Exhibit 4(ii)

                SECOND AMENDED AND RESTATED PARENT GUARANTY AGREEMENT

        THIS SECOND AMENDED AND RESTATED PARENT GUARANTY AGREEMENT,  dated as of
July 15, 1996 (the "Guaranty"),  is made by STANDARD COMMERCIAL  CORPORATION,  a
North Carolina  corporation ("SCC"), in favor of the Banks (the "Banks") parties
to the Loan  Agreements  (as defined  below),  and  NATIONSBANK,  N.A.  (SOUTH),
formerly  known as  NationsBank  of Georgia,  N.A.,  as agent for the Banks (the
"Agent"),  for the benefit of STANDARD COMMERCIAL TOBACCO CO., INC. ("SCTC"),  a
wholly owned subsidiary of SCC.

        PRELIMINARY  STATEMENT.  SCTC has entered into (i) that certain Loan and
Security  Agreement,  dated  as of May 2,  1995,  as  amended  by  that  certain
Amendment No. 1 to Loan and Security Agreement dated as of November 17, 1995, as
further amended by that certain  Amendment No. 2 to Loan and Security  Agreement
dated as of December 31, 1995, and as further amended by that certain  Amendment
No. 3 to Loan and  Security  Agreement,  of even  date  herewith,  and (ii) that
certain  Loan  and  Security   Agreement  (Term  Loan)  of  even  date  herewith
(collectively the "Loan Agreements") with NationsBank, N.A. (South), First Union
Commercial  Corporation,  the other lenders  signatory thereto from time to time
(collectively and including their successors and assigns, the "Banks"),  and the
Agent, pursuant to which Loan Agreements the Lenders have agreed to provide SCTC
credit facilities  aggregating up to $110,000,000.  In order to induce the Agent
and each Bank to accept  the terms of the Loan  Agreements  and  because  of the
direct  benefit to SCC of loans made from time to time hereafter by the Banks to
SCTC and letters of credit issued by the Banks,  SCC has agreed to guarantee the
payment and performance of the Guaranteed Indebtedness (hereinafter as defined).
This Second Amended and Restated Parent Guaranty  Agreement  amends and restates
the terms and conditions of that certain  Amended and Restated  Parent  Guaranty
Agreement,  dated as of November 17, 1995,  made by the  undersigned in favor of
the Agent and the Banks for the benefit of SCTC.

        NOW, THEREFORE, for value received and to induce the Agent and each Bank
to accept the terms of the Loan  Agreements and because of the direct benefit to
SCC of loans made from time to time  hereafter  by the Banks to SCTC and letters
of credit issued and SCC agrees as follows:


                        ARTICLE I.  DEFINITIONS
                        -----------------------
        Section 1.01 DEFINITIONS.  (a) The following  capitalized terms that are
used herein have the following meanings, respectively:

        "AFFILIATE" means, with respect to any Person, any other Person directly
or  indirectly  controlling  (including  but not  limited to all  directors  and
officers of such  Person),  controlled  by or under  direct or  indirect  common
control with such Person.  A Person shall be deemed to control a corporation  if
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities  having ordinary voting power for the election of directors of
such  corporation  or (ii) to direct or cause  direction of the  management  and
policies  of  such   corporation,   whether  through  the  ownership  of  voting
securities, by contract or otherwise.

        "ASSIGNEE"  means any  assignee  acquiring  all or a portion of a Bank's
interest in either of the Loan  Agreements  and such Bank's Notes in  accordance
with the terms and provisions of such Loan Agreement.

        "BUSINESS  DAY" means any day other than a Saturday,  a Sunday,  a legal
holiday in Charlotte,  North Carolina, and New York, New York, or a day on which
banking  institutions in Charlotte,  North Carolina,  or New York, New York, are
authorized by law or other governmental action to close.

        "CASH  EQUIVALENTS"  means (i)  securities  issued or directly and fully
guaranteed  or  insured  by the  United  States  of  America  or any  agency  or
instrumentality  thereof  (provided that the full faith and credit of the United
States of America is pledged in support  thereof) having  maturities of not more
than six months from the date of acquisition,  (ii) U.S. dollar  denominated (or
foreign  currency fully hedged by U.S.  Dollars) time deposits,  certificates of
deposit, Eurodollar time deposits, Eurodollar certificates of deposit of (x) any
domestic  commercial  bank  organized  or licensed  under the laws of the United
States or any State  thereof  including  the District of Columbia of  recognized
standing  having capital and surplus in excess of  $400,000,000  or (y) any bank
whose  short-term  commercial  paper  rating  from  S&P is at  least  A-1 or the
equivalent  thereof or from  Moody's is at least P-1 or the  equivalent  thereof
(any such bank being an "APPROVED  BANK"),  in each case with  maturities of not
more than six months from the date of acquisition,  (iii)  commercial  paper and
variable  or fixed  rate  notes  issued by any  Approved  Bank (or by the parent
company  thereof) or any  variable  rate notes issued by, or  guaranteed  by any
domestic  corporation rated A-1 (or the equivalent  thereof) or better by S&P or
P-1 (or the  equivalent  thereof) or better by Moody's and  maturing  within six
months of the date of acquisition and (iv) repurchase  agreements with a bank or
trust  company  (including  any Bank) or  recognized  securities  dealer  having
capital and surplus in excess of $400,000,000 for direct  obligations  issued by
or fully  guaranteed  by the United States of America in which SCTC shall have a
perfected  first  priority  security  interest  (subject  to no  other  liens or
encumbrances) and having,  on the date of purchase thereof,  a fair market value
of at least 100% of the amount of the repurchase obligations.

        "CODE" means the Internal  Revenue Code of 1986, as amended from time to
time.

        "CONSISTENT  BASIS" or  "consistent  basis"  means,  with  regard to the
application of United States  accounting  principles,  United States  accounting
principles consistent in all material respects with the United States accounting
principles  used  and  applied  in  preparation  of  the  financial   statements
previously delivered to the Banks and referred to in Section 3.06 hereof.

        "CONTROLLED  GROUP" means (i) the controlled  group of  corporations  as
defined in Section 414(b) of the Code and the applicable regulations thereunder,
or (ii) the group of trades or  businesses  under  common  control as defined in
Section 414(c) of the Code and the applicable regulations  thereunder,  of which
SCTC is a part or may become a part.

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

        "DOCUMENTS" shall mean the Loan Agreements, the Notes and any agreement,
instrument,  certificate or document now or hereafter  executed by SCTC, SCC, or
any of their Affiliates or Subsidiaries in connection with the obligations under
the Loan Agreements and delivered to any Holder including,  without  limitation,
any letter of credit  applications  executed in  connection  with the Letters of
Credit.

        "ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, regulations,  ordinances, rules, regulations, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental  restrictions  or  policies  including,   without  limitation,  the
Comprehensive  Environmental  Response,  Compensation  and  Liability  Act,  the
Superfund  Amendments and  Reauthorization  Act, the Resource  Conservation  and
Recovery Act, the Toxic Substances  Control Act, the Clean Air Act and the Clean
Water Act relating to the environment or to emissions, discharges or releases of
pollutants,   contaminants,   petroleum  or  petroleum  products,  chemicals  or
industrial,  toxic or  hazardous  substances  or  wastes  into  the  environment
(including,  without  limitation,  ambient air,  surface water,  ground water or
land) or otherwise relating to the manufacture,  processing,  distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
petroleum or petroleum  products,  chemicals or  industrial,  toxic or hazardous
substances or wastes or the clean-up or other remediation thereof.

        "ERISA" means the Employee  Retirement  Income  Security Act of 1974, as
amended  from time to time,  and the  regulations  promulgated  and the  rulings
issued thereunder.

        "ERISA  AFFILIATE"  means  each  person (as  defined in Section  3(9) of
ERISA) which  together with SCTC,  the  undersigned  or any of their  respective
Affiliates would be deemed to be a member of the same "controlled  group" within
the meaning of Section 414(b), (c), (m) and (o) of the Code.

        "EUROPEAN  CREDIT  FACILITIES"  means the  revolving  credit  facilities
extended  by  various  European   financial   institutions  to  SCC  and/or  its
Subsidiaries  on a committed  basis  through and including May 2, 1998 under the
Master Facilities Agreement.

        "EVENT OF DEFAULT" has the meaning specified in Article VI.

        "GENERALLY  ACCEPTED  ACCOUNTING   PRINCIPLES"  or  "generally  accepted
accounting  principles" means generally  accepted  accounting  principles in the
United States in effect as of the date of the Loan Agreements.

        "GUARANTEED  INDEBTEDNESS"  shall mean  without  duplication  all of the
indebtedness, obligations and liabilities (in each case, whether or not existing
on the date hereof or arising from time to time thereafter,  direct or indirect,
joint  or  several,  actual,  absolute  or  contingent,  matured  or  unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or  otherwise)  of SCTC to the Holders  under or in respect of any one or
more of the  Documents,  including,  without  limitation,  the principal of, and
interest on, the Notes.

        "GUARANTY OBLIGATIONS" means any obligations (other than endorsements in
the  ordinary  course of  business  of  negotiable  instruments  for  deposit or
collection)  guaranteeing  or intended to guarantee  any  Indebtedness,  leases,
dividends or other obligations of any other Person in any manner, whether direct
or indirect,  and including  without  limitation any obligation,  whether or not
contingent,  (i) to purchase any such  Indebtedness  or other  obligation or any
property  constituting  security  therefor,  (ii) to advance or provide funds or
other support for the payment or purchase of such  indebtedness or obligation or
to maintain working  capital,  solvency or other balance sheet condition of such
other Person  (including  without  limitation keep well agreements,  maintenance
agreements, comfort letters or similar agreement or arrangement), (iii) to lease
or  purchase  property,  securities  or  services  primarily  for the purpose of
assuring the owner of such Indebtedness or obligation,  or (iv) otherwise assure
or hold harmless the owner of such  Indebtedness  or obligation  against loss in
respect thereof. The amount of Guaranty Obligations hereunder shall be deemed to
be an amount equal to the stated or determinable  amount of the  Indebtedness or
obligation  in  respect  of which such  Guaranty  Obligation  is made or, if not
stated or determinable,  the maximum  reasonably  anticipated  amount in respect
thereof  (assuming  such other  Person is  required  to perform  thereunder)  as
determined in good faith.

        "HOLDER" shall mean each Bank and any other Assignee.

        "INDEBTEDNESS"  means  without  duplication,  (i) all  indebtedness  for
borrowed money,  (ii) the deferred purchase price of assets or services which in
accordance with generally accepted accounting  principles would be shown to be a
liability  (or on the  liability  side of a balance  sheet),  (iii) all Guaranty
Obligations,  (iv) the  maximum  amount  of all  letters  of  credit  issued  or
acceptance  facilities  established for the account of such Person and,  without
duplication,  all drafts  drawn  thereunder  (other  than  letters of credit (x)
supporting  other  Indebtedness of the  undersigned and its  Subsidiaries or (y)
offset  by a like  amount  of cash or  government  securities  held in escrow to
secure such letter of credit and draws  thereunder),  (v) all capitalized  lease
obligations,  (vi) all Indebtedness of another Person secured by any lien or any
property  of the  undersigned  or any of its  Subsidiaries,  whether or not such
indebtedness  has been  assumed,  (vii) all  obligations  under  take-or-pay  or
similar   arrangements  or  under  interest  rate,   currency,   or  commodities
agreements, (viii) indebtedness created or arising under any conditional sale or
title retention agreement,  and (ix) withdrawal liability or insufficiency under
ERISA or under any qualified plan or related trust; but  specifically  excluding
from the foregoing  trade payables and accrued  expenses  arising or incurred in
the ordinary course of business.

        "INTANGIBLE  ASSETS"  shall  mean,  as of the date of any  determination
thereof,  the total amount of all assets of the undersigned and its Subsidiaries
consisting of goodwill, patents, tradenames, trademarks, copyrights, franchises,
experimental  expense,  organization  expense,  unamortized  debt  discount  and
expense,  deferred  assets other than prepaid  insurance and prepaid taxes,  the
excess of cost of shares  acquired  over book value of  related  assets and such
other assets as are properly  classified  as  "intangible  assets" in accordance
with Generally Accepted Accounting Principles.

        "INTEREST  EXPENSE" means the aggregate  amount of interest  accruing on
Indebtedness  and all  amortization of debt discount and expense on Indebtedness
(including,  without limitation, any obligation to pay rent in respect of leases
required to be capitalized  in accordance  with  Generally  Accepted  Accounting
Principles) of the undersigned or any of its  Subsidiaries  in the  twelve-month
period ending on the date such discount or expense is calculated.

        "LETTER OF CREDIT  OBLIGATIONS"  means the sum of all Regular  Letter of
Credit Obligations and all JTI Letter of Credit  Obligations,  as such terms are
defined in the Loan Agreements.

        "LEVERAGE  RATIO"  means  the  ratio  of  (a)  Total  Liabilities  minus
Subordinated Indebtedness to (b) Tangible Net Worth plus Subordinated
Indebtedness.

        "LIEN" means any mortgage, pledge,  hypothecation,  assignment,  deposit
arrangement,  security  interest,  encumbrance,  lien  (statutory or otherwise),
preference,  priority or charge of any kind (including any agreement to give any
of the foregoing,  any conditional sale or other title retention agreement,  any
financing or similar statement or notice filed under the Uniform Commercial Code
as adopted and in effect in the relevant jurisdiction or other similar recording
or notice statute, and any lease in the nature thereof).

        "MAJORITY  HOLDERS" means, at a particular time, the holders of at least
51% of the  aggregate  unpaid  principal  amount of the Notes and the  Letter of
Credit  Obligations,  or if no amounts are outstanding under the Notes and there
are no Letter of Credit Obligations or, then such determination shall be made on
the basis of Holders having an aggregate Commitment Percentage of at least 51%.

        "MASTER   FACILITIES   AGREEMENT"  means  that  certain  loan  document,
including all exhibits and schedules thereto, executed by SCC and certain of its
European  subsidiaries  with various financial  institutions,  providing for the
renewal and extension of the European  Credit  Facilities,  as such agreement is
amended  as of the  date  of  this  Agreement  or as may be  hereafter  amended,
modified, or supplemented.

        "MATERIAL  ADVERSE  EFFECT" means a material  adverse  effect on (i) the
operations or financial condition of the undersigned and its Subsidiaries, taken
as a whole, (ii) the ability of the undersigned to perform its obligations under
this Guaranty,  or (iii) the validity or enforceability of this Guaranty, or the
rights and remedies of the Holders hereunder.

        "MOODY'S" means Moody's Investors Service, Inc., and any
successor thereof.

        "MULTIEMPLOYER  PLAN" means at any time an employee pension benefit plan
within the  meaning of  Section  4001(a)(3)  of ERISA to which any member of the
Controlled Group is then making or accruing an obligation to make  contributions
or has within the preceding  five plan years made  contributions,  including for
these  purposes any Person which ceased to be a member of the  Controlled  Group
during such five year period.

        "PBGC" means the Pension Benefit Guaranty Corporation  established under
ERISA, and any successor thereto.

        "PERMITTED  INVESTMENTS"  means  (i)  cash and  Cash  Equivalents,  (ii)
receivables owing to the undersigned from any of its customers and/or suppliers,
in each case if created, acquired or made in the ordinary course of business and
payable or  dischargeable  in  accordance  with  customary  trade  terms,  (iii)
Indebtedness  to the  undersigned  incurred in the ordinary  course of business,
(iv) loans and  advances to  employees  for  business-related  travel  expenses,
moving  expenses  and  other  similar  expenses,  in each case  incurred  in the
ordinary  course of business) in an aggregate  amount not to exceed  $500,000 at
any time outstanding,  (v) investments  (including debt obligations) received in
connection with the bankruptcy or  reorganization of suppliers and customers and
in settlement of delinquent  obligations of, and other disputes with,  customers
and suppliers arising in the ordinary course of business, (vi) equity securities
listed on the New York Stock  Exchange  ("NYSE"),  PROVIDED  that the  long-term
credit rating of the corporation  issuing such  securities  shall be at least AA
from S&P or AA2 from Moody's,  or (vii)  investments owned by the undersigned on
the date hereof and set forth in EXHIBIT A (but without additional  acquisitions
thereof except as otherwise  permitted  hereby or with prior written  consent of
the Holders).

        "PERMITTED  LIENS"  means  (i) Liens  described  on  EXHIBIT B  attached
hereto;  (ii) Liens for taxes not yet due or Liens for taxes being  contested in
good faith by appropriate  proceedings for which adequate reserves determined in
accordance with generally accepted  accounting  principles have been established
(and as to  which  the  property  subject  to such  lien is not yet  subject  to
foreclosure,  sale or loss on  account  thereof);  (iii)  Liens  in  respect  of
property  imposed by law  arising in the  ordinary  course of  business  such as
materialmen's,  mechanics',  warehousemen's  and other like Liens  provided that
such Liens secure only amounts not yet due and payable; (iv) pledges or deposits
made  to  secure  payment  of  worker's  compensation  insurance,   unemployment
insurance,  pensions or social  security  programs;  (v) Liens arising from good
faith deposits in connection with or to secure performance of tenders, statutory
obligations,  surety and  appeal  bonds,  bids,  leases,  government  contracts,
performance and return-of-money  bonds and other similar obligations incurred in
the  ordinary  course of  business  (other  than  obligations  in respect of the
payment  of  borrowed  money);  (vi)  easements,   rights-of-way,   restrictions
(including  zoning  restrictions),  minor defects or irregularities in title and
other similar charges or encumbrances  not, in any material  respect,  impairing
the use of such  property  for its  intended  purposes or  interfering  with the
ordinary  conduct of business  of the  undersigned  or any of its  Subsidiaries;
(vii)  purchase  money Liens on assets other than  inventory  securing  purchase
money indebtedness of up to $5,000,000 at any time outstanding;  (viii) Liens on
the capital stock of each of the Subsidiaries  identified on EXHIBIT B to secure
repayment of the European Credit  Facilities;  (ix) Liens permitted  pursuant to
Section 5.07 hereof; and (x) Liens in favor of the Agent for the ratable benefit
of the Banks.

        "PERSON"  means  any  individual,   partnership,  joint  venture,  firm,
corporation,   association,   trust  or  other   enterprise   (whether   or  not
incorporated),  or any  government  or  political  subdivision  or  any  agency,
department or instrumentality thereof.

        "PLAN" means any  multiemployer  or  single-employer  plan as defined in
Section  4001 of ERISA,  which is  maintained,  or at any time  during  the five
calendar years preceding the date of this Guaranty was maintained, for employees
of the undersigned, any of its Subsidiaries or an ERISA Affiliate.

        "REGULATION  D" means  Regulation  D of the  Board of  Governors  of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.

        "REGULATION  G" means  Regulation  G of the  Board of  Governors  of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.

        "REGULATION  U" means  Regulation  U of the  Board of  Governors  of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.

        "REGULATION  X" means  Regulation  X of the  Board of  Governors  of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion of establishing margin requirements.

        "SCTC NOTE" means that certain promissory note executed by SCTC in favor
of SCC in the original principal amount of $15,000,000.

        "S&P" means Standard & Poors Corporation, and any successor
thereof.

        "SALE OF WOOL  GROUP"  means the sale or sales of the  capital  stock or
substantially  all assets or  business  of a Wool Group  Company at  arms-length
terms for cash consideration.

        "SUBORDINATED  INDEBTEDNESS"  means indebtedness of SCC the repayment of
which has been subordinated to the repayment of the obligations of SCC hereunder
pursuant to subordination  agreements in form and substance  satisfactory to the
Banks.

        "SUBORDINATION  AGREEMENT" means the subordination agreement executed by
SCC in favor  of the  Agent  and the  Banks  whereby  SCC (i)  subordinates  the
repayment of the SCTC Note to the repayment of the  Guaranteed  Obligations on a
permanent  basis,   and  (ii)   subordinates  the  repayment  of  the  remaining
obligations of SCTC to SCC to the repayment of the Guaranteed  Obligations  upon
the  occurrence of a Default under the Loan  Agreements as amended,  modified or
supplemented from time to time.

        "SUBSIDIARY"  means (i) any corporation  more than 50% of whose stock of
any class or classes having by the terms thereof  ordinary voting power to elect
a majority of the directors of such corporation  (irrespective of whether or not
at the time, any class or classes of such  corporation  shall have or might have
voting power by reason of the happening of any contingency) is at the time owned
by such  Person  directly  or  indirectly  through  Subsidiaries,  and  (ii) any
partnership,  association,  joint  venture or other  entity in which such person
directly or indirectly through Subsidiaries has more than 50% equity interest at
any time.

        "TANGIBLE NET WORTH" means, at any time,  consolidated net shareholders'
equity of the  undersigned and its  Subsidiaries,  determined in accordance with
Generally Accepted Accounting  Principles applied on a Consistent Basis, with no
upward  adjustments due to a revaluation of assets,  minus all Intangible Assets
of the undersigned and its  Subsidiaries  and excluding  cumulative  translation
adjustments.

        "TOTAL  LIABILITIES" means all items which, in accordance with Generally
Accepted  Accounting  Principles,  would  be  classified  as  liabilities  on  a
consolidated balance sheet of the undersigned and its Subsidiaries.

        "WOOL GROUP COMPANY" means each of the companies  identified on SCHEDULE
1 attached hereto.

        (b)  Capitalized  terms that are used herein and are not defined  herein
shall have the meanings ascribed to them in the Loan Agreements.


                        ARTICLE II.  THE GUARANTY
                        -------------------------

        Section 2.01 GUARANTY OF PAYMENT AND  PERFORMANCE  OF  OBLIGATIONS.  SCC
unconditionally  guarantees to each Holder the full and prompt payment when due,
whether  at  maturity,  at any  stated  prepayment  date or earlier by reason of
acceleration or otherwise, and at all times thereafter, of all of the Guaranteed
Indebtedness;  and the undersigned further agrees to pay all costs and expenses,
including,  without limitation,  all court costs and reasonable  attorneys' fees
and expenses,  paid or incurred in endeavoring to collect all or any part of the
Guaranteed  Indebtedness from, or in prosecuting any action against, SCTC or the
undersigned  of all or  any  part  of the  Guaranteed  Indebtedness.  This  is a
continuing guaranty of payment and not of collection.

        The  undersigned  covenants  that it will not be  discharged  except  by
complete  performance  of the  obligations  contained  herein.  Upon an Event of
Default  under the Loan  Agreements,  any Holder may, at its sole  election  and
without notice,  proceed directly and at once against the undersigned to collect
and recover the full amount of any portion of the  liability of the  undersigned
hereunder,  without  first  proceeding  against SCTC,  any other Person,  or any
security or collateral for the Guaranteed  Indebtedness  or for the liability of
the undersigned under this Guaranty.  Each Holder shall have the exclusive right
to  determine  the  application  of  payments  and  credits,  if any,  from  the
undersigned,  SCTC or  from  any  other  Person  on  account  of the  Guaranteed
Indebtedness owed to such Holder.

        Section 2.02 OBLIGATIONS  UNCONDITIONAL.  The undersigned  hereby agrees
that the obligations of the undersigned under this Guaranty shall be continuing,
absolute   and   unconditional,   irrespective   of  (i)   the   invalidity   or
unenforceability  of any  part  or all of  the  Guaranteed  Indebtedness  or any
Document; (ii) the absence of any attempt to collect the Guaranteed Indebtedness
from SCTC or from any other  guarantor  of the  Guaranteed  Indebtedness  or any
other  action  to  enforce  the same or to  realize  upon any  security  for any
thereof;  (iii) the waiver or consent by the Agent or any Holder with respect to
any provision of any Document or  applicable  law; (iv) any failure by the Agent
or any Holder to acquire,  perfect or maintain a security  interest  in, or take
any steps to  preserve  its  rights  to,  any  security  or  collateral  for the
Guaranteed  Indebtedness,  this Guaranty or any other guaranty of the Guaranteed
Indebtedness;  (v) any  defense  arising  by reason of any  disability  or other
defense  (other  than a defense of  payment,  unless  the  payment on which such
defense is based was or is subsequently  invalidated,  declared to be fraudulent
or preferential,  otherwise,  avoided and/or required to be repaid to or for the
benefit of SCTC, in which case there shall be no defense of payment with respect
to such  payment)  of SCTC or any  endorser,  guarantor,  comaker  or any  other
Person;  (vi) the Agent's or a Holder's election,  in any proceeding  instituted
under Chapter 11 of Title 11 of the  Bankruptcy  Code (11 U.S.C.  Section 101 et
seq.), of the application of Section  1111(b)(2) of the Bankruptcy  Code;  (vii)
any   borrowing   or   grant   of   a   security   interest   by   SCTC,   as  a
debtor-in-possession,  under  Section  364 of the  Bankruptcy  Code;  (viii) the
disallowance  or  avoidance  of all or any  portion of a Holder's  claim(s)  for
repayment  of the  Guaranteed  Indebtedness  under  the  Bankruptcy  Code or the
avoidance of any security for the  Guaranteed  Indebtedness;  (ix) any errors or
omissions  by a Holder  with  respect to the  administration  of the  Guaranteed
Indebtedness  or any  security  therefor or which might  change the scope of the
undersigned's  rights  hereunder;  (x)  the  acceptance  of  additional  parties
primarily or  secondarily  liable on the  Guaranteed  Indebtedness;  or (xi) any
other  circumstance  which  might  otherwise  constitute  a legal  or  equitable
discharge or defense of a guarantor.

        Section  2.03  FREEDOM  TO  ACT.  The  Agent  or any  Holder  is  hereby
authorized,   without  notice  and  without   affecting  the  liability  of  the
undersigned hereunder to the Agent or such Holder or any other Holder, from time
to time to (i)  renew,  extend,  accelerate  or  otherwise  change  the time for
payment  of,  or other  terms  relating  to,  the  Guaranteed  Indebtedness,  or
otherwise modify, amend or change the terms of any of the Documents; (ii) accept
partial payments on the Guaranteed Indebtedness; (iii) take and hold security or
collateral for the Guaranteed Indebtedness or any other liabilities of SCTC, the
obligations of the undersigned under this Guaranty and the obligations under any
other guaranties of the Guaranteed Indebtedness,  and exchange,  enforce, waive,
release,  sell,  transfer,  assign or otherwise  deal with any such  security or
collateral;  (iv)  apply such  security  or  collateral  and direct the order or
manner of sale  thereof as each  Holder may  determine  in its  discretion;  (v)
settle,  release,  compromise,  collect or otherwise  liquidate  the  Guaranteed
Indebtedness or any portion  thereof and any security or collateral  therefor in
any manner;  (vi) extend additional loans,  credit and financial  accommodations
and otherwise  create  additional  Guaranteed  Indebtedness;  (vii) waive strict
compliance with the terms of the Documents and otherwise  forbear from asserting
the Agent's or such Holder's rights and remedies  thereunder;  (viii) enforce or
forbear from enforcing the guaranty of any other guarantor of all or any part of
the  Guaranteed  Indebtedness  or release any such  guarantor;  (ix) assign this
Guaranty in part or in whole in  connection  with any  assignment of any part or
all of the Guaranteed  Indebtedness;  or (x) release any obligor with respect to
the Guaranteed Indebtedness.

        No delay on the part of the Agent or any Holder in the  exercise  of any
right or remedy  shall  operate  as a waiver  thereof,  and no single or partial
exercise by the Agent or any Holder of any right or remedy  shall  preclude  any
further  exercise  thereof by the Agent or such  Holder or any other  Holder nor
shall any  modification  or waiver of any of the  provisions of this Guaranty be
binding upon the Agent or any Holder  except as expressly set forth in a writing
duly  signed  and  delivered  on the  Agent's  or such  Holder's  behalf  by any
authorized  officer of the Agent or such  Holder.  The Agent's or such  Holder's
failure at any time or times  hereafter  to require  strict  performance  by the
undersigned  of  any  of  the  covenants,  provisions,   warranties,  terms  and
conditions  contained  in this  Guaranty  or any  other  promissory  note,  loan
agreement, lease, security agreement,  mortgage, agreement,  instrument or other
document now or at any time or times  hereafter  executed by the undersigned and
delivered  to the Agent or such Holder  shall not waive,  affect or diminish any
right of the  Agent or such  Holder  at any time or times  hereafter  to  demand
strict performance  therewith and no waiver of any such right shall be deemed to
occur by any act or knowledge of the Agent or such Holder, its agents,  officers
or employees or be binding against the Agent or such Holder, except as expressly
set forth in a writing duly signed and delivered on the Agent's or such Holder's
behalf by an officer of the Agent or such Holder, respectively. No waiver by the
Agent or such  Holder  of any  default  shall  operate  as a waiver of any other
default or the same default on a future occasion,  and no action by the Agent or
such Holder permitted hereunder shall in any way affect or impair the Agent's or
such Holder's rights or the obligations of the undersigned  under this Guaranty.
No modification or waiver of any of the provisions of this Guaranty by the Agent
or any  Holder nor any  action by the Agent or any  Holder  permitted  hereunder
shall  affect or impair  any other  Holder's  rights or the  obligations  of the
undersigned  under this Guaranty unless such  modification,  waiver or action is
consented to in a writing duly signed and delivered on such  Holder's  behalf by
an officer of such Holder.

        The  undersigned  hereby  transfers  and  conveys to the Agent,  for the
ratable  benefit  of the  Holders,  any and  all  balances,  credits,  deposits,
accounts, items and monies of the undersigned now or hereafter in the possession
or control of the Agent or any  Holder,  and the Agent and each Holder is hereby
given a lien upon, security title to, and a security interest in all property of
the undersigned of every kind and description now or hereafter in the possession
or  control  of the Agent and each  Holder  for any  reason,  including  without
limitation  all  dividends  and  distributions  on or other rights in connection
therewith.  The Agent and each Holder may, without demand or notice of any kind,
at any time and from  time to time  when  any  amount  shall be due and  payable
hereunder,  appropriate and apply toward the payment of such amount, and in such
order  of  application  as the  Agent  may from to time to time  determine,  any
property,  balances, credits, deposits,  accounts, items or monies of SCC in the
possession or control of the Agent or any Holder for any purpose.

        Section 2.04 WAIVERS OF UNDERSIGNED. The undersigned shall have no right
of subrogation,  reimbursement or indemnity  whatsoever and no right of recourse
to or with  respect to any assets or property of SCTC or to any  collateral  for
said debts and  obligations  of SCTC to the  Holders.  The  undersigned  further
waives any right to demand  security from SCTC and any benefit of, and any right
to participate  in, any security or collateral  given to any Holder,  including,
without  limitation,  security  given to any  Holder  to secure  payment  of the
Guaranteed  Indebtedness  or any  other  liability  of SCTC to any  Holder.  The
undersigned  also waives all set-offs and  counterclaims  and all  presentments,
demands  for  performance,  notices  of  nonperformance,  protests,  notices  of
protest,  notices of dishonor,  and  diligence  with  respect to the  Guaranteed
Indebtedness and the obligations of the undersigned hereunder, the filing of any
claims with a court in the event of  receivership  or  bankruptcy  of SCTC,  and
notices of acceptance  of this  Guaranty.  The  undersigned  further  waives all
notices  that the  principal  amount,  any payment or any portion  thereof,  any
interest  and/or  premium on all or any part of the Guaranteed  Indebtedness  is
due,  notices of the  creation  or  existence  of the  Guaranteed  Indebtedness,
notices of any and all  proceedings  to collect  from SCTC,  any endorser or any
other  guarantor  of all or any  part of the  Guaranteed  Indebtedness,  or from
anyone else,  and, to the extent  permitted by law,  notices of exchange,  sale,
surrender or other handling of any security or collateral given to any Holder to
secure  payment of the Guaranteed  Indebtedness.  The  undersigned  consents and
agrees that no Holder  shall be under any  obligation  to marshall any assets in
favor  of  the  undersigned  or  against  or in  payment  of  any  or all of the
Guaranteed  Indebtedness.  The  undersigned  waives any and all  requirements of
diligence  in  collection  or  protection  of  realization  upon the  Guaranteed
Indebtedness  or any collateral  granted to the Agent or any Holder  pursuant to
the Loan  Documents  or in  enforcing  any remedy  available to the Agent or any
Holder under any of the Loan Documents.  The  undersigned  waives the benefit of
N.C. Gen. Stat.  Sections 26-7 through 26-9,  inclusive.  The  undersigned  also
waives any provisions under the applicable law of any jurisdiction,  relating to
the undersigned's right to discharge upon the undersigned's giving notice to the
Agent or any Holder to proceed against SCTC for collection  after the Guaranteed
Indebtedness is due and payable,  and the failure or refusal of the Agent or any
Holder to commence an action or  foreclose  any  collateral  within any specific
time period or at any time.

        Section 2.05 REVIVAL.  The undersigned further agrees that to the extent
that SCTC or the undersigned  make a payment or a transfer of an interest in any
property  to any  Holder,  which  payment  or  transfer  or any part  thereof is
subsequently  invalidated,   declared  to  be  fraudulent  or  preferential,  or
otherwise is avoided,  and/or required to be repaid to SCTC or the  undersigned,
the estate of SCTC or the  undersigned,  a trustee,  receiver or any other party
under any bankruptcy law, state or federal law,  common law or equitable  cause,
then to the  extent of such  avoidance  or  repayment,  the  obligation  or part
thereof  intended to be satisfied  shall be revived and  continued in full force
and effect as if said payment had not been made.

        Section 2.06 SUBORDINATION;  BANKRUPTCY.  The undersigned further agrees
that  any and all  present  and  future  debts  and  obligations  of SCTC to the
undersigned  and any and all claims of the  undersigned  against SCTC, or any of
its properties,  howsoever arising, shall be subordinate and subject in right of
payment to the prior  payment,  in full, of the Guaranteed  Indebtedness  and as
security for this Guaranty,  the  undersigned  hereby assigns to each Holder all
claims of any nature which the  undersigned  may now or  hereafter  have against
SCTC. If SCTC or the undersigned  should at any time become  insolvent or make a
general  assignment  for  the  benefit  of  creditors,  or  if a  proceeding  in
bankruptcy or any  insolvency or  reorganization  proceedings  shall be filed or
commenced  by,  against or in respect  of SCTC or the  undersigned,  any and all
obligations of the undersigned  shall,  at the option of any Holder,  become due
and payable,  and the  undersigned  shall  forthwith pay to the Holders the full
amount which would be payable  hereunder by the  undersigned  if all  Guaranteed
Indebtedness was then due and payable.

        Section 2.07 OBLIGATION TO KEEP INFORMED. The undersigned hereby assumes
responsibility  for keeping itself  informed of the financial  condition of SCTC
and any and all  endorsers  and/or  other  guarantor  of all or any  part of the
Guaranteed  Indebtedness and of all other circumstances bearing upon the risk of
nonpayment  of  the  Guaranteed  Indebtedness  or  any  part  thereof,  and  the
undersigned  hereby  agrees  that no  Holder  shall  have a duty to  advise  the
undersigned of information  known to any Holder  regarding such condition or any
such  circumstance.  In the  event  that any  Holder,  in its  sole  discretion,
undertakes at any time or from time to time to provide any such  information  to
the undersigned,  that Holder or other Holders shall not be under any obligation
(i) to  undertake  any  investigation,  whether  or not a part of their  regular
business  routine,  (ii) to disclose any information  which any Holder wishes to
maintain confidential,  or (iii) to make any other or future disclosures of such
information or any other information to the undersigned.


                ARTICLE III.  REPRESENTATIONS AND WARRANTIES
                --------------------------------------------
        The  undersigned  hereby  represents  and  warrants to the Agent and the
Holders that:

        Section 3.01 ORGANIZATION AND GOOD STANDING. The undersigned and each of
its  Subsidiaries are corporations  duly  incorporated,  validly existing and in
good standing  under the laws of the respective  states of their  incorporation,
are duly qualified and in good standing as foreign corporations authorized to do
business  in every  jurisdiction  where the  failure to so qualify  would have a
Material Adverse Effect on the undersigned or any of such  Subsidiaries and have
the requisite  corporate power and authority to own their respective  properties
and to carry on their respective  businesses as now conducted and as proposed to
be conducted.

        Section 3.02 DUE  AUTHORIZATION.  The  undersigned (i) has the corporate
power and requisite authority to execute,  deliver and perform this Guaranty and
the  Subordination  Agreement  and  (ii) is duly  authorized  to,  and has  been
authorized by all necessary  corporate action,  to execute,  deliver and perform
this Guaranty and the Subordination Agreement.

        Section  3.03 NO  CONFLICTS  OR  CONSENTS.  Neither  the  execution  and
delivery of this Guaranty or the Subordination  Agreement,  nor the consummation
of the transactions contemplated therein, nor performance of and compliance with
the terms and provisions thereof will (i) violate or conflict with any provision
of its  articles  of  incorporation  or  bylaws,  (ii)  violate,  contravene  or
materially  conflict  with any law,  regulation  (including  without  limitation
Regulation U or Regulation  X), order,  writ,  judgment,  injunction,  decree or
permit applicable to it, (iii) violate,  contravene or materially  conflict with
contractual  provisions of, or cause an event of default  under,  any indenture,
loan  agreement,  mortgage,  deed of  trust,  contract  or  other  agreement  or
instrument  to which it is a party or by which it may be bound or (iv) result in
or require  the  creation  of any lien,  security  interest  or other  charge or
encumbrance  (other  than  those  contemplated  in or in  connection  with  this
Guaranty) upon or with respect its properties.

        Section 3.04 CONSENTS. No consent, approval,  authorization or order of,
or  filing,  registration  or  qualification  with,  any  court or  governmental
authority or third party is required in connection with the execution,  delivery
or performance of this Guaranty or the Subordination Agreement.

        Section   3.05   ENFORCEABLE   OBLIGATIONS.   This   Guaranty   and  the
Subordination Agreement have been duly executed and delivered by the undersigned
and  constitute  the legal,  valid and binding  obligations  of the  undersigned
enforceable in accordance with their respective terms,  except as may be limited
by bankruptcy or insolvency  laws or similar laws  affecting  creditors'  rights
generally.

        Section 3.06 FINANCIAL CONDITION. The financial statements and financial
information provided to the Holders, consisting of, among other things, the most
recent  audited   consolidated   balance  sheet  of  the   undersigned  and  its
Subsidiaries together with related consolidated  statements of income,  retained
earnings  and cash  flows  certified  by  Deloitte  & Touche,  certified  public
accountants,  as true and correct,  fairly represent the financial  condition of
the undersigned and its Subsidiaries as of such date. Such financial  statements
were  prepared in  accordance  with  generally  accepted  accounting  principles
applied on a consistent basis. The undersigned has also furnished to the Holders
internally  prepared  and  unaudited  financial   projections.   Such  financial
projections  were  prepared  based  on the  best  information  available  to the
undersigned  and, where  applicable,  were prepared in accordance with Generally
Accepted  Accounting  Principles  applied on a Consistent  Basis. Such financial
projections  are  accurate,  to the best  knowledge of the  undersigned,  in all
material respects,  and since the date of such financial  projections there have
occurred  no  changes  or  circumstances  which have had or are likely to have a
Material Adverse Effect on the undersigned or its Subsidiaries

        Section  3.07 NO  DEFAULT.  No  Default  or Event of  Default  presently
exists.

        Section 3.08 LIENS.  Except for Permitted Liens, the undersigned and its
Subsidiaries  have  good  and  marketable  title  to  all  of  their  respective
properties  and  assets  free and clear of all liens,  encumbrances,  mortgages,
pledges, security interests and other adverse claims of any nature.

        Section 3.09 INDEBTEDNESS.  The undersigned and its Subsidiaries have no
Indebtedness  (including  without  limitation  reimbursement or other contingent
obligations)  except as  disclosed in the  financial  statements  referenced  in
Section 3.06 and as set forth in EXHIBIT C.

        Section 3.10 LITIGATION.  Except as disclosed in EXHIBIT D, there are no
actions, suits or legal, equitable,  arbitration or administrative  proceedings,
pending  or,  to  the  knowledge  of the  undersigned  threatened,  against  the
undersigned or any of its  Subsidiaries  which, if adversely  determined,  could
have a Material Adverse Effect on the enforceability of this Guaranty.

        Section 3.11 MATERIAL AGREEMENTS. Neither the undersigned nor any of its
Subsidiaries,  is in default in any material respect under any contract,  lease,
loan  agreement,  indenture,  mortgage,  security  agreement  or other  material
agreement or obligation to which it is a party or by which any of its properties
is bound.

        Section 3.12  BURDENSOME  CONTRACTS.  Neither the undersigned nor any of
its  Subsidiaries  is a party to, or bound by, any contract,  lease,  indenture,
loan agreement or other  agreement or arrangement the performance of which would
have  a  Material  Adverse  Effect  on the  business,  condition  (financial  or
otherwise),  operations or properties of the  undersigned or any such Subsidiary
or on the  ability of the  undersigned  to perform  its  obligations  under this
Guaranty or the Subordination Agreement.

        Section 3.13 TAXES. The undersigned and its Subsidiaries  have filed, or
caused to be filed, all material tax returns (federal, state, local and foreign)
required  to be filed and paid all  amounts  of taxes  shown  thereon  to be due
(including  interest  and  penalties)  and have  paid  all  other  taxes,  fees,
assessments and other governmental  charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it and its Subsidiaries,
except  for such  taxes (i) which  are not yet  delinquent  or (ii) as are being
contested in good faith and by proper  proceedings,  and against which  adequate
reserves are being maintained in accordance with generally  accepted  accounting
principles.   The  undersigned  is  not  aware  of  any  proposed  material  tax
assessments  against it or any of its  Subsidiaries.  No  extension  of time for
assessment or payment by the  undersigned of any federal,  state or local tax in
effect other than extensions granted in the ordinary course of business which do
not have a Material Adverse Effect.

        Section 3.14 COMPLIANCE  WITH LAW. The undersigned and its  Subsidiaries
are in  compliance  with  all  laws,  rules,  regulations,  orders  and  decrees
(including  without  limitation  environmental  laws)  applicable  to it and its
Subsidiaries, or to its and its Subsidiaries' properties.

        Section 3.15 ERISA.  (i) No  Reportable  Event (as defined in ERISA) has
occurred  and is  continuing  with  respect  to any  Plan;  (ii) no Plan  has an
unfunded  current  liability  (determined  under  Section 412 of the Code) or an
accumulated funding deficiency,  (iii) no proceedings have been instituted,  or,
to the  knowledge  of the  undersigned,  planned,  to terminate  any Plan,  (iv)
neither  the   undersigned,   any  member  of  a  Controlled   Group,   nor  any
duly-appointed  administrator  of a  Plan  (A)  has  instituted  or  intends  to
institute  proceedings  to withdraw  from any  Multi-Employer  Pension  Plan (as
defined in Section 3(37) or ERISA);  and (v) each Plan has been  maintained  and
funded in all material  respects with its terms and with the provisions of ERISA
applicable thereto.

        Section 3.16 SUBSIDIARIES. The undersigned has no Subsidiaries except as
set forth in EXHIBIT E.

        Section 3.17 GOVERNMENT  REGULATION.  Neither the undersigned nor any of
its  Subsidiaries  is subject to  regulation  under the Public  Utility  Holding
Company Act of 1935, the Federal Power Act, the  Investment  Company Act of 1940
or the  Interstate  Commerce  Act,  each as amended.  In  addition,  neither the
undersigned  nor  any  of  its  Subsidiaries  is  (i)  an  "investment  company"
registered  or required to be  registered  under the  Investment  Company Act of
1940, as amended,  and is not  controlled by such a company,  or (ii) a "holding
company," or a "Subsidiary company" of a "holding company," or an "affiliate" of
a "holding  company" or of a  "Subsidiary"  or a "holding  company,"  within the
meaning of the Public Utility Holding Company Act of 1935, as amended.

        Section 3.18 HAZARDOUS SUBSTANCES.  The real property owned or leased by
the undersigned or any of its Subsidiaries or on which the undersigned or any of
its  Subsidiaries  operates  (the "Subject  Property")  is free from  "hazardous
substances" as defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C.  Sub Section 9601 et seq., as amended,  and
the regulations  promulgated  thereunder;  no portion of the Subject Property is
subject  to  federal,  state or local  regulation  or  liability  because of the
presence of stored,  leaked or spilled  petroleum  products,  waste materials or
debris,  "PCB's"  or  PCB  items  (as  defined  in  40  C.F.R.  Section  763.3),
underground storage tanks,  "asbestos" (as defined in 40 C.F.R.  Section 763.63)
or the past or present accumulation,  spillage or leakage of any such substance;
and the  undersigned and each of its  Subsidiaries is in substantial  compliance
with  all  Environmental  Laws and the  undersigned  knows  of no  complaint  or
investigation  regarding real property which it or any of its Subsidiaries' owns
or leases or on which it or any of its Subsidiaries' operates.

        Section 3.19 PATENTS,  ETC. The undersigned and its Subsidiaries possess
all material  patents,  trademarks,  service  marks,  trade  names,  copyrights,
licenses and other rights, free from burdensome restrictions, that are necessary
for the operation of its and its Subsidiaries' businesses as presently conducted
and as proposed to be conducted.

        Section 3.20 SOLVENCY.  The  undersigned  is, and after  consummation of
this Guaranty and after giving effect to all  Indebtedness  incurred  hereunder,
will be solvent.


                        ARTICLE IV.  AFFIRMATIVE COVENANTS
                        ----------------------------------
        The  undersigned  hereby  covenants  and agrees that so long as the Loan
Agreements  are in effect and until the  Loans,  all  obligations  in respect of
Letters of Credit, and other obligations  arising under the Documents,  together
with interest, fees and other charges thereunder, have been paid in full and the
Commitments thereunder shall have terminated:

        Section 4.01 INFORMATION  COVENANTS.  The undersigned  will furnish,  or
cause to be furnished, to the Agent and each Holder:

        (a) ANNUAL FINANCIAL  STATEMENTS.  As soon as available and in any event
within  90 days  after  the  close of each  fiscal  year of the  undersigned,  a
consolidated  and  consolidating  balance  sheet  of  the  undersigned  and  its
Subsidiaries as at the end of such fiscal year together with related  statements
of income and retained earnings and of cash flows for such fiscal year,  setting
forth  in  comparative  form  figures  for the  preceding  fiscal  year,  all in
reasonable  detail and examined  independent  certified  public  accountants  of
recognized  national standing acceptable to the Agent and whose opinion shall be
to the effect that such  financial  statements  have been prepared in accordance
with generally accepted accounting  principles applied on a consistent basis and
shall not be  qualified  as to the scope of the audit or as to the status of the
undersigned as a going concern,  and which shall be accompanied by a certificate
of such  accountants  stating  that in the  course of its  regular  audit of the
business  of the  undersigned  which  audit was  conducted  in  accordance  with
generally accepted auditing standards (including tests of the accounting records
and  such  other  auditing  procedures  as  were  considered  necessary  in  the
circumstances)  they have  obtained  no  knowledge  of any  Default  or Event of
Default  which has  occurred  and is  continuing  or, if in the  opinion of such
accounting  firm  such a  Default  or  Event  of  Default  has  occurred  and is
continuing,  a statement as to the nature thereof, all of the foregoing to be in
reasonable  detail and in form and substance  satisfactory  to the Agent and the
Majority Holders.  It is specifically  understood and agreed that failure of the
annual  financial  statements to be accompanied by an opinion and certificate of
such  accountants  in form and substance as provided  herein shall  constitute a
Default hereunder.

        (b)  QUARTERLY  FINANCIAL  STATEMENTS.  As soon as available  and in any
event within 45 days after the end of each fiscal  quarter,  a consolidated  and
consolidating  balance sheet of the undersigned  and its  Subsidiaries as at the
end of such  quarter  together  with related  statements  of income and retained
earnings  and of cash flows for such  quarter  and for the portion of the fiscal
year ending with such quarter,  in each case setting forth in  comparative  form
figures  for the  corresponding  period of the  preceding  fiscal  year,  all in
reasonable  form and detail  acceptable  to the Agent and the Majority  Holders,
subject to changes resulting from audit and normal year-end adjustments.

        (c)  OFFICER'S  CERTIFICATE.  At the time of delivery  of the  financial
statements  provided for in Sections 4.01(a) and (b) hereof, a certificate of an
authorized  financial  officer of the undersigned,  substantially in the form of
EXHIBIT G to the effect that such  financial  statements  have been  prepared in
accordance with generally accepted accounting principles applied on a consistent
basis and that the  undersigned is in compliance with the terms of this Guaranty
and no Default or Event of Default exists, or if any Default or Event of Default
does  exist  specifying  the  nature  and  extent  thereof  and what  action the
undersigned  proposes to take with respect thereto. In addition,  such officer's
certificate shall demonstrate compliance of the financial covenants contained in
Sections 4.10, 4.11, 4.12 and 5.06 by calculation  thereof as of the end of each
such fiscal period.

        (d)  ACCOUNTANT'S  CERTIFICATE.  Within the period for  delivery  of the
annual financial  statements  provided in Section 4.01(a),  a certificate of the
accountants  conducting  the annual audit  stating that they have  reviewed this
Guaranty and stating further  whether,  in the course of their audit,  they have
become  aware of any  Default or Event of Default  (insofar as any such terms or
provisions  pertain to accounting  matters) and, if any such Default or Event of
Default exists, specifying the nature and extent thereof.

        (e)  AUDITOR'S  REPORTS.  Promptly upon receipt  thereof,  a copy of any
other  report  submitted  by  independent  accountants  to  the  undersigned  in
connection  with any  annual,  interim  or  special  audit  of the  books of the
undersigned including any management letter.

        (f) SEC AND OTHER REPORTS. Promptly upon transmission thereof, copies of
any filings and  registrations  with,  and  reports to, (i) the  Securities  and
Exchange Commission, or any successor agency, by the undersigned,  and copies of
all  financial  statements,  proxy  statements,   notices  and  reports  as  the
undersigned  shall  send to its  shareholders  or to the  holders  of any  other
Indebtedness  (including  specifically  without  limitation,   any  Subordinated
Indebtedness  or the  indebtedness  under the Senior Notes) in their capacity as
such holders and (ii) the United States Environmental  Protection Agency, or any
state or local agency responsible for environmental  matters,  the United States
Occupational  Health and  Safety  Administration,  or any state or local  agency
responsible  for  health  and  safety  matters,  or any  successor  agencies  or
authorities concerning environmental, health or safety matters.

        (g)     OTHER INFORMATION.  With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of the undersigned as the Agent or the Majority
Holders may reasonably request.

        (h) NOTICE OF  DEFAULT OR  LITIGATION.  Upon the  undersigned  obtaining
knowledge thereof,  it will give written notice to the Agent and the Holders (i)
immediately,  of the occurrence of an event or condition consisting of a Default
or Event of Default, specifying the nature and existence thereof and what action
the undersigned proposes to take with respect thereto, and (ii) promptly, but in
any event within 5 Business Days, of the occurrence of any of the following with
respect to the  undersigned  or any of its  Subsidiaries:  (A) the  pendency  or
commencement of any litigation,  arbitral or governmental proceeding against the
undersigned or any of its Subsidiaries which is likely to have, or could have, a
Material  Adverse  Effect  on  the  business,   properties,   assets,  condition
(financial  or  otherwise)  or  prospects  of  the  undersigned  or  any  of its
Subsidiaries or of the undersigned to perform its obligations hereunder, (B) any
levy of an  attachment,  execution  or other  process  against its or any of its
Subsidiaries'  assets having a value of $250,000 or more,  (C) the occurrence of
an event or condition which shall constitute a default or event of default under
any other agreement for borrowed money, including without limitation any default
in respect of the European Credit Facilities,  (D) any development in its or any
Subsidiary's business or affairs which has resulted in, or which the undersigned
reasonably  believes  may  result  in,  a  Material  Adverse  Effect  or (E) the
institution of any  proceedings  against,  or the receipt of notice of potential
liability or responsibility for violation,  or alleged violation of any federal,
state  or  local  law,  rule  or  regulation,  including  but  not  limited  to,
regulations  promulgated  under the  Resource  Conservation  and Recovery Act of
1976, 42 U.S.C. 6901 et seq., regulating the generation, handling or disposal of
any toxic or hazardous waste or substance or the release into the environment or
storage of any toxic or hazardous  waste or  substance,  the  violation of which
could give rise to a material  liability  on the  business,  assets,  properties
condition  (financial  or otherwise)  or prospects of the  undersigned,  (F) any
notice or determination concerning the imposition of any withdrawal liability by
a  multiemployer  Plan on the  undersigned or any of its ERISA  Affiliates,  the
determination   that  a  multiemployer  Plan  is,  or  is  expected  to  be,  in
reorganization  within the meaning of Title IV or ERISA,  the termination of any
Plan,  and the  amount  of  liability  incurred  or  which  may be  incurred  in
connection with any such event.

        Section 4.02  PRESERVATION OF EXISTENCE AND FRANCHISES.  The undersigned
will do or cause to be done,  all things  necessary to preserve and keep in full
force and  effect  its  existence,  rights,  franchises  and  authority  and the
existence, rights, franchises and authority of each of its Subsidiaries.

        Section 4.03 BOOKS, RECORDS AND INSPECTIONS.  The undersigned will keep,
and will cause each of its Subsidiaries to keep, complete and accurate books and
records  of its and each  Subsidiary's  transactions  in  accordance  with  good
accounting  practices on the basis of generally accepted  accounting  principles
applied on a consistent  basis (including the  establishment  and maintenance of
appropriate  reserves).  The undersigned will permit, and will cause each of its
Subsidiaries   to  permit,   on   reasonable   notice   officers  or  designated
representatives  of  any  Holder  to  visit  and  inspect  its  and  any  of its
Subsidiary's  books of account and  records and any of its and any  Subsidiary's
properties  or assets (in  whomever's  possession)  and to discuss the  affairs,
finances and accounts of the undersigned or any of its Subsidiaries with, and be
advised  as to the  same  by its or any  Subsidiary's  officers,  directors  and
independent accountants.

        Section 4.04 COMPLIANCE WITH LAW. The undersigned will comply,  and will
cause each of its  Subsidiaries  to comply,  with all  applicable  laws,  rules,
regulations  and  orders  of,  and all  applicable  restrictions  imposed by all
applicable governmental bodies, foreign or domestic, or authorities and agencies
thereof (including  quasi-governmental  authorities and agencies), in respect of
the conduct of its or any Subsidiary's  business and the ownership of its or any
Subsidiary's  property  (including all Environmental Laws and controls),  except
where any such  noncompliance  would not have a Material  Adverse  Effect on the
business,  assets,  properties  or condition  (financial  or  otherwise)  of the
undersigned or any of its  Subsidiaries  or on the ability of the undersigned or
any of its Subsidiaries to perform its obligations hereunder.

        Section 4.05 PAYMENT OF TAXES AND OTHER  INDEBTEDNESS.  The  undersigned
will pay and discharge,  and will cause its  Subsidiaries  to pay and discharge,
(i) all taxes, assessments and governmental charges or levies imposed upon it or
its Subsidiaries,  or upon its or its Subsidiaries'  income or profits,  or upon
any of its  properties,  before they shall  become  delinquent,  (ii) all lawful
claims  (including  claims for labor,  materials and supplies) which, if unpaid,
might give rise to a Lien or charge upon any of its or any of its  Subsidiaries'
properties,  and  (iii)  except  as  prohibited  hereunder,  all  of  its or its
Subsidiaries'  other Indebtedness as they shall become due;  PROVIDED,  however,
that neither the  undersigned nor any of its  Subsidiaries  shall be required to
pay any such tax, assessment, charge, levy, claim or Indebtedness which is being
contested  in good faith by  appropriate  proceedings  and as to which  adequate
reserves  therefor have been  established in accordance with generally  accepted
accounting  principles,  UNLESS the failure to make any such payment  shall give
rise to an immediate  right to foreclosure  on a lien securing such amounts,  in
which case the undersigned or any such Subsidiary  shall make immediate  payment
of or shall  otherwise  satisfy such tax,  assessment,  charge,  levy,  claim or
Indebtedness upon commencement of proceedings to foreclose on any such lien.

        Section 4.06 INSURANCE.  The undersigned will at all times maintain, and
will cause its  Subsidiaries  to  maintain  in full  force and effect  insurance
(including  worker's  compensation  insurance,   liability  insurance,  casualty
insurance and business  interruption  insurance) in such amounts,  covering such
risks and liabilities and with such deductibles or self-insurance  retentions as
are in accordance with normal industry  practice.  The undersigned will promptly
provide evidence of the foregoing insurance upon the request of any Bank. If the
undersigned  fails to maintain any of the foregoing  insurance,  the Agent shall
have the right to obtain such insurance at the undersigned's expense.

        Section 4.07 MAINTENANCE OF PROPERTY.  The undersigned will maintain and
preserve,  and will cause its Subsidiaries to maintain and preserve, its and its
Subsidiaries'   properties   and  equipment   used  or  useful  in  its  or  its
Subsidiaries'  business  (in  whomsoever's  possession  as they  may be) in good
repair,  working order and condition,  normal wear and tear  excepted,  and will
make, or cause to be made, in such  properties  and equipment  from time to time
all repairs,  renewals,  replacements,  extensions,  additions,  betterments and
improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.

        Section 4.08 PERFORMANCE OF OBLIGATIONS. The undersigned will perform in
all  material  respects,  and will  cause its  Subsidiaries  to  perform  in all
material  respects,  all of its and its  Subsidiaries'  obligations  (including,
except as may be otherwise  prohibited  or  contemplated  hereunder,  payment of
Indebtedness  in  accordance  with its  terms)  under the terms of all  material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it or any  Subsidiary  is a party or by which it or any  Subsidiary  is
bound.

        Section 4.09 ERISA. The undersigned  will (a) at all times,  make prompt
payment of all  contributions  required under all employee pension benefit plans
("Plans") and required to meet the minimum  funding  standard set forth in ERISA
with respect to its Plans; (b) promptly upon request,  furnish the Agent and the
Holders copies of each annual  report/return  (Form 5500 Series), as well as all
schedules  and  attachments  required to be filed with the  Department  of Labor
and/or the  Internal  Revenue  Service  pursuant to ERISA,  and the  regulations
promulgated thereunder, in connection with each of its Plans for each Plan Year;
(c) notify the Agent immediately of any fact, including, but not limited to, any
Reportable  Event (as defined in ERISA)  arising in  connection  with any of its
Plans, which might constitute grounds for termination thereof by the PBGC or for
the appointment by the appropriate  United States District Court of a trustee to
administer such Plan,  together with a statement,  if requested by the Agent, as
to the reason therefor and the action, if any, proposed to be taken with respect
thereof;  and (d)  furnish  to the  Agent,  upon its  request,  such  additional
information  concerning  any of its Plans as may be  reasonably  requested.  The
undersigned  will not,  nor will it permit  any of its ERISA  Affiliates  to (I)
terminate  a Plan if any such  termination  would  give rise to or result in any
material liability, or (II) cause or permit to exist any Termination Event under
ERISA or other event or condition  which presents a material risk of termination
at the request of the PBGC.

        Section 4.10 TANGIBLE NET WORTH. The undersigned shall maintain Tangible
Net Worth of at least (i)  $80,000,000  from April 1, 1996 through and including
September 30, 1996, (ii)  $82,500,000 from October 1, 1996 through and including
December 31, 1996,  and (iii)  $85,000,000  on and at all times after January 1,
1997.


                        ARTICLE V.  NEGATIVE COVENANTS
                        ------------------------------
        The  undersigned  hereby  covenants  and agrees that so long as the Loan
Agreements are in effect and until the Loans,  all obligations in respect of the
Letters  of  Credit,  and all other  obligations  arising  under the  Documents,
together with  interest,  fees and other charges  thereunder,  have been paid in
full and the Commitments thereunder shall have terminated:

        Section 5.01 NATURE OF BUSINESS.  The undersigned  will not, nor will it
permit any of its Subsidiaries to,  substantively alter the character or conduct
of its or any Subsidiary's business from that conducted as of the Closing Date.

        Section 5.02 CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. The undersigned
will not, nor will it permit any of its Subsidiaries to, dissolve, liquidate, or
wind up its or any Subsidiary's affairs, or enter into any transaction of merger
or  consolidation,  sell,  transfer,  lease or  otherwise  dispose of all or any
substantial  part of its or any  Subsidiary's  property or assets (other than in
the ordinary  course of business  for fair  consideration);  provided,  however,
notwithstanding  the foregoing,  SCC may permit its applicable  Subsidiaries  to
conclude the Sale of the Wool Group so long as the net proceeds of such sale are
used  and  applied  in  accordance  with  the  terms  of the  Master  Facilities
Agreement;  and  provided,  further,  that SCC may,  or  permit  its  applicable
Subsidiaries  to, sell,  transfer or otherwise  dispose of the capital  stock or
assets of Bela Duty Free Import-Export GmbH and Stancom Building Supplies, Inc.
in arms'-length transactions for fair consideration.

        Section 5.03 FISCAL YEAR. The  undersigned  will not, nor will it permit
any Subsidiary to, change, or permit a change, in its or any Subsidiary's fiscal
year.

        Section 5.04 ARTICLES AND BYLAWS.  The undersigned will not, nor will it
permit any  Subsidiary  to,  amend,  modify or change in any  respect its or any
Subsidiary's  articles  of  incorporation  (corporate  charter or other  similar
organizational  document) or bylaws if such  amendment,  modification  or change
would have a Material Adverse Effect.

        Section 5.05 NO DIVIDEND RESTRICTION. The undersigned will not, nor will
it permit  any  Subsidiary  to,  enter  into,  assume or become  subject  to any
agreement  prohibiting  or otherwise  restricting or limiting the ability of any
Subsidiary of the undersigned to pay dividends to the undersigned except for (i)
the  limitation  on the payment of dividends  set forth in the Loan  Agreements,
(ii) the  limitation  on the  payment  of  dividends  set  forth  in the  Master
Facilities  Agreement,  and (iii) the  limitation on the payment of dividends in
those certain "ringed fence" wool group credit  facilities,  extended to certain
of the Subsidiaries, existing as of the date hereof.Section 5.06 LEVERAGE RATIO.
The undersigned  will not permit its Leverage Ratio (i) to exceed 4.75 to 1.0 at
any time prior to the Sale of the Wool  Group,  and (ii) to exceed 3.5 to 1.0 at
any time after the Sale of the Wool Group.

        Section  5.07  LIENS.  The  undersigned  will  not  permit  any  of  its
Subsidiaries  located  outside of the United  States to pledge their  respective
assets to secure their respective credit facilities,  except (i) pursuant to the
terms and  conditions of, or as disclosed in, the Master  Facilities  Agreement,
(ii)  pursuant to or in connection  with the Wool Group  Facility (as defined in
the Master Facilities Agreement),  or (iii) in connection with securing lines of
credit in individual  countries where the assets of a particular  subsidiary are
pledged to secure local  facilities  used by such subsidiary for general working
capital purposes.

        Section 5.08 NEGATIVE  PLEDGE OF CAPITAL  STOCK.  Except with respect to
any Permitted Liens, the undersigned  shall not pledge or otherwise grant a Lien
upon any of the capital stock of any of its Subsidiaries.

                        ARTICLE VI.  EVENTS OF DEFAULT
                        ------------------------------
        Section 6.01 EVENTS OF DEFAULT.  The  occurrence of any of the following
events shall constitute an "Event of Default" hereunder:

        (a)     PAYMENT.  The undersigned shall default in the payment
when due of any of any of its obligations hereunder; or

        (b) REPRESENTATIONS.  Any representation,  warranty or statement made or
deemed to be made by the  undersigned  herein,  in any statement or  certificate
delivered or required to be  delivered  pursuant  hereto or thereto  shall prove
untrue in any  material  respect  on the date as of which it was  deemed to have
been made; or

                (c)  COVENANTS.  The  undersigned  shall (i)  default in the due
performance  or  observance  of any term,  covenant or  agreement  contained  in
Section 4.10 or 5.06 hereof,(ii) default in the due performance or observance of
any term,  covenant or agreement  contained in Section 5.01, 5.02, 5.03, 5.04 or
5.05 hereof or (iii) default in the due  performance  or observance by it of any
term,  covenant or agreement  (other than those  referred to in subsection  (a),
(b), (c)(i) or (c)(ii) of this Section 6.01) contained in this Guaranty and such
default shall continue  unremedied for a period of at least 30 days after notice
thereof by the Agent or any Bank to the undersigned; or

        (d) GUARANTY.  This Guaranty or any provision  thereof shall cease to be
in full force and  effect,  or the  undersigned  or any  Person  acting by or on
behalf of the undersigned shall deny or disaffirm the undersigned's  obligations
under this Guaranty,  or the undersigned shall default in the due performance or
observance  of any term,  covenant or  agreement  on its part to be performed or
observed pursuant to this Guaranty; or

        (e) BANKRUPTCY,  ETC. The undersigned or any of its  Subsidiaries  shall
commence a voluntary case  concerning  itself under the Bankruptcy Code in Title
11 of the United States Code (as amended, modified,  succeeded or replaced, from
time to time,  the  "BANKRUPTCY  CODE");  or an  involuntary  case is  commenced
against the undersigned or any of its Subsidiaries under the Bankruptcy Code and
the petition is not dismissed within 60 days, after commencement of the case; or
a  custodian  (as defined in the  Bankruptcy  Code) is  appointed  for, or takes
charge of all or substantially  all of the property of the undersigned or any of
its  Subsidiaries;  or the undersigned or any of its Subsidiaries  commences any
other proceeding under any reorganization,  arrangement, adjustment of the debt,
relief of creditors, dissolution,  insolvency or similar law of any jurisdiction
whether now or hereafter  in effect  relating to the  undersigned  or any of its
Subsidiaries;  or there  is  commenced  against  the  undersigned  or any of its
Subsidiaries  any such proceeding  which remains  undismissed for a period of 30
days; or the undersigned or any of its Subsidiaries is adjudicated  insolvent or
bankrupt;  or any  order of  relief or other  order  approving  any such case or
proceeding is entered;  or the  undersigned or any of its  Subsidiaries  suffers
appointment of any custodian or the like for it or for any  substantial  part of
its property to continue  undischarged  or unstayed for a period of 30 days;  or
the undersigned or any of its  Subsidiaries  makes a general  assignment for the
benefit of creditors; or any corporate action is taken by the undersigned or any
of its Subsidiaries for the purpose of effecting any of the foregoing; or

        (f)  DEFAULTS  UNDER OTHER  AGREEMENTS.  (i) The  undersigned  shall (x)
default in any payment (beyond the applicable grace period with respect thereto,
if any) with respect to any Indebtedness in excess of $100,000 or (y) default in
the observance or performance of any agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating  thereto,  or any other event or  condition  shall  occur or  condition
exist,  the effect of which default or other event or condition is to cause,  or
permit,  the  holder or  holders of such  Indebtedness  (or  trustee or agent on
behalf of such  holders)  to cause  (determined  without  regard to whether  any
notice or lapse of time is required),  any such Indebtedness to become due prior
to its stated maturity;  or (ii) any such  Indebtedness of the undersigned shall
be declared due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof; or

        (g) JUDGMENTS. One or more judgments or decrees shall be entered against
the  undersigned  involving a liability of $500,000 or more in any instance,  or
$1,000,000 or more in the  aggregate for all such  judgments and decrees for the
undersigned  (not paid or fully  covered by insurance  provided by a carrier who
has acknowledged coverage) and any such judgments or decrees shall not have been
vacated,  discharged or stayed or bonded  pending appeal within 60 days from the
entry thereof; or

        (h)  OWNERSHIP.  Any Person  other than Ery W.  Kehaya or his  immediate
family members shall possess, directly or indirectly,  the power to (A) vote 25%
or more of the  securities  having  ordinary  voting  power for the  election of
directors of the  undersigned or (B) direct or cause direction of the management
and  policies  of the  undersigned,  whether  through  the  ownership  of voting
securities, by contract or otherwise.

                (i) ERISA.  (i) The  undersigned or any member of the Controlled
Group shall fail to pay when due an amount or amounts  aggregating  in excess of
$100,000  which it shall have become  liable to pay under Title IV of ERISA;  or
notice  of intent  to  terminate  a Plan or Plans  which in the  aggregate  have
unfunded liabilities in excess of $1,000,000  (individually and collectively,  a
"MATERIAL  PLAN") shall be filed under Title IV of ERISA by the  undersigned  or
any member of the Controlled Group, any plan administrator or any combination of
the foregoing;  or the PBGC shall institute  proceedings under Title IV of ERISA
to terminate, to impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be  appointed to  administer  any
Material  Plan; or a condition  shall exist by reason of which the PBGC would be
entitled  to  obtain  a  decree  adjudicating  that any  Material  Plan  must be
terminated;  or there shall occur a complete or partial  withdrawal  from,  or a
default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one
or more  Multiemployer  Plans  which  could  cause  one or more  members  of the
Controlled Group to incur a current payment obligation in excess of $500,000.

        (j) EUROPEAN FACILITY. Without limiting the generality of the foregoing,
any default or event of default shall occur (and continues beyond any applicable
grace  period)  under or with respect to the European  Credit  Facilities or the
Master  Facilities  Agreement,  or any loan or  security  documents  executed in
connection  therewith  or  governed  or  affected  thereby;  or the  outstanding
commitments of the European lenders parties to the Master  Facilities  Agreement
shall be less than $100,000,000.00 at any time.

                        ARTICLE VII.  MISCELLANEOUS
                        ---------------------------

        Section 7.01 SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon
the  undersigned   and  upon  the  trustees,   successors  and  assigns  of  the
undersigned,  and shall inure to the  benefit of each  Holder's  successors  and
assigns; all references herein to SCTC and to the undersigned shall be deemed to
include their respective trustees, successors and assigns.

        Section 7.02 NOTICES. All written communications  provided for hereunder
shall be sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and (i) if to a Holder, addressed to such Holder at the address
specified for such communications as the signature pages of the Loan Agreements,
or at such other address as such Holder shall have specified to the  undersigned
in writing, (ii) if to any other Holder,  addressed to such other Holder at such
address as such other Holder shall have specified to the undersigned in writing,
(iii) if to the undersigned,  addressed to it at 2201 Miller Road, Wilson, North
Carolina  27893,  Attention:  Rick  Hardy,  or at  such  other  address  as  the
undersigned shall have specified to each Holder in writing;  provided,  however,
that any such  communication  to the  undersigned may also, at the option of any
Holder, be delivered by any other means either to the undersigned at its address
specified above or to any of its officers.

        Section  7.03  AMENDMENT.  Subject to the terms of the Loan  Agreements,
this  Guaranty may be amended,  and the  undersigned  may take any action herein
prohibited, or omit to perform any act herein required to be performed by it, if
the undersigned  shall obtain the written  consent to such amendment,  action or
omission  to act,  of each of the  Holders.  No course of  dealing  between  the
undersigned  and any Holder nor any delay in exercising any rights  hereunder or
under any Note shall  operate as a waiver of any rights of any  Holder.  As used
herein, the term "this Guaranty" and references thereto shall mean this Guaranty
as it may from time to time be amended or supplemented.

        Section  7.04  SURVIVAL  OF  REPRESENTATIONS   AND  WARRANTIES;   ENTIRE
AGREEMENT.  All  representations  and  warranties  contained  herein  or made in
writing by or on behalf of the undersigned in connection  herewith shall survive
the execution and delivery of this  Guaranty,  the transfer by any Holder of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Assignee, regardless of any investigation made at any time
by or on  behalf  of  any  Bank  or any  transferee.  Subject  to the  preceding
sentence,  this Guaranty embodies the entire agreement and understanding between
the  Banks  and  the  undersigned  and  supersedes  all  prior   agreements  and
understandings relating to the subject matter hereof.

        Section 7.05 SATISFACTION REQUIREMENT. If any agreement,  certificate or
other  writing,  or any  action  taken or to be  taken,  is by the terms of this
Guaranty  required to be satisfactory to any Holder,  the  determination of such
satisfaction  shall be made by such Holder,  in the sole and exclusive  judgment
(exercised in good faith) of the Holder making such determination.

        Section  7.06  GOVERNING  LAW.  This  Guaranty  shall be  construed  and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of North Carolina.  The undersigned  hereby submits to the
nonexclusive  jurisdiction  of the United States  District Courts located in the
State of North  Carolina  and of any  North  Carolina  State  court  sitting  in
Charlotte  for purposes of all legal  proceedings  arising out of or relating to
this  Guaranty  or  the  transactions   contemplated   hereby.  The  undersigned
irrevocably  waives, to the fullest extent permitted by law, any objection which
it may now or hereafter  have to the laying of the venue of any such  proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.

        Section 7.07 WAIVER OF JURY TRIAL. THE UNDERSIGNED,  HEREBY  IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS GUARANTY,  ANY OTHER FINANCING  DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

        Section 7.08  MISCELLANEOUS.  Wherever  possible each  provision of this
Guaranty  shall be interpreted in such manner as to be effective and valid under
applicable  law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such  provision  shall be  ineffective  to the extent of
such  prohibition  or  invalidity  without  invalidating  the  remainder of such
provision or the remaining provisions of this Guaranty. The descriptive headings
of the sections of this  Guaranty are inserted for  convenience  only and do not
constitute a part of this Guaranty.

        Section 7.09 CONSENT AND ACCEPTANCE.  The undersigned  hereby  expressly
consents to and accepts the  amendments  effected by Amendment No. 3 to Loan and
Security Agreement,  and the undersigned hereby fully restates and reaffirms its
guaranty of payment to each Holder of all of the  Guaranteed  Indebtedness  upon
the terms and conditions set forth herein.



        IN  WITNESS  WHEREOF,  this  Guaranty  has  been  duly  executed  by the
undersigned as of the date first above written.



ATTEST:                                 STANDARD COMMERCIAL CORPORATION

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

        (Corporate Seal)