      Computation of Time Periods.

                  For purposes of computation of periods of time hereunder, the
word "from" means "from and including" and the words "to" and "until" each mean
"to but excluding."

         1.3      Accounting Terms; Certain Calculations

         (a)      Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made by application of GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1; provided, however, if (a) the Domestic Borrower shall object to
determining such compliance on such basis at the time of delivery of such
financial statements due to any change in GAAP or the rules promulgated with
respect thereto or (b) the Domestic Administrative Agent or the Required Lenders
shall so object in writing within 30



                                       33
<PAGE>   39

days after delivery of such financial statements, then such calculations shall
be made on a basis consistent with the most recent financial statements
delivered by the Domestic Borrower to the Lenders as to which no such objection
shall have been made.

         (b)      Notwithstanding anything to the contrary contained in
subsection (a) above, the parties hereto agree that the financial covenants set
forth in Section 7.9 shall be calculated as follows (including, without
limitation, calculation of the Consolidated Total Leverage Ratio for the purpose
of the definition of "Applicable Percentage" set forth in Section 1.1 and
calculation of all such financial covenants for the purposes of Sections 8.3 and
8.4):

                  (i)      all such calculations shall be performed on a Pro
         Forma Basis with respect to any Acquisition or Divestiture occurring
         within such four quarter period (or, solely for the purposes of
         Sections 8.3 and 8.4, contemplated to occur within the fiscal quarter
         following such period);

                  (ii)     solely for the purpose of calculations to be
         performed on a Pro Forma Basis for the purposes of Section 8.4, any
         adjustments to pro forma consolidated income statement items
         attributable to an Acquisition shall be performed in accordance with
         Rule 11.02 of Regulation S-X promulgated by the SEC or otherwise
         consented to by both Administrative Agents and the Required Lenders;
         and

                  (iii)    all such calculations with respect to periods ending
         on or before June 30, 1999 shall be performed utilizing, to the extent
         applicable, the unaudited pro forma as adjusted financial statements
         for the fiscal quarters ended December 31, 1997, March 31, 1998, June
         30, 1998 and September 30, 1998.


                                    SECTION 2
                                CREDIT FACILITIES

         2.1      Commitments.

                  (a)      Domestic Revolving Commitment. During the Commitment
Period, subject to the terms and conditions hereof, each Domestic Lender
severally agrees to make revolving credit loans (the "Domestic Revolving
Loans") to the Domestic Borrower in U.S. Dollars from time to time in the amount
of such Domestic Lender's Domestic Revolving Commitment Percentage of such
Domestic Revolving Loans for the purposes hereinafter set forth; provided that
(i) with regard to the Domestic Lenders collectively, the aggregate principal
amount of Domestic Obligations outstanding at any time shall not exceed NINETY
MILLION U.S. DOLLARS (US$90,000,000) (as such amount may be reduced or increased
from time to time in accordance with the provisions hereof, the "Aggregate
Domestic Revolving Committed Amount"), (ii) with regard to each Domestic Lender
individually, such Domestic Lender's Domestic Revolving Commitment Percentage of
Domestic Obligations outstanding at any time



                                       34
<PAGE>   40

shall not exceed such Domestic Lender's Domestic Revolving Committed Amount, and
(iii) with regard to the Lenders collectively, the aggregate principal Dollar
Amount of Obligations outstanding at any time shall not exceed the Borrowing
Base. Domestic Revolving Loans may consist of Base Rate Loans or Eurodollar
Loans, or a combination thereof, as the Domestic Borrower may request, and may
be repaid and reborrowed in accordance with the provisions hereof.

                  (b)      Letter of Credit Commitment. During the Commitment
Period, subject to the terms and conditions hereof and of the LOC Documents, if
any, and such other terms and conditions which the Issuing Lender may reasonably
require, the Issuing Lender shall issue, and the Domestic Lenders shall
participate in, such Letters of Credit in U.S. Dollars as the Domestic Borrower
may request for its own account or for the account of another Domestic Credit
Party as provided herein, in a form acceptable to the Issuing Lender, for the
purposes hereinafter set forth; provided that (i) the aggregate amount of LOC
Obligations shall not exceed TWENTY MILLION U.S. DOLLARS (US$20,000,000) at any
time (as such amount may be reduced from time to time in accordance with the
provisions hereof, the "LOC Committed Amount"), (ii) with regard to the Domestic
Lenders collectively, the aggregate principal amount of Domestic Obligations
outstanding at any time shall not exceed the Aggregate Domestic Revolving
Committed Amount, (iii) with regard to each Domestic Lender individually, such
Domestic Lender's Domestic Revolving Commitment Percentage of Domestic
Obligations outstanding at any time shall not exceed such Domestic Lender's
Domestic Revolving Committed Amount, and (iv) with regard to the Lenders
collectively, the aggregate principal Dollar Amount of Obligations outstanding
at any time shall not exceed the Borrowing Base. Letters of Credit issued
hereunder shall not have an original expiry date more than one year from the
date of issuance or extension. If any Letter of Credit issued hereunder shall
have an expiry date, whether as originally issued or by extension, extending
beyond the Termination Date for Domestic Revolving Commitments, the Domestic
Borrower shall, on the Termination Date, either (i) cause such Letter of Credit
to be surrendered to the Issuing Lender, (ii) provide to the Issuing Lender a
back-to-back letter of credit in respect thereof reasonably satisfactory to the
Issuing Lender or (iii) provide cash collateral to the Issuing Lender in an
amount equal to the maximum amount available to be drawn under such Letter of
Credit. Each Letter of Credit shall comply with the related LOC Documents. The
issuance date of each Letter of Credit shall be a Business Day.

                  (c)      Swingline Commitment. During the Commitment Period,
subject to the terms and conditions hereof, the Swingline Lender agrees to make
certain revolving credit loans (the "Swingline Loans") to the Domestic Borrower
in U.S. Dollars from time to time for the purposes hereinafter set forth;
provided that (i) the aggregate principal amount of Swingline Loans shall not
exceed FIVE MILLION U.S. DOLLARS (US$5,000,000) (as such amount may be reduced
from time to time in accordance with the provisions hereof, the "Swingline
Committed Amount"), (ii) with regard to the Domestic Lenders collectively, the
aggregate principal amount of Domestic Obligations outstanding at any time shall
not exceed the Aggregate Domestic Revolving Committed Amount, and (iii) with
regard to the Lenders collectively, the aggregate principal Dollar Amount of
Obligations outstanding at any time shall not exceed the Borrowing Base.
Swingline Loans may consist of Base Rate Loans or Quoted



                                       35
<PAGE>   41

Rate Swingline Loans, or a combination thereof, as the Domestic Borrower may
request, and may be repaid and reborrowed in accordance with the provisions
hereof.

                  (d)      Canadian Revolving Commitment. During the Commitment
Period, subject to the terms and conditions hereof, each Canadian Lender
severally agrees to make revolving credit loans (the "Canadian Revolving Loans")
to the Canadian Borrowers in U.S. Dollars or Canadian Dollars from time to time
in the amount of such Canadian Lender's Canadian Revolving Commitment Percentage
of such Canadian Revolving Loans for the purposes hereinafter set forth;
provided that (i) with regard to the Canadian Lenders collectively, the
aggregate principal Dollar Amount of Canadian Obligations outstanding at any
time shall not exceed FIFTEEN MILLION U.S. DOLLARS (US$15,000,000) (as such
amount may be reduced from time to time in accordance with the provisions
hereof, the "Aggregate Canadian Revolving Committed Amount"), (ii) with regard
to each Canadian Lender individually, such Canadian Lender's Canadian Revolving
Commitment Percentage of the Dollar Amount of Canadian Obligations outstanding
at any time shall not exceed such Canadian Lender's Canadian Revolving Committed
Amount, and (iii) with regard to the Lenders collectively, the aggregate
principal Dollar Amount of Obligations outstanding at any time shall not exceed
the Borrowing Base. Canadian Revolving Loans denominated in Canadian Dollars
shall consist of Base Rate Loans. Canadian Revolving Loans denominated in U.S.
Dollars may consist of Base Rate Loans or Eurodollar Loans, or a combination
thereof, as the Canadian Borrowers may request. Canadian Revolving Loans may be
repaid and reborrowed in accordance with the provisions hereof.

The Canadian Administrative Agent shall give notice to the Domestic
Administrative Agent of each advance of a Canadian Revolving Loan (including
extensions and conversions thereof) and repayments thereof.

                  (e)      Canadian Bankers' Acceptance Commitment. During the
Commitment Period, subject to the terms and conditions hereof and of the BA
Documents, if any, and such other terms and conditions which the Canadian
Lenders may reasonably require, each Canadian Lender severally agrees to create
Bankers' Acceptances by accepting orders of the Canadian Borrowers presented to
it for acceptance equal to such Canadian Lender's Canadian Revolving Commitment
Percentage of such Bankers' Acceptances; provided that (i) with regard to the
Canadian Lenders collectively, the aggregate principal Dollar Amount of Canadian
Obligations outstanding at any time shall not exceed the Aggregate Canadian
Revolving Committed Amount, (ii) with regard to each Canadian Lender
individually, such Canadian Lender's Canadian Revolving Commitment Percentage of
the Dollar Amount of Canadian Obligations outstanding at any time shall not
exceed such Canadian Lender's Canadian Revolving Committed Amount, and (iii)
with regard to the Lenders collectively, the aggregate principal Dollar Amount
of Obligations outstanding at any time shall not exceed the Borrowing Base. The
Canadian Lenders may, but are not obligated to, purchase any of the Bankers'
Acceptances. For greater certainty, with respect to each Extension of Credit by
way of Bankers' Acceptances, each Bankers' Acceptance shall have the same term
and, upon sale, each Bankers' Acceptance shall be discounted. The creation and
maturity date for each Bankers' Acceptance shall be a Business Day and no
Bankers' Acceptance shall have a maturity date later than the Termination Date.
Subject to Section



                                       36
<PAGE>   42

2.8(e)(iii), it shall be the responsibility of each Canadian Lender to arrange,
in accordance with normal market practice, for the sale on each drawdown date of
the Bankers' Acceptances issued by a Canadian Borrower and to be accepted by a
Canadian Lender, failing which each Canadian Lender shall purchase such Bankers'
Acceptances at the Applicable BA Discount Rate. The Canadian Administrative
Agent shall give notice to the Domestic Administrative Agent of each advance by
way of a Bankers' Acceptance (including extensions and conversions thereof) and
repayments thereof.

                  (f)      Joint and Several Nature of Canadian Borrowers'
Obligations. The obligations of the Canadian Borrowers, as to the Canadian
Obligations hereunder, are joint and several in nature.

                  (g)      Extension of Termination Date. The Domestic Borrower
may request that the Domestic Lenders extend the Termination Date for Domestic
Revolving Commitments for an additional one year period, and the Canadian
Borrowers may request that the Canadian Lenders extend the Termination Date for
Canadian Revolving Commitments for an additional one year period as follows:

                           (i)      Request for Extension. Not more than 15
         months and not less than 60 days prior to the Termination Date, the
         applicable Borrower(s) may, by notice to the respective Administrative
         Agent, make written request of the respective Lenders to extend the
         Termination Date for an additional one year period. In any such case,
         the relevant Administrative Agent will give prompt notice to each of
         the relevant Lenders of its receipt of any such request for extension
         of the Termination Date. Each such Lender shall notify the
         Administrative Agent in writing not later than 30 days after receipt of
         such notice as to whether or not it will agree to extend the
         Termination Date as requested. Each decision by each such Lender shall
         be in its sole discretion; provided, however, that failure by any such
         Lender to respond within 30 days after receipt of such notice shall be
         deemed to constitute a refusal by such Lender to extension of the
         Termination Date. If Domestic Lenders holding more than 50% of the
         respective aggregate Domestic Revolving Commitments (as such Domestic
         Revolving Commitments may be increased pursuant to Section 2.1(g)(ii)
         below) timely agree in writing to extend the Termination Date for
         Domestic Revolving Commitments for an additional one year period, then,
         subject to the provisions and limitations of clause (ii) below, the
         Termination Date for Domestic Revolving Commitments shall be extended
         for an additional one year period. If Canadian Lenders holding more
         than 50% of the respective aggregate Canadian Revolving Commitments (as
         such Canadian Revolving Commitments may be increased pursuant to
         Section 2.1(g)(ii) below) timely agree in writing to extend the
         Termination Date for Canadian Revolving Commitments for an additional
         one year period, then, subject to the provisions and limitations of
         clause (ii) below, the Termination Date for Canadian Revolving
         Commitments shall be extended for an additional one year period.

                           (ii)     Lender Not Consenting. If any Lender does
         not timely agree in writing to extend the Termination Date applicable
         to such Lender's Commitments, then



                                       37
<PAGE>   43

         the Termination Date, as it relates to such Lender, shall not be
         extended, the Commitments of such Lender shall terminate on the
         Termination Date applicable to such Lender and any Loans made by such
         Lender and all accrued and unpaid interest thereon shall be due and
         payable on the Termination Date applicable to such Lender. Upon the
         termination of the Commitments of any Lender pursuant to the foregoing
         sentence, unless this Agreement is amended as provided in Section
         2.1(g)(v), the aggregate amount of the Commitments shall be reduced by
         the amount of such terminated Commitments and the Domestic Revolving
         Commitment Percentage and/or Canadian Revolving Commitment Percentage
         of each other Lender shall be adjusted accordingly.

                           (iii)    Other Lenders. No refusal by any Lender or
         Lenders to consent to any extension of the Termination Date shall
         affect the extension of the Termination Date as it may relate to the
         Commitment and Loans of any Lender which consents to such extension
         pursuant to Section 2.1(g)(i), and one or more Lenders may consent to
         the extension of the Termination Date as it relates to them
         notwithstanding any refusal by any other Lenders so to consent;
         provided that even as to the consenting Lenders the Termination Date
         will be extended only upon consent to such an extension by Lenders
         holding more than 50% of the respective aggregate Canadian Revolving
         Commitments in the case of the Canadian Lenders and the Domestic
         Revolving Commitments in the case of the Domestic Lenders (in each case
         as such Commitments may be increased pursuant to Section 2.1(g)(v)
         below).

                           (iv)     Termination of Commitment. If any Lender
         does not timely consent to the extension of the Termination Date
         pursuant to Section 2.1(g)(i) and no Loans are then outstanding, the
         applicable Borrower(s) may upon at least three (3) Business Days' prior
         notice to such Lender and to the relevant Administrative Agent
         terminate the Commitment of such Lender. Upon any such termination the
         Domestic Revolving Commitment Percentage and/or the Canadian Revolving
         Commitment Percentage of each other Lender shall be adjusted, if
         necessary, after giving effect to such termination and any increases in
         the aggregate amount of the Commitments under the provisions of Section
         2.1(g)(v).

                           (v)      Increase in Commitment of Other Lender or
         Lenders. If any Lender does not timely consent to the extension of the
         Termination Date applicable to such Lender pursuant to Section
         2.1(g)(i), upon the expiration of the Commitments of such Lender, or
         upon the termination of the Commitments of such Lender as provided in
         Section 2.1(g)(iv), the applicable Borrower(s) may offer each relevant
         Lender which has timely consented to the extension of the Termination
         Date pursuant to Section 2.1(g)(i) a reasonable opportunity to increase
         its Commitment by an amount equal to its pro-rata share (based on its
         Commitment before such increase) of the Commitment of the Lender which
         does not timely consent to the extension of the Termination Date
         pursuant to Section 2.1(g)(i). After giving such Lenders such an
         opportunity, the applicable Borrower(s) and the relevant Administrative
         Agent, acting on behalf of the relevant Lenders, shall amend this
         Credit Agreement to increase the Commitment of any Lender



                                       38
<PAGE>   44

         or Lenders that consent to an increase in their respective Commitments
         hereunder, and such amendment shall be binding on all of the Lenders,
         provided that such increase does not increase the aggregate amount of
         the Commitments to an amount greater than the aggregate amount of
         Commitments in effect immediately before such expiration or
         termination.

                           (vi)     Notice. The relevant Administrative Agent
         shall promptly advise each relevant Lender of any change in Domestic
         Revolving Commitment Percentages and/or the Canadian Revolving
         Commitment Percentages made pursuant to Section 2.1(g)(v) and shall
         promptly provide each of the relevant Lenders and the other
         Administrative Agent with a copy of any amendment made pursuant to
         Section 2.1(g)(v).

         (h)      Increase in Domestic Revolving Commitments. Subject to the
terms and conditions set forth herein, the Domestic Borrower may at any time
upon notice to the Domestic Administrative Agent increase the Domestic Revolving
Commitments by an amount equal to (i) TEN MILLION DOLLARS (US$10,000,000) plus
(ii) the amount by which the Aggregate Canadian Revolving Committed Amount is at
any time permanently reduced by the Domestic Borrower pursuant to Section
3.4(a), in the aggregate to an Aggregate Domestic Revolving Committed Amount of
up to One Hundred Fifteen Million U.S. Dollars (US$115,000,000); provided that

                           (A)      any such increase shall be in a minimum
         aggregate principal amount of US$5,000,000 and integral multiples of
         US$1,000,000 in excess thereof (or the remaining amount, if less),

                           (B)      if any Domestic Revolving Loans are
         outstanding at the time of any such increase, the Domestic Borrower
         shall make such payments and adjustments on the Domestic Revolving
         Loans (including payment of any break-funding amounts owing under
         Section 3.11) as necessary to give effect to the revised commitment
         percentages and commitment amounts,

                           (C)      the conditions to the making of an
         additional Domestic Revolving Loan provided in Section 5.2 shall be
         satisfied, and

                           (D)      the Domestic Borrower shall obtain
         commitments for the amount of the increase from existing Domestic
         Lenders or other banks or financial institutions reasonably acceptable
         to the Domestic Administrative Agent provided that such other
         commercial banks and financial institutions join in this Agreement as
         Domestic Lenders by joinder agreement or other arrangement reasonably
         acceptable to the Domestic Administrative Agent. In connection with any
         such increase in the Domestic Revolving Commitments, Schedule 2.1 shall
         be revised to reflect the modified commitments and commitment
         percentages of the Domestic Lenders, and the Domestic Borrower will
         provide in connection therewith supporting corporate resolutions, legal
         opinions,



                                       39
<PAGE>   45

         promissory notes and other items as may be reasonably requested by the
         Domestic Administrative Agent and the Domestic Lenders or prospective
         Domestic Lenders.

         2.2      Method of Borrowing.

                  (a)      Notice of Request for Extensions of Credit. The
applicable Borrower shall request an Extension of Credit hereunder by written
notice (or telephonic notice promptly confirmed in writing) as follows:

                           (i)      Domestic Revolving Loans. In the case of
         Domestic Revolving Loans, by the Domestic Borrower to the Domestic
         Administrative Agent not later than 11:00 A.M. (Charlotte, North
         Carolina time) on the date of the requested borrowing in the case of
         Base Rate Loans, and on the third Business Day prior to the date of the
         requested borrowing in the case of Eurodollar Loans. Each such request
         for borrowing shall be irrevocable and shall specify (A) that a
         Domestic Revolving Loan is requested, (B) the date of the requested
         borrowing (which shall be a Business Day), (C) the aggregate principal
         amount to be borrowed, and (D) whether the borrowing shall be comprised
         of Base Rate Loans, Eurodollar Loans or a combination thereof, and if
         Eurodollar Loans are requested, the Interest Period(s) therefor. A form
         of Notice of Borrowing is attached as Schedule 2.2(a)(i). The Domestic
         Administrative Agent shall give notice to each Domestic Lender promptly
         upon receipt of each Notice of Borrowing pursuant to this Section
         2.2(a)(i), the contents thereof and each Domestic Lender's share of any
         borrowing to be made pursuant thereto.

                           (ii)     Letters of Credit. In the case of Letters of
         Credit, by the Domestic Borrower to the Issuing Lender with a copy to
         the Domestic Administrative Agent not later than 11:00 A.M. (Charlotte,
         North Carolina time) on the third Business Day prior to the date of the
         requested issuance or extension (or such shorter period as may be
         agreed by the Issuing Lender). Each such request for issuance or
         extension of a Letter of Credit shall be irrevocable and shall specify,
         among other things, (A) that a Letter of Credit is requested, (B) the
         date of the requested issuance or extension, (C) the type, amount,
         expiry date and terms on which the Letter of Credit is to be issued or
         extended, and (D) the beneficiary. A form of Notice of Request for
         Letter of Credit is attached as Schedule 2.2(a)(ii).

                           (iii)    Swingline Loans. In the case of Swingline
         Loans, by the Domestic Borrower to the Swingline Lender with a copy to
         the Domestic Administrative Agent not later than 11:00 A.M. (Charlotte,
         North Carolina time) on the Business Day of the requested borrowing.
         Each such request for borrowing shall be irrevocable and shall specify
         (A) that a Swingline Loan is requested, (B) the date of the requested
         borrowing (which shall be a Business Day), (C) the aggregate principal
         amount to be borrowed, and (D) the interest rate option and maturity
         requested therefor. A form of Notice of Borrowing is attached as
         Schedule 2.2(a)(iii). Notwithstanding the foregoing, however, in the
         event that an "auto borrow" or "zero balance" or similar arrangement
         shall then be in place with



                                       40
<PAGE>   46

         the Swingline Lender, the Domestic Borrower shall request Swingline
         Loans pursuant to such alternative notice arrangements, if any,
         provided thereunder or in connection therewith. Each Swingline Loan
         shall have a maturity date as the Domestic Borrower may request and the
         Swingline Lender may agree.

                           (iv)     Canadian Revolving Loans. In the case of the
         Canadian Revolving Loans, by a Canadian Borrower to the Canadian
         Administrative Agent not later than 10:00 A.M. (Toronto, Ontario time)
         on the Business Day prior to the date of requested borrowing in the
         case of Base Rate Loans, and on the third Business Day prior to the
         date of requested borrowing in the case of Eurodollar Loans. Each such
         request for borrowing shall be irrevocable and shall specify (A) that a
         Canadian Revolving Loan is requested, (B) the aggregate principal
         amount and applicable currency to be borrowed, and (C) whether the
         borrowing shall be comprised of Base Rate Loans, Eurodollar Loans or a
         combination thereof, and if Eurodollar Loans are requested, the
         Interest Period(s) therefor. A form of Notice of Borrowing is attached
         as Schedule 2.2(a)(iv). The Canadian Administrative Agent shall give
         notice to each Canadian Lender promptly upon receipt of each such
         Notice of Borrowing pursuant to this clause (iv), the contents thereof
         and each such Canadian Lender's share of any borrowing to be made
         pursuant thereto.

                           (v)      Canadian Bankers' Acceptances. In the case
         of Bankers' Acceptances, by a Canadian Borrower to the Canadian
         Administrative Agent not later than 10:00 A.M. (Toronto, Ontario time)
         on the second Business Day prior to the date requested for creation of
         the Bankers' Acceptance. Each such request shall be irrevocable and
         shall specify (A) that creation of a Bankers' Acceptance is requested,
         (B) the aggregate Face Amount and the applicable term date of 30, 60,
         90 or 180 days therefor, and shall be accompanied by the Acceptance Fee
         relating thereto (unless otherwise withheld pursuant to Section
         2.8(e)(ii)). A form of Notice of Borrowing is attached as Schedule
         2.2(a)(v). The Canadian Administrative Agent shall give notice to each
         Canadian Lender promptly upon receipt of each such Notice of Borrowing
         relating to creation, drawdown, continuation or conversion pursuant
         this clause (v), the contents thereof and each Canadian Lender's share
         of the Bankers' Acceptances to be created thereby.

                  (b)      Minimum Amounts. Each Revolving Loan advance shall be
in a minimum principal amount of US$1,000,000, in the case of Eurodollar Loans,
or US$1,000,000 (or, if less, the remaining Aggregate Canadian Revolving
Committed Amount in the case of Canadian Revolving Loans, or the Aggregate
Domestic Revolving Committed Amount in the case of Domestic Revolving Loans), in
the case of Base Rate Loans, and integral multiples of US$250,000 in excess
thereof. Each Swingline Loan advance shall be in a minimum principal amount of
US$1,000,000 and integral multiples of US$100,000 in excess thereof (or the
remaining amount of the Swingline Committed Amount, if less) provided that in
the event that an "auto borrow" or "zero balance" or similar arrangement shall
then be in place with the Swingline Lender, each Swingline Loans advance shall
be in such minimum amounts, if any, provided by such agreement. Each request for
creation of Bankers' Acceptances shall be in a minimum aggregate principal
amount of CDN$1,000,000 and integral multiples thereof,



                                       41
<PAGE>   47

provided that (i) the minimum Face Amount of each Bankers' Acceptance created
hereunder shall be in a minimum Face Amount of CDN$100,000 and integral
multiples thereof, and (ii) the amount of any request for Bankers' Acceptances
may be rounded by the Canadian Administrative Agent, in its discretion, to
provide for Face Amounts for each Canadian Lender in a minimum principal amount
of CDN$100,000 and integral multiples thereof.

                  (c)      Information Not Provided. If in connection with any
such request for a Revolving Loan, the applicable Borrower shall fail to specify
(i) an applicable Interest Period in the case of a Eurodollar Loan, the
applicable Borrower shall be deemed to have requested an Interest Period of one
month, or (ii) the type of loan requested in the case of a Revolving Loan or a
Swingline Loan, the applicable Borrower shall be deemed to have requested a Base
Rate Loan.

                  (d)      Maximum Number of Eurodollar Loans. In connection
with any request for a Revolving Loan, (i) Domestic Revolving Loans may be
comprised of no more than five (5) Eurodollar Loans outstanding at any time and
(ii) Canadian Revolving Loans denominated in U.S. Dollars may be comprised of no
more than five (5) Eurodollar Loans outstanding at any time. For purposes
hereof, Eurodollar Loans with separate or different Interest Periods will be
considered as separate Eurodollar Loans even if their Interest Periods expire on
the same date.

         2.3      Interest.

         Subject to Section 3.1, the Loans hereunder shall bear interest at a
per annum rate, payable in arrears on each applicable Interest Payment Date (or
at such other times as may be specified herein), as follows:

                  (a)      Base Rate Loans. During such periods as the Loans
shall be comprised of Base Rate Loans, the sum of the Base Rate plus the
Applicable Percentage;

                  (b)      Eurodollar Loans. During such periods as the Loans
shall be comprised of Eurodollar Loans, the sum of the Eurodollar Rate plus the
Applicable Percentage; and

                  (c)      Quoted Rate Swingline Loans. During such periods as
the Swingline Loans shall be comprised of Quoted Rate Swingline Loans, the
Quoted Rate.

         2.4      Repayment.

                  (a)      Domestic Revolving Loans. The principal amount of all
Domestic Revolving Loans shall be due and payable in full on the Termination
Date.

                  (b)      Swingline Loans. The principal amount of all
Swingline Loans shall be due and payable in full on the Termination Date.

                  (c)      Canadian Revolving Loans. The principal amount of all
Canadian Revolving Loans shall be due and payable in full on the Termination
Date.



                                       42
<PAGE>   48

         2.5      Notes.

         Domestic Revolving Loans and Swingline Loans shall be evidenced by the
Domestic Revolving Notes. Canadian Revolving Loans shall be evidenced by the
Canadian Revolving Notes.

         2.6      Additional Provisions relating to Letters of Credit.

         (a)      Reports. The Issuing Lender will provide to the Domestic
Administrative Agent at least monthly, and more frequently upon request, a
detailed summary report on each Letter of Credit and the activity thereon, in
form and substance acceptable to the Domestic Administrative Agent. In addition,
the Issuing Lender will provide to the Domestic Administrative Agent for
dissemination to the Domestic Lenders at least quarterly, and more frequently
upon request, a detailed summary report on each Letter of Credit and the
activity thereon, including, among other things, the Domestic Credit Party for
whose account the Letter of Credit is issued, the beneficiary, the face amount,
and the expiry date. The Issuing Lender will provide copies of each Letter of
Credit to the Domestic Administrative Agent and the Domestic Lenders promptly
upon request.

         (b)      Participation. Each Domestic Lender, with respect to the
Existing Letters of Credit, hereby purchases a participation interest in the
Existing Letters of Credit, and with respect to Letters of Credit issued on or
after the Closing Date, upon issuance of a Letter of Credit, shall be deemed to
have purchased without recourse a risk participation from the Issuing Lender in
such Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its pro rata share of the obligations under such Letter of
Credit (based on the respective Domestic Revolving Commitment Percentages of the
Domestic Lenders) and shall absolutely, unconditionally and irrevocably assume,
as primary obligor and not as surety, and be obligated to pay to the Issuing
Lender therefor and discharge when due, its pro rata share of the obligations
arising under such Letter of Credit. Without limiting the scope and nature of
each Domestic Lender's participation in any Letter of Credit, to the extent that
the Issuing Lender has not been reimbursed as required hereunder or under any
such Letter of Credit, each Domestic Lender shall pay to the Issuing Lender its
pro rata share of such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) hereof. The obligation of each Domestic Lender to
so reimburse the Issuing Lender shall be absolute and unconditional and shall
not be affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Domestic Borrower to reimburse the Issuing Lender
under any Letter of Credit, together with interest as hereinafter provided.

         (c)      Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Domestic Borrower. Unless
the Domestic Borrower shall immediately notify the Issuing Lender that it
intends to otherwise reimburse the Issuing Lender for such drawing, the Domestic
Borrower shall be deemed to have requested that the Domestic Lenders



                                       43
<PAGE>   49

make a Domestic Revolving Loan in the amount of the drawing as provided in
subsection (d) below on the related Letter of Credit, the proceeds of which will
be used to satisfy the related reimbursement obligations. The Domestic Borrower
promises to reimburse the Issuing Lender on the day of drawing under any Letter
of Credit (either with the proceeds of a Domestic Revolving Loan obtained
hereunder or otherwise) in same day funds. If the Domestic Borrower shall fail
to reimburse the Issuing Lender as provided hereinabove, the unreimbursed amount
of such drawing shall bear interest at a per annum rate equal to the Base Rate
for Domestic Revolving Loans plus the sum of (i) the Applicable Percentage and
(ii) two percent (2%). The Domestic Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of setoff, counterclaim or defense to payment the
Domestic Borrower may claim or have against the Issuing Lender, the Domestic
Administrative Agent, the Lenders, the beneficiary of the Letter of Credit drawn
upon or any other Person, including without limitation any defense based on any
failure of the Domestic Borrower or any other Credit Party to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Lender will promptly notify the other Domestic
Lenders of the amount of any unreimbursed drawing and each Domestic Lender shall
promptly pay to the Domestic Administrative Agent for the account of the Issuing
Lender in U.S. Dollars and in immediately available funds, the amount of such
Domestic Lender's Domestic Revolving Commitment Percentage of such unreimbursed
drawing. Such payment shall be made on the day such notice is received by such
Domestic Lender from the Issuing Lender if such notice is received at or before
2:00 P.M. (Charlotte, North Carolina time) otherwise such payment shall be made
at or before 12:00 Noon (Charlotte, North Carolina time) on the Business Day
next succeeding the day such notice is received. If such Domestic Lender does
not pay such amount to the Issuing Lender in full upon such request, such
Domestic Lender shall, on demand, pay to the Domestic Administrative Agent for
the account of the Issuing Lender interest on the unpaid amount during the
period from the date of such drawing until such Domestic Lender pays such amount
to the Issuing Lender in full at a rate per annum equal to, if paid within two
(2) Business Days of the date that such Domestic Lender is required to make
payments of such amount pursuant to the preceding sentence, the Federal Funds
Rate and thereafter at a rate equal to the Base Rate for Domestic Revolving
Loans. Each Domestic Lender's obligation to make such payment to the Issuing
Lender, and the right of the Issuing Lender to receive the same, shall be
absolute and unconditional, shall not be affected by any circumstance whatsoever
and without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or the
acceleration of the obligations of the Domestic Borrower hereunder and shall be
made without any offset, abatement, withholding or reduction whatsoever.
Simultaneously with the making of each such payment by a Domestic Lender to the
Issuing Lender, such Domestic Lender shall, automatically and without any
further action on the part of the Issuing Lender or such Domestic Lender,
acquire a participation in an amount equal to such payment (excluding the
portion of such payment constituting interest owing to the Issuing Lender) in
the related unreimbursed drawing portion of the LOC Obligation and in the
interest thereon and in the related LOC Documents, and shall have a claim
against the Domestic Borrower with respect thereto.

         (d)      Repayment with Domestic Revolving Loans. On any day on which
the Domestic Borrower shall have requested, or been deemed to have requested, a
Domestic Revolving Loan



                                       44
<PAGE>   50

advance to reimburse a drawing under a Letter of Credit, the Domestic
Administrative Agent shall give notice to the Domestic Lenders that a Domestic
Revolving Loan has been requested or deemed requested by the Domestic Borrower
to be made in connection with a drawing under a Letter of Credit, in which case
a Domestic Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
Loans to the extent the Domestic Borrower has complied with the procedures of
Section 2.2(a)(i) with respect thereto) shall be immediately made to the
Domestic Borrower by all Domestic Lenders (notwithstanding any termination of
the Commitments pursuant to Section 9.2) pro rata based on the respective
Domestic Revolving Commitment Percentages of the Domestic Lenders (determined
before giving effect to any termination of the Commitments pursuant to Section
9.2) and the proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. Each such Domestic Lender hereby
irrevocably agrees to make its pro rata share of each such Domestic Revolving
Loan immediately upon any such request or deemed request in the amount, in the
manner and on the date specified in the preceding sentence notwithstanding (i)
the amount of such borrowing may not comply with the minimum amount for advances
of Domestic Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5.2 are then satisfied, (iii) whether a Default
or an Event of Default then exists, (iv) failure for any such request or deemed
request for Domestic Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which Domestic
Revolving Loans are otherwise permitted to be made hereunder or (vi) any
termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Domestic Revolving
Loan cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Domestic Borrower or any Credit
Party), then each such Domestic Lender hereby agrees that it shall forthwith
purchase (as of the date such borrowing would otherwise have occurred, but
adjusted for any payments received from the Domestic Borrower on or after such
date and prior to such purchase) from the Issuing Lender such participation in
the outstanding LOC Obligations as shall be necessary to cause each such
Domestic Lender to share in such LOC Obligations ratably (based upon the
respective Domestic Revolving Commitment Percentages of the Domestic Lenders
(determined before giving effect to any termination of the Commitments pursuant
to Section 9.2)), provided that in the event such payment is not made on the day
of drawing, such Domestic Lender shall pay in addition to the Issuing Lender
interest on the amount of its unfunded Participation Interest at a rate equal
to, if paid within two (2) Business Days of the date of drawing, the Federal
Funds Rate, and thereafter at the Base Rate for Domestic Revolving Loans.

         (e)      Designation of other Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including without limitation Section 2.2(a)(ii), a Letter of Credit issued
hereunder may contain a statement to the effect that such Letter of Credit is
issued for the account of a Domestic Credit Party other than the Domestic
Borrower, provided that notwithstanding such statement, the Domestic Borrower
shall be the actual account party for all purposes of this Credit Agreement for
such Letter of Credit and such statement shall not affect the Domestic
Borrower's reimbursement obligations hereunder with respect to such Letter of
Credit.



                                       45
<PAGE>   51

         (f)      Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.

         (g)      Uniform Customs and Practices. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits (the "UCP") or the International Standby Practices 1998 (the "ISP98"),
in either case as published as of the date of issue by the International Chamber
of Commerce, in which case the UCP or the ISP98, as applicable, may be
incorporated therein and deemed in all respects to be a part thereof.

         (h)      Indemnification; Nature of Issuing Lender's Duties.

                  (i)      In addition to its other obligations under this
         Section 2.6, the Domestic Borrower hereby agrees to protect, indemnify,
         pay and save the Issuing Lender harmless from and against any and all
         claims, demands, liabilities, damages, losses, costs, charges and
         expenses (including reasonable attorneys' fees) that the Issuing Lender
         may incur or be subject to as a consequence, direct or indirect, of (A)
         the issuance of any Letter of Credit or (B) the failure of the Issuing
         Lender to honor a drawing under a Letter of Credit as a result of any
         act or omission, whether rightful or wrongful, of any present or future
         de jure or de facto government or governmental authority (all such acts
         or omissions, herein called "Government Acts").

                  (ii)     As between the Domestic Borrower and the Issuing
         Lender, the Domestic Borrower shall assume all risks of the acts,
         omissions or misuse of any Letter of Credit by the beneficiary thereof.
         The Issuing Lender shall not be responsible: (A) for the form,
         validity, sufficiency, accuracy, genuineness or legal effect of any
         document submitted by any party in connection with the application for
         and issuance of any Letter of Credit, even if it should in fact prove
         to be in any or all respects invalid, insufficient, inaccurate,
         fraudulent or forged; (B) for the validity or sufficiency of any
         instrument transferring or assigning or purporting to transfer or
         assign any Letter of Credit or the rights or benefits thereunder or
         proceeds thereof, in whole or in part, that may prove to be invalid or
         ineffective for any reason; (C) for errors, omissions, interruptions or
         delays in transmission or delivery of any messages, by mail, cable,
         telegraph, telex or otherwise, whether or not they be in cipher; (D)
         for any loss or delay in the transmission or otherwise of any document
         required in order to make a drawing under a Letter of Credit or of the
         proceeds thereof; and (E) for any consequences arising from causes
         beyond the control of the Issuing Lender, including, without
         limitation, any Government Acts. None of the above shall affect,
         impair, or prevent the vesting of the Issuing Lender's rights or powers
         hereunder.

                  (iii)    In furtherance and extension and not in limitation of
         the specific provisions hereinabove set forth, any action taken or
         omitted by the Issuing Lender, under or in connection with any Letter
         of Credit or the related certificates, if taken or omitted in good
         faith, shall not put the Issuing Lender under any resulting liability
         to the Domestic Borrower or any other Credit Party. It is the intention
         of the parties that this Credit Agreement shall



                                       46
<PAGE>   52

         be construed and applied to protect and indemnify the Issuing Lender
         against any and all risks involved in the issuance of the Letters of
         Credit, all of which risks are hereby assumed by the Domestic Borrower
         (on behalf of itself and each of the other Credit Parties), including,
         without limitation, any and all Government Acts. The Issuing Lender
         shall not, in any way, be liable for any failure by the Issuing Lender
         or anyone else to pay any drawing under any Letter of Credit as a
         result of any Government Acts or any other cause beyond the control of
         the Issuing Lender.

                  (iv)     Nothing in this subsection (h) is intended to limit
         the reimbursement obligations of the Domestic Borrower contained in
         subsection (d) above. The obligations of the Domestic Borrower under
         this subsection (h) shall survive the termination of this Credit
         Agreement. No act or omissions of any current or prior beneficiary of a
         Letter of Credit shall in any way affect or impair the rights of the
         Issuing Lender to enforce any right, power or benefit under this Credit
         Agreement.

                  (v)      Notwithstanding anything to the contrary contained in
         this subsection (h), the Domestic Borrower shall have no obligation to
         indemnify the Issuing Lender in respect of any liability incurred by
         the Issuing Lender (A) arising out of the gross negligence or willful
         misconduct of the Issuing Lender, as determined by a court of competent
         jurisdiction, or (B) caused by the Issuing Lender's failure to pay
         under any Letter of Credit after presentation to it of a request
         strictly complying with the terms and conditions of such Letter of
         Credit, as determined by a court of competent jurisdiction, unless such
         payment is prohibited by any law, regulation, court order or decree.

         (i)      Responsibility of Issuing Lender. It is expressly understood
and agreed that the obligations of the Issuing Lender hereunder to the Lenders
are only those expressly set forth in this Credit Agreement and that the Issuing
Lender shall be entitled to assume that the conditions precedent set forth in
Section 5.2 have been satisfied unless it shall have acquired actual knowledge
that any such condition precedent has not been satisfied; provided, however,
that nothing set forth in this Section 2.6 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section 2.6 in
the event that it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit constituted gross negligence or
willful misconduct on the part of the Issuing Lender.

         (j)      Conflict with LOC Documents. Solely as among the parties
hereto, in the event of any conflict between this Credit Agreement and any LOC
Document (including any letter of credit application), this Credit Agreement
shall control.

         2.7      Additional Provisions relating to Swingline Loans.

         The Swingline Lender may, at any time, in its sole discretion, by
written notice to the Domestic Borrower and the Domestic Lenders, demand
repayment of its Swingline Loans by way of a Domestic Revolving Loan advance, in
which case the Domestic Borrower shall be deemed to



                                       47
<PAGE>   53

have requested a Domestic Revolving Loan advance comprised solely of Base Rate
Loans in the amount of such Swingline Loans; provided, however, that any such
demand shall be deemed to have been given one Business Day prior to the
Termination Date and on the date of the occurrence of any Event of Default
described in Section 9.1 and upon acceleration of the indebtedness hereunder and
the exercise of remedies in accordance with the provisions of Section 9.2. Each
Domestic Lender hereby irrevocably agrees to make its Domestic Revolving
Commitment Percentage of each such Domestic Revolving Loan in the amount, in the
manner and on the date specified in the preceding sentence notwithstanding (i)
the amount of such borrowing may not comply with the minimum amount for advances
of Domestic Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5.2 are then satisfied, (iii) whether a Default
or an Event of Default then exists, (iv) failure of any such request or deemed
request for Domestic Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which Domestic
Revolving Loans are otherwise permitted to be made hereunder or (vi) any
termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Domestic Revolving
Loan cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Domestic Borrower or any other
Credit Party), then each Domestic Lender hereby agrees that it shall forthwith
purchase (as of the date such borrowing would otherwise have occurred, but
adjusted for any payments received from the Domestic Borrower on or after such
date and prior to such purchase) from the Swingline Lender such Participation
Interests in the outstanding Swingline Loans as shall be necessary to cause each
such Domestic Lender to share in such Swingline Loans ratably based upon its
Domestic Revolving Commitment Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 3.4), provided that (A) all
interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective Participation
Interest is funded and (B) at the time any purchase of Participation Interests
pursuant to this sentence is actually made, the purchasing Domestic Lender shall
be required to pay to the Swingline Lender, to the extent not paid to the
Swingline Lender by the Domestic Borrower in accordance with the terms of
Section 2.4(b), interest on the principal amount of Participation Interests
purchased for each day from and including the day upon which such borrowing
would otherwise have occurred to but excluding the date of payment for such
Participation Interests, at the rate equal to the Federal Funds Rate.

         2.8      Additional Provisions relating to Canadian Bankers'
Acceptances.

         (a)      Form.

                  (i)      To facilitate the acceptance of Bankers' Acceptances
         hereunder, each of the Canadian Borrowers hereby appoints each Canadian
         Lender as its attorney to sign and endorse on its behalf, as and when
         considered necessary by such Canadian Lender, an appropriate number of
         orders in the form prescribed by that Canadian Lender.

                  (ii)     Each Canadian Borrower may, at its option, execute
         any order in handwriting or by the facsimile or mechanical signature of
         any of its authorized officers,



                                       48
<PAGE>   54

         and the Canadian Lenders are hereby authorized to accept or pay, as the
         case may be, any order of such Canadian Borrower which purports to bear
         such a signature notwithstanding that any such individual has ceased to
         be an authorized officer of such Canadian Borrower (any such order or
         Bankers' Acceptance shall be as valid and binding on such Canadian
         Borrower as if the individual which signed the order or Bankers'
         Acceptance) were an authorized officer at the date of issue of the
         order or Bankers' Acceptance.

                  (iii)    Any order signed by a Canadian Lender as attorney for
         a Canadian Borrower, whether signed in handwriting or by the facsimile
         or mechanical signature of an authorized officer of a Canadian Lender,
         may be dealt with by the Canadian Administrative Agent or any Canadian
         Lender to all intents and purposes and shall bind the Canadian Borrower
         as if duly signed and issued by the Canadian Borrower.

                  (iv)     The receipt by the Canadian Administrative Agent of a
         notice under Section 2.2(a)(v) requesting the issuance of a Bankers'
         Acceptance shall be each Canadian Lender's sufficient authority to
         execute, and each Canadian Lender shall, subject to the terms and
         conditions of this Agreement, execute orders in accordance with such
         request, and the orders so executed shall thereupon be deemed to have
         been presented for acceptance.

         (b)      Safekeeping of Orders. Any executed orders to be used as
Bankers' Acceptances which are delivered to a Canadian Lender shall be held in
safekeeping with the same degree of care as if they were such Canadian Lender's
own property, and shall be kept at the place at which such orders are ordinarily
held by such Canadian Lender, provided that such Canadian Lender shall not be
deemed to be an insurer thereof.

         (c)      Maturity/Continuations. The Canadian Borrowers shall pay to
the Canadian Administrative Agent, and there shall become due and payable, on
the earlier of (i) 1:00 P.M. (Toronto, Ontario time) on the maturity date for
each Bankers' Acceptance and (ii) the occurrence of an Event of Default and
acceleration of the Loans by the Domestic Administrative Agent pursuant to
Section 9.2, an amount in Canadian Dollars in same day funds equal to the Face
Amount of such Bankers' Acceptance (notwithstanding that any Canadian Lender
which accepted any such Bankers' Acceptance may be the holder thereof at
maturity); provided, however, with respect to clause (i) above, subject to
Section 3.7 and all other applicable provisions hereof and provided that the
applicable Canadian Borrower has, by giving notice in accordance with subsection
2.2(a)(v) or 3.2, requested the Canadian Lenders to accept its orders to replace
all or a portion of outstanding Bankers' Acceptances as they mature, each
Canadian Lender shall, on the maturity of such Bankers' Acceptances and
concurrent with the payment by the Canadian Borrowers to the Canadian Lenders of
the Face Amount of such Bankers' Acceptances or the portion thereof to be
replaced, accept the Canadian Borrowers' order(s) having an aggregate Face
Amount equal to its pro rata share of the aggregate Face Amount of the matured
Bankers' Acceptances or the portion thereof to be replaced. Notwithstanding
anything to the contrary herein or in any other Credit Document, upon the
occurrence of an Event of Default and acceleration of the Loans by the Domestic
Administrative Agent pursuant to Section 9.2, an amount equal to the BA
Obligations shall, without demand upon or further notice to the



                                       49
<PAGE>   55

Canadian Borrowers, be deemed to have been paid or disbursed by the Canadian
Lenders under the applicable Bankers' Acceptances (notwithstanding that such
amounts may not in fact have been so paid or disbursed), and a Canadian
Revolving Loan at the rate of interest then applicable to Canadian Revolving
Loans which are Base Rate Loans in the amount of such payment or disbursement to
have been made and accepted, which Loan shall be immediately due and payable. In
lieu of the foregoing, at the Domestic Administrative Agent's election, after an
Event of Default has occurred and the Loans have been accelerated by the
Domestic Administrative Agent pursuant to Section 9.2, upon the Domestic
Administrative Agent's demand, the applicable Canadian Borrower shall deliver to
Canadian Administrative Agent cash collateral equal to the BA Obligations at
such time. Any such cash collateral and/or any amounts received by Canadian
Administrative Agent in payment of the Loan made pursuant to this section shall
be held by Canadian Administrative Agent, for the benefit of the Canadian
Lenders and shall be retained by the Canadian Administrative Agent, for the
benefit of Canadian Lenders, as collateral security in respect of the BA
Obligations as provided in Section 9.2. Such amounts may be applied to reimburse
Canadian Lenders for drawings or payments under or pursuant to Bankers'
Acceptances which have been paid (or to reimburse any Canadian Lender if any
Bankers' Acceptances have been purchased by a Canadian Lender). Any amounts
remaining in any cash collateral account established pursuant to this section
following payment in full of all Obligations and termination of this Agreement
shall be returned to the applicable Canadian Borrower.

         (d)      Repayments Prior to Maturity. Except as required by Section
3.3(b), no repayment of a Bankers' Acceptance may be made by the Canadian
Borrowers to the Canadian Lenders prior to the maturity date thereof. Any such
repayment required by Section 3.3(b) shall be made to the Canadian
Administrative Agent and such monies shall be held by the Canadian
Administrative Agent, in a cash collateral account hypothecated to the Canadian
Administrative Agent, to be paid to each of the Canadian Lenders on the maturity
date of the Bankers' Acceptances which have been accepted by it. The Canadian
Borrowers shall be entitled to the benefit of any interest accruing thereon, in
each case, on the respective maturity date of each Bankers' Acceptance in
respect of which repayment is made, and upon the maturity of each such Bankers'
Acceptance the Canadian Lenders shall apply the interest thereon in payment of
amounts owed by the Canadian Borrowers hereunder. Any such payment by the
Canadian Borrowers to the Canadian Lenders shall satisfy the Canadian Borrowers'
obligations under the Bankers' Acceptance to which it relates and the Canadian
Lender which has accepted such Bankers' Acceptance shall thereafter be solely
responsible for the payment of such Bankers' Acceptance.

         (e)      Funding of Bankers' Acceptances.

                  (i)      Subject to subsections (ii) and (iii) below, each
         Canadian Lender shall, not later than 1:00 P.M., Toronto, Ontario time,
         on the date of creation of the Bankers' Acceptances, accept orders of
         the Canadian Borrowers which are presented to it for acceptance in an
         amount equal to each such Canadian Lender's Canadian Revolving
         Commitment Percentage of the aggregate Face Amounts of Bankers'
         Acceptances created on such date; provided, however, that if the Face
         Amount of a Banker's Acceptance, which



                                       50
<PAGE>   56

         would otherwise be accepted by a Canadian Lender, would not be
         CD$100,000 or a larger multiple thereof, such Face Amount shall be
         increased or reduced by the Canadian Administrative Agent in its
         discretion to the nearest multiple of CD$100,000. Subject to the
         provisions hereof, the Canadian Administrative Agent shall be
         responsible for making all necessary arrangements with each of the
         Canadian Lenders with respect to the acceptance of Bankers'
         Acceptances.

                  (ii)     Each Canadian Lender shall transfer to the Canadian
         Administrative Agent for value on such creation date immediately
         available Canadian Dollars in an aggregate amount equal to the BA
         Discount Proceeds of all Bankers' Acceptances accepted and sold or
         purchased by the Canadian Lender on such date net of the applicable
         Acceptance Fee and net of the amount required to pay any of its
         previously accepted Bankers' Acceptances that are maturing on such date
         or its percentage of any Base Rate Loan that is being converted to
         Bankers' Acceptances on such date.

                  (iii)    Subject to Section 3.7, in the sole judgment of a
         Canadian Lender, if such Canadian Lender is unable to create a Bankers'
         Acceptance in accordance with this Agreement, such Canadian Lender
         shall, if such Canadian Lender is named on Schedule I or Schedule II to
         the Bank Act (Canada), give an irrevocable notice to such effect to the
         Canadian Administrative Agent and the Canadian Borrowers prior to 10:00
         A.M., Toronto, Ontario time, on the date of the requested creation of
         the Bankers' Acceptances. Any Canadian Lender which is unable to create
         a Bankers' Acceptance in accordance with this Agreement shall make
         available to the Canadian Borrowers not later than 1:00 P.M., Toronto,
         Ontario time, on the date of such requested Bankers' Acceptance a
         Canadian Dollar loan in a principal amount equal to the BA Discount
         Proceeds of such Canadian Lender's pro rata share of the aggregate Face
         Amounts of Bankers' Acceptances to be created on such date, such loan
         to be funded in the same manner as the Bankers' Acceptances provided by
         the other Canadian Lenders. Such loan shall have the same term as the
         Bankers' Acceptance for which it is a substitute and shall bear such
         interest per annum throughout the term thereof as shall permit such
         Canadian Lender to obtain the same effective rate as if such Canadian
         Lender had accepted and purchased a Bankers' Acceptance at the same
         Acceptance Fee and pricing in which the Canadian Administrative Agent
         would have accepted and purchased on the bid side of the market, such
         Bankers' Acceptance at approximately 1:00 P.M., Toronto, Ontario time,
         on the date such loan is made. The Canadian Borrower hereby agrees that
         if such loan is made by a Canadian Lender interest shall be payable in
         advance on the date of such loan by deducting the interest payable in
         respect thereof from the principal amount of such loan. Except as
         described above, such substitute loan shall for all purposes be treated
         as an Extension of Credit by way of a Bankers' Acceptance (including,
         without limitation, for purposes of the definition of "BA Obligations"
         and Sections 2.8(c), 3.5(c), 3.7(b), 3.9, 3.11, 3.13, 5.2(g), 9.2(iii)
         and 9.3).

         If the Canadian Administrative Agent determines that all the conditions
precedent to an Extension of Credit specified in this Agreement have been met,
it shall advance to the applicable



                                       51
<PAGE>   57

Canadian Borrower the amount delivered by each Canadian Lender by crediting the
applicable account of the applicable Canadian Borrower prior to 2:00 P.M.
(Toronto, Ontario time) on the date of such advance, but if the conditions
precedent to such advance are not met by (Toronto time) on such date, the
Canadian Administrative Agent shall return the funds to the Canadian Lenders or
invest them in an overnight investment as orally instructed by each Canadian
Lender until such time as the advance is made.

         The Canadian Administrative Agent shall promptly inform the Domestic
Administrative Agent of the creation of Bankers' Acceptances and the terms
thereof. No Canadian Lender shall be responsible for the failure or delay by any
other Canadian Lender in its obligation to create Bankers' Acceptances
hereunder; provided, however, that the failure of any Canadian Lender to fulfill
its Commitment hereunder shall not relieve any other Canadian Lender of its
Commitment hereunder.

         (f)      Deemed Advances. Except for amounts which are paid from the
proceeds of rollovers of a Bankers' Acceptance, or for which payment has
otherwise been funded by the Canadian Borrowers, any amount which a Canadian
Lender pays to any third party on or after the date of maturity of a Bankers'
Acceptance in satisfaction thereof or which is owing to the Canadian Lender in
respect of such a Bankers' Acceptance on or after the date of maturity of such a
Bankers' Acceptance, shall at the option of Canadian Administrative Agent, be
deemed to be a Canadian Revolving Loan at the rate of interest then applicable
to Canadian Revolving Loans which are Base Rate Loans.

         (g)      Indemnity. Each Canadian Borrower shall on a joint and several
basis indemnify and hold Canadian Administrative Agent and the Canadian Lenders
harmless from any loss, cost, damage or expense with respect to any Bankers'
Acceptance dealt with by Canadian Administrative Agent or the Canadian Lenders
but shall not be obliged to indemnify Canadian Administrative Agent or the
Canadian Lenders for any loss, cost, damage or expense caused by the gross
negligence or willful misconduct of Canadian Administrative Agent or the
Canadian Lenders.

         (h)      Waiver. No Canadian Borrower shall claim from Canadian
Administrative Agent or any Canadian Lender any days of grace for the payment at
maturity of any Bankers' Acceptances presented and accepted by a Canadian Lender
pursuant to this Agreement. Each Canadian Borrower waives any defence to payment
which might otherwise exist if for any reason a Bankers' Acceptance shall be
held by a Canadian Lender in its own right at the maturity thereof, and the
doctrine of merger shall not apply to any Bankers' Acceptance that is at any
time held by a Canadian Lender in its own right.

         (i)      Obligations Absolute. The obligations of each Canadian
Borrower with respect to Bankers' Acceptances under this Agreement shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:



                                       52
<PAGE>   58

                  (i)      any lack of validity or enforceability of any order
         accepted by a Canadian Lender as a Bankers' Acceptance; or

                  (ii)     the existence of any claim, set-off, defence or other
         right which a Canadian Borrower may have at any time against the holder
         of a Bankers' Acceptance, a Canadian Lender or any other person or
         entity, whether in connection with this Agreement or otherwise.

         (j)      Shortfall on Drawdowns, Rollovers and Conversions. Each
Canadian Borrower agrees that:

                  (i)      the difference between the amount of an advance
         requested by a Canadian Borrower by way of Bankers' Acceptances and the
         actual proceeds of such Bankers' Acceptances;

                  (ii)     the difference between the actual proceeds of a
         Bankers' Acceptance and the amount required to pay a maturing Bankers'
         Acceptance, if a Bankers' Acceptance is being rolled over; and

                  (iii)    the difference between the actual proceeds of a
         Bankers' Acceptance and the amount required to repay any advance which
         is being converted to such Bankers' Acceptance;

         shall be funded by the Canadian Borrowers from their own resources by
         11:00 a.m. on the day of the advance or may be advanced by Canadian
         Administrative Agent as a Canadian Revolving Loan at the rate of
         interest then applicable to Canadian Revolving Loans which are Base
         Rate Loans.

         (k)      Prohibited Use of Bankers' Acceptances. No Canadian Borrower
shall enter into any agreement or arrangement of any kind with any person to
whom Bankers' Acceptances have been delivered whereby it undertakes to replace
such Bankers' Acceptances on a continuing basis with other Bankers' Acceptances,
nor shall a Canadian Borrower directly or indirectly take, use or provide
Bankers' Acceptances as security for loans or advances from any other Person.


                                    SECTION 3
                 OTHER PROVISIONS RELATING TO CREDIT FACILITIES

         3.1      Default Rate.

                  Upon the occurrence, and during the continuance, of an Event
of Default, the principal of and, to the extent permitted by law, interest on
the Loans and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate 2% greater
than the rate which would otherwise be applicable (or if no rate is



                                       53
<PAGE>   59

applicable, whether in respect of interest, fees or other amounts, then 2%
greater than the Base Rate).

         3.2      Extension and Conversion.

                  Subject to the terms of Section 5.2, the applicable Borrower
shall have the option, on any Business Day, to extend existing Eurodollar Loans
into a subsequent permissible Interest Period or to convert Base Rate Loans into
Eurodollar Loans; provided, however, that (i) except as provided in Section 3.8,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or conversion,
(iii) Revolving Loans extended as, or converted into, Eurodollar Loans shall be
subject to the terms of the definition of "Interest Period" and shall be in such
minimum amounts as provided in Section 2.2(b), and (iv) any request for
extension or conversion of a Eurodollar Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period of one
month. Each such extension or conversion shall be effected by the applicable
Borrower by giving a Notice of Extension/Conversion (or telephonic notice
promptly confirmed in writing) to, in the case of Domestic Revolving Loans, the
Domestic Administrative Agent prior to 11:00 A.M. (Charlotte, North Carolina
time) or, in the case of Canadian Revolving Loans, the Canadian Administrative
Agent prior to 11:00 A.M. (Toronto, Ontario time), on the Business Day of, in
the case of the conversion of a Eurodollar Loan into a Base Rate Loan, and on
the third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of
the proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Revolving Loans to be so extended or converted, the
types of Revolving Loans into which such Revolving Loans are to be converted
and, if appropriate, the applicable Interest Periods with respect thereto. Each
request for extension of a Eurodollar Loan or conversion of a Base Rate Loan
into a Eurodollar Loan shall be irrevocable and shall constitute a
representation and warranty by the applicable Borrower of the matters specified
in Section 5.2. In the event the applicable Borrower fails to request extension
or conversion of any Eurodollar Loan in accordance with this Section 3.2, or any
such conversion or extension is not permitted or required by this Section 3.2,
then such Eurodollar Loan shall be automatically converted into a Base Rate Loan
at the end of the Interest Period applicable thereto. The Domestic
Administrative Agent shall give each Domestic Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any Domestic
Revolving Loan and the Canadian Administrative Agent shall give each Canadian
Lender notice as promptly as practicable of any such proposed extension or
conversion affecting any Canadian Revolving Loan.

         3.3      Prepayments.

         (a)      Voluntary Prepayments. Loans may be prepaid in whole or in
part without premium or penalty; provided that (i) Eurodollar Loans may be
prepaid only upon three (3) Business Days' prior written notice to the
appropriate Administrative Agent and must be accompanied by payment of any
amounts owing under Section 3.11, (ii) partial prepayments



                                       54
<PAGE>   60

shall be (A) in the case of Revolving Loans which are Eurodollar Loans, in a
minimum aggregate principal amount of US$2,500,000 (or CD$2,500,000, if
applicable) and integral multiples of US$500,000 (or CD$500,000, if applicable)
in excess thereof, (B) in the case of Revolving Loans which are Base Rate Loans,
in a minimum aggregate principal amount of US$1,000,000 (or CD$1,000,000, if
applicable) and integral multiples of US$100,000 (or CD$100,000, if applicable)
in excess thereof, and (C) in the case of Swingline Loans, in a minimum
aggregate principal amount of US$1,000,000 (or CD$1,000,000, if applicable) and
integral multiples of US$100,000 (or CD$100,000, if applicable) in excess
thereof, provided that in the event that an "auto-borrow" or "zero balance" or
other similar arrangement shall then be in place with the Swingline Lender,
Swingline Loans shall be prepaid in such minimum amounts, if any, provided by
such agreement, and (iii) Bankers' Acceptances may not be paid prior to their
respective maturity dates.

         (b)      Mandatory Prepayments. If at any time, (A) the aggregate
principal amount of Domestic Obligations shall exceed the Aggregate Domestic
Revolving Committed Amount, (B) the aggregate amount of LOC Obligations shall
exceed the LOC Committed Amount, or (C) the aggregate amount of Swingline Loans
shall exceed the Swingline Committed Amount, the Domestic Borrower shall
immediately make payment on the Domestic Revolving Loans, on the Swingline Loans
and/or to a cash collateral account in respect of the LOC Obligations, in an
amount equal to the difference. If at any time, the aggregate principal Dollar
Amount of Canadian Obligations shall exceed the Aggregate Canadian Revolving
Committed Amount, the Canadian Borrowers shall immediately make payment on the
Canadian Revolving Loans and/or to a cash collateral account in respect of the
BA Obligations, in an amount equal to the difference. If at any time, the
aggregate principal Dollar Amount of Obligations shall exceed the Borrowing
Base, the Borrowers shall immediately make payment on the Loans and/or to a cash
collateral account in respect of the LOC Obligations or the BA Obligations in an
amount sufficient to eliminate the excess.

         (c)      Application. Unless otherwise specified by the applicable
Borrower, (i) prepayments on the Domestic Obligations shall be applied first to
Swingline Loans, then to Domestic Revolving Loans which are Base Rate Loans,
then to Domestic Revolving Loans which are Eurodollar Loans in direct order of
Interest Period maturities, and then to a cash collateral account to secure LOC
Obligations and (ii) prepayments on the Canadian Obligations shall be applied
first to Canadian Revolving Loans which are Base Rate Loans, then to Canadian
Revolving Loans which are Eurodollar Loans in direct order of Interest Period
maturities, and then to a cash collateral account in respect of BA Obligations.
Amounts prepaid hereunder may be reborrowed in accordance with the provisions
hereof.

         3.4      Termination and Reduction of Commitments

                  (a)      Voluntary Reductions. The Commitments may be
terminated or permanently reduced in whole or in part upon three (3) Business
Days' prior written notice by the Domestic Borrower to the appropriate
Administrative Agent, provided that (i) after giving effect to any voluntary
reduction in the Domestic Revolving Commitments, the aggregate



                                       55
<PAGE>   61

amount of Domestic Obligations shall not exceed the Aggregate Domestic Revolving
Committed Amount, as reduced, (ii) after giving effect to any voluntary
reduction in the Canadian Revolving Commitments, the aggregate amount of
Canadian Obligations shall not exceed the Aggregate Canadian Revolving Committed
Amount, as reduced, and (iii) partial reductions shall be in a minimum principal
amount of US$1,000,000 (or CD$1,000,000, if applicable), and in integral
multiples of US$100,000 (or CD$100,000, if applicable) in excess thereof.

                  (b)      Termination. Unless terminated earlier in accordance
with the terms of this Agreement, the Commitments hereunder shall terminate on
the Termination Date.

         3.5      Fees.

                  (a)      Commitment Fees.

                           (i)      Domestic Revolving Commitments. In
         consideration of the Domestic Revolving Commitments, the Domestic
         Borrower agrees to pay to the Domestic Administrative Agent for the
         ratable benefit of the Domestic Lenders a commitment fee (the "Domestic
         Commitment Fee") equal to the Applicable Percentage per annum on the
         average daily unused amount of the Aggregate Domestic Revolving
         Committed Amount for the applicable period. The Domestic Commitment Fee
         shall be payable quarterly in arrears on the 15th day following the
         last day of each calendar quarter for the immediately preceding
         calendar quarter (or portion thereof) beginning with the first such
         date to occur after the Closing Date (as well as on the Termination
         Date). For purposes of computation of the Domestic Commitment Fee, (A)
         Swingline Loans shall not be counted toward or considered usage of the
         Aggregate Domestic Revolving Committed Amount and (B) LOC Obligations
         shall be counted toward and considered usage of the Aggregate Domestic
         Revolving Committed Amount.


                           (ii)     Canadian Revolving Commitments. In
         consideration of the Canadian Revolving Commitments, the Canadian
         Borrowers agree to pay to the Canadian Administrative Agent for the
         ratable benefit of the Canadian Lenders a commitment fee (the "Canadian
         Commitment Fee") equal to the Applicable Percentage per annum on the
         average daily unused amount of the Aggregate Canadian Revolving
         Committed Amount for the applicable period. The Canadian Commitment Fee
         shall be payable quarterly in arrears on the 15th day following the
         last day of each calendar quarter for the immediately preceding
         calendar quarter (or portion thereof) beginning with the first such
         date to occur after the Closing Date (as well as on the Termination
         Date). For purposes of computation of the Canadian Commitment Fee, the
         Face Amount of BA Obligations shall be counted toward and considered
         usage of the Aggregate Canadian Revolving Committed Amount.



                                       56
<PAGE>   62

                  (b)      Letter of Credit Fees.

                           (i)      Letter of Credit Fee. In consideration of
         the LOC Commitment hereunder, the Domestic Borrower agrees to pay to
         the Domestic Administrative Agent for the ratable benefit of the
         Domestic Lenders a fee (the "Letter of Credit Fee") equal to the
         Applicable Percentage per annum on the average daily maximum amount
         available to be drawn under Letters of Credit from the date of issuance
         to the date of expiration. The Letter of Credit Fee shall be payable
         quarterly in arrears on the 15th day following the last day of each
         calendar quarter for the immediately preceding calendar quarter (or
         portion thereof) beginning with the first such date to occur after the
         Closing Date (as well as on the Termination Date).

                           (ii)     Issuing Lender Fees. In addition to the
         Letter of Credit Fee, the Domestic Borrower agrees to pay to the
         Issuing Lender for its own account without sharing by the other Lenders
         a fronting and negotiation fee of one-eighth of one percent (0.125%)
         per annum on the average daily maximum amount available to be drawn
         under Letters of Credit issued by it from the date of issuance to the
         date of expiration (the "Issuing Lender Fees").

                  (c)      Acceptance Fee. In consideration of the creation of a
particular Bankers' Acceptance hereunder, the Canadian Borrowers agree to pay to
the Canadian Administrative Agent for the benefit of the Canadian Lenders which
created such Bankers' Acceptance an acceptance fee (the "Acceptance Fee") on the
date of issuance or creation of such Bankers' Acceptance in an amount equal to
the product of (i) the Applicable Percentage for Bankers' Acceptances as of the
date of creation of such Banker's Acceptance, multiplied by (ii) the aggregate
Face Amount of such Bankers' Acceptance, multiplied by (iii) a fraction, the
numerator of which is the term to maturity of such Bankers' Acceptance in days,
and the denominator of which is the number of days in the current calendar year.

                  (d)      Administrative Agent's Fees. The Borrowers agree to
pay to the Domestic Administrative Agent, for its own account, the annual
administrative fee and such other fees, if any, referred to in the
Administrative Agent's Fee Letter (collectively, the "Administrative Agent's
Fees").

         3.6      Capital Adequacy.

                  If any Lender has reasonably determined, after the date
hereof, that the adoption or the becoming effective of, or any change in, or any
change by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Lender


                                       57
<PAGE>   63

could have achieved but for such adoption, effectiveness, change or compliance
(taking into consideration such Lender's policies with respect to capital
adequacy), then, subject to the provisions of Section 3.12, each Borrower shall
be obligated to pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction, to the extent related to Extensions
of Credit made to such Borrower.

         3.7      Inability To Determine Interest Rate.

         (a)      If prior to the first day of any Interest Period, the Domestic
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, the Domestic
Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the Lenders as soon as practicable thereafter (which notice shall
be withdrawn by the Domestic Administrative Agent whenever such circumstances no
longer exist). If such notice is given (a) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans
and (b) any Revolving Loans that were to have been converted on the first day of
such Interest Period to or continued as Eurodollar Loans shall be converted to
or continued as Base Rate Loans. Until such notice has been withdrawn by the
Domestic Administrative Agent, no further Eurodollar Loans shall be made or
continued as such, nor shall the Borrowers have the right to convert Base Rate
Loans to Eurodollar Loans.

         (b)      If the Canadian Administrative Agent determines in good faith,
which determination shall be final, conclusive and binding upon the Canadian
Borrowers absent manifest error, and notifies the Canadian Borrowers and each of
the Canadian Lenders that, by reason of circumstances affecting the money market
or the market for bankers' acceptances generally (i) there is no market for
Bankers' Acceptances; or (ii) the demand for Bankers' Acceptances is
insufficient to allow the sale or trading of the Bankers' Acceptances created
and purchased hereunder, then

                  (A)      the right of the Canadian Borrowers to request a
         borrowing by way of Bankers' Acceptances shall be suspended until the
         Canadian Administrative Agent determines in good faith that the
         circumstances causing such suspension no longer exist and the Canadian
         Administrative Agent so notifies the Canadian Borrower; and

                  (B)      any notice of requested Bankers' Acceptances which is
         outstanding shall be canceled and the Bankers' Acceptance requested
         therein shall not be made.

                  (C)      The Canadian Administrative Agent shall promptly
         notify the Canadian Borrowers of the suspension of the Canadian
         Borrowers' right to request a Bankers' Acceptance and of the
         termination of any such suspension.



                                       58
<PAGE>   64

         3.8      Illegality.

         Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrowers
and the Administrative Agents (which notice shall be withdrawn by such Lender
whenever such circumstances no longer exist), (b) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert a Base Rate Loan to Eurodollar Loans shall forthwith be canceled and,
until such time as it shall no longer be unlawful for such Lender to make or
maintain Eurodollar Loans, such Lender shall then have a commitment only to make
a Base Rate Loan when a Eurodollar Loan is requested and (c) such Lender's
Revolving Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, each Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 3.11 to the extent related to Eurodollar Loans made
to such Borrower

         3.9      Requirements of Law.

         If, after the date hereof, the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable to
any Lender, or compliance by any Lender with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority, in each case made subsequent to the Closing Date (or, if later, the
date on which such Lender becomes a Lender):

                           (a)      shall subject such Lender to any tax of any
         kind whatsoever with respect to any Letter of Credit or any Bankers'
         Acceptances or any Eurodollar Loans made by it or its obligation to
         make, issue or create the foregoing, or change the basis of taxation of
         payments to such Lender in respect thereof (except for (i) Taxes
         covered by Section 3.10 (including Taxes imposed solely by reason of
         any failure of such Lender to comply with its obligations under Section
         3.10(d)) and (ii) changes in taxes measured by or imposed upon the
         overall net income, or franchise tax (imposed in lieu of such net
         income tax), of such Lender or its applicable lending office, branch,
         or any affiliate thereof));

                           (b)      shall impose, modify or hold applicable any
         reserve, special deposit, compulsory loan or similar requirement
         against assets held by, deposits or other liabilities in or for the
         account of, advances, loans or other extensions of credit by, or any
         other acquisition of funds by, any office of such Lender which is not
         otherwise included in the determination of the Eurodollar Rate
         hereunder; or

                           (c)      shall impose on such Lender any other
         condition (excluding any tax of any kind whatsoever);



                                       59
<PAGE>   65

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or creating Bankers' Acceptances or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, subject to the
provisions of Section 3.12, the Borrowers shall be obligated to promptly pay
such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount receivable, to the extent
related to Extensions of Credit made to such Borrower, provided that, in any
such case, the Borrowers may elect to convert the Eurodollar Loans made by such
Lender hereunder to Base Rate Loans by giving the appropriate Administrative
Agent at least one Business Day's notice of such election, in which case each
Borrower shall promptly pay to such Lender, upon demand, without duplication,
such amounts, if any, as may be required pursuant to Section 3.11 to the extent
related to Eurodollar Loans made to such Borrower. Each Lender agrees that, as
promptly as practicable after it becomes aware of any circumstances of the type
referred to in paragraphs (a) through (c) above which would result in any such
increased cost or reduced amount receivable, the affected Lender shall, to the
extent not inconsistent with such Lender's internal policies of general
application, designate a different lending office for the making of Revolving
Loans or for accepting or issuing Bankers' Acceptances or Letters of Credit or
otherwise use reasonable commercial efforts to minimize the amounts payable to
it by the Borrowers pursuant to this Section 3.9. This covenant shall survive
the termination of this Credit Agreement and the payment of the Revolving Loans
and all other amounts payable hereunder.

         3.10     Taxes.

         (a)      Any and all payments by any Credit Party to or for the account
of any Lender or either Administrative Agent hereunder or under any other Credit
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and each Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender (or its applicable lending office) or such Administrative Agent (as the
case may be) is organized or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings,
and liabilities being hereinafter referred to as "Taxes"). If any Credit Party
shall be required by law to deduct or withhold any Taxes from or in respect of
any sum payable under this Credit Agreement or any other Credit Document to any
Lender or either Administrative Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section 3.10) such Lender or such Administrative Agent receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Credit Party shall make such deductions and withholdings, (iii) such
Credit Party shall pay the full amount deducted or withheld to the relevant
taxation authority or other authority in accordance with applicable law, and
(iv) such Credit Party shall furnish to the appropriate Administrative Agent, in
each case at its address referred to in Section 11.1, the original or a
certified copy of a receipt evidencing payment thereof.



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<PAGE>   66

         (b)      In addition, the Domestic Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or from the execution or delivery
of, or otherwise with respect to, this Credit Agreement or any other Credit
Document (hereinafter referred to as "Other Taxes").

         (c)      The Domestic Borrower agrees to indemnify each Lender and each
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 3.10) paid by such Lender or
such Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.

         (d)      Each Domestic Lender that is not a United States person under
Section 7701(a)(30) of the Internal Revenue Code, on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each Domestic
Lender listed on the signature pages hereof and on or prior to the date on which
it becomes a Domestic Lender in the case of each other Domestic Lender, and from
time to time thereafter if requested in writing by the Domestic Borrowers or the
Domestic Administrative Agent (but only so long as such Domestic Lender remains
lawfully able to do so), shall provide the Domestic Borrower and the Domestic
Administrative Agent with (i) Internal Revenue Service Form W-8 BEN or W-8 ECI,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Domestic Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces to zero
the rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Credit Agreement is effectively connected
with the conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and/or (iii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Domestic Lender is entitled to an exemption from tax on payments pursuant
to this Credit Agreement or any of the other Credit Documents.

         (e)      For any period with respect to which a Domestic Lender has
failed to provide the Domestic Borrower and the Domestic Administrative Agent
with the appropriate form pursuant to Section 3.10(d) (unless such failure is
due to a change in treaty, law, or regulation occurring subsequent to the date
on which a form originally was required to be provided), such Domestic Lender
shall not be entitled to indemnification under Section 3.10(a) or 3.10(b) with
respect to Taxes imposed by the United States; provided, however, that should a
Domestic Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Domestic Borrower shall take such steps as such
Domestic Lender shall reasonably request to assist such Domestic Lender to
recover such Taxes.

         (f)      If any Credit Party is required to pay additional amounts to
or for the account of any Lender pursuant to this Section 3.10, then, unless a
Commitment Termination Event shall



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have occurred, such Lender will agree to use reasonable efforts to change the
jurisdiction of its applicable lending office so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change, in the
judgment of such Lender, is not otherwise disadvantageous to such Lender.

         (g)      Within thirty (30) days after the date of any payment of
Taxes, the applicable Credit Party shall furnish to the Administrative Agents
the original or a certified copy of a receipt evidencing such payment.

         (h)      Without prejudice to the survival of any other agreement of
the Credit Parties hereunder, the agreements and obligations of the Credit
Parties contained in this Section 3.10 shall survive the repayment of the Loans,
LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.

         3.11     Indemnity.

         The Domestic Borrower, with respect to the Domestic Lenders, and the
Canadian Borrowers, with respect to the Canadian Lenders, promise to indemnify
each such Lender and to hold each such Lender harmless from any loss or expense
which such Lender may sustain or incur (other than through such Lender's gross
negligence or willful misconduct) as a consequence of (a) default by such
Borrower in making a borrowing of, conversion into or continuation of a
Eurodollar Loan or a Bankers' Acceptance after such Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by such Borrower in making any prepayment of a Eurodollar Loan after
such Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement or (c) the making of a prepayment of a Eurodollar Loan on
a day which is not the last day of the Interest Period for such Eurodollar Loan.
With respect to any Eurodollar Loan or Bankers' Acceptance, such indemnification
may be calculated, in lieu of any other method, based on an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of the Interest Period for such Eurodollar Loan (or, in
the case of a failure to borrow, convert or continue, the Interest Period of
such Eurodollar Loan or term of such Bankers' Acceptance that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Revolving Loans provided for herein (excluding, however, the
Applicable Percentage included therein, if any) over (ii) the amount of interest
(as reasonably determined by such Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank Eurodollar market. The covenants of each
Borrower set forth in this Section 3.11 shall survive the termination of this
Credit Agreement and the payment of the Revolving Loans and all other amounts
payable hereunder.



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         3.12     Certain Limitations.

         The provisions of Sections 3.6, 3.9, 3.10 and 3.11 shall be subject to
the following:

         (a)      Each Lender that desires compensation or indemnification under
Sections 3.6, 3.9 or 3.11 shall notify the appropriate Borrower through the
appropriate Administrative Agent of any event occurring after the Closing Date
entitling such Lender to compensation or indemnification under any of such
Sections as promptly as practicable, but in any event within 90 days after the
occurrence of the event giving rise thereto; provided that (i) if any such
Lender fails to give such notice within 90 days after the occurrence of such an
event, such Lender shall only be entitled to compensation or indemnification in
respect of such event accruing under Sections 3.6, 3.9 or 3.11 with respect to
the period from and after the date 90 days prior to the date that such Lender
does give notice.

         (b)      Any notice given by a Lender pursuant to subsection (a) above
shall certify (i) that one of the events described in Sections 3.6, 3.9 or 3.11
has occurred, describing in reasonable detail the nature of such event, (ii) as
to the increased cost, reduced amount receivable or loss or expense resulting
from such event and (iii) as to the additional amount demanded by such Lender,
attaching a reasonably detailed explanation of the calculation thereof. Such a
certificate as to any compensation or indemnification payable pursuant to
Sections 3.6, 3.9 or 3.11, submitted by such Lender through the appropriate
Administrative Agent to the appropriate Borrower, shall be conclusive and
binding on the parties hereto in the absence of manifest error.

         (c)      If any Lender requests compensation or indemnification from a
Borrower under Sections 3.6, 3.9 or 3.10, the Domestic Borrower may, at its
option, within fifteen (15) days after receipt by such Borrower of written
demand from the affected Lender for payment of such compensation or
indemnification, notify the appropriate Administrative Agent and such affected
Lender of its intention to replace the affected Lender. So long as no Event of
Default shall have occurred and be continuing, the Domestic Borrower may obtain,
at the Domestic Borrower's expense, a replacement Lender for the affected
Lender. If the Domestic Borrower obtains a replacement Lender within ninety (90)
days following notice of its intention to do so, the affected Lender must sell
and assign its loans and obligations and any Commitments to such replacement
Lender pursuant to Section 11.3(b) (without giving effect to any requirement
therein that the appropriate Administrative Agent consent thereto), for an
amount equal to the principal balance of all Revolving Loans held by the
affected Lender and all accrued interest and Fees with respect thereto through
the date of such sale, provided that the applicable Borrower shall have paid to
such affected Lender the compensation or indemnification that it is entitled to
receive under Sections 3.6, 3.9 or 3.10, through the date of such sale and
assignment. Notwithstanding the foregoing, the Domestic Borrower shall not have
the right to obtain a replacement Lender if the affected Lender rescinds its
demand for such compensation or indemnification within fifteen (15) days
following its receipt of the Domestic Borrower's notice of intention to replace
such affected Lender. Additionally, if the Domestic Borrower gives a notice to
the appropriate Administrative Agent and an affected Lender of its intention to
replace such affected Lender and does not so replace such affected Lender within
ninety (90) days thereafter, the Domestic Borrower's rights



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under this Section 3.12(c) shall terminate and the applicable Borrower shall
promptly pay all compensation or indemnification demanded by such affected
Lender pursuant to Sections 3.6, 3.9 or 3.10.

         3.13     Notice under the Income Tax Act (Canada).

         Notwithstanding anything contained in this Agreement to the contrary,
if either Administrative Agent or a Lender receives notice under subsection
224(1.1) of the Income Tax Act (Canada) or any successor provision thereto or
any comparable provision of any other taxing statute in respect of a Borrower or
Guarantor, then so long as such notice is effective, the Lenders shall not be
obliged to make any further advances hereunder.

         3.14     Prohibited Rates of Interest.

         Notwithstanding any other provisions of this Agreement or any other
Credit Documents or any related document, the Canadian Credit Parties shall not
be obliged to make any payment of interest or other amounts payable to the
Administrative Agents or Lenders in an amount or at a rate that would be
prohibited by law or would result in the receipt of interest at a criminal rate,
as the terms "interest" and "criminal rate" are defined under the Criminal Code
(Canada), or that would contravene any local usury laws which may be applicable
to any obligations of the Canadian Credit Parties under or in connection with
this Agreement. In any such case, any payment, collection or demand for interest
in excess of the maximum permitted rate shall be deemed to have been made by
mutual mistake, any excess payment shall be refunded to the applicable Canadian
Credit Party and the amount or rate otherwise payable under the terms of any
Credit Document or related document shall be reduced to the maximum amount or
rate payable in accordance with applicable law. For the purposes of this
Agreement, the effective annual rate of interest shall be determined in
accordance with generally accepted actuarial practices and principles and in the
event of any dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries of Canada appointed by the Canadian Administrative Agent shall be
conclusive for the purpose of such determination.

         3.15     Pro Rata Treatment.

         Except to the extent otherwise provided herein:

         (a)      Obligations. Each Domestic Revolving Loan advance, each
payment or prepayment of principal of any Domestic Revolving Loan, each payment
of interest on any Domestic Revolving Loan, each payment on or in respect of the
LOC Obligations and each payment of interest thereon, each payment of the
Domestic Commitment Fee, each payment of the Letter of Credit Fee, each
reduction of Aggregate Domestic Revolving Committed Amount, and each conversion
or extension of Domestic Revolving Loan shall be allocated pro rata among the
Domestic Lenders according to the respective Domestic Revolving Commitment
Percentages of the Domestic Lenders. Each Canadian Revolving Loan advance, each
creation of Bankers' Acceptances, each payment or prepayment of principal of any
Canadian Revolving Loan, each



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payment of interest on the Canadian Revolving Loans, each payment of the
Canadian Commitment Fee, each reduction of Aggregate Canadian Revolving
Committed Amount, and each conversion or extension of Canadian Revolving Loan
shall be allocated pro rata among the Canadian Lenders according to the
respective Canadian Revolving Commitment Percentages of the Canadian Lenders.

         (b)      Advances. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the appropriate Administrative Agent shall have
been notified in writing by any Lender prior to a borrowing that such Lender
will not make the amount that would constitute its ratable share of such
borrowing available to such Administrative Agent, such Administrative Agent may
assume that such Lender is making such amount available to such Administrative
Agent, and such Administrative Agent may, in reliance upon such assumption, make
available to the appropriate Borrower a corresponding amount. If such amount is
not made available to such Administrative Agent by such Lender within the time
period specified therefor hereunder, such Lender shall pay to such
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the Federal Funds Rate for a period of two (2) Business Days, and
thereafter at the Base Rate, for the period until such Lender makes such amount
immediately available to such Administrative Agent. If such Lender does not pay
such amounts to such Administrative Agent forthwith upon demand, such
Administrative Agent may notify the appropriate Borrower(s) and request such
Borrower(s) to immediately pay such amount to such Administrative Agent with
interest at the rate applicable thereto. A certificate of such Administrative
Agent submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error.

         3.16     Sharing of Payments.

         (a)      Domestic Lenders. The Domestic Lenders agree that, in the
event that any Domestic Lender shall obtain payment in respect of any Domestic
Revolving Loan, LOC Obligation or any other obligation owing to such Domestic
Lender under this Credit Agreement through the exercise of a right of setoff,
banker's lien or counterclaim, or pursuant to a secured claim under Section 506
of the Bankruptcy Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Domestic Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
in excess of its pro rata share of such payment as provided for in this Credit
Agreement, such Domestic Lender shall promptly purchase from the other Domestic
Lenders a participation in such Domestic Revolving Loan, LOC Obligation and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all such Domestic Lenders share such
payment in accordance with the respective Domestic Revolving Commitment
Percentages of such Domestic Lenders, as provided for in this Credit Agreement.
The Domestic Lenders further agree that if payment to any such Domestic Lender
obtained by such Domestic Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Domestic Lender which shall have shared the
benefit of such payment




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shall, by repurchase of a participation theretofore sold, return its share of
that benefit (together with its share of any accrued interest payable with
respect thereto) to each such Domestic Lender whose payment shall have been
rescinded or otherwise restored. The Domestic Borrower agrees that any Domestic
Lender so purchasing such a participation may, to the fullest extent permitted
by law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such participation as fully as if such Domestic
Lender were a holder of such Domestic Revolving Loan, LOC Obligation or other
obligation in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Domestic Lender receives a
secured claim in lieu of a setoff to which this Section 3.16 applies, such
Domestic Lender shall, to the extent practicable, exercise its rights in respect
of such secured claim in a manner consistent with the rights of the Domestic
Lenders under this Section 3.16 to share in the benefits of any recovery on such
secured claim.

         (b)      Canadian Lenders. The Canadian Lenders agree that, in the
event that any Canadian Lender shall obtain payment in respect of any Canadian
Revolving Loan, BA Obligation or any other obligation owing to such Canadian
Lender under this Credit Agreement through the exercise of a right of setoff,
banker's lien or counterclaim, or pursuant to a secured claim under the
Bankruptcy Code or other security or interest arising from, or in lieu of, such
secured claim, received by such Canadian Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, in excess
of its pro rata share of such payment as provided for in this Credit Agreement,
such Canadian Lender shall promptly purchase from the other Canadian Lenders a
participation in such Canadian Revolving Loan, BA Obligation and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all such Canadian Lenders share such
payment in accordance with the respective Canadian Revolving Commitment
Percentages of such Canadian Lenders, as provided for in this Credit Agreement.
The Canadian Lenders further agree that if payment to any such Canadian Lender
obtained by such Canadian Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Canadian Lender which shall have shared the
benefit of such payment shall, by repurchase of a participation theretofore
sold, return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each such Canadian Lender whose
payment shall have been rescinded or otherwise restored. The Canadian Borrower
agrees that any Canadian Lender so purchasing such a participation may, to the
fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Canadian Lender were a holder of such Canadian Revolving Loan,
BA Obligation or other obligation in the amount of such participation. If under
any applicable bankruptcy, insolvency or other similar law, any Canadian Lender
receives a secured claim in lieu of a setoff to which this Section 3.16 applies,
such Canadian Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Canadian Lenders under this Section 3.16 to share in the benefits of any
recovery on such secured claim.

         (c)      Lenders and Agents. Except as otherwise expressly provided in
this Credit Agreement, if any Lender or any Agent shall fail to remit to any
other Agent or any other Lender an



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amount payable by such Lender or such Agent to such other Agent or such other
Lender pursuant to this Credit Agreement on the date when such amount is due,
such payments shall be made together with interest thereon for each date from
the date such amount is due until the date such amount is paid to such other
Agent or such other Lender at a rate per annum equal to the Federal Funds Rate.

         3.17     Payments, Computations, Etc.

         (a)      Except as otherwise specifically provided herein, (i) all
payments of principal, interest and fees in connection with Canadian Revolving
Loans, BA Obligations, the Canadian Commitment Fee and the Acceptance Fees shall
be made to the Canadian Administrative Agent in the currency in which such
amount is denominated in immediately available funds, without setoff, deduction,
counterclaim or withholding of any kind, at the Canadian Administrative Agent's
office specified in Section 11.1 not later than 2:00 P.M. (Toronto, Ontario
time) on the date when due and (ii) all payments of principal, interest and fees
in connection with Domestic Revolving Loans, LOC Obligations, Swingline Loans,
the Domestic Commitment Fee, the Letter of Credit Fees, the Issuing Lender Fees
and the Administrative Agent's Fees shall be made to the Domestic Administrative
Agent in Dollars in immediately available funds, without setoff, deduction,
counterclaim or withholding of any kind, at the Domestic Administrative Agent's
office specified in Section 11.1 not later than 2:00 P.M. (Charlotte, North
Carolina time) on the date when due. Payments received after such time shall be
deemed to have been received on the next succeeding Business Day. Such
Administrative Agent may (but shall not be obligated to) debit the amount of any
such payment which is not made by such time to any ordinary deposit account of
the applicable Borrower maintained with such Administrative Agent (with notice
to such Borrower). Each Borrower shall, at the time it makes any payment under
this Credit Agreement, specify to the Domestic Administrative Agent or the
Canadian Administrative Agent, as applicable, the Loans, LOC Obligations, BA
Obligations, Fees, interest or other amounts payable by such Borrower hereunder
to which such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms hereof, the
Domestic Administrative Agent or the Canadian Administrative Agent, as
applicable, shall distribute such payment to the relevant Lenders in such manner
as such Administrative Agent may determine to be appropriate in respect of
obligations owing by such Borrower hereunder, subject to the terms of Section
3.15(a) and Section 3.17). The Domestic Administrative Agent or the Canadian
Administrative Agent, as applicable, will distribute such payments to the
applicable Lenders if any such payment is received prior to 12:00 Noon
(Charlotte, North Carolina time or Toronto, Ontario time, as appropriate) on a
Business Day in like funds as received prior to the end of such Business Day and
otherwise such Administrative Agent will distribute such payment to such Lenders
entitled thereto on the next succeeding Business Day. Whenever any payment
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day (subject
to accrual of interest and Fees for the period of such extension). Except as
expressly provided otherwise herein, all computations of interest and fees shall
be made on the basis of the actual number of days elapsed over a year of 360
days, except with respect to computation of interest on Base Rate Loans
determined by reference to the Prime Rate which shall be calculated based on a
year of 365 or 366 days, as appropriate; provided that in respect of Canadian
Obligations, for purposes of the Interest Act (Canada), if interest computed on
the basis of a 360-



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day year is payable for any part of a calendar year, the equivalent yearly rate
of interest may be determined by multiplying the specified rate of interest by
the number of days (365 or 366) in such calendar year and dividing such product
by 360. Interest shall accrue from and include the date of borrowing, but
exclude the date of payment.

         (b)      Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Administrative Agents or any Lender on account of
the Obligations or any other amounts outstanding under any of the Credit
Documents shall be paid over or delivered as follows:

                  FIRST, to the payment of all reasonable out-of-pocket costs
         and expenses (including without limitation reasonable attorneys' fees)
         of the Agents in connection with enforcing the rights of the Lenders
         under the Credit Documents;

                  SECOND, to payment of any Administrative Agent's Fees then due
         and payable;

                  THIRD, to the payment of all reasonable out-of-pocket costs
         and expenses (including without limitation, reasonable attorneys' fees)
         of each of the Lenders in connection with enforcing its rights under
         the Credit Documents or otherwise with respect to the Obligations owing
         to such Lender;

                  FOURTH, to the payment of all accrued interest and Fees on or
         in respect of the Obligations;

                  FIFTH, to the payment of the outstanding principal amount of
         the Obligations (including the payment of all LOC Obligations then
         reimbursable by the Borrower pursuant to Section 2.6(c), but excluding
         any LOC Obligations attributable to issued but undrawn Letters of
         Credit, and the payment of all matured and unpaid BA Obligations) and
         to the payment of any principal amounts outstanding under Hedging
         Agreements relating to the Obligations to the extent permitted
         hereunder;

                  SIXTH, to the cash collateralization of all LOC Obligations
         and BA Obligations attributable to issued but undrawn Letters of Credit
         and Bankers' Acceptances;

                  SEVENTH, to all other Obligations and other obligations which
         shall have become due and payable under the Credit Documents or
         otherwise and not repaid pursuant to clauses "FIRST" through "SIXTH"
         above; and

                  EIGHTH, to the payment of the surplus, if any, to whoever may
         be lawfully entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) each of the Lenders



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shall receive an amount equal to its pro rata share (based on the proportion
that the then outstanding Obligations and obligations under Hedging Agreements
(relating to the Obligations to the extent permitted hereunder) held by such
Lender bears to the aggregate then outstanding Obligations and obligations under
Hedging Agreements (relating to the Obligations to the extent permitted
hereunder)) of amounts available to be applied pursuant to clauses "THIRD",
"FOURTH", "FIFTH" and "SIXTH" above; and (iii) all amounts available to be
applied to pursuant to clause "SIXTH" above shall be held by the Administrative
Agent in a cash collateral account and applied (A) first, to reimburse the
Issuing Lender for any drawings under such Letters of Credit and (B) then,
following the expiration of all Letters of Credit, to all other obligations of
the types described in clauses "SIXTH" AND "SEVENTH" above in the manner
provided in this Section 3.17(b).

         3.18     Evidence of Debt.

         (a)      Each Lender shall maintain an account or accounts evidencing
each Revolving Loan made by such Lender to the Borrowers from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.

         (b)      The Domestic Administrative Agent shall maintain the Domestic
Register pursuant to Section 11.3(c)(i), and a subaccount for each Domestic
Lender, in which Domestic Register and subaccounts (taken together) shall be
recorded (A) the amount, type and Interest Period of each such Domestic
Revolving Loan hereunder, (B) the amount of any principal or interest due and
payable or to become due and payable to each Domestic Lender hereunder and (C)
the amount of any sum received by the Domestic Administrative Agent hereunder
from or for the account of the Domestic Borrower and each Domestic Lender's
share thereof. The Canadian Administrative Agent shall maintain the Canadian
Register pursuant to Section 11.3(c)(ii), and a subaccount for each Canadian
Lender, in which Canadian Register and subaccounts (taken together) shall be
recorded (A) the amount, type and Interest Period of each such Canadian
Revolving Loan hereunder, (B) the amount of any principal or interest due and
payable or to become due and payable to each Canadian Lender hereunder and (C)
the amount of any sum received by the Canadian Administrative Agent hereunder
from or for the account of the Canadian Borrower and each Canadian Lender's
share thereof. Each Administrative Agent will make reasonable efforts to
maintain the accuracy of the respective subaccounts referred to in the preceding
sentences and to promptly update such subaccounts from time to time, as
necessary.

         (c)      The entries made in the Registers, accounts and the
subaccounts maintained pursuant to subsection (b) of this Section 3.18 (and, if
consistent with the entries of the relevant Administrative Agent, subsection
(a)) shall be prima facie evidence of the existence and amounts of the
obligations of the applicable Borrower therein recorded; provided, however, that
the failure of any Lender or either Administrative Agent to maintain either
Register, any such account, or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the



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Borrowers to repay the Loans and other obligations owing to such Lenders in
accordance with the terms hereof.




                                    SECTION 4
                                    GUARANTY

         4.1      The Guarantee.

         (a)      (i)      Each of the Domestic Guarantors hereby jointly and
severally guarantees to each Lender, to each Affiliate of a Lender that enters
into a Hedging Agreement with a Credit Party relating to the Obligations and to
the Agents, as hereinafter provided, the prompt payment of the Guaranteed
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Domestic Guarantors hereby
further agree that if any of the Guaranteed Obligations are not paid in full
when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), the Domestic
Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
in accordance with the terms of such extension or renewal.

                  (ii)     Each of the Canadian Guarantors hereby jointly and
severally guarantees to each Canadian Lender, to each Affiliate of a Canadian
Lender that enters into a Hedging Agreement with a Canadian Credit Party
relating to the Canadian Obligations, to the Canadian Administrative Agent and
to the Collateral Agent, as hereinafter provided, the prompt payment of the
Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof. The Canadian
Guarantors hereby further agree that if any of the Guaranteed Obligations are
not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as mandatory cash collateralization or otherwise),
the Canadian Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration or otherwise) in accordance with the terms
of such extension or renewal. Notwithstanding the foregoing or any other
provision hereof or in any other Credit Documents, the obligations of the
Canadian Guarantors under Section 4.1 in respect of the Guaranteed Obligations
do not extend to the Domestic Obligations or to the obligations of the Domestic
Guarantors in respect thereof, as to which such Canadian Guarantors shall have
no obligation; and the obligations of the Canadian Guarantors which are Ontario
corporations (each, an "Ontario Guarantor") shall be guarantees only of the
obligations of each respective Ontario



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<PAGE>   76

Guarantor's direct parent corporation of which such Ontario Guarantor is a
direct wholly-owned subsidiary or any corporation which is a subsidiary of such
Ontario Guarantor.

         (b)      Notwithstanding any provision to the contrary contained herein
or in any other of the Credit Documents or Hedging Agreements, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state,
provincial or federal law relating to fraudulent conveyances or transfers or the
granting of financial assistance) then the obligations of each Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal, state or provincial and including, without
limitation, the Bankruptcy Code). In such case or otherwise at the request of an
Agent, each Credit Party shall take such action and shall execute and deliver
all such further documents required by such Agent to cause the obligations of
such Guarantor to be enforceable to the extent required by this Agreement.

         4.2      Obligations Unconditional.

         The obligations of the Domestic Guarantors under Section 4.1 in respect
of the Guaranteed Obligations are joint and several in nature as among the
Domestic Guarantors. The obligations of all of the Guarantors under Section 4.1
are absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 4.2 that the obligations of each
of the Guarantors hereunder shall be absolute and unconditional under any and
all circumstances. Each Guarantor agrees that such Guarantor shall have no right
of subrogation, indemnity, reimbursement or contribution against any of the
Borrowers or any other Guarantor for amounts paid under this Section 4 until
such time as all of the Lenders (and any Affiliates of Lenders entering into
Hedging Agreements) have been paid in full, all Commitments under the Credit
Agreement have been terminated and no Person or Governmental Authority shall
have any right to request any return or reimbursement of funds from the Lenders
in connection with monies received under the Credit Documents or Hedging
Agreements relating to the Obligations. Without limiting the generality of the
foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:

                  (i)      at any time or from time to time, without notice to
         any Guarantor, the time for any performance of or compliance with any
         of the Guaranteed Obligations shall be extended, or such performance or
         compliance shall be waived;

                  (ii)     any of the acts mentioned in any of the provisions of
         any of the Credit Documents, any Hedging Agreement or any other
         agreement or instrument referred to in the Credit Documents or Hedging
         Agreements shall be done or omitted;



                                       71
<PAGE>   77

                  (iii)    the maturity of any of the Guaranteed Obligations
         shall be accelerated, or any of the Guaranteed Obligations shall be
         modified, supplemented or amended in any respect, or any right under
         any of the Credit Documents, any Hedging Agreement or any other
         agreement or instrument referred to in the Credit Documents or Hedging
         Agreements shall be waived or any other guarantee of any of the
         Guaranteed Obligations or any security therefor shall be released or
         exchanged in whole or in part or otherwise dealt with;

                  (iv)     any Lien granted to, or in favor of, either
         Administrative Agent or any Lender or Lenders as security for any of
         the Guaranteed Obligations shall fail to attach or be perfected; or

                  (v)      any of the Guaranteed Obligations shall be determined
         to be void or voidable (including, without limitation, for the benefit
         of any creditor of any Guarantor) or shall be subordinated to the
         claims of any Person (including, without limitation, any creditor of
         any Guarantor).

With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the either Administrative Agent or any
Lender exhaust any right, power or remedy or proceed against any Person under
any of the Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements, or against
any other Person under any other guarantee of, or security for, any of the
Guaranteed Obligations.

         4.3      Reinstatement.

         (a)      The obligations of the Domestic Guarantors under this Section
4 shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Person in respect of the Guaranteed Obligations
is rescinded or must be otherwise restored by any holder of any of the
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Domestic Guarantor agrees that it will
indemnify the Agents and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Agents or such Lender in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.

         (b)      The obligations of the Canadian Guarantors under this Section
4 shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Person in respect of the Guaranteed Obligations
is rescinded or must be otherwise restored by any holder of any of the
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Canadian Guarantor agrees that it will
indemnify the Canadian Administrative Agent, the Collateral Agent and each
Canadian Lender on demand for all reasonable costs and expenses (including,
without limitation, reasonable fees and expenses of



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<PAGE>   78

counsel) incurred by the Canadian Administrative Agent, the Collateral Agent or
such Canadian Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.

         4.4      Certain Additional Waivers.

         Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Guaranteed Obligations, except through the exercise
of the rights of subrogation pursuant to Section 4.2.

         4.5      Remedies.

         The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agents and the Lenders, on the
other hand, the Guaranteed Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Guaranteed Obligations
being deemed to have become automatically due and payable), the Guaranteed
Obligations (whether or not due and payable by any other Person) shall forthwith
become due and payable by the Guarantors for purposes of Section 4.1.

         4.6      Rights of Contribution.

         The Domestic Guarantors hereby agree, as among themselves, that if any
Domestic Guarantor shall become an Excess Funding Guarantor (as defined below),
each other Domestic Guarantor shall, on demand of such Excess Funding Guarantor
(but subject to the succeeding provisions of this Section 4.6), pay to such
Excess Funding Guarantor an amount equal to such Domestic Guarantor's Pro Rata
Share (as defined below and determined, for this purpose, without reference to
the properties, assets, liabilities and debts of such Excess Funding Guarantor)
of such Excess Payment (as defined below). The Canadian Guarantors hereby agree,
as among themselves, that if any Canadian Guarantor shall become an Excess
Funding Guarantor (as defined below), each other Canadian Guarantor shall, on
demand of such Excess Funding Guarantor (but subject to the succeeding
provisions of this Section 4.6), pay to such Excess Funding Guarantor an amount
equal to such Canadian Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations. For purposes
hereof, (a) "Excess Funding Guarantor" shall mean, in respect of any obligations
arising under the



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<PAGE>   79

other provisions of this Section 4 (hereafter, the "Guarantied Obligations"), a
Guarantor that has paid an amount in excess of its Pro Rata Share of the
Guarantied Obligations; (b) "Excess Payment" shall mean, in respect of any
Guarantied Obligations, the amount paid by an Excess Funding Guarantor in excess
of its Pro Rata Share of such Guarantied Obligations; and (c) "Pro Rata Share",
for the purposes of this Section 4.6, shall mean, for any Guarantor, the ratio
(expressed as a percentage) of (i) the amount by which the aggregate present
fair saleable value of all of its assets and properties exceeds the amount of
all debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (ii) (A) in the case of the Domestic Guarantors, the
amount by which the aggregate present fair saleable value of all assets and
other properties of the Domestic Borrower and all of the Domestic Guarantors
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Domestic Borrower and the Domestic Guarantors hereunder) of
the Domestic Borrower and all of the Domestic Guarantors, all as of the Closing
Date and (B) in the case of the Canadian Guarantors, the amount by which the
aggregate present fair saleable value of all assets and other properties of the
Canadian Borrowers and all of the Canadian Guarantors (other than the Domestic
Borrower) exceeds the amount of all of the debts and liabilities (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of the Canadian Borrowers and the Canadian Guarantors hereunder)
of the Canadian Borrowers and all of the Canadian Guarantors, all as of the
Closing Date (in each case, if any Guarantor becomes a party hereto subsequent
to the Closing Date, then for the purposes of this Section 4.6 such subsequent
Guarantor shall be deemed to have been a Guarantor as of the Closing Date and
the information pertaining to, and only pertaining to, such Guarantor as of the
date such Guarantor became a Guarantor shall be deemed true as of the Closing
Date).

         4.7      Continuing Guarantee.

         The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Guaranteed Obligations whenever arising.


                                    SECTION 5
                                   CONDITIONS

         5.1      Conditions to Closing.

         This Credit Agreement shall become effective, and the initial
Extensions of Credit may be made, upon the satisfaction of the following
conditions precedent:

                  (a)      Execution of Credit Agreement and Credit Documents.
Receipt by the Domestic Administrative Agent of (i) multiple counterparts of
this Credit Agreement, (ii) a Note for each Lender, (iii) multiple counterparts
of the Pledge Agreements, (iv) multiple counterparts of the Security Agreements
and (v) UCC financing statements, Personal Property Security Act financing
statements and other documents relating to the Pledge Agreements and the
Security



                                       74
<PAGE>   80

Agreements, if any, in each case executed by a duly authorized officer of each
party thereto and in each case conforming to the requirements of this Credit
Agreement.

                  (b)      Legal Opinions. Receipt by the Domestic
Administrative Agent of multiple counterparts of opinions of counsel for the
Credit Parties relating to the Credit Documents and the transactions
contemplated herein, in form and substance satisfactory to the Administrative
Agents and the Required Lenders.

                  (c)      Stock Certificates. Receipt by the Collateral Agent
of original stock certificates evidencing the ownership interests of the Credit
Parties pledged pursuant to the Pledge Agreements, together in each case with
original undated stock powers executed in blank, and other ancillary documents
required by the Collateral Agent.

                  (d)      Evidence of Insurance. Receipt by the Collateral
Agent of insurance certificates or policies evidencing casualty insurance
(including builders' risk and all-risk permanent policies) and liability
insurance conforming to the requirements of this Credit Agreement and the other
Credit Documents, together with evidence of payment of premiums thereon.

                  (e)      Absence of Legal Proceedings. The absence of any
action, suit, investigation or proceeding pending in any court or before any
arbitrator or governmental instrumentality which could reasonably be expected to
have a Material Adverse Effect.

                  (f)      Corporate Documents. Receipt by the Domestic
Administrative Agent of the following (or their equivalent) for each of the
Credit Parties:

                           (i)      Resolutions. Copies of resolutions of the
         board of directors approving and adopting the respective Credit
         Documents, the transactions contemplated therein and authorizing
         execution and delivery thereof, certified by a secretary or assistant
         secretary as of the Closing Date to be true and correct and in force
         and effect as of such date.

                           (ii)     Good Standing. Copies, where applicable, of
         (A) certificates of good standing, existence or its equivalent
         certified as of a recent date by the appropriate governmental
         authorities of the state of incorporation and (B) certificates
         indicating payment of all corporate franchise taxes certified as of a
         recent date by the appropriate governmental taxing authorities of the
         state of incorporation.

                           (iii)    Officer's Certificate. An officer's
         certificate for each of the Credit Parties dated as of the Closing Date
         substantially in the form of Schedule 5.1(f)(iii)-1, Schedule
         5.1(f)(iii)-2, Schedule 5.1(f)(iii)-3, as appropriate, in each case
         with appropriate insertions and attachments.



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<PAGE>   81

                  (g)      Fees. Receipt of all fees, if any, owing pursuant to
the Administrative Agent's Fee Letter, Section 3.5 or otherwise.

                  (h)      Section 5.2 Conditions. The conditions specified in
Section 5.2 shall be satisfied.

         5.2      Conditions to All Extensions of Credit.

         The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:

                  (a)      Representations and Warranties. The representations
and warranties made by the Credit Parties herein and in the other Credit
Documents or which are contained in any certificate furnished at any time under
or in connection herewith shall be true and correct in all material respects on
and as of the date of such Extension of Credit as if made on and as of such date
(except for those which expressly relate to an earlier date and those which are
untrue solely as a result of a change permitted by this Agreement).

                  (b)      No Default or Event of Default. No Default or Event
of Default shall have occurred and be continuing on such date or after giving
effect to the Extension of Credit to be made on such date unless such Default or
Event of Default shall have been waived in accordance with this Credit
Agreement.

                  (c)      Additional Conditions to Domestic Revolving Loans. If
a Domestic Revolving Loan is requested pursuant to Section 2.1, all conditions
set forth in Section 2 shall have been satisfied.

                  (d)      Additional Conditions to Letters of Credit. If the
issuance of a Letter of Credit is requested pursuant to Section 2.1, all
conditions set forth in Section 2 shall have been satisfied.

                 (e)      Additional Conditions to Swingline Loans. If a
Swingline Loan is requested pursuant to Section 2.1, all conditions set forth in
Section 2 shall have been satisfied.

                  (f)      Additional Conditions to Canadian Revolving Loans. If
a Canadian Revolving Loan is requested pursuant to Section 2.1, all conditions
set forth in Section 2 shall have been satisfied.

                  (g)      Additional Conditions to Bankers' Acceptances. If the
issuance of a Bankers' Acceptance is requested pursuant to Section 2.1, all
conditions set forth in Section 2 shall have been satisfied.



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<PAGE>   82

         Each request for Extension of Credit (including extensions of
Eurodollar Loans and conversions of Base Rate Loans into Eurodollar Loans) and
each acceptance by the applicable Borrower of an Extension of Credit (including
extensions of Eurodollar Loans and conversions of Base Rate Loans into
Eurodollar Loans) shall be deemed to constitute a representation and warranty by
such Borrower as of the date of such Extension of Credit that the applicable
conditions in paragraphs (a) and (b), and in (c), (d), (e), (f) or (g) of this
subsection have been satisfied.


                                    SECTION 6
                         REPRESENTATIONS AND WARRANTIES

         To induce the Lenders to enter into this Credit Agreement and to make
Extensions of Credit herein provided for, each of the Credit Parties hereby
represents and warrants to each Administrative Agent and to each Lender that:

         6.1      Financial Condition.

         Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agents for distribution to the
Lenders), have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly the financial condition and results from operations
of the entities and for the periods specified (subject in the case of interim
company-prepared statements to normal year-end adjustments and the absence of
footnotes):

         (i)      audited consolidated and consolidating balance sheets for the
members of the Consolidated Group dated as of December 31, 1998, together with
related audited consolidated and consolidating statements of operations,
shareholders equity and cash flows certified by Arthur Andersen LLP, certified
public accountants;

         (ii)     company-prepared consolidated and consolidating balance sheets
for the members of the Consolidated Group dated as of March 31, 1999, together
with related consolidated statements of operations, shareholders equity and cash
flows; and

         (iii)    after the Closing Date, the annual and quarterly financial
statements provided in accordance with Sections 7.1(a) and (b).

         6.2      No Changes or Restricted Payments.

         Since March 31, 1999, (a) there has been no circumstance, development
or event relating to or affecting the members of the Consolidated Group which
has had or would be reasonably expected to have a Material Adverse Effect, and
(b) except as permitted herein, no Restricted Payments have been made or
declared by any members of the Consolidated Group.



                                       77
<PAGE>   83

         6.3      Organization; Existence; Compliance with Law.

         Each of the Credit Parties (a) is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
organization, except to the extent that the failure to be in good standing would
not, in the aggregate, have a Material Adverse Effect, (b) has the corporate or
other necessary power and authority, and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
entity and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, other than in such jurisdictions where the failure
to be so qualified and in good standing would not, in the aggregate, have a
Material Adverse Effect, and (d) is in compliance with its certificate of
incorporation and bylaws (or other organizational or governing documents) and
all Requirements of Law, except to the extent that the failure to comply
therewith would not, in the aggregate, be reasonably expected to have a Material
Adverse Effect.

         6.4      Power; Authorization; Enforceable Obligations.

         Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and has taken all necessary corporate or other
action to authorize the execution, delivery and performance by it of the Credit
Documents to which it is a party. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with acceptance of extensions of credit
or the making of the guaranties hereunder or with the execution, delivery or
performance of any Credit Documents by the Credit Parties (other than those
which have been obtained, such filings as are required by the Securities and
Exchange Commission and to fulfill other reporting requirements with
Governmental Authorities) or with the validity or enforceability of any Credit
Document against the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
Each Credit Document to which it is a party constitutes a legal, valid and
binding obligation of such Credit Party enforceable against such Credit Party in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

         6.5      No Legal Bar.

         The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law, the certificate of incorporation or bylaws (or other
organizational or governing documents) or any Contractual Obligation of any
Credit Party (except those as to which waivers or consents have been obtained),
and will not result in, or require, the creation or imposition of any Lien on
any of its respective properties or revenues pursuant to any Requirement of Law,
its certificate of incorporation or bylaws (or other organizational or governing
documents) or Contractual



                                       78
<PAGE>   84

Obligation other than the Liens arising under or contemplated in connection with
the Credit Documents. No member of the Consolidated Group is in default under or
with respect to any of its Contractual Obligations in any respect which would
reasonably be expected to have a Material Adverse Effect.

         6.6      No Material Litigation.

         No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the
Credit Parties, threatened by or against, any members of the Consolidated Group
or against any of their respective properties or revenues which (a) purports to
affect the legality, validity or enforceability of any of the Credit Documents
and which is reasonably likely to be adversely determined, or (b) is reasonably
likely to have a Material Adverse Effect.

         6.7      No Default.

         No Default or Event of Default has occurred and is continuing.

         6.8      Ownership of Property; Liens.

         Each of the Credit Parties has good record and marketable title in fee
simple to, or (subject to the documentation of certain agreed-upon leases
between certain Credit Parties and certain of the shareholders or principals of
the corresponding Founding Companies) a valid leasehold interest in, all its
real property material to the Consolidated Group, and good title to, or a valid
leasehold interest in, all its other property material to the Consolidated
Group, and none of such property is subject to any Lien, except for Permitted
Liens.

         6.9      Intellectual Property.

         Each of the members of the Consolidated Group owns, or has the legal
right to use, all United States trademarks, tradenames, copyrights, technology,
know-how and processes, if any, necessary for each of them to conduct its
business as currently conducted (the "Intellectual Property") except for those
the failure to own or have such legal right to use would not be reasonably
expected to have a Material Adverse Effect. No claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Credit Party know of any such claim, and the use of such
Intellectual Property by the members of the Consolidated Group does not infringe
on the rights of any Person, except for such claims and infringements that in
the aggregate, would not be reasonably expected to have a Material Adverse
Effect.




                                       79
<PAGE>   85

         6.10     No Burdensome Restrictions.

         Neither the certificate of incorporation or bylaws (or other
organizational or governing documents) nor any Requirement of Law or Contractual
Obligation of the members of the Consolidated Group would be reasonably expected
to have a Material Adverse Effect.

         6.11     Taxes.

         Each of the Credit Parties has filed or caused to be filed all United
States and Canadian federal income tax returns and all other material tax
returns which, to the best knowledge of the Credit Parties, are required to be
filed and has paid (a) all taxes shown to be due and payable on said returns or
(b) all taxes shown to be due and payable on any assessments of which it has
received notice made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any (i) taxes, fees or other charges with respect to which
the failure to pay, in the aggregate, would not have a Material Adverse Effect
or (ii) taxes, fees or other charges the amount or validity of which are
currently being contested and with respect to which reserves in conformity with
GAAP have been provided on the books of such Person), and no tax Lien has been
filed (other than tax Liens which, in the aggregate, would not have a Material
Adverse Effect), and, to the best knowledge of the Credit Parties, no claim is
being asserted, with respect to any such tax, fee or other charge (other than
such claims which, in the aggregate, would not have a Material Adverse Effect).

         6.12     ERISA

         Except as would not reasonably be expected to have a Material Adverse
Effect:

         (a)      During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the best knowledge of the Credit Parties, no event or condition has occurred or
exists as a result of which any ERISA Event could reasonably be expected to
occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code, whether or not waived, has occurred with respect to any Plan;
(iii) each Plan has been maintained, operated, and funded in compliance with its
own terms and in material compliance with the provisions of ERISA, the Internal
Revenue Code, and any other applicable federal or state laws; and (iv) no lien
in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.

         (b)      The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the date on
which this representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value of the
assets of such Plan.



                                       80
<PAGE>   86

         (c)      No member of the Consolidated Group nor any ERISA Affiliate
has incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. No member of the Consolidated
Group nor any ERISA Affiliate would become subject to any withdrawal liability
under ERISA if any member of the Consolidated Group or any ERISA Affiliate were
to withdraw completely from all Multiemployer Plans and Multiple Employer Plans
as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No member of the Consolidated Group nor
any ERISA Affiliate has received any notification that any Multiemployer Plan is
in reorganization (within the meaning of Section 4241 of ERISA), is insolvent
(within the meaning of Section 4245 of ERISA), or has been terminated (within
the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Credit Parties, reasonably expected to be in reorganization,
insolvent, or terminated.

         (d)      No prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Internal Revenue Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or may
subject any member of the Consolidated Group or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Internal Revenue Code, or under any agreement or other instrument pursuant
to which any member of the Consolidated Group or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability.

         (e)      No member of the Consolidated Group nor any ERISA Affiliates
has any material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Internal
Revenue Code apply has been administered in compliance in all material respects
of such sections.

         6.13     Governmental Regulations, Etc.

         (a)      No part of the proceeds of the Extensions of Credit hereunder
will be used, directly or indirectly, for the purpose of purchasing or carrying
any "margin stock" within the meaning of Regulation U. If requested by any
Lender or the Domestic Administrative Agent, each Borrower will furnish to the
Domestic Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to in said
Regulation U. No indebtedness being reduced or retired out of the proceeds of
the Extensions of Credit hereunder was or will be incurred for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U or
any "margin security" within the meaning of Regulation T. "Margin stock" within
the meanings of Regulation U does not constitute more than 25% of the value of
the consolidated assets of the Domestic Borrower and its Subsidiaries. None of
the transactions contemplated by this Credit Agreement (including, without
limitation, the direct or indirect use of the proceeds of the Loans) will
violate or result in a violation of the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, or regulations issued pursuant
thereto, or Regulation T, U or X.



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<PAGE>   87

         (b)      None of the members of the Consolidated Group is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940, each as amended. In addition,
none of the members of the Consolidated Group is (i) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.

         (c)      No director, executive officer or principal shareholder of any
member of the Consolidated Group is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O.

         6.14     Subsidiaries.

         Set forth on Schedule 6.14 are all the Subsidiaries of the Domestic
Borrower at the Closing Date, the jurisdiction of their incorporation and the
direct or indirect ownership interest of the Domestic Borrower therein.

         6.15     Purpose of Extensions of Credit.

         The Extensions of Credit may be used (i) for working capital, capital
expenditures and other lawful corporate purposes and (ii) to finance
Acquisitions permitted hereunder and refinance funded debt in connection with
such Acquisitions.

         6.16     Environmental Matters.

         Except as would not reasonably be expected to have a Material Adverse
Effect:

         (a)      Each of the facilities and properties owned, leased or
operated by the members of the Consolidated Group (the "Properties") and all
operations at the Properties are in compliance with all applicable Environmental
Laws, and there is no violation of any Environmental Law with respect to the
Properties or the businesses operated by the members of the Consolidated Group
(the "Businesses"), and there are no conditions relating to the Businesses or
Properties that could give rise to liability under any applicable Environmental
Laws.

         (b)      None of the Properties contains, or has previously contained,
any Materials of Environmental Concern at, on or under the Properties in amounts
or concentrations that constitute or constituted a violation of, or could give
rise to liability under, Environmental Laws.

         (c)      None of the members of the Consolidated Group has received any
written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation,



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<PAGE>   88

non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the Businesses, nor does any member of the Consolidated Group have knowledge or
reason to believe that any such notice will be received or is being threatened.

         (d)      Materials of Environmental Concern have not been transported
or disposed of from the Properties, or generated, treated, stored or disposed of
at, on or under any of the Properties or any other location, in each case by or
on behalf any members of the Consolidated Group in violation of, or in a manner
that would be reasonably likely to give rise to liability under, any applicable
Environmental Law.

         (e)      No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Credit Party, threatened,
under any Environmental Law to which any member of the Consolidated Group is or
will be named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
any member of the Consolidated Group, the Properties or the Businesses.

         (f)      There has been no release or, threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or related
to the operations (including, without limitation, disposal) of any member of the
Consolidated Group in connection with the Properties or otherwise in connection
with the Businesses, in violation of or in amounts or in a manner that could
give rise to liability under Environmental Laws.

         6.17     Year 2000 Compliance.

         The Domestic Borrower has (i) developed a plan and timeline for
addressing the "Year 2000 Problem" (that is, the risk that computer applications
used by such Person may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999) on a timely basis, (ii) to date, implemented that plan in
accordance with that timetable and (iii) believes that all of its computer
applications that are material to its or any of its Subsidiaries' business and
operations are reasonably expected on a timely basis to be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 Compliant"), except to the extent that a failure to do
so could not reasonably be expected to have a Material Adverse Effect.

         6.18     Canadian Pension Plans

         Except as would not reasonably be expected to have a Material Adverse
Effect, (a) each Canadian Pension Plan is ongoing, duly registered and complies,
and has been administered in compliance, in all material respects, with all
applicable legislation and governmental rules and regulations (collectively,
"Canadian Pension Laws") including, without limitation, pension benefits
standards legislation and the Income Tax Act (Canada) and any applicable
provincial legislation; (b) each Canadian Pension Plan is in good standing under
Canadian Pension Laws,



                                       83
<PAGE>   89

and no events have occurred which would reasonably be expected to impair such
status; (c) there has been no payment out of the pension fund held in respect of
any Canadian Pension Plan except for the purpose of paying or arranging for the
payment of authorized benefits or the proper expenses of any Canadian Pension
Plan in accordance with its terms and Canadian Pension Laws; (d) no steps have
been instituted by a Canadian Credit Party and no Canadian Credit Party has
acquiesced in any action by another Person which could result in the
termination, in whole or in part, of any Canadian Pension Plan, whether by
declaration by any governmental authority or otherwise; (e) all contributions
have been made to each Canadian Pension Plan in accordance with the terms of
such Canadian Pension Plan and the recommended funding requirements disclosed in
any actuarial valuations or reports pertaining to such Canadian Pension Plan and
no contribution failure has occurred with respect to any Canadian Pension Plan
sufficient to give rise to any liability, to constitute an offense or to
jeopardize the registration of any Canadian Pension Plan under any Canadian
Pension Laws; (f) no Canadian Pension Plan has a "solvency deficiency" as
defined and determined in accordance with any Canadian Pension Laws; (g) no
material actions, suits, claims or proceedings are pending or threatened in
respect of any Canadian Pension Plan, other than routine uncontested claims for
benefits; (h) no condition exists or transaction has occurred in connection with
any Canadian Pension Plan which could result in the incurrence by a Canadian
Credit Party of any material liability, fine or penalty and (i) where a Canadian
Pension Plan is required to be registered under applicable Canadian Pension Law,
either such Canadian Pension Plan is duly registered or timely application for
such registration has been made.


                                    SECTION 7
                              AFFIRMATIVE COVENANTS

         Each of the Credit Parties covenants and agrees that on the Closing
Date, and so long as this Credit Agreement is in effect and until the
Commitments have been terminated, no Obligations remain outstanding and all
amounts owing hereunder or in connection herewith have been paid in full, unless
the Required Lenders otherwise consent in writing, the Domestic Borrower shall,
and in the case of Sections 7.4, 7.5, 7.6, 7.7 and 7.8 below, shall cause each
of the other Credit Parties to:

         7.1      Financial Statements.

         Furnish, or cause to be furnished, to the Administrative Agents and
Lenders:

                  (a)      Audited Financial Statements. As soon as available,
         but in any event within 95 days after the end of each fiscal year, an
         audited consolidated balance sheet of the Consolidated Group as of the
         end of the fiscal year and the related consolidated statements of
         operations, shareholders' equity and cash flows for the year, audited
         by Arthur Andersen LLP, or other firm of independent certified public
         accountants of nationally recognized standing reasonably acceptable to
         the Required Lenders, setting forth in each case in comparative form
         the figures for the previous year, reported without




                                       84
<PAGE>   90

         a "going concern" or like qualification or exception, or qualification
         indicating that the scope of the audit was inadequate to permit such
         independent certified public accountants to certify such financial
         statements without such qualification.

                  (b)      Company-Prepared Financial Statements. As soon as
         available, but in any event

                           (i)      within 50 days after the end of each of the
                  first three fiscal quarters, a company-prepared consolidated
                  and consolidating balance sheet of the Consolidated Group as
                  of the end of the quarter and related company-prepared
                  consolidated and consolidating statements of operations,
                  shareholders' equity and cash flows for such quarterly period
                  and for the fiscal year to date;

                           (ii)     within 30 days prior to the end of each
                  fiscal year, an annual business plan and budget for the
                  members of the Consolidated Group, containing, among other
                  things, projected financial statements for the next fiscal
                  year,

         in each case setting forth in comparative form the consolidated and
         consolidating figures for the corresponding period or periods of the
         preceding fiscal year or the portion of the fiscal year ending with
         such period, as applicable, in each case subject to normal year-end
         audit adjustments.

                  (c)      Borrowing Base Certificate. Within 30 days after the
         end of each calendar month, a statement of the Borrowing Base and its
         components as of the end of such calendar month, in form and content
         satisfactory to the Administrative Agents and certified by the chief
         financial officer of the Domestic Borrower to be true and correct as of
         the date thereof (the "Borrowing Base Certificate").

         All such financial statements shall be complete and correct in all
         material respects (subject, in the case of interim statements, to
         normal year-end audit adjustments) and shall be prepared in reasonable
         detail and, in the case of the annual and quarterly financial
         statements provided in accordance with subsections (a) and (b) above,
         in accordance with GAAP applied consistently throughout the periods
         reflected therein and further accompanied by a description of, and an
         estimation of the effect on the financial statements on account of, any
         change in the application of accounting principles as provided in
         Section 1.3(a).

         7.2      Certificates; Other Information.

         Furnish, or cause to be furnished, to the Administrative Agents and the
Lenders:

                  (a)      Accountant's Certificate and Reports. Concurrently
         with the delivery of the financial statements referred to in subsection
         7.1(a) above, a certificate of the independent certified public
         accountants reporting on such financial statements stating



                                       85
<PAGE>   91

         that in the course of performing their audit, nothing came to their
         attention that caused them to believe the Domestic Borrower was not in
         compliance with the financial covenants contained in Section 7.9 below
         insofar as such covenants relate to accounting matters, except as
         specified in such certificate.

                  (b)      Officer's Compliance Certificate. Concurrently with
         the delivery of the financial statements referred to in Sections 7.1(a)
         and 7.1(b) above, a certificate of a Responsible Officer stating that,
         to the best of such Responsible Officer's knowledge and belief, (i) the
         financial statements fairly present in all material respects the
         financial condition of the parties covered by such financial
         statements, (ii) during such period the Credit Parties have observed or
         performed in all material respects the covenants and other agreements
         hereunder and under the other Credit Documents relating to them, and
         satisfied in all material respects the conditions contained in this
         Credit Agreement to be observed, performed or satisfied by them, and
         (iii) such Responsible Officer has obtained no knowledge of any Default
         or Event of Default except as specified in such certificate. Such
         certificate shall include the calculations required to indicate
         compliance with Section 7.9. A form of Officer's Certificate is
         attached as Schedule 7.2(b).

                  (c)      Accountants' Reports. Promptly upon receipt, a copy
         of any final (as distinguished from a preliminary or discussion draft)
         "management letter" or other similar report submitted by independent
         accountants or financial consultants to the members of the Consolidated
         Group in connection with any annual, interim or special audit.

                  (d)      Public Information. Within thirty days after the same
         are sent, copies of all reports (other than those otherwise provided
         pursuant to Section 7.1) and other financial information which the
         Domestic Borrower sends to its public stockholders, and within thirty
         days after the same are filed, copies of all financial statements and
         non-confidential reports which the Domestic Borrower may make to, or
         file with, the SEC.

                  (e)      Other Information. Promptly, such additional
         financial and other information as either Administrative Agent, at the
         request of any Lender, may from time to time reasonably request.

         7.3      Notices.

         Give notice to the Administrative Agents (which shall promptly transmit
such notice to each Lender) of:

                  (a)      Defaults. Immediately (and in any event within five
         (5) Business Days) after any Responsible Officer knows or has reason to
         know thereof, the occurrence of any Default or Event of Default.



                                       86
<PAGE>   92

                  (b)      Contractual Obligations. Promptly (and in any event
         within ten (10) Business Days) after any Responsible Officer knows or
         has reason to know of the occurrence of any default or event of default
         under any Contractual Obligation of any member of the Consolidated
         Group which would reasonably be expected to have a Material Adverse
         Effect.

                  (c)      Legal Proceedings. Promptly (and in any event within
         ten (10) Business Days) after any Responsible Officer knows or has
         reason to know of any litigation, or any investigation or proceeding
         (including without limitation, any environmental proceeding), or any
         material development in respect thereof, affecting any member of the
         Consolidated Group which, if adversely determined, would reasonably be
         expected to have a Material Adverse Effect.

                  (d)      ERISA. Promptly (and in any event within thirty (30)
         Business Days) after any Responsible Officer knows or has reason to
         know of (i) any event or condition, including, but not limited to, any
         Reportable Event, that constitutes, or might reasonably lead to, an
         ERISA Event; (ii) with respect to any Multiemployer Plan, the receipt
         of notice as prescribed in ERISA or otherwise of any withdrawal
         liability assessed against any of their ERISA Affiliates, or of a
         determination that any Multiemployer Plan is in reorganization or
         insolvent (both within the meaning of Title IV of ERISA); (iii) the
         failure to make full payment on or before the due date (including
         extensions) thereof of all amounts which the members of the
         Consolidated Group or any ERISA Affiliate are required to contribute to
         each Plan pursuant to its terms and as required to meet the minimum
         funding standard set forth in ERISA and the Internal Revenue Code with
         respect; or (iv) any change in the funding status of any Plan that
         reasonably could be expected to have a Material Adverse Effect;
         together with a description of any such event or condition or a copy of
         any such notice and a statement by the chief financial officer of the
         Domestic Borrower briefly setting forth the details regarding such
         event, condition, or notice, and the action, if any, which has been or
         is being taken or is proposed to be taken by the Credit Parties with
         respect thereto. Promptly upon request, the members of the Consolidated
         Group shall furnish the Administrative Agents and the Lenders with such
         additional information concerning any Plan as may be reasonably
         requested, including, but not limited to, copies of each annual
         report/return (Form 5500 series), as well as all schedules and
         attachments thereto required to be filed with the Department of Labor
         and/or the Internal Revenue Service pursuant to ERISA and the Internal
         Revenue Code, respectively, for each "plan year" (within the meaning of
         Section 3(39) of ERISA).

                  (e)      Canadian Pension Plans. Promptly (and in any event
         within 30 Business Days) after the institution of any steps by a
         Canadian Credit Party or any other Person to which such other Person is
         subject to terminate any Canadian Pension Plan, or the failure to make
         a required contribution to any Canadian Pension Plan if such failure is
         sufficient to give rise to a Lien under applicable laws and
         regulations, or the taking of any action with respect to such a
         Canadian Pension Plan which could result in the requirement that the
         such Person furnish a bond or other security to any applicable
         Governmental



                                       87
<PAGE>   93

         Authority or such Canadian Pension Plan, or the occurrence of any event
         with respect to any such Canadian Pension Plan which could result in
         the incurrence by such Person of any material liability, fine or
         penalty, or any material increase in the contingent liability of such
         Person with respect to any post-retirement Canadian Pension Plan
         benefit.

                  (f)      Other. Promptly (and in any event within ten (10)
         Business Days), any other development or event which a Responsible
         Officer determines could reasonably be expected to have a Material
         Adverse Effect.

Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the relevant Credit Parties propose to take with respect
thereto.

         7.4      Payment of Obligations.

         Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with prudent business
practice (subject, where applicable, to specified grace periods) all material
obligations of each Credit Party of whatever nature and any additional costs
that are imposed as a result of any failure to so pay, discharge or otherwise
satisfy such obligations, except when the amount or validity of such obligations
and costs is currently being contested in good faith by appropriate proceedings
and reserves, if applicable, in conformity with GAAP with respect thereto have
been provided on the books of the Consolidated Group, as the case may be.

         7.5      Conduct of Business and Maintenance of Existence.

         Continue to engage in business of the same general type as conducted on
the Closing Date by the Domestic Borrower and the other Credit Parties, taken as
a whole, and similar or related businesses; preserve, renew and keep in full
force and effect its corporate existence except as otherwise permitted by this
Credit Agreement and take all reasonable action to maintain all rights,
privileges, licenses and franchises necessary or desirable in the normal conduct
of its business except to the extent that failure to comply therewith would not,
in the aggregate, have a Material Adverse Effect; and comply with all
Contractual Obligations, its certificate of incorporation or bylaws (or other
organizational or governing documents) and all Requirements of Law applicable to
it except to the extent that failure to comply therewith would not, in the
aggregate, have a Material Adverse Effect.

         7.6      Maintenance of Property; Insurance.

         Keep all material property useful and necessary in its business in
reasonably good working order and condition (ordinary wear and tear excepted)
except to the extent that failure to comply therewith would not, in the
aggregate, have a Material Adverse Effect; maintain with financially sound and
reputable insurance companies casualty, liability and such other insurance
(which may include plans of self-insurance) with such coverage and deductibles,
and in such



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<PAGE>   94

amounts as may be consistent with prudent business practice and in any event
consistent with normal industry practice (except to any greater extent as may be
required by the terms of any of the other Credit Documents); and furnish to
either Administrative Agent or the Collateral Agent, upon written request, full
information as to the insurance carried.

         7.7      Inspection of Property; Books and Records; Discussions.

         Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its businesses and
activities; and permit, during regular business hours and upon reasonable notice
to a Responsible Officer by the Domestic Administrative Agent, the Domestic
Administrative Agent, and its representatives, to visit and inspect any of its
properties and examine and make abstracts (including photocopies) from any of
its books and records (other than materials protected by the attorney-client
privilege and materials which the Credit Parties may not disclose without
violation of a confidentiality obligation binding upon them) and to discuss the
business, operations, properties and financial and other condition of the Credit
Parties with officers and employees of any Borrower and, so long as any
discussion takes place in the presence of a Responsible Officer, with officers
and employees of the Credit Parties and with any Borrower's independent
certified public accountants. The cost of the inspection referred to in the
preceding sentence shall be for the account of the Lenders unless an Event of
Default has occurred and is continuing, in which case the cost of such
inspection shall be for the account of the Credit Parties. The Credit Parties
agree that the Domestic Administrative Agent, on behalf of the Lenders, and its
representatives (including representatives of the Lenders), may conduct an
annual audit of the inventory and receivables of the Credit Parties, at the
expense of the Borrowers.

         7.8      Environmental Laws.

         (a)      Comply in all material respects with, and take reasonable
actions to ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and take reasonable actions
to ensure that all tenants and subtenants obtain and comply in all material
respects with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws except to the
extent that failure to do so would not reasonably be expected to have a Material
Adverse Effect; and

         (b)      Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the failure to do or the pendency of such
proceedings would not reasonably be expected to have a Material Adverse Effect.



                                       89
<PAGE>   95

         7.9      Financial Covenants.

         Comply with the following financial covenants (each of which shall be
computed in accordance with Section 1.3(b), to the extent applicable):

         (a)      Consolidated Total Leverage Ratio. As of the end of each
fiscal quarter of the members of the Consolidated Group, the Consolidated Total
Leverage Ratio shall not be greater than 4.0:1.0.

         (b)      Consolidated Senior Leverage Ratio. As of the end of each
fiscal quarter of the members of the Consolidated Group, the Consolidated Senior
Leverage Ratio shall not be greater than 2.5:1.0.

         (c)      Consolidated Net Worth. As of the end of each fiscal quarter
of the members of the Consolidated Group, Consolidated Net Worth shall be not
less than the sum of US$96,227,000 plus on the last day of each fiscal quarter
to end after March 31, 1999, seventy-five percent (75%) of Consolidated Net
Income for the fiscal quarter (but not less than zero), such increases to be
cumulative, plus one hundred percent (100%) of any increases in Consolidated Net
Worth resulting from Equity Transactions occurring after the Closing Date.

         (d)      Consolidated Fixed Charge Coverage Ratio. As of the end of
each fiscal quarter of the members of the Consolidated Group, the Consolidated
Fixed Charge Coverage Ratio shall not be less than 1.75:1.0.

         (e)      Consolidated Rent Expense. Consolidated Rent Expense for any
fiscal year shall not exceed three percent (3%) of revenues of the Consolidated
Group determined on a consolidated basis in accordance with GAAP.

         (e)      Consolidated Capital Expenditures. Consolidated Capital
Expenditures for any fiscal year shall not exceed an amount equal to the greater
of (a) five percent (5%) of revenues of the Consolidated Group determined on a
consolidated basis in accordance with GAAP for such fiscal year or (b)
US$25,000,000.

         7.10     Administrative Fees.

         Pay to each Administrative Agent the Administrative Agent's Fees and
comply with the other agreements provided for in the Administrative Agent's Fee
Letter.

         7.11     Additional Guaranties and Stock Pledges.

         (a)      Domestic Subsidiaries. Where Domestic Subsidiaries which are
not Domestic Guarantors (the "Non-Guarantor Domestic Subsidiaries") shall at any
time (the "Domestic Threshold Requirement"):



                                       90
<PAGE>   96

                  (i)      in any instance for any such Non-Guarantor Domestic
         Subsidiary, constitute more than five percent (5%) of consolidated
         assets for the Consolidated Group as of the end of the immediately
         preceding fiscal quarter or generate more than five percent (5%) of
         consolidated revenues for the Consolidated Group for the period of four
         consecutive fiscal quarters ending as of the end of the immediately
         preceding fiscal quarter, or

                  (ii)     in the aggregate for all such Non-Guarantor Domestic
         Subsidiaries, constitute more than ten percent (10%) of consolidated
         assets for the Consolidated Group as of the end of the immediately
         preceding fiscal quarter or generate more than ten percent (10%) of
         consolidated revenues for the Consolidated Group for the period of four
         consecutive fiscal quarters ending as of the end of the immediately
         preceding fiscal quarter,

then the Domestic Borrower shall (i) notify the Domestic Administrative Agent
thereof within 10 days after a Responsible Officer has knowledge thereof, and
(ii) within 45 days thereafter, (A) cause each such Domestic Subsidiary to
become a Domestic Guarantor by execution of a Joinder Agreement, such that
immediately after joinder as a Domestic Guarantor, the remaining Non-Guarantor
Domestic Subsidiaries shall not in any instance, or collectively, exceed the
Domestic Threshold Requirement, (B) deliver with the Joinder Agreement such
supporting resolutions, incumbency certificates, corporate formation and
organizational documentation and opinions of counsel as the Domestic
Administrative Agent may reasonably request, and (C) deliver stock certificates
and related pledge agreements or pledge joinder agreements evidencing the pledge
of 100% of the capital stock of each Domestic Subsidiary (whether or not it is a
Guarantor) of the Domestic Borrower and 66% (or such greater percentage which
would not result in material adverse tax consequences) of the issued and
outstanding capital stock entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of
each Foreign Subsidiary (including Canadian Subsidiaries) directly owned by each
such Domestic Subsidiary to secure the obligations of the Domestic Guarantors
under the Credit Documents, together with undated stock transfer powers executed
in blank.

         (b)      Canadian Subsidiaries. Where Canadian Subsidiaries which are
not Canadian Guarantors (the "Non-Guarantor Canadian Subsidiaries") shall at any
time (the "Canadian Threshold Requirement"):

                  (i)      in any instance for any such Non-Guarantor Canadian
         Subsidiary, constitute more than five percent (5%) of consolidated
         assets for the Consolidated Group as of the end of the immediately
         preceding fiscal quarter or generate more than five percent (5%) of
         consolidated revenues for the Consolidated Group for the period of four
         consecutive fiscal quarters ending as of the end of the immediately
         preceding fiscal quarter, or



                                       91
<PAGE>   97

                  (ii)     in the aggregate for all such Non-Guarantor Canadian
         Subsidiaries, constitute more than ten percent (10%) of consolidated
         assets for the Consolidated Group as of the end of the immediately
         preceding fiscal quarter or generate more than ten percent (10%) of
         consolidated revenues for the Consolidated Group for the period of four
         consecutive fiscal quarters ending as of the end of the immediately
         preceding fiscal quarter,

then the Canadian Borrower shall (i) notify the Administrative Agents thereof
within 10 days after a Responsible Officer has knowledge thereof, and (ii)
within 45 days thereafter, (A) cause each such Canadian Subsidiary to become a
Canadian Guarantor (subject, in the case of any Canadian Non-Guarantor
Subsidiary which is an Ontario corporation, to the limitations set forth in
Section 4.1(a)(ii)) (and, so long as no adverse tax consequences in the
reasonable determination of the Domestic Borrower would be created thereby,
cause each such Canadian Subsidiary to become a Domestic Guarantor) by execution
of a Joinder Agreement, such that immediately after joinder as a Canadian
Guarantor, the remaining Non-Guarantor Canadian Subsidiaries shall not in any
instance, or collectively, exceed the Canadian Threshold Requirement, (B)
deliver with the Joinder Agreement such supporting resolutions, incumbency
certificates, corporate formation and organizational documentation and opinions
of counsel as the Administrative Agents may reasonably request, and (C) deliver
stock certificates and related pledge agreements or pledge joinder agreements
evidencing the pledge of (I) 66% (or such greater percentage which would not
result in material adverse tax consequences) of the issued and outstanding
capital stock entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of each direct
Canadian Subsidiary of a Domestic Credit Party to secure the obligations of the
Domestic Guarantors under the Credit Documents, (II) 34% (or the percentage not
pledged pursuant to the foregoing clause (I), if less) of the of the issued and
outstanding capital stock not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) of each direct Canadian Subsidiary of a Domestic
Credit Party to secure the obligations of the Canadian Guarantors under the
Credit Documents, and (III) 100% of the of the issued and outstanding capital
stock of each Foreign Subsidiary (including Canadian Subsidiaries) directly or
indirectly owned by each such Canadian Subsidiary to secure the obligations of
the Canadian Guarantors under the Credit Documents, in each case together with
undated stock transfer powers executed in blank and other ancillary documents
reasonably requested by the Collateral Agent.

         (c)      Other Foreign Subsidiaries. Where Foreign Subsidiaries (other
than Canadian Subsidiaries) shall at any time in the aggregate generate more
than ten percent (10%) of consolidated revenues for the Consolidated Group for
the period of four consecutive fiscal quarters ending as of the end of the
immediately preceding fiscal quarter or more than ten percent (10%) of
Consolidated EBITDA for the period of four consecutive fiscal quarters ending as
of the end of the immediately preceding fiscal quarter, then the Domestic
Borrower shall (a) notify the Domestic Administrative Agent thereof within 10
days after a Responsible Officer has knowledge thereof, and (b) within 45 days
thereafter, cause (i) delivery of supporting resolutions, incumbency
certificates, corporation formation and organizational documentation and
opinions



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<PAGE>   98

of counsel as the Administrative Agents may reasonably request, and (ii)
delivery of stock certificates (where required for perfection under local law)
and a related pledge agreement or pledge joinder agreement evidencing the pledge
of (I) 66% (or such greater percentage which would not result in material
adverse tax consequences) of the issued and outstanding capital stock entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of
the issued and outstanding Capital Stock not entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) of each Foreign Subsidiary (other
than Canadian Subsidiaries) directly owned by a Domestic Credit Party to secure
the obligations of the Domestic Guarantors under the Credit Documents, (II) 34%
(or the percentage not pledged pursuant to the foregoing clause (I), if less) of
the of the issued and outstanding capital stock not entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) of each Foreign Subsidiary (other
than Canadian Subsidiaries) directly owned by a Domestic Credit Party to secure
the obligations of the Canadian Guarantors under the Credit Documents, and (III)
100% of the of the issued and outstanding capital stock of each other Foreign
Subsidiary (other than Canadian Subsidiaries) to secure the obligations of the
Canadian Guarantors under the Credit Documents, in each case together with
undated stock transfer powers executed in blank and other ancillary documents
reasonably requested by the Collateral Agent.

         (d)      Guaranties Given in respect of Other Indebtedness.
Notwithstanding anything to the contrary contained herein, the Domestic Borrower
will promptly provide, or cause to be provided, to the Administrative Agents,
appropriate Joinder Agreements in respect of the obligations of the Domestic
Guarantors and the Canadian Guarantors under the Credit Documents from any
Subsidiary or Affiliate which shall give a guaranty in respect of the Senior
Subordinated Notes, together with the other items referenced in subsections (a)
or (b) above, as appropriate.

         7.12     Ownership of Subsidiaries.

         Except to the extent otherwise permitted in Section 8.6, the Domestic
Borrower shall, directly or indirectly, own at all times 100% of the Voting
Stock of each of its Subsidiaries.

         7.13     Use of Proceeds.

         Extensions of Credit will be used solely for the purposes provided in
Section 6.15.

         7.14     Year 2000 Compatibility.

         Take all action reasonably necessary to assure that its computer based
systems are Year 2000 Compliant (within the meaning of Section 6.17), except to
the extent that a failure to do so would not have a Material Adverse Effect,
and, at the reasonable request of either Administrative Agent or the Required
Lenders, provide evidence to the Lenders that it is taking such action.



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         7.15     Canadian Pension Plans.

         Maintain and cause each Canadian Credit Party to maintain each Canadian
Pension Plan to which it is subject in compliance with all applicable
requirements of law and regulations, except to the extent the failure to do so
would not be reasonably expected to have a Material Adverse Effect.


                                    SECTION 8
                               NEGATIVE COVENANTS

         Each of the Credit Parties covenants and agrees that on the Closing
Date, and so long as this Credit Agreement is in effect and until the
Commitments have been terminated, no Obligations remain outstanding and all
amounts owing hereunder or in connection herewith, have been paid in full, no
member of the Consolidated Group shall (without the prior written consent of the
Required Lenders):

         8.1      Indebtedness.

         Contract, create, incur, assume or permit to exist any Indebtedness,
except:

                  (a)      Indebtedness arising or existing under this Credit
         Agreement and the other Credit Documents;

                  (b)      Indebtedness set forth in Schedule 8.1, and renewals,
         refinancings and extensions thereof on terms and conditions consistent
         with then prevailing market standards for such existing Indebtedness;

                  (c)      Capital Lease Obligations and Indebtedness incurred,
         in each case, to provide all or a portion of the purchase price or
         costs of construction of an asset or, in the case of a sale/leaseback
         transaction as described in Section 8.9, to finance the value of such
         asset owned by a member of the Consolidated Group, provided that (i)
         such Indebtedness when incurred shall not exceed the purchase price or
         cost of construction of such asset or, in the case of a sale/leaseback
         transaction, the fair market value of such asset, (ii) no such
         Indebtedness shall be refinanced for a principal amount in excess of
         the principal balance outstanding thereon at the time of such
         refinancing, and (iii) the aggregate amount of Capital Lease
         Obligations shall not exceed US$10 million at any time outstanding and
         the total amount of all such Indebtedness shall not exceed US$25
         million at any time outstanding;

                  (d)      Indebtedness and obligations owing under interest
         rate protection agreements relating to the Obligations hereunder and
         under interest rate, commodities and foreign currency exchange
         protection agreements entered into in the ordinary course of business
         to manage existing or anticipated risks and not for speculative
         purposes;



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<PAGE>   100

                  (e)      unsecured intercompany Indebtedness owing by a member
         of the Consolidated Group to another members of the Consolidated Group
         (subject, however, to the limitations of Section 8.5 in the case of the
         member of the Consolidated Group extending the intercompany loan,
         advance or credit);

                  (f)      Subordinated Debt of the Domestic Borrower consisting
         of

                           (i)      the Senior Subordinated Notes in an
                  aggregate principal amount of up to US$125 million (and
                  renewals, refinancing and refundings of the then outstanding
                  principal amount the terms of subordination of which shall be
                  identical in all material respects to the terms of
                  subordination under the Senior Subordinated Notes (and the
                  indenture relating thereto) and on other terms and conditions
                  no less favorable to the Lenders than the terms and conditions
                  contained in the Senior Subordinated Notes (and the indenture
                  relating thereto); and

                           (ii)     other Subordinated Debt, provided that (A)
                  the Domestic Borrower shall demonstrate it will be in
                  compliance with the financial covenants in Section 7.9 after
                  giving effect thereto on a Pro Forma Basis, and (B) no Default
                  or Event of Default shall exist after giving effect thereto;

                  (g)      Indebtedness in respect of financed insurance premium
         obligations;

                  (h)      purchase money Indebtedness (including Capital Lease
         Obligations) assumed in connection with the Permitted Acquisitions in
         an aggregate principal amount not to exceed US$15,000,000 at any time
         outstanding;

                  (i)      seller financing obligations incurred in connection
         with the Permitted Acquisitions in an aggregate principal amount not to
         exceed an amount equal to ten percent (10%) of Consolidated Net Worth
         as of the end of the immediately preceding fiscal quarter;

                  (j)      Indebtedness of Canadian Subsidiaries of up to US$10
         million in the aggregate owing under a Canadian working capital credit
         facility extended by one or more Canadian lenders, secured by personal
         property of the Canadian Subsidiaries, guaranteed by the Domestic
         Borrower and the Canadian Subsidiaries (but not the Domestic
         Subsidiaries), and extensions and renewals thereof;

                  (k)      other unsecured Indebtedness of any of the Credit
         Parties of up to US$2,500,000 in the aggregate at any time outstanding;

                  (l)      Support Obligations of Indebtedness permitted under
         this Section 8.1; provided that any Support Obligations given in
         support of Subordinated Debt shall be



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<PAGE>   101

         subordinated on the same basis as the Subordinated Debt which is the
         subject thereof and Support Obligations given in support of the
         Canadian credit facility referenced under clause (j) hereof shall be
         limited as provided therein; and

                  (m)      other Indebtedness consented to in writing by the
         Required Lenders (provided that if the aggregate principal amount of
         such Indebtedness equals or exceeds US$25,000,000, the Required Lenders
         shall determine whether or not the instrument evidencing such
         Indebtedness shall specifically designate that such Indebtedness is
         "Designated Senior Debt" (as such term is defined in the Senior
         Subordinated Notes)).

         8.2      Liens.

         Contract, create, incur, assume or permit to exist any Lien with
respect to any of their respective property or assets of any kind (whether real
or personal, tangible or intangible), whether now owned or hereafter acquired,
except for Permitted Liens.

         8.3      Consolidation, Merger, Amalgamation Divestiture, etc.

                  (a)      Enter into a transaction of merger, amalgamation or
         consolidation, except

                           (i)      a member of the Consolidated Group may be a
         party to a transaction of merger, amalgamation or consolidation with
         another member of the Consolidated Group, provided that (A) if the
         Domestic Borrower is a party thereto, it shall be the surviving
         corporation, (B) if a Domestic Guarantor is a party thereto and the
         Domestic Borrower is not a party thereto, a Domestic Guarantor shall be
         the surviving corporation or the surviving corporation shall be a
         Domestic Subsidiary and shall become a Domestic Guarantor hereunder
         pursuant to Section 7.11 concurrently therewith, (C) if a Canadian
         Borrower is a party thereto and a Domestic Credit Party is not a party
         thereto, a Canadian Borrower shall be the surviving corporation, (D) if
         a Canadian Guarantor is a party thereto and neither a Canadian Borrower
         nor a Domestic Credit Party is a party thereto, a Canadian Guarantor
         shall be the surviving corporation or the surviving corporation shall
         be a Canadian Subsidiary and shall become a Canadian Guarantor
         hereunder pursuant to Section 7.11 concurrently therewith, and (E) no
         Default or Event of Default shall exist either immediately prior to or
         immediately after giving effect thereto; and

                           (ii)     a member of the Consolidated Group (other
         than the Domestic Borrower) may be a party to a transaction of merger,
         amalgamation or consolidation with any other Person in connection with
         an Acquisition permitted under Section 8.4 and a Divestiture permitted
         under Section 8.3(b), provided that, in connection with an Acquisition,
         the provisions of Section 7.11 regarding joinder of certain
         Subsidiaries as Additional Credit Parties hereunder shall be complied
         with.

                  (b)      Make any Divestiture which:



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                           (i)      in any instance (including any series of
         related transactions comprising a Divestiture) shall be of Property (or
         of a Person owning Property) constituting more than five percent (5%)
         of consolidated assets at the end of the immediately preceding fiscal
         year or generating more than five percent (5%) of Consolidated Net
         Income for the immediately preceding fiscal year, or

                           (ii)     in the aggregate in any fiscal year shall be
         of Property (or of a Person owning Property) constituting more than ten
         percent (10%) of consolidated assets at the end of the immediately
         preceding fiscal year or generating more than ten percent (10%)
         Consolidated Net Income for the immediately preceding fiscal year;

         provided in the case of any Divestiture permitted under subsections (i)
         and (ii) above, that no Default of Event of Default would exist after
         giving effect thereto, determined in the case of financial covenant
         compliance on a Pro Forma Basis and as otherwise set forth in Section
         1.3(b).

                  (c)      In the case of the Domestic Borrower, liquidate,
wind-up or dissolve, whether voluntarily or involuntarily (or suffer to permit
any such liquidation or dissolution).

         Any consent of the Required Lenders requested by the Domestic Borrower
under this Section 8.3 shall not be arbitrarily withheld or unreasonably
delayed.

         8.4      Acquisitions.

         Make any Acquisition, unless

                  (a)      in respect of any such Acquisition, total cash
         consideration shall not exceed an amount equal to thirty percent (30%)
         of Consolidated EBITDA on a Pro Forma Basis for the immediately
         preceding fiscal year;

                  (b)      in respect of all such Acquisitions in any fiscal
         year, total cash consideration shall not exceed an amount equal to
         sixty percent (60%) of Consolidated EBITDA on a Pro Forma Basis for the
         immediately preceding fiscal year;

                  (c)      the Board of Directors of the Person which is, or
         whose Property is, the subject of the Acquisition shall have approved
         the Acquisition; and

                  (d)      no Default or Event of Default would exist after
         giving effect thereto, determined in the case of financial covenant
         compliance on a Pro Forma Basis and as otherwise set forth in Section
         1.3(b).

         Any consent of the Required Lenders requested by the Domestic Borrower
under this Section 8.4 shall not be arbitrarily withheld or unreasonably
delayed.



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         8.5      Investments.

         Make any Investment in any Person except for Permitted Investments.

         8.6      Ownership of Equity Interests.

         Issue, sell, transfer, pledge or otherwise dispose of any partnership
interests, shares of capital stock or other equity or ownership interests
("Equity Interests") in any member of the Consolidated Group, except (i)
issuance, sale or transfer of Equity Interests to a Credit Party by a Subsidiary
of such Credit Party, (ii) in connection with a transaction permitted by
Sections 8.3, 8.4 or 8.5, (iii) as needed to qualify directors under applicable
law and (iv) dispositions of Permitted Investments (other than Investments by a
Credit Party in another Credit Party).

         8.7      Fiscal Year.

         Change its fiscal year from a December 31 fiscal year end.

         8.8      Restricted Payments.

         Make or permit any Restricted Payments.

         8.9      Sale Leasebacks.

         Except as permitted pursuant to Section 8.1(c), directly or indirectly,
become or remain liable as lessee or as guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any Property,
whether now owned or hereafter acquired, (i) which such Person has sold or
transferred or is to sell or transfer to any other Person other than a Credit
Party or (ii) which such Person intends to use for substantially the same
purpose as any other Property which has been sold or is to be sold or
transferred by such Person to any other Person in connection with such lease.

         8.10     No Further Negative Pledges.

         Except with respect to (i) prohibitions against other encumbrances on
specific Property encumbered to secure payment of particular Indebtedness (which
Indebtedness relates solely to such specific Property, and improvements and
accretions thereto, and is otherwise permitted hereby) and (ii) the Senior
Subordinated Notes, enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any Lien upon
its properties or assets, whether now owned or hereafter acquired, or requiring
the grant of any security for such obligation if security is given for some
other obligation.

         8.11     Modifications and Payments in respect of Subordinated Debt.



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                  (a)      Amend or modify (or consent to, permit or acquiesce
         to the amendment or modification of) the Subordinated Debt if the
         effect thereof would be to (A) increase the interest rate on the
         Subordinated Debt; (B) change the dates upon which payments of
         principal or interest are due on the Subordinated Debt other than to
         extend such dates; (C) change any default or event of default other
         than to delete or make any default provision therein less restrictive;
         (D) change or add any covenant with respect thereto other than to make
         any covenant less restrictive; or (E) change the redemption or
         prepayment provisions thereof other than to extend the dates therefor
         or to reduce the premiums payable in connection therewith, in each case
         without the prior written consent of the Required Lenders; provided,
         however, that nothing contained in this Section 8.11(a) or elsewhere in
         this Agreement shall be construed to require the consent of Required
         Lenders to any waiver by the holders of Subordinated Debt of any
         default or event of default under the Subordinated Debt documents or of
         any of the rights and remedies of the holders of Subordinated Debt
         thereunder;

                  (b)      Make any payment in contravention of the terms of any
         Subordinated Debt; or

                  (c)      Except in connection with a refinancing or refunding
         permitted hereunder, make any prepayment, redemption, defeasance or
         acquisition for value of (including without limitation, by way of
         depositing money or securities with the trustee with respect thereto
         before due for the purpose of paying when due), or refund, refinance or
         exchange of any Subordinated Debt, other than regularly scheduled
         payments of principal and interest on such Subordinated Debt, without
         the prior written consent of the Required Lenders hereunder.

         8.12     Limitations on Transactions with Affiliates.

                  (a)      Directly or indirectly enter into or permit to exist
         any transaction or series of related transactions (including, without
         limitation, the purchase, sale, lease or exchange of any Property or
         the rendering of any service) with, or for the benefit of, any of its
         Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate
         Transactions permitted under paragraph (b) below and (y) Affiliate
         Transactions on terms that are no less favorable than those that might
         reasonably have been obtained in a comparable transaction at such time
         on an arm's-length basis from a Person that is not an Affiliate of the
         Domestic Borrower or other member of the Consolidated Group.

                  All Affiliate Transactions (and each series of related
         Affiliate Transactions which are similar or part of a common plan)
         involving aggregate payments or other Property with a fair market value
         in excess of US$2,000,000 shall be approved by the Board of Directors
         of the respective member of the Consolidated Group, as the case may be,
         such approval to be evidenced by a Board Resolution stating that such
         Board of Directors has determined that such transaction complies with
         the foregoing provisions. If a member of the Consolidated Group enters
         into an Affiliate Transaction (or a series of related Affiliate


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<PAGE>   105

         Transactions related to a common plan) that involves an aggregate fair
         market value of more than US$5,000,000, the Domestic Borrower or other
         member of the Consolidated Group, as the case may be, shall, prior to
         the consummation thereof, obtain a favorable opinion as to the fairness
         of such transaction or series of related transactions to the Domestic
         Borrower or other relevant member of the Consolidated Group, as the
         case may be, from a financial point of view, from an Independent
         Financial Advisor and file the same with the Administrative Agents.

                  (b)      The restrictions set forth in the first paragraph of
                  this covenant shall not apply to:

                           (1)      reasonable fees and compensation (including
                           severance payments and compensation in the form of
                           securities) and customary expense, reimbursement paid
                           to and indemnity and reimbursement provided on behalf
                           of, officers, directors, employees or consultants of
                           the Domestic Borrower or any member of the
                           Consolidated Group as determined in good faith by the
                           Domestic Borrower's Board of Directors or senior
                           management;

                           (2)      transactions exclusively between or among
                           the Domestic Borrower or any of the members of the
                           Consolidated Group or exclusively between or among
                           such members of the Consolidated Group, provided such
                           transactions are not otherwise prohibited hereunder;

                           (3)      transactions pursuant to or contemplated by
                           any agreement as in effect as of the date of
                           Amendment No. 3 (being April 6, 1999) or any
                           amendment thereto or any replacement agreement so
                           long as any such amendment or replacement agreement
                           is not more disadvantageous to the Lenders hereunder
                           in any material respect than the original agreement
                           as in effect on the date of Amendment No. 3 (being
                           April 6, 1999);

                           (4)      loans and advances to employees or officers
                           which constitute Permitted Investments hereunder; and

                           (5)      Restricted Payments permitted hereunder.


                                    SECTION 9
                                EVENTS OF DEFAULT

         9.1      Events of Default.

         An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):



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        (a)       Payment.  Any Credit Party shall

                  (i)      default in the payment when due of any principal of
         any of the Loans, or

                  (ii)     default, and such default shall continue for three
         (3) or more Business Days, in the payment when due of any reimbursement
         obligations under Letters of Credit or Bankers' Acceptances, or of any
         interest on the Loans or on any reimbursement obligations under Letters
         of Credit or Bankers' Acceptances, or of any Fees or other amounts
         owing hereunder, under any of the other Credit Documents or in
         connection herewith or therewith; or

         (b)      Representations. Any representation, warranty or statement
made or deemed to be made herein, in any of the other Credit Documents, or in
any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove untrue in any material respect on the date as of
which it was made or deemed to have been made (other than those which are untrue
solely as a result of changes permitted by this Agreement); or

         (c)      Covenants.

                  (i)      Default in the due performance or observance of any
         term, covenant or agreement contained in Section 7.3(a), 7.9, 7.11,
         7.13 or 8.1 through 8.12, inclusive; or

                  (ii)     Default in the due performance or observance by it of
         any term, covenant or agreement (other than those referred to in
         subsections (a), (b) or (c)(i) of this Section 9.1) contained in this
         Credit Agreement and such default shall continue unremedied for a
         period of at least 30 days after the earlier of a Responsible Officer
         becoming aware of such default or notice thereof by the Administrative
         Agent; or

         (d)      Other Credit Documents. (i) Any Credit Party shall default in
the due performance or observance of any material term, covenant or agreement in
any of the other Credit Documents (subject to applicable grace or cure periods,
if any), or (ii) except as to any Credit Party which is dissolved, released or
merged or consolidated out of existence as the result of or in connection with a
dissolution, merger or disposition permitted by Section 8.3 or Section 8.4, any
Credit Document shall fail to be in full force and effect or to give the
Administrative Agents and/or the Lenders any material part of the Liens, rights,
powers and privileges purported to be created thereby; or

         (e)      Guaranties. Except as to any Credit Party which is dissolved,
released or merged or consolidated out of existence as the result of or in
connection with a dissolution, merger or disposition permitted by Section 8.3 or
Section 8.4, the guaranty given by any Guarantor hereunder or any material
provision thereof shall cease to be in full force and effect, or any Guarantor
hereunder or any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under such guaranty, or any Guarantor
shall default in the



                                      101
<PAGE>   107

due performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to any guaranty; or

         (f)      Bankruptcy, etc. Any Bankruptcy Event shall occur with respect
to any Material Credit Party; or

         (g)      Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit Agreement)
in excess of US$3,000,000 in the aggregate for the Consolidated Group taken as a
whole, (A) (1) any Material Credit Party shall default in any payment (beyond
the applicable grace period with respect thereto, if any) with respect to any
such Indebtedness, or (2) the occurrence and continuance of a default in the
observance or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or holders of
such Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is required),
any such Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof; or

         (h)      Judgments. Any Material Credit Party shall fail within 30 days
of the date due and payable to pay, bond or otherwise discharge any judgment,
settlement or order for the payment of money which judgment, settlement or
order, when aggregated with all other such judgments, settlements or orders due
and unpaid at such time, exceeds US$3,000,000, and which is not stayed on appeal
(or for which no motion for stay is pending) or is not otherwise being executed;
or

         (i)      ERISA. Any of the following events or conditions, if such
event or condition could reasonably be expected to have a Material Adverse
Effect: (1) any "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Internal Revenue Code, whether or
not waived, shall exist with respect to any Plan, or any Lien shall arise on the
assets of a member of the Consolidated Group or any ERISA Affiliate in favor of
the PBGC or a Plan; (2) an ERISA Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the Domestic
Administrative Agent, likely to result in the termination of such Plan for
purposes of Title IV of ERISA; (3) an ERISA Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable
opinion of the Domestic Administrative Agent, likely to result in (i) the
termination of such Plan for purposes of Title IV of ERISA, or (ii) a member of
the Consolidated Group or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the meaning of
Section 4241 of ERISA), or insolvency of (within the meaning of Section 4245 of
ERISA) such Plan; or (4) any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Internal Revenue Code) or breach of
fiduciary responsibility shall occur which may subject a member of the
Consolidated Group or any ERISA Affiliate to any liability under Sections 406,
409, 502(i), or 502(l) of ERISA or Section 4975 of the Internal



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Revenue Code, or under any agreement or other instrument pursuant to which a
member of the Consolidated Group or any ERISA Affiliate has agreed or is
required to indemnify any person against any such liability; or

         (j)      Canadian Pension Laws. Any of the following events or
conditions, if such event or condition could reasonably be expected to have a
Material Adverse Effect: (1) the filing of a notice of intent to terminate or
wind-up any Canadian Pension Plan by a Canadian Credit Party; the institution of
proceedings to terminate, in whole or in part, a Canadian Pension Plan by any
applicable Governmental Authority; (2) a "solvency deficiency" exists under any
Canadian Pension Plan; (3) the withdrawal by a Canadian Credit Party from a
multi-employer Canadian Pension Plan; (4) the failure of a Canadian Credit Party
to make a required contribution to any Canadian Pension Plan, including, but not
limited to, any failure to pay any amount sufficient to give rise to liability
or constitute a material offense under any Canadian Pension Law; (5) the
occurrence of any other event with respect to any Canadian Pension Plan which
could result in the incurrence by a Canadian Credit Party of any material
liability, fine or penalty, including, but not limited to, liability pursuant to
any Canadian Pension Law; (6) the establishment of a new Canadian Pension Plan
or an amendment to any existing Canadian Pension Plan which will result in a
material increase in contributions or benefits under such Canadian Pension Plan
or the incurrence of any material increase in the liability of a Canadian Credit
Party with respect to any Canadian Pension Plan; or (7) the occurrence of any
event that constitutes a material breach of the terms of any Canadian Pension
Plan or a material breach of any Canadian Pension Law with respect to any
Canadian Pension Plan.

         (k)      Subordinated Debt. Any Governmental Authority determines that
(i) the Obligations do not constitute Senior Debt (as defined in the indenture
governing the Senior Subordinated Notes) or (ii) the obligations of the Credit
Parties with respect to the Senior Subordinated Notes are not fully subordinate
to the repayment of the Obligations and all other amounts owing under the Credit
Documents.

         (l)      Ownership. There shall occur a Change of Control.

         9.2      Acceleration; Remedies.

         Upon the occurrence and during the continuation of an Event of Default,
the Domestic Administrative Agent shall, upon the request and direction of the
Required Lenders, by written notice to the Credit Parties take any of the
following actions without prejudice to the rights of the Agents or any Lender to
enforce its claims against the Credit Parties, except as expressly provided for
herein:

                  (i)      Termination of Commitments. Declare the Commitments
         terminated whereupon the Commitments shall be immediately terminated.

                  (ii)     Acceleration. Declare the unpaid principal of and any
         accrued interest in respect of all Loans, any reimbursement obligations
         arising from drawings under Letters



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         of Credit and Bankers' Acceptances (based on the maximum face amount of
         LOC Obligations and BA Obligations, respectively, then outstanding) and
         any and all other indebtedness or obligations of any and every kind
         owing by the Credit Parties to the Administrative Agent and/or any of
         the Lenders hereunder to be due whereupon the same shall be immediately
         due and payable without presentment, demand, protest or other notice of
         any kind, all of which are hereby waived by each of the Credit Parties.

                  (iii)    Cash Collateral. Direct the Borrowers to pay (and
         each Borrower agrees that upon receipt of such notice, or upon the
         occurrence of an Event of Default under Section 9.1(f), it will
         immediately pay) to the respective Administrative Agent additional
         cash, to be held by such Administrative Agent, for the benefit of the
         respective Lenders, in a cash collateral account as additional security
         for (i) LOC Obligations in respect of subsequent drawings under all
         then outstanding Letters of Credit in an amount equal to the maximum
         aggregate amount which may be drawn under all Letters of Credits and
         (ii) BA Obligations in respect of subsequent maturities under all then
         outstanding Bankers' Acceptances in an amount equal to the maximum
         aggregate amount of all BA Obligations.

                  (iv)     Enforcement of Rights. Enforce any and all rights and
         interests created and existing under the Credit Documents and all
         rights of set-off.

Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit and Bankers'
Acceptances, all accrued interest in respect thereof, all accrued and unpaid
Fees and other indebtedness or obligations owing to any Agent and/or any of the
Lenders hereunder automatically shall immediately become due and payable without
presentment, demand, protest or the giving of any notice or other action by any
Agent or the Lenders, all of which are hereby waived by the Credit Parties.

         9.3      Conversion and Redenomination of Certain Loans; Purchase of
Risk Participation.

                  (a)      Conversion and Redenomination. Notwithstanding
anything herein to the contrary, upon the termination of Commitments hereunder
following the occurrence of an Event of Default (a "Commitment Termination
Event"), (i) all outstanding Loans denominated in foreign currency (including
Canadian Dollars) or bearing interest at a rate other than the Base Rate shall
be redenominated and/or converted into Base Rate Loans denominated in U.S.
Dollars, and (ii) all BA Obligations and other obligations, if any, denominated
in foreign currency (including Canadian Dollars) shall be redenominated into
U.S. Dollars, in each case on and with effect from the soonest practicable date
following the Commitment Termination Event as determined by the respective
Administrative Agents (the "Conversion Date") and at the exchange rate in effect
as of such Conversion Date as determined by the respective Administrative
Agents. The Borrowers hereby agree to pay to the Administrative Agents, for the
pro rata benefit of the respective Lenders, on the Conversion Date any
break-funding amounts owing pursuant to Section 3.11 as a result of any such
conversion occurring prior to the end of an Interest Period or



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the term of any Bankers' Acceptance. The Administrative Agent(s) will promptly
notify the respective Borrowers and the Lenders of any such redenomination and
conversion following a Commitment Termination Event.

                  (b)      Purchase of Risk Participations. Each Lender hereby
agrees that it shall forthwith purchase, as of the Conversion Date (but adjusted
for any payments received from a Borrower on or after such date and prior to
such purchase), from the other Lenders such Participation Interests in the
outstanding Obligations hereunder (whether or not such Obligations have been
redenominated or converted pursuant to subsection 9.3(a)) as shall be necessary
to cause each such Lender to share in all such Obligations ratably based on its
share of Obligations (including Participation Interests therein), provided that
(i) all interest and fees payable on Obligations shall be for the account of the
Lender that originally extended such Obligation until the date as of which the
respective Participation Interest is funded, and (ii) if any purchase of a
Participation Interest required hereunder is not made on the Conversion Date,
then at the time such purchase is actually made the purchasing Lender shall be
required to pay to the selling Lender, to the extent not paid to such selling
Lender by the applicable Borrower in accordance with the terms of this Credit
Agreement, interest on the principal amount of the Participation Interest
purchased for each day from and including the day upon which such purchase of
the Participation Interest would otherwise have occurred to but excluding the
date of the actual payment for the purchase of such Participation Interest, at a
rate equal to the Federal Funds Rate.


                                   SECTION 10
                                AGENCY PROVISIONS

         10.1     Appointment.

         The Lenders hereby designate and appoint Bank of America, N.A., as
Domestic Administrative Agent and as Collateral Agent, and Bank of America
Canada, as Canadian Administrative Agent, in each case, of the Lenders to act as
specified herein and the other Credit Documents, and each of the Lenders hereby
authorizes the Agents to take such action on their behalf under the provisions
of this Credit Agreement and the other Credit Documents and to exercise such
powers and perform such duties as are expressly delegated to such Agents by the
terms hereof and of the other Credit Documents, together with such other powers
as are reasonably incidental thereto. Each of the Lenders further directs and
authorizes the Administrative Agents and the Collateral Agent to execute
releases (or similar agreements) to give effect to the provisions of this Credit
Agreement and the other Credit Documents, including specifically, without
limitation, in connection with a Divestiture consented to or permitted pursuant
to the provisions of Section 8.3 or a sale, lease, transfer or other disposition
of Property not prohibited by this Credit Agreement. Notwithstanding any
provision to the contrary elsewhere herein and in the other Credit Documents,
the Agents shall not have any duties or responsibilities, except those expressly
set forth herein and therein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit Agreement or any of the other Credit
Documents, or shall otherwise exist against the Agents. The



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provisions of this Section 10 are solely for the benefit of the Agents and the
Lenders, and none of the Credit Parties shall have any rights as a third party
beneficiary of the provisions hereof (other than as set forth in the second
sentence hereof). In performing their functions and duties under this Credit
Agreement and the other Credit Documents, each Agent shall act solely as Agent
of the Lenders and do not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for any Credit Party or
any of their respective Affiliates.

         10.2     Delegation of Duties.

         Each Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. No Agent
shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

         10.3     Exculpatory Provisions.

         No Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by them or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, document,
financial statement or other written or oral statement referred to or provided
for in, or received by such Agent under or in connection herewith or in
connection with the other Credit Documents, or the enforceability or sufficiency
therefor of any of the other Credit Documents, or for any failure of any Credit
Party to perform its obligations hereunder or thereunder. No Agent shall be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of this Credit Agreement, or any
of the other Credit Documents or for any representations, warranties, recitals
or statements made herein or therein or made by any Borrower or any other Credit
Party in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made available by such Agent to the Lenders or by or
on behalf of the Credit Parties to such Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or the use of the Letters of Credit
or Bankers' Acceptances or of the existence or possible existence of any Default
or Event of Default or to inspect the properties, books or records of the Credit
Parties or any of their respective Affiliates.

         10.4     Reliance on Communications.

         Each Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and



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upon advice and statements of legal counsel (including, without limitation,
counsel to any of the Credit Parties, independent accountants and other experts
selected by the such Agent with reasonable care). Each Agent may deem and treat
the Lenders as the owners of their respective interests hereunder for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the appropriate Administrative Agent in accordance
with Section 11.3(b). Each Agent shall be fully justified in failing or refusing
to take any action under this Credit Agreement or under any of the other Credit
Documents unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, hereunder or under any of the other Credit Documents in accordance
with a request of the Required Lenders (or to the extent specifically provided
in Section 11.6, all the Lenders) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders (including
their successors and assigns).

         10.5     Notice of Default.

         No Agent shall be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless such Agent has received
notice from a Lender or a Credit Party referring to the Credit Document,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that such Agent receives such a notice, such
Agent shall give prompt notice thereof to the other Agents and to the Lenders.
The Agents shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders.

         10.6     Non-Reliance on Administrative Agent and Other Lenders.

         Each Lender expressly acknowledges that neither any Agent nor any
officers, directors, employees, agents, attorneys-in-fact or affiliates of any
Agent has made any representations or warranties to it and that no act by the
Agents or any affiliate thereof hereinafter taken, including any review of the
affairs of any Credit Party or any of their respective Affiliates, shall be
deemed to constitute any representation or warranty by any Agent to any Lender.
Each Lender represents to the Agents that it has, independently and without
reliance upon the Agents or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrowers, the other
Credit Parties or their respective Affiliates and made its own decision to make
its Revolving Loans hereunder and other financial accommodations hereunder and
enter into this Credit Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agents or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business, assets,
operations, property, financial and other conditions, prospects and
creditworthiness of the Borrowers, the other




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Credit Parties and their respective Affiliates. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the Agents
hereunder, the Agents shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
assets, property, financial or other conditions, prospects or creditworthiness
of the Borrowers, the other Credit Parties or any of their respective Affiliates
which may come into the possession of the Agents or any of their officers,
directors, employees, agents, attorneys-in-fact or affiliates.

         10.7     Indemnification.

         The Lenders agree to indemnify each Agent in its capacity as such (to
the extent not reimbursed by the Borrowers and without limiting the obligation
of the Borrowers to do so), ratably according to their respective Commitments
(or if the Commitments have expired or been terminated, in accordance with the
respective principal amounts of outstanding Obligations and Participation
Interests of the Lenders), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the final payment of all of
the obligations of the Borrowers hereunder and under the other Credit Documents)
be imposed on, incurred by or asserted against such Agent in its capacity as
such in any way relating to or arising out of this Credit Agreement or the other
Credit Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of such Agent. If any indemnity furnished to an Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this Section shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.

         10.8     Administrative Agent in its Individual Capacity.

         The Agents and their affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrowers, their
Subsidiaries or their respective Affiliates as though the Agents were not the
Agents hereunder. With respect to the Loans made by and all obligations of the
Borrowers hereunder and under the other Credit Documents, the Agents shall have
the same rights and powers under this Credit Agreement as any Lender and may
exercise the same as though it were not an Agent hereunder, and the terms
"Lender" and "Lenders" shall include the Agents in their individual capacity.



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         10.9     Successor Administrative Agent.

         Any Agent may, at any time, resign upon 20 days' written notice to the
Lenders, and may be removed, upon show of cause, by the Required Lenders upon 30
days' written notice to such Agent. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the notice of resignation
or notice of removal, as appropriate, then the retiring Agent shall select a
successor Agent provided that (a) in the case of the Domestic Administrative
Agent or the Collateral Agent, such successor is a Domestic Lender hereunder or
a commercial bank organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at least
US$400,000,000 and (b) in the case of the Canadian Administrative Agent, such
successor is a Canadian Lender hereunder or a commercial bank organized under
the laws of Canada and has a combined capital and surplus of at least
CD$200,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations as Agent,
as appropriate, under this Credit Agreement and the other Credit Documents, and
the provisions of this Section 10 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Credit
Agreement.


                                   SECTION 11
                                  MISCELLANEOUS

         11.1     Notices.

         Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of a Borrower, the Guarantors and the Agents, set forth
below, and, in the case of the Lenders, set forth on Schedule 11.1, or at such
other address as such party may specify by written notice to the other parties
hereto:



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           if to the Domestic Borrower, any Canadian Borrower or any Guarantor:

                    RailWorks Corporation
                    1104 Kenilworth Drive
                    Suite 301
                    Baltimore, MD 21204
                    Attn: Michael R. Azarela
                    Telephone: (410) 512-0501
                    Telecopy:  (410) 825-6920

           if to the Domestic Administrative Agent or the Collateral Agent:

                    Bank of America, N.A.
                    101 N. Tryon Street
                    Independence Center, 15th Floor
                    NC1-001-15-04
                    Charlotte, North Carolina  28255
                    Attn: Gregg Newland
                          Agency Services
                    Telephone: (704) 386-4218
                    Telecopy:  (704) 388-9436

           with a copy to:

                    Bank of America, N.A.
                    10 Light Street
                    Sixteenth Floor
                    MD4-302-16-01
                    Baltimore, MD  21202-1435
                    Attn:  Monica Brandes
                    Telephone: (410) 605-8019
                    Telecopy:  (410) 539-7508

           if to the Canadian Administrative Agent:

                    Bank of America Canada

                    --------------------------
                    Toronto, Ontario
                    Attn:
                    Telephone:
                    Telecopy:



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         11.2     Right of Set-Off.

         In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, each Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Lender (including, without
limitation branches, agencies or Affiliates of such Lender wherever located) to
or for the credit or the account of any Credit Party against obligations and
liabilities of such Person to such Lender hereunder, under the Notes, the other
Credit Documents or otherwise, irrespective of whether such Lender shall have
made any demand hereunder and although such obligations, liabilities or claims,
or any of them, may be contingent or unmatured, and any such set-off shall be
deemed to have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of such Lender
subsequent thereto. Any Person purchasing a participation in the Revolving Loans
and Commitments hereunder pursuant to Section 3.16 or Section 11.3(d) may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder.

         11.3     Benefit of Agreement.

         (a)      Generally. This Credit Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that, except as expressly provided
herein, none of the Credit Parties may assign or transfer any of its interests
without prior written consent of the Lenders; provided further that the rights
of each Lender to transfer, assign or grant participations in its rights and/or
obligations hereunder shall be limited as set forth in this Section 11.3,
provided however that nothing herein shall prevent or prohibit any Lender from
(i) pledging its Revolving Loans hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank, or (ii)
granting assignments or selling participations in such Lender's Revolving Loans
and/or Commitments hereunder to its parent company and/or to any Affiliate or
Subsidiary of such Lender.

         (b)      Assignments. Each Lender may assign all or a portion of its
rights and obligations hereunder (including, without limitation, all or a
portion of its Commitments or its Loans), pursuant to an assignment agreement
substantially in the form of Schedule 11.3(b), to (i) a Lender, (ii) an
affiliate of a Lender or (iii) any other Person that (A) is a bank, financial
institution, commercial lender or institutional investor, (B) if such Person is
to be a Domestic Lender, such Person shall be reasonably acceptable to the
Domestic Administrative Agent, (C) if such Person is to be a Canadian Lender,
(i) such Person shall be reasonably acceptable to the Canadian Administrative
Agent and (ii) so long as no Default or Event of Default has occurred and is
continuing, such Person shall be a bank, financial institution, commercial
lender or institutional investor incorporated or organized under the laws of
Canada, and (D) so long as no Default or Event of Default has occurred and is
continuing, such Person shall be reasonably acceptance to the Borrowers (the
consent of the Borrowers shall not be unreasonably withheld or delayed);
provided that (i) any such assignment (other than any assignment to an existing
Lender) shall be in a minimum aggregate amount of



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US$5,000,000 (or CD$5,000,000, if applicable) (or, if less, the remaining amount
of the Commitment being assigned by such Lender) of the Commitments and in
integral multiples of US$1,000,000 (or CD$1,000,000, if applicable) above such
amount and (ii) each such assignment shall be of a constant, not varying,
percentage of all such Lender's rights and obligations under this Credit
Agreement. Any assignment hereunder shall be effective upon delivery to the
appropriate Administrative Agent of written notice of the assignment together
with a transfer fee of US$3,500 (or CD$3,500, if applicable) payable to the
appropriate Administrative Agent for its own account from and after the later of
(i) the effective date specified in the applicable assignment agreement and (ii)
the date of recording of such assignment in appropriate Register pursuant to the
terms of subsection (c) below. The assigning Lender will give prompt notice to
the Administrative Agent and the Borrower of any such assignment. Upon the
effectiveness of any such assignment (and after notice to, and (to the extent
required pursuant to the terms hereof), with the consent of, the Borrower as
provided herein), the assignee shall become a "Lender" for all purposes of this
Credit Agreement and the other Credit Documents and, to the extent of such
assignment, the assigning Lender shall be relieved of its obligations hereunder
to the extent of the Loans and Commitment components being assigned. Along such
lines the Borrowers agree that upon notice of any such assignment and surrender
of the appropriate Note or Notes, it will promptly provide to the assigning
Lender and to the assignee separate promissory notes in the amount of their
respective interests substantially in the form of the original Note (but with
notation thereon that it is given in substitution for and replacement of the
original Note or any replacement notes thereof). By executing and delivering an
assignment agreement in accordance with this Section 11.3(b), the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim; (ii) except
as set forth in clause (i) above, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement, any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement, any
of the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto or the financial condition of any Credit Party or any
of their respective Affiliates or the performance or observance by any Credit
Party of any of its obligations under this Credit Agreement, any of the other
Credit Documents or any other instrument or document furnished pursuant hereto
or thereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such assignment agreement; (iv) such assignee confirms
that it has received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such assignment agreement;
(v) such assignee will independently and without reliance upon the Agents, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Credit Agreement and
the other Credit Documents; (vi) such assignee appoints and authorizes the
Agents to take such action on its behalf and to exercise such powers under this
Credit Agreement or any other Credit Document as are delegated to the Agents by
the terms hereof or thereof, together with such powers as are reasonably
incidental thereto; and (vii)



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such assignee agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Credit Agreement and the other Credit
Documents are required to be performed by it as a Lender.

         (c)      Maintenance of Register.

                  (i)      Domestic Register. The Domestic Administrative Agent
         shall maintain at one of its offices in Charlotte, North Carolina a
         copy of each Domestic Lender assignment agreement delivered to it in
         accordance with the terms of subsection (b) above and a register for
         the recordation of the identity of the principal amount, type and
         Interest Period of each Domestic Loan outstanding hereunder, the names,
         addresses and the Commitments of the Domestic Lenders pursuant to the
         terms hereof from time to time (the "Domestic Register"). The Domestic
         Administrative Agent will make reasonable efforts to maintain the
         accuracy of the Domestic Register and to promptly update the Domestic
         Register from time to time, as necessary. The entries in the Domestic
         Register shall be conclusive in the absence of manifest error and the
         Borrowers, the Agents and the Lenders may treat each Person whose name
         is recorded in the Domestic Register pursuant to the terms hereof as a
         Domestic Lender hereunder for all purposes of this Credit Agreement.
         The Domestic Register shall be available for inspection by the
         Borrowers and each Lender, at any reasonable time and from time to time
         upon reasonable prior notice.

                  (ii)     Canadian Register. The Canadian Administrative Agent
         shall maintain at one of its offices in Toronto, Canada a copy of each
         Canadian Lender assignment agreement delivered to it in accordance with
         the terms of subsection (b) above and a register for the recordation of
         the identity of the principal amount, type and Interest Period of each
         Canadian Loan outstanding hereunder, the names, addresses and the
         Commitments of the Canadian Lenders pursuant to the terms hereof from
         time to time (the "Canadian Register"). The Canadian Administrative
         Agent will make reasonable efforts to maintain the accuracy of the
         Canadian Register and to promptly update the Canadian Register from
         time to time, as necessary. The entries in the Canadian Register shall
         be conclusive in the absence of manifest error and the Borrowers, the
         Agents and the Lenders may treat each Person whose name is recorded in
         the Canadian Register pursuant to the terms hereof as a Canadian Lender
         hereunder for all purposes of this Credit Agreement. The Canadian
         Register shall be available for inspection by the Borrowers and each
         Lender, at any reasonable time and from time to time upon reasonable
         prior notice.

         (d)      Participations. Each Lender may sell, transfer, grant or
assign participations in all or a portion of such Lender's rights, obligations
or rights and obligations hereunder (including all or a portion of its
Commitments or its Loans); provided that (i) such selling Lender shall remain a
"Lender" for all purposes under this Credit Agreement (such selling Lender's
obligations under the Credit Documents remaining unchanged) and the participant
shall not constitute a Lender hereunder, (ii) no such participant shall have, or
be granted, rights to approve any amendment or waiver relating to this Credit
Agreement or the other Credit Documents except to the extent any such amendment
or waiver would (A) reduce the principal of or rate of interest on or Fees in


                                      113
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respect of any Loans in which the participant is participating, (B) postpone the
date fixed for any payment of principal (including extension of the Termination
Date or the date of any mandatory prepayment), interest or Fees in which the
participant is participating, (C) except as the result of or in connection with
a dissolution, merger or disposition of a Subsidiary permitted under Section
8.3, release any Borrower or substantially all of the Guarantors from its or
their obligations under the Credit Documents, or (D) except as the result of or
in connection with a Divestiture permitted under Section 8.3(b), release all or
substantially all of the collateral, and (iii) sub-participations by the
participant (except to an affiliate, parent company or affiliate of a parent
company of the participant) shall be prohibited. In the case of any such
participation, the participant shall not have any rights under this Credit
Agreement or the other Credit Documents (the participant's rights against the
selling Lender in respect of such participation to be those set forth in the
participation agreement with such Lender creating such participation) and all
amounts payable by the Borrowers hereunder shall be determined as if such Lender
had not sold such participation, provided, however, that such participant shall
be entitled to receive additional amounts under Sections 3.6, 3.9, 3.10, 3.11
and 11.2 on the same basis as if it were a Lender.

         11.4     No Waiver; Remedies Cumulative.

         No failure or delay on the part of any Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between any Agent or any Lender and any of the
Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which any Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle the Borrowers or any other
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agents or the Lenders
to any other or further action in any circumstances without notice or demand.

         11.5     Payment of Expenses, etc.

         The Borrowers agree to: (i) pay all reasonable out-of-pocket costs and
expenses (A) of the Agents in connection with the negotiation, preparation,
execution and delivery and administration of this Credit Agreement and the other
Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and expenses of Moore & Van
Allen, PLLC and Borden & Elliot, special counsel to the Domestic Administrative
Agent and the Collateral Agent) and any amendment, waiver or consent relating
hereto and thereto including, but not limited to, any such amendments, waivers
or consents resulting from or related to any work-out, renegotiation or
restructure relating to the performance by the Credit Parties under this Credit
Agreement and (B) of the Agents and the Lenders in connection with enforcement
of the Credit Documents and the documents and instruments referred to therein
(including, without limitation, in connection with any such enforcement, the
reasonable fees and disbursements of counsel for the Agents and each of the
Lenders); (ii) permit the Administrative Agents to perform inventory and


                                      114
<PAGE>   120

accounts receivable field audits at the Borrowers' expense, provided that unless
an Event of Default shall be in existence the Borrowers' obligation to reimburse
the Administrative Agents for such field audits shall be limited to one such
field audit each fiscal year; (iii) pay and hold each of the Lenders harmless
from and against any and all present and future stamp and other similar taxes
with respect to the foregoing matters and save each of the Lenders harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Lender) to pay such
taxes; and (iv) indemnify each Lender, its officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all losses, liabilities, claims, damages or expenses incurred by any of them as
a result of, or arising out of, or in any way related to, or by reason of (A)
any investigation, litigation or other proceeding (whether or not any Lender is
a party thereto) related to the entering into and/or performance of any Credit
Document or the use of proceeds of any Loans or other Extensions of Credit
hereunder or the consummation of any other transactions contemplated in any
Credit Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding or (B) the presence or Release of any Materials
of Environmental Concern at, under or from any Property owned, operated or
leased by the Borrowers or any of their Subsidiaries, or the failure by the
Borrowers or any of their Subsidiaries to comply with any Environmental Law (but
excluding, in the case of either of clause (A) or (B) above, any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of
gross negligence or willful misconduct on the part of the Person to be
indemnified).

         11.6     Amendments, Waivers and Consents.

         Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Credit Parties, provided, however, that:

         (a)      without the consent of each Lender affected thereby, neither
         this Credit Agreement nor any of the other Credit Documents may be
         amended to

                           (i)      except as contemplated by Section 2.1(g),
                  extend the final maturity of any Loan or the time of payment
                  of any reimbursement obligation, or any portion thereof,
                  arising from drawings under Letters of Credit, or any portion
                  thereof,

                           (ii)     reduce the rate or extend the time of
                  payment of interest thereon or Fees hereunder (other than as a
                  result of waiving the applicability of any increase in
                  interest rates or Fees after the occurrence of an Event of
                  Default or on account of a failure to deliver financial
                  statements on a timely basis),

                           (iii)    reduce or waive the principal amount of any
                  Loan or of any reimbursement obligation, or any portion
                  thereof, arising from drawings under Letters of Credit,



                                      115
<PAGE>   121

                           (iv)     increase the Commitment of a Lender over the
                  amount thereof in effect (it being understood and agreed that
                  a waiver of any Default or Event of Default shall not
                  constitute an increase in the Commitment of any Lender),

                           (v)      except as the result of or in connection
                  with a dissolution, merger or disposition of a member of the
                  Consolidated Group permitted under Section 8.3, release the
                  Domestic Borrower, any Canadian Borrower or substantially all
                  of the Guarantors from its or their obligations under the
                  Credit Documents,

                           (vi)     except as the result of or in connection
                  with a Divestiture permitted under Section 8.3(b), release all
                  or substantially all of the collateral,

                           (vii)    amend, modify or waive any provision of this
                  Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.13,
                  3.14, 3.15, 3.16, 3.17, 9.1(a), 11.2, 11.3, 11.5 or 11.9,

                           (viii)   reduce any percentage specified in, or
                  otherwise modify, the definition of Required Lenders, or

                           (ix)     consent to the assignment or transfer by the
                  Domestic Borrower, any Canadian Borrower or any Guarantor of
                  any of its rights and obligations under (or in respect of) the
                  Credit Documents except as permitted thereby;

                  (b)      (i)      without the consent of Domestic Required
         Lenders, waive the provisions of Section 5.2 (including any
         representation, covenant or default referenced therein) or the
         applicability thereof in respect of further Extensions of Credit by the
         Domestic Lenders or the Issuing Lender; and

                           (ii)     without the consent of Canadian Required
         Lenders, waive the provisions of Section 5.2 (including any
         representation, covenant or default referenced therein) or the
         applicability thereof in respect of further Extensions of Credit by the
         Canadian Lenders;

                  (c)      (i)      with respect to matters affecting only the
         Domestic Obligations and the Domestic Lenders (and not affecting the
         Canadian Obligations or the Canadian Lenders), the consent of only the
         Domestic Required Domestic Lenders shall be required (and the consent
         of the Canadian Required Lenders, or the Required Lenders, shall not be
         required); and

                           (ii)     with respect to matters affecting only the
         Canadian Obligations and the Canadian Lenders (and not affecting the
         Domestic Obligations or the Domestic Lenders), the consent of only the
         Canadian Required Lenders shall be required (and the



                                      116
<PAGE>   122

         consent of the Domestic Required Lenders, or the Required Lenders,
         shall not be required);

                  (d)      without the consent of the Agents, no provision of
         Section 10 may be amended;

                  (e)      without the consent of the Issuing Lender, no
         provision of Section 2.1(b), 2.2(a)(ii), 2.6 or 3.5(b)(ii) may be
         amended.

         Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersede the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.

         11.7     Counterparts.

         This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.

         11.8     Headings.

         The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.

         11.9     Survival.

         All indemnities set forth herein, including, without limitation, in
Section 2.6(h), 3.9, 3.11, 10.7 or 11.5 shall survive the execution and delivery
of this Credit Agreement, the making of the Loans, the issuance of the Letters
of Credit, the repayment of the Loans, LOC Obligations, BA Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.

         11.10    Governing Law; Submission to Jurisdiction; Venue.

         (a)      THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.



                                      117
<PAGE>   123

         (b)      Any legal action or proceeding with respect to this Credit
Agreement or any other Credit Document may be brought in the courts of the State
of North Carolina in Mecklenburg County, or of the United States for the Western
District of North Carolina, and, by execution and delivery of this Credit
Agreement, each of the Credit Parties hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the Credit Parties further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for notices
pursuant to Section 11.1, such service to become effective three (3) days after
such mailing. Nothing herein shall affect the right of the Agents to serve
process in any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against any Credit Party in any other jurisdiction.

         (c)      Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.

         (d)      TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENTS, THE
LENDERS, THE BORROWER AND THE OTHER CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

         11.11    Severability.

         If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

         11.12    Entirety.

         This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.



                                      118
<PAGE>   124

         11.13    Binding Effect; Termination.

         (a)      This Credit Agreement shall become effective at such time on
or after the Closing Date when it shall have been executed by the Borrower, the
Guarantors and the Agents, and the Administrative Agent shall have received
copies hereof (telefaxed or otherwise) which, when taken together, bear the
signatures of each Lender, and thereafter this Credit Agreement shall be binding
upon and inure to the benefit of the Borrower, the Guarantors, the Agents and
each Lender and their respective successors and assigns.

         (b)      The term of this Credit Agreement shall commence on the
effective date pursuant to subsection (a) above and shall continue until no
Loans, LOC Obligations or any other amounts payable hereunder or under any of
the other Credit Documents shall remain outstanding and until all of the
Commitments hereunder shall have expired or been terminated.

         11.14    Confidentiality.

         The Agents and the Lenders agree to keep confidential (and to cause
their respective affiliates, officers, directors, employees, agents and
representatives to keep confidential) all information, materials and documents
furnished to the Agents or any such Lender by or on behalf of any Credit Party
(whether before or after the Closing Date) which relates to the Borrower or any
of its Subsidiaries (the "Information"). Notwithstanding the foregoing, the
Agents and each Lender shall be permitted to disclose Information (i) to its
affiliates, officers, directors, employees, agents and representatives in
connection with its participation in any of the transactions evidenced by this
Credit Agreement or any other Credit Documents or the administration of this
Credit Agreement or any other Credit Documents, subject to the provisions of
this Section 11.14; (ii) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, or requested by any
Governmental Authority; (iii) to the extent such Information (A) becomes
publicly available other than as a result of a breach of this Credit Agreement
or any agreement entered into pursuant to clause (iv) below, (B) becomes
available to the Agent or such Lender on a non-confidential basis from a source
other than a Credit Party or (C) was available to the Agent or such Lender on a
non-confidential basis prior to its disclosure to the Agent or such Lender by a
Credit Party; (iv) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) first specifically agrees in a writing furnished to and for the
benefit of the Credit Parties to be bound by the terms of this Section 11.14; or
(v) to the extent that the Borrower shall have consented in writing to such
disclosure. Nothing set forth in this Section 11.14 shall obligate the Agent or
any Lender to return any materials furnished by the Credit Parties.

         11.15    Source of Funds.

         Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:



                                      119
<PAGE>   125

                  (a)      no part of such funds constitutes assets allocated to
         any separate account maintained by such Lender in which any employee
         benefit plan (or its related trust) has any interest;

                  (b)      to the extent that any part of such funds constitutes
         assets allocated to any separate account maintained by such Lender,
         such Lender has disclosed to the Borrower the name of each employee
         benefit plan whose assets in such account exceed 10% of the total
         assets of such account as of the date of such purchase (and, for
         purposes of this subsection (b), all employee benefit plans maintained
         by the same employer or employee organization are deemed to be a single
         plan);

                  (c)      to the extent that any part of such funds constitutes
         assets of an insurance company's general account, such insurance
         company has complied with all of the requirements of the regulations
         issued under Section 401(c)(1)(A) of ERISA; or

                  (d)      such funds constitute assets of one or more specific
         benefit plans which such Lender has identified in writing to the
         Borrower.

As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.

         11.16    Judgment Currency.

                  (a)      Each Credit Party's obligations hereunder and under
the other Credit Documents to make payments in U.S. Dollars or applicable
foreign currency (the "Obligation Currency") shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the
Administrative Agents, the Collateral Agent or a Lender of the full amount of
the Obligation Currency expressed to be payable to such Administrative Agents,
Collateral Agent or Lender hereunder or under any other of the Credit Documents.
If, for the purpose of obtaining or enforcing a judgment against any Credit
Party in any court or in any jurisdiction, it becomes necessary to convert into
or from any currency other than the Obligation Currency (such other currency
being hereafter revered to as the "Judgment Currency") an amount due in the
Obligation Currency, the conversion shall be made, at the Dollar Equivalent
determined as of the Business Day immediately preceding the day on which the
judgment is given (such Business Day hereafter being referred to as the
"Judgment Currency Conversion Date").

                  (b)      If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, such amount payable by the applicable Credit Party
shall be reduced or increased, as applicable, such that the amount paid in the
Judgment Currency, when converted at the rate of exchange prevailing on the date
of payment, will produce the amount of the Obligation Currency which



                                      120
<PAGE>   126

could have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange prevailing on the Judgment
Currency Conversion Date.

         11.17    Conflict.

         To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.

                           [Signature Page to Follow]









                                      121
<PAGE>   127



         IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.

DOMESTIC
BORROWER:                           RAILWORKS CORPORATION,
                                    a Delaware corporation

                                    By:  /s/ Michael R. Azarela
                                       ---------------------------------
                                    Name:   Michael R. Azarela
                                    Title:  Executive Vice President and
                                            Chief Financial Officer

CANADIAN
BORROWERS:                          GANTREX RW COMPANY,
                                    a Nova Scotia unlimited liability company

                                    By:  /s/ Michael R. Azarela
                                       ---------------------------------
                                    Name:   Michael R. Azarela
                                    Title:  Executive Vice President and
                                            Chief Financial Officer

                                    RAILWORKS CANADA COMPANY,
                                    a Nova Scotia unlimited liability company

                                    By:  /s/ Michael R. Azarela
                                       ---------------------------------
                                    Name:   Michael R. Azarela
                                    Title:  Executive Vice President and
                                            Chief Financial Officer

<PAGE>   128

DOMESTIC
GUARANTORS:                ALPHA-KEYSTONE ENGINEERING, INC.,
                           a Pennsylvania corporation
                           ANNEX RAILROAD BUILDERS, INC.,
                           an Indiana corporation
                           ARMCORE ACQUISITION CORP.,
                           a Delaware corporation
                           ARMCORE RAILROAD CONTRACTORS, INC.,
                           an Illinois corporation
                           BIRMINGHAM WOOD, INC.,
                           an Alabama corporation
                           COMSTOCK HOLDINGS INC.,
                           a Delaware corporation
                           COMTRAK CONSTRUCTION, INC.,
                           a Georgia corporation
                           CONDON BROTHERS, INC.,
                           a Washington corporation
                           CPI CONCRETE PRODUCTS INCORPORATED,
                           a Tennessee corporation
                           EARL CAMPBELL CONSTRUCTION COMPANY, INC.,
                           a Texas corporation
                           FCM RAIL, LTD., a Michigan corporation
                           F&V METRO CONTRACTING CORP.,
                           a New York corporation
                           GANTREX CORPORATION,
                           a Pennsylvania corporation
                           H.P. MCGINLEY INC.,
                           a Pennsylvania corporation
                           IMPULSE ENTERPRISES OF NEW YORK, INC.,
                           a New York corporation
                           KENNEDY RAILROAD BUILDERS, INC.,
                           a Pennsylvania corporation
                           M-TRACK ENTERPRISES, INC.,
                           a New York corporation
                           MCCORD TREATED WOOD, INC.,
                           an Alabama corporation
                           MERIT RAILROAD CONTRACTORS, INC.,
                           a Missouri corporation

                           By:  /s/
                              ------------------------------------------
                           Name:   Michael R. Azarela
                           Title:  Executive Vice President of each
                                   of the foregoing Domestic Guarantors

                                   [Signature Pages Continue]


<PAGE>   129


                           MIDWEST CONSTRUCTION SERVICES, INC.,
                           an Indiana corporation
                           MIDWEST RAILROAD CONSTRUCTION & MAINTENANCE
                           CORPORATION OF WYOMING, a Wyoming corporation
                           MIDWEST RW, INC.,
                           a Delaware corporation
                           MINNESOTA RAILROAD SERVICE, INC.,
                           a Tennessee corporation
                           NEOSHO ASIA, INC.,
                           a Kansas corporation
                           NEOSHO CENTRAL AMERICA, INC.,
                           a Kansas corporation
                           NEOSHO CONSTRUCTION COMPANY, INCORPORATED,
                           a Kansas corporation
                           NEOSHO CONTRACTORS, INC.,
                           a Wyoming corporation
                           NEOSHO INCORPORATED,
                           a Kansas corporation
                           NEOSHO INTERNATIONAL, INC.,
                           a Kansas corporation
                           NEW ENGLAND RAILROAD CONSTRUCTION CO., INC.,
                           a Connecticut corporation
                           NORTHERN RAIL SERVICE AND SUPPLY COMPANY, INC.,
                           a Michigan corporation
                           PARSONS RAILWAY SHOPS, INC.,
                           a Kansas corporation
                           R. & M. B. RAIL CO., INC.,
                           an Indiana corporation
                           RAILCORP, INC.,
                           an Ohio corporation
                           RAILROAD RESOURCES, INC.,
                           a Missouri corporation
                           RAILROAD SERVICE, INC.,
                           a Nevada corporation
                           RAILROAD SPECIALTIES, INC.,
                           an Indiana corporation

                           By: /s/
                              -----------------------------------------
                           Name:   Michael R. Azarela
                           Title:  Executive Vice President of each
                                   of the foregoing Domestic Guarantors

                                    [Signature Pages Continue]


<PAGE>   130


                           SOUTHERN INDIANA WOOD PRESERVING CO., INC.,
                           an Indiana corporation
                           U.S. RAILWAY SUPPLY, INC.,
                           an Indiana corporation
                           U.S. TRACKWORKS, INC.,
                           a Michigan corporation
                           V&R ELECTRICAL CONTRACTORS, INC.,
                           a New York corporation
                           WM. A. SMITH CONSTRUCTION CO., INC.,
                           a Texas corporation
                           WM. A. SMITH RERAILING SERVICES, INC.,
                           a Texas corporation

                           By: /s/
                              ------------------------------------------
                           Name:   Michael R. Azarela
                           Title:  Executive Vice President of each
                                   of the foregoing Domestic Guarantors

                           L.K. COMSTOCK & COMPANY, INC.,
                           a New York corporation

                           By: /s/
                              ------------------------------------------
                           Name:   C. William Moore
                           Title:  Chief Executive Officer and President

                           F&V METRO RW, INC.,
                           a Delaware corporation

                           By: /s/
                              ------------------------------------------
                           Name:   John P. Nuzzo
                           Title:  Assistant Secretary

                           GANTREX RW, INC.,
                           a Delaware corporation
                           GANTREX SYSTEMS, INC.,
                           a Delaware corporation
                           RAILWORKS CANADA, INC.
                           a Delaware corporation

                           By: /s/
                              ------------------------------------------
                           Name:   John P. Nuzzo
                           Title:  Secretary of each of the foregoing
                                   Domestic Guarantors

                           By: /s/
                              ------------------------------------------
                           Name:   Michael R. Azarela
                           Title:  Executive Vice President of each
                                   of the foregoing Domestic Guarantors

                                   [Signature Pages Continue]


<PAGE>   131


CANADIAN
GUARANTORS:                GANTREX GROUP, LTD.,
                           an Ontario corporation
                           GANTREX HOLDINGS-CANADA, INC.,
                           a Nova Scotia corporation
                           GANTREX LIMITED,
                           an Ontario corporation
                           GANTREX SYSTEMS LIMITED,
                           an Ontario corporation
                           PACIFIC NORTHERN RAIL CONTRACTORS CORP.,
                           a British Columbia company
                           PACIFIC NORTHERN RAIL HOLDINGS LTD.,
                           a British Columbia company
                           PACIFIC NORTHERN RAIL RW, INCORPORATED,
                           a Nova Scotia corporation
                           PNR LEASING LTD.,
                           a British Columbia company
                           PNR INVESTMENTS LTD.,
                           a British Columbia company

                           By: /s/
                               ---------------------------------------
                           Name:   Michael R. Azarela
                           Title:  Executive Vice President of each
                                   of the foregoing Canadian Guarantors

                                   [Signature Pages Continue]


<PAGE>   132


LENDERS:           BANK OF AMERICA, N.A.,
                   individually in its capacity as a
                   Lender and in its capacity as Domestic Administrative Agent

                   By:
                      -----------------------------------
                   Name:
                   Title:

                   BANK OF AMERICA CANADA
                   individually in its capacity as a
                   Lender and in its capacity as Canadian Administrative Agent

                   By:
                      -----------------------------------
                   Name:
                   Title:




<PAGE>   133



                                  Schedule 2.1

                       Schedule of Lenders and Commitments

                         Domestic Revolving Commitments

<TABLE>
<CAPTION>
                                         Domestic Revolving         Domestic Revolving                LOC
               Lender                   Commitment Percentage        Committed Amount           Committed Amount
               ------                   ---------------------        ----------------           ----------------
<S>                                     <C>                         <C>                         <C>
Bank of America, N.A.                       22.22222222%               $20,000,000               $ 4,444,444.46
First Union National Bank                   16.66666667%               $15,000,000               $ 3,333,333.33
Summit Bank                                 11.11111111%               $10,000,000               $ 2,222,222.22
Fleet Bank, N.A.                            11.11111111%               $10,000,000               $ 2,222,222.22
KeyBank National Association                11.11111111%               $10,000,000               $ 2,222,222.22
Bank One                                    11.11111111%               $10,000,000               $ 2,222,222.22
M&T Bank                                    16.66666667%               $15,000,000               $ 3,333,333.33
                                            ------------               -----------               --------------
Total:                                         100.00%                 $90,000,000               $20,000,000.00
</TABLE>


                         Canadian Revolving Commitments

<TABLE>
<CAPTION>
                                                    Canadian Revolving          Canadian Revolving
                    Lender                         Commitment Percentage         Committed Amount
                    ------                         ---------------------         ----------------
<S>                                                <C>                          <C>
Bank of America Canada                                 33.33333333%                $ 5,000,000
Congress Financial Corporation [Canada]                66.66666667%                $10,000,000
                                                       ------------                 ----------
Total:                                                    100.00%                  $15,000,000
</TABLE>



<PAGE>   134



                               Schedule 2.2(a)(i)

            FORM OF NOTICE OF BORROWING FOR DOMESTIC REVOLVING LOANS

Bank of America, N.A.
  as Domestic Administrative Agent
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attention:  Agency Services

         RE:      Amended and Restated Credit Agreement dated as of August 5,
                  1999 (as amended and modified, the "Credit Agreement") among
                  RailWorks Corporation, a Delaware corporation, the
                  Subsidiaries identified therein, the lenders identified
                  therein, First Union National Bank, as documentation agent for
                  the Lenders, Bank of America Canada, as administrative agent
                  for the Canadian Lenders and Bank of America, N.A., as
                  administrative agent for the Domestic Lenders

Ladies and Gentlemen:

The undersigned hereby gives notice of a request for a Domestic Revolving Loan
pursuant to Section 2.1(a) of the Credit Agreement as follows:

<TABLE>
<S>      <C>                                 <C>
(A)      Date of Borrowing
         (which is a Business Day)           --------------------------------

(B)      Principal Amount of
         Borrowing                           --------------------------------

(C)      Interest rate basis
                                             --------------------------------

(D)      Interest Period and the
         last day thereof                    --------------------------------
</TABLE>

In accordance with the requirements of Section 5.2 of the Credit Agreement, the
undersigned Borrower hereby certifies that:

         (a) The representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all material
respects as of the date of this request, and will be true and correct after
giving effect to the requested Extension of Credit (except for those which
expressly related to an earlier date).

         (b) No Default or Event of Default exists, or will exist after giving
effect to the requested Extension of Credit.

         (c) All conditions set forth in Section 2 as to the making of Domestic
Revolving Loans have been satisfied.

                                                     Very truly yours,

                                                     RAILWORKS CORPORATION

                                                     By:
                                                        -----------------------
                                                     Name:
                                                     Title:


<PAGE>   135


                               Schedule 2.2(a)(ii)

                 Form of Notice of Request for Letter of Credit

                                     [Date]

Bank of America, N.A.                    Bank of America, N.A.
  as Issuing Lender under the             as Domestic Administrative Agent under
  Credit Agreement referred to below      the Credit Agreement referred to below
101 N. Tryon Street                      101 N. Tryon Street
Independence Center, 15th Floor          Independence Center, 15th Floor
NC1-001-15-04                            NC1-001-15-04
Charlotte, North Carolina  28255         Charlotte, North Carolina  28255

Attention:        Agency Services

         RE:      Amended and Restated Credit Agreement dated as of August 5,
                  1999 (as amended and modified, the "Credit Agreement") among
                  RailWorks Corporation, a Delaware corporation, the
                  Subsidiaries identified therein, the lenders identified
                  therein, First Union National Bank, as documentation agent for
                  the Lenders, Bank of America Canada, as administrative agent
                  for the Canadian Lenders and Bank of America, N.A., as
                  administrative agent for the Domestic Lenders. Terms used but
                  not otherwise defined herein shall have the meanings provided
                  in the Credit Agreement.

Ladies and Gentlemen:

         The undersigned, pursuant to Section 2.1(b) of the Credit Agreement,
hereby requests that the following Letters of Credit be issued on [Date] as
follows:

         (1)      Account Party:

         (2)      For use by:

         (3)      Beneficiary:

         (4)      Face Amount of Letter of Credit:

         (5)      Date of Issuance:

         Delivery of Letter of Credit should be made as follows:

         This Notice of Request of Letter of Credit shall be delivered together
with an Application and Agreement for Letter of Credit.

         In accordance with the requirements of Section 5.2 of the Credit
Agreement, the undersigned Borrower hereby certifies that:

         (a)      The representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all material
respects as of the date of this request, and will be


<PAGE>   136

true and correct after giving effect to the requested Extension of Credit
(except for those which expressly relate to an earlier date).

         (b)      No Default or Event of Default exists, or will exist after
giving effect to the requested Extension of Credit.

         (c)      All conditions set forth in Section 2 as to the issuance of a
Letter of Credit have been satisfied.

                               Very truly yours,

                               RAILWORKS CORPORATION

                               By: /s/
                                  ------------------------------------
                               Name:    Michael R. Azarela
                               Title:   Executive Vice President and
                                        Chief Financial Officer


<PAGE>   137


                              Schedule 2.2(a)(iii)

                 Form of Notice of Borrowing for Swingline Loans

Bank of America, N.A., as Swingline Lender
  under the Credit Agreement referred to below
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attention:  Agency Services

         RE:      Amended and Restated Credit Agreement dated as of August 5,
                  1999 (as amended and modified, the "Credit Agreement") among
                  RailWorks Corporation, a Delaware corporation, the
                  Subsidiaries identified therein, the lenders identified
                  therein, First Union National Bank, as documentation agent for
                  the Lenders, Bank of America Canada, as administrative agent
                  for the Canadian Lenders and Bank of America, N.A., as
                  administrative agent for the Domestic Lenders

Ladies and Gentlemen:

The undersigned hereby gives notice of a request for a Swingline Loan pursuant
to Section 2.1(c) of the Credit Agreement as follows:

<TABLE>
<S>      <C>                                 <C>
(A)      Date of Borrowing                   ----------------------------------
         (which is a Business Day)

(B)      Principal Amount of
         Borrowing                           ----------------------------------

(C)      Interest rate basis
                                             ----------------------------------

(D)      Interest Period and the
         last day thereof                    ----------------------------------
</TABLE>

In accordance with the requirements of Section 5.2 of the Credit Agreement, the
undersigned Borrower hereby certifies that:

         (a) The representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all material
respects as of the date of this request, and will be true and correct after
giving effect to the requested Extension of Credit (except for those which
expressly related to an earlier date).

         (b) No Default or Event of Default exists, or will exist after giving
effect to the requested Extension of Credit.

         (c) All conditions set forth in Section 2 as to the making of Swingline
Loans have been satisfied.


                                                      Very truly yours,

                                                      RAILWORKS CORPORATION

                                                      By:
                                                         -----------------------
                                                      Name:
                                                      Title:


<PAGE>   138


                               Schedule 2.2(a)(iv)

            FORM OF NOTICE OF BORROWING FOR CANADIAN REVOLVING LOANS

Bank of America Canada,
  as Canadian Administrative Agent under the
  Credit Agreement referred to below
[address]
Toronto, Ontario
Attention:

         RE:      Amended and Restated Credit Agreement dated as of August 5,
                  1999 (as amended and modified, the "Credit Agreement") among
                  RailWorks Corporation, a Delaware corporation, the
                  Subsidiaries identified therein, the lenders identified
                  therein, First Union National Bank, as documentation agent for
                  the Lenders, Bank of America Canada, as administrative agent
                  for the Canadian Lenders and Bank of America, N.A., as
                  administrative agent for the Domestic Lenders

Ladies and Gentlemen:

The undersigned hereby gives notice of a request for a Canadian Revolving Loan
pursuant to Section 2.1(d) of the Credit Agreement as follows:

<TABLE>
<S>      <C>                                 <C>
(A)      Date of Borrowing
         (which is a Business Day)           --------------------------------

(B)      Principal Amount of
         Borrowing                           --------------------------------

(C)      Currency of Borrowing
                                             --------------------------------

(D)      Interest rate basis                 --------------------------------

(E)      Interest Period and the
         last day thereof                    --------------------------------
</TABLE>

In accordance with the requirements of Section 5.2 of the Credit Agreement, the
undersigned Borrower hereby certifies that:

         (a) The representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all material
respects as of the date of this request, and will be true and correct after
giving effect to the requested Extension of Credit (except for those which
expressly related to an earlier date).

         (b) No Default or Event of Default exists, or will exist after giving
effect to the requested Extension of Credit.

         (c) All conditions set forth in Section 2 as to the making of Domestic
Revolving Loans have been satisfied.

                                             Very truly yours,

                                             [CANADIAN BORROWER]

                                             By:
                                                -------------------------------
                                             Name:
                                             Title:


<PAGE>   139


                               Schedule 2.2(a)(v)

                    FORM OF NOTICE OF REQUEST FOR ISSUANCE OF
                          CANADIAN BANKERS' ACCEPTANCES

                                [TO BE PROVIDED]


<PAGE>   140


                                 Schedule 2.5-1

                         FORM OF DOMESTIC REVOLVING NOTE


                                                                  August 5, 1999

         FOR VALUE RECEIVED, RAILWORKS CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of ______________________, its
successors and permitted assigns (the "Lender"), on or before the Termination
Date to the office of the Domestic Administrative Agent in immediately available
funds as provided in the Credit Agreement,

         (i)      in the case of Domestic Revolving Loans, the Lender's Domestic
Revolving Committed Amount or, if less, the aggregate unpaid principal amount of
all Domestic Revolving Loans owing to the Lender, and

         (ii)     in the case of Swingline Loans, if the Lender is the Swingline
Lender, the Swingline Committed Amount or, if less, the aggregate unpaid
principal amount of all Swingline Loans owing to the Lender,

together with interest thereon at the rates and as provided in the Credit
Agreement.

         This Note is one of the Domestic Revolving Notes referred to in the
Amended and Restated Credit Agreement dated as of August 5, 1999 (as amended and
modified, the "Credit Agreement") among the Borrower, the Subsidiaries
identified therein, the lenders identified therein, First Union National Bank,
as Documentation Agent, Bank of America Canada, as Canadian Administrative
Agent, and Bank of America, N.A., as Domestic Administrative Agent. Terms used
but not otherwise defined herein shall have the meanings provided in the Credit
Agreement.

         The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
Borrower to pay amounts evidenced hereby.

         Upon the occurrence of an Event of Default, all amounts evidenced by
this Note may, or shall, become immediately due and payable as provided in the
Credit Agreement without presentment, demand, protest or notice of any kind, all
of which are waived by the Borrower. In the event payment of amounts evidenced
by this Note is not made at any stated or accelerated maturity, the Borrower
agrees to pay, in addition to principal and interest, all costs of collection,
including reasonable attorneys' fees.

         This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.

         This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.


<PAGE>   141

         IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed as of the date first above written.

                                             RAILWORKS CORPORATION,
                                             a Delaware corporation

                                             By: /s/
                                                -------------------------------
                                             Name:  Michael R. Azarela
                                             Title: Executive Vice President and
                                                    Chief Financial Officer


<PAGE>   142


                                 Schedule 2.5-2

                         FORM OF CANADIAN REVOLVING NOTE

                                                                  August 5, 1999

         FOR VALUE RECEIVED, [NAME OF FOREIGN BORROWER], a [__________]
corporation (the "Canadian Borrower"), hereby promises to pay to the order of
______________________, its successors and permitted assigns (the "Lender"), on
or before the Termination Date to the office of the Canadian Administrative
Agent in immediately available funds as provided in the Credit Agreement, the
Lender's Canadian Revolving Committed Amount or, if less, the aggregate unpaid
principal amount of all Canadian Revolving Loans owing to the Lender, together
with interest thereon at the rates and as provided in the Credit Agreement.

         This Note is one of the Canadian Revolving Notes referred to in the
Amended and Restated Credit Agreement dated as of August 5, 1999 (as amended and
modified, the "Credit Agreement") among the RailWorks Corporation, a Delaware
corporation, the Subsidiaries identified therein, including the Canadian
Borrower, the lenders identified therein, First Union National Bank, as
Documentation Agent, Bank of America Canada, as Canadian Administrative Agent,
and Bank of America, N.A., as Domestic Administrative Agent. Terms used but not
otherwise defined herein shall have the meanings provided in the Credit
Agreement.

         The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information shall not affect the obligation of the
Canadian Borrower to pay amounts evidenced hereby.

         Upon the occurrence of an Event of Default, all amounts evidenced by
this Note may, or shall, become immediately due and payable as provided in the
Credit Agreement without presentment, demand, protest or notice of any kind, all
of which are waived by the Canadian Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
Canadian Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.

         This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.

         This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.

         IN WITNESS WHEREOF, the Canadian Borrower has caused this Note to be
duly executed as of the date first above written.

                            GANTREX RW COMPANY,
                            a Nova Scotia unlimited liability company

                            By:
                                --------------------------------------
                            Name:  Michael R. Azarela
                            Title: Executive Vice President and
                                   Chief Financial Officer



                            RAILWORKS CANADA COMPANY,
                            a Nova Scotia unlimited liability company

                            By: /s/
                                --------------------------------------
                            Name:  Michael R. Azarela
                            Title: Executive Vice President and
                                   Chief Financial Officer


<PAGE>   143


                                 Schedule 2.6(b)

                           Existing Letters of Credit

<PAGE>   144


                                  Schedule 3.2

                     Form of Notice of Extension/Conversion


Bank of America, N.A.,                         Bank of America Canada, as
  as Domestic Administrative Agent               Canadian Administrative Agent
101 N. Tryon Street                            [address]
Independence Center, 15th Floor                [address]
NC1-001-15-04                                  [address]
Charlotte, North Carolina  28255               Ontario, Canada
Attention:  Agency Services]                   Attention:  [____]]

         RE:      Amended and Restated Credit Agreement dated as of August 5,
                  1999 (as amended and modified, the "Credit Agreement") among
                  RailWorks Corporation, a Delaware corporation, the
                  Subsidiaries identified therein, the lenders identified
                  therein, First Union National Bank, as documentation agent for
                  the Lenders, Bank of America Canada, as administrative agent
                  for the Canadian Lenders and Bank of America, N.A., as
                  administrative agent for the Domestic Lenders. Terms used but
                  not otherwise defined herein shall have the meanings provided
                  in the Credit Agreement.

Ladies and Gentlemen:

         The undersigned hereby gives notice pursuant to Section 3.2 of the
Credit Agreement that it requests an extension or conversion of a [Domestic
Revolving Loan][Canadian Revolving Loan] outstanding under the Credit Agreement,
and in connection therewith sets forth below the terms on which such extension
or conversion is requested to be made:

<TABLE>
<S>      <C>                                          <C>
(A)      Date of Extension or Conversion
         (which is the last day of the                -------------------------
         applicable Interest Period)

(B)      Principal Amount of
         Extension or Conversion                      -------------------------

(C)      Currency of Revolving Loan
         (in the case of Canadian Revolving Loans)    -------------------------

(D)      Interest rate basis                          -------------------------

(E)      Interest Period and the
         last day thereof                             -------------------------
</TABLE>

         In accordance with the requirements of Section 3.2 of the Credit
Agreement, the undersigned Borrower hereby certifies that, in the case of an
extension of a Eurodollar Loan or the conversion of a Base Rate Loan into a
Eurodollar Loan:

                  (a)      The representations and warranties contained in the
         Credit Agreement and the other Credit Documents are true and correct in
         all material respects as of the date of this request,


<PAGE>   145

         and will be true and correct after giving effect to the requested
         Extension of Credit (except for those which expressly relate to an
         earlier date).

                  (b)      No Default or Event of Default exists, or will exist
         after giving effect to the requested Extension of Credit.

                  (c)      All conditions set forth in Section 3.2 as to the
         extension of a Eurodollar Loan or the conversion of a Base Rate Loan
         into a Eurodollar Loan have been satisfied.

                                       Very truly yours,

                                       BORROWER]

                                       By:
                                          -------------------------------
                                       Name:
                                       Title:


<PAGE>   146


                             Schedule 5.1(f)(iii)-1

                             Secretary's Certificate

         Pursuant to Section 5.1(f)(iii) of the Amended and Restated Credit
Agreement (the "Credit Agreement"; capitalized used herein an not otherwise
defined shall have the meanings given to such terms in the Credit Agreement),
dated as of August 5, 1999, among RailWorks Corporation, a Delaware corporation,
the Subsidiaries identified therein, the lenders identified therein, First Union
National Bank, as Documentation Agent, Bank of America Canada, as Canadian
Administrative Agent, and Bank of America, N.A., as Domestic Administrative
Agent, the undersigned, John P. Nuzzo, Secretary of each of those companies
listed on Schedule 1 and Assistant Secretary of each of those companies listed
on Schedule 2 hereto (each "Corporation"), hereby certifies as follows:

         1. Attached hereto as Annex I is a true and complete copy of
resolutions duly adopted by the board of directors of each Corporation on
_________________, 199__. The attached resolutions have not been rescinded or
modified and remain in full force and effect. The attached resolutions are the
only corporate proceedings of each Corporation now in force relating to or
affecting the matters referenced to therein.

         2. The Articles of Incorporation or Certificate of Incorporation, as
the case may be, and Bylaws of each Company listed on Schedule 3, true and
correct copies of which were previously delivered in certified form to
NationsBank N.A., as Administrative Agent under the Original Credit Agreement,
have not been amended, rescinded, modified or revoked and remain in full force
and effect.

         3. Attached hereto as Annex II is a true and complete copy of the
By-laws of each Corporation listed on Schedule 4 as in effect on the date
hereof.

         4. Attached hereto as Annex III is a true and complete copy of the
Articles of Certificate of Incorporation, as the case may be, of each
Corporation listed on Schedule 4 and all amendments thereto as in effect on the
date hereof.

         5. Each of the following persons is now a duly elected and qualified
officer of the Corporation, holding the office(s) indicated, and the signature
opposite his/her name below is his/her true and genuine signature, and such
officer is duly authorized to execute and deliver, on behalf of each
Corporation, the Credit Agreement, the Notes and the other Credit Documents and
to act as a Responsible Officer, on behalf of the Corporation, under the Credit
Agreement.

<TABLE>
<CAPTION>
Name                             Office                           Signature
----                             ------                           ---------
<S>                              <C>                           <C>
Michael R. Azarela               Executive Vice President
                                                               -----------------
John P. Nuzzo                    Secretary or
                                 Assistant Secretary           -----------------
</TABLE>



<PAGE>   147


         IN WITNESS WHEREOF, the undersigned, in his aforesaid capacity, has
hereunto set his name this ___ of _____, 1999.



                                                 ------------------------------
                                                 Secretary/Assistant Secretary


                  The undersigned, Executive Vice President of the Corporation,
does hereby certify that (i) John P. Nuzzo has been duly elected by the Board of
Directors of each Corporation to serve as Secretary or Assistant Secretary, as
the case may be, (ii) he has been duly qualified and is presently serving each
Corporation in such capacity, and (iii) the signature set forth above is his
genuine signature.


                                                 /s/
                                                 -----------------------------
                                                 Michael R. Azarela
                                                 Executive Vice President



<PAGE>   148


SCHEDULE 1



1.       Birmingham Wood, Inc.

2.       Gantrex RW, Inc.

3.       Gantrex Corporation

4.       Gantrex RW Company

5.       Gantrex Holdings - Canada, Inc.

6.       Gantrex Group Ltd.

7.       Gantrex Limited

8.       Gantrex Systems Limited

9.       Gantrex Systems, Inc.

10.      McCord Treated Wood, Inc.

11.      MidWest RW, Inc.

12.      Pacific Northern Rail RW, Incorporated

13.      Pacific Northern Rail Contractors Holdings Ltd.

14.      Pacific Northern Rail Contractors Corp.

15.      PNR Investments Ltd.

16.      PNR Leasing Ltd.



<PAGE>   149


SCHEDULE 2

1.       Armcore Acquisition Corp.

2.       Armcore Railroad Contractors, Inc.

3.       Earl Campbell Construction Company, Inc.

4.       F&V Metro RW, Inc.

5.       F&V Metro Contracting Corp.

6.       FCM Rail, Ltd.

7.       Impulse Electric Enterprises of New York, Inc.

8.       M-Track Enterprises, Inc.

9.       MidWest Railroad Construction and Maintenance Corporation of Wyoming

10.      Neosho Incorporated

11.      Neosho Construction Company, Incorporated

12.      Neosho International, Inc.

13.      Neosho Asia, Inc.

14.      Neosho Central America, Inc.

15.      Neosho Contractors, Inc.

16.      New England Railroad Construction Co., Inc.

17.      Parson Railway Shops, Inc.

18.      Railroad Resources, Inc.

19.      Railroad Service, Inc.

20.      Railroad Specialties, Inc.

21.      RailWorks Canada, Inc.

22.      RailWorks of Canada Company

23.      Sheldon Electric, Inc.

24.      Southern Indiana Wood Preserving Co., Inc.

25.      U.S. Railway Supply, Inc.

26.      U.S. Trackworks, Inc.

27.      V&R Electrical Contractors, Inc.



<PAGE>   150


SCHEDULE 3



1.       Armcore Acquisition Corp.

2.       Armcore Railroad Contractors, Inc.

3.       F&V Metro RW, Inc.

4.       F&V Metro Contracting Corp.

5.       FCM Rail, Ltd.

6.       Gantrex RW, Inc.

7.       Gantrex Corporation

8.       Impulse Electric Enterprises of New York, Inc.

9.       M-Track Enterprises, Inc.

10.      McCord Treated Wood, Inc.

11.      MidWest RW, Inc.

12.      MidWest Railroad Construction and Maintenance Corporation of Wyoming

13.      Neosho Incorporated

14.      Neosho Construction Company, Incorporated

15.      Neosho International, Inc.

16.      Neosho Asia, Inc.

17.      Neosho Central America, Inc.

18.      Neosho Contractors, Inc.

19.      New England Railroad Construction Co., Inc.

20.      Railroad Service, Inc.

21.      Railroad Specialties, Inc.

22.      Sheldon Electric, Inc.

23.      Southern Indiana Wood Preserving Co., Inc.

24.      U.S. Railway Supply, Inc.

25.      U.S. Trackworks, Inc.

26.      V&R Electrical Contractors, Inc.



<PAGE>   151


SCHEDULE 4

1.       Birmingham Wood, Inc.

2.       Earl Campbell Construction Company, Inc.

3.       Gantrex RW Company

4.       Gantrex Holdings - Canada, Inc.

5.       Gantrex Group Ltd.

6.       Gantrex Limited

7.       Gantrex Systems Limited

8.       Gantrex Systems, Inc.

9.       Pacific Northern Rail RW, Incorporated

10.      Pacific Northern Rail Contractors Holdings Ltd.

11.      Pacific Northern Rail Contractors Corp.

12.      PNR Investments Ltd.

13.      PNR Leasing Ltd.

14.      Railroad Resources, Inc.

15.      RailWorks Canada, Inc.

16.      RailWorks of Canada Company





<PAGE>   152


                             Schedule 5.1(f)(iii)-2

                             Secretary's Certificate

         Pursuant to Section 5.1(f)(iii) of the Amended and Restated Credit
Agreement (the "Credit Agreement"; capitalized used herein an not otherwise
defined shall have the meanings given to such terms in the Credit Agreement),
dated as of August 5, 1999, among RailWorks Corporation, a Delaware corporation,
the Subsidiaries identified therein, the lenders identified therein, First Union
National Bank, as Documentation Agent, Bank of America Canada, as Canadian
Administrative Agent, and Bank of America, N.A., as Domestic Administrative
Agent, the undersigned, John Kennedy, Secretary of each of those companies
listed on Schedule 1 and Assistant Secretary of each of those companies listed
on Schedule 2 hereto (each a "Corporation"), hereby certifies as follows:

         1.       Attached hereto as Annex I is a true and complete copy of
resolutions duly adopted by the board of directors of each Corporation on
_________________, 199__. The attached resolutions have not been rescinded or
modified and remain in full force and effect. The attached resolutions are the
only corporate proceedings of each Corporation now in force relating to or
affecting the matters referenced to therein.

         2.       The Articles of Incorporation or Certificate of Incorporation,
as the case may be, and Bylaws of each Company listed on Schedule 3, true and
correct copies of which were previously delivered in certified form to
NationsBank N.A., as Administrative Agent under the Original Credit Agreement,
have not been amended, rescinded, modified or revoked and remain in full force
and effect.

         3.       Each of the following persons is now a duly elected and
qualified officer of each Corporation, holding the office(s) indicated, and the
signature opposite his/her name below is his/her true and genuine signature, and
such officer is duly authorized to execute and deliver, on behalf of each
Corporation, the Credit Agreement, the Notes and the other Credit Documents and
to act as a Responsible Officer, on behalf of the Corporation, under the Credit
Agreement.


<TABLE>
<CAPTION>
Name                           Office                             Signature
----                           ------                             ---------
<S>                            <C>                         <C>
Michael R. Azarela             Executive Vice President
                                                           ---------------------
John Kennedy                   Secretary or
                               Assistant Secretary         ---------------------
</TABLE>



<PAGE>   153


         IN WITNESS WHEREOF, the undersigned, in his aforesaid capacity, has
hereunto set his name this ___ of _____, 1999.



                                          ------------------------------
                                          Secretary/Assistant Secretary


                  The undersigned, Executive Vice President of the Corporation,
does hereby certify that (i) John Kennedy has been duly elected by the Board of
Directors of each Corporation to serve as Secretary or Assistant Secretary, as
the case may be, (ii) he has been duly qualified and is presently serving each
Corporation in such capacity, and (iii) the signature set forth above is his
genuine signature.

                                          -----------------------------
                                          Michael R. Azarela
                                          Executive Vice President


<PAGE>   154


SCHEDULE 1



1.       RailWorks Corporation



<PAGE>   155


SCHEDULE 2

1.       Alpha-Keystone Engineering, Inc.

2.       Annex Railroad Builders, Inc.

3.       Comstock Holdings, Inc.

4.       Comtrack Construction, Inc.

5.       Condon Brothers, Inc.

6.       CPI Concrete Products, Incorporated

7.       H.P. McKinley, Inc.

8.       Kennedy Railroad Builders

9.       Merit Railroad Contractors, Inc.

10.      MidWest Construction Services, Inc.

11.      Minnesota Railroad Service, Inc.

12.      Northern Rail Service and Supply Company, Inc.

13.      R. & M.B. Rail Co., Inc.

14.      Railcorp, Inc.

15.      Wm. A. Smith Construction Co., Inc.

16.      Wm. A Rerailing Services, Inc.



                                       27

<PAGE>   156


                             Schedule 5.1(f)(iii)-3

                             Secretary's Certificate

         Pursuant to Section 5.1(f)(iii) of the Amended and Restated Credit
Agreement (the "Credit Agreement"; capitalized used herein an not otherwise
defined shall have the meanings given to such terms in the Credit Agreement),
dated as of August__, 1999, among RailWorks Corporation, a Delaware corporation,
the Subsidiaries identified therein, the lenders identified therein, First Union
National Bank, as Documentation Agent, Bank of America Canada, as Canadian
Administrative Agent, and Bank of America, N.A., as Domestic Administrative
Agent, the undersigned, John Kennedy, Assistant Secretary of L.K. Comstock &
Company, Inc. (the "Corporation"), hereby certifies as follows:

         1.       Attached hereto as Annex I is a true and complete copy of
resolutions duly adopted by the board of directors of the Corporation on
_________________, 199__. The attached resolutions have not been rescinded or
modified and remain in full force and effect. The attached resolutions are the
only corporate proceedings of the Corporation now in force relating to or
affecting the matters referenced to therein.

         2.       The Articles of Incorporation or Certificate of Incorporation,
as the case may be, and Bylaws of the Company, true and correct copies of which
were previously delivered in certified form to NationsBank N.A., as
Administrative Agent under the Original Credit Agreement, have not been amended,
rescinded, modified or revoked and remain in full force and effect.

         3.       Each of the following persons is now a duly elected and
qualified officer of the Corporation, holding the office(s) indicated, and the
signature opposite his/her name below is his/her true and genuine signature, and
such officer is duly authorized to execute and deliver, on behalf of the
Corporation, the Credit Agreement, the Notes and the other Credit Documents and
to act as a Responsible Officer, on behalf of the Corporation, under the Credit
Agreement.


<TABLE>
<CAPTION>
Name                           Office                              Signature
----                           ------                              ---------
<S>                            <C>                             <C>
C. William Moore               Chief Executive Officer &
                               President                       -----------------

John Kennedy                   Assistant Secretary
                                                               -----------------
</TABLE>


                                       28

<PAGE>   157


         IN WITNESS WHEREOF, the undersigned, in his aforesaid capacity, has
hereunto set his name this ___ of _____, 1999.



                                             ----------------------------------
                                             Secretary


                  The undersigned, Chief Executive Officer and President of the
Corporation, does hereby certify that (i) John Kennedy has been duly elected by
the Board of Directors of the Corporation to serve as Secretary, (ii) he has
been duly qualified and is presently serving the Corporation in such capacity,
and (iii) the signature set forth above is his genuine signature.



                                             /s/
                                             ----------------------------------
                                             C. William Moore
                                             Chief Executive Officer & President



                                       29

<PAGE>   158


                                  Schedule 6.8

                                 Existing Liens



















                                       30
<PAGE>   159


                                  Schedule 6.14

                                  Subsidiaries




























                                       31
<PAGE>   160


                                 Schedule 7.2(b)

                    Form of Officer's Compliance Certificate

         This Certificate is delivered in accordance with the provisions of
Section 7.2(b) of that Credit Agreement dated as of August 5, 1999 (as amended,
modified and supplemented, the "Credit Agreement") among RailWorks Corporation,
a Delaware corporation, the Subsidiaries identified therein, the lenders
identified therein, First Union National Bank, as Documentation Agent, Bank of
America Canada, as Canadian Administrative Agent and Bank of America, N.A., as
Domestic Administrative Agent. Terms used but not otherwise defined herein shall
have the same meanings provided in the Credit Agreement.

         The undersigned, being a Responsible Officer of RailWorks Corporation,
a Delaware corporation, hereby certifies, in my official capacity and not in my
individual capacity, that to the best of my knowledge and belief:

         (a) the financial statements accompanying this Certificate fairly
present the financial condition of the parties covered by such financial
statements in all material respects;

         (b) during the period covered by the financial statements the Credit
Parties have observed or performed all of their covenants and other agreements
in all material respects, and satisfied in all material respects every material
condition, contained in this Credit Agreement to be observed, performed or
satisfied by them;

         (c) no Default or Event of Default has occurred and is continuing; and

         (d) detailed calculations demonstrating compliance with the financial
covenants set out in Section 7.9 of the Credit Agreement accompany this
Certificate.

         This the _______________ day of ________________________, 199__.

                                    RAILWORKS CORPORATION

                                    By:
                                       --------------------------------
                                    Name:
                                    Title:







                                       32
<PAGE>   161


                       Attachment to Officer's Certificate

                       Computation of Financial Covenants

























                                       33
<PAGE>   162


                                 Schedule 7.11-1

               Form of Joinder Agreement for Domestic Subsidiaries

         THIS JOINDER AGREEMENT (the "Agreement"), dated as of
___________________, ____, is by and among _______________________, a
__________________ (the "Applicant Guarantor"), BANK OF AMERICA CANADA, in its
capacity as Canadian Administrative Agent, and BANK OF AMERICA, N.A., in its
capacity as Domestic Administrative Agent and as Collateral Agent, under that
certain Amended and Restated Credit Agreement dated as of July __, 1999 (as
amended and modified, the "Credit Agreement") by and among RailWorks
Corporation, a Delaware corporation, the Subsidiaries identified therein, the
lenders identified therein, First Union National Bank, as Documentation Agent,
Bank of America Canada, as Canadian Administrative Agent, and Bank of America,
N.A., as Domestic Administrative Agent. All of the defined terms in the Credit
Agreement are incorporated herein by reference.

         The Applicant Guarantor has indicated its desire to become a Domestic
Guarantor or is required by the terms of Section 7.11 of the Credit Agreement to
become a Domestic Guarantor.

         Accordingly, the Applicant Guarantor hereby agrees with the Agents, for
the benefit of the Lenders, as follows:

         1.       The Applicant Guarantor hereby acknowledges, agrees and
confirms that, by its execution of this Agreement, the Applicant Guarantor will
be deemed to be a party to the Credit Agreement and a "Domestic Guarantor" for
all purposes of the Credit Agreement and the other Credit Documents, and shall
have all of the obligations of a Domestic Guarantor thereunder as if it had
executed the Credit Agreement and the other Credit Documents. The Applicant
Guarantor agrees to be bound by all of the terms, provisions and conditions
contained in the Credit Documents, including without limitation (i) all of the
affirmative and negative covenants set forth in Sections 7 and 8 of the Credit
Agreement applicable to a Domestic Guarantor and (ii) all of the undertakings
and waivers applicable to a Domestic Guarantor set forth in Section 4 of the
Credit Agreement. Without limiting the generality of the foregoing terms of this
paragraph 1, the Applicant Guarantor hereby (A) jointly and severally together
with the other Domestic Guarantors, guarantees to each Lender (including the
Issuing Lender), each Affiliate of a Lender which enters into a Hedging
Agreement with a Credit Party relating to the Obligations and the Agents, as
provided in Section 4 of the Credit Agreement, the prompt payment and
performance of the Guaranteed Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof,
(B) agrees that if any of the Guaranteed Obligations are not paid or performed
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), the Applicant
Guarantor will, jointly and severally together with the other Domestic
Guarantors, promptly pay and perform the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) in accordance
with the terms of such extension or renewal, (C) grants to the Collateral Agent,
for the benefit of the Lenders, a security interest in its Collateral as
referred in, and pursuant to the terms of, the Domestic Security Agreement, and
(D) pledges and grants a security interest to the Collateral Agent, for the
benefit of the Lenders, in the Collateral as referred in, and pursuant to the
terms of, the Pledge Agreement, including the Pledged Stock identified in
Schedule A attached hereto, if any.




                                       34
<PAGE>   163

         2.       The Applicant Guarantor acknowledges and confirms that it has
received a copy of the Credit Agreement and the other Credit Documents
(including the Schedules and Exhibits thereto). The information on Schedule 1 to
the Domestic Security Agreement and Schedule 1 to the Domestic Pledge Agreement
is amended to provide the information shown on the attached Schedule A with
respect to the Applicant Guarantor.

         3.       The Applicant Guarantor hereby waives acceptance by the Agents
and the Lenders of the guaranty by the Applicant Guarantor under Section 4 of
the Credit Agreement upon the execution of this Joinder Agreement by the
Applicant Guarantor.

         4.       This Agreement may be executed in two or more counterparts,
each of which shall constitute an original but all of which when taken together
shall constitute one contract.

         5.       This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York.

         IN WITNESS WHEREOF, each of the parties hereto has caused this Joinder
Agreement to be duly executed by its authorized officer as of the day and year
first above written.

                                 APPLICANT GUARANTOR

                                 By:
                                      ---------------------------------
                                 Name:
                                 Title:

                                 Acknowledged and accepted:

                                 BANK OF AMERICA, N.A.,
                                 as Domestic Administrative Agent
                                 and as Collateral Agent

                                 By:
                                      ---------------------------------
                                 Name:
                                 Title:

                                 BANK OF AMERICA CANADA,
                                 as Canadian Administrative Agent

                                 By:
                                      ---------------------------------
                                 Name:
                                 Title:







                                       35
<PAGE>   164


                                   Schedule A
                                       to
                   Joinder Agreement for Domestic Subsidiaries

                    Schedule 1 to Domestic Security Agreement

                             Chief Executive Office

                                             Chief Executive
      Applicant Guarantor                         Office





                     Schedule 1 to Domestic Pledge Agreement

                          Description of Pledged Shares

<TABLE>
<CAPTION>
                                            No. of      Certificate
Pledgor/Applicant Guarantor      Issuer     Shares         No.        Percentage
---------------------------      ------     ------         ---        ----------
<S>                              <C>        <C>         <C>           <C>
</TABLE>







<PAGE>   165


                                 Schedule 7.11-2

               Form of Joinder Agreement for Canadian Subsidiaries

         THIS JOINDER AGREEMENT (the "Agreement"), dated as of
___________________, ____, is by and between _______________________, a
__________________ (the "Applicant Guarantor"), BANK OF AMERICA, N.A., in its
capacity as Collateral Agent, and BANK OF AMERICA CANADA, in its capacity as
Canadian Administrative Agent, under that certain Credit Agreement dated as of
July __, 1999 (as amended and modified, the "Credit Agreement") by and among
RailWorks Corporation, a Delaware corporation, the Subsidiaries identified
therein, the lenders identified therein, First Union National Bank, as
Documentation Agent, Bank of America Canada, as Canadian Administrative Agent,
and Bank of America, N.A., as Domestic Administrative Agent. All of the defined
terms in the Credit Agreement are incorporated herein by reference.

         The Applicant Guarantor has indicated its desire to become a Canadian
Guarantor or is required by the terms of Section 7.11 of the Credit Agreement to
become a Canadian Guarantor.

         Accordingly, the Applicant Guarantor hereby agrees with the Collateral
Agent and the Canadian Administrative Agent, for the benefit of the Canadian
Lenders, as follows:

         1.       The Applicant Guarantor hereby acknowledges, agrees and
confirms that, by its execution of this Agreement, the Applicant Guarantor will
be deemed to be a party to the Credit Agreement and a "Canadian Guarantor" for
all purposes of the Credit Agreement and the other Credit Documents, and shall
have all of the obligations of a Canadian Guarantor thereunder as if it had
executed the Credit Agreement and the other Credit Documents. The Applicant
Guarantor agrees to be bound by all of the terms, provisions and conditions
contained in the Credit Documents, including without limitation (i) all of the
affirmative and negative covenants set forth in Sections 7 and 8 of the Credit
Agreement applicable to a Canadian Guarantor and (ii) all of the undertakings
and waivers applicable to a Canadian Guarantor set forth in Section 4 of the
Credit Agreement. Without limiting the generality of the foregoing terms of this
paragraph 1, the Applicant Guarantor hereby (A) jointly and severally together
with the other Canadian Guarantors, guarantees to each Canadian Lender, each
Affiliate of a Canadian Lender which enters into a Hedging Agreement with a
Canadian Credit Party relating to the Canadian Obligations, the Collateral Agent
and the Canadian Administrative Agent as provided in Section 4 of the Credit
Agreement, the prompt payment and performance of the Guaranteed Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof, (B) agrees that if any of the Guaranteed
Obligations are not paid or performed in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Applicant Guarantor will, jointly and
severally together with the other Canadian Guarantors, promptly pay and perform
the same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension
or renewal, (C) grants to the Collateral Agent, for the benefit of the Canadian
Lenders, a security interest in its Collateral as referred in, and pursuant to
the terms of, the Canadian Security Agreement, and (D) pledges and grants a
security interest to the Collateral Agent, for the benefit of the Canadian
Lenders, in the Collateral as referred in, and pursuant to the terms of, the
Canadian Pledge Agreement, including the Pledged Stock identified in Schedule A
attached hereto, if any.


                                       37

<PAGE>   166

         2.       The Applicant Guarantor acknowledges and confirms that it has
received a copy of the Credit Agreement and the other Credit Documents
(including the Schedules and Exhibits thereto). The information on Schedule 1 to
the Canadian Security Agreement and Schedule 1 to the Canadian Pledge Agreement
is amended to provide the information shown on the attached Schedule A with
respect to the Applicant Guarantor.

         3.       The Applicant Guarantor hereby waives acceptance by the Agents
and the Lenders of the guaranty by the Applicant Guarantor under Section 4 of
the Credit Agreement upon the execution of this Joinder Agreement by the
Applicant Guarantor.

         4.       This Agreement may be executed in two or more counterparts,
each of which shall constitute an original but all of which when taken together
shall constitute one contract.

         5.       This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York.

         IN WITNESS WHEREOF, each of the parties hereto has caused this Joinder
Agreement to be duly executed by its authorized officer as of the day and year
first above written.

                                            APPLICANT GUARANTOR

                                            By:
                                                 ------------------------------
                                            Name:
                                            Title:

                                            Acknowledged and accepted:

                                            BANK OF AMERICA N.A.,
                                            as Collateral Agent

                                            By:
                                                 ------------------------------
                                            Name:
                                            Title:


                                            BANK OF AMERICA CANADA,
                                            as Canadian Administrative Agent

                                            By:
                                                 ------------------------------
                                            Name:
                                            Title:




                                       38

<PAGE>   167



                                   Schedule A
                                       to
                   Joinder Agreement for Canadian Subsidiaries

                    Schedule 1 to Canadian Security Agreement

                             Chief Executive Office

                                                   Chief Executive
    Applicant Guarantor                                  Office





                     Schedule 1 to Canadian Pledge Agreement

                          Description of Pledged Shares

<TABLE>
<CAPTION>
                                            No. of      Certificate
Pledgor/Applicant Guarantor      Issuer     Shares         No.        Percentage
---------------------------      ------     ------         ---        ----------
<S>                              <C>        <C>         <C>           <C>
</TABLE>






<PAGE>   168


                                  Schedule 8.1

                                  Indebtedness


<PAGE>   169


                                  Schedule 11.1

                         Schedule of Lenders' Addresses

<PAGE>   170


                                Schedule 11.3(b)

                        Form of Assignment and Acceptance

         THIS ASSIGNMENT AND ACCEPTANCE dated as of ____________, 199_ (this
"Assignment") is entered into between THE LENDER IDENTIFIED ON THE SIGNATURE
PAGES HERETO AS THE "ASSIGNOR" (the "Assignor") and THE PARTY IDENTIFIED ON THE
SIGNATURE PAGES HERETO AS "ASSIGNEE" (the "Assignee").

         Reference is made to that Amended and Restated Credit Agreement dated
as of August 4, 1998 (as amended and modified, the "Credit Agreement") among
RailWorks Corporation, a Delaware corporation, the Subsidiaries identified
therein, the lenders identified therein, First Union National Bank, as
Documentation Agent, Bank of America Canada, as Canadian Administrative Agent,
and Bank of America, N.A., as Domestic Administrative Agent. Terms defined in
the Credit Agreement are used herein with the same meanings.

         1.       The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Effective Date shown below, those rights
and interests of the Assignor under the Credit Agreement identified below (the
"Assigned Interests"), including the Obligations and Commitments relating
thereto, together with unpaid interest and fees relating thereto accruing from
the Effective Date. The Assignor represents and warrants that it owns interests
assigned hereby free and clear of liens, encumbrances or other claims. The
Assignee represents that it is a permitted assignee under Section 11.3(c) of the
Credit Agreement. The Assignor and the Assignee hereby make and agree to be
bound by all the representations, warranties and agreements set forth in Section
11.3 of the Credit Agreement, a copy of which has been received by each such
party. From and after the Effective Date (i) each Assignee, if it is not already
a Lender under the Credit Agreement, shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the interests assigned
by this Assignment, have the rights and obligations of a Lender thereunder and
(ii) each Assignor shall, to the extent of the interests assigned by this
Assignment, relinquish its rights and be released from its obligations under the
Credit Agreement (other than the rights of indemnification referenced in Section
11.9 of the Credit Agreement). Schedule 2.1 is deemed modified and amended to
the extent necessary to give effect to this Assignment.

         2.       This Assignment shall be governed by and construed in
accordance with the laws of the State of New York.

         3.       Terms of Assignment

         (a)      Date of Assignment:                   ________________  , __
         (b)      Legal Name of Assignor:                     SEE SIGNATURE PAGE
         (c)      Legal Name of Assignee:                     SEE SIGNATURE PAGE
         (d)      Effective Date of Assignment:         ________________  , __

See Schedule I attached for a description of the Loans, Obligations and
Commitments (and the percentage interests therein and relating thereto) which
are the subject of this Assignment.

         4.       The fee payable to the relevant Administrative Agent in
connection with this Assignment is enclosed.


<PAGE>   171

         IN WITNESS WHEREOF, the parties hereto have caused the execution of
this Assignment by their duly authorized officers as of the date first above
written.

ASSIGNOR:                                    ASSIGNEE:

By:                                          By:
   ------------------------------               -------------------------------
Name:                                        Name:
Title:                                       Title:


                                             Address for Notices:


ACKNOWLEDGMENT AND ACCEPTANCE:

BANK OF AMERICA, N.A.
as Domestic Administrative Agent]

BANK OF AMERICA CANADA
as Canadian Administrative Agent]

By:
   --------------------------------
Name:
Title:

ACKNOWLEDGMENT AND CONSENT:

RAILWORKS CORPORATION,
a Delaware corporation

By:
   --------------------------------
Name:
Title:


<PAGE>   172



                                   SCHEDULE I
                          TO ASSIGNMENT AND ACCEPTANCE
                              RAILWORKS CORPORATION

[DOMESTIC][CANADIAN]REVOLVING LOANS [AND LETTERS OF CREDIT] PRIOR TO ASSIGNMENT

<TABLE>
<CAPTION>
                   Revolving        Revolving        Revolving           LOC             LOC
                   Committed       Commitment          Loans          Committed      Obligations
                    Amount         Percentage       Outstanding        Amount        Outstanding
                    ------         ----------       -----------        ------        -----------
<S>               <C>              <C>             <C>                <C>            <C>
ASSIGNOR



ASSIGNEE



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

                  $                                  $                 $               $
</TABLE>


<PAGE>   173


                                   SCHEDULE I
                          TO ASSIGNMENT AND ACCEPTANCE
                              RAILWORKS CORPORATION

           [DOMESTIC][CANADIAN]REVOLVING LOANS [AND LETTERS OF CREDIT]
                           SUBJECT TO THIS ASSIGNMENT

<TABLE>
<CAPTION>
                   Revolving        Revolving        Revolving           LOC             LOC
                   Committed       Commitment          Loans          Committed      Obligations
                    Amount         Percentage       Outstanding        Amount        Outstanding
                    ------         ----------       -----------        ------        -----------
<S>               <C>              <C>             <C>                <C>            <C>
ASSIGNOR



ASSIGNEE



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

                  $                                  $                 $               $
</TABLE>



<PAGE>   174


                                   SCHEDULE I
                          TO ASSIGNMENT AND ACCEPTANCE
                              RAILWORKS CORPORATION

  [DOMESTIC][CANADIAN]REVOLVING LOANS [AND LETTERS OF CREDIT] AFTER ASSIGNMENT



<TABLE>
<CAPTION>
                   Revolving        Revolving        Revolving           LOC             LOC
                   Committed       Commitment          Loans          Committed      Obligations
                    Amount         Percentage       Outstanding        Amount        Outstanding
                    ------         ----------       -----------        ------        -----------
<S>               <C>              <C>             <C>                <C>            <C>
ASSIGNOR



ASSIGNEE



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

                  $                                  $                 $               $
</TABLE>