EXHIBIT 4(ii)
                            FARMLAND INDUSTRIES, INC.
                              FARMLAND FOODS, INC.

                                CREDIT AGREEMENT

                  This CREDIT AGREEMENT is dated as of February 7, 2002 and
entered into by and among FARMLAND INDUSTRIES, INC., a Kansas cooperative
corporation ("Company"), FARMLAND FOODS, INC, a Kansas corporation ("Foods"),
and together with Company, jointly and severally, the "Borrowers", THE FINANCIAL
INSTITUTIONS PARTY HERETO (each individually referred to herein as a "Lender"
and collectively as "Lenders"), COBANK, ACB ("CoBank") and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A. "Rabobank International", New York BRANCH
("Rabobank"), as co-syndication agents for Lenders (in such capacity,
"Co-Syndication Agents"), HARRIS TRUST & SAVINGS BANK and U.S. BANK NATIONAL
ASSOCIATION, as co-documentation agents for Lenders (in such capacity,
"Co-Documentation Agents"), and BANKERS TRUST COMPANY ("BTCo"), as
administrative agent for Lenders (in such capacity, "Agent").

                                 R E C I T A L S

     WHEREAS,  capitalized  terms used without  definition in these Recitals are
defined in subsection 1.1;

                  WHEREAS, Borrowers desire that Lenders extend certain credit
facilities to Borrowers, the proceeds of which will be used for (i) the
refinancing of Indebtedness under the Existing Credit Agreement and the
replacement or continuation of certain existing letters of credit in connection
therewith and the refinancing of the Synthetic Lease and (ii) general corporate
purposes of Borrowers and their Restricted Subsidiaries;

                  WHEREAS, Borrowers desire to secure all of the Obligations
hereunder and under the other Loan Documents by pledging and/or granting to
Agent for the benefit of the Lenders as their interests appear, the Collateral
as follows: (a) a First Priority security interest in the Working Capital
Collateral for the benefit of the Revolving Lenders; (b) a Second Priority
security interest in the PPE Collateral for the benefit of the Revolving
Lenders; (c) an equal and ratable First Priority security interest in the Pari
Passu Collateral for the benefit of the Revolving Lenders and the Term Lenders;
(d) a First Priority security interest in the PPE Collateral for the benefit of
the Term Lenders; (e) a Second Priority security interest in the Working Capital
Collateral for the benefit of the Term Lenders; (f) a Third Priority security
interest in the Collateral which consists of PPE Collateral for the benefit of
the Lender Hedge Providers; (g) a Third Priority security interest in the
Collateral which consists of Working Capital Collateral for the benefit of the
Lender Hedge Providers; and (h) a Second Priority security interest in the
Collateral which consists of Pari Passu Collateral for the benefit of the Lender
Hedge Providers;

                  WHEREAS, the Material Subsidiaries of Borrowers have agreed to
guarantee the Obligations hereunder and under the other Loan Documents and to
secure their guaranties by granting to Agent, for the benefit of the Lenders as
their interests appear, the Collateral as follows: (a) a First Priority security
interest in the Working Capital Collateral for the benefit of the Revolving
Lenders; (b) a Second Priority security interest in the PPE Collateral for the
benefit of the Revolving Lenders; (c) an equal and ratable First Priority
security interest in the Pari Passu Collateral for the benefit of the Revolving
Lenders and the Term Lenders; (d) a First Priority security interest in the PPE
Collateral for the benefit of the Term Lenders; (e) a Second Priority security
interest in the Working Capital Collateral for the benefit of the Term Lenders;
(f) a Third Priority security interest in the Collateral which consists of PPE
Collateral for the benefit of the Lender Hedge Providers; (g) a Third Priority
security interest in the Collateral which consists of Working Capital Collateral
for the benefit of the Lender Hedge Providers; and (h) a Second Priority
security interest in the Collateral which consists of Pari Passu Collateral for
the benefit of the Lender Hedge Providers.

                  NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrowers, Lenders and
Agent agree as follows:

Section 1.        DEFINITIONS

1.1      Certain Defined Terms.
         ---------------------

                  The following terms used in this Agreement shall have the
following meanings:

                  "Account" means, with respect to any Person, all present and
future rights of such Person to payment for goods sold or leased or for services
rendered (except those evidenced by instruments or chattel paper), whether now
existing or hereafter arising and wherever arising, and whether or not they have
been earned by performance.

                  "Additional Mortgaged Property" has the meaning set forth in
subsection 6.9.

                  "Additional Mortgages" has the meaning set forth in subsection
6.9.

                  "Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (i) the offered quotation (rounded
upward to the nearest 1/16 of one percent) to first class banks in the interbank
Eurodollar market by BTCo for U.S. dollar deposits of amounts in same day funds
comparable to the principal amount of the Eurodollar Rate Loan of BTCo for which
the Adjusted Eurodollar Rate is then being determined with maturities comparable
to such Interest Period as of approximately 12:00 Noon (New York City time) on
such Interest Rate Determination Date by (ii) a percentage equal to 100% minus
the stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable on such Interest Rate Determination Date to any member bank of the
Federal Reserve System in respect of "Eurocurrency liabilities" as defined in
Regulation D (or any successor category of liabilities under Regulation D).

                  "Adjusted Pro Rata Share" means, with respect to any Lender,
the percentage obtained by dividing (i) the applicable Revolving Loan Exposure
of that Lender by (ii) the aggregate applicable Revolving Loan Exposure of all
Lenders other than Daily Funding Lender.

                  "ADM/Farmland Master Lease" means the Master Lease dated May
4, 2001 between Company, as Lessor, and ADM/Farmland, Inc., a wholly owned
subsidiary of Archer Daniels Midland Company, as Lessee, pursuant to which
ADM/Farmland, Inc. leases certain grain elevators from Company and shares losses
and profits from the operation thereof with Company, as more specifically
provided therein.

                  "Affected Lender" has the meaning assigned to that term in
subsection 2.6C.

                  "Affected Loans" has the meaning assigned to that term in
subsection 2.6C.

                  "Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise. For purposes of this definition, a Person shall be
deemed to be "controlled by" a Person if such Person possesses, directly or
indirectly, power to vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person. Notwithstanding the
foregoing, neither Administrative Agent nor any Lender shall be deemed to be an
Affiliate of any of the Loan Parties.

                  "Affiliated Fund" means, with respect to any Lender, a fund
that invests in commercial loans and is managed by the same investment advisor
as such Lender, an Affiliate of such Lender or by an Affiliate of the same
investment advisor as such Lender.

                  "Agent" has the meaning assigned to that term in the
introduction to this Agreement, and, with respect to the issuance of any Letter
of Credit and so long as BTCo serves as Agent hereunder, includes any Affiliates
of BTCo acting as an Issuing Lender, and also means and includes any successor
Agent appointed pursuant to subsection 9.5.

                  "Agents" means Agent and Co-Syndication Agents, collectively.

                  "Agreement" means this Credit Agreement dated as of February
7, 2002, as it may be amended, supplemented or otherwise modified from time to
time.

                  "Agriliance" means Agriliance LLC, a Delaware limited
liability company, which is a Joint Venture of Company.

                  "AP Aging Report" means a written report of the payment status
of Borrowers' accounts payable to any Person who has asserted or claimed a Lien
against, or payment or setoff right with respect to, any Inventory, which report
shall include the amounts due, payment terms, whether any offset or defenses to
such payment exist, and such other information required by Agent, in form and
substance reasonably required by Agent.

                  "AP Reserve" means the fluctuating reserve established by
Agent from time to time against the Borrowing Base in an amount estimated to be
the amount (without duplication) of accounts payable and outstanding checks or
drafts payable to any Person who may claim a Lien against, or payment or setoff
right with respect to, any Inventory and including without limitation Persons
who may claim a Lien against Foods under the Packers and Stockyard Act of 1921
(7 U.S.C. ss. 181 et. seq.), as amended, and tank farm and pipeline owners
entitled to payment with respect to the storage, transportation and shipping
costs, expenses and charges incurred by Company in connection with the storage
and transportation of goods used in Company's Petroleum Business.

                  "Approved Indenture" means any of the Indentures or
supplements thereto as of the Closing Date described in the definition of
Subordinated Investment Certificates and Subordinated Debenture Bonds
(collectively, "Existing Indentures") together with any other indenture or
supplement thereto after the Closing Date pursuant to which the Company issues
Subordinated Indebtedness which is permitted to be issued under this Agreement,
provided that the form and substance of any such other indenture or supplement
thereto shall be substantially the same as the Existing Indentures as to
subordination, redemption, prepayment, payment or defeasance provisions.

                  "AR Aging Report" means a written report of the payment status
of Borrowers' accounts receivable, which report shall include the delinquency
status, collectibility assessment, write downs or charge-offs, modification or
extension of initial payment terms and such other information required by Agent,
in form and substance reasonably required by Agent.

                  "Asset Sale" means the sale or disposition by any Borrower or
any of its Restricted Subsidiaries to any Person other than a Borrower or a
Subsidiary Guarantor of (i) any of the stock of any Subsidiaries of Company held
by any Borrower or any of their Restricted Subsidiaries, (ii) substantially all
of the assets of any division or line of business of any Borrower or any of
their Restricted Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of any Borrower or any of their Restricted Subsidiaries with an
individual value in excess of $100,000 (other than (a) sales or other
disposition of inventory in the ordinary course of business and (b) provided
that if the Term Loans have been paid in full and all Obligations under the Term
Loans have been satisfied, any such other assets to the extent that the
aggregate value of such assets sold in any single transaction or related series
of transactions does not exceed $500,000 individually and $5,000,000 in the
aggregate.

                  "Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit XI annexed hereto.

                  "Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.

                  "Base Rate" means, at any time, the higher of (i) the Prime
Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.

                  "Base Rate Loans" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.

                  "Base Rate Margin" means the margin over the Base Rate used in
determining the rate of interest of Base Rate Loans pursuant to subsection 2.2A.

                  "Best Efforts" means with respect to any Person, that such
Person shall have used its good faith, commercially reasonable best efforts to
accomplish any required or requested action but without requiring such Person to
relinquish any material rights or incur any additional material obligations or
to expend more than a nominal amount of money over and above the reimbursement,
if required, of out-of-pocket costs including attorneys fees.

                  "Borrowers" has the meaning assigned to that term in the
introduction to this Agreement.

                  "Borrowing Base" means, as at any date of determination, an
aggregate amount equal to:

                  I.(A) ninety percent (90%) of the net orderly liquidation
         value of items of Eligible Inventory related to Company's Fertilizer
         Business, with such net orderly liquidation value being calculated as
         follows:

                 (i)      eighty percent (80%) of Raw Materials; plus
                                                                 ----

                 (ii)     eighty-five percent (85%) of Work-in-Process; plus
                                                                        ----

                 (iii)    eighty-five percent (85%) of Finished Goods; plus
                                                                       ----

                 (iv)     thirty percent (30%) of Spare Parts and Supplies; plus
                                                                            ----

                  (B) ninety percent (90%) of the net orderly liquidation value
         of items of Eligible Inventory related to Company's Petroleum Business,
         with such net orderly liquidation value being calculated as follows:

                (i)      ninety percent (90%) of Raw Materials; plus
                                                                ----

                (ii)     eighty-five percent (85%) of Work-in-Process; plus
                                                                       ----

                (iii)    eighty-five percent (85%) of Finished Goods; plus
                                                                      ----

                (iv)     twenty percent (20%) of Spare Parts and Supplies; plus
                                                                           ----

                  (C) ninety percent (90%) of the net orderly liquidation value
         of items of Eligible Inventory related to Borrowers' Pork Business,
         with such net orderly liquidation value being calculated as follows:

                (i)      eighty percent (80%) of Raw Materials; plus
                                                                ----

                (ii)     eighty percent (80%) of Work-in-Process; plus
                                                                  ----

                (iii)    eighty percent (80%) of Finished Goods; plus
                                                                 ----

                (iv)     twenty percent (20%) of Spare Parts and Supplies; plus
                                                                           ----

                (v)      forty-five percent (45%) of Packaging Materials; plus
                                                                          ----

     II. eighty-five percent (85%) of Eligible Accounts Receivable,  minus
                                                                     -----
III. the  aggregate  amount of  reserves,  if any,  established  by Agent in the
exercise of its Permitted  Discretion  against  Eligible  Inventory and Eligible
Accounts Receivable, minus

                  IV.      the Required Reserves;

provided that Agent, in the exercise of its Permitted Discretion, may (a)
increase or decrease reserves against Eligible Inventory and Eligible Accounts
Receivable and (b) reduce the advance rates provided in this definition, or
restore such advance rates to any level equal to or below the advance rates in
effect as of the Closing Date.

                  "Borrowing Base Certificate" means a certificate substantially
in the form of Exhibit VIII annexed hereto delivered to Lenders by Company
pursuant to subsection 4.1 or subsection 6.1(xvii).

                  "BTCo" has the meaning assigned to that term in the
introduction to this Agreement.

                  "BTCo Account" means a deposit account maintained by Agent at
BTCo into which the applicable Lock Box Banks are instructed to transfer funds
on deposit in the applicable Lock Box Accounts pursuant to the terms of the
applicable Lock Box Agreement, if any.

                  "Business Day" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York or is a
day on which banking institutions located in either such state are authorized or
required by law or other governmental action to close; provided, however, that
in connection with all matters relating to Letters of Credit, "Business Day"
shall also exclude any other day on which an Issuing Lender is authorized or
required by law or other governmental action to close.

                  "Capital Lease", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.

                  "Capital Stock" means the capital stock or other equity
interests of a Person.

                  "Cash" means money, currency or a credit balance in a Deposit
Account.

                  "Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either "S&P" or Moody's; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's.

                  "Change in Control" means any of the following: (i) any
Person, or any Person acting in concert with one or more other Persons, shall
have acquired beneficial ownership, directly or indirectly, of Securities of
Company (or other Securities convertible into such Securities) representing 25%
or more of the combined voting power of all Securities of Company entitled to
vote in the election of members of the Governing Body of Company, other than
Securities having such power only by reason of the happening of a contingency;
(ii) the occurrence of a change in the composition of the Governing Body of
Company such that a majority of the members of any such Governing Body are not
Continuing Members; and (iii) the occurrence of any "Change in Control" or
similar provision as defined in any Subordinated Indebtedness of Company, or the
Demand Loan Certificates. As used herein, the term "beneficially own" or
"beneficial ownership" shall have the meanings set forth therefor in the
Exchange Act and the rules and regulations promulgated thereunder.

          "Class"  means,  as  applied to  Lenders,  each of the  following  two
     classes of Lenders:  (i) Lenders  having  Revolving  Loan Exposure and (ii)
     Lenders having Term Loan Exposure.

          "Closing  Date" means  February 8, 2002, the date on which the initial
     Loans are made.

          "Closing  Date  Mortgage  Policies"  has  the  meaning  set  forth  in
     subsection 4.1N.

          "Closing  Date  Mortgaged  Property"  has the  meaning  set  forth  in
     subsection 4.1N.

          "Closing Date Mortgages" has the meaning set forth in subsection 4.1N.

                  "CoBank" is defined in the preamble to this Agreement.

                  "CoBank Equity Interests" means the equity interests in CoBank
that CoBank may from time to time require Company to purchase in accordance with
CoBank's bylaws and capital plans applicable to cooperative borrowers generally
and pursuant to a written description of the terms and conditions under which
such CoBank equity interests are issued which has been provided to Agent prior
to the Closing Date.

                  "Coffeyville Bonds" means, collectively, those certain (a)
City of Coffeyville, Kansas, Taxable Industrial Revenue Bonds, Series A, 1997
(Farmland Industries, Inc.) in the aggregate original principal amount of
$255,110,000 and (b) City of Coffeyville, Kansas, Subordinated Taxable
Industrial Revenue Bonds, Series B, 1997 (Farmland Industries, Inc.) in the
aggregate original principal amount of $10,520,000, each issued pursuant to the
Trust Indenture dated as of December 11, 1997 by and between the City of
Coffeyville, Kansas, as issuer, and The Chase Manhattan Bank, as indenture
trustee.

                  "Coffeyville Fertilizer Plant" means the Company's coke
gasification fertilizer complex facility located in the City of Coffeyville,
Kansas, together with all real and personal property constituting such Facility.

                  "Coffeyville Mortgage" means the Closing Date Mortgage on the
Real Property Assets comprising the Coffeyville Fertilizer Plant, as the same
may be amended, supplemented or otherwise modified from time to time.

                  "Collateral" means, collectively, all of the real, personal
and mixed property (including capital stock and similar equity interests) in
which Liens are purported to be granted pursuant to the Collateral Documents as
security for the Obligations.

                  "Collateral Access Agreement" means any landlord waiver,
mortgagee waiver, bailee letter or any similar acknowledgement agreement of any
landlord or mortgagee in respect of any Real Property Asset where any Inventory
is located or any warehouseman or processor in possession of Inventory,
substantially in the form of Exhibit XIV annexed hereto, with such changes
thereto as may be agreed to by Agent.

                  "Collateral Account" has the meaning assigned to that term in
the Security Agreement.

                  "Collateral Documents" means the Security Agreement, the
Collateral Access Agreements, the Control Agreements, the Commodity Account
Control Agreements, the Mortgages, the Lock Box Agreements and all other
instruments or documents delivered by any Loan Party or any Person pursuant to
this Agreement or any of the other Loan Documents in order to grant to Agent, on
behalf of Lenders, a Lien on any real, personal or mixed property of that Loan
Party as security for the Obligations.

                  "Commercial Letter of Credit" means any letter of credit or
similar instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or services by
Borrowers or any of their Restricted Subsidiaries in the ordinary course of
business of Borrowers or such Restricted Subsidiary.

                  "Commitment Fee Percentage" is defined in subsection 2.3A.

                  "Commitments" means the commitments of Lenders to make Loans
as set forth in subsection 2.1A.

                  "Commodity Account Control Agreement" means the Commodity
Account Control Agreement executed and delivered by a commodity intermediary,
Agent and Borrowers, substantially in the form of Exhibit XVIII annexed hereto
or such other form as may be approved by Agent, as such Commodity Account
Control Agreement may be amended, supplemented or otherwise modified from time
to time, and "Commodity Account Control Agreements" means all such Commodity
Account Control Agreements, collectively.

                  "Commodity Agreement" means any commodity derivative contract,
forward sales contract, futures contract, option contract or other similar
agreement or arrangement to which Borrowers or any of their Restricted
Subsidiaries is a party.

                  "Compliance Certificate" means a certificate substantially in
the form of Exhibit VII annexed hereto delivered to Agent by Borrowers pursuant
to subsection 6.1(iv).

                  "Concentration Account" means the Deposit Account of the
Company described on Schedule 7.14 as Company's "concentration account", as
modified or supplemented from time to time with the approval of Agent, which
Deposit Account shall at all times be subject to a Control Agreement.

                  "Confidential Information Memorandum" means the Confidential
Information Memorandum circulated by the Agents in connection with the
syndication of the Loans and the Commitments.

                  "Conforming Leasehold Interest" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit of Agent
(which writing has been delivered to Agent), whether under the terms of the
applicable lease, under the terms of a Landlord Consent and Estoppel, or
otherwise, to the matters described in the definition of "Landlord Consent and
Estoppel," which interest, if a subleasehold or sub-subleasehold interest, is
not subject to any contrary restrictions contained in a superior lease or
sublease.

                  "Consolidated Capital Expenditures" means, for any period, the
sum of the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and its
Restricted Subsidiaries) by Borrowers and their Restricted Subsidiaries during
that period that, in conformity with GAAP, are included in "additions to
property, plant or equipment" or comparable items reflected in the consolidated
statement of cash flows of Company and its Restricted Subsidiaries; provided
that Consolidated Capital Expenditures shall not include (i) the expenditure of
insurance or condemnation proceeds permitted under this Agreement to be used to
rebuild or replace damaged, destroyed or condemned assets of the Borrowers and
their Restricted Subsidiaries, including any such expenditures to repair or
replace assets (at the present location or otherwise) located at the Facility in
Albert Lea, Minnesota, or (ii) capital expenditures which are recognized as a
result of accounting changes in conformity with GAAP in connection with the
Synthetic Lease Restructuring.

                  "Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period excluding, however, any interest
expense not payable in Cash (including amortization of discount and amortization
of debt issuance costs).

                  "Consolidated EBITDA" means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv)
total depreciation expense, (v) total amortization expense, (vi) Distributions
received and (vii) other non-cash items deducted in the calculation of
Consolidated Net Income (other than any such non-cash item to the extent it
represents an accrual of or reserve for cash expenditures in any future period),
less (viii) other non-cash items added in the calculation of Consolidated Net
Income (other than any such non-cash item to the extent that it will result in
the receipt of cash payments in any future period), all of the foregoing as
determined on a consolidated basis for Borrowers and their Restricted
Subsidiaries in conformity with GAAP; provided, however, that "Consolidated
EBITDA" for the Fiscal Quarters set forth below shall be the correlative amounts
indicated:

                        Fiscal Quarter                     Consolidated EBITDA
            Third Quarter, 2001                                $79,900,000
            Fourth Quarter, 2001                               $74,100,000

          "Consolidated Excess Cash Flow" means, for any period, an
amount (if positive) equal to (i) Consolidated EBITDA minus (ii) the sum,
without duplication, of the amounts for such period of (a) voluntary and
scheduled repayments of Consolidated Total Debt (excluding repayments of
Revolving Loans except to the extent the Revolving Loan Commitments are
permanently reduced in connection with such repayments), (b) the greater of (i)
the Maximum Consolidated Capital Expenditures Amount for such period or (ii) the
actual Consolidated Capital Expenditures permitted by subsection 7.8 and
expended in such period, in each case net of any proceeds of any related
financings with respect to such expenditures, (c) Consolidated Cash Interest
Expense, (d) the provision for current taxes based on income of Borrowers and
their Restricted Subsidiaries and payable in cash with respect to such period,
(e) Cash dividends paid on the Company's Preferred Stock to the extent permitted
pursuant to subsection 7.5 and (f) Permitted Cash Patronage Dividends.

                  "Consolidated Fixed Charges" means, for any period, the sum
(without duplication) of the amounts for such period of (i) Consolidated
Interest Expense, (ii) scheduled principal payments in respect of the Term
Loans, (iii) provisions for taxes based on income, (iv) Cash dividends paid on
the Company's Preferred Stock and (v) Permitted Cash Patronage Dividends, all of
the foregoing as determined on a consolidated basis for Borrowers and their
Restricted Subsidiaries in conformity with GAAP.

                  "Consolidated Interest Expense" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Borrowers and their Restricted
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Borrowers and their Restricted Subsidiaries, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Interest Rate
Agreements, but excluding, however, any amounts referred to in subsection 2.3
payable to Agents and Lenders on or before the Closing Date.

                  "Consolidated Leverage Ratio" means, as at any date, the ratio
of (a) Consolidated Total Debt as at such date to (b) Consolidated EBITDA for
the consecutive four Fiscal Quarters ending on the last day of the most recently
ended Fiscal Quarter.

                  "Consolidated Net Income" means, for any period, the net
income (or loss) of Borrowers and their Restricted Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP; provided that there shall be excluded (i)
the income (or loss) of any Joint Venture during such period, (ii) the income
(or loss) of any Person accrued prior to the date it becomes a Restricted
Subsidiary of Company or is merged into or consolidated with Borrowers or any of
their Restricted Subsidiaries or that Person's assets are acquired by Borrowers
or any of their Restricted Subsidiaries, (iii) the income of any Restricted
Subsidiary of Borrowers to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary, (iv) any after-tax gains or
losses attributable to Asset Sales (other than after tax gains or losses
attributable to the sale of Company's interest in Country Energy LLC) or
returned surplus assets of any Pension Plan, and (v) (to the extent not included
in clauses (i) through (iv) above) any net extraordinary gains or net non-cash
extraordinary losses.

                  "Consolidated Senior Leverage Ratio" means, as at any date,
the ratio of (a) Consolidated Total Senior Debt as at such date to (b)
Consolidated EBITDA for the consecutive four Fiscal Quarters ending on the last
day of the most recently ended Fiscal Quarter.

                  "Consolidated Total Debt" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Borrowers and their Restricted Subsidiaries, determined on a consolidated basis
in accordance with GAAP.

                  "Consolidated Total Senior Debt" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Borrowers and their Restricted Subsidiaries which is not Subordinated
Indebtedness, determined on a consolidated basis in accordance with GAAP.

                  "Contingent Obligation", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) net liabilities under Hedge Agreements. Contingent
Obligations shall include (a) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of the
obligation of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any other party or parties
to an agreement, and (c) any liability of such Person for the obligation of
another through any agreement (contingent or otherwise) (1) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(2) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.

                  "Continuing Members" means, as of any date of determination,
any member of the Governing Body of a Borrower who (i) was a member of such
Governing Body on the Closing Date or (ii) was nominated for election or elected
to such Governing Body with the affirmative vote of a majority of the members
who were either members of such Governing Body on the Closing Date or whose
nomination or election was previously so approved.

                  "Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.

                  "Control Agreement" means a control agreement with respect to
deposit accounts executed and delivered by a depositary bank, Agent and
Borrowers, substantially in the form of Exhibit XIII attached hereto or such
other form as may be approved by Agent, as such Control Agreement may hereafter
be amended, supplemented or modified from time to time.

                  "Co-Syndication Agents" means CoBank and Rabobank.

                  "Currency Agreement" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement to which Borrowers or any of their
Restricted Subsidiaries is a party.

                  "Daily Funding Lender" means Agent, in its individual capacity
as a Lender hereunder.

                  "Daily Funding Lender Discretionary Period" is defined in
subsection 2.1C.

                  "Demand Loan Certificates" means those certain (i) Demand Loan
Certificates issued pursuant to the Indenture dated as of December 4, 1997
between Company and Commerce Bank, National Association, as Trustee, and (ii)
Demand Loan Certificates issued pursuant to the Indenture dated as of November
20, 1981 between Company and Commerce Bank of Kansas City, National Association,
as Trustee, as such Indentures may be amended, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.12.

                  "Deposit Account" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.

                  "Designated Officer" means the Company's chief executive
officer, president, chief financial officer, treasurer or assistant treasurer.

                  "Distributions" means cash distributions received by Borrowers
and/or their Restricted Subsidiaries from Joint Ventures, Unrestricted
Subsidiaries on account of ownership or equity interests in such Persons, plus
the amount of "Additional Rent" paid in cash under the ADM/Farmland Master
Lease, as defined therein.

                  "Dollars" and the sign "$" mean the lawful money of the United
States of America.

                  "Domestic Subsidiary" means any Subsidiary of Borrowers that
is incorporated or organized under the laws of the United States of America, any
state thereof or of the District of Columbia.

                  "Eligible Accounts Receivable" means the Accounts of Borrowers
arising out of the Fertilizer Business, the Petroleum Business and the Pork
Business deemed by Agent in the exercise of its Permitted Discretion to be
eligible for inclusion in the calculation of the Borrowing Base. In determining
the amount to be so included, the face amount of such Accounts shall be reduced
by, without duplication, the amount of all returns, discounts, deductions,
credits, charges, or other allowances. Unless otherwise approved in writing by
Agent, an Account shall not be an Eligible Accounts Receivable if:

(a)               in the case of Accounts arising out of the Fertilizer
                  Business, its payment terms are longer than 30 days from
                  invoice date; in the case of Accounts arising out of the
                  Petroleum Business, its payment terms are longer than 30 days
                  from invoice date; in the case of Accounts arising out of the
                  Pork Business, its payment terms are longer than 7 days from
                  product receipt date; or

(b)               it is unpaid more than 60 days after the original payment due
                  date on payment terms which do not exceed those described in
                  the preceding clause (a); or

(c)               it arises out of a sale made by such Borrower to an Affiliate,
                  other than between Borrowers, to an Unrestricted Subsidiary or
                  to Agriliance, Farmland Hydro, SF Phosphates Limited Company,
                  Farmland MissChem Limited or in connection with Related
                  Business Activities; or

(d)               it is from the same account debtor or its Affiliate and fifty
                  percent (50%) or more of all Accounts from that account debtor
                  (and its Affiliates) are ineligible under (b) above; or

(e)               when aggregated with all other Accounts of an account debtor,
                  such Account exceeds thirty percent (30%) of an amount equal
                  to (x) the face value of all Accounts of Borrowers then
                  outstanding arising out of the Fertilizer Business, the
                  Petroleum Business and the Pork Business less (y) all
                  prepayments, security deposits or similar advances made to
                  Borrowers with respect to such Accounts which are not
                  otherwise subject to a non-offset agreement which has been
                  approved by Agent, but only to the extent of such excess,
                  unless such excess is supported by an irrevocable letter of
                  credit satisfactory to Agent (as to form, substance and
                  issuer) in which Agent has a perfected First Priority security
                  interest; or

(f)               the account debtor for such Account has asserted a right of
                  setoff against any Borrower, or has disputed or contested its
                  liability in whole or in part or otherwise has made any claim
                  with respect to such Account or any other Account which has
                  not been resolved, in each case to the extent of the amount of
                  such actual or asserted right of setoff, or the amount of such
                  dispute or claim, as the case may be; or

(g)               the account debtor for such Account is a creditor of any
                  Borrower, but only to the extent of the amount owed by any
                  Borrower to such account debtor, or

(h)               such Account is not payable in Dollars or the account debtor
                  for such Account is located outside the continental United
                  States, unless such Account is supported by an irrevocable
                  letter of credit satisfactory to Agent (as to form, substance
                  and issuer) in which Agent has a perfected First Priority
                  security interest; or

(i)               the account debtor is owed amounts in respect of trade
                  promotions or rebates, but only to the extent of such owed
                  amounts; or

(j)               the  account  debtor is the United  States of America or any
                  department,  agency or instrumentality  thereof, unless such
                  Borrower  duly assigns its rights to payment of such Account
                  to Agent  pursuant to the  Assignment of Claims Act of 1940,
                  as amended (31 U.S.C.ss.ss.3727 et seq.); or

(k)               the account debtor is (or its assets are) the subject of an
                  Insolvency Event; or

(l)               the sale to the account debtor is on a bill-and-hold,
                  guarantied sale, sale-and-return, sale on approval or
                  consignment basis or made pursuant to any other written
                  agreement providing for repurchase or return; or

(m)               Agent determines by its own credit analysis that collection of
                  such Account is uncertain or that such Account may not be
                  paid; or

(n)               the goods giving rise to such Account have not been shipped to
                  the account debtor, the services giving rise to such Account
                  have not been performed, or such Account otherwise does not
                  represent a final sale; or

(o)               such Account does not comply with all requirements of law,
                  including without limitation the Federal Consumer Credit
                  Protection Act, the Federal Truth in Lending Act and
                  Regulation Z of the Board of Governors of the Federal Reserve
                  System; or

(p)               it is not subject to a valid and perfected First Priority Lien
                  in favor of Agent or does not otherwise conform to the
                  representations and warranties contained in the Loan
                  Documents; or

(q)               such Account is subject to any adverse security deposit,
                  prepayment or other similar advance made by or for the benefit
                  of the applicable account debtor which are not otherwise
                  subject to a non-offset agreement which has been approved by
                  Agent, but only to the extent of such deposit, prepayment or
                  advance; or

(r)               the account debtor is owed amounts in respect of contractual
                  volume rebates, but only to the extent of such owed amounts;

provided that Agent, in the exercise of its Permitted Discretion, may impose
additional restrictions (or eliminate restrictions) to the standards of
eligibility set forth in this definition. Notwithstanding that an Account may
not constitute an Eligible Account Receivable, it shall still constitute Working
Capital Collateral.

                  "Eligible Assignee" means (i) (a) a commercial bank organized
under the laws of the United States or any state thereof; (b) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (c) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (1) such bank is
acting through a branch or agency located in the United States or (2) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (d) any other entity that is an "accredited investor" (as defined
in Regulation D under the Securities Act) that extends credit or buys loans as
one of its businesses including insurance companies, mutual funds and lease
financing companies; and (ii) any Lender, any Affiliate of any Lender and any
Affiliated Fund of any Lender; provided that neither Borrowers nor any Affiliate
of Borrowers shall be an Eligible Assignee.

                  "Eligible Inventory" means the aggregate amount of Raw
Materials, Work-in-Process, Finished Goods, Spare Parts and Supplies and
Packaging Material of Borrowers used in or arising from the Fertilizer Business,
the Petroleum Business and the Pork Business deemed by Agent in the exercise of
its Permitted Discretion to be eligible for inclusion in the calculation of the
Borrowing Base. In determining the amount to be so included, such Inventory
shall be valued at the lower of cost or market on a basis consistent with such
Borrower's current and historical accounting practice and net of an allowance
for shipping or freight charges. Unless otherwise approved in writing by Agent,
an item of such Inventory shall not be included in Eligible Inventory if:

(a)               it is not subject to a valid and perfected First Priority Lien
                  in favor of Agent except, with respect to Inventory stored at
                  sites described in clause (b) below, for Liens for unpaid rent
                  or normal and customary warehousing, storage or pipeline
                  tariff charges which are not past due; or

(b)                 it is not located on property  owned or leased by a Borrower
                    or in a contract warehouse,  tank farm or pipeline,  in each
                    case subject to a Collateral  Access  Agreement  executed by
                    any applicable  mortgagee,  lessor,  contract  warehouseman,
                    tank  farm or  pipeline  owner,  as the  case  may  be,  and
                    segregated or otherwise  separately  identifiable from goods
                    of others, if any, stored on the premises (provided that the
                    failure to deliver any Collateral Access Agreement  referred
                    to in this clause (b) shall not render the  applicable  item
                    ineligible to the extent that Agent establishes  reserves in
                    an  amount  at  least  equal to three  months  rent  payable
                    thereunder  or with respect to an item of Inventory  located
                    in a tank farm or  pipeline  in an amount at least  equal to
                    all amounts owing to the owner or operator of such tank farm
                    or pipeline and Borrowers'  costs to store or transport such
                    Inventory  to a location  owned by Borrowers or subject to a
                    Collateral Access Agreement); or

(c)               it reflects gains or losses on a Hedge Agreement; or

(d)               it is not owned solely by such Borrower or such Borrower does
                  not have good, valid and marketable title thereto; or it is
                  subject to an exchange agreement or reciprocal supply or
                  purchase agreement with other producers or suppliers; or

(e)      it constitutes promotional supplies; or

(f)      it is not located in the United States; or

(g)               it consists of goods returned or rejected by such Borrower's
                  customers or goods in transit to third parties (other than
                  goods in transit in the United States to sites described in
                  clause (b) above, covered by a Collateral Access Agreement or
                  as to which such reserve has been established); or

(h)               it is not  first-quality  goods, is obsolete or slow moving,
                    or does not  otherwise  conform to the  representations  and
                    warranties contained in the Loan Documents;

provided that Agent, in the exercise of its Permitted Discretion, may impose
additional restrictions (or eliminate restrictions) to the standards of
eligibility set forth in this definition. Notwithstanding that Inventory may not
constitute Eligible Inventory it shall still constitute Working Capital
Collateral.

                  "Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or contributed to by
Borrowers, any of their Restricted Subsidiaries or any of their respective ERISA
Affiliates.

                  "Environmental Claim" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Government Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.

                  "Environmental Laws" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of any Government
Authority relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage, transportation
or disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Borrowers or any of their Restricted
Subsidiaries or any Facility.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor
thereto.

                  "ERISA Affiliate" means, as applied to any Person, (i) any
corporation that is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) that is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of a Person or any of
their Subsidiaries shall continue to be considered an ERISA Affiliate of such
Person or such Subsidiary within the meaning of this definition with respect to
the period such entity was an ERISA Affiliate of such Person or such Subsidiary
and with respect to liabilities arising after such period for which such Person
or such Subsidiary could be liable under the Internal Revenue Code or ERISA.

                  "ERISA Event" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by Borrowers, any of their Restricted Subsidiaries or any of
their respective ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan in each case
resulting in liability pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on Borrowers, any of their
Restricted Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of Borrowers, any of their Restricted
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Borrowers, any of their Restricted Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the assertion of a claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Borrowers, any of their Restricted Subsidiaries or any of their
respective ERISA Affiliates in connection with any Employee Benefit Plan, which,
in each case, would be reasonably expected to have a Material Adverse Effect;
(ix) receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (x) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.

                  "Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.

                  "Eurodollar Rate Margin" means the margin over the Adjusted
Eurodollar Rate used in determining the rate of interest of Eurodollar Rate
Loans pursuant to subsection 2.2A.

                  "Event of Default" means each of the events set forth in
Section 8.

                  "Excess Funded Amount" is defined in subsection 2.1D(ii).

                  "Excess Paydown Amount" is defined in subsection 2.1D(iii).

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.

                  "Existing Credit Agreement" means that certain Credit
Agreement (Revolving Loan) dated as of May 10, 2000 between Company, CoBank, as
Administrative Agent, and the financial institutions party thereto, as amended
prior to the Closing Date.

                  "Existing Letters of Credit" is defined in subsection 3.1C.

                  "Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Borrowers or any of their
Restricted Subsidiaries or any of their respective predecessors or Affiliates.

               "Farmland Hydro" means Farmland Hydro,  L.P., a Delaware  limited
                    partnership, which is a Joint Venture of the Company.

                  "Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Agent from three Federal funds brokers of
recognized standing selected by Agent.

                  "Fertilizer Business" means the business conducted by the
Company consisting of the production, manufacture, processing, marketing and
sale of fertilizers and related products.

                  "Financial Plan" has the meaning assigned to that term in
subsection 6.1(xii).

                  "Finished Goods" means completed finished goods which are held
for sale or lease by a Person but not including any Raw Materials,
Work-in-Process, Spare Parts and Supplies or Packaging Materials.

                  "First Priority" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than Permitted
Encumbrances and Liens permitted pursuant to subsection 7.2) and (ii) such Lien
is the only Lien (other than Permitted Encumbrances and Liens permitted pursuant
to subsection 7.2) to which such Collateral is subject.

                  "Fiscal Quarter" means a fiscal quarter of any Fiscal Year.

                  "Fiscal Year" means (a) the fiscal year of Borrowers and their
Subsidiaries (other than Tradigrain and its affiliated companies described on
Schedule 5.1) ending on or about August 31 of each calendar year, and (b) in the
case of Tradigrain and its affiliated companies a fiscal year ending on July 31
of each calendar year.

                  "Flood Hazard Property" means any real property located in an
area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.

                  "Foreign Subsidiary" means any Subsidiary of Borrowers that is
not a Domestic Subsidiary.

                  "Funding and Payment Office" means (i) the office of Agent
located at 31 West 52nd Street, New York, New York 10019 or (ii) such other
office of Agent as may from time to time hereafter be designated as such in a
written notice delivered by Agent to Borrowers and each Lender.

                  "Funding Date" means the date of the funding of a Loan.

                  "GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.

                  "Governing Body" means the board of directors or other body
having the power to direct or cause the direction of the management and policies
of a Person that is a corporation, partnership, trust or limited liability
company.

                  "Government Authority" means any political subdivision or
department thereof, any other governmental or regulatory body, commission,
central bank, board, bureau, organ or instrumentality or any court, in each case
whether federal, state, local or foreign.

                  "Governmental Authorization" means any permit, license,
registration, authorization, plan, directive, consent order or consent decree of
or from, or notice to, any Government Authority.

                  "Hazardous Materials" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Government Authority or which may or could pose a hazard to the
health and safety of the owners, occupants or any Persons in the vicinity of any
Facility or to the indoor or outdoor environment.

                  "Hazardous Materials Activity" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.

                  "Hedge Agreement" means an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively, or a Commodity Agreement designed to hedge
against fluctuations in commodity prices.

                  "Hedge Reserve" means the fluctuating reserve established by
Agent from time to time against the Borrowing Base in an amount equal to the
aggregate Mark-to-Market Adjustment Amounts under all applicable Lender Hedge
Agreements then outstanding. Agent shall adjust the Hedge Reserve to reflect any
change in any Mark-to-Market Adjustment Amount under a Lender Hedge Agreement as
set forth in a certificate of such Lender or its Affiliate.

                  "Indebtedness", as applied to any Person, means (i) all
indebtedness for borrowed money (excluding accrued interest other than
payable-in-kind interest), (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) drafts accepted by third parties other than in the
ordinary course of such Person's business and notes payable representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person (provided that the amount of indebtedness shall be limited
to the value of such property or asset if such indebtedness is nonrecourse to
such Person). Obligations under Interest Rate Agreements, Currency Agreements
and Commodity Agreements constitute (1) in the case of Hedge Agreements,
Contingent Obligations, and (2) in all other cases, Investments, and in neither
case constitute Indebtedness.

                  "Indemnitee" has the meaning assigned to that term in
subsection 10.3.

                  "Insolvency Event" means, with respect to any Person, that a
court with jurisdiction over such Person shall enter a decree or order for
relief in respect of the Person or its Subsidiaries in an involuntary case under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, which decree or order is not stayed; or
any other similar relief shall be granted under any applicable federal or state
law; or an involuntary case shall be commenced against such Person or any of its
Subsidiaries under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over such Person or any of its Subsidiaries, or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
such Person or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of such Person or any
of its Subsidiaries, and any such event described in this clause shall continue
for 30 days unless dismissed, bonded or discharged.

                  "Intellectual Property" means all patents, trademarks,
tradenames, copyrights, technology, software, know-how and processes used in or
necessary for the conduct of the business of Borrowers and their Restricted
Subsidiaries as currently conducted that are material to the condition
(financial or otherwise), business or operations of Borrowers and their
Restricted Subsidiaries, taken as a whole.

                  "Interest Payment Date" means (i) with respect to any Base
Rate Loan, the last day of each calendar month, commencing on the first such
date to occur after the Closing Date, and (ii) with respect to any Eurodollar
Rate Loan, the last day of each Interest Period applicable to such Loan;
provided that in the case of each Interest Period of greater than three months
"Interest Payment Date" shall also include the date that is three months after
the commencement of such Interest Period.

                  "Interest Period" has the meaning assigned to that term in
subsection 2.2B.

                  "Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Borrowers or any of their Restricted
Subsidiaries is a party.

                  "Interest Rate Determination Date" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.

                  "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.

                  "Inventory" means, with respect to any Person, all goods,
merchandise and other personal property which are held by such Person for sale
or lease, including any to be furnished under a contract of service, including
without limitation Raw Materials, Work-in-Process, Finished Goods, Spare Parts
and Supplies and Packaging Materials.

                  "Investment" means (i) any direct or indirect purchase or
other acquisition by Borrowers or any of their Restricted Subsidiaries of, or of
a beneficial interest in, any Securities of any other Person (including any
Restricted Subsidiary of Borrowers), (ii) any direct or indirect redemption,
retirement, purchase or other acquisition for value, by any Restricted
Subsidiary of Borrowers from any Person other than Borrowers or any of their
Restricted Subsidiaries, of any equity Securities of such Restricted Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Borrowers or any of their Restricted Subsidiaries to any other Person (other
than a wholly-owned Restricted Subsidiary of Borrowers), including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business, or (iv) any Interest Rate Agreements, Currency Agreements or
Commodity Agreements not constituting Hedge Agreements. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment.

                  "IP Collateral" means, collectively, the Intellectual Property
that constitutes Collateral under the Security Agreement.

                  "Issuing Lender" means, with respect to any Letter of Credit,
the Lender that agrees or is otherwise obligated to issue such Letter of Credit,
determined as provided in subsection 3.1B(ii); provided that any Issuing Lender
may be an Affiliate of BTCo at the option of BTCo so long as (i) BTCo is a
Lender under this Agreement and (ii) such Affiliate shall have executed a
counterpart of this Agreement on or prior to the date of any issuance of any
Letter of Credit by such Affiliate.

                  "Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any Subsidiary of any Person be considered to be
a Joint Venture to which such Person is a party.

                  "Joint Venture Agreement" means the joint venture, operating,
partnership or other agreement pursuant to which a Joint Venture is organized
and operated and which shall include the ADM/Farmland Master Lease.

                  "Landlord Consent and Estoppel" means, with respect to any
Leasehold Property, a letter, certificate or other instrument in writing from
the lessor under the related lease, satisfactory in form and substance to Agent
or in the form attached hereto as Exhibit XII, pursuant to which such lessor
agrees, for the benefit of Agent, (i) that without any further consent of such
lessor or any further action on the part of the Loan Party holding such
Leasehold Property, such Leasehold Property may be encumbered pursuant to a
Mortgage and may be assigned to the purchaser at a foreclosure sale or in a
transfer in lieu of such a sale (and to a subsequent third party assignee if
Agent, any Lender, or an Affiliate of either so acquires such Leasehold
Property), (ii) that such lessor shall not terminate such lease as a result of a
default by such Loan Party thereunder without first giving Agent notice of such
default and at least 60 days (or, if such default cannot reasonably be cured by
Agent within such period, such longer period as may reasonably be required) to
cure such default, (iii) to the matters contained in a Collateral Access
Agreement, and (iv) to such other matters relating to such Leasehold Property as
Agent may reasonably request.

                  "Leasehold Property" means any leasehold interest of any Loan
Party as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Agent in its sole discretion as not
being required to be included in the Collateral.

                  "Lender" and "Lenders" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 10.1, and the term
"Lenders" shall include BTCo as an Issuing Lender unless the context otherwise
requires; provided that the term "Lenders", when used in the context of a
particular Commitment, shall mean Lenders having that Commitment.

                  "Lender Hedge Agreement" means any Hedge Agreement entered
into by any Borrower and one or more Lenders pursuant to the terms of this
Agreement. Any Lender may, from time to time, in its sole and absolute
discretion, and as approved by Agent in its reasonable discretion, enter into
one or more Lender Hedge Agreements. Each Lender Hedge Agreement shall
constitute a Loan Document for purposes of this Agreement.

                  "Letter of Credit" or "Letters of Credit" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued by
Issuing Lenders for the account of Borrowers pursuant to subsection 3.1.

                  "Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Lenders and not theretofore reimbursed out of the
proceeds of Revolving Loans pursuant to subsection 3.3B or otherwise reimbursed
by Borrowers.

                  "Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.

                  "Loan" or "Loans" means one or more of the Term Loans or
Revolving Loans or any combination thereof.

                  "Loan Documents" means this Agreement, the Notes, the Letters
of Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Borrowers in favor of an Issuing Lender
relating to, the Letters of Credit), the Subsidiary Guaranty, the Collateral
Documents and any Post Closing Agreement.

                  "Loan Party" means each of Borrowers and each of Borrowers'
Material Subsidiaries executing a Loan Document, and "Loan Parties" means all
such Persons, collectively.

                  "Lock Box" means a lockbox maintained by any Borrower pursuant
to arrangements satisfactory to Agent.

                  "Lock Box Account" means a Deposit Account under the exclusive
dominion and control of Agent that is maintained by any Borrower with a Lock Box
Bank pursuant to a Lock Box Agreement.

                  "Lock Box Agreement" means a Lock Box Agreement executed and
delivered by a Lock Box Bank, Agent and the applicable Borrower, substantially
in the form of Exhibit XV annexed hereto, as such Lock Box Agreement may be
amended, supplemented or otherwise modified from time to time, and "Lock Box
Agreements" means all such Lock Box Agreements, collectively.

                  "Lock Box Bank" means any commercial bank satisfactory to
Agent at which any Borrower maintains a Lock Box Account.

                  "Mandatory Redemption Amount" means any of the following
amounts required to be paid to holders of Subordinated Debenture Bonds,
Subordinated Investment Certificates, or other Subordinated Indebtedness
pursuant to each Approved Indenture therefor, as applicable (i) the principal
amount of such Subordinated Indebtedness upon the holder thereof becoming
disabled, declared mentally incompetent, attaining age 59 1/2 or upon notice of
such holder's death, (ii) the principal amount of such Subordinated Indebtedness
upon a mandatory withdrawal from an individual retirement account established
under Section 408 of the Internal Revenue Code, and (iii) the principal amount
of such Subordinated Indebtedness upon any other required mandatory redemption
of such Subordinated Indebtedness, subject to the limitations on amounts and the
timing of payment thereof set forth in the applicable Approved Indenture and
excluding any voluntary redemption of such Subordinated Indebtedness by the
Company.

                  "Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.

                  "Mark-to-Market Adjustment Amount" means the fluctuating
credit exposure of a Lender or its Affiliate under a Lender Hedge Agreement
based upon increases or decreases in the interest rate, currency values or
commodity prices, as applicable. Each such Lender or its Affiliate shall provide
to the Agent a certificate containing the calculation of the Mark-to-Market
Adjustment Amount under the related Lender Hedge Agreement in reasonable detail,
not less frequently than monthly.

                  "Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Borrowers and their Restricted Subsidiaries, taken as
a whole, (ii) the impairment of the ability of any Loan Party to perform in all
material respects, or of Agent or Lenders to enforce, the Obligations, or (iii)
a material adverse effect on the value of the Collateral or the amount which
Agent or Lenders would be likely to receive (after giving consideration to
delays in payment and costs of enforcement) in the liquidation of the
Collateral.

                  "Material Contract" means any contract or other arrangement to
which Borrowers or any of their Restricted Subsidiaries is a party (other than
the Loan Documents) for which breach, nonperformance, cancellation or failure to
renew could have a Material Adverse Effect.

                  "Material Leasehold Property" means a Leasehold Property
reasonably determined by Agent to be of material value as Collateral or of
material importance to the operations of Borrowers or any of their Restricted
Subsidiaries; provided, however that, excepting any such Leasehold Properties
set forth on Schedule 5.5B annexed hereto, no Leasehold Property with respect to
which the aggregate amount of all rents payable during any one Fiscal Year never
exceeds $150,000 shall be a "Material Leasehold Property".

                  "Material Real Property Asset" means any Real Property Asset
owned in fee by Borrowers or any Material Subsidiary which has a fair market
value in excess of $5,000,000 as reasonably determined by Borrowers and subject
to approval by Agent in its reasonable discretion.

                  "Material Subsidiary" means (a) Farmland Transportation, Inc.,
a Missouri corporation, Farmland Pipe Line Company and SFA, Inc., an Arkansas
corporation, and (b) any Restricted Subsidiary of Borrowers now existing or
hereafter acquired or formed, (i) with more than $3,000,000 of shareholders'
equity or (ii) as may be designated by Borrowers as a "Material Subsidiary";
provided that in no event shall the aggregate amount of shareholders' equity in
Restricted Subsidiaries which are not also Material Subsidiaries exceed
$10,000,000 at any time.

                  "Maximum Rate" is defined in subsection 2.2G.

                  "Member" means any Person that is a member of Company.

                  "Monthly Reporting Package" means a monthly report of
Borrowers which contains Borrowers' monthly and Fiscal Year-to-date financial
information prepared on a Restricted Subsidiary Basis.

                  "Moody's" means Moody's Investor Services, Inc.

                  "Mortgage" means (i) a security instrument (whether designated
as a deed of trust or a mortgage or by any similar title) executed and delivered
by any Loan Party, substantially in the form of Exhibit VI annexed hereto or in
such other form as may be approved by Agent in its sole discretion, in each case
with such changes thereto as may be recommended by Agent's local counsel based
on local laws or customary local mortgage or deed of trust practices, or (ii) at
Agent's option, in the case of an Additional Mortgaged Property, an amendment to
an existing Mortgage, in form satisfactory to Agent, adding such Additional
Mortgaged Property to the Real Property Assets encumbered by such existing
Mortgage, in either case as such security instrument or amendment may be
amended, supplemented or otherwise modified from time to time. "Mortgages" means
all such instruments, including the Closing Date Mortgages and any Additional
Mortgages, collectively.

               "Multiemployer  Plan" means any  Employee  Benefit Plan that is a
                    "multiemployer plan" as defined in Section 3(37) of ERISA.

                  "Net Asset Sale Proceeds" means, with respect to any Asset
Sale, Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, including
principal payments thereon but only as and when so received) received from such
Asset Sale, net of any bona fide direct costs incurred in connection with such
Asset Sale, including (i) income taxes reasonably estimated to be actually
payable within one year of the date of such Asset Sale as a result of any gain
recognized in connection with such Asset Sale and (ii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is secured by a Lien on the stock or
assets in question and that is required to be repaid under the terms thereof as
a result of such Asset Sale.

                  "Net Insurance/Condemnation Proceeds" means any Cash payments
or proceeds received by Borrowers or any of their Restricted Subsidiaries (i)
under any business interruption or casualty insurance policy in respect of a
covered loss thereunder or (ii) as a result of the taking of any assets of
Borrowers or any of their Restricted Subsidiaries by any Person pursuant to the
power of eminent domain, condemnation or otherwise, or pursuant to a sale of any
such assets to a purchaser with such power under threat of such a taking, in
each case net of any actual and reasonable documented costs incurred by
Borrowers or any of their Restricted Subsidiaries in connection with the
adjustment or settlement of any claims of Borrowers or such Restricted
Subsidiary in respect thereof, provided that "Net Insurance/Condemnation
Proceeds" shall not include the insurance or condemnation proceeds received or
to be received by Borrowers in connection with the casualty at the Borrowers'
Facility in Albert Lea, Minnesota.

                  "Net Securities Proceeds" means the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses) from
issuance of Securities of or incurrence of Indebtedness by Borrowers or any of
their Restricted Subsidiaries.

                  "Non-US Lender" has the meaning assigned to that term in
subsection 2.7B(iii)(a).

                  "Notes" means one or more of the Term Notes or Revolving Notes
or any combination thereof.

                  "Notice of Borrowing" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Borrowers to Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.

                  "Notice of Conversion/Continuation" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Borrowers to
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.

                  "Obligations" means all obligations of every nature of each
Loan Party from time to time owed to Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.

                  "Officer" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.

                  "Officer's Certificate" means, as applied to any Person that
is a corporation, partnership, trust or limited liability company, a certificate
executed on behalf of such Person by one or more Officers of such Person or one
or more Officers of a general partner or a managing member if such general
partner or managing member is a corporation, partnership, trust or limited
liability company.

                  "Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.

                  "Organizational Documents" means the documents (including
Bylaws, if applicable) pursuant to which a Person that is a corporation,
partnership, trust or limited liability company is organized.

                  "Pari Passu Collateral" means Collateral consisting of all
intangible assets of Borrowers and their Material Subsidiaries and all proceeds
thereof, provided that in no event shall Pari Passu Collateral include Working
Capital Collateral or PPE Collateral.

                  "Packaging Materials" means goods consisting of unused
containers, cardboard boxes and related supplies used for the packaging of
Finished Goods for the Pork Business.

                  "Patronage Dividends" means, for any period, the dividends
paid by Company to patrons or Members pursuant to the Company's Articles of
Incorporation.

                  "Payee" is defined in subsection 2.1D(iv).

                  "Payor" is defined in subsection 2.1D(iv).

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

                  "Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.

                  "Permitted Cash Patronage Dividends" is defined in subsection
7.6G.

                  "Permitted Discretion" means Agent's good faith judgment based
upon any factor which it believes in good faith: (i) could be reasonably likely
to adversely affect the value of any Collateral, the enforceability or priority
of Agent's Liens thereon or the amount which Agent and Lenders would be likely
to receive (after giving consideration to delays in payment and costs of
enforcement) in the liquidation of such Collateral; (ii) suggests that any
collateral report or financial information delivered to Agent by any Person on
behalf of any Borrower is incomplete, inaccurate or misleading in any material
respect; (iii) materially increases the likelihood of a bankruptcy,
reorganization or other insolvency proceeding involving any of the Borrowers or
any of their Restricted Subsidiaries or any of the Collateral; or (iv) creates
or reasonably could be expected to create a Potential Event of Default or Event
of Default. In exercising such judgment, Agent may consider such factors already
included in or tested by the definition of Eligible Accounts Receivable or
Eligible Inventory, as well as any of the following: (i) the financial and
business climate of any Borrower's industry and general macroeconomic
conditions, (ii) changes in collection history and dilution with respect to
Borrowers' Accounts, (iii) changes in demand for, and pricing of, Borrowers'
Inventory, (iv) changes in any concentration of risk with respect to such
Accounts or Inventory, and (v) any other factors that change the credit risk of
lending to Borrowers on the security of such Accounts or Inventory. The burden
of establishing lack of good faith shall be on Borrowers.

                  "Permitted Encumbrances" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly prohibited
by any applicable terms of any of the Collateral Documents):

(ii)      Liens for taxes,  assessments  or  governmental  charges or claims the
payment of which is not, at the time, required by subsection 6.3;

(iii)      statutory  Liens of landlords,  statutory Liens and rights of set-off
of banks,  statutory  Liens of  carriers,  warehousemen,  mechanics,  repairmen,
workmen and  materialmen,  and other Liens imposed by law, in each case incurred
in the  ordinary  course of business  (a) for amounts not yet overdue or (b) for
amounts that are overdue and that (in the case of any such amounts overdue for a
period in excess of 5 days) are being  contested  in good  faith by  appropriate
proceedings,  so long as (1) such reserves or other appropriate  provisions,  if
any, as shall be  required  by GAAP shall have been made for any such  contested
amounts,  and (2) in the  case of a Lien  with  respect  to any  portion  of the
Collateral,  such contest proceedings  conclusively  operate to stay the sale of
any portion of the Collateral on account of such Lien;

(iv)              Liens incurred or deposits made 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,
                  surety and appeal bonds, bids, leases, government contracts,
                  trade contracts, performance and return-of-money bonds and
                  other similar obligations (exclusive of obligations for the
                  payment of borrowed money), so long as no foreclosure, sale or
                  similar proceedings have been commenced with respect to any
                  portion of the Collateral on account thereof;

(v)               any attachment or judgment Lien not constituting an Event of
                  Default under subsection 8.8;

(vi)              leases or subleases granted to third parties and not
                  interfering in any material respect with the ordinary conduct
                  of the business of Borrowers or any of their Restricted
                  Subsidiaries or resulting in a material diminution in the
                  value of any Collateral as security for the Obligations and
                  licenses and other agreements granting to third parties rights
                  of use or possession of portions of a Borrower's Real Property
                  Assets which are not required for the operations of any
                  Borrower or Material Subsidiary and in each case which do not
                  interfere in any material respect with the ordinary operation
                  of the business of Borrowers or any Restricted Subsidiaries or
                  result in a material diminution in the value of any Collateral
                  as security for the Obligations;

(vii)             easements, rights-of-way, restrictions, encroachments, and
                  other minor defects or irregularities in title, in each case
                  which do not and will not interfere in any material respect
                  with the ordinary conduct of the business of Borrowers or any
                  of their Restricted Subsidiaries or result in a material
                  diminution in the value of any Collateral as security for the
                  Obligations;

(viii)            any (a) interest or title of a lessor or sublessor under any
                  lease not prohibited by this Agreement, (b) restriction or
                  encumbrance that the interest or title of such lessor or
                  sublessor may be subject to, or (c) subordination of the
                  interest of the lessee or sublessee under such lease to any
                  restriction or encumbrance referred to in the preceding clause
                  (b), so long as the holder of such restriction or encumbrance
                  agrees to recognize the rights of such lessee or sublessee
                  under such lease;

(ix)             Liens arising from filing UCC financing statements relating
                  solely to leases not prohibited by this Agreement;

(x)              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;

(xi)              any zoning or similar law or right reserved to or vested in
                  any governmental office or agency to control or regulate the
                  use of any real property;

(xii)             Liens securing obligations (other than obligations
                  representing Indebtedness for borrowed money) under operating,
                  reciprocal easement or similar agreements entered into in the
                  ordinary course of business of Borrowers and their Restricted
                  Subsidiaries;

(xiii)            licenses of Intellectual Property granted by Borrowers or any
                  of their Restricted Subsidiaries in the ordinary course of
                  business and not interfering in any material respect with the
                  ordinary conduct of the business of Borrowers or such
                  Restricted Subsidiary; and

(xiv)             matters disclosed in the Closing Date Mortgage Policies as
                  accepted by Agent.

                  "Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.

                  "Petroleum Business" means the business conducted by Company
consisting of the production, manufacture, processing, marketing and sale of
refined fuels, propane, petroleum and petroleum by-products.

                  "Pork Business" means the business conducted by Borrowers
consisting of the production, manufacture, processing, marketing and sale of
pork and meat products and packing house by-products.

                  "Post Closing Agreement" means that certain Post Closing
Agreement of even date herewith by and among the Borrowers, the Material
Subsidiaries and Agent, pursuant to which the Borrowers agree to cause the
matters set forth in the Post Closing Agreement to be completed in the manner
and by the applicable dates set forth therein.

                  "Potential Event of Default" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.

                  "PPE Collateral" means Collateral consisting of all tangible
real and personal property of Borrowers and their Material Subsidiaries located
on the Real Property Assets identified on Schedule 5.5B as being subject to a
Mortgage in favor of Agent, together with proceeds thereof, provided that in no
event shall PPE Collateral include Working Capital Collateral or Pari Passu
Collateral.

                  "Preferred Stock" means the shares of 8% Series A Cumulative
Redeemable Preferred Stock issued by the Company pursuant to a Certificate of
Designation dated December 17, 1999 filed with the Kansas Secretary of State.

                  "Prime Rate" means the rate that BTCo announces from time to
time as its prime lending rate in the United States for Dollar denominated
loans, as in effect from time to time. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. BTCo or any other Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.

                  "Proceedings" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.

                  "Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the Term Loan Commitment or the Term
Loan of any Lender, the percentage obtained by dividing (x) the Term Loan
Exposure of that Lender by (y) the aggregate Term Loan Exposure of all Lenders,
(ii) with respect to all payments, computations and other matters relating to
the Revolving A Loan Commitment or the Revolving A Loans of any Lender or any
Letters of Credit issued or participations therein purchased by any Lender under
such Revolving A Loan Commitment, the percentage obtained by dividing (x) the
Revolving A Loan Exposure of that Lender by (y) the aggregate Revolving A Loan
Exposure of all Lenders, (iii) with respect to all payments, computations and
other matters relating to the Revolving B Loan Commitment or the Revolving B
Loans of any Lender or any Letters of Credit issued or participations therein
purchased by any Lender under such Revolving B Loan Commitment, the percentage
obtained by dividing (x) the Revolving B Loan Exposure of that Lender by (y) the
aggregate Revolving B Loan Exposure of all Lenders, (iv) with respect to all
payments, computations and other matters relating to the aggregate Revolving
Loan Commitments or the aggregate Revolving Loans of any Lender or any Letters
of Credit issued or participations therein purchased by any Lender under such
aggregate Revolving Loan Commitments, the percentage obtained by dividing (x)
the aggregate Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, and (v) for all other purposes with
respect to each Lender, the percentage obtained by dividing (x) the sum of the
Term Loan Exposure of that Lender plus the aggregate Revolving Loan Exposure of
that Lender by (y) the sum of the aggregate Term Loan Exposure of all Lenders
plus the aggregate Revolving Loan Exposure of all Lenders, in any such case as
the applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1 or required pursuant to subsection 10.5. The initial Pro Rata
Share of each Lender for purposes of each of clauses (i), (ii), (iii), (iv) and
(v) of the preceding sentence is set forth opposite the name of that Lender in
Schedule 2.1 annexed hereto.

                  "PTO" means the United States Patent and Trademark Office or
any successor or substitute office in which filings are necessary or, in the
opinion of Agent, desirable in order to create or perfect Liens on any IP
Collateral.

                  "Raw Materials" means all raw materials or supplies to be used
or consumed in the production or manufacture of Finished Goods by a Person in
the ordinary course of business prior to such use or consumption but not
including any living livestock, Spare Parts and Supplies or Packaging Materials.

                  "Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.

                  "Recorded Leasehold Interest" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Agent's reasonable judgment, to give
constructive notice of such Leasehold Property to third-party purchasers and
encumbrancers of the affected real property. For purposes of this definition,
the term "Record Document" means, with respect to any Leasehold Property, (a)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (b)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient to
give such constructive notice upon recordation and otherwise in form reasonably
satisfactory to Agent.

                  "Refinery Assets" shall mean the petroleum refinery facilities
owned by Borrowers or their Restricted Subsidiaries located in Coffeyville,
Kansas and Phillipsburg, Kansas and related assets, including any associated
crude oil gathering assets, pipelines and Pipeline.

                  "Register" has the meaning assigned to that term in subsection
2.1E.

                  "Regulation D" means Regulation D of the Board of Governors of
 the Federal Reserve System, as in effect from time to
time.

                  "Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.

                  "Related Agreements" mean the Joint Venture Agreements, Joint
Venture credit agreements and other agreements set forth on Schedule 1.1A
annexed hereto.

                  "Related Business Activities" means the business activities
conducted by either Borrower consisting of the following services: (i) package
label and invoice printing services for members, (ii) truck hauling services for
Borrowers' customers and divisions and (iii) semi-truck and trailer repair
services for Borrowers' customers and divisions.

                  "Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.

                  "Request for Issuance of Letter of Credit" means a request in
the form of Exhibit III annexed hereto delivered by a Borrower to Agent pursuant
to subsection 3.1B(i) with respect to the proposed issuance of a Letter of
Credit.

                  "Required Reserves" means the Hedge Reserve and the AP
Reserve.

                  "Requisite Class Lenders" means, at any time of determination
(i) for the Class of Lenders having Revolving Loan Exposure, Lenders having or
holding more than 50% of the aggregate Revolving Loan Exposure of all Lenders
and (ii) for the Class of Lenders having Term Loan Exposure, Lenders having or
holding more than 50% of the aggregate Term Loan Exposure of all Lenders.

                  "Requisite Lenders" means Lenders having or holding more than
50% of the sum of the aggregate Term Loan Exposure of all Lenders plus the
aggregate Revolving Loan Exposure of all Lenders.

                  "Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (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 of Company now or
hereafter outstanding, (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 of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.

                  "Restricted Subsidiary" means a Subsidiary that is not an
Unrestricted Subsidiary.

                  "Restricted Subsidiary Basis" has the meaning set forth
therefor in subsection 6.1(ii).

                  "Revolving A Lender" means a Lender that has a Revolving A
Loan Commitment and/or that has an outstanding Revolving A Loan.

                  "Revolving A Loan Commitment" means the commitment of a
Revolving A Lender to make Revolving A Loans pursuant to subsection 2.1A(ii)(a),
and "Revolving A Loan Commitments" means such commitments of all Revolving A
Lenders in the aggregate.

         "Revolving A Loan Commitment Termination Date" means February 28, 2007.

         "Revolving A Loan Exposure" means, with respect to any
Revolving A Lender as of any date of determination (i) prior to the termination
of the Revolving A Loan Commitments, that Lender's Revolving A Loan Commitment
and (ii) after the termination of the Revolving A Loan Commitments, the sum of
(a) the aggregate outstanding principal amount of the Revolving A Loans of that
Lender plus (b) in the event that Lender is an Issuing Lender, the aggregate
Letter of Credit Usage in respect of all Letters of Credit issued by that Lender
(in each case net of any participations purchased by other Lenders in such
Letters of Credit or in any unreimbursed drawings thereunder) under such
Revolving A Loan Commitment plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or any
unreimbursed drawings under any Letters of Credit under such Revolving A Loan
Commitment.

                  "Revolving A Loans" means the Loans made by Revolving A
Lenders to Borrowers pursuant to subsection 2.1A(ii)(a).

                  "Revolving A Notes" means (i) the promissory notes of
Borrowers issued pursuant to subsection 2.1F on the Closing Date, (ii) any
promissory notes issued in connection with any increases in the Revolving A Loan
Commitments under subsection 2.1A(iii) and (iii) any promissory notes issued by
Borrowers pursuant to the last sentence of subsection 10.1B(i) in connection
with assignments of the Revolving A Loan Commitments and Revolving A Loans of
any Revolving A Lenders, in each case substantially in the form of Exhibit V-A
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.

                  "Revolving B Lender" means a Lender that has a Revolving B
Loan Commitment and/or that has an outstanding Revolving B Loan.

                  "Revolving B Loan Commitment" means the commitment of a
Revolving B Lender to make Revolving B Loans pursuant to subsection 2.1A(ii)(b),
and "Revolving B Loan Commitments" means such commitments of all Revolving B
Lenders in the aggregate.

                  "Revolving B Loan Commitment Termination Date" means initially
May 7, 2002, as such date may be extended from time to time with respect to all
or any portion of the Revolving B Loan Commitment for additional three-month
periods in the reasonable judgment of the Agent; provided that the Agent shall
extend such date for additional three-month periods unless Agent makes a
determination in the exercise of its reasonable judgment that the Borrowers have
sufficient availability under the remaining Revolving Loan Commitments that any
such portion of the Revolving B Loan Commitment not being extended is no longer
necessary for Borrowers' working capital or other corporate purposes.

                  "Revolving B Loan Exposure" means, with respect to any
Revolving B Lender as of any date of determination (i) prior to the termination
of the Revolving B Loan Commitments, that Lender's Revolving B Loan Commitment
and (ii) after the termination of the Revolving B Loan Commitments, the sum of
(a) the aggregate outstanding principal amount of the Revolving B Loans of that
Lender plus (b) in the event that Lender is an Issuing Lender, the aggregate
Letter of Credit Usage in respect of all Letters of Credit issued by that Lender
(in each case net of any participations purchased by other Lenders in such
Letters of Credit or in any unreimbursed drawings thereunder) under such
Revolving B Loan Commitment plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or any
unreimbursed drawings under any Letters of Credit under such Revolving B Loan
Commitment.

                  "Revolving B Loans" means the Loans made by Revolving B
Lenders to Borrowers pursuant to subsection 2.1A(ii)(b).

                  "Revolving B Notes" means (i) the promissory notes of
Borrowers issued pursuant to subsection 2.1F on the Closing Date and (ii) any
promissory notes issued by Borrowers pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Revolving B Loan Commitments and
Revolving B Loans of any Revolving B Lenders, in each case substantially in the
form of Exhibit V-B annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.

                  "Revolving Lender" means a Revolving A Lender or a Revolving B
Lender.

                  "Revolving Loan Commitment" means a Revolving A Loan
Commitment or a Revolving B Loan Commitment.

                  "Revolving Loan Commitment Termination Date" means the
Revolving A Loan Commitment Termination Date or the Revolving B Loan Commitment
Termination Date.

                  "Revolving Loan Exposure" means, with respect to any Revolving
Lender as of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan Commitment and (ii)
after the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that Lender
plus (b) in the event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that Lender (in each
case net of any participations purchased by other Lenders in such Letters of
Credit or in any unreimbursed drawings thereunder) plus (c) the aggregate amount
of all participations purchased by that Lender in any outstanding Letters of
Credit or any unreimbursed drawings under any Letters of Credit.

                  "Revolving Loans" means the Revolving A Loans or the Revolving
B Loans.

                  "Revolving Notes" means the Revolving A Notes or the Revolving
B Notes.

                  "S&P" means Standard & Poor's Rating Group, a division of The
McGraw-Hill Companies.

                  "Second Priority" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than First
Priority Liens and Permitted Encumbrances and Liens permitted pursuant to
subsection 7.2) and (ii) such Lien is the only Lien (other than First Priority
Liens and Permitted Encumbrances and Liens permitted pursuant to subsection 7.2)
to which such Collateral is subject.

                  "Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, equity interests, options, warrants,
bonds, debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as "securities" or any certificates of interest, shares or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing, whether or not certificated.

                  "Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.

                  "Security Agreement" means the Security Agreement executed and
delivered on the Closing Date, substantially in the form of Exhibit XVII annexed
hereto, as such Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.

                  "Settlement Date" is defined in subsection 2.1D(i).

                  "Settlement Notice" is defined in subsection 2.1D(i).

                  "Solvent" means, with respect to any Person, that as of the
date of determination both (i)(a) the then fair saleable value of the property
of such Person is (1) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (2) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and due considering all financing alternatives and
potential asset sales reasonably available to such Person; (b) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (c) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (ii) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

                  "Spare Parts and Supplies" means goods consisting of spare and
replacement parts and supplies used in or to facilitate the production or
manufacture of Finished Goods by a Person in the ordinary course of business but
not including Raw Materials, Work-in-Process or Packaging Materials.

                  "Standby Letter of Credit" means any Existing Letter of Credit
and any standby letter of credit or similar instrument issued for the purpose of
supporting (i) Indebtedness of Borrowers or any of their Restricted Subsidiaries
in respect of industrial revenue or development bonds or financings, (ii)
workers' compensation liabilities of Borrowers or any of their Restricted
Subsidiaries, (iii) the obligations of third party insurers of Borrowers or any
of their Restricted Subsidiaries arising by virtue of the laws of any
jurisdiction requiring third party insurers, (iv) obligations with respect to
Capital Leases or Operating Leases of Borrowers or any of their Restricted
Subsidiaries, and (v) performance, payment, deposit or surety obligations of
Borrowers or any of their Restricted Subsidiaries, in any case if required by
law or governmental rule or regulation or in accordance with custom and practice
in the industry and (vi) trade payables in the Borrowers' ordinary course of
business; provided that Standby Letters of Credit may not be issued for the
purpose of supporting any Indebtedness constituting "antecedent debt" (as that
term is used in Section 547 of the Bankruptcy Code).

                  "Subordinated Debenture Bonds" means the unsecured
Subordinated Debenture Bonds issued by Company from time to time pursuant to the
Subordinated Indenture dated December 4, 1997 between Company and Commerce Bank,
National Association, as Trustee, as such Subordinated Debenture may be amended,
supplemented, or otherwise modified from time to time to the extent permitted
under subsection 7.12.

                  "Subordinated Indebtedness" means (i) the Subordinated
Debenture Bonds, (ii) the Subordinated Investment Certificates and (iii) any
unsecured Indebtedness of Borrowers or their Restricted Subsidiaries that is
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to Agent and Requisite Lenders.
                  "Subordinated Investment Certificates" means the following
unsecured, subordinated obligations of the Company issued pursuant to the
referenced Indentures, as the same may be amended, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.12: (i) 20
Year Subordinated Capital Investment Certificates, issued pursuant to that
certain Indenture dated as of November 8, 1984 by and between Company and
Commerce Bank of Kansas City, National Association, as Trustee (the "Trustee");
(ii) 10 Year Subordinated Capital Investment Certificates issued pursuant to
that certain Indenture dated as of November 8, 1984 by and between Company and
the Trustee, as amended January 3, 1985 and December 3, 1991; (iii) 5 Year
Subordinated Capital Investment Certificates issued pursuant to that certain
Indenture dated as of November 8, 1984 by and between Company and the Trustee,
as amended January 3, 1985 and December 3, 1991; (iv) 10 Year Subordinated
Monthly Income Capital Investment Certificates issued pursuant to that certain
Indenture dated as of November 8, 1984 by and between Company and the Trustee,
as amended January 3, 1985 and December 3, 1991; (v) 5 Year Subordinated Monthly
Income Capital Investment Certificates issued pursuant to that certain Indenture
dated as of November 11, 1985 by and between Company and the Trustee; and (vi)
10 Year Subordinated Individual Retirement Account Certificates issued pursuant
to that certain Indenture dated as of November 8, 1984 by and between Company
and the Trustee, as amended January 3, 1985 and December 3, 1991.

                  "Subsidiary" means, with respect to any Person, any
corporation, partnership, trust, limited liability company, association, joint
venture or other business entity of which more than 50% of the total voting
power of shares of stock or other ownership interests entitled (without regard
to the occurrence of any contingency) to vote in the election of the members of
the Governing Body is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.

                  "Subsidiary Guarantor" means any Material Subsidiary of any
Borrower that executes and delivers a counterpart of the Subsidiary Guaranty on
the Closing Date or from time to time thereafter pursuant to subsection 6.8.

                  "Subsidiary Guaranty" means the Subsidiary Guaranty executed
and delivered by existing Material Subsidiaries of Borrowers on the Closing Date
and to be executed and delivered by additional Material Subsidiaries of
Borrowers from time to time thereafter in accordance with subsection 6.8,
substantially in the form of Exhibit XVI annexed hereto, as such Subsidiary
Guaranty may hereafter be amended, supplemented or otherwise modified from time
to time.

                  "Supermajority Lenders" means Lenders having or holding more
than 66% of the sum of the aggregate Revolving Loan Exposure of all Lenders plus
the aggregate Term Loan Exposure of all Lenders.

                  "Supplemental Collateral Agent" has the meaning assigned to
that term in subsection 9.1B.

                  "Synthetic Lease" means the synthetic lease financing
arrangement evidenced by that certain Participation Agreement between the
Company, as Lessee and Guarantor, Wilmington Trust Company, as Owner Trustee and
Lessor, CSL Leasing, Inc., Scotiabank Inc., Dresdner Bank, AG, Grand Cayman
Branch and Texaco Hydrogen Inc., as Owner Participants, The Chase Manhattan
Bank, as agent for Lenders, and the financial institutions party thereto, dated
as of December 11, 1997, as amended prior to the Closing Date.

                  "Synthetic Lease Restructuring" means the restructuring of the
Synthetic Lease, including among other things, the payoff of all amounts
outstanding under that certain Credit Agreement dated as of December 11, 1997 by
and among Wilmington Trust Company, as lessor, The Chase Manhattan Bank, as
agent, and the other financial institutions party thereto, and the release or
assignment of all Liens and security interests provided for therein and as
described on Schedule 1.1B annexed hereto. The Synthetic Lease Restructuring
must be satisfactory to Agent in all respects.

                  "Tax" or "Taxes" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed, including interest, penalties, additions to tax and any
similar liabilities with respect thereto; except that, in the case of a Lender,
there shall be excluded taxes that are imposed on the overall net income or net
profits (including franchise taxes imposed in lieu thereof) by the United States
or by any other Government Authority under the laws of which the Lender is
organized or has its principal office or maintains its applicable lending
office.

                  "Term Lender" means a Lender that has a Term Loan Commitment
and/or that has an outstanding Term Loan.

                  "Term Loan Commitment" means the commitment of a Lender to
make a Term Loan to Borrowers pursuant to subsection 2.1A(i), and "Term Loan
Commitments" means such commitments of all Lenders in the aggregate.

                  "Term Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Term Loans, that
Lender's Term Loan Commitment and (ii) after the funding of the Term Loans, the
outstanding principal amount of the Term Loan of that Lender.

                  "Term Loans" means the Loans made by Lenders to Borrowers
pursuant to subsection 2.1A(i).

                  "Term Notes" means (i) the promissory notes of Borrowers
issued pursuant to subsection 2.1F on the Closing Date and (ii) any promissory
notes issued by Borrowers pursuant to the last sentence of subsection 10.1B(i)
in connection with assignments of the Term Loan Commitments or Term Loans of any
Lenders, in each case substantially in the form of Exhibit IV annexed hereto, as
they may be amended, supplemented or otherwise modified from time to time.

                  "Third Priority" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than First
Priority Liens, Second Priority Liens, and Permitted Encumbrances and Liens
permitted pursuant to subsection 7.2) and (ii) such Lien is the only Lien (other
than First Priority Liens, Second Priority Liens and Permitted Encumbrances and
Liens permitted pursuant to subsection 7.2) to which such Collateral is subject.

                  "Title Company" means one or more title insurance companies
reasonably satisfactory to Agent.

                  "Total Utilization of Revolving A Loan Commitments" means, as
at any date of determination, the sum of (i) the aggregate principal amount of
all outstanding Revolving A Loans plus (ii) the Letter of Credit Usage under
such Revolving A Loan Commitments.

                  "Total Utilization of Revolving B Loan Commitments" means, as
at any date of determination, the sum of (i) the aggregate principal amount of
all outstanding Revolving B Loans plus (ii) the Letter of Credit Usage under
such Revolving B Loan Commitments.

                  "Total Utilization of Revolving Loan Commitments" means, as at
any date of determination, the sum of the Total Utilization of the Revolving A
Loan Commitments plus the Total Utilization of the Revolving B Loan Commitments.

                  "Transaction Costs" means the fees, costs and expenses payable
by Borrowers on or before the Closing Date in connection with the transactions
contemplated by the Loan Documents.

                  "UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.

                  "Unrestricted Subsidiary" means any Subsidiary identified as
such on Schedule 5.1 attached hereto and that has been so designated by the
Governing Body of the Company as an Unrestricted Subsidiary pursuant to a Board
Resolution or by a written notification from a Designated Officer to the extent
such Officer has been so authorized to act; provided that such Subsidiary: (i)
has no Indebtedness that is directly or indirectly recourse to any Borrower or
any Restricted Subsidiary; (ii) is not party to any agreement, contract,
arrangement or understanding with any Borrower or any Restricted Subsidiary of
any Borrower that would provide the creditors of such Unrestricted Subsidiary
(including Persons with contingent claims against such Unrestricted Subsidiary)
with any recourse to or against any Borrower or any of their Restricted
Subsidiaries or any of their respective assets or revenues; (iii) is a Person
with respect to which no Borrower nor any of its Restricted Subsidiaries has any
direct or indirect obligation (1) to subscribe for additional equity Securities
or other equity or ownership interests, or (2) to maintain or preserve such
Person's financial condition or to cause such Person to achieve or maintain any
specified levels of profitability; (iv) has not guaranteed or otherwise directly
or indirectly provided credit support for any Indebtedness of any Borrower or
any of their Restricted Subsidiaries; and (v) has no Subsidiaries and provided
further that, upon giving effect to such designation, no Potential Event of
Default or Event of Default shall have occurred. Any such designation by the
Company shall be evidenced to Agent by filing with Agent an Officer's
Certificate of a Designated Officer certifying that such designation complied
with the foregoing conditions. If, at any time, any Unrestricted Subsidiary
fails to meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement
and any Indebtedness of such Subsidiary shall be deemed incurred by a Restricted
Subsidiary of Company as of such date. The Governing Body of the Company or
Designated Officer may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation shall be deemed to be an
incurrence of Indebtedness by a Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under subsection 7.1 and (ii) no
Event of Default or Potential Event of Default would be in existence following
such designation.

                  "Unused Portion" is defined in subsection 2.3A.

                  "Working Capital Collateral" means Collateral consisting of
Inventory and Accounts of Borrowers and their Material Subsidiaries, together
with proceeds thereof.

                  "Work-in-Process" means goods to be sold or leased by a Person
in the normal course of business which are at the time of determination in the
process of being manufactured by such Person but not including any Raw
Materials, Spare Parts and Supplies or Packaging Materials.

1.2      Accounting Terms; Utilization of GAAP for Purposes of Calculations
         ------------------------------------------------------------------
         Under Agreement.
         ---------------

                  Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrowers to Lenders pursuant to clauses (ii), (iii)
and (xii) of subsection 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize GAAP as in effect on the date of determination, applied
in a manner consistent with that used in preparing the financial statements
referred to in subsection 5.3. If at any time any change in GAAP would affect
the computation of any financial ratio or requirement set forth in any Loan
Document, and Borrowers, Agent or Requisite Lenders shall so request, Agent,
Lenders and Borrowers shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of Requisite Lenders), provided that, until so
amended, such ratio or requirement shall continue to be computed in accordance
with GAAP prior to such change therein and Borrowers shall provide to Agent and
Lenders reconciliation statements provided for in subsection 6.1(v).

1.3      Other Definitional Provisions and Rules of Construction.
         -------------------------------------------------------

A. Any of the terms defined herein may, unless the context otherwise requires,
be used in the singular or the plural, depending on the reference.

B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.

C. The use in any of the Loan Documents of the word "include" or "including",
when following any general statement, term or matter, shall not be construed to
limit such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as "without limitation" or "but not limited to" or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter.

D. Whenever the phrase "Borrowers and their Restricted Subsidiaries on a
consolidated basis" or words of similar meaning appear in this Agreement, such
phrases are intended to refer to the consolidation of the financial statements,
in accordance with GAAP, of Borrowers and their Restricted Subsidiaries as if
the Restricted Subsidiaries are Borrowers' only Subsidiaries.

Section 2.        AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

2.1      Commitments; Making of Loans; the Register; Notes.
         -------------------------------------------------

     A.  Commitments.  Subject to the terms and conditions of this Agreement and
in reliance upon the  representations  and  warranties  of Borrowers  herein set
forth,  each Lender  hereby  severally  agrees to make the Loans as described in
subsections 2.1A(i) and 2.1A(ii).

     (i) Term Loan. Each Lender that has a Term Loan Commitment severally agrees
          ---------
to lend to Borrowers on the Closing Date an amount    not exceeding its
Pro Rata Share of the aggregate  amount of the Term Loan  Commitments to be used
for the purposes identified in subsection 2.5A. The amount of each Lender's Term
Loan  Commitment is set forth  opposite its name on Schedule 2.1 annexed  hereto
                                                    ------------
and the aggregate amount of the Term Loan Commitments is $150,000,000;  provided
                                                                       --------
that the    Term  Loan  Commitments  of  Lenders  shall be
adjusted to give effect to any assignments of the Term Loan Commitments pursuant
to subsection 10.1B. Each Lender's Term Loan Commitment shall expire immediately
and without further action on February 7, 2002 if the Term Loans are not made on
or before that date.  Borrowers may make only one borrowing  under the Term Loan
Commitments.  Amounts  borrowed under this subsection  2.1A(i) and  subsequently
repaid or prepaid may not be reborrowed.

(ii)     Revolving Loans.
         ---------------

     (a) Revolving A Loans. Each Revolving A Lender severally agrees, subject to
         -----------------
the  limitations set forth below with respect to the  maximum
amount of Revolving A Loans  permitted to be  outstanding  from time to time, to
lend to  Borrowers  from time to time during the period from the Closing Date to
but  excluding  the Revolving A Loan  Commitment  Termination  Date an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the Revolving
A Loan  Commitments to be used for the purposes  identified in subsection  2.5B.
The original amount of each Revolving A Lender's  Revolving A Loan Commitment is
set forth  opposite  its name on Schedule 2.1 annexed  hereto and the  aggregate
                                 ------------
original   amount  of     the  Revolving  A  Loan   Commitments  is
$319,000,000;  provided,  that the Revolving A Loan  Commitments  of Revolving A
               --------
  Lenders  shall be  adjusted  to give  effect  to any  increase  of the
Revolving A Loan Commitments pursuant to subsection 2.1A(iii);  provided further
                                                               --------  -------
that the Revolving A Loan  Commitments  of Revolving A Lenders shall be adjusted
to give   effect to any  assignments  of the  Revolving A Loan
Commitments  pursuant to subsection 10.1B and shall be reduced from time to time
by the amount of any  reductions  thereto made pursuant to subsection  2.4. Each
Revolving A Lender's Revolving A Loan Commitment shall expire on the Revolving A
Loan Commitment Termination Date and all Revolving A Loans and all other amounts
owed  hereunder  with respect to the  Revolving A Loans and the Revolving A Loan
Commitments  shall be paid in full no later than that date;  provided  that each
                                                             --------
Revolving  A  Lender's  Revolving  A  Loan    Commitment  shall  expire
immediately and without further action on February 7, 2002 if a Revolving A Loan
is not made on or before  that date.  Amounts  borrowed  under  this  subsection
2.1A(ii)(a)  may be repaid and  reborrowed to but excluding the Revolving A Loan
Commitment Termination Date.

                           Anything contained in this Agreement to the contrary
                  notwithstanding, the Revolving A Loans and the Revolving A
                  Loan Commitments shall be subject to the following limitations
                  in the amounts indicated:

                    (w)  in no event shall the Total  Utilization of Revolving A
                         Loan  Commitments  at any time  exceed the  Revolving A
                         Loan Commitments then in effect;

                    (x)  in no event shall the Total  Utilization  of  Revolving
                         Loan  Commitments at any time exceed the Revolving Loan
                         Commitments then in effect; and

                    (y)  in no event shall the Total  Utilization  of  Revolving
                         Loan  Commitments at any time exceed the Borrowing Base
                         then in effect.

     (b) Revolving B Loans. Each Revolving B Lender severally agrees, subject to
the  limitations set forth below with respect to the  -----------------  maximum
amount of Revolving B Loans  permitted to be  outstanding  from time to time, to
lend to  Borrowers  from time to time during the period from the Closing Date to
but  excluding  the Revolving B Loan  Commitment  Termination  Date an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the Revolving
B Loan  Commitments to be used for the purposes  identified in subsection  2.5B.
The original amount of each Revolving B Lender's  Revolving B Loan Commitment is
set forth  opposite  its name on Schedule 2.1 annexed  hereto and the  aggregate
original amount of ------------ the Revolving B Loan Commitments is $31,000,000;
provided that the Revolving B Loan  Commitments of Revolving B --------  Lenders
shall be  adjusted  to give effect to any  assignments  of the  Revolving B Loan
Commitments  pursuant to subsection 10.1B and shall be reduced from time to time
by the amount of any  reductions  thereto made pursuant to subsection  2.4. Each
Revolving B Lender's Revolving B Loan Commitment shall expire on the Revolving B
Loan Commitment Termination Date and all Revolving B Loans and all other amounts
owed  hereunder  with respect to the  Revolving B Loans and the Revolving B Loan
Commitments  shall  be paid in full no  later  than  that  date;  provided  that
--------  each  Revolving B Lender's  Revolving B Loan  Commitment  shall expire
immediately  and without  further action on February 7, 2002 if a Revolving Loan
is not made on or before  that date.  Amounts  borrowed  under  this  subsection
2.1A(ii)(b)  may be repaid and  reborrowed to but excluding the Revolving B Loan
Commitment Termination Date.

                           Anything contained in this Agreement to the contrary
                  notwithstanding, the Revolving B Loans and the Revolving B
                  Loan Commitments shall be subject to the following limitations
                  in the amounts indicated:

                    (w)  in no event shall the Total  Utilization of Revolving B
                         Loan  Commitments  at any time  exceed the  Revolving B
                         Loan Commitments then in effect;

                    (x)  in no event shall the Total  Utilization  of  Revolving
                         Loan  Commitments at any time exceed the Revolving Loan
                         Commitments then in effect;

                    (y)  in no event shall the Total  Utilization  of  Revolving
                         Loan  Commitments at any time exceed the Borrowing Base
                         then in effect; and

                    (z)  no  Revolving  B Loan  shall  be made or  shall  remain
                         outstanding   unless  the  Total   Utilization  of  the
                         Revolving  A Loan  Commitments  equals the  Revolving A
                         Loan Commitments then in effect.

     (iii)  Increases in Revolving A Loan  Commitments.  At any time on or after
            -----------------------------------------
          the  Closing  Date  that no  Event  of  Default  has  occurred  and is
          continuing,  the Revolving A Loan Commitments may be increased through
          new commitments  provided by existing Revolving A Lenders and/or other
          financial  institutions  not then a party to this  Agreement  that are
          satisfactory to the Agent;  provided that such additional  Revolving A
                                      ---------
          Loan Commitments shall not exceed an aggregate amount of

          $31,000,000  and  that  any  such  increase  in the  Revolving  A Loan
          Commitments   shall  effect  a  decrease  in  the   Revolving  B  Loan
          Commitments pursuant to subsection 2.4B(iii)(j).  Nothing contained in
          this  subsection  2.1A(iii) or otherwise in this Agreement is intended
          to commit any  Revolving  A Lender or Agent to provide  any portion of
          any such additional Revolving A Loan Commitments. If and to the extent
          that any  Revolving  A Lenders  and/or  other  financial  institutions
          agree,  in their  sole  discretion,  to  provide  any such  additional
          Revolving A Loan Commitments, (i) the total amount of Revolving A Loan
          Commitments  shall  be  increased  by the  amount  of  the  additional
          Revolving A Loan  Commitments  agreed to be so provided,  (ii) the Pro
          Rata  Shares of the  respective  Revolving A Lenders in respect of the
          Revolving A Loan  Commitments  shall be  proportionally  adjusted  and
          (iii) the Borrowers  shall execute and deliver any  additional  Notes,
          joinder  agreements  or  other  amendments  or  modifications  to this
          Agreement  or any other  Loan  Document  as the  Agent may  reasonably
          request.

     B. Borrowing  Mechanics.  Term Loans or Revolving Loans made on any Funding
Date (other than Revolving  Loans made pursuant to subsection  3.3B) shall be in
an aggregate  minimum amount of $5,000,000 and multiples of $1,000,000 in excess
of that amount;  provided that Term Loans or Revolving Loans made on any Funding
Date as Eurodollar  Rate Loans with a particular  Interest Period shall be in an
aggregate minimum amount of $10,000,000 and multiples of $1,000,000 in excess of
that amount. Whenever Borrowers desire that Lenders make Term Loans or Revolving
Loans they shall deliver to Agent a Notice of Borrowing no later than 11:00 A.M.
(New York City time) at least  three  Business  Days in advance of the  proposed
Funding  Date  (in the  case of a  Eurodollar  Rate  Loan)  or on the day of the
proposed  Funding  Date  (in the  case of a Base  Rate  Loan).  Term  Loans  and
Revolving  Loans may be  continued  as or  converted  into  Base Rate  Loans and
Eurodollar Rate Loans in the manner provided in subsection 2.2D. Notwithstanding
anything to the contrary herein  contained,  during the period commencing on and
including the Closing Date and ending on the earlier of (i) the date which is 90
days after the Closing  Date and (ii) the date on which  Agent  sends  notice to
Borrowers  indicating  that Lenders'  primary  syndication  has been  concluded,
Borrowers  may only request that  Revolving  Loans be made as Base Rate Loans or
Eurodollar  Rate  Loans  with  the  same  30-day  Interest  Period.  In  lieu of
delivering a Notice of Borrowing,  Borrowers may give Agent telephonic notice by
the required time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly  confirmed in writing by delivery of a Notice
of Borrowing to Agent on or before the applicable Funding Date.

                  Neither Agent nor any Lender shall incur any liability to
Borrowers in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by an Officer or other person
authorized to borrow on behalf of Borrowers or for otherwise acting in good
faith under this subsection 2.1B or under subsection 2.2D, and upon funding of
Loans by Daily Funding Lender and/or Lenders, and upon conversion or
continuation of the applicable basis for determining the interest rate with
respect to any Loans pursuant to subsection 2.2D, in each case in accordance
with this Agreement, pursuant to any such telephonic notice Borrowers shall have
effected Loans or a conversion or continuation, as the case may be, hereunder.

                  Borrowers shall notify Agent prior to the funding of any Loans
if any of the matters to which Borrowers are required to certify in the
applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Borrowers of the proceeds of any
Loans shall constitute a re-certification by Borrowers, as of the applicable
Funding Date, as to the matters to which Borrowers are required to certify in
the applicable Notice of Borrowing.

                  Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for, or a Notice of Conversion/Continuation for
conversion to, or continuation of, a Eurodollar Rate Loan (or telephonic notice
in lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Borrowers shall be bound to make a borrowing or to
effect a conversion or continuation in accordance therewith.

C.       Disbursement of Funds.

(i)  Subject to this subsection  2.1C and subsection  2.1D, all Loans under this
     Agreement shall be made by Lenders  simultaneously  and  proportionately to
     their  respective  applicable  Pro Rata Shares,  it being  understood  that
     neither  Agent nor any Lender shall be  responsible  for any default by any
     other Lender in that other  Lender's  obligation  to make a Loan  requested
     hereunder  nor shall the  Commitment  of any Lender to make the  particular
     type of Loan  requested  be increased or decreased as a result of a default
     by any  other  Lender  in that  other  Lender's  obligation  to make a Loan
     requested hereunder.

(ii) Upon receipt by Agent of a Notice of Borrowing  pursuant to subsection 2.1B
     (or telephonic  notice in lieu thereof) for Revolving Loans that consist of
     Base Rate Loans and upon satisfaction or waiver of the conditions precedent
     specified in subsection 4.1 (in the case of Loans made on the Closing Date)
     and,  subject to the  provisions  set forth in the  immediately  succeeding
     paragraph,  subsection 4.2 (in the case of all Loans), Daily Funding Lender
     shall, without prior notice to the other Lenders, make such Revolving Loans
     for its own account on the  applicable  Funding Date (subject to settlement
     with the other Lenders in accordance  with  subsection  2.1D) by making the
     proceeds of such  Revolving  Loans  available  to Borrowers on such Funding
     Date by causing an amount of same day funds  equal to the  proceeds of such
     Revolving  Loans to be credited to the account of  Borrowers at the Funding
     and Payment Office.  Such Revolving Loans shall constitute  Revolving Loans
     by Daily Funding Lender for all purposes under the Loan Documents,  subject
     to settlement  with the other  Lenders  pursuant to  subsection  2.1D.  All
     interest  accrued on any such  Revolving  Loans from the date made by Daily
     Funding  Lender to the  Settlement  Date with respect  thereto shall be for
     Daily  Funding  Lender's  own  account.  Daily  Funding  Lender  shall make
     Revolving Loans for its own account  pursuant to this  subsection  2.1C(ii)
     notwithstanding the fact that the principal amount of such Revolving Loans,
     when added to the  aggregate  principal  amount of Daily  Funding  Lender's
     Revolving  Loans  then  outstanding,  may  exceed  Daily  Funding  Lender's
     Revolving  Loan  Commitment  then in effect;  provided that such  Revolving
     Loans  shall at all times be  --------  Obligations  owed to Daily  Funding
     Lender under this  Agreement;  and provided  further that in no event shall
     the --------  -------  aggregate  principal  amount of all Revolving Loans,
     including such Revolving  Loans,  outstanding at any time exceed the lesser
     of the Borrowing Base or the aggregate  Revolving Loan  Commitments then in
     effect minus the Letter of ----- Credit Usage as of such time.

     Notwithstanding  anything  in  this  Agreement  to  the  contrary,  if  the
     conditions  precedent  specified in subsection 4.2 cannot be fulfilled with
     respect to any  proposed  Revolving  Loans that consist of Base Rate Loans,
     Borrowers  shall,  in its Notice of Borrowing or otherwise,  give immediate
     written  notice thereof  (specifying  the  circumstances  which prevent the
     conditions  precedent from being  fulfilled) to Agent,  with a copy to each
     Lender,  and Daily Funding  Lender may (and each Lender  hereby  authorizes
     Daily  Funding  Lender  to),  but is not  obligated  to,  continue  to make
     Revolving Loans that are Base Rate Loans for 20 Business Days from the date
     Agent first receives such notice,  or until sooner  instructed by Requisite
     Lenders to cease making such  Revolving  Loans (the "Daily  Funding  Lender
     Discretionary   Period").   Once   notice  is  given  by   Borrowers   that
     circumstances  exist which  prevent the  conditions  precedent to borrowing
     from  being  fulfilled,  no  additional  notice  with  respect  to the same
     circumstances  will be  effective  to commence a new Daily  Funding  Lender
     Discretionary Period.

     (iii) Promptly after receipt by Agent of a Notice of Borrowing  pursuant to
     subsection 2.1B (or telephonic notice in lieu thereof) for any Loans (other
     than for  Revolving  Loans that  consist of Base Rate  Loans),  Agent shall
     notify each  Revolving A Lender or Revolving B Lender,  as the case may be,
     of the  proposed  borrowing.  Each such Lender shall make the amount of its
     Loan available to Agent,  in same day funds in Dollars,  at the Funding and
     Payment  Office,  not later  than  12:00  Noon (New York City  time) on the
     applicable Funding Date. Except as provided in subsection 3.3B with respect
     to Revolving Loans used to reimburse any Issuing Lender for the amount of a
     drawing under a Letter of Credit issued by it, upon  satisfaction or waiver
     of the conditions  precedent  specified in subsections  4.1 (in the case of
     Loans made on the Closing Date) and, subject to the provisions set forth in
     the immediately preceding paragraph,  4.2 (in the case of all Loans), Agent
     shall  make the  proceeds  of such  Loans  available  to  Borrowers  on the
     applicable  Funding  Date by causing an amount of same day funds in Dollars
     equal to the  proceeds of all such Loans  received by Agent from Lenders to
     be credited to the account of Borrowers at the Funding and Payment Office.

     Unless  Agent shall have been  notified by any Lender  prior to the Funding
     Date for any Loans pursuant to this  subsection  2.1C that such Lender does
     not  intend to make  available  to Agent the amount of such  Lender's  Loan
     requested on such Funding Date,  Agent may assume that such Lender has made
     such amount  available  to Agent on such Funding Date and Agent may, in its
     sole discretion, but shall not be obligated to, make available to Borrowers
     a corresponding  amount on such Funding Date. If such corresponding  amount
     is not in fact  made  available  to Agent by such  Lender,  Agent  shall be
     entitled to recover  such  corresponding  amount on demand from such Lender
     together with interest  thereon,  for each day from such Funding Date until
     the date such amount is paid to Agent,  at the customary  rate set by Agent
     for the  correction  of errors  among  banks for  three  Business  Days and
     thereafter at the Base Rate. If such Lender does not pay such corresponding
     amount forthwith upon Agent's demand therefor,  Agent shall promptly notify
     Borrowers and Borrowers shall immediately pay such corresponding  amount to
     Agent together with interest  thereon,  for each day from such Funding Date
     until the date such amount is paid to Agent, at the rate payable under this
     Agreement  for Base Rate Loans.  Nothing in this  subsection  2.1C shall be
     deemed to relieve any Lender from its obligation to fulfill its Commitments
     hereunder or to prejudice  any rights that  Borrowers  may have against any
     Lender as a result of any default by such Lender hereunder.

D.                Settlement Procedures.

(i) Daily Funding  Lender will from time to time notify the other  Lenders,  not
later than 12:00  Noon (New York time) (a) on at least one  Business  Day during
each seven calendar-day period, (b) on each date on which payment of interest on
any Revolving  Loans is required to be made pursuant to subsection  2.2C, (c) on
the applicable Revolving Loan Commitment Termination Date, and (d) at such other
times as Daily Funding Lender in its discretion may determine  (each such notice
by  Daily  Funding  Lender  being a  "Settlement  Notice"  and the  date of each
Settlement Notice being a "Settlement  Date") of the aggregate  principal amount
of  outstanding  Revolving  Loans  made by Daily  Funding  Lender and each other
Lender as of the close of business on the Business Day immediately preceding the
applicable Settlement Date.

(ii) If a Settlement  Notice  indicates that the aggregate  principal  amount of
outstanding  Revolving Loans made by Daily Funding Lender  (including  Revolving
Loans made for its own account pursuant to subsection  2.1C(ii)) is in excess of
Daily Funding  Lender's  applicable  Pro Rata Share of the  aggregate  principal
amount  of  outstanding  Revolving  A Loans  or  Revolving  B Loans  made by all
Revolving  A Lenders or  Revolving B Lenders,  respectively  (the amount of such
excess being the "Excess Funded Amount"), each such other Lender will, not later
than 4:00 P.M. (New York time) on the applicable  Settlement  Date, pay to Daily
Funding Lender,  by depositing same day funds in the account  specified by Daily
Funding  Lender at the  Funding  and  Payment  Office,  an amount  equal to such
Lender's  Adjusted  Pro Rata  Share of such  Excess  Funded  Amount,  upon which
payment Daily Funding Lender shall be deemed to have sold, and such Lender shall
be deemed to have purchased,  as of the applicable Settlement Date, a portion of
the  outstanding  Revolving A Loans or  Revolving B Loans made by Daily  Funding
Lender for its own  account  pursuant  to  subsection  2.1C(ii)  on or after the
immediately  preceding  Settlement Date equal to such Lender's Adjusted Pro Rata
Share of such Excess Funded Amount.  The obligation of each Lender to purchase a
portion of any Revolving  Loan made by Daily Funding  Lender as provided in this
subsection  2.1D(ii) is subject to the condition that at the time such Revolving
Loan was made by Daily Funding Lender (a) the duly  authorized  officer of Daily
Funding Lender  responsible  for the  administration  of Daily Funding  Lender's
credit  relationship  with  Borrowers  believed in good faith that either (X) no
Event of Default had  occurred  and was  continuing  or (Y) any Event of Default
that had occurred and was continuing had been waived by Requisite Lenders at the
time such Revolving  Loan was made or (b) a Daily Funding  Lender  Discretionary
Period was in effect.

(iii) If a Settlement  Notice  indicates that the aggregate  principal amount of
outstanding  Revolving  Loans  made by Daily  Funding  Lender is less than Daily
Funding Lender's  applicable Pro Rata Share of the aggregate principal amount of
outstanding  Revolving  A Loans or  Revolving  B Loans made by all  Revolving  A
Lenders or  Revolving B Lenders,  respectively  (the  amount of such  difference
being the "Excess  Paydown  Amount"),  Daily Funding  Lender will, no later than
4:00 P.M. (New York time) on the applicable Settlement Date, unconditionally pay
to each other such Lender, by depositing same day funds in the account specified
by such Lender to Daily  Funding  Lender,  in an amount  equal to such  Lender's
Adjusted Pro Rata Share of such Excess Paydown  Amount,  upon which payment such
Lender shall be deemed to have sold, and Daily Funding Lender shall be deemed to
have  purchased,  as of  the  applicable  Settlement  Date,  a  portion  of  the
outstanding  Revolving A Loans or Revolving B Loans of such Lender equal to such
Lender's Adjusted Pro Rata Share of such Excess Paydown Amount.

(iv) Except as provided in subsection 2.1D(ii), the obligations of Daily Funding
Lender and each other Lender  pursuant to  subsections  2.1D(ii)  and  2.1D(iii)
shall  be  absolute  and   unconditional  and  shall  not  be  affected  by  any
circumstance,  including,  without  limitation,  (a) any set-off,  counterclaim,
recoupment,  defense or other right  which Agent or any Lender may have  against
Agent,  any other  Lender,  any Loan  Party or any other  Person  for any reason
whatsoever;  (b) the  occurrence  or  continuance  of an Event of  Default  or a
Potential Event of Default;  (c) any adverse change in the condition  (financial
or otherwise) of any Loan Party;  (d) any breach of this Agreement by Borrowers,
Agent  or any  Lender;  or (e)  any  other  circumstance,  happening,  or  event
whatsoever,  whether or not similar to any of the  foregoing.  In the event that
any Person (the  "Payor")  obligated  to make a payment to any other Person (the
"Payee")  pursuant to this  subsection 2.1D fails to make available to the Payee
the amount of such payment  required to be made by the Payor, the Payee shall be
entitled to recover such amount on demand from the Payor  together with interest
at the  customary  rate set by Agent for the  correction of errors among Lenders
for three Business Days and thereafter at the Base Rate.

(v) In the event that all or any portion of any  repayment  of  principal of the
Revolving Loans is thereafter  recovered by or on behalf of Borrowers from Daily
Funding Lender (including any such recovery in a proceeding under any applicable
bankruptcy,  insolvency  or other  similar law now or hereafter in effect) in an
amount that is proportionately  greater (based on the respective  applicable Pro
Rata Shares of Lenders) than any such recovery from the other Lenders,  the loss
of the amount so recovered shall be ratably shared among all applicable  Lenders
in the manner contemplated by subsection 10.5.

E.       The Register.

                  Agent, acting for these purposes solely as an agent of
Borrowers (it being acknowledged that Agent, in such capacity, and its officers,
directors, employees, agent and affiliates shall constitute Indemnitees under
subsection 10.3), shall maintain (and make available for inspection by Borrowers
and Lenders upon reasonable prior notice at reasonable times) at its address
referred to in subsection 10.8 a register for the recordation of, and shall
record, the names and addresses of Lenders and the Term Loan Commitment,
Revolving A Loan Commitment, Revolving B Loan Commitment, Term Loan and
Revolving A Loans and Revolving B Loans of each Lender from time to time (the
"Register"). Borrowers, Agent and Lenders shall deem and treat the Persons
listed as Lenders in the Register as the holders and owners of the corresponding
Commitments and Loans listed therein for all purposes hereof; all amounts owed
with respect to any Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof; and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans. Each Lender shall record on its internal records the
amount of its Loans and Commitments and each payment in respect thereof, and any
such recordation shall be conclusive and binding on Borrowers, absent manifest
error, subject to the entries in the Register, which shall, absent manifest
error, govern in the event of any inconsistency with any Lender's records.
Failure to make any recordation in the Register or in any Lender's records, or
any error in such recordation, shall not affect any Loans or Commitments or any
Obligations in respect of any Loans.

     F. Notes.  Borrowers  shall  execute and deliver on the Closing Date (i) to
Lenders (or to Agent for Lenders) (a) a Term Note  substantially  in the form of
Exhibit IV annexed  hereto to evidence each Lender's Term Loan, in the principal
amount  of  ----------  that  Lender's  Term  Loan  and with  other  appropriate
insertions,  and (b) a Revolving A Note substantially in the form of Exhibit V-A
-----------  annexed  hereto to evidence each  Revolving A Lender's  Revolving A
Loans, in the principal amount of that Lender's  Revolving A Loan Commitment and
with other  appropriate  insertions and a Revolving B Note  substantially in the
form of Exhibit V-B annexed  hereto to  -----------  evidence  each  Revolving B
Lender's Revolving B Loans, in the principal amount of that Lender's Revolving B
Loan Commitment and with other appropriate insertions.

                  Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by Agent
as provided in subsection 10.1B(ii). Any request, authority or consent of any
person or entity who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, assignee or transferee of that Note or of any Note or
Notes issued in exchange therefor.

2.2      Interest on the Loans.

A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7, each
Term Loan and each Revolving Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate or the Adjusted
Eurodollar Rate. The applicable basis for determining the rate of interest with
respect to any Term Loan or any Revolving Loan shall be selected by Borrowers
initially at the time a Notice of Borrowing is given with respect to such Loan
pursuant to subsection 2.1B, and the basis for determining the interest rate
with respect to any Term Loan or any Revolving Loan may be changed from time to
time pursuant to subsection 2.2D. If on any day a Term Loan or Revolving Loan is
outstanding with respect to which notice has not been delivered to Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.

(i)               Subject to the provisions of subsections 2.2E, 2.2G and 2.7,
                  the Revolving Loans shall bear interest through maturity as
                  follows:

                           (a) if a Base Rate Loan, then at the sum of the Base
                  Rate plus the Base Rate Margin set forth in the table below
                  opposite the Consolidated Senior Leverage Ratio for the four
                  Fiscal Quarter period for which the applicable Compliance
                  Certificate has been delivered pursuant to subsection 6.1(iv);
                  or

                           (b) if a Eurodollar Rate Loan, then at the sum of the
                  Adjusted Eurodollar Rate plus the Eurodollar Rate Margin set
                  forth in the table below opposite the Consolidated Senior
                  Leverage Ratio for the four Fiscal Quarter period for which
                  the applicable Compliance Certificate has been delivered
                  pursuant to subsection 6.1(iv);
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------
                               Revolving Loan Applicable Margins
-------------------------------------------------------------------------------------------------





<S>                                                    <C>                     <C>

------------------------------------------------------ ----------------------- ------------------
                    Consolidated                          Eurodollar Rate            Base
                Senior Leverage Ratio                          Margin             Rate Margin
------------------------------------------------------ ----------------------- ------------------
------------------------------------------------------ ----------------------- ------------------
         Greater than or equal to 2.00:1.00                    3.75%                2.75%
------------------------------------------------------ ----------------------- ------------------
------------------------------------------------------ ----------------------- ------------------
         Greater than or equal to 1.50:1.00
               but less than 2.00:1.00                         3.50%                2.50%
------------------------------------------------------ ----------------------- ------------------
------------------------------------------------------ ----------------------- ------------------
  Greater than or equal to 1.00:1.00 but less than
                      1.50:1.00                                3.25%                2.25%
------------------------------------------------------ ----------------------- ------------------
------------------------------------------------------ ----------------------- ------------------
                 Less than 1.00:1.00                           3.00%                2.00%
------------------------------------------------------ ----------------------- ------------------
</TABLE>

provided that the applicable margin for Revolving Loans that are Eurodollar Rate
Loans shall be 3.50% per annum and the applicable margin for Revolving Loans
that are Base Rate Loans shall be 2.50% per annum until the delivery of the
first Compliance Certificate after the six-month anniversary of the Closing
Date.

(ii) Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the Term Loans
shall bear interest through maturity as follows:

(a)               if a Base Rate Loan, then at the sum of the Base Rate plus
                  3.50% per annum; provided that, if the outstanding principal
                  balance of the Term Loan on the six-month anniversary of the
                  Closing Date equals or exceeds $50,000,000, the interest rate
                  thereafter shall be the sum of the Base Rate plus 4.00% per
                  annum until such time as the outstanding aggregate principal
                  balance of the Term Loans is reduced below $50,000,000, or

(b)               if a Eurodollar Rate Loan, then at the sum of the Adjusted
                  Eurodollar Rate plus 4.50% per annum; provided that, if the
                  outstanding principal balance of the Term Loan on the
                  six-month anniversary of the Closing Date equals or exceeds
                  $50,000,000, the interest rate thereafter shall be the sum of
                  the Adjusted Eurodollar Rate plus 5.00% per annum until such
                  time as the outstanding aggregate principal balance of the
                  Term Loans is reduced below $50,000,000.

                  (iii) Upon delivery of a Compliance Certificate by Borrowers
         to Agent pursuant to subsection 6.1(iv), the Base Rate Margin and the
         Eurodollar Rate Margin provided in subsection 2.2A(i) shall
         automatically be adjusted in accordance with such Compliance
         Certificate, such adjustment to become effective on the next succeeding
         Business Day following the receipt by Agent of such Compliance
         Certificate (subject to the provisions of the foregoing clause (i));
         provided that, if at any time a Compliance Certificate is not delivered
         at the time required pursuant to subsection 6.1(iv), from the time such
         Compliance Certificate was required to be delivered until delivery of
         such Compliance Certificate, the applicable margins shall be the
         maximum percentage amount for the relevant Loan set forth above.

     B.  Interest  Periods.  In  connection  with  each  Eurodollar  Rate  Loan,
Borrowers  may,  pursuant to the  applicable  Notice of  Borrowing  or Notice of
Conversion/Continuation,  as the case may be, select an interest period (each an
"Interest  Period") to be applicable to such Loan,  which Interest  Period shall
be, at  Borrowers'  option,  either a one,  two,  three or,  subject  to Agent's
approval, six-month period; provided that: --------

(i)               the initial Interest Period for any Eurodollar Rate Loan shall
                  commence on the Funding Date in respect of such Loan, in the
                  case of a Loan initially made as a Eurodollar Rate Loan, or on
                  the date specified in the applicable Notice of
                  Conversion/Continuation, in the case of a Loan converted to a
                  Eurodollar Rate Loan;

(ii)              in the case of immediately successive Interest Periods
                  applicable to a Eurodollar Rate Loan continued as such
                  pursuant to a Notice of Conversion/Continuation, each
                  successive Interest Period shall commence on the day on which
                  the next preceding Interest Period expires;

(iii)             if an Interest Period would otherwise expire on a day that is
                  not a Business Day, such Interest Period shall expire on the
                  next succeeding Business Day; provided that, if any Interest
                  Period would otherwise expire on a day that is not a Business
                  Day but is a day of the month after which no further Business
                  Day occurs in such month, such Interest Period shall expire on
                  the next preceding Business Day;

(iv)              any Interest Period that begins on the last Business Day of a
                  calendar month (or on a day for which there is no numerically
                  corresponding day in the calendar month at the end of such
                  Interest Period) shall, subject to clause (v) of this
                  subsection 2.2B, end on the last Business Day of a calendar
                  month;

(v)               no Interest Period with respect to any portion of the Term
                  Loans shall extend beyond February 29, 2004, and no Interest
                  Period with respect to any portion of the Revolving Loans
                  shall extend beyond any applicable Revolving Loan Commitment
                  Termination Date;

(vi)              no Interest Period with respect to any type of Term Loans
                  shall extend beyond a date on which Borrowers are required to
                  make a scheduled payment of principal of such type of Term
                  Loans, unless the sum of (a) the aggregate principal amount of
                  such type of Term Loans that are Base Rate Loans plus (b) the
                  aggregate principal amount of such type of Term Loans that are
                  Eurodollar Rate Loans with Interest Periods expiring on or
                  before such date equals or exceeds the principal amount
                  required to be paid on such type of Term Loans on such date;

(vii)             no Interest Period with respect to any portion of the
                  Revolving Loans shall extend beyond the date on which a
                  permanent reduction of the applicable Revolving Loan
                  Commitments is scheduled to occur unless the sum of (a) the
                  aggregate principal amount of such Revolving Loans that are
                  Base Rate Loans plus (b) the aggregate principal amount of
                  such Revolving Loans that are Eurodollar Rate Loans with
                  Interest Periods expiring on or before such date plus (c) the
                  excess of the applicable Revolving Loan Commitments then in
                  effect over the aggregate principal amount of such Revolving
                  Loans then outstanding equals or exceeds the permanent
                  reduction of the applicable Revolving Loan Commitments that is
                  scheduled to occur on such date;

(viii)            there shall be no more than ten (10) Interest Periods
                  outstanding at any time; and

(ix)              in the event Borrowers fail to specify an Interest Period for
                  any Eurodollar Rate Loan in the applicable Notice of Borrowing
                  or Notice of Conversion/Continuation, Borrowers shall be
                  deemed to have selected an Interest Period of one month.

     C.  Interest  Payments.  Subject  to the  provisions  of  subsection  2.2E,
interest  on each Loan  shall be  payable  in  arrears  on and to each  Interest
Payment Date  applicable to that Loan,  upon any prepayment of that Loan (to the
extent  accrued on the amount being  prepaid) and at maturity  (including  final
maturity),  provided  that in the event any  Revolving  Loans that are Base Rate
Loans are -------- prepaid pursuant to subsection  2.4B(i),  interest accrued on
such  Loans  through  the date of such  prepayment  shall be payable on the next
succeeding  Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).

D. Conversion or Continuation. Subject to the provisions of subsection 2.6,
Borrowers shall have the option (i) to convert at any time all or any part of
their outstanding Term Loans or Revolving Loans equal to $5,000,000 and
multiples of $1,000,000 in excess of that amount from Loans bearing interest at
a rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis, or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $10,000,000 and multiples of $1,000,000 in excess
of that amount as a Eurodollar Rate Loan; provided, however, that a Eurodollar
Rate Loan may only be converted into a Base Rate Loan on the expiration date of
an Interest Period applicable thereto unless Borrowers pay on such conversion
date all amounts owing to Lenders under subsection 2.6D; provided further that,
until the earlier of the ninetieth day after the Closing Date and the date
specified by Agent to Borrowers on which the primary syndication of the Loans
has been completed, no Base Rate Loans may be converted into Eurodollar Rate
Loans other than Eurodollar Rate Loans with the same 30-day Interest Period.

                  Borrowers shall deliver a Notice of Conversion/Continuation to
Agent no later than 11:00 A.M. (New York City time) at least one Business Day in
advance of the proposed conversion date (in the case of a conversion to a Base
Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). In lieu of delivering a Notice of
Conversion/Continuation, Borrowers may give Agent telephonic notice by the
required time of any proposed conversion/continuation under this subsection
2.2D; provided that such notice shall be promptly confirmed in writing by
delivery of a Notice of Conversion/Continuation to Agent on or before the
proposed conversion/continuation date. Upon receipt of written or telephonic
notice of any proposed conversion/continuation under this subsection 2.2D, Agent
shall promptly transmit such notice by telefacsimile or telephone to each Lender
of the Loan subject to the Notice of Conversion/Continuation.

E. Default Rate. Upon the occurrence and during the continuation of any Event of
Default, the outstanding principal amount of all Loans and, to the extent
permitted by applicable law, any interest payments thereon not paid when due and
any fees and other amounts then due and payable hereunder, shall thereafter bear
interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable upon demand at a
rate that is 2% per annum in excess of the interest rate otherwise payable under
this Agreement with respect to the applicable Loans (or, in the case of any such
fees and other amounts, at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Base Rate Loans);
provided that, in the case of Eurodollar Rate Loans, upon the expiration of the
Interest Period in effect at the time any such increase in interest rate is
effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans and
shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Agent or any Lender.

F. Computation of Interest. Interest on the Loans shall be computed on the basis
of a 360-day year, in each case for the actual number of days elapsed in the
period during which it accrues. In computing interest on any Loan, the date of
the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar
Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.

G. Limitation on Interest. It is the intention of the parties hereto to comply
with all applicable usury laws, whether now existing or hereafter enacted.
Accordingly, notwithstanding any provision to the contrary in this Agreement,
the Notes, the other Loan Documents or any other document evidencing, securing,
guaranteeing or otherwise pertaining to the Obligations of Borrowers to the
Lenders, in no contingency or event whatsoever, whether by acceleration of the
maturity of indebtedness of Borrowers to the Lenders or otherwise, shall the
interest contracted for, charged or received by the Lenders exceed the maximum
amount permissible under applicable law. If from any circumstances whatsoever
fulfillment of any provisions of this Agreement, the Notes, the other Loan
Documents or of any other document evidencing, securing, guaranteeing or
otherwise pertaining to the Obligations of Borrowers to the Lenders, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity, and if from any such
circumstances the Lenders shall ever receive anything of value as interest or
deemed interest by applicable law under this Agreement, the Notes, the other
Loan Documents or any other document evidencing, securing, guaranteeing or
otherwise pertaining to the Obligations of Borrowers to the Lenders or otherwise
an amount that would exceed the highest lawful amount (the "Maximum Rate"), such
amount that would be excessive interest shall be applied to the reduction of the
principal amount owing in connection with this Agreement or on account of any
other indebtedness of Borrowers to the Lenders, and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of principal
owing in connection with this Agreement and such other indebtedness, such excess
shall be refunded to Borrowers. In determining whether or not the interest paid
or payable with respect to indebtedness of Borrowers to the Lenders, under any
specific contingency, exceeds the maximum nonusurious rate permitted under
applicable law, the Lenders may, at their option (a) characterize any
non-principal payment as an expense, fee or premium rather than as interest, (b)
exclude voluntary prepayments and the effects thereof, (c) amortize, prorate,
allocate and spread the total amount of interest throughout the full term of
such indebtedness so that the actual rate of interest on account of such
indebtedness does not exceed the maximum amount permitted by applicable law,
and/or (d) allocate interest between portions of the Obligations, to the end
that no such portion shall bear interest at a rate greater than that permitted
by law. Notwithstanding the foregoing, if for any period of time interest on any
Obligations is calculated at the Maximum Rate rather than the applicable rate
under this Agreement, and thereafter such applicable rate becomes less than the
Maximum Rate, the rate of interest payable on such Obligations shall remain at
the Maximum Rate until each Lender shall have received the amount of interest
which such Lender would have received during such period on such Obligations had
the rate of interest not been limited to the Maximum Rate during such period.

2.3      Fees.

     A. Commitment  Fees.  Borrowers agree to pay to Agent,  for distribution to
each Lender in  proportion  to that  Lender's Pro Rata Share of the  Revolving A
Loan  Commitments  or the  Revolving  B Loan  Commitments,  as the  case may be,
commitment  fees for the  period  from and  including  the  Closing  Date to and
excluding the applicable Revolving Loan Commitment Termination Date in an amount
equal to the  average  of the daily  excess  of the  applicable  Revolving  Loan
Commitments over the applicable Total  Utilization of Revolving Loan Commitments
(the "Unused  Portion")  multiplied by a rate per annum equal to the  percentage
(the  "Commitment  Fee  Percentage")  set forth  ----------  in the table  below
opposite the Unused Portion for the applicable month, such commitment fees to be
calculated  on the basis of a 360-day year and the actual number of days elapsed
and to be payable  monthly in  arrears  on the last  Business  Day of each month
commencing  on the first such date to occur after the Closing  Date,  and on the
applicable Revolving Loan Commitment Termination Date.

     --------------------------------------------- -----------------------------
                      Unused Portion                  Commitment Fee Percentage
     --------------------------------------------- -----------------------------
     --------------------------------------------- -----------------------------
     Less than 33.3%                                            0.50%
     --------------------------------------------- -----------------------------
     --------------------------------------------- -----------------------------
     Equal to or greater than 33.3% but less than
     66.6%                                                      0.75%
     --------------------------------------------- -----------------------------
     --------------------------------------------- -----------------------------
     Equal to or greater than 66.6%                             1.00%
     --------------------------------------------- -----------------------------


     B. Other  Fees.  Borrowers  agree to pay to Agents such fees in the amounts
and at the times separately agreed upon between Borrowers and Agents.

     2.4 Repayments,  Prepayments and Reductions in Revolving Loan  Commitments;
         -----------------------------------------------------------------------
         General Provisions Regarding Payments; Application of
         -----------------------------------------------------
         Proceeds of Collateral and Payments Under Subsidiary Guaranty.
         --------------------------------------------------------------

     A. Scheduled  Payments of Term Loans and Scheduled  Reductions of Revolving
Loan Commitments.

     (i)  Scheduled  Payments  of Term  Loans.  Borrowers  shall make  principal
          --------------------------------
          payments   on  the  Term   Loans   in   installments   on  the   dates
          and in the amounts set forth below:

                         Date                            Scheduled Repayment
                         ----                            -------------------
                  May 31, 2002                              $10,000,000
                  August 31, 2002                           $10,000,000
                  November 30, 2002                         $10,000,000
                  February 28, 2003                         $10,000,000
                  May 31, 2003                              $15,000,000
                  August 31, 2003                           $15,000,000
                  November 30, 2003                         $15,000,000
                  February 29, 2004                         $65,000,000


; provided that the scheduled installments of principal of the Term Loans set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans in accordance with subsection 2.4B(iv); and
provided, further that the Term Loans and all other amounts owed hereunder with
respect to the Term Loans shall be paid in full no later than February 29, 2004,
and the final installment payable by Borrowers in respect of the Term Loans on
such date shall be in an amount, if such amount is different from that specified
above, sufficient to repay all amounts owing by Borrowers under this Agreement
with respect to the Term Loans.

(ii)     Scheduled Reductions of Revolving Loan Commitments.
         --------------------------------------------------

     (a)  The Revolving Loan  Commitments  shall be  permanently  reduced on the
          dates and in the amounts set forth below:

                              Date                      Scheduled Reduction
                              ----                      -------------------
                  February 28, 2005                          $50,000,000
                  February 28, 2006                          $50,000,000
                  February 28, 2007                         $250,000,000


; provided that the scheduled reductions of the Revolving Loan Commitments set
forth above shall be reduced in connection with any voluntary reductions of the
Revolving Loan Commitments in accordance with subsection 2.4B(iv). The scheduled
reductions to the Revolving Loan Commitments as set forth above shall be
allocated between the Revolving A Loan Commitments and the Revolving B Loan
Commitments on a pro rata basis based on the aggregate Revolving Loan
Commitments. Any decreases in the Revolving B Loan Commitments pursuant to
subsection 2.4B(iii)(j) or pursuant to the definition of "Revolving B Loan
Commitment Termination Date" shall decrease the scheduled reductions to the
Revolving Loan Commitments set forth above on a pro rata basis. Any increases in
the Revolving A Loan Commitments pursuant to subsection 2.1A(iii) shall increase
the scheduled reductions to the Revolving Loan Commitments set forth above on a
pro rata basis.

(b)               Revolving B Loan Commitments. The Revolving B Loan Commitments
                  shall be permanently reduced on February 28, 2005, by the
                  amount of $31,000,000; provided that such scheduled reduction
                  of the Revolving B Loan Commitments shall be reduced in
                  connection with any voluntary reductions of the Revolving B
                  Loan Commitments in accordance with subsection 2.4B(iv).

B.       Prepayments of Loans and Reductions in Revolving Loan Commitments.

     (i)  Voluntary Prepayments.  Borrowers may, upon not less than one Business
          ---------------------
          Day's   prior   written   or   telephonic    notice,   in   the   case
          of Base Rate Loans,  and three  Business  Days'
          prior written or  telephonic  notice,  in the case of Eurodollar  Rate
          Loans,  in each case given to Agent by 12:00 Noon (New York City time)
          on the date required and, if given by telephone, promptly confirmed in
          writing to Agent (which  original  written or telephonic  notice Agent
          will promptly  transmit by  telefacsimile  or telephone to each Lender
          for the Loans to be prepaid), at any time and from time to time prepay
          any Term Loans or  Revolving  Loans on any Business Day in whole or in
          part in an aggregate  minimum amount of $1,000,000 in the case of Base
          Rate Loans and $5,000,000 in the case of Eurodollar Rate Loans and, in
          each case,  multiples of $500,000 in excess of that amount;  provided,
                                                                       ---------
          however,  that a  Eurodollar  Rate Loan may only be  prepaid   on the
          -------
          expiration of the Interest  Period  applicable  thereto
          unless  Borrowers pay all amounts  owing to Lenders  under  subsection
          2.6D.  Notice  of  prepayment  having  been  given as  aforesaid,  the
          principal  amount of the Loans  specified  in such notice shall become
          due and payable on the  prepayment  date specified  therein.  Any such
          voluntary  prepayment  shall be applied  as  specified  in  subsection
          2.4B(iv).

     (ii)  Voluntary  Reductions of Revolving Loan  Commitments.  Borrowers may,
           --------------------------------------------------
     upon   not   less   than   three    Business   Days'   prior   written   or
          telephonic    notice
     confirmed in writing to Agent (which original written or telephonic  notice
     Agent  will  promptly  transmit  by  telefacsimile  or  telephone  to  each
     Revolving Lender),  at any time and from time to time terminate in whole or
     permanently reduce in part, without premium or penalty,  the Revolving Loan
     Commitments  in an amount up to the  amount  by which  the  Revolving  Loan
     Commitments  exceed the Total  Utilization of Revolving Loan Commitments at
     the time of such proposed termination or reduction;  provided that any such
                                                          --------
     partial reduction of the Revolving Loan  Commitments shall be in an
     aggregate  minimum amount of $1,000,000 and multiples of $500,000 in excess
     of that amount.  Borrowers' notice to Agent shall designate the date (which
     shall be a Business Day) of such termination or reduction and the amount of
     any partial  reduction,  and such termination or reduction of the Revolving
     Loan  Commitments  shall be effective on the date  specified in  Borrowers'
     notice and shall reduce the Revolving  Loan  Commitment  of each  Revolving
     Lender  proportionately to its Pro Rata Share. Any such voluntary reduction
     of the  Revolving  Loan  Commitments  shall  be  applied  as  specified  in
     subsection 2.4B(iv).

(iii)             Mandatory Prepayments of Loans. The Loans shall be prepaid in
                  the amounts and under the circumstances set forth below, all
                  such prepayments to be applied as set forth below or as more
                  specifically provided in subsection 2.4B(iv):

(a)               Prepayments From Net Asset Sale Proceeds. No later than the
                  first Business Day following the date of receipt by Borrowers
                  or any of their Restricted Subsidiaries of any Net Asset Sale
                  Proceeds in respect of any Asset Sale, Borrowers shall prepay
                  the Loans in an aggregate amount equal to such Net Asset Sale
                  Proceeds.

(b)               Prepayments from Net Insurance/ Condemnation Proceeds. No
                  later than the first Business Day following the date of
                  receipt by Agent or by Borrowers or any of their Restricted
                  Subsidiaries of any Net Insurance/Condemnation Proceeds that
                  are required to be applied to prepay the Loans pursuant to the
                  provisions of subsection 6.4C, Borrowers shall prepay the
                  Loans in an aggregate amount equal to the amount of such Net
                  Insurance/Condemnation Proceeds.

(c)               Prepayments Due to Issuance of Equity Securities. No later
                  than the first Business Day following the date of receipt of
                  Net Securities Proceeds from the issuance of any equity
                  Securities of Borrowers or any of their Restricted
                  Subsidiaries after the Closing Date (other than cash proceeds
                  from issuance of equity interests to Members, cash proceeds
                  from equity interests in Company issued to officers and
                  employees of Borrowers and their Subsidiaries pursuant to
                  option plans or similar plans or agreements adopted by
                  Company's Governing Body and cash proceeds from the issuance
                  of equity interests by Borrowers and their Restricted
                  Subsidiaries to Borrowers and their Restricted Subsidiaries),
                  Borrowers shall prepay the Loans in an aggregate amount equal
                  to such Net Securities Proceeds.

     (d)  Prepayments Due to Issuance of  Indebtedness.  No later than the first
           -------------------------------------------
Business    Day    following    the    date    of    receipt    of    the    Net
Securities   Proceeds   from   the
issuance  of  any   Indebtedness  of  Borrowers  or  any  of  their   Restricted
Subsidiaries after the Closing Date, other than Indebtedness  permitted pursuant
to subsection 7.1 as in effect on the Closing Date,  Borrowers  shall prepay the
Loans in an aggregate  amount equal to such Net  Securities  Proceeds;  provided
                                                                        --------
however,  that  notwithstanding  the foregoing,  the following
-------
provisions shall apply with respect to the Subordinated  Debenture Bonds and the
Subordinated  Investment  Certificates:  no later  than the tenth  Business  Day
following  the last day of each  Fiscal  Quarter  following  the  Closing  Date,
Borrowers  shall  prepay  the  Loans  in an  aggregate  amount  equal to the Net
Securities  Proceeds received from the issuance of Subordinated  Indebtedness in
such Fiscal Quarter to the extent but only to the extent the aggregate principal
amount of such Subordinated  Indebtedness  issued in such Fiscal Quarter exceeds
the sum of (i) the aggregate amount of the scheduled principal amortization paid
with respect to  Subordinated  Indebtedness in such Fiscal Quarter plus (ii) the
aggregate  Mandatory  Redemption  Amounts paid with respect to the  Subordinated
Indebtedness in such Fiscal Quarter plus (iii) the aggregate principal amount of
all Subordinated  Indebtedness  irrevocably called for redemption by the Company
pursuant to subsection 7.5(i)(D) in such Fiscal Quarter.

     (e) Prepayments and Reductions from  Consolidated  Excess Cash Flow. In the
         ---------------------------------------------------------------
event that there  shall be  Consolidated  Excess  Cash Flow for any Fiscal  Year
(commencing with Fiscal Year ending August 31, 2002),  Borrowers shall, no later
than 95 days after the end of such  Fiscal  Year,  prepay the Loans by an amount
equal to such Consolidated Excess Cash Flow.

     (f)  Calculations  of Net  Proceeds  Amounts;  Additional  Prepayments  and
          ----------------------------------------------------------------------
Reductions      Based     on     Subsequent      Calculations.      Concurrently
-------------------------------------------------------------
with any  prepayment  of the Loans  pursuant  to  subsections  2.4B(iii)(a)-(e),
Borrowers  shall  deliver to Agent an Officer's  Certificate  demonstrating  the
calculation  of the  amount of the  applicable  Net  Asset  Sale  Proceeds,  Net
Insurance/Condemnation  Proceeds,  Net  Securities  Proceeds,  or the applicable
Consolidated  Excess  Cash  Flow,  as the case may be,  that  gave  rise to such
prepayment.  In the event that Borrowers shall  subsequently  determine that the
actual  amount  was  greater  than  the  amount  set  forth  in  such  Officer's
Certificate, Borrowers shall promptly make an additional prepayment of the Loans
in  an  amount  equal  to  the  amount  of  such  excess,  and  Borrowers  shall
concurrently  therewith deliver to Agent an Officer's Certificate  demonstrating
the derivation of the additional  amount resulting in such excess.  In addition,
in  connection  with  any  prepayment  of  the  Loans  pursuant  to  subsections
2.4B(iii)(a),  (b) or (c) and  notwithstanding the fact that any such Asset Sale
may have involved the sale of Capital Stock,  such Officer's  Certificate  shall
set  forth  the  amount  of  the  applicable   Net  Asset  Sale  Proceeds,   Net
Insurance/Condemnation  Proceeds or Net Securities Proceeds which, in Borrowers'
good faith  judgment  and subject to  Requisite  Lenders'  reasonable  approval,
constitutes   Working  Capital   Collateral,   Pari  Passu  Collateral  and  PPE
Collateral, as applicable.

     (g) Prepayments Due to Restrictions of Revolving Loan Commitments or Due to
Insufficient  Borrowing  Base.  Borrowers  shall  from time to time  prepay  the
applicable  Revolving  Loans  to the  extent  necessary  (1) so that  the  Total
Utilization  of  Revolving A Loan  Commitments  shall not at any time exceed the
Revolving A Loan Commitments then in effect,  (2) so that the Total  Utilization
of  Revolving B Loan  Commitments  shall not at any time exceed the  Revolving B
Loan Commitments then in effect,  (3) so that the Total Utilization of Revolving
Loan  Commitments  shall not at any time exceed the Revolving  Loan  Commitments
then  in  effect,  and (4) so that  the  Total  Utilization  of  Revolving  Loan
Commitments shall not exceed at any time the Borrowing Base then in effect.

     (h)  Prepayments  of  Revolving  Loans  from  Amounts  Transferred  to BTCo
          ----------------------------------------------------------------------
Account.  If any amounts are transferred to the BTCo Account on any Business Day
-------
pursuant to the terms of any Lock Box  Agreement,  then on such Business Day, if
such amounts are  transferred  to the BTCo Account  prior to 1:00 p.m. (New York
time) on such  Business  Day, or on the next  succeeding  Business  Day, if such
amounts  are  transferred  to the BTCo  Account on or after 1:00 p.m.  (New York
time) on such Business Day, Borrowers shall prepay Borrowers' Revolving Loans in
an amount equal to the amount  transferred  to the BTCo Account  pursuant to the
terms of the  applicable  Lock Box Agreement on such Business Day (to the extent
such amount relates to payments  received in respect of Accounts of Borrowers or
any of their Restricted  Subsidiaries)  until all of Borrowers'  Revolving Loans
shall have been paid in full.

     (i) Deposit of Prepayment Amounts into Collateral Account.  Notwithstanding
         -----------------------------------------------------
the  foregoing  subsections  2.4B(iv)(a)  through  (e),  if  the  making  of any
prepayments required thereunder shall cause the Borrowers to prepay a Eurodollar
Rate Loan and incur breakage and other costs pursuant to subsection  2.6D, then,
provided that there is no Event of Default or Potential  Event of Default on the
date of such  prepayment,  Borrowers  may  instead  deposit  the  amount of such
required prepayment into the Collateral Account and Agent shall thereafter apply
such funds in the Collateral  Account to the repayment of the  applicable  Loans
upon the expiration of the  applicable  Eurodollar  Rate Loan Interest  Periods;
provided,   that  (a)  Agent  shall  have  no   liability  in  the  event  of  a
--------
misapplication of such funds and (b) upon the  occurrence of an Event of
Default  or  Potential  Event of  Default,  Agent  may apply  such  funds to the
applicable Eurodollar Rate Loans without notice to Borrowers and Borrowers shall
be liable  under  subsection  2.6D for any  breakage  or other  costs  resulting
therefrom.

     (j)  Prepayments  of  Revolving  B  Loans/Reductions  of  Revolving  B Loan
          ----------------------------------------------------------------------
Commitments. Immediately upon the effectiveness of any increase in the Revolving
-----------
A Loan  Commitments  pursuant  to  subsection  2.1A(iii),  the  Revolving B Loan
Commitments  shall be  permanently  reduced by an amount  equal to the amount of
such increase in the Revolving A Loan Commitments under subsection 2.1A(iii) and
Borrowers  shall  prepay  Revolving B Loans to the extent  necessary so that the
Total  Utilization  of the  Revolving  B Loan  Commitments  shall not exceed the
Revolving B Loan Commitments as so reduced.

(iv)     Application of Prepayments.
         --------------------------

(a) Application of Voluntary Prepayments by Type of Loans and Order of Maturity.
---------------------------------------------------------------------------  Any
voluntary   prepayments  pursuant  tosubsection  2.4B(i)  shall  be  applied  as
specified by Borrowers in the applicable notice of prepayment;  provided that in
the event Borrowers fail to specify the Loans to which any such prepayment shall
be applied,  such prepayment  shall be applied first to repay  outstanding  Term
                                               -----
Loans to the full extent thereof,  and second to repay  outstanding
                                       ------
Revolving  Loans  to  the  full  extent  thereof,   and  provided  further  that
notwithstanding  any  contrary  instruction  by  Borrowers  or  any  failure  by
Borrowers to specify the application thereof, any prepayment shall be applied to
repay  outstanding  Revolving  B Loans to the full  extent  thereof  before  any
repayment of the Revolving A Loans. Any voluntary  prepayments of the Term Loans
pursuant  to  subsection  2.4B(i)  shall be  applied  to  reduce  the  scheduled
installments  of  principal  of the Term Loans set forth in  subsection  2.4A in
forward order of maturity.

(b) Application of Mandatory  Prepayments by Type of Loans. Any amounts required
-----------------------------------------------------   to  be   applied   as  a
mandatory prepayment of the Loans pursuant to subsections 2.4B(iii)(a)-(e) shall
be applied first, to prepay the Term Loans to the full extent  thereof, and
           -----
second,  to the extent of any  remaining  portion of such amount,  to prepay the
------
Revolving  Loans to the  full extent  thereof  (without  any  reduction in
Revolving Loan Commitments);  provided, however, that to the extent any  Net
                              -------- -------
 Asset Sale Proceeds,  Net  Insurance/Condemnation  Proceeds,  or Net
Securities  Proceeds from the issuance of equity Securities  constitute proceeds
of (X)  Working  Capital  Collateral,  then such  amounts  shall be  applied  as
follows:  first, to repay outstanding  Revolving Loans (without any reduction in
          -----
Revolving Loan  Commitments) and second, to the  extent of remaining
                                 ------
amounts,  to repay  outstanding Term Loans to the full extent thereof;  (Y) Pari
Passu Collateral (other than Pari Passu Collateral from the sale of the Refinery
Assets), then such amounts shall be applied on a pro rata basis in proportion to
the amounts then  outstanding to repay (i) outstanding  Revolving Loans (without
any reduction in Revolving Loan Commitments) and (ii) outstanding Term Loans; or
(Z) Pari  Passu  Collateral  from the sale of the  Refinery  Assets;  then  such
amounts shall be applied first,  to repay  outstanding  Revolving Loans (without
                         -----
any   reduction in Revolving Loan  Commitments)  to the full extent thereof

and second, to the extent of remaining amounts,  to repay outstanding Term
    ------
Loans to the full  extent  thereof;  provided,  further,  however,  that any Net
                                     --------   -------   -------
Securities    Proceeds  received  from the issuance of
Subordinated  Indebtedness and required,  pursuant to subsection 2.4B(iii)(d) to
be applied as a mandatory prepayment of the Loans and any amounts required to be
applied  as  mandatory   prepayments   of  the  Loans   pursuant  to  subsection
2.4B(iii)(e)  shall be applied as follows:  50% to repay  outstanding Term Loans
and 50% to repay outstanding Revolving Loans (without any reduction in Revolving
Loan  Commitments)  until  payment in full of the  outstanding  Term Loans,  and
thereafter  100% of such  mandatory  prepayments  shall  be  applied  to  prepay
outstanding   Revolving   Loans   (without  any  reduction  in  Revolving   Loan
Commitments).  Any amounts  required to be applied as a mandatory  prepayment of
the Revolving Loans pursuant to subsections  2.4B(iii)(a)-(e)  and (g)-(h) shall
be applied first to the Revolving B Loans to the full extent thereof,  and after
prepayment of all  outstanding  Revolving B Loans to the extent of any remaining
portion of such amount to the Revolving A Loans.

     (c)  Application  of  Mandatory  Prepayments  of Term  Loans  to  Scheduled
Installments of Principal Thereof.  Any mandatory  prepayments of the Term Loans
pursuant  to  subsection  2.4B(iii)  shall be applied  to reduce  the  scheduled
installments of principal of the Term Loans set forth in subsection 2.4A(i) on a
pro rata basis.

     (d)  Application  of  Prepayments  to Base Rate Loans and  Eurodollar  Rate
Loans. Considering Term Loans and Revolving Loans being prepaid separately,  any
prepayment  thereof shall be applied first to Base Rate Loans to the full extent
thereof before  application to Eurodollar  Rate Loans,  in each case in a manner
which  minimizes  the amount of any  payments  required to be made by  Borrowers
pursuant to subsection 2.6D.

     (e)  Application of Unscheduled  Reductions of Revolving Loan  Commitments.
Any  voluntary  reduction of the  Revolving  Loan  Commitments  pursuant to such
section  2.4B(ii)  shall  be  applied  first  to  reduce  the  Revolving  B Loan
Commitments  to the full  extent  thereof  and  thereafter  to the extent of any
remaining  portion to reduce the  scheduled  reductions  of the  Revolving  Loan
Commitments set forth in subsection 2.4A(ii), in each case in forward order.

C.       General Provisions Regarding Payments.

(i)  Manner  and Time of  Payment.  All  payments  by  Borrowers  of  principal,
     ----------------------------
under the Notes  shall be made in Dollars in same day  funds,  without  defense,
setoff or counterclaim,  free of any restriction or condition,  and delivered to
Agent not  later  than  1:00  p.m.  (New York City  time) on the date due at the
Funding and Payment  Office for the account of Lenders.  Funds received by Agent
after that time on such due date shall be deemed to have been paid by  Borrowers
on the next  succeeding  Business Day. In order to effect timely  payment of any
interest,  fees,  commissions or other amounts due hereunder,  Borrowers  hereby
authorize  Agent to request Daily Funding Lender to make Revolving Loans for its
own account  (subject to settlement  pursuant to subsection 2.1D) in a principal
amount equal to such interest, fees, commissions or other amounts; provided that
                                                                   --------
 Agent  shall not have the right to request  such  Revolving  Loans if,
after giving  effect to such  Revolving  Loans,  (a) the  aggregate  outstanding
principal  amount of Revolving Loans would exceed the Revolving Loan Commitments
then in effect minus the Letter of Credit Usage, or (b) the Total Utilization of
               -----
Revolving Loan Commitments would exceed the  Borrowing Base then in effect.
Daily Funding Lender shall make the amount of such Revolving  Loans (which shall
be made as Base Rate  Loans)  available  to  Agent,  in same day  funds,  at the
Funding and Payment Office, not later than 1:00 P.M. (New York time) on the date
requested by Agent, and Borrowers and Lenders hereby authorize Agent, whether or
not the conditions specified in subsection 4.2 have been satisfied or waived, to
apply the  proceeds  of such  Revolving  Loans  directly  to the payment of such
unpaid  interest,  fees,  commissions or other amounts.  Borrowers  hereby agree
that,  upon the funding of any such  Revolving  Loans by Daily Funding Lender in
accordance with the provisions of this subsection 2.4C(i),  Borrowers shall have
effected Revolving Loans hereunder, which Revolving Loans shall for all purposes
of this Agreement be deemed to have been made by Daily Funding  Lender  pursuant
to and in accordance  with the  provisions of subsection  2.1C(ii).  Agent shall
deliver  prompt  notice to  Borrowers  of the  amount of  Revolving  Loans  made
pursuant to this  subsection  2.4C together with copies of all invoices or other
statements  evidencing  the fees,  commissions  or other  amounts due  hereunder
(other  than  interest)  paid with the  proceeds  of such  Revolving  Loans.  In
addition,  Borrowers hereby authorize Agent to charge its accounts with Agent in
order to cause timely  payment to be made to Agent of all  principal,  interest,
fees and expenses due hereunder  (subject to sufficient funds being available in
its accounts for that purpose).

(ii)  Application  of Payments to Principal and Interest.  Except as provided in
      --------------------------------------------------
subsection  2.2C,  all payments in respect of the  principal  amount of any Loan
shall include payment of accrued  interest on the principal  amount being repaid
or prepaid, and all such payments (and, in any event, any payments in respect of
any Loan on a date when  interest is due and payable  with respect to such Loan)
shall be applied to the payment of interest before application to principal.

(iii)  Apportionment of Payments.  Aggregate  principal and interest payments in
       -------------------------
respect of Term Loans and  Revolving  Loans  shall be
apportioned  among all outstanding  Loans to which such payments relate, in each
case  proportionately  to  Lenders'  respective  Pro Rata  Shares of such Loans;
provided  that (i)  payments  of  principal  in respect of the  Revolving  Loans
--------
  pursuant  to  subsection  2.4B(iii)(h)  shall be applied to reduce the
outstanding  Revolving  Loans of Daily  Funding  Lender  (subject to  settlement
pursuant to subsection  2.1D) prior to application to the outstanding  Revolving
Loans of any other Lender and (ii)  payments of interest in respect of Revolving
Loans which are Base Rate Loans shall be  apportioned  ratably  among Lenders in
proportion  to the average  daily  amount of such Base Rate Loans of each Lender
outstanding  during the period in which such interest shall have accrued.  Agent
shall promptly distribute to each Lender, at its primary address set forth below
its name on the  appropriate  signature  page hereof or at such other address as
such Lender may  request,  its Pro Rata Share of all such  payments  received by
Agent in respect of Loans and the  commitment  fees of such Lender when received
by Agent pursuant to subsection 2.3. Notwithstanding the foregoing provisions of
this subsection  2.4C(iii),  if, pursuant to the provisions of subsection  2.6C,
any Notice of  Conversion/Continuation is withdrawn as to any Affected Lender or
if any  Affected  Lender  makes Base Rate Loans in lieu of its Pro Rata Share of
any  Eurodollar  Rate Loans,  Agent shall give  effect  thereto in  apportioning
payments received thereafter.

(iv) Payments on Business Days.  Whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business  Day,  such payment shall be
made on the next  succeeding  Business  Day and such  extension of time shall be
included  in the  computation  of the payment of  interest  hereunder  or of the
commitment fees hereunder, as the case may be.

(v) Notation of Payment.  Each Lender  agrees that before  disposing of any Note
held by it, or any part thereof (other than by granting participations therein),
that Lender will make a notation thereon of all Loans evidenced by that Note and
all principal payments previously made thereon and of the date to which interest
thereon  has been paid;  provided  that the failure to make (or any error in the
making  of) a  notation  of any Loan made  under  such  Note  shall not limit or
otherwise affect the obligations of Borrowers  hereunder or under such Note with
respect to any Loan or any payments of principal or interest on such Note.

D.       Application of Proceeds of Collateral and Payments under Guaranties.

(i)               Proceeds of Collateral. All proceeds received by Agent in
                  ----------------------
                  respect of any sale of, collection from, or other realization
                  by Agent upon all or any part of the Collateral under any
                  Collateral Document may, in the discretion of Agent, be held
                  by Agent as Collateral for, and/or (then or at any time
                  thereafter) applied in full or in part by Agent against, the
                  applicable Secured Obligations (as defined in such Collateral
                  Document), in each case in the following order of priority:

(a)               to the payment of all costs and expenses of such sale,
                  collection or other realization, all other expenses,
                  liabilities and advances made or incurred by Agent in
                  connection therewith, and all amounts for which Agent is
                  entitled to compensation (including the fees described in
                  subsection 2.3), reimbursement and indemnification under any
                  Loan Document and all advances made by Agent thereunder for
                  the account of the applicable Loan Party, and to the payment
                  of all costs and expenses paid or incurred by Agent in
                  connection with the Loan Documents, all in accordance with
                  subsections 9.4, 10.2 and 10.3 and the other terms of this
                  Agreement and the Loan Documents;

     (b)  thereafter (A) excess  proceeds of Working  Capital  Collateral  shall
first be applied to pay in full  Obligations  in respect  of Revolving Loan
-----
Commitments  (including  the cash  collateralization  of issued and  outstanding
Letters of Credit), then second, to the extent of any amounts remaining,  to pay
                         ------
in full  Obligations  in  respect of Term  Loans,  in each    case for the
ratable benefit of the holders thereof  (subject to the provisions of subsection
2.4C(ii) hereof), and then third, to the extent of any amounts remaining, to pay
                           -----
in full  obligations in respect of Lender Hedge   Agreements,  in each case
for the ratable  benefit of the  holders  thereof;  (B) excess  proceeds of Pari
Passu  Collateral  shall  first be  applied  ratably in  proportion  to the then
                          -----
outstanding  amounts  to pay in full the   Obligations  in  respect of Term
Loans and Revolving Loan Commitments  (including the cash  collateralization  of
issued and  outstanding  Letters of Credit) in each case for the ratable benefit
of the holders thereof (subject to the provisions of subsection  2.4C(ii) hereof
and then second, to the extent of any amounts  remaining,  to pay in full
         ------
obligations in respect of Lender Hedge Agreements,  in each case for the ratable
benefit of the holders thereof;  and (C) excess proceeds of PPE Collateral shall
first be applied to pay in full Obligations in respect of Term Loans,  then
-----
second,  to the extent of amounts  remaining,  to pay  Obligations in respect of
------
Revolving  Loan  Commitments    (including the cash  collateralization  of
issued and outstanding  Letters of Credit), in each case for the ratable benefit
of the  holders  thereof  (subject  to the  provisions  of  subsection  2.4C(ii)
hereof), and then third, to the  extent of any amounts remaining, to pay in
                  -----
full  obligations  in respect of Lender Hedge  Agreements,  in each case for the
ratable benefit of the holders thereof; and

(c)               thereafter, to the extent of any such excess proceeds, to the
                  payment to or upon the order of such Loan Party or to
                  whosoever may be lawfully entitled to receive the same or as a
                  court of competent jurisdiction may direct.

     (ii)  Application of Payments Under  Guaranties.  All payments  received by
           ----------------------------------------
Agent     under     the     Subsidiary     Guaranty     shall     be     applied
promptly from time to time by Agent in the following order of priority:

     (a) To the  payment of the costs and  expenses of any  collection  or other
realization under the Subsidiary Guaranty,  all other expenses,  liabilities and
advances made or incurred by Agent in connection therewith,  and all amounts for
which  Agent is  entitled  to  compensation  (including  the fees  described  in
subsection 2.3), reimbursement and indemnification under the Subsidiary Guaranty
or any Loan Document and all advances made by Agent  thereunder  for the account
of the applicable  Subsidiary Guarantor or Loan Party, and to the payment of all
costs and expenses paid or incurred by Agent in connection  with the  Subsidiary
Guaranty and the Loan Documents,  all in accordance with  subsections  9.4, 10.2
and 10.3 and the other terms of this Agreement, the Subsidiary Guaranty and Loan
Documents;

     (b)  thereafter (A) excess  proceeds of Working  Capital  Collateral  shall
first be applied to pay in full  Obligations in respect  of  Revolving Loan
-----
Commitments  (including  the cash  collateralization  of issued and  outstanding
Letters of Credit), then second, to the extent of any amounts remaining,  to pay
                         ------
in full  Obligations  in  respect  of Term  Loans,  in each case   for the
ratable benefit of the holders thereof  (subject to the provisions of subsection
2.4C(ii) hereof), and then third, to the extent of any amounts remaining, to pay
                           -----
in full  obligations in respect of Lender Hedge  Agreements,  in  each case
for the ratable  benefit of the  holders  thereof;  (B) excess  proceeds of Pari
Passu  Collateral shall first be applied ratably in proportion to the then
                        -----
outstanding  amounts to pay in full the Obligations in respect of Term Loans and
Revolving Loan Commitments  (including the cash  collateralization of issued and
outstanding  Letters  of  Credit)  in each case for the  ratable  benefit of the
holders  thereof  (subject to the provisions of subsection  2.4C(ii)  hereof and
then second, to the extent of any amounts remaining,  to pay in full obligations
     ------
in respect  of  Lender  Hedge  Agreements,  in each case for the  ratable
benefit of the holders thereof;  and (C) excess proceeds of PPE Collateral shall
first be applied to pay in full  Obligations  in  respect  of Term  Loans,  then
-----
second, to the extent of  amounts  remaining,  to pay Obligations in
------
respect of Revolving Loan Commitments  (including the cash  collateralization of
issued and outstanding  Letters of Credit), in each case for the ratable benefit
of the  holders  thereof  (subject  to the  provisions  of  subsection  2.4C(ii)
hereof), and then third, to the extent of any amounts remaining, to pay in
                  -----
full  obligations  in respect of Lender Hedge  Agreements,  in each case for the
ratable benefit of the holders thereof; and

     (c) thereafter,  to the extent of any such excess payments,  to the payment
to the applicable  Subsidiary Guarantor or to whosoever may be lawfully entitled
to receive the same or as a court of competent jurisdiction may direct.

2.5      Use of Proceeds.
         ---------------

     A.  Term  Loans.  The  proceeds  of the  Term  Loans,  together  with up to
$193,000,000  in  proceeds of the  initial  Revolving  Loans shall be applied by
Borrowers to refinance the Indebtedness under the Existing Credit Agreement,  to
consummate the Synthetic Lease  Restructuring,  and to pay Transaction  Costs in
connection therewith and in connection with the consummation of the transactions
contemplated by this Agreement.

     B.  Revolving  Loans.  The proceeds of Revolving  Loans shall be applied by
Borrowers for the purposes set forth in subsection  2.5A and for working capital
and  other  general  corporate  purposes,   which  may  include  the  making  of
intercompany loans to any of Borrowers' wholly-owned Restricted Subsidiaries, in
accordance with subsection 7.1(iv), for their own general corporate purposes.

     C. Margin  Regulations.  No portion of the proceeds of any borrowing  under
this  Agreement  shall  be  used  by  Borrowers  or  any  of  their   Restricted
Subsidiaries  in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the  Exchange  Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.

2.6      Special Provisions Governing Eurodollar Rate Loans.
         --------------------------------------------------

                  Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:

A. Determination of Applicable Interest Rate. As soon as practicable after 10:00
A.M. (New York City time) on each Interest Rate Determination Date, Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply to
the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to Borrowers and each Lender.

B. Inability to Determine Applicable Interest Rate. In the event that Agent
shall have determined (which determination shall be final, conclusive and
binding upon all parties hereto), on any Interest Rate Determination Date with
respect to any Eurodollar Rate Loans that by reason of circumstances affecting
the interbank Eurodollar market adequate and fair means do not exist for
ascertaining the interest rate applicable to such Loans on the basis provided
for in the definition of Adjusted Eurodollar Rate, Agent shall on such date give
notice (by telefacsimile or by telephone confirmed in writing) to Borrowers and
each Lender of such determination, whereupon (i) no Loans may be made as, or
converted to, Eurodollar Rate Loans until such time as Agent notifies Borrowers
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Borrowers with respect to the Loans in respect of which such determination was
made shall be deemed to be for a Base Rate Loan.

C. Illegality or Impracticability of Eurodollar Rate Loans. In the event that on
any date any Lender shall have determined (which determination shall be
conclusive and binding upon all parties hereto but shall be made only after
consultation with Borrowers and Agent) that the making, maintaining or
continuation of its Eurodollar Rate Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Lender material hardship, as a result
of contingencies occurring after the date of this Agreement which materially and
adversely affect the interbank Eurodollar market or the position of such Lender
in that market, then, and in any such event, such Lender shall be an "Affected
Lender" and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to Borrowers and Agent of such determination (which notice
Agent shall promptly transmit to each other Lender). Thereafter (a) the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by
the Affected Lender, (b) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by Borrowers pursuant to
a Notice of Borrowing or a Notice of Conversion/Continuation, the Affected
Lender shall make such Loan as (or convert such Loan to, as the case may be) a
Base Rate Loan, (c) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate Loans (the "Affected Loans") shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being requested
by Borrowers pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Borrowers shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Agent of such rescission on the date on
which the Affected Lender gives notice of its determination as described above
(which notice of rescission Agent shall promptly transmit to each other Lender).
Except as provided in the immediately preceding sentence, nothing in this
subsection 2.6C shall affect the obligation of any Lender other than an Affected
Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate
Loans in accordance with the terms of this Agreement.

D. Compensation For Breakage or Non-Commencement of Interest Periods. Borrowers
shall compensate each Lender, upon written request by that Lender pursuant to
subsection 2.8 (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including,
without limitation, any interest paid by that Lender to lenders of funds
borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense
or liability sustained by that Lender in connection with the liquidation or
re-employment of such funds) which that Lender may sustain: (i) if for any
reason (other than a default by that Lender) a borrowing of any Eurodollar Rate
Loan does not occur on a date specified therefor in a Notice of Borrowing or a
telephonic request for borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment (including any prepayment or conversion occasioned by the
circumstances described in subsection 2.6C) or other principal payment or any
conversion of any of its Eurodollar Rate Loans occurs on a date prior to the
last day of an Interest Period applicable to that Loan, (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by Borrowers, or (iv) as a consequence of any other
default by Borrowers in the repayment of its Eurodollar Rate Loans when required
by the terms of this Agreement.

E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or transfer
Eurodollar Rate Loans at, to, or for the account of any of its branch offices or
the office of an Affiliate of that Lender; provided however, that other than in
connection with any costs payable by Borrowers pursuant to subsection 2.6D,
Borrowers shall not be liable for any increased or additional costs as a result
of any such transfer or re-booking of Eurodollar Rate Loans by a Lender.

F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of all
amounts payable to a Lender under this subsection 2.6 and under subsection 2.7A
shall be made as though that Lender had funded each of its Eurodollar Rate Loans
through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate in
an amount equal to the amount of such Eurodollar Rate Loan and having a maturity
comparable to the relevant Interest Period, whether or not its Eurodollar Rate
Loans had been funded in such manner.

G. Eurodollar Rate Loans After Default. After the occurrence of and during the
continuation of a Potential Event of Default or an Event of Default, (i)
Borrowers may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Borrowers with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed for a Base Rate Loan or, if the conditions to making a
Loan set forth in subsection 4.2 cannot then be satisfied, to be rescinded by
Borrowers.

2.7      Increased Costs; Taxes; Capital Adequacy.
         ----------------------------------------

A. Compensation for Increased Costs. Subject to the provisions of subsection
2.7B (which shall be controlling with respect to the matters covered thereby),
in the event that any Lender (including any Issuing Lender) shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or other Government Authority, in each case that becomes effective after
the date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
Government Authority (whether or not having the force of law):

          (i) subjects  such Lender to any  additional  Tax with respect to this
          Agreement or any of its obligations  hereunder (including with respect
          to issuing or  maintaining  any  Letters  of Credit or  purchasing  or
          maintaining any  participations  therein or maintaining any Commitment
          hereunder) or any payments to such Lender of principal, interest, fees
          or any other amount payable hereunder; or

          (ii)  imposes,  modifies  or holds  applicable  any  reserve,  special
          deposit,  compulsory  loan,  insurance  charge or similar  requirement
          against assets held by, or deposits or other liabilities in or for the
          account of, or advances or loans by, or other  credit  extended by, or
          any other  acquisition  of funds by, any office of such Lender  (other
          than any such reserve or other requirements with respect to Eurodollar
          Rate Loans that are reflected in the definition of Adjusted Eurodollar
          Rate);

and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Loans or Commitments or agreeing to
issue, issuing or maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce any amount
received or receivable by such Lender with respect thereto; then, in any such
case, Borrowers shall promptly pay to such Lender, upon receipt of the statement
referred to in subsection 2.8A, such additional amount or amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender, in its sole discretion, shall determine) as may be
necessary to compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder.

B.       Taxes.

(i)               Payments to Be Free and Clear. All sums payable by Borrowers
                  under this Agreement and the other Loan Documents shall be
                  paid free and clear of, and without any deduction or
                  withholding on account of, any Tax imposed, levied, collected,
                  withheld or assessed by or within the United States of America
                  or any political subdivision in or of the United States of
                  America or any other jurisdiction from or to which a payment
                  is made by or on behalf of Borrowers or by any federation or
                  organization of which the United States of America or any such
                  jurisdiction is a member at the time of payment.

(ii)              Grossing-up of Payments. If Borrowers or any other Person is
                  required by law to make any deduction or withholding on
                  account of any such Tax from any sum paid or payable by
                  Borrowers to Agent or any Lender under any of the Loan
                  Documents:

                         (a)   Borrowers   shall   notify   Agent  of  any  such
                    requirement or any change in any such requirement as soon as
                    Borrowers become aware of it;

                         (b)  Borrowers  shall pay any such Tax when such Tax is
                    due,  such  payment to be made (if the  liability  to pay is
                    imposed  on  Borrowers)  for its  own  account  or (if  that
                    liability  is imposed on Agent or such  Lender,  as the case
                    may  be) on  behalf  of and in the  name  of  Agent  or such
                    Lender;

                         (c) the sum  payable by  Borrowers  in respect of which
                    the relevant  deduction,  withholding or payment is required
                    shall be increased  to the extent  necessary to ensure that,
                    after the making of that deduction,  withholding or payment,
                    Agent or such  Lender,  as the case may be,  receives on the
                    due date a net sum equal to what it would have  received had
                    no such  deduction,  withholding or payment been required or
                    made; and

                         (d) within 30 days  after  paying any sum from which it
                    is required by law to make any deduction or withholding, and
                    within  30 days  after  the due date of  payment  of any Tax
                    which it is required  by clause (b) above to pay,  Borrowers
                    shall deliver to Agent  evidence  satisfactory  to the other
                    affected  parties of such deduction,  withholding or payment
                    and of the  remittance  thereof  to the  relevant  taxing or
                    other authority;

provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after the
date on which such Lender became a Lender in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date on which such Lender became a Lender, in respect of payments
to such Lender.

(iii)    Evidence of Exemption from U.S. Withholding Tax.
         -----------------------------------------------

          (a) Each Lender that is organized  under the laws of any  jurisdiction
     other than the United  States or any state or other  political  subdivision
     thereof (for  purposes of this  subsection  2.7B(iii),  a "Non-US  Lender")
     shall  deliver to Agent and to  Borrowers,  on or prior to the Closing Date
     (in the case of each Lender listed on the signature  pages hereof) or on or
     prior to the date of the Assignment  Agreement pursuant to which it becomes
     a Lender (in the case of each other Lender), and at such other times as may
     be  necessary  in the  determination  of  Borrowers  or Agent  (each in the
     reasonable  exercise of its  discretion),  two original  copies of Internal
     Revenue  Service Form W-8BEN or W-8ECI (or any  successor  forms)  properly
     completed  and duly  executed  by such  Lender,  together  with  any  other
     certificate or statement of exemption  required under the Internal  Revenue
     Code or the regulations  issued thereunder to establish that such Lender is
     not subject to United States  withholding  tax with respect to any payments
     to such Lender of interest payable under any of the Loan Documents.

          (b) Each  Non-US  Lender  hereby  agrees,  from time to time after the
     initial delivery by such Lender of such forms,  whenever a lapse in time or
     change in circumstances renders such forms,  certificates or other evidence
     so delivered  obsolete or  inaccurate  in any material  respect,  that such
     Lender shall  promptly  (1) deliver to Agent and to Borrowers  two original
     copies of renewals,  amendments or additional or successor forms,  properly
     completed  and duly  executed  by such  Lender,  together  with  any  other
     certificate  or  statement  of  exemption  required  in order to confirm or
     establish that such Lender is not subject to United States  withholding tax
     with  respect to payments to such Lender  under the Loan  Documents  or (2)
     notify  Agent and  Borrowers  of its  inability  to deliver any such forms,
     certificates or other evidence.

          (c) Borrowers  shall not be required to pay any  additional  amount to
     any Non-US  Lender under clause (c) of  subsection  2.7B(ii) if such Lender
     shall have  failed to satisfy the  requirements  of clause (a) or (b)(1) of
     this  subsection  2.7B(iii);  provided  that  if  such  Lender  shall  have
     satisfied  the  requirements  of subsection  2.7B(iii)(a)  on the date such
     -------- Lender became a Lender,  nothing in this  subsection  2.7B(iii)(c)
     shall relieve  Borrowers of its  obligation to pay any amounts  pursuant to
     subsection  2.7B(ii)(c) in the event that, as a result of any change in any
     applicable law, treaty or  governmental  rule,  regulation or order, or any
     change in the interpretation,  administration or application thereof,  such
     Lender is no longer  properly  entitled to deliver forms,  certificates  or
     other evidence at a subsequent date  establishing the fact that such Lender
     is not subject to withholding as described in subsection 2.7B(iii)(a).

     C. Capital  Adequacy  Adjustment.  If any Lender shall have determined that
the adoption, effectiveness,  phase-in or applicability after the date hereof of
any  law,  rule or  regulation  (or any  provision  thereof)  regarding  capital
adequacy,  or any change  therein  or in the  interpretation  or  administration
thereof  by  any  Government   Authority  charged  with  the  interpretation  or
administration thereof, or compliance by any Lender with any guideline,  request
or directive regarding capital adequacy (whether or not having the force of law)
of any such Government  Authority,  has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a  consequence  of,  or with  reference  to,  such  Lender's  Loans or
Commitments or Letters of Credit or participations  therein or other obligations
hereunder  with  respect to the Loans or the  Letters of Credit to a level below
that which such Lender or such controlling  corporation  could have achieved but
for such adoption, effectiveness,  phase-in, applicability, change or compliance
(taking  into  consideration  the  policies of such  Lender or such  controlling
corporation  with regard to capital  adequacy),  then from time to time,  within
five Business Days after receipt by Borrowers  from such Lender of the statement
referred  to in  subsection  2.8A,  Borrowers  shall  pay to  such  Lender  such
additional  amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction.

2.8  Statement  of  Lenders;  Obligation  of  Lenders  and  Issuing  Lenders  to
     ---------------------------------------------------------------------------
     Mitigate.
     --------


     A. Statements.  Each Lender claiming compensation or reimbursement pursuant
to  subsection  2.6D,  2.7 or 2.8B shall  deliver to  Borrowers  (with a copy to
Agent) a written statement,  setting forth in reasonable detail the basis of the
calculation of such  compensation  or  reimbursement,  which  statement shall be
conclusive and binding upon all parties hereto absent manifest error.

     B.  Mitigation.  Each Lender and Issuing Lender agrees that, as promptly as
practicable  after the officer of such Lender or Issuing Lender  responsible for
administering  the Loans or Letters of Credit of such Lender or Issuing  Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender or Issuing Lender to receive payments under subsection
2.7, use reasonable  effort to make,  issue, fund or maintain the Commitments of
such Lender or the Affected Loans or Letters of Credit of such Lender or Issuing
Lender  through  another  lending or letter of credit  office of such  Lender or
Issuing Lender, if (i) as a result thereof the  circumstances  which would cause
such Lender to be an  Affected  Lender  would  cease to exist or the  additional
amounts  which would  otherwise be required to be paid to such Lender or Issuing
Lender  pursuant  to  subsection  2.7 would be  materially  reduced  and (ii) as
determined by such Lender or Issuing Lender in its sole discretion,  such action
would  not  otherwise  be  disadvantageous  to such  Lender or  Issuing  Lender;
provided  --------  that such Lender or Issuing  Lender will not be obligated to
utilize  such  other  lending  or  letter  of  credit  office  pursuant  to this
subsection 2.8B unless Borrowers agree to pay all incremental  expenses incurred
by such Lender or Issuing  Lender as a result of utilizing such other lending or
letter of credit office as described above.

2.9      Replacement of a Lender.
         -----------------------

                  If Borrowers receive a statement of amounts due pursuant to
subsection 2.8A from a Lender, a Revolving Lender defaults in its obligations to
fund a Revolving Loan pursuant to this Agreement, a Lender (a "Non-Consenting
Lender") refuses to consent to an amendment, modification or waiver of this
Agreement that, pursuant to subsection 10.6, requires consent of 100% of the
Lenders or 100% of the Lenders with Obligations directly affected or a Lender
becomes an Affected Lender (any such Lender, a "Subject Lender"), so long as (i)
no Potential Event of Default or Event of Default shall have occurred and be
continuing and Borrowers have obtained a commitment from another Lender or an
Eligible Assignee to purchase at par the Subject Lender's Loans and assume the
Subject Lender's Commitments and all other obligations of the Subject Lender
hereunder, (ii) such Lender is not an Issuing Lender with respect to any Letters
of Credit outstanding (unless all such Letters of Credit are terminated or
arrangements acceptable to such Issuing Lender (such as a "back-to-back" letter
of credit) are made) and (iii), if applicable, the Subject Lender is unwilling
to withdraw the notice delivered to Borrowers pursuant to subsection 2.8 and/or
is unwilling to remedy its default upon 10 days prior written notice to the
Subject Lender and Agent, Borrowers may require the Subject Lender to assign all
of its Loans and Commitments to such other Lender, Lenders, Eligible Assignee or
Eligible Assignees pursuant to the provisions of subsection 10.1B; provided
that, prior to or concurrently with such replacement (1) Borrowers have paid to
the Lender giving such notice all amounts under subsections 2.6D, 2.7 and/or
2.8B (if applicable) through such date of replacement, (2) the processing fee
required to be paid by subsection 10.1B(i) shall have been paid to Agent, (3)
all of the requirements for such assignment contained in subsection 10.1B,
including, without limitation, the consent of Agent (if required) and the
receipt by Agent of an executed Assignment Agreement and other supporting
documents, have been fulfilled, and (4) in the event such Subject Lender is a
Non-Consenting Lender, each assignee shall consent, at the time of such
assignment, to each matter in respect of which such Subject Lender was a
Non-Consenting Lender and Borrowers also require each other Subject Lender that
is a Non-Consenting Lender to assign its Loans and Commitments.

2.10     Collection, Deposit and Transfer of Payments in Respect of Accounts.
         -------------------------------------------------------------------

                  Borrowers shall maintain in effect at all times a system of
accounts and procedures reasonably satisfactory to Agent for the collection and
deposit of payments in respect of such Person's Accounts and the transfer of
amounts so deposited to the BTCo Account. Without limiting the generality of the
foregoing:

     A. Maintenance of Lock Boxes and Lock Box Accounts.

     (i)  Except as permitted under subsection 2.10A(ii), Borrowers shall at all
          times  maintain  any Lock  Boxes  and Lock  Box  Accounts  established
          pursuant to the terms of this Agreement and the Lock Box Agreements.

     (ii) Borrowers  shall not close any Lock Box Account or open a new Lock Box
          Account unless it shall have (a) notified Agent in writing at least 30
          days (or such  lesser  number  of days as may be  agreed  to by Agent)
          prior to the proposed  closing or opening and (b) in the case of a new
          Lock  Box  Account,  entered  into  a  Lock  Box  Agreement  with  the
          applicable Lock Box Bank.

B.       Collection and Deposit of Payments in Respect of Accounts.

     (i)  Borrowers  shall deliver such notices to account  debtors and take all
          such  other  actions  as may  reasonably  be  necessary  to cause  all
          payments in respect of such Person's Accounts to be made directly to a
          Lock Box.

     (ii) Borrowers shall direct their  authorized  representatives  pursuant to
          the terms of the applicable Lock Box Agreement,  at least once on each
          Business Day, to retrieve all checks and other  instruments  delivered
          to a Lock Box and, as promptly as possible on the same Business Day so
          retrieved, to endorse for payment and deposit each such check or other
          instrument  in  the  Lock  Box  Account  related  to  such  Lock  Box.
          Notwithstanding the foregoing, from and after such time as Agent shall
          have  notified  Borrowers of its election to exercise its rights under
          this subsection 2.10B(ii),  Borrowers' authorized representative shall
          not be  permitted  to  retrieve  any  items  from any Lock Box  unless
          accompanied by a representative of Agent, and Borrowers hereby appoint
          Agent or any of its  designees as  Borrowers'  attorneys-in-fact  with
          powers,  upon  notification  by Agent as aforesaid,  to (a) access all
          Lock Boxes and (b) endorse for payment any checks or other instruments
          representing  payment in respect of any  Accounts of such Persons that
          are delivered to any Lock Box. All acts of said attorneys or designees
          are hereby  ratified  and  approved,  and said  attorneys or designees
          shall not be liable for any acts of omission or commission (other than
          acts or omissions  constituting gross negligence or willful misconduct
          as determined in a final order by a court of competent  jurisdiction),
          nor for any error of judgment or mistake of fact or law.  The power of
          attorney set forth in this subsection  2.10B(ii) is irrevocable  until
          all Obligations shall have been paid in full and the Commitments shall
          have terminated.

     (iii)In the event  that any  Borrower  receives  any check,  cash,  note or
          other  instrument  representing  payment of an Account (other than any
          item delivered to a Lock Box), Borrowers shall hold such item in trust
          for Agent and shall,  as soon as practicable  (and in any event within
          one  Business  Day)  after  receipt  thereof,  cause  such  item to be
          deposited into a Lock Box Account with any necessary endorsements.

     (iv) Borrowers  hereby  agree,  from and after such time,  if any, as Agent
          shall have notified  Borrowers in writing that the  provisions of this
          subsection 2.10B(iv) are to become effective until such later time, if
          any,  as Agent  shall have  notified  Borrowers  in writing  that such
          provisions  are no longer to be  effective,  not to deposit any monies
          into the Lock Box  Accounts  or to  otherwise  permit any monies to be
          deposited  into any of such  accounts,  except  payments  received  in
          respect of Borrowers' Accounts.

     C.  Transfer  of Amounts  Deposited  in the Lock Box  Accounts  to the BTCo
Account. Borrowers shall cause all amounts deposited in each Lock Box Account to
be transferred  on each Business Day to the BTCo Account in accordance  with the
terms of the applicable Lock Box Agreement.

     D.  Treatment of  Accounts.  Borrowers  shall not,  without  Agent's  prior
written  consent,  grant any  extension  of the time of payment of any  Account,
compromise or settle any Account for less than the full amount thereof, release,
in whole or in part, any person or property liable for the payment  thereof,  or
allow any credit or discount whatsoever thereon, except, prior to the occurrence
of an Event of Default,  in accordance  with their usual and customary  business
practices.

E. Borrowers to Provide Information. Borrowers shall, at such intervals as Agent
may reasonably request, furnish such statements, schedules and/or information as
Agent may request relating to Borrowers' and their Restricted Subsidiaries'
Accounts and the collection, deposit and transfer of payments in respect
thereof, including, without limitation, all invoices evidencing such Accounts.

2.11     Borrowers.
         ---------

     The  Agent  and the  Lenders  may rely,  and  shall be fully  protected  in
relying, on any Notice of Borrowing, Notice of Conversion/Continuation,  Request
for Issuance of Letter of Credit, disbursement instruction,  report, information
or any other notice or communication  made or given by any Borrower,  whether in
its own name, on behalf of any other  Borrower or on behalf of "the  Borrowers",
and  neither  the Agent nor any  Lender  shall have any  obligation  to make any
inquiry or request any  confirmation  from or on behalf of any other Borrower as
to the binding effect on it of any such notice,  request,  instruction,  report,
information,  other  notice or  communications,  nor shall the joint and several
character of the Borrowers' liability for the Obligations be affected,  provided
that the  provisions  of this  subsection  2.11 shall not be  construed so as to
preclude any  Borrower  from taking  other  actions  permitted to be taken by "a
Borrower" hereunder.  The Agent and each Lender intend to maintain a single loan
account in the name of "Farmland  Industries,  Inc." hereunder and each Borrower
expressly agrees to such  arrangement and confirms that such  arrangement  shall
have no effect  on the joint and  several  character  of its  liability  for the
Obligations.

2.12     Joint and Several Liability.
         ---------------------------

     A. Joint and Several Liability.  The Obligations shall constitute one joint
and  several   direct  and  general   obligation   of  all  of  the   Borrowers.
Notwithstanding anything to the contrary contained herein, each of the Borrowers
shall  be  jointly  and  severally,  with  the  other  Borrowers,  directly  and
unconditionally  liable to the Agent and the  Lenders  for all  Obligations  and
shall have the obligations of co-maker with respect to the Loans,  the Notes and
the Obligations, it being agreed that the advances to each Borrower inure to the
benefit of all of the Borrowers,  and that the Agent and the Lenders are relying
on the joint and several  liability  of the  Borrowers as co-makers in extending
the Loans  hereunder and  arranging for the issuance of Letters of Credit.  Each
Borrower hereby  unconditionally  and irrevocably  agrees that upon a default in
the payment when due (whether at stated maturity,  by acceleration or otherwise)
of any principal of, or interest on, any Loan or other Obligation payable to the
Agent or any Lender which constitutes an Event of Default, it will forthwith pay
the same,  without notice or demand except to the extent  expressly  provided to
the contrary herein.

     B. No Reduction in  Obligations.  No payment or payments made by any of the
Borrowers  or any other  Person or  received  or  collected  by the Agent or any
Lender from any of the  Borrowers or any other Person by virtue of any action or
proceeding or any setoff or  appropriation  or  application  at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to
modify,  reduce,  release or otherwise  affect the liability of each Borrower to
repay any outstanding  Obligations  until all such  outstanding  Obligations are
paid in full and this Agreement is terminated.

2.13     Obligations Absolute.
         --------------------

     Each  Borrower  agrees  that  the  Obligations  will  be paid  strictly  in
accordance  with  the  terms  of the  Loan  Documents,  regardless  of any  law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Agent or any Lender with respect thereto. All
Obligations  shall be  conclusively  presumed  to have been  created in reliance
hereon. The liabilities under this Agreement shall be absolute and unconditional
irrespective of: (a) any lack of validity or enforceability of any Loan Document
or any other  agreement or instrument  relating  thereto;  (b) any change in the
time,  manner or place of payments  of, or in any other term of, all or any part
of the  Obligations,  or any other amendment or waiver thereof or any consent to
departure  therefrom,  including any increase in the Obligations  resulting from
the extension of additional credit to any Borrower or otherwise; (c) any taking,
exchange,  release  or  non-perfection  of any  collateral,  or any  release  or
amendment or waiver of or consent to departure  from any guaranty for all or any
of  the  Obligations;  (d)  any  change,  restructuring  or  termination  of the
corporate structure or existence of any Borrower;  or (e) any other circumstance
which might otherwise  constitute a defense available to, or a discharge of, any
Borrower. This Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the  Obligations  is rescinded
or must  otherwise  be returned by the Agent or any Lender upon the  insolvency,
bankruptcy or  reorganization  of any Borrower or otherwise,  all as though such
payment had not been made.

2.14     Waiver of Suretyship Defenses.
         -----------------------------

     Each Borrower agrees that the joint and several  liability of the Borrowers
provided  for in  subsection  2.13  shall not be  impaired  or  affected  by any
modification, supplement, extension or amendment of any contract or agreement to
which the other Borrowers may hereafter agree (other than an agreement signed by
the Agent and, if  applicable,  the Lenders  specifically  releasing or limiting
such liability),  nor by any delay,  extension of time,  renewal,  compromise or
other  indulgence  granted by the Agent or any Lender with respect to any of the
Obligations, nor by any other agreements or arrangements whatever with the other
Borrowers or with anyone else,  each Borrower  hereby waiving all notice of such
delay,  extension,   release,   substitution,   renewal,   compromise  or  other
indulgence,  and hereby  consenting to be bound thereby as fully and effectually
as if it had expressly agreed thereto in advance. The liability of each Borrower
is direct and  unconditional as to all of the  Obligations,  and may be enforced
without  requiring  the Agent or any Lender  first to resort to any other right,
remedy or security. Each Borrower hereby expressly waives promptness, diligence,
notice of  acceptance  and any other  notice  (except  to the  extent  expressly
provided  for herein or in another  Loan  Document)  with  respect to any of the
Obligations,  the  Notes,  this  Agreement  or any other Loan  Document  and any
requirement that the Agent or any Lender protect,  secure, perfect or insure any
Lien or any  property  subject  thereto or exhaust  any right or take any action
against any Borrower or any other Person or any collateral.

2.15     Contribution and Indemnification among the Borrowers.
         ----------------------------------------------------

     Each  Borrower is obligated to repay the  Obligations  as joint and several
obligors under this Agreement. To the extent that any Borrower shall, under this
Agreement  as a  joint  and  several  obligor,  repay  any  of  the  Obligations
constituting  Loans made to the other Borrowers  hereunder or other  Obligations
incurred  directly  and  primarily  by the other  Borrowers  (an  "Accommodation
Payment"), then the Borrower making such Accommodation Payment shall be entitled
to  contribution  and  indemnification  from,  and be  reimbursed  by, the other
Borrowers  in an amount  equal to such  Accommodation  Payment.  All  rights and
claims of contribution,  indemnification and reimbursement under this subsection
2.15 shall be  subordinate  in right of payment to the prior  payment in full in
Cash of the Obligations.

Section 3.        LETTERS OF CREDIT

          3.1  Issuance   of  Letters  of  Credit  and   Lenders'   Purchase  of
               -----------------------------------------------------------------
               Participations Therein.
               ----------------------


     A. Letters of Credit. In addition to Borrowers requesting that Lenders make
Revolving  Loans  pursuant to subsection  2.1A(ii),  Borrowers  may request,  in
accordance  with the provisions of this subsection 3.1, from time to time during
the period  from the  Closing  Date to but  excluding  the 30th day prior to the
Revolving Loan Commitment  Termination  Date, that one or more Revolving Lenders
issue Letters of Credit for the account of Borrowers for the purposes  specified
in the definition of Standby Letters of Credit and Commercial Letters of Credit.
Subject to the terms and  conditions of this  Agreement and in reliance upon the
representations  and warranties of Borrowers  herein set forth,  any one or more
Lenders  may,  but  (except as  provided in  subsection  3.1B(ii))  shall not be
obligated to, issue such Letters of Credit in accordance  with the provisions of
this  subsection  3.1;  provided  that  Borrowers  shall  not  request  that any
Revolving Lender issue (and no Revolving Lender shall issue):

               (i)  any  Letter  of  Credit  if,  after  giving  effect  to such
               issuance,  the Total  Utilization of Revolving  Loan  Commitments
               would exceed the Revolving Loan Commitments  then in effect;  any
               Letter of Credit under the Revolving A Loan Commitments if, after
               giving  effect  to  such  issuance,   the  Total  Utilization  of
               Revolving A Loan  Commitments  would exceed the  Revolving A Loan
               Commitments  then in  effect;  any  Letter  of  Credit  under the
               Revolving B Loan  Commitments  if,  after  giving  effect to such
               issuance,  the Total  Utilization of Revolving B Loan Commitments
               would exceed the Revolving B Loan Commitments then in effect; any
               Letter of Credit under the Revolving B Loan Commitments unless at
               the time of such  issuance the Total  Utilization  of Revolving A
               Loan  Commitments  is equal to the  Revolving A Loan  Commitments
               then in effect;

               (ii) any  Letter  of  Credit  if,  after  giving  effect  to such
               issuance,  the  aggregate  Letter of Credit  Usage  would  exceed
               $75,000,000;

               (iii) any Letter of Credit for the account of Borrowers if, after
               giving  effect  to  such  issuance,   the  Total  Utilization  of
               Revolving Loan  Commitments  would exceed the Borrowing Base then
               in effect;

               (iv) any Standby Letter of Credit having an expiration date later
               than  the  earlier  of  (a)  five  Business  Days  prior  to  the
               applicable Revolving Loan Commitment Termination Date and (b) the
               date which is one year from the date of issuance of such  Standby
               Letter of Credit;  provided that the immediately preceding clause
                                  --------
               (b) shall not prevent any Issuing Lender from agreeing
               that a Standby  Letter of Credit will  automatically  be extended
               for one or more  successive  periods  not to exceed one year each
               unless  such  Issuing  Lender  elects  not to extend for any such
               additional period; and provided, further that such Issuing Lender
                                      --------  -------
               shall elect not to extend such Standby Letter of Credit if it has
                knowledge that an Event of Default has occurred
               and is  continuing  (and has not been waived in  accordance  with
               subsection  10.6) at the time  such  Issuing  Lender  must  elect
               whether or not to allow such extension;

               (v) any Commercial Letter of Credit having an expiration date (a)
               later than the  earlier of (1) the date which is 30 days prior to
               the applicable Revolving Loan Commitment Termination Date and (2)
               the  date  which is 180 days  from the date of  issuance  of such
               Commercial Letter of Credit or (b) that is otherwise unacceptable
               to the applicable Issuing Lender in its reasonable discretion; or

               (vi) any Letter of Credit  denominated  in a currency  other than
               Dollars.

B.       Mechanics of Issuance.

(i) Request for Issuance.  Whenever Borrowers desire the issuance of a Letter of
    --------------------
Credit,  Borrowers  shall  deliver to Agent a   Request for
Issuance  of Letter of Credit in the form of  Exhibit  III  annexed  hereto  and
                                              -----------
designating whether such issuance is requested under the Revolving A
Loan Commitment or the Revolving B Loan Commitment no later than 12:00 Noon (New
York City time) at least one  Business  Day (in the case of  Standby  Letters of
Credit) or five Business Days (in the case of Commercial Letters of Credit),  or
in each case such  shorter  period as may be agreed to by the Issuing  Lender in
any  particular  instance,  in advance of the  proposed  date of  issuance.  The
Issuing Lender, in its reasonable discretion, may require changes in the text of
the proposed  Letter of Credit or any documents  described in or attached to the
Request for Issuance of Letter of Credit. Any Standby Letter of Credit issued by
BTCo or an  Affiliate  must  provide  that  drawings  thereon  shall  be made on
presentment of sight drafts in form and substance satisfactory to the applicable
Issuing Lender and not on presentment of any documentary requirements.

     Borrowers  shall notify the applicable  Issuing Lender (and Agent, if Agent
is not such Issuing Lender) prior to the issuance of any Letter of Credit in the
event that any of the matters to which  Borrowers are required to certify in the
applicable Request for Issuance is no longer true and correct as of the proposed
date of issuance of such Letter of Credit,  and upon the  issuance of any Letter
of Credit Borrowers shall be deemed to have re-certified, as of the date of such
issuance,  as to the matters to which  Borrowers  are required to certify in the
applicable Request for Issuance of Letter of Credit.

     (ii)  Determination  of Issuing Lender.  Upon receipt by Agent of a Request
           -------------------------------
     for    Issuance   of   Letter   of   Credit    pursuant    to    subsection
      3.1B(i) requesting the issuance of a Letter
     of Credit, in the event Agent elects to issue such Letter of Credit,  Agent
     shall promptly so notify  Borrowers,  and Agent shall be the Issuing Lender
     with  respect  thereto.  In the event that Agent,  in its sole  discretion,
     elects not to issue such Letter of Credit,  Agent shall  promptly so notify
     Borrowers,  whereupon  Borrowers  may  request any other  Revolving  Lender
     having the  applicable  Revolving  Loan  Commitment to issue such Letter of
     Credit by  delivering  to such  Revolving  Lender a copy of the  applicable
     Request for Issuance of Letter of Credit. Any Revolving Lender so requested
     to issue such Letter of Credit shall  promptly  notify  Borrowers and Agent
     whether or not, in its sole discretion, it has elected to issue such Letter
     of  Credit,  and any such  Revolving  Lender  that so elects to issue  such
     Letter of Credit shall be the Issuing Lender with respect  thereto.  In the
     event  that all other  Revolving  Lenders  shall have  declined  to issue a
     Standby Letter of Credit, then  notwithstanding the prior election of Agent
     not to issue such  Standby  Letter of Credit,  Agent  shall be the  Issuing
     Lender with respect  thereto,  notwithstanding  the fact that the Letter of
     Credit  Usage with respect to such Letter of Credit and with respect to all
     other  Letters of Credit  issued by Agent,  when  aggregated  with  Agent's
     outstanding  Revolving Loans, may exceed Agent's  Revolving Loan Commitment
     then in effect.  In the event that all other  Revolving  Lenders shall have
     declined to issue a Commercial Letter of Credit,  then  notwithstanding the
     prior  election  of CoBank not to issue such  Commercial  Letter of Credit,
     CoBank  shall be obligated  to issue such  Commercial  Letter of Credit and
     shall be the Issuing Lender with respect thereto,  notwithstanding the fact
     that the Letter of Credit  Usage with  respect to such Letter of Credit and
     with  respect  to all other  Letters  of  Credit  issued  by  CoBank,  when
     aggregated with CoBank's  outstanding  Revolving Loans, may exceed CoBank's
     Revolving Loan Commitment then in effect.

     (iii)  Issuance  of Letter  of  Credit.  Upon  satisfaction  or waiver  (in
     accordance with subsection  10.6) of the conditions set forth in subsection
     4.3,  the  Issuing  Lender  shall issue the  requested  Letter of Credit in
     accordance with the Issuing Lender's standard operating procedures.

     (iv) Notification to Revolving  Lenders.  Promptly after the issuance of or
     amendment  of any  Standby  Letter of  Credit,  the  Issuing  Lender  shall
     promptly  notify the Agent and Borrowers,  in writing,  of such issuance or
     amendment,  and such notice must be  accompanied by a copy of such issuance
     or amendment.  Promptly upon receipt of such notice, the Agent shall notify
     each other Lender of such issuance or  amendment,  and if so requested by a
     Lender, the Agent shall furnish such Lender with a copy of such issuance or
     amendment.  With  regards to  Commercial  Letters of Credit,  each  Issuing
     Lender shall on the first Business Day of each week furnish the Agent (with
     a copy to Borrowers),  by facsimile,  with a report of the daily  aggregate
     outstanding Commercial Letters of Credit issued by such Issuing Lender.

     C. Revolving Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
having the applicable Revolving Loan Commitment shall be deemed to, and hereby
agrees to, have irrevocably purchased from the Issuing Lender a participation in
such Letter of Credit and any drawings honored thereunder in an amount equal to
such Revolving Lender's Pro Rata Share of the maximum amount which is or at any
time may become available to be drawn thereunder. Upon satisfaction of the
conditions set forth in Section 4.1, the Letters of Credit set forth on Schedule
3.1C (the "Existing Letters of Credit") shall, effective as of such Closing
Date, become Letters of Credit under this Agreement to the same extent as if
initially issued hereunder and each Lender having a Revolving A Loan Commitment
shall be deemed to have irrevocably purchased from the Issuing Lender a
participation in such Letters of Credit and drawings thereunder in an amount
equal to such Lender's Pro Rata Share of the maximum amount which is or at any
time may become available to be drawn thereunder and the Lender shown in
Schedule 3.1C as the Issuer of any Existing Letter of Credit shall be deemed to
be the Issuing Lender hereunder with respect to such Existing Letter of Credit.

3.2      Letter of Credit Fees.
         ---------------------

     Borrowers  agree to pay the  following  amounts  with respect to Letters of
Credit issued hereunder:

     (i) with  respect to each  Letter of Credit,  (a) a fronting  fee,  payable
     directly to the applicable Issuing Lender for its own account, equal to the
     greater of (X) $500 and (Y) 0.25% per annum of the daily  amount  available
     to be drawn  under such  Letter of Credit  and (b) a letter of credit  fee,
     payable to Agent for the account of Revolving Lenders having the applicable
     Revolving Loan Commitment,  equal to the applicable  Eurodollar Rate Margin
     for Revolving  Loans  multiplied by the daily amount  available to be drawn
     under such Letter of Credit, in each case payable in arrears on and to (but
     excluding)  the first  Business  Day of each  March,  June,  September  and
     December of each year and  computed on the basis of a 360-day  year for the
     actual number of days elapsed;

     (ii) with respect to the issuance,  amendment or transfer of each Letter of
     Credit and each payment of a drawing made thereunder  (without  duplication
     of the fees payable  under clause (i) above),  documentary  and  processing
     charges,  payable  directly to the  applicable  Issuing  Lender for its own
     account,  in accordance with such Issuing  Lender's  standard  schedule for
     such charges in effect at the time of such issuance, amendment, transfer or
     payment, as the case may be; and

     (iii) For purposes of calculating any fees payable under clause (i) of this
     subsection 3.2, the daily amount  available to be drawn under any Letter of
     Credit  shall be  determined  as of the  close of  business  on any date of
     determination.  Promptly  upon receipt by Agent of any amount  described in
     clause  (i)(b) of this  subsection  3.2,  Agent  shall  distribute  to each
     Revolving  Lender having the applicable  Revolving Loan  Commitment its Pro
     Rata Share of such amount.  With respect to Existing Letters of Credit, the
     fees  described  in clause (i) above shall  accrue from and  including  the
     Closing Date.

3.3      Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
         ------------------------------------------------------------------

     A.   Responsibility  of  Issuing  Lender  With  Respect  to  Drawings.   In
determining  whether  to honor any  drawing  under  any  Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents  delivered  under such Letter of Credit with  reasonable care so as to
ascertain  whether they appear on their face to be in accordance  with the terms
and conditions of such Letter of Credit.

     B.  Reimbursement by Borrowers of Amounts Paid Under Letters of Credit.  In
the event an Issuing  Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately  notify Borrowers and
Agent,  and  Borrowers  shall  reimburse  such  Issuing  Lender on or before the
Business  Day  immediately  following  the date on which such drawing is honored
(the  "Reimbursement  Date") in an amount in Dollars and in same day funds equal
to the  amount  of such  payment;  provided  that,  anything  contained  in this
Agreement  to the  contrary  notwithstanding,  (i) unless  Borrowers  shall have
notified  Agent and such Issuing Lender prior to 11:00 A.M. (New York City time)
on the date such drawing is honored  that  Borrowers  intend to  reimburse  such
Issuing Lender for the amount of such payment with funds other than the proceeds
of Revolving  Loans,  Borrowers shall be deemed to have given a timely Notice of
Borrowing to Agent requesting  Revolving Lenders having the applicable Revolving
Loan  Commitment  to make  Revolving  Loans  that  are  Base  Rate  Loans on the
Reimbursement  Date in an amount in Dollars  equal to the amount of such payment
and (ii)  subject  to  satisfaction  or waiver of the  conditions  specified  in
subsection 4.2B, such Revolving Lenders shall, on the  Reimbursement  Date, make
Revolving  Loans  that are Base Rate Loans in the  amount of such  payment,  the
proceeds of which shall be applied  directly by Agent to reimburse  such Issuing
Lender for the amount of such  payment;  and  provided,  further that if for any
reason  proceeds of Revolving  Loans are not received by such Issuing  Lender on
the  Reimbursement  Date in an  amount  equal  to the  amount  of such  payment,
Borrowers shall reimburse such Issuing Lender,  on demand,  in an amount in same
day funds equal to the excess of the amount of such payment  over the  aggregate
amount of such Revolving  Loans, if any, which are so received.  Nothing in this
subsection  3.3B  shall be deemed to relieve  any  Revolving  Lender  having the
applicable Revolving Loan Commitment from its obligation to make Revolving Loans
on the terms and conditions  set forth in this  Agreement,  and Borrowers  shall
retain any and all rights it may have  against any  Revolving  Lender  resulting
from the failure of such  Revolving  Lender to make such  Revolving  Loans under
this subsection 3.3B.

C.      Payment by Lenders of Unreimbursed Amounts Paid Under Letters of Credit.

     (i) Payment by Revolving  Lenders.  In the event that Borrowers  shall fail
         ----------------------------
     for    any    reason    to    reimburse     any    Issuing     Lender    as
      provided in subsection 3.3B in an amount equal
     to the  amount of any  payment  by such  Issuing  Lender  under a Letter of
     Credit issued by it, such Issuing Lender shall  promptly  notify each other
     Lender having the applicable  Revolving Loan Commitment of the unreimbursed
     amount  of such  honored  drawing  and of  such  other  Revolving  Lender's
     respective  participation therein based on such Revolving Lender's Pro Rata
     Share.   Each  Revolving  Lender  having  the  applicable   Revolving  Loan
     Commitment  shall make  available to such Issuing Lender an amount equal to
     its  respective  participation,  in Dollars  and in same day funds,  at the
     office of such Issuing  Lender  specified  in such  notice,  not later than
     12:00 Noon (New York City time) on the first  business  day (under the laws
     of the jurisdiction in which such office of such Issuing Lender is located)
     after the date  notified  by such  Issuing  Lender.  In the event  that any
     Revolving  Lender having the applicable  Revolving Loan Commitment fails to
     make  available to such Issuing  Lender on such  business day the amount of
     such Revolving Lender's  participation in such Letter of Credit as provided
     in this  subsection  3.3C, such Issuing Lender shall be entitled to recover
     such amount on demand from such  Revolving  Lender  together  with interest
     thereon  at the  rate  customarily  used by  such  Issuing  Lender  for the
     correction of errors among banks for three  Business Days and thereafter at
     the Base Rate. Nothing in this subsection 3.3C shall be deemed to prejudice
     the right of any Lender to recover from any Issuing Lender any amounts made
     available by such Revolving  Lender to such Issuing Lender pursuant to this
     subsection 3.3C in the event that it is determined by the final judgment of
     a court of competent jurisdiction that the payment with respect to a Letter
     of Credit by such  Issuing  Lender in respect of which  payment was made by
     such Revolving Lender constituted gross negligence or willful misconduct on
     the part of such Issuing Lender.

     (ii) Distribution to Lenders of Reimbursements  Received From Borrowers. In
     ------------------------------------------------------------------
     the event any Issuing Lender shall have been reimbursed by other Revolving
     Lenders  pursuant to subsection  3.3C(i) for
     all or any portion of any payment by such Issuing  Lender under a Letter of
     Credit  issued by it, such Issuing  Lender shall  distribute  to each other
     Revolving  Lender having the applicable  Revolving Loan Commitment that has
     paid all amounts  payable by it under  subsection  3.3C(i)  with respect to
     such payment such other  Revolving  Lender's Pro Rata Share of all payments
     subsequently   received  by  such   Issuing   Lender  from   Borrowers   in
     reimbursement of such payment under the Letter of Credit when such payments
     are received.  Any such distribution shall be made to a Revolving Lender at
     its primary address set forth below its name on the  appropriate  signature
     page hereof or at such other address as such Revolving Lender may request.

D.       Interest on Amounts Paid Under Letters of Credit.

(i) Payment of Interest by  Borrowers.  Borrowers  agree to pay to each  Issuing
    --------------------------------
Lender,      with     respect     to     payments      under     any     Letters
  of Credit issued by it, interest on the amount
paid by such  Issuing  Lender in  respect of each such  payment  from the date a
drawing  is honored  to but  excluding  the date such  amount is  reimbursed  by
Borrowers  (including  any such  reimbursement  out of the proceeds of Revolving
Loans  pursuant to  subsection  3.3B) at a rate equal to (a) for the period from
the date such drawing is honored to but excluding the  Reimbursement  Date,  the
rate then in effect under this  Agreement  with respect to Revolving  Loans that
are Base Rate Loans and (b)  thereafter,  a rate which is 2% per annum in excess
of the rate of interest  otherwise  payable under this Agreement with respect to
Revolving  Loans that are Base Rate  Loans.  Interest  payable  pursuant to this
subsection  3.3D(i)  shall be  computed  on the basis of a 360-day  year for the
actual number of days elapsed in the period during which it accrues and shall be
payable  on demand  or, if no demand is made,  on the date on which the  related
drawing under a Letter of Credit is reimbursed in full.

(ii) Distribution of Interest Payments by Issuing Lender.  Promptly upon receipt
---------------------------------------------------
by any Issuing Lender of any
payment of interest  pursuant to  subsection  3.3D(i)  with respect to a payment
under a Letter of Credit issued by it, (a) such Issuing Lender shall  distribute
to each other Revolving Lender having the applicable  Revolving Loan Commitment,
out of the  interest  received by such  Issuing  Lender in respect of the period
from the date such  drawing is honored to but  excluding  the date on which such
Issuing Lender is reimbursed for the amount of such payment  (including any such
reimbursement  out of the proceeds of  Revolving  Loans  pursuant to  subsection
3.3B),  the amount that such other Revolving  Lender would have been entitled to
receive in  respect of the letter of credit fee that would have been  payable in
respect of such Letter of Credit for such period  pursuant to subsection  3.2 if
no drawing had been  honored  under such Letter of Credit,  and (b) in the event
such  Issuing  Lender  shall have been  reimbursed  by other  Revolving  Lenders
pursuant to  subsection  3.3C(i) for all or any  portion of such  payment,  such
Issuing  Lender  shall  distribute  to each other  Revolving  Lender  having the
applicable  Revolving Loan  Commitment  that has paid all amounts  payable by it
under  subsection  3.3C(i) with  respect to such  payment  such other  Revolving
Lender's  Pro Rata Share of any  interest  received  by such  Issuing  Lender in
respect of that portion of such payment so  reimbursed  by such other  Revolving
Lenders  for the  period  from the  date on which  such  Issuing  Lender  was so
reimbursed  by other such  Revolving  Lenders to but excluding the date on which
such portion of such payment is reimbursed by Borrowers.  Any such  distribution
shall be made to a Revolving  Lender at its primary  address set forth below its
name on the  appropriate  signature page hereof or at such other address as such
Revolving Lender may request.

3.4      Obligations Absolute.

     The  obligation of Borrowers to reimburse  each Issuing Lender for payments
under the Letters of Credit issued by it and to repay any  Revolving  Loans made
by  Revolving  Lenders  pursuant  to  subsection  3.3B  and the  obligations  of
Revolving   Lenders  under  subsection   3.3C(i)  shall  be  unconditional   and
irrevocable  and shall be paid  strictly  in  accordance  with the terms of this
Agreement under all circumstances including any of the following circumstances:

     (i) any lack of validity or enforceability of any Letter of Credit;

     (ii) the  existence  of any claim,  set-off,  defense or other  right which
     Borrowers or any Lender may have at any time against a  beneficiary  or any
     transferee  of any  Letter  of  Credit  (or any  Persons  for whom any such
     transferee may be acting),  any Issuing Lender or other Revolving Lender or
     any other Person or, in the case of a Revolving Lender,  against Borrowers,
     whether in connection with this Agreement,  the  transactions  contemplated
     herein or any unrelated transaction  (including any underlying  transaction
     between  Borrowers  or  one  of  their  Restricted   Subsidiaries  and  the
     beneficiary for which any Letter of Credit was procured);

     (iii)  any draft or other  document  presented  under any  Letter of Credit
     proving to be forged, fraudulent, invalid or insufficient in any respect or
     any statement therein being untrue or inaccurate in any respect;

     (iv) payment by the  applicable  Issuing  Lender under any Letter of Credit
     against   presentation  of  a  draft  or  other  document  which  does  not
     substantially comply with the terms of such Letter of Credit;

     (v) any adverse  change in the business,  operations,  properties,  assets,
     condition  (financial  or  otherwise)  or  prospects of Borrowers or any of
     their Restricted Subsidiaries;

     (vi) any breach of this  Agreement or any other Loan  Document by any party
     thereto;

     (vii)  any other  circumstance  or  happening  whatsoever,  whether  or not
     similar to any of the foregoing; or

     (viii) the fact that an Event of Default  or a  Potential  Event of Default
     shall have occurred and be continuing;

provided, in each case, that payment by the applicable Issuing Lender under the
--------
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).

3.5      Indemnification; Nature of Issuing Lenders' Duties.
         --------------------------------------------------

     A.  Indemnification.   In  addition  to  amounts  payable  as  provided  in
subsection  2.7,  Borrowers  hereby  agree to protect,  indemnify,  pay and save
harmless  each  Issuing  Lender from and  against  any and all claims,  demands,
liabilities,  damages, losses, costs, charges and expenses (including reasonable
fees,  expenses and  disbursements  of outside  counsel and  allocated  costs of
internal  counsel)  which  such  Issuing  Lender may incur or be subject to as a
consequence,  direct or indirect, of (i) the issuance of any Letter of Credit by
such  Issuing  Lender,  other  than as a result of (a) the gross  negligence  or
willful misconduct of such Issuing Lender as determined by a final judgment of a
court of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful  dishonor by such  Issuing  Lender of a proper  demand for payment made
under any  Letter of Credit  issued by it or (ii) the  failure  of such  Issuing
Lender to honor a drawing under any such 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 Authority.

     B. Nature of Issuing Lenders' Duties.  As between Borrowers and any Issuing
Lender,  Borrowers  assume all risks of the acts and  omissions of, or misuse of
the  Letters  of  Credit  issued  by such  Issuing  Lender  by,  the  respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing,  such Issuing Lender shall not be responsible  for: (i) 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 such  Letter of Credit,  even if it should in fact prove to be in any or all
respects  invalid,  insufficient,  inaccurate,  fraudulent  or forged;  (ii) the
validity  or  sufficiency  of  any  instrument   transferring  or  assigning  or
purporting  to  transfer  or assign  any such  Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective  for any reason;  (iii) failure of the  beneficiary of
any such Letter of Credit to comply fully with any conditions  required in order
to draw upon such Letter of Credit;  (iv) 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;  (v)  errors  in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise  of any  document  required in order to make a drawing  under any such
Letter of Credit or of the proceeds  thereof;  (vii) the  misapplication  by the
beneficiary  of any such Letter of Credit of the  proceeds of any drawing  under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing  Lender,  including  any act or omission by a Government
Authority  specified in subsection  3.5A,  and none of the above shall affect or
impair, or prevent the vesting of, any of such Issuing Lender's rights or powers
hereunder.

     In  furtherance  and  extension  and  not in  limitation  of  the  specific
provisions set forth in the first paragraph of this subsection  3.5B, any action
taken or omitted by any Issuing  Lender under or in connection  with the Letters
of Credit issued by it or any documents and certificates  delivered  thereunder,
if taken or omitted in good faith,  shall not put such Issuing  Lender under any
resulting liability to Borrowers.

     Notwithstanding  anything to the contrary contained in this subsection 3.5,
Borrowers shall retain any and all rights it may have against any Issuing Lender
for  any  liability  arising  solely  out of the  gross  negligence  or  willful
misconduct of such Issuing Lender,  as determined by a final judgment of a court
of competent jurisdiction.

Section 4.        CONDITIONS TO LOANS AND LETTERS OF CREDIT

                  The obligations of Lenders to make Term Loans and Revolving
Loans and the issuance of Letters of Credit hereunder are subject to the
satisfaction of the following conditions.

4.1      Conditions to Term Loans and Initial Revolving Loans.
         ----------------------------------------------------

                  The obligations of Lenders to make the Term Loans and any
Revolving Loans to be made on the Closing Date are, in addition to the
conditions precedent specified in subsection 4.2, subject to prior or concurrent
satisfaction of the following conditions:

     A. Loan Party  Documents.  On or before the Closing Date,  Borrowers shall,
and shall  cause each other Loan Party to,  deliver to Lenders (or to Agent with
sufficient  originally executed copies, where appropriate,  for each Lender) the
following  with  respect to  Borrowers  or such Loan Party,  as the case may be,
each, unless otherwise noted, dated the Closing Date:

     (i) Copies of the Organizational Documents of such Person, certified by the
     Secretary of State of its jurisdiction of organization or, if such document
     is of a type that may not be so  certified,  certified by the  secretary or
     similar officer of the applicable Loan Party, together with a good standing
     certificate from the Secretary of State of its jurisdiction of organization
     and each other state in which such Person is qualified to do business  and,
     to the extent generally available,  a certificate or other evidence of good
     standing as to payment of any  applicable  franchise or similar  taxes from
     the appropriate taxing authority of each of such jurisdictions,  each dated
     a recent date prior to the Closing Date;

     (ii)  Resolutions  of the  Governing  Body of  such  Person  approving  and
     authorizing  the execution,  delivery and performance of the Loan Documents
     to which it is a party,  certified as of the Closing Date by the  secretary
     or similar officer of such Person as being in full force and effect without
     modification or amendment;

     (iii) Signature and incumbency  certificates of the officers of such Person
     executing the Loan Documents to which it is a party;

     (iv)  Executed  originals  of the Loan  Documents to which such Person is a
     party; and

     (v) Such other documents as Agent may reasonably request.

     B.  Fees.  Borrowers  shall  have  paid  to  Agent,  for  distribution  (as
appropriate)  to Agents  and  Lenders,  the fees  payable  on the  Closing  Date
referred to in subsection 2.3.

     C. Corporate and Capital Structure, Ownership and Management.

          (i) Corporate  Structure.  The corporate  organizational  structure of
              -------------------
          Borrowers  and  their   Subsidiaries   shall  be
          satisfactory  to Agent,  including  without  limitation the nature and
          structure  of  Borrowers'  and their  Subsidiaries'  respective  Joint
          Venture and operating relationships.

          (ii)  Capital  Structure  and  Ownership.  The capital  structure  and
                ----------------------------------
          ownership  of  Borrowers  and their  Subsidiaries  and Joint  Ventures
           shall be satisfactory to Agents.

          (iii)  Management.  The Borrowers' and their Restricted  Subsidiaries'
                 ----------
          senior management and any employment contracts with the Borrowers' and
          their Subsidiaries' senior management shall be satisfactory to Agents.

D. Representations and Warranties; Performance of Agreements. Borrowers shall
have delivered to Agent an Officer's Certificate, in form and substance
satisfactory to Agent, to the effect that the representations and warranties in
Section 5 hereof are true, correct and complete in all material respects on and
as of the Closing Date to the same extent as though made on and as of that date
(or, to the extent such representations and warranties specifically relate to an
earlier date, that such representations and warranties were true, correct and
complete in all material respects on and as of such earlier date) and that
Borrowers shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by them on or before the Closing Date except as otherwise disclosed to
and agreed to in writing by Agent; provided that where a representation and
warranty, covenant or condition is qualified as to materiality, such materiality
qualifier shall be disregarded for purposes of this condition.

E. Financial Statements; Pro Forma Statements. On or before the Closing Date,
Lenders shall have received from Borrowers (i) audited financial statements of
Borrowers and their Subsidiaries for Fiscal Year ended August 31, 2001, (ii)
unaudited financial statements of Borrowers and their Subsidiaries consisting of
consolidated and consolidating balance sheets and the related consolidated and
consolidating statements of income and cash flows for the fiscal quarters ended
not later than 45 days prior to the Closing Date and monthly financial
statements for any fiscal period of less than three months, (iii) pro forma
consolidated and consolidating balance sheet of the Borrowers and their
Subsidiaries as at the Closing Date prepared in accordance with GAAP and
reflecting the consummation of the financings and other transactions
contemplated hereby, (iv) projected financial statements consisting of
consolidated and consolidating balance sheets and the related consolidated and
consolidating statements of income and cash flows for the five-year period after
the Closing Date, and (v) audited financial statements or, if unavailable,
unaudited financial statements consisting of consolidated and consolidating
balance sheets and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows with respect to the Borrowers and
their Restricted Subsidiaries for the twelve month period ended November 30,
2001, all of the foregoing in clauses (i) through (v) to be substantially
consistent with any financial statements previously delivered to Agents and,
substantially consistent with any projected financial results for such periods
previously delivered to Agents and otherwise in form and substance satisfactory
to Agents.

F. Borrowing Base Certificate. On or before the Closing Date, Borrowers shall
have delivered to Agent and Lenders a Borrowing Base Certificate substantially
in the form of Exhibit VIII annexed hereto, prepared as of a recent date prior
to the Closing Date. After giving effect to the Revolving Loans funded and the
Letters of Credit issued on the Closing Date, the Borrowing Base on the Closing
Date shall exceed the Total Utilization of Revolving Loan Commitments by an
amount not less than $50,000,000.

G. Opinions of Counsel to Loan Parties. Lenders shall have received originally
executed copies of one or more favorable written opinions of Borrower's general
counsel, Stinson, Mag & Fizzell PC, counsel for Loan Parties, and Salans
Hertzfeld Heilbronn Christy & Viener, special New York counsel to the Loan
Parties, in form and substance reasonably satisfactory to Agent and its counsel,
dated as of the Closing Date and collectively setting forth substantially the
matters in the opinions designated in Exhibit IX annexed hereto and as to such
other matters as Agent acting on behalf of Lenders may reasonably request (this
Credit Agreement constituting a written request by Borrowers to such counsel to
deliver such opinions to Lenders).

H. Opinions of Agent's Counsel.  Lenders shall have received originally executed
copies of one or more  favorable  written  opinions  of  O'Melveny  & Myers LLP,
counsel to Agent,  dated as of the Closing  Date,  substantially  in the form of
Exhibit X annexed hereto.
---------

I. Ratings of Loans.  The Loans shall have a rating  satisfactory to Agents from
S&P, Moody's or such other rating agency acceptable to Agents.

J. Evidence of Insurance. Agent shall have reviewed the adequacy of the types
and amounts of Borrowers' insurance coverage, including without limitation,
casualty, hazard, title, business interruption and product liability insurance,
and such review shall be in form and substance satisfactory to Agent. Agent
shall have received a certificate from each Borrower's insurance broker or other
evidence satisfactory to it that all insurance required to be maintained
pursuant to subsection 6.4 is in full force and effect and that Agent on behalf
of Lenders has been named as additional insured and/or loss payee thereunder to
the extent required under subsection 6.4.

K. Necessary Governmental Authorizations and Consents; Expiration of Waiting
Periods, Etc. Borrowers shall have obtained all Governmental Authorizations and
all consents of other Persons, in each case that are necessary or advisable in
connection with the transactions contemplated by the Loan Documents and the
continued operation of the business conducted by Borrowers and their Restricted
Subsidiaries in substantially the same manner as conducted prior to the Closing
Date. Each such Governmental Authorization or consent shall be in full force and
effect, except in a case where the failure to obtain or maintain a Governmental
Authorization or consent, either individually or in the aggregate, should not
reasonably be expected to have a Material Adverse Effect. All applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority that would restrain, prevent or otherwise impose adverse
conditions on the transactions contemplated by the Loan Documents or the
financing thereof. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable Government Authority to take action
to set aside its consent on its own motion shall have expired.

L. Environmental Reports. Agent shall have received reports and other
information, in form, scope and substance satisfactory to Agent, regarding
environmental matters relating to the Closing Date Mortgaged Properties, which
reports shall include, without limitation (i) all existing environmental reports
and assessments, together with a Phase I environmental assessment for each of
the Closing Date Mortgaged Properties currently owned, leased, operated or used
by Borrowers or any of their Restricted Subsidiaries and so required by Agent
which (a) are in general conformance with the ASTM Standard Practice for
Environmental Site Assessments: Phase I Environmental Site Assessment Process, E
1527 and acceptable to Agent, (b) was conducted no more than twelve months prior
to the Closing Date in a manner satisfactory to Agent or such longer period of
time as may be acceptable to Agent, and (c) includes an estimate of the
reasonable worst-case cost of investigating and remediating any Hazardous
Materials Activity identified in such Phase I environmental assessments as
giving rise to an actual or potential material violation of any Environmental
Law or as presenting a material risk of giving rise to a material Environmental
Claim, (ii) a compliance review by Agent's environmental consultant of
Borrowers', their Restricted Subsidiaries' and such Facilities' compliance with
Environmental Laws, and (iii) such other reports and information that Agent may
request.

M. Security Interests in Personal and Mixed Property. To the extent not
otherwise satisfied pursuant to subsection 4.1N, Agent shall have received
evidence satisfactory to it that Borrowers and Subsidiary Guarantors shall have
taken or caused to be taken all such actions, executed and delivered or caused
to be executed and delivered all such agreements, documents and instruments, and
made or caused to be made all such filings and recordings (other than the filing
or recording of items described in clauses (ii), (iii) and (iv) below) that may
be necessary or, in the opinion of Agent, desirable in order to (x) create in
favor of Agent, for the benefit of Revolving Lenders, a valid and (upon such
filing and recording) perfected First Priority security interest in the Working
Capital Collateral of such Persons and create in favor of Agent, for the benefit
of Revolving Lenders, a valid and (upon such filing and recording) perfected
Second Priority security interest in the PPE Collateral of such Persons, (y)
create in favor of Agent, for the benefit of Term Lenders, a valid and (upon
such filing and recording) perfected First Priority security interest in the PPE
Collateral of such Persons and create in favor of Agent, for the benefit of Term
Lenders, a valid and (upon such filing and recording) perfected Second Priority
security interest in the Working Capital Collateral of such Persons and (z)
create in favor of Agent, for the benefit of Revolving Lenders and Term Lenders,
a pari passu valid and (upon such filing and recording) perfected First Priority
security interest in the Pari Passu Collateral of such Person; provided, however
that no such security interests will be required on the Closing Date with
respect to (1) the Refinery Assets (other than Inventory and Accounts), (2)
equity interests other than any Borrower's equity interests in a Material
Subsidiary or in Farmland National Beef Packing Company, L.P., Farmland Hydro,
United Country Brands, LLC and Land O'Lakes Farmland Feed LLC and (3) the CoBank
Equity Interests. Such actions shall include the following:

     (i)  Stock   Certificates  and  Instruments.   Delivery  to  Agent  of  (a)
     certificates  (which  certificates  shall  be  accompanied  by  irrevocable
     undated stock powers, duly endorsed in blank and otherwise  satisfactory in
     form and  substance  to  Agent)  representing  all  capital  stock  pledged
     pursuant to the Security  Agreement and (b) all  promissory  notes or other
     instruments (duly endorsed, where appropriate,  in a manner satisfactory to
     Agent) evidencing any Collateral;

     (ii) Lien Searches and UCC Termination Statements. Delivery to Agent of (a)
          --------------------------------------------
     the results of a recent search,  by a Person  satisfactory to Agent, of all
     effective UCC financing statements and fixture filings and all judgment and
     tax lien  filings  which may have been made with respect to any personal or
     mixed property of any Loan Party,  together with copies of all such filings
     disclosed by such search, and (b) UCC termination  statements duly executed
     by all applicable Persons for filing in all applicable jurisdictions as may
     be necessary to terminate any effective UCC financing statements or fixture
     filings disclosed in such search including without limitation, with respect
     to the Synthetic Lease and Existing Credit  Agreement  (other than any such
     financing  statements or fixture  filings in respect of Liens  permitted to
     remain outstanding pursuant to the terms of this Agreement);

     (iii) UCC Financing  Statements and Fixture  Filings.  Delivery to Agent of
     UCC financing  statements and, where  appropriate,  fixture  filings,  duly
     executed by each  applicable  Loan Party with  respect to all  personal and
     mixed  property   Collateral  of  such  Loan  Party,   for  filing  in  all
     jurisdictions as may be necessary or, in the opinion of Agent, desirable to
     perfect the security  interests created in such Collateral  pursuant to the
     Collateral Documents;

     (iv) PTO Cover Sheets,  Etc. Delivery to Agent of all cover sheets or other
     ---------------------  documents or  instruments  required to be filed with
     the  PTO  in  order  to  create  or  perfect  Liens  in  respect  of any IP
     Collateral;

     (v) Cash Management.  Delivery to Agent of a Lock Box Agreement executed by
     ---------------  each Person that is a party  thereto  with respect to each
     Lockbox  Account  listed  on  Schedule  7.14 and a Control  Agreement  with
                                   -------------
     respect  to  each  Concentration  Account  listed  on  Schedule  7.14;  and
                                                            -------------

     (vi) Opinions of Local Counsel. Upon request by Agent, delivery to Agent of
     an opinion of counsel  (which counsel shall be reasonably  satisfactory  to
     Agent)  with  respect  to the  creation  and  perfection  of  the  security
     interests in favor of Agent in such personal or mixed  property  Collateral
     and such other matters governed by the laws of such jurisdiction  regarding
     such security  interests as Agent may reasonably  request,  in each case in
     form and substance reasonably satisfactory to Agent.

     N. Closing Date Mortgages;  Closing Date Mortgage Policies; Etc. Subject to
such matters as may be contained in a Post Closing  Agreement,  Agent shall have
received from Borrowers and each applicable Subsidiary Guarantor:

     (i) Closing Date Mortgages.  Fully executed and notarized Mortgages (each a
     "Closing Date Mortgage" and,  collectively,  the "Closing Date Mortgages"),
     duly recorded in all  appropriate  places in all applicable  jurisdictions,
     encumbering each Real Property Asset listed in Schedule 5.5B annexed hereto
     and so  identified  as a Closing Date  Mortgaged  Property on such Schedule
     5.5B (each a "Closing  Date  Mortgaged  Property"  and,  collectively,  the
     "Closing  Date  Mortgaged  Properties").  With  respect to the  Coffeyville
     Fertilizer Plant,  Agent shall have received a fully executed and notarized
     durable power of attorney with respect to the parcelization of the Refinery
     Assets and Coffeyville Fertilizer Plant, in form and substance satisfactory
     to Agent;

     (ii) Opinions of Local Counsel.  An opinion of counsel (which counsel shall
     be reasonably  satisfactory to Agent) in each state in which a Closing Date
     Mortgaged  Property is located  with respect to the  enforceability  of the
     form(s) of Closing  Date  Mortgages  to be  recorded in such state and such
     other  matters as Agent may  reasonably  request,  in each case in form and
     substance reasonably satisfactory to Agent;

     (iii) Landlord Consents and Estoppels; Recorded Leasehold Interests. In the
     case of each  Closing Date  Mortgaged  Property  consisting  of a Leasehold
     Property,  (a) a Landlord Consent and Estoppel with respect thereto and (b)
     evidence that such Leasehold Property is a Recorded Leasehold Interest;

     (iv) Title  Insurance.  (a) ALTA  mortgagee  title  insurance  policies  or
     ---------------  unconditional  commitments  therefor  (the  "Closing  Date
     Mortgage Policies") issued by the Title Company with respect to the Closing
     Date Mortgaged Properties listed in Part A of Schedule 5.5B annexed hereto,
                                                   -------------
     in amounts not less than the  respective  amounts  designated  therein with
     respect to any particular Closing Date Mortgaged  Properties,  insuring fee
     simple title to, or a valid  leasehold  interest in, each such Closing Date
     Mortgaged  Property  vested in such Loan Party and assuring  Agent that the
     applicable  Closing  Date  Mortgages  create  valid and  enforceable  First
     Priority,  Second  Priority  and  Third  Priority  mortgage  Liens  on  the
     respective Closing Date Mortgaged  Properties  encumbered thereby,  subject
     only to Permitted  Encumbrances and to a standard survey  exception,  which
     Closing  Date  Mortgage  Policies  (1) shall  include  an  endorsement  for
     mechanics'  liens,  for future  advances  under this  Agreement and for any
     other  matters  reasonably  requested  by Agent and (2) shall  provide  for
     affirmative insurance and such reinsurance as Agent may reasonably request,
     all of the  foregoing  in form and  substance  reasonably  satisfactory  to
     Agent; and (b) evidence  satisfactory to Agent that such Loan Party has (i)
     delivered to the Title Company all certificates and affidavits  required by
     the Title  Company in  connection  with the  issuance of the  Closing  Date
     Mortgage  Policies and (ii) paid to the Title Company or to the appropriate
     governmental  authorities all expenses and premiums of the Title Company in
     connection with the issuance of the Closing Date Mortgage  Policies and all
     recording and stamp taxes  (including  mortgage  recording  and  intangible
     taxes)  payable in connection  with recording the Closing Date Mortgages in
     the appropriate real estate records;

     (v) Title  Reports.  With respect to each Closing Date  Mortgaged  Property
     listed in Part A of Schedule 5.5B annexed hereto,  a title report issued by
     the Title Company with respect  thereto,  dated not more than 30 days prior
     to the Closing Date and satisfactory in form and substance to Agent;

     (vi)  Copies  of  Documents  Relating  to Title  Exceptions.  Copies of all
           -----------------------------------------------------
     recorded  documents listed as exceptions to title or otherwise  referred to
     in the Closing Date  Mortgage  Policies or in the title  reports  delivered
     pursuant to subsection 4.1N(v); and

(vii) Matters Relating to Flood Hazard Properties. (a) Evidence, which may be in
      -------------------------------------------
the form of a letter from an  insurance  broker or a municipal  engineer,  as to
whether (1) any Closing Date Mortgaged  Property is a Flood Hazard  Property and
(2) the  community  in which  any such  Flood  Hazard  Property  is  located  is
participating in the National Flood Insurance Program, (b) if there are any such
Flood Hazard Properties, such Loan Party's written acknowledgement of receipt of
written  notification  from  Agent (1) as to the  existence  of each such  Flood
Hazard  Property  and (2) as to whether the  community  in which each such Flood
Hazard  Property is located is  participating  in the National  Flood  Insurance
Program,  and (c) in the event any such Flood  Hazard  Property  is located in a
community that  participates in the National Flood Insurance  Program,  evidence
that  Borrowers  have obtained  flood  insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of the Board of
Governors of the Federal Reserve System.

     O.  Matters  Relating  to  Existing  Indebtedness  of  Borrowers  and their
Restricted Subsidiaries.

(i)  Termination  of Existing  Credit  Agreement and Related Liens and Synthetic
     ---------------------------------------------------------------------------
Lease Restructuring;  Existing Letters of Credit. On the Closing Date, Borrowers
------------------------------------------------
and their Restricted Subsidiaries shall have (a) repaid in full all Indebtedness
outstanding  under the  Existing  Credit  Agreement,  (b) repaid or caused to be
repaid in full all Indebtedness  outstanding under the Synthetic Lease, pursuant
to the Synthetic Lease Restructuring,  (c) terminated or caused to be terminated
any  commitments  to lend or make other  extensions of credit under the Existing
Credit  Agreement and the Synthetic  Lease, (d) delivered to Agent all documents
or  instruments  necessary to release all Liens securing  Indebtedness  or other
obligations  of (A)  Borrowers  and  their  Restricted  Subsidiaries  under  the
Existing  Credit  Agreement,  (B) of the Owner  Trustee  and  Company  under the
Synthetic  Lease  pursuant  to  the  Synthetic  Lease  Restructuring,  (e)  made
arrangements  satisfactory  to Agent  with  respect to the  cancellation  of any
letters of credit outstanding thereunder or the issuance of Letters of Credit to
support the  obligations  of Borrowers and their  Restricted  Subsidiaries  with
respect thereto or that such letters of credit  constitute  Existing  Letters of
Credit hereunder and (f) delivered to Agent satisfactory  evidence that the fees
and  expenses  to be  incurred  in  connection  with the  foregoing  subsections
4.1O(i)(a) and 4.1O(i)(b) and the related  transactions  will not exceed amounts
acceptable  to the Agent,  including the payment of any premiums and accrued and
unpaid interest under the Existing Credit Agreement and the Synthetic Lease.

(ii) Existing  Indebtedness to Remain Outstanding.  Agent shall have received an
Officer's  Certificate  of Borrowers  stating  that,  after giving effect to the
transactions described in this subsection 4.1O, the Indebtedness of Loan Parties
(other than Indebtedness under the Loan Documents,  the Demand Loan Certificates
in the approximate  amount of $18,000,000 and the  Subordinated  Debenture Bonds
and  Subordinated   Investment   Certificates  in  the  approximate   amount  of
$511,000,000,  shall consist of approximately $80,000,000 in aggregate principal
amount of outstanding Indebtedness described in Schedule 7.1 annexed hereto. The
terms and conditions of all such Indebtedness  shall be in form and in substance
satisfactory to Agent.

     P. Collateral  Audits and Appraisals.  Agent shall have received (i) audits
and  appraisals of the Inventory and Accounts of Borrowers and their  Restricted
Subsidiaries  in  form,  scope  and  substance   satisfactory  to  Agents,  (ii)
appraisals,  in form, scope and substance  satisfactory to Agents concerning the
value  of  PPE  Collateral  of  Borrowers  and  their  Restricted   Subsidiaries
designated by Agent,  and (iii) such reviews  and/or  valuations of the business
operations of Borrowers and their Subsidiaries to the extent required by Agents,
such reviews and valuations to be in form,  scope and substance  satisfactory to
Agents.

     Q. Completion of Proceedings.  All corporate and other proceedings taken or
to be taken in  connection  with the  transactions  contemplated  hereby and all
documents incidental thereto not previously found acceptable by Agent, acting on
behalf of Lenders,  and its counsel shall be  satisfactory in form and substance
to Agent and such  counsel,  and Agent and such counsel  shall have received all
such  counterpart  originals or certified  copies of such documents as Agent may
reasonably request.

     R. No Disruption of Financial and Capital Markets. There shall have been no
material  adverse  change  in the  syndication  markets  for  credit  facilities
comparable to the  transactions  contemplated  hereby,  and there shall not have
occurred and be continuing a material  disruption of (including the continuation
of any existing conditions) or material adverse change in the financial, banking
or capital  markets  that has or would have a  material  adverse  effect on such
syndication  market,  in each  case  as  determined  by the  Agent  in its  sole
discretion.

     S. Pork Business. The Agent shall have received from Borrowers such audits,
reports,  monthly  financials and other information as may be requested by Agent
concerning the cost savings and incremental earnings increases Borrowers project
in the pork processing and marketing  business of Farmland Foods Inc., the form,
scope,  substance  and results of such  audits,  reports,  financials  and other
information to be satisfactory to Agents.

     T. Post Closing  Agreement.  If  Borrowers  are unable to obtain any of the
items  required to be delivered  under this Agreement on or prior to the Closing
Date, to the extent  permitted by Agent any such items shall be delivered on the
date and in the manner specified in the Post Closing Agreement.

4.2      Conditions to All Loans.
         -----------------------

     The  obligations  of Lenders to make Loans on each Funding Date are subject
to the following further conditions precedent:

     A. Agent shall have received  before that Funding Date, in accordance  with
the provisions of subsection  2.1B, an originally  executed Notice of Borrowing,
in each case signed by a duly authorized Officer of Borrowers.

     B. As of that Funding Date:

     (i) The  representations  and warranties  contained herein and in the other
     Loan Documents shall be true, correct and complete in all material respects
     on and as of that  Funding Date to the same extent as though made on and as
     of that date,  except to the extent  such  representations  and  warranties
     specifically relate to an earlier date, in which case such  representations
     and warranties  shall have been true,  correct and complete in all material
     respects  on  and  as  of  such  earlier  date;  provided,   that  where  a
     representation  and warranty is already  qualified as to materiality,  such
     materiality qualifier shall be disregarded for purposes of this condition;

     (ii) No event shall have  occurred and be  continuing  or would result from
     the consummation of the borrowing  contemplated by such Notice of Borrowing
     that would constitute an Event of Default or a Potential Event of Default;

     (iii) Each Loan Party shall have  performed  in all  material  respects all
     agreements and satisfied all conditions which this Agreement provides shall
     be performed or satisfied by it on or before that Funding Date;

     (iv) No order, judgment or decree of any arbitrator or Government Authority
     shall  purport to enjoin or restrain any Lender from making the Loans to be
     made by it on that Funding Date;

     (v) Borrowers  shall have  delivered such other  certificates  or documents
     that Agent shall reasonably request, in form and substance  satisfactory to
     Agent; and

     (vi) The  aggregate  amount of Cash  constituting  available  and collected
     balances in a Deposit Account and Cash Equivalents held by Borrowers, minus
     the amount of payments reasonably expected to be made within the next three
     Business Days shall not exceed  $1,000,000 or such greater amount as may be
     approved by Agent.

4.3      Conditions to Letters of Credit.
         -------------------------------

     The  issuance  of any  Letter  of  Credit  hereunder  (whether  or not  the
applicable  Issuing  Lender is  obligated  to issue  such  Letter of  Credit) is
subject to the following conditions precedent:

     A. On or  before  the date of  issuance  of the  initial  Letter  of Credit
pursuant to this Agreement, the initial Loans shall have been made.

     B. On or before the date of issuance of such Letter of Credit,  Agent shall
have  received,  in accordance  with the  provisions of subsection  3.1B(i),  an
originally executed Request for Issuance of Letter of Credit in each case signed
by a duly authorized  Officer of Borrowers,  together with all other information
specified in subsection  3.1B(i) and such other  documents or information as the
applicable Issuing Lender may reasonably require in connection with the issuance
of such Letter of Credit.

     C. On the  date of  issuance  of such  Letter  of  Credit,  all  conditions
precedent  described in subsection 4.2B shall be satisfied to the same extent as
if the  issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.

Section 5.        BORROWERS' REPRESENTATIONS AND WARRANTIES

     In order to induce  Lenders  to enter into this  Agreement  and to make the
Loans,  to induce  Issuing  Lender  to issue  Letters  of  Credit  and to induce
Revolving Lenders to purchase  participations  therein,  Borrowers represent and
warrant to each Lender, on the date of this Agreement,  on each Funding Date and
on the date of issuance of each Letter of Credit, that the following  statements
are true, correct and complete:

     5.1  Organization,  Powers,  Qualification,  Good  Standing,  Business  and
          ----------------------------------------------------------------------
          Restricted Subsidiaries.
          ------------------

     A.  Organization and Powers.  Company is a cooperative  corporation and the
Restricted Subsidiaries are corporations duly organized, validly existing and in
good standing under the laws of their  jurisdiction of organization as specified
in Schedule  5.1 annexed  hereto.  Each Loan Party and each of their  Restricted
Subsidiaries  has all  requisite  power and  authority  to own and  operate  its
properties,  to carry on its  business  as now  conducted  and as proposed to be
conducted,  to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby.

     B.  Qualification  and Good  Standing.  Each  Loan  Party and each of their
Restricted  Subsidiaries  is qualified  to do business  and in good  standing in
every  jurisdiction where its assets are located and wherever necessary to carry
out its business and operations, except in jurisdictions where the failure to be
so  qualified  or in good  standing  has not had and will  not  have a  Material
Adverse Effect.

     C. Conduct of Business.  Borrowers and their  Restricted  Subsidiaries  are
engaged only in the businesses permitted to be engaged in pursuant to subsection
7.11. In  accordance  with their past  practices,  Borrowers  shall  continue to
monitor the  existence of supplier  Liens with  respect to any Raw  Materials or
living livestock  purchased and used in Borrowers'  business and to make payment
for products on which Liens have been  disclosed  jointly to the Lien holder and
the seller of such products.

     D.  Subsidiaries.  All of the  Subsidiaries  of Borrowers are identified in
Schedule 5.1 annexed hereto,  as said Schedule 5.1 may be supplemented from time
to time pursuant to the provisions of subsection  6.1(xv).  The capital stock or
similar equity interest of each of the  Subsidiaries of Borrowers  identified in
Schedule 5.1 annexed hereto (as so supplemented)  are duly  authorized,  validly
issued,  fully paid and  nonassessable and none of such capital stock or similar
equity interests constitutes Margin Stock. Each of the Subsidiaries of Borrowers
identified in Schedule 5.1 annexed hereto (as so  supplemented) is a cooperative
corporation,   corporation,   partnership  or  limited  liability  company  duly
organized or formed, validly existing and in good standing under the laws of its
respective  jurisdiction  of organization  set forth therein,  has all requisite
power  and  authority  to own and  operate  its  properties  and to carry on its
business as now conducted  and as proposed to be conducted,  and is qualified to
do  business  and in good  standing in every  jurisdiction  where its assets are
located and wherever necessary to carry out its business and operations, in each
case except where  failure to be so  qualified or in good  standing or a lack of
such  power  and  authority  has not had and will not  have a  Material  Adverse
Effect.  Schedule 5.1 annexed hereto (as so  supplemented)  correctly sets forth
the ownership  interest of Borrowers and each of their  Subsidiaries  in each of
the  Subsidiaries  of  Borrowers  identified  therein and  identifies  each such
Subsidiary as a Material Subsidiary,  a Restricted Subsidiary or an Unrestricted
Subsidiary.  The aggregate  shareholders' equity for all Restricted Subsidiaries
which are not Material Subsidiaries does not exceed $10,000,000.

     E.  Joint  Ventures.  All of the  Joint  Ventures  of  Borrowers  and their
Subsidiaries  are set forth on Schedule  5.1E annexed  hereto,  as said Schedule
5.1E  may be  supplemented  from  time to time  pursuant  to the  provisions  of
subsection  6.1(xviii).  The business  purpose,  capitalization  and constituent
members,  together with percentage  ownership  interests thereof,  of each Joint
Venture are described on Schedule 5.1E.

5.2      Authorization of Borrowing, etc.
         -------------------------------

     A. Authorization of Borrowing.  The execution,  delivery and performance of
the Loan Documents have been duly authorized by all necessary action on the part
of each Loan Party that is a party thereto.

     B. No Conflict. The execution,  delivery and performance by Loan Parties of
the  Loan  Documents  to which  they are  parties  and the  consummation  of the
transactions  contemplated by the Loan Documents do not and will not (i) violate
any provision of any law or any  governmental  rule or regulation  applicable to
Borrowers or any of their Restricted Subsidiaries,  the Organizational Documents
of Borrowers or any of their Restricted  Subsidiaries or any order,  judgment or
decree of any court or other agency of government binding on Borrowers or any of
their  Restricted  Subsidiaries,  (ii) conflict  with,  result in a breach of or
constitute  (with  due  notice  or lapse of time or both) a  default  under  any
Contractual  Obligation  of Borrowers or any of their  Restricted  Subsidiaries,
(iii)  result in or require the creation or  imposition  of any Lien upon any of
the  properties or assets of Borrowers or any of their  Restricted  Subsidiaries
(other than any Liens created under any of the Loan  Documents in favor of Agent
on behalf of  Lenders),  or (iv)  require any  approval of  stockholders  or any
approval or consent of any Person under any Contractual  Obligation of Borrowers
or any of their Restricted  Subsidiaries,  except for such approvals or consents
which will be obtained on or before the Closing Date and disclosed in writing to
Lenders.

     C. Governmental Consents.  The execution,  delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the  consummation of
the transactions  contemplated by the Loan Documents do not and will not require
any Governmental Authorization.

     D. Binding  Obligation.  Each of the Loan  Documents has been duly executed
and  delivered  by each Loan Party that is a party  thereto  and is the  legally
valid and binding obligation of such Loan Party,  enforceable  against such Loan
Party in  accordance  with its  respective  terms,  except as may be  limited by
bankruptcy, insolvency,  reorganization,  moratorium or similar laws relating to
or limiting  creditors' rights generally or by equitable  principles relating to
enforceability.

5.3      Financial Condition.
         -------------------

     Borrowers have heretofore  delivered to Lenders,  at Lenders' request,  the
financial  statements  and  information  set forth in subsection  4.1E. All such
statements other than pro forma financial statements were prepared in conformity
with GAAP and fairly present,  in all material respects,  the financial position
(on a consolidated and, where applicable,  consolidating  basis) of the entities
described in such financial  statements as at the  respective  dates thereof and
the  results  of  operations  and  cash  flows  (on a  consolidated  and,  where
applicable,  consolidating  basis) of the entities described therein for each of
the periods then ended,  subject,  in the case of any such  unaudited  financial
statements,  to changes  resulting from audit and normal  year-end  adjustments.
None of the Borrowers and no Restricted  Subsidiary has (nor will have following
the  funding  of  the  initial  Loans)  any  Contingent  Obligation,  contingent
liability  or  liability  for  taxes,  long-term  lease or  unusual  forward  or
long-term  commitment  that,  as of the Closing  Date,  is not  reflected in the
foregoing financial  statements or the notes thereto and, as of any Funding Date
subsequent to the Closing  Date,  is not reflected in the most recent  financial
statements  delivered to Lenders pursuant to subsection 6.1 or the notes thereto
and that, in any such case, is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Borrowers
or any of their Restricted Subsidiaries.

5.4      No Material Adverse Change; No Restricted Junior Payments.
         ---------------------------------------------------------

     Since August 31, 2001,  no event or change has occurred  that has caused or
evidences,  either in any case or in the aggregate,  a Material  Adverse Effect.
Neither  Borrowers  nor any of their  Restricted  Subsidiaries  has  directly or
indirectly  declared,  ordered,  paid or made,  or set apart any sum or property
for,  any  Restricted  Junior  Payment or agreed to do so except as permitted by
subsection 7.5.

5.5      Title to Properties; Liens; Real Property; Intellectual Property.
         ----------------------------------------------------------------

     A. Title to Properties;  Liens. Borrowers and their Restricted Subsidiaries
have (i) good  sufficient  and legal title to (in the case of fee  interests  in
real  property),  (ii) valid  leasehold  interests  in (in the case of leasehold
interests in real or personal property),  or (iii) good title to (in the case of
all other  personal  property),  all of their  respective  properties and assets
reflected in the financial  statements  referred to in subsection  5.3 or in the
most recent financial  statements  delivered pursuant to subsection 6.1, in each
case except for assets  disposed of since the date of such financial  statements
in the ordinary course of business or as otherwise  permitted  under  subsection
7.7.  Except  for  Permitted  Encumbrances  or as  otherwise  permitted  by this
Agreement, all such properties and assets are free and clear of Liens.

     B. Real  Property.  As of the Closing Date,  Schedule  5.5B annexed  hereto
contains a true,  accurate  and  complete  list of (i) all fee  interests in any
Material Real Property  Asset and (ii) all leases,  subleases or  assignments of
leases (together with all amendments,  modifications,  supplements,  renewals or
extensions of any thereof) constituting a Material Leasehold Property. Except as
specified in Schedule 5.5B annexed hereto,  each agreement listed in clause (ii)
of the immediately  preceding sentence is in full force and effect and Borrowers
do not have  knowledge  of any  default  that  has  occurred  and is  continuing
thereunder,  and each such agreement  constitutes  the legally valid and binding
obligation of each  applicable  Borrower or Restricted  Subsidiary,  enforceable
against such  Borrower or Restricted  Subsidiary  in accordance  with its terms,
except as enforcement may be limited by bankruptcy, insolvency,  reorganization,
moratorium or similar laws relating to or limiting  creditors'  rights generally
or by equitable principles.

     C.  Intellectual  Property.  As of the Closing Date,  Schedule 5.5C annexed
hereto contains a true, accurate and complete list of all Intellectual Property.
Each of Borrowers and their Restricted Subsidiaries owns or has the right to use
all Intellectual Property used in the conduct of its business,  and none of such
Intellectual  Property  conflicts with a right of any other Person to the extent
such  conflict  could  reasonably  be expected  to result in a Material  Adverse
Effect.

5.6      Litigation; Adverse Facts.
         -------------------------

     Except  as  set  forth  in  Schedule  5.6  annexed  hereto,  there  are  no
Proceedings  (whether or not  purportedly on behalf of Borrowers or any of their
Restricted Subsidiaries) at law or in equity, or before or by any court or other
Government Authority  (including any Environmental  Claims) that are pending or,
to the knowledge of Borrowers,  threatened against or affecting Borrowers or any
of their  Restricted  Subsidiaries  or any property of Borrowers or any of their
Restricted  Subsidiaries  and  that,  individually  or in the  aggregate,  could
reasonably be expected to result in a Material Adverse Effect. Neither Borrowers
nor any of their  Restricted  Subsidiaries (i) is in violation of any applicable
laws  (including  Environmental  Laws) that,  individually  or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect,  or (ii) is
subject  to  or  in  default  with  respect  to  any  final  judgments,   writs,
injunctions,  decrees,  rules or  regulations  of any court or other  Government
Authority,  that, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.

5.7      Payment of Taxes.
         ----------------

     Except to the extent  permitted  by  subsection  6.3,  all tax  returns and
reports of Borrowers and their Subsidiaries  required to be filed by any of them
have been  timely  filed,  and all taxes shown on such tax returns to be due and
payable and all assessments,  fees and other governmental charges upon Borrowers
and their  Subsidiaries and upon their respective  properties,  assets,  income,
businesses and  franchises  that are due and payable have been paid when due and
payable.  Borrowers  know of no proposed tax  assessment  against  Borrowers and
their  Subsidiaries  that is not being  actively  contested by Borrowers or such
Subsidiary  in good faith and by  appropriate  proceedings;  provided  that such
reserves  or other  appropriate  provisions,  if any,  as shall be  required  in
conformity with GAAP shall have been made or provided therefor.

5.8  Performance  of  Agreements;   Materially  Adverse   Agreements;   Material
     ---------------------------------------------------------------------------
     Contracts.
     ---------

     A. Neither Borrowers nor any of their Restricted Subsidiaries is in default
in the  performance,  observance  or  fulfillment  of  any  of the  obligations,
covenants or conditions contained in any of its Contractual Obligations,  and no
condition  exists that,  with the giving of notice or the lapse of time or both,
would  constitute  such a  default,  except  where the  consequences,  direct or
indirect,  of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.

     B. Neither Borrowers nor any of their Restricted Subsidiaries is a party to
or is otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate,  could reasonably
be expected to result in a Material Adverse Effect.

     C. All  Material  Contracts  are in full force and  effect and no  material
defaults currently exist thereunder.

5.9      Governmental Regulation.
         -----------------------

     Neither  Borrowers nor any of their  Restricted  Subsidiaries is subject to
regulation  under the Public  Utility  Holding  Company Act of 1935, the Federal
Power Act, the Interstate  Commerce Act or the Investment Company Act of 1940 or
under any other  federal  or state  statute  or  regulation  which may limit its
ability to incur  Indebtedness or which may otherwise  render all or any portion
of the Obligations unenforceable.

5.10     Securities Activities.
         ---------------------

     A. Neither  Borrowers nor any of their  Restricted  Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.

     B. Following application of the proceeds of each Loan, not more than 25% of
the value of the assets  (either of  Borrowers  only or of  Borrowers  and their
Restricted  Subsidiaries  on a consolidated  basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any  restriction  contained in any agreement
or instrument,  between Borrowers and any Lender or any Affiliate of any Lender,
relating to Indebtedness  and within the scope of subsection 8.2, will be Margin
Stock.

5.11     Employee Benefit Plans.
         ----------------------

     A. Borrowers, each of their Subsidiaries and each of their respective ERISA
Affiliates are in compliance with all applicable  provisions and requirements of
ERISA and the regulations and published interpretations  thereunder with respect
to each Employee  Benefit Plan, and have performed all their  obligations  under
each Employee Benefit Plan,  except where the instances of noncompliance and the
failures to perform would not,  individually or in the aggregate,  be reasonably
expected to result in a Material Adverse Effect. Each Employee Benefit Plan that
is intended to qualify  under  Section  401(a) of the Internal  Revenue Code has
received  from  the  Internal  Revenue  Service  a  determination  that it is so
qualified,  and to the best  knowledge of  Borrowers,  no event or condition has
occurred  or exists  which would  reasonably  be expected to result in a loss of
qualification.

     B. No ERISA  Event has  occurred or is  reasonably  expected to occur that,
individually or in the aggregate,  has resulted in or would reasonably  expected
to result in a Material Adverse Effect.

     C.  Except to the  extent  required  under  Section  4980B of the  Internal
Revenue Code or except as set forth in Schedule 5.11 annexed hereto, no Employee
Benefit  Plan  provides  health or welfare  benefits  (through  the  purchase of
insurance or otherwise) for any retired or former employee of Borrowers,  any of
their Subsidiaries or any of their respective ERISA Affiliates.

     D. As of the most recent valuation date for any Pension Plan, the excess of
(1)  the  actuarial  present  value  (determined  on  the  basis  of  reasonable
assumptions  employed  by the  independent  actuary  for such  Pension  Plan for
purposes of Section 412 of the Internal Revenue Code or Section 302 of ERISA) of
benefit  liabilities  (as defined in Section  4001(a)(16) of ERISA) over (2) the
fair market value of the assets of such  Pension  Plan,  individually  or in the
aggregate for all Pension Plans  (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit liabilities), does not
exceed an amount that, if payable,  would  reasonably be expected to result in a
Material Adverse Effect.

     E. As of the most recent  valuation  date for each  Multiemployer  Plan for
which the actuarial report is available,  the potential  liability of Borrowers,
their  Subsidiaries  and  their  respective  ERISA  Affiliates  for  a  complete
withdrawal from such  Multiemployer  Plan (within the meaning of Section 4203 of
ERISA),  when aggregated with such potential liability for a complete withdrawal
from all Multiemployer Plans, based on information available pursuant to Section
4221(e) of ERISA, does not exceed an amount which, if payable,  would reasonably
be expected to result in a Material Adverse Effect.

5.12     Certain Fees.
         ------------

                  Borrowers and their Subsidiaries have incurred no liability or
obligation for any broker's or finder's fees or commissions with respect to this
Agreement or any of the transactions contemplated hereby, and Borrowers hereby
indemnify Lenders against, and agree that they will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged to
have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.

5.13     Environmental Protection.
         ------------------------

     A. Except for the matters disclosed on Schedule 5.13 annexed hereto,  which
individually  and in the aggregate  could not reasonably be expected to have any
Material  Adverse  Effect,  and except for such exceptions as individually or in
the  aggregate  could not  reasonably  be  expected  to have a Material  Adverse
Effect:

     (i) neither  Borrowers nor any of their Restricted  Subsidiaries nor any of
     their  respective  Facilities or  operations is subject to any  outstanding
     written  order,  consent  decree or  settlement  agreement  with any Person
     relating to (a) any Environmental Law, (b) any Environmental  Claim, or (c)
     any Hazardous Materials Activity;

     (ii)  neither  Borrowers  nor  any of  their  Restricted  Subsidiaries  has
     received  any letter or request for  information  under  Section 104 of the
     Comprehensive Environmental Response,  Compensation,  and Liability Act (42
     U.S.C.ss. 9604) or any comparable state law;

     (iii)  there are and, to  Borrowers'  knowledge,  have been no  conditions,
     occurrences,  or Hazardous  Materials  Activities that could  reasonably be
     expected to form the basis of an Environmental  Claim against  Borrowers or
     any of their Restricted Subsidiaries;

     (iv) neither  Borrowers nor any of their  Restricted  Subsidiaries  nor, to
     Borrowers'  knowledge,  any  predecessor  of  Borrowers  or  any  of  their
     Restricted  Subsidiaries has filed any notice under any  Environmental  Law
     indicating  past  or  present  treatment  of  Hazardous  Materials  at  any
     Facility,  and none of Borrowers' or any of their Restricted  Subsidiaries'
     operations involves the generation,  transportation,  treatment, storage or
     disposal of hazardous  waste,  as defined under 40 C.F.R.  Parts 260-270 or
     any state equivalent;

     (v)  Borrowers  and  the  Restricted  Subsidiaries  have  been  and  are in
     compliance with all current or reasonably  foreseeable future  requirements
     pursuant to or under Environmental Laws.

     B. The information  Company has provided Agent,  through its  environmental
consultant,  Golder &  Associates,  with  respect to the  matters  described  in
subsection  4.1L,  including  oral and  written  communications  in  response to
inquiries  of Golder &  Associates,  is accurate  and  complete in all  material
respects.

5.14     Employee Matters.
         ----------------

                  There is no strike or work stoppage in existence or threatened
involving Borrowers or any of their Restricted Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.

5.15     Solvency.
         --------

                  Each Borrower is and, upon the incurrence of any Obligations
by such Borrower on any date on which this representation is made, will be
Solvent.

5.16     Matters Relating to Collateral.
         ------------------------------

     A. Creation,  Perfection and Priority of Liens.  The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
pursuant to subsections  4.1M,  4.1N, 6.8 and 6.9 and (ii) the delivery to Agent
of any  Collateral  not delivered to Agent at the time of execution and delivery
of the  applicable  Collateral  Document  (all of which  Collateral  has been so
delivered) are effective to create in favor of Agent for the benefit of Lenders,
as security for the respective Secured Obligations (as defined in the applicable
Collateral  Document in respect of any Collateral),  a valid and perfected First
Priority Lien, Second Priority Lien or pari passu Lien on all of the Collateral,
as the case may be, and all filings and other actions  necessary or desirable to
perfect and maintain the perfection and First Priority, Second Priority or First
Priority pari passu status of such Liens have been duly made or taken and remain
in full force and effect,  other than the filing of any UCC financing statements
delivered to Agent for filing (but not yet filed) and the periodic filing of UCC
continuation  statements in respect of UCC financing  statements  filed by or on
behalf of Agent.

     B. Governmental Authorizations. No authorization,  approval or other action
by, and no notice to or filing with,  any  Government  Authority is required for
either (i) the pledge or grant by any Loan  Party of the Liens  purported  to be
created in favor of Agent  pursuant to any of the  Collateral  Documents or (ii)
the  exercise by Agent of any rights or  remedies  in respect of any  Collateral
(whether  specifically  granted or  created  pursuant  to any of the  Collateral
Documents or created or provided for by applicable  law),  except for filings or
recordings  contemplated by subsection  5.16A and except as may be required,  in
connection with the disposition of any Collateral,  by laws generally  affecting
the offering and sale of securities.

     C. Absence of  Third-Party  Filings.  Except such as may have been filed in
favor of Agent as  contemplated  by subsection  5.16A and to evidence  permitted
lease  obligations and other Liens permitted  pursuant to subsection 7.2, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect  covering all or any part of the  Collateral  is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.

     D.  Margin  Regulations.  The  pledge  of the  Collateral  pursuant  to the
Collateral  Documents  does not  violate  Regulation  T, U or X of the  Board of
Governors of the Federal Reserve System.

     E. Information Regarding  Collateral.  All information supplied to Agent by
or on behalf of any Loan Party with  respect to any of the  Collateral  (in each
case taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects.

5.17     Disclosure.
         ----------

                  No representation or warranty of Borrowers or any of their
Subsidiaries contained in the Confidential Information Memorandum or in any Loan
Document or in any other document, certificate or written statement furnished to
Lenders or their agents, consultants, auditor, attorneys or representatives,
including without limitation Agent's environmental consultant, by or on behalf
of Borrowers or any of their Subsidiaries for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state a material fact (known to Borrowers, in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Borrowers to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Borrowers
(other than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders or their agents, consultants, auditor,
attorneys or representatives, including without limitation Agent's environmental
consultant, for use in connection with the transactions contemplated hereby.

5.18      Subordinated Indebtedness.
          -------------------------

                  The Obligations constitute senior indebtedness that is
superior in right of payment to the Subordinated Debenture Bonds and the
Subordinated Investment Certificates and all other Subordinated Indebtedness and
are entitled to the benefits of the subordination provisions of all Subordinated
Indebtedness of Borrowers and their Restricted Subsidiaries.

Section 6.        BORROWERS' AFFIRMATIVE COVENANTS

                  Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Borrowers shall perform, and shall cause each of their Subsidiaries to
perform, all covenants in this Section 6.

6.1      Financial Statements and Other Reports.
         --------------------------------------

                  Borrowers will maintain, and cause each of their Subsidiaries
to maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP. Borrowers will deliver to Agent for distribution to the
Lenders:

     (i)  Events of  Default,  etc.:  promptly  upon any  officer  of  Borrowers
          -----------------------
     obtaining knowledge (a) of any condition or event that constitutes an Event
     of Default or Potential Event of Default, or becoming aware that any Lender
     has given any notice  (other than to Agent) or taken any other  action with
     respect to a claimed  Event of Default or Potential  Event of Default,  (b)
     that  any  Person  has  given  any  notice  to  Borrowers  or any of  their
     Restricted Subsidiaries or taken any other action with respect to a claimed
     default or event or condition of the type  referred to in  subsection  8.2,
     (c) of any  condition  or event that would be required to be disclosed in a
     current  report  filed  by  Borrowers  with  the  Securities  and  Exchange
     Commission  on Form 8-K if  Borrowers  were  required to file such  reports
     under the Exchange  Act, (d) of the  occurrence of any event or change that
     has caused or evidences, either in any case or in the aggregate, a Material
     Adverse  Effect,  or (e) the  occurrence  of an event of default  under any
     material  indebtedness of any Joint Venture which default could  reasonably
     be expected to allow such Joint Venture's  creditors to block Distributions
     to Borrowers or their  Restricted  Subsidiaries,  an Officer's  Certificate
     specifying the nature and period of existence of such  condition,  event or
     change,  or specifying  the notice given or action taken by any such Person
     and the  nature  of such  claimed  Event  of  Default,  Potential  Event of
     Default, default, event or condition, and what action Borrowers have taken,
     are  taking  and  propose  to take  with  respect  thereto,  to the  extent
     Borrowers exercising their Best Efforts have the ability to take any action
     pursuant to the applicable Joint Venture Agreement;

     (ii) Monthly and Quarterly Financials:  (a) as soon as available and in any
          --------------------------------
     event  within 30 days after the end of each month  ending after the Closing
     Date the Monthly  Reporting Package and (b) as soon as available and in any
     event  within one  Business  Day after  filing with the SEC but in no event
     later than 50 days after the end of each Fiscal  Quarter (or,  with respect
     to the fourth Fiscal  Quarter,  95 days),  for Fiscal Quarters ending after
     the Closing Date, (i) the consolidated and consolidating  balance sheets of
     Company and its  Subsidiaries  as at the end of such fiscal  period and the
     related consolidated and consolidating  statements of income and cash flows
     of Company and its  Subsidiaries  for such fiscal period and for the period
     from the  beginning  of the  then  current  Fiscal  Year to the end of such
     fiscal  period,  setting  forth  in  each  case  in  comparative  form  the
     corresponding  figures for the corresponding periods of the previous Fiscal
     Year and the corresponding  figures from the Financial Plan for the current
     Fiscal  Year,  to the  extent  prepared  for  such  fiscal  period,  all in
     reasonable detail and certified by the chief financial officer or treasurer
     of  Company  that  they  fairly  present,  in all  material  respects,  the
     financial  condition  of  Company  and  its  Subsidiaries  as at the  dates
     indicated and the results of their  operations and their cash flows for the
     periods  indicated,  subject  to  changes  resulting  from audit and normal
     year-end adjustments,  (ii) a narrative report describing the operations of
     Company and its  Subsidiaries  in the form  prepared  for  presentation  to
     senior  management  for such  fiscal  period  and for the  period  from the
     beginning of the then current  Fiscal Year to the end of such fiscal period
     and (iii) the  balance  sheets  and  statements  of income  and cash  flows
     required  in clause (i) above  prepared  on the basis  that the  Restricted
     Subsidiaries  are the  only  Subsidiaries  of  Borrowers  (the  "Restricted
     Subsidiary Basis");

     (iii) Year-End Financials:  as soon as available and in any event within 90
           -------------------
     days  after  the  end  of  each  Fiscal  Year,  (a)  the  consolidated  and
     consolidating  balance sheets of Company and its Subsidiaries as at the end
     of  such  Fiscal  Year  and  the  related  consolidated  and  consolidating
     statements  of income,  stockholders'  equity and cash flows of Company and
     its  Subsidiaries  for such  Fiscal  Year,  setting  forth in each  case in
     comparative form the corresponding figures for the previous Fiscal Year and
     the  corresponding  figures  from the  Financial  Plan for the Fiscal  Year
     covered  by  such  financial  statements,  all  in  reasonable  detail  and
     certified by the chief financial  officer or treasurer of Company that they
     fairly  present,  in all  material  respects,  the  financial  condition of
     Company and its  Subsidiaries  as at the dates indicated and the results of
     their  operations  and their cash flows for the  periods  indicated,  (b) a
     narrative report  describing the operations of Company and its Subsidiaries
     in the form prepared for  presentation to senior  management of Company for
     such  Fiscal  Year,  (c)  in  the  case  of  such  consolidated   financial
     statements,  a report thereon of KPMG, LLP or other  independent  certified
     public  accountants of recognized  national  standing selected by Borrowers
     and satisfactory to Agent, which report shall be unqualified, shall express
     no doubts about the ability of Company and its  Subsidiaries to continue as
     a  going  concern,  and  shall  state  that  such  consolidated   financial
     statements  fairly  present,  in all material  respects,  the  consolidated
     financial  position  of  Company  and  its  Subsidiaries  as at  the  dates
     indicated and the results of their  operations and their cash flows for the
     periods  indicated in  conformity  with GAAP applied on a basis  consistent
     with  prior  years  (except  as  otherwise   disclosed  in  such  financial
     statements) and that the examination by such accountants in connection with
     such  consolidated  financial  statements has been made in accordance  with
     generally  accepted  auditing  standards  and (d) the  balance  sheets  and
     statements of income and cash flows  required  above in clause (a) prepared
     on the Restricted Subsidiary Basis;

     (iv)  Compliance  Certificates:  together  with each  delivery of financial
           -----------------------
     statements of Company and its  Subsidiaries  pursuant to subdivisions  (ii)
     and (iii) above, (a) an Officer's Certificate of Borrowers stating that the
     signers have reviewed the terms of this  Agreement and have made, or caused
     to be made under their  supervision,  a review in reasonable  detail of the
     transactions and condition of Borrowers and their  Restricted  Subsidiaries
     during the accounting period covered by such financial  statements and that
     such review has not disclosed  the  existence  during or at the end of such
     accounting  period,  and that the  signers  do not  have  knowledge  of the
     existence as at the date of such Officer's Certificate, of any condition or
     event that  constitutes an Event of Default or Potential  Event of Default,
     or, if any such condition or event existed or exists, specifying the nature
     and period of existence  thereof and what action  Borrowers have taken, are
     taking  and  propose to take with  respect  thereto;  and (b) a  Compliance
     Certificate demonstrating in reasonable detail compliance during and at the
     end of the applicable accounting periods with the restrictions contained in
     Section 7, in each case to the extent  compliance with such restrictions is
     required to be tested at the end of the applicable accounting period;

     (v) Reconciliation  Statements: if, as a result of any change in accounting
         -------------------------
     principles  and policies from those used in the  preparation of the audited
     financial  statements  referred  to in  subsection  5.3,  the  consolidated
     financial  statements  of  Borrowers  and  their  Restricted   Subsidiaries
     delivered  pursuant to subdivisions (ii), (iii) or (xii) of this subsection
     6.1 will differ in any  material  respect from the  consolidated  financial
     statements that would have been delivered pursuant to such subdivisions had
     no such change in accounting  principles  and policies been made,  then (a)
     together  with the first  delivery  of  financial  statements  pursuant  to
     subdivision  (ii),  (iii) or (xii) of this  subsection  6.1 following  such
     change,  consolidated  financial statements of Company and its Subsidiaries
     and the financial  statements  prepared on the Restricted  Subsidiary Basis
     for (y) the current  Fiscal Year to the  effective  date of such change and
     (z) the two full  Fiscal  Years  immediately  preceding  the Fiscal Year in
     which such change is made, in each case prepared on a pro forma basis as if
     such change had been in effect during such  periods,  and (b) together with
     each delivery of financial  statements  pursuant to subdivision (ii), (iii)
     or (xii) of this subsection 6.1 following such change, if required pursuant
     to subsection 1.2, a written  statement of the chief accounting  officer or
     chief  financial   officer  of  Borrowers  setting  forth  the  differences
     (including any differences that would affect any  calculations  relating to
     the  financial  covenants  set forth in  subsection  7.6) which  would have
     resulted if such  financial  statements  had been prepared  without  giving
     effect to such change;

     (vi)   Accountants'   Certification:   together   with  each   delivery  of
            --------------------------
     consolidated  financial statements of Company and its Subsidiaries pursuant
     to  subdivision  (iii)  above,  a  written  statement  by  the  independent
     certified  public  accountants  giving the report  thereon (a) stating that
     their  audit  examination  has  included  a  review  of the  terms  of this
     Agreement  and the  other  Loan  Documents  as they  relate  to  accounting
     matters,  (b) stating whether,  in connection with their audit examination,
     any  condition or event that  constitutes  an Event of Default or Potential
     Event of Default has come to their  attention  and, if such a condition  or
     event has come to their  attention,  specifying  the  nature  and period of
     existence  thereof;  provided that such accountants  shall not be liable by
     reason of any  failure  -------- to obtain  knowledge  of any such Event of
     Default or  Potential  Event of Default  that would not be disclosed in the
     course of their  audit  examination,  and (c)  stating  that based on their
     audit  examination  nothing has come to their attention that causes them to
     believe either or both that the information  contained in the  certificates
     delivered  therewith  pursuant to subdivision  (iv) above is not correct or
     that  the  matters  set  forth  in the  Compliance  Certificates  delivered
     therewith  pursuant  to  clause  (b) of  subdivision  (iv)  above  for  the
     applicable  Fiscal Year are not stated in accordance with the terms of this
     Agreement;

     (vii)   Accountants'   Reports:   promptly  upon  receipt  thereof  (unless
     restricted by applicable  professional  standards),  copies of all opinions
     submitted to Borrowers  by  independent  certified  public  accountants  in
     connection  with each annual  interim or, if  requested  by Agent,  special
     audit of the financial  statements of Company and its Subsidiaries  made by
     such  accountants,  including  any  management  letter  submitted  by  such
     accountants to management in connection with their annual audit;

     (viii)  SEC  Filings  and Press  Releases:  promptly  upon  their  becoming
             ---------------------------------
     available,  copies of (a) all financial  statements,  reports,  notices and
     proxy  statements  sent or made  available  generally by Borrowers to their
     security  holders or by any  Restricted  Subsidiary  of  Borrowers to their
     security holders other than Borrowers or another  Restricted  Subsidiary of
     Borrowers,  (b) all  regular  and  periodic  reports  and all  registration
     statements (other than on Form S-8 or a similar form) and prospectuses,  if
     any, filed by Borrowers or any of their  Restricted  Subsidiaries  with any
     securities  exchange or with the Securities and Exchange  Commission or any
     governmental or private  regulatory  authority,  and (c) all press releases
     and other statements made available  generally by Borrowers or any of their
     Restricted  Subsidiaries to the public concerning material  developments in
     the business of Borrowers or any of their Restricted Subsidiaries;

     (ix)  Litigation  or Other  Proceedings:  (a) promptly  upon any officer of
     Borrowers  obtaining  knowledge of (1) the institution of, or non-frivolous
     threat of, any  Proceeding  against or affecting  Borrowers or any of their
     Restricted  Subsidiaries  or any  property  of  Borrowers  or any of  their
     Restricted Subsidiaries not previously disclosed in writing by Borrowers to
     Lenders or (2) any material  development  in any  Proceeding  that,  in any
     case:

     (x) if adversely determined, has a reasonable possibility of giving rise to
     a Material Adverse Effect; or

     (y) seeks to enjoin or otherwise prevent the consummation of, or to recover
     any damages or obtain relief as a result of, the transactions  contemplated
     hereby;

                  written notice thereof together with such other information as
                  may be reasonably available to Borrowers to enable Lenders and
                  their counsel to evaluate such matters; and (b) within twenty
                  days after the end of each Fiscal Quarter, a schedule of all
                  Proceedings involving an alleged liability of, or claims
                  against or affecting, Borrowers or any of their Restricted
                  Subsidiaries equal to or greater than $1,000,000, and promptly
                  after request by Agent such other information as may be
                  reasonably requested by Agent to enable Agent and its counsel
                  to evaluate any of such Proceedings;

     (x) ERISA  Events:  promptly upon  becoming  aware of the  occurrence of or
     forthcoming  occurrence of any ERISA Event, a written notice specifying the
     nature thereof, what action Borrowers,  any of their Subsidiaries or any of
     their  respective ERISA Affiliates has taken, is taking or proposes to take
     with respect thereto and, when known, any action taken or threatened by the
     Internal Revenue Service,  the Department of Labor or the PBGC with respect
     thereto;

     (xi) ERISA Notices: with reasonable  promptness,  copies of (a) all notices
     received by Borrowers, any of their Subsidiaries or any of their respective
     ERISA  Affiliates  from a  Multiemployer  Plan sponsor  concerning an ERISA
     Event;  and (b) copies of such other documents or  governmental  reports or
     filings  relating to any Employee  Benefit  Plan as Agent shall  reasonably
     request;

     (xii)  Financial  Plans:  as soon as practicable  and in any event no later
            ---------------
     than 30 days after the  beginning of each Fiscal Year, a  consolidated  and
     consolidating plan and financial forecast for such Fiscal Year and the next
     succeeding  Fiscal  Year  (the  "Financial  Plan"  for such  Fiscal  Year),
     including (a) forecasted  consolidated and consolidating balance sheets and
     forecasted  consolidated  and  consolidating  statements of income and cash
     flows of Borrowers and their  Restricted  Subsidiaries for each such Fiscal
     Year, together with a pro forma Compliance Certificate for each such Fiscal
     Year  ---  -----  and an  explanation  of the  assumptions  on  which  such
     forecasts  are  based,  (b)  forecasted   consolidated  and   consolidating
     statements  of income  and cash  flows of  Borrowers  and their  Restricted
     Subsidiaries  for  each  month  of  such  Fiscal  Year,  together  with  an
     explanation of the  assumptions on which such forecasts are based,  (c) the
     amount of forecasted  unallocated  overhead for each such Fiscal Year,  and
     (d) such other  information  and  projections  as any Lender may reasonably
     request;

     (xiii)  Insurance:  as soon as  practicable  after any  material  change in
             ---------
     insurance   coverage   maintained   by  Borrowers   and  their   Restricted
     Subsidiaries  notice  thereof to Agent  specifying  the changes and reasons
     therefore;

     (xiv) Governing Body:  with  reasonable  promptness,  written notice of any
           --------------
     change in the Governing Body of any Borrower;


     (xv) New  Subsidiaries:  promptly upon any Person  becoming a Subsidiary of
     any Borrower,  a written  notice  setting forth with respect to such Person
     (a) the date on which such Person became a Subsidiary of a Borrower and (b)
     all of the data  required  to be set forth in Schedule  5.1 annexed  hereto
     with respect to all  Subsidiaries  of Borrowers (it being  understood  that
     such  written  notice  shall be deemed to  supplement  Schedule 5.1 annexed
     hereto for all purposes of this Agreement);

     (xvi) Material  Contracts:  promptly,  and in any event within ten Business
     Days after any Material  Contract of  Borrowers or any of their  Restricted
     Subsidiaries  is  terminated  or  amended  in a manner  that is  materially
     adverse to Borrowers or such Restricted Subsidiary,  as the case may be, or
     any new Material Contract is entered into, a written  statement  describing
     such event with copies of such material amendments or new contracts, and an
     explanation of any actions being taken with respect thereto;

     (xvii) Borrowing Base  Certificates:  as soon as available and in any event
            ---------------------------
     within ten (10)  Business  Days after the last  Business  Day of each month
     ending after the Closing Date, a Borrowing Base Certificate dated as of the
     last Business Day of such month, together with any additional schedules and
     other  information  as Agent may  reasonably  request,  together with an AR
     Aging  Report and AP Aging Report for the period  covered by the  Borrowing
     Base  Certificate;  provided  that -------- in the event that the Borrowing
     Base  at  any  time  exceeds  the  Total   Utilization  of  Revolving  Loan
     Commitments by less than  $30,000,000,  the Agent may require  Borrowers to
     prepare and provide Borrowing Base Certificates and related  information on
     a weekly basis.  In addition to such monthly  Borrowing Base  Certificates,
     Borrowers  may from  time to time  deliver  to  Agent  and  Lenders  on any
     Business Day after the Closing Date a Borrowing Base  Certificate  dated as
     of such Business  Day,  together  with any  additional  schedules and other
     information as Agent may reasonably request,  and the most recent Borrowing
     Base Certificate described in this clause (xvii) that is delivered to Agent
     shall  be  used  in  calculating  the  Borrowing  Base  as of any  date  of
     determination;

     (xviii)  Joint  Ventures:  promptly  upon  Borrowers  or  their  Restricted
     Subsidiaries  formation of a Joint Venture,  a written notice setting forth
     all of the data  required  to be set  forth  on  Schedule  5.1E  (it  being
     understood that such written notice shall be deemed to supplement  Schedule
     5.1E for all purposes of this Agreement); and

     (xix) Other Information: with reasonable promptness, such other information
           -----------------
     and data with  respect to Borrowers  or any of their  Subsidiaries  as from
     time to time may be reasonably requested by any Lender.

6.2      Existence, etc.

                  Except as permitted under subsection 7.7, Borrowers will, and
will cause each of their Subsidiaries to, at all times preserve and keep in full
force and effect its existence and all rights and franchises material to its
business; provided, however that neither Borrowers nor any of their Subsidiaries
shall be required to preserve any such right or franchise if the Governing Body
of Borrowers or such Subsidiary shall determine that the preservation thereof is
no longer desirable in the conduct of the business of Borrowers or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Borrowers, such Subsidiary or Lenders.

6.3      Payment of Taxes and Claims; Tax.
         --------------------------------

     A. Borrowers  will, and will cause each of their  Subsidiaries  to, pay all
taxes,  assessments and other governmental charges imposed upon it or any of its
properties  or  assets  or in  respect  of  any  of its  income,  businesses  or
franchises before any penalty accrues thereon,  and all claims (including claims
for labor,  services,  materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its  properties or
assets,  prior to the time  when any  penalty  or fine  shall be  incurred  with
respect  thereto;  provided  that no such  charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently  conducted,  so  long  as  (i)  such  reserve  or  other  appropriate
provision,  if any, as shall be required in conformity with GAAP shall have been
made  therefor and (ii) in the case of a charge or claim which has or may become
a Lien against any of the Collateral,  such proceedings  conclusively operate to
stay the sale of any portion of the Collateral to satisfy such charge or claim.

     B.  Borrowers  will  not,  nor will  they  permit  any of their  Restricted
Subsidiaries  to, file or consent to the filing of any  consolidated  income tax
return  with  any  Person  (other  than  Borrowers  or any of  their  Restricted
Subsidiaries).

6.4  Maintenance  of  Properties;   Insurance;  Application  of  Net  Insurance/
     ---------------------------------------------------------------------------
     Condemnation Proceeds.
     ---------------------

     A. Maintenance of Properties.  Borrowers will, and will cause each of their
Restricted  Subsidiaries  to, maintain or cause to be maintained in good repair,
working  order and  condition,  ordinary  wear and tear  excepted,  all material
properties  used or useful in the  business of  Borrowers  and their  Restricted
Subsidiaries  (including all  Intellectual  Property) and from time to time will
make or cause to be made all  appropriate  repairs,  renewals  and  replacements
thereof.

     B.  Insurance.  Borrowers  will  maintain or cause to be  maintained,  with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance,  business  interruption  insurance and casualty
insurance  with  respect  to  liabilities,  losses or damage in  respect  of the
assets, properties and businesses of Borrowers and their Restricted Subsidiaries
as may  customarily  be carried or  maintained  under similar  circumstances  by
corporations of established  reputation engaged in similar  businesses,  in each
case in such amounts (giving effect to  self-insurance),  with such deductibles,
covering  such  risks and  otherwise  on such terms and  conditions  as shall be
customary for corporations similarly situated in the industry.  Without limiting
the  generality  of the  foregoing,  Borrowers  will  maintain  or  cause  to be
maintained (i) flood  insurance with respect to each Flood Hazard  Property that
is located in a community  that  participates  in the National  Flood  Insurance
Program, in each case in compliance with any applicable regulations of the Board
of Governors of the Federal Reserve System,  and (ii) replacement value casualty
insurance  on  the  Collateral  under  such  policies  of  insurance  with  such
exceptions to replacement  coverage as reasonably  approved by Agent,  with such
insurance companies,  in such amounts, with such deductibles,  and covering such
risks as are at all times  satisfactory to Agent in its commercially  reasonable
judgment.  Each such policy of insurance shall (a) name Agent for the benefit of
Lenders as an additional  insured thereunder as its interests may appear and (b)
in the case of each business interruption and casualty insurance policy, contain
a loss payable  clause or  endorsement,  satisfactory  in form and  substance to
Agent,  that names Agent for the benefit of Lenders as the loss payee thereunder
for any covered  loss in excess of $250,000  and  provides  for at least 30 days
prior  written  notice  to Agent of any  modification  or  cancellation  of such
policy.

C.       Application of Net Insurance/Condemnation Proceeds.

     (i) Business  Interruption  Insurance.  Upon receipt by Borrowers or any of
     their  Restricted  Subsidiaries  of  any  business  interruption  insurance
     proceeds constituting Net  Insurance/Condemnation  Proceeds, (a) so long as
     no Event of Default or Potential  Event of Default  shall have occurred and
     be continuing, Borrowers or such Restricted Subsidiary may retain and apply
     such Net Insurance/Condemnation  Proceeds for working capital purposes, and
     (b) if an  Event of  Default  or  Potential  Event of  Default  shall  have
     occurred and be continuing,  Borrowers  shall apply an amount equal to such
     Net  Insurance/Condemnation  Proceeds  to  prepay  the  Loans  (and/or  the
     Revolving  Loan  Commitments  shall be reduced)  as provided in  subsection
     2.4B;

     (ii)  Net  Insurance/Condemnation  Proceeds  Received  by  Borrowers.  Upon
           --------------------------------------------------------------
     receipt by Borrowers  or any of their  Restricted  Subsidiaries  of any Net
     Insurance/Condemnation  Proceeds  other  than  from  business  interruption
     insurance, (a) so long as no Event of Default or Potential Event of Default
     shall have occurred and be continuing,  Borrowers shall, or shall cause one
     or more of their Restricted  Subsidiaries to, promptly and diligently apply
     such Net  Insurance/Condemnation  Proceeds to pay or reimburse the costs of
     repairing,  restoring or replacing  the assets in respect of which such Net
     Insurance/Condemnation  Proceeds  were  received  or, to the  extent not so
     applied,  to prepay the Loans (and/or the Revolving Loan Commitments  shall
     be reduced) as provided in subsection  2.4B, and (b) if an Event of Default
     or  Potential  Event of Default  shall  have  occurred  and be  continuing,
     Borrowers  shall apply an amount  equal to such Net  Insurance/Condemnation
     Proceeds to prepay the Loans (and/or the Revolving Loan  Commitments  shall
     be reduced) as provided in subsection 2.4B;

     (iii) Net  Insurance/Condemnation  Proceeds Received by Agent. Upon receipt
           -------------------------------------------------------
     by Agent of any Net  Insurance/Condemnation  Proceeds as loss payee, (a) if
     and to the  extent  Borrowers  would have been  required  to apply such Net
     Insurance/Condemnation  Proceeds  (if they had received  them  directly) to
     prepay the Loans and/or reduce the Revolving Loan Commitments, Agent shall,
     and    Borrowers    hereby    authorize    Agent   to,   apply   such   Net
     Insurance/Condemnation  Proceeds to prepay the Loans  (and/or the Revolving
     Loan Commitments  shall be reduced) as provided in subsection 2.4B, and (b)
     to the extent the  foregoing  clause (a) does not apply Agent shall deliver
     such Net Insurance/Condemnation Proceeds to Borrowers, and Borrowers shall,
     or shall cause one or more of their  Restricted  Subsidiaries  to, promptly
     apply such Net  Insurance/Condemnation  Proceeds to the costs of repairing,
     restoring,   or  replacing   the  assets  in  respect  of  which  such  Net
     Insurance/Condemnation Proceeds were received.

6.5      Inspection Rights; Lender Meeting.
         ---------------------------------

     A.  Inspection  Rights.  Borrowers  shall,  and shall  cause  each of their
Restricted  Subsidiaries  to, and shall use their Best  Efforts to cause (to the
extent not  prohibited by the  applicable  Joint Venture  Agreements)  the Joint
Ventures to permit (i) any authorized  representatives  designated by any Lender
(a) to visit  and  inspect  any of the  properties  of  Borrowers,  any of their
Restricted  Subsidiaries or of the Joint Ventures, (b) to inspect, copy and take
extracts  from their  financial  and  accounting  records,  and to discuss their
affairs,  finances  and accounts  with their  officers  and  independent  public
accountants  (provided that  Borrowers may, if they so choose,  be present at or
participate  in any such  discussion),  all upon  reasonable  notice and at such
reasonable  times during normal business hours and as often as may reasonably be
requested  and  (c) to  visit,  inspect  and  audit  any of  the  properties  of
Borrowers,  or any of their Subsidiaries or the Joint Ventures,  including their
financial and accounting books and records, and to make copies and take extracts
therefrom,  and to discuss  their  affairs,  finances  and  accounts  with their
officers,  partners, members and independent public accountants;  and (ii) Agent
shall have the right to designate its authorized  representatives to conduct two
audits and/or  appraisals of all Inventory,  Accounts,  machinery and equipment,
Real Property  Assets or  Intellectual  Property of the Loan Parties during each
twelve-month  period  after  the  Closing  Date  (exclusive  of the  audits  and
appraisals to in subsection 4.1P  (collectively,  the "Base Audit")),  each such
audit or appraisal  to be  substantially  similar in scope and  substance to the
Base  Audit,  all upon  reasonable  notice and  during  normal  business  hours;
provided  that upon the  occurrence  and during the  continuance  of an Event of
Default,  Agent shall have the option to conduct such audits or  appraisals on a
quarterly basis. Without in any way limiting the foregoing, Borrowers will, upon
the request of Agent,  participate in a meeting of Agent and Lenders once during
each  Fiscal  Year to be held at  Borrowers'  corporate  offices  (or such other
location  as may be agreed  to by  Borrowers  and  Agent) at such time as may be
agreed to by Borrowers and Agent.

     B. Lender  Meeting.  Borrowers will, upon the request of Agent or Requisite
Lenders,  participate  in a meeting of Agent and Lenders once during each Fiscal
Year to be held at Borrowers'  principal  offices (or at such other  location as
may be agreed  to by  Borrowers  and  Agent) at such time as may be agreed to by
Borrowers and Agent.

6.6      Compliance with Laws, etc.

                  Borrowers shall comply, and shall cause each of their
Restricted Subsidiaries and all other Persons on or occupying any Facilities to
comply, with the requirements of all applicable laws, rules, regulations and
orders of any Government Authority (including all Environmental Laws),
noncompliance with which could reasonably be expected to cause, individually or
in the aggregate, a Material Adverse Effect.

6.7      Environmental Matters.
         ---------------------

A.       Environmental Disclosure.  Borrowers will deliver to Agent and Lenders:

     (i)  Environmental  Audits and Reports.  As soon as  practicable  following
     receipt  thereof,  copies  of  all  environmental  audits,  investigations,
     analyses  and  reports  of any  kind  or  character,  whether  prepared  by
     personnel  of  Borrowers  or any of  their  Restricted  Subsidiaries  or by
     independent  consultants,  governmental  authorities  or any other Persons,
     with respect to  significant  environmental  matters at any Facility  that,
     individually or in the aggregate, could reasonably be expected to result in
     a Material Adverse Effect or with respect to any Environmental Claims that,
     individually or in the aggregate, could reasonably be expected to result in
     a Material Adverse Effect;

     (ii) Notice of Certain Releases,  Remedial Actions,  Etc. Promptly upon the
     occurrence thereof,  written notice describing in reasonable detail (a) any
     Release required to be reported to any federal, state or local governmental
     or regulatory agency under any applicable  Environmental Laws which Release
     could  reasonably be expected to have a Material  Adverse  Effect,  (b) any
     remedial  action  taken by Borrowers or any other Person in response to (1)
     any Hazardous Materials  Activities the existence of which could reasonably
     be  expected  to  result  in  one  or  more  Environmental  Claims  having,
     individually or in the aggregate,  a Material  Adverse  Effect,  or (2) any
     Environmental  Claims  that,  individually  or  in  the  aggregate,   could
     reasonably be expected to result in a Material Adverse Effect;

     (iii) Written Communications Regarding Environmental Claims, Releases, Etc.
           ---------------------------------------------------------------------
     As  soon as  practicable  following  the  sending  or  receipt  thereof  by
     Borrowers or any of their  Restricted  Subsidiaries,  a copy of any and all
     written  communications with respect to (a) any Environmental  Claims that,
     individually or in the aggregate, could reasonably be expected to result in
     a Material  Adverse Effect,  (b) any Release required to be reported to any
     federal, state or local governmental or regulatory agency where the failure
     to report any such Release could  reasonably be expected to have a Material
     Adverse Effect,  and (c) any request for information  from any governmental
     agency that suggests such agency is investigating  whether Borrowers or any
     of their  Restricted  Subsidiaries  may be potentially  responsible for any
     Hazardous Materials Activity which could reasonably be expected to cause an
     Environmental Claim that would have a Material Adverse Effect;

     (iv) Notice of Certain Proposed Actions Having Environmental Impact. Prompt
           --------------------------------------------------------------
     written notice describing in reasonable detail (a) any proposed acquisition
     of stock,  assets,  or property  by  Borrowers  or any of their  Restricted
     Subsidiaries  that could  reasonably be expected to (1) expose Borrowers or
     any of their Restricted Subsidiaries to, or result in, Environmental Claims
     that  could  reasonably  be  expected  to  have,  individually  or  in  the
     aggregate, a Material Adverse Effect or (2) affect the ability of Borrowers
     or any of their  Restricted  Subsidiaries  to  maintain  in full  force and
     effect  all  material  Governmental   Authorizations   required  under  any
     Environmental  Laws for their  respective  operations  and (b) any proposed
     action to be taken by Borrowers or any of their Restricted  Subsidiaries to
     modify current  operations in a manner that could reasonably be expected to
     subject Borrowers or any of their Restricted Subsidiaries to any additional
     obligations or requirements under any Environmental Laws which individually
     or in the aggregate could reasonably be expected to have a Material Adverse
     Effect.

B.   Borrowers' Actions Regarding Hazardous Materials Activities,  Environmental
     Claims and Violations of Environmental Laws.

     (i) Remedial Actions Relating to Hazardous Materials Activities.  Borrowers
     shall,  in compliance  with all  applicable  Environmental  Laws,  promptly
     undertake,  and shall cause each of their Restricted  Subsidiaries promptly
     to  undertake,  any and all  investigations,  studies,  sampling,  testing,
     abatement,   cleanup,  removal,   remediation  or  other  response  actions
     necessary to remove,  remediate,  clean up or abate any Hazardous Materials
     Activity  on,  under or about  any  Facility  that is in  violation  of any
     Environmental  Laws or that  presents a material  risk of giving rise to an
     Environmental Claim.

     (ii)  Actions  with  Respect  to  Environmental  Claims and  Violations  of
     Environmental Laws.  Borrowers shall promptly take, and shall cause each of
     their  Restricted  Subsidiaries  promptly  to  take,  any and  all  actions
     necessary to (i) cure any material  violation of  applicable  Environmental
     Laws by Borrowers or their Restricted Subsidiaries that could reasonably be
     expected to have,  individually  or in the  aggregate,  a Material  Adverse
     Effect and (ii) make an  appropriate  response to any  Environmental  Claim
     against Borrowers or any of their Restricted Subsidiaries and discharge any
     obligations  it may have to any Person  thereunder  where  failure to do so
     could reasonably be expected to have,  individually or in the aggregate,  a
     Material Adverse Effect.

     C.  Environmental  Review  and  Investigation.  Borrowers  agree  that upon
Agent's receipt of information  which Agent  reasonably  determines may indicate
the possibility of a Material  Adverse Effect,  Agent may, from time to time and
in its reasonable discretion,  (i) retain, at Borrowers' expense, an independent
professional  consultant  to review any  environmental  audits,  investigations,
analyses  and  reports  relating  to  Hazardous  Materials  prepared  by or  for
Borrowers and (ii) conduct its own investigation of any Facility; provided that,
in the  case of any  Facility  no  longer  owned,  leased,  operated  or used by
Borrowers  or any of their  Restricted  Subsidiaries,  Borrowers  shall  only be
obligated  to use  commercially  reasonable  efforts  to obtain  permission  for
Agent's  professional  consultant to conduct an  investigation of such Facility.
For purposes of conducting such a review and/or investigation,  Borrowers hereby
grant to Agent and its employees, consultants and contractors the right to enter
into or  onto  any  Facilities  currently  owned,  leased,  operated  or used by
Borrowers or any of their  Restricted  Subsidiaries and to perform such tests on
such  property  (including  taking  samples of soil,  groundwater  and suspected
asbestos-containing   materials)  as  are  reasonably  necessary  in  connection
therewith.  Any such  investigation  of any Facility shall be conducted,  unless
otherwise agreed to by Borrowers and Agent, during normal business hours and, to
the extent  reasonably  practicable,  shall be  conducted so as not to interfere
with the ongoing  operations  at such Facility or to cause any damage or loss to
any property at such Facility.  Borrowers and Agent hereby acknowledge and agree
that any report of any investigation  conducted at the request of Agent pursuant
to this  subsection 6.7C will be obtained and shall be used by Agent and Lenders
for the purposes of Lenders'  internal credit  decisions,  to monitor and police
the Loans and to protect  Lenders'  security  interests,  if any, created by the
Loan Documents.  If requested by Borrowers,  and provided no Event of Default or
Potential Event of Default is outstanding, Agent agrees to deliver a copy of any
such report to Borrowers with the understanding  that Borrowers  acknowledge and
agree that (x) they will  indemnify and hold harmless Agent and each Lender from
any costs,  losses or  liabilities  relating to Borrowers' use of or reliance on
such  report,  (y)  neither  Agent nor any Lender  makes any  representation  or
warranty  with  respect to such  report,  and (z) by  delivering  such report to
Borrowers,  neither  Agent  nor any  Lender is  requiring  or  recommending  the
implementation of any suggestions or recommendations contained in such report.

6.8  Execution of Subsidiary Guaranty and Personal Property Collateral Documents
     ---------------------------------------------------------------------------
     After the Closing Date.
     ------------------------


     A.  Execution  of  Subsidiary  Guaranty and  Personal  Property  Collateral
Documents. In the event that any Person becomes a Subsidiary which is a Domestic
Material  Subsidiary  of any  Borrower  after the date  hereof,  Borrowers  will
promptly notify Agent of that fact and cause such Domestic  Material  Subsidiary
to either (at the  discretion  of Agent)  become  (i) a Borrower  under the Loan
Documents  by  executing  a joinder  agreement  satisfactory  to Agent or (ii) a
Subsidiary  Guarantor by executing and  delivering to Agent a counterpart of the
Subsidiary  Guaranty and Security Agreement and to take all such further actions
and execute all such  further  documents  and  instruments  (including  actions,
documents and instruments  comparable to those described in subsection  4.1M) as
may be  necessary  or, in the opinion of Agent,  desirable to create in favor of
Agent, for the benefit of Lenders, a valid and perfected First Priority,  Second
Priority, or Third Priority or First Priority pari passu Lien (as applicable) on
all of the  personal  and  mixed  property  assets of such  Material  Subsidiary
described in the applicable forms of Collateral Documents.

     B.  Foreign  Subsidiaries.  In the event that any Person  becomes a Foreign
Subsidiary  of any  Borrower or any Material  Subsidiary  after the date hereof,
Borrowers  will  promptly  notify Agent of that fact and, if such  Subsidiary is
directly  owned by any  Borrower  or a  Domestic  Subsidiary  that is a Material
Subsidiary, such Borrower will or will cause such Material Subsidiary to execute
and  deliver to Agent  such  documents  and  instruments  and take such  further
actions  (including  actions,  documents  and  instruments  comparable  to those
described in subsection 4.1M) as may be necessary,  or in the reasonable opinion
of Agent,  desirable to create in favor of Agent, for the benefit of Lenders,  a
valid and perfected First Priority, Second Priority or First Priority pari passu
Lien on 65% of the capital stock of such Foreign Subsidiary. Notwithstanding any
contrary  provision of this Agreement,  Borrowers shall not be required to grant
to Agent,  for the benefit of the  Lenders,  a Lien on the capital  stock of any
Foreign  Subsidiary  formed as a single purpose entity to directly or indirectly
hold an  Investment  in Farmland  MissChem  Limited,  a Joint Venture of Company
incorporated under the laws of the Republic of Trinidad and Tobago.

     C. Restricted Subsidiary  Organizational  Documents,  Legal Opinions,  Etc.
Borrowers  shall  deliver  to Agent,  together  with such  Loan  Documents,  (i)
certified  copies  of  such  Material  Subsidiary's   Organizational  Documents,
together  with, if such Material  Subsidiary  is a Domestic  Subsidiary,  a good
standing  certificate  from the  Secretary of State of the  jurisdiction  of its
organization  and each  other  state in which  such  Person is  qualified  to do
business and, to the extent generally available, a certificate or other evidence
of good standing as to payment of any applicable franchise or similar taxes from
the appropriate taxing authority of each of such jurisdictions, each to be dated
a recent date prior to their delivery to Agent,  (ii) a certificate  executed by
the secretary or similar officer of such Material  Subsidiary as to (a) the fact
that the attached  resolutions of the Governing Body of such Material Subsidiary
approving and authorizing  the execution,  delivery and performance of such Loan
Documents are in full force and effect and have not been modified or amended and
(b) the incumbency  and  signatures of the officers of such Material  Subsidiary
executing such Loan Documents,  and (iii) a favorable opinion of counsel to such
Material  Subsidiary,  in form  and  substance  satisfactory  to  Agent  and its
counsel,  as to (a) the due  organization  and good  standing  of such  Material
Subsidiary,  (b) the due authorization,  execution and delivery by such Material
Subsidiary of such Loan Documents, (c) the enforceability of such Loan Documents
against such Material  Subsidiary and (d) such other matters  (including matters
relating to the creation and perfection of Liens in any  Collateral  pursuant to
such Loan Documents) as Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Agent and its counsel.

6.9      Matters Relating to Refinery Assets.
         -----------------------------------

     A. Sale of Refinery  Assets.  If  Borrowers do not sell all of the Refinery
Assets on or before the date which is 270 days after the Closing  Date,  or such
longer period as approved by Requisite  Lenders in their reasonable  discretion,
then any such unsold Refinery Assets shall be subject to this subsection 6.9 and
Borrowers shall deliver to Agent the following:

     (i)  Additional  Mortgage.  A fully  executed  and  notarized  Mortgage (an
     "Additional  Mortgage"),  duly  recorded in all  appropriate  places in the
     applicable jurisdiction, encumbering the interest of such Loan Party in the
     Refinery Assets  constituting Real Property Assets (but excluding any crude
     oil pipeline and gathering systems which are not located on the property on
     which the refinery is situated);

     (ii) Opinions of Counsel.  (a) A favorable  opinion of counsel to such Loan
     Party, in form and substance  satisfactory to Agent and its counsel,  as to
     the due  authorization,  execution  and delivery by such Loan Party of such
     Additional Mortgage and such other matters as Agent may reasonably request,
     and (b) if required by Agent, an opinion of counsel (which counsel shall be
     reasonably  satisfactory  to Agent) in the state of Kansas with  respect to
     the  enforceability  of the form of the Additional  Mortgage and such other
     matters  (including any matters governed by the laws of the state of Kansas
     regarding   personal  property   security   interests  in  respect  of  any
     Collateral)  as Agent  may  reasonably  request,  in each  case in form and
     substance reasonably satisfactory to Agent;

     (iii) Title  Insurance.  (a) If required by Agent,  an ALTA mortgagee title
           ---------------
     insurance  policy or an  unconditional  commitment  therefor  issued by the
     Title Company with respect to such  Additional  Mortgaged  Property,  in an
     amount  satisfactory  to Agent,  insuring  fee simple  title to, or a valid
     leasehold  interest in, such Additional  Mortgaged  Property vested in such
     Loan Party and assuring Agent that such Additional  Mortgage  creates valid
     and enforceable First Priority, Second Priority and Third Priority mortgage
     Liens on such  Additional  Mortgaged  Property,  subject  only to Permitted
     Encumbrances a standard survey exception, which policy (1) shall include an
     endorsement for mechanics'  liens, for future advances under this Agreement
     and for any  other  matters  reasonably  requested  by Agent  and (2) shall
     provide  for  affirmative  insurance  and such  reinsurance  as  Agent  may
     reasonably request,  all of the foregoing in form and substance  reasonably
     satisfactory  to Agent;  and (b) evidence  satisfactory  to Agent that such
     Loan Party has (i)  delivered  to the Title  Company all  certificates  and
     affidavits required by the Title Company in connection with the issuance of
     such  policy  and (ii)  paid to the  Title  Company  or to the  appropriate
     governmental  authorities all expenses and premiums of the Title Company in
     connection  with the  issuance of such policy and all  recording  and stamp
     taxes  (including  mortgage  recording  and  intangible  taxes)  payable in
     connection with recording the Additional  Mortgage in the appropriate  real
     estate records;

     (iv) Title Report. If no title insurance policy is required with respect to
     such  Additional  Mortgaged  Property,  a title report  issued by the Title
     Company with respect thereto, dated not more than 30 days prior to the date
     such  Additional  Mortgage is to be recorded and  satisfactory  in form and
     substance to Agent;

     (v)  Copies  of  Documents  Relating  to Title  Exceptions.  Copies  of all
          ------------------------------------------------
     recorded  documents listed as exceptions to title or otherwise  referred to
     in the additional title insurance policy or title report delivered pursuant
     to clause (iii) or (iv) above;

     (vi) Matters Relating to Flood Hazard Properties.  (a) Evidence,  which may
          -------------------------------------------
     be in the  form  of a  letter  from  an  insurance  broker  or a  municipal
     engineer,  as to (1) whether such Additional  Mortgaged Property is a Flood
     Hazard  Property and (2) if so,  whether the  community in which such Flood
     Hazard Property is located is participating in the National Flood Insurance
     Program,  (b) if such  Additional  Mortgaged  Property  is a  Flood  Hazard
     Property,  such Loan Party's written  acknowledgement of receipt of written
     notification  from Agent (1) that such Additional  Mortgaged  Property is a
     Flood  Hazard  Property  and (2) as to whether the  community in which such
     Flood Hazard  Property is located is  participating  in the National  Flood
     Insurance Program,  and (c) in the event such Additional Mortgaged Property
     is a Flood Hazard Property that is located in a community that participates
     in the National  Flood  Insurance  Program,  evidence that  Borrowers  have
     obtained  flood  insurance in respect of such Flood Hazard  Property to the
     extent required under the applicable  regulations of the Board of Governors
     of the Federal Reserve System; and

     (vii)  Environmental  Audit.  If  required  by  Agent,  reports  and  other
     information,  in form,  scope  and  substance  satisfactory  to  Agent  and
     prepared by environmental consultants satisfactory to Agent, concerning any
     environmental  hazards  or  liabilities  to which  Borrowers  or any of its
     Restricted  Subsidiaries  may be subject  with  respect to such  Additional
     Mortgaged Property.

     B.  Refinery  Assets  Allocation  of  Proceeds.   Without   derogating  the
provisions of subsection 2.4B(iii)(f), in connection with the sale of all or any
portion of the  Refinery  Assets,  prior to the  consummation  of any such sale,
Borrowers shall provide Agent with the proposed  allocation of the consideration
to be received  as between PPE  Collateral,  Pari Passu  Collateral  and Working
Capital  Collateral,  which  proposed  allocation  shall be  subject  to Agent's
reasonable approval.

     C. Coffeyville  Mortgage.  Lenders acknowledge and agree that Borrowers may
require the recordation in the applicable real property  records of a reciprocal
easement  agreement or a declaration of covenants,  restrictions  and conditions
with respect to Real  Property  Assets  comprising  the Refinery  Assets and the
Coffeyville Fertilizer Plant in accordance with the Coffeyville Plan (as defined
in the Coffeyville  Mortgage) in order to provide for ingress and egress, access
and shared  utility  easements  and sharing of common area  between the Refinery
Assets and the Coffeyville  Fertilizer  Plant, as more particularly set forth in
the Coffeyville  Mortgage.  Provided such reciprocal  easement  agreement and/or
such covenants, restrictions and conditions are reasonably satisfactory to Agent
and do not impair in any  material  manner the use,  value or  operation  of the
Coffeyville Fertilizer Plant, Agent may without Requisite Lender approval amend,
supplement  or otherwise  modify the  Coffeyville  Mortgage  (including  but not
limited  to by  means  of a  partial  release  of the  lien  of the  Coffeyville
Mortgage)  to permit  the  implementation  and  recordation  of such  reciprocal
easement  agreement  and/or  such  covenants,  restrictions  and  conditions  as
contemplated by the Coffeyville Mortgage.

6.10     Matters Relating to Additional Personal Property.
         ------------------------------------------------

                  From and after the Closing Date, at the request of Agent, in
the event Agent in good faith reasonably believes the value of the PPE
Collateral has been impaired or that a Potential Event of Default or an Event of
Default has occurred and is continuing, Borrowers shall deliver to Agent
certificates of title with respect to all motor vehicles and rolling stock of
Loan Parties and take all actions necessary to cause Agent to be noted as lien
holder thereon or otherwise necessary to perfect the Lien granted to Agent on
behalf of Lenders in such motor vehicles and rolling stock.

Section 7.        BORROWERS' NEGATIVE COVENANTS

                  Borrowers covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Borrowers shall perform, and shall cause each of their Restricted
Subsidiaries to perform, all covenants in this Section 7.

7.1      Indebtedness.
         ------------

                  Borrowers shall not, and shall not permit any of their
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:

     (i) Borrowers may become and remain liable with respect to the Obligations;

     (ii)  Borrowers  and their  Restricted  Subsidiaries  may become and remain
     liable with respect to Contingent  Obligations  permitted by subsection 7.4
     and, upon any matured  obligations  actually arising pursuant thereto,  the
     Indebtedness corresponding to the Contingent Obligations so extinguished;

     (iii) Borrowers and their  Restricted  Subsidiaries  may remain liable with
     respect to  Indebtedness in respect of Capital Leases set forth on Schedule
     7.1;

     (iv) Any Borrower or any Material  Subsidiary  may become and remain liable
     with  respect  to  Indebtedness  to  any  Borrower  or  any  of  Borrower's
     Restricted  Subsidiaries,  and any  Restricted  Subsidiary  may  become and
     remain  liable with  respect to  Indebtedness  to any Borrower or any other
     Restricted Subsidiary of any Borrower;  provided that (a) all such --------
     intercompany  Indebtedness held by a Borrower or any Material Subsidiary of
     a Borrower shall be evidenced by promissory notes that are pledged to Agent
     pursuant to the terms of the applicable  Collateral Document,  (b) all such
     intercompany  Indebtedness  owed by any Borrower to any of their Restricted
     Subsidiaries  shall be  subordinated  in right of payment to the payment in
     full of the Obligations pursuant to the terms of the applicable  promissory
     notes or an intercompany  subordination  agreement,  (c) any payment by any
     Material  Subsidiary of any Borrower under any guaranty of the  Obligations
     shall  result in a pro tanto  reduction  of the amount of any  intercompany
     Indebtedness --- ----- owed by such Material  Subsidiary to any Borrower or
     to any of their  Material  Subsidiaries  for whose  benefit such payment is
     made, and (d) the aggregate  principal  amount of all  Indebtedness  of all
     Foreign  Restricted  Subsidiaries  of  Borrowers  to  Borrowers  and  their
     Domestic  Material  Subsidiaries  shall not exceed  $5,000,000  at any time
     outstanding,  and the aggregate principal amount of all Indebtedness of all
     Domestic Restricted  Subsidiaries of Borrowers other than Domestic Material
     Subsidiaries to Borrowers and their Domestic  Material  Subsidiaries  shall
     not exceed $10,000,000 at any time outstanding;

     (v) Borrowers and their Restricted Subsidiaries,  as applicable, may remain
     liable with  respect to  Indebtedness  described  in  Schedule  7.1 annexed
     hereto,   the  aggregate   principal   amount  of  which  does  not  exceed
     $80,000,000;

     (vi)  Company  may become  and  remain  liable  with  respect to  unsecured
     Subordinated   Debenture   Bonds,    unsecured   Subordinated    Investment
     Certificates and other unsecured Subordinated  Indebtedness issued pursuant
     to Approved Indentures;  provided however that with respect to any issuance
     of Subordinated  Indebtedness  occurring after the Closing Date there shall
     be no  regularly  scheduled  amortization  payments  on  such  Subordinated
     Indebtedness  prior to the final  maturity  thereof and such final maturity
     shall not be earlier than the fifth anniversary of the Closing Date;

     (vii)  Company may become and remain  liable with respect to the  unsecured
     Demand Loan Certificates in an aggregate amount not to exceed $30,000,000;

     (viii) Company may become and remain liable with respect to the Coffeyville
     Bonds,  provided that at all times Borrowers or their Material Subsidiaries
     shall own such  Coffeyville  Bonds and Agent shall have a  perfected  First
     Priority security interest in such Coffeyville Bonds; and

     (ix)  Borrowers may become and remain  liable with respect to  Indebtedness
     (including  Capital Leases) in an aggregate  principal amount not to exceed
     $25,000,000 at any time outstanding.

7.2      Liens and Related Matters.
         -------------------------

     A.  Prohibition on Liens.  Borrowers shall not, and shall not permit any of
their Restricted Subsidiaries to, directly or indirectly,  create, incur, assume
or permit to exist any Lien on or with  respect to any  property or asset of any
kind  (including  any  document  or  instrument  in respect of goods or accounts
receivable) of Borrowers or any of their  Restricted  Subsidiaries,  whether now
owned or  hereafter  acquired,  or any income or profits  therefrom,  or file or
permit the filing of, or permit to remain in effect, any financing  statement or
other  similar  notice of any Lien with  respect  to any such  property,  asset,
income  or  profits  under  the UCC or under  any  similar  recording  or notice
statute, except:

     (i) Permitted  Encumbrances;  (ii) Liens granted pursuant to the Collateral
     Documents;

     (iii) Liens described in Schedule 7.2 annexed hereto; ------------

     (iv) Liens on any asset  existing at the time of  acquisition of such asset
     by any Borrower or a Restricted Subsidiary,  or Liens to secure the payment
     of all or any part of the purchase  price of an asset upon the  acquisition
     of such asset by any Borrower or a Restricted  Subsidiary  or to secure any
     Indebtedness  permitted  hereby  incurred by any  Borrower or a  Restricted
     Subsidiary  at the time of or within ninety days after the  acquisition  of
     such asset, which Indebtedness is incurred for the purpose of financing all
     or any part of the purchase price thereof; provided, however, that the Lien
     shall apply only to the asset so acquired ; and provided further,  that the
     aggregate of all amounts secured by such Liens shall not exceed $10,000,000
     at any time;

     (v) Liens evidencing Capital Leases permitted by subsection 7.1;

     (vi) Liens of CoBank and other cooperatives,  respectively,  on Investments
     by  Borrowers  in  the  stock,  participation  certificates,  or  allocated
     reserves of CoBank or other cooperatives,  respectively, owned by Borrowers
     and their Restricted Subsidiaries;

     (vii)  Liens  on goods  exported  securing  any  indemnity  and  repurchase
     obligations  contemplated  by  transactions  involving the Borrowers or any
     Restricted  Subsidiary and any financial institution pursuant to the export
     credit  guarantee  program  of the  Commodity  Credit  Corporation  (or any
     successor) or other program designed to assist or enhance export sales;

     (viii) Liens granted on the Company's direct or indirect ownership interest
     in the  Farmland  MissChem  Limited  and the  assets  owned  by such  Joint
     Venture; and

     (ix) Liens on oil, gas and other mineral  rights arising out of or existing
     in connection with oil or gas leases or interests and mineral rights, or in
     real property pertaining thereto, provided that the aggregate amount of all
     obligations secured by all such Liens shall not exceed $1,000,000.

     B.  Equitable  Lien in  Favor  of  Lenders.  If  Borrowers  or any of their
Restricted  Subsidiaries  shall  create  or  assume  any Lien  upon any of their
properties or assets, whether now owned or hereafter acquired,  other than Liens
excepted by the provisions of subsection 7.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other  Indebtedness  secured thereby as long as any
such  Indebtedness  shall be so  secured;  provided  that,  notwithstanding  the
foregoing,  this  covenant  shall not be  construed  as a consent  by  Requisite
Lenders to the  creation or  assumption  of any such Lien not  permitted  by the
provisions of subsection 7.2A.

     C. No Further Negative  Pledges.  No Borrower or any Restricted  Subsidiary
shall enter into any  agreement  prohibiting  the creation or  assumption of any
Lien upon any of its  properties  or  assets,  whether  now  owned or  hereafter
acquired,  except with respect to specific property encumbered to secure payment
of particular  Indebtedness or to be sold pursuant to an executed agreement with
respect to an Asset Sale.

D. No Restrictions on Restricted Subsidiary  Distributions to Borrowers or Other
Restricted  Subsidiaries.  Borrowers  will not, and will not permit any of their
Restricted  Subsidiaries  to,  create or  otherwise  cause or suffer to exist or
become  effective any  consensual  encumbrance or restriction of any kind on the
ability of any such Restricted Subsidiary to (i) pay dividends or make any other
distributions  on any of such  Restricted  Subsidiary's  capital  stock owned by
Borrowers or any other Restricted Subsidiary of Borrowers,  (ii) repay or prepay
any  Indebtedness  owed by such Restricted  Subsidiary to Borrowers or any other
Restricted Subsidiary of Borrowers, (iii) make loans or advances to Borrowers or
any other  Restricted  Subsidiary  of  Borrowers,  or (iv)  transfer  any of its
property or assets to Borrowers or any other Restricted Subsidiary of Borrowers,
except  (a) as  provided  in this  Agreement  and (b) as may be  provided  in an
executed  agreement  with  respect  to  an  Asset  Sale  permitted  pursuant  to
subsection 7.7.

7.3      Investments; Acquisitions.
         -------------------------

                  Borrowers shall not, and shall not permit any of their
Restricted Subsidiaries to, directly or indirectly, make or own any Investment
in any Person, including any Joint Venture, or acquire, by purchase or
otherwise, all or substantially all the business, property or fixed assets of,
or capital stock or other ownership interest of any Person, or any division or
line of business of any Person except:

     (i)  Borrowers  and  their   Restricted   Subsidiaries  may  make  and  own
     Investments in Cash Equivalents;

     (ii) Borrowers and their Material  Subsidiaries may make and own additional
     equity Investments in their respective  wholly-owned Material Subsidiaries;
     Restricted  Subsidiaries other than Material  Subsidiaries may make and own
     additional  Investments  in Borrowers  and other  Restricted  Subsidiaries;
     Borrowers  and  Material  Subsidiaries  may  make  and own  Investments  in
     Restricted  Subsidiaries other than Material  Subsidiaries in an amount not
     to exceed $10,000,000 in any Fiscal Year;

     (iii) Borrowers and their  Restricted  Subsidiaries  may make  intercompany
     loans to the extent permitted under subsection 7.1(iv);

     (iv)  Borrowers and their  Restricted  Subsidiaries  may make  Consolidated
     Capital Expenditures permitted by subsection 7.8;

     (v) Borrowers  and their  Restricted  Subsidiaries  may continue to own the
     Investments owned by them as of the Closing Date, including  Investments in
     Joint Ventures, described in Schedule 7.3 annexed hereto;

     (vi)  Borrowers  and  their  Restricted  Subsidiaries  may  acquire  assets
     (including  capital  stock  or  other  ownership  interests  and  including
     Investments in Joint Ventures and Unrestricted  Subsidiaries) having a fair
     market  value  not in  excess  of  $5,000,000  in any one  Fiscal  Year and
     $15,000,000  in the  aggregate  and  continue to own such assets  after the
     acquisition  thereof;  provided that no Potential Event of Default or Event
     of Default shall occur as a result of such acquisition and Borrowers shall,
     and  shall  cause  their  Restricted   Subsidiaries  to,  comply  with  the
     requirements  of  subsections  6.8  and  6.9  with  respect  to  each  such
     acquisition that results in a Person becoming a Material Subsidiary;

     (vii)  Company  may  make  and own  Investments  in the  form  of  non-cash
     Patronage  Dividends  in any Person  including  Investments  in the form of
     CoBank Equity Interests;

     (viii)  Borrowers  and  their  Material   Subsidiaries  may  make  and  own
     Investments  in the  Coffeyville  Bonds,  provided  that at all times Agent
     shall have a perfected First Priority security interest in such Coffeyville
     Bonds; and

     (ix)  Borrowers  and  their  Restricted   Subsidiaries  may  make  and  own
     additional  Investments  in an  aggregate  amount not to exceed at any time
     $15,000,000.

7.4      Contingent Obligations.
         ----------------------

                  Borrowers shall not, and shall not permit any of their
Restricted Subsidiaries to, directly or indirectly, create or become or remain
liable with respect to any Contingent Obligation, except:

     (i) Material  Subsidiaries  of Borrowers  may become and remain liable with
     respect to Contingent Obligations in respect of the Subsidiary Guaranty;

     (ii)  Borrowers  may become and remain  liable with  respect to  Contingent
     Obligations in respect of Letters of Credit;

     (iii)  Borrowers  may become and remain  liable with respect to  Contingent
     Obligations  under Hedge  Agreements with respect to (a) Indebtedness in an
     aggregate  notional  principal  amount  not to  exceed  the  amount  of the
     liabilities  so hedged  and (b)  fluctuations  in  commodity  prices in the
     ordinary course of Borrowers' business;

     (iv)  Borrowers  and their  Restricted  Subsidiaries  may become and remain
     liable  with  respect to  Contingent  Obligations  in respect of  customary
     indemnification  and  purchase  price  adjustment  obligations  incurred in
     connection with Asset Sales or other sales of assets;

     (v)  Borrowers  and their  Restricted  Subsidiaries  may  become and remain
     liable with  respect to  Contingent  Obligations  under  guarantees  in the
     ordinary  course of business of the  obligations  of suppliers,  customers,
     franchisees and licensees of Borrowers and their Restricted Subsidiaries in
     an aggregate amount not to exceed at any time $15,000,000;

     (vi)  Borrowers  and their  Restricted  Subsidiaries  may become and remain
     liable  with  respect  to   Contingent   Obligations   in  respect  of  any
     Indebtedness of Borrowers or any of their Material  Subsidiaries  permitted
     by subsection 7.1; Restricted Subsidiaries of Borrowers other than Material
     Subsidiaries  may become  and  remain  liable  with  respect to  Contingent
     Obligations  in  respect  of  Indebtedness  of  Borrowers  and any of their
     Restricted Subsidiaries permitted by subsection 7.1;

     (vii) Company may remain liable with respect to Contingent  Obligations  in
     connection with the Coffeyville Bonds, provided that at all times Borrowers
     or their Material  Subsidiaries  shall own such Coffeyville Bonds and Agent
     shall have a perfected First Priority security interest in such Coffeyville
     Bonds; and

     (viii)  Borrowers and their  Restricted  Subsidiaries,  as applicable,  may
     remain liable with respect to Contingent  Obligations described in Schedule
     7.4 annexed hereto.

7.5      Restricted Junior Payments.
         --------------------------

                  Borrowers shall not, and shall not permit any of their
Restricted Subsidiaries to, directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Junior Payment; provided that Borrowers may
(i) provided that no Event of Default or Potential Event of Default has occurred
and is continuing or would occur immediately after giving effect to such
payment, (A) make regularly scheduled payments of interest in respect of any
Subordinated Indebtedness, (B) make regularly scheduled payments of principal
and accrued interest in respect of any Subordinated Indebtedness issued prior to
the Closing Date, (C) pay Mandatory Redemption Amounts and accrued interest
thereon in respect of any Subordinated Indebtedness and (D) redeem Subordinated
Indebtedness from the proceeds of the prior issuance of Subordinated
Indebtedness permitted pursuant to subsection 7.1(vi) provided that the
Subordinated Indebtedness issued to make such redemption payments bears interest
at a lower rate than the Subordinated Indebtedness so redeemed, in each case in
accordance with the terms of, and only to the extent required by, and subject to
the subordination provisions contained in, the Approved Indenture pursuant to
which such Subordinated Indebtedness was issued, as such indenture or other
agreement may be amended from time to time to the extent permitted under
subsection 7.12B, and (ii) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or shall be caused thereby, (a)
pay Permitted Cash Patronage Dividends; (b) redeem equity interests of patrons
or Members with cash payments upon the death of individual patrons or Members in
an aggregate amount not to exceed $500,000 per Fiscal Year for all such cash
redemptions; and (c) pay dividends on the Company's Preferred Stock in an
aggregate annual amount not to exceed $8,000,000.

7.6      Financial Covenants.
         -------------------

                  From and after the Fiscal Quarter ending in May, 2002:

     A. Minimum Interest Coverage Ratio. Borrowers shall not permit the ratio of
(i)  Consolidated   EBITDA  to  (ii)  Consolidated   Interest  Expense  for  any
four-Fiscal  Quarter  period ending during any of the periods set forth below to
be less than the correlative ratio indicated:

                      Fiscal Quarter                       Minimum Interest
                    Ending on or about                      Coverage Ratio
                    ------------------                      --------------
May 31, 2002                                                   2.40:1:00
August 31, 2002                                                2.40:1:00

November 30, 2002                                              2.40:1:00
February 28, 2003                                              2.40:1:00
May 31, 2003                                                   2.60:1:00
August 31, 2003                                                2.60:1:00

November 30, 2003                                              2.70:1:00
February 29, 2004                                              2.70:1:00
May 31, 2004                                                   2.70:1:00
August 31, 2004 and each Fiscal Quarter thereafter             3.00:1:00


     B. Maximum Senior Leverage Ratio.  Borrowers shall not permit  Consolidated
Senior  Leverage  Ratio as of the last day of the  most  recently  ended  Fiscal
Quarter  ending  during  any of the  periods  set  forth  below  to  exceed  the
correlative ratio indicated:

                      Fiscal Quarter                   Maximum Senior Leverage
                    Ending on or about                             Ratio

May 31, 2002                                                     2.50:1:00
August 31, 2002                                                  2.50:1:00

November 30, 2002                                                2.25:1:00
February 28, 2003                                                2.20:1:00
May 31, 2003                                                     2.00:1:00
August 31, 2003                                                  1.80:1:00

November 30, 2003                                                1.75:1:00
February 29, 2004 and each Fiscal Quarter thereafter             1.50:1:00


     C. Maximum  Leverage  Ratio.  Borrowers  shall not permit the  Consolidated
Leverage  Ratio as of the last day of the most  recently  ended  Fiscal  Quarter
ending during any of the periods set forth below to exceed the correlative ratio
indicated:

                          Period                      Maximum Leverage Ratio

May 31, 2002                                                 5.50:1:00
August 31, 2002                                              5.50:1:00

November 30, 2002                                            5.25:1:00
February 28, 2003                                            5.00:1:00
May 31, 2003                                                 5.00:1:00
August 31, 2003                                              5.00:1:00

November 30, 2003                                            4.50:1:00
February 29, 2004                                            4.50:1:00
May 31, 2004                                                 4.00:1:00
August 31, 2004                                              4.00:1:00

November 30, 2004                                            4.00:1:00
February 28, 2005                                            4.00:1:00
May 31, 2005                                                 4.00:1:00
August 31, 2005                                              3.75:1:00

November 30, 2005                                            3.75:1:00
February 28, 2006                                            3.75:1:00
May 31, 2006                                                 3.75:1:00
August 31, 2006                                              3.75:1:00

November 30, 2006 and each Fiscal Quarter thereafter         3.50:1:00

     D. Minimum  Consolidated  EBITDA.  Borrowers shall not permit  Consolidated
EBITDA  for any period set forth  below to be less than the  correlative  amount
indicated:

                      Fiscal Quarter                       Minimum
                    Ending on or about               Consolidated EBITDA
                    ------------------               -------------------
May 31, 2002                                                $165,000,000
August 31, 2002                                             $165,000,000

November 30, 2002                                           $175,000,000
February 28, 2003                                           $180,000,000
May 31, 2003                                                $180,000,000
August 31, 2003                                             $180,000,000

November 30, 2003                                           $185,000,000
February 29, 2004                                           $190,000,000
May 31, 2004                                                $200,000,000
August 31, 2004 and each Fiscal Quarter thereafter          $205,000,000

     E. Minimum  Fixed Charge  Coverage  Ratio.  Borrowers  shall not permit the
ratio of (i)  Consolidated  EBITDA to (ii)  Consolidated  Fixed  Charges for any
four-Fiscal  Quarter  period ending during any of the periods set forth below to
be less than the correlative ratio indicated:

                                                            Minimum
                       Period                     Fixed Charge Coverage Ratio
May 31, 2002 and each Fiscal Quarter                       1.00:1.00
thereafter

     F. Minimum Subordinated Indebtedness.  Company shall on August 31, 2002 and
at the end of each  Fiscal  Quarter  thereafter  have  outstanding  Subordinated
Indebtedness  issued pursuant to Approved  Indentures in an aggregate  principal
amount  not  less  than  the  aggregate  principal  amount  of the  Subordinated
Debenture  Bonds and  Subordinated  Investment  Certificates  outstanding at the
Closing Date.

     G. Permitted Cash Patronage  Dividends.  Provided no Event of Default or no
                                               --------
Potential  Event of Default  shall have  occurred and be  continuing or shall be
caused  thereby,  Borrowers  may make annual  Cash  Patronage  Dividends  to the
applicable patrons or Members in an aggregate amount equal to 20% (or such other
minimum amount as may be required by tax laws to preserve the  non-taxability of
such net patronage  income) of  Borrowers'  consolidated  net  patronage  income
derived from such patrons or Members for the Fiscal Year  preceding  the year in
which the payments are to be made ("Permitted Cash Patronage Dividends").

     H. Minimum Excess  Availability.  Borrowers  shall not permit the Borrowing
Base to exceed the Total  Utilization of Revolving Loan Commitments by less than
$15,000,000 at any time.

7.7      Restriction on Fundamental Changes; Asset Sales.
         -----------------------------------------------

                  Borrowers shall not, and shall not permit any of their
Restricted Subsidiaries to, alter the corporate, capital or legal structure of
Borrowers or any of their Restricted Subsidiaries or any Joint Venture, or enter
into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business,
property or assets (including its notes or receivables and Capital Stock of a
Subsidiary or Joint Venture, whether newly issued or outstanding), whether now
owned or hereafter acquired, except:

     (i) any  Restricted  Subsidiary  of Company  may be merged with or into any
     Borrower  or  any  Material  Subsidiary,  or  be  liquidated,  wound  up or
     dissolved,  or all or any part of its  business,  property or assets may be
     conveyed,  sold,  leased,  transferred  or  otherwise  disposed  of, in one
     transaction  or a series of  transactions,  to any Borrower or any Material
     Subsidiary;  provided that, in the case of such a merger,  such Borrower or
     such  Material  Subsidiary  shall be -------- the  continuing  or surviving
     Person; any Restricted  Subsidiary other than a Material  Subsidiary may be
     merged with any other Restricted Subsidiary, or be liquidated,  wound up or
     dissolved,  or all or any part of its  business,  property or assets may be
     conveyed,  sold, leased,  transferred or otherwise disposed of to any other
     Restricted Subsidiary;

     (ii)  Borrowers  and their  Restricted  Subsidiaries  may sell or otherwise
     dispose  of assets in  transactions  that do not  constitute  Asset  Sales;
     provided  that the  consideration  received  for such assets shall be in an
     amount at least equal to the fair market value thereof;

     (iii) Borrowers and their Restricted  Subsidiaries may dispose of obsolete,
     worn out or surplus property in the ordinary course of business;

     (iv) Borrowers may sell the Refinery Assets provided that (i) the terms and
     conditions  of such  sale  are  reasonably  satisfactory  to  Supermajority
     Lenders, (ii) that any non-Cash  consideration shall be pledged to Agent as
     Collateral,  (iii) the Cash proceeds of such Asset Sale shall be applied as
     required by subsection  2.4B(iii)(a)  or subsection  2.4D, and (iv) Company
     shall,  prior to consummating  any such sale, enter into a long term supply
     agreement with the purchaser of the Refinery  Assets to provide coke to the
     Company's  Coffeyville  coke  gasification  facility  on  terms  and  for a
     duration reasonably acceptable to Supermajority Lenders;

     (v) Borrowers and their Restricted Subsidiaries may make Asset Sales in any
     Fiscal Year in an aggregate amount not to exceed $20,000,000; provided that
     (a) the  consideration  received  for such assets  shall be in an amount at
     least equal to the fair market value thereof;  (b) no more than 25% of such
     consideration may be non-Cash  consideration which is pledged as Collateral
     to the Agent  and  provided  that the  aggregate  amount  of such  non-Cash
     consideration  may not exceed  $5,000,000  in any Fiscal Year;  and (c) the
     Cash  proceeds  of such  Asset  Sales  shall  be  applied  as  required  by
     subsection 2.4B(iii)(a) or subsection 2.4D; and

     (vi)  Company or a Restricted  Subsidiary  may sell or dispose of shares of
     Capital Stock of any of their Restricted Subsidiaries,  in order to qualify
     members of the Governing Body of the  Restricted  Subsidiary if required by
     applicable law.

7.8      Consolidated Capital Expenditures.
         ---------------------------------

                  Borrowers shall not, and shall not permit their Restricted
Subsidiaries to, make or incur Consolidated Capital Expenditures, in any Fiscal
Year indicated below, in an aggregate amount in excess of the corresponding
amount (the "Maximum Consolidated Capital Expenditures Amount") set forth below
opposite such Fiscal Year; provided that the Maximum Consolidated Capital
Expenditures Amount for any Fiscal Year shall be increased by an amount equal to
the excess, if any, of the Maximum Consolidated Capital Expenditures Amount for
the previous Fiscal Year over the actual amount of Consolidated Capital
Expenditures for such previous Fiscal Year; provided further that in no event
shall the amount of such increase exceed 75% of the Maximum Consolidated Capital
Expenditures Amount set forth in the table below for such previous Fiscal Year:

                                                           Maximum Consolidated
                        Fiscal Year                        Capital Expenditures
Fiscal Year ending August 31, 2002                              $75,000,000
Fiscal Year ending August 31, 2003                              $90,000,000
Fiscal Year ending August 31, 2004                             $125,000,000
Fiscal Year ending August 31, 2005 and each Fiscal Year        $105,000,000
thereafter


7.9      Transactions with Shareholders and Affiliates.
         ---------------------------------------------

                  Borrowers shall not, and shall not permit any of their
Restricted Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Borrowers or with any Affiliate of Borrowers or of
any such holder, on terms that are less favorable to Borrowers or that
Restricted Subsidiary, as the case may be, than those that might be obtained at
the time from Persons who are not such a holder or Affiliate; provided that the
foregoing restriction shall not apply to (i) any transaction between Borrowers
and any of their wholly-owned Restricted Subsidiaries or between any of their
wholly-owned Restricted Subsidiaries or (ii) reasonable and customary fees paid
to members of the Governing Bodies of Borrowers and their Restricted
Subsidiaries.

7.10     Sales and Lease-Backs

                  Borrowers shall not, and shall not permit any of their
Restricted Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease, whether an
Operating Lease or a Capital Lease, of any property (whether real, personal or
mixed), whether now owned or hereafter acquired, (i) that Borrowers or any of
their Restricted Subsidiaries has sold or transferred or is to sell or transfer
to any other Person (other than Borrowers or any of their Material Subsidiaries)
or (ii) that Borrowers or any of their Restricted Subsidiaries intends to use
for substantially the same purpose as any other property that has been or is to
be sold or transferred by Borrowers or any of their Restricted Subsidiaries to
any Person (other than Borrowers or any of their Material Subsidiaries) in
connection with such lease; provided that Borrowers and their Restricted
Subsidiaries may become and remain liable as lessee, guarantor or other surety
with respect to any such lease to the extent that the Net Cash Proceeds of such
sale and lease back are applied as required by subsection 2.4B(iii)(a).

7.11     Conduct of Business.
         -------------------

                  From and after the Closing Date, Borrowers shall not, and
shall not permit any of their Restricted Subsidiaries to, engage in any business
other than (i) the businesses engaged in by Borrowers and their Restricted
Subsidiaries on the Closing Date and similar or related businesses and (ii) such
other lines of business as may be consented to by Requisite Lenders.

7.12 Amendments  or Waivers  of  Certain  Agreements;  Amendments  of  Documents
     ---------------------------------------------------------------------------
     Relating to Subordinated Indebtedness.
     -------------------------------------


     A. Amendments or Waivers of Certain  Agreements.  Borrowers shall not agree
to any material  amendment to, or waive any of their material rights under,  the
Demand  Loan  Certificates  and  the  Indenture  under  which  the  Demand  Loan
Certificates were issued or under any Related Agreements after the Closing Date,
without in each case obtaining the prior written consent of Requisite Lenders to
such amendment or waiver; provided,  however, that the foregoing shall not apply
to  agreements   governing  Joint  Venture  indebtedness  to  the  extent  after
exercising  their Best Efforts  Borrowers have no ability to consent or withhold
consent to any such amendment or waiver. Upon receipt,  Borrowers shall promptly
provide  Agent  with  copies  of  all  material  amendments,   modifications  or
supplements to any of the Related Agreements.

     B.  Amendments  or  Supplements  to  Documents   Relating  to  Subordinated
Indebtedness.  Borrowers shall not, and shall not permit any of their Restricted
Subsidiaries  to,  amend or  otherwise  change  the  terms  of any  Subordinated
Indebtedness, or make any payment consistent with an amendment thereof or change
thereto,  if the effect of such  amendment or change is to increase the interest
rate on such Subordinated Indebtedness, change (to earlier dates) any dates upon
which  payments of principal  or interest  are due thereon,  change any event of
default or condition to an event of default with respect  thereto (other than to
eliminate  any such  event of  default  or  increase  any grace  period  related
thereto),  change the redemption,  prepayment or defeasance  provisions thereof,
change the subordination  provisions  thereof (or of any guaranty  thereof),  or
change any collateral  therefor (other than to release such  collateral),  or if
the effect of such  amendment or change,  together with all other  amendments or
changes  made,  is  to  increase  materially  the  obligations  of  the  obligor
thereunder  or  to  confer  any  additional   rights  on  the  holders  of  such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to Borrowers or Lenders.  Subject to  subsection  7.1(vi)
hereof,   the  terms  and  conditions  of  the  Subordinated   Debenture  Bonds,
Subordinated Investment  Certificates or other Subordinated  Indebtedness issued
subsequent to the Closing Date shall be issued pursuant to an Approved Indenture
and will not be less favorable to the Lenders,  including without  limitation as
to subordination, redemption, prepayment, payment or defeasance provisions, than
the Subordinated Debenture Bonds or Subordinated Investment Certificates, as the
case may be,  outstanding  on the Closing Date;  provided  however that interest
rates payable on Subordinated  Indebtedness issued after the Closing Date may be
payable at market rates and that nothing  herein shall limit such interest rates
to  the  rates  in  effect  on  Subordinated  Debenture  Bonds  or  Subordinated
Investment Certificates outstanding on the Closing Date.

7.13     Fiscal Year.

                  Borrowers shall not change their Fiscal Year-end from that in
effect on the Closing Date.

7.14     Cash Management Systems.
         -----------------------

         Borrowers' cash management system is described on Schedule 7.14.
Borrowers shall cause each of their Restricted Subsidiaries to transfer all net
cash balances in such Restricted Subsidiaries' Deposit Accounts or other cash
management accounts into the Concentration Account on a regular basis in
accordance with Borrowers' historical cash management procedures but in any
event no less frequently than weekly or as otherwise reasonably required by
Agent.

7.15     Sale or Discount of Receivables.
         -------------------------------

                  Borrowers shall not, and shall not permit any of their
Restricted Subsidiaries to, directly or indirectly, sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of their
notes or accounts receivable.

Section 8.        EVENTS OF DEFAULT

                  If any of the following conditions or events ("Events of
Default") shall occur and be continuing:

8.1      Failure to Make Payments When Due.
         ---------------------------------

                  Failure by Borrowers to pay any installment of principal of
any Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by Borrowers
to pay when due any amount payable to an Issuing Lender in reimbursement of any
drawing under a Letter of Credit; or failure by Borrowers to pay any interest on
any Loan or any fee or any other amount due under this Agreement within five
days after the date due; or

8.2      Default in Other Agreements.
         ---------------------------

     (i) Failure of Borrowers  or any of their  Restricted  Subsidiaries  to pay
     when due any  principal  of or interest on or any other  amount  payable in
     respect one or more items of Indebtedness (other than Indebtedness referred
     to in subsection 8.1) or Contingent  Obligations in an aggregate  principal
     amount of  $10,000,000  or more,  in each case  beyond the end of any grace
     period provided therefor; or

     (ii)  breach  or  default  by   Borrowers   or  any  of  their   Restricted
     Subsidiaries,  which  breach or default  remains  uncured or unwaived for a
     period of more than 90 consecutive days, with respect to any other material
     term of (a) one or more items of Indebtedness or Contingent  Obligations in
     the aggregate  principal amounts referred to in clause (i) above or (b) any
     loan agreement,  mortgage,  indenture or other  agreement  relating to such
     item(s) of Indebtedness or Contingent Obligation(s),  if the effect of such
     breach or default  is to cause,  or to permit the holder or holders of that
     Indebtedness  or Contingent  Obligation(s)  (or a trustee on behalf of such
     holder or holders) to cause, that Indebtedness or Contingent  Obligation(s)
     to become or be declared  due and payable  prior to its stated  maturity or
     the stated maturity of any underlying obligation,  as the case may be (upon
     the giving or receiving of notice, lapse of time, both, or otherwise); or

8.3      Breach of Certain Covenants.

                  Failure of Borrowers to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or

8.4      Breach of Warranty.
         ------------------

                  Any representation, warranty, certification or other statement
made by Borrowers or any of their Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Borrowers or any of their
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or

8.5      Other Defaults Under Loan Documents.
         -----------------------------------

                  Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or waived within 15
days after the earlier of (i) an Officer of Borrowers or such Loan Party
becoming aware of such default or (ii) receipt by Borrowers and such Loan Party
of notice from Agent or any Lender of such default; or

8.6      Involuntary Bankruptcy; Appointment of Receiver, etc.

     (i) A court having  jurisdiction  in the  premises  shall enter a decree or
     order  for  relief  in  respect  of  Borrowers  or any of their  Restricted
     Subsidiaries in an involuntary  case under the Bankruptcy Code or under any
     other applicable bankruptcy,  insolvency or similar law now or hereafter in
     effect,  which decree or order is not stayed;  or any other similar  relief
     shall be granted under any applicable federal or state law; or

     (ii) an  involuntary  case shall be commenced  against  Borrowers or any of
     their Restricted  Subsidiaries under the Bankruptcy Code or under any other
     applicable  bankruptcy,  insolvency  or  similar  law now or  hereafter  in
     effect; or a decree or order of a court having jurisdiction in the premises
     for the  appointment  of a  receiver,  liquidator,  sequestrator,  trustee,
     custodian or other officer  having  similar powers over Borrowers or any of
     their  Restricted  Subsidiaries,  or over all or a substantial  part of its
     property,  shall  have been  entered;  or there  shall  have  occurred  the
     involuntary appointment of an interim receiver,  trustee or other custodian
     of  Borrowers  or  any  of  their  Restricted  Subsidiaries  for  all  or a
     substantial part of its property; or a warrant of attachment,  execution or
     similar process shall have been issued against any substantial  part of the
     property of Borrowers or any of their Restricted Subsidiaries, and any such
     event  described  in this  clause  (ii) shall  continue  for 60 days unless
     dismissed, bonded or discharged; or

8.7      Voluntary Bankruptcy; Appointment of Receiver, etc.

     (i) Any  Borrower  or any of their  Restricted  Subsidiaries  shall have an
     order for relief  entered with  respect to it or commence a voluntary  case
     under  the  Bankruptcy  Code or  under  any  other  applicable  bankruptcy,
     insolvency  or similar law now or hereafter in effect,  or shall consent to
     the  entry  of an  order  for  relief  in an  involuntary  case,  or to the
     conversion of an involuntary  case to a voluntary case, under any such law,
     or shall consent to the appointment of or taking  possession by a receiver,
     trustee or other  custodian for all or a substantial  part of its property;
     or any  Borrower  or any of their  Restricted  Subsidiaries  shall make any
     assignment for the benefit of creditors; or

     (ii) Any Borrower or any of their Restricted  Subsidiaries shall be unable,
     or shall fail  generally,  or shall admit in writing its inability,  to pay
     its debts as such debts become due; or the  Governing  Body of any Borrower
     or any of their Restricted  Subsidiaries  (or any committee  thereof) shall
     adopt any  resolution  or otherwise  authorize any action to approve any of
     the actions referred to in clause (i) above or this clause (ii); or

8.8      Judgments and Attachments.
         -------------------------

                  Any money judgment, writ or warrant of attachment or similar
process involving in the aggregate at any time an amount in excess of
$10,000,000 (in either case not adequately covered by insurance as to which a
solvent and unaffiliated insurance company has acknowledged coverage) shall be
entered or filed against any Borrower or any of their Restricted Subsidiaries or
any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days (or in any event later than five
days prior to the date of any proposed sale thereunder); or

8.9      Dissolution.
         -----------

                  Any order, judgment or decree shall be entered against any
Borrower or any of their Restricted Subsidiaries decreeing the dissolution or
split up of any Borrower or any Restricted Subsidiary and such order shall
remain undischarged or unstayed for a period in excess of 30 days; or

8.10     Employee Benefit Plans.
         ----------------------

                  There shall occur one or more ERISA Events which individually
or in the aggregate results in or might reasonably be expected to result in
liability of any Borrower, any of their Subsidiaries or any of their respective
ERISA Affiliates in excess of an individual or aggregate amount which would
reasonably be expected to result in a Material Adverse Effect during the term of
this Agreement; or the excess of (1) the actuarial present value (determined on
the basis of reasonable assumptions employed by the independent actuary for such
Pension Plan for purposes of Section 412 of the Internal Revenue Code or Section
302 of ERISA) of benefit liabilities (as defined in Section 4001(a)(16) of
ERISA) over (2) the fair market value of the assets of such Pension Plan,
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), does not exceed an amount that, if payable, would
reasonably be expected to result in a Material Adverse Effect; or

8.11     Change in Control.
         -----------------

                  A Change in Control shall have occurred; or

8.12    Invalidity of Guaranty; Failure of Security; Repudiation of Obligations.
         -----------------------------------------------------------------------

                  At any time after the execution and delivery thereof, (i) the
Guaranty for any reason, other than the satisfaction in full of all Obligations,
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void, (ii) any Collateral Document
shall cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Agent shall not have or shall cease to have a valid
and perfected First Priority, Second Priority or First Priority pari passu Lien,
as the case may be, in any Collateral purported to be covered thereby, in each
case for any reason other than the failure of Agent or any Lender to take any
action within its control, or (iii) any Loan Party shall contest the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Loan Document to which it is a party:

THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Borrowers, and the obligation of each Lender to make any Loan, the
obligation of Agent to issue any Letter of Credit and the right of any Lender to
issue any Letter of Credit hereunder shall thereupon terminate, and (ii) upon
the occurrence and during the continuation of any other Event of Default, Agent
shall, upon the written request or with the written consent of Requisite
Lenders, by written notice to Borrowers, declare all or any portion of the
amounts described in clauses (a) through (c) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each Lender
to make any Loan, the obligation of Agent to issue any Letter of Credit and the
right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate; provided that the foregoing shall not affect in any way the
obligations of Revolving Lenders under subsection 3.3C(i).

                  Any amounts described in clause (b) above, when received by
Agent, shall be held by Agent pursuant to the terms of the Security Agreement
and shall be applied as therein provided.

                  Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to clause (ii) of such paragraph Borrowers shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then all Lenders, by written
notice to Borrowers, may at their option rescind and annul such acceleration and
its consequences; but such action shall not affect any subsequent Event of
Default or Potential Event of Default or impair any right consequent thereon.
The provisions of this paragraph are intended merely to bind Lenders to a
decision which may be made at the election of all Lenders and are not intended,
directly or indirectly, to benefit Borrowers, and such provisions shall not at
any time be construed so as to grant Borrowers the right to require Lenders to
rescind or annul any acceleration hereunder or to preclude Agent or Lenders from
exercising any of the rights or remedies available to them under any of the Loan
Documents, even if the conditions set forth in this paragraph are met.

Section 9.        ADMINISTRATIVE AGENT

9.1      Appointment.
         -----------

     A. Appointment of Agent. BTCo is hereby appointed Agent hereunder and under
the other Loan  Documents.  Each Lender  hereby  authorizes  Agent to act as its
agent  in  accordance  with the  terms  of this  Agreement  and the  other  Loan
Documents.  Agent  agrees to act upon the express  conditions  contained in this
Agreement and the other Loan  Documents,  as applicable.  The provisions of this
Section 9 are solely  for the  benefit  of Agent and  Lenders  and no Loan Party
shall have rights as a third party beneficiary of any of the provisions thereof.
In performing its functions and duties under this  Agreement,  Agent (other than
as provided in subsection 2.1D) shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have  assumed  any  obligation  towards or
relationship of agency or trust with or for Borrowers or any other Loan Party.

     B. Appointment of Supplemental Collateral Agents. It is the purpose of this
Agreement and the other Loan  Documents  that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact  business as agent or trustee in such  jurisdiction.
It is recognized  that in case of litigation  under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan  Documents,  or in case Agent deems that by reason of any present or future
law of any  jurisdiction  it may  not  exercise  any of the  rights,  powers  or
remedies  granted herein or in any of the other Loan Documents or take any other
action which may be desirable or necessary in  connection  therewith,  it may be
necessary  that Agent  appoint an  additional  individual  or  institution  as a
separate trustee, co-trustee,  collateral agent or collateral co-agent (any such
additional  individual or institution being referred to herein individually as a
"Supplemental  Collateral  Agent" and collectively as  "Supplemental  Collateral
Agents").

                  In the event that Agent appoints a Supplemental Collateral
Agent with respect to any Collateral, (i) each and every right, power, privilege
or duty expressed or intended by this Agreement or any of the other Loan
Documents to be exercised by or vested in or conveyed to Agent with respect to
such Collateral shall be exercisable by and vest in such Supplemental Collateral
Agent to the extent, and only to the extent, necessary to enable such
Supplemental Collateral Agent to exercise such rights, powers and privileges
with respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by such Supplemental
Collateral Agent shall run to and be enforceable by either Agent or such
Supplemental Collateral Agent, and (ii) the provisions of this Section 9 and of
subsections 10.2 and 10.3 that refer to Agent shall inure to the benefit of such
Supplemental Collateral Agent and all references therein to Agent shall be
deemed to be references to Agent and/or such Supplemental Collateral Agent, as
the context may require.

                  Should any instrument in writing from Borrowers or any other
Loan Party be required by any Supplemental Collateral Agent so appointed by
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Borrowers shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Agent. In case any Supplemental Collateral Agent, or a successor
thereto, shall die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental Collateral Agent, to
the extent permitted by law, shall vest in and be exercised by Agent until the
appointment of a new Supplemental Collateral Agent.

9.2      Powers and Duties; General Immunity.
         -----------------------------------

     A. Powers;  Duties Specified.  Each Lender irrevocably  authorizes Agent to
take such action on such Lender's behalf and to exercise such powers, rights and
remedies  hereunder  and under  the other  Loan  Documents  as are  specifically
delegated  or granted to Agent by the terms hereof and  thereof,  together  with
such powers,  rights and remedies as are reasonably  incidental  thereto.  Agent
shall have only those duties and  responsibilities  that are expressly specified
in this Agreement and the other Loan Documents.  Agent may exercise such powers,
rights  and  remedies  and  perform  such  duties by or  through  its  agents or
employees. Agent shall not have, by reason of this Agreement or any of the other
Loan Documents,  a fiduciary  relationship in respect of any Lender; and nothing
in this Agreement or any of the other Loan Documents,  expressed or implied,  is
intended to or shall be so construed as to impose upon Agent any  obligations in
respect of this Agreement or any of the other Loan Documents except as expressly
set forth herein or therein.

     B. No Responsibility for Certain Matters.  No Agent shall be responsible to
any   Lender   for  the   execution,   effectiveness,   genuineness,   validity,
enforceability,  collectibility  or  sufficiency  of this Agreement or any other
Loan  Document or for any  representations,  warranties,  recitals or statements
made  herein or therein  or made in any  written  or oral  statements  or in any
financial or other statements, instruments, reports or certificates or any other
documents  furnished  or made by such  Agent to  Lenders  or by or on  behalf of
Borrowers to such Agent or any Lender in connection  with the Loan Documents and
the transactions contemplated thereby or for the financial condition or business
affairs  of  Borrowers  or any  other  Person  liable  for  the  payment  of any
Obligations,  nor shall such Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or  agreements  contained  in any of the Loan  Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as to the existence
or possible  existence  of any Event of Default or  Potential  Event of Default.
Anything  contained in this  Agreement to the  contrary  notwithstanding,  Agent
shall  not have any  liability  arising  from  confirmations  of the  amount  of
outstanding  Loans  or the  Letter  of  Credit  Usage or the  component  amounts
thereof.

     C.  Exculpatory  Provisions.  No Agent or any of its  officers,  directors,
employees  or agents  shall be liable to Lenders for any action taken or omitted
by such Agent under or in connection  with any of the Loan  Documents  except to
the extent caused by such Agent's gross  negligence  or willful  misconduct.  An
Agent  shall be  entitled  to  refrain  from any act or the taking of any action
(including  the failure to take an action) in connection  with this Agreement or
any of the other Loan Documents or from the exercise of any power, discretion or
authority vested in it hereunder or thereunder unless and until such Agent shall
have received  instructions in respect  thereof from Requisite  Lenders (or such
other  Lenders as may be required  to give such  instructions  under  subsection
10.6) and, upon receipt of such  instructions  from  Requisite  Lenders (or such
other  Lenders,  as the case may be),  such Agent  shall be  entitled  to act or
(where so instructed) refrain from acting, or to exercise such power, discretion
or authority,  in accordance with such  instructions.  Without  prejudice to the
generality of the foregoing, (i) each Agent shall be entitled to rely, and shall
be fully protected in relying,  upon any  communication,  instrument or document
believed  by it to be genuine and correct and to have been signed or sent by the
proper  person or persons,  and shall be entitled to rely and shall be protected
in relying on opinions  and  judgments of  attorneys  (who may be attorneys  for
Borrowers and their  Restricted  Subsidiaries),  accountants,  experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against an Agent as a result of such Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other Loan
Documents in  accordance  with the  instructions  of Requisite  Lenders (or such
other  Lenders as may be required  to give such  instructions  under  subsection
10.6).

     D. Agents Entitled to Act as Lender.  The agency hereby created shall in no
way  impair or affect  any of the  rights and powers of, or impose any duties or
obligations  upon, an Agent in its  individual  capacity as a Lender  hereunder.
With respect to its participation in the Loans and the Letters of Credit,  Agent
shall  have the same  rights and powers  hereunder  as any other  Lender and may
exercise  the same as though it were not  performing  the duties  and  functions
delegated  to it  hereunder,  and the term  "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include Agent in its
individual capacity.  An Agent and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of banking,  trust, financial advisory
or other  business  with  Borrowers or any of its  Affiliates  as if it were not
performing  the  duties  specified  herein,   and  may  accept  fees  and  other
consideration  from Borrowers for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.

9.3  Independent  Investigation by Lenders;  No Responsibility  For Appraisal of
     ---------------------------------------------------------------------------
     Creditworthiness.
     --------------

                  Each Lender agrees that it has made its own independent
investigation of the financial condition and affairs of Borrowers and their
Restricted Subsidiaries in connection with the making of the Loans and the
issuance of Letters of Credit hereunder and that it has made and shall continue
to make its own appraisal of the creditworthiness of Borrowers and their
Restricted Subsidiaries. No Agent shall have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and no Agent shall have
any responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.

9.4      Right to Indemnity.
         ------------------

                  Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Agents and the officers, directors, employees, agents,
attorneys, professional advisors and affiliates of each of them to the extent
that any such Person shall not have been reimbursed by Borrowers, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements and fees and disbursements of any financial advisor engaged by
Agents) or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against an Agent or and other such Persons in
exercising the powers, rights and remedies of an Agent or performing duties of
an Agent hereunder or under the other Loan Documents or otherwise in its
capacity as Agent in any way relating to or arising out of this Agreement or the
other Loan Documents; provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from an Agent's gross
negligence or willful misconduct. If any indemnity furnished to an Agent or any
other such Person 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.

9.5      Successor Agents.
         ----------------

                  Agent may resign at any time by giving 30 days' prior written
notice thereof to Lenders and Company. Upon any such notice of resignation,
Requisite Lenders shall have the right, upon five Business Days' notice to
Company, to appoint a successor Agent. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, that 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 under this Agreement. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 9 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement.

9.6      Collateral Documents and Subsidiary Guaranty.
         --------------------------------------------

                  Each Lender hereby further authorizes Agent, on behalf of and
for the benefit of Lenders, to enter into each Collateral Document as secured
party and to be the agent for and representative of Lenders under Subsidiary
Guaranty, and each Lender agrees to be bound by the terms of each Collateral
Document and Subsidiary Guaranty; provided that Agent shall not (i) enter into
or consent to any material amendment, modification, termination or waiver of any
provision contained in any Collateral Document or the Subsidiary Guaranty or
(ii) release any Collateral in excess of $10,000,000 per Fiscal Year (except as
otherwise expressly permitted or required pursuant to the terms of this
Agreement or the applicable Collateral Document), in each case without the prior
consent of such Lenders as may be provided for in subsection 10.6; provided
further, however, that, without further written consent or authorization from
Lenders, Agent may execute any documents or instruments necessary to (a) release
any Lien encumbering any item of Collateral that is the subject of a sale or
other disposition of assets permitted by this Agreement or to which Requisite
Lenders have otherwise consented or (b) release any Subsidiary Guarantor from
the Subsidiary Guaranty if all of the capital stock of such Subsidiary Guarantor
is sold to any Person (other than an Affiliate of Borrowers) pursuant to a sale
or other disposition permitted hereunder or to which Requisite Lenders have
otherwise consented. Anything contained in any of the Loan Documents to the
contrary notwithstanding, Borrowers, Agent and each Lender hereby agree that (1)
no Lender shall have any right individually to realize upon any of the
Collateral or to enforce the Subsidiary Guaranty, it being understood and agreed
that all powers, rights and remedies under the Collateral Documents and the
Subsidiary Guaranty may be exercised solely by Agent for the benefit of Lenders
in accordance with the terms thereof, and (2) in the event of a foreclosure by
Agent on any of the Collateral pursuant to a public or private sale, Agent or
any Lender may be the purchaser of any or all of such Collateral at any such
sale and Agent, as agent for and representative of Lenders (but not any Lender
or Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Obligations as a credit on account of the purchase price for any collateral
payable by Agent at such sale.

9.7      Duties of Other Agents.
         ----------------------

                  Neither any of the Lenders identified in this Agreement as a
"co-agent" nor Syndication Agent shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of such
Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgements with respect to such
Lenders as it makes with respect to Agents in subsection 9.3.

9.8      Agent May File Proofs of Claim.
         ------------------------------

                  In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to Borrowers or any of the Restricted
Subsidiaries of Borrowers, Agent (irrespective of whether the principal of any
Loan shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether Agent shall have made any demand on
Borrowers) shall be entitled and empowered, by intervention in such proceeding
or otherwise

     (i) to file  and  prove a claim  for the  whole  amount  of  principal  and
     interest owing and unpaid in respect of the Loans and any other Obligations
     that are owing and unpaid and to file such other papers or documents as may
     be necessary or advisable in order to have the claims of Lenders and Agents
     (including   any  claim   for  the   reasonable   compensation,   expenses,
     disbursements  and  advances  of Lenders  and  Agents and their  agents and
     counsel and all other amounts due Lenders and Agents under  subsections 2.3
     and 10.2) allowed in such judicial proceeding, and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Agent and, in the event that Agent shall
consent to the making of such payments directly to Lenders, to pay to Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of Agents and their agents and counsel, and any other amounts due Agents under
subsections 2.3 and 10.2 hereof.

                  Nothing herein contained shall be deemed to authorize Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lenders or to authorize Agent to vote in respect of the
claim of any Lender in any such proceeding.

Section 10.       MISCELLANEOUS

10.1 Successors and Assigns; Assignments and Participations in Loans and Letters
     ---------------------------------------------------------------------------
     of Credit.
     ----------

     A. General.  This  Agreement  shall be binding upon the parties  hereto and
their  respective  successors  and assigns and shall inure to the benefit of the
parties hereto and the  successors  and assigns of Lenders (it being  understood
that Lenders' rights of assignment are subject to the further provisions of this
subsection 10.1).  Neither  Borrowers'  rights or obligations  hereunder nor any
interest  therein may be assigned or delegated  by  Borrowers  without the prior
written consent of all Lenders.  Subject to subsection  10.1B, each Lender shall
have the  right at any time to (i)  sell,  assign or  transfer  to any  Eligible
Assignee,  or (ii) sell  participations to any Person in, all or any part of its
Commitments  or any  Loan  or  Loans  made by it or its  Letters  of  Credit  or
participations  therein or any other interest herein or in any other Obligations
owed to it; provided that,  except as provided in subsection 10.5, no such sale,
assignment or transfer  described in clause (i) above shall be effective  unless
and until an Assignment  Agreement  effecting such sale,  assignment or transfer
shall have been  accepted by Agent and  recorded in the  Register as provided in
subsection 10.1B(ii); provided, further that no such sale, assignment,  transfer
or  participation  of any Letter of Credit or any  participation  therein may be
made  separately  from  a  sale,  assignment,  transfer  or  participation  of a
corresponding  interest in the Revolving Loan Commitment and the Revolving Loans
of  the  Revolving   Lender  effecting  such  sale,   assignment,   transfer  or
participation.  Except as otherwise  provided in this subsection 10.1, no Lender
shall,  as  between  Borrowers  and  such  Lender,  be  relieved  of  any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations  in, all or any part of its Commitments or the Loans,
the Letters of Credit or participations  therein,  or the other Obligations owed
to such Lender.

B.       Assignments.

     (i) Amounts and Terms of  Assignments.  Each  Commitment,  Loan,  Letter of
     --------------------------------  Credit or participation therein, or other
     Obligation  may (a) be assigned in any amount to another  Lender,  or to an
     Affiliate or  Affiliated  Fund of the assigning  Lender or another  Lender,
     with the giving of notice to  Borrowers  and Agent and with the  consent of
     Agent (which consent shall not be unreasonably  withheld or delayed) or (b)
     be assigned in an aggregate amount of not less than $5,000,000 with respect
     to the Revolving Loan  Commitments  and $1,000,000 with respect to the Term
     Loans (or such lesser amount as shall  constitute  the aggregate  amount of
     the Commitments,  Loans, Letters of Credit and participations  therein, and
     other  Obligations of the assigning  Lender) to any other Eligible Assignee
     with the giving of notice to Borrowers and with the consent of Agent (which
     consent shall not be  unreasonably  withheld or delayed).  To the extent of
     any such assignment in accordance with either clause (a) or (b) above,  the
     assigning  Lender shall be relieved of its obligations  with respect to its
     Commitments,  Loans, Letters of Credit or participations  therein, or other
     Obligations  or the portion  thereof so assigned.  The parties to each such
     assignment  shall  execute and  deliver to Agent,  for its  acceptance  and
     recording  in  the  Register,  an  Assignment  Agreement,  together  with a
     processing and  recordation  fee of $3,500 and such forms,  certificates or
     other  evidence,  if any, with respect to United States  federal income tax
     withholding matters as the assignee under such Assignment  Agreement may be
     required to deliver to Agent pursuant to subsection 2.7B(iii)(a). Upon such
     execution,   delivery  acceptance  and  recordation,  from  and  after  the
     effective date  specified in such  Assignment  Agreement,  (y) the assignee
     thereunder  shall be a party  hereto  and,  to the extent  that  rights and
     obligations  hereunder have been assigned to it pursuant to such Assignment
     Agreement,  shall have the rights and obligations of a Lender hereunder and
     (z) the assigning  Lender  thereunder  shall, to the extent that rights and
     obligations  hereunder have been assigned by it pursuant to such Assignment
     Agreement,  relinquish  its rights (other than any rights which survive the
     termination of this Agreement under subsection  10.9B) and be released from
     its  obligations  under this  Agreement  (and, in the case of an Assignment
     Agreement  covering all or the remaining  portion of an assigning  Lender's
     rights and obligations under this Agreement,  such Lender shall cease to be
     a party  hereto;  provided  that,  anything  contained  in any of the  Loan
     -------- Documents to the contrary  notwithstanding,  if such Lender is the
     Issuing  Lender  with  respect to any  outstanding  Letters of Credit  such
     Lender  shall  continue  to have all rights and  obligations  of an Issuing
     Lender with  respect to such Letters of Credit  until the  cancellation  or
     expiration of such Letters of Credit and the  reimbursement  of any amounts
     drawn thereunder).  If any such assignment occurs after the issuance of the
     Notes hereunder, the assigning Lender shall, upon the effectiveness of such
     assignment  or  as  promptly  thereafter  as  practicable,   surrender  its
     applicable Notes to Agent for  cancellation,  and thereupon new Notes shall
     be issued to the assignee and/or to the assigning Lender,  substantially in
     the form of Exhibit IV, Exhibit V-A or Exhibit V-B annexed  hereto,  as the
     ----------   -----------   -----------
     case  may  be,  with   appropriate      insertions,  to reflect the new
     Commitments and/or outstanding Revolving Loans and/or outstanding Term
     Loans,  as the case may be, of the assignee and/or the assigning Lender.

     (ii) Acceptance by Agent;  Recordation in Register.  Upon its receipt of an
          --------------------------------------------
     Assignment  Agreement  executed  by an  assigning  Lender  and an  assignee
     representing that it is an Eligible Assignee,  together with the processing
     and  recordation  fee  referred to in  subsection  10.1B(i)  and any forms,
     certificates or other evidence with respect to United States federal income
     tax  withholding  matters that such  assignee may be required to deliver to
     Agent  pursuant  to  subsection  2.7B(iii)(a),  Agent  shall,  if Agent has
     consented to the assignment  evidenced  thereby (to the extent such consent
     is required  pursuant to subsection  10.1B(i)),  (a) accept such Assignment
     Agreement by executing a  counterpart  thereof as provided  therein  (which
     acceptance   shall   evidence  any  required   consent  of  Agent  to  such
     assignment),  (b) record the information contained therein in the Register,
     and (c) give prompt  notice  thereof to Borrowers.  Agent shall  maintain a
     copy  of each  Assignment  Agreement  delivered  to and  accepted  by it as
     provided in this subsection 10.1B(ii).

     C. Participations. The holder of any participation, other than an Affiliate
of the Lender granting such participation, shall not be entitled to require such
Lender  to take or omit to take any  action  hereunder  except  action  directly
affecting  (i) the extension of the  scheduled  final  maturity date of any Loan
allocated to such  participation  or (ii) a reduction of the principal amount of
or the rate of interest payable on any Loan allocated to such participation, and
all amounts payable by Borrowers  hereunder  (including  amounts payable to such
Lender  pursuant to  subsections  2.6D and 2.7) shall be  determined  as if such
Lender  had not  sold  such  participation.  Borrowers  and each  Lender  hereby
acknowledge  and agree that,  solely for purposes of subsections  10.4 and 10.5,
(a) any participation  will give rise to a direct obligation of Borrowers to the
participant and (b) the participant shall be considered to be a "Lender".

     D. Assignments to Federal Reserve Banks. In addition to the assignments and
participations permitted under the foregoing provisions of this subsection 10.1,
any Lender may  assign  and  pledge all or any  portion of its Loans,  the other
Obligations  owed to such Lender,  and its Note or Notes to any Federal  Reserve
Bank as collateral  security  pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any operating  circular issued by such Federal
Reserve Bank;  provided that (i) no Lender shall, as between  Borrowers and such
Lender, be relieved of any of its obligations  hereunder as a result of any such
assignment  and pledge and (ii) in no event shall such  Federal  Reserve Bank be
considered  to be a "Lender" or be entitled to require the  assigning  Lender to
take or omit to take any action hereunder.

     E.  Information.   Each  Lender  may  furnish  any  information  concerning
Borrowers and their  Restricted  Subsidiaries  in the  possession of that Lender
from time to time to assignees and participants (including prospective assignees
and participants), subject to subsection 10.19.

     F. Agreements of Lenders.  Each Lender listed on the signature pages hereof
hereby agrees (i) that it is an Eligible  Assignee  described in the  definition
thereof;  (ii) that it has  experience and expertise in the making of loans such
as the Loans;  and (iii) that it will make its Loans for its own  account in the
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the  Securities  Act or the Exchange Act or other  federal
securities  laws (it being  understood  that,  subject to the provisions of this
subsection 10.1, the disposition of such Loans or any interests therein shall at
all times remain within its exclusive control). Each Lender that becomes a party
hereto  pursuant to an  Assignment  Agreement  shall be deemed to agree that the
agreements of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.

     G. Patronage Payments.  Borrowers acknowledge and agree that: (i) only that
portion of the Loans represented by CoBank's Pro Rata Share which is retained by
CoBank for its own account is entitled to patronage  distributions in accordance
with  CoBank's  bylaws and its  practices  and  procedures  related to patronage
distribution; and (ii) any patronage, or similar payments to which Borrowers are
entitled on account their ownership of CoBank Equity Interests or otherwise will
not be based on any  portion of CoBank's  interest in the Loans in which  CoBank
has at any time granted a participation interest.

10.2     Expenses.
         --------

                  Whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree to pay promptly (i) all the actual and reasonable
costs and expenses of negotiation, preparation and execution of the Loan
Documents and any consents, amendments, waivers or other modifications thereto;
(ii) all the costs of furnishing all opinions by counsel for Borrowers
(including any opinions requested by Agent or Lenders as to any legal matters
arising hereunder) and of Borrowers' performance of and compliance with all
agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents including with respect to confirming
compliance with environmental, insurance and solvency requirements; (iii) the
reasonable fees, expenses and disbursements of counsel to Agent (including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Borrowers; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Agent on behalf
of Lenders pursuant to any Loan Document, including costs of conducting record
searches, examining Collateral, opening bank accounts and lockboxes, depositing
checks, receiving and transferring funds (including charges for checks for which
there are insufficient funds), costs of title insurance premiums, real estate
survey costs, and fees and taxes in connection with the filing of financing
statements, costs of preparing and recording Loan Documents, fees and expenses
of counsel for providing such opinions as Agent or Requisite Lenders may
reasonably request, and fees and expenses of legal counsel to Agent; (v) all the
actual costs and reasonable expenses (including the reasonable fees, expenses
and disbursements of any auditors, accountants or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
Agent or its counsel) of obtaining and reviewing any appraisals provided for
under this Agreement and any environmental audits or reports provided for under
this Agreement; (vi) the custody or preservation of any of the Collateral; (vii)
all other actual and reasonable costs and expenses incurred by Agent in
connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (viii) all costs and expenses, including reasonable attorneys' fees
of Agent's counsel (including allocated costs of internal counsel) and costs of
settlement, incurred by Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Loan Documents (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty) or in connection with any refinancing or restructuring of
the credit arrangements provided under this Agreement in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy proceedings.

10.3     Indemnity.
         ---------

                  In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Borrowers agree to defend, with counsel selected by Borrowers and reasonably
acceptable to Agent (provided no Event of Default or Potential Event of Default
has occurred and is continuing in which event Indemnitees shall select such
counsel), indemnify, pay and hold harmless Agent and Lenders, and the officers,
directors, employees, agents and affiliates of Agent and Lenders (collectively
called the "Indemnitees"), from and against any and all Indemnified Liabilities
(as hereinafter defined); provided that Borrowers shall not have any obligation
to any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross negligence or
willful misconduct of that Indemnitee as determined by a final judgment of a
court of competent jurisdiction.

                  As used herein, "Indemnified Liabilities" means, collectively,
any and all liabilities, obligations, losses, damages (including natural
resource damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof, or any enforcement of any of the Loan Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty), (ii) the statements contained in the
commitment letter delivered by any Lender to Borrowers with respect thereto, or
(iii) any Environmental Claim or any Hazardous Materials Activity relating to or
arising from, directly or indirectly, any past or present activity, operation,
land ownership, or practice of Borrowers or any of their Restricted
Subsidiaries.

                  To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this subsection 10.3 may be unenforceable in
whole or in part because they are violative of any law or public policy,
Borrowers shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.

10.4     Set-Off; Security Interest in Deposit Accounts.
         ----------------------------------------------

                  In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by Borrowers
at any time or from time to time, without notice to Borrowers or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender or any Affiliate of such Lender to or for the credit or the
account of Borrowers and each other Loan Party against and on account of the
obligations and liabilities of Borrowers or any other Loan Party to that Lender
(or any Affiliate of such Lender) or to any other Lender (or any Affiliate of
any other Lender) under this Agreement, the Letters of Credit and participations
therein and the other Loan Documents, including all claims of any nature or
description arising out of or connected with this Agreement, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Upon receiving notice of any setoff
pursuant to this subsection 10.4, Agent shall provide notice thereof to
Borrowers, provided that Agent shall have no liability for any failure to
provide such notice. Each Borrower hereby further grants to Agent and each
Lender a security interest in all deposits and accounts maintained with Agent or
such Lender as security for the Obligations.

10.5     Ratable Sharing.
         ---------------

                  Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment (other than a voluntary prepayment of Loans
made and applied in accordance with the terms of this Agreement), by realization
upon security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive any Collateral or proceeds thereof
or payment or reduction of a proportion of the aggregate amount of principal,
interest, amounts payable in respect of Letters of Credit, fees and other
amounts then due and owing to that Lender hereunder or under the other Loan
Documents (collectively, the "Aggregate Amounts Due" to such Lender) that is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Agent and each other Lender of
the receipt of such payment and (ii) apply a portion of such payment to purchase
assignments (which it shall be deemed to have purchased from each seller of an
assignment simultaneously upon the receipt by such seller of its portion of such
payment) of the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Borrowers or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such assignments shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Borrowers expressly consent to
the foregoing arrangement and agree that any purchaser of an assignment so
purchased may exercise any and all rights of a Lender as to such assignment as
fully as if that Lender had complied with the provisions of subsection 10.1B
with respect to such assignment. In order to further evidence such assignment
(and without prejudice to the effectiveness of the assignment provisions set
forth above), each purchasing Lender and each selling Lender agree to enter into
an Assignment Agreement at the request of a selling Lender or a purchasing
Lender, as the case may be, in form and substance reasonably satisfactory to
each such Lender.

10.6     Amendments and Waivers.
         ----------------------

                  No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, and no consent to any departure by
Borrowers therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any amendment, modification,
termination, waiver or consent which:

     (a) extends the final  scheduled  maturity of any Loan or Note or postpones
the date or reduces the amount of any scheduled  payment (but not prepayment) of
principal  of any  Loan or  postpones  the date or  reduces  the  amount  of any
scheduled  reduction of any Revolving  Loan  Commitments,  or extends the stated
maturity of any Letter of Credit beyond the applicable Revolving Loan Commitment
Termination Date, or reduces the rate or extends the time of payment of interest
or fees thereon  (except in  connection  with a waiver of  applicability  of any
post-default  increase  in interest  rates),  or reduces  the  principal  amount
thereof (except to the extent repaid in cash); or

     (b) releases all of the Collateral or Collateral with an aggregate value in
excess of  $25,000,000  in any Fiscal Year (except as expressly  provided in the
Loan Documents) under all the Collateral  Documents,  or releases any Subsidiary
Guarantor  (except  as  expressly  provided  in the  Loan  Documents)  from  its
obligations under the Subsidiary Guaranty; or

     (c) amends, modifies or waives any provision of this subsection 10.6; or

     (d) reduces the  percentage  specified  in the  definitions  of  "Requisite
Lenders" or "Supermajority  Lenders" (it being understood that, with the consent
of Requisite Lenders, additional extensions of credit pursuant to this Agreement
may be included in the  determination of Requisite  Lenders on substantially the
same basis as the  extensions of Term Loans and Revolving Loan  Commitments  are
included on the Closing  Date  provided  that any  increases in Revolving A Loan
Commitments  effected in accordance with subsection 2.1A(iii) do not require any
further consent of Requisite Lenders); or

     (e)  consents to the  assignment  or transfer by  Borrowers of any of their
rights and obligations under this Agreement or any other Loan Document; or

     (f) changes in any manner the provisions  contained in the second paragraph
of subsection 2.1C(ii); or

shall be effective only if evidenced in a writing signed by or on behalf of all
Lenders (with Obligations being directly affected in the case of clause (a)
above).

                  In addition, (i) no amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written
concurrence of the Lender which is the holder of that Note, (ii) no amendment,
modification, termination or waiver of any provision of Section 3 shall be
effective without the written concurrence of Agent and, with respect to the
purchase of participations in Letters of Credit, without the written concurrence
of each Issuing Lender that has issued an outstanding Letter of Credit or has
not been reimbursed for a payment under a Letter of Credit, (iii) no amendment,
modification, termination or waiver of any provision of Section 9 or of any
other provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of Agent shall be effective without the written
concurrence of Agent, (iv) no amendment, modification, termination or waiver of
any provision of subsection 2.4 which has the effect of changing any voluntary
or mandatory prepayments applicable to a Class in a manner that
disproportionately disadvantages such Class relative to any other Class shall be
effective without the written concurrence of Requisite Class Lenders of such
affected Class (it being understood and agreed that any amendment, modification,
termination or waiver of any such provisions which only postpones or reduces any
voluntary or mandatory prepayment from those set forth in subsection 2.4 with
respect to one Class but not any other Class shall be deemed to
disproportionately disadvantage such one Class but not to disproportionately
disadvantage any such other Class for purposes of this clause (iv)), (v) no
amendment, modification, termination or waiver of any provision of any
Collateral Document which has the effect of terminating, waiving or otherwise
changing the relative priority of the Liens of any Class of Lender with respect
to the Collateral or the rights, remedies or powers of any Class of Lender or
the exercise of such rights, remedies or powers with respect to the Collateral
which is pledged, restricted or encumbered by such Collateral Document, as
applicable, shall be effective without the written concurrence of all Lenders of
the affected Class, (vi) no amendment, modification, termination or waiver of
any provision which increases the advance rate with respect to the Revolving
Loans (except for the restoration by Agent of an advance rate in whole or in
part to its original level after the prior reduction thereof by Agent) or of the
definitions of "Eligible Accounts Receivable" or "Eligible Inventory" which
makes such definitions less restrictive shall be effective without the written
concurrence of all Revolving Lenders; provided that notwithstanding the
foregoing the "Eligible Inventory" definition may be amended or modified to
include Collateral outside of the United States upon the written concurrence of
66% of Revolving Lenders, (vii) no amendment which increases the Commitment or
the Pro Rata Share of any Lender shall be effective without the consent of that
Lender, (viii) no amendment, modification, termination or waiver of any
provision related to the Revolving B Loan Commitment or the Revolving B Loans
shall be effective without the written concurrence of Lenders having or holding
more than 50% of the aggregate Revolving B Loan Exposure, and (ix) no amendment,
modification, termination or waiver of subsection 7.7(iv) or 7.7(v) shall be
effective without the consent of Supermajority Lenders. In addition, this
Agreement may be amended or modified by an amendment or modification entered
into by Borrowers and Agent to the extent, in Agent's judgment, such amendment
or modification is necessary to complete the successful syndication of the
Revolving B Loan Commitments; provided that no such amendment or modification
shall be adverse to the Lenders. Agent may, but shall have no obligation to,
with the concurrence of any Lender, execute amendments, modifications, waivers
or consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Borrowers in any case shall entitle Borrowers
to any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Borrowers, on Borrowers.

10.7     Independence of Covenants.
         -------------------------

                  All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.

10.8     Notices.
         -------

                  Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Agent shall not be effective until received.
For the purposes hereof, the address of each party hereto shall be as set forth
under such party's name on the signature pages hereof or (i) as to Borrowers and
Agent, such other address as shall be designated by such Person in a written
notice delivered to the other parties hereto and (ii) as to each other party,
such other address as shall be designated by such party in a written notice
delivered to Agent.

10.9     Survival of Representations, Warranties and Agreements.

     A. All representations, warranties and agreements made herein shall survive
the execution and delivery of this Agreement and the making of the Loans and the
issuance of the Letters of Credit hereunder.

     B.  Notwithstanding  anything  in this  Agreement  or implied by law to the
contrary,  the agreements of Borrowers set forth in subsections 2.6D, 2.7, 3.5A,
10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections 9.2C,
9.4 and 10.5  shall  survive  the  payment  of the Loans,  the  cancellation  or
expiration of the Letters of Credit and the  reimbursement  of any amounts drawn
thereunder, and the termination of this Agreement.

10.10    Failure or Indulgence Not Waiver; Remedies Cumulative.

                  No failure or delay on the part of an Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

10.11    Marshalling; Payments Set Aside.

                  Neither any Agent nor any Lender shall be under any obligation
to marshal any assets in favor of Borrowers or any other party or against or in
payment of any or all of the Obligations. To the extent that Borrowers make a
payment or payments to Agent or Lenders (or to Agent for the benefit of
Lenders), or Agents or Lenders enforce any security interests or exercise their
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.

10.12    Severability.
         ------------

                  In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

10.13    Obligations Several; Independent Nature of Lenders' Rights.
         ----------------------------------------------------------

                  The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.

10.14    Headings.
         --------

                  Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

10.15    Applicable Law.
         --------------

                  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.

10.16    Construction of Agreement.
         -------------------------

                  Each of the parties hereto acknowledges that it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, that it has had full and fair opportunity to review and revise the
terms of this Agreement, and that this Agreement has been drafted jointly by all
of the parties hereto. Accordingly, each of the parties hereto acknowledges and
agrees that the terms of this Agreement shall not be construed against or in
favor of another party.

10.17    Consent to Jurisdiction and Service of Process.
         ----------------------------------------------

                  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWERS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, COUNTY OF NEW YORK AND CITY OF NEW YORK.
BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH BORROWER, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY

     (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS;

     (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

     (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH
COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED,  TO
SUCH BORROWER AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;

     (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO
CONFER  PERSONAL  JURISDICTION  OVER SUCH BORROWER IN ANY SUCH PROCEEDING IN ANY
SUCH COURT,  AND OTHERWISE  CONSTITUTES  EFFECTIVE AND BINDING  SERVICE IN EVERY
RESPECT;

     (V) AGREES  THAT  LENDERS  RETAIN  THE RIGHT TO SERVE  PROCESS IN ANY OTHER
MANNER  PERMITTED BY LAW OR TO BRING  PROCEEDINGS  AGAINST SUCH  BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION; AND

     (VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17
         RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
         THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
         SECTION 5-1402 OR OTHERWISE.

10.18    Waiver of Jury Trial.
         --------------------

                  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has
already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.

10.19    Confidentiality.
         ---------------

                  Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with such Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by Borrowers that in any event a Lender may make (a) disclosures to Affiliates
and professional advisors of such Lender, (b) disclosures reasonably required by
(i) any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Loans or any
participations therein, or (ii) any direct or indirect contractual
counterparties in swap agreements or such contractual counterparties'
professional advisors provided that such assignee, transferee, participant,
contractual counterparty or professional advisor agrees in writing to keep such
information confidential to the same extent required of the Lenders hereunder,
or (c) disclosures required or requested by any Government Authority or
representative thereof or pursuant to legal process and that no written or oral
communications from counsel to an Agent and no information that is or is
designated as privileged or as attorney work product may be disclosed to any
Person unless such Person is a Lender or a participant hereunder; provided that,
unless specifically prohibited by applicable law or court order, each Lender
shall notify Borrowers of any request by any Government Authority or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such Government
Authority) for disclosure of any such non-public information prior to disclosure
of such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Borrowers or any of
their Restricted Subsidiaries.

10.20    Counterparts; Effectiveness.
         ---------------------------

                  This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.

                                   [Remainder of page intentionally left blank]






                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

                  BORROWERS:

                         FARMLAND INDUSTRIES, INC.



                         By:  _______________________________________
                         Title:  ______________________________________


                                                Notice Address:

                                    12200 North Ambassador Drive
                                    Kansas City, Missouri  64163-1244
         Attention: Treasurer


                           FARMLAND FOODS, INC.



                           By:  _______________________________________
                           Title:  ______________________________________


                           Notice Address:

                                    c/o Farmland Industries, Inc.
                                    12200 North Ambassador Drive
                                    Kansas City, Missouri  64163-1244
                              Attention: Treasurer





                                                BANKERS TRUST COMPANY,
                                                as a Lender and as Agent



                           By:  _______________________________________
                           Title:  ______________________________________


                           Notice Address:

                                    31 W. 52nd Street
                                    New York, New York  10019
                                    Attention:  Sam A. Cardone

                           With a copy to:

                                    Deutsche Banc Alex.Brown Inc.
                                    300 S. Grand Avenue, 41st Floor
                                    Los Angeles, California  90071
                                    Attention:  Keith J. Alexander






                                                COBANK, ACB
                      as a Lender and Co-Syndication Agent




                              By:  _______________________________________
                              Title:  _____________________________________


                              Notice Address:

                                       5500 South Quebec Street
                                       Greenwood Village, Colorado  80111
                                       Attention:  ___________________________






                          cooperatieve centrale raiffeisen-boerenleenbank b.a.,
                           new york branch, RABOBANK
                          INTERNATIONAL," as a Lender and Co-Syndication Agent




                          By:  _______________________________________
                          Title:  _____________________________________


                          By:  _______________________________________
                          Title:  _____________________________________


                          Notice Address:

         300 S. Wacker Drive
                                   Suite 3500
                                   Chicago, Illinois  60606
                                   Attention:  ___________________________











                                CREDIT AGREEMENT

                          Dated as of February 7, 2002

                                      among

                            FARMLAND INDUSTRIES, INC.
                                       and
                                                         FARMLAND FOODS, INC.,
                                                               as Borrowers,

                            THE LENDERS PARTY HERETO,
                                   as Lenders,

                             BANKERS TRUST COMPANY,
                                    as Agent,

                                       and

                                   COBANK, ACB
                                       and
                              Cooperatieve Centrale
                              Raiffeisen-Boerenleenbank B.A., "RABOBANK
                              INTERNATIONAL," New York BRANCH,
                                 as Co-Syndication Agents
                                       and

                           HARRIS TRUST & SAVINGS BANK
                                       and
                         U.S. BANK NATIONAL ASSOCIATION,
                           As Co-Documentation Agents

                         DEUTSCHE BANC ALEX.BROWN INC.,
                                as Lead Arranger
                                       and
                            Sole Book Running Manager











                      TABLE OF CONTENTS






Section 1.       DEFINITIONS...................................................2

       1.1       Certain Defined Terms.........................................2

       1.2       Accounting Terms; Utilization of GAAP for Purposes of
                 Calculations Under Agreement...41

       1.3       Other Definitional Provisions and Rules of Construction......42


Section 2.       AMOUNTS AND TERMS OF COMMITMENTS AND LOANS...................42

       2.1       Commitments; Making of Loans; the Register; Notes............42

       2.2       Interest on the Loans........................................51

       2.3       Fees.........................................................56

       2.4       Repayments, Prepayments and Reductions in Revolving Loan
                 Commitments; General Provisions Regarding Payments;
                 Application of Proceeds of Collateral and Payments
                 Under Subsidiary Guaranty....................................57

       2.5       Use of Proceeds..............................................67

       2.6       Special Provisions Governing Eurodollar Rate Loans...........68

       2.7       Increased Costs; Taxes; Capital Adequacy.....................70

       2.8       Statement of Lenders; Obligation of Lenders and
                 Issuing Lenders to Mitigate..................................73

       2.9       Replacement of a Lender......................................74

       2.10      Collection, Deposit and Transfer of Payments in
                 Respect of Accounts..........................................74

       2.11      Borrowers....................................................76

       2.12      Joint and Several Liability..................................76

       2.13      Obligations Absolute.........................................77

       2.14      Waiver of Suretyship Defenses................................77

       2.15      Contribution and Indemnification among the Borrowers.........78


Section 3.       LETTERS OF CREDIT............................................78

       3.1       Issuance of Letters of Credit and Lenders' Purchase
                 of Participations Therein....................................78

       3.2       Letter of Credit Fees........................................81

       3.3       Drawings and Reimbursement of Amounts Paid Under
                 Letters of Credit............................................82

       3.4       Obligations Absolute.........................................85

       3.5       Indemnification; Nature of Issuing Lenders' Duties...........86


Section 4.       CONDITIONS TO LOANS AND LETTERS OF CREDIT....................87

       4.1       Conditions to Term Loans and Initial Revolving Loans.........87

       4.2       Conditions to All Loans......................................95

       4.3       Conditions to Letters of Credit..............................96


Section 5.       BORROWERS' REPRESENTATIONS AND WARRANTIES....................96

       5.1       Organization, Powers, Qualification, Good Standing,
                 Business and Restricted Subsidiaries.........................96


       5.2       Authorization of Borrowing, etc..............................98

       5.3       Financial Condition..........................................98

       5.4       No Material Adverse Change; No Restricted Junior
                 Payments.....................................................99

       5.5       Title to Properties; Liens; Real Property;
                 Intellectual Property........................................99

       5.6       Litigation; Adverse Facts...................................100

       5.7       Payment of Taxes............................................100

       5.8       Performance of Agreements; Materially Adverse
                 Agreements; Material Contracts..............................100

       5.9       Governmental Regulation.....................................101

       5.10      Securities Activities.......................................101

       5.11      Employee Benefit Plans......................................101

       5.12      Certain Fees................................................102

       5.13      Environmental Protection....................................102

       5.14      Employee Matters............................................103

       5.15      Solvency....................................................103

       5.16      Matters Relating to Collateral..............................103

       5.17      Disclosure..................................................104

       5.18      Subordinated Indebtedness...................................105


Section 6.       BORROWERS' AFFIRMATIVE COVENANTS............................105

       6.1       Financial Statements and Other Reports......................105

       6.2       Existence, etc..............................................111

       6.3       Payment of Taxes and Claims; Tax............................111

       6.4       Maintenance of Properties; Insurance; Application of
                 Net Insurance/ Condemnation Proceeds........................111

       6.5       Inspection Rights; Lender Meeting...........................113

       6.6       Compliance with Laws, etc...................................114

       6.7       Environmental Matters.......................................114

       6.8       Execution of Subsidiary Guaranty and Personal
                 Property Collateral Documents After the Closing Date........116

       6.9       Matters Relating to Refinery Assets.........................118

       6.10      Matters Relating to Additional Personal Property............120


Section 7.       BORROWERS' NEGATIVE COVENANTS...............................120

       7.1       Indebtedness................................................120

       7.2       Liens and Related Matters...................................121

       7.3       Investments; Acquisitions...................................123

       7.4       Contingent Obligations......................................124

       7.5       Restricted Junior Payments..................................125

       7.6       Financial Covenants.........................................126

       7.7       Restriction on Fundamental Changes; Asset Sales.............129

       7.8       Consolidated Capital Expenditures...........................130

       7.9       Transactions with Shareholders and Affiliates...............131

       7.10      Sales and Lease-Backs.......................................131

       7.11      Conduct of Business.........................................131

       7.12      Amendments or Waivers of Certain Agreements;
                 Amendments of Documents Relating to Subordinated
                 Indebtedness................................................131

       7.13      Fiscal Year.................................................132

       7.14      Cash Management Systems.....................................132

       7.15      Sale or Discount of Receivables.............................132


Section 8.       EVENTS OF DEFAULT...........................................133

       8.1       Failure to Make Payments When Due...........................133

       8.2       Default in Other Agreements.................................133

       8.3       Breach of Certain Covenants.................................133

       8.4       Breach of Warranty..........................................133

       8.5       Other Defaults Under Loan Documents.........................134

       8.6       Involuntary Bankruptcy; Appointment of Receiver, etc........134

       8.7       Voluntary Bankruptcy; Appointment of Receiver, etc..........134

       8.8       Judgments and Attachments...................................135

       8.9       Dissolution.................................................135

       8.10      Employee Benefit Plans......................................135

       8.11      Change in Control...........................................135

       8.12      Invalidity of Guaranty; Failure of Security;
                 Repudiation of Obligations..................................136


Section 9.       ADMINISTRATIVE AGENT........................................137

       9.1       Appointment.................................................137

       9.2       Powers and Duties; General Immunity.........................138

       9.3       Independent Investigation by Lenders; No
                 Responsibility For Appraisal of Creditworthiness............139

       9.4       Right to Indemnity..........................................140

       9.5       Successor Agents............................................140

       9.6       Collateral Documents and Subsidiary Guaranty................140

       9.7       Duties of Other Agents......................................141

       9.8       Agent May File Proofs of Claim..............................141


Section 10.      MISCELLANEOUS...............................................142

       10.1      Successors and Assigns; Assignments and
                 Participations in Loans and Letters of Credit...............142

       10.2      Expenses....................................................145

       10.3      Indemnity...................................................146

       10.4      Set-Off; Security Interest in Deposit Accounts..............147

       10.5      Ratable Sharing.............................................147

       10.6      Amendments and Waivers......................................148

       10.7      Independence of Covenants...................................150

       10.8      Notices.....................................................150

       10.9      Survival of Representations, Warranties and Agreements......150

       10.10     Failure or Indulgence Not Waiver; Remedies Cumulative.......151

       10.11     Marshalling; Payments Set Aside.............................151

       10.12     Severability................................................151

       10.13     Obligations Several; Independent Nature of Lenders'
                 Rights......................................................151

       10.14     Headings....................................................152

       10.15     Applicable Law..............................................152

       10.16     Construction of Agreement...................................152

       10.17     Consent to Jurisdiction and Service of Process..............152

       10.18     Waiver of Jury Trial........................................153

       10.19     Confidentiality.............................................153

       10.20     Counterparts; Effectiveness.................................154




                                    EXHIBITS



                  I        FORM OF NOTICE OF BORROWING

                  II       FORM OF NOTICE OF CONVERSION/CONTINUATION

                  III      FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT

                  IV       FORM OF TERM NOTE

                  V-A      FORM OF REVOLVING A NOTE

                  V-B      FORM OF REVOLVING B NOTE

                  VI       FORM OF MORTGAGE

                  VII      FORM OF COMPLIANCE CERTIFICATE

                  VIII     FORM OF BORROWING BASE CERTIFICATE

                  IX       FORM OF OPINION OF BORROWERS' COUNSEL

                  X        FORM OF OPINION OF O'MELVENY & MYERS LLP

                  XI       FORM OF ASSIGNMENT AGREEMENT

                  XII      FORM OF LANDLORD CONSENT AND ESTOPPEL

                  XIII     FORM OF CONTROL AGREEMENT

                  XIV      FORM OF COLLATERAL ACCESS AGREEMENT

                  XV       FORM OF LOCK BOX AGREEMENT

                  XVI      FORM OF SUBSIDIARY GUARANTY

                  XVII     FORM OF SECURITY AGREEMENT

                  XVIII    FORM OF COMMODITY ACCOUNT CONTROL AGREEMENT






                                    SCHEDULES




                  1.1A     RELATED AGREEMENTS

                  1.1B     SYNTHETIC LEASE RESTRUCTURING

                  2.1      LENDERS' COMMITMENTS AND PRO RATA SHARES

                  3.1C     EXISTING LETTERS OF CREDIT

                  5.1      SUBSIDIARIES OF COMPANY

                  5.1E     JOINT VENTURES

                  5.5B     REAL PROPERTY

                  5.5C     INTELLECTUAL PROPERTY

                  5.6      LITIGATION

                  5.11     CERTAIN EMPLOYEE BENEFIT PLANS

                  5.13     ENVIRONMENTAL MATTERS

                  7.1      CERTAIN EXISTING INDEBTEDNESS

                  7.2      CERTAIN EXISTING LIENS

                  7.3      CERTAIN EXISTING INVESTMENTS

                  7.4      CERTAIN CONTINGENT OBLIGATIONS

                  7.14     BORROWERS' CASH MANAGEMENT SYSTEM