<PAGE>   1





                                                                    EXHIBIT 10.1

                                  AVIALL, INC.



                 $100 MILLION SENIOR SECURED CREDIT FACILITIES



                           NATIONSBANK OF TEXAS, N.A.
                              Administrative Agent
                                LC Fronting Bank


                          J.P. MORGAN SECURITIES INC.
                              Documentation Agent


                       NATIONSBANC CAPITAL MARKETS, INC.
                               Syndication Agent





                               SEPTEMBER 26, 1996
<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
    <S>              <C>                                                     <C>
    SECTION 1        DEFINITIONS AND TERMS  . . . . . . . . . . . . . . .     1
            1.1      Definitions  . . . . . . . . . . . . . . . . . . . .     1
            1.2      Number and Gender of Words . . . . . . . . . . . . .    19
            1.3      Accounting Principles  . . . . . . . . . . . . . . .    19

    SECTION 2        AMOUNTS AND TERMS OF THE LOAN FACILITIES . . . . . .    20
            2.1      Term Loan  . . . . . . . . . . . . . . . . . . . . .    20
            2.2      Revolving Credit Facility  . . . . . . . . . . . . .    20
            2.3      Borrowing Procedure  . . . . . . . . . . . . . . . .    20
            2.4      LC Subfacility . . . . . . . . . . . . . . . . . . .    21
            2.5      Termination or Reduction of Revolving Credit
                     Commitment . . . . . . . . . . . . . . . . . . . . .    27

    SECTION 3        TERMS OF PAYMENT . . . . . . . . . . . . . . . . . .    27
            3.1      Notes and Payments . . . . . . . . . . . . . . . . .    27
            3.2      Interest and Principal Payments and Commitment
                     Reductions . . . . . . . . . . . . . . . . . . . . .    27
            3.3      Voluntary Prepayments  . . . . . . . . . . . . . . .    28
            3.4      Mandatory Prepayments  . . . . . . . . . . . . . . .    28
            3.5      Quotation of Rates . . . . . . . . . . . . . . . . .    29
            3.6      Default Rate . . . . . . . . . . . . . . . . . . . .    29
            3.7      Interest Calculations; Determination of Rates  . . .    30
            3.8      Interest Periods . . . . . . . . . . . . . . . . . .    30
            3.9      Conversions/Continuations  . . . . . . . . . . . . .    30
            3.10     Order of Application . . . . . . . . . . . . . . . .    31
            3.11     Sharing of Payments, Etc.  . . . . . . . . . . . . .    31
            3.12     Offset . . . . . . . . . . . . . . . . . . . . . . .    32
            3.13     Booking Loans  . . . . . . . . . . . . . . . . . . .    32
            3.14     Basis Unavailable or Inadequate for LIBOR Rate . . .    32
            3.15     Additional Costs . . . . . . . . . . . . . . . . . .    33
            3.16     Change in Laws . . . . . . . . . . . . . . . . . . .    34
            3.17     Consequential Loss . . . . . . . . . . . . . . . . .    34
            3.18     Taxes  . . . . . . . . . . . . . . . . . . . . . . .    34
            3.19     Net Payments . . . . . . . . . . . . . . . . . . . .    36

    SECTION 4        FEES . . . . . . . . . . . . . . . . . . . . . . . .    36
            4.1      Treatment of Fees  . . . . . . . . . . . . . . . . .    36
            4.2      Administrative Agent's Fee . . . . . . . . . . . . .    37
            4.3      Arrangement Fee  . . . . . . . . . . . . . . . . . .    37

</TABLE>




                                      (i)
<PAGE>   3
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
    <S>              <C>                                                    <C>
            4.4      Facility Fee . . . . . . . . . . . . . . . . . . . .    37
            4.5      Commitment Fee . . . . . . . . . . . . . . . . . . .    37
            4.6      LC Fees  . . . . . . . . . . . . . . . . . . . . . .    38

    SECTION 5        CONDITIONS PRECEDENT . . . . . . . . . . . . . . . .    38
            5.1      Conditions Precedent to Initial Loan . . . . . . . .    38
            5.2      Conditions Precedent to Each Loan and LC . . . . . .    42
            5.3      Conditions Precedent to Each Conversion of a Loan  .    42

    SECTION 6        REPRESENTATIONS AND WARRANTIES . . . . . . . . . . .    43
            6.1      Purpose of Credit Facility . . . . . . . . . . . . .    43
            6.2      Existence, Good Standing, Authority, and
                     Authorizations . . . . . . . . . . . . . . . . . . .    43
            6.3      Subsidiaries . . . . . . . . . . . . . . . . . . . .    44
            6.4      Authorization and Contravention  . . . . . . . . . .    44
            6.5      Binding Effect . . . . . . . . . . . . . . . . . . .    44
            6.6      Financial Statements . . . . . . . . . . . . . . . .    45
            6.7      Litigation, Claims, Investigations . . . . . . . . .    45
            6.8      Taxes  . . . . . . . . . . . . . . . . . . . . . . .    45
            6.9      Environmental Matters  . . . . . . . . . . . . . . .    45
            6.10     Employee Benefit Plans . . . . . . . . . . . . . . .    47
            6.11     Properties; Liens  . . . . . . . . . . . . . . . . .    48
            6.12     Government Regulations . . . . . . . . . . . . . . .    48
            6.13     Transactions with Affiliates . . . . . . . . . . . .    48
            6.14     Debt . . . . . . . . . . . . . . . . . . . . . . . .    48
            6.15     Material Agreements  . . . . . . . . . . . . . . . .    48
            6.16     Insurance  . . . . . . . . . . . . . . . . . . . . .    49
            6.17     Labor Matters  . . . . . . . . . . . . . . . . . . .    49
            6.18     Solvency . . . . . . . . . . . . . . . . . . . . . .    49
            6.19     Tradenames . . . . . . . . . . . . . . . . . . . . .    49
            6.20     Intellectual Property  . . . . . . . . . . . . . . .    49
            6.21     Compliance with Laws . . . . . . . . . . . . . . . .    50
            6.22     Chief Executive Office; Chief Place of Business  . .    50
            6.23     Full Disclosure  . . . . . . . . . . . . . . . . . .    50

    SECTION 7        COVENANTS  . . . . . . . . . . . . . . . . . . . . .    50
            7.1      Use of Proceeds  . . . . . . . . . . . . . . . . . .    51
            7.2      Books and Records  . . . . . . . . . . . . . . . . .    51
            7.3      Items to be Furnished  . . . . . . . . . . . . . . .    51
            7.4      Inspections  . . . . . . . . . . . . . . . . . . . .    54
</TABLE>





                                      (ii)
<PAGE>   4
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
    <S>              <C>                                                     <C>
            7.5      Taxes  . . . . . . . . . . . . . . . . . . . . . . .    54
            7.6      Prepayment of Other Debt . . . . . . . . . . . . . .    54
            7.7      Expenses . . . . . . . . . . . . . . . . . . . . . .    54
            7.8      Maintenance of Existence, Assets, and Business . . .    55
            7.9      Insurance  . . . . . . . . . . . . . . . . . . . . .    55
            7.10     Preservation and Protection of Rights  . . . . . . .    55
            7.11     Employee Benefit Plans . . . . . . . . . . . . . . .    55
            7.12     Environmental Laws . . . . . . . . . . . . . . . . .    56
            7.13     Debt . . . . . . . . . . . . . . . . . . . . . . . .    57
            7.14     Liens  . . . . . . . . . . . . . . . . . . . . . . .    58
            7.15     Transactions with Affiliates . . . . . . . . . . . .    60
            7.16     Compliance with Laws and Documents . . . . . . . . .    60
            7.17     Assignment . . . . . . . . . . . . . . . . . . . . .    60
            7.18     Fiscal Year and Accounting Methods . . . . . . . . .    60
            7.19     Government Regulations . . . . . . . . . . . . . . .    60
            7.20     Indemnification  . . . . . . . . . . . . . . . . . .    61
            7.21     Loans, Advances, and Investments . . . . . . . . . .    62
            7.22     Dividends and Distributions  . . . . . . . . . . . .    64
            7.23     Disposition of Assets  . . . . . . . . . . . . . . .    64
            7.24     Capital Expenditures . . . . . . . . . . . . . . . .    65
            7.25     Mergers and Dissolutions . . . . . . . . . . . . . .    65
            7.26     Conduct and Scope of Business  . . . . . . . . . . .    65
            7.27     Financial Covenants  . . . . . . . . . . . . . . . .    66
            7.28     Designated Subsidiaries  . . . . . . . . . . . . . .    67
            7.29     After-Acquired Property  . . . . . . . . . . . . . .    67
            7.30     After-Acquired Subsidiaries  . . . . . . . . . . . .    68
            7.31     Delivery of Certain Collateral and Lien Releases . .    68

    SECTION 8        DEFAULT  . . . . . . . . . . . . . . . . . . . . . .    68
            8.1      Payment of Obligation  . . . . . . . . . . . . . . .    68
            8.2      Covenants  . . . . . . . . . . . . . . . . . . . . .    69
            8.3      Debtor Relief  . . . . . . . . . . . . . . . . . . .    69
            8.4      Judgments and Attachments  . . . . . . . . . . . . .    69
            8.5      Government Action  . . . . . . . . . . . . . . . . .    69
            8.6      Misrepresentation  . . . . . . . . . . . . . . . . .    70
            8.7      Change of Control  . . . . . . . . . . . . . . . . .    70
            8.8      Default Under Other Agreements . . . . . . . . . . .    70
            8.9      Employee Benefit Plans . . . . . . . . . . . . . . .    71
            8.10     Validity and Enforceability of Loan Documents  . . .    71

</TABLE>




                                     (iii)
<PAGE>   5
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
    <S>              <C>                                                     <C>
    SECTION 9        RIGHTS AND REMEDIES  . . . . . . . . . . . . . . . .    71
            9.1      Remedies Upon Default  . . . . . . . . . . . . . . .    71
            9.2      Company Waivers  . . . . . . . . . . . . . . . . . .    72
            9.3      Performance by Administrative Agent  . . . . . . . .    72
            9.4      Delegation of Duties and Rights  . . . . . . . . . .    72
            9.5      Not in Control . . . . . . . . . . . . . . . . . . .    73
            9.6      Course of Dealing  . . . . . . . . . . . . . . . . .    73
            9.7      Cumulative Rights  . . . . . . . . . . . . . . . . .    73
            9.8      Application of Proceeds  . . . . . . . . . . . . . .    73
            9.9      Diminution in Value of Collateral  . . . . . . . . .    73
            9.10     Certain Proceedings  . . . . . . . . . . . . . . . .    74

    SECTION 10       AGREEMENT AMONG LENDERS  . . . . . . . . . . . . . .    74
            10.1     Administrative Agent . . . . . . . . . . . . . . . .    74
            10.2     Expenses . . . . . . . . . . . . . . . . . . . . . .    76
            10.3     Proportionate Absorption of Losses . . . . . . . . .    76
            10.4     Delegation of Duties; Reliance . . . . . . . . . . .    76
            10.5     Limitation of Liability  . . . . . . . . . . . . . .    77
            10.6     Notice of Default; Instructions  . . . . . . . . . .    78
            10.7     Limitation of Liability  . . . . . . . . . . . . . .    79
            10.8     Relationship of Lenders  . . . . . . . . . . . . . .    79
            10.9     Collateral . . . . . . . . . . . . . . . . . . . . .    79
            10.10    Benefits of Agreement  . . . . . . . . . . . . . . .    80
            10.11    LC Fronting Bank . . . . . . . . . . . . . . . . . .    80

    SECTION 11       MISCELLANEOUS  . . . . . . . . . . . . . . . . . . .    80
            11.1     Headings . . . . . . . . . . . . . . . . . . . . . .    80
            11.2     Nonbusiness Days . . . . . . . . . . . . . . . . . .    80
            11.3     Communications . . . . . . . . . . . . . . . . . . .    80
            11.4     Form and Number of Documents . . . . . . . . . . . .    81
            11.5     Exceptions to Covenants  . . . . . . . . . . . . . .    81
            11.6     Survival . . . . . . . . . . . . . . . . . . . . . .    81
            11.7     Governing Law  . . . . . . . . . . . . . . . . . . .    81
            11.8     Invalid Provisions . . . . . . . . . . . . . . . . .    81
            11.9     Maximum Interest . . . . . . . . . . . . . . . . . .    82
            11.10    Entirety . . . . . . . . . . . . . . . . . . . . . .    82
            11.11    Venue; Service of Process; Jury Trial  . . . . . . .    83
            11.12    Amendments, Consents, Conflicts, and Waivers . . . .    84
            11.13    Multiple Counterparts  . . . . . . . . . . . . . . .    85

</TABLE>




                                      (iv)
<PAGE>   6
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
            <S>      <C>                                                     <C>
            11.14    Successors and Assigns; Participation  . . . . . . .    85
            11.15    Discharge Only Upon Payment in Full;
                     Reinstatement in Certain Circumstances . . . . . . .    88
            11.16    Confidentiality  . . . . . . . . . . . . . . . . . .    88
            11.17    Non-Application of Chapter 15 of Texas Credit
                     Code . . . . . . . . . . . . . . . . . . . . . . . .    89

</TABLE>




                                      (v)
<PAGE>   7
                                                            
                                                            
    Schedule 2.1     -   Lenders and Committed Sums       
    Schedule 2.4     -   Existing LCs                       
    Schedule 5.1(e)  -   UCC Filing Offices                 
    Schedule 6.3     -   Subsidiaries                       
    Schedule 6.7     -   Litigation                         
    Schedule 6.9     -   Environmental Matters              
    Schedule 6.11    -   Location of Personal Property
    Schedule 6.13    -   Affiliate Transactions
    Schedule 6.15    -   Material Agreements
    Schedule 6.16    -   Insurance
    Schedule 6.19    -   Tradenames
    Schedule 6.20    -   Intellectual Property
    Schedule 6.22    -   Principal Offices
    Schedule 7.13    -   Existing Debt
    Schedule 7.14    -   Existing Liens
    Schedule 7.21    -   Other Investments
    Schedule 7.29    -   Lease Estoppels


    Exhibit A-1      -   Form of Term Note                                    
    Exhibit A-2      -   Form of Revolving Credit Note                        
    Exhibit B        -   Form of Guaranty                                     
    Exhibit C-1      -   Form of Pledge Agreement - Borrower                  
    Exhibit C-2      -   Form of Pledge Agreement - Subsidiary                
    Exhibit D-1      -   Form of Security Agreement-Borrower                  
    Exhibit D-2      -   Form of Security Agreement-Subsidiary                
    Exhibit E-1      -   Form of Notice of Borrowing                          
    Exhibit E-2      -   Form of Notice of Conversion                         
    Exhibit E-3      -   Form of Notice of LC                                 
    Exhibit E-4      -   Form of LC Applications                              
    Exhibit F        -   Form of Collateral Account Agreement                 
    Exhibit G        -   Form of Compliance Certificate                       
    Exhibit H        -   Form of Borrowing Base Report                        
    Exhibit I-1      -   Form of Opinion of Counsel to the Companies          
    Exhibit I-2      -   Form of Opinion of Winstead Sechrest & Minick        
                         P.C.                                                 
    Exhibit J        -   Form of Assignment Agreement                         
    Exhibit K        -   Form of Landlord Estoppel                            
                                                                              




                                     (vi)
<PAGE>   8
                                CREDIT AGREEMENT


            THIS AGREEMENT is entered into as of September 26, 1996, among
    Aviall, Inc., a Delaware corporation ("BORROWER"), Lenders (hereinafter
    defined), NationsBank of Texas, N.A., as Administrative Agent and LC
    Fronting Bank, J.P. Morgan Securities Inc., as Documentation Agent, and
    NationsBanc Capital Markets, Inc., as Syndication Agent.


                                    RECITALS

            A.       Borrower has requested that Lenders extend credit to
    Borrower in the form of a term loan in the aggregate amount of $50,000,000
    (referred to below as the Term Loan), and revolving credit loans in an
    aggregate amount up to $50,000,000 (referred to below as the Revolving
    Credit Facility), all on the terms and conditions set forth herein, for the
    purpose of repaying its outstanding senior debt facilities and for other
    purposes set forth herein.

            B.       Upon and subject to the terms of this Agreement, Lenders
    are willing to extend such credit to Borrower.

            Accordingly, in consideration of the mutual covenants contained
    herein, Borrower, Administrative Agent, Documentation Agent, Syndication
    Agent, LC Fronting Bank, and Lenders agree as follows:


    SECTION 1        DEFINITIONS AND TERMS.

            1.1      Definitions.  As used herein:

            ADMINISTRATIVE AGENT means NationsBank of Texas, N.A., and its
    successor or successors as Administrative Agent for Lenders under this
    Agreement pursuant to SECTION 10.1(B).

            AFFILIATE of any Person means any other individual or entity that
    directly or indirectly controls, or is controlled by, or is under common
    control with, such Person, and, for purposes of this definition only,
    "control," "controlled by," and "under common control with" mean
    possession, directly or indirectly, of the power to vote more than 5% of
    the Voting Stock of such Person or to direct or cause the direction of the
    management or policies of such Person (whether through ownership of Voting
    Stock, by contract, or otherwise).

            AFTER-ACQUIRED SUBSIDIARY is defined in SECTION 7.30.

            AGREEMENT means this Credit Agreement (as the same may hereafter be
    amended, modified, supplemented or restated from time to time).

            APPLICABLE MARGIN means, at the time of any determination thereof,
    for purposes of all Loans under the Term Loan and the Revolving Credit
    Facility, as applicable, the margin of interest over the Base Rate or the
    LIBOR Rate, as the case may be, which is applicable at the time of any
<PAGE>   9
    determination of interest rates under this Agreement, which Applicable
    Margin shall be subject to adjustment (upwards or downwards, as
    appropriate), as follows:

                     (a)     As of the initial Borrowing Date until the fifth
                             Business Day after delivery pursuant to SECTION
                             7.3(B) hereof of Borrower's quarterly Financial
                             Statements and Compliance Certificate as of the
                             last day of the fiscal quarter ending on or about
                             June 30, 1997, unless such Financial Statements
                             are not delivered timely in which event the
                             highest Applicable Margin will be in effect from
                             the required delivery date until such time as such
                             Financial Statements and Compliance Certificate
                             are actually delivered:


<TABLE>
<CAPTION>
=====================================================================
          Applicable Margin             Applicable Margin
            for LIBOR Rate                for Base Rate
                Loans                        Loans
---------------------------------------------------------------------
                <S>                           <C>
                2.00%                         1.00%
=====================================================================
</TABLE>




                     (b)     Thereafter, the Applicable Margin shall be
            adjusted based on the ratio of Funded Debt to EBITDA determined as
            of the last day of the preceding fiscal quarter as follows:

<TABLE>
<CAPTION>
================================================================================
              Ratio of                Applicable Margin      Applicable Margin
             Funded Debt                for LIBOR Rate          for Base Rate
              to EBITDA                      Loans                  Loans    
--------------------------------------------------------------------------------
  <S>                                       <C>                      <C>     
  Greater than 4.00                         2.25%                    1.25%   
--------------------------------------------------------------------------------
  Less than or equal to 4.00 but            2.00%                    1.00%   
  greater than 3.50                                                          
--------------------------------------------------------------------------------
  Less than or equal to 3.50 but            1.75%                    0.75%   
  greater than 3.00                                                          
--------------------------------------------------------------------------------
  Less than or equal to 3.00 but            1.50%                    0.50%   
  greater than 2.25                                                          
--------------------------------------------------------------------------------
  Less than or equal to 2.25 but            1.00%                     0%    
  greater than 1.50                                                          
--------------------------------------------------------------------------------
  Less than or equal to 1.50                0.75%                     0%    
================================================================================

</TABLE>




                                      -2-
<PAGE>   10

            The ratio of Funded Debt to EBITDA shall be determined as of the
            last day of the preceding fiscal quarter from the then most current
            quarterly or annual Financial Statements and related Compliance
            Certificate delivered by Borrower pursuant to SECTIONS 7.3(A) and
            7.3(B) hereof.  The adjustment, if any, to the Applicable Margin
            pursuant to this SUBSECTION (B) shall be effective commencing on
            the fifth Business Day after delivery of Financial Statements (and
            the related Compliance Certificate) containing the Funded Debt to
            EBITDA ratio.  If Borrower fails at any time to timely furnish to
            Lenders the Financial Statements and related Compliance
            Certificates as required to be delivered pursuant to SECTIONS
            7.3(A) and (B) hereof, then the highest Applicable Margin will be
            in effect from the required delivery date until such time as such
            Financial Statements and Compliance Certificates are actually
            delivered.

            AUTHORIZATIONS means all filings, recordings, and registrations
    with, and all validations or exemptions, approvals, orders, authorizations,
    consents, franchises, licenses, certificates, and permits and ratings from,
    any Tribunal (including, without limitation, the FAA, the CAA and any other
    similar authority) and, to the extent the absence of any Authorization from
    such Person would be a Material Adverse Event, any original equipment
    manufacturer.

            BASE RATE means, for any day, the greater of (a) the prime rate per
    annum most recently announced by Administrative Agent as its prime rate in
    effect at its principal office in Dallas, Texas, automatically fluctuating
    upward and downward with and at the time specified in each such
    announcement without special notice to Borrower or any other Person, which
    prime rate may not necessarily represent the lowest or best rate actually
    charged to a customer, or (b) the sum of the Federal Funds Rate plus 0.5%.

            BASE RATE LOAN means a Loan bearing interest at the sum of the Base
    Rate plus the Applicable Margin.

            BORROWER is defined in the introductory paragraph to this
    Agreement.

            BORROWER SECURITY AGREEMENT means a security agreement in
    substantially the form and upon the terms of EXHIBIT D-1 (as the same may
    hereafter be amended, modified, supplemented or restated from time to
    time).

            BORROWING BASE means, at any time the sum of (i) 80% of the
    aggregate amount of Eligible Accounts, plus (ii) 50% of the aggregate book
    value of Eligible Inventory (calculated on a basis consistent with
    practices in effect on December 31, 1995), in each case determined on a
    consolidated basis with all intercompany eliminations; provided, however,
    that COMPONENT (II) shall never exceed 50% of the aggregate amount of
    Eligible Accounts plus Eligible Inventory.  For purposes of calculating the
    Dollar equivalent of Eligible Accounts described in PARAGRAPH (7) of the
    definition of Eligible Accounts, the conversion rates as reported in The
    Wall Street Journal on the date as of which calculation is being made shall
    be used.





                                      -3-
<PAGE>   11
            BORROWING BASE DEFICIENCY means, at any time, the amount by which
    the Revolving Credit Commitment Usage exceeds the Borrowing Base.

            BORROWING BASE REPORT means a certificate substantially in the form
    attached as EXHIBIT H.

            BORROWING DATE is defined in SECTION 2.3(A).

            BUSINESS DAY means (a) for all purposes, any day other than
    Saturday, Sunday, and any other day on which commercial banking
    institutions are required or authorized by Law to be closed in New York,
    New York, or Dallas, Texas, and (b) in respect of any LIBOR Rate Loan, a
    day on which dealings are current in the London interbank market and
    commercial banks are open for international business in London.

            CAA means the Civil Aviation Authority of the United Kingdom and
    any successor Authority.

            CAPITAL EXPENDITURES means, for any Person, the aggregate amount of
    all expenditures which would be capitalized on such Person's balance sheet
    in accordance with GAAP.

            CAPITAL LEASE means any capital lease or sublease which should be
    capitalized in accordance with GAAP on a balance sheet.

            CERCLA means the Comprehensive Environmental Response, Compensation
    and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et seq.

            CHANGE OF CONTROL is defined in SECTION 8.7.

            CODE means the Internal Revenue Code of 1986, as amended, together
    with rules and regulations promulgated thereunder.

            COLLATERAL means the collateral described in the Security Documents
    from time to time subject to or intended to be subject to Liens securing
    the Obligation and shall include without limitation all proceeds of
    litigation.

            COMMITTED SUM means, for any Lender in respect of either the Term
    Loan or the Revolving Credit Facility, the amounts respectively stated
    beside its name for the Term Loan or the Revolving Credit Facility on
    SCHEDULE 2.1 or on the most recently amended SCHEDULE 2.1, if any,
    delivered by Administrative Agent pursuant to this Agreement, subject to
    reduction and cancellation as provided in this Agreement.

            COMMITMENT PERCENTAGE means, at the time of any determination
    thereof for any Lender in respect of the Term Loan and the Revolving Credit
    Facility, respectively, the proportion which its Committed Sum in respect
    thereof bears to the aggregate Committed Sums of all Lenders in respect
    thereof.





                                      -4-
<PAGE>   12

            COMPANIES means, at the time of any determination thereof, Borrower
    and each of its Subsidiaries and "Company" means any one of them.

            COMPLIANCE CERTIFICATE means a certificate signed by the chief
    financial officer, treasurer or controller of Borrower, substantially in
    the form of EXHIBIT G.

            CONSEQUENTIAL LOSS means any loss or expense which any Lender may
    reasonably incur in respect of a LIBOR Rate Loan as a consequence of (a)
    any inability, failure or refusal of Borrower to take such Loan after
    Borrower shall have requested it under this Agreement, or (b) any
    prepayment or payment of such Loan or conversion of such Loan to a Loan of
    another Type, in each case, prior to the last day of the Interest Period
    therefor.

            CONTRACT RATE is defined in SECTION 11.9.

            CURRENT DATE is defined in SECTION 5.1(G).

            CURRENT FINANCIALS means, at the time of any determination thereof,
    the most recently delivered to Lenders of the Financial Statements of
    Borrower and its consolidated Subsidiaries required to be delivered under
    SECTIONS 7.3(A) or 7.3(B), as the case may be.

            CURRENT RATIO means, at any particular time, the ratio of (i) the
    sum of cash, cash equivalents, accounts receivable, and inventory of
    Borrower and its Subsidiaries on a consolidated basis, to (ii) the sum of
    accounts payable, accrued expenses, and current maturities of long term
    Debt of Borrower and its Subsidiaries on a consolidated basis.

            DEBT means (without duplication), for any Person, all obligations,
    contingent or otherwise (including, without limitation, contingent
    obligations in connection with letters of credit), which in accordance with
    GAAP should be classified upon such Person's balance sheet as liabilities,
    but in any event including, without limitation, whether or not such
    obligations in accordance with GAAP should be classified as liabilities,
    (a) liabilities secured (or for which the holder of such Debt has an
    existing Right, contingent or otherwise, to be so secured) by any Lien
    existing on property owned or acquired by such Person or a Subsidiary
    thereof (whether or not the liability secured thereby shall have been
    assumed), (b) obligations which have been or under GAAP should be
    capitalized for financial reporting purposes, (c) all guaranties,
    endorsements, and other contingent obligations with respect to Debt of
    others, including, but not limited to, any obligations to purchase, sell,
    or furnish property or services primarily for the purpose of enabling such
    other Person to make payment of any of such Person's Debt, or to otherwise
    assure the holder of any of such Debt against loss with respect thereto,
    and (d) liabilities under any interest rate swap, collar, floor, cap or
    similar contract.

            DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States
    of America and all other applicable liquidation, conservatorship,
    bankruptcy, moratorium, rearrangement, receivership, insolvency,
    reorganization, fraudulent transfer or conveyance, suspension of payments
    or similar Laws from time to time in effect affecting the Rights of
    creditors generally.





                                      -5-
<PAGE>   13

            DEFAULT is defined in SECTION 8.

            DEFAULT RATE means a per annum rate of interest equal from day to
    day to (a) with respect to any Loan, the rate otherwise applicable to such
    Loan (including, without limitation, the Applicable Margin included in such
    rate) plus 2%, and (b) with respect to any other amounts due hereunder, the
    Base Rate plus the Applicable Margin then in effect for Base Rate Loans
    plus 2%.

            DESIGNATED SUBSIDIARIES means those Subsidiaries of Borrower
    designated on SCHEDULE 6.3 as a foreign Subsidiary in the process of
    terminating its existence through liquidation or merger or as an inactive
    Subsidiary.

            DISTRIBUTION for any Person means, with respect to any shares of
    any capital stock or other equity securities issued by such Person, (a) the
    retirement, redemption, purchase, or other acquisition for value of any
    such securities, (b) the declaration or payment of any dividend on or with
    respect to any such securities, (c) any loan or advance by such Person to,
    or other investment by such Person in, the holder of any of such
    securities, and (d) any other payment by such Person with respect to such
    securities.

            DOCUMENTATION AGENT means J.P. Morgan Securities Inc., and its
    successors, as Documentation Agent under this Agreement.

            DOLLARS or $ means lawful money of the United States of America.

            EBITDA means, for any period, for Borrower and its Subsidiaries on
    a consolidated basis, the sum of (a) earnings (or loss) before provision
    for interest and income Taxes for such period, plus (b) all non-cash
    charges, including, but not limited to, depreciation and amortization and
    other non-cash charges to the extent that such non-cash charges are
    actually deducted in arriving at such earnings, plus (c) losses (or minus
    gains) from the sale of fixed assets not in the ordinary course of business
    and other extraordinary items, plus (d) restructuring costs incurred to the
    extent that such restructuring costs are actually deducted in arriving at
    such earnings (including but not limited to severance costs, write-off of
    debt issuance costs originally incurred with respect to the Existing Credit
    Agreement, loan restructuring fees, interest rate hedging termination costs
    and fees, and real estate lease buyout costs or termination fees) so long
    as such costs, other than with respect to the write-off of debt issuance
    costs, do not exceed $5,000,000 in the aggregate during the term of this
    Agreement, and with respect to the write-off of debt issuance costs such
    costs do not exceed $4,000,000 in the aggregate during the term of this
    Agreement, minus (e) the excess of amounts reserved prior to the date
    hereof with respect to Borrower's discontinued lines of business over
    amounts actually expended in connection therewith (or plus any shortfalls
    in amounts so reserved which are required to be expended) to the extent
    such amounts are actually deducted in arriving at such earnings, minus (f)
    interest income for such period received under that certain promissory note
    dated March 15, 1995, executed by International Airmotive Corp. and payable
    to the order of Aviall Services, Inc. in the original principal amount of
    $12,000,000 (the "AIRMOTIVE NOTE") to the extent such amounts are actually
    included in arriving at such earnings.





                                      -6-
<PAGE>   14

            ELIGIBLE ACCOUNTS means, at the time of any determination thereof,
    the aggregate of all accounts receivable (net of reserves) of the
    Restricted Companies for inventory sold or leased or services rendered, in
    either case in the ordinary course of business, which meet all of the
    following requirements:

                     (1)     Not evidenced by negotiable instruments (except a
            negotiable instrument in which Administrative Agent, for the
            benefit of Lenders, has a first and prior perfected Lien) or
            documents;

                     (2)     Legal, valid and binding obligations of the
            account obligor;

                     (3)     Payable by third party obligors;

                     (4)     Payable on customary terms;

                     (5)     Obligations for products shipped and subject to
            invoice, in compliance with all applicable Laws;

                     (6)     If arising pursuant to a contract with the United
            States government, an account receivable in which Administrative
            Agent for the benefit of Lenders has a perfected first priority
            Lien pursuant to the Assignment of Claims Act, or, if arising
            pursuant to a contract with any other government, an account
            receivable which is insured by an insurer satisfactory to
            Administrative Agent;

                     (7)     Denominated and payable in Dollars or other
            acceptable, freely convertible currency with conversion rates
            reported in The Wall Street Journal;

                     (8)     If a domestic account receivable, an "account" as
            defined by the Uniform Commercial Code in the appropriate
            jurisdiction;

                     (9)     Not more than 90 days past due;

                     (10)    Not modified, extended, or renegotiated in any way
            not provided for in the Security Documents and not charged off;

                     (11)    Not subject to defense, withholding, offset,
            counterclaim, or dispute for more than 30 days past invoice date 
            unless the aggregate disputed amounts for a single obligor are 
            less than 10% of the total amount owed to the Restricted 
            Companies by such obligor;

                     (12)    As to which there exists a first and prior
            perfected Lien in favor of Administrative Agent for the benefit of
            Lenders to secure the Obligation and no other Liens except
            Permitted Liens;





                                      -7-
<PAGE>   15

                     (13)    Secured by a prior perfected Lien in the
            underlying security, if any;

                     (14)    Not owed by an obligor that is the subject of a
            proceeding under any Debtor Relief Law unless the obligor is the
            subject of a proceeding under Chapter 11 of the Bankruptcy Code of
            the United States of America to the extent the claim in respect of
            such account is an administrative expense claim in such proceeding;

                     (15)    Not owed by an obligor that has more than 20% of
            its aggregate accounts owed to the Restricted Companies outstanding
            more than 90 days past due, or for whom a material credit loss has
            been recognized or reserved against (but without duplication of
            amounts which have already been deducted in calculating net
            accounts receivable) and not reversed during the previous three
            years;

                     (16)    Not that portion of an account which, when
            aggregated with other amounts payable by the same obligor, is in
            excess of 5% of aggregate accounts receivable of the Restricted
            Companies, unless approved by the Required Lenders; and

                     (17)    Not that portion of amounts owed by obligors whose
            residence or principal place of business, as the case may be, is
            located outside the United States of America, the United Kingdom or
            Canada (unless an account receivable insured by an insurer
            satisfactory to Administrative Agent) in excess of 25% of the
            aggregate accounts receivable of the Restricted Companies, unless
            otherwise approved by Required Lenders.

            Any right to payment that is at any time an Eligible Account, but
            which subsequently fails to meet the foregoing requirements, shall
            cease to be an Eligible Account, and from and after such date shall
            not constitute part of the Borrowing Base unless and until it shall
            again become an Eligible Account but shall remain a portion of the
            Collateral.

            ELIGIBLE ASSIGNEE means (a) a commercial bank organized under the
    laws of the United States of America, or any State thereof, and having a
    combined capital and surplus in excess of $50,000,000, (b) a commercial
    bank organized under the laws of any other country which is a member of
    OECD, or a political subdivision of any such country, and having a combined
    capital and surplus in excess of $50,000,000; provided that such bank is
    acting through a branch or agency located in (x) the United States or the
    country in which it is organized or another country which is also a member
    of the OECD or (y) the Cayman Islands, (c) the central bank of any country
    which is a member of the OECD, (d) a commercial finance company or finance
    subsidiary of a corporation organized under the laws of the United States
    of America, or any State thereof, and having a combined capital and surplus
    in excess of $50,000,000, (e) an insurance company organized under the laws
    of the United States of America (or any State thereof) and having a
    combined capital and surplus in excess of $50,000,000, (f) a savings bank
    or savings and loan association organized under the laws of the United
    States of America, or any State thereof, and having a combined capital and
    surplus in excess of $50,000,000, (g) a pension fund or other institutional
    lender or investor, and (h) any Lender party to this Agreement on the
    initial Borrowing Date or any Affiliate of any thereof, provided that no





                                      -8-
<PAGE>   16
    Person (other than a Person described in CLAUSE (H)) may be an Eligible
    Assignee unless (1) it represents and warrants that it does not engage in
    the same line of business as, or derive more than 5% of its revenues in the
    same line of business as, the Companies, and (2) if no Default exists,
    Borrower, Administrative Agent, and LC Fronting Bank shall have consented
    thereto, which consent shall not be unreasonably withheld.

            ELIGIBLE INVENTORY means, at the time of any determination thereof,
    all inventory owned by the Restricted Companies (exclusive of (i) inventory
    stored in foreign locations and inventory at locations [other than
    Borrower's warehouse at 2075 Diplomat Drive, Dallas, Texas] for which
    Administrative Agent has not received a landlord's Lien waiver satisfactory
    to it which in the aggregate exceed 15% of the total amount of inventory,
    and (ii) work in process) that is stored in a storage facility listed on
    SCHEDULE 6.11 and that in each case would be classified as inventory of a
    Restricted Company in accordance with GAAP and that is subject to a first
    and prior perfected Lien (except with respect to inventory stored in
    foreign locations) in favor of Administrative Agent for the benefit of
    Lenders to secure the Obligation and no other Liens except landlord's Liens
    which are subordinated to the Liens in favor of Administrative Agent upon
    terms satisfactory to Administrative Agent, minus the annual rent expense
    of Borrower at its warehouse located at 2075 Diplomat Drive, Dallas, Texas,
    until such time as the landlord at such location has subordinated its
    landlord Lien to the Liens in favor of Administrative Agent upon terms
    satisfactory to Administrative Agent.  Eligible Inventory shall not include
    any Inventory which together with all other Inventory having the same part
    number has not been sold within two years of purchase.  Any inventory that
    is at any time Eligible Inventory, but which subsequently fails to meet the
    foregoing requirements, shall cease to be Eligible Inventory, and from and
    after such date shall not constitute part of the Borrowing Base unless and
    until it shall again become Eligible Inventory but shall remain a portion
    of the Collateral.

            EMPLOYEE PLAN means any Pension Benefit Plan, any Welfare Benefit
    Plan, and any material employee benefit plan, policy, or arrangement
    (whether written or oral) established or maintained by any Company or to
    which any Company contributes or is required to contribute, including but
    not limited to stock option, bonus, management incentive, deferred
    compensation, and cafeteria plans, policies, or arrangements.

            ENVIRONMENTAL BUDGET means a consolidated budget for the Companies
    reflecting (a) a good faith estimate (including the basis or rationale for
    the estimate) of the amount and nature of any probable Environmental
    Liabilities known to any Company that are reasonably anticipated to result
    in expenditures by any Company in the applicable fiscal year or those that
    may result in future expenditures by any Company on the occurrence of any
    contingency, and (b) the amount of any reserves or other provisions for
    loss if such probable Environmental Liabilities result in actual
    expenditures by any Company.

            ENVIRONMENTAL INDEMNITY AGREEMENT means any contract or agreement
    (including without limitation, insurance policies) known to any Company
    pursuant to which any Company or Predecessor is (or may reasonably claim to
    be) entitled to receive reimbursement or other payment on account of any
    Environmental Liability, excluding, however, any contracts or agreements
    (x) in





                                      -9-
<PAGE>   17
    the nature of environmental consulting or engineering contracts and/or
    agreements for professional services, or (y) the terms of which preclude
    any Company or Predecessor from asserting a claim for reimbursement or
    other payment on account of any Environmental Liability.

            ENVIRONMENTAL LAW means any applicable Law that relates (a) to the
    pollution or protection of air, ground or surface water or soil, or human
    health, (b) to the manufacturing, processing, recycling, distribution, use,
    investigation, reporting, treatment, storage, disposal, transportation, or
    other handling of Hazardous Substances, or (c) to the Release or threatened
    Release of Hazardous Substances.

            ENVIRONMENTAL LIABILITY means any liability, loss, fine, penalty,
    charge, liens, damage, cost, or expense of any kind that results directly
    or indirectly, in whole or in part, (I) under an Environmental Law from (a)
    the violation of any Environmental Law, (b) the Release or threatened
    Release of any Hazardous Substance, (c) removal, remedial, or other similar
    actions in response to the Release or threatened Release of any Hazardous
    Substance, (d) from actual or threatened damages to natural resources, or
    (e) the imposition of injunctive relief or other orders, or (II) from
    personal injury, death, or property damage which occurs as a result of any
    Company's use, storage, handling, disposal, or the Release or threatened
    Release of a Hazardous Substance, in any case not already the subject of
    any reasonably adequate reserves or other provisions for loss, including
    without limitation, insurance policies.

            ENVIRONMENTALLY MATERIAL means any one or more circumstances or
    events which, individually or collectively, results in Environmental
    Liability in excess of $2,500,000.

            ENVIRONMENTAL PERMIT means any permit, license, or other
    authorization from any Tribunal that is required under any Environmental
    Law for the lawful conduct of any business, process, or other activity.

            ENVIRONMENTAL REPORT means any one or more environmental site
    assessments or investigations conducted at any time or from time to time
    concerning any Real Property and/or the operations of any Company, whether
    at the request of Required Lenders, upon the order or request of any
    Tribunal, or at the voluntary instigation of such Company.

            ERISA means the Employee Retirement Income Security Act of 1974, as
    amended, and the regulations and rulings thereunder.

            ERISA AFFILIATE means any company or trade or business (whether or
    not incorporated) which, for purposes of Title IV of ERISA, is a member of
    the Borrower's controlled group or which is under common control with
    Borrower within the meaning of Section 414 of the Code.

            EXHIBIT means an exhibit to this Agreement unless otherwise
    specified.

            EXISTING CREDIT AGREEMENT is defined in SECTION 5.1(V).





                                      -10-
<PAGE>   18

            EXISTING LCS is defined in SECTION 2.4(K).

            FAA means the Federal Aviation Administration and any successor
    authority.

            FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded
    upwards, if necessary, to the nearest 0.01%) determined (which
    determination shall be conclusive and binding, absent manifest error) by
    Administrative Agent to be equal to the weighted average of the rates on
    overnight Federal funds transactions with member banks of the Federal
    Reserve System arranged by Federal funds brokers on such day, as published
    by the Federal Reserve Bank of Dallas on the Business Day next succeeding
    such day, or, if such rates are not published for any day, the average of
    the quotations at approximately 10:00 a.m. (Dallas, Texas time) received by
    the Administrative Agent from three Federal funds brokers of recognized
    standing selected by the Administrative Agent in its sole discretion.

            FINANCIAL STATEMENTS means balance sheets, profit and loss
    statements, reconciliations of capital and surplus, and statements of cash
    flow prepared in accordance with GAAP, which profit and loss statements and
    statements of cash flow shall be in comparative form to the corresponding
    period of the preceding fiscal year and to the figures for the
    corresponding quarter in the budget furnished pursuant to SECTION 7.3(D),
    and which balance sheets and reconciliations of capital and surplus shall
    be in comparative form to the prior fiscal year-end figures.

            FIXED CHARGE COVERAGE RATIO means, on any date of determination, on
    a consolidated basis for Borrower and its consolidated Subsidiaries, for
    the four fiscal quarters ending on such date, the ratio of (a) EBITDA,
    minus income Taxes paid during such period, to (b) the sum of (i) Interest
    Expense for such period, plus (ii) scheduled principal payments on Debt for
    borrowed money and under Capital Leases for such period, plus (iii) cash
    dividends paid during such period.

            FUNDED DEBT means (without duplication), for any Person, (a) the
    obligations in respect of Debt of such Person for money borrowed net of
    unamortized debt issuance costs, (b) all obligations of such Person under
    Capital Leases, (c) all obligations of such Person issued or assumed as the
    deferred purchase price of property, all conditional sale obligations, and
    all obligations under any title retention agreement (but excluding trade
    accounts payable arising in the ordinary course of business), (d) all
    obligations of the type referred to in CLAUSES (A) through (C) preceding of
    other Persons for the payment of which such Person is responsible or liable
    as obligor, guarantor, or otherwise, and (e) all obligations of the type
    referred to in CLAUSES (A) through (D) preceding of other Persons secured
    by any Lien on any property or asset of such Person (whether or not such
    obligation is assumed by such Person), the amount of such obligation being
    deemed to be the lesser of the value of such property or assets or the
    amount of the obligation so secured.

            GAAP means generally accepted accounting principles of the
    Accounting Principles Board of the American Institute of Certified Public
    Accountants and the Financial Accounting Standards Board which (except as
    set forth in SECTION 1.3) are applicable from time to time.





                                      -11-
<PAGE>   19

            GUARANTY means a guaranty in substantially the form and upon the
    terms of EXHIBIT B (as the same may hereafter be amended, modified,
    supplemented or restated from time to time).

            HAZARDOUS SUBSTANCE means (a) any substance as to which
    investigation, removal, remediation, or other response is required under
    any Environmental Law, (b) any substance that is defined or classified as a
    hazardous waste, hazardous material, pollutant, contaminant, or toxic or
    hazardous substance under any Environmental Law, including without
    limitation, any hazardous substance within the meaning of Section 101(14)
    of CERCLA, (c) petroleum, oil, gasoline, natural gas, fuel oil, motor oil,
    waste oil, diesel fuel, jet fuel, and other petroleum hydrocarbons, (d)
    asbestos and asbestos-containing materials in any form, or (e)
    polychlorinated biphenyls.

            INCUMBENT BOARD is defined in SECTION 8.7.

            INTEREST EXPENSE means for any period of calculation thereof, all
    interest (whether accrued as a liability and payable in cash or imputed) on
    Debt during such period (including, without limitation, (a) imputed
    interest on Capital Lease obligations, and (b) costs associated with Rate
    Protection Agreements that are expensed as interest in accordance with
    GAAP, less any payments under Rate Protection Agreements which in
    accordance with GAAP are treated as interest income), but excluding
    amortization of debt issuance costs, and without deduction for interest
    income received in respect of the Airmotive Note.

            INTEREST PERIOD is determined in accordance with SECTION 3.8.

            LAWS means all applicable statutes, laws, treaties, ordinances,
    tariff requirements, rules, regulations, orders, writs, injunctions,
    decrees, judgments, opinions, or interpretations of any Tribunal as
    enacted, promulgated, or amended from time to time.

            LC means an Existing LC or a letter of credit issued by LC Fronting
    Bank under this Agreement pursuant to an LC Agreement.

            LC AGREEMENT means an application for an LC and the related
    reimbursement agreement in the forms customarily used by LC Fronting Bank
    submitted by Borrower to Administrative Agent and LC Fronting Bank for an
    LC for its own account (whether issued on its behalf or on behalf of any of
    the Companies); provided that, each such LC Agreement shall specifically
    provide that in the event of a conflict between the terms of such LC
    Agreement and the Loan Documents, the Loan Documents shall be controlling.

            LC EXPOSURE means, without duplication, the sum of (a) the
    aggregate amount remaining to be drawn on all uncancelled LCs plus (b) the
    aggregate unpaid reimbursement obligations of Borrower in respect of
    drawings or drafts under any LC.  For the purpose of calculating the Dollar
    equivalent of the LC Exposure in connection with maximum amount available
    under the Revolving Credit Facility and the LC Subfacility, the LC Fronting
    Bank shall determine the Dollar equivalent of any LC issued or applied for
    on the date such a determination of availability is required.





                                      -12-
<PAGE>   20

            LC FRONTING BANK means NationsBank of Texas, N.A. as the issuer of
    LCs pursuant to SECTION 2.4 hereof, and its successor or successors as LC
    Fronting Bank under this Agreement pursuant to SECTION 10.11.

            LC SUBFACILITY means a subfacility of the Revolving Credit Facility
    for the issuance of LCs as described in and subject to the limitations of
    SECTION 2.4.

            LENDERS means the financial institutions named on SCHEDULE 2.1 or
    on the most recently amended SCHEDULE 2.1, if any, delivered by
    Administrative Agent pursuant to this Agreement, and, subject to the terms
    and conditions of this Agreement, their respective successors and assigns,
    but not any Participant who is not otherwise a party to this Agreement.

            LIBOR RATE means with respect to a LIBOR Rate Loan for the relevant
    Interest Period, the per annum rate of interest (rounded upward, if
    necessary, to the nearest 0.01%) equal to the quotient obtained by dividing
    (a) the rate appearing on Telerate Page 3750 (or any successor page), or,
    if not available, appearing on the Reuters Screen LIBO Page (if more than
    one rate, then the average of such rates) as the London interbank offered
    rate for deposits in Dollars at approximately 11:00 a.m. (London time) two
    (2) Business Days prior to the first day of the applicable Interest Period
    in an amount comparable to the amount of the relevant LIBOR Rate Loans and
    having a maturity comparable to the applicable Interest Period; by (b) one
    minus the Reserve Requirement (expressed as a decimal) applicable to such
    Interest Period.

            LIBOR RATE LOAN means a Loan bearing interest at the sum of the
    LIBOR Rate plus the Applicable Margin.

            LIEN means any lien (including statutory liens), mortgage, security
    interest, pledge, collateral assignment, charge, title retention agreement,
    or other encumbrance of any kind.

            LITIGATION means any action by or before any Tribunal.

            LOAN means any amount loaned by one or more Lenders to Borrower
    under the Loan Documents (whether such amount constitutes an original
    disbursement of funds, the continuation of an amount outstanding, or
    payment of a draft under an LC) under the Term Loan or the Revolving Credit
    Facility (including the LC Subfacility).

            LOAN DOCUMENTS means (a) this Agreement, certificates delivered
    pursuant to this Agreement, and Exhibits and Schedules hereto, (b) all
    agreements, documents, or instruments executed by any of the Companies in
    favor of Administrative Agent or Lenders (or Administrative Agent on behalf
    of Lenders) and delivered pursuant to this Agreement or otherwise delivered
    in connection with all or any part of the Obligation, including, without
    limitation, the Notes, the Guaranties, the Security Documents, all LCs,
    including, without limitation, all Existing LCs, and all LC Agreements, and
    (c) all renewals, extensions, or restatements of, or amendments or
    supplements to, any of the foregoing made in accordance with the terms of
    any of the foregoing.





                                      -13-
<PAGE>   21

            MAJORITY LENDERS means, on any date of determination, any
    combination of Lenders who collectively hold more than 50% of the sum of
    (a) the aggregate Committed Sums under the Revolving Credit Facility and
    (b) the Principal Debt under the Term Loan outstanding as of such date.

            MATERIAL ADVERSE EVENT means any set of one or more circumstances
    or events which, individually or collectively, results in any (a) material
    and adverse effect on the business, properties, condition (financial or
    otherwise of) or results of operations of, the Companies (excluding the
    Designated Subsidiaries), in each case considered as a whole, from that
    represented in the consolidated Financial Statements of the Companies for
    the period ended June 30, 1996, or (b) Default or Potential Default.

            MATERIAL AGREEMENT means, for any one of the Companies, any
    material written or oral agreement, contract, commitment, or understanding
    to which such Company is a party, by which such Company is directly or
    indirectly bound, or to which any assets of such Company may be subject,
    and which is not cancelable by such Company upon 30 days or less notice
    without liability for further payment other than nominal penalty, and which
    requires such Company to pay more than $2,500,000 during any 12-month
    period, excluding purchase orders for materials or inventory in the
    ordinary course of business.

            MAXIMUM AMOUNT is defined in SECTION 11.9.

            MAXIMUM RATE is defined in SECTION 11.9.

            MORTGAGE means each mortgage, deed of trust or other similar
    instrument encumbering the properties of any Company, now or hereafter
    executed by any Company in favor of Administrative Agent for the benefit of
    Lenders and LC Fronting Bank (as the same may hereafter be amended,
    modified, supplemented or restated from time to time).

            MULTIEMPLOYER PLAN means a multiemployer plan as defined in
    Sections 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to
    which any Company or any ERISA Affiliate (i) is making, or has made, or has
    an obligation to make contributions, or (ii) is accruing, or has accrued,
    an obligation to make contributions.

            NONEXCLUDED TAXES is defined in SECTION 3.18(A).

            NOTES means, at the time of any determination thereof, all
    outstanding and unpaid Term Notes and Revolving Credit Notes.

            NOTICE OF BORROWING is defined in SECTION 2.3(A).

            NOTICE OF CONVERSION is defined in SECTION 3.9.





                                      -14-
<PAGE>   22

            NOTICE OF LC is defined in SECTION 2.4(A).

            OBLIGATION means all present and future indebtedness, liabilities,
    and obligations, and all renewals and extensions thereof, or any part
    thereof, now or hereafter owed to Administrative Agent, LC Fronting Bank,
    Documentation Agent, Syndication Agent or any Lender by any Company arising
    from, by virtue of, or pursuant to, (a) any Loan Document, together with
    all interest accruing thereon, fees, costs, and expenses (including,
    without limitation, all attorneys' fees and expenses incurred in the
    enforcement or collection thereof) payable under the Loan Documents, or (b)
    any Rate Protection Agreement with a Lender.

            OTHER TAXES is defined in SECTION 3.18(B).

            OECD means the Organization for Economic Cooperation and
    Development.

            PARTICIPANT is defined in SECTION 11.14(B).

            PBGC means the Pension Benefit Guaranty Corporation, or any
    successor thereof, established pursuant to ERISA.

            PENSION BENEFIT PLAN means any "employee pension benefit plan"
    within the meaning of Section 3(2) of ERISA established or maintained by
    any Company or to which any Company contributes or is required to
    contribute.

            PERMITTED DEBT means Debt described in SECTION 7.13.

            PERMITTED LIENS means Liens described in SUBSECTIONS (I) through
    (IX) of SECTION 7.14.

            PERSON means any individual, entity, or Tribunal.

            PLEDGE AGREEMENT means a pledge agreement in substantially the form
    and upon the terms of EXHIBIT C-1 (for Borrower) or EXHIBIT C-2 (for any
    Subsidiary of Borrower) (as the same may hereafter be amended, modified,
    supplemented or restated from time to time).

            POTENTIAL DEFAULT means the occurrence of any event or existence of
    any circumstance described in SECTION 8 hereof which, with the giving of
    notice under SECTION 8 hereof or lapse of time provided in SECTION 8 hereof
    or both, would become a Default.

            PREDECESSOR means any corporation or other person or entity for
    whose obligations and liabilities any Company may be liable as the result
    of any merger, de facto merger, stock purchase, asset purchase or
    divestiture, combination, joint venture, investment, reclassification, or
    other similar business transaction.





                                      -15-
<PAGE>   23

            PRINCIPAL DEBT means, at the time of any determination thereof, the
    aggregate unpaid principal balance of all Loans and all unreimbursed
    payments pursuant to LCs.

            PRO RATA and PRO RATA PART means, at the time of any determination
    thereof (a) for any Lender in respect of the Term Loan or the Revolving
    Credit Facility, respectively, the proportion that the Principal Debt owed
    to it thereunder bears to the aggregate Term Principal Debt or Revolving
    Credit Principal Debt owed to all Lenders thereunder, as the case may be,
    and (b) for any Lender in respect of the total facilities hereunder,
    including without limitation for purposes of SECTION 10, the proportion
    that the aggregate Principal Debt owed to it under this Agreement bears to
    the Principal Debt owed to all Lenders hereunder.

            PURCHASER is defined in SECTION 11.14(C).

            RATE PROTECTION AGREEMENT means a swap, collar, floor, cap, foreign
    exchange agreement, or other contract entered into by Borrower with any
    Lender or another Person reasonably acceptable to Administrative Agent
    under the Laws of a jurisdiction in which such contracts are legal and
    enforceable, which is intended to reduce or eliminate the risk of
    fluctuations in interest rates applicable to Loans under this Agreement.

            REAL PROPERTY means any land, buildings, fixtures, and other
    improvements to land now or hereafter directly or indirectly owned by any
    Restricted Company or leased to or otherwise operated by any Restricted
    Company.

            RELEASE means any spilling, leaking, pumping, pouring, emitting,
    emptying, discharging, injecting, escaping, leaching, dumping, disposal, or
    other movement into the air, ground or surface water, or soil.

            REPORTABLE EVENT shall have the meaning specified in Section 4043
    of ERISA in connection with an Employee Plan, excluding events for which
    the notice requirement is waived under applicable PBGC regulations.

            REPRESENTATIVES means representatives, officers, directors,
    employees, attorneys, and agents.

            REQUIRED LENDERS means, on any date of determination, any
    combination of Lenders who collectively hold at least 66.67% of the sum of
    (a) the aggregate Committed Sums under the Revolving Credit Facility and
    (b) the Principal Debt under the Term Loan outstanding as of such date.

            RESERVE REQUIREMENT means, with respect to any LIBOR Rate Loan for
    the relevant Interest Period, the reserve percentage applicable for
    determining the maximum reserve requirement (including all basic,
    supplemental, emergency, special, marginal, and other reserves required by
    applicable Law) applicable to a member bank of the Federal Reserve System
    in respect of eurocurrency fundings or liabilities with a term equal to
    such Interest Period.





                                      -16-
<PAGE>   24

            RESPONSIBLE OFFICER means the chairman, president, chief executive
    officer, chief financial officer, vice president, treasurer or controller
    of Borrower.

            RESTRICTED COMPANIES, at the time of any determination thereof,
    shall mean Borrower and each of its Subsidiaries organized under the Laws
    of the United States.

            REVOLVING CREDIT COMMITMENT USAGE means, at the time of any
    determination thereof, without duplication, the sum of (a) the aggregate
    Principal Debt outstanding under the Revolving Credit Facility, plus (b)
    the LC Exposure.

            REVOLVING CREDIT FACILITY means the credit facility (the Principal
    Debt of which when added to the aggregate amount remaining to be drawn on
    all uncancelled LCs may never exceed the aggregate of $50,000,000, as such
    amount is subject to reduction and cancellation in accordance with this
    Agreement) described in and subject to the limitations of SECTION 2.2(A).

            REVOLVING CREDIT NOTE means a promissory note in substantially the
    form of EXHIBIT A-2, and all renewals, extensions, amendments and
    replacements of all or any part thereof.

            REVOLVING CREDIT PRINCIPAL DEBT means, on any date of
    determination, that portion of the Principal Debt outstanding under the
    Revolving Credit Facility.

            REVOLVING CREDIT TERMINATION DATE means the earlier of (a)
    September 30, 2001, or (b) the effective date that Lenders' commitments to
    lend under this Agreement are otherwise cancelled or terminated in
    accordance with this Agreement.

            RIGHTS means rights, remedies, powers, privileges, and benefits.

            RYDER means Ryder System, Inc.

            RYDER ERISA AFFILIATE means any company or trade or business
    (whether or not incorporated) which, for purposes of Title IV of ERISA, is
    a member of Ryder's controlled group or which is under common control with
    Ryder within the meaning of Section 414 of the Code.

            SCHEDULE means a schedule attached to this Agreement unless
    specified otherwise.

            SECURITY DOCUMENTS means the Pledge Agreements, Borrower Security
    Agreement, Subsidiary Security Agreements, the Mortgages and any collateral
    account agreement delivered pursuant to SECTION 3.4(D) or otherwise.

            SOLVENT  means, as to a Person, that (a) the aggregate fair market
    value of such Person's assets exceeds its liabilities (whether contingent,
    subordinated, unmatured, unliquidated, or otherwise), (b) such Person has
    sufficient cash flow to enable it to pay its Debts as they mature, and (c)
    such Person does not have unreasonably small capital to conduct such
    Person's businesses.





                                      -17-
<PAGE>   25

            SUBSIDIARY of any Person means any entity of which an aggregate of
    more than 50% (in number of votes) of the stock (or equivalent interests)
    is owned of record or beneficially, directly or indirectly, by such Person;
    when no Person is specified, SUBSIDIARY and SUBSIDIARIES shall mean those
    of Borrower.

            SUBSIDIARY SECURITY AGREEMENT means a security agreement in
    substantially the form and upon the terms of EXHIBIT D-2.

            SYNDICATION AGENT means NationsBanc Capital Markets, Inc., and its
    successors, as Syndication Agent under this Agreement.

            TANGIBLE NET WORTH means Borrower's net worth as determined in
    accordance with GAAP minus goodwill, patents, trademarks, trade names,
    copyrights, franchises and deferred charges, and all similar assets that
    would be classified as intangible assets.

            TAX TRANSFEREE is defined in SECTION 3.18(A).

            TAXES means, for any Person, taxes, assessments, or other
    governmental charges or levies imposed upon such Person, its income, or any
    of its properties, franchises, or assets.

            TERM NOTE means a promissory note in substantially the form of
    EXHIBIT A-1, and all renewals, extensions, amendments and replacements of
    all or any part thereof.

            TERM PRINCIPAL DEBT means, on any date of determination, that
    portion of the Principal Debt outstanding under the Term Loan.

            TERM LOAN means the loan originally in the amount of $50,000,000,
    described in and subject to the limitations of SECTION 2.1(A).

            TOTAL COMMITMENT means, on any date of determination the sum of all
    Committed Sums for all Lenders in respect of the Term Loan and the
    Revolving Credit Facility (as any such facility may have been reduced or
    cancelled as provided in this Agreement) then in effect.

            TRIBUNAL  means any (a) local, state, commonwealth, federal or
    foreign judicial, executive, or legislative instrumentality, or any agency,
    authority, commission, or board thereof, including, without limitation, any
    aviation authority, (b) private arbitration board or panel, or (c) central
    bank.

            TYPE means any type of Loan determined with respect to the interest
    option applicable thereto.

            VOTING STOCK shall mean securities (as such term is defined in
    Section 2(1) of the Securities Act of 1933, as amended) of any class or
    classes, the holders of which are ordinarily, in the absence





                                      -18-
<PAGE>   26
    of contingencies, entitled to elect a majority of the corporate directors
    (or Persons performing similar functions).

            WELFARE BENEFIT PLAN means any "employee welfare benefit plan"
    within the meaning of Section 3(1) of ERISA established or maintained by
    any Company or to which any Company contributes or is required to
    contribute.

            1.2      Number and Gender of Words.  Whenever in any Loan Document
    the singular number is used, the same shall include the plural where
    appropriate and vice versa, and words of any gender shall include each
    other gender where appropriate.

            1.3      Accounting Principles.  All accounting and financial terms
    used in the Loan Documents and the compliance with each financial covenant
    therein shall be determined in accordance with GAAP as in effect on
    December 31, 1995, and all accounting principles shall be applied on a
    consistent basis so that the accounting principles in a current period are
    comparable in all material respects to those applied in the consolidated
    Financial Statements for the Companies for the twelve months ended December
    31, 1995; provided that the Financial Statements required to be delivered
    pursuant to SECTION 7.3(A) and (B) shall be prepared in accordance with
    GAAP as in effect from time to time.  If a change occurs in GAAP, the
    Compliance Certificate and Borrowing Base Certificate shall include
    calculations setting forth the adjustments from the relevant financial
    items as shown in the current Financial Statements, based on the then
    current GAAP, to the corresponding financial items based on GAAP as used in
    the Financial Statements for the twelve months ended December 31, 1995, so
    as to demonstrate how such financial covenant compliance was derived from
    the current Financial Statements; provided, however, that Administrative
    Agent, Documentation Agent, Lenders and Borrower will thereafter negotiate
    in good faith to revise any affected covenants to make such covenants
    consistent with the prior covenants and GAAP, as then in effect, and, after
    any such revision as shall be agreed to by Borrower and Majority Lenders,
    this Agreement will be construed in accordance with GAAP, as then in
    effect.


    SECTION 2        AMOUNTS AND TERMS OF THE LOAN FACILITIES.

            2.1      Term Loan.

                     (a)     Subject to and in reliance upon the terms,
            conditions, representations, and warranties in the Loan Documents,
            each Lender that has a Committed Sum under the Term Loan severally
            and not jointly agrees to lend to Borrower in a single advance on
            the initial Borrowing Date such Lender's Commitment Percentage of
            the Loans under the Term Loan made on the initial Borrowing Date.

                     (b)     Loans under the Term Loan shall, at the option of
            Borrower, bear interest at (i) the Base Rate plus the Applicable
            Margin, or (ii) the LIBOR Rate plus the Applicable Margin.





                                      -19-
<PAGE>   27

            2.2      Revolving Credit Facility.

                     (a)     Subject to and in reliance upon the terms,
            conditions, representations, and warranties in the Loan Documents,
            each Lender that has a Committed Sum under the Revolving Credit
            Facility severally and not jointly agrees to lend to Borrower such
            Lender's Commitment Percentage of one or more Loans under the
            Revolving Credit Facility, which, subject to the Loan Documents,
            Borrower may borrow, repay, and reborrow under this Agreement;
            provided that (i) each such Loan must occur on a Business Day and
            no later than the Business Day immediately preceding the Revolving
            Credit Termination Date; (ii) each such Loan shall be in an amount
            not less than $1,000,000 or a greater integral multiple of
            $1,000,000 or, if such Loan is made pursuant to SECTION 2.4(E), in
            the amount of the drawing under the LC giving rise to the deemed
            Notice of Borrowing; and (iii) on any date of determination, the
            Revolving Credit Commitment Usage shall never exceed the lesser of
            (x) $50,000,000 (as such amount is subject to reduction and
            cancellation in accordance with this Agreement) or (y) the
            Borrowing Base.

                     (b)     Loans under the Revolving Credit Facility shall,
            at the option of Borrower, bear interest at (i) the Base Rate plus
            the Applicable Margin, or (ii) the LIBOR Rate plus the Applicable
            Margin.

            2.3      Borrowing Procedure.  The following procedures apply to
                     Loans.

                     (a)     Each Loan (other than a Loan pursuant to SECTION
            2.4(E)) shall be made on Borrower's notice (a "NOTICE OF
            BORROWING", substantially in the form of EXHIBIT E-1) to
            Administrative Agent requesting that Lenders fund a Loan on a
            certain date (the "BORROWING DATE"), which notice (i) shall be
            irrevocable and binding on Borrower, (ii) shall state if it is for
            a Loan under the Term Loan or the Revolving Credit Facility, (iii)
            shall specify the Borrowing Date, amount, Type, and (for a Loan
            comprised of LIBOR Rate Loans) Interest Period, and (iv) must be
            received by Administrative Agent no later than 10:00 a.m. (Dallas,
            Texas time) on the third Business Day preceding the Borrowing Date
            for any LIBOR Rate Loan or on the Borrowing Date for any Base Rate
            Loan.  Administrative Agent shall promptly notify each Lender with
            respect to each Notice of Borrowing.

                     (b)     Each Lender shall remit its Commitment Percentage
            for the relevant facility of each requested Loan to Administrative
            Agent's principal office in Dallas, Texas, in funds which are or
            will be available for immediate use by Administrative Agent by
            12:00 Noon (Dallas, Texas time) on the Borrowing Date therefor.
            Subject to receipt of such funds, Administrative Agent shall
            (unless to its actual knowledge any of the conditions precedent
            therefor have not been satisfied by Borrower or waived by Required
            Lenders) make such funds available to Borrower by causing such
            funds to be deposited to Borrower's account with Administrative
            Agent, which account shall be designated to Administrative Agent by
            Borrower.  Notwithstanding the foregoing, unless Administrative
            Agent shall have been notified by a Lender prior to a Borrowing
            Date that such Lender does not intend to make





                                      -20-
<PAGE>   28
            available to Administrative Agent such Lender's Commitment
            Percentage of the applicable Loan, Administrative Agent may assume
            that such Lender has made such proceeds available to Administrative
            Agent on such date, as required herein, and Administrative Agent
            may (unless to its actual knowledge any of the conditions precedent
            therefor have not been satisfied by Borrower or waived by Required
            Lenders), in reliance upon such assumption (but shall not be
            required to), make available to Borrower a corresponding amount in
            accordance with the foregoing terms, but, if such corresponding
            amount is not in fact made available to Administrative Agent by
            such Lender on such Borrowing Date, Administrative Agent shall be
            entitled to recover such corresponding amount on demand (i) from
            such Lender, together with interest at the Federal Funds Rate
            during the period commencing on the date such corresponding amount
            was made available to Borrower and ending on (but excluding) the
            date Administrative Agent recovers such corresponding amount from
            such Lender, or (ii), if such Lender fails to pay such
            corresponding amount forthwith upon such demand, then from
            Borrower, together with interest at a rate per annum equal to the
            applicable rate for such Loan during the period commencing on such
            Borrowing Date and ending on (but excluding) the date
            Administrative Agent recovers such corresponding amount from
            Borrower.  No Lender shall be responsible for the failure of any
            other Lender to make available its Commitment Percentage of any
            Loan, but the failure of any Lender to make available its
            Commitment Percentage of any Loan shall not relieve any other
            Lender from its obligation to do so.

            2.4      LC Subfacility.

                     (a)     Subject to the terms and conditions of this
            Agreement and applicable Law, LC Fronting Bank agrees to issue LCs
            on behalf of Lenders that have a Committed Sum under the Revolving
            Credit Facility, upon Borrower's application therefor by delivering
            to Administrative Agent and LC Fronting Bank a properly completed
            notice (a "NOTICE OF LC," substantially in the form of EXHIBIT E-3)
            and an LC Agreement with respect thereto no later than 10:00 a.m.
            (Dallas, Texas time) three (3) Business Days before such LC is to
            be issued; provided that (i) on any date of determination, as
            determined by Administrative Agent, the Revolving Credit Commitment
            Usage shall never exceed the lesser of the Borrowing Base or
            $50,000,000 (as such amount is subject to reduction and
            cancellation in accordance with this Agreement), (ii) on any date
            of determination, the LC Exposure shall never exceed  $20,000,000;
            and (iii) each LC must expire no later than the earlier of 18
            months after the date of its issuance or August 31, 2001; provided
            that each LC may be automatically renewed for successive twelve
            month periods (but no renewal period may extend beyond August 31,
            2001) unless LC Fronting Bank shall have given prior notice to the
            applicable beneficiary of its election not to extend such LC.
            Administrative Agent shall promptly notify each Lender with respect
            to each Notice of LC.  LC Fronting Bank agrees to deliver
            notification of the issuance of an LC delivered hereunder to the
            beneficiary of such LC promptly upon its issuance.  LC Fronting
            Bank will use its reasonable best efforts, but is not required, to
            issue LCs in a currency other than Dollars.  For purposes of
            calculating the Dollar equivalent of any LC issued in a currency
            other than Dollars, LC Fronting Bank shall determine the Dollar





                                      -21-
<PAGE>   29
            equivalent of the amount of such LC on the date of issuance and
            shall determine the Dollar equivalent of any draft paid by LC
            Fronting Bank in a currency other than Dollars on the date of
            payment, in each case based on the quoted spot exchange rate as
            determined by LC Fronting Bank.  Any payment by Borrower and any
            funding by Lenders in respect of any LC issued in a currency other
            than Dollars shall be made in the Dollar equivalent.

                     (b)     Immediately upon the issuance by LC Fronting Bank
            of any LC, LC Fronting Bank shall be deemed to have sold and
            transferred to each other Lender that has a Committed Sum under the
            Revolving Credit Facility, and each such Lender shall be deemed
            irrevocably and unconditionally to have purchased and received from
            LC Fronting Bank, without recourse or warranty, an undivided
            interest and participation, to the extent of such Lender's
            Commitment Percentage under the Revolving Credit Facility, in such
            LC and all Rights of LC Fronting Bank in respect thereof (other
            than Rights to receive certain fees provided for in SECTION
            2.4(C)).  Upon issuance or renewal or extension of an LC, LC
            Fronting Bank shall provide a copy to Administrative Agent, and
            Administrative Agent shall provide copies of such LC to each other
            Lender.

                     (c)     In order to induce LC Fronting Bank to issue and
            maintain LCs and Lenders to participate therein, Borrower agrees to
            pay or reimburse LC Fronting Bank (i) on the date on which any
            draft is presented under any LC, the amount of any draft paid or to
            be paid by LC Fronting Bank, and (ii) promptly, upon demand, the
            amount of any fees in addition to the fees described in SECTION
            4.6, that LC Fronting Bank customarily charges to a Person
            similarly situated in the ordinary course of its business for
            amending LC Agreements, for honoring drafts, and taking similar
            action in connection with letters of credit.  Subject to the
            proviso at the end of SECTION 2.4(D), Borrower's obligations under
            this SECTION 2.4(C) shall be absolute and unconditional under any
            and all circumstances and irrespective of any setoff, counterclaim,
            or defense to payment which Borrower may have at any time against
            LC Fronting Bank or any other Person, and shall be made in
            accordance with the terms and conditions of this Agreement under
            all circumstances, including, without limitation, any of the
            following circumstances: (1) any lack of validity or enforceability
            of this Agreement or any of the Loan Documents; (2) the existence
            of any claim, setoff, defense, or other Right which Borrower may
            have at any time against a beneficiary named in a LC, any
            transferee of any LC (or any Person for whom any such transferee
            may be acting), LC Fronting Bank, Administrative Agent, any Lender,
            or any other Person, whether in connection with this Agreement, any
            LC, the transactions contemplated herein, or any unrelated
            transactions (including any underlying transaction between Borrower
            and the beneficiary named in any such LC); (3) any draft,
            certificate, or any other document presented under the LC proving
            to be forged, fraudulent, invalid, or insufficient in any respect
            or any statement therein being untrue or inaccurate in any respect;
            and (4) the occurrence of any Potential Default or Default.
            Administrative Agent shall promptly distribute such payments
            received from Borrower to LC Fronting Bank or, in the case of a
            funding by Lenders pursuant to SECTION 2.4(E), to all Lenders
            according to their Pro Rata Part of the Revolving Credit Facility.
            Interest on any amounts remaining unpaid by Borrower under this
            clause at any time





                                      -22-
<PAGE>   30
            from and after the date such amounts become payable until paid in
            full shall be payable by Borrower to Administrative Agent on demand
            at the Default Rate unless paid in full with the proceeds of a Loan
            advanced pursuant to SECTION 2.4(E).

                     (d)     If any draft shall be presented for honor under
            any LC, LC Fronting Bank shall promptly notify Administrative Agent
            and Borrower of the date and amount of such draft; provided that
            failure to give any such notice shall not affect the obligations of
            Borrower hereunder.  LC Fronting Bank shall make payment upon
            presentment of a draft for honor unless it appears that presentment
            on its face does not comply with the terms of such LC, regardless
            of whether (i) any default or potential default under any other
            agreement has occurred and (ii) the obligations under any other
            agreement have been performed by the beneficiary or any other
            Person (and LC Fronting Bank shall not be liable for any obligation
            of any Person thereunder).  LC Fronting Bank and Lenders shall not
            be responsible for, and Borrower's reimbursement obligations for
            honored drafts shall not be affected by, any matter or event
            whatsoever (including, without limitation, the validity or
            genuineness of documents or of any endorsements thereof, even if
            such documents should in fact prove to be in any respect invalid,
            fraudulent, or forged), or any dispute among any Company, the
            beneficiary of any LC, or any other Person to whom any LC may be
            transferred, or any claims whatsoever of any Company against any
            beneficiary of any LC or any such transferee; provided that,
            nothing in this SECTION 2.4 shall constitute a waiver of Borrower's
            Rights to assert any claim based upon the gross negligence or
            willful misconduct of LC Fronting Bank, Administrative Agent or any
            Lender.

                     (e)     If Borrower is obligated to reimburse LC Fronting
            Bank as provided in SECTION 2.4(C), LC Fronting Bank shall promptly
            notify Administrative Agent, and Administrative Agent shall
            promptly notify each Lender that has a Committed Sum under the
            Revolving Credit Facility of such reimbursement obligation, of the
            date and amount of the drawing, and of such Lender's Commitment
            Percentage under the Revolving Credit Facility thereof.  Unless
            Borrower shall have notified LC Fronting Bank prior to 10:00 a.m.
            (Dallas, Texas time) on the date of such drawing that Borrower
            intends to reimburse LC Fronting Bank for the amount of such
            drawing with funds other than the proceeds of the Loans, Borrower
            shall be deemed to have given a Notice of Borrowing to
            Administrative Agent requesting such Lenders to make Loans under
            the Revolving Credit Facility on the date on which such drawing is
            honored in an amount equal to the amount of such drawing, and,
            subject to satisfaction or waiver of the conditions specified in
            SECTION 5.2, each Lender shall, on the date of such drawing, make
            available its Commitment Percentage of Loans in the amount of such
            drawing, the proceeds of which shall be applied directly by
            Administrative Agent to reimburse LC Fronting Bank for the amount
            of such drawing; provided that if for any reason proceeds of Loans
            are not received by LC Fronting Bank on such date in an amount
            equal to the amount of such drawing, Borrower shall reimburse LC
            Fronting Bank on the Business Day immediately following the date of
            such drawing, in an amount in same day funds equal to the excess of
            the amount of such drawing over the amount of such Loans, if any,
            as shall be so received, plus accrued interest on such amount at
            the per annum rate of





                                      -23-
<PAGE>   31
            the sum of the Base Rate plus the Applicable Margin.  If Borrower
            fails to reimburse LC Fronting Bank as provided in SECTION 2.4(C)
            or the preceding sentence for any reason whatsoever (including,
            without limitation, the failure to satisfy any condition precedent
            set forth in SECTION 5.2), LC Fronting Bank shall promptly notify
            Administrative Agent and Administrative Agent shall promptly notify
            each Lender of the unreimbursed amount of such drawing and of such
            Lender's Commitment Percentage (and amount) of the unreimbursed
            amount.  Each such Lender shall promptly and unconditionally make
            available to Administrative Agent for the account of LC Fronting
            Bank, in immediately available funds such Lender's Commitment
            Percentage of such unpaid reimbursement obligation, which funds
            shall be paid to Administrative Agent on or before the close of
            business on the Business Day on which such notice was given by
            Administrative Agent (if given prior to 12:00 Noon, Dallas, Texas
            time) or on the next succeeding Business Day (if notice was given
            after 12:00 Noon, Dallas, Texas time).  All such amounts payable by
            any such Lender shall include interest thereon accruing at the
            Federal Funds Rate from the day the applicable draft is paid by LC
            Fronting Bank to (but not including) the date such amount is paid
            by such Lender to Administrative Agent for the account of LC
            Fronting Bank.  Borrower agrees that any Lender making payments to
            Administrative Agent for the account of LC Fronting Bank may to the
            fullest extent permitted by Law, exercise all of its Rights of
            payment (including the Right of offset) with respect to such amount
            as fully as if such Lender were the direct creditor of Borrower in
            such amount.  The obligations of such Lenders to make payments to
            Administrative Agent for the account of LC Fronting Bank with
            respect to LCs shall be irrevocable and not subject to any
            qualification or exception whatsoever (other than the gross
            negligence or willful misconduct of LC Fronting Bank) and shall be
            made in accordance with the terms and conditions of this Agreement
            under all circumstances, including, without limitation, any of the
            following circumstances: (i) any lack of validity or enforceability
            of this Agreement or any of the Loan Documents; (ii) the existence
            of any claim, setoff, defense, or other Right which Borrower may
            have at any time against a beneficiary named in a LC, any
            transferee of any LC (or any Person for whom any such transferee
            may be acting), Administrative Agent, LC Fronting Bank, any Lender,
            or any other Person, whether in connection with this Agreement, any
            LC, the transactions contemplated herein, or any unrelated
            transactions (including any underlying transaction between Borrower
            and the beneficiary named in any such LC); (iii) any draft,
            certificate, or any other document presented under the LC proving
            to be forged, fraudulent, invalid, or insufficient in any respect
            or any statement therein being untrue or inaccurate in any respect;
            and (iv) the occurrence of any Potential Default or Default.

                     (f)     Borrower acknowledges that each LC will be deemed
            issued upon delivery to its beneficiary or Borrower.  If Borrower
            requests any LC be delivered to Borrower rather than the
            beneficiary, and Borrower subsequently cancels such LC, Borrower
            agrees to return it to LC Fronting Bank together with Borrower's
            written certification that it has never been delivered to such
            beneficiary.  If any LC is delivered to its beneficiary pursuant to
            Borrower's instructions, no cancellation thereof by Borrower shall
            be effective without written consent of such beneficiary to LC
            Fronting Bank and return of such LC to LC Fronting Bank.





                                      -24-
<PAGE>   32
            BORROWER HEREBY AGREES THAT IF LC FRONTING BANK BECOMES INVOLVED IN
            ANY DISPUTE AS A RESULT OF BORROWER'S CANCELLATION OF ANY LC, IT
            SHALL INDEMNIFY LC FRONTING BANK FOR ALL LOSSES, COSTS, DAMAGES,
            EXPENSES, AND ATTORNEYS' FEES SUFFERED OR INCURRED BY LC FRONTING
            BANK AS A RESULT THEREOF.

                     (g)     LC Fronting Bank agrees with each Lender that it
            will exercise and give the same care and attention to each LC as it
            gives to its other letters of credit.  Each Lender and Borrower
            agree that, in paying any draw under any LC, LC Fronting Bank shall
            not have any responsibility to obtain any document (other than any
            documents required by the respective LC) or to ascertain or inquire
            as to the validity or accuracy of any such document or the
            authority of the Person delivering any such document.  LC Fronting
            Bank, Administrative Agent, Lenders, and their respective
            Representatives shall not be liable to any other Lender or any
            Company for the use which may be made of any LC or for any acts or
            omissions of any beneficiary thereof in connection therewith.  Any
            action, inaction, error, delay, or omission taken or suffered by LC
            Fronting Bank or any of its Representatives under or in connection
            with any LC, the draws, drafts, or documents relating thereto, or
            the transmission, dispatch, or delivery of any message or advice
            related thereto, if in good faith and in conformity with such Laws
            as LC Fronting Bank or any of its Representatives may deem
            applicable and in accordance with the LC Agreement covering such
            LC, shall be binding upon the Companies and Lenders and shall not
            place LC Fronting Bank or any of its Representatives under any
            resulting liability to any Company or any Lender.  Any action taken
            or omitted to be taken by LC Fronting Bank under or in connection
            with any LC if taken or omitted in the absence of gross negligence
            or willful misconduct shall not create for LC Fronting Bank any
            resulting liability to any Lender or any Company.

                     (h)     On the Revolving Credit Termination Date or upon
            demand by Administrative Agent upon the occurrence and continuance
            of a Default, Borrower shall provide to Administrative Agent, for
            the benefit of Lenders, cash collateral in an amount equal to 102%
            of the LC Exposure existing on such date.

                     (i)     IN ADDITION TO AMOUNTS PAYABLE AS ELSEWHERE
            PROVIDED IN THIS AGREEMENT, BORROWER AND EACH RESTRICTED COMPANY ON
            WHOSE BEHALF A LC IS ISSUED HEREBY JOINTLY AND SEVERALLY AGREES TO
            PROTECT, INDEMNIFY, PAY AND SAVE LC FRONTING BANK, ADMINISTRATIVE
            AGENT, DOCUMENTATION AGENT, AND EACH LENDER HARMLESS FROM AND
            AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES,
            COSTS, CHARGES, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES)
            WHICH LC FRONTING BANK, ADMINISTRATIVE AGENT, DOCUMENTATION AGENT,
            OR ANY LENDER MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE, DIRECT
            OR INDIRECT, OF (I) THE ISSUANCE OF ANY LC OR (II) THE FAILURE OF
            LC FRONTING BANK TO HONOR A DRAFT UNDER SUCH LC AS





                                      -25-
<PAGE>   33
            A RESULT OF ANY ACT OR OMISSION, WHETHER RIGHTFUL OR WRONGFUL, OF
            ANY PRESENT OR FUTURE TRIBUNAL; PROVIDED THAT, BORROWER SHALL HAVE
            NO LIABILITY TO INDEMNIFY LC FRONTING BANK, ADMINISTRATIVE AGENT,
            DOCUMENTATION AGENT, OR ANY LENDER IN RESPECT OF ANY LIABILITY
            ARISING OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
            PARTY.

                     (j)     Although referenced in any LC, terms of any
            particular agreement or other obligation to the beneficiary are not
            in any manner incorporated herein.  The fees and other amounts
            payable with respect to each LC shall be as provided in this
            Agreement, drafts under any LC shall be deemed part of the
            Obligation, and in the event of any conflict between the terms of
            this Agreement and any LC Agreement, the terms of this Agreement
            shall be controlling.

                     (k)     SCHEDULE 2.4 contains a description of Existing
            LCs issued by The First National Bank of Boston prior to September
            26, 1996, for the account of Borrower.  The First National Bank of
            Boston shall, with respect to the Existing LCs, constitute an "LC
            Fronting Bank" for all purposes of this Agreement and any Existing
            LC shall constitute an LC for all purposes of this Agreement.  Each
            such Existing LC shall, for purposes of SECTION 2.4(B) and SECTION
            4.6, be deemed issued on the date of this Agreement.  Except as
            modified by the provisions of this SECTION 2.4(K), the provisions
            of the LC Agreements shall continue to apply to the Existing LCs.
            The First National Bank of Boston as LC Fronting Bank for the
            Existing LCs shall be entitled to all fees due to the LC Fronting
            Bank with respect to the Existing LCs.

            2.5      Termination or Reduction of Revolving Credit Commitment.
    Upon giving not less than three (3) Business Days prior written and
    irrevocable notice to Administrative Agent, Borrower may terminate in whole
    or in part, without premium or penalty, the unused portion of the aggregate
    Committed Sums under the Revolving Credit Facility; provided that each
    partial termination shall be in an amount of not less than $5,000,000 (or,
    if less, the remaining Committed Sums under the Revolving Credit Facility)
    or a greater integral multiple of $1,000,000, and shall be Pro Rata as a
    reduction of the Committed Sums of all Lenders that have Committed Sums
    under the Revolving Credit Facility.  Each such termination shall be
    permanent and not subject to reinstatement.


    SECTION 3        TERMS OF PAYMENT.

            3.1      Notes and Payments.

                     (a)     The Term Principal Debt shall be evidenced by the
            Term Notes, one payable to each Lender that has a Committed Sum
            under the Term Loan in the stated principal amount of its Committed
            Sum for the Term Loan.  Revolving Credit Principal Debt shall be
            evidenced by the Revolving Credit Notes, one payable to each Lender
            that has a Committed





                                      -26-
<PAGE>   34
            Sum under the Revolving Credit Facility in the stated amount of its
            Committed Sum for the Revolving Credit Facility.

                     (b)     Each payment or prepayment on the Obligation is
            due and must be paid at Administrative Agent's principal office in
            Dallas, Texas, in immediately available funds by 1:00 p.m. (Dallas,
            Texas time) on the day due.  Payments made after 1:00 p.m. (Dallas,
            Texas time) shall be deemed made on the Business Day next
            following.  Administrative Agent shall pay to each Lender any
            payment or prepayment to which such Lender is entitled hereunder on
            the same day Administrative Agent shall have received the same from
            Borrower; provided such payment or prepayment is received by
            Administrative Agent prior to 1:00 p.m. (Dallas, Texas time) and
            otherwise before 1:00 p.m. (Dallas, Texas time) on the Business Day
            next following.  If and to the extent Administrative Agent shall
            not make such payments to Lenders when due as set forth in the
            preceding sentence, such unpaid amounts shall accrue interest at
            the Federal Funds Rate from the due date until (but not including)
            the date on which Administrative Agent makes such payments to
            Lenders.

            3.2      Interest and Principal Payments and Commitment Reductions.

                     (a)     Interest on each LIBOR Rate Loan shall be due and
            payable as it accrues on the last day of its respective Interest
            Period, and in the case of an Interest Period greater than three
            months, at three-month intervals after the first day of such
            Interest Period, and on the Revolving Credit Termination Date.
            Interest on each Base Rate Loan shall be due and payable as it
            accrues on the last day of each calendar quarter, commencing
            December 31, 1996, and on the Revolving Credit Termination Date.

                     (b)     The Term Principal Debt shall be payable in
            principal installments in the following amounts on the following
            dates:





                                      -27-
<PAGE>   35
<TABLE>
<CAPTION>
 Payment Amount                       Payment Date                        
 --------------                       ------------                        
 <S>                                  <C>                                 
 $1,000,000                           September 30 and December 31, 1997  
                                                                          
 $2,000,000                           March 31, June 30, September 30 and 
                                      December 31, 1998                   
                                                                          
 $3,000,000                           March 31, June 30, September 30 and 
                                      December 31, 1999                   
                                                                          
 $3,250,000                           March 31, June 30, September 30, and
                                      December 31, 2000                   
                                                                          
 $5,000,000                           March 31 and June 30, 2001          
                                                                          
 Balance of Principal Debt            September 30, 2001                  
</TABLE>

            3.3      Voluntary Prepayments.  After giving Administrative Agent
    advance written notice of the intent to prepay, Borrower may voluntarily
    prepay all or any part of the Principal Debt from time to time and at any
    time, in whole or in part, without premium or penalty except as set forth
    below; provided that (i) such notice must be received by Administrative
    Agent by 1:00 p.m. (Dallas, Texas time) on (A) the third Business Day
    preceding the date of prepayment of a LIBOR Rate Loan, and (B) one (1)
    Business Day preceding the date of prepayment of a Base Rate Loan; (ii)
    each such partial prepayment must be in a minimum amount of at least
    $1,000,000 or a greater integral multiple of $1,000,000 thereof; (iii) all
    accrued interest on the amount of the Obligation prepaid must also be paid
    in full, to the date of such prepayment; and (iv) Borrower may not prepay
    any LIBOR Rate Loan prior to the end of the applicable Interest Period
    unless on the date of such prepayment Borrower shall pay the related
    Consequential Loss, if any.  Each notice of prepayment shall specify the
    prepayment date, the facility hereunder being prepaid, the Type of Loan(s)
    and amount(s) of such Loan(s) to be prepaid and shall constitute a binding
    obligation of Borrower to make a prepayment on the date stated therein.
    All voluntary prepayments on Term Principal Debt shall be applied to
    remaining principal of the Term Principal Debt in the inverse order of
    maturity.  Voluntary prepayments of the Revolving Credit Facility Principal
    Debt may be reborrowed subject to the terms and conditions of the Loan
    Documents.

            3.4      Mandatory Prepayments.

                     (a)     On any date of determination if the Revolving
            Credit Commitment Usage exceeds the lesser of (i) the aggregate of
            Lenders' Committed Sums under the Revolving Credit Facility or (ii)
            the Borrowing Base, then Borrower shall make a mandatory prepayment
            of the Principal Debt under the Revolving Credit Facility in at
            least the amount of such excess, together with (A) all accrued and
            unpaid interest on the principal amount so prepaid and (B) any
            Consequential Loss arising as a result thereof.





                                      -28-
<PAGE>   36

                     (b)     On each date Borrower issues any equity
            securities, except issuances resulting from the exercise of
            employee stock options, Borrower shall make a mandatory prepayment
            on the Obligation in an amount equal to 75% of the cash proceeds of
            any such equity issuances net of all ordinary reasonable legal
            expenses, commissions and other fees and expenses paid or to be
            paid to Persons not Affiliates of the Company and all Taxes
            assessed in connection therewith.  All such proceeds shall be
            applied to the remaining installments of the Term Loan in the
            inverse order of maturity and then to reduce the Revolving Credit
            Principal Debt and the Total Commitments under the Revolving Credit
            Facility.  At such time Borrower shall also prepay all accrued and
            unpaid interest on the principal amount so prepaid and any
            Consequential Loss arising as a result thereof.

                     (c)     On each date Borrower issues any Debt permitted by
            SECTION 7.13(L), Borrower shall make a mandatory prepayment on the
            Obligation in an amount equal to 100% of the cash proceeds of any
            such Debt issuances net of all ordinary reasonable legal expenses,
            commissions and other fees and expenses paid or to be paid to
            Persons not Affiliates of the Company and all Taxes assessed in
            connection therewith. All such proceeds shall be applied to the
            remaining installments of the Term Loan in the inverse order of
            maturity and then to reduce the Revolving Credit Principal Debt and
            the Total Commitments under the Revolving Credit Facility.  At such
            time Borrower shall also prepay all accrued and unpaid interest on
            the principal amount so prepaid and any Consequential Loss arising
            as a result thereof.

                     (d)     To the extent that any prepayment is required
            under this SECTION 3.4 which will require Borrower to make a
            prepayment of any Loan other than on the last day of the applicable
            Interest Period, Borrower may, at its option, place such amount as
            cash Collateral for the Obligation in an account with
            Administrative Agent pursuant to the terms of an agreement in the
            form of EXHIBIT F.

            3.5      Quotation of Rates.  It is hereby acknowledged that a
    Responsible Officer or other appropriately designated officer or employee
    of Borrower may call Administrative Agent on or before the date on which a
    Notice of Borrowing is to be delivered by Borrower in order to receive an
    indication of the rates then in effect, but such indicated rates shall
    neither be binding upon Administrative Agent or Lenders nor affect the rate
    of interest which thereafter is actually in effect when the Notice of
    Borrowing is given.

            3.6      Default Rate.  At the option of Required Lenders and to
    the extent permitted by Law, upon the occurrence and during the continuance
    of a Default in the payment of any Principal Debt or interest thereon, all
    Principal Debt and accrued interest thereon and any other amount due or
    becoming due hereunder shall bear interest at the Default Rate until paid,
    regardless whether such payment is made before or after entry of a
    judgment.





                                      -29-
<PAGE>   37
            3.7      Interest Calculations; Determination of Rates.

                     (a)     All payments of interest shall be calculated on
            the basis of actual number of days (including the first day but
            excluding the last day) elapsed but computed as if each calendar
            year consisted of 360 days, in the case of a LIBOR Rate Loan, or
            365 days, in the case of a Base Rate Loan (unless based on the
            Federal Funds Rate in which case it shall be computed as if each
            calendar year consisted of 360 days).  All interest rate
            determinations and calculations by Administrative Agent shall be
            conclusive and binding absent manifest error.

                     (b)     The provisions of this Agreement relating to
            calculation of the Base Rate and the LIBOR Rate are included only
            for the purpose of determining the rate of interest or other
            amounts to be paid hereunder that are based upon such rate.

                     (c)     Each change in the Base Rate will become
            effective, without notice to Borrower or any other Person, upon the
            effective date of such change.

            3.8      Interest Periods.  When Borrower requests any LIBOR Rate
    Loan, such Loan shall be elected for an interest period (each an "INTEREST
    PERIOD") which shall be a period of one, two, three or six months;
    provided, however, (a) the initial Interest Period for a LIBOR Rate Loan
    shall commence on the date of such Loan (including the date of any
    conversion thereto), and each Interest Period occurring thereafter in
    respect of such Loan shall commence on the day on which the next preceding
    Interest Period applicable thereto expires; (b) if any Interest Period for
    a LIBOR Rate Loan begins on a day for which there is no numerically
    corresponding Business Day in the calendar month at the end of such
    Interest Period, such Interest Period shall end on the next Business Day
    immediately following what otherwise would have been such numerically
    corresponding day in the calendar month at the end of such Interest Period
    (unless such date would be in a different calendar month from what would
    have been the month at the end of such Interest Period, or unless there is
    no numerically corresponding day in the calendar month at the end of the
    Interest Period; whereupon, such Interest Period shall end on the last
    Business Day in the calendar month at the end of such Interest Period); (c)
    no Interest Period may be chosen with respect to any portion of the
    Principal Debt which would extend beyond the scheduled repayment date for
    such portion of the Principal Debt; and (d) no more than an aggregate of
    five (5) Interest Periods shall be in effect at one time.

            3.9      Conversions/Continuations.  Borrower may (a) convert a
    Base Rate Loan or portion thereof at any time to a LIBOR Rate Loan, or (b)
    elect a new Interest Period (in the case of a LIBOR Rate Loan), by giving
    notice (a "NOTICE OF CONVERSION", substantially in the form of EXHIBIT E-2)
    of such intent no later than 10:00 a.m. (Dallas, Texas time) on the third
    Business Day prior to the date of conversion or the last day of the
    Interest Period, as the case may be, in the case of a conversion to a LIBOR
    Rate Loan or an election of a new Interest Period; provided that, the
    principal amount converted to, or continued as, a LIBOR Rate Loan shall be
    in an amount not less than $1,000,000 or a greater integral multiple of
    $1,000,000.  Administrative Agent shall promptly notify each Lender with
    respect to each Notice of Conversion.  Absent Borrower's timely notice of
    conversion or election





                                      -30-
<PAGE>   38
    of a new Interest Period as provided herein, a LIBOR Rate Loan shall be
    deemed converted to a Base Rate Loan effective as of the expiration of the
    Interest Period applicable thereto.

            3.10     Order of Application.

                     (a)     Payments and prepayments of the Obligation shall
            be applied in the order and manner specified in this Agreement;
            provided that if no order is specified and no Default in the
            payment of Principal Debt or interest thereon has occurred and is
            continuing, payments and prepayments of the Obligation shall be
            applied in the order and manner as Borrower may direct, or, if
            Borrower shall fail to give directions, in the following order:
            (i) to fees and expenses for which Administrative Agent, LC
            Fronting Bank, Syndication Agent, Documentation Agent or Lenders
            have not been paid or reimbursed in accordance with the Loan
            Documents; (ii) to accrued interest on the Principal Debt; (iii) to
            Principal Debt of the Revolving Credit Facility then due, if any,
            and then to Term Principal Debt then due and payable; (iv) to any
            reimbursement obligation with respect to any LC which is due and
            payable and which remains unfunded by any Loan under the Revolving
            Credit Facility; (v) to that portion of the Principal Debt
            outstanding under the Revolving Credit Facility (in an order that
            will minimize any Consequential Loss); (vi) to the remaining
            Principal Debt in such order as Required Lenders may elect
            (provided that Required Lenders will apply such amounts in an order
            that will minimize any Consequential Loss); and (vii) to the
            remaining Obligation.

                     (b)     If a Default in the payment of Principal Debt or
            interest thereon has occurred and is continuing, subject to the
            provisions of this Agreement relating to application of payments,
            any payment or prepayment (including proceeds from the exercise of
            any Rights) shall be applied in the following order: (i) to all
            fees and expenses for which Administrative Agent, LC Fronting Bank,
            Syndication Agent, Documentation Agent or Lenders have not been
            paid or reimbursed in accordance with the Loan Documents; (ii) to
            accrued interest on the Principal Debt; (iii) to any reimbursement
            obligation with respect to any LC which is due and payable and
            which remains unfunded by any Loan under the Revolving Credit
            Facility; (iv) pro rata to the remaining outstanding Principal Debt
            under the Term Loan and the Revolving Credit Facility; (v) to the
            remaining Obligation in the order and manner Required Lenders deem
            appropriate; and (vi) as a deposit with Administrative Agent, for
            the benefit of Lenders, as security for, and to provide for the
            payment of, any reimbursement obligations, if any, thereafter
            arising with respect to any LC.

            3.11     Sharing of Payments, Etc.  If any Lender shall obtain any
    payment (whether voluntary, involuntary, or otherwise, including, without
    limitation, as a result of exercising its Rights under SECTION 3.12) on
    account of the Loans made by it or its participation in LCs which is in
    excess of its ratable share of payments on account of the Loans or LCs
    obtained by all Lenders entitled to share therein, such Lender shall
    purchase from the other Lenders such participations as shall be necessary
    to cause such purchasing Lender to share the excess payment ratably with
    each of them; provided, however, that if all or any portion of such excess
    payment is thereafter recovered from such purchasing Lender, the purchase
    shall be rescinded and the purchase price restored to the extent of





                                      -31-
<PAGE>   39
    such recovery.  Borrower agrees that any Lender so purchasing a
    participation from another Lender pursuant to this section may to the
    fullest extent permitted by Law, exercise all of its Rights of payment
    (including the Right of offset) with respect to such participation as fully
    as if such Lender were the direct creditor of Borrower in the amount of
    such participation.

            3.12     Offset.  Upon the occurrence and during the continuance of
    a Default, each Lender and its Affiliates shall be entitled to exercise
    (for the benefit of all Lenders in accordance with SECTION 3.11) the Rights
    of offset and/or banker's Lien against each and every account and other
    property, or any interest therein, which any Company may now or hereafter
    have with, or which is now or hereafter in the possession of, such Lender
    to the extent of the full amount of any past due portion of the Obligation
    owed to such Lender.

            3.13     Booking Loans.

                     (a)     To the extent permitted by Law, any Lender may
            make, carry, or transfer its Loans at, to, or for the account of
            any of its branch offices or the office of any of its Affiliates,
            provided that no Affiliate shall be entitled to receive any greater
            payment under SECTIONS 3.15, 3.16 and 3.18 than the transferor
            Lender would have been entitled to receive with respect to such
            Loans.

                     (b)     Each Lender agrees that, upon the occurrence of
            any event giving rise to the operation of SECTIONS 3.15, 3.16 or
            3.18 with respect to such Lender, it will, if requested by
            Borrower, use reasonable efforts (subject to overall policy
            considerations of such Lender) to designate another lending office
            for any Loans affected by such event, provided that such
            designation is made on such terms that such Lender and its lending
            office suffer no economic, legal or regulatory disadvantage, with
            the object of avoiding the consequence of the event giving rise to
            the operation of any such Section.  Nothing in this SECTION 3.13
            shall affect or postpone any of the obligations of Borrower or the
            right of any Lender provided in SECTIONS 3.15, 3.16 or 3.18.

            3.14     Basis Unavailable or Inadequate for LIBOR Rate.  If, on or
    before any date on which a LIBOR Rate is to be determined for a Loan,
    Administrative Agent determines that appropriate quotations are not being
    provided for the amount of the Loan or for the Interest Period requested or
    Required Lenders determine that the resulting rate does not accurately
    reflect the cost to Lenders of making, maintaining, or converting Loans at
    such rate for the applicable Interest Period, then Administrative Agent
    shall promptly give notice of such determination to Borrower and Lenders
    (and such determination shall be conclusive and binding on Borrower, absent
    manifest error) and such Loan shall bear interest at the sum of the Base
    Rate plus the Applicable Margin.  Until Administrative Agent notifies
    Borrower that the circumstances giving rise to such condition no longer
    exist, Lenders' commitments hereunder to make or maintain, or to convert
    to, LIBOR Rate Loans shall be suspended and such Loans shall be made or
    maintained at the sum of the Base Rate plus the Applicable Margin.  Subject
    to the terms and conditions of this Agreement, if Administrative Agent
    notifies Borrower that the circumstances giving rise to the suspension of
    Lenders' obligations to make or maintain LIBOR





                                      -32-
<PAGE>   40
    Rate Loans no longer exist, Borrower shall be entitled to request LIBOR
    Rate Loans and convert Base Rate Loans to LIBOR Rate Loans as if the
    provisions of this paragraph had never applied.

            3.15     Additional Costs.

                     (a)     If, in respect of all or any portion of any LIBOR
            Rate Loan owed to any Lender (i) any change in present Law or any
            future Law shall impose, modify, or deem applicable, or compliance
            by such Lender with any requirement (whether or not having the
            force of Law) of any Tribunal shall result in, any requirement that
            any reserves (including, without limitation, any marginal,
            emergency, supplemental, special, or other reserves) be maintained,
            and (ii) any of the same results in a reduction in any sums
            receivable by such Lender hereunder or an increase in the costs
            incurred by such Lender in advancing or maintaining any portion of
            any LIBOR Rate Loan, then such Lender (through Administrative
            Agent) shall notify Borrower upon becoming aware of same and
            deliver to Borrower a certificate setting forth in reasonable
            detail the amount necessary to compensate such Lender for such
            reduction or such increase (which certificate shall be conclusive
            and binding as to such amount, absent manifest error), and Borrower
            shall pay such amount to Administrative Agent (for the account of
            such Lender) within ten (10) Business Days after demand therefor.

                     (b)     If with respect to all or any portion of any Loan
            or any LC, any change in present Law or any future Law regarding
            capital adequacy or compliance by LC Fronting Bank (as issuer of
            LCs) or any Lender with any request, directive, or requirement now
            existing or hereafter imposed by any Tribunal regarding capital
            adequacy (whether or not having the force of Law), shall result in
            a reduction in the rate of return on the capital of such Lender or
            any corporation controlling such Lender as a consequence of its
            obligations under this Agreement to a level below that which it
            otherwise could have achieved, taking into consideration its
            policies with respect to capital adequacy (and it may, in
            determining such amount, utilize such assumptions and allocations
            of costs and expenses as it shall deem reasonable and may use any
            reasonable averaging or attribution method), then (unless the
            effect of such event is already reflected in the rate of interest
            then applicable hereunder) LC Fronting Bank or such Lender (through
            Administrative Agent) shall notify Borrower upon becoming aware of
            same and deliver to Borrower a certificate setting forth in
            reasonable detail the calculation of the amount necessary to
            compensate Administrative Agent or such Lender therefor, which
            certificate shall be conclusive and binding absent manifest error,
            and Borrower shall pay such amount to Administrative Agent (for the
            account of LC Fronting Bank or such Lender) within ten (10)
            Business Days after demand therefor.

            3.16     Change in Laws.  If at any time any Law or the
    interpretation thereof by any Tribunal shall make it unlawful for any
    Lender to make or maintain LIBOR Rate Loans, or any central bank or other
    Tribunal to which any Lender is subject shall assert that it is unlawful to
    make or maintain LIBOR Rate Loans, then such Lender (through Administrative
    Agent) shall notify Borrower upon becoming aware of same, and (a) in
    respect of undisbursed funds, such Lender shall not be obligated to make
    any requested Loan which would be unlawful, and (b) in respect of any
    outstanding Loan





                                      -33-
<PAGE>   41
    (i) if maintaining such Loan until the last day of the Interest Period
    applicable thereto is unlawful, such Loan shall be converted to a Base Rate
    Loan as of the date of such notice, and Borrower shall pay any related
    Consequential Loss, or (ii) if not so prohibited by Law, such Loan shall be
    converted to a Base Rate Loan as of the last day of the Interest Period
    then applicable thereto, or (iii) if any such conversion will not resolve
    such unlawfulness, Borrower shall prepay promptly such LIBOR Rate Loan,
    without penalty, but with any related Consequential Loss.

            3.17     Consequential Loss.  BORROWER SHALL INDEMNIFY EACH LENDER
    AGAINST, AND SHALL PAY TO ADMINISTRATIVE AGENT (FOR THE ACCOUNT OF SUCH
    LENDER) WITHIN TEN (10) BUSINESS DAYS AFTER DEMAND THEREFOR, THE AMOUNT OF
    ANY CONSEQUENTIAL LOSS OF SUCH LENDER.  When any Lender demands that
    Borrower pay any Consequential Loss, such Lender shall deliver to Borrower
    and Administrative Agent a certificate setting forth in reasonable detail
    the basis for imposing such Consequential Loss and the calculation of such
    amount thereof, which calculation shall be conclusive and binding absent
    manifest error.

            3.18     Taxes.

                     (a)     Subject to SUBSECTION 3.18(F), any and all
            payments by Borrower hereunder or under the Notes to or for the
            benefit of any Lender shall be made, in accordance with SECTION 3,
            free and clear of and without deduction or withholding for any and
            all present or future Taxes, levies, imposts, duties, fees,
            assessments, deductions, charges or withholdings and all
            liabilities with respect thereto, excluding (i) Taxes imposed on
            its net income (including, without limitation, any Taxes imposed on
            branch profits) and franchise Taxes imposed on it by the
            jurisdiction under the Laws of which such Lender is organized or
            any political subdivision thereof, (ii) Taxes imposed on its net
            income (including, without limitation, any Taxes imposed on branch
            profits), and franchise Taxes imposed on it, by the jurisdiction of
            such Lender's applicable lending office or any political
            subdivision thereof, (iii) any Taxes, levies, imposts, deductions,
            charges or withholdings that are in effect and that would apply to
            a payment to such Lender as of the Closing Date, (iv) if any Person
            acquires any interest in this Agreement or any Note pursuant to the
            provisions hereof, including without limitation a participation
            (whether or not by operation of law), or a foreign Lender changes
            the office in which the Loan is made, accounted for or booked (any
            such Person or such foreign Lender in that event being referred to
            as a "TAX TRANSFEREE"), any Taxes, levies, imposts, deductions,
            charges or withholdings to the extent that they are in effect and
            would apply to a payment to such Tax Transferee as of the date of
            the acquisition of such interest or change in office, as the case
            may be, and (v) Taxes which are otherwise included in any amounts
            otherwise payable by Borrower pursuant to any other provision of
            this Agreement (all such nonexcluded Taxes, levies, imposts,
            deductions, charges, withholdings and liabilities, excluding ITEMS
            (I) through (V) above, being hereinafter referred to as
            "NONEXCLUDED TAXES").  If Borrower shall be required by Law to
            deduct any Nonexcluded Taxes from or in respect of any sum payable
            hereunder or under any Note to or for the benefit of any Lender or
            any Tax Transferee, (A) the sum payable shall be increased as may
            be necessary so that after





                                      -34-
<PAGE>   42
            making all required deductions of Nonexcluded Taxes such Lender or
            such Tax Transferee, as the case may be, receives an amount equal
            to the sum it would have received had no such deductions been made,
            (B) Borrower shall make such deductions, and (C) Borrower shall pay
            the full amount so deducted to the relevant taxation authority or
            other authority in accordance with applicable Law.

                     (b)     In addition, Borrower agrees to pay any present or
            future stamp, documentary, privilege, intangible or similar Taxes
            or any excise or property Taxes, charges or similar levies that
            arise at any time and from time to time (i) from any payment made
            under any and all Loan Documents, or (ii) from the execution or
            delivery of, or from the filing or recording or maintenance of, or
            otherwise with respect to the exercise by Administrative Agent or
            Lenders of their Rights under, any and all Loan Documents
            (hereinafter referred to as "OTHER TAXES").

                     (c)     BORROWER WILL INDEMNIFY ADMINISTRATIVE AGENT, LC
            FRONTING BANK, DOCUMENTATION AGENT, EACH LENDER AND EACH TAX
            TRANSFEREE FOR THE FULL AMOUNT OF TAXES, AND WILL INDEMNIFY
            ADMINISTRATIVE AGENT, LC FRONTING BANK, DOCUMENTATION AGENT, EACH
            LENDER AND THE TAX TRANSFEREE FOR THE FULL AMOUNT OF OTHER TAXES
            PAID BY ADMINISTRATIVE AGENT, LC FRONTING BANK, DOCUMENTATION
            AGENT, SUCH LENDER OR SUCH TAX TRANSFEREE, AS THE CASE MAY BE, AND
            ANY LIABILITY ARISING SOLELY THEREFROM OR WITH RESPECT THERETO,
            WHETHER OR NOT SUCH TAXES, OTHER TAXES OR OTHER ITEMS WERE
            CORRECTLY OR LEGALLY ASSERTED.  PAYMENT OF THIS INDEMNIFICATION
            SHALL BE MADE WITHIN 30 DAYS FROM THE DATE ADMINISTRATIVE AGENT, LC
            FRONTING BANK, DOCUMENTATION AGENT, SUCH LENDER OR SUCH TAX
            TRANSFEREE, AS THE CASE MAY BE, MAKES WRITTEN DEMAND THEREFOR.

                     (d)     Within 30 days after the date that any Lender or
            any Tax Transferee receives a refund of any Taxes which are clearly
            identified to an amount for which it has been indemnified by
            Borrower pursuant to the provisions of SUBSECTION (C) preceding,
            such Lender or Tax Transferee, as the case may be, shall pay to
            Borrower such refund of Taxes along with any interest received with
            respect thereto.

                     (e)     Each Lender that is organized under the laws of
            any jurisdiction other than the United States of America or any
            State thereof (a) represents to Administrative Agent and Borrower
            that (i) under applicable Laws and treaties no Taxes will be
            required to be withheld by Administrative Agent or Borrower with
            respect to any payments to be made to such Lender in respect of the
            Obligation and (ii) it has furnished to Administrative Agent and
            Borrower two duly completed copies of either U.S. Internal Revenue
            Service Form 4224 or Form 1001 (wherein such Lender claims
            entitlement to complete exemption from U.S. federal withholding
            tax on all interest payments hereunder) or Form W-8, as applicable,
            and





                                      -35-
<PAGE>   43
            (b) covenants to (i) provide Administrative Agent and Borrower a
            new Form 4224, Form 1001 or Form W-8 upon the expiration or
            obsolescence of any previously delivered form in accordance with
            applicable Laws, duly executed and completed by such Lender and
            (ii) comply from time to time with all applicable Laws with regard
            to such withholding tax exemption.

                     (f)     The obligation of Borrower to pay the amounts
            described in this SECTION 3.18 to any Lender shall not apply:

                             (i)      to any payment to a Lender hereunder if
                     such Lender has failed to submit a Form 1001 (relating to
                     such Lender and entitling it to a complete exemption from
                     withholding on all interest to be received by it hereunder
                     in respect of the Loans) or Form 4224 (relating to all
                     interest to be received by such Lender hereunder in
                     respect of the Loans as required pursuant to SUBSECTION
                     (E) preceding), or Form W-8, as applicable, or

                             (ii)     to any Tax imposed solely by reason of
                     the failure by such Lender to comply with applicable
                     certification, information, documentation or other
                     reporting requirements concerning the nationality,
                     residence, identity or connections with the United States
                     of America of such Lender if such compliance is required
                     by statute or regulation of any Tribunal as a precondition
                     to relief or exemption from such Tax.

            3.19     Net Payments.  All payments made by Borrower under this
    Agreement or under any Note will be made without setoff, counterclaim or
    other defense.


    SECTION 4        FEES.

            4.1      Treatment of Fees.  Except as otherwise provided by Law,
    the fees described in this SECTION 4 (a) are in addition to, and not in
    lieu of, interest and expenses otherwise described in this Agreement, (b)
    shall be payable in accordance with SECTION 3.1(B), (c) shall be
    non-refundable, (d) shall, to the fullest extent permitted by Law, bear
    interest, if not paid when due, at the Default Rate, and (e) shall be
    calculated on the basis of actual number of days (including the first day
    but excluding the last day) elapsed, but computed as if each calendar year
    consisted of 360 days.

            4.2      Administrative Agent's Fee.  Borrower shall pay to
    Administrative Agent, solely for its own account, the administrative agency
    fee described in a separate letter agreement between Borrower and
    Administrative Agent.

            4.3      Arrangement Fee.  On the date of this Agreement, Borrower
    shall pay to Syndication Agent an arrangement fee described in a separate
    letter agreement between Borrower and Syndication Agent, and to
    Documentation Agent an arrangement fee described in a separate letter
    agreement among Borrower, Documentation Agent, and Morgan Guaranty Trust
    Company of New York.





                                      -36-
<PAGE>   44

            4.4      Facility Fee.  On the date of this Agreement, (i) each
    Lender (other than NationsBank of Texas, N.A. and Morgan Guaranty Trust
    Company of New York) will be paid the facility fees previously agreed to be
    paid to such Lender, and (ii) NationsBank of Texas, N.A. and Morgan
    Guaranty Trust Company of New York will be paid the facility fees described
    in separate letter agreements with Borrower.

            4.5      Commitment Fee.  Borrower shall pay to Administrative
    Agent, for the ratable account of Lenders having a Committed Sum under the
    Revolving Credit Facility, a commitment fee, payable in arrears on the last
    day of each calendar quarter (commencing December 31, 1996), and on the
    Revolving Credit Termination Date, equal to a rate per annum as set forth
    below, calculated on the amount by which (a) the aggregate Committed Sums
    under the Revolving Credit Facility exceed (b) the average daily Revolving
    Credit Commitment Usage, in each case during the calendar quarter (or
    portion thereof commencing on the initial Borrowing Date) preceding and
    including such due date; provided that, for the purposes of this SECTION
    4.5, "RATABLE" shall mean, for any period of calculation, with respect to
    any such Lender, that proportion which (x) the average daily unused
    Committed Sum of such Lender under the Revolving Credit Facility during
    such period bears to (y) the aggregate amount of the average daily unused
    Committed Sums for all Lenders under the Revolving Credit Facility during
    such period.  As of the Initial Borrowing Date, the commitment fee will be
    0.45% until the fifth Business Day after delivery pursuant to SECTION
    7.3(B) hereof of Borrower's quarterly Financial Statements and Compliance
    Certificate as of the last day of the fiscal quarter ending on or about
    June 30, 1997, unless such Financial Statements are not delivered timely in
    which event the highest Applicable Margin will be in effect from the
    required delivery date until such time as such Financial Statements and
    Compliance Certificate are actually delivered.  Thereafter the commitment
    fee will be adjusted based on the ratio of Funded Debt to EBITDA determined
    as of the last day of the preceding fiscal quarter, as follows:


<TABLE>
<CAPTION>
================================================================================
                Funded Debt to                          Applicable
                 EBITDA Ratio                         Commitment Fee
--------------------------------------------------------------------------------
      <S>                                                 <C>
      Greater than 4.00                                   0.50%
--------------------------------------------------------------------------------
      Less than or equal to 4.00 but
      greater than 3.50                                   0.45%
--------------------------------------------------------------------------------
      Less than or equal to 3.50 but
      greater than 3.00                                   0.375%
--------------------------------------------------------------------------------
      Less than or equal to 3.00 but
      greater than 2.25                                   0.35%
--------------------------------------------------------------------------------
      Less than or equal to 2.25 but
      greater than 1.50                                   0.30%
--------------------------------------------------------------------------------
      Less than or equal to 1.50                          0.25%
================================================================================

</TABLE>




                                      -37-
<PAGE>   45

    The ratio of Funded Debt to EBITDA shall be determined as of the last day
    of the preceding fiscal quarter from the then most current quarterly or
    annual Financial Statements and related Compliance Certificate delivered by
    Borrower pursuant to SECTIONS 7.3(A) and 7.3(B) hereof.  The adjustment, if
    any, to the commitment fee shall be effective commencing on the fifth
    Business Day after delivery of Financial Statements (and the related
    Compliance Certificate) containing the Funded Debt to EBITDA ratio.  If
    Borrower fails at any time to timely furnish to Lenders the Financial
    Statements and related Compliance Certificates as required to be delivered
    pursuant to SECTIONS 7.3(A) and (B) hereof, then the highest commitment fee
    will be in effect from the required delivery date until such time as such
    Financial Statements and Compliance Certificates are actually delivered.

            4.6      LC Fees.  Borrower shall pay to Administrative Agent for
    distribution to LC Fronting Bank a fee for each LC equal to 0.125% per
    annum calculated on the amount of such LC remaining to be drawn.  Borrower
    shall pay to Administrative Agent, for the ratable benefit of Lenders
    having a Committed Sum under the Revolving Credit Facility in accordance
    with their respective Commitment Percentages under the Revolving Credit
    Facility, a fee for each LC equal to the product of (i) the Applicable
    Margin on such date for LIBOR Rate Loans (applied on a per annum basis)
    multiplied by (ii) the amount of such LC remaining to be drawn based on the
    number of days elapsed for any period of calculation.  Such fees shall be
    payable quarterly in arrears on the last day of each calendar quarter, for
    the period from the issue date for the applicable LC to the next quarterly
    payment date, and thereafter on the last day of each calendar quarter to
    and including the stated expiry date.


    SECTION 5        CONDITIONS PRECEDENT.

            5.1      Conditions Precedent to Initial Loan.  Lenders will not be
    obligated to fund the initial Loan and LC Fronting Bank will not be
    obligated to issue any LC, unless Administrative Agent has received (with
    sufficient copies for the Lenders) all of the following in form and
    substance satisfactory to (unless otherwise specified) Administrative Agent
    and Documentation Agent (unless otherwise indicated, all documents shall be
    dated as of the date of this Agreement):

                     (a)     Notes.  For each Lender with a Committed Sum under
            the Term Loan, a Term Note in the form of EXHIBIT A-1; and for each
            Lender with a Committed Sum under the Revolving Credit Facility, a
            Revolving Credit Note in the form of EXHIBIT A-2; as contemplated
            in SECTION 3.1(A).

                     (b)     Pledge Agreements.  A Pledge Agreement, in the
            form of EXHIBIT C-1, executed by Borrower and in the form of
            EXHIBIT C-2 executed by each Subsidiary organized under the Laws of
            the United States that owns equity interests in any Subsidiary,
            covering the stock or other equity interest of all direct
            Subsidiaries of Borrower or such Subsidiary, as applicable,  except
            foreign Subsidiaries, together with stock certificates evidencing
            the stock pledged thereunder and blank stock powers for such
            certificates.





                                      -38-
<PAGE>   46

                     (c)     Borrower Security Agreement.  The Borrower
            Security Agreement, in the form of EXHIBIT D-1, executed by
            Borrower.

                     (d)     Subsidiary Security Agreements.  A Security
            Agreement, in the form of EXHIBIT D-2, executed by each Subsidiary
            of Borrower other than the foreign Subsidiaries.

                     (e)     UCC Financing Statements.  UCC financing
            statements for filing in each filing office set forth on SCHEDULE
            5.1(E) hereto, executed by Borrower and the Subsidiaries executing
            a Subsidiary Security Agreement, as debtor, in favor of
            Administrative Agent as secured party for the benefit of Lenders
            and LC Fronting Bank.

                     (f)     Guaranty.  A Guaranty, in the form of EXHIBIT B,
            executed by each Subsidiary of Borrower other than the foreign
            Subsidiaries.

                     (g)     Articles of Incorporation.  Copies of the Articles
            or Certificate of Incorporation (or similar document), and all
            amendments thereto, of each Restricted Company that is executing
            any Loan Document, accompanied by certificates that such copy is
            correct and complete, one dated a Current Date (as used herein, the
            term "CURRENT DATE" means any date not more than 60 days prior to
            the date of this Agreement), issued by the appropriate Tribunal of
            the jurisdiction of incorporation of each such Company, and one
            dated the date of this Agreement, executed by the Secretary or an
            Assistant Secretary of each such Company.

                     (h)     Bylaws.  Copies of the Bylaws (or similar
            document), and all amendments thereto, of each Restricted Company,
            accompanied by a certificate that such copy is correct and
            complete, executed by the Secretary or an Assistant Secretary of
            each such Company.

                     (i)     Good Standing and Authority.  Certificates of the
            appropriate Tribunals of such jurisdictions as Administrative Agent
            and Documentation Agent may request, each dated a Current Date, to
            the effect that each Restricted Company is in good standing with
            respect to the payment of franchise and similar Taxes and is duly
            qualified to transact business in such jurisdictions (accompanied,
            if requested by Administrative Agent and Documentation Agent, by
            the certificate of the Secretary or an Assistant Secretary of
            Borrower, that such Tribunal certificates are true and correct).

                     (j)     Incumbency.  Certificates of incumbency of all
            officers of each Restricted Company who will be authorized to
            execute or attest any of the Loan Documents on behalf of any
            Company, executed by the President or a Vice President and the
            Secretary or an Assistant Secretary of each such Company.

                     (k)     Resolutions.  Copies of resolutions approving the
            Loan Documents and authorizing the transactions contemplated in the
            Loan Documents duly adopted by the Board of Directors of each
            Company that is executing any Loan Document, accompanied by a





                                      -39-
<PAGE>   47
            certificate of the Secretary or an Assistant Secretary of each such
            Company, that such copy is a true and correct copy of resolutions
            duly adopted at a meeting of (which may be held by conference
            telephone or similar communications equipment by means of which all
            Persons participating in a meeting can hear each other if permitted
            by applicable Law and, if required by such Law, by the Bylaws of
            such Company), or by the unanimous written consent of (if permitted
            by applicable Law and, if required by such Law, by the Bylaws of
            such Company), the Board of Directors of such Company, and that
            such resolutions constitute all the resolutions adopted with
            respect to such transactions, have not been amended, modified, or
            revoked in any respect, and are in full force and effect as of the
            date of this Agreement.

                     (l)     Opinion of Counsel to the Companies.  The opinion
            of Jones Day Reavis & Pogue, counsel to the Companies, Jeffrey J.
            Murphy, General Counsel of the Companies, and local counsel to the
            Companies, addressed to Administrative Agent, Documentation Agent,
            and Lenders, as to the matters covered in EXHIBIT I-1.

                     (m)     Local Counsel Opinions.  Such other written
            opinions of local counsel in Tennessee, California, Georgia, and
            Florida, as Administrative Agent and Documentation Agent may
            reasonably require, addressed to Administrative Agent,
            Documentation Agent and Lenders, in form and substance satisfactory
            to Administrative Agent and Documentation Agent.

                     (n)     Opinion of Winstead Sechrest & Minick P.C.  The
            opinion of Winstead Sechrest & Minick P.C., substantially in the
            form of EXHIBIT I-2.

                     (o)     Lien Searches and Lien Releases.  Filing officer
            certificates (or commercial reports similar thereto, if
            satisfactory to Administrative Agent and Documentation Agent) under
            Section 9-407(2) of the UCC, releases or partial releases of Liens
            or financing statements, and other evidence satisfactory to
            Administrative Agent that there are no Liens on any assets of any
            Restricted Company, except the Permitted Liens.

                     (p)     Insurance.  Certificates of insurance for each
            policy of insurance maintained by any Company reflecting
            Administrative Agent, for the benefit of Lenders, as an additional
            insured, together with evidence of payment of all premiums thereon.

                     (q)     Notice of Borrowing.  A duly completed Notice of
            Borrowing for the initial Loans.

                     (r)     Borrowing Base Report.  A duly completed Borrowing
            Base Report.

                     (s)     Internal Revenue Service Forms.  Duly completed
            copies of Form 4224 or Form 1001, as applicable, from each foreign
            Lender.





                                      -40-
<PAGE>   48

                     (t)     Payment of Fees and Expenses.  Payment of all fees
            payable on or prior to the initial Borrowing Date to Administrative
            Agent, Syndication Agent, Documentation Agent or any Lender as
            provided for in SECTION 4, together with reimbursements to LC
            Fronting Bank, Administrative Agent, Syndication Agent and
            Documentation Agent for all amounts described in SECTION 7.7.

                     (u)     Authorizations.  Evidence satisfactory to Lenders
            and their counsel that the Companies shall have made all filings
            and registrations and shall have obtained all Authorizations which
            are or may be required as prerequisites to the validity and
            enforceability of the Loan Documents, and the transactions
            contemplated thereby.

                     (v)     Repayment of Certain Existing Debt.  Evidence
            satisfactory to Administrative Agent, Documentation Agent and their
            counsel that the Companies shall have paid or concurrently with the
            making of the initial Loan will pay, in full (including principal,
            interest, and fees), all outstanding liquidated Debt to the
            Lenders, LC Fronting Bank and Managing Agents pursuant to that
            certain Credit Agreement dated as of November 23, 1993, as amended
            (the "EXISTING CREDIT AGREEMENT").

                     (w)     Other Documents.  Copies of such other agreements,
            documents, instruments, certificates, and evidences as
            Administrative Agent may reasonably request.

            5.2      Conditions Precedent to Each Loan and LC.  In addition,
    Lenders will not be obligated to make any Loan (other than a Loan pursuant
    to SECTION 3.9) and LC Fronting Bank will not be obligated to issue any LC
    unless on the Borrowing Date of such Loan and the issuance date of such LC,
    as applicable (and after giving effect thereto), as the case may be:  (a)
    Administrative Agent shall have timely received therefor a Notice of
    Borrowing unless a Notice of Borrowing is deemed to have been given
    pursuant to SECTION 2.4(E) or Notice of LC as the case may be; (b) all of
    the representations and warranties of Borrower or any Company set forth in
    the Loan Documents are true and correct in all material respects (except to
    the extent that (i) the representations and warranties speak to a specific
    date or (ii) in the case of representations and warranties set forth in
    SECTIONS 6.2, 6.3, 6.6, 6.7, 6.11, 6.13, 6.15, 6.16, 6.20 and 6.22, the
    facts on which such representations and warranties are based have been
    changed by transactions contemplated or permitted by this Agreement and
    supplemental Schedules have been delivered with respect thereto and, in the
    case of SCHEDULE 6.7, approved by Required Lenders, and in the case of
    SCHEDULE 6.13, approved by Majority Lenders); (c) no material adverse
    change shall have occurred since December 31, 1995, in the condition,
    financial or otherwise, or business, of the Companies taken as a whole (as
    determined by Required Lenders); (d) no Default or Potential Default shall
    have occurred and be continuing; (e) the funding of such Loans and the
    issuance of such LC, as applicable, is permitted by Law; and (f) all
    conditions related to such Loan or LC, as applicable, shall have been
    satisfied in the reasonable determination of all Lenders, in the case of
    the Loans made and LCs issued on the initial Borrowing Date, or of Required
    Lenders, in the case of any Loan made or LC issued thereafter, and upon the
    reasonable request of Administrative Agent, Borrower shall have delivered
    to Administrative Agent evidence substantiating any of the matters in the
    Loan Documents which are





                                      -41-
<PAGE>   49
    necessary to enable Borrower to qualify for such Loan or LC.  Each Notice
    of Borrowing and Notice of LC, as applicable, delivered to Administrative
    Agent shall constitute the representation and warranty by Borrower to
    Administrative Agent that the statements in CLAUSES (B), (C), and (D) above
    are true and correct in all respects.  Each condition precedent in this
    Agreement is material to the transactions contemplated in this Agreement,
    and time is of the essence in respect of each thereof.  Subject to the
    prior approval of all Lenders, in the case of the Loans made and LCs issued
    on the initial Borrowing Date, or of Required Lenders, in the case of any
    Loan or LC made thereafter, Lenders may fund any Loan and LC Fronting Bank
    may issue any LC without all conditions being satisfied, but, to the extent
    permitted by Law, the same shall not be deemed to be a waiver of the
    requirement that each such condition precedent be satisfied as a
    prerequisite for any subsequent funding or issuance, unless all Lenders
    specifically waive each such item in writing.

            5.3      Conditions Precedent to Each Conversion of a Loan.
    Lenders will not be obligated to convert any Loan to a LIBOR Rate Loan or
    continue any LIBOR Rate Loan for a new Interest Period pursuant to SECTION
    3.9 unless on the date of conversion of such Loan (and after giving effect
    thereto), as the case may be:  (a) Administrative Agent shall have timely
    received therefor a Notice of Conversion; (b) all of the representations
    and warranties of Borrower or any Company set forth in the Loan Documents
    are true and correct in all material respects (except the representations
    and warranties set forth in SECTIONS 6.6 and 6.7 and except to the extent
    that (i) the representations and warranties speak to a specific date or
    (ii) in the case of representations and warranties set forth in SECTIONS
    6.2, 6.3, 6.11, 6.13, 6.15, 6.16, 6.20 and 6.22, the facts on which such
    representations and warranties are based have been changed by transactions
    contemplated or permitted by this Agreement and supplemental Schedules have
    been delivered with respect thereto and, in the case of SCHEDULE 6.13,
    approved by Majority Lenders); (c) no Default or Potential Default shall
    have occurred and be continuing; (d) the funding of such Loans is permitted
    by Law; and (e) all conditions related to such Loan shall have been
    satisfied in the reasonable determination of Required Lenders.


    SECTION 6        REPRESENTATIONS AND WARRANTIES.  Borrower, as to itself
    and each Company, represents and warrants to Administrative Agent and
    Lenders as follows:

            6.1      Purpose of Credit Facility.  After the initial Borrowing
    Date, Borrower will use the Revolving Credit Facility for working capital
    of the Companies, Capital Expenditures by the Companies, the issuance of
    LCs and other lawful corporate purposes.  No Company 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" within the meaning of Regulation U of the Board of Governors of the
    Federal Reserve System, as amended.  No LC and no part of the proceeds of
    any Loan will be used, directly or indirectly, for a purpose which violates
    any Law, including without limitation, the provisions of Regulation U of
    the Board of Governors of the Federal Reserve System, as amended.

            6.2      Existence, Good Standing, Authority, and Authorizations.
    Each Company (excluding Designated Subsidiaries) is duly organized, validly
    existing, and in good standing under the Laws of





                                      -42-
<PAGE>   50
    its jurisdiction of organization (such jurisdictions being identified on
    SCHEDULE 6.3).  Except where failure is not reasonably likely to be a
    Material Adverse Event, each Company (excluding Designated Subsidiaries)
    (a) is duly qualified to transact business and is in good standing as a
    foreign corporation in each jurisdiction where the nature and extent of its
    business and properties require the same (such jurisdictions being
    identified on SCHEDULE 6.3, as supplemented from time to time after the
    initial Borrowing Date) and (b) possesses all requisite authority, power,
    licenses, permits, agreements, Authorizations, and franchises to use its
    assets and conduct its business as it is now being, or is contemplated
    herein to be, conducted.  No Authorization which has not heretofore been
    obtained is required to authorize, or is required in connection with, the
    execution, delivery, legality, validity, binding effect, performance of, or
    enforceability of the Loan Documents.  Except where failure is not
    reasonably likely to be a Material Adverse Event, the Companies (excluding
    Designated Subsidiaries) have obtained all licenses, permits, agreements,
    Authorizations and franchises necessary and appropriate to operate their
    respective businesses, as required, and all such licenses, permits,
    agreements, Authorizations and franchises are in full force and effect.
    There are no violations of any of the foregoing which, individually or
    collectively, are reasonably likely to be a Material Adverse Event, nor are
    there any proceedings pending or threatened against the Companies to revoke
    or limit any such Authorization which are reasonably likely to be adversely
    determined and if successful are reasonably likely to be a Material Adverse
    Event.

            6.3      Subsidiaries.  Borrower has no Subsidiaries except as
    disclosed on SCHEDULE 6.3 (as supplemented from time to time after the
    initial Borrowing Date to reflect any change to such schedule as a result
    of transactions permitted by this Agreement), and all of the outstanding
    shares of capital stock (or similar voting interests) of each such
    Subsidiary are duly authorized, validly issued, fully paid, and
    nonassessable and are owned of record and beneficially as set forth
    thereon, free and clear of any Liens, restrictions, claims, or Rights of
    another Person, other than Permitted Liens, and none of such shares is
    subject to any warrant, option, or other Right of any Person to acquire the
    same or subject to any restriction on transfer thereof except for
    restrictions imposed by securities Laws and general corporate Laws.  Each
    of the Designated Subsidiaries is either inactive or is in the process of
    dissolving or consolidating with another Company, as set forth on SCHEDULE
    6.3.  The aggregate loans and advances to, and investments of the Companies
    in, all Designated Subsidiaries is not in excess of $2,000,000 as of the
    initial Borrowing Date.

            6.4      Authorization and Contravention.  The execution and
    delivery by each Company of each Loan Document to which it is a party, and
    the performance by such Company of its obligations thereunder (a) are
    within the corporate power of such Company, (b) have been duly authorized
    by all necessary corporate action, (c) require no action by or in respect
    of, or filing with, any Tribunal, which action or filing has not been taken
    or made on or prior to the initial Borrowing Date, (d) will not violate any
    provision of the charter or bylaws of such Company, (e) will not violate
    any provision of Law applicable to it, other than such violations which
    individually or collectively could not be a Material Adverse Event, (f)
    will not violate any Material Agreements to which it is a party, other than
    such violations which could not be a Material Adverse Event, or (g) will
    not result in the creation or imposition of any Lien on any asset of any
    Company.  Other than such consents and approvals the failure of which to
    obtain could not be a Material Adverse Event, the Companies have obtained
    all





                                      -43-
<PAGE>   51
    necessary consents and approvals of any Person or Tribunal required to be
    obtained in order for such Company to execute, deliver, and perform the
    Loan Documents,.  No Company is in violation of any provision of Law
    applicable to it, other than such violations which are not reasonably
    likely to be a Material Adverse Event.

            6.5      Binding Effect.  Upon execution and delivery by all
    parties thereto, each Loan Document will constitute a legal, valid, and
    binding obligation of each Company party thereto, enforceable against each
    such Company in accordance with its terms, except as enforceability may be
    limited by applicable Debtor Relief Laws and general principles of equity.

            6.6      Financial Statements.  The Current Financials were
    prepared in accordance with GAAP and present fairly the consolidated
    financial condition, results of operations, and cash flows of Borrower and
    its Subsidiaries as of and for the portion of the fiscal year ending on the
    date or dates thereof (subject in the case of interim statements only to
    normal year-end audit adjustments).  There were no material liabilities,
    direct or indirect, fixed or contingent, of the Companies as of the date or
    dates of the Current Financials which are not reflected therein or in the
    notes thereto, to the extent required by GAAP.  Except for transactions
    directly related to, or specifically contemplated by, the Loan Documents,
    there have been no changes in the financial condition of the Companies from
    that shown in the Current Financials after such date which are reasonably
    likely to be a Material Adverse Event, nor has Borrower or any Company
    incurred any liability not permitted by this Agreement, direct or indirect,
    fixed or contingent, after such date which could be a Material Adverse
    Event.

            6.7      Litigation, Claims, Investigations.  Except as described
    on SCHEDULE 6.7 (as supplemented from time to time after the initial
    Borrowing Date, if, with respect to such supplemental Schedule, the matters
    disclosed thereon are approved by Required Lenders), no Company is subject
    to, or aware to the best of its knowledge of the threat of, any Litigation
    which is reasonably likely to be adversely determined, and if adversely
    determined, is reasonably likely to be a Material Adverse Event.  Moreover,
    except as set forth on SCHEDULE 6.7, there are no formal complaints, suits,
    claims, investigations, or proceedings initiated at or by any Tribunal
    pending or to the best of its knowledge threatened by or against any
    Company which (i) if adversely determined, could impair the ability of
    Borrower to perform or pay its obligations under the Loan Documents or
    impair the Rights of Lenders under the Loan Documents or their ability to
    exercise such Rights, or (ii) if adversely determined are reasonably likely
    to be a Material Adverse Event, nor are there any judgments, decrees, or
    orders of any Tribunal outstanding against any Company which are reasonably
    likely to be a Material Adverse Event.

            6.8      Taxes.  All Tax returns of each Company required to be
    filed have been filed (or extensions have been granted) prior to
    delinquency, except for any such returns for which the failure to so file
    is not reasonably likely to be a Material Adverse Event, and all Taxes
    imposed upon each Company which are due and payable have been paid prior to
    delinquency, other than Taxes for which the criteria for Permitted Liens
    (as specified in SECTION 7.14(F)) have been satisfied or for which
    nonpayment thereof is not reasonably likely to constitute a Material
    Adverse Event.





                                      -44-
<PAGE>   52

            6.9      Environmental Matters.

                     (a)     No consent or other approval of any Tribunal, nor
            any declaration or other filing with any Tribunal, not obtained or
            made, is required under any Environmental Law in connection with
            any transaction contemplated by the Loan Documents, except for the
            absence of, failure to obtain, or to make any one or more of which
            is not reasonably likely to be Environmentally Material.

                     (b)     Except as disclosed on SCHEDULE 6.9 or as is not
            reasonably likely to be Environmentally Material, no Real Property
            is encumbered by any Lien under any Environmental Law, listed on
            any Contaminated Site List, and no Company knows that any such
            encumbrance or listing is being considered by any Tribunal.

                     (c)     Except as disclosed on SCHEDULE 6.9 or as is not
            reasonably likely to be Environmentally Material, no Company knows
            or has reason to believe that any of the following are present at
            any Real Property: (i) any asbestos or asbestos-containing
            material; (ii) any underground or aboveground storage tank or tank
            system subject to regulation under any Environmental Law; or (iii)
            any electrical or other fixtures or equipment containing
            polychlorinated biphenyls.

                     (d)     Except as disclosed on SCHEDULE 6.9 or as is not
            reasonably likely to be Environmentally Material, no Company knows
            or has reason to believe that any Release of any Hazardous
            Substance has occurred at or in the vicinity of any Real Property
            (i) in a quantity that requires any report or other notice to any
            Tribunal pursuant to any Environmental Law that has not been
            submitted to the appropriate Tribunal, or (ii) that has resulted or
            that threatens to result in the presence of any Hazardous Substance
            in the environment in a quantity, concentration, state, or other
            condition that exceeds any applicable standard for the protection
            of human health or the environment under any Environmental Law or
            which requires remediation for which a Company is responsible under
            any lease agreement under which a Company is the lessee.

                     (e)     Except as disclosed on SCHEDULE 6.9 or as is not
            reasonably likely to be Environmentally Material, no Real Property
            (upon which manufacturing or repair activities occur or have
            occurred), has been used except as in compliance with Environmental
            Laws for the storage, recycling and treatment, or disposal of any
            Hazardous Substance while owned or operated by any Company.  No
            Company has actual or constructive knowledge that any such use has
            occurred at any other time.

                     (f)     Except as disclosed on SCHEDULE 6.9 or as is not
            reasonably likely to be Environmentally Material, each Company and
            Real Property is in compliance with all Environmental Laws and
            applicable Environmental Permits.  Except where not likely to be
            Environmentally Material, each Environmental Permit required to be
            issued to any Company or for any process or activity of any Company
            under any Environmental Law has been issued,





                                      -45-
<PAGE>   53
            is in full force and effect, and will remain in full force and
            effect notwithstanding the consummation of the transactions
            contemplated by the Loan Documents.

                     (g)     Except as disclosed on SCHEDULE 6.9 or SCHEDULE
            6.7 or as is not reasonably likely to be Environmentally Material,
            no Company has received any notice from any Tribunal that it or any
            Predecessor is potentially liable for any removal, remediation, or
            other response costs under any Environmental Law as the result of
            the Release or threatened Release of any Hazardous Substance.

                     (h)     Except as disclosed on SCHEDULE 6.9 or SCHEDULE
            6.7:

                             (i)      no Company is subject to any Litigation;
                     and

                             (ii)     no Litigation is, to the knowledge of
                     each Company, pending against any Predecessor; and

                             (iii)    no Litigation is, to the knowledge of
                     each Company, threatened against any Company or
                     Predecessor;

            which is reasonably likely to be adversely determined, and if
            adversely determined, is reasonably likely to be a Material Adverse
            Event, in which it is asserted that any Company or Predecessor (x)
            failed to comply with any Environmental Law or Environmental
            Permit, (y) is liable for or should be compelled to undertake any
            removal, remediation, or other response actions as the result of
            the Release or threatened Release of any Hazardous Substance, or
            (z) is liable for damages, fines, penalties, or other relief
            (including the revocation of any Environmental Permit) as the
            result of noncompliance with any Environmental Law or as the result
            of the Release or threatened Release of any Hazardous Substance.

                     (i)     No Company knows of any material error or omission
            in any Environmental Report.

            6.10     Employee Benefit Plans.  (a) No Pension Benefit Plan has
    incurred an accumulated funding deficiency, as defined in Section 302 of
    ERISA and Section 412 of the Code, (b) excluding premiums required to be
    paid to the PBGC (all of which have been paid or the time for such payment
    has not passed), no Company has incurred material liability under ERISA to
    the PBGC in connection with any such Pension Benefit Plan, (c) no Company
    or ERISA Affiliate has incurred any withdrawal liability within the meaning
    of Section 4201 of ERISA as a result of a withdrawal, in whole or in part,
    from participation in a Multiemployer Plan where such withdrawal could be a
    Material Adverse Event, (d) with respect to any Pension Benefit Plan and
    Welfare Benefit Plan, there have been no "prohibited transactions" (as
    defined in Section 406 of ERISA or Section 4975 of the Code) which could be
    a Material Adverse Event, and (e) no Reportable Event has occurred with
    respect to any Pension Benefit Plan which could be a Material Adverse
    Event.  Except where no Material Adverse





                                      -46-
<PAGE>   54
    Event could result therefrom, no Company or ERISA Affiliate has any
    liability under or is subject to any lien under ERISA, the Code or any
    similar provisions of any law of Canada or any province thereof to or on
    account of any employee benefit plan, program, scheme or arrangement
    established or maintained by Ryder or a Ryder ERISA Affiliate, or to which
    Ryder or a Ryder ERISA Affiliate contributes or had an obligation to
    contribute, including but not limited to any such liability arising from
    such Company or ERISA Affiliate having been under common control with Ryder
    or any Ryder ERISA Affiliate within the meaning of Section 414 of the Code
    or any equivalent provision of the laws of the United Kingdom, or of Canada
    or any province thereof.  Each Employee Plan complies in all material
    respects, both in form and operation, with ERISA and the Code.  Except as
    disclosed in the Current Financials, the Companies do not sponsor or
    participate in and have no current or future obligation to contribute to
    any plan, fund, or arrangement that provides post-retirement or
    post-termination medical, health, or similar benefits which could be a
    Material Adverse Event.  To the knowledge of the Borrower, no Multiemployer
    Plan is in reorganization within the meaning of Section 418 of the Code.

            6.11     Properties; Liens.  Each Company has good and marketable
    title to all its property reflected on the Current Financials.  SCHEDULE
    6.11 (as supplemented from time to time) accurately describes the location
    of all tangible personal property of the Restricted Companies.  There is no
    Lien (other than the Liens created by the Loan Documents) on any shares of
    stock of any Subsidiary and, except for Permitted Liens, there is no Lien
    on any property of any Company, and the execution, delivery, performance,
    or observance of the Loan Documents will not require or result in the
    creation of any Lien on such property, except as contemplated by the Loan
    Documents.

            6.12     Government Regulations.  No Restricted Company is subject
    to regulation under the Investment Company Act of 1940, as amended, the
    Public Utility Holding Company Act of 1935, as amended, or any other
    material Law (other than Regulations G, T, U, and X of the Board of
    Governors of the Federal Reserve System) which regulates the incurrence of
    Debt.

            6.13     Transactions with Affiliates.  As of the initial Borrowing
    Date, except as disclosed on SCHEDULE 6.13 (as supplemented from time to
    time after the initial Borrowing Date, if, with respect to such
    supplemental Schedule, the matters disclosed thereon are approved by
    Majority Lenders), no Company is a party to a transaction with any of its
    Affiliates, other than transactions in the ordinary course of business and
    upon fair and reasonable terms not materially less favorable than such
    Company could obtain or could become entitled to in an arm's-length
    transaction with a Person that was not its Affiliate.

            6.14     Debt.  No Company is an obligor on any Debt other than
    Permitted Debt.

            6.15     Material Agreements.  No Company is a party to any
    Material Agreement, except for the Loan Documents and the Material
    Agreements described on SCHEDULE 6.15 (as supplemented from time to time).
    All such Material Agreements are in full force and effect, and no default
    or potential default exists on the part of any Company thereunder, which is
    reasonably likely to be a Material Adverse Event.





                                      -47-
<PAGE>   55

            6.16     Insurance.  Each Company maintains with financially sound
    and reputable insurers (or, as to workers' compensation or similar
    insurance, with an insurance fund or by self-insurance authorized by the
    jurisdictions in which it operates) insurance in such amounts (and with
    such deductibles) and covering such risks as is ordinary and customary for
    similar businesses in the industry in the jurisdictions in which it
    operates.  Each such insurance policy maintained by the Companies is set
    forth on SCHEDULE 6.16 (as supplemented from time to time).

            6.17     Labor Matters.  There are no actual or threatened strikes,
    labor disputes, slow downs, walkouts, or other concerted interruptions of
    operations by the employees of any Company that are reasonably likely to be
    a Material Adverse Event.  Hours worked by and payment made to employees of
    the Restricted Companies have not been in violation of the Fair Labor
    Standards Act or any other applicable Law dealing with such matters, other
    than any such violations, individually or collectively, which are not
    reasonably likely to constitute a Material Adverse Event.  All payments due
    from any Company on account of employee health and welfare insurance have
    been paid or accrued as a liability on its books in accordance with GAAP,
    other than any such nonpayments which, individually or collectively, are
    not reasonably likely to constitute a Material Adverse Event.

            6.18     Solvency.  At the time of each Loan hereunder, each
    Restricted Company is (and after giving effect to the transactions
    contemplated by the Loan Documents, and any incurrence of additional Debt
    will be) Solvent.

            6.19     Tradenames.  Neither Borrower nor any Company that is a
    party to any Security Document has used or transacted business under any
    other corporate or trade name in the five-year period preceding the initial
    Borrowing Date, except as set forth on SCHEDULE 6.19.

            6.20     Intellectual Property.  SCHEDULE 6.20 (as supplemented
    from time to time) accurately sets forth the United States and foreign
    patents, patent applications, copyright applications and registrations, and
    service mark and trademark applications and registrations of the Companies,
    and the record owners and beneficial owners thereof.  Each Company owns,
    possesses or has the right to use all licenses, permits, patents, patent
    applications, copyrights, service marks, trademarks, service mark and
    trademark applications, trade secrets, trade names and other intellectual
    property rights necessary to continue to conduct its businesses as
    heretofore conducted by it, now conducted by it, and proposed to be
    conducted by it immediately after the initial Borrowing Date except any
    such property the absence of which is not reasonably likely to be a
    Material Adverse Event.  Each of the foregoing is in full force and effect
    and each Company is conducting its business without infringement or claim
    of infringement of any license, permit, patent, copyright, service mark,
    trademark, trade name, trade secret, or other intellectual property right
    of others, other than any such infringements or claims which, individually
    or collectively, are not reasonably likely to be a Material Adverse Event.
    To the knowledge of any Company, there is no infringement or claim of
    infringement by others of any license, permit, patent, copyright, service
    mark, trademark, trade name, trade secret, or other intellectual property
    right of any Company which is reasonably likely to be a Material Adverse
    Event.  Except as set forth in SCHEDULE 6.20, no United States or foreign
    patent, patent application, copyright or copyright registration, service
    mark or trademark, trademark or service mark registration or





                                      -48-
<PAGE>   56
    application, owned by any Company is subject to a license, other than to
    another Company or entity under the direct control of a Company, and the
    goodwill inured in any trademark or service mark, registered or
    unregistered, owned by each Company is not otherwise encumbered.

            6.21     Compliance with Laws.  No Company is in violation of any
    Laws, other than such violations which, individually or collectively, are
    not reasonably likely to be a Material Adverse Event.  No Company has
    received notice alleging any noncompliance with any Laws, except for such
    noncompliance which has been cured or no longer exists, or which is not
    reasonably likely to constitute a Material Adverse Event.

            6.22     Chief Executive Office; Chief Place of Business.  SCHEDULE
    6.22 (as supplemented from time to time) accurately sets forth the location
    of the chief executive office and chief place of business (as such terms
    are used in the Uniform Commercial Code of each state whose law would
    purport to govern the attachment and perfection of the security interests
    granted by the Security Documents) of Borrower and each Subsidiary which is
    a party to any Security Document.

            6.23     Full Disclosure.  There is no material fact or condition
    relating to the Loan Documents or the financial condition, business, or
    property of any Company which is reasonably likely to be a Material Adverse
    Event and which has not been related, in writing, to Administrative Agent,
    Documentation Agent and Syndication Agent.  All information heretofore
    furnished by or on behalf of any Company prior to the date hereof to
    Administrative Agent, Syndication Agent, Documentation Agent or any Lender
    in connection with the Loan Documents was, and as of the initial Borrowing
    Date, will be, true and accurate in all material respects in light of the
    circumstances in which made or based on reasonable estimates on the date as
    of which such information is stated or certified.


    SECTION 7        COVENANTS.  So long as Lenders are committed to fund Loans
    and LC Fronting Bank is committed to issue LCs under this Agreement and
    thereafter until the Obligation is paid and performed in full, unless
    Borrower receives a prior written consent to the contrary by Administrative
    Agent as authorized by Required Lenders, Borrower covenants and agrees that
    it will and will cause each Subsidiary to comply with the following:

            7.1      Use of Proceeds.  Borrower shall use the proceeds of Loans
    only for the purposes represented herein.

            7.2      Books and Records.  Each Company shall maintain books,
    records and accounts necessary to prepare the financial statements required
    to be delivered hereunder in accordance with GAAP.

            7.3      Items to be Furnished.  Borrower shall cause the following
    to be furnished to Lenders:

                     (a)     Promptly after preparation, and no later than 120
            days after the last day of each fiscal year of Borrower, Financial
            Statements showing the consolidated and





                                      -49-
<PAGE>   57
            consolidating (except with respect to cash flow in the case of
            consolidating statements) financial condition and results of
            operations of Borrower and its consolidated Subsidiaries as of, and
            for the year ended on, such last day, accompanied by:

                             (i)      the unqualified opinion of a firm of
                     nationally-recognized independent certified public
                     accountants, based on an audit as to the consolidated
                     Financial Statements and a review as to the consolidating
                     Financial Statements, using generally accepted auditing
                     standards, that such Financial Statements were prepared in
                     accordance with GAAP and present fairly the consolidated
                     financial condition and results of operations of the
                     Companies,

                             (ii)     any management letter prepared by such
                     accounting firm,

                             (iii)    a certificate from such accounting firm
                     to Administrative Agent indicating that during its audit
                     it obtained no knowledge of any Default or Potential
                     Default or, if it obtained such knowledge, the nature and
                     period of existence thereof, and

                             (iv)     a Compliance Certificate with respect to
                     such Financial Statements.

                     (b)     Promptly after preparation, and no later than 60
            days after the last day of each of the first three fiscal quarters,
            and no later than 90 days after the end of the fourth fiscal
            quarter, of each fiscal year of Borrower, Financial Statements
            showing the consolidated and consolidating (except with respect to
            cash flow in the case of consolidating statements) financial
            condition and results of operations of the Companies for such
            fiscal quarter and for the period from the beginning of the current
            fiscal year to such last day, accompanied by a Compliance
            Certificate with respect to such Financial Statements.

                     (c)     Within 15 Business Days after the last day of each
            calendar month, a Borrowing Base Report as of such last day.

                     (d)     Prior to the close of each fiscal year of
            Borrower, the quarterly financial budget for the next succeeding
            fiscal year, and financial projections for the succeeding three
            fiscal years, all in such detail as shall be reasonably
            satisfactory to Administrative Agent, accompanied by a certificate
            executed by the chief financial officer, treasurer or controller of
            Borrower, certifying that such projections and budget were prepared
            by Borrower based on assumptions which, in light of the historical
            performance of the Companies and their prospects for the future,
            are realistic.

                     (e)     Notice, promptly after Borrower knows, (i) the
            existence and status of any Litigation which, if determined
            adversely to any Company, is reasonably likely to be a Material
            Adverse Event, (ii) any material change in any material fact or
            circumstance represented or warranted in any Loan Document, (iii) a
            Default or Potential Default,





                                      -50-
<PAGE>   58
            specifying the nature thereof and what action Borrower or any other
            Company has taken, is taking, or proposes to take with respect
            thereto, (iv) the receipt by any Company of any notice from any
            Tribunal of the expiration without renewal, termination, material
            modification or suspension of, or institution of any proceedings to
            terminate, materially modify, or suspend, any Authorization granted
            by the FAA, the CAA or any other Authorization now or hereafter
            held by (or required to be held by) any Company which is required
            for such Company to operate its business in compliance with all
            applicable Laws and which the failure to so hold is reasonably
            likely to be a Material Adverse Event, (v) any federal, state, or
            local statute, regulation, or ordinance or judicial or
            administrative order limiting or controlling the operations of any
            Company which has been issued or adopted hereafter and which is of
            material adverse importance or effect in relation to the operation
            of any Company, (vi) the receipt by any Company of notice of any
            violation or alleged violation of any Environmental Law, which
            violation or alleged violation could individually or collectively
            with other such violations or allegations, constitute a Material
            Adverse Event, or (vii) any material breach by any Company party to
            a Material Agreement.  The notice shall include or be accompanied
            by such information and materials then in the possession of any
            Company as may be necessary to disclose all relevant facts and
            circumstances.

                     (f)     Promptly after preparation, true, correct, and
            complete copies of all material reports or filings (including
            without limitation each Form 10-K and Form 10-Q) filed by or on
            behalf of any Company with the Securities and Exchange Commission.

                     (g)     Promptly upon receipt thereof, a copy of each
            interim or special audit made by independent accountants of the
            books of any Company and any management letter received from such
            accountants.

                     (h)     Promptly upon reasonable request therefor by
            Administrative Agent, Documentation Agent, or two or more Lenders
            (through Administrative Agent) whose Committed Sums aggregate at
            least 25% of the aggregate Committed Sums of all Lenders, such
            information (not otherwise required to be furnished under the Loan
            Documents) respecting the business affairs, assets, and liabilities
            of the Companies, and such certifications and documents, in
            addition to those mentioned in this Agreement, as reasonably
            requested.

                     (i)     Borrower shall submit a proposed Environmental
            Budget for each forthcoming fiscal year 30 days prior to the
            commencement thereof.  The Environmental Budget is intended as a
            means of assisting Administrative Agent and Lenders to monitor
            compliance with the Loan Documents and to preserve and protect the
            Collateral.  The Environmental Budget forecasts, but does not
            restrict, expenditures.  Accordingly, each Company shall make
            expenditures as necessary to comply with other requirements of this
            Section, even if the expenditures are not contemplated by the
            Environmental Budget.  If any material expenditures occur (or can
            reasonably be anticipated by any Company to occur in the current
            fiscal year) that are not reflected on the current fiscal year's
            approved Environmental Budget, Borrower shall notify Administrative
            Agent of the relevant facts and circumstances within 30 days and





                                      -51-
<PAGE>   59
            if requested by Required Lenders, shall appropriately revise the
            Environmental Budget.  Borrower shall represent and warrant that
            each Environmental Budget (as the same may be revised in accordance
            with the immediately preceding sentence) contains no material error
            or omission.

                     (j)     Within 60 days after the end of each fiscal year,
            Borrower shall submit to Administrative Agent a report comparing
            any material differences between actual expenditures and those
            projected in the prior fiscal year's Environmental Budget.

                     (k)     Within 30 days of the date any Environmental
            Report is finalized, Borrower shall deliver to Administrative Agent
            copies thereof.

                     (l)     Within 30 days of obtaining knowledge of the
            existence thereof, Borrower shall deliver to Administrative Agent a
            copy of any Environmental Indemnity Agreement not otherwise
            previously known to exist.

                     (m)     Within 45 days of any request therefor and with
            respect to each Environmental Indemnity Agreement that Required
            Lenders consider material, information reasonably satisfactory to
            Required Lenders regarding the creditworthiness of the indemnitor
            or other obligor under such Environmental Indemnity Agreement and
            written statements reasonably satisfactory to Required Lenders from
            Borrower regarding the status of such Environmental Indemnity
            Agreement and any claims or demands thereunder.

            7.4      Inspections.  Each Company shall allow Administrative
    Agent (or its Representatives) or any Lender to inspect any of its
    properties, to review reports, files, and other records and to make and
    take away reasonably requested copies thereof, to conduct tests or
    investigations, and to discuss any of its affairs, conditions, and finances
    with such Company's other creditors, directors, officers, or public
    accountants, from time to time, during reasonable business hours upon
    reasonable notice; provided that, notwithstanding the foregoing, prior to
    the occurrence of a Default or Potential Default, Administrative Agent (or
    its Representatives) or any such Lender will obtain the prior approval of a
    Responsible Officer prior to any such discussions with officers, directors
    or public accountants of any Company and all costs associated with such
    inspection shall be paid by the party requesting such inspection; provided,
    further, that, if a Default or Potential Default has occurred and is
    continuing, no notice shall be required and no such prior approval from a
    Responsible Officer shall be required to have been obtained by
    Administrative Agent (or its Representatives) or any such Lender, and
    Borrower shall pay all costs associated with any such inspection.

            7.5      Taxes.  Each Company (a) shall promptly pay when due any
    and all Taxes other than Taxes the amount or validity of which is being
    contested in good faith by lawful proceedings diligently conducted, against
    which reserve or other provision required by GAAP has been made, and in
    respect of which levy and execution of any lien securing same have been and
    continue to be stayed, and (b) will not, directly or indirectly, use any
    portion of the proceeds of any Loan to pay the wages of employees unless a
    timely payment to or deposit with the United States of America or
    applicable





                                      -52-
<PAGE>   60
    jurisdiction of all amounts of Tax required to be deducted and withheld
    with respect to such wages is also made.

            7.6      Prepayment of Other Debt.  No Company shall make any
    voluntary prepayment of principal of, or interest on, any Funded Debt other
    than the Obligation, whether subordinate to the Obligation or not, except
    (a) prepayment of Debt described in SECTION 7.13(M) and SECTION 7.13(N) and
    (b) when no Default or Potential Default exists, prepayment of Debt which
    is not subordinated to the Obligation in the aggregate amount of $500,000
    per fiscal year.

            7.7      Expenses.  Borrower shall promptly pay on the initial
    Borrowing Date and thereafter within ten (10) Business Days after request
    therefor (i) all reasonable costs, fees, and out of pocket expenses paid or
    incurred by Administrative Agent, LC Fronting Bank, Documentation Agent and
    Syndication Agent in connection with the negotiation, preparation,
    delivery, execution, administration and syndication of the Loan Documents
    and any related amendment, waiver, or consent (including, but not limited
    to, the reasonable fees and expenses of counsel to Administrative Agent, LC
    Fronting Bank, Documentation Agent and Syndication Agent, including any
    local counsel, and the reasonable fees and expenses of non-legal
    professionals retained by Administrative Agent, LC Fronting Bank,
    Documentation Agent and Syndication Agent) and (ii) all reasonable costs
    and expenses of Administrative Agent and LC Fronting Bank incurred by
    Administrative Agent or LC Fronting Bank in connection with the enforcement
    of the obligations of any Company arising under the Loan Documents or the
    exercise or preservation of any Rights arising under the Loan Documents
    (including, but not limited to, reasonable attorneys' fees and court
    costs), and, after a Default in the payment of any amount due hereunder,
    all such reasonable costs and expenses of any Lender in connection with
    such enforcement or exercise of such Rights, all of which shall be a part
    of the Obligation, and shall bear interest at the Default Rate from the
    date due until the date paid in full.

            7.8      Maintenance of Existence, Assets, and Business.  Except as
    otherwise permitted by SECTION 7.26, each Company excluding Designated
    Subsidiaries shall at all times (a) maintain its existence and good
    standing in the jurisdiction of its organization and its authority to
    transact business in all other jurisdictions identified for such Company on
    SCHEDULE 6.3, as supplemented from time to time after the initial Borrowing
    Date, except where the failure to so maintain its authority to transact
    business is not reasonably expected to be a Material Adverse Event; (b)
    maintain all licenses, permits, and franchises necessary for its business
    except where the failure to so maintain is not reasonably expected to be a
    Material Adverse Event; (c) keep all of its assets which are used and
    useful in and necessary to its business in good working order and condition
    (ordinary wear and tear excepted) and make all necessary repairs thereto
    and replacements thereof; and (d) do all things necessary to obtain, renew,
    extend, and continue in effect all licenses, permits, agreements,
    Authorizations and franchises which may at any time and from time to time
    be necessary and appropriate to operate its business for any Company,
    except where the failure to do so is not reasonably expected to be a
    Material Adverse Event.  Nothing contained in this SECTION 7.8 shall
    restrict disposition of assets to the extent permitted by SECTION 7.23.





                                      -53-
<PAGE>   61

            7.9      Insurance.  Each Company shall, at its cost and expense,
    maintain insurance with financially sound and reputable insurers, in such
    amounts (and with such deductibles), and covering such risks, as shall be
    ordinary and customary for similar businesses in the industry in the
    jurisdiction in which it operates and commercially available to the
    Companies.  Each Company shall deliver to Administrative Agent certificates
    of insurance from time to time received by it for each such policy of
    insurance, reflecting Administrative Agent, for the benefit of Lenders, as
    an additional insured and co-loss payee, and evidence of payment of all
    premiums thereon.

            7.10     Preservation and Protection of Rights.  Each Company shall
    perform such acts and duly authorize, execute, acknowledge, deliver, file,
    and record any additional agreements, documents, instruments, and
    certificates as Administrative Agent or Required Lenders may reasonably
    deem necessary or appropriate in order to preserve and protect the Rights
    of Administrative Agent and Lenders under any Loan Document.

            7.11     Employee Benefit Plans.  Except where a Material Adverse
    Event could not result therefrom, no Company or ERISA Affiliate shall,
    directly or indirectly, (a) engage in any "prohibited transaction" (as
    defined in Section 406 of ERISA or Section 4975 of the Code), (b) incur any
    "accumulated funding deficiency" as such term is defined in Section 302 of
    ERISA with respect to any Pension Benefit Plan, (c) permit any Employee
    Plan to ever be subject to involuntary termination proceedings, (d) without
    the consent of the Required Lenders, fully or partially withdraw from any
    Multiemployer Plan, (e) without the consent of the Required Lenders, agree
    to contribute to any multiemployer plan within the meaning of Section
    4001(a)(3) which was not a Multiemployer Plan as of the date of this
    Agreement, (f) permit any Pension Benefit Plan which is intended to be
    qualified under Section 401(a) of the Code to cease to be qualified, or (g)
    permit any employee benefit plan, program, scheme or arrangement maintained
    by the Company or an ERISA Affiliate in Canada or the United Kingdom to
    suffer an event which, under the relevant law of such jurisdiction, is
    equivalent to a prohibited transaction or accumulated funding deficiency.

            7.12     Environmental Laws.

                     (a)     Each Company shall operate and manage its
            businesses, processes, and other activities (including without
            limitation, activities for which expenditures are identified in any
            Environmental Budget) in a manner consistent with the ordinary and
            customary environmental management and engineering practices of
            similar businesses in the industry.

                     (b)     The Companies shall take all steps that may be
            necessary or appropriate to timely assert and receive payment of
            claims under any Environmental Indemnity Agreement.  No Company
            shall consent to any modification or amendment of any Environmental
            Indemnity Agreement, or waive, compromise, settle, or otherwise
            release or discharge any obligation or liability of the indemnitor
            or other obligor thereunder in an amount greater than $5 million
            without the prior written consent of Required Lenders in each
            instance.





                                      -54-
<PAGE>   62

                     (c)     Except as is not reasonably likely to be
            Environmentally Material, the Companies shall comply with all
            Environmental Laws, obtain and keep in effect all Environmental
            Permits required by Environmental Laws, and comply with all
            Environmental Permits.

                     (d)     Except as is not reasonably likely to be
            Environmentally Material, if any Release of a Hazardous Substance
            occurs at any Real Property that has resulted in any report or
            other notice to any Tribunal or that results or threatens to result
            in the presence of any Hazardous Substance in the environment in a
            quantity, concentration, state, or other condition that exceeds any
            applicable standard for the protection of human health or the
            environment under any Environmental Law, (i) Borrower shall notify
            Administrative Agent within 30 days after any Company first has
            knowledge or reason to believe that such a Release of a Hazardous
            Substance has occurred, (ii) the Companies shall promptly take such
            reasonable and prudent actions as may be required under
            Environmental Law to terminate such Release of a Hazardous
            Substance, to prevent or minimize potential Environmental
            Liabilities from such Release of a Hazardous Substance, and to
            comply with Environmental Laws, and (iii) thereafter, the Companies
            shall promptly and diligently carry out such removal, remedial, or
            other response actions to prevent or minimize potential
            Environmental Liabilities from such Release of a Hazardous
            Substance and to comply with Environmental Laws.  At the request of
            Required Lenders, at any time, Borrower shall provide Lenders
            reasonable information regarding the status and progress of actions
            taken to comply with the foregoing obligations.

            7.13     Debt.  No Company shall, directly or indirectly, create,
    incur, or suffer to exist any direct, indirect, fixed, or contingent
    liability for any Debt, other than (without duplication):

                     (a)     Debt existing on the initial Borrowing Date, as
            more particularly described on SCHEDULE 7.13;

                     (b)     Debt under this Agreement and the Notes;

                     (c)     Debt incurred by Borrower under any Rate
            Protection Agreement;

                     (d)     Debt of a Restricted Company listed on SCHEDULE
            6.3 to Borrower or to another Restricted Company listed on such
            Schedule;

                     (e)     obligations under Capital Leases and Debt secured
            by a Lien described in SECTION 7.14(II), subject to the limitations
            set forth in SECTION 7.14(II);

                     (f)     current accounts payable and accrued expenses
            arising out of transactions (other than borrowings) in the ordinary
            course of business and documentary letters of credit to support
            same;





                                      -55-
<PAGE>   63

                     (g)     endorsements of instruments or items of payment
            for deposit to the general account of any Company in the ordinary
            course of business;

                     (h)     Guaranties of the Obligation;

                     (i)     indemnities by any Company of liabilities of
            directors and officers pursuant to provisions contained in such
            Company's articles of incorporation or bylaws, or otherwise
            permitted by applicable Laws;

                     (j)     Other Debt of Borrower, all of the proceeds of
            which are applied as a prepayment of the Obligation provided that
            such Debt repays the Obligation in full and all commitments of
            Lenders hereunder are contemporaneously terminated;

                     (k)     Exclusive of Debt described in SUBSECTION (M)
            below, Debt of the foreign Subsidiaries existing on September 26,
            1996, plus additional Debt in an amount not to exceed $5,000,000 at
            any time outstanding;

                     (l)     Unsecured Debt which is subordinated to the
            Obligation upon terms and conditions satisfactory to Required
            Lenders so long as the net cash proceeds of such Debt are applied
            as a mandatory prepayment of the Obligation in accordance with
            SECTION 3.4(C);

                     (m)     Debt of Aviall (Canada) Ltd. to The Royal Bank of
            Canada in an amount not to exceed $5,000,000 at any time
            outstanding secured solely by an LC or the assets of Aviall
            (Canada) Ltd. and incurred for working capital purposes;

                     (n)     Debt comprised of borrowings against the cash
            surrender value of life insurance policies owned by a Company and
            of which such Company is the beneficiary up to the maximum amount
            of $3,000,000 at any time outstanding; and

                     (o)     Extensions, renewals, and refinancings of the Debt
            described in (A), (C), (D), (E), (K), (L), (M), and (N) above so
            long as the terms thereof are no less favorable to the Companies
            than the terms of the Debt to be so refinanced, there are no
            increases (except as expressly contemplated by the subparagraphs
            above) in the principal amount thereof, no additional security for
            such Debt is provided, the priority of any such Debt is not
            favorably modified, and the maturity of any such Debt is not
            shortened.

            7.14     Liens.  No Company will, directly or indirectly, (a)
    create, incur, or suffer or permit to be created or incurred or to exist
    any Lien upon any of its assets, or (b) enter into or permit to exist any
    arrangement or agreement which directly or indirectly prohibits any Company
    from creating or incurring any Lien on any of its assets, other than the
    Loan Documents, except:

                     (i)     The existing Liens described on SCHEDULE 7.14
            hereto, together with renewals and extensions thereof but not
            increases in the principal debt secured thereby, but only to the





                                      -56-
<PAGE>   64
            respective dates, if any, set forth in SCHEDULE 7.14 for the
            removal and termination of any such Liens;

                     (ii)    Liens and negative pledges on property (including
            any inventory acquired by a Restricted Company and financed by or
            arranged by the seller in connection with a contract to provide
            services) incurred at the time of purchase thereof, securing all or
            part of the purchase price thereof to any Company and Liens
            (whether or not assumed) existing in property at the time of
            purchase thereof by any Company, as the case may be (and extension,
            renewal and replacement Liens upon the same property theretofore
            subject to a Lien described in this SECTION 7.14(B), provided that
            the amount secured by each Lien constituting such extension,
            renewal or replacement shall not exceed the amount secured by the
            Lien theretofore existing), and, provided, further,

                             (1)      each such Lien is confined solely to the
                     property so purchased, improvements thereto and proceeds
                     thereof; and

                             (2)      the aggregate amount secured by all such
                     Liens, plus the aggregate amount of obligations of the
                     Companies under Capital Leases, shall not exceed at any
                     time an amount equal to 5% of the book value of the
                     tangible assets of the Companies.

                     (iii)   Pledges or deposits made to secure payment of
            worker's compensation, or to participate in any fund in connection
            with worker's compensation, unemployment insurance, pensions, or
            other social security programs;

                     (iv)    Good-faith pledges or deposits made to secure
            performance of bids, tenders, contracts (other than for the
            repayment of borrowed money), or leases, or to secure statutory
            obligations, surety or appeal bonds, or indemnity, performance, or
            other similar bonds (other than for the repayment of borrowed
            money) as all such Liens arise in the ordinary course of business
            of the Companies so long as such Liens are limited to specific
            property of the Companies and do not in the aggregate materially
            detract from the value of the property of the Person in question or
            materially impair the use thereof in the operation of its business;

                     (v)     Encumbrances consisting of zoning restrictions,
            easements, or other restrictions on the use of real property, none
            of which impair in any material respect the use of such property by
            the Person in question in the operation of its business, and none
            of which is violated by existing or proposed structures or land
            use;

                     (vi)    The following so long as the validity or amount
            thereof is being contested in good faith and by appropriate and
            lawful proceedings diligently conducted (if any claim is being
            asserted with respect thereto), reserve or other appropriate
            provision (if any) required by GAAP shall have been made, levy and
            execution thereon have been stayed and continue to be stayed, and
            they do not in the aggregate materially detract from the value of
            the





                                      -57-
<PAGE>   65
            property of the Person in question, or materially impair the use
            thereof in the operation of its business: Claims and Liens for
            Taxes due and payable; claims and Liens upon, and defects of title
            to, real or personal property, including any attachment of personal
            or  real property or other legal process prior to adjudication of a
            dispute on the merits; claims and Liens of mechanics, materialmen,
            warehousemen, carriers, landlords, or other like statutory Liens;
            and adverse judgments on appeal;

                     (vii)   Liens created under the Loan Documents;

                     (viii)  Liens on assets covered by the Liens created under
            the Loan Documents in favor of any Lender party to a Rate
            Protection Agreement; and

                     (ix)    Liens on assets of Aviall (Canada) Ltd. in favor
            of The Royal Bank of Canada to secure the Debt permitted by SECTION
            7.13(M) or any refinancing thereof permitted by SECTION 7.13(O).

            7.15     Transactions with Affiliates.  No Company shall enter into
    any transaction with any of its Affiliates (excluding other Restricted
    Companies), other than (a) the transactions disclosed on SCHEDULE 6.13 (as
    supplemented from time to time, if, with respect to such supplemental
    Schedule, the matters disclosed thereon are approved by Majority Lenders),
    and (b) other transactions in the ordinary course of business and upon fair
    and reasonable terms not materially less favorable than such Company could
    obtain or could become entitled to in an arm's-length transaction with a
    Person that was not its Affiliate.

            7.16     Compliance with Laws and Documents.  No Company shall
    violate the provisions of any Laws applicable to it, including, without
    limitation, the rules and regulations promulgated by the FAA or CAA or the
    provisions of any Material Agreement to which it is a party if such
    violation alone, or when aggregated with all other such violations, is
    reasonably likely to be a Material Adverse Event; no Company shall (a)
    violate the provisions of its charter or bylaws or (b) modify, repeal,
    replace, or amend any provision of its charter or bylaws if such action is
    reasonably likely to be a Material Adverse Event.

            7.17     Assignment.  No Company shall assign or transfer any of
    its Rights, duties, or obligations under any of the Loan Documents;
    provided that, if any Restricted Company merges with another Restricted
    Company in accordance with SECTION 7.25 hereof, the assignment or transfer
    of such Rights, duties, and obligations shall be permitted so long as the
    surviving Company assumes all obligations of the other Company arising
    under the Loan Documents.

            7.18     Fiscal Year and Accounting Methods.  No Company shall
    change its fiscal year for book accounting purposes or its method of
    accounting other than changes made in accordance with GAAP.





                                      -58-
<PAGE>   66

            7.19     Government Regulations.  No Restricted Company shall
    conduct its business in such a way that it will become subject to
    regulation under the Investment Company Act of 1940, as amended, the Public
    Utility Holding Company Act of 1935, as amended, or any other material Law
    which regulates the incurrence of Debt.

            7.20     Indemnification.

                     (a)     THE RESTRICTED COMPANIES SHALL, JOINTLY AND
            SEVERALLY, INDEMNIFY AND HOLD HARMLESS ADMINISTRATIVE AGENT,
            DOCUMENTATION AGENT, SYNDICATION AGENT AND EACH LENDER AND THEIR
            RESPECTIVE PARENTS, SUBSIDIARIES, DIRECTORS, OFFICERS, EMPLOYEES,
            AFFILIATES, ATTORNEYS, AGENTS, SUCCESSORS AND ASSIGNS,
            (COLLECTIVELY, THE "INDEMNIFIED PARTIES") FROM AND AGAINST, AND
            REIMBURSE EACH INDEMNIFIED PARTY UPON ITS DEMAND FOR, ANY AND ALL
            LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
            JUDGMENTS, SUITS, CLAIMS, AND PROCEEDINGS AND ALL COSTS, EXPENSES
            (INCLUDING, WITHOUT LIMITATION, ALL REASONABLE ATTORNEYS' FEES,
            INCLUDING ALLOCATED COSTS OF IN-HOUSE COUNSEL, AND LEGAL EXPENSES,
            WHETHER OR NOT SUIT IS BROUGHT), AND DISBURSEMENTS OF ANY KIND OR
            NATURE WHATSOEVER INCLUDING ALL LIABILITIES, OBLIGATIONS, LOSSES,
            DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, AND
            PROCEEDINGS AND ALL COSTS AND EXPENSES ARISING OUT OF OR RESULTING
            FROM ANY INDEMNIFIED PARTY'S ORDINARY NEGLIGENCE (THE "INDEMNIFIED
            LIABILITIES") WHICH MAY AT ANY TIME BE IMPOSED ON, INCURRED BY, OR
            ASSERTED AGAINST THE INDEMNIFIED PARTIES, IN ANY WAY RELATING TO OR
            ARISING OUT OF (A) THE DIRECT OR INDIRECT RESULT OF THE VIOLATION
            BY ANY COMPANY OF ANY ENVIRONMENTAL LAW, (B) THE GENERATION,
            MANUFACTURE, PRODUCTION, STORAGE, RECYCLING, RELEASE, THREATENED
            RELEASE, DISCHARGE, DISPOSAL OR PRESENCE ON THE REAL PROPERTY OF A
            HAZARDOUS SUBSTANCE (INCLUDING, WITHOUT LIMITATION, (I) ALL DAMAGES
            OF ANY SUCH USE, GENERATION, MANUFACTURE, PRODUCTION, STORAGE,
            RECYCLING, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL, OR
            PRESENCE, OR (II) THE COSTS OF ANY REQUIRED OR NECESSARY
            ENVIRONMENTAL INVESTIGATION, MONITORING, REPAIR, CLEANUP, OR
            DETOXIFICATION AND THE PREPARATION AND IMPLEMENTATION OF ANY
            CLOSURE, REMEDIAL, OR OTHER PLANS), OR (C) THE LOAN DOCUMENTS OR
            ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN OR THE USE OF PROCEEDS
            OF ANY LOAN, TO THE EXTENT THAT ANY OF THE INDEMNIFIED LIABILITIES
            RESULTS, DIRECTLY OR INDIRECTLY, FROM ANY CLAIM MADE OR ACTION,
            SUIT, OR PROCEEDING COMMENCED BY OR ON BEHALF OF ANY





                                      -59-
<PAGE>   67
            PERSON OTHER THAN THE INDEMNIFIED PARTIES (PROVIDED THAT, NO
            INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO BE INDEMNIFIED HEREUNDER
            FOR ITS OWN FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT OR FOR
            ANY INDEMNIFIED LIABILITIES ARISING FROM ANY DISPUTE AMONG
            INDEMNIFIED PARTIES, LENDERS OR PARTICIPANTS EXCEPT FOR INDEMNIFIED
            LIABILITIES ATTRIBUTED TO ACTIONS OF ANY COMPANY, RYDER OR ANY
            AFFILIATE).

                     (b)     The foregoing agreements shall:

                             (i)      Survive (1) the foreclosure of any Lien
                     or any transfer in lieu of foreclosure, (2) the repayment
                     of the Loans, (3) the release of any or all Liens of
                     Administrative Agent for the benefit of Lenders, or (4)
                     the sale or other transfer of any Real Property or other
                     Collateral to any Person;

                             (ii)     Not be limited in amount, even if that 
                     amount exceeds the amount of the Loans;

                             (iii)    Include (but not be limited to) (1)
                     damages to persons, property, or natural resources arising
                     under any statutory or common Law, (2) punitive damages,
                     fines, and other penalties, and (3) loss of value of any
                     Real Property or other Collateral;

                             (iv)     Not be affected by (1) any act or
                     omission of any Tribunal or other third party, or (2) the
                     source or origin of any Hazardous Substance; and

                             (v)      Not be affected by Administrative Agent,
                     Documentation Agent or any Lender's or any other
                     Indemnified Party's (1) investigation or actual or
                     constructive knowledge, (2) ordinary negligent act or
                     omission, or (3) course of dealing or waiver; provided,
                     however, the Companies shall not be obligated under this
                     Section for any Environmental Liability caused solely by
                     Administrative Agent or any Lender's knowing violation of
                     an Environmental Law or caused solely by the gross
                     negligence or willful misconduct of Administrative Agent
                     or any Lender.

            7.21     Loans, Advances, and Investments.  Except as permitted by
    SECTION 7.22 or SECTION 7.26, no Company shall make or permit to remain
    outstanding any loan, advance, extension of credit, or capital contribution
    to, make any investment in, or purchase or commit to purchase any stock or
    other securities or evidences of Debt of, or interests in, any other
    Person, other than:

                     (a)     investments existing on the initial Borrowing Date
            and described on SCHEDULE 7.21;





                                      -60-
<PAGE>   68

                     (b)     the capital stock of a Subsidiary owned on the
            initial Borrowing Date and listed on SCHEDULE 6.3;

                     (c)     advances to employees to meet expenses incurred by
            such employees or in connection with relocation by employees, in
            each case in the ordinary course of business;

                     (d)     loans, advances and investments between Borrower
            and any Restricted Company listed on SCHEDULE 6.3 as of the initial
            Borrowing Date or between Restricted Companies listed on SCHEDULE
            6.3 as of the initial Borrowing Date;

                     (e)     obligations of, or fully guaranteed by, the United
            States of America (including repurchase obligations) maturing
            within one year from the date of acquisition;

                     (f)     short term certificates of deposit and time
            deposits, which mature in one year from the date of issuance and
            which are fully insured by the Federal Deposit Insurance
            Corporation or are issued by any Lender or by commercial banks
            organized under the Laws of the United States or any state thereof,
            Canada, western Europe, or Japan, with a long term debt rating of
            "A" or better by Standard & Poors Corporation or of "A2" or better
            by Moody's Investors Service, Inc. or with a short term commercial
            paper rating of "A1" or better by Standard & Poors Corporation or
            "P1" or better by Moody's Investors Service, Inc.;

                     (g)     commercial paper maturing in 270 days or less from
            the date of issuance and rated not less than "P-1" by Moody's
            Investors Service, Inc., or not less than "A-1" by Standard & Poors
            Corporation;

                     (h)     readily marketable tax-free municipal bonds of a
            domestic issuer maturing in three years or less from the date of
            acquisition thereof, which are rated "aaa" or better by Moody's
            Investors Service, Inc., or "AAA" or better by Standard & Poors
            Corporation;

                     (i)     demand deposit accounts maintained in the ordinary
            course of business;

                     (j)     Loans and advances to, and investments in, foreign
            Designated Subsidiaries that do not exceed at any time $2,000,000
            in the aggregate for all foreign Designated Subsidiaries or
            $500,000 for any foreign Designated Subsidiary;

                     (k)     investments by the Restricted Companies in joint
            ventures, subject to the limitations set forth in SECTION 7.24, so
            long as (i) such entity is established in the ordinary course of
            business on an arm's length basis and no Company has any liability
            for the obligations of the joint venture or any other partner,
            joint venturer, or other Person with respect thereto, (ii) such
            joint venture has no Debt which is recourse to any Company or its
            assets, and (iii) Administrative Agent, for the benefit of Lenders,
            has a perfected first priority security interest in 100% (or, in
            the case of foreign joint ventures, 65%) of the equity interest
            owned by the Restricted Companies; and





                                      -61-
<PAGE>   69

                     (l)     Loans and advances to, investments in, and LCs
            issued on behalf of foreign Subsidiaries (excluding foreign
            Designated Subsidiaries) in which Administrative Agent, for the
            benefit of Lenders, has a perfected first priority security
            interest in 65% of the stock or other equity interest, that do not
            exceed at any time in the aggregate for all such Subsidiaries
            $30,000,000 during calendar year 1996, $31,000,000 during calendar
            year 1997, $32,000,000 during calendar year 1998, $33,000,000
            during calendar year 1999, $34,000,000 during calendar year 2000,
            and $35,000,000 during calendar year 2001.

            7.22     Dividends and Distributions.  No Company shall directly or
    indirectly declare, make, or pay any Distribution other than (a)
    Distributions declared, made, or paid by Borrower wholly in the form of its
    capital stock, (b) Distributions by any Company to Borrower, (c) cash
    dividends on its stock and/or stock repurchases in an aggregate amount not
    to exceed $1,000,000 per fiscal year at such time as the ratio of Funded
    Debt to EBITDA shall not have exceeded 3.0 to 1 for four consecutive
    quarters and no Default or Potential Default exists, and (d) other
    Distributions in an amount not to exceed $250,000 in the aggregate during
    the term of this Agreement.  No Company shall enter into or permit to exist
    any arrangement or agreement which directly or indirectly prohibits any
    Subsidiary from making any Distribution to Borrower.

            7.23     Disposition of Assets.  No Company shall sell, assign,
    lease, transfer, or otherwise dispose of any of its assets other than (a)
    sales or leases of inventory in the ordinary course of business, (b) the
    sale, discount, or transfer of delinquent accounts receivable in the
    ordinary course of business for purposes of collection, (c) occasional
    sales of immaterial assets and dispositions of obsolete assets for
    consideration not less than the fair market value thereof and in a
    cumulative amount not in excess of $2,500,000, and (d) sales, leases, or
    other dispositions from a Company to a Restricted Company.  No Company
    shall enter into any sale-leaseback arrangement with any Person pursuant to
    which such Company shall lease any asset (whether now owned or hereafter
    acquired) if such asset has been or is to be sold or transferred by any
    Company to any other Person unless the proceeds from such sale are at least
    as great as the fair market value of the asset which has been or is to be
    sold and all proceeds from such sale are applied as a prepayment of the
    Obligation (accompanied, in the case of a prepayment under the Revolving
    Credit Facility, by a corresponding reduction of the aggregate Committed
    Sums under the Revolving Credit Facility) and no Default or Potential
    Default exists at the time of such sale or would exist after giving effect
    to such transaction.

            7.24     Capital Expenditures.  The Companies shall not directly or
    indirectly make Capital Expenditures except Capital Expenditures by the
    Companies that do not exceed the following amounts:





                                      -62-
<PAGE>   70


<TABLE>
<CAPTION>
                   Period                   Maximum Amount Permitted   
                   ------                   ------------------------   
  <S>                                               <C>                        
  September 26, 1996 to December 31, 1997           $2,750,000                 
  January 1, 1998 to December 31, 1998              $2,000,000                 
  January 1, 1999 to December 31, 1999              $3,000,000                 
  January 1, 2000 to December 31, 2000              $3,000,000                 
  January 1, 2001 to September 30, 2001             $3,000,000                 
</TABLE>

    plus Capital Expenditures aggregating not more than $5,000,000 for the
    purpose of replacing or upgrading of the computer systems of the Companies;
    provided that Capital Expenditures by the foreign Subsidiaries may not
    exceed $1,000,000 during any fiscal year.  The amount of Capital
    Expenditures permitted hereunder for any fiscal year shall be reduced by
    the amount of investments during such fiscal year by the Restricted
    Companies under SECTION 7.21(K).

            7.25     Mergers and Dissolutions.  No Company shall, directly or
    indirectly, merge or consolidate with any other Person, other than (a)
    mergers among wholly-owned Restricted Companies, provided that, in any
    merger involving Borrower, Borrower must be the surviving entity and in any
    merger involving a foreign Company and a domestic Company, the domestic
    Company must be the surviving entity; (b) mergers among foreign
    Subsidiaries (excluding the Designated Subsidiaries) so long as
    Administrative Agent, for the benefit of Lenders, has a first and prior
    perfected Lien on 65% of the stock of the surviving Subsidiary, and
    opinions and other evidences satisfactory to Administrative Agent have been
    delivered; (c) as previously approved by Required Lenders, or (d) mergers
    of Designated Subsidiaries with and into other Companies.  Other than
    liquidations, dissolutions or mergers permitted under this SECTION 7.25 and
    sales of assets permitted pursuant to SECTION 7.23, no Restricted Company
    shall liquidate, wind up, or dissolve (or suffer any liquidation or
    dissolution).

            7.26     Conduct and Scope of Business.  No Company will engage in
    any business other than the businesses conducted by the Companies on the
    date of this Agreement and businesses reasonably related thereto, and the
    Companies as a whole will not discontinue any of their material businesses
    or operations, except as a result of the discontinuance of business by the
    Designated Subsidiaries.

            7.27     Financial Covenants.  As calculated on a consolidated
    basis for Borrower and its Subsidiaries:

                     (a)     Borrower shall not permit the ratio of its Funded
            Debt to EBITDA as of the end of any fiscal quarter listed below,
            calculated in the case of EBITDA, for the four fiscal quarters then
            ended (except that with respect to the fiscal quarters ending prior
            to June 30, 1997, such calculation shall be made for the period
            beginning July 1, 1996, through the date of calculation, and at
            December 31, 1996 shall be calculated on the basis of 2 times
            EBITDA and at March 31, 1997 shall be calculated on the basis of
            4/3 times EBITDA), to exceed the following:





                                      -63-
<PAGE>   71

<TABLE>
<CAPTION>
                       Period                         Maximum Ratio Permitted
                       ------                         -----------------------
      <S>                                                     <C>          
      December 31, 1996                                       4.0 to 1     
      March 31, 1997                                          4.25 to 1    
      June 30, 1997 to September 30, 1997                     4.0 to 1     
      December 31, 1997                                       3.75 to 1    
      March 31, 1998 to September 30, 1998                    3.5 to 1     
      December 31, 1998                                       3.25 to 1    
      March 31, 1999 to September 30, 1999                    2.75 to 1    
      December 31, 1999 to September 30, 2000                 2.5 to 1     
      December 31, 2000 and thereafter                        2.0 to 1     
</TABLE>

                     (b)     Borrower shall never permit its Fixed Charge
            Coverage Ratio as of the end of any fiscal quarter during the
            applicable period listed below, for the four fiscal quarters ending
            on such date (except that with respect to the fiscal quarters
            ending prior to June 30, 1997, such calculation shall be made for
            the period beginning July 1, 1996, through the date of
            calculation), to be less than the following:

<TABLE>
<CAPTION>
                     Period                     Minimum Ratio Permitted 
                     ------                     ----------------------- 
    <S>                                                <C>              
    December 31, 1996 to December 31, 1997             2.0 to 1         
    March 31, 1998 and thereafter                      1.5 to 1         
</TABLE>

                     (c)     Borrower shall not permit the ratio of the Current
            Ratio of Borrower and its consolidated Subsidiaries (as calculated
            at the end of each of its fiscal quarters in accordance with GAAP)
            to be less than the following:

<TABLE>
<CAPTION>
                Period                        Minimum Ratio Permitted   
                ------                        -----------------------   
     <S>                                            <C>                  
     December 31, 1996 and thereafter               1.25 to 1            
</TABLE>

                     (d)     Borrower shall never permit the Tangible Net Worth
            of Borrower and its consolidated Subsidiaries (as calculated at the
            end of each of its fiscal quarters) to be less than $23,000,000,
            plus the sum of 75% of the consolidated net income of Borrower and
            its consolidated Subsidiaries for each fiscal quarter ending after
            December 31, 1996 (with no deduction if consolidated net income is
            a deficit figure), and 100% of the net proceeds received by any
            Company from the sale of stock or other equity.

                     (e)     Borrower shall not at any time permit the
            aggregate rental expenses of the Companies of a capital and
            operating nature to exceed the following:





                                      -64-
<PAGE>   72

<TABLE>
<CAPTION>
                  Period                           Maximum Amount Permitted 
                  ------                           ------------------------ 
 <S>                                                        <C>             
 September 26, 1996 to December 31, 1997                    $10,000,000     
 January 1, 1998 to December 31, 1998                       9,000,000       
 January 1, 1999 to December 31, 1999                       9,500,000       
 January 1, 2000 to December 31, 2000                       10,000,000      
 January 1, 2001 to December 31, 2001                       10,500,000      

</TABLE>
            7.28     Designated Subsidiaries.  At the option of the Companies,
    the foreign Designated Subsidiaries may continue to operate their
    respective businesses, subject to the limitations on investments in such
    Subsidiaries as set forth in SECTION 7.21(J), or the Designated
    Subsidiaries may be liquidated, dissolved or merged into another Company
    or, so long as no Restricted Company is materially adversely affected,
    dissolved through an insolvency proceeding.

            7.29     After-Acquired Property.  Concurrently upon any Restricted
    Company acquiring any additional interest in real property having a value
    in excess of $500,000 in any acquisition or a series of acquisitions, such
    Company shall execute and deliver, at the request of Required Lenders,
    additional mortgages, deeds of trust or other collateral assignments
    satisfactory in form and substance to Administrative Agent, granting to
    Administrative Agent, for the benefit of Lenders and LC Fronting Bank, a
    first priority Lien in such real property, and shall deliver surveys,
    appraisals, environmental reports and title insurance policies as may be
    required by Majority Lenders and satisfactory in amount, form and substance
    to Administrative Agent.  Prior to any Restricted Company maintaining
    assets with an aggregate value in excess of $1,000,000 at any leased
    business location, such Company shall use reasonable best efforts to cause
    to be executed and delivered to Administrative Agent an estoppel and
    subordination agreement executed and acknowledged by the lessor thereof,
    waiving or subordinating its landlord's Liens, if any, to the Liens in
    favor of Lenders and otherwise upon terms reasonably satisfactory to
    Administrative Agent.  The Companies agree to use reasonable best efforts
    to deliver to Administrative Agent on or before February 28, 1997 estoppel
    and subordination agreements executed by the lessors of each leasehold
    interest listed on SCHEDULE 7.29.  Administrative Agent agrees that the
    form of Landlord Estoppel attached hereto as EXHIBIT K is satisfactory to
    it.  Within thirty days after any Restricted Company maintains equipment
    and other fixed assets with an aggregate book value in excess of $1,000,000
    at any business location, other than locations at which such filing is
    prohibited by the terms of the lease for such location and for which no
    consent or waiver may be obtained, such Company shall deliver to
    Administrative Agent a UCC fixture filing in form and substance
    satisfactory to Administrative Agent for such location.

            7.30     After-Acquired Subsidiaries.  Concurrently upon the
    formation or acquisition by any Restricted Company of any Subsidiary after
    the date hereof (an "AFTER-ACQUIRED SUBSIDIARY"), such Company shall pledge
    all (or, in the case of a foreign After-Acquired Subsidiary, 65%) of its
    stock or other equity interest in the After-Acquired Subsidiary and shall
    cause the After-Acquired Subsidiary (other than a foreign After-Acquired
    Subsidiary) to deliver articles of incorporation, bylaws, and resolutions
    and such opinions as Administrative Agent shall require and to execute a
    Guaranty and such mortgages, security agreements and other collateral
    documents, in the same form as the Security Documents, as shall be required
    by Administrative Agent to create first priority Liens





                                      -65-
<PAGE>   73
    in favor of Administrative Agent, for the benefit of Lenders, in
    substantially all the assets of such After-Acquired Subsidiary.

            7.31     Delivery of Certain Collateral and Lien Releases.  On or
    before February 28, 1997, Borrower shall deliver or cause to be delivered
    (a) to Administrative Agent (with sufficient copies for Lenders) a Pledge
    Agreement in substantially the form of EXHIBIT C-1, executed by Borrower
    and in substantially the form of EXHIBIT C-2, executed by each Subsidiary
    organized under the Laws of the United States that owns equity interests in
    any foreign Subsidiary, covering 65% of the stock or other equity interest
    of all foreign Subsidiaries, together with stock certificates evidencing
    the stock pledged thereunder and blank stock powers for such certificates,
    in form and substance satisfactory to Administrative Agent and
    Documentation Agent, and (b) to Administrative Agent evidence of the
    release of all Liens upon the assets of foreign Subsidiaries which secure
    the Debt owing under the Existing Credit Agreement.

    SECTION 8        DEFAULT.  The term "DEFAULT" means the occurrence and
    continuance of any one or more of the following events:

            8.1      Payment of Obligation.  The failure or refusal of any
    Company to pay (a) Principal Debt when the same becomes due and payable in
    accordance with the Loan Documents, or (b) interest, fees, or any other
    part of the Obligation (other than as set forth in CLAUSES (C) and (D))
    within three (3) Business Days after the same becomes due and payable in
    accordance with the Loan Documents; (c) the indemnifications and
    reimbursements provided for in SECTIONS 3.15 through 3.18 within ten (10)
    Business Days after demand therefor or as otherwise required by such
    Sections; or (d) the failure of the Company to punctually and properly
    perform, observe, and comply with SECTION 7.20 or with any other provision
    in the Loan Documents setting forth indemnification or reimbursement
    obligations (other than pursuant to SECTIONS 3.15 through 3.18) of the
    Companies, and such failure or refusal continues for fifteen (15) days.

            8.2      Covenants.  The failure or refusal of Borrower (and, if
    applicable, any other Company) to punctually and properly perform, observe,
    and comply with:

                     (a)     Any covenant, agreement, or condition contained in
            SECTIONS 7.1, 7.8(A) (as it relates to corporate existence), 7.13,
            7.14, 7.15, 7.17, and 7.21 THROUGH 7.27; or

                     (b)     Any covenant, agreement, or condition contained in
            SECTION 7.3, and such failure or refusal continues for fifteen (15)
            days; or

                     (c)     Any other covenant, agreement, or condition
            contained in any Loan Document (other than the covenants to pay the
            Obligation set forth in SECTION 8.1 and the covenants in CLAUSES
            (A) and (B) preceding), and such failure or refusal continues for
            30 days.

            8.3      Debtor Relief.  Any Restricted Company (a) shall fail to
    pay its Debts generally as they become due, (b) shall voluntarily seek,
    consent to, or acquiesce in the benefit of any Debtor Relief





                                      -66-
<PAGE>   74
    Law with respect to it or any substantial part of its property, assets or
    business, or (c) shall become a party to or is made the subject of any
    proceeding provided for by any Debtor Relief Law with respect to it or any
    substantial part of its property, assets or business, other than as a
    creditor or claimant, (unless, in the event such proceeding is involuntary,
    the petition instituting same is dismissed within 60 days after its
    filing).

            8.4      Judgments and Attachments.  Any Company fails, within 60
    days after entry, to pay, bond, or otherwise discharge any judgment or
    order for the payment of money the uninsured portion of which is in excess
    of $1,000,000 (individually or collectively) or any warrant of attachment,
    sequestration, or similar proceeding against any Company's assets having a
    value (individually or collectively) of $1,000,000, which in each such case
    is not either (a) stayed on appeal or (b) in the case of any attachment,
    sequestration or similar proceeding, being diligently contested in good
    faith by appropriate proceedings and adequate reserves have been set aside
    on the books of such Company in accordance with GAAP and as to which no
    foreclosure proceeding has been commenced against any property that has not
    been stayed.

            8.5      Government Action.  (a) A final non-appealable order is
    issued by any Tribunal, including, but not limited to, the United States
    Justice Department, seeking to cause any Restricted Company to divest a
    substantial portion of its assets pursuant to any antitrust, restraint of
    trade, unfair competition, industry regulation, or similar Laws, or (b) any
    Tribunal shall condemn, seize, or otherwise appropriate, or take custody or
    control of all or any substantial portion of the assets of any Restricted
    Company, which in the case of either (A) or (B) would be a Material Adverse
    Event.

            8.6      Misrepresentation.  Any representation or warranty made by
    any Company contained in any Loan Document shall at any time prove to have
    been incorrect in any material respect when made in light of the
    circumstances in which made.

            8.7      Change of Control.    A Change of Control shall occur.
    For the purpose of this Section, a "CHANGE OF CONTROL" shall be deemed to
    have occurred if:

                     (a)     a third person, including a "group" as defined in
            Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
            (the "EXCHANGE ACT"), but excluding any employee benefit plan or
            plans of Borrower and its subsidiaries and affiliates, becomes the
            beneficial owner, directly or indirectly, of twenty percent (20%)
            or more of the combined voting power of Borrower's outstanding
            voting securities ordinarily having the right to vote for the
            election of directors of Borrower; or

                     (b)     the individuals who, as of September 26, 1996
            constituted the Board of Directors of Borrower (the "BOARD"
            generally and as of  September 26, 1996 the "INCUMBENT BOARD")
            cease for any reason to constitute at least two-thirds (2/3) of the
            Board, or in the case of a merger or consolidation of Borrower, do
            not constitute or cease to constitute at least two-thirds (2/3) of
            the board of directors of the surviving company (or in a case where
            the surviving corporation is controlled, directly or indirectly, by
            another corporation or entity





                                      -67-
<PAGE>   75
            do not constitute or cease to constitute at least two-thirds (2/3)
            of the board of such controlling corporation or do not have or
            cease to have at least two-thirds (2/3) voting seats on any body
            comparable to a board of directors of such controlling entity or,
            if there is no body comparable to a board of directors, at least
            two-thirds (2/3) voting control of such controlling entity),
            provided that any person becoming a director (or, in the case of a
            controlling non-corporate entity, obtaining a position comparable
            to a director or obtaining a voting interest in such entity)
            subsequent to September 26, 1996, whose election, or nomination for
            election, was approved by a vote of the persons comprising at least
            two-thirds (2/3) of the Incumbent Board (other than an election or
            nomination of an individual whose initial assumption of office is
            in connection with an actual or threatened election contest, as
            such terms are used in Rule 14a-11 of Regulation 14A promulgated
            under the Exchange Act) shall be, for purposes of this Agreement,
            considered as though such person were a member of the Incumbent
            Board.

            8.8      Default Under Other Agreements.  (a) Any Company fails to
    pay when due any Funded Debt (other than the Obligation) or any obligation
    under any Material Agreement in excess (individually or collectively) of
    $2,500,000; (b) any breach exists under any agreement to which any Company
    is a party which results in the acceleration of the maturity of any Funded
    Debt or of any obligation under any Material Agreement in excess
    (individually or collectively) of $2,500,000 or permits (or, with the
    giving of notice or lapse of time or both, would permit) the holder of such
    Funded Debt or a party to such Material Agreement or a Person acting on
    such Person's behalf to accelerate the maturity thereof; or (c) any Funded
    Debt or any obligation under any Material Agreement in excess (individually
    or collectively) of $2,500,000 shall be declared to be due and payable or
    required to be prepaid by any Company prior to the stated maturity thereof.

            8.9      Employee Benefit Plans.  Any of the following exists with
    respect to any Employee Plan of any Company, but only where a Material
    Adverse Event could result:  (a) a Reportable Event; (b) disqualification
    or involuntary termination proceedings; (c) voluntary termination
    proceedings are initiated while a funding deficiency (as determined under
    section 412 of the Code) exists; (d) withdrawal liability exists with
    respect to a Multiemployer Plan; (e) a trustee is appointed by any federal
    district court or the PBGC to administer an Employee Plan; (f) termination
    proceedings are initiated by the PBGC; or (g) failure by any Company to
    promptly notify Administrative Agent upon such Company's receipt of notice
    of any proceeding or other actions which may result in termination of an
    Employee Plan if such proceeding or termination could constitute a Material
    Adverse Event.

            8.10     Validity and Enforceability of Loan Documents.  Any Loan
    Document shall, at any time after its execution and delivery and for any
    reason, cease to be in full force and effect in any material respect or be
    declared to be null and void or the validity or enforceability thereof be
    contested by any Company party thereto or any Company shall deny that it
    has any liability or obligations under any Loan Document to which it is a
    party.





                                      -68-
<PAGE>   76

    SECTION 9        RIGHTS AND REMEDIES.

            9.1      Remedies Upon Default.

                     (a)     If a Default exists under SECTION 8.3(B) or (C),
            the commitment to extend credit hereunder shall automatically
            terminate and the entire unpaid balance of the Obligation shall
            automatically become due and payable without any action or notice
            of any kind whatsoever.

                     (b)     If any Default exists other than as set forth in
            SECTION 9.1(A) with respect to a Default under SECTION 8.3(B) or
            (C), Administrative Agent may (in the case of (I) and (II) below
            with the consent of Required Lenders), and, subject to the terms of
            SECTION 10, shall upon the request of Required Lenders or Required
            Lenders' may, do any one or more of the following:  (i) if the
            maturity of the Obligation has not already been accelerated under
            SECTION 9.1(A), declare the entire unpaid balance of the
            Obligation, or any part thereof, immediately due and payable,
            whereupon it shall be due and payable; (ii) terminate the
            commitments of Lenders to extend credit or issue LCs hereunder;
            (iii) reduce any claim to judgment; (iv) to the extent permitted by
            Law, exercise (or request each Lender to, and each Lender shall be
            entitled to, exercise) the Rights of offset or banker's Lien
            against the interest of any Company in and to every account and
            other property of any Company which are in the possession of
            Administrative Agent or any Lender to the extent of the full amount
            of any past due portion of the Obligation (to the extent permitted
            by Law, each Company being deemed directly obligated to each Lender
            in the full amount of the Obligation for such purposes); (v)
            demand, at any time after the occurrence and during the continuance
            of a Default in the payment of Principal Debt or interest thereon,
            that Borrower provide cash collateral in an account with
            Administrative Agent in an amount equal to 102% of the LC Exposure
            then existing; and (vi) exercise any and all other legal or
            equitable Rights afforded by the Loan Documents, the Laws of the
            State of Texas or any other applicable jurisdiction as
            Administrative Agent shall deem appropriate, or otherwise,
            including, but not limited to, the Right to bring suit or other
            proceedings before any Tribunal either for specific performance of
            any covenant or condition contained in any of the Loan Documents or
            in aid of the exercise of any Right granted to Administrative Agent
            or any Lender in any of the Loan Documents.

            9.2      Company Waivers.  To the extent permitted by Law, each
    Company hereby waives presentment and demand for payment, protest, notice
    of intention to accelerate, notice of acceleration, and notice of protest
    and nonpayment, and agrees that its liability with respect to the
    Obligation, or any part thereof, shall not be affected by any renewal or
    extension in the time of payment of the Obligation, by any indulgence, or
    by any release or change in any security for the payment of the Obligation.

            9.3      Performance by Administrative Agent.  If any covenant,
    duty, or agreement of any Company is not performed in accordance with the
    terms of the Loan Documents, after the occurrence and during the
    continuance of a Default, Administrative Agent may, at its option (but
    subject to the





                                      -69-
<PAGE>   77
    approval of Required Lenders), perform or attempt to perform such covenant,
    duty, or agreement on behalf of such Company.  In such event, any amount
    expended by Administrative Agent in such performance or attempted
    performance shall be payable by the Companies, jointly and severally, to
    Administrative Agent on demand, shall become part of the Obligation, and
    shall bear interest at the Default Rate from the date of such expenditure
    by Administrative Agent until paid.  Notwithstanding the foregoing, it is
    expressly understood that Administrative Agent does not assume and shall
    never have, except by its express written consent, any liability or
    responsibility for the performance of any covenant, duty, or agreement of
    any Company.

            9.4      Delegation of Duties and Rights.  Lenders may perform any
    of their duties or exercise any of their Rights under the Loan Documents by
    or through their respective Representatives.

            9.5      Not in Control.  None of the covenants or other provisions
    contained in any Loan Document shall, or shall be deemed to, give
    Administrative Agent or Lenders the Right to exercise control over the
    assets (including, without limitation, real property), affairs, or
    management of any Company, the power of Administrative Agent or Lenders
    being limited to the Right to exercise the remedies provided in SECTION 9.
    All rights or powers that Administrative Agent and Lenders have under the
    Loan Documents exist solely to preserve and protect the Collateral and to
    assure payment and performance of the Obligation.  All rights or powers
    that Administrative Agent or any Lender exercises pursuant to the Loan
    Documents shall be exercised in a manner calculated by Lender in its good
    faith business judgment to preserve and protect the Collateral and to
    assure payment and performance of the Obligation.  Nothing in the Loan
    Documents shall be construed as giving Administrative Agent or any Lender
    any right or power to (i) preclude or interfere with any Company's
    compliance with any Law, (ii) to require any act or omission by any Company
    that may be harmful to persons or property, or (iii) exercise control over
    the affairs or management of any Company.

            9.6      Course of Dealing.  The acceptance by Administrative Agent
    or Lenders at any time and from time to time of partial payment on the
    Obligation shall not be deemed to be a waiver of any Default then existing.
    No waiver by Administrative Agent, Required Lenders, or Lenders of any
    Default shall be deemed to be a waiver of any other then-existing or
    subsequent Default.  No delay or omission by Administrative Agent, Required
    Lenders, or Lenders in exercising any Right under the Loan Documents shall
    impair such Right or be construed as a waiver thereof or any acquiescence
    therein, nor shall any single or partial exercise of any such Right
    preclude other or further exercise thereof, or the exercise of any other
    Right under the Loan Documents or otherwise.

            9.7      Cumulative Rights.  All Rights available to Administrative
    Agent and Lenders under the Loan Documents are cumulative of and in
    addition to all other Rights granted to Administrative Agent and Lenders at
    law or in equity, whether or not the Obligation is due and payable and
    whether or not Administrative Agent or Lenders have instituted any suit for
    collection, foreclosure, or other action in connection with the Loan
    Documents.





                                      -70-
<PAGE>   78

            9.8      Application of Proceeds.  Any and all proceeds ever
    received by Administrative Agent or Lenders from the exercise of any Rights
    under SECTION 9 pertaining to the Obligation shall be applied to the
    Obligation in the order and manner set forth in SECTION 3.10(B).

            9.9      Diminution in Value of Collateral.  Neither Administrative
    Agent, Documentation Agent, nor any Lender shall have any liability or
    responsibility whatsoever for any diminution in or loss of value of any
    Collateral now or hereafter securing payment or performance of all or part
    of the Obligation, subject to the provisions of the Loan Documents.

            9.10     Certain Proceedings.  Borrower will promptly execute and
    deliver, or cause the execution and delivery of, all applications,
    certificates, instruments, registration statements, and all other documents
    and papers Administrative Agent or Lenders may reasonably request in
    connection with the obtaining of any consent, approval, registration,
    qualification, permit, license, or authorization of any Tribunal or other
    Person necessary or appropriate for the effective exercise of any Rights
    under the Loan Documents.  Because Borrower agrees that Administrative
    Agent's and Lenders' remedies at Law for failure of Borrower to comply with
    the provisions of this paragraph would be inadequate and that such failure
    would not be adequately compensable in damages, Borrower agrees that the
    covenants of this paragraph may be specifically enforced.


    SECTION 10       AGREEMENT AMONG LENDERS.

            10.1     Administrative Agent.

                     (a)     Each Lender and LC Fronting Bank hereby appoints
            Administrative Agent (and Administrative Agent hereby accepts such
            appointment) as its nominee and agent, in its name and on its
            behalf:  (i) to act as nominee for and on behalf of such Lender and
            LC Fronting Bank in and under all Loan Documents; (ii) to arrange
            the means whereby the funds of Lenders and LC Fronting Bank are to
            be made available to Borrower under the Loan Documents; (iii) to
            take such action as may be requested by any Lender or LC Fronting
            Bank under the Loan Documents (when such Lender or LC Fronting Bank
            is entitled to make such request under the Loan Documents and after
            such requesting Lender or LC Fronting Bank has obtained the
            concurrence of such other Lenders as may be required under the Loan
            Documents); (iv) to receive all documents and items to be furnished
            to Lenders and LC Fronting Bank under the Loan Documents; (v) to be
            the secured party, mortgagee, beneficiary, and similar party in
            respect of, and to receive, as the case may be, any Collateral for
            the benefit of Lenders and LC Fronting Bank; (vi) to promptly
            distribute to each Lender and LC Fronting Bank all items delivered
            by Borrower pursuant to SECTION 7.3 and other material information,
            requests, documents, and items received from Borrower under the
            Loan Documents; (vii) to promptly distribute to each Lender and LC
            Fronting Bank its ratable part of each payment or prepayment
            (whether voluntary, as proceeds of collateral upon or after
            foreclosure, as proceeds of insurance thereon, or otherwise) in
            accordance with the terms of the Loan Documents; and (viii) to
            deliver to the appropriate Persons requests, demands,





                                      -71-
<PAGE>   79
            approvals, and consents received from Lenders and LC Fronting Bank;
            provided, however, Administrative Agent shall not be required to
            take any action which is contrary to the Loan Documents or
            applicable Law.

                     (b)     Administrative Agent may resign as Administrative
            Agent under the Loan Documents at any time upon at least 30 days
            prior written notice to Borrower, LC Fronting Bank and Lenders, and
            may be removed as Administrative Agent under the Loan Documents at
            any time with cause by Required Lenders.  Should the initial or any
            successor Administrative Agent ever cease to be a party hereto or
            should the initial or any successor Administrative Agent ever
            resign or be removed as Administrative Agent, then Required Lenders
            shall elect the successor Administrative Agent from among the
            Lenders (other than the resigning Administrative Agent) with the
            consent of Borrower (which consent shall not be unreasonably
            withheld).  If no successor Administrative Agent shall have been so
            appointed within 30 days after the retiring Administrative Agent's
            giving of notice of resignation or the Required Lenders' removal of
            the retiring Administrative Agent, then the retiring Administrative
            Agent may, on behalf of Lenders and LC Fronting Bank, appoint a
            successor Administrative Agent, which shall be a commercial bank
            having a combined capital and surplus of at least $1,000,000,000.
            Upon the acceptance of any appointment as Administrative Agent
            under the Loan Documents by a successor Administrative Agent, such
            successor Administrative Agent shall thereupon succeed to and
            become vested with all the Rights of the retiring Administrative
            Agent, and the retiring Administrative Agent shall be discharged
            from its duties and obligations of Administrative Agent under the
            Loan Documents, and each Lender and LC Fronting Bank shall execute
            such documents as any Lender or LC Fronting Bank may reasonably
            request to reflect such change in and under the Loan Documents.
            After any retiring Administrative Agent's resignation or removal as
            Administrative Agent under the Loan Documents, the provisions of
            this SECTION 10 shall inure to its benefit as to any actions taken
            or omitted to be taken by it while it was Administrative Agent
            under the Loan Documents.

                     (c)     Administrative Agent, in its capacity as a Lender,
            shall have the same Rights under the Loan Documents as any other
            Lender and may exercise the same as though it were not acting as
            Administrative Agent; the term "Lender" shall, unless the context
            otherwise indicates, include Administrative Agent; and any
            resignation, or removal of by Administrative Agent hereunder shall
            not impair or otherwise affect any Rights which it has or may have
            in its capacity as an individual Lender.  Each Lender, LC Fronting
            Bank and Borrower agree that Administrative Agent is not a
            fiduciary for Lenders, LC Fronting Bank or for Borrower but simply
            is acting in the capacity described herein to alleviate
            administrative burdens for Borrower, Lenders and LC Fronting Bank,
            that Administrative Agent has no duties or responsibilities to
            Lenders, LC Fronting Bank, or Borrower except those expressly set
            forth herein, and that Administrative Agent in its capacity as a
            Lender has all Rights of any other Lender.  In performing its
            duties as Administrative Agent hereunder, Administrative Agent will
            use the same care as it takes in connection with Loans in which it
            alone is interested, subject to the limitations on liabilities
            contained in this SECTION 10.





                                      -72-
<PAGE>   80

                     (d)     Administrative Agent may now or hereafter be
            engaged in one or more loan, letter of credit, leasing, or other
            financing transactions with Borrower, act as trustee or depositary
            for Borrower, or otherwise be engaged in other transactions with
            Borrower (collectively, the "OTHER ACTIVITIES") not the subject of
            the Loan Documents.  Without limiting the Rights of Lenders and LC
            Fronting Bank specifically set forth in the Loan Documents,
            Administrative Agent shall not be responsible to account to Lenders
            or LC Fronting Bank for such other activities, and no Lender or LC
            Fronting Bank shall have any interest in any other activities, any
            present or future guaranties by or for the account of Borrower
            which are not contemplated or included in the Loan Documents, any
            present or future offset exercised by Administrative Agent in
            respect of such other activities, any present or future property
            taken as security for any such other activities, or any property
            now or hereafter in the possession or control of Administrative
            Agent which may be or become security for the obligations of
            Borrower arising under the Loan Documents by reason of the general
            description of indebtedness secured or of property contained in any
            other agreements, documents or instruments related to any such
            other activities; provided that, if any payments in respect of such
            guaranties or such property or the proceeds thereof shall be
            applied to reduction of the obligations of Borrower arising under
            the Loan Documents, then each Lender shall be entitled to share in
            such application ratably.

            10.2     Expenses.  Upon demand by Administrative Agent, LC
    Fronting Bank, Documentation Agent, or Syndication Agent, each Lender shall
    pay its Pro Rata Part of any expenses (including, without limitation, court
    costs, attorneys' fees and other costs of collection) incurred by
    Administrative Agent, LC Fronting Bank, Documentation Agent or Syndication
    Agent in connection with any of the Loan Documents if Administrative Agent,
    LC Fronting Bank, Documentation Agent or Syndication Agent does not receive
    reimbursement therefor from other sources within 60 days after incurred;
    provided that each Lender shall be entitled to receive its Pro Rata Part of
    any reimbursement for such expenses, or part thereof, which Administrative
    Agent, LC Fronting Bank, Documentation Agent or Syndication Agent
    subsequently receives from such other sources.

            10.3     Proportionate Absorption of Losses.  Except as herein
    provided, nothing in the Loan Documents shall be deemed to give any Lender
    any advantage over any other Lender insofar as the Obligation arising under
    the Loan Documents is concerned, or to relieve any Lender from ratably
    absorbing any losses sustained with respect to the Obligation (except to
    the extent unilateral actions or inactions by any Lender result in any
    credit, allowance, setoff, defense, or counterclaim solely with respect to
    all or any part of such Lender's Pro Rata Part of the Obligation).

            10.4     Delegation of Duties; Reliance.  Administrative Agent,
    Documentation Agent, LC Fronting Bank, and Syndication Agent may perform
    any of their respective duties or exercise any of their respective Rights
    under the Loan Documents by or through their respective Representatives.
    Administrative Agent, Documentation Agent, LC Fronting Bank, Syndication
    Agent and their respective Representatives shall (a) be entitled to rely
    upon (and shall be protected in relying upon) any writing, resolution,
    notice, consent, certificate, affidavit, letter, cablegram, telecopy,
    telegram, telex or teletype message, statement, order, or other documents
    or conversation believed to be





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    genuine and correct and to have been signed or made by the proper Person
    and, with respect to legal matters, upon opinion of counsel, (b) be
    entitled to deem and treat each Lender as the owner and holder of its Pro
    Rata Part of the Principal Debt for all purposes until, subject to SECTION
    11.14, written notice of the assignment or transfer thereof shall have been
    given to and received by Administrative Agent (and any request,
    authorization, consent, or approval of any Lender shall be conclusive and
    binding on each Purchaser and Participant until such notice is given and
    received), (c) not be deemed to have notice of the occurrence of a Default
    unless a responsible officer of Administrative Agent, who handles matters
    associated with the Loan Documents and transactions thereunder, has actual
    knowledge thereof or Administrative Agent has been notified thereof by a
    Lender or Borrower, or, in the case of LC Fronting Bank, has been notified
    thereof by Administrative Agent, a Lender or Borrower, and (d) be entitled
    to consult with legal counsel (including counsel for Borrower), independent
    accountants and other experts and shall not be liable for any action taken
    or omitted to be taken in good faith in accordance with the advice of such
    counsel, accountants or experts.

            10.5     Limitation of Liability.

                     (a)     None of Administrative Agent, Documentation Agent,
            LC Fronting Bank, Syndication Agent or any of their respective
            Representatives shall be liable for any action taken or omitted to
            be taken by it or them in good faith and believed by it or them to
            be within the discretion or power conferred upon it or them or be
            responsible for the consequences of any error of judgment, except
            for fraud, gross negligence, or willful misconduct, and none of
            Administrative Agent, Documentation Agent, LC Fronting Bank,
            Syndication Agent, or any of their respective Representatives has a
            fiduciary relationship with any Lender by virtue of the Loan
            Documents or the transactions contemplated thereby (provided that
            nothing herein shall negate the obligation of Administrative Agent
            to account for funds received by it for the account of any Lender).

                     (b)     Unless indemnified to its satisfaction against
            loss, cost, liability, and expense, neither Administrative Agent
            nor LC Fronting Bank shall be compelled to do any act under the
            Loan Documents or to take any action toward the execution or
            enforcement of the powers thereby created or to prosecute or defend
            any suit in respect of the Loan Documents. If Administrative Agent
            or LC Fronting Bank requests instructions from Lenders or Required
            Lenders, as the case may be, with respect to any act or action
            (including, but not limited to, any failure to act) in connection
            with any Loan Document, Administrative Agent or LC Fronting Bank
            shall be entitled (but shall not be required) to refrain (without
            incurring any liability to any Person by so refraining) from such
            act or action unless and until it has received such instructions.
            In no event, however, shall Administrative Agent or LC Fronting
            Bank, or any of their respective Representatives be required to
            take any action which it or they determine could incur for it or
            them criminal or onerous civil liability.  Without limiting the
            generality of the foregoing, no Lender shall have any right of
            action against Administrative Agent or LC Fronting Bank as a result
            of Administrative Agent's or LC Fronting Bank's





                                      -74-
<PAGE>   82
            acting or refraining from acting hereunder in accordance with the
            instructions of Required Lenders (or all Lenders if required by
            SECTION 11.12(B)).

                     (c)     Neither Administrative Agent, LC Fronting Bank,
            Documentation Agent, nor Syndication Agent shall be responsible in
            any manner to any Lender or any Participant for, and each Lender
            represents and warrants that it has not relied upon Administrative
            Agent, LC Fronting Bank, Documentation Agent or Syndication Agent
            in respect of, (i) the creditworthiness of any Company and the
            risks involved to such Lender, (ii) the effectiveness,
            enforceability, genuineness, validity, or the due execution of any
            Loan Document, (iii) any representation, warranty, document,
            certificate, report, or statement made therein or furnished
            thereunder or in connection therewith, (iv) the existence,
            priority, or perfection of any Lien hereafter granted or purported
            to be granted under any Loan Document, or (v) observation of or
            compliance with any of the terms, covenants, or conditions of any
            Loan Document on the part of any Company.  Each Lender agrees to
            indemnify Administrative Agent, Documentation Agent, LC Fronting
            Bank, Syndication Agent and their respective Representatives and
            hold them harmless from and against (but limited to such Lender's
            Pro Rata Part of) any and all liabilities, obligations, losses,
            damages, penalties, actions, judgments, suits, costs, reasonable
            expenses, and reasonable disbursements of any kind or nature
            whatsoever which may be imposed on, asserted against, or incurred
            by them in any way relating to or arising out of the Loan Documents
            or any action taken or omitted by them under the Loan Documents, to
            the extent Administrative Agent, LC Fronting Bank, Documentation
            Agent, Syndication Agent and their respective Representatives are
            not reimbursed for such amounts by any Company (provided that,
            Administrative Agent, LC Fronting Bank, Documentation Agent,
            Syndication Agent and their Representatives shall not have the
            right to be indemnified hereunder for its or their own fraud, gross
            negligence, or willful misconduct).

            10.6     Notice of Default; Instructions.  Administrative Agent
    shall promptly notify Lenders and LC Fronting Bank upon receipt by
    Administrative Agent of notice from Borrower or any Lender that a Default
    or Potential Default has occurred or upon becoming aware of any Default or
    Potential Default.  Upon the occurrence and continuance of a Default,
    Lenders agree to promptly confer in order that Required Lenders or Lenders,
    as the case may be, may agree upon a course of action for the enforcement
    of the Rights of Lenders; and Administrative Agent shall be entitled to
    refrain from taking any action (without incurring any liability to any
    Person for so refraining) unless and until Administrative Agent shall have
    received instructions from Required Lenders.

            10.7     Limitation of Liability.  To the extent permitted by Law,
    (a) neither Administrative Agent, LC Fronting Bank, Documentation Agent nor
    Syndication Agent (acting in their respective agent capacities) shall incur
    any liability to any other Lender, Documentation Agent, Syndication Agent,
    LC Fronting Bank, Administrative Agent, or Participant except for acts or
    omissions resulting from its own gross negligence or willful misconduct,
    and (b) neither Administrative Agent, LC Fronting Bank, Documentation Agent
    nor Syndication Agent, Lender, or Participant shall incur any liability to
    any other Person for any act or omission of any other Lender or any other
    Participant.





                                      -75-
<PAGE>   83


            10.8     Relationship of Lenders.  Nothing herein shall be
    construed as creating a partnership or joint venture among Administrative
    Agent, LC Fronting Bank, Documentation Agent, Syndication Agent, and
    Lenders or among Lenders.

            10.9     Collateral.

                     (a)     In actions with respect to any property of any
            Company, Administrative Agent is acting for the ratable benefit of
            each Lender and LC Fronting Bank.  Any and all agreements to
            subordinate (whether made heretofore or hereafter) other
            indebtedness or obligations of Borrower to the Obligation shall be
            construed as being for the ratable benefit of each Lender and LC
            Fronting Bank.  If Administrative Agent acquires any security for
            the Obligation or any guaranty of the Obligation upon or in lieu of
            foreclosure, the same shall be held for the benefit of all Lenders
            and LC Fronting Bank in proportion to their respective Pro Rata
            Parts.

                     (b)     Each Lender and LC Fronting Bank authorizes and
            directs Administrative Agent to enter into the Security Documents
            for the benefit of Lenders and LC Fronting Bank.  The
            Administrative Agent is hereby authorized on behalf of Lenders and
            LC Fronting Bank to take any action with respect to any Collateral
            or Security Documents which may be necessary to perfect and
            maintain perfected the Liens upon the Collateral granted pursuant
            to the Security Documents.

                     (c)     The Lenders and LC Fronting Bank hereby authorize
            Administrative Agent to release any Lien granted to or held by
            Administrative Agent upon any Collateral (i) upon termination of
            the commitments of lenders hereunder and payment and satisfaction
            in full of the Obligation, and (ii) constituting assets or property
            which has been disposed of and which disposition was permitted
            under SECTION 7.23.

            10.10    Benefits of Agreement.  Except for the representations and
    covenants in SECTIONS 10.1(C) and 10.9 in favor of Borrower, none of the
    provisions of this SECTION 10 shall inure to the benefit of any Company or
    any other Person other than Lenders and LC Fronting Bank; consequently,
    neither any Company nor any other Person shall be entitled to rely upon, or
    to raise as a defense, in any manner whatsoever, the failure of any Lender
    or LC Fronting Bank to comply with such provisions.

            10.11    LC Fronting Bank.  LC Fronting Bank may resign as LC
    Fronting Bank under the Loan Documents upon prior notice to Administrative
    Agent and Borrower, subject to the appointment of a successor LC Fronting
    Bank satisfactory to Borrower and Required Lenders.





                                      -76-
<PAGE>   84


    SECTION 11       MISCELLANEOUS.

            11.1     Headings.  The headings, captions, and arrangements used
    in any of the Loan Documents are for convenience only and shall not be
    deemed to limit, amplify, or modify the terms of the Loan Documents, nor
    affect the meaning thereof.

            11.2     Nonbusiness Days.  In any case where any payment or action
    is due under any Loan Document on a day which is not a Business Day, such
    payment or action may be delayed until the next-succeeding Business Day,
    but interest and fees shall continue to accrue in respect of any payment to
    which it is applicable until such payment is in fact made; provided that,
    if in the case of any such payment in respect of a LIBOR Rate Loan the
    next-succeeding Business Day is in the next calendar month, then such
    payment shall be made on the next-preceding Business Day.

            11.3     Communications.  Unless specifically otherwise provided,
    whenever any Loan Document requires or permits any consent, approval,
    notice, request, or demand from one party to another, such communication
    must be in writing (which may be by telex or telecopy) to be effective and
    shall be deemed to have been given (a) if by telex, when transmitted to the
    telex number, if any, for such party, and the appropriate answerback is
    received, (b) if by telecopy, when transmitted to the telecopy number for
    such party (and all such communications sent by telecopy shall be confirmed
    promptly thereafter by personal delivery or mailing in accordance with the
    provisions of this section; provided, that any requirement in this
    parenthetical shall not affect the date on which such telecopy shall be
    deemed to have been delivered), (c) if by mail, on the third Business Day
    after it is enclosed in an envelope, properly addressed to such party,
    properly stamped, sealed, and deposited in the appropriate official postal
    service, or (d) if by any other means, when actually delivered to such
    party.  Until changed by notice pursuant hereto, the address (and telex and
    telecopy numbers, if any) for each Lender, and Administrative Agent is set
    forth on SCHEDULE 2.1.  Any such communication to Borrower or any Company
    shall be addressed to:

                            Aviall, Inc.                              
                            2055 Diplomat Drive                       
                            Dallas, TX  75235                         
                            Attn:   Treasurer with a copy to          
                                    General Counsel                   
                            Fax:  (972) 406-6636                      

            11.4     Form and Number of Documents.  Each agreement, document,
    instrument, or other writing to be furnished under any provision of this
    Agreement must be in form and substance and in such number of counterparts
    as may be reasonably satisfactory to Administrative Agent and Documentation
    Agent.

            11.5     Exceptions to Covenants.  No Company shall take any action
    or fail to take any action which is permitted as an exception to any of the
    covenants contained in any Loan Document if such





                                      -77-
<PAGE>   85
    action or omission would result in the breach of any other covenant
    contained in any of the Loan Documents.

            11.6     Survival.  All covenants, agreements, undertakings,
    representations, and warranties made in any of the Loan Documents shall
    survive all closings under the Loan Documents and, except as otherwise
    indicated, shall not be affected by any investigation made by any party.
    All rights of, and provisions relating to, reimbursement and
    indemnification of Administrative Agent, Documentation Agent, LC Fronting
    Bank, Syndication Agent or any Lender shall survive termination of this
    Agreement and payment in full of the Obligation.

            11.7     GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
    INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND ANY
    DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
    RELATIONSHIP ESTABLISHED BETWEEN BORROWER, ADMINISTRATIVE AGENT, LC
    FRONTING BANK, DOCUMENTATION AGENT, SYNDICATION AGENT AND LENDERS IN
    CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THE
    MORTGAGES, IF ANY, WHICH ARE SUBJECT TO THE PROVISIONS SET FORTH THEREIN),
    AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
    RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS
    OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF TEXAS EXCEPT TO THE
    EXTENT THE LAWS OF THE JURISDICTION WHERE COLLATERAL IS LOCATED MANDATORILY
    REQUIRE APPLICATION OF SUCH LAWS WITH REGARD TO SUCH COLLATERAL.

            11.8     Invalid Provisions.  If any provision in any Loan Document
    is held to be illegal, invalid, or unenforceable, such provision shall be
    fully severable; the appropriate Loan Document shall be construed and
    enforced as if such provision had never comprised a part thereof; and the
    remaining provisions thereof shall remain in full force and effect and
    shall not be affected by such provision or by its severance therefrom.
    Administrative Agent, Documentation Agent, Syndication Agent, Lenders, LC
    Fronting Bank, and each Company party to such Loan Document agree to
    negotiate, in good faith, the terms of a replacement provision as similar
    to the severed provision as may be possible and be legal, valid, and
    enforceable.

            11.9     Maximum Interest.  Regardless of any provision contained
    in any Loan Document, no Lender, LC Fronting Bank, Administrative Agent,
    Documentation Agent or Syndication Agent shall ever be entitled to contract
    for, charge, take, reserve, receive, or apply, as interest on the
    Obligation, or any part thereof, any amount in excess of the Maximum Rate,
    and, if Lenders, LC Fronting Bank, Administrative Agent, Documentation
    Agent or Syndication Agent ever do so, then such excess shall be deemed a
    partial prepayment of principal and treated hereunder as such and any
    remaining excess shall be refunded to Borrower.  If at any time the
    interest rate (the "CONTRACT RATE") for any Loan shall exceed the Maximum
    Rate, thereby causing the interest accruing on such Loan to be limited to
    the Maximum Rate, then any subsequent reduction in the Contract Rate for
    such Loan shall not reduce the rate of interest on such Loan below the
    Maximum Rate until the aggregate





                                      -78-
<PAGE>   86
    amount of interest accrued on such Loan equals the aggregate amount of
    interest which would have accrued on such Loan if the Contract Rate for
    such Loan had at all times been in effect.  In determining if the interest
    paid or payable exceeds the Maximum Rate, Borrower and Lenders shall, to
    the maximum extent permitted under applicable Law, (a) treat all Loans as
    but a single extension of credit (and Lenders, LC Fronting Bank,
    Administrative Agent, Documentation Agent or Syndication Agent and Borrower
    agree that such is the case and that provision herein for multiple Loans is
    for convenience only), (b) characterize any nonprincipal payment as an
    expense, fee, or premium rather than as interest, (c) exclude voluntary
    prepayments and the effects thereof, and (d) amortize, prorate, allocate,
    and spread the total amount of interest throughout the entire contemplated
    term of the Obligation; provided that, if the Obligation is paid and
    performed in full prior to the end of the full contemplated term thereof,
    and if the interest received for the actual period of existence thereof
    exceeds the Maximum Amount, Lenders, LC Fronting Bank, Administrative
    Agent, Documentation Agent or Syndication Agent shall refund such excess,
    and, in such event, Lenders shall not, to the extent permitted by Law, be
    subject to any penalties provided by any Laws for contracting for,
    charging, taking, reserving, or receiving interest in excess of the Maximum
    Amount.  As used herein, "MAXIMUM AMOUNT" and "MAXIMUM RATE" respectively
    mean, for each Lender, LC Fronting Bank, Administrative Agent,
    Documentation Agent or Syndication Agent, the maximum non-usurious amount
    and the maximum non- usurious rate of interest which, under applicable Law,
    such Lender, LC Fronting Bank, Administrative Agent, Documentation Agent or
    Syndication Agent is permitted to contract for, charge, take, reserve, or
    receive on the Obligation.

            11.10    ENTIRETY.  THIS AGREEMENT (AS AMENDED IN WRITING FROM TIME
    TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY ANY COMPANY, ANY
    LENDER, LC FRONTING BANK, DOCUMENTATION AGENT, SYNDICATION AGENT AND/OR
    ADMINISTRATIVE AGENT REPRESENT THE FINAL AGREEMENT BETWEEN THE COMPANIES,
    LENDERS, LC FRONTING BANK, DOCUMENTATION AGENT, SYNDICATION AGENT AND
    ADMINISTRATIVE AGENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
    CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY SUCH PARTIES.  THERE ARE
    NO ORAL AGREEMENTS BETWEEN SUCH PARTIES.

            11.11    VENUE; SERVICE OF PROCESS; JURY TRIAL.

                     (a)     BORROWER HEREBY EXPRESSLY SUBMITS TO THE
            JURISDICTION OF STATE AND FEDERAL COURTS LOCATED IN TEXAS.
            BORROWER WAIVES IN ALL DISPUTES BEFORE ANY COURT ANY OBJECTION THAT
            IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE
            INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
            OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS.

                     (b)     BORROWER AGREES THAT ADMINISTRATIVE AGENT, LC
            FRONTING BANK, DOCUMENTATION AGENT, SYNDICATION AGENT AND ANY
            LENDER SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED BY





                                      -79-
<PAGE>   87
            APPLICABLE LAW, TO PROCEED AGAINST BORROWER OR ITS PROPERTY IN A
            COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO ENABLE
            ADMINISTRATIVE AGENT, LC FRONTING BANK, DOCUMENTATION AGENT,
            SYNDICATION AGENT OR ANY LENDER TO REALIZE ON SUCH PROPERTY, OR TO
            ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
            ADMINISTRATIVE AGENT, LC FRONTING BANK, DOCUMENTATION AGENT,
            SYNDICATION AGENT OR ANY LENDER.  BORROWER WAIVES ANY OBJECTION
            THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH
            ADMINISTRATIVE AGENT, LC FRONTING BANK, DOCUMENTATION AGENT,
            SYNDICATION AGENT OR ANY LENDER HAS COMMENCED A PROCEEDING
            DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY
            OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
            NON CONVENIENS.

                     (c)     TO THE EXTENT PERMITTED BY LAW, BORROWER,
            ADMINISTRATIVE AGENT, LC FRONTING BANK, DOCUMENTATION AGENT,
            SYNDICATION AGENT AND LENDERS EACH WAIVE ANY RIGHT TO HAVE A JURY
            PARTICIPATE IN RESOLVING ANY DISPUTE WHETHER SOUNDING IN CONTRACT,
            TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
            INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
            CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
            INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
            TRIAL WITHOUT A JURY.

                     (d)     NOTHING HEREIN SHALL AFFECT THE RIGHT OF
            ADMINISTRATIVE AGENT, LC FRONTING BANK, DOCUMENTATION AGENT,
            SYNDICATION AGENT, ANY LENDER OR ANY HOLDER OF A NOTE TO SERVE
            PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
            PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER
            JURISDICTION.

            11.12    Amendments, Consents, Conflicts, and Waivers.

                     (a)     Except as otherwise specifically provided, (i)
            this Agreement may only be amended by an instrument in writing
            executed jointly by Borrower and Required Lenders and supplemented
            only by documents delivered or to be delivered in accordance with
            the express terms hereof, and (ii) the other Loan Documents may
            only be the subject of an amendment, modification, or waiver if
            Borrower and Required Lenders have approved same; provided that no
            amendment, waiver or consent affecting the rights or duties of
            Administrative Agent or LC Fronting Bank shall in any event be
            effective unless in writing and signed by Administrative Agent or
            LC Fronting Bank, as applicable, in addition to Borrower and the
            Lenders required herein to take such action.





                                      -80-
<PAGE>   88

                     (b)     Any amendment to or consent or waiver under this
            Agreement or any Loan Document which purports to accomplish any of
            the following must be by an instrument in writing executed by
            Borrower, Administrative Agent and LC Fronting Bank and executed
            (or approved, as the case may be) by each Lender: (i) extends the
            due date or decreases the amount of any scheduled payment or other
            payment of the Obligation beyond the date specified in the Loan
            Documents; (ii) decreases any rate or amount of interest, fees, or
            other sums payable to Administrative Agent, LC Fronting Bank or
            Lenders hereunder (except such reductions as are contemplated by
            this Agreement); (iii) changes the definition of "APPLICABLE
            MARGIN," "COMMITTED SUM," "COMMITMENT PERCENTAGE," "MAJORITY
            LENDERS," "REQUIRED LENDERS," "REVOLVING CREDIT TERMINATION DATE,"
            or "TOTAL COMMITMENT"; (iv) increases any one or more Lenders'
            Committed Sums; (v) releases (in whole or in part) any Guaranty or
            releases (in whole or in part) any Collateral, except to the extent
            dispositions of assets are permitted by this Agreement; or (vi)
            changes this CLAUSE (B) or any other matter specifically requiring
            the consent of all Lenders hereunder.

                     (c)     Any conflict or ambiguity between the terms and
            provisions herein and terms and provisions in any other Loan
            Document shall be controlled by the terms and provisions herein.

                     (d)     No course of dealing nor any failure or delay by
            Administrative Agent, LC Fronting Bank, any Lender, or any of their
            respective Representatives with respect to exercising any Right of
            Administrative Agent, LC Fronting Bank or any Lender hereunder
            shall operate as a waiver thereof.  A waiver must be in writing and
            signed by Required Lenders (or by all Lenders, if required
            hereunder, or by Majority Lenders, if permitted hereunder) to be
            effective, and such waiver will be effective only in the specific
            instance and for the specific purpose for which it is given.

            11.13    Multiple Counterparts.  This Agreement may be executed in
    a number of identical counterparts, each of which shall be deemed an
    original for all purposes and all of which constitute, collectively, one
    agreement; but, in making proof of this Agreement, it shall not be
    necessary to produce or account for more than one such counterpart.  It is
    not necessary that each Lender execute the same counterpart so long as
    identical counterparts are executed by Borrower, each Lender,
    Administrative Agent, LC Fronting Bank, Syndication Agent, and
    Documentation Agent.  This Agreement shall become effective when
    counterparts hereof shall have been executed and delivered to
    Administrative Agent by each Lender, Administrative Agent, LC Fronting
    Bank, Syndication Agent, Documentation Agent, and Borrower, or, in the case
    only of Lenders, when Administrative Agent shall have received telecopied,
    telexed, or other evidence satisfactory to it that each Lender has executed
    and is delivering to Administrative Agent a counterpart hereof.  Certain
    Lenders may have executed multiple signature pages hereof in addition to
    full counterparts hereof, in which event, Borrower and Administrative Agent
    are authorized to execute such additional signature pages and insert them,
    along with signature pages for other parties hereto, into one or more
    counterparts of this Agreement containing signatures of all parties hereto,
    each of which counterpart shall be deemed an original of this Agreement for
    all purposes.





                                      -81-
<PAGE>   89

            11.14    Successors and Assigns; Participation.

                     (a)     This Agreement shall be binding upon, and inure to
            the benefit of the parties hereto and their respective successors
            and assigns, except that (i) no Company may, directly or
            indirectly, assign or transfer, or attempt to assign or transfer,
            any of its Rights, duties or obligations under any Loan Documents
            without the express written consent of all Lenders (except for such
            assignments or transfers permitted by SECTION 7.17 hereof), and
            (ii) no Lender may transfer, assign or sell any participation in
            its portion of the Obligation except as permitted under this
            section, and no Lender may pledge or encumber its portion of the
            Obligation except to a Person that qualifies as an Eligible
            Assignee and that has agreed in writing (with a copy to Borrower
            and Administrative Agent) to be bound by the provisions of SECTION
            11.16.  Notwithstanding CLAUSE (II) of this SECTION 11.14(A), any
            Lender may at any time, without the consent of Borrower or
            Administrative Agent, assign all or any portion of its Rights under
            this Agreement, the Loan Documents, and the Notes to a Federal
            Reserve Bank; provided, however, that no such assignment shall
            release the transferor Lender from its obligations under this
            Agreement.

                     (b)     Subject to the provisions of this section and in
            accordance with applicable Law, any Lender may, upon notice to
            Borrower and Administrative Agent, in the ordinary course of its
            business and in accordance with applicable Law, at any time sell to
            one or more Persons (each a "PARTICIPANT") participating interests
            in an amount not less than $5,000,000 in its portion of the
            Obligation.  In the event of any such sale to a Participant, (i)
            such Lender shall remain a "Lender" under this Agreement and the
            Participant shall not constitute a "Lender" hereunder, (ii) such
            Lender's obligations under this Agreement shall remain unchanged,
            (iii) such Lender shall remain solely responsible for the
            performance thereof, (iv) such Lender shall remain the holder of
            its share of the Principal Debt for all purposes under this
            Agreement, and (v) Borrower and Administrative Agent shall continue
            to deal solely and directly with such Lender in connection with
            such Lender's Rights and obligations under the Loan Documents.
            Participants shall have no Rights under the Loan Documents.
            Subject to the following, each Lender shall be entitled to obtain
            (on behalf of its Participants) the benefits of SECTIONS 3.15
            through 3.18 with respect to all participations in its part of the
            Obligation outstanding from time to time so long as Borrower shall
            not be obligated to pay any amount in excess of the amount that
            would be due to such Lender under SECTIONS 3.15 through 3.18
            calculated as though no participations have been made.  No Lender
            shall sell any participating interest under which the Participant
            shall have any Rights to approve any amendment, modification, or
            waiver of any Loan Document, except to the extent such amendment,
            modification, or waiver extends the due date for payment of any
            amount in respect of principal, interest, or fees due under the
            Loan Documents, reduces the interest rate or the amount of
            principal or fees applicable to the Obligation (except such
            reductions as are contemplated by this Agreement) or releases any
            material portion of the Collateral (except as permitted by this
            Agreement); provided that in those cases where a Participant is
            entitled to the benefits of SECTIONS 3.15 through 3.18, such Lender
            must include a voting mechanism in the relevant participation
            agreement whereby a majority of such Lender's portion of the





                                      -82-
<PAGE>   90
            Obligation (whether held by such Lender or participated) shall
            control the vote for all of such Lender's portion of the
            Obligation.  Except in the case of the sale of a participating
            interest to a Lender, the relevant participation agreement shall
            not permit the Participant to transfer, pledge, assign, sell
            participation in, or otherwise encumber its portion of the
            Obligation.  Each Participant shall comply with and be bound by the
            obligations set forth in SECTION 11.16 as fully as if such
            Participant were a Lender hereunder.

                     (c)     Subject to the provisions of this section, upon
            the prior notice to Borrower and Administrative Agent, any Lender
            may, in the ordinary course of its business and in accordance with
            applicable Law, sell to one or more Eligible Assignees (each a
            "PURCHASER") a proportionate part (not less than $5,000,000 of (i)
            Term Principal Debt, (ii) its Committed Sum under the Revolving
            Credit Facility, or (iii) a combination of (I) AND (II), unless
            such Lender is selling all of its Rights and obligations under the
            Loan Documents or is selling to another Lender or an Affiliate of a
            Lender) of all or any part of its Rights and obligations under the
            Loan Documents, and such Purchaser shall assume such Rights and
            obligations, pursuant to an Assignment Agreement, substantially in
            the form of EXHIBIT J hereto; provided that no Lender may sell an
            interest that would cause its combined Term Principal Debt and
            Committed Sum under the Revolving Credit Facility to be less than
            $5,000,000, except in the case of a sale of all of its Rights and
            obligations under the Loan Documents.  Upon (i) delivery of an
            executed copy of the Assignment Agreement to Borrower and
            Administrative Agent, and (ii) payment of a fee of $3,000 from such
            transferor to Administrative Agent, from and after the assignment's
            effective date (which shall be after the date of such delivery),
            such Purchaser shall for all purposes be a Lender party to this
            Agreement and shall have all the Rights and obligations of a Lender
            under this Agreement to the same extent as if it were an original
            party hereto with commitments as set forth in the assignment
            agreement, and the transferor Lender shall be released from its
            obligations hereunder to a corresponding extent, and, except as
            provided in the following sentence, no further consent or action by
            Borrower, Lenders, or Administrative Agent shall be required.  Upon
            the consummation of any transfer to a Purchaser pursuant to this
            CLAUSE (C), SCHEDULE 2.1 shall automatically be deemed to reflect
            the name, address, and Committed Sum of such Purchaser,
            Administrative Agent shall deliver to Borrower and Lenders an
            amended SCHEDULE 2.1 reflecting such changes, Borrower shall
            execute and deliver to each of the transferor Lender and such
            Purchaser, Notes in the face amount of the respective Committed
            Sums following such transfer, and, upon receipt of such Notes, such
            transferor Lender shall return to Borrower the Notes previously
            delivered to such Lender hereunder.  A Purchaser shall be subject
            to all the provisions in this section the same as if it were a
            Lender signatory hereto as of the initial Borrowing Date.

                     (d)     If pursuant to CLAUSES (B) or (C) above any
            interest in the Obligation is transferred to any Participant or
            Purchaser which is organized under the Laws of any jurisdiction
            other than the United States of America or any state thereof, the
            transferor Lender shall, as a condition to the effectiveness and
            completion of such transfer, cause such Participant or Purchaser,
            concurrently with the effectiveness of such transfer (i) to
            represent





                                      -83-
<PAGE>   91
            to the transferor Lender (for the benefit of the transferor Lender,
            Administrative Agent, and Borrower) that, under applicable Laws, no
            Taxes will be required to be withheld by Administrative Agent,
            Borrower, or the transferor Lender with respect to any payments to
            be made to such Participant or Purchaser in respect of the
            Obligation, (ii) to furnish to each of the transferor Lender,
            Administrative Agent, and Borrower two duly completed copies of
            either U.S. Internal Revenue Service Form 4224 or Form 1001
            (wherein such Purchaser or Participant claims entitlement to
            complete exemption from United States federal withholding Tax on
            all interest payments hereunder), or Form W-8, as applicable, and
            (iii) to agree (for the benefit of the transferor Lender,
            Administrative Agent, and Borrower), (x) to provide the transferor
            Lender, Administrative Agent, and Borrower a new Form 4224 or Form
            1001 or Form W-8, as applicable, upon the expiration or
            obsolescence of any previously delivered form in accordance with
            applicable Laws, duly executed and completed by such Purchaser, and
            (y) to comply from time to time with all applicable Laws with
            regard to such withholding Tax exemption.

                     (e)     The Administrative Agent will maintain records
            that reflect and identify the owners of an interest in the
            Obligation.

            11.15    Discharge Only Upon Payment in Full;  Reinstatement in
    Certain Circumstances.  Each Company's obligations under the Loan Documents
    shall remain in full force and effect until the Total Commitment shall have
    terminated and the Obligation shall have been paid in full, except for
    provisions under the Loan Documents expressly intended to survive by the
    terms hereof or by the terms of the applicable Loan Documents.  If at any
    time any payment of the principal of or interest on any Note or any other
    amount payable by Borrower under any Loan Document is rescinded or must be
    otherwise restored or returned upon the insolvency, bankruptcy, or
    reorganization of Borrower or otherwise, the obligations of each Company
    under the Loan Documents with respect to such payment shall be reinstated
    as though such payment had been due but not made at such time.

            11.16    Confidentiality.  Administrative Agent, Documentation
    Agent, Syndication Agent, LC Fronting Bank, each Lender and each
    Participant shall hold all non-public information, furnished by or on
    behalf of Borrower and Companies in connection with or pursuant to the
    negotiation, preparation or requirements of this Agreement or any of the
    Loan Documents which have been identified as such by Borrower in accordance
    with its customary procedures for handling confidential information of this
    nature and in accordance with safe and sound banking practices and in any
    event, may make any disclosure to its attorneys or as reasonably required
    by any prospective bona fide Eligible Assignee or Participant in connection
    with the contemplated transfer of any Loan so long as any such contemplated
    Eligible Assignee or Participant has agreed in writing (with a copy to each
    of Borrower and Administrative Agent) to be bound by the provisions of this
    SECTION 11.16 or as required or requested by any governmental agency or
    representative thereof or pursuant to any Law or legal process; provided
    that unless specifically prohibited by applicable Law or court order,
    Administrative Agent, Documentation Agent, Syndication Agent, LC Fronting
    Bank, each Lender and each Participant shall notify Borrower of any request
    by any governmental agency or





                                      -84-
<PAGE>   92
    representative thereof (other than any such request in connection with an
    examination of the financial condition of such Person by such governmental
    agency) for disclosure of such non-public information.

            11.17    Non-Application of Chapter 15 of Texas Credit Code.  The
    provisions of Chapter 15 of the Texas Credit Code (Vernon's Texas Civil
    Statutes, Article 5069-15) are specifically declared by the parties hereto
    not to be applicable to this Agreement or any of the other Loan Documents
    or to the transactions contemplated hereby.


       [REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGES FOLLOW.]





                                      -85-
<PAGE>   93

         EXECUTED the 26th day of September, 1996, but effective as of the date
first mentioned on the initial page of this Credit Agreement.



                                        AVIALL, INC.,
                                        as Borrower


                                        By  /s/ C. Van Den Handel
                                            ------------------------------------
                                            C. Van Den Handel
                                            Treasurer and Director of Planning


                                        NATIONSBANK OF TEXAS, N.A.,
                                        as Administrative Agent and LC Fronting
Bank


                                        By  /s/ Todd Shipley
                                            ------------------------------------
                                            Todd Shipley
                                            Senior Vice President


                                        J.P. MORGAN SECURITIES INC.,
                                        as Documentation Agent


                                        By  /s/ Michael C. Mauer
                                            ------------------------------------
                                            Michael C. Mauer
                                            Vice President


                                        NATIONSBANC CAPITAL MARKETS, INC.,
                                        as Syndication Agent


                                        By  /s/ Gary L. Kahn
                                            ------------------------------------
                                            Gary L. Kahn
                                            Senior Vice President
<PAGE>   94
         Signature Page to that certain Credit Agreement dated as of September
26, 1996, among Aviall, Inc., as Borrower, NationsBank of Texas, N.A., as
Administrative Agent and LC Fronting Bank, J.P. Morgan Securities Inc., as
Documentation Agent, NationsBanc Capital Markets, Inc., as Syndication Agent,
and certain Lenders named therein, including the undersigned.

         EXECUTED the 26th day of September, 1996, but effective as of the date
first mentioned on the initial page of this Credit Agreement.


                                        THE FIRST NATIONAL BANK OF BOSTON,
                                        as a Lender


                                        By  /s/ Robert L. Wallace
                                            ------------------------------------
                                            Robert L. Wallace
                                            Director
<PAGE>   95
         Signature Page to that certain Credit Agreement dated as of September
26, 1996, among Aviall, Inc., as Borrower, NationsBank of Texas, N.A., as
Administrative Agent and LC Fronting Bank, J.P. Morgan Securities Inc., as
Documentation Agent, NationsBanc Capital Markets, Inc., as Syndication Agent,
and certain Lenders named therein, including the undersigned.

         EXECUTED the 26th day of September, 1996, but effective as of the date
first mentioned on the initial page of this Credit Agreement.



                                        MORGAN GUARANTY TRUST COMPANY
                                        OF NEW YORK,
                                        as a Lender


                                        By  /s/ Stephen B. King
                                            ------------------------------------
                                            Stephen B. King
                                            Vice President
<PAGE>   96
         Signature Page to that certain Credit Agreement dated as of September
26, 1996, among Aviall, Inc., as Borrower, NationsBank of Texas, N.A., as
Administrative Agent and LC Fronting Bank, J.P. Morgan Securities Inc., as
Documentation Agent, NationsBanc Capital Markets, Inc., as Syndication Agent,
and certain Lenders named therein, including the undersigned.

         EXECUTED the 26th day of September, 1996, but effective as of the date
first mentioned on the initial page of this Credit Agreement.



                                        NATIONSBANK OF TEXAS, N.A.,
                                        as a Lender


                                        By  /s/ Todd Shipley
                                            ------------------------------------
                                            Todd Shipley
                                            Senior Vice President
<PAGE>   97
         Signature Page to that certain Credit Agreement dated as of September
26, 1996, among Aviall, Inc., as Borrower, NationsBank of Texas, N.A., as
Administrative Agent and LC Fronting Bank, J.P. Morgan Securities Inc., as
Documentation Agent, NationsBanc Capital Markets, Inc., as Syndication Agent,
and certain Lenders named therein, including the undersigned.

         EXECUTED the 26th day of September, 1996, but effective as of the date
first mentioned on the initial page of this Credit Agreement.



                                        SOCIETE GENERALE, SOUTHWEST AGENCY,
                                        as a Lender


                                        By  /s/ Richard M. Lewis
                                            ------------------------------------
                                            Richard M. Lewis
                                            Vice President
<PAGE>   98
         Signature Page to that certain Credit Agreement dated as of September
26, 1996, among Aviall, Inc., as Borrower, NationsBank of Texas, N.A., as
Administrative Agent and LC Fronting Bank, J.P. Morgan Securities Inc., as
Documentation Agent, NationsBanc Capital Markets, Inc., as Syndication Agent,
and certain Lenders named therein, including the undersigned.

         EXECUTED the 26th day of September, 1996, but effective as of the date
first mentioned on the initial page of this Credit Agreement.



                                        THE SUMITOMO BANK, LIMITED,
                                        as a Lender


                                        By  /s/ Kirk L. Stites
                                            Kirk L. Stites
                                            ------------------------------------
                                            Vice President and Manager



                                        By  /s/ Julie A. Schell
                                            ------------------------------------
                                            Julie A. Schell
                                            Vice President