EXHIBIT 28
                           SECOND AMENDED AND RESTATED
                      LOAN, GUARANTY AND SECURITY AGREEMENT

                            Dated as of July 23, 2001

                                      Among

                    THE FINANCIAL INSTITUTIONS NAMED HEREIN,

                                 as the Lenders,

                              BANK OF AMERICA, N.A.

                                  as the Agent,

                              RIDDELL SPORTS INC.,

                            as the Parent Guarantor,

                                       and

                           VARSITY SPIRIT CORPORATION,

                    VARSITY SPIRIT FASHIONS & SUPPLIES, INC.,

                 VARSITY USA, INC., VARSITY/INTROPA TOURS, INC.,

                                       and

                           INTERNATIONAL LOGOS, INC.,

                          collectively, as the Borrower


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                                TABLE OF CONTENTS

                                    ARTICLE 1

                        INTERPRETATION OF THIS AGREEMENT

1.1      Definitions...........................................................2

1.2      Accounting Terms.....................................................25

1.3      Interpretive Provisions..............................................25

                                    ARTICLE 2

                           LOANS AND LETTERS OF CREDIT

2.1      Total Facility.......................................................26

2.2      Revolving Loans......................................................26

2.3      [INTENTIONALLY OMITTED]..............................................31

2.4      Letters of Credit....................................................31

                                    ARTICLE 3

                                INTEREST AND FEES

3.1      Interest.............................................................37

3.2      [INTENTIONALLY OMITTED]..............................................38

3.3      Maximum Interest Rate................................................38

3.4      [INTENTIONALLY OMITTED]..............................................41

3.5      Unused Line Fee......................................................38

3.6      Letter of Credit Fee.................................................38

3.7      Agent's Fee..........................................................39

                                    ARTICLE 4

                            PAYMENTS AND PREPAYMENTS

4.1      Revolving Loans......................................................39

4.2      Termination or Reduction of Facility.................................39

4.3      [INTENTIONALLY OMITTED]..............................................39

4.4      [INTENTIONALLY OMITTED]..............................................39

4.5      [INTENTIONALLY OMITTED]..............................................39

4.6      Payments by the Borrower.............................................40

4.7      Payments as Revolving Loans..........................................40

4.8      Apportionment, Application and Reversal of Payments..................40

4.9      Indemnity for Returned Payments......................................41

4.10     Agent's and Lenders' Books and Records; Monthly Statements...........41



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                                    ARTICLE 5

                     TAXES, YIELD PROTECTION AND ILLEGALITY

5.1      Taxes................................................................41

5.2      [INTENTIONALLY OMITTED]..............................................42

5.3      Increased Costs and Reduction of Return..............................42

5.4      [INTENTIONALLY OMITTED]..............................................43

5.5      Certificates of Lenders..............................................43

5.6      Survival.............................................................43

                                    ARTICLE 6

                                   COLLATERAL

6.1      Grant of Security Interest...........................................43

6.2      Perfection and Protection of Security Interest.......................44

6.3      Location of Collateral...............................................46

6.4      Title to, Liens on, and Sale and Use of Collateral...................46

6.5      Appraisals...........................................................47

6.6      Access and Examination; Confidentiality..............................47

6.7      Collateral Reporting.................................................48

6.8      Accounts.............................................................48

6.9      Collection of Accounts; Payments.....................................50

6.10     Inventory; Perpetual Inventory.......................................50

6.11     Equipment............................................................51

6.12     Assigned Contracts...................................................52

6.13     Documents, Instruments, and Chattel Paper............................52

6.14     Right to Cure........................................................53

6.15     Power of Attorney....................................................53

6.16     The Agent's and Lenders' Rights, Duties and Liabilities..............53

6.17     Site Visits, Observations and Testing................................54

6.18     [INTENTIONALLY OMITTED]..............................................54

6.19     [INTENTIONALLY OMITTED]..............................................54

                                    ARTICLE 7

                BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES

7.1      Books and Records....................................................54

7.2      Financial Information................................................55

7.3      Notices to the Lenders...............................................57

                                       ii

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                                    ARTICLE 8

                     GENERAL WARRANTIES AND REPRESENTATIONS

8.1      Authorization, Validity, and Enforceability of this
          Agreement and the Loan Documents....................................59

8.2      Validity and Priority of Security Interest...........................60

8.3      Organization and Qualification.......................................60

8.4      Corporate Name; Prior Transactions...................................60

8.5      Subsidiaries and Affiliates..........................................60

8.6      Financial Statements and Projections.................................60

8.7      Capitalization.......................................................61

8.8      Solvency.............................................................61

8.9      Debt.................................................................61

8.10     Distributions........................................................61

8.11     Title to Property....................................................61

8.12     Real Estate; Leases..................................................61

8.13     Proprietary Rights...................................................62

8.14     Trade Names and Terms of Sale........................................62

8.15     Litigation...........................................................62

8.16     Restrictive Agreements...............................................62

8.17     Labor Disputes.......................................................62

8.18     Environmental Laws...................................................62

8.19     No Violation of Law..................................................63

8.20     No Default...........................................................63

8.21     ERISA Compliance.....................................................63

8.22     Taxes................................................................64

8.23     Regulated Entities...................................................64

8.24     Use of Proceeds; Margin Regulations..................................64

8.25     Copyrights, Patents, Trademarks and Licenses.........................64

8.26     No Material Adverse Effect...........................................64

8.27     Full Disclosure......................................................65

8.28     Material Agreements..................................................65

8.29     Bank Accounts........................................................65

8.30     Governmental Authorization...........................................65

                              ARTICLE 9   65

9.1      Taxes and Other Obligations..........................................65

9.2      Corporate Existence and Good Standing................................65

                                      iii
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9.3      Compliance with Law and Agreements; Maintenance of Licenses..........66

9.4      Maintenance of Property..............................................66

9.5      Insurance............................................................66

9.6      Condemnation.........................................................67

9.7      Environmental Laws...................................................68

9.8      Compliance with ERISA................................................69

9.9      Mergers, Consolidations or Sales.....................................69

9.10     Distributions; Capital Change; Restricted Investments................70

9.11     Transactions Affecting Collateral or Obligations.....................70

9.12     Guaranties...........................................................70

9.13     Debt.................................................................70

9.14     Prepayment...........................................................71

9.15     Transactions with Affiliates.........................................71

9.16     Investment Banking and Finder's Fees.................................71

9.17     [INTENTIONALLY OMITTED]..............................................71

9.18     Business Conducted...................................................71

9.19     Liens................................................................71

9.20     Sale and Leaseback Transactions......................................71

9.21     New Subsidiaries.....................................................72

9.22     Fiscal Year..........................................................72

9.23     Capital Expenditures.................................................72

9.24     Operating Lease Obligations..........................................72

9.25     Net Worth............................................................72

9.26     Fixed Charge Coverage Ratio..........................................73

9.27     Use of Proceeds......................................................73

9.28     Umbro Consent........................................................73

9.29     Further Assurances...................................................73

                                   ARTICLE 10

                              CONDITIONS OF LENDING

10.1     Conditions Precedent to Making of Loans to be Satisfied
          on the Closing Date ................................................73

10.2     Additional Conditions Precedent to Each Loan.........................75

                                       iv

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                                   ARTICLE 11

                                DEFAULT; REMEDIES

11.1     Events of Default....................................................76

11.2     Remedies.............................................................78

                                   ARTICLE 12

                              TERM AND TERMINATION

12.1     Term and Termination.................................................80

                                   ARTICLE 13

           AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS

13.1     No Waivers Cumulative Remedies.......................................80

13.2     Amendments and Waivers...............................................80

13.3     Assignments; Participations..........................................81

                                   ARTICLE 14

                                    THE AGENT

14.1     Appointment and Authorization........................................83

14.2     Delegation of Duties.................................................83

14.3     Liability of Agent...................................................83

14.4     Reliance by Agent....................................................84

14.5     Notice of Default....................................................84

14.6     Credit Decision......................................................84

14.7     Indemnification......................................................85

14.8     Agent in Individual Capacity.........................................85

14.9     Successor Agent......................................................85

14.10    Withholding Tax......................................................86

14.11    [INTENTIONALLY OMITTED]..............................................87

14.12    Collateral Matters...................................................87

14.13    Restrictions on Actions by Lenders; Sharing of Payments..............88

14.14    Agency for Perfection................................................89

14.15    Payments by Agent to Lenders.........................................89

14.16    Concerning the Collateral and the Related Loan Documents.............89

14.17    Field Audit and Examination Reports; Disclaimer by Lenders...........89

14.18    Relation Among Lenders...............................................90

                                       v

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                                   ARTICLE 15

                                  MISCELLANEOUS

15.1     Cumulative Remedies; No Prior Recourse to Collateral.................90

15.2     Severability.........................................................90

15.3     Governing Law; Choice of Forum; Service of Process;
          Jury Trial Waiver ..................................................90

15.4     Submission to Jurisdiction; Waivers..................................92

15.5     Survival of Representations and Warranties...........................92

15.6     Other Security and Guaranties........................................92

15.7     Fees and Expenses....................................................92

15.8     Notices..............................................................93

15.9     Waiver of Notices....................................................94

15.10    Binding Effect.......................................................94

15.11    Indemnity of the Agent and the Lenders by the Borrower...............94

15.12    Limitation of Liability..............................................95

15.13    Final Agreement......................................................95

15.14    Counterparts.........................................................95

15.15    Captions.............................................................96

15.16    Right of Setoff......................................................96

15.17    Borrower Joint and Several Liability.................................96

15.18    Contribution and Indemnification among the Borrowers.................97

15.19    Agency of the Parent Guarantor for each Borrower
          and other Loan Party ...............................................97

                                   ARTICLE 16

                                    GUARANTEE

16.1     Guaranteed Obligations...............................................98

16.2     Guarantee Absolute; Alteration of Obligations........................98

16.3     Obligations Joint and Several; Rights Not Exclusive..................99

16.4     Waivers.............................................................100

16.5     Contribution and Indemnification; Subrogation.......................101

16.6     Subordination.......................................................102

16.7     No Effect on Guarantee..............................................102

16.8     Continuing Guarantee................................................102

                                       vi

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                             EXHIBITS AND SCHEDULES

EXHIBIT A - INTENTIONALLY OMITTED
EXHIBIT B - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C - FINANCIAL STATEMENTS
EXHIBIT D - LIST OF CLOSING DOCUMENTS
EXHIBIT E - NOTICE OF BORROWING
EXHIBIT F - NOTICE OF CONVERSION/CONTINUATION
EXHIBIT G - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 1--NOTICE OF ASSIGNMENT AND ACCEPTANCE
SCHEDULE 1.1--MATERIAL LICENSE AGREEMENTS
SCHEDULE 6.3--LOCATION OF COLLATERAL
SCHEDULE 8.3--ORGANIZATION AND QUALIFICATION
SCHEDULE 8.4--CORPORATE NAME; PRIOR TRANSACTIONS
SCHEDULE 8.5--SUBSIDIARIES AND AFFILIATES
SCHEDULE 8.9--DEBT
SCHEDULE 8.12--REAL ESTATE; LEASES
SCHEDULE 8.13--PROPRIETARY RIGHTS
SCHEDULE 8.14--TRADE  NAMES AND TERMS OF SALE
SCHEDULE 8.15--LITIGATION
SCHEDULE 8.17--LABOR  DISPUTES
SCHEDULE 8.18--ENVIRONMENTAL   LAWS
SCHEDULE 8.21--ERISA  COMPLIANCE
SCHEDULE 8.28--MATERIAL  AGREEMENTS
SCHEDULE 8.29--BANK ACCOUNTS
SCHEDULE 9.5--INSURANCE
SCHEDULE 9.19--LIENS
SCHEDULE 9.14--PREPAYMENT
SCHEDULE 10.1 --

                                      vii

<PAGE>


                           SECOND AMENDED AND RESTATED

                      LOAN, GUARANTY AND SECURITY AGREEMENT

         THIS AMENDED AND RESTATED LOAN, GUARANTY AND SECURITY AGREEMENT,  dated
as of July 23, 2001, is among the financial institutions listed on the signature
pages  hereof  (such  financial  institutions,  together  with their  respective
successors  and assigns  (provided  such  assignees  satisfy the  conditions  in
SECTION  13.3  hereof),  are  referred to  hereinafter  each  individually  as a
"Lender" and  collectively  as the  "Lenders"),  Bank America,  N.A., a national
banking association,  as successor in interest to Bank of America National Trust
and Savings Association, a national banking association ("Bank of America") with
an office at 6060 Poplar  Avenue,  Memphis,  Tennessee  38119,  as agent for the
Lenders (in its capacity as agent), together with its successors in its capacity
as agent (the  "Agent"),  Riddell  Sports  Inc.,  a Delaware  corporation,  with
offices at 2525 Horizon Lake Drive,  Suite One,  Memphis,  TN 38133 (the "Parent
Guarantor"),  and each of Varsity Spirit  Corporation,  a Tennessee  corporation
("Spirit"),  with  offices at 2525 Horizon Lake Drive,  Suite One,  Memphis,  TN
38133,  Varsity  Spirit  Fashions &  Supplies,  Inc.,  a  Minnesota  corporation
("Fashions"),  with offices at 2525 Horizon Lake Drive,  Suite One, Memphis,  TN
38133, Varsity USA, Inc., a Tennessee  corporation ("USA"), with offices at 2525
Horizon Lake Drive, Suite One, Memphis, TN 38133, Varsity/Intropa Tours, Inc., a
Tennessee  corporation  ("Intropa"),  with  offices at 2525  Horizon Lake Drive,
Suite One,  Memphis,  TN 38133,  and  International  Logos,  Inc.,  a  Tennessee
corporation  ("Logos"),  with  offices at 2525  Horizon  Lake Drive,  Suite One,
Memphis,  TN 38133 (Spirit,  Fashions,  USA,  Intropa and Logos are collectively
referred to as the "Borrower").

                               W I T N E S S E T H

         WHEREAS,  the Parent Guarantor,  as borrower,  together with certain of
the parties comprising the Borrower and certain other subsidiaries of the Parent
Guarantor as guarantors,  NBD Bank, as administrative  and collateral agent (the
"Prior Administrative  Agent"),  NationsBank,  N.A., as documentation agent (the
"Prior Documentation  Agent"), and certain lenders (the "Prior Lenders") entered
into that certain Credit Agreement,  dated as of June 19, 1997 (as amended,  the
"First Loan Agreement");

         WHEREAS,  the Lenders  acquired the rights and obligations of the Prior
Lenders  under the First  Loan  Agreement  and the other  Credit  Documents  (as
defined  in the  First  Loan  Agreement)  pursuant  to  the  Loan  Purchase  and
Assignment  Agreement,  dated  as  of  April  20,  1999  (the  "Loan  Assignment
Agreement"), and the Lenders replaced the Prior Lenders;

         WHEREAS,  the Lenders agreed to modify the credit facility evidenced by
the First Loan  Agreement to make  available to Parent  Guarantor and certain of
its  subsidiaries  a $48,000,000  revolving line of credit  facility  ("Original
Loan")  pursuant  to that  certain  Amended and  Restated  Loan,  Guaranty,  and
Security  Agreement  dated  as of April  20,  1999,  as  amended  ("Second  Loan
Agreement"); and

         WHEREAS,  Bank of  America  has  previously  acquired  all of the other
Lenders'  interests in the Original Loan pursuant to Assignment  and  Acceptance
dated July 6, 2001; and

         WHEREAS,  certain of the parties comprising  "Borrower" and "Subsidiary
Guarantors",  as defined and described in the Second Loan  Agreement,  have been
terminated  and  released as Loan  Parties  under the Second Loan  Agreement  in
connection  with the sale of such parties by Parent  Guarantor,  all pursuant to
that certain Paydown Letter dated June 22, 2001; and


                                       1
<PAGE>


         WHEREAS,  the Parent and the Borrower have now requested (i) a decrease
in the  maximum  available  revolving  line of credit  for loans and  letters of
credit to an amount not to exceed $15,000,000 and which extensions of credit the
Borrower will use for its working capital needs and general  business  purposes,
(ii) a shortening of the maturity date of the credit facility,  (iii) changes to
the interest rates on the loans, and (iv) certain other amendments to the Second
Loan Agreement and the other documents  evidencing,  security or relating to the
Original  Loan,  and the Lenders and the Agent have agreed  thereto on the terms
and subject to the conditions set forth herein;

         WHEREAS,  to effectuate  the  foregoing,  the parties  hereto desire to
amend and restate in its entirety the Second Loan Agreement as  hereinafter  set
forth, and the Lenders have agreed to make available to the Borrower a revolving
credit facility described herein upon the terms and conditions set forth in this
Agreement;

         WHEREAS,  Spirit is a wholly-owned  subsidiary of the Parent Guarantor,
and Fashions,  Intropa,  Logos and USA are wholly-owned  subsidiaries of Spirit,
and Parent Guarantor desires to guaranty such extensions of credit to induce the
Lenders to make  available to the Borrower  such  extensions  of credit,  as the
Parent Guarantor will directly benefit  therefrom and which extensions of credit
and guarantees thereof will further the promotion, conduct and attainment of the
business of the Parent Guarantor; and

         NOW,   THEREFORE,   in  consideration  of  the  mutual  conditions  and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged,  the Lenders, the Agent, the Parent
Guarantor and the Borrower  hereby amend and restate the Second Loan  Agreement,
and agree, as follows.

                                    ARTICLE 1
                        INTERPRETATION OF THIS AGREEMENT

         1.1 Definitions. As used herein:

         "Accounts"  means,  without  duplication,  all of each Loan Party's now
owned or hereafter  acquired or arising accounts and receivables,  and any other
rights  to  payment  for the sale or lease of goods or  rendition  of  services,
whether or not they have been earned by performance.

         "Account  Debtor"  means  each  Person  obligated  in any  way on or in
connection with an Account.

         "Adjusted  Net Earnings  from  Operations"  means,  with respect to any
fiscal period of the Parent Guarantor,  the Parent Guarantor's  consolidated net
income  (including  only  those   Subsidiaries  that  comprise  Borrower)  after
provision for income taxes for such fiscal  period,  as determined in accordance
with GAAP and reported on the Financial  Statements  for such period,  excluding
any and all of the  following  included  in such  net  income:  (a) gain or loss
arising from the sale of any capital assets;  (b) gain arising from any write-up
or loss  arising  from any  write-  downs in the book  value of any  asset;  (c)
earnings  or losses of any  corporation,  substantially  all the assets of which
have been  acquired by the  Borrower,  with the consent of the  Lenders,  in any
manner,  to the extent realized by such other  corporation  prior to the date of
acquisition;  (d) earnings (or loss) of any business  entity  (other than a Loan
Party) in which the Parent Guarantor or any of its Subsidiaries has an ownership
interest  unless (and only to the extent) such earnings (or loss) shall actually
have been

                                       2
<PAGE>


received  (or paid) by the Parent  Guarantor or any of its  Subsidiaries  in the
form of cash  distributions  or  payments;  (e)  earnings of any Person to which
assets of the Parent Guarantor or any of its Subsidiaries  shall have been sold,
transferred  or disposed  of, or into which the Parent  Guarantor  or any of its
Subsidiaries  shall have been merged,  or which has been a party with the Parent
Guarantor  or any of its  Subsidiaries  to any  consolidation  or other  form of
reorganization,  prior to the date of such transaction,  unless (and only to the
extent) such earnings shall actually have been received by the Parent  Guarantor
or any of its Subsidiaries in the form of cash distributions; (f) gain (or loss)
arising  from  the  acquisition  of  debt or  equity  securities  of the  Parent
Guarantor or any of its  Subsidiaries  or from  cancellation  or  forgiveness of
Debt; and (g) gain or non-cash loss (meaning that non-cash losses when initially
recorded for accounting  purposes shall be excluded from the  calculation of net
income,  but to the  extent  cash is paid at a  later  date in  respect  of such
non-cash loss,  such cash payment,  and all other losses paid in cash,  shall be
included in the  calculation  of net income (that is,  deducted from income) for
the period in which such cash is paid)  arising  from  extraordinary  items,  as
determined in accordance with GAAP, or from any other non-recurring transaction;
and (h) Expenses from Discontinued Operations.

         "Affiliate" means, as to any Person,  any other Person which,  directly
or  indirectly,  is in control of, is controlled  by, or is under common control
with,  such Person or which owns,  directly or indirectly,  ten percent (10%) or
more of the outstanding equity interest of such Person. A Person shall be deemed
to control  another  Person if the  controlling  Person  possesses,  directly or
indirectly,  the power to direct or cause the  direction of the  management  and
policies  of  the  other  Person,   whether  through  the  ownership  of  voting
securities, by contract, or otherwise.

         "Agent" means Bank of America,  solely in its capacity as agent for the
Lenders, and any successor agent.

         "Agent Advances" has the meaning specified in SECTION 2.2(i).

         "Agent's Fee" has the meaning specified in SECTION 3.7.

         "Agent's Liens" means the Liens in the Collateral granted to the Agent,
for the ratable benefit of the Lenders, and Agent pursuant to this Agreement and
the other Loan Documents.

         "Agent-Related  Persons"  means  the  Agent  and any  successor  agent,
together  with  their  respective  Affiliates,  and  the  officers,   directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.

         "Aggregate  Additional  Debt and  Investment  Basket  Amount" means the
maximum amount of all Restricted  Investments  permitted to be outstanding under
clause  (m) of the  definition  of such  term  and the  maximum  amount  of Debt
permitted  to be  outstanding  under  clause  (g) of  SECTION  9.13,  which when
aggregated together shall not exceed $1,000,000 outstanding at any time.

         "Aggregate   Revolver   Outstandings"   means,  at  any  time:  without
duplication the sum of (a) the unpaid principal  balance of Revolving Loans, (b)
the aggregate amount of Pending  Revolving Loans, (c) one hundred percent (100%)
of the aggregate undrawn face amount of all outstanding  Letters of Credit,  and
(d) the aggregate amount of any unpaid  reimbursement  obligations in respect of
Letters of Credit.

         "Agreement"  means this Second Amended and Restated Loan,  Guaranty and
Security Agreement, as amended,  supplemented or otherwise modified from time to
time.


                                       3
<PAGE>


         "Alternative  Permitted  Uses"  shall  have the  meaning  specified  in
SCHEDULE 9.14 hereto.

         "Anniversary Date" means each anniversary of the Closing Date.

         "Applicable  Margin" means,  for the period from the date hereof to and
including the Stated  Termination  Date, 1.00% for Base Rate Loans and 2.50% for
Letter of Credit Fees.

         "Assigned  Contracts"  means,  collectively,  all of the  Loan  Party's
rights and remedies under,  and all moneys and claims for money due or to become
due to the  Loan  Party  under,  those  contracts  set  forth  on  SCHEDULE  1.1
(including the Material  License  Agreements) and any other material  contracts,
and  any and all  amendments,  supplements,  extensions,  and  renewals  thereof
including,  without  limitation,  all rights and claims of the Loan Party now or
hereafter  existing:  (i)  under any  insurance,  indemnities,  warranties,  and
guarantees  provided  for or  arising  out of or in  connection  with any of the
foregoing  agreements;  (ii) for any  damages  arising  out of or for  breach or
default under or in connection with any of the foregoing contracts; (iii) to all
other amounts from time to time paid or payable under or in connection  with any
of the  foregoing  agreements;  or  (iv)  to  exercise  or  enforce  any and all
covenants, remedies, powers and privileges thereunder.

         "Assignee"   has   the   meaning    specified   in   SECTION   13.3(a).

         "Assignment  and  Acceptance"  has the  meaning  specified  in  SECTION
13.3(a).

         "Attorney Costs" means and includes all reasonable  fees,  expenses and
disbursements  of any law firm or other external  counsel  engaged by the Agent,
the allocated  cost of internal legal services of the Agent and all expenses and
disbursements of internal counsel of the Agent.

         "Availability"  means,   at  any   time:  (a)  the  lesser  of  (i) the
Maximum  Revolver  Amount  or (ii) the sum  without  duplication  of (A)  eighty
percent (80%) of the Net Amount of Eligible Accounts;  (B) (without duplication)
fifty percent (50%) of Eligible Unbilled Accounts Receivable;  (C) fifty percent
(50%) of the value (lower of FIFO cost or market) of the first quality  finished
goods  Eligible  Inventory;  and (D) forty  percent (40%) of the value (lower of
FIFO cost or market) of Eligible  Raw Material  Inventory;  MINUS (b) the sum of
(i) the Aggregate  Revolver  Outstandings  (ii) reserves for accrued interest on
the Obligations,  (iii) the  Environmental  Compliance  Reserve,  (iv) all other
reserves  which the Agent deems  necessary  in the  exercise  of its  reasonable
credit judgment to maintain with respect to the Borrower's  account,  including,
without limitation, (x) reserves for amounts that may be payable by the Agent or
any Lender to or for the benefit of institutions at which a Loan Party maintains
accounts in connection with lockbox account or blocked account arrangements, (y)
reserves  for any amounts  which the Agent or any Lender may be obligated to pay
in the future for the account of the  Borrower  royalties,  and (z) reserves for
royalties,  license fees, rent,  processing  charges and any other amounts which
the Agent in the exercise of its reasonable credit judgment believes may have to
be paid to third  parties in  connection  with  exercise  of the  Agent's or the
Lenders' rights or remedies under this Agreement or any other Loan Document, and
(v) unless and until the Umbro  Consent has been  obtained  and the Lenders have
properly perfected a first lien security interest in the Umbro Collateral to the
satisfaction of Agent, the value of any Umbro Collateral to the extent otherwise
included in the calculation of "Availability" pursuant to clauses (a)(ii)(A)-(D)
above, inclusive.

         "Available  Proceeds" shall have the meaning specified in SCHEDULE 9.14
hereto.


                                       4
<PAGE>


         "Bank  of  America"  has  the  meaning  specified  in the  introductory
paragraph of this Agreement.

         "Bank of America  Loan" and "Bank of America  Loans" have the  meanings
specified in SECTION 2.2(h).

         "Bankruptcy  Code"  means  Title  11 of  the  United  States  Code  (11
U.S.C.SS.101 ET SEQ.).

         "Base  Rate"  means,  for any day,  the rate of interest on a per annum
basis (rounded upwards, if necessary,  to the nearest whole multiple of 1/100 of
1%) equal to the  greater  of (a) the  Federal  Funds Rate in effect on such day
plus 1/2 of 1% or (b) the rate of  interest  in effect for such day as  publicly
announced from time to time by Bank of America in Charlotte,  North Carolina, as
its "reference rate" or "prime rate" (the "reference rate" or "prime rate" being
a rate set by Bank of  America  based upon  various  factors  including  Bank of
America's  costs and  desired  return,  general  economic  conditions  and other
factors,  and is used as a reference point for pricing some loans,  which may be
priced at, above,  or below such  announced  rate).  Any change in the reference
rate or prime rate announced by Bank of America shall take effect at the opening
of business on the day specified in the public announcement of such change. Each
Interest Rate based upon the Base Rate shall be adjusted simultaneously with any
change in the Base Rate.

         "Base Rate Loans" means any Revolving Loan.

         "Borrowing" means a borrowing  hereunder  consisting of Revolving Loans
made on the same day by the  Lenders to the  Borrower  (or by Bank of America in
the case of a Borrowing  funded by Bank of America Loans) or by the Agent in the
case of a Borrowing consisting of an Agent Advance.

         "Borrowing  Base  Certificate"  means a  certificate  by a  Responsible
Officer of the Borrower, substantially in the form of Exhibit B (or another form
acceptable to the Agent)  setting  forth the  calculation  of the  Availability,
including a calculation of each component  thereof,  as of the close of business
no more than five (5) Business Days prior to the date of such  certificate,  all
in such  detail as shall be  satisfactory  to the  Agent.  All  calculations  of
Availability   in  connection   with  the  preparation  of  any  Borrowing  Base
Certificate shall originally be made by the Borrower and certified to the Agent;
provided,  that the Agent  shall  have the right to review  and  adjust,  in the
exercise of its reasonable credit judgment, any such calculation (1) (with three
(3) Business  Days' prior written  notice to Borrower) to reflect its reasonable
estimate of declines in value of any of the Collateral  described  therein,  and
(2)  (without  prior  notice)  to the  extent  that such  calculation  is not in
accordance with this Agreement.

         "Business Day" means any day that is not a Saturday,  Sunday,  or a day
on which banks in Memphis, Tennessee, are required or permitted to be closed.

         "Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental  Authority,  or any other law, rule or
regulation,  whether  or not having  the force of law,  in each case,  regarding
capital adequacy of any bank or of any corporation controlling a bank.


                                       5
<PAGE>


         "Capital  Expenditures" means all payments due (whether or not paid) in
respect  of  the  cost  of any  fixed  asset  or  improvement,  or  replacement,
substitution,  or  addition  thereto,  which has a useful  life of more than one
year, including,  without limitation, those costs arising in connection with the
direct or  indirect  acquisition  of such asset by way of  increased  product or
service charges or offset items or in connection with a Capital Lease, including
all payments due in respect of the  acquisition of any division,  operating unit
or other assets of any business,  and including all payments due (whether or not
paid) in respect of the cost of data or other information processing products or
services; PROVIDED, HOWEVER, that "Capital Expenditures" shall not include up to
$400,000 of  expenditures  by Parent  Guarantor  on tenant  improvements  to the
Leased Space to the extent funded or reimbursed to Parent Guarantor  directly by
Lessor without any increase in the rental rate under the Lease.

         "Capital  Lease"  means any lease of  property  by a Person  which,  in
accordance  with  GAAP,  is or should  be  reflected  as a capital  lease on the
balance sheet of such Person.

         "Capital Stock" means, with respect to any Person,  any and all shares,
interests,  participations or other  equivalents  (however  designated,  whether
voting or  non-voting)  in equity of such  Person,  whether  outstanding  on the
Closing Date or issued thereafter.

         "Change of  Control"  means  either of the  following  events:  (a) any
"person"  or  "group"  (within  the  meaning  of  Section  13(d) or 14(d) of the
Exchange Act), in each case,  other than the Principals and the Related Parties,
has become, directly or indirectly,  the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act,  except that a Person shall be deemed to
have "beneficial  ownership" of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), by way of merger,  consolidation  or otherwise,  of 35% or more of the
voting power of the Capital  Stock of the Parent  Guarantor  on a  fully-diluted
basis,  after giving effect to the  conversion  and exercise of all  outstanding
warrants,  options and other securities of the Parent Guarantor  (whether or not
such securities are then currently  convertible or  exercisable),  (b) the first
day on which a majority of the members of the Board of  Directors  of the Parent
Guarantor are not Continuing  Directors or (c) a "change in control" (as defined
in the  documentation  evidencing  the Senior  Notes or the  Subordinated  Debt)
occurs.

         "Closing Date" means the date of this Agreement.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, and regulations promulgated thereunder.

         "Collateral" has the meaning specified in SECTION 6.1.

         "Collateral License Agreement  Assignment" has the meaning specified in
clause (f)(ii)(y) of the definition of Eligible Inventory.

         "Commitment" means, at any time with respect to a Lender, the principal
amount set forth beside such Lender's name under the heading "Commitment" on the
signature pages of this Agreement or on the signature page of the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder in accordance
with the  provisions of SECTION 13.3,  as such  Commitment  may be adjusted from
time  to  time  in  accordance   with  the   provisions  of  SECTION  13.3,  and
"Commitments"  means,  collectively,  the aggregate amount of the commitments of
all of the Lenders.


                                       6
<PAGE>


         "Commitment  Letter"  means that certain  Commitment  Letter of Bank of
America dated June 13, 2001.

         "Credit   Support"  has  the  meaning   specified  in  SECTION  2.4(a).

         "Contaminant" means any waste,  pollutant,  hazardous substance,  toxic
substance,  hazardous  waste,  special  waste,  petroleum  or  petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.

         "Continuing  Directors"  means,  as of any date of  determination,  any
member of the Board of Directors of the Parent Guarantor who (i) was a member of
such Board of Directors on the date of this  Agreement or (ii) was nominated for
election or elected to such Board of  Directors  with the approval of a majority
of the  Continuing  Directors who were members of such Board at the time of such
nomination or election.

         "Copyright"  means any and all copyrights in works of authorship of any
kind in any country or political  subdivision  thereof throughout the world, for
the full  term  thereof,  and all  applications,  registrations  and  recordings
thereof in the Office of the United States  Register of  Copyrights,  Library of
Congress,  or in any  similar  office  or  agency of any  country  or  political
subdivision thereof throughout the world, including but not limited to those set
forth on SCHEDULE 8.13 (as from time to time amended,  modified or  supplemented
in  accordance  with the terms hereof)  attached  hereto and made a part hereof,
together with all  extensions,  renewals and corrections  thereof,  whether such
rights are vested,  contingent  or  reversionary  under any copyright law now or
hereafter in force or effect throughout the world, and all licenses thereof, and
all causes of action or claims arising out of or pertaining  thereto  (including
but not  limited  to  claims  of  infringement)  and any  legal,  beneficial  or
equitable  right to the use or ownership  of the works to which they relate,  by
means of any  technology  now known or hereafter  developed,  including  but not
limited  to the  rights to  reproduce,  adapt,  transform,  derive,  distribute,
perform, record, display or otherwise exploit in any way those works.

         "Debt"  means,  with respect to any Person,  without  duplication,  all
liabilities, obligations and indebtedness of such Person to any other Person, of
any kind or nature, now or hereafter owing,  arising, due or payable,  howsoever
evidenced,  created,  incurred,  acquired or owing, whether primary,  secondary,
direct,  contingent,  fixed or  otherwise,  and  including,  without  in any way
limiting the generality of the foregoing:  (i)  liabilities  and  obligations to
trade creditors; (ii) all Obligations;  (iii) all obligations and liabilities of
any Person  secured by any Lien on such  Person's  property,  even  though  such
Person  shall  not have  assumed  or  become  liable  for the  payment  thereof;
PROVIDED,  HOWEVER,  that all such obligations and liabilities which are limited
in recourse to such property shall be included in Debt only to the extent of the
book value of such  property as would be shown on a balance sheet of such Person
prepared in accordance with GAAP; (iv) all obligations or liabilities created or
arising under any Capital  Lease or  conditional  sale or other title  retention
agreement with respect to property used or acquired by such Person,  even if the
rights and remedies of the lessor,  seller or lender  thereunder  are limited to
repossession  of such property and all  obligations  and  liabilities  under any
synthetic  lease,  tax  retention  operating  lease,  off-balance  sheet loan or
similar off-balance sheet financing product where such transaction is considered
borrowed money  indebtedness  for tax purposes but is classified as an operating
lease in accordance with GAAP; PROVIDED,  HOWEVER, that all such obligations and
liabilities  which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such  property as would be shown on
a balance sheet of such Person prepared in accordance with GAAP; (v) all

                                       7
<PAGE>

accrued   pension  fund  and  other  employee   benefit  plan   obligations  and
liabilities;  (vi) all obligations and liabilities under  Guaranties;  (vii) all
obligations in respect of deferred  taxes;  (viii) all obligations in respect of
Hedging  Agreements;  and (ix) all  obligations  in respect of  preferred  stock
issued by such Person and required by the terms  thereof to pay  dividends or to
be redeemed, or for which mandatory sinking fund payments are due within one (1)
year of the date of determination.

         "Default"  means any event or  circumstance  which,  with the giving of
notice,  the lapse of time, or both,  would (if not cured or otherwise  remedied
during such time) constitute an Event of Default.

         "Defaulting  Lender" has the meaning  specified in SECTION  2.2(g)(ii).

         "Default Rate" means a fluctuating per annum interest rate at all times
equal to the sum of: (a) the  otherwise  applicable  Interest  Rate plus (b) two
percent (2%). Each Default Rate shall be adjusted simultaneously with any change
in the applicable Interest Rate. In addition, with respect to Letters of Credit,
the  Default  Rate shall mean an increase in the Letter of Credit Fee by two (2)
percentage points.

         "Distribution" means, in respect of any corporation: (a) the payment or
making of any dividend or other  distribution  of property in respect of capital
stock (or any options or warrants  for such  stock) of such  corporation,  other
than  distributions  in  capital  stock of the same  class  (or any  options  or
warrants for such stock);  or (b) the  redemption or other  acquisition  by such
corporation  of any capital stock (or any options or warrants for such stock) of
such corporation.

         "DOL"  means the United  States  Department  of Labor or any  successor
department or agency.

         "Dollar"  and "$" means  dollars in the lawful  currency  of the United
States.

         "EBITDA" means,  for any period,  with respect to the Parent  Guarantor
and the Subsidiaries comprising Borrower on a consolidated basis, the sum of (a)
Adjusted Net Earnings from  Operations for such period plus (b) an amount which,
in the  determination  of Adjusted Net Earnings from  Operations for such period
has been deducted for (i) Interest Expense for such period,  (ii) total Federal,
state, foreign or other income taxes for such period, and (iii) all depreciation
and amortization for such period, all as determined in accordance with GAAP.

         "Eligible  Accounts" means all Accounts of the Borrower  created in the
ordinary  course  of its  business  arising  out of the  sale of the  Borrower's
Inventory or the rendition of services by the  Borrower,  which the Agent in the
exercise  of its  reasonable  commercial  discretion  determines  to be Eligible
Accounts.  Without limiting the discretion of the Agent to reasonably  establish
other criteria of  ineligibility,  Eligible Accounts shall not, unless the Agent
in its sole discretion elects, include any Account:

         (a)  with  respect  to  which  a valid  invoice  has  not  been  issued
(provided,  that an invoice shall not be required to have been issued in respect
of  Eligible  Unbilled  Accounts  Receivable)  or which  is "Past  Due" (As used
herein,  "Past Due" means an Account with respect to which the invoice  therefor
has not been paid within 120 days of the invoice date);


                                       8
<PAGE>


         (b) with  respect  to  which  any of the  representations,  warranties,
covenants,  and agreements contained in SECTION 6.8 are not or have ceased to be
complete and correct or have been breached;

         (c) with  respect to which,  in whole or in part,  a check,  promissory
note,  draft,  trade acceptance or other instrument for the payment of money has
been  received,  presented for payment and returned  uncollected  for any reason
(unless resulting solely from a bank clerical error);

         (d) which represents a progress billing (as hereinafter  defined) or as
to which the  Borrower  has extended the time for payment to a date that without
such  extension such Account would have been "Past Due" as defined in clause (a)
above, without the consent of the Agent (which consent,  however, shall not make
such Account an Eligible Account);  for the purposes hereof,  "progress billing"
means any invoice  (provided no invoice is required,  as provided above, for any
Eligible  Unbilled  Accounts  Receivable)  for goods sold or leased or  services
rendered  under a contract or agreement  pursuant to which the Account  Debtor's
obligation to pay such invoice is conditioned upon the Borrower's  completion of
any further  performance under the contract or agreement (provided that, for the
sake of  clarification,  "progress  billing"  does not include the allocable and
severable  portion of an invoice for goods sold and shipped or services rendered
for which payment is not conditional, even if other portions of such invoice are
for future sales or shipments of goods or future performance of services);

         (e) as to which any one or more of the  following  events has  occurred
with  respect  to  the  Account  Debtor  on  such  Account:  death  or  judicial
declaration  of  incompetency  of an Account  Debtor who is an  individual;  the
filing  by  or  against  the  Account  Debtor  of  a  request  or  petition  for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a
bankrupt,  winding-up,  or other relief  under the  bankruptcy,  insolvency,  or
similar  laws of the  United  States,  any state or  territory  thereof,  or any
foreign  jurisdiction,  now or  hereafter  in effect;  the making of any general
assignment by the Account Debtor for the benefit of creditors;  the  appointment
of a receiver or trustee for the Account  Debtor or for any of the assets of the
Account  Debtor,  including,  without  limitation,  the appointment of or taking
possession by a  "custodian,"  as defined in the Federal  Bankruptcy  Code;  the
institution  by or against  the Account  Debtor of any other type of  insolvency
proceeding  (under the bankruptcy  laws of the United States or otherwise) or of
any  formal or  informal  proceeding  for the  dissolution  or  liquidation  of,
settlement of claims  against,  or winding up of affairs of, the Account Debtor;
the sale,  assignment,  or transfer of all or any material part of the assets of
the Account Debtor; the nonpayment  generally by the Account Debtor of its debts
as they become due; or the cessation of the business of the Account  Debtor as a
going concern;

         (f) if fifty percent  (50%) or more of the  aggregate  Dollar amount of
outstanding  Accounts  owed  at such  time  by the  Account  Debtor  thereon  is
classified as ineligible  under the other criteria set forth herein or otherwise
established by the Agent  (provided that an Account for which the Account Debtor
thereon is a school shall not be ineligible under this clause (f) solely because
more than 50% of the aggregate  Dollar amount of  outstanding  Accounts for such
Account Debtor are "Past Due" as defined in clause (a) above);

         (g) owed by an Account  Debtor  which:  (i) does not maintain its chief
executive  office in the United States;  or (ii) is not organized under the laws
of the United  States or any state  thereof;  or (iii) is the  government of any
foreign country or sovereign state, or of any state, province,  municipality, or
other  political  subdivision  thereof,  or of any  department,  agency,  public
corporation,  or other instrumentality thereof; except to the extent that either
(i) such Account is secured or payable by a letter of credit satisfactory to the
Agent in its  discretion  or (ii) such  Account is  approved

                                       9
<PAGE>

by  the  Agent  in  its  sole  discretion  to  be  an  Eligible  Account  (which
determination  may be made by the Agent  without  the  consent  of the  Majority
Lenders or Required Lenders so long as not more than $1,000,000 of such Accounts
are Eligible Accounts at any one time);

         (h) owed by an Account  Debtor which is an Affiliate or employee of the
Borrower;  except to the  extent  that such  Account  is for a bona fide sale of
goods at fair market prices and otherwise on "arms-length" terms to an Affiliate
listed on SCHEDULE 8.5 hereto;

         (i) except as provided in (k) below, as to which either the perfection,
enforceability,  or validity of the Agent's Lien in such Account, or the Agent's
right or ability to obtain  direct  payment to the Agent of the proceeds of such
Account,  is governed by any federal,  state,  or local  statutory  requirements
other than those of the UCC;

         (j)  which is owed by an  Account  Debtor  to  which  the  Borrower  is
indebted in any way, or which is subject to any right of setoff or recoupment by
the Account  Debtor,  unless the Account  Debtor has entered  into an  agreement
acceptable to the Agent to waive setoff rights; or if the Account Debtor thereon
has disputed  liability or made any claim with respect to any other  Account due
from such  Account  Debtor;  but in each  such  case only to the  extent of such
indebtedness, setoff, recoupment, dispute, or claim;

         (k) which is owed by the government of the United States of America, or
any department,  agency, public corporation,  or other instrumentality  thereof,
unless the Federal  Assignment of Claims Act of 1940, as amended (31 U.S.C.  SS.
3727 et seq.),  and any other  steps  necessary  to  perfect  the  Agent's  Lien
therein,  have been  complied with to the Agent's  satisfaction  with respect to
such Account; except to the extent that such Account is approved by the Agent in
its sole discretion to be an Eligible Account (which  determination  may be made
by the Agent without the consent of the Majority  Lenders or Required Lenders so
long as not more than  $1,000,000 of such Accounts are Eligible  Accounts at any
one time);

         (l)  which  is owed by any  state,  municipality,  or  other  political
subdivision of the United States of America, or any department,  agency,  public
corporation,  or  other  instrumentality  thereof  and  as to  which  the  Agent
determines that its Lien therein is not or cannot be perfected;

         (m) which represents a sale on a  bill-and-hold,  guaranteed sale, sale
and return, sale on approval, consignment, or other repurchase or return basis;

         (n) which is evidenced by a promissory  note or other  instrument or by
chattel paper;

         (o) if the Agent believes,  in the exercise of its reasonable judgment,
that the prospect of  collection of such Account is impaired or that the Account
may not be paid by reason of the Account Debtor's financial inability to pay;

         (p) with  respect to which the  Account  Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar report
in order to permit the Borrower to seek  judicial  enforcement  in such State of
payment of such  Account,  unless such  Borrower has qualified to do business in
such state or has filed a Notice of  Business  Activities  Report or  equivalent
report for the then current year;


                                       10
<PAGE>


         (q) which arises out of a sale not made in the  ordinary  course of the
Borrower's business;

         (r) as to which the goods  giving  rise to such  Account  have not been
shipped and  delivered  to and  accepted by the Account  Debtor or the  services
giving rise to such Account have not been  performed  by the  Borrower,  and, if
applicable,  accepted by the Account  Debtor,  or the Account Debtor revokes its
acceptance of such goods or services;

         (s) is owed by an Account  Debtor  which is  obligated  to the Borrower
respecting  Accounts  the  aggregate  unpaid  balance of which  exceeds  fifteen
percent  (15%) of the  aggregate  unpaid  balance  of all  Accounts  owed to the
Borrower at such time by all of the Borrower's Account Debtors,  but only to the
extent of such excess;

         (t) arises out of an enforceable contract or order which, by its terms,
forbids,  restricts or makes void or unenforceable the granting of a Lien by the
Borrower to the Agent with respect to such Account;

         (u) which is not subject to a first  priority  and  perfected  security
interest in favor of the Agent for the benefit of the Lenders; and/or

         (v) which is an Intercompany Account.

         If any Account at any time  ceases to be an Eligible  Account by reason
of any of the foregoing  exclusions or any failure to meet any other eligibility
criteria  established by the Agent in the exercise of its reasonable  discretion
then such Account shall  promptly be excluded from the  calculation  of Eligible
Accounts.

         "Eligible  Inventory"  means  Inventory of the Borrower,  valued at the
lower of cost (on a FIFO  basis) or  market,  that  constitutes  "first  quality
finished  goods"  Inventory  and that,  unless the Agent in its sole  discretion
elects: (a) is not, in the Agent's reasonable opinion, obsolete, slow moving, or
unmerchantable;  (b) is located at premises owned by the Borrower or on premises
otherwise reasonably acceptable to the Agent, PROVIDED,  HOWEVER, that Inventory
located on premises leased to the Borrower,  on a vendor's premises or otherwise
on  premises  owned by a Person  other than the  Borrower  shall not be Eligible
Inventory  unless (i) the Borrower  shall have  delivered to the Agent a written
waiver,  duly executed on behalf of the  appropriate  landlord,  vendor or other
Person and in form and substance  acceptable to the Agent, of all Liens or other
rights  which the  landlord  for such  premises,  vendor or other  Person may be
entitled to assert against such  Inventory,  or (ii) unless  Eligible  Inventory
having a book  value  (determined  on a FIFO basis if  applicable)  of less than
$100,000 is located on such premises  and, if the Agent or the Majority  Lenders
so elect in its or their sole discretion,  as to which reserves in an amount for
ninety (90) days rent at such premises,  estimated  processing charges and other
applicable  charges  for  lessors,  vendors  or such  other  Persons  have  been
established  under clause (b) (iv) (z) of the  definition of  Availability;  (c)
upon  which  the Agent  for the  benefit  of the  Lenders  has a first  priority
perfected security interest; (d) is not work-in-process or raw materials, (e) is
not spare parts,  packaging  and  shipping  materials,  supplies,  bill-and-hold
Inventory for Account  Debtors,  returned or defective  Inventory,  or Inventory
delivered  to the  Borrower  on  consignment;  (f) is not  subject to a Material
License Agreement unless (i) the Material License Agreement is in full force and
effect and (ii) the Agent has received (y) a  collateral  assignment  of license
agreement  (a  "Collateral  License  Agreement  Assignment")  for such  Material
License  Agreement  and (z) a consent  thereto  from all other  parties  to such
Material License Agreement,  each in a form reasonably acceptable to it; and (g)
the Agent,  in the  exercise  of its


                                       11
<PAGE>
reasonable  commercial  discretion,  deems  eligible as the basis for  Revolving
Loans based on such collateral and credit criteria as the Agent may from time to
time  establish.  If any Inventory at any time ceases to be Eligible  Inventory,
such  Inventory  shall  promptly be excluded  from the  calculation  of Eligible
Inventory.

         "Eligible Raw Material  Inventory" means raw material  Inventory of the
Borrower  meeting all of the requirements of clauses (a), (b), (c), (e), (f) and
(g) of the definition of Eligible Inventory.

         "Eligible Unbilled Account  Receivable" means, solely during the period
of April 1 to September 1 of each  calendar  year and not at any other time,  an
Account of Fashions that has been created and is outstanding  during such period
in such year (and not  created  during  such  period in a prior  year or created
during any other  period),  but has not yet been  invoiced,  that  represents an
obligation  for payment  created by shipment of Inventory to the Account  Debtor
pursuant  to a purchase  order  issued to  Fashions  in the  ordinary  course of
business. During the period of September 2 to December 31 and January 1 to March
31 of each year there will be no Eligible Unbilled Account Receivables.

         "Environmental  Claims"  means all  claims,  however  asserted,  by any
Governmental   Authority  or  other  Person  alleging  potential   liability  or
responsibility  for violation of any Environmental Law, or for release or injury
to the environment.

         "Environmental  Compliance Reserve" means any reserves which the Agent,
after the Closing  Date,  and upon three (3) days' prior  written  notice to the
Borrower,  establishes from time to time for amounts that are reasonably  likely
(as determined by the Borrower and the Agent or by an independent  environmental
consultant engaged by the Agent or the Borrower and reasonably acceptable to the
Agent)  to be  expended  by the  Borrower  in  order  for the  Borrower  and its
operations  and  property:  (a) to comply  with any notice  from a  Governmental
Authority  asserting material  non-compliance with Environmental Laws, or (b) to
correct any such material non-compliance identified in a report delivered to the
Agent and the Lenders pursuant to SECTION 9.7.

         "Environmental Laws" means all federal,  state or local laws, statutes,
common law duties, rules,  regulations,  ordinances and codes, together with all
administrative orders, directed duties, requests,  licenses,  authorizations and
permits  of, and  agreements  with,  any  Governmental  Authority,  in each case
relating to environmental, health, safety and land use matters.

         "Environmental  Lien"  means  a  Lien  in  favor  of  any  Governmental
Authority for: (1) any liability  under any  Environmental  Laws, or (2) damages
arising from, or costs incurred by such Governmental Authority in response to, a
Release or threatened Release of a Contaminant into the environment.

         "Environmental  Property Transfer Act" means any applicable requirement
of law that  conditions,  restricts,  prohibits or requires any  notification or
disclosure  triggered  by the closure of any property or the  transfer,  sale or
lease  of any  property  or deed or title  for any  property  for  environmental
reasons,  including,  but not limited to, any so-called  "Environmental  Cleanup
Responsibility Acts" or "Responsible Property Transfer Acts."

         "Equipment"  means all of each  Loan  Party's  now owned and  hereafter
acquired  machinery,  equipment,  furniture,  furnishings,  fixtures,  and other
tangible  personal  property (except  Inventory),  including motor vehicles with
respect to which a certificate of title has been issued,

                                       12
<PAGE>

aircraft,  dies, tools, jigs, and office equipment, as well as all of such types
of  property  leased by any Loan Party and all of each Loan  Party's  rights and
interests with respect thereto under such leases (including, without limitation,
options  to  purchase);  together  with all  present  and future  additions  and
accessions  thereto,  replacements  therefor,  component and auxiliary parts and
supplies used or to be used in connection therewith, and all substitutes for any
of the foregoing, and all manuals, drawings, instructions, warranties and rights
with respect thereto; wherever any of the foregoing is located.

         "ERISA" means the Employee  Retirement Income Security Act of 1974, and
regulations promulgated thereunder.

         "ERISA   Affiliate"  means  any  trade  or  business  (whether  or  not
incorporated)  under  common  control  with the  Borrower  within the meaning of
Section  414(b) or (c) of the Code (and Sections  414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).

         "ERISA Event" means:  (a) a Reportable  Event with respect to a Pension
Plan;  (b) a withdrawal  by the Borrower or any ERISA  Affiliate  from a Pension
Plan  subject  to  Section  4063 of ERISA  during a plan  year in which it was a
substantial  employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations  which is treated as such a withdrawal  under  Section  4062(e) of
ERISA;  (c) a  complete  or  partial  withdrawal  by the  Borrower  or any ERISA
Affiliate from a Multi-employer  Plan or notification that a Multi-employer Plan
is in  reorganization;  (d) the filing of a notice of intent to  terminate,  the
treatment of a Plan  amendment as a  termination  under Section 4041 or 4041A of
ERISA,  or the  commencement  of  proceedings by the PBGC to terminate a Pension
Plan or  Multi-employer  Plan; (e) the occurrence of an event or condition which
might  reasonably be expected to constitute  grounds under Section 4042 of ERISA
for the  termination  of, or the  appointment  of a trustee to  administer,  any
Pension Plan or  Multi-employer  Plan;  or (f) the  imposition  of any liability
under Title IV of ERISA,  other than for PBGC  premiums  due but not  delinquent
under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

         "Event  of  Default"  has  the  meaning   specified  in  SECTION  11.1.

         "Exchange  Act"  means  the  Securities   Exchange  Act  of  1934,  and
regulations promulgated thereunder.

         "Expenses  from   Discontinued   Operations"  means  any  non-recurring
expenses associated with Parent Guarantor's  discontinuing operations (i) at its
office at 50 East 42nd  Street,  Suite  1808,  New York,  New York,  (ii) of Fox
Athletic LLC, and (iii) of Parent Guarantor's internet web site.

         "FDIC"  means  the  Federal  Deposit  Insurance  Corporation,  and  any
Governmental Authority succeeding to any of its principal functions.

         "Federal  Funds  Rate"  means,  for any day,  the rate set forth in the
weekly   statistical   release   designated  as  H.15(519),   or  any  successor
publication,  published by the Federal  Reserve Bank of New York  (including any
such successor,  "H.15(519)") on the preceding Business Day opposite the caption
"Federal  Funds  (Effective)";  or, if for any  relevant day such rate is not so
published on any such preceding  Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight  Federal funds arranged  prior to 9:00 a.m.  (Central time) on that
day by each of three leading  brokers of Federal funds  transactions in New York
City selected by the Agent.


                                       13
<PAGE>


         "Federal  Reserve  Board"  means the Board of  Governors of the Federal
Reserve System or any successor thereto.

         "Fee  Letter"  means  the  letter  dated as of the date  hereof  by and
between Bank of America and the Borrower with respect to the Agent's Fee.

         "FIFO" means the "first-in,  first-out"  method of calculating the book
value of inventory in accordance with GAAP.

         "Financial  Statements" means,  according to the context in which it is
used, the financial statements referred to in SECTION 8.6 or any other financial
statements required to be given to the Lenders pursuant to this Agreement.

         "First Loan Agreement" shall have the meaning set forth in the Recitals
hereto.

         "Fiscal  Year" means the Parent  Guarantor's  fiscal year for financial
accounting purposes. The current Fiscal Year of the Parent Guarantor will end on
December 31, 2001.

         "Fixed Assets" means Equipment of any Loan Party.

         "Fixed Charge Coverage  Ratio" means,  for the applicable  period,  the
ratio of (a) EBITDA during such period to (b) the sum of cash  Interest  Expense
during such period,  Scheduled  Principal  Payments during such period,  Capital
Expenditures  during such period,  all Rentals during such period,  and all cash
tax  expenses  (state,  federal,  local,  foreign or other) of Parent  Guarantor
and/or Borrower during such period. During the period from the date hereof until
March 20, 2002,  the following  adjustment  shall be made in computing the Fixed
Charge  Coverage  Ratio:  (i) actual cash  interest  earnings  on the  Available
Proceeds for such period  shall be excluded  from EBITDA in the  numerator,  and
(ii) actual cash interest  expense for such period  attributable to Senior Notes
with a face  amount  equal to the  amount  of the  Available  Proceeds  shall be
excluded from Interest Expense in the denominator.

         "Funded Debt" means,  without  duplication,  the sum of (a) all Debt of
the Parent  Guarantor and its  Subsidiaries for borrowed money, (b) all purchase
money Debt of the  Parent  Guarantor  and its  Subsidiaries,  (c) the  principal
portion of all obligations of the Parent  Guarantor and its  Subsidiaries  under
Capital  Leases  and the  principal  portion  under  any  synthetic  lease,  tax
retention  operating lease,  off-balance sheet loan or similar off-balance sheet
financing   product  where  such   transaction  is  considered   borrowed  money
indebtedness  for tax  purposes  but is  classified  as an  operating  lease  in
accordance with GAAP, (d) all obligations,  contingent or otherwise, relative to
the face  amount  of all  letters  of  credit  (other  than  letters  of  credit
supporting  trade payables in the ordinary  course of business),  whether or not
drawn, and banker's  acceptances issued for the account of such Person (it being
understood  that,  to the extent an undrawn  letter of credit  supports  another
obligation consisting of Indebtedness,  in calculating  aggregated  Indebtedness
only such other  obligation  shall be included),  (e) any Guaranty of the Parent
Guarantor and its  Subsidiaries  with respect to Funded Debt of another  Person,
(f) all Funded Debt of another  entity  secured by a Lien on any property of the
Parent Guarantor or any of its Subsidiaries  whether or not such Funded Debt has
been  assumed  by a Parent  Guarantor  or any of its  Subsidiaries,  and (g) all
Funded Debt of any  partnership,  limited  liability  company or  unincorporated
joint venture to the extent the Parent  Guarantor or one of its  Subsidiaries is
legally  obligated or has a reasonable  expectation of being liable with respect
thereto, net of any assets of such partnership or joint venture.


                                       14
<PAGE>


         "Funding Date" means the date on which a Borrowing occurs.

         "GAAP" means generally  accepted  accounting  principles set forth from
time to time in the opinions and  pronouncements  of the  Accounting  Principles
Board and the American  Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession).

         "General  Intangibles"  means  all of each  Loan  Party's  now owned or
hereafter  acquired general  intangibles,  choses in action and causes of action
and all other intangible  personal  property of any Loan Party of every kind and
nature (other than Accounts,  goods and money),  including,  without limitation,
all contract rights,  Proprietary  Rights,  corporate or other business records,
inventions,   designs,  blueprints,   plans,  specifications,   patents,  patent
applications,  trademarks,  service marks, trade names, trade secrets, goodwill,
copyrights,   computer  software,  customer  lists,   registrations,   licenses,
franchises,  tax refund claims, any funds which may become due to any Loan Party
in connection with the termination of any Plan or other employee benefit plan or
any rights thereto and any other amounts payable to any Loan Party from any Plan
or other employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds thereof,
property,  casualty or any similar type of insurance  and any proceeds  thereof,
proceeds of  insurance  covering  the lives of key  employees  on which any Loan
Party is  beneficiary,  and any letter of  credit,  guarantee,  claim,  security
interest or other security held by or granted to any Loan Party.

         "Governmental  Authority" means any nation or government,  any state or
other political  subdivision  thereof,  any central bank (or similar monetary or
regulatory  authority) thereof,  any entity exercising  executive,  legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any  corporation  or other  entity  owned or  controlled,  through  stock or
capital ownership or otherwise, by any of the foregoing.

         "Guarantee" has the meaning specified in SECTION 16.1.

         "Guarantor" has the meaning specified in SECTION 16.1.

         "Guaranty" means, with respect to any Person, without duplication,  all
obligations of such Person which in any manner directly or indirectly  guarantee
or assure,  or in effect guarantee or assure,  the payment or performance of any
indebtedness, dividend or other obligations of any other Person (the "guaranteed
obligations"),  or assure  or in  effect  assure  the  holder of the  guaranteed
obligations against loss in respect thereof, including,  without limitation, any
such obligations incurred through an agreement,  contingent or otherwise: (a) to
purchase  the  guaranteed  obligations  or any  property  constituting  security
therefor;  (b) to advance  or supply  funds for the  purchase  or payment of the
guaranteed  obligations or to maintain a working  capital or other balance sheet
condition; or (c) to lease property or to purchase any debt or equity securities
or other property or services.

         "Hedging  Agreements"  means,  collectively,  interest rate  protection
agreements,  foreign currency exchange agreements,  commodity purchase or option
agreements  or other  interest  or  exchange  rate or  commodity  price  hedging
agreements,  in each case,  entered into or purchased by the Parent Guarantor or
any of its Subsidiaries.

         "Indenture"  has the  meaning  specified  in the  definition  of Senior
Notes.


                                       15
<PAGE>


         "Insolvency  Proceeding"  has the  meaning  specified  in clause (v) of
SECTION 16.2(B).

         "Intellectual   Property"   means  the  present  and  future   Patents,
Trademarks, Copyrights and related licenses and rights held by the Loan Parties.

         "Intercompany  Accounts"  means  without  duplication  all  assets  and
liabilities,  however arising, which are due to a Loan Party from, which are due
from a Loan Party to, or which  otherwise  arise from any  transaction by a Loan
Party with, any Affiliate.

         "Interest Expense" means, for any period, total interest expense of the
Parent Guarantor and its Subsidiaries during such period, including the interest
portion  of Capital  Leases and  "synthetic"  and other such  off-balance  sheet
leases as described in the definition of Debt.

         "Interest Rate" means each or any of the interest rates,  including the
Default Rate, set forth in SECTION 3.1.

         "Inventory"  means  without  duplication  all of each Loan  Party's now
owned and hereafter acquired inventory, goods and merchandise, wherever located,
to be  furnished  under any  contract of service or held for sale or lease,  all
returned goods, raw materials,  work in process, other materials and supplies of
any kind,  nature or  description  which  are or might be  consumed  in the Loan
Party's  business or used in connection  with the printing,  packing,  shipping,
advertising,  selling,  leasing or finishing of such goods, merchandise and such
other  personal  property,  and  all  documents  of  title  or  other  documents
representing them.

         "Investment  Property" means: (a) a security,  whether  certificated or
uncertificated;  (b) a security  entitlement;  (c) a securities  account;  (d) a
commodity contract; or (e) a commodity account.

         "IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.

         "Latest  Projections"  means:  (a) on the Closing  Date and  thereafter
until the Agent  receives  new  projections  pursuant  to  SECTION  7.2(f),  the
projections of the Borrower's  financial condition,  results of operations,  and
cash flow,  for the period  commencing on January 1, 2001 and ending on December
31,  2001  and  delivered  to the  Agent  prior  to the  Closing  Date;  and (b)
thereafter,  the  projections  most recently  received by the Agent  pursuant to
SECTION 7.2(f).

         "Lease" shall mean that certain Lease  Agreement dated February 1, 2001
between  Lenox  Park  Building  F  Partners,  as Lessor  ("Lessor")  and  Parent
Guarantor as Lessee for  approximately  51,045 square feet of rentable  space at
Building  F at 6745  Lenox  Center  Court,  Memphis,  Tennessee  38115  ("Leased
Space").

         "Lender" and "Lenders" have the meanings  specified in the introductory
paragraph  hereof and shall include the Agent to the extent of any Agent Advance
outstanding  and Bank of  America  to the  extent  of any Bank of  America  Loan
outstanding;  provided  that no such Agent Advance or Bank of America Loan shall
be taken into account in determining any Lender's Pro Rata Share.


                                       16
<PAGE>


         "Letter  of  Credit"  means a standby  Letter of Credit or  documentary
Letter of Credit  issued or caused to be issued for the account of the  Borrower
pursuant to SECTION 2.4.

         "Letter  of Credit  Fee" has the  meaning  specified  in  SECTION  3.6.

         "Lien" means: (a) any interest in property  securing an obligation owed
to, or a claim by, a Person other than the owner of the  property,  whether such
interest is based on the common law, statute, or contract, and including without
limitation, a security interest, charge, claim, or lien arising from a mortgage,
deed  of  trust,  encumbrance,   pledge,  hypothecation,   assignment,   deposit
arrangement, agreement, security agreement, conditional sale or trust receipt or
a lease,  consignment or bailment for security  purposes;  and (b) to the extent
not  included  under  clause  (a),  any  reservation,  exception,  encroachment,
easement, right-of-way,  covenant, condition,  restriction, lease or other title
exception or encumbrance affecting property.

         "Loan  Account"  means the loan account of the Borrower,  which account
shall be maintained by the Agent.

         "Loan  Documents"  means  the  Commitment  Letter,  which by its  terms
survives the closing of the  transactions  contemplated  hereby,  the Note, this
Agreement,  the Pledge Agreement,  the Collateral License Agreement  Assignments
and  any  other  agreements,  instruments,  and  documents  heretofore,  now  or
hereafter  evidencing,  securing,  guaranteeing  or  otherwise  relating  to the
Obligations,   the  Collateral,   or  any  other  aspect  of  the   transactions
contemplated by this Agreement.

         "Loan Party"  means each Person  defined as the Borrower and the Parent
Guarantor, and their permitted successors and assigns.

         "Loans"  means,  collectively,  all loans and advances  provided for in
ARTICLE 2.

         "Majority  Lenders"  means at  anytime  Lenders  whose Pro Rata  shares
aggregate more than 50.1% of the Commitments or, if no Commitments shall then be
in effect, Lenders who hold more than 50.1% of the aggregate principal amount of
the Loans then outstanding.

         "Margin  Stock"  means  "margin  stock"  as  such  term is  defined  in
Regulation U of the Federal Reserve Board.

         "Material Adverse Effect" means: (a) a material adverse change in, or a
material adverse effect upon, the operations,  business,  properties,  condition
(financial or otherwise),  profits or prospects of the Loan Parties,  taken as a
whole, or the value or condition of the Collateral; (b) a material impairment of
the ability of the Parent or the Borrower or the Loan  Parties  taken as a whole
to  perform  satisfactorily  under  any Loan  Document  or to avoid any Event of
Default; or (c) a material adverse effect upon the legality,  validity,  binding
effect or enforceability  against the Parent or the Borrower or the Loan Parties
taken as a whole or any  third  party  of any Loan  Document  or the Lien on the
Collateral in favor of the Agent.

"Material  License  Agreements"  means (a) that certain  License  Agreement with
Umbro set forth on SCHEDULE  1.1 and (b) all other  license  agreements  entered
into by the Borrower or any of its  Subsidiaries  pursuant to which (i) Borrower
or such Subsidiary  either Guarantees or actually pays royalties to the licensor
party to such license agreement in an amount equal or greater

                                       17
<PAGE>

than $100,000 per year or (ii) Borrower carries  Eligible  Inventory with a book
value of in excess of $100,000.

         "Maximum  Revolver Amount" means  $15,000,000 (or such lesser amount to
which the Total Facility may be permanently  reduced by the Borrower pursuant to
SECTION 4.2 hereof).

         "Multi-employer  Plan"  means a  "multi-employer  plan" as  defined  in
Section  4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by the Borrower or any
ERISA Affiliate.

         "Net Amount of Eligible  Accounts" means, at any time, the gross amount
of Eligible  Accounts  less sales,  excise or similar  taxes,  and less returns,
discounts,  claims,  credits and  allowances  of any nature at any time  issued,
owing, granted, outstanding, available or claimed.

         "Net Worth"  means,  at any date:  (a) the book value (after  deducting
related depreciation,  obsolescence,  amortization,  valuation, and other proper
reserves as  determined  in  accordance  with GAAP) at which the assets would be
shown  on  a  balance  sheet  of  the  Parent  Guarantor  and  its  consolidated
Subsidiaries  at such date prepared in accordance with GAAP; less (b) the amount
at which the Parent Guarantor's and its consolidated  Subsidiaries'  liabilities
would be shown on such  balance  sheet,  including as  liabilities  all Debt and
reserves  for  contingencies  and other  potential  liabilities  which  would be
required to be shown on such balance sheet.

         "Note" means the Amended and Restated  Master Secured  Promissory  Note
dated as of the date  hereof,  executed  and  delivered by Borrower to Agent and
evidencing the Total Facility.

         "Notice of  Borrowing"  has the meaning  specified  in SECTION  2.2(b).

         "Notice  of  Conversion/Continuation"  has  the  meaning  specified  in
SECTION 3.2(b).

         "Obligations"  means without  duplication all present and future loans,
advances,  liabilities,  obligations,  covenants, duties, and debts owing by the
Borrower or any other Loan Party to the Agent and/or any Lender,  arising  under
or pursuant to this Agreement or any of the other Loan  Documents,  or any Hedge
Agreement,  whether  or not  evidenced  by any  note,  or  other  instrument  or
document,  whether  arising from an extension of credit,  opening of a letter of
credit, acceptance, loan, guaranty, indemnification or otherwise, whether direct
or indirect  (including,  without limitation,  those acquired by assignment from
others,  absolute or contingent,  due or to become due, primary or secondary, as
principal or  guarantor,  and  including,  without  limitation,  all  principal,
interest,  charges,  expenses,  fees, attorneys' fees, filing fees and any other
sums  chargeable to the Borrower or any other Loan Party  hereunder or under any
of the other Loan  Documents.  "Obligations"  includes,  without  limitation  or
duplication, all debts, liabilities, and obligations now or hereafter owing from
the  Borrower to the Agent  and/or any Lender  under or in  connection  with the
Letters of Credit and includes, without limitation, all interest that would have
accrued but for the  commencement  of any Insolvency  Proceeding with respect to
any Person.

         "Original Loan" has the meaning specified in the Recitals hereto.

         "Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property  taxes,  charges or similar levies which arise from
any payment made hereunder or from the execution,  delivery or registration  of,
or otherwise with respect to, this Agreement or any other Loan Documents.


                                       18
<PAGE>


         "Participant"  means any Person who shall have been  granted,  pursuant
and subject to the terms and  conditions of ARTICLE 13 hereof,  the right by any
Lender to  participate  in the  financing  provided  by such  Lender  under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.

         "Patent"  means any and all letters patent and  applications  therefor,
and all registrations and recordings  thereof,  including,  without  limitation,
applications,  registrations  and  recordings  in the United  States  Patent and
Trademark  Office,  or in any similar office or agency of the United States,  or
any  state  thereof,  or in any  similar  office or  agency  of any  country  or
political subdivision thereof throughout the world,  including,  but not limited
to, those described in SCHEDULE 8.13 (as from time to time amended,  modified or
supplemented  in accordance  with the terms hereof)  attached  hereto and made a
part  hereof,  together  with  all  re-examinations,   reissues,  continuations,
continuations-in-part,  divisions,  improvements and extensions  thereof and all
licenses  thereof or pertaining  thereto,  including,  without  limitation,  the
License Agreements with respect thereto, and all claims for infringement thereof
or  pertaining  thereto,  and the  rights to make,  use and sell,  and all other
rights  with  respect  to, the  inventions  disclosed  or claimed  therein,  all
inventions, designs, proprietary or technical information,  know-how, other data
or information,  software,  databases,  all embodiments or fixations thereof and
related documentation, and all other trade secret rights not described above.

         "Payment Account" means each blocked bank account established  pursuant
to  SECTION  6.9,  to  which  the  funds  of a Loan  Party  (including,  without
limitation,  proceeds  of  Accounts  and  other  Collateral)  are  deposited  or
credited,  and which is  maintained in the name of the Agent or such Loan Party,
as the Agent may determine, on terms acceptable to the Agent.

         "PBGC"  means  the  Pension   Benefit   Guaranty   Corporation  or  any
Governmental Authority succeeding to the functions thereof.

         "Pending  Revolving Loans" means, at any time, the aggregate  principal
amount of all Revolving Loans  requested in any Notice(s) of Borrowing  received
by the Agent which have not yet been advanced.

         "Pension  Plan"  means a pension  plan (as  defined in Section  3(2) of
ERISA)  subject to Title IV of ERISA  which the Parent  Guarantor  or any of its
Subsidiaries  sponsors,  maintains,  or to  which it  makes,  is  making,  or is
obligated to make  contributions,  or in the case of a  Multi-employer  Plan has
made  contributions  at any time during the immediately  preceding five (5) plan
years.

         "Period of  Availability"  means the period from January 15 through and
including September 15th of each calendar year.

         "Period of  Unavailability"  means the period from September 16 of each
calendar year through and including January 14 of the subsequent calendar year.

         "Permitted Liens" means:

         (a) Liens for taxes not delinquent;  or statutory Liens for taxes in an
amount not to exceed $1,000,000  outstanding at any one time,  provided that the
payment of such taxes which are due and payable is being contested in good faith
and by appropriate  proceedings  diligently  pursued and as to which reserves in
such amount have been  established  under clause

                                       19
<PAGE>

(b)(iv) of the definition of Availability and adequate  financial  reserves have
been  established on the applicable Loan Party's books and records and a stay of
enforcement of any such Lien is in effect.

         (b) the Agent's Liens;

         (c) deposits  under . worker's  compensation,  unemployment  insurance,
social  security and other similar laws, or to secure the  performance  of bids,
tenders,  leases  (other than Capital  Leases) or contracts  (other than for the
repayment  of  borrowed  money) or to  secure  indemnity,  performance  or other
similar bonds for the performance of bids,  tenders or contracts (other than for
the repayment of borrowed money) or to secure statutory  obligations (other than
liens arising under ERISA or Environmental  Liens) or surety or appeal bonds, or
to secure  indemnity,  performance or other similar bonds in the ordinary course
of business;

         (d) Liens  securing  the claims or demands of  materialmen,  mechanics,
carriers,  warehousemen,  landlords and other like Persons, provided that if any
such Lien arises  from the  nonpayment  of such claims or demand when due,  such
claims or demands do not exceed  $1,000,000 in the aggregate unless such Lien is
being contested in good faith by appropriate  proceedings diligently pursued and
as to which reserves in such amount have been  established  under clause (b)(iv)
of the  definition of  Availability  and adequate  financial  reserves have been
established on the applicable Loan Party's books and records;

         (e) [INTENTIONALLY OMITTED];

         (f) Judgment and other similar  Liens arising in connection  with court
proceedings  to the extent the attachment or enforcement of such Liens would not
result in an Event of Default hereunder;

         (g) Liens  existing on the date  hereof as set forth on SCHEDULE  9.19;

         (h) [INTENTIONALLY OMITTED];

         (i) [INTENTIONALLY OMITTED]; and

         (j) Liens securing Debt as and to the extent permitted under clause (f)
of SECTION 9.13.

         "Permitted   Rentals"  has  the  meaning  specified  in  SECTION  9.24.

         "Person" means any individual, sole proprietorship,  partnership, joint
venture,   trust,   unincorporated   organization,   association,   corporation,
Governmental Authority, or any other entity.

         "Plan"  means an employee  benefit  plan (as defined in Section 3(3) of
ERISA)  which  the  Parent  Guarantor  or any of its  Subsidiaries  sponsors  or
maintains or to which the Parent Guarantor or any of its Subsidiaries  makes, is
making, or is obligated to make contributions and includes any Pension Plan.

         "Pledge  Agreement"  means the Amended and  Restated  Pledge  Agreement
dated as of the date hereof  executed  and  delivered to the Agent by the Parent
Guarantor  and each of its  Subsidiaries  that  holds any  Capital  Stock of the
Borrower or any other Subsidiary of the Parent Guarantor, or any promissory note
representing  any  intercompany  Debt  issued  by the  Parent


                                       20
<PAGE>

Guarantor or any  Subsidiary  thereof to the Parent  Guarantor or any Subsidiary
thereof,  to evidence and perfect the Agent's security  interest for the benefit
of itself  and the  Lenders in all  Capital  Stock of the  Borrower,  each other
Subsidiary of the Parent Guarantor, and in all promissory notes representing any
intercompany  Debt issued by the Parent  Guarantor or any Subsidiary  thereof to
the Parent Guarantor or any Subsidiary thereof.

         "Principals"  means  Robert  E.  Nederlander,  Leonard  Toboroff,  John
McConnaughy, Jr., Jeffrey G. Webb, John Nichols or David Groelinger.

         "Pro Rata Share" means, with respect to a Lender, a fraction (expressed
as a  percentage),  the  numerator  of  which  is the  amount  of such  Lender's
Commitment and the  denominator of which is the sum of the amounts of all of the
Lenders'  Commitments,   or  if  no  Commitments  are  outstanding,  a  fraction
(expressed as a percentage), the numerator of which is the amount of Obligations
owed to such Lender and the denominator of which is the aggregate  amount of the
Obligations owed to the Lenders.

         "Proprietary  Rights"  means  all of each  Loan  Party's  now owned and
hereafter arising or acquired:  all Intellectual Property and, to the extent not
covered in such definition,  all other licenses,  franchises,  permits, patents,
patent  rights,  copyrights,  works which are the subject  matter of copyrights,
trademarks,  service marks,  trade names,  trade styles,  patent,  trademark and
service mark  applications,  and all  licenses and rights  related to any of the
foregoing,  including, without limitation,  those patents,  trademarks,  service
marks,  trade names and  copyrights  set forth on SCHEDULE 8.13 hereto,  and all
other rights under any of the foregoing,  all  extensions,  renewals,  reissues,
divisions, continuations, and continuations-in-part of any of the foregoing, and
all  rights to sue for  past,  present  and  future  infringement  of any of the
foregoing.

         "Redemption"  shall have the meaning specified in SCHEDULE 9.14 HERETO.

         "Related Party" means, with respect to any Principal, (A) any spouse or
immediate  family member of such  Principal,  (B) the estate or any heir of such
Principal,  (C) any  Subsidiary  of any of the  Principals  or any other Related
Party or (D) any trust,  the  beneficiaries  of whom are  Principals  or Related
Parties.

         "Release"  means  a  release,   spill,  emission,   leaking,   pumping,
injection, deposit, disposal,  discharge,  dispersal, leaching or migration of a
Contaminant  into  the  indoor  or  outdoor  environment  or  into or out of any
property,  including the movement of  Contaminants  through or in the air, soil,
surface water, groundwater or property.

         "Rentals" has the meaning specified in SECTION 9.24.

         "Reportable  Event"  means,  any of the  events  set  forth in  Section
4043(b) of ERISA or the  regulations  thereunder,  other than any such event for
which the 30-day notice  requirement  under ERISA has been waived in regulations
issued by the PBGC.

         "Required  Lenders"  means at any time  Lenders  whose Pro Rata  Shares
aggregate more than 66.7% of the Commitments or, if no Commitments shall then be
in effect, Lenders who hold more than 66.7% of the aggregate principal amount of
the Loans then outstanding.

         "Requirement  of Law" means,  as to any Person,  any law  (statutory or
common), treaty, rule or regulation or final non-appealable  determination of an
arbitrator or of a Governmental

                                       21
<PAGE>

Authority,  in each case  applicable to or binding upon the Person or any of its
property or to which the Person or any of its property is subject.

         "Responsible   Officer"  means  the  chief  executive  officer  or  the
president of the Parent Guarantor, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with financial
covenants and the  preparation  of the  Borrowing  Base  Certificate,  the chief
financial  officer,  the  treasurer  or  the  chief  accounting  officer  of the
Borrower,  or any other  officer  having  substantially  the same  authority and
responsibility.

         "Restricted  Investment"  means,  as to any Person,  any acquisition of
property by such Person in exchange for cash or other  property,  whether in the
form of an acquisition of stock, debt, or other  indebtedness or obligation,  or
the purchase or acquisition of any other property,  or a loan, advance,  capital
contribution, or subscription, except holdings or acquisitions of the following:
(a)  Equipment  to be used in the  business of the Borrower or any Loan Party so
long as the acquisition costs thereof constitute Capital Expenditures  permitted
hereunder;  (b) Inventory in the ordinary course of business; (c) current assets
arising  from the sale or lease of goods or the  rendition  of  services  in the
ordinary  course of  business  of the  Borrower  or any Loan  Party;  (d) direct
obligations  of the  United  States  of  America,  or  any  agency  thereof,  or
obligations  guaranteed by the United States of America,  which are subject to a
first-priority  perfected  Lien  in  favor  of the  Agent,  provided  that  such
obligations  mature within one year from the date of  acquisition  thereof;  (e)
certificates  of deposit  maturing within one year from the date of acquisition,
bankers'  acceptances,  Eurodollar bank deposits, or overnight bank deposits, in
each case issued by, created by, or with a bank or trust company organized under
the laws of the United  States or any state thereof  having  capital and surplus
aggregating  at  least  $100,000,000,  which  are  subject  to a  first-priority
perfected  Lien in favor of the Agent;  (f)  commercial  paper given a rating of
"A2" or better by  Standard  & Poor's  Corporation  or "P2" or better by Moody's
Investors  Service,  Inc.  and  maturing not more than 270 days from the date of
creation thereof, which are subject to a first-priority  perfected Lien in favor
of the Agent;  (g) Capital  Stock or Debt of the Borrower or other  Subsidiaries
and in Fox Athletic LLC held by the Parent  Guarantor  and disclosed on SCHEDULE
8.5; (h) Debt of the Parent  Guarantor  held by the  Borrower  and  disclosed on
SCHEDULE 8.5; (i) (w) additional  investments  after the date hereof made by the
Borrower  consisting  of Debt of another  Person  within the  definition  of the
Borrower,  (x) intentionally  omitted, (y) additional investments made after the
date hereof by the Borrower  consisting of Debt of the Parent Guarantor owing to
the  Borrower  which is pari passu with the Senior  Notes and is advanced to the
Parent  Guarantor  to pay  interest  on the  Senior  Notes  when due,  scheduled
payments of  principal  and interest on the  Subordinated  Debt when due and the
Parent  Guarantor's  expenses  incurred in the  ordinary  course of its business
consistent  with customary  business  practices and (z)  additional  investments
after the date hereof made by the Parent  Guarantor in the form of contributions
of equity to or Capital Stock (pledged to the Agent  hereunder) of the Borrower;
(j) investments  consisting of Debt or Capital Stock received in connection with
the  bankruptcy  or  reorganization  of suppliers and customers in settlement of
delinquent  obligations  of, and other bona fide  disputes  with,  suppliers and
customers;  (k) deposit accounts  maintained by any Loan Party which, except for
travel agent escrow  accounts,  are subject to a Lien in favor of the Agent; (l)
loans and  advances  made to  employees  in the  ordinary  course of  employment
consistent with past practices; (m) investments in Persons other than the Parent
Guarantor and its Subsidiaries consisting of Debt or Capital Stock not to exceed
the  Aggregate  Additional  Debt  and  Investment  Basket  Amount  at  any  time
outstanding;  (n)  Intentionally  Omitted;  (o) investments  consisting of money
market  accounts  with the  Agent,  a Lender or  another  financial  institution
reasonably  acceptable  to the Agent,  provided  such money market  accounts are
subject  to a  first-priority  perfected  Lien in  favor of the  Agent;  and (p)
expenditures otherwise permitted under SCHEDULE 9.14 hereto;  provided,  that in
each case an investment  of any type  described in clauses (d) through (p)

                                       22
<PAGE>

shall  not be a made if a  Default  or  Event of  Default  has  occurred  and is
continuing or would result therefrom.

         "Revolving Loans" has the meaning specified in SECTION 2.2 and includes
each Agent Advance and Bank of America Loan.

         "Scheduled  Principal Payments" means all principal payments in respect
of Funded  Debt  (other  than  under  this  Agreement)  scheduled  to be made or
actually made pursuant to the terms thereof during the applicable period;  which
shall include,  in the case of reducing  revolving  commitments,  the difference
between the revolving  commitment amount on the first day of such period and the
revolving  commitment  amount at the end of such  period,  but shall not include
revolving loan repayments.

         "Second  Loan  Agreement"  shall  have  the  meaning  set  forth in the
Recitals hereto.

         "Senior Notes" means the  $115,000,000 of 10 1/2% Senior Notes due 2007
issued  pursuant to the Indenture by and between the Borrower and Marine Midland
Bank, dated June 19, 1997 (the "Indenture").

         "Settlement"  and  "Settlement  Date" have the  meanings  specified  in
SECTION 2.2(j)(i).

         "Solvent"  means when used with  respect to any Person that at the time
of determination:

       (i)    the assets of such Person,  at a fair valuation,  are in excess of
the  total  amount  of its  debts  (including,  without  limitation,  contingent
liabilities); and

       (ii)   the present fair saleable  value of its assets is greater than its
probable  liability  on its  existing  debts as such debts  become  absolute and
matured; and

       (iii)  it is  then  able  and  expects  to  be  able  to  pay  its  debts
(including, without limitation,  contingent debts and other commitments) as they
mature; and

       (iv)   it has capital  sufficient  to carry on its  business as conducted
and as proposed to be conducted.

         For purposes of determining whether a Person is Solvent,  the amount of
any contingent  liability  shall be computed as the amount that, in light of all
the facts and  circumstances  existing at such time,  represents the amount that
can reasonably be expected to become an actual or matured liability.

    "Stated Termination Date" means September 15, 2002.

         "Subordinated Debt" means those certain convertible  subordinated notes
issued by the Parent  Guarantor,  in the  aggregate  amount of  $7,500,000,  and
maturing on November 1, 2007.

         "Subsidiary"   of  a  Person   means  any   corporation,   association,
partnership,  joint  venture or other  business  entity of which more than fifty
percent  (50%) of the voting  stock or other  equity  interests  (in the case of
Persons other than corporations),  is owned or controlled directly or indirectly
by  the  Person,  or one  or  more  of the  Subsidiaries  of  the  Person,  or a
combination thereof.

                                       23
<PAGE>


Unless  the  context  otherwise   clearly  requires,   references  herein  to  a
"Subsidiary" refer to a Subsidiary of the Parent Guarantor.

         "Swap Transactions" means Hedging Agreements providing for any interest
rate swap  transaction,  forward rate  transaction,  treasury lock  transaction,
interest rate cap, floor or collar  transaction,  any similar  transaction,  any
option to enter  into any of the  foregoing,  or any  combination  of any of the
foregoing.

         "Taxes"  means any and all present or future  taxes,  levies,  imposts,
deductions,  charges or withholdings,  and all liabilities with respect thereto,
excluding,  in the case of each  Lender  and the Agent,  such  taxes  (including
income taxes or franchise  taxes) as are imposed on or measured by each Lender's
net income by the jurisdiction (or any political  subdivision thereof) under the
laws of which such  Lender or the  Agent,  as the case may be, is  organized  or
maintains a lending office.

         "Termination  Date"  means  the  earliest  to occur  of (i) the  Stated
Termination  Date, (ii) the date the Total Facility is terminated  either by the
Borrower  pursuant  to  SECTION  4.2 or by the  Agent  or the  Majority  Lenders
pursuant  to  SECTION  11.2,  and  (iii) the date this  Agreement  is  otherwise
terminated for any reason whatsoever (provided, that this clause (iii) shall not
be construed as giving any party  hereto any right  hereunder to terminate  this
Agreement).

         "Total Facility" has the meaning specified in SECTION 2.1.

         "Trademark"  means any and all trademarks,  trade names,  trade styles,
service marks,  corporate  names,  company  names,  business  names,  fictitious
business names,  logos,  emblems,  designs,  prints and labels,  all elements of
package,  trade  styles or trade  dress of goods and  services,  and all general
intangibles  of like  nature,  together  with  the  goodwill  of each  Grantor's
business  connected  with  the  use  thereof  and  symbolized  thereby,  and all
applications,   registrations  and  recordings   thereof,   including,   without
limitation,  applications,  registrations  and  recordings  in the United States
Patent and Trademark  Office,  or in any similar  office or agency of the United
States,  or in any office of the Secretary of State (or equivalent) of any state
thereof,  or in any  similar  office  or  agency  of any  country  or  political
subdivision thereof throughout the world,  including,  but not limited to, those
described  in  SCHEDULE  8.13  (as  from  time  to  time  amended,  modified  or
supplemented  in accordance  with the terms hereof)  attached  hereto and made a
part hereof, together with all extensions, renewals and corrections thereof, and
all licenses thereof or pertaining thereto,  including,  without limitation, the
License  Agreements  with respect  thereto,  and all claims for  infringement or
dilution thereto or injury to goodwill of the business connected.

         "UCC" means the Uniform  Commercial Code (or any successor  statute) of
the State of  Tennessee  or of any other state the laws of which are required by
Section 9-103  thereof to be applied in connection  with the issue of perfection
of security interests.

         "Umbro" has the meaning specified in SECTION 9.28.

         "Umbro  Collateral"  means any  Inventory  of Fashions to be  acquired,
produced,  owned,  sold or otherwise  disposed of or dealt with  pursuant to the
terms of the Material License Agreement with Umbro.

         "Umbro Consent" has the meaning specified in SECTION 9.28.

                                       24
<PAGE>


         "Unfunded  Pension  Liability"  means the  excess  of a Plan's  benefit
liabilities  under Section  4001(a)(16) of ERISA, over the current value of that
Plan's assets,  determined in accordance with the  assumptions  used for funding
the Pension  Plan  pursuant to Section 412 of the Code for the  applicable  plan
year.

         "Unused  Letter  of  Credit  Subfacility"  means  an  amount  equal  to
$4,000,000 during each Period of Availability, and $2,000,000 during each Period
of  Unavailability,  minus in either case the sum of (a) the  aggregate  undrawn
amount of all  outstanding  Letters  of  Credit  plus (b) the  aggregate  unpaid
reimbursement obligations with respect to all Letters of Credit.

         "Unused Line Fee" has the meaning specified in SECTION 3.5.

   1.2   ACCOUNTING  TERMS.  Any accounting  term used in this  Agreement  shall
have, unless otherwise  specifically  provided herein,  the meaning  customarily
given in accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
as  consistently  applied and using the same method for  inventory  valuation as
used in the preparation of the Financial Statements.

   1.3   INTERPRETIVE PROVISIONS.

         (a) The  meanings  of  defined  terms  are  equally  applicable  to the
singular and plural forms of the defined terms.

         (b) The words "hereof,"  "herein,"  "hereunder" and similar words refer
to  this  Agreement  as a  whole  and not to any  particular  provision  of this
Agreement; and Subsection,  Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.

         (c)  (i)  The  term  "documents"  includes  any  and  all  instruments,
documents,  agreements,  certificates,  indentures,  notices and other writings,
however evidenced.

              (ii) The term  "including"  is not limiting  and means  "including
without limitation."

              (iii) In the  computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including," the words
"to" and "until" each mean "to but excluding"  and the word "through"  means "to
and including."

         (d) Unless  otherwise  expressly  provided  herein,  (i)  references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be  construed  as  including  all  statutory  and  regulatory  provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation; provided, that any representation or warranty by any Loan Party made
herein  or in any  other  Loan  Document  (or  certificate  given  hereunder  or
thereunder)  with respect to compliance with any statute or regulation  shall be
limited  to the  statutes  and  regulations  in  effect  on  the  date  of  such
representation  and/or warranty;  and, provided,  further,  that the immediately
preceding proviso shall not limit any Loan Party's  covenants  contained in this
Agreement or any other Loan Document to comply with statutes and regulations.


                                       25
<PAGE>

         (e) The captions and headings of this Agreement are for  convenience of
reference only and shall not affect the interpretation of this Agreement.

         (f) This Agreement and other Loan  Documents may use several  different
limitations,  tests or measurements to regulate the same or similar matters. All
such  limitations,  tests and  measurements  are  cumulative  and shall  each be
performed in accordance with their terms.

         (g) This  Agreement  and the other  Loan  Documents  are the  result of
negotiations  among and have been reviewed by counsel to the Agent, the Borrower
and the other parties,  and are the products of all parties.  Accordingly,  they
shall not be construed  against the Lenders or the Agent  merely  because of the
Agent's or Lenders' involvement in their preparation.

                                   ARTICLE 2
                           LOANS AND LETTERS OF CREDIT

   2.1   TOTAL  FACILITY.  Subject  to all of the terms and  conditions  of this
Agreement, the Lenders severally agree to make available a total credit facility
of up to $15,000,000 (as such amount is, if at all,  reduced pursuant to SECTION
4.2, the "Total  Facility")  for the Borrower's use from time to time during the
term of this  Agreement.  The Total  Facility  shall be comprised of a revolving
line of credit  consisting  of  revolving  loans and letters of credit up to the
Maximum Revolver Amount, as described in SECTIONS 2.2 and 2.4.

   2.2   REVOLVING LOANS.

         (a) AMOUNTS.  Subject to the  satisfaction of the conditions  precedent
set forth in ARTICLE 10,  each  Lender  severally  agrees,  upon the  Borrower's
request from time to time on any Business Day during any Period of  Availability
from the Closing Date to the  Termination  Date,  to make  revolving  loans (the
"Revolving Loans") to the Borrower, in amounts not to exceed (except for Bank of
America with respect to Bank of America Loans or Agent  Advances)  such Lender's
Pro Rata Share of the Borrower's  Availability.  The Lenders,  however, in their
discretion, may elect to make Revolving Loans or participate (as provided for in
SECTION 2.4(f)) in the credit support or enhancement  provided through the Agent
to the issuers of Letters of Credit in excess of the Availability on one or more
occasions,  but if they do so, neither the Agent nor the Lenders shall be deemed
thereby  to have  changed  the  limits  of the  Maximum  Revolver  Amount or the
Availability or to be obligated to exceed such limits on any other occasion.  If
the  Aggregate   Revolver   Outstandings   exceed  the  Availability  (with  the
Availability  for  this  purpose   calculated  as  if  the  Aggregate   Revolver
Outstandings  were zero),  the Lenders may refuse to make or otherwise  restrict
the making of  Revolving  Loans as the Lenders  determine  until such excess has
been eliminated,  subject to the Agent's authority,  in its sole discretion,  to
make Agent Advances pursuant to the terms of SECTION 2.2(i).

         (b) PROCEDURE FOR BORROWING.  (1) Each Borrowing shall be made upon the
Borrower's  irrevocable  written notice  delivered to the Agent in the form of a
notice of  borrowing  ("Notice of  Borrowing")  together  with a Borrowing  Base
Certificate  reflecting  sufficient  Availability (which must be received by the
Agent  prior to  12:00  p.m.  (Central  time) on the  requested  Funding  Date),
specifying:

                  (A) the amount of the Borrowing; and


                                       26
<PAGE>


                  (B) the requested Funding Date, which shall be a Business Day.

              (2) In lieu of delivering the above-described  Notice of Borrowing
the  Borrower  may give the  Agent  telephonic  notice  of such  request  by the
required time, with such telephonic  notice to be confirmed in writing within 24
hours of the giving of such  notice but the Agent  shall be  entitled to rely on
the telephonic notice in making such Revolving Loans.

         (c)  RELIANCE  UPON  AUTHORITY.  On or  prior to the  Closing  Date and
thereafter prior to any change with respect to any of the information  contained
in the following clauses (i) and (ii), the Borrower shall deliver to the Agent a
writing  setting  forth (i) the  account of the  Borrower  to which the Agent is
authorized to transfer the proceeds of the Revolving Loans requested pursuant to
this  SECTION  2.2,  and (ii) the names of the  persons  authorized  to  request
Revolving  Loans on behalf of the  Borrower,  and shall provide the Agent with a
specimen  signature  of each such  person.  The Agent  shall be entitled to rely
conclusively on such person's  authority to request Revolving Loans on behalf of
the Borrower, the proceeds of which are to be transferred to any of the accounts
specified by the Borrower pursuant to the immediately preceding sentence,  until
the Agent receives  written notice from the Borrower to the contrary.  The Agent
shall have no duty to verify the identity of any individual  representing him or
herself as one of the officers  authorized by the Borrower to make such requests
on its behalf.

         (d) NO  LIABILITY.  The Agent  shall not  incur  any  liability  to the
Borrower  as a result of acting upon any notice  referred to in SECTIONS  2.2(b)
and (c),  which notice the Agent believes in good faith to have been given by an
officer duly authorized by the Borrower to request Revolving Loans on its behalf
or for otherwise  acting in good faith under this SECTION 2.2, and the crediting
of Revolving  Loans to the Borrower's  deposit  account,  or transmittal to such
Person as the Borrower shall direct, shall conclusively establish the obligation
of the Borrower to repay such Revolving Loans as provided herein.

         (e) NOTICE  IRREVOCABLE.  Any Notice of Borrowing (or telephonic notice
in lieu thereof) made pursuant to SECTION  2.2(b) shall be  irrevocable  and the
Borrower  shall be bound to borrow the funds  requested  therein  in  accordance
therewith.

         (f) AGENT'S  ELECTION.  Promptly after receipt of a Notice of Borrowing
(or telephonic  notice in lieu thereof)  pursuant to SECTION  2.2(b),  the Agent
shall elect, in its discretion, (i) to have the terms of SECTION 2.2(g) apply to
such requested  Borrowing,  or (ii) to request Bank of America to make a Bank of
America  Loan  pursuant  to the terms of  SECTION  2.2(h)  in the  amount of the
requested Borrowing;  PROVIDED, however, that if Bank of America declines in its
sole discretion to make a Bank of America Loan pursuant to SECTION  2.2(h),  the
Agent shall elect to have the terms of SECTION  2.2(g)  apply to such  requested
Borrowing.

         (g) MAKING OF  REVOLVING  LOANS.  (i) In the event that the Agent shall
elect to have the terms of this SECTION 2.2(g) apply to a requested Borrowing as
described  IN  SECTION  2.2(f),  then  promptly  after  receipt  of a Notice  of
Borrowing  or  telephonic  notice  pursuant to SECTION  2.2(b),  the Agent shall
notify the Lenders by telecopy, telephone or other similar form of transmission,
of the requested  Borrowing.  Each Lender shall make the amount of such Lender's
Pro Rata Share of the  requested  Borrowing  available  to the Agent in same day
funds,  to such account of the Agent as the Agent may designate,  not later than
1:30 p.m.  (Central  time) on the Funding  Date  applicable  thereto.  After the
Agent's receipt of the proceeds of such Revolving  Loans,  upon  satisfaction of
the  applicable  conditions  precedent  set forth in ARTICLE 10, the Agent shall
make the  proceeds of such  Revolving  Loans  available  to the  Borrower on the
applicable  Funding Date by transferring same day

                                       27
<PAGE>
funds equal to the proceeds of such Revolving Loans received by the Agent to the
account of the Borrower, designated in writing by the Borrower and acceptable to
the Agent; PROVIDED,  however, that the amount of Revolving Loans so made on any
date shall in no event exceed the Availability on such date.

              (ii) Unless the Agent receives notice from a Lender on or prior to
the Closing Date or, with respect to any  Borrowing  after the Closing  Date, at
least one  Business  Day prior to the date of such  Borrowing,  that such Lender
will not make  available  as and when  required  hereunder  to the Agent for the
account  of the  Borrower  the  amount of that  Lender's  Pro Rata  Share of the
Borrowing,  the Agent may assume that each Lender has made such amount available
to the Agent in  immediately  available  funds on the Funding Date and the Agent
may (but shall not be so  required),  in  reliance  upon such  assumption,  make
available to the  Borrower on such date a  corresponding  amount.  If and to the
extent any Lender shall not have made its full amount  available to the Agent in
immediately  available  funds  and the  Agent  in such  circumstances  has  made
available  to the Borrower  such  amount,  that Lender shall on the Business Day
following  such Funding Date make such amount  available to the Agent,  together
with  interest at the  Federal  Funds Rate for each day during  such  period.  A
notice of the Agent  submitted to any Lender with respect to amounts owing under
this subsection shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall constitute such Lender's Loan on
the payment date for all purposes of this Agreement.  If such amount is not made
available to the Agent on the Business Day following the Funding Date, the Agent
will notify the Borrower of such failure to fund and,  upon demand by the Agent,
the  Borrower  shall  pay such  amount to the  Agent  for the  Agent's  account,
together  with  interest  thereon  for each day  elapsed  since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at the time
to the Loans  comprising such  Borrowing.  The failure of any Lender to make any
Loan on any Funding  Date (any such Lender,  prior to the cure of such  failure,
being  hereinafter  referred to as a "Defaulting  Lender") shall not relieve any
other Lender of any  obligation  hereunder to make a Loan on such Funding  Date,
but no Lender shall be  responsible  for the failure of any other Lender to make
the Loan to be made by such other Lender on any Funding Date.

              (iii) The Agent shall not be obligated to transfer to a Defaulting
Lender any payments  made by Borrower to the Agent for the  Defaulting  Lender's
benefit;  nor  shall a  Defaulting  Lender be  entitled  to the  sharing  of any
payments hereunder. Amounts payable to a Defaulting Lender shall instead be paid
to or retained by the Agent. The Agent may hold and, in its discretion,  re-lend
to Borrower the amount of all such  payments  received or retained by it for the
account of such Defaulting  Lender. Any amounts so re-lent to the Borrower shall
bear  interest  at the rate  applicable  to Base  Rate  Loans  and for all other
purposes of this  Agreement  shall be treated as if they were  Revolving  Loans,
PROVIDED,  HOWEVER,  that for purposes of voting or  consenting  to matters with
respect to the Loan Documents and determining  Pro Rata Shares,  such Defaulting
Lender shall be deemed not to be a "Lender" and such Lender's  Commitment  shall
be deemed to be zero (-0-).  Until a Defaulting Lender cures its failure to fund
its Pro Rata Share of any  Borrowing  (1) such  Defaulting  Lender  shall not be
entitled to any portion of the Unused Line Fee and (2) the Unused Line Fee shall
accrue in favor of the  Lenders  which have  funded  their  respective  Pro Rata
Shares of such requested  Borrowing and shall be allocated among such performing
Lenders ratably based upon their relative Commitments. This Section shall remain
effective with respect to such Lender until such time as the  Defaulting  Lender
shall no longer be in default of any of its  obligations  under this  Agreement.
The terms of this Section shall not be construed to increase or otherwise affect
the  Commitment  of any  Lender,  or relieve or excuse  the  performance  by the
Borrower of its duties and obligations hereunder.




                                       28
<PAGE>

         (h) MAKING OF BANK OF AMERICA  LOANS.  (i) In the event the Agent shall
elect,  with the consent of Bank of America,  to have the terms of this  SECTION
2.2(h) apply to a requested  Borrowing as described in SECTION  2.2(f),  Bank of
America shall make a Revolving  Loan in the amount of such  Borrowing  (any such
Revolving  Loan made solely by Bank of America  pursuant to this SECTION  2.2(h)
being  referred to as a "Bank of America  Loan" and such  Revolving  Loans being
referred to collectively  as "Bank of America Loans")  available to the Borrower
on the Funding  Date  applicable  thereto by  transferring  same day funds to an
account of the Borrower, designated in writing by the Borrower and acceptable to
the Agent.  Each Bank of America Loan is a Revolving Loan hereunder and shall be
subject to all the terms and  conditions  applicable  to other  Revolving  Loans
except that all payments  thereon shall be payable to Bank of America solely for
its own account (and for the account of the holder of any participation interest
with  respect to such  Revolving  Loan).  The Agent  shall not  request  Bank of
America to make any Bank of America  Loan if (i) the Agent  shall have  received
written notice from any Lender, or otherwise has actual  knowledge,  that one or
more of the applicable  conditions precedent set forth in ARTICLE 10 will not be
satisfied on the requested  Funding Date for the applicable  Borrowing,  or (ii)
the requested Borrowing would exceed the Availability on such Funding Date. Bank
of America shall not otherwise be required to determine  whether the  applicable
conditions  precedent  set  forth  in  ARTICLE  10 have  been  satisfied  or the
requested Borrowing would exceed the Availability on the Funding Date applicable
thereto prior to making, in its sole discretion, any Bank of America Loan.

              (ii) The Bank of America Loans shall be secured by the Collateral,
shall  constitute  Revolving  Loans and  Obligations  hereunder,  and shall bear
interest at the rate applicable to the Revolving Loans from time to time.

         (i) AGENT  ADVANCES.  (i) Subject to the  limitations  set forth in the
provisos contained in this SECTION 2.2(i), the Agent is hereby authorized by the
Borrower and the Lenders, from time to time in the Agent's sole discretion,  (1)
after the  occurrence  of a Default or an Event of  Default,  or (2) at any time
that any of the other  applicable  conditions  precedent set forth in ARTICLE 10
have not been  satisfied,  to make Revolving  Loans to the Borrower on behalf of
the  Lenders  which  the  Agent,  in its  reasonable  business  judgment,  deems
necessary or desirable (A) to preserve or protect the Collateral, or any portion
thereof,  (B) to enhance the likelihood of, or maximize the amount of, repayment
of the Loans and other Obligations, or (C) to pay any other amount chargeable to
the  Borrower  pursuant  to the  terms  of this  Agreement,  including,  without
limitation,  costs,  fees and  expenses as described in SECTION 15.7 (any of the
advances  described in this  SECTION  2.2(i)  being  hereinafter  referred to as
"Agent  Advances");  PROVIDED,  that the Required Lenders may at any time revoke
the  Agent's  authorization  contained  in this  SECTION  2.2(i)  to make  Agent
Advances,  any  such  revocation  to be  in  writing  and  to  become  effective
prospectively upon the Agent's receipt thereof; PROVIDED, FURTHER, that an Agent
Advance which results in Aggregate Revolver  Outstandings to be in excess of the
Borrower's  Availability  shall not by itself  alone  cause an Event of  Default
hereunder;  and PROVIDED,  FURTHER, that an Agent Advance for an amount not paid
by the Borrower  when due shall not be considered to have cured any such failure
to pay when due.

              (ii) The Agent Advances shall be secured by the Collateral,  shall
constitute Revolving Loans and Obligations hereunder, and shall bear interest at
the rate  applicable to the Revolving  Loans from time to time.  The Agent shall
notify each Lender in writing of each such Agent Advance.

         (j)  SETTLEMENT.  It is agreed that each Lender's funded portion of the
Revolving  Loan is  intended  by the  Lenders  to be equal at all  times to such
Lender's Pro Rata Share of the outstanding Revolving Loans. Notwithstanding such
agreement,  the Agent,  Bank of  America,  and

                                       29
<PAGE>

the other  Lenders  agree  (which  agreement  shall not be for the benefit of or
enforceable by the Borrower) that in order to facilitate the  administration  of
this  Agreement and the other Loan  Documents,  settlement  among them as to the
Revolving  Loans,  the Bank of America Loans and the Agent  Advances  shall take
place on a periodic basis in accordance with the following provisions:

              (i) The Agent shall  request  settlement  ("Settlement")  with the
Lenders on a weekly basis,  or on a more frequent  basis if so determined by the
Agent,  (1) on behalf of Bank of America,  with respect to each outstanding Bank
of America Loan,  (2) for itself,  with respect to each Agent  Advance,  and (3)
with respect to collections  received, in each case, by notifying the Lenders of
such  requested  Settlement  by  telecopy,  telephone  or other  similar form of
transmission,  of such requested  Settlement,  no later than 11:00 a.m. (Central
time) on the date of such requested  Settlement (the  "Settlement  Date").  Each
Lender (other than Bank of America,  in the case of Bank of America Loans) shall
make the amount of such  Lender's  Pro Rata Share of the  outstanding  principal
amount of the Bank of America  Loans and Agent  Advances  with  respect to which
Settlement is requested available to the Agent, for itself or for the account of
Bank of America,  in same day funds,  to such  account of the Agent as the Agent
may designate,  not later than 1:30 p.m.  (Central time), on the Settlement Date
applicable thereto,  regardless of whether the applicable  conditions  precedent
set forth in ARTICLE 10 have then been satisfied. Such amounts made available to
the Agent shall be applied against the amounts of the applicable Bank of America
Loan or Agent  Advance  and,  together  with the portion of such Bank of America
Loan or Agent Advance  representing  Bank of America's  Pro Rata Share  thereof,
shall constitute Revolving Loans of such Lenders. If any such amount is not made
available to the Agent by any Lender on the Settlement Date applicable  thereto,
the Agent shall be  entitled  to recover  such amount on demand from such Lender
together with interest thereon at the Federal Funds Rate for the first three (3)
days from and after the Settlement Date and thereafter at the Interest Rate then
applicable to the Revolving Loans.

              (ii) Notwithstanding the foregoing, not more than one (1) Business
Day after demand is made by the Agent (whether before or after the occurrence of
a  Default  or an Event of  Default  and  regardless  of  whether  the Agent has
requested a Settlement with respect to a Bank of America Loan or Agent Advance),
each other Lender shall  irrevocably  and  unconditionally  purchase and receive
from Bank of America or the Agent, as applicable,  without recourse or warranty,
an undivided  interest and  participation  in such Bank of America Loan or Agent
Advance to the extent of such  Lender's Pro Rata Share  thereof by paying to the
Agent,  in same day funds,  an amount  equal to such  Lender's Pro Rata Share of
such Bank of America Loan or Agent  Advance.  If such amount is not in fact made
available  to the Agent by any  Lender,  the Agent  shall be entitled to recover
such amount on demand from such Lender  together  with  interest  thereon at the
Federal  Funds Rate for the first  three (3) days from and after such demand and
thereafter at the Interest Rate then applicable to the Revolving Loans.

              (iii)  From and  after  the  date,  if any,  on which  any  Lender
purchases an undivided interest and participation in any Bank of America Loan or
Agent  Advance  pursuant  to  subsection  (ii) above,  the Agent shall  promptly
distribute to such Lender at such address as such Lender may request in writing,
such  Lender's Pro Rata Share of all payments of principal  and interest and all
proceeds of Collateral  received by the Agent in respect of such Bank of America
Loan or Agent Advance.

              (iv) Between  Settlement  Dates, the Agent, to the extent no Agent
Advances  or Bank of  America  Loans  are  outstanding,  may pay over to Bank of
America any payments  received by the Agent,  which in accordance with the terms
of this Agreement would be applied to the reduction of the Revolving  Loans, for
application to Bank of America's other


                                       30
<PAGE>

outstanding Revolving Loans. If, as of any Settlement Date, collections received
since the then immediately  preceding  Settlement Date have been applied to Bank
of America's  other  outstanding  Revolving  Loans other than to Bank of America
Loans or Agent  Advances,  as provided  for in the  previous  sentence,  Bank of
America shall pay to the Agent for the accounts of the Lenders, to be applied to
the outstanding Revolving Loans of such Lenders, an amount such that each Lender
shall,  upon receipt of such amount,  have, as of such Settlement  Date, its Pro
Rata Share of the Revolving Loans.  During the period between  Settlement Dates,
Bank of America with respect to Bank of America Loans, the Agent with respect to
Agent  Advances,  and each Lender with respect to the Revolving Loans other than
Bank of America Loans and Agent  Advances,  shall be entitled to interest at the
applicable  rate or rates  payable  under this  Agreement on the actual  average
daily  amount  of funds  employed  by Bank of  America,  the Agent and the other
Lenders.

         (k) NOTATION.  The Agent shall record on its books the principal amount
of the Revolving Loans owing to each Lender, including the Bank of America Loans
owing to Bank of America,  and the Agent Advances owing to the Agent,  from time
to time. In addition,  each Lender is authorized,  at such Lender's  option,  to
note the date and amount of each  payment or  prepayment  of  principal  of such
Lender's  Revolving Loans in its books and records,  including computer records,
such books and records  constituting  rebuttably  presumptive  evidence,  absent
manifest error, of the accuracy of the information contained therein.

         (l) LENDERS' FAILURE TO PERFORM.  All Loans (other than Bank of America
Loans and Agent  Advances)  shall be made by the Lenders  simultaneously  and in
accordance with their Pro Rata Shares. It is understood that (a) no Lender shall
be responsible  for any failure by any other Lender to perform its obligation to
make any Loans hereunder, nor shall any Commitment of any Lender be increased or
decreased  as a result  of any  failure  by any  other  Lender  to  perform  its
obligation to make any Loans hereunder,  (b) no failure by any Lender to perform
its  obligation to make any Loans  hereunder  shall excuse any other Lender from
its  obligation to make any Loans  hereunder,  and (c) the  obligations  of each
Lender hereunder shall be several, not joint and several.

   2.3   [INTENTIONALLY OMITTED]

   2.4   Letters of Credit.

         (a) AGREEMENT TO CAUSE ISSUANCE. Subject to the terms and conditions of
this Agreement,  and in reliance upon the  representations and warranties of the
Borrower  herein set forth,  the Agent agrees (i) to issue or cause to be issued
by Bank of America or any of its  Affiliates  or another  financial  institution
that has its  principal  place of  business  in the United  States and  combined
capital and surplus of at least $400,000,000 for the account of the Borrower one
or more  documentary  and standby  letters of credit (" Letters of Credit")  and
(ii) to provide  credit  support or other  enhancement  to banks  acceptable  to
Agent,  which issue  Letters of Credit for the account of the Borrower (any such
credit support or enhancement being herein referred to as a "Credit Support") in
accordance  with  this  SECTION  2.4 from time to time  during  the term of this
Agreement.

         (b)  AMOUNTS;  OUTSIDE  EXPIRATION  DATE.  The Agent shall not have any
obligation  to take  steps to cause to be  issued  any  Letter  of  Credit or to
provide  Credit Support for any Letter of Credit at any time if: (1) the maximum
undrawn  amount of the  requested  Letter of Credit is  greater  than the Unused
Letter of Credit Subfacility at such time; (2) the maximum undrawn amount of the
requested Letter of Credit and all  commissions,  fees, and charges due from the
Borrower in connection with the opening  thereof exceed the  Availability of the
Borrower at such time; or (3) such Letter of Credit has an expiration date later
than  twelve  (12)  months  from the date of  issuance in the

                                       31
<PAGE>

case of a stand-by  Letter of Credit  (or 180 days in the case of a  documentary
Letter of Credit); PROVIDED, however, that standby Letters of Credit shall, upon
Borrower's  request,  have  "evergreen"  clauses  providing for automatic annual
renewals  unless  terminated  by the Agent and/or the issuer  thereof by written
notice to the  beneficiary  thereof thirty (30) days prior to the annual renewal
date.

         (c) OTHER CONDITIONS.  In addition to being subject to the satisfaction
of the applicable  conditions  precedent contained in ARTICLE 10, the obligation
of the Agent to issue or cause to be issued  any  Letter of Credit or to provide
Credit  Support for any Letter of Credit is subject to the following  conditions
precedent having been satisfied in a manner satisfactory to the Agent:

                  (1) The Borrower shall have  delivered to the proposed  issuer
         of such  Letter of  Credit,  at such  times and in such  manner as such
         proposed  issuer may  prescribe,  an  application in form and substance
         satisfactory  to such proposed issuer and the Agent for the issuance of
         the  Letter of  Credit  and such  other  documents  as may be  required
         pursuant to the terms  thereof,  and the form and terms of the proposed
         Letter of Credit shall be  satisfactory  to the Agent and such proposed
         issuer; and

                  (2) As of  the  date  of  issuance,  no  order  of any  court,
         arbitrator  or  Governmental  Authority  shall  purport by its terms to
         enjoin or restrain money center banks generally from issuing letters of
         credit of the type and in the amount of the proposed  Letter of Credit,
         and no  law,  rule or  regulation  applicable  to  money  center  banks
         generally and no request or directive  (whether or not having the force
         of law) from any Governmental  Authority with  jurisdiction  over money
         center banks  generally  shall  prohibit,  or request that the proposed
         issuer of such Letter of Credit  refrain from,  the issuance of letters
         of credit generally or the issuance of such Letters of Credit.

         (d) Issuance of Letters of Credit.

                  (1) REQUEST FOR  ISSUANCE.  The Borrower  shall give the Agent
         three (3) Business Days' prior written notice of the Borrower's request
         for the  issuance  of a Letter  of  Credit  together  with a  completed
         application for such Letter of Credit. Such notice shall be irrevocable
         and shall  specify  the  original  face  amount of the Letter of Credit
         requested,  the effective  date (which date shall be a Business Day) of
         issuance of such  requested  Letter of Credit,  whether  such Letter of
         Credit may be drawn in a single or in partial draws,  the date on which
         such  requested  Letter of Credit is to expire  (which  date shall be a
         Business  Day),  the  purpose  for which such Letter of Credit is to be
         issued,  and the  beneficiary  of the requested  Letter of Credit.  The
         Borrower shall attach to such notice the proposed form of the Letter of
         Credit.

                  (2) RESPONSIBILITIES OF THE AGENT;  ISSUANCE.  The Agent shall
         determine,  as of the Business Day immediately  preceding the requested
         effective  date of  issuance  of the  Letter of Credit set forth in the
         notice from the Borrower pursuant to SECTION 2.4(d)(1),  (i) the amount
         of the  applicable  Unused  Letter of Credit  Subfacility  and (ii) the
         Availability  as of  such  date.  If  (i)  the  undrawn  amount  of the
         requested  Letter of Credit is not greater than the  applicable  Unused
         Letter of Credit  Subfacility  and (ii) the issuance of such  requested
         Letter of Credit and all  commissions,  fees,  and charges due from the
         Borrower in  connection  with the opening  thereof would not exceed the
         Availability  of the  Borrower,  the Agent  shall


                                       32
<PAGE>

         issue or  cause such issuer to issue the requested  Letter of Credit on
         such requested effective date of issuance.

                  (3)  NOTICE OF  ISSUANCE.  On each  Settlement  Date the Agent
         shall give  notice to each  Lender of the  issuance  of all  Letters of
         Credit issued since the last Settlement Date.

                  (4)  NO  EXTENSIONS  OR  AMENDMENT.  The  Agent  shall  not be
         obligated  to cause any  Letter of  Credit to be   extended  or amended
         unless the  requirements of this SECTION 2.4(d) are met as though a new
         Letter of Credit were being  requested and issued.  With respect to any
         Letter of Credit which contains any  "evergreen"  or automatic  renewal
         provision,  each Lender  shall be deemed to have  consented to any such
         extension or renewal  unless any such Lender shall have provided to the
         Agent,  not  less  than 30 days  prior to the  last  date on which  the
         applicable  issuer can in accordance  with the terms of the  applicable
         Letter of Credit  decline  to extend or renew  such  Letter of  Credit,
         written  notice that it declines  to consent to any such  extension  or
         renewal,  PROVIDED, that if all of the requirements of this SECTION 2.4
         are met and no  Default  or Event of Default  exists,  no Lender  shall
         decline to consent to any such extension or renewal.

         (e) PAYMENTS PURSUANT TO LETTERS OF CREDIT.

                  (1)  PAYMENT  OF LETTER OF CREDIT  OBLIGATIONS.  The  Borrower
         agrees to reimburse  the issuer for any draw under any Letter of Credit
         and the Agent for the account of the Lenders upon any payment  pursuant
         to any Credit Support immediately upon demand, and to pay the issuer of
         the  Letter of Credit  the  amount of all other  obligations  and other
         amounts  payable to such issuer under or in connection  with any Letter
         of Credit  immediately  when due,  irrespective  of any claim,  setoff,
         defense or other right which the  Borrower may have at any time against
         such issuer or any other Person (it being understood and agreed that no
         such  payment  shall be deemed a waiver of any claim the  Borrower  may
         have  against the Agent or the Lenders for a breach of its  obligations
         under  this  Agreement   and/or  any  issuer  for  the  breach  of  its
         obligations under a Letter of Credit).

                  (2) REVOLVING LOANS TO SATISFY REIMBURSEMENT  OBLIGATIONS.  In
         the event that the  issuer of any Letter of Credit  honors a draw under
         such Letter of Credit or the Agent shall have made any payment pursuant
         to any Credit  Support  and the  Borrower  shall not have  repaid  such
         amount  to the  issuer  of such  Letter  of  Credit  or the  Agent,  as
         applicable,  pursuant  to  SECTION  2.4(e)(1),  the Agent  shall,  upon
         receiving  notice of such failure,  notify each Lender of such failure,
         and each Lender shall unconditionally pay to the Agent, for the account
         of such  issuer  or the  Agent,  as  applicable,  as and when  provided
         hereinbelow,  an amount  equal to such  Lender's  Pro Rata Share of the
         amount of such  payment in Dollars and in same day funds.  If the Agent
         so  notifies  the  Lenders  prior to 11:00 a.m.  (Central  time) on any
         Business Day, each Lender shall make  available to the Agent the amount
         of such payment, as provided in the immediately  preceding sentence, on
         such  Business Day. Such amounts paid by the Lenders to the Agent shall
         constitute Revolving Loans which shall be deemed to have been requested
         by the Borrower pursuant to SECTION 2.2 as set forth in SECTION 4.7.


                                       33
<PAGE>

         (f) PARTICIPATIONS.

                  (1) PURCHASE OF  PARTICIPATIONS.  Immediately upon issuance of
         any Letter of Credit in  accordance  with SECTION  2.4(d),  each Lender
         shall be deemed to have irrevocably and  unconditionally  purchased and
         received  without  recourse or  warranty,  an  undivided  interest  and
         participation  in the Letter of Credit or the Credit  Support  provided
         through the Agent to such  issuer in  connection  with the  issuance of
         such  Letter of Credit,  equal to such  Lender's  Pro Rata Share of the
         face  amount of such  Letter of  Credit  or the  amount of such  Credit
         Support (including, without limitation, all obligations of the Borrower
         with respect thereto,  and any security therefor or guaranty pertaining
         thereto).

                  (2) SHARING OF REIMBURSEMENT OBLIGATION PAYMENTS. Whenever the
         Agent receives a payment from the Borrower on account of  reimbursement
         obligations  in respect  of a Letter of Credit or Credit  Support as to
         which the Agent has  previously  received for the account of the issuer
         thereof payment from a Lender pursuant to SECTION 2.4(e)(2),  the Agent
         shall  promptly pay to such Lender such Lender's Pro Rata Share of such
         payment from the Borrower in Dollars.  Each such payment  shall be made
         by  the  Agent  on  the  Business  Day  on  which  the  Agent  receives
         immediately  available  funds  paid  to  such  Person  pursuant  to the
         immediately preceding sentence, if received prior to 1:30 p.m. (Central
         time)  on  such  Business  Day and  otherwise  on the  next  succeeding
         Business Day.

                  (3)  DOCUMENTATION.  Upon the request of any Lender, the Agent
         shall   furnish  to  such  Lender  copies  of  any  Letter  of  Credit,
         reimbursement agreements executed in connection therewith,  application
         for any  Letter of Credit and credit  support or  enhancement  provided
         through  the Agent in  connection  with the  issuance  of any Letter of
         Credit, and such other  documentation as may reasonably be requested by
         such Lender.

                  (4) OBLIGATIONS IRREVOCABLE. The obligations of each Lender to
         make payments to the Agent with respect to any Letter of Credit or with
         respect to any Credit Support  provided  through the Agent with respect
         to a Letter of Credit,  and the  obligations  of the  Borrower  to make
         payments  to the  Agent,  for the  account  of the  Lenders,  shall  be
         irrevocable, not subject to any qualification or exception whatsoever ,
         including, without limitation, any of the following circumstances:

                  (i) any lack of validity or  enforceability  of this Agreement
         or any of the other Loan Documents;

                  (ii) the  existence  of any  claim,  setoff,  defense or other
         right which the  Borrower  may have at any time  against a  beneficiary
         named in a Letter of Credit or any  transferee  of any Letter of Credit
         (or any Person for whom any such transferee may be acting), any Lender,
         the Agent,  the issuer of such Letter of Credit,  or any other  Person,
         whether in connection  with this Agreement,  any Letter of Credit,  the
         transactions   contemplated   herein  or  any  unrelated   transactions
         (including  any  underlying  transactions  between the  Borrower or any
         other  Person  and the  beneficiary  named  in any  Letter  of  Credit)
         (provided  that no such  payment  shall be deemed a waiver of any claim
         the Borrower may have);


                                       34
<PAGE>

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

                  (iv) the  surrender  or  impairment  of any  security  for the
         performance  or  observance  of  any of the  terms  of any of the  Loan
         Documents; or

                  (v) the occurrence of any Default or Event of Default.

         (g) RECOVERY OR  AVOIDANCE OF PAYMENTS.  In the event any payment by or
on behalf of the  Borrower  received by the Agent with  respect to any Letter of
Credit or Credit  Support  provided for any Letter of Credit (or any guaranty by
the Borrower or reimbursement  obligation of the Borrower  relating thereto) and
distributed  by  the  Agent  to the  Lenders  on  account  of  their  respective
participations  therein is thereafter  set aside,  avoided or recovered from the
Agent in connection with any receivership, liquidation or bankruptcy proceeding,
the Lenders shall,  upon demand by the Agent,  pay to the Agent their respective
Pro Rata Shares of such amount set aside,  avoided or  recovered,  together with
interest at the rate  required to be paid by the Agent upon the amount  required
to be repaid by it.

         (h) COMPENSATION FOR LETTERS OF CREDIT.

                  (1) LETTER OF CREDIT FEE.  The  Borrower  agrees to pay to the
         Agent with  respect to each  Letter of Credit,  for the  account of the
         Lenders,  the Letter of Credit Fee specified in, and in accordance with
         the terms of, SECTION 3.6.

                  (2) ISSUER FEES AND  CHARGES.  The  Borrower  shall pay to the
         issuer of any Letter of Credit, or to the Agent, for the account of the
         issuer of any such Letter of Credit,  solely for such issuer's account,
         such fees and other  charges as are  charged by such issuer for letters
         of credit issued by it,  including,  without  limitation,  its standard
         fees  for  issuing,  administering,   amending,  renewing,  paying  and
         canceling  letters of credit and all other fees associated with issuing
         or servicing letters of credit, as and when assessed.

         (i) INDEMNIFICATION; EXONERATION; POWER OF ATTORNEY

                  (1)  INDEMNIFICATION.   In  addition  to  amounts  payable  as
         elsewhere  provided in this SECTION 2.4, the Borrower  hereby agrees to
         protect,  indemnify,  pay and save the Lenders  and the Agent  harmless
         from and  against any and all claims,  demands,  liabilities,  damages,
         losses,  costs, charges and expenses (including  reasonable  attorneys'
         fees)  which any  Lender or the Agent may incur or be  subject  to as a
         consequence,  direct or  indirect,  of the  issuance  of any  Letter of
         Credit  or the  provision  of any  credit  support  or  enhancement  in
         connection therewith,  except to the extent resulting directly from the
         gross negligence or willful misconduct of the Agent or such Lender. The
         agreement  in this  SECTION  2.4(i)(1)  shall  survive  payment  of all
         Obligations.

                  (2) ASSUMPTION OF RISK BY THE BORROWER. As among the Borrower,
         the Lenders,  and the Agent, the Borrower assumes all risks of the acts
         and  omissions  of, or misuse of any of the  Letters  of Credit by, the
         respective  beneficiaries of such Letters of Credit. In furtherance and
         not in limitation of the foregoing, the


                                       35
<PAGE>

         Lenders  and the  Agent  shall not be  responsible  for:  (A) the form,
         validity,  sufficiency,   accuracy,  genuineness or legal effect of any
         document  submitted  by any Person in connection  with the  application
         for and issuance  of and  presentation of drafts with respect to any of
         the  Letters  of  Credit,  even if it should  prove to be in any or all
         respects invalid,  insufficient,  inaccurate, fraudulent or forged; (B)
         the  validity  or  sufficiency  of   any  instrument   transferring  or
         assigning or  purporting to  transfer or assign any Letter of Credit or
         the rights or  benefits  thereunder or proceeds thereof, in whole or in
         part, which may prove  to be invalid or ineffective for any reason; (C)
         the failure of the   beneficiary of any Letter of Credit to comply duly
         with conditions  required  in order to draw upon such Letter of Credit;
         (D) errors,  omissions,   interruptions,  or delays in  transmission or
         delivery  of  any  messages,   by  mail,  cable,  telegraph,  telex  or
         otherwise,   whether  or  not  they  be   in  cipher;   (E)  errors  in
         interpretation   of  technical  terms;  (F) any  loss or  delay  in the
         transmission  or  otherwise  of any  document  required in order make a
         drawing under any Letter of  Credit or of the proceeds thereof; (G) the
         misapplication  by the  beneficiary   of any  Letter  of  Credit of the
         proceeds  of any  drawing   under  such  Letter of  Credit;  or (H) any
         consequences   arising from causes beyond the control of the Lenders or
         the Agent, including,  without limitation, any act or omission, whether
         rightful  or  wrongful,   of any  present or future de jure or de facto
         Governmental  Authority.  None of the foregoing shall affect, impair or
         prevent the vesting of  any rights or powers of the Agent or any Lender
         under this SECTION 2.4(i).

                  (3)  EXONERATION.  In furtherance  and  extension,  and not in
         limitation,  of the specific  provisions  set forth  above,  any action
         taken or omitted by the Agent or any Lender under or in connection with
         any of the Letters of Credit or any related  certificates,  if taken or
         omitted in the absence of gross negligence or willful misconduct, shall
         not put the Agent or any Lender  under any  resulting  liability to the
         Borrower or relieve the Borrower of any of its obligations hereunder to
         any such Person.

                  (4)  POWER OF  ATTORNEY.  In  connection  with  all  Inventory
         financed by Letters of Credit,  the Borrower hereby appoints the Agent,
         or  the  Agent's  designee,  as  its  attorney,  with  full  power  and
         authority:  (a) to sign  and/or  endorse the  Borrower's  name upon any
         warehouse or other  receipts;  (b) to sign the Borrower's name on bills
         of lading and other  negotiable and  non-negotiable  documents;  (c) to
         clear Inventory  through customs in the Agent's or the Borrower's name,
         and to sign and deliver to customs  officials powers of attorney in the
         Borrower's name for such purpose;  (d) to complete in the Borrower's or
         the Agent's name, any order, sale, or transaction, obtain the necessary
         documents in connection  therewith,  and collect the proceeds  thereof;
         and (e) to do such other acts and things as are  necessary  in order to
         enable the Agent to obtain  possession  of the  Inventory and to obtain
         payment of the Obligations.  Neither the Agent nor its designee, as the
         Borrower's attorney, will be liable for any acts or omissions,  nor for
         any error of judgment or mistakes of fact or law,  except to the extent
         directly  resulting from the Agent's (or the Agent's  designee's) gross
         negligence  or willful  misconduct.  This power,  being coupled with an
         interest,  is  irrevocable  until  all  Obligations  have been paid and
         satisfied.

                  (5) ACCOUNT PARTY. The Borrower hereby  authorizes and directs
         any issuer of a Letter of Credit to name the  Borrower as the  "Account
         Party" therein and to deliver to the Agent all  instruments,  documents
         and other writings and

                                       36
<PAGE>

         property received  by the issuer pursuant to the Letter of Credit,  and
         to accept and  rely upon the Agent's  instructions  and agreements with
         respect to all  matters arising in connection with the Letter of Credit
         or the application therefor.

                  (6) CONTROL OF  INVENTORY.  In  connection  with all Inventory
         financed  by Letters of  Credit,  the  Borrower  will,  at the  Agent's
         request, instruct all suppliers,  carriers,  forwarders,  warehouses or
         others  receiving  or holding  cash,  checks,  Inventory,  documents or
         instruments  in which the Agent  holds a security  interest  to deliver
         them to the Agent  and/or  subject to the  Agent's  order,  and if they
         shall  come into the  Borrower's  possession,  to  deliver  them,  upon
         request,  to the Agent in their original form. The Borrower shall also,
         at the Agent's  request,  designate  the Agent as the  consignee on all
         bills of lading and other negotiable and non-negotiable documents.

         (j) SUPPORTING LETTER OF CREDIT; CASH COLLATERAL.  If,  notwithstanding
the  provisions  of SECTION  2.4(b) and  SECTION  12.1,  any Letter of Credit is
outstanding  upon the termination of this Agreement,  then upon such termination
the Borrower shall deposit with the Agent,  for the ratable benefit of the Agent
and the Lenders, with respect to each Letter of Credit then outstanding,  as the
Majority Lenders, in their discretion shall specify, either (A) a standby letter
of credit (a "Supporting  Letter of Credit") in form and substance  satisfactory
to the Agent,  issued by an issuer  reasonably  satisfactory  to the Agent in an
amount equal to the greatest amount for which such Letter of Credit may be drawn
plus any fees and expenses  associated  with such Letter of Credit,  under which
Supporting  Letter of Credit the Agent is entitled to draw amounts  necessary to
reimburse  the  Agent and the  Lenders  for  payments  made by the Agent and the
Lenders under such Letter of Credit or under any credit  support or  enhancement
provided  through  the Agent  with  respect  thereto  and any fees and  expenses
associated  with such  Letter of  Credit,  or (B) cash in amounts  necessary  to
reimburse  the  Agent  and the  Lenders  for  payments  made by the Agent or the
Lenders under such Letter of Credit or under any credit  support or  enhancement
provided  through  the Agent  with  respect  thereto  and any fees and  expenses
associated  with such  Letter of  Credit.  Such  Supporting  Letter of Credit or
deposit of cash shall be held by the Agent, for the ratable benefit of the Agent
and the  Lenders,  as  security  for,  and to provide  for the  payment  of, the
aggregate  undrawn amount of such Letters of Credit remaining  outstanding,  and
shall be returned by the Agent upon the  Borrower's  request,  to the extent not
utilized,  at the end of the 91-day  period  following  the  expiration  of such
Letter of Credit and the payment of all fees and expenses  associated  with such
Letter of Credit.

                                   ARTICLE 3
                                INTEREST AND FEES

   3.1   INTEREST.

         (a) INTEREST RATES. All outstanding  Obligations shall bear interest on
the unpaid principal amount thereof (including,  to the extent permitted by law,
on interest  thereon not paid when due) from the date made until paid in full in
cash at a rate  determined  as set forth in this  SECTION 3.1, but not to exceed
the Maximum Rate described in SECTION 3.3. Except as otherwise  provided herein,
all Base Rate Loans and other  Obligations  shall bear interest at a fluctuating
per annum rate equal to the Base Rate plus the Applicable Margin.

Each change in the Base Rate shall be reflected in the interest  rate  described
in clause  (i)  above as of the  effective  date of such  change.  All  interest
charges  shall be  computed  on the basis of a year of

                                       37
<PAGE>

360 days and actual days elapsed (which results in more interest being paid than
if computed on the basis of a 365-day year).  Interest  accrued on all Base Rate
Loans will be payable in arrears on the first day of each month hereafter.

         (b) DEFAULT RATE. If any Event of Default  occurs and is continuing and
the Majority Lenders in their discretion so elect, then, while any such Event of
Default  is  outstanding,  all of the  Obligations  shall bear  interest  at the
Default Rate applicable thereto.

   3.2   [INTENTIONALLY OMITTED]

   3.3   MAXIMUM INTEREST RATE. In no event shall any interest rate provided for
hereunder  exceed the  maximum  rate  legally  chargeable  by any  Lender  under
applicable  law for  loans of the type  provided  for  hereunder  (the  "Maximum
Rate"). If, in any month, any interest rate, absent such limitation,  would have
exceeded the Maximum  Rate,  then the interest  rate for that month shall be the
Maximum Rate,  and, if in future months,  that interest rate would  otherwise be
less than the Maximum Rate,  then that interest rate shall remain at the Maximum
Rate until such time as the amount of interest paid hereunder  equals the amount
of interest  which would have been paid if the same had not been  limited by the
Maximum Rate. In the event that,  upon payment in full of the  Obligations,  the
total amount of interest  paid or accrued  under the terms of this  Agreement is
less than the total amount of interest  which  would,  but for this SECTION 3.3,
have been paid or  accrued if the  interest  rates  otherwise  set forth in this
Agreement  had at all times  been in effect,  then the  Borrower  shall,  to the
extent  permitted  by  applicable  law,  pay the Agent,  for the  account of the
Lenders,  an amount  equal to the  excess of (a) the lesser of (i) the amount of
interest  which would have been  charged if the Maximum  Rate had, at all times,
been in effect or (ii) the amount of interest  which would have  accrued had the
interest  rates  otherwise set forth in this  Agreement,  at all times,  been in
effect  over (b) the amount of  interest  actually  paid or  accrued  under this
Agreement. In the event that a court determines that the Agent and/or any Lender
has received interest and other charges hereunder in excess of the Maximum Rate,
such excess shall be deemed received on account of, and shall  automatically  be
applied to reduce, the Obligations other than interest,  in the inverse order of
maturity,  and if there are no  Obligations  outstanding,  the Agent and/or such
Lender shall refund to the Borrower such excess.

   3.4   [INTENTIONALLY OMITTED]

   3.5   UNUSED LINE FEE. Until the  Obligations  have been paid in full and the
Agreement terminated, the Borrower agrees to pay, on the first day of each month
and on the  Termination  Date,  to the  Agent,  for the  ratable  account of the
Lenders, an unused line fee equal to one-half of one percent (0.5%) per annum on
the average daily amount by which the Maximum  Revolver  Amount exceeded the sum
of the average daily outstanding  amount of Revolving Loans and the undrawn face
amount of all outstanding  Letters of Credit,  during the immediately  preceding
month or shorter period if calculated on the  Termination  Date. The unused line
fee shall be  computed on the basis of a 360-day  year for the actual  number of
days  elapsed.  All payments  received by the Agent on account of Accounts or as
proceeds of other  Collateral  shall be deemed to be credited to the  Borrower's
Loan Account  immediately  upon receipt for purposes of  calculating  the unused
line fee pursuant to this SECTION 3.5.

   3.6   LETTER OF CREDIT FEE. The Borrower agrees to pay to the Agent,  for the
ratable account of the Lenders,  for each Letter of Credit,  a percent per annum
fee (the "Letter of Credit Fee") equal to the  Applicable  Margin  identified in
the  definition  of such term as the  Letter of Credit Fee of the  undrawn  face
amount  of each  Letter of  Credit  issued  for the  Borrower's  account  at the
Borrower's request,  PLUS all out-of-pocket costs, fees and expenses incurred by
the Agent in

                                       38
<PAGE>

connection with the application for,  issuance of, or amendment to any Letter of
Credit,  which costs,  fees and expenses could include a "fronting fee" required
to be paid by the Agent to such issuer for the assumption of the settlement risk
in connection  with the issuance of such Letter of Credit;  The Letter of Credit
Fee shall be payable monthly in arrears on the first day of each month following
any  month in which a Letter of Credit  was  issued  and/or in which a Letter of
Credit  remains  outstanding.  The Letter of Credit Fee shall be computed on the
basis of a 360-day year for the actual number of days elapsed.

   3.7   AGENT'S  FEE.  The  Borrower  agrees  to pay to the  Agent  for its own
account an annual fee of $35,000 plus an asset based lending  monitoring  fee of
$17,000 per year (the "Agent's Fee") on the Closing Date and annually thereafter
in the  amount  set forth in the Fee  Letter,  which  fees  shall be  payable in
advance, non-refundable and fully earned on each such payment date.

                                   ARTICLE 4
                            PAYMENTS AND PREPAYMENTS

   4.1   REVOLVING  LOANS.  The Borrower shall repay the  outstanding  principal
balance of the Revolving Loans, plus all accrued but unpaid interest thereon, on
the  Termination  Date;  PROVIDED,   HOWEVER,  that  Borrower  shall  repay  the
outstanding  principal  balance of any  Revolving  Loans,  plus all  accrued but
unpaid interest  thereon,  on the last day of each Period of  Availability.  The
Borrower may prepay  Revolving Loans at any time, and reborrow during any Period
of Availability subject to the terms of this Agreement. In addition, and without
limiting the generality of the foregoing,  upon demand the Borrower  promises to
pay to the Agent, for account of the Lenders,  the amount,  without duplication,
by which the  Aggregate  Revolver  Outstanding  exceeds the  Availability  (with
Availability  for  this  purpose   calculated  as  if  the  Aggregate   Revolver
Outstandings were zero).

   4.2   TERMINATION OR REDUCTION OF FACILITY.

         (a) The Borrower may terminate this Agreement upon at least thirty (30)
days' prior notice to the Agent and the Lenders, upon (i) the payment in full of
all outstanding Revolving Loans, together with accrued interest thereon, and the
cancellation of all outstanding Letters of Credit (or payment of sufficient cash
or delivery of a supporting  letter of credit in accordance  with SECTION 2.4(j)
if any such Letter of Credit cannot be  canceled),  and (ii) the payment in full
in cash of all other Obligations together with accrued interest thereon.

         (b) The Borrower may from time to time permanently reduce the amount of
the Total  Facility  upon  thirty  (30) days  prior  notice to the Agent and the
Lenders;  provided that (i) Aggregate Revolver Outstandings shall not exceed the
Total Facility amount after giving effect to such reduction, and (ii) all Unused
Line Fees on the amount of the reduction and all other  Obligations then due and
payable shall have been paid in full.

         (c) Except as expressly  provided in this SECTION 4.2, the Borrower may
not reduce the Total Facility or terminate this Agreement.

   4.3   [INTENTIONALLY OMITTED]

   4.4   [INTENTIONALLY OMITTED]

   4.5   [INTENTIONALLY OMITTED]


                                       39
<PAGE>

   4.6   PAYMENTS BY THE BORROWER.

         (a) All  payments  to be made by the  Borrower  shall  be made  without
set-off,  recoupment or  counterclaim.  Except as otherwise  expressly  provided
herein,  all payments by the Borrower shall be made to the Agent for the account
of the Lenders at the Agent's  address set forth in SECTION  15.8,  and shall be
made in Dollars  and in  immediately  available  funds,  no later than 1:00 p.m.
(Central time) on the date specified  herein.  Any payment received by the Agent
later than 1:00 p.m. (Central time) shall be deemed to have been received on the
following  Business  Day and any  applicable  interest or fee shall  continue to
accrue.

         (b) Subject to the  provisions set forth in the definition of "Interest
Period" herein,  whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following  Business Day, and such extension of
time shall in such case be included in the  computation  of interest or fees, as
the case may be.

         (c) Unless the Agent  receives  notice from the  Borrower  prior to the
date on which any payment is due to the Lenders that the Borrower  will not make
such  payment  in full as and when  required,  the  Agent  may  assume  that the
Borrower has made such payment in full to the Agent on such date in  immediately
available  funds and the Agent may (but shall not be so  required),  in reliance
upon such assumption, distribute to each Lender on such due date an amount equal
to the amount then due such  Lender.  If and to the extent the  Borrower has not
made such payment in full to the Agent,  each Lender shall repay to the Agent on
demand such amount distributed to such Lender, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is  distributed to
such Lender until the date repaid.

   4.7   PAYMENTS AS  REVOLVING  LOANS.  All  payments of  principal,  interest,
reimbursement  obligations in connection with Letters of Credit,  fees, premiums
and other sums  payable  hereunder,  including  all  reimbursement  for expenses
pursuant  to  SECTION  15.7,  may,  at the  option  of the  Agent,  in its  sole
discretion,  subject  only to the terms of this  SECTION  4.7,  be paid from the
proceeds of Revolving Loans made hereunder,  whether made following a request by
the  Borrower  pursuant to SECTION  2.2 or a deemed  request as provided in this
SECTION 4.7. The Borrower hereby irrevocably  authorizes the Agent to charge the
Loan  Account  for the  purpose  of paying  principal,  interest,  reimbursement
obligations in connection with Letters of Credit,  fees, premiums and other sums
payable hereunder,  including reimbursing expenses pursuant to SECTION 15.7, and
agrees that all such amounts charged shall constitute Revolving Loans (including
Bank of America Loans and Agent  Advances) and that all such Revolving  Loans so
made shall be deemed to have been requested by Borrower pursuant to SECTION 2.2.

   4.8   APPORTIONMENT,   APPLICATION   AND  REVERSAL  OF  PAYMENTS.   Aggregate
principal and interest  payments shall be apportioned  ratably among the Lenders
(according to the unpaid  principal  balance of the Loans to which such payments
relate held by each Lender) and payments of the fees shall,  as  applicable,  be
apportioned  ratably  among the Lenders.  All payments  shall be remitted to the
Agent and all such  payments  not  relating to principal or interest of specific
Loans,  or not  constituting  payment of  specific  fees,  and all  proceeds  of
Accounts or other Collateral  received by the Agent, shall be applied,  ratably,
subject to the provisions of this Agreement: first, to pay any fees, indemnities
or expense  reimbursements  then due to the Agent from the Borrower;  second, to
pay any  fees  or  expense  reimbursements  then  due to the  Lenders  from  the
Borrower;  third,  to pay  interest  due in  respect  of  all  Revolving  Loans,
including  Bank of America Loans and Agent  Advances;  fourth,  to pay or prepay
principal  of the Bank of America  Loans and Agent  Advances;  fifth,  to pay or
prepay  principal of the  Revolving  Loans (other than Bank of America Loans and
Agent  Advances) and

                                       40
<PAGE>

unpaid reimbursement  obligations in respect of Letters of Credit; and sixth, to
the  payment  of any  other  Obligation  due to the  Agent or any  Lender by the
Borrower.  The Agent shall promptly  distribute to each Lender,  pursuant to the
applicable wire transfer instructions received from each Lender in writing, such
funds  as it may be  entitled  to  receive,  subject  to a  Settlement  delay as
provided  for in  SECTION  2.2(j).  The Agent  and the  Lenders  shall  have the
continuing and exclusive right to apply and reverse and reapply any and all such
proceeds and payments to any portion of the Obligations.

   4.9   INDEMNITY FOR RETURNED  PAYMENTS.  If, after receipt of any payment of,
or proceeds applied to the payment of, all or any part of the  Obligations,  the
Agent or any Lender is for any reason  compelled  to  surrender  such payment or
proceeds to any  Person,  because  such  payment or  application  of proceeds is
invalidated,  declared fraudulent,  set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for any
other  reason,  then the  Obligations  or part thereof  intended to be satisfied
shall be revived and continue and this Agreement shall continue in full force as
if such payment or proceeds  had not been  received by the Agent or such Lender,
and the Borrower shall be liable to pay to the Agent,  and hereby does indemnify
the Agent and the Lenders and hold the Agent and the Lenders  harmless  for, the
amount of such payment or proceeds  surrendered.  The provisions of this SECTION
4.9 shall be and remain effective  notwithstanding any contrary action which may
have been  taken by the Agent or any  Lender in  reliance  upon such  payment or
application of proceeds,  and any such contrary action so taken shall be without
prejudice to the Agent's and the Lenders'  rights under this Agreement and shall
be deemed to have been  conditioned upon such payment or application of proceeds
having become final and  irrevocable.  The  provisions of this SECTION 4.9 shall
survive the termination of this Agreement.

   4.10  AGENT'S  AND  LENDERS'  BOOKS  AND  RECORDS;  MONTHLY  STATEMENTS.  The
Borrower agrees that the Agent's and each Lender's books and records showing the
Obligations and the  transactions  pursuant to this Agreement and the other Loan
Documents shall be admissible in any action or proceeding arising therefrom, and
shall constitute rebuttably  presumptive proof thereof,  irrespective of whether
any Obligation is also evidenced by a promissory note or other  instrument.  The
Agent will provide to the Borrower a monthly statement of Loans,  payments,  and
other  transactions  pursuant to this Agreement.  Such statement shall be deemed
correct, accurate, and binding on the Borrower and an account stated (except for
reversals  and  reapplications  of payments  made as provided in SECTION 4.8 and
corrections of errors discovered by the Agent), unless the Borrower notifies the
Agent in writing to the contrary  within sixty (60) days after such statement is
rendered.  In the event a timely  written  notice of  objections is given by the
Borrower, only the items to which exception is expressly made will be considered
to be disputed by the Borrower.

                                   ARTICLE 5
                     TAXES, YIELD PROTECTION AND ILLEGALITY

   5.1   TAXES.

         (a) Any and all  payments  by the  Borrower to each Lender or the Agent
under this  Agreement and any other Loan  Document  shall be made free and clear
of, and without  deduction or  withholding  for any Taxes  (except  Taxes that a
Borrower is required by law to withhold).  In addition,  the Borrower  shall pay
all Other Taxes.

         (b) The Borrower  agrees to indemnify and hold harmless each Lender and
the Agent for the full  amount of Taxes or Other Taxes  (including  any Taxes or
Other Taxes imposed by

                                       41
<PAGE>

any  jurisdiction  on amounts  payable under this Section) paid by the Lender or
the Agent and any liability (including penalties, interest, additions to tax and
reasonable  expenses) arising therefrom or with respect thereto,  whether or not
such Taxes or Other Taxes were correctly or legally asserted. Payment under this
indemnification  shall be made  within 30 days  after the date the Lender or the
Agent makes written demand therefor and provides  evidence in reasonable  detail
of the payment of, or the obligation to make payment of, such Taxes, Other Taxes
or other liability arising therefrom or with respect thereto.

         (c) If the Borrower  shall be required by law to deduct or withhold any
Taxes or Other  Taxes  from or in respect of any sum  payable  hereunder  to any
Lender or the Agent, then:

                  (i) the sum payable  shall be  increased  as necessary so that
         after  making  all  required  deductions  and  withholdings  (including
         deductions and withholdings applicable to additional sums payable under
         this Section) such Lender or the Agent, as the case may be, receives an
         amount equal to the sum it would have  received had no such  deductions
         or withholdings been made;

                  (ii) the Borrower shall make such deductions and withholdings;

                  (iii) the  Borrower  shall  pay the full  amount  deducted  or
         withheld  to the  relevant  taxing  authority  or  other  authority  in
         accordance with applicable law; and

                  (iv) the  Borrower  shall also pay to each Lender or the Agent
         for the  account of such  Lender,  at the time  interest  is paid,  all
         additional  amounts which the respective  Lender specifies as necessary
         to preserve the after-tax  yield the Lender would have received if such
         Taxes or Other Taxes had not been imposed.

         (d) Within 30 days after the date of any  payment  by the  Borrower  of
Taxes or Other  Taxes,  the Borrower  shall  furnish the Agent the original or a
certified copy of a receipt  evidencing  payment  thereof,  or other evidence of
payment reasonably satisfactory to the Agent.

         (e) If the Borrower is required to pay additional amounts to any Lender
or the Agent pursuant to subsection (c) of this Section,  then such Lender shall
use reasonable  efforts  (consistent with legal and regulatory  restrictions) to
change  the  jurisdiction  of its  lending  office so as to  eliminate  any such
additional  payment by the Borrower which may thereafter  accrue, if such change
in the judgment of such Lender is not otherwise disadvantageous to such Lender.

   5.2   [INTENTIONALLY OMITTED]

   5.3   INCREASED COSTS AND REDUCTION OF RETURN.

         (a) [INTENTIONALLY OMITTED]

         (b) If any Lender shall have  determined  that, in each case  occurring
after the Closing Date, (i) the introduction of any Capital Adequacy Regulation,
(ii) any  change in any  Capital  Adequacy  Regulation,  (iii) any change in the
interpretation  or  administration  of any Capital  Adequacy  Regulation  by any
central bank or other Governmental  Authority charged with the interpretation or
administration  thereof,  or (iv) compliance by the Lender or any corporation or
other  entity  controlling  the Lender  with any  Capital  Adequacy  Regulation,
affects  or would  affect  the  amount of capital  required  or  expected  to be
maintained  by the Lender or any  corporation  or other


                                       42
<PAGE>
entity  controlling the Lender and (taking into  consideration  such Lender's or
such  corporation's or other entity's  policies with respect to capital adequacy
and such Lender's desired return on capital)  determines that the amount of such
capital is increased as a  consequence  of its  Commitments,  loans,  credits or
obligations   (including  to  participate  in  Letters  of  Credit)  under  this
Agreement,  then, upon demand of such Lender to the Borrower  through the Agent,
the  Borrower  shall pay to the Lender,  from time to time as  specified  by the
Lender,  additional  amounts  sufficient  to  compensate  the  Lender  for  such
increase.

         (c) [INTENTIONALLY OMITTED]

   5.4   [INTENTIONALLY OMITTED]

   5.5   CERTIFICATES  OF  LENDERS.   Any  Lender  claiming   reimbursement   or
compensation  under this ARTICLE 5 shall deliver to the Borrower (with a copy to
the Agent) a certificate  setting forth in reasonable  detail the amount payable
to the Lender hereunder and such certificate  shall be conclusive and binding on
the Borrower in the absence of manifest error.

   5.6   SURVIVAL.  The  agreements  and  obligations  of the  Borrower  in this
ARTICLE 5 shall survive the payment of all other Obligations and the termination
of this Agreement.

                                   ARTICLE 6
                                   COLLATERAL

   6.1   GRANT OF SECURITY INTEREST.

         (a) As security for all present and future Obligations, each Loan Party
hereby  grants  to the  Agent,  for the  ratable  benefit  of the  Agent and the
Lenders, a continuing  security interest in, lien on, assignment of and right of
set-off against,  all of the following property of such Loan Party,  whether now
owned or existing or hereafter acquired or arising, regardless of where located:

                  (i) all Accounts;

                  (ii) all Inventory;

                  (iii)  all  contract  rights,  letters  of  credit,   Assigned
         Contracts  (including without limitation all rights and interests under
         Material  License  Agreements),   chattel  paper,  instruments,  notes,
         documents  and  documents of title with respect to or arising out of or
         resulting from any Accounts, Inventory or Equipment;

                  (iv) all  Equipment  (other than  Equipment  subject to a Lien
         described in clause (j) of the definition of Permitted  Liens the terms
         of which expressly prohibit the granting of this Lien thereon);

                  (v)  all  money,  Investment  Property,  securities  accounts,
         securities  and other  property  of any kind of such Loan  Party in the
         possession  or  under  the  control  of the  Agent or any  Lender,  any
         assignee of or participant in the Obligations,  or a bailee of any such
         party or such party's affiliates, or any other financial institution;

                  (vi) all of such Loan Party's deposit accounts,  credits,  and
         balances  with

                                       43
<PAGE>

         and   other  claims  against  the  Agent  or any  Lender  or any of its
         affiliates  or any  other  financial  institution  with which such Loan
         Party maintains  deposits;

                  (vii) all  books,  records  and other  property  related to or
         referring  to any  of the  foregoing,  including,  without  limitation,
         books,  records,  account ledgers,  data processing  records,  computer
         software  and  other  property,  and  General  Intangibles  at any time
         evidencing or relating to any of the foregoing; and

                  (viii) all accessions to,  substitutions for and replacements,
         products  and  proceeds  of any of the  foregoing,  including,  but not
         limited to,  proceeds of any insurance  policies  (including  insurance
         proceeds payable on account of business  interruption),  claims against
         third parties, and condemnation or requisition payments with respect to
         all or any of the foregoing.

All of the  foregoing,  together with all other  "Collateral"  as defined in any
other Loan Document and all other  property of any Loan Party in which the Agent
or any Lender may at any time be granted a Lien, is herein collectively referred
to as the  "Collateral";  provided,  that unless and until the Umbro Consent has
been obtained,  "Collateral"  shall not include any Umbro Collateral.  After the
Umbro Consent has been obtained,  the Umbro  Collateral shall be included in the
"Collateral"  for all purposes,  and the Loan Parties shall promptly execute and
deliver any UCC-3  amendments or other  instruments  or agreements  requested by
Agent to evidence  the same and/or  perfect  Lenders'  security  interest in the
Umbro Collateral.

         (b) As security for all  Obligations,  each applicable Loan Party shall
simultaneously  herewith  execute  and  deliver,  or  cause to be  executed  and
delivered,  to the Agent the Pledge  Agreement  to grant to the  Agent,  for the
ratable  benefit  of the Agent  and the  Lenders,  a  security  interest  in all
"Collateral" as defined in any such document.

         (c) All of the Obligations shall be secured by all of the Collateral.

         (d) Upon the  termination,  expiration  or  defeasance of and, with the
consent of the requisite  percentage  of the holders of the Senior Notes,  which
consent the Parent  Guarantor shall use reasonable  efforts to obtain unless the
Parent  Guarantor  has a  reasonable  basis for  concluding  that a request  for
consent to the granting of such security interest would materially prejudice its
ability to obtain such  amendment,  modification  or change,  upon any  material
amendment,  modification  or change to the  Indenture,  each of the Loan Parties
shall (i)  grant to the  Agent,  for the  ratable  benefit  of the Agent and the
Lenders, a continuing  security interest in, lien on, assignment of and right of
set-off against, all General Intangibles and Intellectual  Property of such Loan
Party,  whether  now  owned  or  existing  or  hereafter  acquired  or  arising,
regardless  of where  located and (ii) execute and deliver a security  agreement
and applicable assignments with respect thereto in forms acceptable to the Agent
and the Majority Lenders.

   6.2   PERFECTION AND PROTECTION OF SECURITY INTEREST.

         (a) Each Loan Party shall, at its expense,  perform all steps requested
by the Agent at any time to perfect, maintain,  protect, and enforce the Agent's
Liens, including,  without limitation:  (i) executing,  delivering and/or filing
and recording of financing or continuation  statements,  and amendments thereof,
in form and substance  satisfactory  to the Agent;  (ii) delivering to the Agent
the originals of all instruments,  documents,  certificates,  and chattel paper,
and all other  Collateral of which the Agent  determines it should have physical
possession  in order to  perfect  and

                                       44
<PAGE>

protect  the  Agent's  security  interest  therein,  duly  pledged,  endorsed or
assigned to the Agent or in blank without restriction;  (iii) after a Default or
Event of  Default,  delivering  to the Agent  warehouse  receipts  covering  any
portion of the Collateral located in warehouses and for which warehouse receipts
are issued and  certificates of title covering any portion of the collateral for
which  certificates  of title  have been  issued;  (iv) when an Event of Default
exists,  transferring  Inventory  to  warehouses  designated  by the Agent;  (v)
placing  notations on such Loan Party's books of account to disclose the Agent's
security  interest;  (vi) delivering to the Agent all letters of credit on which
such Loan Party is named  beneficiary;  and (vii) taking such other steps as are
deemed  necessary  or desirable by the Agent to maintain and protect the Agent's
Liens. To the extent  permitted by applicable  law, the Agent may file,  without
any Loan Party's  signature,  one or more  financing  statements  disclosing the
Agent's Liens. Each Loan Party agrees that a carbon, photographic,  photostatic,
or  other  reproduction  of  this  Agreement  or  of a  financing  statement  is
sufficient as a financing statement.

         (b) If any Collateral  having a book value  (determined on a FIFO basis
if  applicable)  of  $100,000  or  more is at any  time  located  at,  or in the
possession  or  control  of any  warehouseman,  bailee or any of a Loan  Party's
agents,  vendors  or  processors,  then such Loan Party  shall  notify the Agent
thereof and shall,  at the  request of Agent,  notify such Person of the Agent's
security  interest in such Collateral , obtain a lien waiver from such Person in
form and substance  reasonably  acceptable to the Agent and instruct such Person
to hold all such  Collateral  for the  Agent's  account  subject to the  Agent's
instructions  (which  instructions  the Agent  will not give  unless an Event of
Default has occurred and is continuing).  If at any time any Collateral having a
book value  (determined  on a FIFO basis if  applicable)  of $100,000 or more is
located on any  operating  facility  of a Loan Party  which is not owned by such
Loan Party,  then such Loan Party  shall,  at the  request of the Agent,  obtain
written waivers, in form and substance satisfactory to the Agent, of all present
and future  Liens to which the owner or lessor of such  premises may be entitled
to assert against the Collateral.

         (c) From time to time, each Loan Party shall, upon the Agent's request,
execute and deliver  confirmatory written instruments pledging to the Agent, for
the ratable benefit of the Agent and the Lenders, the Collateral with respect to
such Loan  Party,  but such Loan  Party's  failure  to do so shall not affect or
limit any  security  interest or any other  rights of the Agent or any Lender in
and to the Collateral with respect to such Loan Party. So long as this Agreement
is in effect and until all Obligations  have been fully  satisfied,  the Agent's
Liens shall continue in full force and effect in all Collateral  (whether or not
deemed eligible for the purpose of calculating the  Availability or as the basis
for any advance, loan, extension of credit, or other financial accommodation).

         (d) Without  limiting  SECTION 9.21, if the Lenders permit the creation
or  acquisition  of any  new  Subsidiary,  at the  time  any  Person  becomes  a
Subsidiary of the Parent  Guarantor,  the Parent  Guarantor  shall so notify the
Agent and  promptly  thereafter  (but in any event within 30 days after the date
thereof)  shall (i) cause such Person to become a party to this  Agreement  in a
manner  acceptable  to the Agent,  (ii) cause all of the  Capital  Stock of such
Person to be delivered to the Agent  (together  with undated stock powers signed
in blank) and pledged to the Agent pursuant to an appropriate  Pledge  Agreement
in  substantially  the form of the  Pledge  Agreement  and  otherwise  in a form
reasonably  acceptable  to the  Agent,  (iii)  pledge  all of its  assets to the
Lenders pursuant to this Agreement and such other security agreements consistent
with this  Agreement  as may be  requested  by the Agent,  including  a separate
collateral assignment of any Material License Agreements to which it is a party,
(iv) if such Person has any  Subsidiaries,  (y) deliver all of the Capital Stock
of such Subsidiaries (together with undated stock powers signed in blank) to the
Agent and (z) execute a pledge agreement in substantially the form of the Pledge
Agreement and  otherwise in a form  reasonably  acceptable to the Agent,  (v) if
such Person owns any Real Estate, execute any

                                       45
<PAGE>

and all  necessary  mortgages,  deeds of trust,  deeds to  secure  debt or other
appropriate real estate collateral documentation in a form reasonably acceptable
to the  Agent,  and (vi)  deliver  such  other  documentation  as the  Agent may
reasonably request in connection with the foregoing, including appropriate UCC-1
financing  statements,  real  estate  title  insurance  policies,  environmental
reports,   certified   resolutions  and  other  organizational  and  authorizing
documents of such Person and favorable opinions of counsel to such Person (which
shall cover,  among other things,  the legality,  validity,  binding  effect and
enforceability  of the  documentation  referred  to above  subject  to  standard
assumptions, qualifications and limitations that are customary in legal opinions
of such type),  all in form,  content and scope  reasonably  satisfactory to the
Agents; PROVIDED,  HOWEVER, that the requirement of clause (ii) shall apply only
to all Capital  Stock held  directly or  indirectly by or for the benefit of the
Parent Guarantor or any of its Subsidiaries.

         (e) If,  subsequent  to the  Closing  Date,  any Loan  Party  shall (i)
acquire any real  property  or (ii)  acquire  any  intellectual  property or any
Capital Stock or other personal  property  required to be delivered to the Agent
as Collateral hereunder or under any of the Loan Documents,  or (iii) enter into
any Material License  Agreement,  the Parent Guarantor shall immediately  notify
the Agent of same. The Parent  Guarantor and its applicable  Subsidiaries  shall
take such action,  as requested by the Agent and at the  Borrower's own expense,
to ensure  that (x) the  Lenders  have a  perfected  Lien in all owned  real and
personal  property of the Parent  Guarantor and its Subsidiaries as set forth in
the Loan Documents  (whether now owned or hereafter  acquired),  subject only to
Permitted Liens, (y) the Lenders have Collateral  License Agreement  Assignments
of all Material  License  Agreements  in the form  requested by the Agent to the
extent permitted under the terms of the applicable  Material  License  Agreement
(and,  if not so  permitted,  the  Borrower  agrees  to  use  prompt  continuing
reasonable  efforts to obtain the consent of the  licensor  under each  Material
License  Agreement to such Collateral  License  Agreement  Assignment),  and (z)
during  the  occurrence  of a  Default  or Event of  Default,  the Agent and the
Lenders have the right to use all Proprietary Rights of the Parent Guarantor and
its Subsidiaries as set forth in SECTION 11.2(b).

   6.3   LOCATION OF COLLATERAL.  Each Loan Party represents and warrants to the
Agent and the Lenders  that:  (a) SCHEDULE 6.3 is a correct and complete list of
its chief executive office, the location of its books and records, the locations
of the Collateral, and the locations of all of its other places of business; and
(b) SCHEDULE 6.3 correctly  identifies any of such facilities and locations that
are not owned by it and sets  forth  the  names of the  owners  and  lessors  or
sublessors  of and, to the best of its  knowledge,  the holders of any mortgages
on, such facilities and locations.  Each Loan Party covenants and agrees that it
will not (i) maintain any Collateral at any location other than those  locations
listed  for it on  SCHEDULE  6.3,  (ii)  otherwise  change or add to any of such
locations,  or (iii) change the location of its chief executive  office from the
location  identified in SCHEDULE 6.3,  unless it gives the Agent at least thirty
(30) days' prior  written  notice  thereof and  executes  any and all  financing
statements and other documents that the Agent requests in connection  therewith.
Without limiting the foregoing, except as otherwise permitted in SECTION 6.2(b),
each Loan Party  represents  that all of its Inventory  (other than Inventory in
transit) is, and covenants that all of its Inventory will be, located either (a)
on premises owned by it, (b) on premises  leased by it,  provided that the Agent
has, if requested by the Agent,  received an executed  landlord  waiver from the
landlord of such premises in form and substance  satisfactory  to the Agent,  or
(c) in a public  warehouse,  provided  that the Agent has, if  requested  by the
Agent,   received  an  executed   bailee  letter  from  the  applicable   public
warehouseman in form and substance satisfactory to the Agent.

   6.4   TITLE TO,  LIENS ON,  AND SALE AND USE OF  COLLATERAL.  Each Loan Party
represents  and  warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that: (a) all of the Collateral is and will continue to be owned
by it free and clear of all Liens  whatsoever,  except for

                                       46
<PAGE>

Permitted  Liens; (b) the Agent's Liens in the Collateral will not be subject to
any prior Lien (other than Permitted  Liens described in clause (a), (d), or (j)
of the  definition  of such term);  (c) it will use,  store,  and  maintain  the
Collateral  with all  reasonable  care and will use such  Collateral  for lawful
purposes only; and (d) it will not, without the Agent's prior written  approval,
sell, or dispose of or permit the sale or  disposition  of any of the Collateral
except for sales of Inventory  in the  ordinary  course of business and sales of
Equipment  as  permitted  by SECTION  6.11.  The  inclusion  of  proceeds in the
Collateral shall not be deemed to constitute the Agent's or any Lender's consent
to any sale or other disposition of the Collateral except as expressly permitted
herein.

   6.5   APPRAISALS. Whenever a Default or an Event of Default exists, each Loan
Party shall, at its expense and upon the Agent's request, provide the Agent with
appraisals or updates thereof of any or all of the Collateral from an appraiser,
and prepared on a basis,  satisfactory to the Agent, such appraisals and updates
to include,  without  limitation,  information  required by  applicable  law and
regulation and by the internal policies of the Lenders.

   6.6   ACCESS AND EXAMINATION; CONFIDENTIALITY.

         (a) The Agent,  accompanied  by any Lender which so elects,  may at all
reasonable  times during regular  business hours (and at any time when a Default
or Event of Default exists and is continuing)  have access to,  examine,  audit,
make  extracts  from or copies  of and  inspect  any or all of any Loan  Party's
records,  files,  and books of account and the Collateral,  and discuss any Loan
Party's  affairs with its and the Parent  Guarantor's  officers and  management.
Each Loan Party will deliver to the Agent any instrument necessary for the Agent
to obtain  records  from any service  bureau  maintaining  records for such Loan
Party. The Agent may, and at the direction of the Majority Lenders shall, at any
time when a Default or Event of Default exists,  and at the Borrower's  expense,
make copies of all of any Loan Party's  books and  records,  or require any Loan
Party to deliver such copies to the Agent. The Agent may, without expense to the
Agent, use such of any Loan Party's respective personnel, supplies, and premises
as may be reasonably  necessary for  maintaining or enforcing the Agent's Liens.
The Agent shall have the right,  at any time, in the Agent's name or in the name
of a nominee of the Agent,  to verify the  validity,  amount or any other matter
relating to the Accounts, Inventory, or other Collateral, by mail, telephone, or
otherwise.

         (b) Each Loan Party  agrees  that,  subject  to the Parent  Guarantor's
prior  consent for uses other than in a  traditional  tombstone,  which  consent
shall not be unreasonably withheld or delayed, the Agent and each Lender may use
any Loan Party's name in advertising and promotional material and in conjunction
therewith  disclose  the  general  terms of this  Agreement.  The Agent and each
Lender agree to take normal and reasonable  precautions and exercise due care to
maintain the confidentiality of all information  identified as "confidential" or
"secret"  by a Loan  Party and  provided  to the  Agent or such  Lender by or on
behalf of such Loan Party, under this Agreement or any other Loan Document,  and
neither the Agent, nor such Lender nor any of their respective  Affiliates shall
use any such information other than in connection with or in enforcement of this
Agreement  and  the  other  Loan  Documents,  except  to the  extent  that  such
information (i) was or becomes generally available to the public other than as a
result  of  disclosure  by the  Agent or such  Lender,  or (ii)  was or  becomes
available on a  nonconfidential  basis from a source other than such Loan Party,
provided that such source is not bound by a confidentiality  agreement with such
Loan Party known to the Agent or such Lender; PROVIDED,  HOWEVER, that the Agent
and any Lender may disclose such  information  (1) at the request or pursuant to
any requirement of any Governmental  Authority to which the Agent or such Lender
is subject or in connection  with an  examination of the Agent or such Lender by
any such  Governmental  Authority;  (2)  pursuant  to  subpoena  or other  court
process;  (3) when  required to do so in accordance  with the  provisions of any
applicable  requirement

                                       47
<PAGE>

of law; (4) to the extent reasonably  required in connection with any litigation
or proceeding  (including,  but not limited to, any  bankruptcy  proceeding)  to
which the Agent, any Lender or their respective  Affiliates may be party; (5) to
the extent  reasonably  required in  connection  with the exercise of any remedy
hereunder or under any other Loan Document;  (6) to the Agent's or such Lender's
independent auditors,  accountants,  attorneys and other professional  advisors;
(7)  to any  prospective  Participant  or  assignee  under  any  Assignment  and
Acceptance,  actual or potential,  provided that such prospective Participant or
assignee  agrees  to keep  such  information  confidential  to the  same  extent
required  of the Agent and the Lenders  hereunder;  (8) as  expressly  permitted
under the terms of any other document or agreement regarding  confidentiality to
which such Loan Party is party or is deemed party with the Agent or such Lender,
and (9) to its Affiliates.

   6.7   COLLATERAL  REPORTING.  The Borrower  shall  provide the Agent with the
following  documents at the following  times in form  satisfactory to the Agent:
(a) on a monthly basis, or more  frequently if requested by the Agent,  and on a
weekly  basis  during  any period in which the  outstanding  amount of the Loans
exceeds  seventy  percent (70%) of  Availability,  a schedule of the  Borrower's
Accounts  (with  the  information  for  Eligible  Unbilled  Account  Receivables
separately  broken out and stated)  created  since the last such  schedule and a
Borrowing  Base  Certificate;  (b) on a monthly  basis,  or more  frequently  if
requested  by  Agent,  an  aging of the  Borrower's  Accounts,  together  with a
reconciliation  to the previous month's aging of the Borrower's  Accounts and to
the Borrower's  general  ledger,  in each case with the information for Eligible
Unbilled Account Receivables  separately broken out and stated; (c) on a monthly
basis,  or more  frequently  if requested by Agent,  an aging of the  Borrower's
accounts payable; (d) on a monthly basis (or more frequently if requested by the
Agent),  Inventory reports by category, with additional detail showing additions
to and deletions  from the  Inventory;  (e) upon request,  copies of invoices in
connection  with the Borrower's  Accounts,  customer  statements,  credit memos,
remittance advices and reports,  deposit slips,  shipping and delivery documents
in connection  with the Borrower's  Accounts (with the  information for Eligible
Unbilled Account Receivables separately broken out and stated) and for Inventory
and Equipment acquired by the Borrower,  purchase orders and invoices;  (f) upon
request,  a statement of the balance of each of the Intercompany  Accounts;  (g)
such other  reports as to the  Collateral  of the  Borrower  as the Agent  shall
reasonably request from time to time (with the information for Eligible Unbilled
Account Receivables separately broken out and stated); and (h) with the delivery
of each of the foregoing,  a certificate of the Borrower  executed by an officer
thereof certifying as to the accuracy and completeness of the foregoing.  If any
of the  Borrower's  records or  reports of the  Collateral  are  prepared  by an
accounting  service or other agent, the Borrower hereby  authorizes such service
or agent to deliver such records,  reports,  and related documents to the Agent,
for distribution to the Lenders.

   6.8   ACCOUNTS.

         (a) Each Loan Party hereby represents and warrants to the Agent and the
Lenders,  with respect to the Loan Parties'  Accounts,  that:  (i) each existing
Account represents,  and each future Account will represent, a bona fide sale or
lease and delivery of goods by such Loan Party, or rendition of services by such
Loan Party,  in the  ordinary  course of such Loan Party's  business;  (ii) each
existing  Account is, and each future  Account will be, for a liquidated  amount
payable by the  Account  Debtor  thereon  on the terms set forth in the  invoice
therefor (or, in the case of Eligible Unbilled Account  Receivables,  will be so
invoiced) or in the schedule thereof delivered to the Agent, without any offset,
deduction,  defense,  or counterclaim  except those known to such Loan Party and
disclosed  to the Agent and the  Lenders  pursuant to this  Agreement;  (iii) no
payment will be received with respect to any Account,  and no credit,  discount,
or extension,  or agreement  therefor will be granted on any Account,  except as
reported to the Agent and the Lenders in accordance  with

                                       48
<PAGE>

this Agreement; (iv) each copy of an invoice delivered to the Agent by such Loan
Party will be a genuine copy of the original  invoice sent to the Account Debtor
named therein; and (v) all goods described in any invoice representing a sale of
goods will have been  delivered  to the Account  Debtor and all services of such
Loan Party described in each invoice will have been performed.

         (b) No Loan Party  shall  re-date  any invoice or sale or make sales on
extended  dating beyond that customary in the Borrower's  business or, except as
and to the  extent  permitted  in  clause  (d) of  the  definition  of  Eligible
Accounts,  extend or modify any Account.  If a Loan Party  becomes  aware of any
matter adversely  affecting the  collectability of any Account or Account Debtor
involving an amount greater than $100,000,  including  information regarding the
Account Debtor's  creditworthiness,  such Loan Party will promptly so advise the
Agent.

         (c) No Loan Party shall accept any note or other  instrument  (except a
check or other  instrument  for the immediate  payment of money) with respect to
any Account  without the Agent's written  consent.  If the Agent consents to the
acceptance  of any such  instrument,  it shall be  considered as evidence of the
Account and not payment  thereof and such Loan Party will promptly  deliver such
instrument  to the Agent,  endorsed  by such Loan Party to the Agent in a manner
satisfactory  in form and  substance  to the  Agent.  Regardless  of the form of
presentment,  demand,  notice of protest  with respect  thereto,  the Loan Party
shall remain liable thereon until such instrument is paid in full.

         (d) Each Loan Party shall notify the Agent promptly of all disputes and
claims in excess of  $25,000  with any  Account  Debtor,  and  agrees to settle,
contest,  or adjust  such  dispute  or claim at no  expense  to the Agent or any
Lender.  No discount,  credit or allowance  shall be granted to any such Account
Debtor without the Agent's prior written consent, except for discounts,  credits
and allowances made or given in the ordinary  course of the Borrower's  business
when no Event of Default exists hereunder.  Each Loan Party shall issue promptly
and report to the Agent promptly any credit  memorandum and shall send the Agent
a copy of each credit  memorandum  in excess of $100,000 as soon as issued.  The
Agent may, and at the direction of the Majority Lenders shall, at all times when
an Event of  Default  exists  hereunder,  settle or adjust  disputes  and claims
directly with Account  Debtors for amounts and upon terms which the Agent or the
Majority Lenders, as applicable, shall consider advisable and, in all cases, the
Agent will credit the Borrower's Loan Account with only the net amounts received
by the Agent in payment of any Accounts.

         (e) Except for de minimus exchanges of Inventory,  if an Account Debtor
returns any Inventory to a Loan Party when no Event of Default exists, then such
Loan Party shall promptly determine the reason for such return and shall issue a
credit  memorandum to the Account Debtor in the  appropriate  amount.  Such Loan
Party shall  immediately  report to the Agent any return  involving an amount in
excess of $50,000.  Each such report shall  indicate the reasons for the returns
and the  locations  and  condition of the returned  Inventory.  In the event any
Account  Debtor  returns  Inventory  to a Loan  Party  when an Event of  Default
exists,  such Loan Party upon request of the Agent, shall: (i) hold the returned
Inventory in trust for the Agent; (ii) segregate all returned Inventory from all
of its other property;  (iii) dispose of the returned Inventory solely according
to the  Agent's  written  instructions;  and  (iv)  not  issue  any  credits  or
allowances with respect thereto without the Agent's prior written  consent.  All
returned  Inventory shall be subject to the Agent's Liens thereon.  Whenever any
Inventory is returned,  the related  Account  shall be deemed  ineligible to the
extent of the amount owing by the Account  Debtor with respect to such  returned
Inventory.


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<PAGE>

   6.9   COLLECTION OF ACCOUNTS; PAYMENTS.

         (a) Each Loan Party shall  establish a lock-box  service  and/or  other
blocked  account for  collections of Accounts at a bank  acceptable to the Agent
and pursuant to  documentation  satisfactory  to the Agent,  including  lock-box
agreements and blocked account  agreements  satisfactory to the Agent. Each Loan
Party shall  instruct all Account  Debtors to make all payments  directly to the
address  established  for  such  lock-box  service.  If,   notwithstanding  such
instructions,  a Loan Party receives any proceeds of Accounts,  it shall receive
such  payments  as the  Agent's  trustee,  and shall  immediately  deliver  such
payments to the Agent in their  original  form duly endorsed in blank or deposit
them into a Payment Account,  as the Agent may direct. All collections  received
in any such  lock-box  or  Payment  Account or  directly  by a Loan Party or the
Agent,  and all funds in any  Payment  Account  or other  account  to which such
collections  are  deposited  shall be subject to the Agent's sole  control.  The
Agent or the Agent's  designee may, at any time after the occurrence of an Event
of Default,  notify Account  Debtors that the Accounts have been assigned to the
Agent  and of the  Agent's  security  interest  therein,  and may  collect  them
directly and charge the  collection  costs and expenses to the  Borrower's  Loan
Account as a Revolving  Loan. So long as an Event of Default has occurred and is
continuing,  each Loan Party, at the Agent's request,  shall execute and deliver
to the Agent such documents as the Agent shall require to grant the Agent access
to any post office box in which collections of Accounts are received.

         (b) If sales of  Inventory  are made or services are rendered for cash,
each Loan Party shall immediately deliver to the Agent or deposit into a Payment
Account the cash which such Loan Party receives.

         (c) All payments, including immediately available funds received by the
Agent at a bank  designated by it,  received by the Agent on account of Accounts
or as proceeds of other  Collateral  will be the Agent's  sole  property for its
benefit and the  benefit of the  Lenders and will be credited to the  Borrower's
Loan Account (conditional upon final collection) on the same Business Day in the
case of wire transfers (received by 1:30 p.m., Central time, and if not received
by such time on the next Business Day) and account  debits and,  after  allowing
three  (3)  Business  Days  for  collection,  in the case of  checks;  PROVIDED,
HOWEVER,  that such  payments  shall be deemed to be credited to the  Borrower's
Loan  Account,  immediately  upon  receipt,  for  purposes  of  (i)  determining
Availability,  (ii) calculating the unused line fee pursuant to SECTION 3.5, and
(iii)  calculating the amount of interest accrued thereon solely for purposes of
determining the amount of interest to be distributed by the Agent to the Lenders
(but not the amount of interest payable by the Borrower).

         (d) In the event the Borrower  repays all of the  Obligations  upon the
termination of this Agreement or upon  acceleration  of the  Obligations,  other
than  through  the Agent's  receipt of  payments  on account of the  Accounts or
proceeds of the other  Collateral,  such payment  will be credited  (conditional
upon final collection) to the Borrower's Loan Account one (1) Business Day after
the Agent's receipt of such funds.

         (e) Each Loan Party  agrees to  execute  and  deliver,  and cause to be
executed  and  delivered,  such  control  agreements,   endorsements  in  blank,
registrations, acknowledgments, transaction statements or other documents as the
Agent may request to perfect,  maintain,  protect or enforce the Agent's Lien in
Investment   Property,   securities,   securities   accounts  or  other  similar
Collateral.

   6.10  INVENTORY; PERPETUAL INVENTORY. Each Loan Party represents and warrants
to the Agent and the Lenders  and agrees  with the Agent and the  Lenders  that,
except  for  Inventory  used as

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<PAGE>

demonstration  or display models,  all of the Inventory owned by such Loan Party
is and will be held for sale or lease, or to be furnished in connection with the
rendition of services, in the ordinary course of such Loan Party's business, and
is and will be fit for such purposes. Each Loan Party will keep its Inventory in
good and marketable  condition,  at its own expense. No Loan Party will, without
the prior  written  consent of the Agent,  acquire  or accept any  inventory  on
consignment  or approval,  except for inventory  not to exceed  $500,000 of book
value  (determined  on a FIFO basis) held on  consignment at any time to be sold
for cash. Each Loan Party agrees that all inventory produced by it in the United
States will be produced,  and it will use reasonable  efforts to ensure that all
inventory  produced by others will be produced,  in accordance  with the Federal
Fair Labor Standards Act of 1938, as amended,  and all rules,  regulations,  and
orders  thereunder.  Each  Loan  Party  will  conduct  a  physical  count of the
Inventory at least once per Fiscal Year,  and after and during the  continuation
of an Event of  Default,  at such other times as the Agent  requests.  Each Loan
Party will maintain at all times the inventory reporting system in effect on the
date hereof or another type of inventory reporting system reasonably  acceptable
to the Agent. No Loan Party will, without the Agent's written consent,  sell any
Inventory  on a  bill-and-hold,  guaranteed  sale,  sale  and  return,  sale  on
approval, consignment, or other repurchase or return basis.

   6.11  EQUIPMENT.

         (a) Each  Loan  Party  represents  and  warrants  to the  Agent and the
Lenders  and agrees  with the Agent and the  Lenders  that all of the  Equipment
owned  by such  Loan  Party  is and  will be used or held  for use in such  Loan
Party's  business,  and is and will be fit for such  purposes.  Each Loan  Party
shall keep and maintain its  Equipment in good  operating  condition  and repair
(ordinary  wear and tear and damage from  casualty  excepted) and shall make all
necessary replacements thereof.

         (b) Each Loan Party  shall  promptly  inform the Agent of any  material
additions to or  deletions  from the  Equipment.  No Loan Party shall permit any
Equipment  having a book value  (determined  on a FIFO basis if  applicable)  of
$100,000 or more to become a fixture with respect to real  property or to become
an accession with respect to other personal  property with respect to which real
or personal property the Agent does not have a Lien. No Loan Party will, without
the Agent's prior written  consent,  alter or remove any  identifying  symbol or
number on any of such Loan Party's Equipment consisting of Collateral.

         (c) No Loan Party shall,  without the Agent's  prior  written  consent,
sell,  lease as a lessor,  or  otherwise  dispose  of any of such  Loan  Party's
Equipment;  PROVIDED,  HOWEVER,  that a Loan Party may  dispose of  obsolete  or
unusable Equipment having an orderly  liquidation value no greater than $250,000
in the  aggregate in any Fiscal Year,  or $500,000 in the  aggregate  during the
term of this Agreement,  without the Majority Lenders'  consent,  subject to the
conditions set forth in the next sentence. In the event any of such Equipment is
sold,  transferred or otherwise disposed of pursuant to the proviso contained in
the immediately preceding sentence, (1) if such sale, transfer or disposition is
effected without replacement of such Equipment, or such Equipment is replaced by
Equipment leased by such Loan Party or by Equipment purchased by such Loan Party
subject to a Lien,  then such Loan Party shall  deliver all of the cash proceeds
of any such sale,  transfer or disposition to the Agent, which proceeds shall be
applied  ratably to the reduction of the  Obligation as provided in SECTION 4.8,
or (2) if such sale,  transfer or  disposition  is made in  connection  with the
purchase by such Loan Party of replacement Equipment, then such Loan Party shall
use the  proceeds  of such  sale,  transfer  or  disposition  to  purchase  such
replacement Equipment and shall deliver to the Agent written evidence of the use
of the proceeds for such purchase (and such proceeds as so expended shall not be
considered  a  Capital  Expenditure  for the  purposes  of  SECTION  9.23).  All


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<PAGE>

replacement  Equipment  purchased by a Loan Party shall be free and clear of all
Liens  except the Agent's  Lien and Liens  described in clause (d) or (j) of the
definition of the term Permitted Liens.

   6.12  ASSIGNED  CONTRACTS.  Each Loan Party  shall  fully  perform all of its
material obligations under each of the Assigned Contracts, and shall enforce all
of its rights and remedies thereunder,  in each case, as it deems appropriate in
its  business  judgment;  PROVIDED,  HOWEVER,  that no Loan Party shall take any
action or fail to take any action with respect to its Assigned  Contracts  which
would cause the termination of a material Assigned Contract,  if the termination
of such  Assigned  Contract  could  reasonably  be  expected  to have a Material
Adverse  Effect  unless  (i) the other  party  thereto  is in  material  default
thereunder  or (ii) the Loan  Party is  simultaneously  entering  into a similar
contract  on terms the same as or more  favorable  to such Loan  Party.  Without
limiting the generality of, but subject to, the foregoing, each Loan Party shall
take all action  necessary  or  appropriate  to  permit,  and shall not take any
action which would have any materially adverse effect upon, the full enforcement
of all indemnification rights under its Assigned Contracts. No Loan Party shall,
without the Agent's and the Majority  Lenders'  prior written  consent,  modify,
amend,  supplement,  compromise,  satisfy,  release,  or  discharge  any  of its
Assigned Contracts, any collateral securing the same, any Person liable directly
or indirectly  with respect  thereto,  or any  agreement  relating to any of its
Assigned  Contracts  or the  collateral  therefor,  if the result of such action
could reasonably be expected to have a Material Adverse Effect.  Each Loan Party
shall  notify the Agent and the  Lenders in  writing,  promptly  after such Loan
Party  becomes  aware  thereof,  of any event or fact which could give rise to a
claim by it for indemnification  under any of its Assigned Contracts,  and shall
diligently pursue any such material right and report to the Agent on all further
developments  with respect thereto.  Each Loan Party shall remit directly to the
Agent for application to the  Obligations in such order as the Majority  Lenders
shall determine,  all amounts received by such Loan Party as  indemnification or
otherwise pursuant to its Assigned  Contracts.  If a Loan Party shall fail after
the Agent's  demand to pursue  diligently  any material right under its Assigned
Contracts,  or if an Event of Default  then  exists,  the Agent may,  and at the
direction of the Majority Lenders shall,  directly enforce such right in its own
or such  Loan  Party's  name  and may  enter  into  such  settlements  or  other
agreements  with  respect  thereto  as the  Agent or the  Majority  Lenders,  as
applicable,  shall determine.  In any suit,  proceeding or action brought by the
Agent for the benefit of the Lenders  under any  Assigned  Contract  for any sum
owing  thereunder  or to enforce  any  provision  thereof,  the  Borrower  shall
indemnify and hold the Agent and Lenders  harmless from and against all expense,
loss or  damage  suffered  by  reason  of any  defense,  setoff,  counterclaims,
recoupment,  or  reduction  of liability  whatsoever  of the obligor  thereunder
arising out of a breach by a Loan Party of any obligation  thereunder or arising
out of any other  agreement,  indebtedness or liability at any time owing from a
Loan  Party  to or in  favor  of  such  obligor  or  its  successors.  All  such
obligations  of a Loan Party shall be and remain  enforceable  only against such
Loan Party and shall not be enforceable  against the Agent.  Notwithstanding any
provision  hereof to the  contrary,  each Loan Party  shall at all times  remain
liable to  observe  and  perform  all of its duties  and  obligations  under its
Assigned  Contracts,  and the Agent's or any  Lender's  exercise of any of their
respective  rights with  respect to the  Collateral  shall not release such Loan
Party from any of such duties and obligations.  Neither the Agent nor any Lender
shall be  obligated  to  perform  or  fulfill  any of a Loan  Party's  duties or
obligations under its Assigned Contracts or to make any payment  thereunder,  or
to make any inquiry as to the nature or  sufficiency  of any payment or property
received  by it  thereunder  or the  sufficiency  of  performance  by any  party
thereunder, or to present or file any claim, or to take any action to collect or
enforce any  performance,  any payment of any  amounts,  or any  delivery of any
property.

   6.13  DOCUMENTS,  INSTRUMENTS,  AND CHATTEL PAPER. Each Loan Party represents
and warrants to the Agent and the Lenders that (a) all  documents,  instruments,
and chattel paper

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<PAGE>

describing,  evidencing,  or  constituting  Collateral,  and all  signatures and
endorsements thereon, are and will be complete,  valid, and genuine, and (b) all
goods evidenced by such documents,  instruments,  and chattel paper are and will
be owned by such Loan Party,  free and clear of all Liens  other than  Permitted
Liens.

   6.14  RIGHT TO CURE. At any time if a Default or Event of Default exists,  or
otherwise  after  such  notice  as the  Agent  deems in good  faith can be given
without  prejudice  to its rights or remedies  hereunder,  the Agent may, in its
discretion,  and shall, at the direction of the Majority Lenders, pay any amount
or do any act  required  of any Loan  Party  hereunder  or under any other  Loan
Document in order to preserve, protect, maintain or enforce the Obligations, the
Collateral or the Agent's Liens therein,  and which such Loan Party fails to pay
or do, including, without limitation,  payment of any judgment against such Loan
Party, any insurance premium,  any warehouse charge, any finishing or processing
charge,  any  landlord's  claim,  and any other Lien upon or with respect to the
Collateral.  All  payments  that the Agent makes under this SECTION 6.14 and all
out-of-pocket  costs and  expenses  that the Agent pays or incurs in  connection
with any action taken by it hereunder  shall be charged to the  Borrower's  Loan
Account as a Revolving Loan. Any payment made or other action taken by the Agent
under this  SECTION  6.14 shall be without  prejudice  to any right to assert an
Event of Default hereunder and to proceed thereafter as herein provided.

   6.15  POWER OF ATTORNEY.  Each Loan Party  hereby  appoints the Agent and the
Agent's designee as such Loan Party's attorney,  with power: (a) to endorse such
Loan Party's name on any checks,  notes,  acceptances,  money  orders,  or other
forms of  payment  or  security  that  come  into the  Agent's  or any  Lender's
possession;  (b) to sign such Loan Party's name on any invoice,  bill of lading,
warehouse  receipt or other  document of title  relating to any  Collateral,  on
drafts against customers,  on assignments of Accounts, on notices of assignment,
financing  statements  and other public  records and to file any such  financing
statements  by  electronic  means with or without a signature as  authorized  or
required  by  applicable  law or filing  procedure;  (c) so long as any Event of
Default has occurred and is continuing, to notify the post office authorities to
change  the  address  for  delivery  of such  Loan  Party's  mail to an  address
designated by the Agent and to receive,  open and dispose of all mail  addressed
to such Loan  Party;  (d) to send  requests  for  verification  of  Accounts  to
customers or Account Debtors; (e) to clear Inventory,  the purchase of which was
financed with Letters of Credit,  through customs in such Loan Party's name, the
Agent's  name or the name of the  Agent's  designee,  and to sign and deliver to
customs officials powers of attorney in such Loan Party's name for such purpose;
and (f) to do all things necessary to carry out this Agreement.  Each Loan Party
ratifies  and  approves  all acts of such  attorney.  None of the Lenders or the
Agent nor their  attorneys  will be liable for any acts or  omissions or for any
error of judgment or mistake of fact or law.  This power,  being coupled with an
interest,  is  irrevocable  until this  Agreement  has been  terminated  and the
Obligations have been fully satisfied.

   6.16  THE AGENT'S AND  LENDERS'  RIGHTS,  DUTIES AND  LIABILITIES.  Each Loan
Party assumes all  responsibility  and liability arising from or relating to the
use, sale or other disposition of the Collateral,  except as otherwise expressly
provided in SECTION 11.2. The  Obligations  shall not be affected by any failure
of the Agent or any Lender to take any steps to perfect the Agent's  Liens or to
collect  or  realize  upon the  Collateral,  nor shall  loss of or damage to the
Collateral  release any Loan Party from any of the  Obligations.  Following  the
occurrence and continuation of an Event of Default, the Agent may (but shall not
be required to), and at the  direction of the Majority  Lenders  shall,  without
notice to or consent from any Loan Party, sue upon or otherwise collect,  extend
the time for payment of, modify or amend the terms of,  compromise or settle for
cash, credit, or otherwise upon any terms, grant other indulgences,  extensions,
renewals,  compositions,  or releases, and take or omit to take any other action
with respect to the Collateral,  any security  therefor,  any

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<PAGE>

agreement  relating thereto,  any insurance  applicable  thereto,  or any Person
liable directly or indirectly in connection  with any of the foregoing,  without
discharging  or  otherwise  affecting  the  liability  of any Loan Party for the
Obligations  or under this  Agreement  or any other  agreement  now or hereafter
existing between the Agent and/or any Lender and any Loan Party.

   6.17  SITE   VISITS,   OBSERVATIONS   AND   TESTING.   The   Agent   and  its
representatives  will have the right at any  reasonable  time to enter and visit
the Premises and any other place where any property of any Loan Party is located
for the  purposes of  observing  the  Premises,  and subject to the terms of any
lease of Premises and if the Agent has a reasonable  basis for doing so (such as
a Phase I report  recommending  any such  action),  taking and removing  soil or
groundwater samples, and conducting tests on any part of the Premises. The Agent
is under no duty, however, to visit or observe the Premises or to conduct tests,
and any such acts by the Agent will be solely for the purposes of protecting the
Agent's  Liens and  preserving  the Agent and the  Lenders'  rights  under  this
Agreement.  No site visit,  observation  or testing by the Agent and the Lenders
will result in a waiver of any default of any Loan Party or impose any liability
on the Agent or any  Lender  (except  for the  Agent's  or such  Lender's  gross
negligence or willful misconduct).  In no event will any site visit, observation
or testing by the Agent be a representation that hazardous substances are or are
not  present  in, on or under the  Premises,  or that  there has been or will be
compliance  with any  Environmental  Law.  Neither  any Loan Party nor any other
party is  entitled  to rely on any site  visit,  observation  or  testing by the
Agent.  The Agent and the  Lenders owe no duty of care to protect any Loan Party
or any other party against, or, except to the extent the Agent is required to do
so by applicable Environmental Laws, to inform any Loan Party or any other party
of, any  hazardous  substances  or any other  adverse  condition  affecting  the
Premises.  The Agent may in its  discretion,  except to the  extent the Agent is
required to do so by applicable  Environmental  Laws, disclose to any Loan Party
or any other party any report or findings  made as a result of, or in connection
with,  any site  visit,  observation  or testing  by the Agent.  Each Loan Party
understands and agrees that the Agent makes no warranty or representation to any
Loan Party or any other party  regarding the truth,  accuracy or completeness of
any such  report  or  findings  that may be  disclosed.  Each  Loan  Party  also
understands  that  depending  on the results of any site visit,  observation  or
testing by the Agent and disclosed to such Loan Party,  such Loan Party may have
a legal obligation to notify one or more environmental  agencies of the results,
that such reporting  requirements are site-specific,  and are to be evaluated by
such Loan Party without advice or assistance  from the Agent.  In each instance,
the Agent  will give such Loan  Party  reasonable  notice  before  entering  the
Premises or any other place the Agent is  permitted  to enter under this SECTION
6.17. The Agent will make reasonable efforts to avoid interfering with such Loan
Party's use of the  Premises  or any other  property  in  exercising  any rights
provided hereunder.

   6.18  [INTENTIONALLY OMITTED]

   6.19  [INTENTIONALLY OMITTED]


                                   ARTICLE 7
                BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES

   7.1   BOOKS AND  RECORDS.  Each Loan  Party  shall  maintain,  at all  times,
correct and complete books, records and accounts in which complete,  correct and
timely  entries are made of its  transactions  in  accordance  with GAAP applied
consistently  with the audited  Financial  Statements  required to be  delivered
pursuant  to SECTION  7.2(a).  Each Loan Party  shall,  by means of  appropriate
entries,  reflect  in  such  accounts  and in all  Financial  Statements  proper
liabilities and reserves for all taxes and proper provision for depreciation and
amortization  of property and bad debts,  all in

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<PAGE>

accordance  with GAAP.  Each Loan Party  shall  maintain  at all times books and
records pertaining to the Collateral in such detail, form and scope as the Agent
or any Lender shall reasonably require,  including,  but not limited to, records
of (a) all payments received and all credits and extensions granted with respect
to the Accounts; (b) the return, rejections,  repossession, stoppage in transit,
loss,  damage,  or  destruction  of any  Inventory;  and (c) all other  dealings
affecting the Collateral.

   7.2   FINANCIAL  INFORMATION.  Each Loan Party shall promptly furnish to each
Lender,  all  such  financial  information  as the  Agent  or any  Lender  shall
reasonably  request,  and notify its auditors and accountants that the Agent, on
behalf of the Lenders,  is authorized to obtain such  information  directly from
them. Without limiting the foregoing, the Borrower will furnish to the Agent, in
sufficient  copies for distribution by the Agent to each Lender,  in such detail
as the Agent or the Lenders shall reasonably request, the following:

         (a) As soon as  available,  but in any event not later than one hundred
twenty (120) days after the close of each Fiscal Year, consolidated audited, and
consolidating  unaudited,  balance sheets, and statements of income and expense,
cash  flow  and of  stockholders'  equity  for  the  Parent  Guarantor  and  its
Subsidiaries for such Fiscal Year, and the accompanying  notes thereto,  setting
forth in each case in comparative form figures for the previous Fiscal Year, all
in reasonable  detail,  fairly presenting the financial position and the results
of operations of the Parent  Guarantor and its  consolidated  Subsidiaries as at
the date thereof and for the Fiscal Year then ended,  and prepared in accordance
with  GAAP.  Such  audited  statements  shall be  examined  in  accordance  with
generally  accepted  auditing  standards by and, in the case of such  statements
performed on a consolidated  basis,  accompanied by a report thereon unqualified
as to  scope  of  Grant  Thornton  LLP or  other  independent  certified  public
accountants selected by the Parent Guarantor and reasonably  satisfactory to the
Agent.  The Parent  Guarantor,  simultaneously  with retaining such  independent
public  accountants  to conduct such annual  audit,  shall send a letter to such
accountants,  with  a  copy  to  the  Agent  and  the  Lenders,  notifying  such
accountants  that one of the primary  purposes for retaining  such  accountants'
services and having audited financial  statements prepared by them is for use by
the Agent  and the  Lenders.  Each Loan  Party  hereby  authorizes  the Agent to
communicate  directly  with  its  certified  public  accountants  and,  by  this
provision,  authorizes  those  accountants  to disclose to the Agent any and all
financial  statements  and other  supporting  financial  documents and schedules
relating to the Borrower and to discuss directly with the Agent the finances and
affairs of the Parent Guarantor and its Subsidiaries.

         (b) As soon as  available,  but in any event not later than  forty-five
(45) days after the end of each month,  consolidated unaudited balance sheets of
the Parent  Guarantor and its  consolidated  Subsidiaries  as at the end of such
month, and consolidated unaudited statements of income and expense and cash flow
for the Parent  Guarantor and its  consolidated  Subsidiaries for such month and
for the period from the  beginning  of the Fiscal Year to the end of such month,
all in reasonable  detail,  fairly presenting the financial position and results
of operations of the Parent  Guarantor and its  consolidated  Subsidiaries as at
the date  thereof and for such  periods,  and prepared in  accordance  with GAAP
applied  consistently  with the  audited  Financial  Statements  required  to be
delivered  pursuant to SECTION 7.2(a)  (provided  that such  statements may omit
earnings per share  amounts,  footnotes  and other  disclosure  items  otherwise
required by GAAP). The Parent Guarantor shall certify by a certificate signed by
its chief  financial  officer  that all such  statements  have been  prepared in
accordance with GAAP and present fairly, subject to normal year-end adjustments,
the Parent Guarantor's and its consolidated  Subsidiaries' financial position as
at the dates thereof and its results of operations for the periods then ended.


                                       55
<PAGE>

         (c) As soon as  available,  but in any event not later than  forty-five
(45) days after the close of each fiscal  quarter other than the fourth  quarter
of a Fiscal Year, consolidated and consolidating unaudited balance sheets of the
Parent  Guarantor  and  its  consolidated  Subsidiaries  as at the  end of  such
quarter,  and consolidated and consolidating  unaudited statements of income and
expense  and  statement  of  cash  flows  for  the  Parent   Guarantor  and  its
Subsidiaries  for such  quarter  and for the period  from the  beginning  of the
Fiscal  Year  to the end of  such  quarter,  all in  reasonable  detail,  fairly
presenting  the  financial  position  and  results  of  operation  of the Parent
Guarantor  and its  Subsidiaries  as at the date  thereof and for such  periods,
prepared  in  accordance  with  GAAP  consistent  with  the  audited   Financial
Statements  required to be delivered  pursuant to SECTION 7.2(a)  (provided that
such  statements may omit those footnotes and other GAAP  disclosures  which are
not  required to be included in quarterly  interim  financial  statements).  The
Parent  Guarantor  shall certify by a certificate  signed by its chief financial
officer that all such  statements have been prepared in accordance with GAAP and
present fairly,  subject to normal year-end adjustments,  the Parent Guarantor's
and its consolidated  Subsidiaries'  financial  position as at the dates thereof
and its results of operations for the periods then ended.

         (d) With each of the audited Financial Statements delivered pursuant to
SECTION 7.2(a), a certificate of the independent  certified  public  accountants
that  examined  such  statement  to the effect that they have  reviewed  and are
familiar with this Agreement and that, in examining  such Financial  Statements,
they did not become  aware of any fact or  condition  which then  constituted  a
Default or Event of Default,  except for those, if any,  described in reasonable
detail in such certificate.

         (e) With each of the  annual  audited  Financial  Statements  delivered
pursuant to SECTION  7.2(a),  and within  forty-five  (45) days after the end of
each fiscal quarter,  a certificate of the chief financial officer of the Parent
Guarantor (i) setting forth in reasonable  detail the  calculations  required to
establish that the Loan Parties were in compliance  with the covenants set forth
in  SECTION  9.23  THROUGH  9.26  during the  period  covered in such  Financial
Statements and as at the end thereof,  (ii) stating that, except as explained in
reasonable  detail  in  such  certificate,  (A) all of the  representations  and
warranties  of the Loan Parties  contained in this  Agreement and the other Loan
Documents  are correct and complete in all  material  respects as at the date of
such  certificate  as if made at such time,  except for those that speak as of a
particular  day,  (B) each Loan  Party is, at the date of such  certificate,  in
compliance  in all material  respects with all of its  respective  covenants and
agreements  in this  Agreement and the other Loan  Documents,  (C) no Default or
Event of  Default  then  exists or existed  during  the  period  covered by such
Financial  Statements,  (D)  describing  and analyzing in reasonable  detail all
material trends, changes, and developments in each and all Financial Statements;
and (E) explaining the variances of the figures in the corresponding budgets and
prior Fiscal Year  financial  statements,  and (iii) setting forth in reasonable
detail a summary of all pending suits,  proceedings or counterclaims,  including
all reserves taken with respect thereto.  If such  certificate  discloses that a
representation  or warranty is not correct or complete in any material  respect,
or that a covenant  has not been  complied  with,  or that a Default or Event of
Default  existed or exists,  such  certificate  shall set forth what  action the
Borrower has taken or proposes to take with respect thereto.

         (f) No sooner  than  sixty  (60)  days  prior  to,  and not later  than
eighty-five (85) days after, the beginning of each Fiscal Year, annual forecasts
(to include forecasted consolidated and consolidating balance sheets, statements
of income and expenses and statements of cash flow) for the Parent Guarantor and
its Subsidiaries as at the end of and for each month of such Fiscal Year.


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<PAGE>

         (g)  Promptly  after  filing  with the PBGC and the IRS, a copy of each
annual  report or other  filing  filed  with  respect to each Plan of the Parent
Guarantor or any of its ERISA Affiliates.

         (h) Promptly upon the filing thereof, copies of all reports, if any, to
or other documents filed by the Parent Guarantor or any of its Subsidiaries with
the Securities and Exchange  Commission under the Exchange Act, and all reports,
notices,  or statements  sent or received by the Parent  Guarantor or any of its
Subsidiaries  to or from the  holders  of any  equity  interests  of the  Parent
Guarantor (other than routine  non-material  correspondence sent by shareholders
of the Parent  Guarantor to the Parent  Guarantor) or any such  Subsidiary or of
any Funded Debt of the Parent  Guarantor or any of its  Subsidiaries  registered
under the  Securities  Act of 1933 or to or from the trustee under any indenture
under which the same is issued.

         (i) As soon as available, but in any event not later than 15 days after
the Parent  Guarantor's  receipt thereof,  a copy of all management  reports and
management  letters  prepared for the Parent  Guarantor by Grant Thornton LLP or
any other independent certified public accountants of the Parent Guarantor.

         (j)  Promptly  after  their  preparation,  copies  of any and all proxy
statements,  financial statements,  and reports which the Parent Guarantor makes
available to its shareholders.

         (k) Promptly after filing with the IRS, a copy of each tax return filed
by the Parent Guarantor or by any of its Subsidiaries.

         (l) Such additional information as the Agent and/or any Lender may from
time to time reasonably  request regarding the financial and business affairs of
the Parent Guarantor or any Subsidiary.

   7.3   NOTICES TO THE LENDERS.  Each Loan Party shall notify the Agent and the
Lenders, in writing of the following matters at the following times:

         (a) Within one Business Day after a  responsible  officer of the Parent
Guarantor becomes aware of any Default or Event of Default.

         (b) Within one Business Day after a  responsible  officer of the Parent
Guarantor  becomes  aware of the assertion by the holder of any capital stock of
the Parent Guarantor or Subsidiary  thereof or of any Debt that a default exists
with respect thereto or that the Parent  Guarantor or any Subsidiary  thereof is
not in compliance with the terms thereof,  or the threat or commencement by such
holder  of  any  enforcement   action  because  of  such  asserted   default  or
non-compliance.

         (c) Within one Business Day after a  responsible  officer of the Parent
Guarantor becomes aware of any Material Adverse Effect.

         (d) Within one Business Day after a  responsible  officer of the Parent
Guarantor becomes aware of any pending action, suit, proceeding, or counterclaim
by any  Person  which may have a  Material  Adverse  Effect,  or any  pending or
threatened  investigation by a Governmental Authority, in each case with respect
to any Loan Party or any portion of the Collateral.


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<PAGE>

         (e) Within one Business Day after a  responsible  officer of the Parent
Guarantor  becomes aware of any pending or  threatened  strike,  work  stoppage,
unfair  labor  practice  claim,  or other  labor  dispute  affecting  the Parent
Guarantor  or any of its  Subsidiaries  in a manner  which could  reasonably  be
expected to have a Material Adverse Effect.

         (f) Within one Business Day after a  responsible  officer of the Parent
Guarantor  becomes aware of any violation of any law,  statute,  regulation,  or
ordinance of a  Governmental  Authority  affecting  the Parent  Guarantor or any
Subsidiary which could reasonably be expected to have a Material Adverse Effect.

         (g) Within one Business Day after a  responsible  officer of the Parent
Guarantor receives any notice of any violation by the Parent Guarantor or any of
its Subsidiaries of any  Environmental Law which could reasonably be expected to
have a Material Adverse Effect or that any  Governmental  Authority has asserted
that the Parent  Guarantor or any Subsidiary  thereof is not in compliance  with
any  Environmental  Law or is  investigating  the  Parent  Guarantor's  or  such
Subsidiary's  compliance therewith,  and such non-compliance could reasonably be
expected to have a Material Adverse Effect.

         (h) Within one Business Day after a  responsible  officer of the Parent
Guarantor  receives any written  notice that the Parent  Guarantor or any of its
Subsidiaries  is or may be liable to any  Person as a result of the  Release  or
threatened  Release of any Contaminant or that the Borrower or any Subsidiary is
subject to investigation by any Governmental  Authority  evaluating  whether any
remedial action is needed to respond to the Release or threatened Release of any
Contaminant  which,  in  either  case,  is  reasonably  likely  to give  rise to
liability in excess of $1,000,000.

         (i) Within one Business Day after a  responsible  officer of the Parent
Guarantor  receives any written  notice of the  imposition of any  Environmental
Lien against any property of the Parent Guarantor or any of its Subsidiaries.

         (j) Any change in any Loan Party's  name,  state of  incorporation,  or
form of organization, trade names under which any Loan Party will sell Inventory
or create Accounts,  or to which  instruments in payment of Accounts may be made
payable, in each case at least thirty (30) days prior thereto.

         (k) Within ten (10) Business  Days after a  responsible  officer of the
Parent  Guarantor or any ERISA  Affiliate  knows or has reason to know,  that an
ERISA Event or a prohibited transaction (as defined in Sections 406 of ERISA and
4975 of the Code) has occurred,  and, when known, any action taken or threatened
by the IRS, the DOL or the PBGC with respect thereto.

         (l) Upon  request,  or,  in the  event  that  such  filing  reflects  a
significant change with respect to the matters covered thereby, within three (3)
Business  Days after the filing  thereof  with the PBGC,  the DOL or the IRS, as
applicable,  copies of the following: (i) each annual report (form 5500 series),
including  Schedule  B  thereto,  filed  with the PBGC,  the DOL or the IRS with
respect to each Plan,  (ii) a copy of each funding waiver request filed with the
PBGC,  the  DOL or the IRS  with  respect  to any  Plan  and all  communications
received by the Parent  Guarantor or any ERISA  Affiliate from the PBGC, the DOL
or the IRS with respect to such  request,  and (iii) a copy of each other filing
or notice filed with the PBGC,  the DOL or the IRS, with respect to each Plan of
either Borrower or any ERISA Affiliate.


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<PAGE>

         (m) Upon  request,  copies  of each  actuarial  report  for any Plan or
Multi-employer  Plan and annual report for any  Multi-employer  Plan; and within
three (3)  Business  Days after  receipt  thereof by the  Borrower  or any ERISA
Affiliate,  copies of the following:  (i) any notices of the PBGC's intention to
terminate a Plan or to have a trustee  appointed to administer  such Plan;  (ii)
any  favorable or  unfavorable  determination  letter from the IRS regarding the
qualification  of a Plan under  Section  401(a) of the Code; or (iii) any notice
from a Multi-employer Plan regarding the imposition of withdrawal liability.

         (n) Within three (3) Business Days after the  occurrence  thereof:  (i)
any  changes in the  benefits of any  existing  Plan which  increase  the Parent
Guarantor's  annual  costs  with  respect  thereto  by an  amount  in  excess of
$1,000,000,  or the  establishment  of any  new  Plan  or  the  commencement  of
contributions  to any Plan to which the Parent  Guarantor or any ERISA Affiliate
was not previously contributing;  or (ii) any failure by the Parent Guarantor or
any ERISA Affiliate to make a required installment or any other required payment
under Section 412 of the Code on or before the due date for such  installment or
payment.

         (o) Within three (3) Business Days after a  responsible  officer of the
Parent  Guarantor or any ERISA Affiliate knows or has reason to know that any of
the following events has or will occur:  (i) a  Multi-employer  Plan has been or
will be terminated;  (ii) the  administrator or plan sponsor of a Multi-employer
Plan  intends  to  terminate  a  Multi-employer  Plan;  or  (iii)  the  PBGC has
instituted  or  will  institute  proceedings  under  Section  4042 of  ERISA  to
terminate a Multi-employer Plan.

         (p) Without  limiting  SECTION  6.12,  within one  Business Day after a
responsible  officer of the Parent Guarantor becomes aware of any (i) failure by
a Loan Party to comply with the terms of any Material  License  Agreement,  (ii)
failure of a Material License Agreement to be in full force and effect and (iii)
any material modification or amendment to any Material License Agreement.

         Each notice given under this Section shall  describe the subject matter
thereof in  reasonable  detail,  and shall set forth the action  that the Parent
Guarantor, its Subsidiary,  or any ERISA Affiliate, as applicable,  has taken or
proposes to take, if any, with respect thereto.

                                   ARTICLE 8
                     GENERAL WARRANTIES AND REPRESENTATIONS

         Each Loan Party  warrants and  represents  to the Agent and the Lenders
that except as hereafter disclosed to and accepted by the Agent and the Majority
Lenders in writing:

   8.1   AUTHORIZATION,  VALIDITY,  AND ENFORCEABILITY OF THIS AGREEMENT AND THE
LOAN  DOCUMENTS.  Each Loan  Party has the  corporate  power  and  authority  to
execute,  deliver and perform this  Agreement and the other Loan  Documents,  to
incur  the  Obligations,  and to  grant to the  Agent  Liens  upon and  security
interests in the Collateral.  Each Loan Party has taken all necessary  corporate
action (including, without limitation, obtaining approval of its stockholders if
necessary)  to  authorize  its  execution,  delivery,  and  performance  of this
Agreement and the other Loan  Documents to which it is a party.  This  Agreement
and the other Loan  Documents  have been duly  executed and delivered by it, and
constitute the legal, valid and binding  obligations of it, enforceable  against
it in  accordance  with  their  respective  terms  without  defense,  setoff  or
counterclaim,  except as  enforceability  thereof  may be limited by  applicable
bankruptcy,  insolvency,  reorganization or similar laws affecting the rights of
creditors  generally  or by  general  principles  of  equity.  The Loan  Party's
execution,  delivery,

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<PAGE>

and  performance  of  this  Agreement  and the  other  Loan  Documents,  and the
incurrence  of any Debt and the  granting of the Liens  hereunder  and under the
other  Loan  Documents,  do not and will not  conflict  with,  or  constitute  a
violation or breach of, or constitute a default under, or result in the creation
or imposition of any Lien (other than the Agent's Lien) upon the property of the
Loan  Party  or any of its  Subsidiaries  by  reason  of the  terms  of (a)  any
contract,  mortgage,  Lien, lease, agreement,  indenture, or instrument to which
the Loan Party is or any of its Subsidiaries is a party or which is binding upon
it, including under the Senior Notes,  the  Subordinated  Debt or any indenture,
loan agreement,  note purchase agreement or other document related thereto,  (b)
any Requirement of Law applicable to the Loan Party or any of its  Subsidiaries,
or (c) the  certificate  or  articles  of  incorporation  or by-laws of the Loan
Parties or any of its Subsidiaries.

   8.2   VALIDITY  AND PRIORITY OF SECURITY  INTEREST.  The  provisions  of this
Agreement and the other Loan  Documents  create legal and valid Liens on all the
Collateral in favor of the Agent,  for the ratable  benefit of the Agent and the
Lenders,  and such Liens  constitute  perfected and continuing  Liens on all the
Collateral,  having priority over all other Liens on the Collateral  (except for
Liens described in clause (a), (d), or (j) of the definition of Permitted Liens,
securing all the  Obligations,  and  enforceable  against the Loan Party and all
third parties.

   8.3   ORGANIZATION   AND   QUALIFICATION.   Each  Loan   Party  (a)  is  duly
incorporated  and organized and validly existing in good standing under the laws
of the state of its incorporation,  (b) is qualified to do business as a foreign
corporation and is in good standing in the  jurisdictions  set forth on SCHEDULE
8.3 which,  except as set forth in SCHEDULE 8.3, are the only  jurisdictions  in
which failure to so qualify or be in good standing could  reasonably be expected
to have a material  adverse  effect on such Loan Party's  business,  operations,
prospects,  property or condition  (financial  or  otherwise) or on the value or
collectibility  of any Collateral and (c) has all requisite  power and authority
to conduct its business and to own its property.

   8.4   CORPORATE NAME; PRIOR TRANSACTIONS.  No Loan Party has, during the past
five (5) years, been known by or used any other corporate or fictitious name, or
been a party to any merger or  consolidation,  or acquired all or  substantially
all of the assets of any Person,  or acquired any of its property outside of the
ordinary course of business, except in each case as set forth on SCHEDULE 8.4.

   8.5   SUBSIDIARIES  AND  AFFILIATES.  SCHEDULE  8.5 is a correct and complete
list of the name and relationship (including the ownership of Capital Stock with
respect thereto) to the Parent Guarantor of each and all of its Subsidiaries and
other  Affiliates.  Each Subsidiary is (a) duly  incorporated  and organized and
validly  existing in good standing under the laws of its state of  incorporation
set  forth on  SCHEDULE  8.3,  and (b),  except as set  forth in  SCHEDULE  8.3,
qualified to do business as a foreign  corporation  and in good standing in each
jurisdiction  in which the  failure to so qualify or be in good  standing  could
reasonably  be  expected  to  have  a  material   adverse  effect  on  any  such
Subsidiary's business, operations,  prospects, property, or condition (financial
or otherwise) or on the value or the  collectibility  of any  Collateral and (c)
has all  requisite  power and  authority  to conduct  its  business  and own its
property.

   8.6   FINANCIAL STATEMENTS AND PROJECTIONS.

         (a) The Parent Guarantor has delivered to the Agent and the Lenders the
audited balance sheet and related statements of income,  retained earnings, cash
flows,  and  changes in  stockholders  equity for the Parent  Guarantor  and its
consolidated  Subsidiaries as of December 31, 2000, and for the Fiscal Year then
ended,  accompanied by the report thereon of the Parent Guarantor's  independent
certified public accountants,  Grant Thornton LLP. The Parent Guarantor


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<PAGE>

has also delivered to the Agent and the Lenders the unaudited  balance sheet and
related  statements  of income and cash flows for the Parent  Guarantor  and its
consolidated  Subsidiaries as of March 31, 2001.  Such financial  statements are
attached  hereto as EXHIBIT C. All such financial  statements have been prepared
in accordance with GAAP and present accurately and fairly the financial position
of the  Parent  Guarantor  and its  consolidated  Subsidiaries  as at the  dates
thereof and their results of operations for the periods then ended.

         (b) The Latest  Projections  when  submitted to the Lenders as required
herein  represent the Parent  Guarantor's  best estimate of the future financial
performance of the Parent  Guarantor and its  consolidated  Subsidiaries for the
periods set forth  therein.  The Latest  Projections  have been  prepared on the
basis of the assumptions set forth therein,  which the Parent Guarantor believes
are fair and reasonable in light of current and reasonably  foreseeable business
conditions at the time submitted to the Lender.

   8.7   CAPITALIZATION.   The  Parent  Guarantor's   authorized  capital  stock
consists of (i) 40,000,000  shares of common stock, par value $.01 per share, of
which  9,452,250  shares are validly issued and outstanding as of June 22, 2001,
fully paid and  non-assessable and not less than 47% of which outstanding shares
are owned beneficially and of record, in the aggregate,  by the Principals,  and
(ii) 5,000,000  shares of preferred  stock,  par value $.01 per share,  of which
none  are  issued  and  outstanding.  The  Parent  Guarantor  owns  directly  or
indirectly 100% of the issued and  outstanding  Capital Stock of each other Loan
Party.

   8.8   SOLVENCY.  Each Loan Party is Solvent  prior to and after giving effect
to the making of the  Revolving  Loans to be made on the Closing Date and on the
date of each Loan  thereafter  and the  issuance  of the Letters of Credit to be
issued on the Closing Date and on any date thereafter,  and shall remain Solvent
during the term of this Agreement.

   8.9   DEBT.  After giving effect to the making of the  Revolving  Loans to be
made on the  Closing  Date,  the Loan Party and its  Subsidiaries  have no Debt,
except (a) the Obligations,  (b) the Senior Notes, the Subordinated Debt and the
other  Debt  described  on  SCHEDULE  8.9,  and (c)  trade  payables  and  other
contractual obligations arising in the ordinary course of business.

   8.10  DISTRIBUTIONS.  Since  December  31,  2000,  no  Distribution  has been
declared,  paid,  or made  upon or in  respect  of any  Capital  Stock  or other
securities of the Parent Guarantor.

   8.11  TITLE  TO  PROPERTY.  Each  Loan  Party  has  good,  indefeasible,  and
merchantable title to all of its property  (including,  without limitation,  the
assets reflected on the December 31, 2000 Financial  Statements delivered to the
Agent and the Lenders,  except as disposed of in the ordinary course of business
since the date thereof), free of all Liens except Permitted Liens.

   8.12  REAL ESTATE; LEASES.  SCHEDULE 8.12 sets forth, as of the Closing Date,
a correct  and  complete  list of all leases and  subleases  of real or personal
property by the Loan Party or its  Subsidiaries  as lessee or  sublessee  (other
than  leases  of  personal  property  as to which  the Loan  Party is  lessee or
sublessee for which the value of such personal  property is less than $100,000),
and all leases and  subleases of real or personal  property by the Loan Party or
its Subsidiaries as lessor, lessee, sublessor or sublessee.  Each of such leases
and subleases is valid and  enforceable  in accordance  with its terms and is in
full force and  effect,  and,  to the best of such Loan  Party's  knowledge,  no
default by any party to any such lease or sublease exists. No Loan Party owns or
has  contracted to acquire a fee interest in any real property as of the Closing
Date.


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<PAGE>

   8.13  PROPRIETARY  RIGHTS.  SCHEDULE  8.13 sets forth a correct and  complete
list  of all of the  Loan  Parties'  material  Proprietary  Rights.  None of the
material  Proprietary  Rights is subject to any  licensing  agreement or similar
arrangement  except  as set  forth  on  SCHEDULE  8.13.  To the best of any Loan
Party's knowledge, none of the Proprietary Rights infringes on or conflicts with
any other  Person's  property,  and no other Person's  property  infringes on or
conflicts with the  Proprietary  Rights.  The  Proprietary  Rights  described on
SCHEDULE  8.13  constitute  all of the  property of such type  necessary  to the
current and anticipated future conduct of the each Loan Party's business.

   8.14  TRADE NAMES AND TERMS OF SALE.  All trade  names or styles  under which
the  Loan  Party  or any of its  Subsidiaries  will  sell  Inventory  or  create
Accounts,  or to which  instruments  in payment of Accounts may be made payable,
are listed on SCHEDULE 8.14.

   8.15  LITIGATION.  Except as set forth on SCHEDULE 8.15,  there is no pending
or (to  the  best of any  Loan  Party's  knowledge)  threatened,  action,  suit,
proceeding,  or counterclaim by any Person, or investigation by any Governmental
Authority which could reasonably be expected to cause a Material Adverse Effect.

   8.16  RESTRICTIVE  AGREEMENTS.   Neither  the  Loan  Party  nor  any  of  its
Subsidiaries is a party to any contract or agreement,  or subject to any charter
or other corporate restriction,  which affects its ability to execute,  deliver,
and perform the Loan Documents and repay the Obligations or which materially and
adversely  affects or, insofar as any Loan Party can reasonably  foresee,  could
reasonably  be  expected to  materially  and  adversely  affect,  the  property,
business, operations, or condition (financial or otherwise) of the Loan Party or
such  Subsidiary,  or would  otherwise in any respect  cause a Material  Adverse
Effect.

   8.17  LABOR  DISPUTES.  Except as set forth on SCHEDULE 8.17, (a) there is no
collective  bargaining  agreement or other labor contract covering  employees of
the Loan Party or any of its  Subsidiaries,  (b) no such  collective  bargaining
agreement or other labor contract is scheduled to expire during the term of this
Agreement,  (c) to the best of such Loan  Party's  knowledge,  no union or other
labor organization is seeking to organize,  or to be recognized as, a collective
bargaining unit of employees of the Loan Party or any of its Subsidiaries or for
any  similar  purpose,  and (d) there is no  pending or (to the best of any Loan
Party's  knowledge)  threatened,  strike,  work stoppage,  material unfair labor
practice  claim,  or other material labor dispute  against or affecting the Loan
Party or its Subsidiaries or their employees.

   8.18  ENVIRONMENTAL LAWS. Except as otherwise disclosed on SCHEDULE 8.18:

         (a) The Loan Party and its  Subsidiaries  have complied in all material
respects with all Environmental Laws applicable to its business, and neither the
Loan Party nor any Subsidiary  nor, to the best of such Loan Party's  knowledge,
any of its present Premises or operations, nor, to the best of such Loan Party's
knowledge, its past property or operations,  is subject to any enforcement order
from or liability  agreement with any  Governmental  Authority or private Person
respecting  (i)  compliance  with any  Environmental  Law or (ii) any  potential
liabilities  and costs or remedial action arising from the Release or threatened
Release of a Contaminant.

         (b) The Loan  Party and its  Subsidiaries  have  obtained  all  permits
necessary for their current  operations under  Environmental  Laws, and all such
permits  are in good  standing  and the Loan Party and its  Subsidiaries  are in
material compliance with all terms and conditions of such permits.


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<PAGE>

         (c)  Neither  the Loan Party nor any of its  Subsidiaries,  nor, to the
best of any Loan Party's knowledge,  any of its predecessors in interest, has in
violation of applicable law stored,  treated or disposed of any hazardous waste,
as defined pursuant to 40 CFR Part 261 or any equivalent Environmental Law.

         (d) Neither the Loan Party nor any of its Subsidiaries has received any
summons,  complaint, order or similar written notice that it is not currently in
compliance  with,  or that  any  Governmental  Authority  is  investigating  its
compliance  with, any  Environmental  Laws or that it is or may be liable to any
other Person as a result of a Release or threatened Release of a Contaminant.

         (e) To the best of such Loan Party's knowledge,  none of the present or
past  operations  of the Loan Party and its  Subsidiaries  is the subject of any
investigation  by any  Governmental  Authority  evaluating  whether any remedial
action is needed to respond to a Release or threatened Release of a Contaminant.

         (f)  [INTENTIONALLY OMITTED]

         (g)  Neither the Loan Party nor any of its  Subsidiaries  has filed any
notice  under  any  requirement  of  Environmental  Law  reporting  a  spill  or
accidental  and  unpermitted  release or  discharge  of a  Contaminant  into the
environment.

         (h) Neither the Loan Party nor any of its Subsidiaries has entered into
any negotiations or settlement  agreements with any Person  (including,  without
limitation,  the prior owner of its property)  imposing material  obligations or
liabilities  on the Loan Party or any of its  Subsidiaries  with  respect to any
remedial  action in response to the Release of a Contaminant or  environmentally
related  claim (other than  customary  indemnities  under leases with respect to
which no claim has arisen thereunder).

         (i) None of the products manufactured,  distributed or sold by the Loan
Party or any of its Subsidiaries contain asbestos containing material.

         (j) No  Environmental  Lien has  attached  to any  property of the Loan
Party or any of its Subsidiaries.

   8.19  NO VIOLATION OF LAW. Neither the Loan Party nor any of its Subsidiaries
is in violation of any law, statute, regulation,  ordinance, judgment, order, or
decree  applicable to it which violation could  reasonably be expected to have a
Material Adverse Effect.

   8.20  NO DEFAULT.  Neither the Loan Party nor any of its  Subsidiaries  is in
default with respect to any note, indenture,  loan agreement,  mortgage,  lease,
deed, or other  agreement to which the Loan Party or such  Subsidiary is a party
or by which it is bound,  which default  could  reasonably be expected to have a
Material Adverse Effect.

   8.21  ERISA COMPLIANCE. Except as specifically disclosed in SCHEDULE 8.21:

         (a)  Each  Plan is in  compliance  in all  material  respects  with the
applicable  provisions  of ERISA,  the Code and other federal or state law. Each
Plan which is intended to qualify under Section  401(a) of the Code has received
a favorable  determination  letter from the IRS and to the best knowledge of any
Loan  Party,   nothing  has  occurred   which  would  cause  the  loss  of  such
qualification.  The Loan Party and each ERISA  Affiliate  has made all  required
contributions to any

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Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any  amortization  period pursuant to Section 412 of the Code
has been made with respect to any Plan.

         (b) There are no pending or, to the best  knowledge  of any Loan Party,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could  reasonably  be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary  responsibility  rules with respect to any Plan which
has  resulted or could  reasonably  be expected to result in a Material  Adverse
Effect.

         (c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability;  (iii) neither the Loan
Party nor any ERISA Affiliate has incurred,  or reasonably expects to incur, any
liability  under Title IV of ERISA with  respect to any Pension Plan (other than
premiums due and not delinquent  under Section 4007 of ERISA);  (iv) neither the
Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which,  with the giving of notice under
Section 4219 of ERISA,  would result in such  liability)  under  Section 4201 or
4243 of ERISA with respect to a  Multi-employer  Plan;  and (v) neither the Loan
Party nor any ERISA Affiliate has engaged in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA.

   8.22  TAXES. The Loan Party and its  Subsidiaries  have filed all federal and
other tax returns and  reports  required to be filed,  and have paid all federal
and other taxes,  assessments,  fees and other  governmental  charges  levied or
imposed  upon  them or their  properties,  income or  assets  otherwise  due and
payable.

   8.23  REGULATED  ENTITIES.  None of the Borrower,  any Person controlling the
Loan Party,  or any  Subsidiary  of it, is an  "Investment  Company"  within the
meaning  of the  Investment  Company  Act of 1940.  No Loan  Party is subject to
regulation  under the Public  Utility  Holding  Company Act of 1935, the Federal
Power Act, the Interstate  Commerce Act, any state public utilities code or law,
or any other  federal or state  statute or  regulation  limiting  its ability to
incur indebtedness.

   8.24  USE OF PROCEEDS;  MARGIN REGULATIONS.  The proceeds of the Loans are to
be used  solely for  working  capital  purposes.  Neither the Loan Party nor any
Subsidiary  of it is engaged in the  business of  purchasing  or selling  Margin
Stock or  extending  credit for the purpose of  purchasing  or  carrying  Margin
Stock.

   8.25  COPYRIGHTS,  PATENTS,  TRADEMARKS AND LICENSES. Each Loan Party owns or
is licensed or otherwise  has the right to use all of the  patents,  trademarks,
service marks, trade names, copyrights,  contractual franchises,  authorizations
and  other  rights  that  are  reasonably  necessary  for the  operation  of its
businesses, without conflict with the rights of any other Person (but subject to
the  limitations  contained in the  Material  License  Agreements).  To the best
knowledge  of any Loan  Party,  no  Proprietary  Rights,  and no slogan or other
advertising device, product,  process, method, substance, part or other material
now  employed,  or now  contemplated  to be  employed,  by the Loan Party or any
Subsidiary  infringes  upon  any  valid  rights  held by any  other  Person.  No
meritorious claim or litigation regarding any of the foregoing is pending or, to
the best of such Loan Party's knowledge,  threatened,  and no patent, invention,
device, application,  principle or any statute, law, rule, regulation,  standard
or code is pending or, to the knowledge of any Loan Party,  proposed,  which, in
either case, could reasonably be expected to have a Material Adverse Effect.

   8.26  NO MATERIAL  ADVERSE  EFFECT.  No Material  Adverse Effect has occurred
since the date of the most recent Financial Statements delivered to the Lender.


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   8.27  FULL DISCLOSURE.  None of the representations or warranties made by the
Loan Party or any  Subsidiary  of it in the Loan  Documents  as of the date such
representations  and  warranties  are  made  or  deemed  made,  and  none of the
statements contained in any exhibit,  report, statement or certificate furnished
by or on behalf of the Loan Party or any Subsidiary of it in connection with the
Loan Documents  (including the offering and disclosure materials delivered by or
on behalf of the Loan Party to the Lenders prior to the Closing Date),  contains
any untrue  statement of a material  fact or omits any material fact required to
be stated therein or necessary to make the statements made therein,  in light of
the circumstances  under which they are made, not misleading as of the time when
made or delivered.

   8.28  MATERIAL  AGREEMENTS.  SCHEDULE  8.28  hereto  sets forth all  material
agreements and contracts to which the Loan Party or any of its Subsidiaries is a
party or is bound as of the date hereof.

   8.29  BANK  ACCOUNTS.  SCHEDULE 8.29 contains a complete and accurate list of
all bank accounts  maintained by the Loan Party or any of its Subsidiaries  with
any bank or other financial institution.

   8.30  GOVERNMENTAL   AUTHORIZATION.    No   approval,   consent,   exemption,
authorization,   or  other  action  by,  or  notice  to,  or  filing  with,  any
Governmental  Authority or other  Person is necessary or required in  connection
with the execution, delivery or performance by, or enforcement against, the Loan
Party or any of its Subsidiaries of this Agreement or any other Loan Document.

                                   ARTICLE 9
                       AFFIRMATIVE AND NEGATIVE COVENANTS

         Each Loan Party covenants to the Agent and each Lender that, so long as
any of the Obligations remain outstanding or this Agreement is in effect:

   9.1   TAXES AND OTHER OBLIGATIONS. The Loan Party shall, and shall cause each
of its  Subsidiaries  to, (a) file when due (after  giving  effect to extensions
obtained in accordance  with  applicable  law) all tax returns and other reports
which it is required to file; (b) pay, or provide for the payment,  when due, of
all taxes, fees,  assessments and other governmental  charges against it or upon
its property, income and franchises, make all required withholding and other tax
deposits, and establish adequate reserves for the payment of all such items, and
provide to the Agent and the Lenders, upon request, satisfactory evidence of its
timely  compliance with the foregoing;  and (c) pay when due all Debt owed by it
and all claims of materialmen,  mechanics,  carriers,  warehousemen,  landlords,
processors and other like Persons, and all other Debt owed by it and perform and
discharge in a timely manner all other  obligations  undertaken by it; PROVIDED,
HOWEVER,  so long as the Loan Party has notified  the Agent in writing,  neither
the Loan Party nor any of its Subsidiaries need pay any tax, fee, assessment, or
governmental  charge, or claims or Debt described in clause (b) or (c), that (i)
it is contesting in good faith by appropriate  proceedings  diligently  pursued,
(ii)  the Loan  Party or its  Subsidiary,  as the case may be,  has  established
proper  reserves  for as  provided  in GAAP,  and  (iii) no Lien  (other  than a
Permitted Lien) results from such non-payment.

   9.2   CORPORATE  EXISTENCE AND GOOD STANDING.  Except as permitted in SECTION
9.9, the Loan Party shall, and shall cause each of its Subsidiaries to, maintain
its  corporate  existence  and  its

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qualification  and good  standing in all  jurisdictions  in which the failure to
maintain such existence and  qualification  or good standing could reasonably be
expected to have a Material Adverse Effect.

   9.3   COMPLIANCE WITH LAW AND AGREEMENTS;  MAINTENANCE OF LICENSES.  The Loan
Party shall comply,  and shall cause each Subsidiary to comply,  in all material
respects  with all  Requirements  of Law of any  Governmental  Authority  having
jurisdiction over it or its business (including the Federal Fair Labor Standards
Act). The Loan Party shall,  and shall cause each of its Subsidiaries to, obtain
and maintain all licenses, permits,  franchises, and governmental authorizations
necessary  to own its  property  and to conduct its business as conducted on the
Closing  Date,  the  failure  to obtain  or loss of which  would  reasonably  be
expected to result in a Material  Adverse  Effect.  No Loan Party shall  modify,
amend or alter its  certificate  or  article  of  incorporation  other than in a
manner which does not adversely affect the rights of the Lenders or the Agent.

   9.4   MAINTENANCE OF PROPERTY.  The Loan Party shall, and shall cause each of
its  Subsidiaries  to, maintain all of its property  necessary and useful in the
conduct of its business,  in good operating condition and repair,  ordinary wear
and tear excepted.

   9.5   INSURANCE.

         (a)  The  Loan  Party  shall  maintain,  and  shall  cause  each of its
Subsidiaries to maintain, with financially sound and reputable insurers having a
rating of at least A-VII or better by Best Rating Guide,  insurance against loss
or damage by fire with extended coverage; theft, burglary, pilferage and loss in
transit; public liability and third party property damage; larceny, embezzlement
or other criminal liability;  business interruption;  public liability and third
party  property  damage;  and such other  hazards  or of such other  types as is
customary for Persons engaged in the same or similar business,  as the Agent, in
its  discretion,  or acting at the  direction  of the  Majority  Lenders,  shall
specify, in amounts,  and under policies reasonably  acceptable to the Agent and
the Majority  Lenders (it being  agreed that the amounts of insurance  now being
maintained  by the Loan  Parties,  as  described  on  SCHEDULE  9.5  hereof,  is
acceptable  to the  Agent  and  the  Majority  Lenders).  Without  limiting  the
foregoing,  the Loan Party  shall  also  maintain,  and shall  cause each of its
Subsidiaries to maintain,  flood insurance, in the event of a designation of the
area in which any Real Estate  covered by the Mortgages and any of the Equipment
and  Inventory  located on such Real  Estate is  located  as "flood  prone" or a
"flood  risk  area,"  (hereinafter  "SFHA")  as  defined  by the Flood  Disaster
Protection  Act of 1973, in an amount to be reasonably  determined by the Agent,
and  shall  comply  with  the  additional  requirements  of the  National  Flood
Insurance  Program as set forth in said Act.  The Borrower  shall also  maintain
flood insurance for its Inventory and Equipment  which is, at any time,  located
in a SFHA.

         (b) The Loan Party  shall cause the Agent,  for the ratable  benefit of
the Agent and the Lenders,  to be named in each such policy as secured  party or
mortgagee and sole loss payee or additional  insured,  in a manner acceptable to
the  Agent.  Each  policy of  insurance  shall  contain a clause or  endorsement
requiring  the insurer to give not less than  thirty  (30) days'  prior  written
notice to the Agent in the event of  cancellation  of the  policy for any reason
whatsoever  and a clause or  endorsement  stating that the interest of the Agent
shall not be impaired or  invalidated by any act or neglect of the Loan Party or
any of its Subsidiaries or the owner of any premises for purposes more hazardous
than are permitted by such policy. All premiums for such insurance shall be paid
by the Borrower when due, and certificates of insurance and, if requested by the
Agent or any Lender,  photocopies  of the  policies,  shall be  delivered to the
Agent, in each case in sufficient quantity for distribution by the Agent to each
of the Lenders.  If the Loan Party fails to procure such insurance or


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to pay the premiums  therefor  when due, the Agent may, and at the  direction of
the Majority Lenders shall, do so from the proceeds of Revolving Loans.

         (c) The Loan Party shall  promptly  notify the Agent and the Lenders of
any loss, damage, or destruction to the Collateral arising from its use, whether
or not  covered by  insurance.  The Agent is hereby  authorized  to collect  all
insurance proceeds directly, and to apply or remit them as follows:

                  (i) So long as there does not then exist any  Default or Event
         of Default,  with  respect to insurance  proceeds  relating to property
         other  than   Collateral,   after  deducting  from  such  proceeds  the
         reasonable expenses, if any, incurred by the Agent in the collection or
         handling thereof, the Agent shall promptly remit to the Loan Party such
         proceeds.

                  (ii) With respect to insurance proceeds relating to Collateral
         other than  Fixed  Assets,  or if a Default  or Event of  Default  then
         exists, after deducting from such proceeds the reasonable expenses,  if
         any, incurred by the Agent in the collection or handling  thereof,  the
         Agent shall  apply such  proceeds,  ratably,  to the  reduction  of the
         Obligations in the order provided for in SECTION 4.8.

                  (iii)  With   respect  to  insurance   proceeds   relating  to
         Collateral  consisting  of Fixed  Assets,  after  deducting  from  such
         proceeds the reasonable expenses,  if any, incurred by the Agent in the
         collection or handling thereof,  the Agent shall apply such proceeds to
         the  permanent  reduction of the  Revolving  Loans  Commitment  and the
         payment of the Obligations in the order provided for in SECTION 4.8, or
         at the  option of the  Majority  Lenders  or the  Agent,  may permit or
         require  the  Borrower  to use  such  money,  or any part  thereof,  to
         replace,  repair,  restore or rebuild the  relevant  Fixed  Assets in a
         diligent and  expeditious  manner with  materials  and  workmanship  of
         substantially  the same quality as existed  before the loss,  damage or
         destruction;  PROVIDED,  HOWEVER,  that so long as there  does not then
         exist any Default or Event of Default,  the Borrower shall be permitted
         to use insurance  proceeds  relating to Collateral  consisting of Fixed
         Assets in an aggregate amount not to exceed  $1,000,000 with respect to
         any  occurrence,  to replace,  repair,  restore or rebuild the relevant
         Fixed Assets,  in the manner set forth in this sentence;  and PROVIDED,
         FURTHER,  that the Loan  Party  first  (i)  provides  the Agent and the
         Majority Lenders with plans and  specifications  for any such repair or
         restoration,  if any,  which shall be  reasonably  satisfactory  to the
         Agent and the Majority Lenders and (ii)  demonstrates to the reasonable
         satisfaction  of the  Agent  and the  Majority  Lenders  that the funds
         available to it (taking into account the  insurance  proceeds that will
         be available) will be sufficient to complete such project in the manner
         provided therein.

   9.6   CONDEMNATION.

         (a) The Loan Party shall,  within one Business Day after a  responsible
officer  of  the  Parent  Guarantor  becomes  aware  of the  institution  of any
proceeding for the  condemnation or other taking of any of its property,  notify
the Agent of the  pendency  of such  proceeding,  and agrees  that the Agent may
participate  in any such  proceeding,  and the Loan Party from time to time will
deliver to the Agent all instruments reasonably requested by the Agent to permit
such participation.

         (b) The Agent is hereby  authorized  to  collect  the  proceeds  of any
condemnation claim or award directly, and to apply or remit them as follows:


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                  (i) So long as there does not then exist any  Default or Event
         of Default,  with respect to condemnation proceeds relating to property
         other  than   Collateral,   after  deducting  from  such  proceeds  the
         reasonable expenses, if any, incurred by the Agent in the collection or
         handling thereof, the Agent shall remit to the Borrower such proceeds.

                  (ii)  With  respect  to  condemnation   proceeds  relating  to
         Collateral other than Fixed Assets, or if a Default or Event of Default
         then  exists,   after  deducting  from  such  proceeds  the  reasonable
         expenses,  if any,  incurred by the Agent in the collection or handling
         thereof, the Agent shall apply such proceeds, ratably, to the reduction
         of the Obligations in the order provided for in SECTION 4.8.

                  (iii)  With  respect  to  condemnation  proceeds  relating  to
         Collateral  consisting  of Fixed  Assets,  after  deducting  from  such
         proceeds the reasonable expenses,  if any, incurred by the Agent in the
         collection or handling thereof,  the Agent shall apply such proceeds to
         the  permanent  reduction  of the  Revolving  Loan  Commitment  and the
         payment of the Obligations in the order provided for in SECTION 4.8, or
         at the  option of the  Majority  Lenders  or the  Agent,  may permit or
         require  the Loan  Party to use such  money,  or any part  thereof,  to
         replace,  repair,  restore or rebuild the  relevant  Fixed  Assets in a
         diligent and  expeditious  manner with  materials  and  workmanship  of
         substantially  the same  quality  as existed  before the  condemnation;
         PROVIDED,  HOWEVER,  that so long as  there  does not  then  exist  any
         Default or Event of Default,  the  Borrower  shall be  permitted to use
         proceeds  relating  to  Collateral  consisting  of Fixed  Assets  in an
         aggregate  amount  not  to  exceed   $1,000,000  with  respect  to  any
         occurrence,  to replace,  repair, restore or rebuild the relevant Fixed
         Assets,  in the  manner  set  forth  in this  sentence;  and  PROVIDED,
         FURTHER,   that  plans  and  specifications  for  any  such  repair  or
         restoration,  if any, shall be reasonably satisfactory to the Agent and
         the Majority Lenders.

   9.7   ENVIRONMENTAL LAWS.

         (a) The Loan Party shall,  and shall cause each of its Subsidiaries to,
conduct  its  business  in  compliance   in  all  material   respects  with  all
Environmental  Laws  applicable  to it,  including,  without  limitation,  those
relating  to  the  generation,  handling,  use,  storage,  and  disposal  of any
Contaminant.  The Loan Party shall, and shall cause each of its Subsidiaries to,
take  prompt  and  appropriate  action to  respond  to any  non-compliance  with
Environmental Laws and shall regularly report to the Agent on such response.

         (b) Without  limiting the generality of the  foregoing,  the Loan Party
shall  submit to the Agent and the  Lenders  annually,  commencing  on the first
Anniversary  Date, and on each  Anniversary  Date  thereafter,  an update of the
status of each  environmental  compliance or liability  issue.  The Agent or any
Lender may request  copies of technical  reports  prepared by the Loan Party and
its  communications  with any  Governmental  Authority to determine  whether the
Borrower or any of its Subsidiaries is proceeding reasonably to correct, cure or
contest in good faith any alleged  non-compliance  or  environmental  liability.
Subject to any express limitations thereon contained in the terms of a lease for
Premises not owned by a Loan Party,  the Loan Party shall, at the Agent's or the
Majority  Lenders'  request  and  at  the  Borrower's  expense,  (a)  retain  an
independent environmental engineer acceptable to the Agent to evaluate the site,
including   tests  if   appropriate,   where  the   non-compliance   or  alleged
non-compliance  with  Environmental Laws has occurred and prepare and deliver to
the Agent, in sufficient  quantity for distribution by the Agent to the Lenders,
a report  setting  forth the  results of such  evaluation,  a proposed  plan for
responding to any environmental  problems described therein,  and an estimate of
the costs  thereof,  and (b) provide to the Agent and the


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Lenders  a  supplemental  report  of such  engineer  whenever  the  scope of the
environmental  problems, or the response thereto or the estimated costs thereof,
shall change in any material respect.

   9.8   COMPLIANCE  WITH ERISA.  The Loan Party shall,  and shall cause each of
its ERISA  Affiliates  to: (a) maintain  each Plan in compliance in all material
respects with the applicable  provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified  under  Section  401(a) of the
Code to maintain such qualification;  (c) make all required contributions to any
Plan  subject  to  Section  412 of the  Code;  (d) not  engage  in a  prohibited
transaction or violation of the fiduciary  responsibility  rules with respect to
any Plan;  and (e) not engage in a transaction  that could be subject to Section
4069 or 4212(c) of ERISA.

   9.9   MERGERS, CONSOLIDATIONS OR SALES. Neither the Loan Party nor any of its
Subsidiaries  shall enter into any  transaction  of merger,  reorganization,  or
consolidation,  or transfer, sell, assign, lease, or otherwise dispose of all or
any part of its property,  or wind up, liquidate or dissolve, or agree to do any
of the  foregoing,  except (i) for sales of Inventory in the ordinary  course of
its business,  (ii) for sales or other dispositions of Equipment in the ordinary
course of business  that are obsolete or no longer  useable by Loan Party in its
business as permitted by SECTION 6.11,  (iii) a Subsidiary of Parent  Guarantor,
or Fox Athletic  LLC, may merge,  reorganize  or  consolidate  with or into,  or
wind-up,  liquidate  or dissolve in a  transaction  whereby all of the assets of
such  Subsidiary,  or Fox Athletic LLC, are transferred  to, another  Subsidiary
which is  wholly-owned  by the Parent  Guarantor  or the Borrower so long as the
Borrower is the  continuing  or  surviving  Person,  (iv) a Borrower  may merge,
reorganize  or  consolidate  into  another,  or  transfer  all of its assets and
liabilities to another, Borrower, (v) a Loan Party may transfer property to make
an investment of the type described in clauses (a) through (p) of the definition
of  Restricted  Investment  as and to the  extent  permitted  therein or to make
Distributions  permitted  under  SECTION  9.10 below,  and (vi) a Loan Party may
dispose  of  property  in  a  bona  fide  arms'  length   transaction  for  cash
consideration  at  fair  market  value  so  long  as  the  aggregate  amount  of
consideration  for all dispositions  from and including the date hereof does not
exceed $5,000,000 and on the last day of the quarter  immediately  preceding the
date of any  such  transfer,  and  after  giving  proforma  effect  to any  such
transfer,  the  Parent  Guarantor  was in  compliance  by more  than 120% of the
consolidated  Net Worth required under SECTION 9.25 and by more than 120% of the
Fixed Charge Coverage Ratio required under SECTION 9.26; provided,  HOWEVER, the
Parent Guarantor shall give the Agent not less than ten (10) Business Days prior
written notice of any such  transaction  described in clauses (iii) through (vi)
above setting forth the terms of and parties to such  transaction  in reasonable
detail,  and certifying that it complies with the  requirements of this Section,
and no such  transaction  described  in clauses (ii) through (vi) above shall be
permitted  if after  giving  effect  thereto a  Material  Adverse  Effect  could
reasonably  be expected  to result  therefrom  or any other  Default or Event of
Default has occurred and is continuing or would result therefrom;  and PROVIDED,
FURTHER,  that, in the case of any such transaction described in clause (iii) or
(iv) above,  the  applicable  continuing,  surviving or  transferee  Person (the
"Successor")  shall  deliver not less than ten (10)  Business  Days prior to the
consummation of such transaction an agreement in form and substance satisfactory
to the Agent whereby the  Successor  agrees to assume and be bound by all of the
other Person's obligations under this Agreement and all other Loan Documents, an
opinion of counsel  reasonably  satisfactory  to the Agent with  respect to such
agreement, the continued perfection of all Liens granted hereunder and under the
other Loan Documents to the Agent in all Collateral which is the subject of such
transfer and as to all other matters reasonably requested by the Agent, and such
other documents and take such other actions as the Agent or the Majority Lenders
may reasonably  request.  Without  limiting the foregoing,  the Parent Guarantor
shall  at all  times  own,  directly  or  indirectly,  100%  of the  issued  and
outstanding  Capital  Stock of each other Loan  Party,  and no Loan Party  shall
dispose of any interest in any Capital Stock of any other Loan Party held by it.


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<PAGE>

   9.10  DISTRIBUTIONS; CAPITAL CHANGE; RESTRICTED INVESTMENTS. Neither the Loan
Party nor any of its  Subsidiaries  shall (i) directly or indirectly  declare or
make, or incur any liability to make, any Distribution,  except Distributions to
the Borrower by its Subsidiaries  and, so long as no Default or Event of Default
has occurred and is continuing or would result  therefrom,  (y) Distributions to
the Parent Guarantor to make scheduled  payments of interest on the Senior Notes
and scheduled  payments of principal and interest on the Subordinated Debt or to
effect the  Redemption  as  expressly  permitted  by the terms of SCHEDULE  9.14
hereto, and (z) Distributions by the Parent Guarantor constituting up to 100% of
the net proceeds raised from the sale of additional  common Capital Stock of the
Parent  Guarantor  to  redeem  (in  whole  or in part)  the  Senior  Notes,  and
Distributions of additional common Capital Stock of the Parent Guarantor to make
an  acquisition  of the  property  or  Capital  Stock of any other  Person,  and
Distributions constituting up to 75% of the net proceeds raised from the sale of
common  Capital  Stock of the Parent  Guarantor  to make an  acquisition  of the
property or Capital Stock of any other  Person,  so long as in each such case no
Material  Adverse Effect could reasonably be expected to result therefrom and no
Default or Event of Default  has  occurred  and is  continuing  or would  result
therefrom (and the Agent and the Majority Lender will not unreasonably  withhold
their consent to the creation of a Subsidiary in connection  therewith if all of
the requirements of SECTION 6.2(d) will be complied with),  (ii) make any change
in its capital  structure  which could have a Material  Adverse  Effect or (iii)
make any Restricted Investment.

   9.11  TRANSACTIONS  AFFECTING  COLLATERAL  OR  OBLIGATIONS.  Neither the Loan
Party nor any of its Subsidiaries  shall enter into any transaction  which would
be reasonably expected to have a Material Adverse Effect.

   9.12  GUARANTIES.  Neither the Loan Party nor any of its  Subsidiaries  shall
make,  issue,  or  become  liable  on any  Guaranty,  except  Guaranties  of the
Obligations  in favor of the Agent and Guaranties of Debt permitted as described
in clause (c) or (g) of SECTION 9.13.

   9.13  DEBT. Neither the Loan Party nor any of its Subsidiaries shall incur or
maintain  any Debt,  other than:  (a) the  Obligations;  (b) trade  payables and
contractual  obligations  to suppliers  and  customers  incurred in the ordinary
course of business;  (c) the Senior Notes, the Subordinated  Debt and other Debt
existing on the Closing Date and  reflected  in SCHEDULE  8.9 and  refinancings,
renewals and  extensions of the Senior  Notes,  the  Subordinated  Debt and such
other Debt that have been  notified to the Agent not less than ten (10) Business
Days  prior  to the  consummation  thereof  and  are  on  terms  and  conditions
(including interest rate,  principal  amortization and term, and, in the case of
the Subordinated Debt, subordination) not less favorable to the Loan Parties and
the Lenders than the terms thereof when initially issued;  (d) intercompany Debt
permitted  by  clauses  (g),  (h)  and  (i)  of  the  definition  of  Restricted
Investment;  (e) Debt consisting of interest rate Swap  Agreements  entered into
the ordinary  course of business with a Lender;  (f) Debt in a principal  amount
not to exceed $3,000,000  outstanding at any time owing to, and secured by Liens
in favor of, lessors or vendors of Equipment for the Loan Parties,  or financial
institutions  designated  by a lessor or vendor,  exclusive of any Loan Party or
any  Affiliate  thereof,  upon  property  constituting  fixed or capital  assets
acquired by a Loan Party in compliance with SECTION 9.23 hereof;  provided, that
(i) any such Lien secures Debt not in excess of the acquisition cost of the item
of property subject thereto,  and (ii) such Lien does not extend to or cover any
item of property other than such property;  (g) additional Debt not to exceed at
any time outstanding the Aggregate Additional Debt and Investment Basket Amount;
and (h) Debt with  respect to orders or  judgments  for the payment of money the
amount of which  would not  result in an Event of  Default  under  SECTION  11.1
hereof.


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<PAGE>

   9.14  PREPAYMENT.  Neither the Loan Party nor any of its  Subsidiaries  shall
voluntarily prepay any Debt, except the Obligations in accordance with the terms
of this Agreement or a refinancing of Debt permitted under SECTION 9.13(c) or as
otherwise permitted under SCHEDULE 9.14 hereto.  Without limiting the foregoing,
except as provided on SCHEDULE  9.14,  the Loan Party will not,  and it will not
permit any of its  Subsidiaries  to, (a) make or offer to make any  voluntary or
optional  principal  payments  with respect to the Senior Notes or  Subordinated
Debt,  (b)  redeem or offer to redeem any of the  Senior  Notes or  Subordinated
Debt,  or (c) deposit any funds  intended to  discharge or defease any or all of
the Senior Notes or Subordinated Debt. Neither the terms of the Senior Notes nor
the  Subordinated  Debt shall be amended or modified  in any manner  without the
prior written consent of the Required Lenders. Notwithstanding the foregoing, so
long as no Default or Event of Default  has  occurred,  is  continuing  or could
result  therefrom,  the Parent  Guarantor  shall also be permitted to prepay the
Senior Notes with the net proceeds of common  Capital Stock issued by the Parent
Guarantor.

   9.15  TRANSACTIONS WITH AFFILIATES. Except for loans or advances to, or other
investments  in an  Affiliate  to the extent (i) existing on the date hereof and
listed on SCHEDULE  8.5 and (ii)  permitted  to be  incurred  from and after the
Closing Date by clause (m) of the definition of Restricted Investment and except
as set forth below,  neither the Loan Party nor any of its  Subsidiaries  shall,
sell, transfer,  distribute,  or pay any money or property,  including,  but not
limited to, any fees or expenses of any nature  (including,  but not limited to,
any fees or expenses for  management  services),  to any  Affiliate,  or lend or
advance  money  or  property  to  any  Affiliate,   or  invest  in  (by  capital
contribution or otherwise) or purchase or repurchase any stock or  indebtedness,
or any  property,  of any  Affiliate,  or become  liable on any  Guaranty of the
indebtedness,  dividends, or other obligations of any Affiliate. Notwithstanding
the foregoing,  the Loan Party and its  Subsidiaries  may engage in transactions
with  Affiliates  in the  ordinary  course  of  business  consistent  with  past
practices,  in  amounts  and upon  terms  fully  disclosed  to the Agent and the
Lenders, and no less favorable to the Loan Party and its Subsidiaries than would
be obtained in a comparable  arm's-length  transaction with a third party who is
not an Affiliate.

   9.16  INVESTMENT BANKING AND FINDER'S FEES. Neither the Loan Party nor any of
its  Subsidiaries  shall pay or agree to pay, or reimburse  any other party with
respect to, any investment banking or similar or related fee, underwriter's fee,
finder's fee, or broker's fee to any Person in connection  with this  Agreement.
The Loan Party shall defend and indemnify the Agent and the Lenders  against and
hold  them  harmless  from all  claims  of any  Person  that  the Loan  Party is
obligated  to pay for any such  fees,  and all  costs  and  expenses  (including
without limitation,  attorneys' fees) incurred by the Agent and/or any Lender in
connection therewith.

   9.17  [INTENTIONALLY OMITTED]

   9.18  BUSINESS  CONDUCTED.  The Loan Party shall not and shall not permit any
of its Subsidiaries  to, engage directly or indirectly,  in any line of business
other than the  businesses  in which the Loan  Party is  engaged on the  Closing
Date, and businesses reasonably incidental thereto.

   9.19  LIENS.  No the Loan  Party  or any of its  Subsidiaries  shall  create,
incur,  assume,  or  permit to exist any Lien on any  property  or other  assets
(tangible or  intangible,  real or personal) now owned or hereafter  acquired by
any of them, except Permitted Liens.

   9.20  SALE AND LEASEBACK TRANSACTIONS.  Neither the Loan Party nor any of its
Subsidiaries shall, directly or indirectly,  enter into any arrangement with any
Person providing for the Loan Party

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<PAGE>

or such  Subsidiary  to lease  or rent  property  that  the  Loan  Party or such
Subsidiary has sold or will sell or otherwise transfer to such Person.

   9.21  NEW  SUBSIDIARIES.  The Loan Party shall not,  directly or  indirectly,
organize,  create,  acquire or permit to exist any  Subsidiary  other than those
listed on SCHEDULE 8.5.

   9.22  FISCAL YEAR. The Loan Party shall not change its Fiscal Year.

   9.23  CAPITAL   EXPENDITURES.   Neither   the  Loan  Party  nor  any  of  its
Subsidiaries shall make or incur any Capital Expenditure if, after giving effect
thereto,  the  aggregate  amount  of all  Capital  Expenditures  by  the  Parent
Guarantor and its  Subsidiaries  on a consolidated  basis during any Fiscal Year
would exceed $2,000,000.

   9.24  OPERATING  LEASE  OBLIGATIONS.  Neither  the Loan  Party nor any of its
Subsidiaries shall enter into, or suffer to exist, any lease of real or personal
property as lessee or sublessee  (other than a Capital Lease),  if, after giving
effect thereto, the aggregate amount of Rentals (as hereinafter defined) payable
by the Parent  Guarantor and its  Subsidiaries  on a  consolidated  basis in any
Fiscal  Year in respect of such lease and all other  such  leases  would  exceed
$3,250,000  for Fiscal  Year 2001 and  $3,500,000  for Fiscal  Year 2002 and any
Fiscal Year  thereafter  (such  amounts  being  referred to herein as "Permitted
Rentals").  The term  "Rentals"  means all  payments  due from Parent  Guarantor
and/or  Borrower  and/or any other  Subsidiary  of a Loan Party as the lessee or
sublessee  under  a  lease  of real or  personal  property,  including,  without
limitation,  basic rent, percentage rent, property taxes, utility or maintenance
costs, and insurance premiums.

   9.25  NET WORTH. The Parent Guarantor will maintain a consolidated Net Worth,
determined  as of the last day of each  calendar  quarter,  of not less than the
amount set forth below for such calendar quarter.


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<PAGE>



               12/31/01                     $8,500,000

               6/30/02                      $8,500,000  plus (i) 75% of Parent
                                            Guarantor's net income, determined
                                            in accordance with GAAP, and (ii)
                                            100% of any equity capital
                                            contributions to Parent Guarantor,
                                            in both cases for the period from
                                            1/01/02 though and including
                                            6/30/02.

   9.26  FIXED CHARGE  COVERAGE  RATIO.  The Parent  Guarantor  will  maintain a
consolidated  (i.e.,  for Parent  Guarantor and its  Subsidiaries  that are Loan
Parties)  Fixed Charge  Coverage Ratio of 1.05 as of the last day of each period
consisting of the four quarters ending December 31, 2001 and each period of four
quarters ending on the last day of each calendar quarter  thereafter (i.e., each
four  quarter  period  ending  March 31, June 30,  September  30 and December 31
thereafter).

   9.27  USE OF  PROCEEDS.  The Loan Party  shall  not,  and shall not suffer or
permit any  Subsidiary  to, use any  portion of the Loan  proceeds,  directly or
indirectly,  (i) to purchase or carry Margin  Stock,  (ii) to repay or otherwise
refinance indebtedness of the Loan Party or others incurred to purchase or carry
Margin  Stock,  (iii) to extend credit for the purpose of purchasing or carrying
any Margin  Stock,  or (iv) to acquire any security in any  transaction  that is
subject to Section 13 or 14 of the Exchange Act.

   9.28  UMBRO CONSENT.  The Parent  Guarantor  shall use reasonable  efforts to
deliver  to  the  Agent  a  licensor   consent  ("Umbro   Consent")  from  Umbro
International,  Inc. ("Umbro") in form and substance reasonably  satisfactory to
the Agent  within  90 days from the  Closing  Date or as soon  thereafter  as is
reasonably  practicable.  Promptly  after  obtaining the Umbro  Consent,  Parent
Guarantor shall execute and deliver an amended and restated  Collateral  License
Agreement  Assignment  in the form  requested  by the Agent with  respect to the
Material License Agreement with Umbro.

   9.29  FURTHER ASSURANCES.  The Loan Party shall execute and deliver, or cause
to be executed and delivered, to the Agent and/or the Lenders such documents and
agreements,  and shall take or cause to be taken such  actions,  as the Agent or
any Lender may, from time to time, request to carry out the terms and conditions
of this Agreement and the other Loan Documents.

                                   ARTICLE 10
                              CONDITIONS OF LENDING

   10.1  CONDITIONS  PRECEDENT TO MAKING OF LOANS TO BE SATISFIED ON THE CLOSING
DATE.  The  obligation  of the  Lenders  to make any  Revolving  Loans,  and the
obligation of the Agent to cause to be issued or provide  Credit Support for any
Letter of Credit and the  obligation of the Lenders to participate in Letters of
Credit or in Credit  Support  for any  Letters  of  Credit,  are  subject to the
following conditions precedent having been satisfied in a manner satisfactory to
the Agent and each Lender as of the Closing Date (except that the  condition set
forth at  SECTION  10.1(B)  shall not be a  condition  precedent  to  Agent's or
Lender's issuance of or provision of Credit Support for any Letter of Credit):


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<PAGE>

         (a) This  Agreement and the other Loan  Documents have been executed by
each party  thereto and each Loan Party shall have  performed  and complied with
all covenants,  agreements and  conditions  contained  herein and the other Loan
Documents  which are required to be  performed or complied  with by the Borrower
before or on such Closing Date.

         (b) Parent Guarantor shall have utilized the Available Proceeds for one
or more of the  Alternative  Permitted  Uses as  expressly  provided  for in and
pursuant to the terms of SCHEDULE 9.14 hereto.

         (c) All  representations and warranties made hereunder and in the other
Loan  Documents  shall be true and  correct in all  material  respects as of the
Closing Date as if made on such date.

         (d) No Default or Event of Default  shall exist on the Closing Date, or
would exist after giving effect to the Loans to be made on such date.

         (e) The Agent and the  Lenders  shall have  received  such  opinions of
counsel for the Loan Parties as the Agent or any Lender shall request, each such
opinion to be in a form,  scope,  and substance  satisfactory to the Agent,  the
Lenders, and their respective counsel.

         (f) [INTENTIONALLY OMITTED]

         (g) The Agent shall have received:

                  (i) acknowledgment copies of proper financing statements, duly
         filed on or before the Closing Date under the UCC of all  jurisdictions
         as the Agent may deem  necessary  or  desirable in order to perfect the
         Agent's Lien in all Collateral;

                  (ii) duly executed UCC-3  Termination  Statements for any Lien
         which is not a Permitted Lien and any other UCC-1 financing  statements
         and/or UCC-3 amendments  reasonably deemed necessary by Agent, and such
         other instruments,  in form and substance satisfactory to the Agent, as
         shall be necessary  to terminate  and satisfy all Liens on the Property
         of the Loan Parties except Permitted Liens; and

                  (iii)  certificates  representing  all  Capital  Stock  of the
         Subsidiaries  of  the  Parent  Guarantor,   together  with  assignments
         separate  from such  certificates  undated  and  executed  in blank and
         voting proxies executed in blank, and all promissory notes representing
         any  intercompany  Debt  between  the Parent  Guarantor  and any of its
         Subsidiaries,  together with endorsements separate from such promissory
         notes undated and issued in blank.

         (h) The Borrower shall have paid all fees and expenses of the Agent and
the Attorney Costs incurred in connection with any of the Loan Documents and the
transactions contemplated thereby to the extent invoiced.

         (i) The  Agent  shall  have  received  evidence,  in form,  scope,  and
substance,  reasonably  satisfactory to the Agent, of all insurance  coverage as
required by this Agreement.

         (j) The Agent and the Lenders shall have had an opportunity, if they so
choose,  to examine  the books of  account  and other  records  and files of the
Borrower and to make copies  thereof,  and to conduct a pre-closing  audit which
shall include,  without  limitation,  verification of


                                       74
<PAGE>

Inventory,  Accounts, and Availability,  and the results of such examination and
audit shall have been satisfactory to the Agent and the Lenders in all respects.

         (k) Except as set forth on SCHEDULE 10.1 hereto, all Obligations of the
Parent  Guarantor and any of its  Subsidiaries  under the Second Loan  Agreement
shall have been paid in full and the outstanding principal balance thereof shall
have been reduced to zero (provided that the same shall in no event be deemed to
be a termination of the Original Loan  evidenced by the Second Loan  Agreement),
all Liens  securing the Second Loan  Agreement,  and any and all  extensions  of
credit thereunder,  shall continue to be perfected for the benefit of Lenders as
to all Collateral owned by the Loan Parties,  and Agent shall have received such
documents,  assignments or other instruments as the Agent may reasonably request
and in form and substance satisfactory to the Agent.

         (l) The Agent and the Lenders shall have received  copies  certified as
being correct and complete of all documentation related to the Senior Notes, the
Subordinated  Debt and the Material  License  Agreements and such  documentation
shall be satisfactory to the Agent and the Lenders in all respects.

         (m) All  proceedings  taken in  connection  with the  execution of this
Agreement,  all other Loan  Documents  and all  documents  and  papers  relating
thereto shall be satisfactory in form, scope, and substance to the Agent and the
Lenders.

         (n) No Material  Adverse Effect shall have occurred since the Financial
Statements dated December 31, 2000.

         The  acceptance  by the  Borrower  of any Loans shall be deemed to be a
representation  and warranty  made by the Borrower to the effect that all of the
conditions  precedent to the making of such Loans have been satisfied,  with the
same effect as delivery to the Agent and the Lenders of a certificate  signed by
a Responsible  Officer of the Borrower,  dated as of the date of such Loans,  to
such effect.

         Execution  and  delivery to the Agent by a Lender of a  counterpart  of
this  Agreement  shall  be  deemed  confirmation  by such  Lender  that  (i) all
conditions   precedent  in  this  SECTION  10.1  have  been   fulfilled  to  the
satisfaction  of such Lender and (ii) the decision of such Lender to execute and
deliver to the Agent an executed  counterpart of this Agreement was made by such
Lender independently and without reliance on the Agent or any other Lender as to
the satisfaction of any condition precedent set forth in this SECTION 10.1.

   10.2  ADDITIONAL  CONDITIONS  PRECEDENT TO EACH LOAN.  The  obligation of the
Lenders  to make each Loan and the  obligation  of the Agent to take  reasonable
steps to cause to be issued  or to  provide  Credit  Support  for any  Letter of
Credit and the  obligation of the Lenders to participate in Letters of Credit or
Credit Support for Letters of Credit, shall be subject to the further conditions
precedent that on and as of the date of any such extension of credit:

         (a) the following  statements  shall be true, and the acceptance by the
Borrower of any  extension  of credit  shall be deemed to be a statement  to the
effect set forth in clauses (i) and (ii),  with the same effect as the  delivery
to the Agent and the Lenders of a certificate  signed by a Responsible  Officer,
dated the date of such extension of credit, stating that:

                  (i)  The  representations  and  warranties  contained  in this
         Agreement  and the other Loan  Documents  are  correct in all  material
         respects  on and as of the date of such


                                       75
<PAGE>

         extension of credit as though  made on and as of such date,  other than
         any such representation or  warranty which relates to a specified prior
         date and  except to the   extent  the Agent and the  Lenders  have been
         notified by the Borrower  that any such  representation  or warranty is
         not correct in any   material  respect and the  Majority  Lenders  have
         explicitly  waived in writing   compliance with such  representation or
         warranty; and

                  (ii) No event has occurred and is continuing,  or would result
         from such extension of credit,  which constitutes a Default or an Event
         of Default; and

         (b) without  limiting  any other  provision  hereof,  the amount of the
Availability  shall be sufficient to make such Revolving Loan without  exceeding
the Availability, PROVIDED, HOWEVER, that the foregoing conditions precedent are
not conditions to each Lender participating in or reimbursing Bank of America or
the Agent for such  Lenders' Pro Rata Share of any Bank of America Loan or Agent
Advance as provided in SECTIONS 2.2(h), (i) and (j); and

         (c)  without  limiting  SECTION  10.2(a),  there shall exist no action,
suit,  investigation,  litigation,  or  proceeding  pending or threatened in any
court or before any arbitrator or governmental  instrumentality that in Lenders'
reasonable  judgment  could  reasonably  be expected to have a Material  Adverse
Effect.

                                   ARTICLE 11
                                DEFAULT; REMEDIES

   11.1  EVENTS OF DEFAULT.  It shall  constitute an event of default ("Event of
Default") if any one or more of the following shall occur for any reason:

         (a) any failure to pay the  principal  of or interest or premium on any
of the Obligations,  when due, whether upon demand or otherwise,  and, solely in
the case of interest, such failure continues for three (3) Business Days or more
after the due date thereof;

         (b) any  representation  or  warranty  made or deemed  made by any Loan
Party in this Agreement or by any Loan Party in any of the other Loan Documents,
any Financial Statement,  or any certificate  furnished by any Loan Party or any
of its  Subsidiaries  at any time to the Agent or any Lender  shall  prove to be
untrue in any material  respect as of the date on which made,  deemed  made,  or
furnished;

         (c) (i) any default shall occur in the observance or performance of any
of the  agreements  contained  in ARTICLE 6,  ARTICLE 7 or ARTICLE 9 (other than
SECTIONS 9.3,  9.4,  9.6,  9.7(b),  9.16 or 9.29) of this  Agreement  (PROVIDED,
HOWEVER, to the extent that any covenant in ARTICLE 6 or SECTIONS 7.2(a) through
(f)  specifies  the  number of days  within  which the Loan  Party  must  comply
(including,  without  limitation,  for the  giving of notice or  delivery,  of a
financial  statement,  forecast or report), the Loan Party shall have the number
of days specified in such covenant  within which to comply,  plus in the case of
SECTIONS  7.2(a) through (f) five (5) additional  days after notice thereof from
the Agent or any Lender of the  failure to provide  such  material,  before such
non-compliance  becomes an Event of Default  under this clause (i)), or (ii) any
default shall occur in the  observance or  performance  of any of the agreements
contained  in any of  SECTIONS  9.3,  9.4,  9.6,  9.7(b),  9.16  or 9.29 of this
Agreement and such default  shall  continue  unremedied  for a period of 10 days
after the earlier to occur of (x) notice thereof from the Agent or any Lender to
any Loan Party or (y) any Loan Party's actual  knowledge  thereof,  or (iii) any
default shall occur in the  observance or  performance  of any of the agreements
contained in this Agreement  (other than as specified in clause (a) or (c)(i) or

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<PAGE>


(ii) above),  any other Loan Documents,  or any other agreement  entered into at
any time to which any Loan  Party and the Agent or any Lender are party and such
default shall  continue  unremedied for a period of 30 days after the earlier to
occur of (x)  notice  thereof  from the Agent or any Lender to any Loan Party or
(y) any Loan  Party's  actual  knowledge  thereof,  or (iv) if any  agreement or
document  referred to in clauses (i), (ii) or (iii) above shall terminate (other
than in  accordance  with its  terms or the  terms  hereof  or with the  written
consent of the Agent and the Majority  Lenders) or become void or unenforceable,
without the written  consent of the Agent and the Majority  Lenders;  or (v) any
default shall occur with respect to the Senior Notes, the  Subordinated  Debt or
any other Debt (other than the  Obligations) in an outstanding  principal amount
which exceeds $2,000,000, or under any agreement or instrument under or pursuant
to which any such Debt may have been issued, created,  assumed, or guaranteed by
any Loan Party or any of its  Subsidiaries,  and such default shall continue for
more than the period of grace, if any, therein specified,  if the effect thereof
(with or without  the  giving of notice or further  lapse of time or both) is to
accelerate,  or to  permit  the  holders  of any such  Debt to  accelerate,  the
maturity of any such Debt; or any such Debt shall be declared due and payable or
be  required  to be  prepaid  (other  than  by a  regularly  scheduled  required
prepayment) prior to the stated maturity thereof;

         (d)  any  Loan  Party  or any  of its  Subsidiaries  shall  (i)  file a
voluntary  petition in bankruptcy  or file a voluntary  petition or an answer or
otherwise commence any action or proceeding seeking reorganization,  arrangement
or  readjustment  of its  debts  or for  any  other  relief  under  the  federal
Bankruptcy Code, as amended,  or under any other bankruptcy or insolvency act or
law, state, federal or foreign, now or hereafter existing, or take any corporate
action in  furtherance  of any of the  foregoing  or consent to,  approve of, or
acquiesce  in,  any such  petition,  action  or  proceeding;  (ii)  apply for or
acquiesce in the appointment of a receiver, assignee, liquidator,  sequestrator,
custodian,  monitor, trustee or similar officer for it or for all or any part of
its property;  (iii) make an assignment for the benefit of creditors; or (iv) be
unable generally to pay its debts as they become due;

         (e) an involuntary  petition or proposal shall be filed or an action or
proceeding    otherwise   commenced   seeking    reorganization,    arrangement,
consolidation  or  readjustment  of the  debts of any  Loan  Party or any of its
Subsidiaries  or for any other  relief  under the federal  Bankruptcy  Code,  as
amended, or under any other bankruptcy or insolvency act or law, state,  federal
or foreign,  now or hereafter  existing and either (i) such petition,  proposal,
action or proceeding shall not have been dismissed within a period of sixty (60)
days after its  commencement  or (ii) an order for relief against any Loan Party
or such Subsidiary shall have been entered in such proceeding;

         (f) a receiver, assignee, liquidator, sequestrator, custodian, monitor,
trustee or similar officer for any Loan Party or any of its  Subsidiaries or for
all or any part of its property  shall be appointed or a warrant of  attachment,
execution or similar process shall be issued against any part of the property of
any Loan Party or any of its Subsidiaries;

         (g) except as  permitted  in SECTION  9.9, any Loan Party or any of its
Subsidiaries  shall file a certificate of dissolution under applicable state law
or shall  be  liquidated,  dissolved  or  wound-up  or  shall  commence  or have
commenced  against it any action or proceeding  for  dissolution,  winding-up or
liquidation, or shall take any corporate action in furtherance thereof;

         (h) all or any  material  part of the property of any Loan Party or any
of its Subsidiaries shall be nationalized,  expropriated or condemned, seized or
otherwise  appropriated,  or custody or control of such  property or of any Loan
Party or such Subsidiary shall be assumed by any  Governmental  Authority or any
court of competent  jurisdiction at the instance of any Governmental


                                       77
<PAGE>

Authority, except where contested in good faith by proper proceedings diligently
pursued where a stay of enforcement is in effect;

         (i) any guaranty of the  Obligations  shall be  terminated,  revoked or
declared void or invalid;

         (j)  one  or  more  judgments  or  orders  for  the  payment  of  money
aggregating in excess of $2,000,000, not payable by insurance, shall be rendered
in any one Fiscal Year against the Loan Parties and their  Subsidiaries taken as
a whole;

         (k) any  loss,  theft,  damage or  destruction  of any item or items of
Collateral  or other  property of any Loan Party or any  Subsidiary of it occurs
which  materially  and  adversely  affects the  property,  business,  operation,
prospects,  or condition of the Borrower or any of its  Subsidiaries  and is not
adequately covered by insurance;

         (l) there occurs a Material Adverse Effect;

         (m) there is filed  against  any Loan Party or any of its  Subsidiaries
any civil or  criminal  action,  suit or  proceeding  under any federal or state
racketeering  statute (including,  without limitation,  the Racketeer Influenced
and Corrupt  Organization Act of 1970), which action,  suit or proceeding (1) is
not dismissed  within one hundred twenty (120) days, and (2) could reasonably be
expected to result in the  confiscation or forfeiture of any material portion of
the Collateral;

         (n) for any  reason  other  than the  failure  of the Agent to take any
action available to it to maintain perfection of the Agent's Liens,  pursuant to
the Loan  Documents,  any Loan Document ceases to be in full force and effect or
any Lien with respect to any material  portion of the Collateral  intended to be
secured thereby ceases to be, or is not, valid, perfected and prior to all other
Liens (other than  Permitted  Liens  described  in clause (a) of the  definition
thereof) or is terminated, revoked or declared void;

         (o) (i) an ERISA Event shall  occur with  respect to a Pension  Plan or
Multi-employer Plan which has resulted or could reasonably be expected to result
in  liability  of the  Borrower  under  Title IV of ERISA to the  Pension  Plan,
Multi-employer  Plan or the PBGC in an aggregate amount in excess of $2,000,000;
(ii) the aggregate amount of Unfunded Pension  Liability among all Pension Plans
at any time exceeds  $2,000,000;  or (iii) the  Borrower or any ERISA  Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment  payment with respect to its withdrawal  liability under Section
4201 of ERISA under a  Multi-employer  Plan in an aggregate  amount in excess of
$2,000,000; or

         (p) there occurs a Change of Control.

   11.2  REMEDIES.

         (a) If a Default or an Event of Default  exists,  the Agent may, in its
discretion,  and shall, at the direction of the Majority Lenders, do one or more
of the  following  at any time or times and in any order,  without  notice to or
demand on the Borrower:  (i) reduce the Maximum Revolver Amount,  or the advance
rates against Eligible Accounts and/or Eligible  Inventory used in computing the
Availability,  or reduce one or more of the other elements used in computing the
Availability; (ii) restrict the amount of or refuse to make Revolving Loans; and
(iii)  restrict or refuse to arrange for or provide  Letters of Credit or Credit
Support. If an Event of Default exists, the Agent

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shall,  at the  direction  of the  Majority  Lenders,  do  one  or  more  of the
following,  in addition to the actions described in the preceding  sentence,  at
any time or times and in any order, without notice to or demand on the Borrower:
(a)  terminate  the  Commitments  and this  Agreement;  (b)  declare  any or all
Obligations to be immediately due and payable; PROVIDED,  HOWEVER, that upon the
occurrence of any Event of Default  described in SECTIONS 11.1(e),  11.1(g),  or
11.1(h),  the Commitments  shall  automatically  and immediately  expire and all
Obligations  shall  automatically  become  immediately  due and payable  without
notice or demand of any kind; and (c) pursue its other rights and remedies under
the Loan Documents  (including  with respect to any and all Collateral  provided
hereunder or thereunder) and applicable law.

         (b) If an Event of Default  has  occurred  and is  continuing:  (i) the
Agent shall have for the benefit of the Lenders, in addition to all other rights
of the Agent and the Lenders,  the rights and remedies of a secured  party under
the UCC; (ii) the Agent may, at any time,  take possession of the Collateral and
keep it on any Loan Party's premises,  at no cost to the Agent or any Lender, or
remove any part of it to such other place or places as the Agent may desire,  or
any Loan Party shall, upon the Agent's demand, at the Borrower's cost,  assemble
the  Collateral  and  make it  available  to the  Agent  at a  place  reasonably
convenient to the Agent; and (iii) the Agent may sell and deliver any Collateral
at public or private sales,  for cash, upon credit or otherwise,  at such prices
and upon such terms as the Agent deems advisable,  in its sole  discretion,  and
may,  if the Agent  deems it  reasonable,  postpone  or adjourn  any sale of the
Collateral by an announcement at the time and place of sale or of such postponed
or  adjourned  sale  without  giving a new  notice of sale.  Without  in any way
requiring  notice to be given in the  following  manner,  each Loan Party agrees
that any  notice  by the Agent of sale,  disposition  or other  intended  action
hereunder or in connection  herewith,  whether required by the UCC or otherwise,
shall constitute  reasonable  notice to such Loan Party if such notice is mailed
by registered or certified mail, return receipt requested,  postage prepaid,  or
is delivered  personally against receipt,  at least five (5) Business Days prior
to such action to such Loan Party's address  specified in or pursuant to SECTION
15.8. If any  Collateral is sold on terms other than payment in full at the time
of sale, no credit shall be given against the Obligations until the Agent or the
Lenders receive payment (including partial payments),  and if the buyer defaults
in payment,  the Agent may resell the Collateral  without  further notice to any
Loan  Party.  In the  event  the Agent  seeks to take  possession  of all or any
portion of the  Collateral  by  judicial  process,  each Loan Party  irrevocably
waives:  (a) the posting of any bond,  surety or security  with respect  thereto
which might  otherwise be required;  (b) any demand for possession  prior to the
commencement  of any suit or  action  to  recover  the  Collateral;  and (c) any
requirement  that the Agent retain  possession and not dispose of any Collateral
until after trial or final  judgment.  Each Loan Party agrees that the Agent has
no obligation to preserve rights to the Collateral or marshal any Collateral for
the benefit of any Person.  The Agent is hereby granted a license or other right
to use,  exercisable only after the occurrence of, and during the continuance of
a Default or an Event of Default,  without  charge,  each Loan  Party's  labels,
patents,   copyrights,   name,  trade  secrets,  trade  names,  trademarks,  and
advertising  matter,  or any similar property or other  Proprietary  Rights,  in
completing  production of, advertising or selling any Collateral,  and each Loan
Party's  rights under all licenses and all franchise  agreements  shall inure to
the Agent's  benefit  for such  purpose.  The  proceeds of sale shall be applied
first  to all  expenses  of sale,  including  attorneys'  fees,  and then to the
Obligations in whatever order the Agent elects. The Agent will return any excess
to the Borrower and the Borrower shall remain liable for any deficiency.

         (c) If an Event of Default  occurs,  each Loan Party hereby  waives all
rights to notice and hearing  prior to the  exercise by the Agent of the Agent's
rights to  repossess  the  Collateral  without  judicial  process or to replevy,
attach or levy upon the Collateral without notice or hearing.


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                                   ARTICLE 12
                              TERM AND TERMINATION

   12.1  TERM AND  TERMINATION.  The  term of this  Agreement  shall  end on the
Stated  Termination Date. The Agent upon direction from the Majority Lenders may
terminate  this  Agreement  without  notice upon the  occurrence  of an Event of
Default. Upon the effective date of termination of this Agreement for any reason
whatsoever,   all  Obligations  (including,   without  limitation,   all  unpaid
principal,  accrued  interest and any early  termination  or prepayment  fees or
penalties)  shall  become  immediately  due and payable and the  Borrower  shall
immediately  arrange for the cancellation of Letters of Credit then outstanding.
Notwithstanding  the  termination of this  Agreement,  until all Obligations are
indefeasibly  paid and  performed in full in cash,  each Loan Party shall remain
bound by the terms of this  Agreement  and shall not be  relieved  of any of its
Obligations  hereunder,  and the Agent and the  Lenders  shall  retain all their
rights and remedies hereunder (including,  without limitation, the Agent's Liens
in  and  all  rights  and  remedies  with  respect  to  all  then  existing  and
after-arising  Collateral).  Without  limiting the  foregoing  or any  provision
hereof that by its terms survives termination of this Agreement,  the provisions
of  ARTICLE  5 and  SECTIONS  14.7,  15.7,  15.11 and 15.12  shall  survive  the
termination of this Agreement and the release of any of the Agent's Liens in any
of the Collateral.

                                   ARTICLE 13
           AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS

   13.1  NO WAIVERS CUMULATIVE  REMEDIES.  No failure by the Agent or any Lender
to exercise any right,  remedy, or option under this Agreement or any present or
future supplement  thereto,  or in any other agreement between or among any Loan
Party and the Agent  and/or any  Lender,  or delay by the Agent or any Lender in
exercising the same, will operate as a waiver thereof. No waiver by the Agent or
any  Lender  will be  effective  unless it is in  writing,  and then only to the
extent  specifically  stated.  No  waiver  by the  Agent or the  Lenders  on any
occasion  shall  affect  or  diminish  the  Agent's  and  each  Lender's  rights
thereafter to require  strict  performance by any Loan Party of any provision of
this  Agreement.  The Agent's and each Lender's rights under this Agreement will
be cumulative  and not exclusive of any other right or remedy which the Agent or
any Lender may have.

   13.2  AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of this
Agreement  or any other  Loan  Document,  and no  consent  with  respect  to any
departure by any Loan Party therefrom,  shall be effective unless the same shall
be in writing and signed by the Majority Lenders (or by the Agent at the written
request of the Majority Lenders) and such Loan Party and then any such waiver or
consent  shall be effective  only in the specific  instance and for the specific
purpose for which given; PROVIDED,  HOWEVER, that no such waiver,  amendment, or
consent shall,  unless in writing and signed by all the Lenders and the Borrower
and acknowledged by the Agent, do any of the following:

         (a) increase or extend the Commitment of any Lender;

         (b)  postpone  or delay any date fixed by this  Agreement  or any other
Loan Document for any payment of principal,  interest, fees or other amounts due
to the Lenders (or any of them) hereunder or under any other Loan Document;


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         (c) reduce the principal of, or the rate of interest  specified  herein
on any Loan, or any fees or other amounts  payable  hereunder or under any other
Loan Document;

         (d) change the percentage of the Commitments or of the aggregate unpaid
principal  amount of the Loans which is required  for the Lenders or any of them
to take any action hereunder;

         (e)  increase any of the  percentages  set forth in the  definition  of
Availability;

         (f) amend this Section or any provision of the Agreement  providing for
consent or other action by all Lenders;

         (g)  release  Collateral  other than as  permitted  by  SECTION  14.12;

         (h) change the definitions of "Majority Lenders" or "Required Lenders";

         (i) increase the Maximum Revolver Amount,  the Maximum  Inventory Loan,
and Unused Letter of Credit Subfacility.

and, PROVIDED  FURTHER,  that no amendment,  waiver or consent shall,  unless in
writing and signed by the Agent,  affect the rights or duties of the Agent under
this Agreement or any other Loan Document.

   13.3  ASSIGNMENTS; PARTICIPATIONS.

         (a) Any Lender may, with the written  consent of the Agent,  assign and
delegate to one or more assignees (provided that no written consent of the Agent
shall be required in connection  with any  assignment and delegation by a Lender
to an Affiliate of such Lender) (each an "Assignee") all, or any ratable part of
all, of the Loans,  the Commitments and the other rights and obligations of such
Lender  hereunder,  in a minimum  amount of  $10,000,000  or if less the  entire
amount  of  such  Lender's  Commitment  or as the  Agent  and the  Borrower  may
otherwise agree; PROVIDED, HOWEVER, that the Borrower and the Agent may continue
to deal solely and directly with such Lender in connection  with the interest so
assigned to an Assignee  until (i) written notice of such  assignment,  together
with payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by such Lender and
the  Assignee;  (ii) such Lender and its  Assignee  shall have  delivered to the
Borrower and the Agent a fully executed and completed  Assignment and Acceptance
in the form of EXHIBIT G ("Assignment and  Acceptance");  and (iii) the assignor
Lender or  Assignee  has paid to the  Agent a  processing  fee in the  amount of
$3,000.

         (b) From and after the date that the Agent notifies the assignor Lender
that it has received an executed  Assignment  and  Acceptance and payment of the
above-referenced  processing fee, (i) the Assignee  thereunder  shall be a party
hereto  and,  to the extent  that  rights and  obligations,  including,  but not
limited  to,  the  obligation  to  participate  in  Letters of Credit and Credit
Support have been  assigned to it pursuant to such  Assignment  and  Acceptance,
shall have the rights and obligations of a Lender under the Loan Documents,  and
(ii) the  assignor  Lender  shall,  to the extent  that  rights and  obligations
hereunder and under the other Loan  Documents  have been assigned by it pursuant
to such  Assignment and  Acceptance,  relinquish its rights and be released from
its  obligations  under this  Agreement  (and in the case of an  Assignment  and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and  obligations  under this  Agreement,  such Lender  shall cease to be a party
hereto).


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         (c) By executing  and  delivering  an Assignment  and  Acceptance,  the
assigning  Lender  thereunder and the Assignee  thereunder  confirm to and agree
with each  other and the other  parties  hereto as  follows:  (1) other  than as
provided in such  Assignment  and  Acceptance,  such  assigning  Lender makes no
representation  or warranty  and assumes no  responsibility  with respect to any
statements,  warranties or  representations  made in or in connection  with this
Agreement or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency  or value of this  Agreement  or any other Loan  Document  furnished
pursuant hereto;  (2) such assigning Lender makes no  representation or warranty
and assumes no  responsibility  with respect to the  financial  condition of any
Loan  Party or the  performance  or  observance  by any Loan Party of any of its
obligations under this Agreement or any other Loan Document  furnished  pursuant
hereto;  (3)  such  Assignee  confirms  that  it has  received  a copy  of  this
Agreement,  together with such other  documents and information as it has deemed
appropriate  to make its own credit  analysis  and  decision  to enter into such
Assignment and  Acceptance;  (4) such Assignee will,  independently  and without
reliance upon the Agent, such assigning Lender or any other Lender, and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own credit  decisions in taking or not taking  action under
this Agreement; (5) such Assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise  such powers under this  Agreement
as are delegated to the Agent by the terms hereof,  together with such powers as
are reasonably  incidental  thereto;  and (6) such Assignee  agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.

         (d) Immediately upon each Assignee's  making its processing fee payment
under  the  Assignment  and  Acceptance,  this  Agreement  shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of  the  Assignee  and  the  resulting  adjustment  of the  Commitments  arising
therefrom.   The  Commitment  allocated  to  each  Assignee  shall  reduce  such
Commitments of the assigning Lender pro tanto.

         (e) Any  Lender may at any time sell to one or more  commercial  banks,
financial  institutions,  or other  Persons not  Affiliates  of the  Borrower (a
"Participant")  participating  interests in any Loans,  the  Commitment  of that
Lender  and the  other  interests  of that  Lender  (the  "originating  Lender")
hereunder and under the other Loan Documents;  PROVIDED,  HOWEVER,  that (i) the
originating  Lender's  obligations  under this Agreement shall remain unchanged,
(ii) the originating  Lender shall remain solely responsible for the performance
of such  obligations,  (iii) Loan  Parties and the Agent shall  continue to deal
solely  and  directly  with  the  originating  Lender  in  connection  with  the
originating  Lender's rights and obligations  under this Agreement and the other
Loan  Documents,  and (iv) no Lender shall  transfer or grant any  participating
interest under which the  Participant has rights to approve any amendment to, or
any  consent  or waiver  with  respect  to,  this  Agreement  or any other  Loan
Document,  and all  amounts  payable  by the  Borrower  or any other  Loan Party
hereunder shall be determined as if such Lender had not sold such participation;
except that, if amounts  outstanding under this Agreement are due and unpaid, or
shall  have  been  declared  or  shall  have  become  due and  payable  upon the
occurrence of an Event of Default, each Participant that has notified the Parent
Guarantor of its  participation  shall be deemed to have the right of set-off in
respect of its  participating  interest in amounts owing under this Agreement to
the same  extent  and  subject  to the same  limitation  as if the amount of its
participating  interest  were  owing  directly  to it  as a  Lender  under  this
Agreement.

         (f) Notwithstanding  any other provision in this Agreement,  any Lender
may at any time create a security interest in, or pledge,  all or any portion of
its rights under and interest in this Agreement in favor of any Federal  Reserve
Bank in accordance with Regulation A of the FRB or

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U.S.  Treasury  Regulation 31 CFR SS.203.14,  and such Federal  Reserve Bank may
enforce  such  pledge  or  security  interest  in  any  manner  permitted  under
applicable law.

         (g) No  assignment  or  participation  described  in this  SECTION 13.3
shall, on the date of such assignment or participation,  result in an Obligation
payable by the Borrower  under  SECTION 5.1 OR 5.3 in an amount in excess of the
amount that would otherwise have been payable on such date if such assignment or
participation had not occurred.

                                   ARTICLE 14
                                    THE AGENT

   14.1  APPOINTMENT  AND  AUTHORIZATION.  Each  Lender  hereby  designates  and
appoints  Bank of  America  National  Trust  and  Savings  Association,  and its
successors in the capacity as agent,  as its Agent under this  Agreement and the
other Loan Documents and each Lender hereby irrevocably  authorizes the Agent to
take such action on its behalf under the  provisions of this  Agreement and each
other Loan  Document and to exercise  such powers and perform such duties as are
expressly  delegated  to it by the terms of this  Agreement  or any  other  Loan
Document,  together with such powers as are reasonably  incidental thereto.  The
Agent agrees to act as such on the express conditions  contained in this ARTICLE
14. The  provisions  of this  ARTICLE 14 are solely for the benefit of the Agent
and the  Lenders  and no Loan  Party  shall  have any  rights  as a third  party
beneficiary  of any of the  provisions  contained  herein.  Notwithstanding  any
provision to the contrary contained  elsewhere in this Agreement or in any other
Loan Document,  the Agent shall not have any duties or responsibilities,  except
those expressly set forth herein,  nor shall the Agent have or be deemed to have
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities,  duties,  obligations or  liabilities  shall be read into this
Agreement  or any other Loan  Document  or  otherwise  exist  against the Agent.
Without limiting the generality of the foregoing  sentence,  the use of the term
"agent" in this Agreement with reference to the Agent is not intended to connote
any  fiduciary or other  implied (or express)  obligations  arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market  custom,  and is  intended  to create or reflect  only an  administrative
relationship  between  independent  contracting  parties.  Except  as  expressly
otherwise provided in this Agreement,  the Agent shall have and may use its sole
discretion  with  respect  to  exercising  or  refraining  from  exercising  any
discretionary  rights or taking or refraining  from taking any actions which the
Agent is expressly entitled to take or assert under this Agreement and the other
Loan Documents,  including,  without  limitation,  (a) the  determination of the
applicability of  ineligibility  criteria with respect to the calculation of the
Availability,  (b) the making of Agent Advances pursuant to SECTION 2.2(i),  and
(c) the exercise of remedies  pursuant to SECTION 11.2,  and any action so taken
or not taken shall be deemed consented to by the Lenders.

   14.2  DELEGATION  OF DUTIES.  The Agent may execute  any of its duties  under
this  Agreement or any other Loan  Document by or through  agents,  employees or
attorneys-in-fact  and shall be  entitled  to advice of counsel  concerning  all
matters  pertaining to such duties.  The Agent shall not be responsible  for the
negligence  or misconduct  of any agent or  attorney-in-fact  that it selects as
long as such selection was made without gross negligence or willful misconduct.

   14.3  LIABILITY  OF AGENT.  None of the  Agent-Related  Persons  shall (i) be
liable  for any  action  taken or omitted to be taken by any of them under or in
connection  with this  Agreement or any other Loan Document or the  transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be  responsible  in any manner to any of the  Lenders  for any  recital,
statement,  representation  or warranty made by Loan Party or any  Subsidiary or
Affiliate of any Loan Party, or any officer thereof, contained in this Agreement
or in any other Loan Document, or in any


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certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in  connection  with,  this  Agreement  or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document,  or for any failure
of any  Loan  Party or any  other  party to any Loan  Document  to  perform  its
obligations hereunder or thereunder.  No Agent-Related Person shall be under any
obligation  to any Lender to  ascertain  or to inquire as to the  observance  or
performance  of any of the  agreements  contained  in, or  conditions  of,  this
Agreement or any other Loan  Document,  or to inspect the  properties,  books or
records of any Loan Party or any of a Loan Party's Subsidiaries or Affiliates.

   14.4  RELIANCE BY AGENT.

         (a) The Agent shall be entitled to rely,  and shall be fully  protected
in  relying,  upon  any  writing,  resolution,   notice,  consent,  certificate,
affidavit, letter, telegram, facsimile, telex or telephone message, statement or
other document or  conversation  believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons,  and upon advice
and  statements  of  legal  counsel  (including  counsel  to  any  Loan  Party),
independent accountants and other experts selected by the Agent. The Agent shall
be fully  justified  in  failing  or  refusing  to take any  action  under  this
Agreement or any other Loan  Document  unless it shall first receive such advice
or concurrence  of the Majority  Lenders as it deems  appropriate  and, if it so
requests,  it shall  first be  indemnified  to its  satisfaction  by the Lenders
against any and all  liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance  with a request or consent of the Majority
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.

         (b)  For  purposes  of  determining   compliance  with  the  conditions
specified in SECTION 10.1, each Lender that has executed this Agreement shall be
deemed to have consented to,  approved or accepted or to be satisfied with, each
document or other  matter  either sent by the Agent to such Lender for  consent,
approval,  acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Lender.

   14.5  NOTICE OF DEFAULT.  The Agent shall not be deemed to have  knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of  principal,  interest and fees required to be paid
to the Agent for the  account  of the  Lenders,  unless  the  Agent  shall  have
received  written  notice  from a  Lender  or the  Borrower  referring  to  this
Agreement,  describing  such  Default or Event of Default and stating  that such
notice is a "notice  of  default."  The Agent  will  notify  the  Lenders of its
receipt of any such  notice.  The Agent shall take such  action with  respect to
such Default or Event of Default as may be requested by the Majority  Lenders in
accordance with SECTION 11; PROVIDED,  HOWEVER,  that unless and until the Agent
has received  any such  request,  the Agent may (but shall not be obligated  to)
take such  action,  or refrain  from taking such  action,  with  respect to such
Default or Event of Default as it shall deem advisable.

   14.6  CREDIT   DECISION.   Each   Lender   acknowledges   that  none  of  the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter  taken,  including any review of the affairs of any
Loan Party and its Affiliates,  shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made  its own  appraisal  of and  investigation  into the  business,  prospects,
operations,  property, financial and other condition and creditworthiness of any
Loan Party and its Affiliates,  and all applicable bank regulatory laws relating


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to the transactions contemplated hereby, and made its own decision to enter into
this  Agreement  and to  extend  credit  to any Loan  Party.  Each  Lender  also
represents  that  it  will,   independently   and  without   reliance  upon  any
Agent-Related  Person and based on such  documents and  information  as it shall
deem  appropriate  at the  time,  continue  to  make  its own  credit  analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents,  and to make such investigations as it deems necessary
to inform itself as to the business, prospects,  operations, property, financial
and other condition and  creditworthiness of any Loan Party. Except for notices,
reports and other  documents  expressly  herein  required to be furnished to the
Lenders by the Agent,  the Agent  shall not have any duty or  responsibility  to
provide any Lender with any credit or other information concerning the business,
prospects,    operations,   property,   financial   and   other   condition   or
creditworthiness  of any Loan Party which may come into the possession of any of
the Agent-Related Persons.

   14.7  INDEMNIFICATION.  Whether or not the transactions  contemplated  hereby
are  consummated,  the Lenders  shall  indemnify  upon demand the  Agent-Related
Persons  (to the  extent  not  reimbursed  by or on behalf of the  Borrower  and
without  limiting the  obligation of the Borrower to do so), pro rata,  from and
against any and all  Indemnified  Liabilities as such term is defined in SECTION
15.11; PROVIDED,  HOWEVER, that no Lender shall be liable for the payment to the
Agent-Related  Persons of any portion of such Indemnified  Liabilities resulting
solely  from such  Person's  gross  negligence  or willful  misconduct.  Without
limitation of the foregoing,  each Lender shall  reimburse the Agent upon demand
for its ratable share of any costs or out-of-pocket expenses (including Attorney
Costs)  incurred by the Agent in  connection  with the  preparation,  execution,
delivery,  administration,   modification,  amendment  or  enforcement  (whether
through  negotiations,  legal  proceedings  or otherwise) of, or legal advice in
respect of rights or  responsibilities  under,  this  Agreement,  any other Loan
Document,  or any document  contemplated by or referred to herein, to the extent
that the  Agent is not  reimbursed  for such  expenses  by or on  behalf  of the
Borrower.  The  undertaking  in this  Section  shall  survive the payment of all
Obligations hereunder and the resignation or replacement of the Agent.

   14.8  AGENT IN INDIVIDUAL  CAPACITY.  Bank of America and its  Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking,  trust,
financial  advisory,  underwriting or other business with any Loan Party and its
Subsidiaries  and  Affiliates  as  though  Bank of  America  were not the  Agent
hereunder  and  without  notice  to or  consent  of  the  Lenders.  The  Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive  information  regarding any Loan Party or its Affiliates  (including
information that may be subject to  confidentiality  obligations in favor of any
Loan Party or such  Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans,  Bank
of America  shall have the same rights and powers  under this  Agreement  as any
other Lender and may exercise the same as though it were not the Agent,  and the
terms "Lender" and "Lenders" include Bank of America in its individual capacity.

   14.9  SUCCESSOR  AGENT. The Agent may resign as Agent upon 30 days' notice to
the  Lenders  and the  Borrower.  In the event Bank of America  sells all of its
Commitments and Revolving Loans as part of a sale, transfer or other disposition
by Bank of America of substantially  all of its loan portfolio,  Bank of America
shall  resign  as Agent  and such  purchaser  or  transferee  shall  become  the
successor Agent hereunder.  In addition, Bank of America may be merged into (and
transfer its agency thereby to) or transfer its agency hereunder to an Affiliate
without the consent of any Person.  If the Agent resigns  under this  Agreement,
except as provided in the preceding two  sentences,  the Majority  Lenders shall
appoint  from  among  the  Lenders a  successor  agent  for the  Lenders.  If no


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successor  agent is appointed  prior to the effective date of the resignation of
the Agent,  the Agent may  appoint,  after  consulting  with the Lenders and the
Borrower,  a successor agent from among the Lenders.  Upon the acceptance of its
appointment as successor agent hereunder,  such successor agent shall succeed to
all the rights,  powers and duties of the  retiring  Agent and the term  "Agent"
shall mean such successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be  terminated.  After any  retiring  Agent's  resignation
hereunder as Agent, the provisions of this SECTION 14 shall inure to its benefit
as to any  actions  taken or omitted to be taken by it while it was Agent  under
this Agreement.  If no successor agent has accepted  appointment as Agent by the
date which is 30 days following a retiring  Agent's notice of  resignation,  the
retiring Agent's  resignation shall nevertheless  thereupon become effective and
the Lenders  shall perform all of the duties of the Agent  hereunder  until such
time, if any, as the Majority  Lenders appoint a successor agent as provided for
above.

   14.10 WITHHOLDING TAX.

         (a) If any  Lender is a  "foreign  corporation,  partnership  or trust"
within the  meaning of the Code and such  Lender  claims  exemption  from,  or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Lender agrees with and in favor of the Agent, to deliver to the Agent:

                  (i) if such Lender  claims an exemption  from,  or a reduction
         of,  withholding  tax  under  a  United  States  tax  treaty,  properly
         completed  IRS Forms 1001 and W-8 before the payment of any interest in
         the first  calendar year and before the payment of any interest in each
         third succeeding  calendar year during which interest may be paid under
         this Agreement;

                  (ii) if such  Lender  claims  that  interest  paid  under this
         Agreement is exempt from United  States  withholding  tax because it is
         effectively  connected  with a United  States trade or business of such
         Lender,  two properly  completed  and executed  copies of IRS Form 4224
         before the payment of any interest is due in the first  taxable year of
         such Lender and in each  succeeding  taxable year of such Lender during
         which interest may be paid under this Agreement, and IRS Form W-9; and

                  (iii) such other  form or forms as may be  required  under the
         Code or other laws of the United  States as a  condition  to  exemption
         from, or reduction of, United States withholding tax.

Such Lender agrees to promptly  notify the Agent of any change in  circumstances
which would modify or render invalid any claimed exemption or reduction.

         (b) If any Lender claims  exemption from, or reduction of,  withholding
tax under a United  States tax treaty by providing IRS Form 1001 and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Borrower to such Lender, such Lender agrees to notify the
Agent of the percentage  amount in which it is no longer the beneficial owner of
Obligations  of the  Borrower to such Lender.  To the extent of such  percentage
amount, the Agent will treat such Lender's IRS Form 1001 as no longer valid.

         (c) If any Lender claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent sells,  assigns,  grants a  participation
in, or otherwise  transfers  all or part of the  Obligations  of the Borrower to
such Lender,  such Lender agrees to undertake sole

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<PAGE>

responsibility  for complying with the withholding tax  requirements  imposed by
Sections 1441 and 1442 of the Code.

         (d) If  any  Lender  is  entitled  to a  reduction  in  the  applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction.  If the forms or other documentation  required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any  interest  payment  to  such  Lender  not  providing  such  forms  or  other
documentation an amount equivalent to the applicable withholding tax.

         (e) If the IRS or any other Governmental Authority of the United States
or other  jurisdiction  asserts a claim that the Agent did not properly withhold
tax  from  amounts  paid  to or for  the  account  of any  Lender  (because  the
appropriate form was not delivered,  was not properly executed,  or because such
Lender failed to notify the Agent of a change in  circumstances  which  rendered
the exemption  from, or reduction of,  withholding tax  ineffective,  or for any
other reason) such Lender shall  indemnify the Agent fully for all amounts paid,
directly or indirectly,  by the Agent as tax or otherwise,  including  penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this  Section,  together  with all costs and expenses
(including  Attorney Costs). The obligation of the Lenders under this subsection
shall survive the payment of all  Obligations and the resignation or replacement
of the Agent.

         Each such  Lender  not so  incorporated  under  the laws of the  United
States of America or a state  thereof  agrees to deliver to the Borrower and the
Agent  two  copies  of Form  1001 or 4224  and  Form  W-8 or W-9,  or  successor
applicable  forms or other  manner of  certification,  as the case may be, on or
before  the date that any such form  expires or  becomes  obsolete  or after the
occurrence  of any event  requiring a change in the most recent form  previously
delivered by it to the Borrower or the Agent,  and such  extensions  or renewals
thereof as may  reasonably  be  requested by the Borrower or the Agent unless in
any such case an event  (including any change in treaty,  law or regulation) has
occurred  prior to the  date on  which  any such  delivery  would  otherwise  be
required which renders all such forms  inapplicable  or which would prevent such
Lender from duly  completing and delivering any such form with respect to it and
such Lender so advises the Borrower and the Agent.

   14.11 [INTENTIONALLY OMITTED]

   14.12 COLLATERAL MATTERS.

         (a) The Lenders hereby  irrevocably  authorize the Agent, at its option
and in its sole discretion, to release (and upon Borrower's request, Agent shall
so release) any Agent's Lien upon any Collateral (i) upon the termination of the
Commitments and this Agreement and payment and  satisfaction in full by Borrower
of all Loans and  reimbursement  obligations in respect of Letters of Credit and
Credit  Support,  and the  termination  of all  outstanding  Letters  of  Credit
(whether or not any of such obligations are due) and all other Obligations; (ii)
constituting property being sold or disposed of if the Borrower certifies to the
Agent that the sale or disposition  is made in compliance  with SECTION 9.9 (and
the  Agent  may rely  conclusively  on any  such  certificate,  without  further
inquiry); (iii) constituting property in which a Loan Party owned no interest at
the time the Lien was granted or at any time  thereafter;  or (iv)  constituting
property  leased  to a Loan  Party  under  a lease  which  has  expired  or been
terminated in a transaction  permitted under this Agreement.  Except as provided
above,  the Agent will not release any of the  Agent's  Liens  without the prior
written  authorization  of the  Lenders;  provided  that the Agent  may,  in its
discretion,  release the Agent's Liens on Collateral valued in the aggregate not
in excess of  $5,000,000  during any one year period  without


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<PAGE>

the prior written authorization of the Lenders. Upon request by the Agent or the
Borrower at any time, the Lenders will confirm in writing the Agent's  authority
to release  any  Agent's  Liens  upon  particular  types or items of  Collateral
pursuant to this SECTION 14.12.

         (b) Upon receipt by the Agent of any authorization required pursuant to
SECTION  14.12(a)  from the  Lenders of the  Agent's  authority  to release  any
Agent's Liens upon  particular  types or items of Collateral,  and upon at least
five (5) Business Days' prior written  request by the Borrower,  the Agent shall
(and is hereby irrevocably  authorized by the Lenders to) execute such documents
as may be  necessary  to evidence  the  release of the  Agent's  Liens upon such
Collateral;  PROVIDED,  HOWEVER,  that (i) the Agent  shall not be  required  to
execute any such document on terms which, in the Agent's  opinion,  would expose
the Agent to liability or create any obligation or entail any consequence  other
than the  release of such Liens  without  recourse  or  warranty,  and (ii) such
release shall not in any manner  discharge,  affect or impair the Obligations or
any Liens (other than those  expressly  being  released) upon (or obligations of
any  Loan  Party in  respect  of) all  interests  retained  by any  Loan  Party,
including  (without  limitation)  the  proceeds of any sale,  all of which shall
continue to constitute part of the Collateral.

         (c) The Agent shall have no obligation whatsoever to any of the Lenders
to assure that the  Collateral  exists or is owned by any Loan Party or is cared
for, protected or insured or has been encumbered, or that the Agent's Liens have
been  properly or  sufficiently  or lawfully  created,  perfected,  protected or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care,  disclosure or fidelity,  or to
continue  exercising,  any of the  rights,  authorities  and  powers  granted or
available  to  the  Agent  pursuant  to  any of the  Loan  Documents,  it  being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto,  the Agent may act in any manner it may deem appropriate,
in its sole  discretion  given the Agent's own interest in the Collateral in its
capacity  as one of the  Lenders  and that the Agent shall have no other duty or
liability whatsoever to any Lender as to any of the foregoing.

   14.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.

         (a) Each of the Lenders  agrees that it shall not,  without the express
consent of all Lenders, and that it shall, to the extent it is lawfully entitled
to do so, upon the request of all Lenders, set off against the Obligations,  any
amounts  owing by such Lender to the  Borrower or any accounts of any Loan Party
now or hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically  requested to do so by the Agent, take or
cause to be taken any action to  enforce  its rights  under  this  Agreement  or
against any Loan Party, including,  without limitation,  the commencement of any
legal or equitable  proceedings,  to foreclose any Lien on, or otherwise enforce
any security interest in, any of the Collateral.

         (b) If at any time or times any Lender  shall  receive  (i) by payment,
foreclosure,  setoff or  otherwise,  any proceeds of  Collateral or any payments
with respect to the  Obligations of any Loan Party to such Lender arising under,
or relating to, this Agreement or the other Loan Documents,  except for any such
proceeds  or payments  received  by such  Lender from the Agent  pursuant to the
terms of this  Agreement,  or (ii)  payments  from the  Agent in  excess of such
Lender's  ratable portion of all such  distributions  by the Agent,  such Lender
shall  promptly  (1) turn the same  over to the  Agent,  in kind,  and with such
endorsements  as may be required to negotiate the same to the Agent,  or in same
day  funds,  as  applicable,  for  the  account  of all of the  Lenders  and for
application to the Obligations in accordance  with the applicable  provisions of
this  Agreement,  or (2) purchase,  without  recourse or warranty,  an undivided
interest and  participation in the Obligations owed to the other


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<PAGE>


Lenders so that such excess payment  received shall be applied  ratably as among
the Lenders in accordance with their Pro Rata Shares; PROVIDED, HOWEVER, that if
all or  part  of  such  excess  payment  received  by the  purchasing  party  is
thereafter  recovered  from  it,  those  purchases  of  participations  shall be
rescinded in whole or in part, as applicable,  and the applicable portion of the
purchase price paid therefor  shall be returned to such  purchasing  party,  but
without  interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

   14.14 AGENCY FOR PERFECTION. Each Lender hereby appoints each other Lender as
agent for the purpose of  perfecting  the Lenders'  security  interest in assets
which,  in  accordance  with  ARTICLE  9 of the  UCC  can be  perfected  only by
possession.  Should any Lender (other than the Agent)  obtain  possession of any
such Collateral,  such Lender shall notify the Agent thereof, and, promptly upon
the Agent's  request  therefor shall deliver such  Collateral to the Agent or in
accordance with the Agent's instructions.

   14.15 PAYMENTS BY AGENT TO LENDERS.  All  payments to be made by the Agent to
the  Lenders  shall  be made by bank  wire  transfer  or  internal  transfer  of
immediately  available  funds as each party may  designate for itself by written
notice  to the  Agent.  Concurrently  with each such  payment,  the Agent  shall
identify  whether such payment (or any portion  thereof)  represents  principal,
premium or interest on the Revolving Loans or otherwise.

   14.16 CONCERNING THE COLLATERAL AND THE RELATED LOAN  DOCUMENTS.  Each Lender
authorizes and directs the Agent to enter into this Agreement and the other Loan
Documents  relating to the Collateral,  for the ratable benefit of the Agent and
the Lenders.  Each Lender  agrees that any action  taken by the Agent,  Majority
Lenders or Required Lenders, as applicable, in accordance with the terms of this
Agreement  or the other  Loan  Documents  relating  to the  Collateral,  and the
exercise  by the Agent,  the  Majority  Lenders,  or the  Required  Lenders,  as
applicable,  of their  respective  powers set forth therein or herein,  together
with such other powers that are reasonably incidental thereto,  shall be binding
upon all of the Lenders.

   14.17 FIELD AUDIT AND EXAMINATION REPORTS;  DISCLAIMER BY LENDERS. By signing
this Agreement, each Lender:

         (a) is deemed to have  requested  that the Agent  furnish  such Lender,
promptly after it becomes  available,  a copy of each field audit or examination
report (each a "Report" and collectively, "Reports") prepared by the Agent;

         (b) expressly agrees and acknowledges  that neither Bank of America nor
the Agent (i) makes any  representation  or warranty  as to the  accuracy of any
Report, or (ii) shall be liable for any information contained in any Report;

         (c)  expressly  agrees  and  acknowledges  that  the  Reports  are  not
comprehensive  audits or examinations,  that the Agent or other party performing
any audit or examination  will inspect only specific  information  regarding the
Borrower and will rely  significantly  upon the Loan Parties' books and records,
as well as on representations of the Loan Parties' personnel;

         (d)  agrees  to keep all  Reports  confidential  and  strictly  for its
internal  use,  and not to  distribute  except to its  participants,  or use any
Report in any other manner; and


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<PAGE>

         (e)  without  limiting  the  generality  of any  other  indemnification
provision  contained in this  Agreement,  agrees:  (i) to hold the Agent and any
such other Lender  preparing a Report harmless from any action the  indemnifying
Lender may take or conclusion the indemnifying Lender may reach or draw from any
Report in  connection  with any loans or other  credit  accommodations  that the
indemnifying  Lender has made or may make to any Loan Party, or the indemnifying
Lender's  participation in, or the indemnifying  Lender's purchase of, a loan or
loans of the Borrower;  and (ii) to pay and protect,  and indemnify,  defend and
hold the Agent and any such other Lender  preparing a Report  harmless  from and
against, the claims,  actions,  proceedings,  damages, costs, expenses and other
amounts (including, without limitation Attorney Costs) incurred by the Agent and
any such other Lender preparing a Report as the direct or indirect result of any
third  parties  who  might  obtain  all  or  part  of  any  Report  through  the
indemnifying Lender.

   14.18 RELATION AMONG LENDERS.  The Lenders are not partners or  co-venturers,
and no Lender  shall be liable  for the acts or  omissions  of,  or  (except  as
otherwise  set forth  herein in case of the Agent)  authorized  to act for,  any
other Lender.

                                   ARTICLE 15
                                  MISCELLANEOUS

   15.1  CUMULATIVE REMEDIES;  NO PRIOR RECOURSE TO COLLATERAL.  The enumeration
herein of the Agent's and each  Lender's  rights and remedies is not intended to
be exclusive,  and such rights and remedies are in addition to and not by way of
limitation  of any other  rights or remedies  that the Agent and the Lenders may
have under the UCC or other applicable law. The Agent and the Lenders shall have
the right, in their sole discretion,  to determine which rights and remedies are
to be exercised  and in which  order.  The exercise of one right or remedy shall
not preclude the exercise of any others,  all of which shall be cumulative.  The
Agent and the Lenders may, without limitation,  when an Event of Default exists,
proceed  directly  against  the  Borrower or any other Loan Party to collect the
Obligations without any prior recourse to the Collateral. No failure to exercise
and no delay in exercising,  on the part of the Agent or any Lender,  any right,
remedy,  power or privilege  hereunder,  shall operate as a waiver thereof;  nor
shall any single or partial  exercise of any right,  remedy,  power or privilege
hereunder  preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.

   15.2  SEVERABILITY.  The illegality or  unenforceability  of any provision of
this Agreement or any instrument or agreement  required  hereunder  shall not in
any way  affect  or impair  the  legality  or  enforceability  of the  remaining
provisions of this Agreement or any instrument or agreement required hereunder.

   15.3  GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS; JURY TRIAL WAIVER.

         (a) THIS AGREEMENT  SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES  HERETO  DETERMINED  IN  ACCORDANCE  WITH THE  INTERNAL  LAWS (AS
OPPOSED TO THE CONFLICT OF LAWS PROVISIONS  PROVIDED THAT PERFECTION ISSUES WITH
RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT
OF LAW  RULES SET  FORTH IN  ARTICLE  9 OF THE UCC) OF THE  STATE OF  TENNESSEE;
PROVIDED  THAT THE AGENT AND THE LENDERS  SHALL RETAIN ALL RIGHTS  ARISING UNDER
FEDERAL LAW.


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<PAGE>

         (b) TO THE MAXIMUM  EXTENT  PERMITTED BY  APPLICABLE  LAW,  EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION  OR  PROCEEDING  RELATING  TO THIS  AGREEMENT  AND  FOR ANY  COUNTERCLAIM
THEREIN.

         ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO  INCLUDING
BUT NOT  LIMITED  TO  THOSE  ARISING  OUT OF OR  RELATING  TO  THIS  INSTRUMENT,
AGREEMENT  OR DOCUMENT  OR ANY RELATED  INSTRUMENTS,  AGREEMENTS  OR  DOCUMENTS,
INCLUDING  ANY  CLAIM  BASED  ON OR  ARISING  FROM AN  ALLEGED  TORT,  SHALL  BE
DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT
(OR IF NOT  APPLICABLE,  THE  APPLICABLE  STATE LAW),  THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL  DISPUTES OF  J.A.M.S./ENDISPUTE  OR
ANY SUCCESSOR THEREOF ("J.A.M.S."),  AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY,  THE SPECIAL RULES SHALL CONTROL.  JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS  INSTRUMENT,  AGREEMENT  OR  DOCUMENT  MAY BRING AN ACTION,  INCLUDING A
SUMMARY OR EXPEDITED  PROCEEDING,  TO COMPEL  ARBITRATION OF ANY  CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.

                  (i) SPECIAL  RULES.  THE  ARBITRATION  SHALL BE  CONDUCTED  IN
         SHELBY COUNTY,  TENNESSEE AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT
         AN  ARBITRATOR;  IF  J.A.M.S.  IS  UNABLE  OR  LEGALLY  PRECLUDED  FROM
         ADMINISTERING   THE   ARBITRATION,   THEN  THE   AMERICAN   ARBITRATION
         ASSOCIATION  WILL SERVE.  ALL  ARBITRATION  HEARINGS  WILL BE COMMENCED
         WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION;  FURTHER,  THE ARBITRATOR
         SHALL  ONLY,  UPON A  SHOWING  OF CAUSE,  BE  PERMITTED  TO EXTEND  THE
         COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.

                  (ii)  RESERVATION  OF  RIGHTS.  NOTHING  IN  THIS  ARBITRATION
         PROVISION  SHALL  BE  DEEMED  TO (I)  LIMIT  THE  APPLICABILITY  OF ANY
         OTHERWISE  APPLICABLE  STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS
         CONTAINED  IN THIS  INSTRUMENT,  AGREEMENT  OR  DOCUMENT;  OR (II) BE A
         WAIVER BY AGENT OR LENDERS  OF THE  PROTECTION  AFFORDED  TO THEM BY 12
         U.S.C.  SEC.  91 OR ANY  SUBSTANTIALLY  EQUIVALENT  STATE LAW; OR (III)
         LIMIT THE RIGHT OF AGENT OR LENDERS (A) TO EXERCISE  SELF HELP REMEDIES
         SUCH AS (BUT NOT LIMITED TO) SETOFF,  OR (B) TO  FORECLOSE  AGAINST ANY
         REAL OR  PERSONAL  PROPERTY  COLLATERAL,  OR (C) TO OBTAIN FROM A COURT
         PROVISIONAL  OR  ANCILLARY  REMEDIES  SUCH  AS  (BUT  NOT  LIMITED  TO)
         INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER.
         AGENT OR LENDERS MAY  EXERCISE  SUCH SELF HELP RIGHTS,  FORECLOSE  UPON
         SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE,
         DURING OR AFTER THE  PENDENCY  OF ANY  ARBITRATION  PROCEEDING  BROUGHT
         PURSUANT  TO THIS  INSTRUMENT,  AGREEMENT  OR  DOCUMENT.  NEITHER  THIS
         EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN
         ACTION FOR

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<PAGE>

         FORECLOSURE  OR PROVISIONAL  OR ANCILLARY  REMEDIES SHALL  CONSTITUTE A
         WAIVER OF THE  RIGHT OF ANY PARTY,  INCLUDING  THE CLAIMANT IN ANY SUCH
         ACTION,   TO  ARBITRATE  THE   MERITS  OF  THE   CONTROVERSY  OR  CLAIM
         OCCASIONING RESORT TO SUCH REMEDIES.

   15.4  SUBMISSION  TO  JURISDICTION;  WAIVERS.  Subject to SECTION 15.3 above,
each of the parties hereto irrevocably and unconditionally:

         (a)  submits  for  itself  and its  property  in any  legal  action  or
proceeding relating to this Agreement to which it is a party, or for recognition
and enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction  of the  courts of the  State of  Tennessee  and the  courts of the
United  States of  America,  for the  Western  District  of  Tennessee,  Western
Division, and appellate courts from any thereof;

         (b) consents that any such action or proceeding  may be brought in such
courts and waives any objection  that it may now or hereafter  have to the venue
of any such  action  or  proceeding  in any such  court or that  such  action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same,

         (c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by  registered  or certified  mail (or any
substantially  similar form of mail) postage prepaid, to the respective party at
its address set forth in SECTION  15.8 hereof or at such other  address of which
the Agent shall have been notified pursuant thereto;

         (d) agrees that nothing herein shall affect the right to effect service
of process in any other manner  permitted by law or shall limit the right to sue
in any other  jurisdiction;  and waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal action or proceeding
referred  to  in  this  SECTION  15.4  any  special,   exemplary,   punitive  or
consequential damages.

   15.5  SURVIVAL OF  REPRESENTATIONS  AND WARRANTIES.  All of the Loan Parties'
representations  and warranties  contained in this  Agreement  shall survive the
execution, delivery, and acceptance thereof by the parties,  notwithstanding any
investigation by the Agent or the Lenders or their respective agents.

   15.6  OTHER SECURITY AND GUARANTIES. The Agent, may, without notice or demand
and without  affecting  the  Borrower's  or any other Loan  Party's  obligations
hereunder,  from time to time:  (a) take  from any  Person  and hold  collateral
(other  than  the  Collateral)  for  the  payment  of  all or  any  part  of the
Obligations  and  exchange,  enforce  or  release  such  collateral  or any part
thereof;  and (b) accept and hold any  endorsement or guaranty of payment of all
or any part of the  Obligations  and release or substitute  any such endorser or
guarantor,  or any  Person  who has given any Lien in any  other  collateral  as
security  for the  payment of all or any part of the  Obligations,  or any other
Person in any way obligated to pay all or any part of the Obligations.

   15.7  FEES AND  EXPENSES.  The Borrower  agrees to pay to the Agent,  for its
benefit,  on  demand,  all  costs  and  expenses  that  Agent  pays or incurs in
connection  with  the  negotiation,  preparation,   syndication,   consummation,
administration,  enforcement,  and  termination  of this Agreement or any of the
other Loan Documents,  including,  without  limitation:  (a) Attorney Costs; (b)
costs and expenses (including  attorneys' and paralegals' fees and disbursements
which shall include the  allocated  costs of Agent's  in-house  counsel fees and
disbursements) for any amendment,

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<PAGE>


supplement,  waiver,  consent, or subsequent closing in connection with the Loan
Documents and the transactions  contemplated  thereby; (c) costs and expenses of
lien and title searches and title insurance;  (d) taxes,  fees and other charges
for recording the Mortgages,  filing trademark, patent or copyright assignments,
filing  financing  statements and  continuations,  and other actions to perfect,
protect,  and continue the Agent's Liens  (including  costs and expenses paid or
incurred by the Agent in connection  with the  consummation  of Agreement);  (e)
sums paid or  incurred  to pay any  amount or take any  action  required  of the
Borrower or any other Loan Party under the Loan  Documents  that the Borrower or
such Loan Party fails to pay or take; (f) costs of appraisals,  inspections, and
verifications of the Collateral, including, without limitation, travel, lodging,
and meals for inspections of the Collateral and the Borrower's operations by the
Agent and Agent's  representatives  plus the Agent's then  customary  charge for
field  examinations  and audits and the  preparation  of reports  thereof  (such
charge is  currently  $650.00  per day (or  portion  thereof)  for each agent or
employee  of the Agent with  respect to each field  examination  or audit);  (g)
costs and expenses of  forwarding  loan  proceeds,  collecting  checks and other
items of payment,  and  establishing  and maintaining  Payment Accounts and lock
boxes;  (h) costs and expenses of preserving and protecting the Collateral;  and
(i)  costs  and  expenses   (including   attorneys'  and  paralegals'  fees  and
disbursements which shall include the allocated cost of Agent's in-house counsel
fees and  disbursements)  paid or incurred to obtain payment of the Obligations,
enforce the Agent's Liens,  sell or otherwise  realize upon the Collateral,  and
otherwise  enforce  the  provisions  of the Loan  Documents  (including  SECTION
15.11),  or to defend any claims  made or  threatened  against  the Agent or any
Lender arising out of the transactions  contemplated  hereby (including  without
limitation,  preparations for and consultations  concerning any such matters and
including  in  connection   with  any   insolvency,   reorganization   or  other
proceedings). The foregoing shall not be construed to limit any other provisions
of the Loan Documents regarding costs and expenses to be paid by the Borrower or
any other Loan Party.  All of the foregoing  costs and expenses shall be charged
to the Borrower's Loan Account as Revolving Loans as described in SECTION 4.7.

   15.8  NOTICES. Except as otherwise provided herein, all notices,  demands and
requests  that any party is  required or elects to give to any other shall be in
writing, or by a telecommunications device capable of creating a written record,
and any such notice shall become effective (a) upon personal  delivery  thereof,
including,  but not limited to, delivery by overnight mail and courier  service,
(b) four (4) days after it shall have been mailed by United  States mail,  first
class,  certified or  registered,  with postage  prepaid,  or (c) in the case of
notice by such a telecommunications  device, when properly transmitted,  in each
case addressed to the party to be notified as follows:

If to the Agent or to Bank of America:

         Bank of America, N.A.
         6060 Poplar Avenue
         Memphis, TN  38119
         Attention:  Thomas Branyan
         Fax No.:  (901)433-8062

         with copies to:

         Richard Spore, Esq.
         Bass, Berry & Sims PLC
         100 Peabody Place, Suite 950
         Memphis, TN  38103-2625
         Fax No. (888)543-4346


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<PAGE>

If to the Borrower or any other Loan Party:

         c/o Riddell Sports Inc.
         2525 Horizon Lake Drive, Suite One
         Memphis, Tennessee  38133
         Fax No: (901) 387-4356


with a copy to:

         Zukerman Gore & Brandeis, LLP
         900 Third Avenue
         New York, New York 10022
         Attention:  Clifford A. Brandeis, Esq.
         Fax No.: (212) 223-6433

or to such other  address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand,  request,  consent,
approval,  declaration or other communication to the persons designated above to
receive  copies shall not  adversely  affect the  effectiveness  of such notice,
demand, request, consent, approval, declaration or other communication.

   15.9  WAIVER OF NOTICES.  Unless otherwise  expressly  provided herein,  each
Loan Party  waives  presentment,  protest and notice of demand or  dishonor  and
protest as to any instrument, notice of intent to accelerate the Obligations and
notice of acceleration of the Obligations,  as well as any and all other notices
to which it might otherwise be entitled.  No notice to or demand on the Borrower
or any other  Loan  Party  which the Agent or any Lender may elect to give shall
entitle the Borrower or any other Loan Party to any or further  notice or demand
in the same, similar or other circumstances.

   15.10 BINDING EFFECT.  The provisions of this Agreement shall be binding upon
and inure to the  benefit of the  respective  representatives,  successors,  and
assigns of the parties hereto;  PROVIDED,  HOWEVER,  that,  except in connection
with a merger or other combination  permitted by SECTION 9.9 hereof, no interest
herein may be assigned by the  Borrower  or any other Loan Party  without  prior
written  consent of the Agent and each  Lender.  The rights and  benefits of the
Agent and the Lenders  hereunder  shall, if such Persons so agree,  inure to any
party acquiring any interest in the Obligations or any part thereof.

   15.11 INDEMNITY OF THE AGENT AND THE LENDERS BY THE BORROWER.

         (a) The Borrower agrees to defend, indemnify and hold the Agent-Related
Persons,  and  each  Lender  and  each of its  respective  officers,  directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses and disbursements
(including  Attorney  Costs) of any kind or nature  whatsoever  which may at any
time (including at any time following  repayment of the Loans and payment of all
other  Obligations,  the  termination  of this  Agreement  and the  termination,
resignation or replacement of the Agent or replacement of any Lender) be imposed
on,  incurred by or asserted  against any such Person in any way  relating to or
arising out of this  Agreement  or any document  contemplated  by or referred to


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herein, or the transactions  contemplated hereby, or any action taken or omitted
by any such Person under or in connection  with any of the foregoing,  including
with respect to any  investigation,  litigation  or  proceeding  (including  any
Insolvency Proceeding or appellate proceeding) related to or arising out of this
Agreement,  any other  Loan  Document,  or the Loans or the use of the  proceeds
thereof,  whether  or not any  Indemnified  Person is a party  thereto  (all the
foregoing,  collectively,  the "Indemnified  Liabilities");  provided,  that the
Borrower  shall have no  obligation  hereunder  to any  Indemnified  Person with
respect to Indemnified  Liabilities resulting solely from the willful misconduct
or gross negligence of such Indemnified  Person.  The agreements in this Section
shall survive payment of all other Obligations.

         (b) The  Borrower  agrees to  indemnify,  defend and hold  harmless the
Agent and the Lenders from any loss or liability  directly or indirectly arising
out  of  the  use,  generation,   manufacture,   production,  storage,  release,
threatened  release,  discharge,  disposal or presence of a hazardous  substance
relating to the Borrower's  operations,  business or property  unless  resulting
from gross  negligence or willful  misconduct of the Agent.  This indemnity will
apply  whether the  hazardous  substance  is on,  under or about the  Borrower's
property  or  operations  or  property  leased to the  Borrower.  The  indemnity
includes  but is not  limited  to  reasonable  attorneys'  fees  (including  the
reasonable  estimate of the allocated cost of in-house  counsel and staff).  The
indemnity  extends  to the Agent and the  Lenders,  their  parents,  affiliates,
subsidiaries  and  all  of  their  directors,   officers,   employees,   agents,
successors,  attorneys and assigns.  "Hazardous substances" means any substance,
material  or waste  that is or  becomes  designated  or  regulated  as  "toxic,"
"hazardous,"   "pollutant,"  or  "contaminant"  or  a  similar   designation  or
regulation  under any  federal,  state or local law  (whether  under common law,
statute,  regulation or otherwise) or judicial or administrative  interpretation
of such,  including without limitation  petroleum or natural gas. This indemnity
will survive repayment of all other Obligations.

   15.12 LIMITATION  OF LIABILITY.  No claim may be made by any Loan Party,  any
Lender or other  Person  against  the  Agent,  any  Lender,  or the  affiliates,
directors,  officers,  employees,  or  agents  of any of them  for any  special,
indirect,  consequential  or punitive damages in respect of any claim for breach
of contract or any other  theory of  liability  arising out of or related to the
transactions  contemplated by this Agreement or any other Loan Document,  or any
act,  omission or event occurring in connection  therewith,  and each Loan Party
and each Lender  hereby  waive,  release and agree not to sue upon any claim for
such  damages,  whether or not accrued and whether or not known or  suspected to
exist in its favor.

   15.13 FINAL  AGREEMENT.  This  Agreement  and the other  Loan  Documents  are
intended  by the Loan  Parties,  the  Agent  and the  Lenders  to be the  final,
complete, and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements  relating to the subject
matter hereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made,  except by
a written  agreement  signed by the applicable  Loan Party and a duly authorized
officer of each of the Agent and the requisite Lenders.

   15.14 COUNTERPARTS.   This  Agreement  may  be  executed  in  any  number  of
counterparts,  and by the Agent,  each  Lender  and each Loan Party in  separate
counterparts,  each of  which  shall  be an  original,  but all of  which  shall
together constitute one and the same agreement;  signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.


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<PAGE>

   15.15 CAPTIONS.  The captions contained in this Agreement are for convenience
of reference only, are without  substantive  meaning and should not be construed
to modify, enlarge, or restrict any provision.

   15.16 RIGHT OF SETOFF.  In addition to any rights and remedies of the Lenders
provided  by  law,  if an  Event  of  Default  exists  or the  Loans  have  been
accelerated,  each  Lender  is  authorized  at any time  and from  time to time,
without  prior  notice to any Loan Party,  any such notice  being waived by each
Loan Party to the fullest extent  permitted by law, to set off and apply any and
all deposits (general or special,  time or demand,  provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for
the  credit or the  account of any Loan Party  against  any and all  Obligations
owing to such Lender, now or hereafter existing,  irrespective of whether or not
the Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such  Obligations  may be  contingent  or unmatured.  Each
Lender  agrees  promptly  to notify the  Borrower  and the Agent  after any such
set-off and application made by such Lender; PROVIDED, HOWEVER, that the failure
to  give  such  notice  shall  not  affect  the  validity  of such  set-off  and
application.  NOTWITHSTANDING THE FOREGOING,  NO LENDER SHALL EXERCISE ANY RIGHT
OF SET-OFF,  BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT  ACCOUNT OR PROPERTY
OF ANY LOAN PARTY HELD OR  MAINTAINED  BY SUCH LENDER  WITHOUT THE PRIOR WRITTEN
UNANIMOUS CONSENT OF THE LENDERS.

   15.17 BORROWER  JOINT AND  SEVERAL  LIABILITY.  Each  Person  defined  as the
"Borrower"  shall be liable for all amounts  due to the Agent  and/or any Lender
under this Agreement,  regardless of which Borrower  actually  receives Loans or
other extensions of credit hereunder or the amount of such Loans received or the
manner in which the Agent  and/or such Lender  accounts  for such Loans or other
extensions of credit on its books and records.  The Borrower's  Obligations with
respect to Loans made to it, and the Borrower's  Obligations arising as a result
of the joint and several  liability of the Borrower  hereunder,  with respect to
Loans made to the other  Borrower  hereunder,  shall be  separate  and  distinct
obligations,  but all such  Obligations  shall be  primary  obligations  of each
Person defined as the "Borrower."

         The Borrower's Obligations arising as a result of the joint and several
liability of the Borrower hereunder with respect to Loans or other extensions of
credit  made to the  other  Borrower  hereunder  shall,  to the  fullest  extent
permitted  by  law,  be  unconditional  irrespective  of  (i)  the  validity  or
enforceability,  avoidance  or  subordination  of the  Obligations  of the other
Borrower or of any promissory note or other document  evidencing all or any part
of the  Obligations  of the other  Borrower,  (ii) the absence of any attempt to
collect the Obligations  from the other Borrower,  any other  guarantor,  or any
other security therefor, or the absence of any other action to enforce the same,
(iii) the waiver, consent, extension,  forbearance or granting of any indulgence
by the Agent and/or any Lender with respect to any  provision of any  instrument
evidencing the  Obligations of the other Borrower,  or any part thereof,  or any
other agreement now or hereafter executed by the other Borrower and delivered to
the Agent and/or any Lender,  (iv) the failure by the Agent and/or any Lender to
take any steps to perfect and maintain its security  interest in, or to preserve
its rights to, any  security  or  collateral  for the  Obligations  of the other
Borrower,  (v) the  Agent's  and/or any  Lender's  election,  in any  proceeding
instituted under the Bankruptcy  Code, of the application of Section  1111(b)(2)
of the Bankruptcy  Code,  (vi) any borrowing or grant of a security  interest by
the other Borrower, as debtor-in-possession  under Section 364 of the Bankruptcy
Code,  (vii) the  disallowance  of all or any portion of the Agent's  and/or any
Lender's  claim(s) for the repayment of the  Obligations  of the other  Borrower
under  Section 502 of the  Bankruptcy  Code,  or (viii) any other  circumstances
which might constitute a legal or equitable  discharge or defense of a guarantor
or of the other Borrower.  With respect to the Borrower's Obligations arising as
a result of the joint and


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<PAGE>

several  liability  of the  Borrower  hereunder  with  respect to Loans or other
extensions  of  credit  made to  either of the  other  Borrower  hereunder,  the
Borrower waives, until the Obligations shall have been paid in full and the Loan
Agreement  shall  have  been  terminated,  any  right to  enforce  any  right of
subrogation  or any  remedy  which the Agent  and/or  any  Lender now has or may
hereafter have against the Borrower, any endorser or any guarantor of all or any
part of the  Obligations,  and any benefit of, and any right to participate  in,
any  security  or  collateral  given to the Agent  and/or  any  Lender to secure
payment of the  Obligations or any other  liability of the Borrower to the Agent
and/or any Lender.

         Upon any Event of Default,  the Agent may proceed directly and at once,
without notice,  against the Borrower to collect and recover the full amount, or
any  portion of the  Obligations,  without  first  proceeding  against the other
Borrower or any other  Person,  or against any  security or  collateral  for the
Obligations.  The Borrower  consents and agrees that the Agent shall be under no
obligation  to  marshal  any  assets in favor of the  Borrower  or against or in
payment of any or all of the Obligations.

   15.18 CONTRIBUTION AND INDEMNIFICATION AMONG THE BORROWERS.  Each Borrower is
obligated  to repay the  Obligations  as joint and several  obligors  under this
Agreement.  To the extent that any  Borrower  shall,  under this  Agreement as a
joint and several obligor, repay any of the Obligations  constituting Loans made
to  another  Borrower  hereunder  or other  Obligations  incurred  directly  and
primarily by any other Borrower (an "Accommodation  Payment"), then the Borrower
making  such  Accommodation  Payment  shall  be  entitled  to  contribution  and
indemnification  from, and be reimbursed  by, each of the other  Borrowers in an
amount,  for  each  of  such  other  Borrowers,  equal  to a  fraction  of  such
Accommodation  Payment, the numerator of which fraction is such other Borrower's
"Allocable Amount" (as defined below) and the denominator of which is the sum of
the Allocable Amounts of all of the Borrowers.  As of any date of determination,
the "Allocable  Amount" of each Borrower shall be equal to the maximum amount of
liability  for  Accommodation  Payments  which  could be asserted  against  such
Borrower  hereunder without (a) rendering such Borrower  "insolvent"  within the
meaning of Section  101 (31) of the  Bankruptcy  Code,  Section 2 of the Uniform
Fraudulent  Transfer  Act  ("UFTA")  or  Section  2 of  the  Uniform  Fraudulent
Conveyance  Act ("UFCA"),  (ii) leaving such Borrower  with  unreasonably  small
capital or assets,  within the  meaning of Section 548 of the  Bankruptcy  Code,
Section 4 of the UFTA,  or Section 5 of the UFCA, or (iii) leaving such Borrower
unable to pay its debts as they  become due within the meaning of Section 548 of
the  Bankruptcy  Code or Section 4 of the UFTA,  or  Section 5 of the UFCA.  All
rights   and   claims  of   contribution,   indemnification,   subrogation   and
reimbursement under this section shall be subordinate in right of payment to the
prior payment in full of the Obligations.  The provisions of this section shall,
to the extent  expressly  inconsistent  with any provision in any Loan Document,
supersede such inconsistent provision.

   15.19 AGENCY OF THE PARENT  GUARANTOR FOR EACH BORROWER AND OTHER LOAN PARTY.
Each of the Borrowers and each other Loan Party appoints the Parent Guarantor as
its  agent for all  purposes  relevant  to this  Agreement,  including  (without
limitation)  the giving and receipt of notices and execution and delivery of all
documents,   instruments   and   certificates   contemplated   herein   and  all
modifications hereto. Any acknowledgment,  consent, direction,  certification or
other action which might  otherwise be valid or effective only if given or taken
by all of the Borrowers and other Loan Parties or acting singly,  shall be valid
and  effective  if gent or taken  only by the Parent  Guarantor,  whether or not
either of the Borrowers or any other Loan Party joins therein.


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                                   ARTICLE 16
                                    GUARANTEE

   16.1  GUARANTEED  OBLIGATIONS.  By its  execution of this  Agreement,  Parent
Guarantor   ("Guarantor")  hereby,   jointly  and  severally,   irrevocably  and
unconditionally  guarantees  the  payment  and  performance,  in full,  when due
(whether at stated  maturity,  by  acceleration  or  otherwise),  of any and all
Obligations  (including  all amounts  payable with  respect to all  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
charges,  expenses and  disbursements  (including  Attorney  Costs) with respect
thereto,  and all fees, costs expenses and other amounts payable by the Borrower
under this  Agreement  or under any  provision of any other Loan  Document  (the
"Guarantee"). Nothing in this ARTICLE 16 shall, or shall be deemed to, waive any
of the notice or cure periods  contained in ARTICLE 11 hereof and neither  Agent
nor  Lenders  shall be  entitled  to enforce  the  Guarantee  unless an Event of
Default shall have occurred and be continuing;  provided,  neither the foregoing
nor any other  provision of the  Guarantee  shall be construed as requiring as a
condition to enforcement of the Guarantee any notice to a Guarantor.

   16.2  GUARANTEE ABSOLUTE; ALTERATION OF OBLIGATIONS.

         (a) The obligations of each Guarantor  hereunder are those of a primary
obligor,  and not merely a surety,  and are  independent of the  Obligations.  A
separate  action or actions  may be brought  against  the  Borrower or any Other
Guarantor  (each an "Other  Guarantor"),  whether  or not an  action is  brought
against the Borrower, any Other Guarantor or any other obligor in respect of the
Obligations or whether the Borrower, any Other Guarantor or any other obligor in
respect of the Obligations is joined in any such action or actions.  Neither the
Agent's nor any Lender's rights  hereunder shall be exhausted by its exercise of
any of its  rights  or  remedies  or by any  such  action  or by any  number  of
successive  actions unless and until all Obligations  and all other  obligations
hereunder have been paid and fully performed.

         (b) Each Guarantor, jointly and severally,  irrevocably guarantees that
the Obligations will be paid and performed strictly in accordance with the terms
of  this  Agreement,  and  the  other  Loan  Documents  regardless  of any  law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Agent or the Lenders  with  respect  thereto.
The  liability  of each  Guarantor  under this  Guarantee  shall be absolute and
unconditional irrespective of:

                  (i)  any   lack  of   genuineness,   validity,   legality   or
         enforceability of this Agreement,  any other Loan Document or any other
         document, agreement or instrument relating thereto or any assignment or
         transfer of any thereof;

                  (ii) any change in the time, manner or place of payment of, or
         in any other term of  (including  a reduction or an  increase),  in the
         rate of interest  on, or other  payment in respect of the Loans) all or
         any of the Obligations, or any waiver, indulgence, compromise, renewal,
         extension,  amendment,  modification  of, or addition,  supplement,  or
         consent to, or departure from, or any other action or inaction under or
         in respect of, the  Obligations  or this  Agreement,  or any other Loan
         Document  or any  document,  instrument  or  agreement  relating to the
         Obligations or any other instrument or agreement  referred to herein or
         any assignment or transfer of any thereof;

                  (iii) any change, subordination,  impairment or release of all
         or any of the  Obligations or the absence of any attempt to collect the
          Obligations  from the Borrower or any

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         other  Guarantor  or any suspension of any right or remedy of the Agent
         or any Lender   against any Person,  including the Borrower,  any Other
         Guarantor or  other obligor in respect of the Obligations;  and no such
         event shall  in any way affect any of the  obligations of any Guarantor
         hereunder  or give any Guarantor any recourse  against the Agent or any
         Lender;

                  (iv) any failure to perfect, or preserve any rights to, or any
         change, subordination, impairment or release of, all or any part of the
         Collateral or any  furnishing  of any  additional  security  (including
         letters of credit and surety bonds) for any of the Obligations;

                  (v) any  insolvency,  reorganization,  bankruptcy  or  similar
         proceeding    ("Insolvency    Proceedings")   (whether   voluntary   or
         involuntary)  in respect of the  Borrower,  any Other  Guarantor or any
         other  obligor in respect of the  Obligations  is commenced or filed or
         any action is taken with  respect to this  Guarantee  by any trustee or
         receiver, or by any court, in any such proceeding;

                  (vi) any  modification or termination of any  intercreditor or
         subordination agreement pursuant to which the claims of other creditors
         of the Borrower or any Other Guarantor are subordinated to those of the
         Agent or any Lender;

                  (vii) the Agent's or any Lender's election,  in any proceeding
         under the Bankruptcy Code, of the application of Section  1111(b)(2) of
         the Bankruptcy Code;

                  (viii) any  borrowing  or grant of a security  interest by any
         Other Guarantor or the Borrower, or debtor-in-possession  under Section
         364 of the Bankruptcy Code;

                  (ix) any  disallowance of all or any portion of the Agent's or
         any Lender's claim(s) for the repayment of the Obligations of any Other
         Guarantor or the Borrower under Section 502 of the Bankruptcy code; or

                  (x) any other circumstance which might otherwise  constitute a
         defense  available  to,  or a legal  or  equitable  discharge  of,  any
         Guarantor.

         (c) This Guarantee shall continue to be effective or be reinstated,  as
the case may be, if at any time payment of the Obligations, or any part thereof,
is, upon any  Insolvency  Proceeding in respect of the Borrower or any Guarantor
or otherwise  pursuant to applicable law, rescinded or reduced in amount or must
otherwise be restored or returned by the Agent or any Lender, all as though such
payment had not been made.

         (d) If an event  permitting the  acceleration of any of the Obligations
shall at any time have occurred and be continuing and such acceleration shall at
such time be  prevented  by reason of the  pendency  against the Borrower of any
Insolvency  Proceeding,  each  Guarantor  agrees  that,  for  purposes  of  this
Guarantee and its obligations hereunder, the Obligations shall be deemed to have
been  accelerated  and  each  Guarantor  shall  forthwith  pay  the  Obligations
(including interest which, but for the filing of such Insolvency Proceeding with
respect to the Company,  would accrue on such Obligations),  without any further
notice or demand.

   16.3  OBLIGATIONS JOINT AND SEVERAL; RIGHTS NOT EXCLUSIVE. The obligations of
each  Guarantor  hereunder are joint and several.  The rights  provided for this
Guarantee are  cumulative and

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are not exclusive of any other rights,  powers,  privileges or remedies provided
by law or in equity,  or under any other  instrument,  document or agreement now
existing or hereafter arising.

   16.4  WAIVERS. In consideration of this Agreement, the Loan Documents and the
agreements  of the  Agent  and the  Lenders  hereunder,  each  Guarantor  hereby
relinquishes  all rights and remedies  accorded by applicable law to sureties or
guarantors which such Guarantor may have in connection with this Guarantee,  and
agrees  not to  assert  or  take  advantage  of any  such  rights  or  remedies,
including:

         (a) any right to require the Agent or any Lender to proceed against the
Borrower,  the Other  Guarantors  or any other  Person or to proceed  against or
exhaust any  security,  letter of credit or surety bond issued in respect of the
Obligations held by the Agent or to require any Lender at any time to pursue any
other remedy in its power before proceeding against such Guarantor;

         (b) the defense of the statute of limitations  in any action  hereunder
or in any action for the collection of the Obligations  guaranteed  hereunder or
any of the other obligations of Guarantor hereunder;

         (c) any  defense  that may arise by reason of the  release of any Other
Guarantor;

         (d)  acceptance  of  this  Guarantee,  demand,  presentment,   protest,
promptness, diligence and notice of any kind, including notice of the existence,
creation or  incurrence  of any new or  additional  Debt or Obligation or of any
action or  non-action on the part of the Borrower,  the Agent,  any Lender,  any
Other  Guarantor or any endorser or creditor of the Company or any  Guarantor or
on the part of any other Person under this or any other instrument in connection
with any obligation or evidence of indebtedness  held by the Agent or any Lender
as  collateral  or support or in connection  with the  Obligations  or any other
obligations hereby guaranteed;

         (e) all rights and  defenses  arising out of an election of remedies by
the Agent or any  Lender,  even  though that  election  of  remedies,  such as a
non-judicial  foreclosure with respect to security for a guaranteed  obligation,
has  destroyed  or  may  destroy  such  Guarantor's  right  of  subrogation  and
reimbursement against the Borrower, or any Other Guarantor, if any;

         (f) any defense  based upon any  statute or rule of law which  provides
that the  obligation  of a surety must be neither  larger in amount nor in other
respects more burdensome than that of the principal;

         (g) any duty on the part of the Agent or any Lender to  disclose to any
Guarantor any facts the Agent or any Lender may now or hereafter  know about the
Borrower or any Other Guarantor,  regardless of whether the Administrative Agent
or any Lender has reason to believe that any such facts materially  increase the
risk  beyond  that which such  Guarantor  intended  to assume,  or has reason to
believe  that such facts are  unknown  to such  Guarantor,  or has a  reasonable
opportunity to communicate  such facts to such  Guarantor,  since each Guarantor
acknowledges  that such  Guarantor  is fully  responsible  for being and keeping
informed of the financial condition of the Borrower and the Other Guarantors and
of all  circumstances  bearing on the risk of  nonperformance of any obligations
hereby guaranteed;

         (h) any  defense  based  upon any  borrowing  or grant of any  security
interest under Section 364 of the Bankruptcy Code or any similar provision under
the Bankruptcy Law;


                                      100
<PAGE>

         (i) any requirement  that at any time any action be taken by any Person
against the Borrower or any other Person;

         (j) any  right to  which  it may be  entitled  in  connection  with any
obligation of the Lenders to sue the Borrower or any Other  Guarantor prior to a
claim being made against the Guarantor hereunder;

         (k) any  right to which it may be  entitled  to have the  assets of the
Borrower  first  be  used  as  payment  of the  Borrower's  or  any  Guarantor's
obligations  hereunder  prior to any amounts  being  claimed from or paid by any
such Guarantor hereunder; and

         (l) any and all other rights and remedies accorded by applicable law to
guarantors or sureties.

   16.5  CONTRIBUTION  AND  INDEMNIFICATION;   SUBROGATION.  Each  Guarantor  is
obligated  to repay the  Obligations  as joint and several  obligors  under this
Agreement.  To the extent that any Guarantor  shall,  under this  Agreement as a
joint and several obligor, repay any of the Obligations  constituting Loans made
to the Borrower  hereunder or other Obligations  incurred directly and primarily
by the Borrower  (an  "Guarantor  Accommodation  Payment"),  then the  Guarantor
making such Guarantor  Accommodation  Payment shall be entitled to  contribution
and indemnification from, and be reimbursed by, each of the individual Borrowers
and Other  Guarantors  in an amount,  for each of the  individual  Borrowers and
Other Guarantors,  equal to a fraction of such Guarantor  Accommodation Payment,
the  numerator  of  which  fraction  is such  Borrower's  or  Other  Guarantor's
"Allocable Amount" (as defined below) and the denominator of which is the sum of
the Allocable  Amounts of all of the individual  Borrowers and Other Guarantors.
As of any date of  determination,  the  "Allocable  Amount" of each  Borrower or
Other  Guarantor shall be equal to the maximum amount of liability for Guarantor
Accommodation  Payments  which could be asserted  against such Borrower or Other
Guarantor  hereunder  without (a)  rendering  such  Borrower or Other  Guarantor
"insolvent"  within  the  meaning of Section  101 (31) of the  Bankruptcy  Code,
Section 2 of the Uniform  Fraudulent  Transfer  Act ("UFTA") or Section 2 of the
Uniform Fraudulent Conveyance Act ("UFCA"),  (ii) leaving such Borrower or Other
Guarantor  with  unreasonably  small  capital or assets,  within the  meaning of
Section 548 of the Bankruptcy  Code,  Section 4 of the UFTA, or Section 5 of the
UFCA, or (iii) leaving such Borrower or Other Guarantor  unable to pay its debts
as they become due within the meaning of Section 548 of the  Bankruptcy  Code or
Section  4 of the UFTA,  or  Section 5 of the UFCA.  All  rights  and  claims of
contribution, indemnification,  subrogation and reimbursement under this Section
shall be  subordinate  in right of payment to the prior payment to the Agent and
the Lender of the Obligations. In furtherance of the foregoing,  notwithstanding
any  payment or  payments  made by any  Guarantor  hereunder,  or any set-off or
application  of funds of any Guarantor by the Agent or any Lender,  no Guarantor
shall be entitled to be  subrogated  to any of the rights of the  Administrative
Agent or any Lender  against the Borrower or any Other  Guarantor or against any
Collateral,  support  or  guaranty  or right of offset  held by the Agent or any
Lender for the payment of the  Obligations,  nor shall any Guarantor  seek or be
entitled to seek any  contribution,  indemnification  or reimbursement  from the
Borrower or any Other  Guarantor in respect of payments made  hereunder,  unless
and until such time as all  Obligations  have been paid in full to the Agent and
the Lenders and this Agreement has been terminated.  If any amount shall be paid
to any Guarantor on account of any subrogation, contribution, indemnification or
reimburesement  rights  at any time when all of the  Obligations  shall not have
been finally  paid in full and the  Agreement  terminated,  such amount shall be
held by such Guarantor in trust for the Agent and the Lenders,  segregated  from
other  funds of such  Guarantor,  and  shall,  forthwith  upon  receipt  by such
Guarantor,  be  turned  over to the  Agent in the exact  form  received  by such
Guarantor  (duly  indorsed by such Guarantor to the Agent, if


                                      101
<PAGE>

required),  to be held and/or  applied to the  Obligations,  whether  matured or
unmatured,  in such order as the Agent may  determine,  but without  reducing or
affecting in any manner the liability of such Guarantor under this Guarantee.

   16.6  SUBORDINATION. Each Guarantor hereby expressly covenants and agrees for
the benefit of the Agent and each Lender  that all  existing  and future Debt of
the Borrower or any Other  Guarantor or any of its  Subsidiaries  (including all
rights of contribution, reimbursement or subrogation), including any Debt listed
on SCHEDULE 8.9 or described in the definition of Restricted Investment, to such
Guarantor  and any right of such  Guarantor  or any of its  Subsidiaries  to the
return or  withdrawal  of any capital  invested by such  Guarantor or any of its
Subsidiaries  in the Borrower or any Other  Guarantor,  shall be subordinated to
and junior in right of payment to the  Obligations.  Without  the prior  written
consent of the Agent,  such  subordinated Debt shall not be paid or withdrawn in
whole or in part, nor shall any Guarantor or any of its Subsidiaries  accept any
payment of, or on account of, any such Debt or as a withdrawal  of capital while
this  Guarantee is in effect,  except in each case from the cash proceeds of the
issuance of common  Capital Stock of the Parent  Guarantor.  Any such payment to
any Guarantor or any of its Subsidiaries in violation of this Guarantee shall be
received by such Guarantor or such Subsidiary,  as the case may be, in trust for
the benefit of the Agent and the  Lenders,  segregated  from other funds of such
Guarantor  or  such  Subsidiary,  and  shall,  forthwith  upon  receipt  by such
Guarantor  or such  Subsidiary,  be turned  over to the Agent in the exact  form
received by such Guarantor or such  Subsidiary  (duly endorsed by such Guarantor
or such Subsidiary to the Agent, if required), to be held and/or applied against
the  Obligations,  whether matured or unmatured,  in such order as the Agent may
determine, but without reducing or affecting in any manner the liability of such
Guarantor under this Guarantee.

   16.7  NO EFFECT ON GUARANTEE.  The  obligations  of any Guarantor  under this
Guarantee shall not be altered, limited or affected by any Insolvency Proceeding
of the  Borrower or any of the Other  Guarantors,  or by any  defense  which the
Borrower  or any Other  Guarantor  may have by reason  of any  order,  decree or
decision of any court or administrative body resulting from any such proceeding.

   16.8  CONTINUING  GUARANTEE.  This  Guarantee is a continuing  guarantee  and
shall (a) remain in full force and effect until  termination  of the  Commitment
and  payment  in full of all  Obligations  and  all of  Guarantors'  obligations
hereunder;  (b) be binding upon each Guarantor,  its successors and assigns; and
(c) inure to the benefit of the Agent-Related Persons, the Agent and each Lender
and their respective successors,  transferees and assigns.  Without limiting the
generality of the  foregoing,  the Agent and each Lender may assign or otherwise
transfer its rights under this Guarantee to any Person to whom a transfer by the
Agent or Lender  is  permitted  under  this  Agreement,  and such  Person  shall
thereupon  become vested with all the benefits in respect  hereof granted to the
Agent or Lender herein or  otherwise,  all as provided in, and to the extent set
forth in, this Agreement.  No Guarantor may assign or otherwise  transfer any of
its obligations hereunder to any Person without the prior written consent of the
Agent  and  all  Lenders  other  than  in  connection  with a  merger  or  other
combination permitted under SECTION 9.9 hereof.

                  [Remainder of Page Intentionally Left Blank-
                       Counterpart Signature Pages Follow]


                                      102
<PAGE>


         IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.

                                   "PARENT GUARANTOR"

                                   Riddell Sports Inc.

                                   By:  /S/ JOHN NICHOLS
                                      ------------------------------------------

                                   Title:  CHIEF FINANCIAL OFFICER AND SECRETARY
                                         ---------------------------------------


                                   "BORROWERS"

                                   Varsity Spirit Corporation

                                   By:  /S/ JOHN NICHOLS
                                      ------------------------------------------

                                   Title:  CHIEF FINANCIAL OFFICER AND SECRETARY
                                         ---------------------------------------


                                   Varsity Spirit Fashions & Supplies, Inc.

                                   By:  /S/ JOHN NICHOLS
                                      ------------------------------------------

                                   Title:  CHIEF FINANCIAL OFFICER AND SECRETARY
                                         ---------------------------------------


                                   Varsity USA, Inc.

                                   By:  /S/ JOHN NICHOLS
                                      ------------------------------------------

                                   Title:  CHIEF FINANCIAL OFFICER AND SECRETARY
                                         ---------------------------------------


                                   Varsity/Intropa Tours, Inc.

                                   By:  /S/ JOHN NICHOLS
                                      ------------------------------------------

                                   Title:  CHIEF FINANCIAL OFFICER AND SECRETARY
                                         ---------------------------------------


                                   International Logos, Inc.

                                   By:  /S/ JOHN NICHOLS
                                      ------------------------------------------

                                   Title:  CHIEF FINANCIAL OFFICER AND SECRETARY
                                         ---------------------------------------



                                      103
<PAGE>

                                   "AGENT"

                                   Bank of America, N.A., as the Agent


                                   By:  /S/ THOMAS BRANYAN
                                      ------------------------------------------
                                         Thomas Branyan, Senior Vice President

                                   "LENDERS"

Commitment:  $15,000,000           Bank of America, N.A., as a Lender


                                   By:  /S/ THOMAS BRANYAN
                                      ------------------------------------------
                                         Thomas Branyan, Senior Vice President


                                      104
<PAGE>


                                    EXHIBIT A

                              INTENTIONALLY OMITTED



                                      105
<PAGE>


                                    EXHIBIT B

                       FORM OF BORROWING BASE CERTIFICATE


                                      106
<PAGE>


                                    EXHIBIT C

                              FINANCIAL STATEMENTS



                                      107
<PAGE>

                                    EXHIBIT D

                            LIST OF CLOSING DOCUMENTS




                                      108
<PAGE>

                                    EXHIBIT E

                               NOTICE OF BORROWING

Date: _____________

To:      Bank of America,  N.A., as Agent for the Lenders who are parties to the
         Second Amended and Restated Loan, Guaranty and Security Agreement dated
         as of  __________________,  2001  (as  extended,  renewed,  amended  or
         restated from time to time,  the "Loan and Security  Agreement")  among
         Riddell Sports Inc., as Parent Guarantor,  Varsity Spirit  Corporation,
         Varsity Spirit Fashions & Supplies, Inc.,  Varsity/Intropa Tours, Inc.,
         Varsity USA, Inc., and  International  Logos, Inc.  (collectively,  the
         "Borrower"),  and certain Lenders which are signatories thereto and, as
         Agent

Ladies and Gentlemen:

         The undersigned,  ____________________________ (the "Borrower"), refers
to the Loan and Security Agreement,  the terms defined therein being used herein
as therein  defined,  and hereby gives you notice  irrevocably  of the Borrowing
specified below:

         1. The Business Day of the proposed Borrowing is ______________, _____.

         2. The aggregate amount of the proposed Borrowing is $_____________.

         3. The amount of the Letter of Credit is $ .

         The undersigned hereby certifies that the following statements are true
on the date  hereof,  and will be true on the  date of the  proposed  Borrowing,
before and after giving effect  thereto and to the  application  of the proceeds
therefrom:

         (a) The representations and warranties of the Borrower contained in the
Loan and  Security  Agreement  are true and  correct as though made on and as of
such  date.  Without  limiting  the  foregoing,   the  incurrence  of  the  Debt
represented  by the  proposed  Borrowing  is  permitted  to be  incurred  by the
Borrower  under the terms of the Senior  Notes,  the  Subordinated  Debt and any
indenture,  loan agreement,  note purchase  agreement or other document  related
thereto;

         (b) No Default or Event of Default has occurred and is  continuing,  or
would result from such proposed Borrowing; and


                                      109
<PAGE>


         (c) The  proposed  Borrowing  will not  cause the  aggregate  principal
amount of all outstanding  Revolving Loans plus the aggregate  amount  available
for drawing under all outstanding  Letters of Credit, to exceed the Availability
or the combined Commitments of the Lenders.

                                              Name of Borrower

                                              By:_____________________________

                                              Title:__________________________


                                              By:_____________________________

                                              Title:__________________________



                                      110
<PAGE>


                                    EXHIBIT F

                              INTENTIONALLY OMITTED


                                      111
<PAGE>

                                    EXHIBIT G

                  [FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT

         This  ASSIGNMENT  AND  ACCEPTANCE   AGREEMENT  (this   "Assignment  and
Acceptance")   dated  as  of   ____________________,   _____  is  made   between
______________________________  (the "Assignor") and  __________________________
(the "Assignee").

                                    RECITALS

         WHEREAS,  the  Assignor  is party to that  certain  Second  Amended and
Restated Loan,  Guaranty and Security  Agreement  dated as of  ________________,
2001 (as amended, amended and restated,  modified,  supplemented or renewed, the
"Credit Agreement") among _________________________________, a[n] ______________
corporation (the "Borrower"),  the several  financial  institutions from time to
time party thereto (including the Assignor, the "Lenders"), and Bank of America,
N.A.,  as agent for the Lenders (the  "Agent").  Any terms defined in the Credit
Agreement and not defined in this  Assignment  and Acceptance are used herein as
defined in the Credit Agreement;

                  WHEREAS, as provided under the Credit Agreement,  the Assignor
has  committed  to making  Loans (the  "Committed  Loans") to the Borrower in an
aggregate amount not to exceed $__________ (the "Commitment");

                  WHEREAS,   the  Assignor  has  made  Committed  Loans  in  the
         aggregate principal amount of $__________ to the Borrower

                  WHEREAS, [the Assignor has acquired a participation in its pro
rata share of the Lenders'  liabilities  under Letters of Credit in an aggregate
principal amount of $____________ (the "L/C Obligations")] [no Letters of Credit
are outstanding under the Credit Agreement]; and

                  WHEREAS,  the Assignor  wishes to assign to the Assignee [part
of the] [all] rights and obligations of the Assignor under the Credit  Agreement
in respect of its Commitment,  together with a corresponding  portion of each of
its  outstanding  Committed  Loans and L/C  Obligations,  in an amount  equal to
$__________  (the "Assigned  Amount") on the terms and subject to the conditions
set forth herein and the Assignee wishes to accept assignment of such rights and
to assume such  obligations  from the Assignor on such terms and subject to such
conditions;

                  NOW,  THEREFORE,  in  consideration  of the  foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:

         1.       ASSIGNMENT AND ACCEPTANCE.

                  (a) Subject to the terms and conditions of this Assignment and
Acceptance,  (i)  the  Assignor  hereby  sells,  transfers  and  assigns  to the
Assignee,  and (ii) the Assignee hereby  purchases,  assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this  Assignment and  Acceptance)  __% (the  "Assignee's  Percentage
Share") of (A) the  Commitment,  the Committed  Loans and the L/C Obligations of
the Assignor and (B) all related rights, benefits, obligations,  liabilities and
indemnities  of the Assignor under and in connection  with the Credit  Agreement
and the Loan Documents.


                                      112
<PAGE>


                  (b) With effect on and after the Effective Date (as defined in
SECTION 5 hereof),  the Assignee  shall be a party to the Credit  Agreement  and
succeed to all of the rights and be obligated to perform all of the  obligations
of a Lender under the Credit  Agreement,  including the requirements  concerning
confidentiality  and the payment of  indemnification,  with a  Commitment  in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance  with their  terms all of the  obligations  which by the terms of the
Credit  Agreement  are  required to be  performed  by it as a Lender.  It is the
intent of the parties  hereto that the Commitment of the Assignor  shall,  as of
the Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations  under
the Credit  Agreement  to the extent such  obligations  have been assumed by the
Assignee;  PROVIDED, HOWEVER, the Assignor shall not relinquish its rights under
Sections __ and __ of the Credit  Agreement to the extent such rights  relate to
the time prior to the Effective Date.

                  (c) After giving effect to the  assignment  and assumption set
         forth herein,  on the Effective Date the Assignee's  Commitment will be
         $__________.

                  (d) After giving effect to the  assignment  and assumption set
         forth herein,  on the Effective Date the Assignor's  Commitment will be
         $__________.

         2.       PAYMENTS.

                  (a) As  consideration  for the sale,  assignment  and transfer
contemplated in SECTION 1 hereof,  the Assignee shall pay to the Assignor on the
Effective Date in immediately  available  funds an amount equal to  $__________,
representing  the  Assignee's  Pro Rata  Share of the  principal  amount  of all
Committed Loans.

                  (b)  The  Assignee  further  agrees  to  pay to  the  Agent  a
         processing  fee in the amount  specified  in Section (__) of the Credit
         Agreement.

         3.       REALLOCATION OF PAYMENTS.


         Any interest,  fees and other  payments  accrued to the Effective  Date
with respect to the Commitment, and Committed Loans and L/C Obligations shall be
for the account of the Assignor.  Any interest,  fees and other payments accrued
on and after the Effective Date with respect to the Assigned Amount shall be for
the account of the Assignee.  Each of the Assignor and the Assignee  agrees that
it will hold in trust for the other party any  interest,  fees and other amounts
which it may  receive  to which  the other  party is  entitled  pursuant  to the
preceding  sentence  and pay to the other  party any such  amounts  which it may
receive promptly upon receipt.

         4.       INDEPENDENT CREDIT DECISION.

         The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules  and Exhibits  thereto,  together with copies of the
most recent financial  statements of the Borrower,  and such other documents and
information  as it has  deemed  appropriate  to make its own  credit  and  legal
analysis  and decision to enter into this  Assignment  and  Acceptance;  and (b)
agrees that it will,  independently and without reliance upon the Assignor,  the
Agent or any other  Lender and based on such  documents  and  information  as it
shall deem  appropriate  at the time,  continue to make its own credit and legal
decisions in taking or not taking action under the Credit Agreement.


                                      113
<PAGE>

         5.       EFFECTIVE DATE; NOTICES.


                  (a) As between the Assignor and the  Assignee,  the  effective
date  for  this  Assignment  and  Acceptance  shall be  __________,  _____  (the
"Effective Date");  provided that the following  conditions  precedent have been
satisfied on or before the Effective Date:

                      (i) this  Assignment and Acceptance  shall be executed and
delivered by the Assignor and the Assignee;

                      [(ii) the consent of the Agent  required  for an effective
assignment  of the Assigned  Amount by the  Assignor to the Assignee  shall have
been duly  obtained  and shall be in full force and  effect as of the  Effective
Date;]

                      (iii) the  Assignee  shall pay to the Assignor all amounts
due to the Assignor under this Assignment and Acceptance;

                      [(iv) the Assignee shall have complied with Section ( ) of
the Credit Agreement (if applicable);]

                      (v) the  processing fee referred to in SECTION 2(b) hereof
and in Section _____ of the Credit  Agreement shall have been paid to the Agent;
and

                  (b) Promptly  following the execution of this  Assignment  and
Acceptance,  the  Assignor  shall  deliver  to the  Borrower  and the  Agent for
acknowledgment  by the Agent, a Notice of Assignment in the form attached hereto
as SCHEDULE 1.

         6.       [Agent.  [INCLUDE ONLY IF ASSIGNOR IS AGENT]

                  (a) The Assignee  hereby  appoints and authorizes the Assignor
to take such action as agent on its behalf and to exercise such powers under the
Credit  Agreement as are  delegated to the Agent by the Lenders  pursuant to the
terms of the Credit Agreement.

                  (b) The Assignee shall assume no duties or obligations held by
the Assignor in its capacity as Agent under the Credit Agreement.]

         7.       WITHHOLDING TAX.

         The Assignee (a) represents  and warrants to the Lender,  the Agent and
the Borrower that under  applicable  law and treaties no tax will be required to
be  withheld  by the  Lender  with  respect  to any  payments  to be made to the
Assignee hereunder,  (b) agrees to furnish (if it is organized under the laws of
any jurisdiction other than the United States or any State thereof) to the Agent
and the  Borrower  prior to the time that the Agent or  Borrower  is required to
make any payment of principal,  interest or fees hereunder,  duplicate  executed
originals of either U.S.  Internal  Revenue  Service Form 4224 or U.S.  Internal
Revenue  Service  Form 1001  (wherein  the Assignee  claims  entitlement  to the
benefits  of a tax  treaty  that  provides  for a complete  exemption  from U.S.
federal income withholding tax on all payments  hereunder) and agrees to provide
new Forms 4224 or 1001 upon the expiration of any  previously  delivered form or
comparable statements in accordance with applicable U.S. law and regulations and
amendments thereto, duly executed and completed by the Assignee,  and (c) agrees
to comply with all  applicable  U.S.  laws and  regulations  with regard to such
withholding tax exemption.


                                      114
<PAGE>

         8.       REPRESENTATIONS AND WARRANTIES.

                  (a) The Assignor  represents  and warrants  that (i) it is the
legal and  beneficial  owner of the interest  being assigned by it hereunder and
that such interest is free and clear of any Lien or other adverse claim; (ii) it
is duly  organized and existing and it has the full power and authority to take,
and has taken,  all action  necessary to execute and deliver this Assignment and
Acceptance  and any other  documents  required  or  permitted  to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder;  (iii) no notices to, or consents,  authorizations or
approvals of, any Person are required (other than any already given or obtained)
for  its  due  execution,  delivery  and  performance  of  this  Assignment  and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit  Agreement,  no further  action by, or notice to, or filing with, any
Person is required of it for such execution,  delivery or performance;  and (iv)
this  Assignment  and  Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against  the  Assignor  in  accordance  with the terms  hereof,  subject,  as to
enforcement,  to bankruptcy,  insolvency,  moratorium,  reorganization and other
laws of general  application  relating to or affecting  creditors' rights and to
general equitable principles.

                  (b) The  Assignor  makes no  representation  or  warranty  and
assumes  no  responsibility  with  respect  to  any  statements,  warranties  or
representations  made in or in  connection  with  the  Credit  Agreement  or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document  furnished  pursuant
thereto.  The Assignor makes no  representation  or warranty in connection with,
and assumes no responsibility with respect to, the solvency, financial condition
or statements of the Borrower, or the performance or observance by the Borrower,
of any of its  respective  obligations  under the Credit  Agreement or any other
instrument or document furnished in connection therewith.

                  (c) The Assignee  represents  and warrants that (i) it is duly
organized  and  existing and it has full power and  authority  to take,  and has
taken,  all  action  necessary  to  execute  and  deliver  this  Assignment  and
Acceptance  and any other  documents  required  or  permitted  to be executed or
delivered  by it in  connection  with this  Assignment  and  Acceptance,  and to
fulfill  its   obligations   hereunder;   (ii)  no  notices  to,  or   consents,
authorizations  or approvals of, any Person are required (other than any already
given or  obtained)  for its due  execution,  delivery and  performance  of this
Assignment  and  Acceptance;  and apart from any agreements or  undertakings  or
filings required by the Credit Agreement, no further action by, or notice to, or
filing  with,  any Person is  required  of it for such  execution,  delivery  or
performance;  (iii) this  Assignment  and  Acceptance has been duly executed and
delivered by it and constitutes the legal,  valid and binding  obligation of the
Assignee,  enforceable against the Assignee in accordance with the terms hereof,
subject,   as   to   enforcement,   to   bankruptcy,   insolvency,   moratorium,
reorganization  and other laws of general  application  relating to or affecting
creditors'  rights  and to  general  equitable  principles;  [and  (iv) it is an
Eligible Assignee.]

         9.       FURTHER ASSURANCES.

         The Assignor and the Assignee  each hereby agree to execute and deliver
such  other  instruments,  and take  such  other  action,  as  either  party may
reasonably  request in connection  with the  transactions  contemplated  by this
Assignment  and  Acceptance,  including  the  delivery  of any  notices or other
documents or instruments to the Borrower or the Agent,  which may be required in
connection with the assignment and assumption contemplated hereby.

         10.      MISCELLANEOUS.


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                  (a)  Any   amendment  or  waiver  of  any  provision  of  this
Assignment and Acceptance  shall be in writing and signed by the parties hereto.
No failure or delay by either party  hereto in  exercising  any right,  power or
privilege  hereunder  shall  operate as a waiver  thereof  and any waiver of any
breach of the  provisions of this  Assignment  and  Acceptance  shall be without
prejudice to any rights with respect to any other or further breach thereof.

                  (b) All  payments  made  hereunder  shall be made  without any
set-off or counterclaim.

                  (c) The Assignor and the Assignee shall each pay its own costs
and expenses incurred in connection with the negotiation, preparation, execution
and performance of this Assignment and Acceptance.

                  (d) This  Assignment  and  Acceptance  may be  executed in any
number of  counterparts  and all of such  counterparts  taken  together shall be
deemed to constitute one and the same instrument.

                  (e) THIS  ASSIGNMENT AND  ACCEPTANCE  SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TENNESSEE. The Assignor and
the Assignee each irrevocably  submits to the non-exclusive  jurisdiction of any
State or Federal court  sitting in New York over any suit,  action or proceeding
arising out of or relating to this  Assignment and  Acceptance  and  irrevocably
agrees that all claims in respect of such action or proceeding  may be heard and
determined  in such  New  York  State  or  Federal  court.  Each  party  to this
Assignment and Acceptance  hereby  irrevocably  waives, to the fullest extent it
may effectively do so, the defense of an  inconvenient  forum to the maintenance
of such action or proceeding.

                  (f) THE  ASSIGNOR  AND THE  ASSIGNEE  EACH  HEREBY  KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY  WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY  LITIGATION  BASED  HEREON,  OR ARISING OUT OF,  UNDER,  OR IN
CONNECTION  WITH THIS  ASSIGNMENT  AND  ACCEPTANCE,  THE CREDIT  AGREEMENT,  ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).

         IN WITNESS  WHEREOF,  the Assignor  and the  Assignee  have caused this
Assignment and Acceptance to be executed and delivered by their duly  authorized
officers as of the date first above written.

                                         [ASSIGNOR]

                                         By:_________________________________
                                         Title:______________________________


                                         By:_________________________________
                                         Title:______________________________




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<PAGE>

                                         Address:____________________________

                                         [ASSIGNEE]

                                         By:_________________________________
                                         Title:______________________________


                                         By:_________________________________
                                         Title:______________________________


                                         Address:____________________________



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                                   SCHEDULE 1

                       NOTICE OF ASSIGNMENT AND ACCEPTANCE

                                                           _______________, 20__

Bank of America, N.A., as agent
_______________________________

_______________________________

Attn:__________________________

Re:  [Name and Address of Borrower]

Ladies and Gentlemen:

         We refer to the Second Amended and Restated Loan, Guaranty and Security
Agreement dated as of _________________, 2001 (as amended, amended and restated,
modified,  supplemented  or renewed  from time to time the  "Credit  Agreement")
among  ______________________ (the "Borrower"),  the Lenders referred to therein
and Bank of America, N.A., as Agent for the Lenders (the "Agent"). Terms defined
in the Credit Agreement are used herein as therein defined.

         1. We  hereby give you  notice   of,  and   request  your  consent  to,
the assignment by  __________________  (the "Assignor") to _______________  (the
"Assignee") of _____% of the right, title and interest of the Assignor in and to
the Credit  Agreement  (including,  without  limitation,  the  right,  title and
interest  of  the  Assignor  in  and to the  Commitments  of the  Assignor,  all
outstanding  Loans made by the Assignor and the Assignor's  participation in the
Letters of Credit pursuant to the Assignment and Acceptance  Agreement  attached
hereto (the  "Assignment  and  Acceptance").  We  understand  and agree that the
Assignor's Commitment,  as of _______,  20____, is $ ___________,  the aggregate
amount of its outstanding Loans is $_____________,  and its participation in L/C
Obligations is $_____________.

         2. The Assignee  agrees that,  upon  receiving the consent of the Agent
and, if applicable,  [NAME OF BORROWER] to such assignment, the Assignee will be
bound by the terms of the Credit Agreement as fully and to the same extent as if
the Assignee  were the Lender  originally  holding  such  interest in the Credit
Agreement.

         3.       The following administrative details apply to the Assignee:

                  (A)      Notice Address:

                           Assignee name:
                                         ______________________________
                           Address:
                                   ____________________________________
                                   ____________________________________
                                   ____________________________________


                           Attention:__________________________________

                           Telephone:  (___)___________________________



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<PAGE>

                           Telecopier:  (___)__________________________

                           Telex (Answerback):_________________________

                  (B)      Payment Instructions:

                           Account No.:________________________________

                           At:_________________________________________

                           ____________________________________________

                           ____________________________________________

                           Reference:__________________________________

                           Attention:__________________________________

         4.       You are entitled to rely upon the representations,  warranties
and covenants of each of the Assignor and Assignee  contained in the  Assignment
and Acceptance.

         IN WITNESS  WHEREOF,  the Assignor  and the  Assignee  have caused this
Notice of  Assignment  and  Acceptance to be executed by their  respective  duly
authorized officials, officers or agents as of the date first above mentioned.

                                           Very truly yours,

                                           [NAME OF ASSIGNOR]

                                           By:__________________________________

                                           Title:_______________________________

                                           [NAME OF ASSIGNEE]

                                           By:__________________________________

                                           Title:_______________________________



ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:

Bank of America National Trust and Savings
Association, as Agent

By:__________________________
Title:_______________________



                                      119
<PAGE>


                                  SCHEDULE 9.14

                                    REPAYMENT

Parent  Guarantor  will  use  the  Available  Proceeds  for  one or  more of the
Alternative  Permitted  Uses.  If  Parent  Guarantor  desires  to use  Available
Proceeds for any Alternative  Permitted Use other than the  Redemption,  it must
obtain  Agent's prior written  consent,  which consent Agent may withhold in its
sole and absolute  discretion.  If Parent Guarantor  effects the Redemption,  it
will do so using an advisor that is acceptable to Bank of America.

For purposes of the immediately  preceding paragraph,  the following definitions
will apply:

"Alternative  Permitted Uses" means any use of the Available  Proceeds permitted
by the  Indenture  which  includes  the  following:  (i)  the  Redemption,  (ii)
acquisition of a controlling interest in a Permitted Business (as defined in the
Indenture),  (iii) capital expenditures,  or (iv) acquisition of other long-term
assets.

"Available Proceeds" means the net proceeds of the sale transaction evidenced by
that certain Stock Purchase Agreement dated as of April 27, 2001 between Riddell
Sports, Inc. and Riddell  Acquisition Sub, among others,  after Parent Guarantor
has used such  proceeds  to pay the  current  outstanding  balance of its credit
facility with Bank of America down to zero. It is anticipated that the Available
Proceeds will total approximately $31,500,000.

"Indenture"  means that certain  Indenture dated June 19, 1997 by Riddell Sports
Inc., as Issuer,  in favor of Marine  Midland Bank, as Trustee,  and relating to
the Senior Notes.

"Redemption"  means Parent  Guarantor's  purchase and/or  redemption of at least
$31,500,000 in face value of the Senior Notes.



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<PAGE>

                                  SCHEDULE 10.1


                                      121